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EXHIBIT 10.8
5251 WESTHEIMER
LEASE AGREEMENT
BY AND BETWEEN
VP 1988-1 LTD., AS LANDLORD
AND
PAYMENT SERVICES COMPANY
AS TENANT
March 27, 1990
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LEASE AGREEMENT
This Lease Agreement ("Lease") made and entered into on this 27 day of March,
1990 by and between VPM 1988-1 LTD., a Texas limited partnership (hereinafter
called "Landlord") and PAYMENT SERVICES COMPANY, a Texas corporation
(hereinafter called "Tenant").
WITNESSETH:
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1.01 Leased Premises.
(a) Subject to and upon the terms hereinafter set
forth,Landlord does hereby lease and demise to Tenant and Tenant does hereby
lease and take from Landlord those certain premises containing approximately
76,481 square feet of "Net Rentable Area" (hereinafter defined), such space
being comprised of approximately 4,171 square feet of Net Rentable Area in the
basement ("Basement") and all of the fifth (5th), seventh (7th), tenth (10th)
and eleventh (11th) floors, in the building (the "Building") currently known as
5251 Westheimer, located on a certain tract or tracts of real property
(collectively the "Land") located at 5251 Westheimer, Houston, Harris County,
Texas and more particularly described on Exhibit "A" attached hereto and made a
part hereof for all purposes. The space hereby leased in the Basement and some
times referred to herein as the "Basement Space", while the other areas in the
Building from time to time subject to this Lease are sometimes herein referred
to as the "Office Space." The Basement Space and the Office Space are
hereinafter called the "Leased Premises" and are outlined on the floor plan
drawings attached hereto as Exhibit "B" and made a part hereof for all
purposes. The Land, Building, the Parking Facilities (hereinafter defined) and
all other improvements now on the Land and those hereafter added thereto or
placed thereon to the extent (but no further) that the same constitute
amenities to the Building or are facilities designed to provide services to the
Building or the tenants there in and all appurtenances to the foregoing are
sometimes collectively referred to herein as the "Property".
(b) The term "Net Rentable Area", as used herein, shall refer
to (i) in the case of an entire floor leased to a single tenant (including, if
applicable, the Basement), the total square footage of all floor area measured
from the inside surface of the exterior glass line or finished outer wall of
the Building to the inside surface of the opposite exterior glass line or
finished outer walls, excluding only Service Areas (defined below) and General
Common Areas (defined below), plus an allocation
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(calculated as set forth below) of the square footage of the General Common
Areas, and (ii) in the case of a floor leased to more than one tenant
(including, if applicable, the Basement), the total square footage of all floor
areas within the inside surface of the exterior glass line or finished outer
wall of the Building enclosing the Leased Premises and measured to the
mid-point of demising walls (i.e., walls separating the Leased Premises from
areas leased to or held for lease to other tenants, from On-Floor Common area
(defined below), and from General Common Areas) excluding only Service Areas,
plus an allocation (calculated as set forth below) of the square footage of
the General Common Areas and an allocation (calculated as set forth below) of
the square foot age of the On-Floor Common Areas; no deductions from Net
Rentable Area shall be made for columns or projections necessary to the
Building.
"Service Areas" shall mean the total square footage within (and measured from
the midpoint of the walls enclosing, or from the inside surface of the exterior
glass enclosing, as the case may be) Building stairs, elevator shafts, flues,
vents, stacks, pipe shafts, vertical ducts and other vertical penetrations
(other than those necessary to the Building). Areas for the specific use of
Tenant or other tenants of the Building or installed at the request of Tenant
or other tenants in the Building such as special stairs or elevators are not
included within the definition of Service Areas.
"General Common Areas" shall mean the total square footage of those areas
within (and measured from the midpoint of the walls or from the inside surface
of the exterior glass enclosing) the Building's elevator machine rooms, main
mechanical rooms, electrical rooms,and public lobbies, engineering and cleaning
staging areas, and other areas not leased or held for lease within the Building
but which are reasonably necessary for the proper utilization of the Building
or to provide customary services to the Building. The allocation of the square
footage of the General Common Areas to the areas of the Building leased from
time to time by Tenant shall be equal to the total square footage of the
General Common Areas multiplied by a fraction, the numerator of which is the
Net Rentable Area of the Leased Premises (excluding the allocation of the
General Common Areas) and the denominator of which is the total of all Net
Rentable Area contained in the Building (excluding the allocation of the
General Common Areas).
"On-Floor Common Areas" shall mean the total square footage of those areas
within (and measured from the midpoint of the walls enclosing) public
corridors, elevator foyers, rest rooms, mechanical rooms, janitor closets,
telephone and equipment rooms, and other similar facilities for the use of all
tenants on the floor (including the Basement) on which the Leased Premises are
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located and which are not (other than pursuant to the allocation of On-Floor
Common Areas) included in the leased premises of any other tenant in the
Building. The allocation of the square footage of the On-Floor Common Areas to
the areas of the Building leased from time to time by Tenant shall be equal to
the total On-Floor Common Areas on said floor multiplied by a fraction, the
numerator of which is the Net Rentable Area of the portion of the Leased
premises (excluding the allocations of General Common Areas and On-Floor Common
Areas) located on said floor and the denominator of which is the total of all
Net Rentable Area on said floor (excluding the allocations of General Common
Area and On-Floor Common Areas).
"Parking Facilities" shall mean the parking structure(s) located on the Land
together with any connecting walkways, covered walkways, or other means of
access to the Building, if any, and any additional improvements at any time
related thereto.
(c) The Net Rentable Area in the Leased Premises has been
calculated on the basis of the foregoing definitions and is hereby stipulated
and agreed for all purposes to be 76,481 square feet of Net Rentable Area,
regardless of whether the same is actually more or less. The Building contains
213,539 feet of Net Rentable Area.
1.02 Term: Lease Year.
(a) The term of this Lease for the entire Leased Premises
shall be for an initial term ("Term") of ten (10) Lease Years (hereinafter
defined) after the Commencement Date (hereinafter defined). This Lease shall
be effective from the date of execution; provided, however, that the period
during which rent will accrue shall commence on the date (the "Commencement
Date"), which date shall be the earlier to occur of (i) the date Tenant actually
takes occupancy of any portion of the Leased Premises and commences to conduct
its normal and customary business therefrom or (ii) the Completion Date (as
defined and determined in accordance with the Work Letter Agreement attached
hereto as Exhibit "C") provided, that if (a) the Completion Date has not
occurred by November 1, 1990, (b) the delay in the Completion Date is not a
result of Tenant delay and (c) the Completion Date occurs on or after November
1, 1990 but before January 1, 1991, then Tenant, at its option, may delay the
Commencement Date to the earlier of (x) the date Tenant actually takes occupancy
of any portion of the Leased Premises and commences to conduct its normal and
customary business therefrom or (y) January 1, 1991. Landlord hereby agrees to
keep Tenant advised as to the progress of construction of the Landlord's Work
(as defined in Exhibit C to be constructed pursuant to the work Letter
Agreement and the anticipated Completion Date in respect thereto.
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(b) "Lease Year", as used herein, shall apply to the entire
Leased Premises and shall mean a period of one year during the Term of this
Lease and both the First and Second Renewal Terms (hereinafter defined), with
the first Lease Year beginning on the Commencement Date and continuing until,
but not including, the first annual anniversary of the first Commencement Date.
Each Lease Year shall be the same for the entire Leased Premises.
1.03 Use.
The Leased Premises are to be used and occupied by Tenant (and its
permitted assignees and subtenants) in compliance with all applicable laws,
rules, regulations and ordinances solely for the purpose of office space and
for no other purpose; except that Tenant may maintain in the Leased Premises
employee lunchrooms, coffee bars, dining rooms and kitchens for the foregoing
and areas for storage, computer operations, telecommunications, repair of
Tenant's equipment used with the Leased Premises and other related general
office uses. However, any use of the Leased Premises which will affect the
exterior appearance of the Building, exceeds structural design capacities of
floors or walls, exceeds allocated usage of mechanical, plumbing or electrical
systems of the Building or affects ventilation in the Building must have
Landlord's prior written approval. Further, the Leased Premises shall not be
used for any purpose which would create unreasonable elevator loads or
otherwise unreasonably interfere with Building operations, and Tenant shall not
engage in any activity which is not in keeping with the first class standards
of the Building. Landlord acknowledges that Tenant intends to conduct business
on levels 5 and 7 of the Building on a 24 hour per day basis and will require
off-hour electrical and air handling services, all of which are hereby
consented to by Landlord. Landlord also hereby acknowledges that the conduct of
Tenant's business requires, a large concentration of personnel within limited
office space area and, subject to Tenant's compliance with applicable fire code
and other laws affecting occupancy of the Building, Landlord hereby consents
thereto. The Tenant will not keep any substance or carry on or permit any
operation which might emit dust or offensive odors or conditions into the
Leased Premises or other portions of the Building, or use any apparatus which
might make undue noise or create vibrations in the Building.
1.04 [Intentionally Left Blank].
1.05 Survival.
Any claim, cause of action, liability: or obligation arising under the
Term of this Lease and under the provisions hereof in favor of a party hereto
against or obligating the other party
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hereto shall survive the expiration or any earlier termination of this Lease.
1.06 Condition of Leased Premises.
As a material inducement to the Landlord to execute and deliver this
Lease, the Tenant agrees that it will accept the Leased Premises and leasehold
improvements therein (other than the leasehold improvements to be constructed
by the Landlord in accordance with Exhibit C hereto) in its AS IS condition,
WITH ALL FAULTS; provided, however, no such acceptance by Tenant shall extend
to latent defects. Landlord hereby represents to Tenant that to the best of
Landlord's actual knowledge, the Building and Leased Premises are structurally
fit for use and occupancy, have adequate facilities for the distribution of
utility services, comply with existing applicable law and that the services
described in Section 3.01 will be provided (subject to the provisions thereof)
in accordance with the terms of this Lease. Except for the representations by
Landlord in the immediately preceding sentence hereof, Tenant acknowledges that
neither Landlord nor any of its purported representatives or agents has made
(and except as noted above Landlord hereby specifically disclaims any and
all) representations and warranties of any kind or character as to the physical
condition of the Leased Premises (other than the leasehold improvements to be
constructed by the Landlord in accordance with Exhibit C hereto), either
express or implied, including without limitation, warranties of fitness for any
purposes or any particular use or commercial habitability. Tenant acknowledges
that Landlord does not warrant that the Leased Premises or the Building are
free from asbestos or asbestos containing material or from any other hazardous
materials or substances (as defined in Section 4.05(b) below). Tenant
acknowledges that it has been provided a copy of the most recent environmental
engineering report on the Building prepared by McClelland Management
Services (together with a copy of the supplement thereto dated March 9, 1990)
which reports (the "McClelland Reports") reflect the existence of nominal
amounts of asbestos in the Building. Landlord has advised Tenant that Landlord
intends to proceed with diligence in removing from the Building the asbestos
identified in the McClelland Reports in accordance with the abatement
procedures recommended therein and, upon completion of such abatement, to cause
a subsequent update of the McClelland Reports to be prepared and a copy thereof
provided to Tenant. Tenant agrees that the existence of asbestos of the type
and nature of that reflected in the McClelland Reports in its present form in
the Building shall not constitute an eviction, actual or constructive, of
Tenant or entitle Tenant to offset against its obligations hereunder; provided,
however, if subsequent to the date hereof (i) hazardous materials or substances
of any kind are brought into the Property through no act or omission of Tenant,
its agents, contractors or
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employees, or hazardous materials or substances are found to exist in the
Building or (ii) the form of the asbestos existing in the Building as of the
date hereof is changed through no act of Tenant, its agents, contractors or
employee, such that, in either case, the same are of the nature and quantity
that they constitute a present threat to the health of Tenant's employees, as
determined by or set forth in standards promulgated or adopted by the city of
Houston, State of Texas or other health or governmental officials with
jurisdiction over the same, or otherwise render the Leased Premises unusable in
substantially the same manner as prior to the discovery of such hazardous
material or substance, then Base Rental and other rentals due under this Lease
shall abate commencing five (5) business days after the date such materials are
determined to constitute a present threat or the Leased Premises have been
rendered unusable to the extent and in the proportion that the Leased Premises
are unusable in substantially the same manner prior to the discovery until they
are again usable. Moreover, if Landlord is unable to remedy the same during the
Environmental Cure Period (as hereinafter defined), Tenant shall have the right
(in addition to its right to abate rent as described above), to terminate this
Lease by providing written notice to Landlord to such effect within thirty (30)
days after the expiration of the Environmental Cure Period. As used herein, the
term "Environmental Cure Period" shall mean a period of sixty (60) days
commencing on the date Landlord receives notice of such hazardous material or
substance, or such longer period (not to exceed one year) as may be reasonably
required to remedy such condition provided that Landlord commences such
remedial efforts within said sixty (60) day period and thereafter diligently
prosecutes the same to completion. Tenant shall notify Landlord of the
existence of such hazardous material or substance within thirty (30) days after
Tenant becomes aware of such condition.
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2.01 Rental Payments.
(a) Commencing on the Commencement Date, and continuing
thereafter throughout the full Term of this Lease, Tenant hereby agrees to pay
the Base Rental (defined below) in accordance with this Section 2.01 and
Section 2.02, and Tenant's Forecast Additional Rental (defined below) and
Tenant's Additional Rental Adjustment (defined below) in accordance with this
Section 2.01 and Section 2.03. The Base Rental and Tenant's Forecast Additional
Rental shall be due and payable in equal monthly installments on the first day
of each calendar month during the Term of this Lease and any extensions or
renewals hereof, and Tenant hereby agrees to pay such rent to Landlord at
Landlord's address as provided herein (or such other address in the continental
United States as may be designated by Landlord from time to time) in advance.
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(b) If the Commencement Date is other than the first day of a
calendar month or if this Lease expires on other than the last day of a
calendar month, then the installments of Base Rental, Tenant's Forecast
Additional Rental and Tenant's Additional Rental for such month or months shall
be prorated and the installment or installments so prorated shall be paid in
advance. Said installments for such prorated month or months shall be
calculated by multiplying the monthly amounts therefor otherwise due hereunder
by a fraction, the numerator of which shall be the number of days of the Term
of this Lease occurring during said commencement or expiration month, as the
case may be, and the denominator of which shall be thirty (30). If the Term
expires on other than the first day of a calendar year, Tenant's Forecast
Additional Rental and Tenant's Additional Rental shall be prorated for such
expiration year by multiplying Tenant's Forecast Additional Rental and Tenant's
Additional Rental by a fraction, the numerator of which shall be the number of
whole and partial months of the Term during the expiration year and the
denominator of which shall be twelve (12). In such event, the calculation
described in Section 2.03(d) shall be made as soon as possible after the
termination of this Lease. Landlord and Tenant hereby agree that the provisions
of this Section 2.01(b) shall survive the expiration or termination of this
Lease.
(c) Tenant agrees to pay all rent and other sums of money as
shall become due from and payable by Tenant to Landlord under this Lease at the
times and in the manner provided in this Lease, without, except as expressly
otherwise provided for in this Lease, abatement, demand, set-off or
counterclaim. All rent and other sums of whatever nature owed by Tenant to
Landlord under this Lease which are not paid within five (5) business days
following the date due shall bear interest from the date due thereof until paid
at the maximum non-usurious interest rate per annum allowed by applicable law
(or if there is no maximum rate, then 18% per annum).
2.02 Base Rental.
As used herein, "Base Rental" shall mean an annual amount equal to
the product of the yearly rate times the number of square feet of Net Rentable
Area of the Leased Premises, as such dollar amount may be adjusted pursuant to
the terms of this Lease. Subject to the other provisions of this Lease, for
each of the Lease Years described in Column A below, Tenant shall pay Base
Rental for each square foot of Net Rentable Area within the Basement Space or
the Office Space, as the case may be, the amount set forth opposite in Column B
and Column C, as the case may be, below:
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Column A Column B Column C
-------- -------- --------
(Lease Years) (Base Rental per square (Base Rental per square
foot of Net Rentable foot of Net Rentable
Area in Office Space) Area in Basement Space)
1 1990/91 $ 6.35 $ 7.00
2 1991/92 6.85 7.00
3 1992/93 16.00 7.00
4 1993/94 17.39 7.00
5 1994/95 19.63 7.00
6 1995/96 20.63 11.00
7 1996/97 21.63 11.00
8 1997/98 22.63 11.00
9 1998/99 23.63 11.00
10 1999/2000 23.63 11.00
2.03 Additional rental.
(a) Commencing with calendar year 1991 and continuing
thereafter for each calendar year during the Term and any renewals thereof,
Landlord shall present to Tenant not less than forty-five (45) days prior to the
beginning of said calendar year a statement of Tenant's Forecast Additional
Rental for such calendar year.
(b) As used herein, "Tenant's Forecast Additional
Rental" shall mean Landlord's reasonable estimate of Tenant's Additional Rental
(defined below) for the coming calendar year.
(c) "Tenant's Additional Rental," as that term is used
herein, shall be computed on a calendar year basis and shall mean the Tenant's
Percentage Share (defined below) of Operating Expenses (defined below), to the
extent such sum exceeds Tenant's Percentage Share of Operating Expenses during
the "Base Year". The "Base Year" is the calendar year 1990. As used herein,
"Tenant's Percentage Share" shall mean a fraction, the numerator of which is
the total number of square feet of Net Rentable Area within the Leased Premises
and the denominator of which is the total square footage of all Net Rentable
Area in the Building leased or held for lease. For the purposes of this Lease,
the "Tenant's Percentage Share" shall be thirty-five and eight thousand one
hundred fifty-nine ten thousandths percent (35.8159%) provided, however, that
in the event that the amount of space leased by Tenant shall increase or
decrease subsequent to the beginning date of the Term of this Lease, whether
pursuant to an option to expand or otherwise, Tenant's Percentage Share shall be
appropriately adjusted by Landlord.
(d) No later than one hundred twenty (120) days after the end
of calendar year 1990, Landlord shall deliver to Tenant a
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statement (certified by Landlord as true and correct) of Operating Expenses for
calendar year 1990. No later than one hundred twenty (120) days after the end of
the calendar year 1991 and of each calendar year thereafter during the Term of
this Lease, Landlord shall provide Tenant a statement (certified by Landlord as
true and correct) comparing the Base Year's Operating Expenses and Operating
Expenses for each such calendar year and a statement prepared by Landlord
comparing Tenant's Forecast Additional Rental with Tenant's Additional Rental.
Each such statement shall be accompanied by materials reflecting expenditure of
operating costs by category, which categories shall be utilized on a consistent
basis (together with any categories here after created) through out the term
hereof for the purpose of reporting Operating Expenses. In the event that
Tenant's Forecast Additional Rental exceeds Tenant Additional Rental actually
paid by Tenant for said calendar year, Landlord shall pay Tenant (in the form
of a credit against rentals next due or, if such overpayment is attributable to
the last year of the Term, or any renewal thereof, then in the form of
Landlord's check which shall be delivered to Tenant within thirty days after
the determination of the amount of such over payment) an amount equal to such
excess. In the event that the Tenant's Additional Rental exceeds Tenant's
Forecast Additional Rental for said calendar year, Tenant hereby agrees to pay
Landlord, within thirty (30) days of receipt of the statement, an amount equal
to such difference ("Tenant's Additional Rental Adjustment"). The provisions of
this paragraph shall survive any expiration, termination or cancellation of
this Lease.
(e) Tenant, at Tenant's sole cost and expense, shall have the
right, to be exercised by written notice given to Landlord within one hundred
eighty (180) days after receipt of the aforesaid statement showing Operating
Expenses for the preceding calendar year, to audit, at the place in Houston,
Texas where Landlord maintains its books and records, Landlord's books and
records pertaining only to such Operating Expenses for such preceding calendar
year, provided such audit commences within sixty (60) days after Tenant's
notice to Landlord and thereafter proceeds regularly and continuously to
conclusion and, provided further, that such audit does not unreasonably
interfere with the conduct of Landlord's business. Landlord agrees to cooperate
in good faith with Tenant in the conduct of any such audit. If such audit
reflects an overstatement in Landlord's calculation of operating Expenses of
five percent (5%) or more, then in addition to refunding any excess payments of
Tenant's Additional Rental made by Tenant, Landlord shall reimburse Tenant for
the reasonable cost and expenses incurred by Tenant in causing such audit to be
performed. In that regard, Tenant shall provide to Landlord copies of all
bills, invoices and vouchers evidencing payments made or expenses incurred by
Tenant in conducting such an audit.
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2.04 Operating expenses.
(a) "Operating Expenses," for each calendar year, shall
consist of all operating costs (defined below) for the Property.
(b) For the purposes of this Lease, "operating costs" shall
mean all reasonable and necessary expenses, costs and accruals (excluding
therefrom those items hereinafter provided) of every kind and nature, computed
on an accrual basis in accordance with generally accepted accounting principles
consistently applied, incurred, paid or accrued in connection with, or relating
to, the ownership, maintenance, or operation of the Property during each
calendar year, including, but not limited to, the following:
(1) management fees of the Building manager not
to exceed, however, three percent (3%) of the gross rentals collected
from tenants in the Building excluding rent charged to tenants for
use of the Parking Facilities so long as the same are operated and
managed by an independent third party operator (for such periods as
Landlord or its affiliates operate the same, rent paid by tenants for
the use of the Parking Facilities shall be included in "gross
rentals" for the purpose of calculating management fees);
(2) wages and salaries, including taxes, insurance
and benefits, of all on and off-site employees (exclusive of
Landlord's executive personnel above the level of Building Manager)
engaged in the operation, maintenance and access control of the
Building; provided, however, that if during the Term of this Lease
any such employees are working on other projects of Landlord as well
as the Building, their wages, salaries and related expenses shall be
appropriately allocated among all such projects and only that portion
of such expense applicable to the Property (as reasonably allocated
by Landlord) shall be included in Operating Expenses and, in
addition, a reasonable rental amount for that portion of the on-site
Building management office, or if none is utilized, that portion of
the off-site management office (which shall be located in the
building commonly known as "5333 Westheimer" located at 5333
Westheimer, Houston, Texas) reasonably allocated to the Building by
Landlord (but in no event more than 2,700 square feet of rentable
area) shall be included in Operating Expenses;
(3) cost of all supplies, tools, equipment and
materials to the extent used in operations and maintenance of the
Property, as reasonably allocated by Landlord;
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(4) cost of all utilities including, but not limited to,
the cost of electricity, the cost of water and the cost of power for
heating, lighting, air conditioning and ventilating;
(5) cost of all maintenance and service agreements for
the Property and the equipment therein, including, but not limited to,
access control service, refuse removal, garage operations, window
cleaning, elevator maintenance, janitorial service and landscaping
maintenance;
(6) cost of repairs and general maintenance excluding (a)
repairs, alterations and general maintenance paid by proceeds of
insurance, by Tenant or by third parties, (b) repairs and general
maintenance required to be paid by other tenants or which would have
been paid by insurance required to be maintained by Landlord under
this Lease, but which insurance Landlord has failed to maintain
through no fault of Tenant, (c) alterations attributable solely to
tenants of the Building other than Tenant and (d) repairs and
maintenance attributable to the negligence or willful misconduct of
Landlord, its agents, contractors or employees, in the operation,
maintenance or repair of the Property;
(7) amortization of the cost (together with reasonable
financing charges and installation costs) of any capital investment
items, system, apparatus, device, or equipment which is installed for
the principal purpose of (i) reducing Operating Expenses, (ii)
promoting safety or (iii) complying with governmental requirements
which become effective after the Commencement Date;
(8) the cost of all insurance, including, but not limited
to, the cost of casualty, rental abatement and liability insurance,
and insurance on Landlord's personal property used in connection with
the ownership, operation and maintenance of the Property, plus the
cost of all deductible payments made by Landlord in connection
therewith;
(9) the cost of reasonable accounting fees;
(10) all taxes, assessments and governmental charges,
whether or not directly paid by Landlord, whether federal, state,
county or municipal and whether they be by taxing districts or
authorities presently taxing the Property or by others subsequently
created or otherwise,
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and any other taxes and assessments attributable to the Property or
their operation, excluding, however, taxes on Landlord's personal
property not used in connection with the ownership, operation and
maintenance of the Property, taxes and assessments attributable to the
personal property of other tenants, federal and state taxes on income,
death taxes, franchise taxes, and any taxes imposed or measured on or
by the income of Landlord from the operation of the Property or
imposed in connection with any change in ownership of the Property;
provided, however, that if at any time during the Term of this Lease,
the present method of taxation or assessment shall be so changed that
the whole or any part of the taxes, assessments, levies, impositions or
charges now levied, assessed or imposed on real estate and the
improvements thereon shall be discontinued and as a substitute
therefor, or in lieu of or in addition thereto, taxes, assessments,
levies, impositions or charges shall be levied, assessed or imposed,
wholly or partially, as a capital levy or otherwise, on the rents
received from the Property or the rents reserved herein or any part
thereof, then such substitute or additional taxes, assessments,
levies, impositions or charges, to the extent so levied, assessed or
imposed with respect to the Property, shall be deemed to be included
within the operating costs. Consultation, legal fees and costs
resulting from any challenge (or consideration of a challenge) of tax
assessments as reasonably allocated by Landlord shall also be included
in operating costs. It is agreed that Tenant will be responsible for
ad valorem taxes on its personal property. In the case of special taxes
and assessments which may be payable in installments, only the amount
of each installment accruing during a calendar year shall be included
in the operating costs for such year.
No single item of expense representing an operating cost shall be
included as such more than once (although expense items of the same
category will be so included) and in no event shall Tenant be charged
more than once for any single item of expense previously included in
operating costs.
The Property includes within its boundaries a retail shopping center
("Shopping Center"), such Shopping Center being shown as the
cross-hatched area on Exhibit "A-1" attached hereto and made part
hereof for all purposes. It is the Landlord's and Tenant's intent,
however, that "operating costs" for purposes of this Lease include only
those expenses and costs related to the ownership, maintenance or
operation of all
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portions of the Property other than the Shopping Center. The
Landlord and Tenant acknowledge, however, that certain items
constituting "operating costs" are and shall be incurred by Landlord
for the entire Property including, by way of example, but without
limitation, ad valorem taxes and insurance premiums. As to the
"operating costs" which are incurred as to the entire Property, the
same shall be reasonably prorated by Landlord with 91.4792% thereof
being allocated to the Building and included in "operating costs" for
the purposes of this Lease.
Notwithstanding the foregoing provisions of this Section
2.04(b), "operating costs" shall not include any of the following:
(i) Any costs or expenditures for which Landlord is
entitled to reimbursement by Tenant (other than pursuant to this
Section 2.04(b)), any other tenant of the Property (other than for
general reimbursement of operating costs or increases therein) or any
other third parties, or from insurance or condemnation proceeds.
(ii) Any overhead, administrative or general office
expense other than that represented by the management fee provided for
in this Section 2.04(b).
(iii) The cost of completing initial construction of the
Building or the cost of constructing leasehold improvements for
specific tenants, including all common areas and tenant occupied
spaces.
(iv) The cost of correcting defects in construction of the
Property or in the Building or Parking Facilities equipment, except
that conditions not occasioned by construction defects resulting from
ordinary wear and tear and use shall not be deemed defects for the
purpose of this category.
(v) Leasing commissions, ground rentals, non-cash items,
debt service and other debt costs, and advertising and promotional
expenditures.
(vi) Any cost or expenditure attributable to a breach by
Landlord of its covenants, obligations and duties under this Lease
that would not have been incurred but for such breach.
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(vii) The cost of any work or service performed for, or
materials, items, or facilities furnished to, any tenant of the
Property to a materially greater extent or in a materially more
favorable manner than that furnished generally to all tenants of the
Property.
(viii) The cost of artwork used to decorate the Property.
(ix) Landlord's central office or its operations
conducted, or employees engaged therein (except to the extent provided
in Section 2.04(b)(1);
(x) Capital improvements and additions to the Property or
any non-cash items such as depreciation and amortization, except to
the extent permitted by Section 2.04(b)(7);
(xi) Expenses and wages of leasing personnel and leasing
commissions, attorneys' fees and other costs and expenses incurred by
Landlord in (i) leasing space in the Property (including, without
limitation, cost of tenant improvements made in the Property by
Landlord in connection therewith or any amounts paid by Landlord in
the settlement of, or by assumption of, any prior lease obligations of
a prospective tenant) or (ii) any litigation, or the negotiation or
settlement of any dispute, between Landlord and any person or entity
with respect to the ownership, sale, financing or refinancing,
operation or maintenance of the Property including, without
limitation, the enforcement of any lease obligation except to the
extent that such litigation, dispute or cost incurred in the operation
or maintenance of the Property is caused by the negligence or willful
misconduct of Tenant, its agents, contractors or employees;
(xii) Any costs incurred in connection with the sale,
refinancing, mortgaging or change in ownership of the Property or any
portion thereof, including, without limitation, brokerage commissions,
attorneys' and other professional fees, closing costs and interest
charges;
(xiii) Overhead or profits increment paid to subsidiaries of
affiliates of Landlord for services on or to the Property to the
extent such overhead or profit increment exceeds that which would have
been earned or paid to an independent, third party provider of the
same or similar services;
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(xiv) Costs incurred due to any violation by Landlord of
the terms and conditions of any lease in the Property or of any ground
lease or mortgage encumbering the Property unless caused by the acts
or omissions of Tenant, its contractors, agents or employees, or any
cost, fines or penalties incurred by Landlord due to any failure by
Landlord to comply with all federal, state and local laws, rules and
regulations in its ownership, operation or maintenance of the Property
unless caused by the acts or omissions of Tenant, its agents,
contractors and employees in the performance of its obligations under
this Lease;
(xv) Any cost or expenses incurred by Landlord in the
ownership, operation or maintenance of any retail space which is
located on the Land but is not within the Building; and
(xvi) Expenses and costs relating in any way to the
encapsulation, removal, replacement, repair or abatement of any
hazardous materials within the Property unless the existence of the
same is caused by the acts or omissions of Tenant, its agents,
contractors or employees.
(c) Notwithstanding any language contained herein to the contrary,
Tenant hereby agrees that, during any calendar year in which the entire
Building is not provided with Building Standard Services (as defined in Section
3.01 below) or is not completely occupied, Landlord shall compute all Variable
Operating Costs (defined below) for such calendar year as though the entire
Building was provided with Building Standard Services and was completely
occupied. For purposes of this Lease the term "Variable Operating Costs" shall
mean any operating cost that is variable with the level of occupancy of the
Building (e.g. tenant utilities and tenant cleaning services) as reasonably
determined by Landlord. In the event that Landlord excludes from "operating
costs" any specific costs billed to or otherwise incurred for the particular
benefit of specific tenants of the Building, Landlord shall have the right to
increase "operating costs" by an amount equal to the cost of providing standard
services similar to the services for which such excluded specific costs were
billed or incurred.
2.05 [Intentionally Left Blank].
2.06 Relocation Expense Allowance.
On the Commencement Date and provided Tenant is not in default
hereunder, the Landlord will reimburse the Tenant for Tenant's out-of-pocket
relocation expenses in an amount equal to the sum of (a) $76,481.00 plus (b)
the product of 76,481 times the Savings. The term "Savings" as used in this
Section 2.06 means the
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amount, if any, by which the actual costs and expenses incurred by Landlord
(including a fee of 2% of the hard costs to be paid to Landlord as a fee for
its services in connection with construction of the Landlord's Work, plus the
allowance to be provided by the Landlord for the Card-Key Access System as
provided above, is less than $22.50; provided, however, for purposes of this
Section 2.06, the maximum amount of Savings for which Landlord shall reimburse
Tenant shall be limited to $2.00 and as to any Savings in excess of $2.00,
Tenant shall receive a credit equal to the amount of such savings in excess of
$2.00 against the first Base Rental or Additional Rental due under this Lease.
The amount of Savings shall be determined upon Completion (as defined in
Exhibit C) of the Landlord's Work and verification of the costs and expenses
incurred by Landlord in connection therewith.
2.07 Renewal Options.
Tenant is hereby granted two options to renew this Lease for
successive five (5) year periods upon the terms and conditions set forth in
Exhibit D attached hereto and made part hereof for all purposes.
2.08 Prevailing Market Base Rental Rate.
(a) As used in this Lease, the term "Prevailing Market Base Rental
Rate" shall mean the annual rental rate which a willing landlord and willing
tenant would agree upon for the lease of space in the Galleria area of Houston,
Texas for space comparable to the space in the Building (including, in the case
of the Leased Premises, all of the Landlord's Work but excluding the Tenant's
Work [as defined in Exhibit C attached hereto]) for which the Prevailing Market
Base Rental Rate is being determined (taking into consideration use, location
and/or floor level within the applicable building compared to the location in
the Building of the floors subject to this Lease [i.e., the Leased Premises
include the 10th and 11th floors of the Building which are the top two floors
thereof and comparative space therefor shall be the top two floors of
comparable buildings], definition of net rentable area, leasehold improvements
existing in the comparable space plus build-out allowance offered by the
Landlord in connection with the leasing thereof, quality and location of the
applicable building, rental concessions such as abatements, moving allowances
or landlord's assumption of the tenant's existing lease obligations the time
the particular rate under consideration became effective, relative operating
expenses and relative services provided). It is agreed that bona fide written
offers to lease the relevant space made to Landlord by third parties may (but
shall not be required to) be used by Landlord as an indication of Prevailing
Market Base Rental Rate.
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(b) Whenever in this Lease (including, without limitation, Section
2.07 hereof and the exhibit related thereto) a provision calls for a rental rate
to be, or to be adjusted to, the Prevailing Market Base Rental Rate, the
Landlord and Tenant shall first attempt to mutually agree upon the same during
the thirty (30) day period which commences no sooner than one hundred eighty
(180) days prior to the date the adjustment to the Prevailing Market base
Rental Rate is to become effective; provided, that, in the event that Landlord
and Tenant are unable to agree upon the Prevailing Market Base Rental Rate
within said thirty (30) day period, the Landlord and Tenant shall each select,
within ten (10) days after the expiration of said thirty (30) day period, an
independent MAI appraiser to determine the Prevailing Market Base Rental Rate
and such appraiser shall be instructed to do so within thirty (30) days from
the date of his appointment. If the Prevailing Market Base Rental Rate as
determined by the respective appraisers are within five percent (5%) of each
other, the Prevailing Market Base Rental Rate shall be deemed to be the average
of the two rates; provided, that, if the Prevailing Market Base Rental Rate as
determined by the respective appraisers are more than five percent (5%) apart,
the two (2) appraisers shall jointly select a third independent MAI appraiser
within thirty (30) days after the first thirty (30) day period provided for
above whose determination of the Prevailing Market Base Rental Rate (which, in
all cases, shall be no lower than the lowest determination or higher than the
highest determination by the initial two (2) appraisers selected by Landlord
and Tenant) shall be conclusive and binding upon both Landlord and Tenant. All
appraisers selected hereunder shall be qualified, independent MAI (or any
successor institution thereto) appraisers who shall have been actively engaged
for the five (5) year period immediately preceding the date of their selection
in appraising rental value of leaseholds in the Galleria area of Houston, Texas
and immediately surrounding areas.
Landlord and Tenant shall each bear the cost of the appraiser selected
by it and shall share equally in the costs and expenses of the third appraiser,
if selected. If Landlord or Tenant shall fail to select an appraiser when
required to do so by the provisions hereof, the determination of the appraiser
selected by the other party shall, if made in good faith, be conclusive and
binding on both Landlord and Tenant.
(c) Whenever in this Lease a provision calls for a rental rate to
be, or be adjusted to, the Prevailing Market Base Rental Rate, Tenant shall
continue to pay Tenant's Forecast Additional Rental and Tenant's Additional
Rental with respect thereto. In the event the Prevailing Market Base Rental
Rate is determined to be a "gross" rate (i.e. the rate includes an allowance
for operating expenses), the Base Rental payable by Tenant during the First or
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Second Renewal Term, is the case may be, shall be equal to the applicable
Prevailing Market Base Rental Rate reduced by an amount equal to the Tenant's
Additional Rental for the calendar year immediately preceding the year in which
the Prevailing Market Base Rental Rate is being determined.
2.09 Access System Allowance.
Provided that Tenant is not in default under this Lease and no event
has occurred which with the giving of notice, the lapse of time or both could
ripen into a default) Landlord will reimburse the Tenant for Tenant's
out-of-pocket expenses incurred in connection with the design, construction and
installation of the Card-Key Access System up to a maximum of $25,000, such
sums to be paid to Tenant upon completion of installation of the same. All
other costs and expenses incurred in connection with the installation,
operation, maintenance and monitoring of the Card-Key Access System shall be
paid by and separately contracted for by Tenant. Tenant shall maintain
separate records as to such costs and expenses actually incurred and upon
completion of installation of the Card-Key Access System shall present the same
to Landlord for verification of the amounts due Tenant by Landlord under this
Section 2.09. "Card-Key Access System" shall mean and refer to the card-key
access system to be designed by or at the direction of Tenant (with approval
thereof by Landlord, which approval shall not be unreasonably withheld or
delayed) containing card-key access control to the Leased Premises, the
Building, the Property and the Tenant's Unassigned Parking Area (hereinafter
defined).
2.10 Expansion Options.
Tenant is hereby granted three (3) options to lease additional space
in the Building upon the terms and conditions set forth in Exhibit E attached
hereto and made part hereof for all purposes.
2.11 Right of First Refusal.
Tenant is hereby granted certain rights of first refusal in respect to
the leasing of space in the Building upon the terms and provisions set forth in
Exhibit F attached hereto and made part hereof for all purposes.
2.12 Architectural and Engineering Expense Allowance.
On the Commencement Date and provided Tenant is not then in default be
render, the Landlord will reimburse Tenant for Tenant's out-of-pocket expenses
paid to its architects and engineers in connection with the preparation of
working drawings, plans and specifications for construction of the leasehold
improvements to be
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constructed in accordance with exhibit C attached hereto up to a maximum amount
of $114,721.50.
2.13 Additional Adjustments to Base Rental.
As set forth in Exhibits D, E and F attached hereto, Base Rental may
be adjusted from time to time. Upon any such adjustments to Base Rental, the
parties shall, upon the request of either of them, execute and deliver an
amendment to this Lease reflecting such adjustment.
2.14 Initial Leasehold Improvements.
The Initial Leased Premises subject to this Lease (i.e., the
approximate 76,481 square feet of Net Rentable Area in the Building described
in Section 1.01 of this Lease) shall be improved in accordance with the Work
Letter Agreement attached hereto as Exhibit C. Landlord, at its sole cost and
expense (subject to the provisions of Exhibit C), shall construct or cause
Landlord's Contractor (as defined in Exhibit C) to construct the Landlord's
Work (as defined in Exhibit C). Tenant, at its sole cost and expense, shall be
responsible for constructing the Tenant's Work.
III
3.01 Services.
So long as Tenant is not in default hereunder, Landlord shall furnish
the following services to the Leased Premises during the Term of this Lease
("Building Standard Services"):
(a) Hot and cold water and common use rest rooms and toilets at
locations provided for general use and as reasonably deemed by Landlord to be
standard for the comfortable use and occupancy of the Building, such service to
be provided 24 hours per day, each day during the Term (and all renewals
thereof).
(b) Subject to curtailment as required by governmental laws, rules
or mandatory regulations, (i) central heat and air conditioning in season, at
such temperatures and in such amounts as are reasonably deemed by Landlord to
be standard for the comfortable use and occupancy of the Building, and on such
dates and at such times as are more particularly described on Exhibit G
attached hereto and incorporated herein and (ii) all necessary air handling;
such air handling shall be of the same quality as when Building heaters and
chillers are being used and in sufficient quantity to enable Tenant to operate
its independent heaters and chillers and shall be provided at all times when
Building Standard heating and chilling service is not being provided. As
reflected
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in the Working Drawings (as defined in Exhibit C) Landlord, as part of
Landlord's Work, shall install the independent heating and chiller equipment on
the roof of the Parking Facilities at or near the northwest corner thereof.
(c) Routine maintenance and electric lighting service for all
public areas and special service areas of the Building in the manner and to the
extent reasonably deemed by Landlord to be standard for the comfortable use and
occupancy of the Building provided, that electric lighting service shall be
provided on a 24 hour per day basis to public corridors and elevators to enable
Tenant access to those floors on which Tenant conducts continuous, 24 hours per
day operations.
(d) Janitor service shall be provided five (5) days per week,
exclusive of holidays, in a manner that Landlord reasonably deems to be
consistent with that provided in buildings similarly situated to the Building;
provided, however, no janitorial service shall se provided to Tenant's main
computer room or other restricted access areas within the Leased Premises and
if Tenant's floor coverings or other improvements are other than Building
Standard (such non Building Standard items to be identified as such by Landlord
during Landlord's review of the Tenant Working Drawings) Tenant shall pay one
hundred and fifteen percent (115%) of the actual additional cleaning cost, if
any, attributable thereto. At Tenant's request and upon payment to Landlord of
one hundred fifteen percent (115%) of the actual cost therefor, Landlord shall
provide additional janitorial services to the Leased Premises; provided,
however, Landlord shall provide off hours Janitorial Service (as defined in
Exhibit G hereto) upon the terms and conditions set forth in Exhibit G hereto.
(e) Access control services for the Property on a 24 hour per day
basis and otherwise comparable as to coverage, control and responsiveness (but
not necessarily as to means for accomplishing same) to other similarly situated
multi-tenant office buildings in the Galleria area of Houston, Texas; provided,
however, Landlord shall have no responsibility to prevent, and shall not be
liable to Tenant for, any liability or loss to Tenant, its agents, employees,
guests, invitees and visitors arising out of losses due to theft, burglary, or
damage or injury to persons or property caused by persons gaining access to the
Leased Premises or the Property, and Tenant hereby releases Landlord from all
liability for such losses, damages or injury.
(f) Sufficient electrical capacity on a 24 hour per day basis to
operate (i) incandescent lights, typewriters, calculating machines,
photocopying machines and other machines of similar low voltage electrical
consumption (120/208 volts), provided that the total rated electrical design
load for said lighting and machines
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of low electrical voltage shall not exceed one (1.00) watt per square foot of
Usable Area (defined below); and (ii) lighting and equipment of high voltage
electrical consumption (277/480 volts), provided that the total rated electrical
design load for said lighting and equipment of high electrical voltage shall
not exceed three and four-tenths (3.40) watts per square foot of Usable
Area (each such rated electrical design load to be hereinafter referred to as
the "Building Standard rated electrical design load"). Tenant shall be
allocated Tenant's pro rata share of the Building Standard circuits provided on
the floor(s) Tenant occupies. The term "Usable Area" shall mean the Net
Rentable Area within the Leased Premises minus all On-floor Common Areas and
General Common Areas included therein.
As reflected in the Working Drawings for the initial
construction of leasehold improvements to the Leased Premises, Tenant requires
electrical capacity in excess of the Building Standard electrical design load.
As reflected on the Working Drawings, the Tenant Operating Equipment (as
defined in Exhibit C here to) and certain other electrical facilities within
the Leased Premises shall be separately circuited and metered and Tenant shall
be billed for and pay the costs of electricity consumed by such Tenant
Equipment and other facilities on the basis set forth on Exhibit G attached
hereto. Landlord, in approving the Working Drawings, consents to such
additional consumption of electricity by Tenant and agrees to make available
throughout the Term, and any renewal thereof, sufficient electrical capacity
and facilities to operate the Tenant Operating Equipment and other facilities
circuited and metered through the separate Tenant meter.
With regard to any construction of leasehold improvements
other than the initial improvements to the Leased Premises, should Tenant's
total rated electrical design load exceed the Building Standard rated
electrical design load for either low or high voltage electrical consumption,
or if Tenant's electrical design requires low voltage or high voltage circuits
in excess of Tenant's share of the Building Standard circuits, Landlord may
elect, at its option, (and at Tenant's expense) to install one (1) additional
high voltage panel and/or one (1) additional low voltage panel with associated
feeders and equipment, based on a maximum of two (2) such additional panels
per floor for all tenants on the floor (which additional panels, feeders and
equipment shall be hereinafter referred to as the "additional electrical
equipment). If the additional electrical equipment is installed because
Tenant's low or high voltage rated electrical design load exceeds the applicable
Building Standard rated electrical design load, then a meter shall also be
added (at Tenant's expense) to measure the electricity used through the
additional electrical equipment. The design and installation of any additional
electrical equipment (or any related meter) required by Tenant shall be subject
to the prior
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approval of Landlord (which approval shall not be unreasonably withheld). All
expenses incurred by Landlord in connection with the review and approval of any
additional electrical equipment shall also be reimbursed to Landlord by Tenant.
If any of Tenant's electrical equipment requires conditioned air in excess of
Building Standard air conditioning, the same shall be installed by Landlord (on
Tenant's behalf), and Tenant shall pay all design,installation, metering and
operating costs relating thereto.
(g) All Building Standard fluorescent bulb replacement in all areas
and all incandescent bulb replacement in General Common Areas, Service Areas
and On-Floor Common Areas.
(h) Non-exclusive multiple cab passenger elevator service to the
Leased Premises during Building Operating Hours and at least one (1) cab
passenger elevator service to the Leased Premises twenty-four (24) hours per
day (all subject to temporary cessation for ordinary repair and maintenance and
during times when life safety systems override normal building operating
systems) with freight elevator service available at other times upon reasonable
prior notice to Landlord and at such times as have been scheduled with
Landlord.
To the extent the services described in subsection 3.01 (1),
(b), (c), (f) and (h) above require electricity and water supplied by public
utilities, Landlord's covenants thereunder shall only impose on Landlord the
obligation to use its good faith, reasonable efforts to cause the applicable
public utilities to furnish the same through facilities suitably located on the
Land. Tenant shall have the right (but not the obligation) to utilize one or
more portable electrical generators to provide electricity to the Leased
Premises during any interruption of such service. Failure by Landlord to
furnish the services described in this Section 3.01, or any cessation or
slow-down thereof, shall not render Landlord liable for damages to either
person or property, nor be construed as an eviction, actual or constructive, of
Tenant, nor (except as hereinafter provided) work an abatement of rent, nor
relieve Tenant from fulfillment of any covenant or agreement hereof. In
addition to the foregoing, should any of the equipment or machinery, for any
cause, fail to operate, or function properly, Tenant (except as expressly set
forth hereinbelow) shall have no claim for rebate of rent or damages on account
of an interruption in service occasioned thereby or resulting therefrom;
provided, however, Landlord agrees to use reasonable efforts to promptly repair
said equipment or machinery and to restore said services. Notwithstanding
anything herein to the contrary, with respect to the services described in
Subsection (a), (b), (c), (f) and (h) only, if such interruption in a service
described in said subsections (i) has not been caused by the acts or omissions
of Tenant, its agents, contractors or employees and continues for a
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period of five (5) consecutive business day, then Base Rental and all other
rentals under this Lease shall abate commencing on said fifth (5th) day in
proportion that the Leased Premises are unusable in substantially the same
manner as prior to said interruption until they are again so usable or (ii) has
not been caused by the acts or omissions of Tenant, its agents, contractors or
employees and continues for a period of one hundred twenty (120) consecutive
business days, then Tenant shall have the right and option (in addition to the
abatement described above) to terminate this Lease by providing Landlord
written notice of such election within thirty (30) business days following the
expiration of said one hundred twenty (120) consecutive business day period.
Upon the giving of such notice, Tenant shall vacate the Leased Premises within
one hundred twenty (120) days thereafter.
3.02 Key and Locks.
As described in Section 2.09 above, Tenant shall be responsible for
design, operation, maintenance and monitoring of the Card-Key Access System
including, without limitation, distribution to its employees of card-keys
therefor. Tenant agrees to provide Landlord a list of its employees who have
been issued card-keys and the card-key identification number for each of
them, which listing shall be updated by Tenant not less often than monthly
throughout the Term. No additional locks or access restraints shall be allowed
on any door of the Leased Premises without Landlord's permission. Upon
termination of this Lease, Tenant shall surrender to Landlord all such card keys
and keys to any other locks or doors entering or within the Leased Premises, the
Parking Facilities or the Property, and give to Landlord the explanation of the
combination of all locks for safes, safe cabinets and vault doors, if any, in
the Leased Premises.
3.03 Graphics, Building Directory Board and Name.
Landlord shall provide and install, at Tenant's expense,the signage
about the Building described in Exhibit H attached hereto, and, at Landlord's
expense, Landlord shall install all graphics, letters, and numerals at the
entrance to the Leased Premises and identification strips (based on the ratio
that the Net Rentable Area of the Leased Premises bears to the total Net
Rentable Area of the Building) containing a listing of Tenant's name and such
other information as Tenant shall reasonably require on the Building directory
board in the main lobby of the Building. All such letters and numerals shall be
in the Building standard graphics except that Landlord hereby approves Tenant's
installation of a directory board (in Building Standard size and form) in the
elevator lobby of each floor (other than the main lobby on the ground floor) in
the Building leased fully to Tenant. Tenant agrees that Landlord shall not be
liable for any inconvenience or
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damage occurring as a result of any error or omission in any directory or
graphics. No signs, numerals, letters or other graphics shall be used or
permitted on the exterior of, or may be visible from outside, the Leased
Premises, unless approved in writing by Landlord. Upon the Commencement Date
for the initial Leased Premises, the Building shall be renamed as the
"Telecheck Plaza" and appropriate changes shall be made to the Building
directory reflecting such change. Landlord shall have the right to change the
Building name if at any time during the Term, or any renewal, the named Tenant
herein (i.e., Payment Services Company) is actually occupying less than 20,000
square feet of Net Rentable Area.
Landlord covenants and agrees that so long as this Lease shall remain
in effect, Landlord shall not permit (i) any signage to be placed on the outside
of the Building other than Tenant's sign to be placed thereon or (ii) any
signage to be placed on the outside of the Building Annex (located at the
northeast corner of the Land) other than signage for a commercial or retail
banking facility located on the east, north and south wall of the Building
Annex.
3.04 Parking.
(a) Landlord has advised Tenant that Landlord plans to re-stripe
the Parking Facilities in an attempt to provide additional spaces for the
parking of automobiles herein. Landlord agrees to provide for the Term 358
parking permits for the parking of automobiles in the Parking Facilities
designated by Landlord; provided, however, only forty (40) of the parking
permits will be on a reserved basis and shall be those parking spaces in the
basement level of the Parking Facilities shown on Exhibit J attached hereto and
made part hereof. The foregoing number of parking permits to be provided to
Tenant is based upon a presumed ratio of approximately 4.68 spaces per 1000
square feet of Net Rentable Area in the Building, a ratio Landlord hopes to
achieve upon re-stripping the Parking Facilities. In the event the ratio (after
re-stripping) is less than 4.68 per 1000 square feet of Net Rentable Area in
the Building, the number of permits to be provided Tenant hereunder shall be
adjusted downward (but in no event below 3.8 spaces per 1000 square feet of Net
Rentable Area in the Leased premises) so that tenant is initially provided with
its allocable share (based upon the number of square feet of Net Rentable Area
in the Leased Premises) thereof; provided, however, no such downward adjustment
shall affect Tenant's rights to rent additional unassigned parking permits as
hereafter provided for in this Section 3.04(a). The areas (the "Tenant's
Unassigned Parking Area") in the Parking Facilities for vehicles parked with
the unassigned, non-reserved parking permits rented by Tenant shall be
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distinguished from other areas in the Parking Facilities by one or more
entry/exit gates constructed by Tenant as part of the Card-Key Access System.
Access to and from these areas shall require use of the card keys used for the
Card-Key Access System. The Tenant's Unassigned Parking Area shall be the first
318 parking spaces in the Parking Facilities commencing at the uppermost
parking level in the Parking facilities and counting downward towards the lower
levels of the parking facilities. The entry/exit gate shall be located within
the Parking Facilities so that behind the same there is an aggregate of 318
parking spaces. To the extent Tenant leases additional spaces during the Term,
the entry/exit gate will be relocated (downward in the Parking Facilities), at
Tenant's cost and expense, so that behind the same there is a parking space for
each unassigned, non-reserved parking permit leased by Tenant pursuant hereto.
Upon presentation to Landlord of evidence reasonably satisfactory to Landlord
that the then number of parking permits leased by Tenant hereunder is
inadequate to accommodate Tenant's actual parking needs, Tenant shall be
entitled to rent additional unassigned permits (up to a maximum of 5.0 parking
permits for each 1,000 square feet of Net Rentable Area in the Leased
Premises). Irrespective of the presentation of such reasonably satisfactory
evidence, Landlord shall nonetheless have no obligation to provide Tenant
additional unassigned permits if subsequent thereto there remain insufficient
parking spaces in the Parking Facilities available for rent to provide 3.5
parking spaces for each 1,000 square feet of Net Rentable Area in the Building
not then being leased by Tenant pursuant to this Lease. Landlord covenants and
agrees that in connection with leasing of space in the Building to third
parties after the date hereof, the average number of parking permits rented to
such tenants shall not exceed 3.5 spaces per 1,000 square feet of Net Rentable
Area in the Building covered by such leases unless Landlord makes provision for
terminating the rental arrangement therefor in connection with fulfilling its
agreements hereunder. In no event, however, shall Tenant ever be entitled to
rent (nor shall Landlord be obligated to provide) parking spaces in excess of
the capacity of the Parking Facilities. Notwithstanding any contrary provisions
hereof, the rights of Tenant hereunder shall terminate or expire simultaneously
with the termination, cancellation or expiration of the Lease. Tenant shall
provide to Landlord such information and documentation evidencing the number of
Tenant's full and part-time employees located within the Leased Premises, as
Landlord shall reasonably request from time to time.
(b) There shall be no rent payable for Parking for the first four
(4) Lease Years. Thereafter during the initial Term, rent for the unassigned
parking spaces shall be charged in the amounts set forth below for the number
of spaces which is equal to the greater of (x) the Average Peak Number (as
determined below) minus 100 and (y) 3.8 spaces per 1,000 square feet of Net
Rentable
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Area within the Leased Premises. The Average Peak Number for each calendar
month through the Term shall be determined as follows: Landlord or the Parking
Facilities operator shall determine, pursuant to a mechanism reasonably
acceptable to Landlord and Tenant, for each hour between 10:00 a.m. and 3:00
p.m. on Monday through Friday the number of Tenant parking permit holders that
are parked within the Parking Facilities during such hour or any portion
thereof. The highest number of parking permit holders that are parked for any
hour between 10:00 a.m. and 3:00 p.m. shall be that day's Peak Number. The
average of the ten (10) highest Peak Numbers for a calendar month shall be that
calendar month's Average Peak Number. Tenant shall pay rent as to all 40
reserved parking spaces at all times during Lease Years 5-10 (and during any
Renewal Term).
The monthly rent for each of the parking spaces (both reserved
and unreserved) for which Tenant is obligated to pay rent pursuant to the
immediately preceding paragraph hereof for the Lease Years set forth in Column
A below shall be applicable amounts set forth in Column and Column C,
respectively:
Column A Column B Column C
(Lease Year) (Monthly Rent for each (Monthly Rent for each
unassigned Space) reserved Space)
5 $30.00 $50.00
6 42.00 70.00
7 42.00 70.00
8 42.00 70.00
9 42.00 70,00
10 42.00 70.00
The monthly rent for each of the parking spaces (both reserved and
unreserved) for which Tenant is obligated to pay rent during the First Renewal
Term and the Second Renewal Term (as defined in Exhibit E) shall be the
prevailing market monthly rate being charged by comparable garages in the
Galleria area of Houston, Texas and shall be determined in accordance with the
process for determination of Prevailing Market Base Rental Rate.
Said rentals shall be due and payable in advance on the first day of
each calendar month beginning with the first day of the first full calendar
month of the fifth (5th) Lease Year; provided, that a pro rata portion thereof
shall be due and payable for any partial month following the first day of the
fifth (5th) Lease Year to, but not including, the first day of said first
calendar month after the first day of the fifth (5th) Lease Year, which payment
shall be due on the first day of the fifth (5th) Lease Year.
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(c) In the event the parking spaces for the parking permits
(collectively, the "Parking Permits") which Landlord is obligated to provide
are not available to Tenant during any portion of the Term for any reason other
than the acts or omissions of Tenant, its agents, contractors or employees,
then Landlord shall provide Tenant a refund of any parking charges actually
paid for periods during which Parking Permits therefor are not available.
Further, in such event, if Landlord is unable to provide Tenant reasonably
convenient alternate parking facilities (Tenant hereby approving as alternate
parking facilities the garage located adjacent to the 5333 Westheimer
Building) within one hundred twenty (120) days after the Parking Permits become
unavailable, Tenant shall have the right and option to terminate this Lease by
providing written notice to Landlord of such election within ten (10) business
days after the expiration of said one hundred twenty (120) day period whereupon
this Lease shall terminate and Tenant shall vacate the Leased Premises within
one hundred twenty (120) days thereafter.
(d) Landlord may make, modify and enforce reasonable rules and
regulations relating to the parking of vehicles in the Parking Facilities
(including, without limitation, designating areas in the Parking Facilities
exclusively for the use of those persons utilizing unassigned permits under
this Lease), and Tenant agrees to abide by such rules and regulations, so long
as such rules and regulations are applied equally (or, considering the special
parking privileges granted to Tenant, as equally as possible) to all users of
the Parking Facilities. Tenant shall indemnify and hold harmless Landlord from
and against all claims, losses, liabilities, damages, costs and expenses
(including, but not limited to, attorneys' fees and court costs) arising or
alleged to arise out of Tenant's use of any such parking permits or the use
thereof by Tenant's personnel, agents, employees, contractors, guests or
invitees, unless resulting solely from Landlord's gross negligence.
(e) The number of parking permits and the charges therefor as described
in Section 3.04 (a) through (d) relates solely to the Tenant's parking
privileges in respect to the initial Leased Premises subject to this Lease. In
connection with the leasing of additional space in the Building pursuant to
Section 2.10 or Section 2.11, parking shall be allocated on the applicable
ratio of parking spaces per 1000 square feet of Net Rentable Area in effect in
respect to the Parking Facilities for tenants generally, in the case of
additional space leased pursuant to Section 2.10 and, in respect to space
leased pursuant to Section 2.11, in accordance with the Availability Notice in
respect thereto, subject, in each case, to Tenant's rights to rent additional
unassigned parking permits as provided in Section 3.04(a) above. The charges
therefor shall, in the case of additional space leased pursuant to Section
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2.10, be the prevailing market monthly rate being charged by comparable parking
garages in the Galleria area of Houston, Texas, or, in the case of space leased
pursuant to Section 2.11, as set forth in the Availability Notice.
IV
4.01 Care of Leased Premises.
Tenant shall not commit or allow to be committed by Tenant's
employees, agents, visitors invitees or contractors, any waste or damage to any
portion of the Leased Premises, or the Property. Upon the expiration or any
earlier termination of this Lease, Tenant shall surrender the Leased Premises
to Landlord in as good condition as existed on the date of possession by
Tenant, ordinary wear and tear, repairs required to be performed by Landlord
under this Lease, condemnation damage, and damage from casualties not caused by
the acts or omissions of Tenant, its agents, contractors or employees excepted.
Upon such expiration or termination of this Lease, Landlord shall have the
right to re-enter and resume possession of the Leased Premises immediately.
4.02 Entry for Repairs and Inspection.
Tenant shall permit Landlord and its contractors, agents or
representatives to enter into and upon any part of the Leased Premises (except
Tenant's main computer room) during reasonable hours upon (except in
emergencies) reasonable notice to Tenant to inspect or clean the same, to the
extent authorized or required to do so by the other provisions of this Lease,
to make repairs, alterations or additions thereto, and, upon reasonable prior
notice to Tenant, for the purpose of showing the same to prospective tenants
(but only during the last 12 months of the Term) or purchasers and Tenant shall
not be entitled to any abatement or reduction of rent by reason thereof.
Landlord shall use its reasonable efforts not to interfere materially with the
operation of Tenant's business during any such entry. Notwithstanding the
foregoing, Landlord is hereby authorized (without the necessity of further
notice to Tenant) to enter the storage room located in the Basement Space from
time to time for the purpose of gaining access to the adjacent mechanical room
located in the Basement.
4.03 Nuisance.
Tenant shall conduct its business and use its diligent, good faith
efforts to control its agents, employees and contractors and, while they are in
the Leased Premises, its invitees and visitors in such a manner as not to
create any nuisance, or interfere with, annoy or disturb any other tenant or
Landlord in its use, enjoyment or operation of the Property.
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4.04 Laws and Regulations; Rules of Building.
Tenant shall comply with, and Tenant shall cause it employees,
contractors and agents to comply with, and shall use its best efforts to cause
its visitors and invitees to comply with, all laws, ordinances, orders, rules
and regulations of all state, federal, municipal and other governmental or
judicial agencies or bodies relating to the use, condition (other than the
condition of any structural components of the Building) or occupancy of the
Leased Premises, and with the rules of the Building reasonably adopted and
altered by Landlord from time to time for the safety, care and cleanliness of
the Leased Premises and Building and for the preservation of good order
therein. The initial rules of the Building are attached hereto and incorporated
herein as Exhibit F. Landlord shall employ its good faith efforts to enforce
such rules in a consistent and even-handed manner as to all tenants of the
Building.
4.05 Legal Use and Violations of Insurance Coverage; Hazardous Materials
(a) Tenant shall not occupy or use the Leased Premises, or permit
any portion of the Leased Premises to be occupied or used, for any business or
purpose which is, directly or indirectly, forbidden by law, ordinance, or
governmental or municipal regulation or order, or which may be dangerous to
life, limb or property, or permit the maintenance of any public or private
nuisance, or do or permit any act or thing which may disturb the quiet
enjoyment of any other tenant of the Building, or permit anything to be done
which would in any way cause the cancellation of fire, liability, or any other
insurance coverage on the Property or its contents. To the extent Tenant's
occupancy or use of the Leased Premises results in an increase in the rate of
fire, liability or any other insurance coverage on the Property or its contents,
the increased charges shall be paid by Tenant as provided in Section 6.04
below.
(b) Tenant shall not (either with or without negligence) cause or
permit the escape, disposal or release of any 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 Property 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
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U.S.C. Section 9601 et seq., the Resource conservation and Recovery Act, as
amended, 42 U.S.C., Section 6901 et seq., the Texas Solid Waste Disposal Act
and 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 due
to the act or omissions of Tenant or any of its agents or employees, then the
reasonable costs thereof shall be reimbursed by Tenant to Landlord upon demand
as additional charges if such requirement applies to the Property. 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 materials on the Property. In all
events, Tenant shall indemnify Landlord in the manner elsewhere provided in
this Lease from any release or storage of hazardous materials in the Leased
Premises occurring while Tenant is in possession, or elsewhere in or about the
Property if caused by Tenant or persons acting under Tenant. These covenants
shall survive the expiration or earlier termination of this Lease.
(c) Landlord covenants and agrees to include the provisions of
Section 4.05(b) (or the substantial equivalent thereof) in each lease hereafter
entered into by Landlord and any third party for space in the Building.
Further, Landlord shall indemnify Tenant from any release or storage of
hazardous materials in the Building or elsewhere about the Property if caused
by Landlord or persons acting at the direction of Landlord (other than Tenant,
any other tenants in the Building or their respective contractors, agents or
employees). Landlord's indemnity, however, shall not extend to asbestos of the
type and nature of that reflected in the McCelland Reports so long as the same
is maintained in its present form or is abated in accordance with applicable
law.
4.06 Landlord's Compliance with Laws.
Landlord shall, at its cost and expense (subject to Tenant's
reimbursement for Tenant's share of Operating Expenses to the extent the same
comprise operating costs) comply with all laws, ordinances, rules, orders and
regulations (state, federal, municipal and other agencies or bodies having any
jurisdiction thereof) relating to the design, construction, use and operation
of the Property, but not the use of any of the premises therein by any tenants.
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V
5.01 Leasehold Improvements.
(a) Tenant hereby agrees that the provisions of the Work Letter
Agreement shall govern the construction of Tenant's initial leasehold
improvements in the initial Leased Premises.
(b) Notwithstanding any language contained herein or in the Work
Letter Agreement to the contrary, if for any reason the Completion Date (as
defined in Exhibit C) has not been achieved on or before one hundred thirty
(130) days from the Delivery Date (as defined in Section 7.07 below) for any
reason other than Landlord's Delay (as defined in the Work Letter Agreement),
Landlord shall not be liable or responsible for any claims, damages or
liabilities in connection therewith or by reason thereof. In the event,
however, that the Completion Date has not been achieved on or before the
expiration of one (1) year from the Delivery Date due to reasons other than
Tenant Delays (as defined in Exhibit C hereto), then Tenant may elect to
terminate this Lease by providing written notice to such effect to Landlord on
or before the expiration of thirteen (13) months from the Delivery Date hereof
in which event neither party hereto shall have any further rights, duties or
obligations one to the other hereunder.
(c) Except as otherwise expressly permitted by the terms of this
Lease, Tenant shall not make or allow to be made any alterations or physical
additions in or to the Leased Premises, or place safes, vaults or other heavy
furniture or equipment within the Leased Premises, without first obtaining the
written consent of Landlord, including Landlord's written approval of Tenant's
contractor(s) and of the plans, working drawings and specifications relating
thereto, such approval not to be unreasonably withheld or delayed. Tenant shall
deliver to Landlord a copy of the "as built" plans and specifications for all
alterations or physical additions so made in or to the Leased Premises.
(d) All alterations, physical additions, or improvements in or
affixed to the Leased Premises (including fixtures) shall become the property
of Landlord upon the expiration or any earlier termination of this Lease;
provided, however, that this subsection shall not apply to Tenant's trade
fixtures, or movable equipment or furniture.
(e) Tenant shall indemnify, defend and hold Landlord harmless from
and against all costs (including reasonable attorneys' fees and costs of suit),
losses, liabilities, or causes of action arising out of or relating to any
alterations, additions or improvements made by Tenant to the Leased Premises,
including, but not limited to, any mechanics' or materialmen's liens asserted
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in connection therewith, which indemnification obligations shall survive any
termination or cancellation of this Lease.
(f) If any mechanic's, materialmen's or other liens are filed
against any portion of the Building, upon Landlord's interest therein or upon
Tenant's leasehold interests by reason of acts or omissions by Tenant or
Tenant's agents, contractors or employees, or because of a claim against Tenant
or Tenant's agents, contractors or employees, Tenant shall cause the same to
be canceled or discharged of record by bond or otherwise within ten (10) days
after notice by Landlord. If Tenant fails to cancel or discharge said lien or
liens within said ten-day period, Landlord may, at its sole option, cancel or
discharge the same, and upon Landlord's demand, Tenant shall promptly reimburse
Landlord for all costs incurred in canceling or discharging such lien or liens.
Tenant will pay, protect and indemnify Landlord, within ten (10) days after
demand therefor, from and against any and all liabilities, losses, claims,
damages, costs and expenses, including attorneys' fees, incurred by Landlord in
connection with the filing of any lien and/or removal of same. No work which
Landlord permits Tenant to perform in the Leased Premises shall be deemed to be
for the immediate use and benefit of Landlord, and no mechanic's, materialmen's
or other liens shall validly attach to the estate of Landlord by reason of
Landlord's consent to such work.
(g) Tenant may remove from the Leased Premises and dispose of as
it deems appropriate all its trade fixtures, movable equipment, computers,
furniture and furnishings installed at its own cost and expense (which shall
include, without limitation, all computer room equipment (other than the raised
flooring, conduits, HVAC facilities and equipment therein), portable computers,
tables, chairs, desks, file cabinets, equipment (other than conduits and
conductors within walls and ceiling spaces push and pull buttons, motion
detectors, smoke detectors and door contacts), including, without limitation,
control cabinets, cameras, and similar items of personalty, at any time or
times provided: (i) such removal must be made not later than the termination of
this Lease and must be performed in such a manner as to minimize to the extent
reasonably possible any interference with or disturbance of other tenants or
occupancy of the Building or any work then being performed by Landlord in or on
the Building (and Tenant and Landlord shall coordinate any work and space being
vacated); (ii) Tenant is not in default in the performance or observance of any
obligation of covenant of this Lease at the time of such removal; and (iii)
such removal may be and is effected without damage to the Leased Premises,
Building or Property, or, to the extent damage is caused thereby, Tenant
promptly repairs at its expense all damage caused by such removal and pays all
costs of clearing and removing of debris caused by or resulting from such
removal and/or repair work,
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which obligations, covenants and agreements of Tenant in respect hereto shall
expressly survive any termination of this Lease.
5.02 Repairs by Landlord.
Landlord shall make (or cause to be made) all repairs, alterations or
additions that affect the Property's structural components or the Property's
mechanical, electrical and plumbing systems provided, however, Landlord's
repair of Tenant's independent air handling equipment, heaters and chillers and
the Card-Key Access System shall be at Tenant's sole cost and expense. In the
event of any damage to such components or systems caused by the act or omission
of Tenant or Tenant's agents, contractors, employees, invitees (other than
Landlord, its agents, contractors or employees) or visitors, the cost of repair
or restoration of such damage shall be paid for solely by Tenant in an amount
equal to Landlord's reasonable costs plus fifteen percent (15%) for
administrative cost recovery. Landlord shall make such repairs to Building
Standard improvements as may be deemed necessary by Landlord for normal
maintenance operations and Landlord shall not otherwise be obligated to make
improvements to, or repairs of, the Leased Premises; provided, however,
Landlord shall, at Tenant's expense, make such improvements to, or repairs of,
the Leased Premises as Tenant shall request in writing, at a cost equal to the
costs incurred by Landlord in such maintenance or such repairs, plus an
additional charge of fifteen percent (15%) for administrative cost recovery.
Subject to the provisions of Article VI and Section 8.04 of this Lease, if
Landlord fails to commence any repairs within the Leased Premises required to
be performed by Landlord under this Section 5.02 within thirty (30) days after
written notice from Tenant (except in the case of an emergency, in which event
no prior notice shall be required) and thereafter continuously and diligently
proceed with such repair work until completion, Tenant may make such repairs
and credit against Base Rental the direct costs reasonably and necessarily
incurred by Tenant in making such repairs, plus an additional charge of fifteen
percent (15%) for administrative cost recovery.
5.03 Repairs by Tenant.
Subject to Section 5.02 and Article VI, Tenant shall at its own cost
and expense, keep the Leased Premises and all leasehold improvements, Tenant's
independent air handling equipment, heaters and chillers and the Card-Key
Access System in a condition similar to the condition as of the Commencement
Date, normal wear and tear excepted and shall perform all repairs and
improvements required by any governmental law, ordination, rule or regulation.
If Tenant fails to commence any repairs to the Leased Premises, leasehold
improvements and other items within thirty (30) days after written notice from
Landlord to Tenant and thereafter continuously and
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diligently proceed with such repair work until completion in accordance with
all applicable law, Landlord may, at its option, make such repairs or any
replacements deemed necessary by Landlord, and Tenant shall pay to Landlord on
demand Landlord's cost thereof plus a charge of fifteen percent (15%) for
administration cost recovery.
VI
6.01 Condemnation.
If all or substantially all of the Leased Premises, or such portion of
the Leased Premises or the Property as would render, in Landlord's or Tenant's
reasonable judgment, the continuance of Tenant's business from the Leased
Premises impracticable, shall be permanently taken or condemned for any public
purpose, then this Lease, at the option of either party upon the giving of
written notice to the other within ten (10) days from the date of such
condemnation or taking, shall forthwith cease and terminate. If less than all
or substantially all of the Leased Premises or any portion of the Property
shall be permanently taken or condemned for any public purpose to the extent
that would in Landlord's or Tenant's reasonable judgment, render continuing
this Lease or the conduct of Tenant's business from the Leased Premises
impracticable, then either party shall have the option of terminating this
Lease by written notice to the other within ten (10) days from the date of such
condemnation or taking. If any portion of the Building or Property not
comprising any portion of the Leased Premises shall be taken or condemned for
any public purpose to such an extent, in Landlord's reasonable judgment, as to
render the continued operation of the Property impracticable, this Lease, at
the option of Landlord upon the giving of written notice to the Tenant within
ten (10) days from the date of such condemnation or taking, shall forthwith
cease and terminate. If this Lease is terminated as provided above, this Lease
shall cease and expire as if the date of transfer of possession of the Leased
Premises, the Property, or any portion thereof, was the expiration date of this
Lease. Notwithstanding anything to the contrary contained herein, Landlords's
obligation to repair such damage is subject to funds being made available to
Landlord therefor by Landlord's Mortgagee (hereinafter defined). In the event
that this Lease is not terminated by Landlord or Tenant as aforesaid, Tenant
shall pay the Base Rental and all other rentals up to the date of transfer of
possession of such portion of the Leased Premises so taken or condemned and
this Lease shall thereupon cease and terminate with respect to such portion of
the Leased Premises so taken or condemned as if the date of transfer of
possession of the Leased Premises was the expiration date of the Term of this
Lease relating to such portion of the Leased Premises. Thereafter the Base
Rental, Tenant's Forecast Additional Rental and Tenant's
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Additional Rental Adjustment shall be adjusted on a pro rata, net rentable
square foot basis. In the event of any condemnation or taking and this Lease is
not so terminated, Landlord shall promptly repair the Leased Premises or the
Property, as the case may be, to Building Standard condition (with Building
Standard materials) so that the remaining portion of the Leased Premises or
Property, as the case may be, shall constitute an architectural unit, fit for
Tenant's occupancy and business; provided, however, that Landlord's obligation
to repair hereunder shall be limited to the extent of the net proceeds made
available to Landlord for such repair from any such condemnation or taking. In
the event of any temporary taking or condemnation for any public purpose of the
Leased Premises or any portion thereof, then this Lease shall continue in full
force and effect except that Base Rental, Tenant's Forecast Additional rental,
and Tenant's Additional Rental shall be adjusted on a pro rata net rentable
square foot basis for the period of time that the Leased Premises are so taken
as of the date of transfer of possession of the Leased Premises and Landlord
shall be under no obligation to make any repairs or alterations. In the event
of any condemnation or taking of the Leased Premises, Tenant hereby assigns to
Landlord the value of all or any portion of the unexpired Term of this Lease
and all leasehold improvements and Tenant may not assert a claim for a
condemnation award therefor; provided, however, Tenant may pursue a separate
attempt to recover an award or compensation against or from the condemning
authority for (i) the value of any fixtures, furniture, furnishings, Tenant
Work and other personal property which were condemned, but which under the
terms of this Lease Tenant is permitted to remove at the end of the Term of
this Lease, (ii) relocation and moving expenses, and (iii) compensation for
loss to Tenant's business; provided that Tenant's pursuit of such claim or
award given as a result thereof, does not delay the delivery of or amount of
award to Landlord.
6.02 Damages from Certain Causes.
Except as otherwise expressly provided for in this Lease, Landlord
shall not be liable or responsible to Tenant or any of its employees, guests,
invitees or agents for any loss or damage to any property or injury to any
person occasioned by theft, fire, act of God, public enemy, riot, strike,
insurrection, trespasser, other tenants in the Building, war, requisition or
order of governmental body or authority, court order or injunction, or any
cause beyond Landlord's reasonable control, or for any damage or inconvenience
which may arise through repair or alteration of any part of the Property and
Tenant hereby forever relinquishes and acquits Landlord from any and all
liability therefor, except in the case of the gross negligence or intentional
misconduct of Landlord.
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6.03 Casualty Clause.
(a) In the event any portion of the Leased Premises, the Building
or any portion of the General Common Areas is damaged by fire or other
casualty, earthquake, flood or by any other cause of any kind or nature
(hereinafter collectively referred to as the "damaged property") and the
damaged property can, in the reasonable written opinion of the Landlord's
architect, be repaired within one hundred eighty (180) calendar days from the
date of notice of Landlord's architect's opinion (such notice to be given no
later than thirty (30) days following the occurrence of the damage), then, the
Lease shall not be terminated and Landlord shall proceed to rebuild or restore
the damaged property to substantially the same condition as existed on the
Completion Date, subject to subsection (d) hereof; provided, however,
Landlord's obligation to repair is subject to funds being made available to
Landlord therefor by Landlord's Mortgagee.
(b) If in the reasonable written opinion of Landlord's architect,
damage to the damaged property cannot be repaired within one hundred eighty
days (180) from the notice of Landlord's architect's opinion (such notice to be
given no later than thirty (30) days following the occurrence of the damage),
then both Landlord and Tenant shall have the right to terminate this Lease by
notifying the other party in writing of such termination within twenty (20)
days of receipt of Landlord's architect's opinion.
(c) Notwithstanding any language herein to the contrary, if at the
time of any such damage, less than one (1) year remains in the Term of this
Lease or in any renewal period, then both Landlord and Tenant shall have the
right to terminate this Lease.
(d) Notwithstanding any language contained herein to the contrary,
in the event this Lease is not terminated as provided hereunder, (i) Landlord
shall be obligated to rebuild or restore the damaged property only to the
extent of the net insurance proceeds available to Landlord for the purpose of
rebuilding and restoration, (ii) if the damaged property is all or any portion
of the Leased Premises, Landlord shall be obligated to rebuild or restore the
damaged property only to substantially the same condition existing as of the
Completion Date provided that Tenant shall bear all costs and expenses,
including without limitation, rentals that are lost due to extended
construction time, in excess of any net insurance proceeds available to
Landlord for the purpose of rebuilding or restoration; and (iii) Tenant shall
be entitled to a pro rata abatement of Base Rental, Tenant's Forecast
Additional Rental, rent paid for parking and Tenant's Additional Rental during
the period of time the Leased Premises, or any portion thereof, are
untenantable due to such damage. At Tenant's election (which shall be made in
writing to Landlord), Landlord agrees to obtain and
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maintain casualty insurance in such amounts as may be necessary to offset the
cost of restoration of and repair to the Leased Premises and items that are
part of the Landlord's Work to substantially the same condition as exists on
the Completion Date provided that Tenant pays for the increased insurance
premiums (i.e. the additional premiums incurred by Landlord in obtaining such
additional casualty insurance) as a separate billed item to Tenant. In the
event of any termination of this Lease under this Section 6.03, this Lease
shall cease and terminate as if the date of such damage was the expiration date
of the Term of this Lease. Notwithstanding any contrary language in this
Section 6.03, if the Leased Premises, the Property, or any portion thereof
shall be damaged through any act or omission of Tenant or its agents,
employees, guests or invitees, the negligence or willful misconduct of Tenant,
such damage shall be repaired by Landlord at the sole expense of Tenant and
rent shall continue hereunder unabated.
6.04 Property Insurance.
Landlord shall maintain standard fire and extended coverage (including
water damage and sprinkler leakage) insurance on the Property (excluding
Tenant's Work) and on all Building Standard improvements. Said insurance shall
be maintained with an insurance company authorized to do business in Texas with
a Best's Insurance Rating Guide (or the equivalent thereof) of B+VIII or
better, in amounts desired by Landlord (but not less than full replacement
value of the Building and Parking Facilities [excluding foundation and
footings]) and payments for losses thereunder shall be made solely to Landlord,
subject to the rights of Landlord's Mortgagee. Tenant shall maintain at its
expense standard fire and extended coverage insurance on all its personal
property, including removable trade fixtures, located in the Leased Premises
and on Tenant's Work and all other additions and improvements (including
fixtures) made by Tenant and not required to be insured by Landlord above. If
the annual premiums to be paid by Landlord shall exceed the standard rates
because of Tenant's operations within, or contents of, the Leased Premises or
because the improvements to the Leased Premises are in excess of Building
Standard improvements, Tenant shall promptly pay the excess amount of the
premium upon request by Landlord, which request shall be accompanied by a
written statement from Landlord's insurance carrier verifying such increase and
the reasons therefor, (and if necessary, Landlord may allocate the insurance
costs of the Property to give effect to this sentence). Upon the request of
Landlord, a duly executed certificate of insurance, reflecting Tenant's
maintenance of the insurance required under this Section 6.04 and Section 6.05,
shall be delivered to Landlord.
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6.05 Liability Insurance.
Landlord (in respect to the Property) and Tenant (in respect to the
Leased Premises) shall each, at their respective cost and expense, maintain a
policy or policies of comprehensive general liability insurance with the
premiums thereon fully paid on or before the due date, issued by and binding
upon a solvent insurance company authorized to transact business in Texas. Such
insurance shall afford minimum protection (which may be affected by primary
and/or excess coverage) of not less than $5,000,000.00 for bodily injury or
death in any one occurrence and of not less than $2,000,000.00 for property
damage in any one occurrence; provided, however, Tenant shall carry such
greater limits of coverage as Landlord may reasonably request from time to time
50 long as Landlord maintains similar limits of coverage.
6.06 Hold Harmless.
Tenant shall indemnify, defend and hold harmless Landlord of, from and
against any and all claims, demands, acts, damages, losses, costs, expenses,
liabilities and judgments suffered by, recovered from and asserted against
Landlord (including reasonable attorneys' fees) resulting from the negligence
of Tenant (but not from the negligence of Landlord) within the Leased Premises
during the Term of this Lease, or any extension or renewal thereof. Landlord
shall indemnify, defend and hold harmless Tenant of, from and against any and
all claims, demands, acts, damages, losses, costs, expenses, liabilities and
judgments suffered by, recovered from and asserted against Tenant (including
reasonable attorneys' fees) resulting from the negligence of Landlord (but not
from the negligence of Tenant) with respect to the Property and the Building
(exclusive of the Leased Premises) during the Term of this Lease, or any
extension or renewal thereof.
6.07 Waiver of Subrogation Rights.
Anything in this Lease to the contrary notwithstanding, Landlord and
Tenant each hereby waives any and all rights of recovery, claim, action or
cause of action, against the other, its agents, servants, partners,
shareholders, officers or employees, for any loss or damage (including the
amount of any deductible attributable thereto) that may occur to the Leased
Premises, the Property or any improvements thereto or thereon, or any personal
property of such party therein or thereon, by reason of fire, the elements, or
any other cause which is required to be insured against under the terms of the
standard fire and extended coverage insurance policies referred to in Section
6.04 hereof, regardless of cause or origin, including negligence of the other
party hereto, its agents, officers, partners, shareholders, servants or
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employees, and each party covenants that no insurer shall hold any right of
subrogation against such other party.
VII
7.01 Default and Remedies.
(a) The occurrence of any of the following shall constitute events
of default:
(1) Base Rental, Tenant's Forecast Additional Rental,
Tenant's Additional Rental Adjustment, or any other sum of money
payable under this Lease is not paid when due;
(2) Tenant's interest in this Lease or the Leased
Premises shall be subjected to any attachment, levy, or sale pursuant
to any order or decree entered against Tenant in any legal proceeding
and such order or decree shall not be vacated within thirty (30) days
of entry thereof; or
(3) Tenant breaches or fails to comply with any term,
provision, condition, or covenant of this Lease, other than as
described in Section 7.01(a)(1), or with any of the Rules and
Regulations now or hereafter established to govern the operation of
the Building or Property.
(4) Tenant shall file a petition under any section or
chapter of the Bankruptcy Code or under any similar law or statute of
the United States or any State thereof, or Tenant shall be adjudged
bankrupt or insolvent in proceedings filed against Tenant thereunder;
or a petition or answer proposing the adjudication of Tenant as a
bankrupt or its reorganization under any present or future federal or
state bankruptcy or similar law shall be filed in any court and such
petition or answer shall not be discharged or denied within ninety
(90) days after the filing thereof.
(5) A receiver or trustee shall be appointed for all or
substantially all of the assets of Tenant or any of Tenant's property
located thereon in any proceeding brought by Tenant, or any such
receiver or trustee shall be appointed in any proceeding brought
against Tenant and shall not be discharged within ninety (90) days
after such appointment or Tenant shall consent to or acquiesce in such
appointment.
(b) Upon the occurrence of any event of default and (i) if the
event of default described in Section 7.01(a)(1) is not cured within ten (10)
days after written notice from Landlord of
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such default, or (ii) the events of default described in Section 7.01(a)(3) is
not cured within thirty (30) days after written notice from Landlord of such
default (or,if the nature of the default is such that it cannot reasonably be
expected to be cured within thirty [30] days, then such curative period shall
be for such reasonable time [not to exceed 90 days] after notice so long as
Tenant promptly commences and diligently and continuously pursues such curative
efforts in good faith), or (iii) the event of default described in any of
Sections 7.01(a)(2), (4) and (5) is not cured immediately, the Landlord shall
have the option to do and perform any one or more of the following in addition
to, and not in limitation of, any other remedy or right permitted it by law or
in equity or by this Lease:
(1) Terminate this Lease by giving notice thereof to
Tenant in which event Tenant shall immediately surrender the Leased
Premises to Landlord and if Tenant fails to do so Landlord may,
without prejudice to any other remedy which it may have for possession
or arrearages in Base Rent, Tenant's Forecast Additional Rental, and
Tenant's Additional Rental Adjustment, (hereinafter collectively
referred to as "Rent") enter upon and take possession of the Leased
Premises and expel or remove Tenant and any other person who may be
occupying the Leased Premises, or any part thereof, by force, if
necessary, without being liable for prosecution or any claim of
damages therefor and Tenant hereby agrees to pay to Landlord on demand
the amount of all loss and damage which Landlord may suffer by reason
of such termination, whether through inability to relet the Leased
Premises on satisfactory terms or otherwise, specifically including,
but not limited to (i) all reasonable expenses necessary to relet the
Leased Premises which shall include the reasonable cost of renovating,
repairing and altering the Leased Premises for a new tenant or
tenants, advertisements and brokerage fees and (ii) any increase in
insurance premiums caused by the vacancy of the Leased Premises.
Nothing contained in this Lease shall limit or prejudice the right of
Landlord to prove for and obtain in proceedings for bankruptcy or
insolvency by reason of the termination of this Lease, an amount equal
to the maximum allowed by any statute or rule of law in effect at the
time when, and governing the proceedings in which, the damages are to
be proved, whether or not the amount be greater, equal to, or less
than the amount of the loss or damages referred to above.
(2) Enter upon and take possession of the Leased Premises
and expel or remove Tenant or any other person who may be occupying
the Leased Premises, or any part thereof, by force, if necessary,
without terminating this Lease,
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Landlord may (but shall be under no obligation to) relet the Leased
Premises or any part thereof for the account of Tenant, in the name of
Tenant or Landlord or otherwise, without notice to Tenant for such
term or terms (which may be greater or less than the period which
would otherwise have constituted the balance of the Term of this
Lease) and on such conditions (which may include concessions or free
rent) and for such uses as Landlord in its absolute discretion may
determine and Landlord may collect and receive any rents payable by
reason of such reletting; and Tenant agrees to pay Landlord on demand
all reasonable expenses necessary to relet the Leased Premises which
shall include the reasonable cost of renovating, repairing and
altering the Leased Premises for a new tenant or tenants,
advertisements and brokerage fees, and Tenant further agrees to pay
Landlord on demand any deficiency that may arise by reason of such
reletting (all such amounts to bear interest at the rate specified in
Section 2.01(c) from the date of demand until paid). Landlord shall
not be responsible or liable for any failure to relet the Leased
Premises or any part thereof or for any failure to collect any rent
due upon any such reletting. No such re-entry or taking of possession
of the Leased Premises by Landlord shall be construed as an election
on Landlord's part to terminate this Lease unless a written notice of
such termination is given to Tenant pursuant to subparagraph (b) (1)
above.
(3) Enter upon the Leased Premises by force if necessary,
and do whatever Tenant is obligated to do under the terms of this
Lease and Tenant agrees to reimburse Landlord on demand for any
reasonable expenses which Landlord may incur in thus effecting
compliance with Tenant's obligations under this Lease and Tenant
further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action, whether caused by the negligence
of Landlord or otherwise.
(4) No repossession of or re-entering on the Leased
Premises or any part thereof pursuant to subparagraphs (b) (2) and (3)
above or otherwise and no reletting of the Leased Premises or any part
thereof pursuant to subparagraph (b) (2) shall relieve Tenant of its
liabilities and obligations hereunder, all of which survive such
repossession or re-entering. In the event of any such repossession or
re-entering on the Leased Premises or any part thereof by reason of
the occurrence of an event of default, Tenant will pay to Landlord the
Rent required to be paid by Tenant.
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Further, upon the occurrence of any such Event of
default and Tenant's failure to remedy the same within the applicable
curative period following notice, if any, Landlord shall,
notwithstanding any contrary provision of Section 92.008 of the Texas
Property Code, have the right to change all of the locks on doors
providing access to the Leased Premises without the necessity of
placing a sticker on any door to the Leased Premises. In such event,
Landlord shall not be obligated to provide Tenant any keys therefor or
allow Tenant or any other party access to the Leased Premises except
on such terms and conditions as may be acceptable to Landlord in its
sole discretion.
(5) No right or remedy herein conferred upon or reserved
to Landlord is intended to be exclusive of any other right or remedy,
and each and every right and remedy shall be cumulative and in
addition to any other right or remedy given hereunder or now or
hereafter existing at law or in equity or by statute. In addition to
other remedies provided in this Lease, Landlord shall be entitled, to
the extent permitted by applicable law, to injunctive relief in case
of the violation, or attempted or threatened violation, of any of the
covenants, agreements, conditions or provisions of this Lease, or to a
decree compelling performance of any of the covenants, agreements,
conditions or provisions of this Lease, or to any other remedy allowed
to Landlord at law or in equity.
(6) No provision of this Lease shall be deemed to have
been waived by Landlord unless such waiver is in writing and signed by
Landlord, nor shall any custom or practice arising between the parties
in the administration of the terms of this Lease be construed to waive
or lessen Landlord's right to insist upon strict performance of the
terms of this Lease.
7.02 Lien for Rent.
Tenant hereby grants to Landlord a security interest in and to all of
Tenant's personal property now or hereafter located within the Leased Premises
(such contractual security interest being in addition to and cumulative of any
other lien granted Landlord by statute or otherwise), and upon the occurrence
of an event of default by Tenant, Landlord may, in addition to any other
remedies provided herein, enter upon the Leased Premises and take possession of
any and all such goods, wares, equipment, fixtures, furniture, improvements and
other personal property owned by Tenant and situated on the Leased Premises,
without liability for trespass or conversion (and Tenant hereby waives any
right to notice or hearing prior to such taking of possession by Landlord),
foreclose
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the security interest hereby granted and sell the same at public or private
sale, with or without having such property at the sale, after giving Tenant
reasonable notice of the time and place of any public sale or of the time after
which any private sale is to be made, at which sale Landlord or its assigns may
purchase unless otherwise prohibited by law. Notwithstanding the foregoing,
neither Landlord's security interest nor any other lien held by Landlord
(statutory or express) shall extend to or cover Tenant's business records or
the database maintained by Tenant in the conduct of its business. Unless
otherwise provided by law, and without intending to exclude any other manner of
giving Tenant reasonable notice, the requirement of reasonable notice shall be
met if such notice is given in the manner prescribed in this Lease at least
five (5) business days before the date of sale. Any sale made pursuant to the
provision of this Section 7.02 shall be deemed to have been a public sale
conducted in a commercially reasonable manner if held in the Leased Premises
after the time, place and method of sale and a general description of the types
of property to be sold have been advertised in a daily newspaper published in
the county where the Property is located for five (5) consecutive days prior to
the date of sale. The proceeds from any such disposition, less any and all
expenses connected with the taking of possession, holding and selling of the
property (including reasonable attorneys fees and other expenses) shall be
applied as a credit against the indebtedness secured by the security interest
granted in this Section 7.02. Landlord shall have all of the rights of a
secured party under the Texas Business and Commerce Code, as the same may be
amended from time to time. Any surplus shall be paid to Tenant or as otherwise
required by law; and the Tenant shall pay any deficiency forthwith.
Notwithstanding the foregoing, Landlord hereby agrees to subordinate its liens
herein retained (as well as any statutory landlord's lien) to any lien securing
bona fide financing of Tenant's trade fixtures, movable personal property or
equipment placed in the Leased Premises or construction of Tenant's
non-Building Standard leasehold improvements to the Leased Premises provided
that (i) the party to whom such lien is granted by Tenant agrees to be bound by
and perform the obligations of the Tenant under Section 5.01(g) hereinabove and
(ii) the equipment, movable personal property and trade fixtures to which such
subordination extends is identified with specificity.
7.03 Landlord's Default; Tenant's Special Rights to Terminate.
(a) Landlord has provided Tenant a copy of the Deed of Trust held
by Landlord's Mortgagee, which Deed of Trust has been filed for record in the
Office of the County Clerk of Harris County, Texas under Harris County Clerk's
File No. F199350 (the "Deed of Trust"). The Deed of Trust contains provisions,
among
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other things, in respect to the distribution to the Grantor (as such term is
defined therein) of proceeds of condemnation awards and insurance proceeds
payable as a result of casualty damage for the purposes of repair and
restoration. Landlord hereby agrees that it shall constitute default by
Landlord under this Lease in the event Landlord hereafter modifies or amends
such provisions of the Deed of Trust in a manner which results in reducing the
obligations of the holder of the Deed of Trust to distribute such proceeds to
Grantor; provided, however, in no event shall the foregoing provisions of this
Section 7.03(a) be applicable to any modification of the Deed of Trust in
connection with the renewal, modification, extension or rearrangement of the
indebtedness secured by the Deed of Trust or in connection with the refinance
thereof.
(b) Tenant, to the maximum extent permissible under applicable
law, hereby waives the provisions of Section 91.004 of the Texas Property Code,
in respect to Tenant's rights to a lien on the Landlord's non-exempt property
in Tenant's possession and on rent and other sums due from time to time
hereunder by Tenant.
(c) Tenant shall have the right and option to terminate this Lease
if prior to the Completion Date the holder of the Deed of Trust has foreclosed
the lien and security interest thereof (or accepted a deed in lieu thereof).
To exercise such option, Tenant must provide written notice of such election to
Landlord's Mortgagee (or the successful purchaser at such foreclosure sale if
it is not Landlord's Mortgagee) within thirty (30) days after receipt of notice
of such foreclosure (or the execution and delivery of a deed in lieu thereof).
Upon such termination, none of Tenant, Landlord or Landlord's Mortgagee shall
have any further rights, duties or obligations hereunder.
7.04 Attorney's Fees.
If either party defaults in the performance of any of the terms,
agreements or conditions contained in this Lease and the other party places the
enforcement of this Lease, or any part thereof, or the collection of any rent
due or to become due hereunder, or recovery of possession of the Leased
Premises, in the hands of an attorney who files suit upon the same and should
the non-defaulting party prevail in such suit, the prevailing party in any such
litigation which ensues shall, in addition to any other award granted to the
prevailing party, be entitled to recover its reasonable attorneys' fees
incurred in such enforcement effort.
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7.05 No Waiver of Rights.
No failure or delay of either party to exercise any right or power
given it herein or to insist upon strict compliance by the other party of any
obligation imposed on it herein and no custom or practice of either party
hereto at variance with any term hereof shall constitute a waiver or a
modification of the terms hereof by Landlord or any right it has herein to
demand strict compliance with the terms hereof by the other party. No waiver of
any right of either party on one occasion shall operate as a waiver of any of
such rights for any subsequent occurrence. No express waiver shall affect any
condition, covenant, rule, or regulation other than the one specified in such
waiver and then only for the time and in the manner specified in such waiver.
No person has or shall have any authority to waive any provision of this Lease
unless such waiver is expressly made in writing and signed by an authorized
officer of Landlord.
7.06 Holding Over.
In the event of holding over by Tenant after expiration or termination
of this Lease without the written consent of the Landlord, Tenant shall pay as
liquidated damages, solely for such holding over, one hundred fifty percent
(150%) of the rent (including, without limitation, all Base Rental, Tenant's
Forecast Additional Rental and Tenant's Additional Rental Adjustment) as would
have been payable if this Lease had not so terminated or expired for the entire
hold over period. No holding over by Tenant after the term of this Lease shall
be construed to extend this Lease. In the event of any unauthorized holding
over, Tenant shall indemnify Landlord against all claims for damages by any
other tenant to whom Landlord shall have leased all or part of the Leased
Premises effective upon the termination of this Lease. Any holding over with
the express written consent of Landlord shall therefore constitute this Lease
to be a lease from month to month at a Base Rental, Tenant's Forecast
Additional Rental, and all other sums required to be paid by Tenant prior to
the expiration or termination of this Lease as may be determined by Landlord.
7.07 Subordination.
Tenant agrees that the rights of Tenant under this Lease are subject
and subordinate to, and upon the request of Landlord made in writing, Tenant
will confirm the subordination of this Lease to, each ground or land lease now
or hereafter covering all or any part of the Land and to each mortgage or deed
to secure debt which may now or hereafter encumber the Property and/or the
Land, as well as to all renewals, modifications, consolidation, replacements
and extensions thereof in a written form reasonably acceptable to the lessor
under any such ground or land lease and
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the holder of any such mortgage or deed to secure debt; provided, however, that
the lessor under any such ground or land lease and the holder of any such
mortgage or deed to secure debt shall, so long as Tenant shall not be in
default under this Lease, not disturb Tenant in its possession of the Leased
Premises or terminate Tenant's rights hereunder. As a condition to Tenant's
obligations under this Lease, Landlord shall obtain from Landlord's Mortgagee a
non-disturbance and attornment agreement in favor of Tenant in form and
substance reasonably acceptable to Tenant, and shall deliver such agreement to
Tenant within thirty (30) days following the execution of this Lease. If
Landlord's Mortgagee fails to execute such non-disturbance and attornment
agreement by such date, or executes such agreement by such date but in such
form as Tenant, in its reasonable judgement, concludes is adverse to the
interest of Tenant, the Tenant shall have the right, as its sole and exclusive
remedy on account thereof, to terminate this Lease by giving written notice
thereof to Landlord on or before ten (10) days after receipt of such proposed
non-disturbance and attornment agreement in which event neither party hereto
shall have any further rights, duties or obligations hereunder. The date upon
which Tenant accepts such proposed non-disturbance and attornment agreement, or
the expiration of said ten (10) day period without Tenant terminating this
Lease is referred to herein as the "Delivery Date". Tenant agrees that upon the
request of Landlord in writing it will subordinate this Lease from time to time
to the lien of any future mortgage to a bank, insurance company or other
financial institution, irrespective of the time of execution or time of
recording of any such mortgage or mortgages, provided that the holder of any
such mortgage shall enter into an agreement with Tenant, in recordable form,
that in the event of foreclosure or other right asserted under the mortgage by
the holder or any assignee thereof, this Lease and the rights of Tenant
hereunder shall continue in full force and effect and the rights of Tenant
shall not be terminated or disturbed except in accordance with the provisions
of this Lease. Tenant expressly recognizes and agrees that the lessor under any
such ground or land lease and the holder of any such mortgage or deed to secure
debt or any of their successors or assigns or any other holder of such
instrument may sell the Property or the Land in the manner provided for by law
in such instrument; and further, such sale may be made subject to this Lease. In
the event of the enforcement by the lessor under any such ground or land lease
or the grantee under any such mortgage or deed to secure debt of the remedies
provided for by law or by such land or ground lease, mortgage or deed to secure
debt, Tenant will, upon request of any person or party succeeding to the
interest of said lessor or grantee, as a result of such enforcement,
automatically become the Tenant of such successor in interest without change in
the terms or provisions of this Lease; provided, however, that such successor
in interest shall not be bound by (x) any payment of rent for more than one
month in advance except prepayments in the nature
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of security for the performance by Tenant of its obligations under this Lease,
or (y) any amendment or modification of this Lease made without the written
consent of such lessor or grantee or such successor in interest if such lessor,
grantee or successor in interest had previously notified Tenant in writing of
its interest. Upon request by such successor in interest, Tenant shall execute
and deliver an instrument or instruments confirming the attornment herein
provided for in a form reasonably acceptable to such successor in interest.
Notwithstanding anything contained in this Lease to the contrary, in the event
of any default by Landlord in performing its covenants or obligations hereunder
which would give Tenant the right to terminate this Lease, Tenant shall not
exercise such right unless and until (aa) Tenant gives written notice of such
default (which notice shall specify the exact nature of said default and how
the same may be cured and shall be provided concurrently with the notice
provided by Tenant to Landlord) to any lessor under any such land or ground
lease and any holder(s) of any mortgage or deed to secure debt who has
heretofore notified Tenant in writing of its interest and the address to which
notices are to be sent, and (b) said lessor and holder(s) fail to undertake
action to cure said default within thirty (30) days from the giving of such
notice by Tenant. The provisions of Section 9.01 shall govern the manner and
effective date of any notice to be given by Tenant to any such parties.
7.08 Estoppel Certificate or Three-Party Agreement.
At the written request of Landlord, Tenant will execute, from time to
time, an estoppel certificate certifying to such facts (if true) as Landlord
may reasonably require. In the event Tenant fails to execute and deliver the
same within ten (10) business days after request therefor, Landlord shall have
the right (and Tenant hereby empowers Landlord) to execute and deliver such
certificate for and on behalf of and as the binding act of Tenant to the extent
the information set forth therein is true and correct.
VIII
8.01 Sublease or Assignment by Tenant.
(a) Except as expressly provided hereinafter, Tenant shall not,
without the Landlord's prior written consent, (i) assign, convey, mortgage,
pledge, encumber, or otherwise transfer (whether voluntarily, by operation of
law, or otherwise) this Lease or any interest hereunder; (ii) allow any lien to
be placed upon Tenant's interest hereunder; (iii) sublet the Leased Premises or
any part thereof; or (iv) permit the use or occupancy of the Leased Premises or
any part thereof by any one other than Tenant. Any attempt to consummate any of
the foregoing without Landlord's consent shall be of no force or effect. For
purposes hereof, the
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transfer of the ownership or voting rights in a controlling interest of the
voting stock of Tenant (if Tenant is a corporation) or the transfer of a
general partnership interest or a majority of the limited partnership interest
in Tenant (if Tenant is a partnership), at any time throughout the Term of this
Lease, shall be deemed to be an assignment of this Lease; provided, however,
the acquisition of eighty percent (80%) or more of Tenant's stock by any
corporation, the stock of which is registered pursuant to the Securities
Exchange Act of 1934, or the merger or consolidation of Tenant into such
corporation (subject to the following provisions hereof), or the registration
of Tenant's stock pursuant thereto in connection with a public offering of the
same shall not be deemed an assignment of this Lease. Notwithstanding the
foregoing, Tenant shall have the right without Landlord's consent to assign
this Lease or sublet the Leased Premises or any portion thereof to an Affiliate
(hereinafter defined), to MasterCard International, Inc. or Cameron Federal
Employees Credit Union or, in connection with a merger, to assign this Lease to
the surviving corporation in such merger if and only if such surviving
corporation has a net worth (calculated and determined in accordance with
generally accepted accounting principals, consistently applied) immediately
following such merger of not less than $2,500,000. Further, Landlord agrees not
to unreasonably withhold its consent to a requested assignment or sublease of
all or any portion of the Leased Premises to any person or entity with which or
whom Tenant regularly conducts business. In such cases, Tenant shall provide
Landlord a copy of the proposed assignment or sublease on or before the
commencement date thereof and in no event shall the same become effective or
binding upon Landlord until Landlord shall have received a signed copy thereof.
In cases of any assignment to an Affiliate, the Affiliate must, in connection
with any assignment or sublease, assume all the Tenant's obligations, duties
and covenants under this Lease. As used in this Lease, the term "Affiliate"
shall mean and refer to any person or entity controlling, controlled by or
under common control with the Tenant. "Control" shall mean the possession,
direct or indirect, of the power to direct or cause direction of the management
and policies of such person or entity; ownership, directly or indirectly, of at
least fifty-one percent (51%) of the voting securities of, or possession of the
right to vote, in the ordinary direction of its affairs, at least fifty-one
percent (51%) of the voting interests in any person or entity shall be presumed
to constitute such control. Any assignment of sublease to an Affiliate or to
the surviving corporation of a merger (to the extent permitted as provided
hereinabove) or to Mastercard International, Inc. or Cameron Federal Employees
Credit Union is referred to herein as a "Permitted Assignments. Notwithstanding
anything to the contrary contained herein, the named Tenant herein (i.e Payment
Services Company) shall remain fully liable and responsible for the performance
of all the Tenant's duties, covenants, obligations and agreements contained
within this Lease
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irrespective of any assignment or sublease and irrespective of whether or not
Landlord has consented to the same.
(b) Notwithstanding anything herein to the contrary, if at any
time or from time to time during the Term of this Lease Tenant desires to
sublet all or any portion of the Leased Premises or assign all or any portion
or Tenant's interest in this Lease, other than pursuant to a Permitted
Assignment, Tenant shall notify Landlord in writing (hereinafter referred to in
this Section 8.01 as the "Notice") of the terms of the proposed subletting or
assignment, the identity of the proposed sublessee or assignee, the area
proposed to be sublet or covered by the assignment (hereinafter referred to as
"Sublet Space"), and such other information as Landlord may request to evaluate
Tenant's request to sublet or assign. Landlord shall then have the option (i)
to withhold consent to such proposed sublease or assignment, or (ii) to allow
the proposed sublease or assignment subject to the provisions of Section
8.01(c) below, as the case may be, shall be exercisable by Landlord in writing
within a period of thirty (30) calendar days after receipt of the Notice and
any failure by Landlord to exercise any of such options within said thirty (30)
day period shall be deemed to constitute the election of option (i) above.
Landlord hereby agrees to consent to a proposed sublease if, in Landlord's
reasonable opinion, (i) the use to be made of the Leased Premises by the
proposed sublessee does not conflict with exclusive rights granted to other
tenants in the Building or violate any fire, building or other applicable
codes, laws, rules or regulations, (ii) the use to be made of the Leased
Premises or the proposed sublessee's occupancy thereof will require an
occupancy density of not more than one person for each three hundred square
feet of Net Rentable Area occupied or subleased by such proposed sublessee,
(iii) the proposed sublessee's use and occupancy of the Building, its business,
character and reputation are consistent with the first class standard of the
Building.
(c) If Landlord elects to allow the proposed sublease or
assignment, such election shall be subject to Landlord, within twenty (20)
calendar days after receipt of Landlord's notice of election, receiving a copy
of the proposed sublease or assignment, which sublease or assignment must
provide for the assumption of all Tenant's obligations under this Lease, and
such additional information concerning the business, reputation and
credit-worthiness of the proposed sublease or assignee as shall be sufficient
to allow Landlord to form a commercially reasonable judgment with respect
thereto. In the event Landlord fails to approve or disapprove any such sublease
or assignment within thirty (30) days after Landlord's receipt of such
submission from Tenant, such sublease or assignment shall be deemed to be
disapproved; provided, however, that if Landlord approves any proposed sublease
or assignment, Landlord shall receive from Tenant as additional
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rent hereunder fifty percent (50%) of any rents or other sums received by
Tenant pursuant to said sublease or assignment in excess of the rentals payable
to Landlord by Tenant under this Lease with respect to the Sublet Space (after
deducting all of Tenant's reasonable costs associated therewith, including
reasonable brokerage fees and the reasonable cost of remodeling or otherwise
improving the Leased Premises for said sublease or assignee), as such rents or
other sums are received by Tenant from the approved sublessee or assignee.
(d) If Landlord approves in writing the proposed sublessee or
assignee and the terms of the proposed sublease or assignment, but a fully
executed counterpart of such sublease or assignment is not delivered to
Landlord within ninety (90) calendar days after the date of Landlord's written
approval, then Landlord's approval of the proposed sublease or assignment shall
be deemed null and void and Tenant shall again comply with all the conditions
of this Section 8.01 as if the Notice and options hereinafter referred to had
not been given, received or exercised. If Landlord fails to approve the form of
sublease or assignment or the sublessee or assignee, Tenant shall have the
right to submit amended forms or other sublessees or assignees to Landlord to
review for approval.
(e) Notwithstanding the giving by Landlord of its consent to any
sublease or assignment with respect to the Leased Premises, no sublessee or
assignee (other than an Affiliate under a Permitted Assignment) may exercise
any expansion option, right of first refusal option, or renewal option under
this Lease except in accordance with a separate written agreement entered into
directly between such sublease or assignee and Landlord.
(f) Notwithstanding the giving by Landlord of its consent to any
subletting, assignment or occupancy as provided hereunder or any language
contained in such lease, sublease or assignment to the contrary, unless this
Lease is expressly terminated by Landlord, Tenant shall not be relieved of any
of Tenant's obligations or covenants under this Lease and Tenant shall remain
fully liable hereunder.
(g) If, with the consent of the Landlord, the Leased Premises or
any part thereof is sublet or occupied by other than Tenant or this Lease is
assigned, Landlord may, after default by Tenant, collect rent from the
subtenant, assignee or occupant, and apply the net amount collected to the Base
Rental, Tenant's Forecast Additional Rental, Tenant's Additional Rental
Adjustment, and any other sums herein reserved. No such subletting, assignment,
occupancy, or collection shall be deemed (i) a waiver or any of Tenant's
covenants contained in this Lease, (ii) a release of Tenant from further
performance by Tenant of its covenants under
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this Lease, or (iii) a waiver of any of Landlord's other rights hereunder.
8.02 Assignment by Landlord.
Landlord shall have the right to transfer and assign, in whole or in
part, all its rights and obligations hereunder, in the Property, the Land and
all other property referred to herein, and in such event and upon such transfer
(any such transferee to have the benefit of, and be subject to, the provisions
of Sections 8.03 and 8.04 hereof) and assumption of Landlord's obligations
under this Lease arising thereafter by the transferee (subject to the
limitations on the Landlord's liability contained herein) and notice thereof to
Tenant, no further liability or obligation shall thereafter accrue against
Landlord hereunder.
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8.03 Peaceful Enjoyment.
Landlord covenants that Tenant shall and may peacefully have, hold and
enjoy the Leased Premises, subject to the other terms hereof, provided that
Tenant pays the rental and other sums herein recited to be paid by Tenant and
performs all of Tenant's covenants and agreements herein contained. It is
understood and agreed that this covenant and any and all other covenants of
Landlord contained in this Lease shall be binding upon Landlord and its
successors only with respect to breaches occurring during the ownership of the
Landlord's interest hereunder.
8.04 Limitation of Landlord's Personal Liability.
Tenant specifically agrees to look solely to Landlord's interest in
the Property and the rent and other income derived therefrom for the recovery
of any judgment against Landlord, it being agreed that Landlord (and its
partners and shareholders) shall never be personally liable for any such
judgment and that Tenant shall not seek or obtain any such judgment. The
provision contained in the foregoing sentence is not intended to, and shall
not, limit any right that Tenant might otherwise have to (i) obtain injunctive
relief against Landlord or Landlord's successors in interest or (ii) any suit
or action in connection with enforcement or collection of amounts which may
become owing or payable under or on account of insurance maintained by
Landlord.
8.05 Force Majeure.
Landlord and Tenant (except with respect to the payment of Base
Rental, Tenant's Forecast Additional Rental, Tenant's Additional Rental
Adjustment, or any other monetary obligation under this Lease, including any
obligations arising pursuant to the Work Letter Agreement) shall be excused for
the period of any delay and shall not be deemed in default with respect to the
performance of any of the terms, covenants and conditions of this Lease when
prevented from so doing by a cause or causes beyond the Landlord's or Tenant's
(as the case may be) reasonable control, which shall include, without
limitation, all labor disputes, governmental regulations or controls, fire or
other casualty, inability to obtain any material or services, acts of God, or
any other cause not within the reasonable control of Landlord or Tenant (as the
case may be); provided, however, that any delay or prevention caused by Tenant
Delay items shall be deemed to be due to a cause or causes within Tenant's
control; and provided further, however, that none of the foregoing shall affect
any abatement or termination rights expressly granted to Tenant under this
Lease.
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IX
9.01 Notices.
Any notice or other communications required or permitted to be given
under this Lease must be in writing and shall be effectively given or delivered
if hand delivered to the addresses for Landlord and Tenant stated below or if
sent by certified or registered United States Mail, return receipt requested,
to said addresses. Any notice mailed shall be deemed to have been given upon
the earlier of (i) receipt or refusal thereof, or (ii) three days after
depositing the same in the U.S. Mail as aforesaid. Notice effected by hand
delivery shall be deemed to have been given at the time of actual delivery.
Either party shall have the right to change its address to which notices shall
thereafter be sent and the party to whose attention such notice shall be
directed by giving the other party notice thereof in accordance with the
provisions of this Section 9.01. Additionally, Tenant agrees to send copies of
all notices required or permitted to be given to Landlord and to each lessor
under any ground or land lease covering all or part of the Land and each
holder of a mortgage or deed to secure debt encumbering the Property and/or
the Land that notifies Tenant in writing of its interest and the address to
which notices are to be sent.
To the Landlord: With copy to:
VPM 1988-1, Ltd. Liddell, Sapp, Zivley,
c/o Veriquest Real Estate Hill & LaBoon
Services, Inc. 3200 Texas Commerce Tower
5251 Westheimer, Suite 400 Houston, Texas 77002
Houston, Texas 77056 Attn: Mr. Scott Hunsaker
Attn: Mr. Larry Strickland
To the Tenant: With copy to:
Payment Service Company Vinson & Elkins
5251 Westheimer, Suite 1100 2600 First City Tower
Houston, Texas 77056 1001 Fannin
Attn: Mr. John Chaney Houston, Texas 77002
Attn: Mr. James B. Rylander
9.02 Landlord's Mortgagee.
For purposes of the provisions of Section 7.07 of the lease, the name
and address of Landlord's Mortgagee is as follows:
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Teacher's Insurance and Annuity Association
730 Third Avenue
New York, New York
Attn: Investment Officer, Mortgage and
Real Estate Services
Tenant acknowledges that this Lease and the rents payable hereunder
have been pledged by Landlord to Teacher's Insurance and Annuity Association as
security for a loan by Teacher's Insurance and Annuity Association to Landlord
in connection with the ownership of the Property.
9.03 Miscellaneous.
(a) This Lease shall be binding upon and inure to the benefit of the
successors and assigns of Landlord, and shall be binding upon and inure to the
benefit of Tenant, its successors, and, to the extent assignment may be
approved by Landlord hereunder, Tenant's assigns. Where appropriate the
pronouns of any gender shall include the other gender, and either the singular
or the plural shall include the other.
(b) All rights and remedies of Landlord and Tenant under this Lease
shall be cumulative and none shall exclude any other rights or remedies allowed
by law. This Lease is declared to be a contract, and all of the terms hereof
shall be construed according to the laws of the state of Texas. This Lease may
not be altered, changed or amended, except by an instrument in writing executed
by all parties hereto. Further, the terms and provisions of this Lease shall
not be construed against or in favor of a party hereto merely because such
party is the "Landlord" or the "Tenant" hereunder or such party or its counsel
is the draftsman of this Lease.
(c) If Tenant is a corporation, partnership or other entity, Tenant
warrants that all consents or approvals required of third parties (including
but not limited to its Board or Directors or partners) for the execution,
delivery and performance of this Lease have been obtained and that Tenant has
the right and authority to enter into and perform its covenants contained in
this Lease. Likewise, if Landlord is a corporation, partnership or other
entity, Landlord warrants that all consent or approvals required of third
parties (including but not limited to its Board of Directors or partners) for
the execution, delivery and performance of this Lease have been obtained and
that Landlord has the right and authority to enter into and perform its
covenants contained in this Lease.
(d) Wherever in this Lease there is imposed upon Landlord the
obligation to use reasonable efforts or due diligence, Landlord shall be
required to do so only to the extent the same is
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economically feasible and otherwise will not impose upon Landlord extreme
financial or other burdens, or the application of such provision to persons or
circumstances other than those as to which it is invalid or unenforceable,
shall not be affected thereby, and each provision of this Lease shall be valid
and shall be enforceable to the extent permitted by law.
(e) The obligation of Tenant to pay all rent and other sums due from
time to time hereunder constitutes an independent, unconditional covenant and
is not dependent upon performance by Landlord of its obligations and agreements
or covenants, express or implied, hereunder. The foregoing shall not, however,
abridge, modify or effect any specific rights to abatement of rental provided
for elsewhere in this Lease.
(f) If any term or provision of this Lease, or the application thereof
to any person or circumstance, shall to any extent be invalid or unenforceable,
the remainder of this Lease, or the application of such provision to persons or
circumstances other than those as to which it is valid or unenforceable, shall
not be affected thereby, and each provision of this Lease shall be valid and
shall be enforceable to the extent permitted by law.
(g) Time is of the essence in this Lease.
(h) Tenant agrees not to record any memorandum or other evidence of
this Lease in the Real Property Records of Harris County, Texas without
Landlord's prior written consent.
(i) The submission of this Lease by Landlord for examination does not
constitute a reservation of or option for the Leased Premises and this Lease
shall become effective only upon execution by all parties hereto and delivery
thereof by Landlord to Tenant.
(j) All monetary obligations of Landlord and Tenant (including,
without limitation, any monetary obligation of Landlord or Tenant for damages
for any breach of the respective covenants, duties or obligation of Landlord or
Tenant hereunder) are performable exclusively in Harris County, Texas.
(k) There shall be no merger of this Lease or of the leasehold estate
hereby created with the fee estate in the Leased Premises or any part thereof
by reason of the fact that the same person may acquire or hold, directly or
indirectly, this Lease or the leasehold estate hereby created or any interest
in this Lease or in such leasehold estate as well as the fee estate in the
Leased Premises or any interest in such fee estate.
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(l) Nothing contained herein shall be deemed or construed as creating
any partnership or joint venture relationship between Landlord and Tenant, or
any other relationship other than that of landlord and tenant.
9.04 Real Estate Broker.
Each party hereto warrants and represents to the other that no real
estate broker and/or salesman has been involved in this Lease other than Asset
Plus corporation, on behalf of Landlord, and Henry S. Miller/Grubb & Ellis on
behalf of Tenant and each party agrees to indemnify and hold the other harmless
from and against any and all claims of any other real estate broker and/or
salesman due to acts of the indemnifying party or its representatives. The
commission payable to Asset Plus Corporation ("Asset Plus") and Henry S.
Miller/Grubb & Ellis ("Miller") is described in an agreement dated __________ ,
1990 executed by and between Landlord and Asset Plus and an agreement dated
_________, 1990 executed by and between Landlord and Miller, which agreements
are hereby incorporated herein by reference. Landlord agrees to pay such
commissions in accordance with such agreements and to cause its successors-in-
interest (other than Landlord's Mortgagee) to honor the same.
9.05 Restrictions on Leasing.
So long as Tenant is not in default hereunder and the named Tenant
herein (i.e., Payment Services Company) is actually occupying 20,000 square
feet of Net Rentable Area or more, then Landlord agrees not to lease any space
in the Building to Telecredit, S.C.A.N. (Electronic Transaction Corporation),
CheckRite, ChexSystems, J.B.S., Checktronics or CASHEX.
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IN WITNESS WHEREOF, Landlord and Tenant, acting herein by duly
authorized individuals, have caused this Lease to be executed as of the date
aforesaid.
VPM 1988-1 LTD., a Texas limited
partnership
By: VeriQuest Real Estate Services,
Inc., General Manager
By: Larry A. Strickland
----------------------------------
Larry A. Strickland
President
"LANDLORD"
PAYMENT SERVICES COMPANY,
a Texas corporation
By: John D. Chaney
----------------------------------
John D. Chaney, Chairman and Chief
Executive Officer
"TENANT"
By his execution hereinbelow, John D. Chaney, individually,
unconditionally and irrevocably guarantees to Landlord, and its successors
hereunder, that all Base Rental becoming due to Landlord under this Lease
during or otherwise attributable to the first two (2) years of the initial Term
will be promptly paid when due in accordance with the provisions of this Lease.
The undersigned's guaranty obligation shall be reduced, dollar for dollar, for
each dollar of Base Rental paid to Landlord during the first two Lease Years.
The undersigned's guaranty obligations shall be performable without respect to
any circumstance which might constitute a legal or equitable discharge of a
surety or guarantor. The undersigned agrees that this is a guaranty of payment
and not of collection and that the Landlord may proceed to enforce this
guaranty without proceeding against the Tenant or any collateral for the
Tenant's obligations.
John D. Chaney
------------------
JOHN D. CHANEY
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EXHIBITS:
Exhibit A - Land
Exhibit A-1 - Retail Land
Exhibit B - Leased Premises
Exhibit C - Work Letter Agreement
Exhibit D - Renewal Options
Exhibit E - Expansion Options
Exhibit F - Right of First Refusal
Exhibit G - Building Operating Hours
Exhibit H - Signage Plan
Exhibit I - Rules and Regulations
Exhibit J - Reserved Parking Spaces
Exhibit K - Superior Tenant Leases
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FIRST SUPPLEMENT TO AND AMENDMENT
OF LEASE AGREEMENT
THIS FIRST SUPPLEMENT TO AND AMENDMENT OF LEASE AGREEMENT ("First
Supplement") is made and entered into effective this 9th day of July, 1990 by
and between VPM 1988-1 LTD., a Texas limited partnership ("Landlord") and
PAYMENT SERVICES COMPANY, a Texas corporation ("Tenant").
RECITALS:
Landlord and Tenant executed and delivered that certain Lease
Agreement (the "Original Lease") dated April 13, 1990 covering the Leased
Premises in the Building. Reference is here made to the Original Lease for all
purposes and words with initial capital letters used but not defined herein
shall have the respective meanings assigned to them in the Original Lease.
Landlord and Tenant desire to supplement the Original Lease in
connection with lease of additional space in the Building and to make certain
other changes thereto as more fully set forth hereinafter.
AGREEMENTS:
NOW, THEREFORE, for and in consideration of the mutual premises
contained herein and the Original Lease, the Landlord and Tenant hereby agree
as follows:
1. Lease of Sixth Floor Space: Subject to the terms contained
herein and in the Original Lease, as supplemented and amended hereby, Landlord
does hereby lease and demise to Tenant and Tenant does hereby lease and take
from Landlord those certain premises containing approximately 10,232 square
feet of Net Rentable Area on the sixth floor of the Building (the "Sixth Floor
Space"). The Sixth Floor Space is outlined on the floor plan drawing attached
hereto as Exhibit A and made part hereof for all purposes. The portions of Net
Rentable Area of the sixth floor not comprising part of the Sixth Floor Space
are sometimes hereinafter referred to as the "Remaining Sixth Floor Space". By
this reference Exhibit A hereto is hereby incorporated in and made part of
Exhibit B to the Original Lease.
The Sixth Floor Space shall constitute Office Space and from
and after the date hereof shall constitute part of the Leased Premises and
otherwise be included in the "Net Rentable Area" of the Original Lease, as
supplemented and amended hereby. Except as otherwise provided herein, the
lease of the Sixth Floor Space shall be subject to all of the terms and
conditions of the Original Lease, as supplemented and amended hereby, as if the
same had been originally included therein. As a result of the lease of the
Sixth Floor Space, the Net Rentable Area of the Leased Premises is agreed and
stipulated to be 86,713 square feet of Net Rentable Area.
61
2. Rental Accrual Date for Sixth Floor Space. The lease of the
Sixth Floor Space shall be effective as of the date of execution hereof;
provided, however, rent shall not commence to accrue in respect thereto until
the earlier to occur of (i) the date Tenant actually takes occupancy thereof
and commences to conduct its normal and customary business therefrom or (ii)
the Completion Date in respect to the Sixth Floor Improvements (hereinafter
defined). Notwithstanding anything to the contrary contained herein, the lease
of the Sixth Floor Space shall be for an initial term beginning on the
effective date hereof and ending ten (10) Lease Years from the Commencement
Date for the initial Leased Premises subject to the Original Lease (i.e. the
76,481 square feet of Net Rentable Area).
3. Construction of Sixth Floor Improvements. Landlord and Tenant
are in the process of preparing and agreeing upon the plans and specifications
for the alterations and additions to the Sixth Floor Space in accordance with
the provisions of the Work Letter Agreement. The dates for submission, review
and resubmission of the proposed Working Drawings for the Sixth Floor
Improvements for purposes of the Work Letter Agreement shall be measured from
the date hereof. Landlord shall pay the costs and expenses charged by Tenant's
architects and engineers in connection with preparation of the initial Working
Drawings for the Sixth Floor Improvements (but not any changes thereto
requested by Tenant). Construction of the Sixth Floor Improvements shall be
undertaken in accordance with the provisions of the Work Letter Agreement. The
term "Sixth Floor Improvements" means the alterations and additions to be made
to the Sixth Floor Space pursuant to the approved Working Drawings therefor.
The "Landlord's Work" in respect to the Sixth Floor Improvements shall mean all
of the work identified on the Working Drawings excluding those portions
identified thereon as the "Tenant's Work".
Landlord shall construct the Landlord's Work in regard to the
Sixth Floor Improvements at its sole cost and expense, except to the extent the
cost thereof (including a fee of 2% of the hard costs to be paid to Landlord as
a fee for its services) exceeds $23.50 per square foot of Net Rentable Area
within the Sixth Floor Space. Tenant shall be solely responsible for the
payment of all such excess costs and expenses and shall be solely responsible
for constructing the Tenant's Work in respect to the Sixth Floor Space.
4. Base Rental for Sixth Floor Space. The Base Rental for each
square foot of Net Rentable Area within the Sixth Floor Space for each of the
Lease Years set forth in Column A below shall be the amount set forth opposite
in Column B below:
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Column A Column B
-------- --------
(Lease Years) (Base Rental for Sixth
Floor Space)
1 $12.04
2 12.54
3 14.54
4 15.54
5 16.54
6 17.54
7 18.54
8 19.54
9 20.54
10 20.54
For purposes this paragraph 4 and as is described in Section 1.02(b) of the
Original Lease, the first Lease Year for the Sixth Floor Space and each
subsequent Lease Year therefor shall be measured from the Commencement Date for
the initial Leased Premises subject to the Original Lease (i.e. the original
76,481 square feet of Net Rentable Area subject of the Original Lease).
5. Savings. For purposes of the Sixth Floor Improvements, the
term "Savings" shall mean the amount, if any, by which the actual costs and
expenses incurred by Landlord (including a fee of 2% of the hard costs to be
paid to Landlord as a fee for its services) in connection with construction of
the Landlord's Work for the Sixth Floor Improvements is less than $23.50 per
square foot of Net Rentable Area within the Sixth Floor Space. On the
Commencement Date in respect to the Sixth Floor Space, Landlord shall pay to
the Tenant in cash the amount of the Savings up to a maximum of the product
(the "Cash Portion of Savings") obtained by multiplying $2.00 times the number
of square feet of Net Rentable Area within the Sixth Floor Space and, as to any
Savings in excess of the Cash Portion of Savings, Tenant may either use the
same to offset costs and expenses required to be paid by Tenant in connection
with the Completion of the improvements to the initial Leased Premises subject
to the Original Lease (i.e. the original 76,481 square feet of Net Rentable
Area subject to the Original Lease) or as a credit against the first Base
Rental due with respect to the Sixth Floor Space.
6. Tenant's Percentage Share. As a result of the leasing of the
Sixth Floor Space, the term "Tenant's Percentage Share" shall from and after
the date hereof mean forty and six-thousand seventy-six ten thousandths percent
(40.6076%).
7. Special Sixth Floor and Building Rates. The Original Lease is
hereby amended by adding thereto a new Section 2.15 which new section shall be
and read in its entirety as follows:
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"2.15 Limited Duration Base Rates.
(a) Landlord has provided to Tenant rental rates
applicable to the lease by Tenant of all or any portion of the
Remaining Sixth Floor Space during the period of time commencing June
15, 1990 through and including June 14, 1991 (the "Set Rate Period").
If within the Set Rate Period Tenant leases all or any portion of the
Remaining Sixth Floor Space pursuant to this Section 2.15 (as opposed
to in response to an Availability Notice [defined in Exhibit F hereto]
delivered to Tenant pursuant to paragraph (b) of Exhibit F) then the
Base Rental for each square foot of Net Rentable Area so leased for
each of the Lease Years set forth in Column A below shall be equal to
the lesser of (x) the then Prevailing Market Rental Rate for each of
said Lease Years or (y) the sum of the applicable Base Rental set
forth opposite in Column B below increased by (i) in the case of space
so leased during the period from June 15, 1990 through and including
September 14, 1990, $1.25, (ii) in the case of space so leased during
the period from September 15, 1990 through and including December 14,
1990, $1.50, (iii) during the period from December 15, through and
including March 14, 1991, $2.00 and (iv) during the remainder of the
Set Rate Period, $2.50:
Column A Column B
-------- --------
(Lease Years) (Base Rental per square
foot of Net Rentable Area)
Balance
of Lease Year 1 $10.50
2 11.00
3 13.00
4 14.00
5 15.00
6 16.00
7 17.00
8 18.00
9 19.00
10 19.00
Portions of the Remaining Sixth Floor Space shall be deemed leased by
Tenant pursuant to this Section 2.15 effective as of the date Tenant
gives Landlord written notice of its desire to do so and specifies
that the same is to be leased pursuant to this Section 2.15(a). Rent
shall commence to accrue as to any space leased pursuant to this
Section 2.15(a) upon the earlier to occur of (i) the date Tenant
actually takes occupancy thereof or (ii) one hundred twenty (120) days
following Tenant's
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delivery of notice to Landlord of Tenant's desire to lease such space.
In connection with any such leasing, Landlord shall
provide Tenant an allowance for the construction of Tenant's
improvements to the premises so leased in the amount of $15.00 for
each square foot of Net Rentable Area leased. In the event the actual
costs and expenses incurred by Landlord in constructing such
improvements is less than the product obtained by multiplying $15.00
times the number of Net Rentable Area leased, the Base Rental for such
space shall be reduced by amortizing the amount of such savings over a
period of years (rounded to the nearest 1/12th of a year) equal to the
unexpired Term as of the date rent begins to accrue in respect to the
premises so leased at a presumed rate of interest of 13% and
subtracting the result thereof from the sum of the applicable Base
Rental plus the increase thereto described in the opening paragraph of
this Section 2.15(a). Landlord also agrees to pay, in connection with
any such leasing, the costs and expenses charged by Tenant's
architects and engineers in connection with preparation of working
drawings for the improvements to such space up to a maximum amount
equal to the product obtained by multiplying $1.50 times the number of
square feet of Net Rentable Area in such space.
(b) Similarly, Landlord has provided to Tenant
rental rates applicable to the lease by Tenant of all or any other
portions of the Building not subject to this Lease during the Set Rate
Period. If within the Set Rate Period Tenant leases all or any such
portions of the Building pursuant to this Section 2.15 (as opposed to
in response to an Availability Notice [defined in Exhibit F hereto]
delivered to Tenant pursuant to paragraph (b) of Exhibit F) then the
Base Rental for each square foot of Net Rentable Area so leased for
each of the Lease Years set forth in Column A below shall be equal to
the lesser of (i) the then Prevailing Market Rental Rate for each of
said Lease Years or (y) the sum of the applicable Base Rental set
forth opposite in Column B below increased by (i) in the case of space
so leased during the period from June 15, 1990 through and including
December 14, 1990, $1.75, (ii) during the period from December 15,
1991 through and including March 14, 1991, $2.00 and (iii) during the
remainder of the Set Rate Period, $2.50:
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Column A Column B
-------- --------
(Lease Years) (Base Rental per square
foot of Net Rentable Area)
Balance
of Lease Year 1 $10.50
2 11.00
3 13.00
4 14.00
5 15.00
6 16.00
7 17.00
8 18.00
9 19.00
10 19.00
Portions of the Building shall be deemed leased by Tenant pursuant to
this Section 2.15 effective as of the date Tenant gives Landlord
written notice of its desire to do so and specifies that the same is
to be leased pursuant to this Section 2.15. Rent shall commence to
accrue as to any space leased pursuant to this Section 2.15(b) upon
the earlier to occur of (i) the date Tenant actually takes occupancy
thereof or (ii) one hundred twenty (120) days following Tenant's
delivery of notice to Landlord of Tenant's desire to lease such space.
In connection with any such leasing, Landlord shall
provide Tenant an allowance for the construction of Tenant's
improvements to the premises so leased in the amount of $15.00 for
each square foot of Net Rentable Area leased. In the event the actual
costs and expenses incurred by Landlord in constructing such
improvements is less than the product obtained by multiplying $15.00
times the number of Net Rentable Area leased, the Base Rental for such
space shall be reduced by amortizing the amount of such savings over a
period of years (rounded to the nearest 1/12th) equal to the unexpired
Term as of the date rent begins to accrue with respect to the premises
so lease at a presumed rate of interest of 13% and subtracting the
result thereof from the sum of the applicable Base Rental plus the
increase thereto described in the opening paragraph of this Section
2.15(b). Landlord also agrees to pay, in connection with any such
leasing, the costs and expenses charged by Tenant's architects and
engineers in connection with preparation of working drawings for the
improvements to such space up to a maximum amount equal to the product
obtained by multiplying $1.50 times the number of square feet of Net
Rentable Area in such space.
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(c) Notwithstanding any contrary provisions of
this Section 2.15, Tenant shall only be entitled to lease up to (and
not in excess of) an aggregate of 20,000 square feet of Net Rentable
Area pursuant to the provisions of this Section 2.15."
9. Right of First Refusal. Tenant hereby acknowledges that the
rental rates set forth for the Sixth Floor Space have been calculated and
determined after taking into account the $100,000 credit described in paragraph
(c) of Exhibit F to the Original Lease. Accordingly, Tenant shall not be
entitled to any further credit pursuant to paragraph (c) of said Exhibit F.
10. Miscellaneous.
(a) Except as expressly supplemented and amended hereby,
the Original Lease is hereby ratified and confirmed in all respects. The
Original Lease, as supplemented and amended hereby, and all rights, obligations
and remedies created thereby or existing thereunder shall remain in full force
and effect.
(b) This First Supplement shall be governed and construed
in accordance with the laws of the state of Texas.
EXECUTED effective as of the date and year first above written.
VPM 1988-1 LTD.,
a Texas limited partnership
By: VeriQuest Real Estate
Services, Inc., General
Manager
By: Larry A. Strickland
-----------------------
Larry A. Strickland
President
PAYMENT SERVICES COMPANY,
a Texas corporation
By: John D. Chaney
----------------------------
John D. Chaney, Chairman
and Chief Executive Officer
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By his execution below, John D. Chaney hereby ratifies and confirms
his guaranty of the Tenant's obligations as set forth in the Original Lease and
acknowledges that the same extends to and covers any additional Base Rental
resulting from the lease of the Sixth Floor Space.
John D. Chaney
---------------------------------------
John D. Chaney
Exhibits
A - Sixth Floor Space
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SECOND AMENDMENT TO LEASE AGREEMENT
This Second Amendment to Lease Agreement ("Amendment") is made and
entered into effective as of Feb. 21, 1992, by and between VPM 1988-1, LTD., a
Texas limited partnership, ("Landlord") and PAYMENT SERVICES COMPANY, a Texas
corporation ("Tenant").
W I T N E S S E T H:
RECITALS:
A. Landlord and Tenant previously entered into that certain Lease
Agreement ("Original Lease") dated April 13, 1990 covering 4,171
square feet of Net Rentable Area in the basement and all of the fifth
(5th), seventh (7th), tenth (10th), and eleventh (11th) floors so that
Tenant leased an aggregate of 76,481 square feet of Net Rentable Area
in a building known as 5251 Westheimer or TeleCheck Plaza (the
"Building").
B. Subsequent to the execution of the Original Lease, Landlord and Tenant
executed that certain First Supplement To And Amendment Of Lease
Agreement ("First Amendment") dated July 9, 1990, wherein Landlord
agreed to lease to Tenant the Sixth Floor Space covering 10,232 square
feet of Net Rentable Area of the sixth (6th) floor of the Building
which increased the total Net Rentable Area in the Building leased by
Tenant to 86,713 square feet.
C. As part of the consideration for leasing the Sixth Floor Space,
Landlord gave Tenant a credit equal to $100,000.00 amortized over the
balance of the Lease Term on additional space Tenant leased from
Landlord within the Building prior to August 15, 1993, all as more
particularly set forth in the Original Lease which $100,000.00 credit
was paid to Tenant in the form of a Base Rental reduction as more
particularly set forth in the First Amendment. The Original Lease, as
amended by the terms and provisions of the First Amendment and the
Letter Agreement shall hereinafter be referred to as the "Lease,"
which Lease is incorporated herein by this reference for all purposes.
Words with initial capital letters used in this Amendment but not
defined herein shall have the respective meanings assigned to such
defined terms in the Lease.
D. Landlord and Tenant now desire to amend portions of the Lease (i) to
provide for Tenant to lease the Remaining Sixth Floor Space in two
parcels consisting of two (2) equal parcels each having 4,518 square
feet of Net Rentable Area and each parcel being referred to as "Parcel
1" and "Parcel 2", (ii) to provide for a change in the Base Rental
which will be adjusted to reflect the total dollars expended by
Landlord in the design and construction of the tenant improvements,
(iii) to provide for Landlord to fund a leasehold improvement
allowance and architectural and engineering allowance for tenant
improvements for the Leased Premises, provided the Base Rental is
increased to cover any portion of the allowance expended in the design
and construction of the improvements, (iv) to provide for a 1991 Base
Year for Parcel 1 and, depending upon when Tenant occupies Parcel 2,
either a 1992 or a 1993 Base Year for Parcel 2, (v) to provide for the
relocation of the existing exterior signage and to permit Tenant to
add comparable signage on the east face of the Building; and (vi) to
ratify the parking provisions of the Lease, all as more particularly
set forth below.
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AGREEMENT:
IN CONSIDERATION OF THE PREMISES and the mutual agreements herein set
forth and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. Lease of the Remaining Sixth Floor Space.
Subject to the terms contained herein and in the Lease, as amended by
the terms of this Amendments, Landlord does hereby lease and demise to
Tenant and Tenant does hereby lease and take from Landlord (i) those
certain premises containing approximately 4,518 square feet of Net
Rentable Area (being Parcel 1), and (ii) those certain premises
containing approximately 4,518 square feet of Net Rentable Area (being
Parcel 2) located on the sixth (6th) floor of the Building. The
Remaining Sixth Floor Space is depicted as Parcel 1 and Parcel 2 on
the floor plan attached hereto as Exhibit A. By this reference,
Exhibit A is hereby incorporated in and made part of Exhibit B to the
Lease.
Parcel 1 and Parcel 2 shall constitute Office Space and from and after
the date hereof shall constitute part of the Leased Premises and
otherwise be included in the Net Rentable Area of the Lease. Except
and otherwise provided herein, the lease of Parcel 1 and Parcel 2
shall be subject to all of the terms and conditions of the Lease, as
amended hereby, as if the same had been originally included therein.
Tenant's right to occupy Parcel 1 and Parcel 2 shall be coterminous
with Tenant's right to occupy the Leased Premises. As a result of the
lease of Parcel 1 and Parcel 2, the Net Rentable Area of the Leased
Premises is agreed and stipulated to be 95,749 square feet of Net
Rentable Area.
2. Rental Accrual Date for Parcel 1 and Parcel 2.
The lease of Parcel 1 and Parcel 2 shall be effective as of the date
of this Amendment; provided, however (a) Base Rental and other sums
due under the Lease for Parcel 1 shall not commence to accrue for
Parcel 1 ("Parcel 1 Rent Commencement Date"). until the earlier of (i)
the date Tenant takes occupancy of Parcel 1 and commences to conduct
its normal and customary business therefrom, or (ii) May 1, 1992, and
(b) Base Rental and other sums due under the Lease for Parcel 2 shall
not commence to accrue for Parcel 2 ("Parcel 2 Rent Commencement
Date") until the earlier of (i) three (3) months after the date Tenant
takes occupancy of Parcel 2 and commences to conduct its normal and
customary business therefrom, or (ii) February 1, 1993. The accrual
date for the payment of Base Rental and other sums due under the Lease
for Parcel 2 reflects the agreement of Landlord to grant Tenant three
(3) months of free rent for Parcel 2 as consideration for executing
this Agreement.
3. Base Rental for Parcel 1 and Parcel 2.
Subject to the adjustments as hereinafter set forth in the event
Tenant uses the Allowance (defined below), commencing on the Parcel 1
Rent Commencement Date and on the Parcel 2 Rent Commencement Date and
continuing thereafter for a period of five (5) years, the Base Rental
for Parcel 1 and Parcel 2 shall mean the yearly rate of $10.40 per
square foot of Net Rentable Area of Office Space contained in Parcel 1
or Parcel 2 multiplied by (i) 4,518 square feet of Net Rentable Area
for Parcel 1, and (ii) 4,518 square feet of Net Rentable Area for
Parcel 2. Subject to the adjustments as hereinafter set forth in the
event Tenant uses the Allowance, commencing five (5) years after the
Parcel 1 Rent Commencement Date
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and five (5) years after the Parcel 2 Rent Commencement Date and
continuing thereafter for the remainder of the Term, the Base Rental
for Parcel 1 and Parcel 2 shall mean the yearly rate of $15.90 per
square foot of Net Rentable Area of Office Space contained in Parcel 1
or Parcel 2 multiplied by (i) 4,518 square feet of Net Rentable Area
for Parcel 1, and (ii) 4,518 square feet of Net Rentable Area for
Parcel 2.
The Base Rental rates have been established assuming Tenant leases
Parcel 1 and Parcel 2 on an AS-IS basis with Landlord not providing
any Allowance or other concessions other than a $11,746.80 credit
given to Tenant in the form of a three (3) month delay in the
commencement date for Base Rental accrual for Parcel 2.
In accordance with the provisions of Paragraph 6 below, Landlord has
agreed to advance to Tenant an Allowance not to exceed $18.00 per
square foot of Net Rentable Area of Office Space contained in Parcel 1
and Parcel 2 for Tenant to use in the design and construction of
Landlord's Work and Tenant's Work for Parcel 1 and Parcel 2. Landlord
will advance to Tenant the Allowance to be used to fully design,
construct and install Landlord's Work and Tenant's Work provided the
Base Rental for Parcel 1 and Parcel 2 is increased by $.208 per year
per square foot of Net Rentable Area for every $1.00 of costs incurred
by Landlord to design, construct and install the Landlord's Work and
Tenant's Work which increase in Base Rental is reflected in Schedule 1
attached hereto. The adjustment in Base Rental shall be prorated and
adjusted to reflect the actual amounts advanced by Landlord to design,
construct and install the Landlord's Work and Tenant's Work.
4. Base Year for the calculation of Tenant's Additional Rental.
In order to calculate Tenant's Share of Operating Expenses for the
Leased Premises, three (3) different Base Years will be utilized. The
Base Year for the Parcel 1 shall be 1991 with Tenant's Percentage
Share for Parcel 1 being calculated as 2.1158%. The Base Year for
Parcel 2 shall be 1992 unless Tenant occupies Parcel 2 in 1993 in
which even the Base Year for Parcel 2 will be 1993 with Tenant's
Percentage Share for Parcel 2 being calculated as 2.1158%. The Base
Year for the remainder of the Leased Premises shall continue to be
1990 with Tenant's Percentage Share being calculated as 40.6076%.
5. Leasehold Improvements.
(a) Tenant shall have prepared at Tenant's cost for Landlord's
approval drawings, plans and specifications ("Working
Drawings") indicating all changes and improvements
("Landlord's Work") which Tenant desires to have constructed
and installed in Parcel 1 and Parcel 2. Parcel 1 and Parcel 2
will be built out simultaneously. The terms and provisions of
the Work Letter attached to the Original Lease shall govern
the construction of Landlord's Work and Tenant's Work except
as may be expressly provided otherwise in this Paragraph 5. As
soon as the Working Drawings have been approved by Landlord
and Tenant, a copy of a schedule of the Working Drawings shall
be appended to this Amendment and the Working Drawings shall
be deemed incorporated herein for all purposes. Landlord shall
diligently pursue towards completion Landlord's Work depicted
in the Working Drawings in accordance with the Construction
Schedule. Tenant's Architect shall be an architectural firm
selected by Tenant subject to Landlord's approval, which
approval shall not be unreasonably withheld, provided such
architectural firm is duly licensed by the State of Texas.
Tenant shall pay Landlord a coordination fee equal to Five
Thousand and 00/100 Dollars ($5,000.00).
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(b) Landlord shall proceed to prepare Parcel 1 and Parcel 2 in
accordance with the Working Drawings (with such minor
variations as Landlord and Tenant agree upon in writing).
Parcel 1 and Parcel 2 will be deemed "completed" when (i) all
Landlord's Work has been substantially completed in accordance
with the Working Drawings, except for punch list items which
do not materially interfere with Tenant's use thereof, and
(ii) Landlord certifies in writing to Tenant as to such
completion. By accepting possession of the leasehold
improvements contained in Parcel 1 and Parcel 2, Tenant shall
be deemed to have accepted the same in its As-Is condition and
to have acknowledged that the same fully complies with
Landlord's covenants and obligations hereunder (subject to any
punch list items which remain to be completed).
(c) All costs and expenses of Landlord's Work and Tenant's Work
shall be paid by Tenant; provided, however, Landlord shall
advance to Tenant an allowance for architectural and
engineering costs, and for the design and construction of
Landlord's Work and Tenant's Work ("Allowance") up to a
maximum of $18.00 per square foot of Net Rentable Area in
Parcel 1 and Parcel 2 equal to $162,648.00 to be advanced by
Landlord to Tenant and credited against such costs and
expenses as incurred. Tenant acknowledges and agrees
Landlord's covenant to advance the Allowance to Tenant is not
a rent concession or an inducement of any kind because if the
Allowance is advanced to Tenant, the Base Rental Tenant is
required to pay for Parcel 1 and Parcel 2 will be increased by
$0.208 per square foot of Net Rentable Area within Parcel 1
and Parcel 2 per year for every dollar per square foot of Net
Rentable Area in Parcel 1 and Parcel 2 that Landlord advances
to Tenant in the form of the Allowance. Tenant shall pay in
cash to Landlord, upon demand, all costs and expenses for
Landlord's Work and Tenant's Work which exceed the Allowance
and for the installation of any improvements or personalty
which are not depicted on the approved Working Drawings.
Landlord's Five Thousand and 00/100 Dollar ($5,000.00)
coordination fee may be paid from the Allowance. In the event
any portion of the Allowance is not used ("Unused Allowance"),
the Unused Allowance may be used prior to February 1, 1993 to
renovate or construct additional improvements to the Leased
Premises provided appropriate Working Drawings are approved by
Landlord. Any use of the Unused Allowance will cause an
increase in the Base Rental for Parcel 1 and Parcel 2 as set
forth in this Paragraph 5. After construction of the
improvements and a final determination of how much of the
Allowance Tenant desires to use, Landlord and Tenant agree to
enter into an appropriate amendment to the Lease to confirm
the adjusted Base Rental for Parcel 1 and Parcel 2.
6. Signage.
Notwithstanding anything to the contrary in Section 3.03 of the Lease,
as part of Tenant's Work, Tenant may relocate at its sole cost and
expense the existing signage located on the south face of the top
floor of the Building to the center south face of the top floor of the
Building. In addition, as part of Tenant's Work, Tenant may at its
sole expense install additional signage comparable in design and
appearance (as described in Exhibit H of the Lease) in the center of
the east face of the top floor of the Building.
Page 4 of 6
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7. Parking.
Landlord and Tenant ratify and confirm that the parking provisions of
the Original Lease as set forth in Section 3.04 remain in full force
and effect. To the extent the Net Rentable Area of the Leased Premises
changes as a consequence of Tenant leasing Parcel 1 and/or Parcel 2,
then Parcel 1 and Parcel 2 shall be deemed to be part of the Initial
Leased Premises and the number of parking permits and the charges
therefor for Parcel 1 and Parcel 2 are set forth in Section 3.04 (a)
through (d) of the original Lease.
8. Tenant hereby covenants, represents and warrants to Landlord that:
(a) Tenant is solvent; that no bankruptcy or insolvency
proceedings are pending or contemplated by or against Tenant;
and that this Amendment is the legal, valid and binding
obligation of Tenant enforceable against Tenant in accordance
with its terms, except as enforceability hereof may be limited
by bankruptcy, insolvency, reorganization or moratorium or
other similar laws relating to Landlord's rights and by
general principles which may limit the right to obtain
equitable remedies.
(b) Except as expressly amended by this Amendment, the Lease is in
all respects ratified and confirmed, and the terms,
provisions, representations, warranties, covenants and
conditions thereof shall be and remain in full force and
effect.
(c) The covenants, representations and warranties contained in the
Lease are true and correct in all material respects on and as
of the date hereof as though made on and as of this date, and
to the best of its knowledge and belief Tenant is not in
default in any manner under the Lease or under any document,
writing or instrument executed in connection therewith or
herewith.
(d) All information, reports, statements and other data furnished
by or on behalf of Tenant prior to, contemporaneously with, or
subsequent to the execution of the Lease or this Amendment are
and shall be true and correct to the best of its knowledge and
belief and do not and shall not omit to state any fact or
circumstance necessary to make the information contained
therein or herein not misleading. Upon request of Landlord,
Tenant shall provide to Landlord on a quarterly basis company
prepared financial statements and on an annual basis annual
audited financial statements of the Tenant.
(e) To the best of its knowledge and belief Tenant has no claims,
demands, counterclaims, defenses, allowances, adjustments or
offsets arising out of or in any way related to the Lease (as
amended hereby) or arising out of any document, writing or
instrument executed in connection therewith or herewith.
9. This Amendment (i) shall be binding upon Landlord and Tenant and their
respective heirs, legal representatives, successors and permitted
assigns; (ii) may be renewed, modified or amended only by a writing
signed by each party hereto; (iii) shall be governed by and construed
in accordance with the laws of the State of Texas and the United
States of America; (iv) may be executed in several counterparts, and
each counterpart when so executed and delivered shall constitute an
original agreement, and all such separate counterparts shall
constitute one and the same agreement; and (v) embodies the entire
agreement and understanding between the parties with respect to the
subject matter hereof and supersedes all prior agreements, consents
and understandings relating to such subject matter. All
Page 5 of 6
73
capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Lease. The term "Lease" as
used in the Lease or in any other instrument, document or writing
executed in connection therewith or herewith shall mean the Lease as
amended by the First Amendment and this Amendment.
IN WITNESS WHEREOF, this Amendment is executed in multiple counterparts by
Landlord and Tenant effective as of the date first written above.
TENANT:
PAYMENT SERVICES COMPANY,
a Texas corporation
By: John D. Chaney
--------------------------------------------------
John D. Chaney, Chairman/Chief Executive Officer
LANDLORD:
VPM 1988-1, LTD.,
a Texas limited partnership
By: VERIQUEST REAL ESTATE SERVICES, INC.,
its General Partner
By: Larry A. Strickland
---------------------------------------------
Larry A. Strickland, President
Exhibit A - Parcel 1 and Parcel 2
Schedule 1 - Adjustments to Base Rental for Allowance Used by Tenant
Page 6 of 6
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THIRD AMENDMENT TO LEASE AGREEMENT
This Third Amendment to Lease Agreement ("Amendment") is made and
entered into effective as of October 5, 1992, by and between VPM 1988-1,
LTD., a Texas limited partnership, ("Landlord") and PAYMENT SERVICES COMPANY,
a Delaware corporation ("Tenant"), as successor in interest by merger to
Payment Services, a Texas corporation ("PSC-Texas").
W I T N E S S E T H:
RECITALS:
A. Landlord and PSC-Texas previously entered into that certain Lease
Agreement ("Original Lease") dated April 13, 1990, covering 4,171
square feet of Net Rentable Area in the basement and all of the fifth
(5th), seventh (7th), tenth (10th), and eleventh (11th) floors so that
PSC-Texas leased an aggregate of 76,481 square feet of Net Rentable
Area in a building known as 5251 Westheimer or TeleCheck Plaza (the
"Building").
B. Subsequent to the execution of the Original Lease, Landlord and
PSC-Texas executed that certain First Supplement To and Amendment Of
Lease Agreement ("First Amendment") dated July 9, 1990, wherein
Landlord agreed to lease to PSC-Texas the Sixth Floor Space covering
10,232 square feet of Net Rentable Area of the sixth (6th) floor of
the Building which increased the total Net Rentable Area in the
Building leased by PSC-Texas to 86,713 square feet.
C. As part of the consideration for leasing the Sixth Floor Space,
Landlord gave PSC-Texas a credit equal to $100,000.00 amortized over
the balance of the Lease Term on additional space PSC-Texas leased
from Landlord within the Building prior to August 15, 1993, all as
more particularly set forth in the Original Lease which $100,000.00
credit was paid to PSC-Texas in the form of a Base Rental reduction as
more particularly set forth in the First Amendment.
D. Landlord and PSC-Texas have executed that certain Second Amendment to
Lease Agreement dated February 21, 1992, ("Second Amendment") in order
(i) to provide for PSC-Texas to lease the Remaining Sixth Floor Space
in two parcels consisting of two (2) equal parcels each having 4,518
square feet of Net Rentable Area and each parcel being referred to as
"Parcel 1" and "Parcel 2," (ii) to provide for a change in the Base
Rental (which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the tenant improvements,
(iii) to provide for Landlord to fund a leasehold improvement
allowance and architectural and engineering allowance for tenant
improvements for the Leased Premises, provided the Base Rental is
increased to cover any portion of the allowance expended in the design
and construction of the improvements, (iv) to provide for a 1991 Base
Year for Parcel 1 and, depending upon when PSC-Texas occupied Parcel
2, either a 1992 or 1993 Base Year for Parcel 2, (v) to provide for
the relocation of the existing exterior signage and to permit
PSC-Texas to add comparable signage on the east face of the Building;
and (vi) to ratify the parking provisions of the Lease. The Original
Lease, as amended by the terms and provisions of the First Amendment,
Second Amendment and this Amendment, shall hereinafter be referred to
as the
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"Lease", which Lease is incorporated herein by this reference for all
purposes. Words with initial capital letters used in this Amendment
but not defined herein shall have the respective meanings assigned to
such defined terms in the Lease.
E. Tenant is now a wholly-owned subsidiary of Payment Services Company
- U.S. which company is a wholly-owned subsidiary of First Financial
Management Corporation ("FFMC"). Landlord has executed that certain
Release dated July 28, 1992, which released John D. Chaney from his
obligations to guarantee the Lease.
F. Landlord and Tenant now desire to amend the Lease (i) to increase the
Base Rental Tenant is required to pay pursuant to Section 5(c) of the
Second Amendment in order to reflect the monies advanced to Tenant to
construct the improvements contemplated by the Second Amendment, (ii)
to provide for Tenant to lease the space located on the fourth (4th)
floor of the Building in two parcels, the first parcel consisting of
9,865 square feet of Net Rentable Area ("Parcel 3") and the second
parcel consisting of 5,538 square feet of Net Rentable Area ("Parcel
4") and to provide for Tenant to lease space located in the basement
of the Building consisting of 2,125 square feet of Net Rentable Area
(the "Additional Basement Space"), (iii) to provide for a change in
the Base Rental for Parcel 3 and Parcel 4 which will be adjusted to
reflect the total dollars expended by Landlord in the design and
construction of the Tenant improvements, (iv) to provide for Landlord
to fund a leasehold improvement allowance and architectural and
engineering allowance for tenant improvements for the Leased Premises,
provided the Base Rental is increased to cover any portion of the
allowance expended in the design and construction of the improvements,
(v) to provide for a 1992 Base Year for Parcel 3 and the Additional
Basement Space, and a 1995 Base Year for Parcel 4, (vi) provide for
the deletion of Landlord's obligation to provide the First Expansion
Area to Tenant, (vii) to provide for the extension of the Term of the
Lease for Parcel 3 and Parcel 4, and (viii) to ratify the parking
provisions of the Lease, all as more particularly set forth below.
AGREEMENT:
IN CONSIDERATION OF THE PREMISES and the mutual agreements herein set
forth and for other good and valuable considerations, the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree
as follows:
1. Lease of Parcel 3, Parcel 4 and the Additional Basement Space.
Subject to the terms contained herein and in the Lease as amended by
the terms of this Amendment, Landlord does hereby lease and demise to
Tenant and Tenant does hereby lease and take from Landlord (i) those
certain premises containing approximately 9,865 square feet of Net
Rentable Area (being Parcel 3), (ii) those certain premises containing
approximately 5,538 square feet of Net Rentable Area (being Parcel 4),
both parcels being located on the fourth (4th) floor of the Building,
and (iii) and those certain premises containing approximately 2,125
square feet of Net Rentable Area (being the Additional Basement
Space). The Additional Basement Space is depicted on the floor plan
attached hereto as Exhibit A-2. Parcel 3 and Parcel 4 are depicted on
the floor
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plan attached hereto as Exhibit A-1. By this reference, Exhibit A-1
and Exhibit A-2 are hereby incorporated in and made a part of Exhibit
B to the Lease.
Parcel 3 shall constitute Office Space and from and after the date
hereof shall constitute a part of the Leased Premises and otherwise be
included in the Net Rentable Area of the Lease. Except as otherwise
provided herein, the lease of Parcel 3, Parcel 4 and the Additional
Basement Space shall be subject to all the terms and conditions of the
Lease, as amended hereby, as if the same had been originally included
therein. Tenant's right to occupy Parcel 3, Parcel 4 and the
Additional Basement Space shall be ten (10) years from the Parcel 3
Commencement Date. Parcel 4 will be provided to Tenant rent free for
two (2) years so long as Parcel 4 is used solely for dead storage.
After two (2) years, Tenant will pay Base Rental for Parcel 4 in
accordance with the provisions of Paragraph 2 below.
Parcel 4 will not be provided any Operating Expenses so long as Parcel
4 is used solely for Dead Storage. "Dead Storage" shall be defined as
space not occupied by any personnel or used for any use other than a
storage area; however, if Tenant occupies Parcel 4 and uses same for
any purpose other than Dead Storage, then Landlord shall provide
Building Standard Services for Parcel 4 and Tenant shall pay its
percentage share of Operating Expenses (less any services not required
by Tenant because of such occupancy). The total Net Rentable Area of
the Leased Premises after inclusion of Parcel 3 and the Additional
Basement Space shall be 107,739 square feet and after two years and
the inclusion of Parcel 4, the total Net Rentable Area of the Leased
Premises shall be 113,277 square feet.
2. Rental Accrual Date for Parcel 3, Parcel 4 and the Additional Basement
Space.
The lease of Parcel 3 and the Additional Basement Space shall be
effective as of the date of this Amendment; provided, however (a) Base
Rental and other sums due under the Lease for Parcel 3 and the
Additional Basement Space shall not commence to accrue for Parcel 3
and the Additional Basement Space ("Parcel 3 Rent Commencement Date")
until the earlier of (i) the date Tenant takes occupancy of Parcel 3
and commences to conduct its normal and customary business therefrom,
or (ii) October 15, 1992, and (b) Base Rental and other sums due under
the Lease for Parcel 4 shall not commence to accrue for Parcel 4
("Parcel 4 Rent Commencement Date") until two (2) years after the
Parcel 3 Rent Commencement Date; provided, however, in the event
Tenant occupies Parcel 4 and uses same for any other purpose than Dead
Storage, then Tenant shall pay its pro rata share of the Operating
Expenses (less any services not required by Tenant because of such
occupancy) until the Parcel 4 Rent Commencement Date.
Further, if Tenant elects to use the Allowance (defined below) to
construct improvements to Parcel 4 prior to the Parcel 4 Rent
Commencement Date, then Tenant shall be required to pay Landlord (in
addition to the Base Rental) a monthly amount calculated to be the
total Allowance provided for Parcel 4 by Landlord to Tenant amortized
over the remaining Term of the Lease at an interest rate of ten
percent (10%).
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3. Lease Term and Base Rental for the Leased Premises.
The Term of the Lease for the Leased Premises and the Base Rental for
the Leased Premises is set forth on Schedule 1 attached hereto which
is incorporated by this reference. Subject to the adjustments as
hereinafter set forth in the event Tenant uses the Allowance (defined
below), commencing on the Parcel 3 Rent Commencement Date and on the
Parcel 4 Rent Commencement Date and continuing thereafter during the
Term of the Lease, Tenant shall pay the Base Rental for the Leased
Premises set forth on Schedule 1.
The Base Rental rates have been established assuming Tenant leases
Parcel 3 and Parcel 4 on an AS-IS basis with Landlord not providing
any allowance or other concessions to Tenant.
Landlord will advance to Tenant the Allowance to be used to fully
design, construct and install the Landlord's Work and Tenant's Work
provided the Base Rental for Parcel 3 is increased by $.1586 per year
per square foot of Net Rentable Area for every $1.00 of costs incurred
by Landlord to design, construct and install the Landlord's Work and
Tenant's Work which increase in Base Rental is reflected in Schedule 2
attached hereto.
Further, if Tenant elects to use the Allowance (defined below) to
construct improvements to Parcel 4 prior to the Parcel 4 Rent
Commencement Date, then Tenant shall be required to pay Landlord (in
addition to the Base Rental) a monthly amount calculated to be the
total Allowance provided for Parcel 4 by Landlord to Tenant amortized
over the remaining Term of the Lease at an interest rate of ten
percent (10%).
In accordance with the provisions of Paragraph 5 below, Landlord has
agreed to advance to Tenant an Allowance (the "Allowance") not to
exceed $18.00 per square foot of Net Rentable Area of Office Space
contained in Parcel 3 and Parcel 4 for Tenant to use in the design and
construction of the Landlord's Work and Tenant's Work for Parcel 3 and
Parcel 4. The adjustment in Base Rental shall be prorated and adjusted
to reflect the actual amounts advanced by Landlord to design,
construct and install the Landlord's Work and Tenant's Work.
4. Base Year for the calculation of Tenant's Additional Rental
In order to calculate Tenant's Share of Operating Expenses for the
Leased Premises, the following different Base Years will be utilized.
The Base Year for Parcel 1 shall be 1991 with Tenant's Percentage
Share for Parcel 1 being calculated as 2.4637%. The Base Year for
Parcel 2 is 1992, being calculated as 1.7678%. The Base Year for
Parcel 3 and the Additional Basement Space shall be 1992 with Tenant's
Percentage Share for Parcel 3 being calculated as 4.6198% and Tenant's
Percentage Share for the Additional Basement Space being calculated as
1.1806%. The Base Year for Parcel 4 shall be 1994, unless Tenant
occupies Parcel 4 prior to 1994, thus the Base Year shall be the year
such space is occupied with Tenant's Percentage Share for Parcel 4
being calculated as 2.5934%. The Base Year for the remainder of the
Leased Premises shall continue to be 1990 with Tenant's Percentage
Share being calculated as 40.6076% for such remainder.
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5. Leasehold Improvements.
(a) Tenant shall have prepared at Tenant's cost for Landlord's
approval drawings, plans and specifications ("Working Drawings")
indicating all changes and improvements ("Landlord's Work") which
Tenant desires to have constructed and installed in the Leased
Premises, Parcel 3, Parcel 4 or the Additional Basement Space. The
terms and provisions of the Work Letter attached to the Original Lease
shall govern the construction of the Landlord's Work and Tenant's Work
except as may be expressly provided otherwise in this Paragraph 5.
Parcel 3 and Parcel 4 do not have to built out simultaneously. As soon
as the Working Drawings have been approved by Landlord and Tenant, a
copy of a schedule of the Working Drawings shall be appended to this
Amendment and the Working Drawings shall be deemed incorporated herein
for all purposes. Landlord shall diligently pursue towards completion
the Landlord's Work depicted in the Working Drawings in accordance
with the Construction Schedule. Tenant's Architect shall be an
architectural firm selected by Tenant subject to Landlord's approval,
which approval shall not be unreasonably withheld, provided such
architectural firm is duly licensed by the State of Texas. Tenant
shall pay Landlord a one time coordination fee equal to $5,500.00 for
the supervision of construction of Landlord's Work and Tenant's Work
for Parcel 4 and Parcel 3.
(b) Landlord shall immediately proceed to prepare Parcel 3 and the
Additional Basement Space and (when advised by Tenant to proceed),
Parcel 4 in accordance with the Working Drawings (with such minor
variations as Landlord and Tenant agree upon in writing). Parcel 3 and
the Additional Basement Space and Parcel 4 will be deemed "completed"
when (i) all Landlord's Work has been substantially completed in
accordance with the Working Drawings, except for punch list items
which do not materially interfere with Tenant's use thereof, and (ii)
Landlord certifies in writing to Tenant as to such completion. By
accepting possession of the leasehold improvements contained in Parcel
3 and the Additional Basement Space and Parcel 4, Tenant shall be
deemed to have accepted the same in its As-Is condition and to have
acknowledged that the same fully complies with Landlord's covenants
and obligations hereunder (subject to any punch list items which
remain to be completed).
(c) All costs and expenses of the Landlord's Work and Tenant's
Work shall be paid by Tenant; provided, however, Landlord shall
advance to Tenant an allowance for the design and construction of the
Landlord's Work and Tenant's Work ("Allowance") up to a maximum of
$18.00 per square foot of Net Rentable Area in Parcel 3 and Parcel 4
equal to $277,254.00 to be advanced by Landlord to Tenant and credited
against such costs and expenses as incurred. Tenant acknowledges and
agrees Landlord's covenant to advance the Allowance to Tenant is not a
rent concession or an inducement of any kind because if the Allowance
is advanced to Tenant, the Base Rental Tenant is required to pay for
Parcel 3 will be increased by $.1586 per square foot of Net Rentable
Area within Parcel 3, per year for every dollar per square foot of Net
Rentable Area in Parcel 3 that Landlord advances to Tenant in the form
of the Allowance. The Base Rental for Parcel 4 shall be increased on a
monthly basis by an amount equal to the total Allowance provided for
Parcel 4 by Landlord to Tenant amortized over the remainder of the
Term of the Lease at an interest rate of ten
Page 5 of 8
79
percent (10%). Tenant shall pay in cash to Landlord, upon demand, all
costs and expenses for the Landlord's Work and Tenant's Work which
exceed the Allowance and for the installation of any improvements or
personalty which are not depicted on the approved Working Drawings.
The Landlord's $5,500.00 coordination fee may be paid from the
Allowance.
In the event any portion of the Allowance is not used ("Unused
Allowance"), the Unused Allowance may be used prior to January 1, 1995
to renovate or construct additional improvements to the Leased
Premises provided appropriate Working Drawings are approved by the
Landlord. Any use of the Unused Allowance will cause an increase in
the Base Rental for Parcel 3 and Parcel 4 as set forth in this
Paragraph 5. After construction of the improvements and a final
determination of how much of the Allowance Tenant desires to use,
Landlord and Tenant agree to enter into an appropriate amendment to
the Lease to confirm the adjusted Base Rental for Parcel 3 and Parcel
4.
6. Parking. Landlord and Tenant ratify and confirm that the parking
provisions of the Original Lease as set forth in Section 3.04 remain
in full force and effect. Landlord and Tenant acknowledge that Tenant
will continue to have all Parking Rent abate for the Lease Premises
until September 1, 1994. In addition, to the extent the Net Rentable
Area of the Leased Premises changes as a consequence of Tenant leasing
Parcel 3 and Parcel 4, then Parcel 3 and Parcel 4 shall be deemed part
of the initial Leased Premises (and not space obtained pursuant to
Section 2.10 or Section 2.11) and the number of parking permits for
Parcel 3 and Parcel 4 are set forth in Section 3.04(a) through (d) of
the Original Lease. Notwithstanding anything herein to the contrary,
Landlord and Tenant agree that Tenant shall not have to pay rental for
any parking permits provided to Tenant for Parcel 3 and Parcel 4 until
three (3) years after the Parcel 3 Rent Commencement Date. Landlord
and Tenant acknowledge that the Parking Facilities have been
re-striped and the current parking ratio is 4.00.
7. Expansion Option. Landlord and Tenant acknowledge that the inclusion
of Parcel 3 and Parcel 4 as part of the Leased Premises constitutes an
early take down of the ten thousand (10,000) square feet of Net
Rentable Area that Landlord and Tenant had contemplated would
constitute the First Expansion Area as defined in Exhibit E of the
Original Lease. Consequently, the obligation of the Landlord to
provide the First Expansion Area to Tenant has been satisfied and the
provisions of Exhibit E are amended accordingly. Nothing contained
herein shall amend Landlord's obligation to provide Tenant with the
Second Expansion Area or the Third Expansion Area.
8. Termination Option. Notwithstanding anything contained herein to the
contrary, so long as Tenant is not in default under the Lease beyond
any applicable grace period, Tenant shall have the right by giving
written notice to Landlord no later than February 28, 2000, to
terminate its lease of Parcel 3 and Parcel 4 effective as of August
31, 2000, provided Tenant pays to Landlord the Termination Fee
(hereinafter defined).
Tenant's notice to terminate its lease of Parcel 3 and Parcel 4 must
be received by Landlord no later than February 27, 2000. If Tenant
shall terminate its lease of Parcel 3 and Parcel 4, Tenant shall pay
to Landlord a Termination Fee equal
Page 6 of 8
80
to (a) $61,125.00, plus (b) the unamortized cost of the leasehold
improvements paid for by Landlord for Parcel 3 and Parcel 4 (using an
interest rate of ten percent (10%) over a term of ten years), plus (c)
the unamortized cost of any leasing commissions paid by Landlord for
Parcel 3 and Parcel 4 (using an interest rate of ten percent (10%)
over a term of ten years).
9. Tenant hereby covenants, represents and warrants to Landlord that:
(a) Tenant is solvent; that no bankruptcy or insolvency
proceedings are pending or contemplated by or against Tenant; and that
this Amendment is the legal, valid and binding obligation of Tenant
enforceable against Tenant in accordance with its terms, except as
enforceability hereof may be limited by bankruptcy, insolvency,
reorganization or moratorium or other similar laws relating to
Landlord's rights and by general principles which may limit the right
to obtain equitable remedies.
(b) Except as expressly amended by this Amendment, the Lease is in
all respects ratified and confirmed, and the terms, provisions,
representations, warranties, covenants and conditions thereof shall be
and remain in full force and effect.
(c) The covenants, representations and warranties contained in the
Lease are true and correct in all material respects on and as of the
date hereof as though made on and as of this date, and to the best of
its knowledge and belief Tenant is not in default in any manner under
the Lease or under any document, writing or instrument executed in
connection therewith or herewith.
(d) All information, reports, statements and other data furnished
by or on behalf of Tenant prior to, contemporaneously with, or
subsequent to the execution of the Lease or this Amendment are and
shall be true and correct to the best of its knowledge and belief and
do not and shall not omit to state any fact or circumstance necessary
to make the information contained therein or herein not misleading.
Upon request of Landlord, Tenant shall provide to Landlord on a
quarterly basis company prepared financial statements and on an annual
basis annual audited financial statements of the Tenant and FFMC.
(e) To the best of its knowledge and belief Tenant has no claims,
demands, counterclaims, defenses, allowances, adjustments or offsets
arising out of or in any way related to the Lease (as amended hereby)
or arising out of any document, writing or instrument executed in
connection therewith or herewith.
10. This Amendment (i) shall be binding upon the Landlord and Tenant and
their respective heirs, legal representatives, successors and
permitted assigns; (ii) may be renewed, modified or amended only by a
writing signed by each party hereto; (iii) shall be governed by and
construed in accordance with the laws of the State of Texas and the
United States of America; (iv) may be executed in several
counterparts, and each counterpart when so executed and delivered
shall constitute an original agreement, and all such separate
counterparts shall constitute one and the same agreement; and (v)
together with the Lease, embodies the entire agreement and
understanding between the parties with respect to the subject matter
hereof and supersedes all prior agreements,
Page 7 of 8
81
consents and understandings relating to such subject matter. All
capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to them in the Lease. The term "Lease" as
used in the Lease or in any other instrument, document or writing
executed in connection therewith or herewith shall mean the Lease as
amended by the First Amendment, Second Amendment and this Amendment.
IN WITNESS WHEREOF, this Amendment is executed in multiple
counterparts by Landlord and Tenant effective as of the date first written
above.
TENANT:
PAYMENT SERVICES COMPANY,
a Delaware corporation
By: Barry W. Burt
-----------------------------
Barry W. Burt, Vice President
LANDLORD:
VPM 1988-1, LTD.,
a Texas limited partnership
By: VERIQUEST REAL ESTATE SERVICES, INC.,
its General Partner
By: Larry A. Strickland
------------------------------
Larry A. Strickland, President
Exhibit A-1 - Parcel 3 and Parcel 4
Exhibit A-2 - Additional Basement Space
Schedule 1 - Base Rental for entire Leased Premises
Schedule 2 - Adjustments to Base Rental for Allowance used by Tenant
Page 8 of 8
82
FOURTH AMENDMENT TO LEASE AGREEMENT
This Fourth Amendment to Lease Agreement ("Amendment") is made and entered into
effective as of April 5, 1993, by and between VPM 19881, LTD., a Texas limited
partnership, ("Landlord") and PAYMENT SERVICES COMPANY, a Delaware corporation
("Tenant"), as successor in interest by merger to Payment Services, a Texas
corporation ("PSC-Texas").
W I T N E S S E T H:
RECITALS:
A. Landlord and PSC-Texas previously entered into that certain Lease
Agreement ("Original Lease") dated April 13, 1990, covering 4,171
square feet of Net Rentable Area in the basement and all of the fifth
(5th), seventh (7th), tenth (10th), and eleventh (11th) floors so that
Tenant leased an aggregate of 76,481 square feet of Net Rentable Area
in a building known as 5251 Westheimer or TeleCheck Plaza (the
"Building").
B. Subsequent to the execution of the Original Lease, Landlord and Tenant
executed that certain First Supplement To and Amendment Of Lease
Agreement ("First Amendment") dated July 9, 1990, wherein Landlord
agreed to lease to Tenant the Sixth Floor Space covering 10,232 square
feet of Net Rentable Area of the sixth (6th) floor of the Building
which increased the total Net Rentable Area in the Building leased by
PSC-Texas to 86,713 square feet.
C. As part of the consideration for leasing the Sixth Floor Space,
Landlord gave PSC-Texas a credit equal to $100,000.00 amortized over
the balance of the Lease Term on additional space PSC-Texas leased
from Landlord within the Building prior to August 15, 1993, all as
more particularly set forth in the Original Lease which $100,000.00
credit was paid to PSC-Texas in the form of a Base Rental reduction as
more particularly set forth in the First Amendment.
D. Landlord and PSC-Texas have executed that certain Second Amendment to
Lease Agreement dated February 21, 1992, ("Second Amendment") in order
(i) to provide for PSC-Texas to lease the Remaining Sixth Floor Space
in two parcels consisting of two (2) equal parcels each having 4,518
square feet of Net Rentable Area and each parcel being referred to as
"Parcel 1" and "Parcel 2", (ii) to provide for a change in the Base
Rental (which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the tenant improvements,
(iii) to provide for Landlord to fund a leasehold improvement
allowance and architectural and engineering allowance for tenant
improvements for the Leased Premises, provided the Base Rental is
increased to cover any portion of the allowance expended in the design
and construction of the improvements, (iv) to provide for a 1991 Base
Year for Parcel 1 and, depending upon when PSC-Texas occupied Parcel
2, either a 1992 or 1993 Base Year for Parcel 2, (v) to provide for
the relocation of the existing exterior signage and to permit
PSC-Texas to add comparable signage on the east face of the Building;
and (vi) to ratify the parking provisions of the Lease Agreement.
-Page 1 of 8-
83
E. Tenant is now a wholly-owned subsidiary of Payment Services Company -
U.S. which company is a wholly-owned subsidiary of First Financial
Management Corporation ("FFMC"). Landlord has executed that certain
Release dated July 28, 1992, which released John D. Chaney from his
obligations to guarantee the Lease.
F. Landlord and PSC-Texas have executed that certain Third Amendment to
Lease Agreement dated October 5, 1992, ("Third Amendment") in order
(i) to increase the Base Rental Tenant is required to pay pursuant to
Section 5(c) of the Second Amendment in order to reflect the monies
advanced to Tenant to construct the improvements contemplated by the
Second Amendment, (ii) to provide for Tenant to lease the space
located on the fourth (4th) floor of the Building in two parcels, the
first parcel consisting of 9,865 square feet of Net Rentable Area
("Parcel 3") and the second parcel consisting of 5,538 square feet of
Net Rentable Area ("Parcel 4") and to provide for Tenant to lease
space located in the basement of the Building consisting of 2,125
square feet of Net Rentable Area (the "Additional Basement Space"),
(iii) to provide for a change in the Base Rental for Parcel 3 and
Parcel 4 which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the Tenant improvements,
(iv) to provide for Landlord to fund a leasehold improvement allowance
and architectural and engineering allowance for tenant improvements
for the Leased Premises, provided the Base Rental is increased to
cover any portion of the allowance expended in the design and
construction of the improvements, (v) to provide for a 1992 Base Year
for Parcel 3 and the Additional Basement Space, and a 1992 Base Year
for Parcel 4, (vi) to provide for the deletion of Landlord's
obligation to provide the First Expansion Area to Tenant, (vii) to
provide for the extension of the Term of the Lease for Parcel 3 and
Parcel 4, and (viii) to ratify the parking provisions of the Lease.
The Original Lease, as amended by the terms and provisions of the
First Amendment, Second Amendment, Third Amendment and this Amendment,
shall hereinafter be referred to as the "Lease", which Lease is
incorporated herein by this reference for all purposes. Words with
initial capital letters used in this Amendment but not defined herein
shall have the respective meanings assigned to such defined terms in
the Lease.
G. Landlord and Tenant now desire to amend the Lease (i) to increase the
Base Rental Tenant is required to pay pursuant to Section 5(c) of the
Third Amendment in order to reflect the monies advanced to Tenant to
construct the improvements contemplated by the Third Amendment, (ii)
to provide for Tenant to lease the space located on the fourth (4th)
floor of the Building in two parcels, the first parcel, being Suite
440, consisting of 2999 square feet of Net Rentable Area ("Parcel 5")
and the second parcel, being Suite 420, consisting of 1,000 square
feet of Net Rentable Area ("Parcel 6"), (iii) to provide for a change
in the Base Rental for Parcel 5 and Parcel 6 which will be adjusted to
reflect the total dollars expended by Landlord in the design and
construction of the Tenant improvements, (iv) to provide for Landlord
to fund a leasehold improvement allowance and architectural and
engineering allowance for tenant improvements for the Leased Premises
and to provide for the relocation of Small Business Loan Services
currently occupying Parcel 5 and Parcel 6, provided the Base Rental is
increased to cover any portion of the allowance expended in the design
and construction of the improvements and the relocation of Small
Business Loan Services, (v) to permit Tenant to install a permanent
emergency generator and to store fuel for the generator at a location
approved by Landlord, (vi) to provide for a 1993 Base Year for Parcel
5 and Parcel 6, (vii) to provide for the extension of the Term of the
Lease for Parcel 5 and Parcel 6, and (viii) to ratify the parking
provisions of the Lease.
-Page 2 of 8-
84
AGREEMENT:
IN CONSIDERATION OF THE PREMISES and the mutual agreements herein set forth and
for other good and valuable considerations, the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Lease of Parcel 5 and Parcel 6.
Subject to the terms contained herein and in the Lease as amended by
the terms of this Amendment, Landlord does hereby lease and demise to
Tenant and Tenant does hereby lease and take from Landlord (i) those
certain premises containing approximately 2,999 square feet of Net
Rentable Area (being Parcel 5), and (ii) those certain premises
containing approximately 1,000 square feet of Net Rentable Area (being
Parcel 6), both parcels being located on the fourth (4th) floor of the
Building. Parcel 5 and Parcel 6 are depicted on the floor plan
attached hereto as Exhibit A4-1. By this reference, Exhibit A4-1 is
hereby incorporated in and made a part of Exhibit B to the Lease.
Parcel 5 and Parcel 6 shall constitute Office Space and from and after
the date hereof shall constitute a part of the Leased Premises and
otherwise be included in the Net Rentable Area of the Lease. Except as
otherwise provided herein, the lease of Parcel 5 and Parcel 6 shall be
subject to all the terms and conditions of the Lease, as amended
hereby, as if the same had been originally included therein. Tenant's
right to occupy Parcel 5 and Parcel 6 shall be from the Parcel 5 and 6
Commencement Date until November 24, 2002. The total Net Rentable Area
of the Leased Premises after inclusion of Parcel 5 and Parcel 6 and
Parcel 4 (pursuant to the terms of the Third Amendment), the total Net
Rentable Area of the Leased Premises shall be 117,276 square feet.
2. Rental Accrual Date for Parcel 5 and Parcel 6.
The lease of Parcel 5 and Parcel 6 shall be effective as of the date
of this Amendment; provided, however (a) Base Rental and other sums
due under the Lease for Parcel 5 and Parcel 6 shall not commence to
accrue for Parcel 5 and Parcel 6 ("Parcel 5 and 6 Rent Commencement
Date") until the earlier of (i) the date Tenant takes occupancy of
Parcel 5 and Parcel 6 and commences to conduct its normal and
customary business therefrom, or (ii) April 1, 1993.
3. Lease Term and Base Rental for the Leased Premises.
The Term of the Lease for the Leased Premises and the Base Rental for
the Leased Premises is set forth on Schedule 1 attached hereto which is
incorporated by this reference. Subject to the adjustments as
hereinafter set forth in the event Tenant uses the Allowance (defined
below), commencing on the Parcel 5 and 6 Rent Commencement Date and
continuing thereafter during the Term of the Lease, Tenant shall pay
the Base Rental for the Leased Premises set forth on Schedule 1.
The Base Rental rates have been established assuming Tenant leases
Parcel 5 and Parcel 6 on an AS-IS basis with Landlord not providing
any allowance or other concessions to Tenant.
Landlord will advance to Tenant the Allowance to be used to fully
design, construct and install the Landlord's work and the Tenant's
Work provided the Base Rental for Parcel 5
-Page 3 of 8-
85
and Parcel 6 is increased by $0.1586 per year per square foot of Net
Rentable Area for every $1.00 of costs incurred by Landlord to design,
construct and install the Landlord's Work and Tenant's Work which
increase in Base Rental is reflected in Schedule 2 attached hereto.
In accordance with the provisions of Paraqraph 5 below, Landlord has
agreed to advance to Tenant an Allowance ("Allowance") not to exceed
$18.00 per square foot of Net Rentable Area of Office Space contained
in Parcel 5 and Parcel 6 for Tenant to use in the design and
construction of the Landlord's Work and Tenant's Work for Parcel 5 and
Parcel 6.
4. Base Year for the calculation of Tenant's Additional Rental.
In order to calculate Tenant's Share of Operating Expenses for the
Leased Premises, the following different Base Years will be utilized.
The Base Year for Parcel 1 shall be 1991 with Tenant's Percentage
Share for Parcel 1 being calculated as (2.4637%). The Base Year for
Parcel 2 shall be 1992 with Tenant's Percentage Share for Parcel 2
being calculated as (1.7678%). The Base Year for Parcel 3 and the
Additional Basement Space shall be 1992 with Tenant's Percentage Share
for Parcel 3 being calculated as (4.6198%) and Tenant's Percentage
Share for the Additional Basement Space being calculated as 0.9951%.
The Base Year for Parcel 4 shall be 1992, with Tenant's Percentage
Share for Parcel 4 being calculated as 2.5934%. The Base Year for
Parcel 5 and Parcel 6 shall be 1993 with Tenant's Percentage Share for
Parcel 5 and Parcel 6 collectively being 1.8727%. The Base Year for
the remainder of the Leased Premises shall continue to be 1990 with
Tenant's Percentage Share being calculated as 40.6076% for such
remainder.
5. Leasehold Improvements.
(a) Tenant shall have prepared at Tenant's cost for Landlord's
approval drawings, plans and specifications ("Working
Drawings") indicating all changes and improvements ("Landlord's
Work") which Tenant desires to have constructed and installed
in the Leased Premises. Parcel 5 and Parcel 6 need to be built
out simultaneously. The terms and provisions of the Work
Letter attached to the Original Lease shall govern the
construction of the Landlord's Work and Tenant's Work except
as may be expressly provided otherwise in this Paragraph 5. As
soon as the Working Drawings have been approved by Landlord and
Tenant, a copy of a schedule of the Working Drawings shall be
appended to this Amendment and the Working Drawings shall be
deemed incorporated herein for all purposes. Landlord shall
diligently pursue towards completion the Landlord's Work
depicted in the Working Drawings in accordance with the
Construction Schedule. Tenant's Architect shall be an
architectural firm selected by Tenant subject to Landlord's
approval, which approval shall not be unreasonably withheld,
provided such architectural firm is duly licensed by the State
of Texas. Tenant shall pay Landlord a one time coordination
fee equal to $5,500.00 for the supervision of construction of
Landlord's Work and Tenant's Work for Parcel 5 and Parcel 6.
(b) Landlord shall immediately proceed to prepare Parcel 5 and
Parcel 6 in accordance with the Working Drawings (with such
minor variations as Landlord and Tenant agree upon in
writing). Parcel 5 and Parcel 6 will be deemed
-Page 4 of 8-
86
"completed" when (i) all Landlord's Work has been
substantially completed in accordance with the
Working Drawings except for punch list items which do
not materially interfere with Tenant's use thereof,
and (ii) Landlord certifies in writing to Tenant as
to such completion. By accepting possession of the
leasehold improvements contained in Parcel 5 and
Parcel 6, Tenant shall be deemed to have accepted the
same in its As-Is condition and to have acknowledged
that the same fully complies with Landlord's
covenants and obligations hereunder (subject to any
punch list items which remain to be completed).
(c) All costs and expenses of relocating Small Business
Loan Services, the Landlord's Work and Tenant's Work
shall be paid by Tenant; provided, however, Landlord
shall advance to Tenant an allowance for the design
and construction of the Landlord's Work and Tenant's
Work ("Allowance") up to a maximum of $18.00 per
square foot of Net Rentable Area in Parcel 5 and
Parcel 6 equal to $71,982.00 to be advanced by
Landlord to Tenant and credited against such costs
and expenses as incurred. Tenant acknowledges and
agrees Landlord's covenant to advance the Allowance
to Tenant is not a rent concession or an inducement
of any kind because if the Allowance is advanced to
Tenant, the Base Rental Tenant is required to pay for
Parcel 5 and Parcel 6 will be increased by $0.1586
per square foot of Net Rentable Area within Parcel 5
and Parcel 6 per year for every dollar per square
foot of Net Rentable Area in Parcel 5 and Parcel 6
that Landlord advances to Tenant in the form of the
Allowance. In the event the total costs of (i)
relocating Small Business Loan Services, and (ii)
Tenant's Work, and (iii) Landlord's Work, and (iv)
installation of any improvements or personalty which
were not depicted on the approved Working Drawings
exceeds the amount of the Allowance (such amount
being called the "Overage") Tenant shall pay the
Overage in cash to Landlord, upon demand, or, at
Tenant's election, Landlord will amortize the Overage
in equal monthly installments over five years of the
Term at an interest rate of ten percent (10%) per
annum commencing on the Parcel 5 and Parcel 6
Commencement Date. Landlord shall advise Tenant of
the amount of the Overage, if any, and Tenant shall
either pay the Overage in cash or elect to have the
Overage amortized over five (5) years of the Lease
term, such election to be made within three (3) days
after receipt of Landlord's notifcation of the
Overage. If Tenant elects to pay the Overage as
additional Base Rental, Landlord shall prepare an
amendment to the Lease reflecting the new Base Rental
for the Leased Premises for Tenant's execution. The
Landord's $5,500.00 Coordination Fee may be paid from
the Allowance.
In the event any portion of the Allowance is not used
("Unused Allowance"), the Unused Allowance may be used
prior to January 1, 1995 to renovate or construct
additional improvements to the Leased Premises
provided appropriate Working Drawings are approved by
the Landlord. Any use of the Unused Allowance will
cause an increase in the Base Rental for Parcel 5 and
Parcel 6 as set forth in this Paraqraph 5. After
construction of the improvements and a final
determination of how much of the Allowance Tenant
desires to use, Landlord and Tenant agree to enter
into an appropriate amendment to the Lease to confirm
the adjusted Base Rental for Parcel 5 and Parcel 6.
-Page 5 of 8-
87
6. Generator.
Tenant may install an electrical generator in a location approved in
writing by Landlord. Upon termination of the Lease, Tenant shall
remove the generator and repair any damage associated with its
removal. Upon prior written notice to Landlord, Tenant may temporarily
store diesel fuel in a location approved by Landlord to run the
generator. Such temporary storage shall only for such period of time
as is necessary for Tenant to take precautions to insure that Tenant
will have adequate electrical power during any impending storm or
other event which could reasonably cause the electrical power to the
Leased Premises to be interrupted. Tenant shall not store fuel for the
generator on a permanent basis and will cause the fuel to be removed
when the reason for temporarily storing the fuel has subsided. Tenant
shall indemnify, defend and hold harmless Landlord from loss, damage,
legal fees and costs associated with any fuel spill or leakage from
the fuel storage drums and from any loss, damage, legal fees and costs
associated with damage to the Building arising from the use of the
generator even if the concurrent negligence (but not the gross
negligence or wilful misconduct) of Landlord contributed to the damage
or loss.
7. Parking.
Landlord and Tenant ratify and confirm that the parking provisions of
the Original Lease as set forth in Section 3.04 remain in full force
and effect. Landlord and Tenant acknowledge that Tenant will continue
to have all Parking Rent abate for the Leased Premises until September
1, 1994. In addition, to the extent the Net Rentable Area of the
Leased Premises changes as a consequence of Tenant leasing Parcel 5
and Parcel 6, then Parcel 5 and Parcel 6 shall be deemed part of the
initial Leased Premises (and not space obtained pursuant to Section
2.10 or Section 2.11) and the number of parking permits and the
charges therefor for Parcel 5 and Parcel 6 are set forth in Section
3.04 (a) through (d) of the Original Lease. Notwithstanding anything
herein to the contrary, Landlord and Tenant agree that Tenant shall
not have to pay rental for any parking permits provided to Tenant tor
Parcel 5 and Parcel 6 until November 25, 1995. Landlord and Tenant
acknowledge that the Parking Facilities have been re-stripped and the
current parking ratio is 4.00.
8. Termination Option.
Notwithstanding anything contained herein to the contrary, so long as
Tenant is not in default under the Lease beyond any applicable grace
period, Tenant shall have the right by giving written notice to
Landlord no later than February 28, 2000, to terminate its lease of
Parcel 5 and Parcel 6 effective as of August 31, 2000, provided Tenant
pays to Landlord the Termination Fee (hereinafter defined).
Tenant's notice to terminate its lease of Parcel 5 and Parcel 6 must
be received by Landlord no later than February 27, 2000. If Tenant
shall terminate its lease of Parcel 5 and Parcel 6, Tenant shall pay
to Landlord a Termination Fee equal to (a) the unamortized cost of the
leasehold improvements paid for by landlord for Parcel 5 and Parcel 6
(using an interest rate of ten percent (10%) over a term of ten (10)
years), plus (b) the unamortized cost of any leasing commissions paid
by Landlord for Parcel 5 and Parcel 6 (using an interest rate of ten
percent (10%) over a term of ten (10) years).
-Page 6 of 8-
88
9. Tenant hereby covenants, represents and warrants to Landlord that:
(a) Tenant is solvent; that no bankruptcy or insolvency
proceedings are pending or contemplated by or against Tenant;
and that this Amendment is the legal, valid and binding
obligation of Tenant enforceable against Tenant in accordance
with its terms, except as enforceability hereof may be limited
by bankruptcy, insolvency, reorganization or moratorium or
other similar laws relating to Landlord's rights and by
general principles which may limit the right to obtain
equitable remedies.
(b) Except as expressly amended by this Amendment, the Lease is in
all respects ratified and confirmed, and the terms,
provisions, representations, warranties, covenants and
conditions thereof shall be and remain in full force and
effect.
(c) The covenants, representations and warranties contained in the
Lease are true and correct in all material respects on and as
of the date hereof as though made on and as of this date, and
to the best of its knowledge and belief Tenant is not in
default in any manner under the Lease or under any document,
writing or instrument executed in connection therewith or
herewith.
(d) All information, reports, statements and other data furnished
by or on behalf of Tenant prior to, contemporaneously with, or
subsequent to the execution of the Lease or this Amendment are
and shall be true and correct to the best of its knowledge and
belief and do not and shall not omit to state any fact or
circumstance necessary to make the information contained
therein or herein not misleading. Upon request of Landlord,
Tenant shall provide to Landlord on a quarterly basis company
prepared financial statements and on an annual basis annual
audited financial statements of the Tenant and FFMC.
(e) To the best of its knowledge and belief Tenant has no claims,
demands, counterclaims, defenses, allowances, adjustments or
offsets arising out of or in any way related to the Lease (as
amended hereby) or arising out of any document, writing or
instrument executed in connection therewith or herewith.
10. This Amendment (i) shall be binding upon the Landlord and Tenant and
their respective heirs, legal representatives, successors and
permitted assigns; (ii) may be renewed, modified or amended only by a
writing signed by each party hereto; (iii) shall be governed by and
construed in accordance with the laws of the State of Texas and the
United States of America; (iv) may be executed in several
counterparts, and each counterpart when so executed and delivered
shall constitute an original agreement, and all such separate
counterparts shall constitute one and the same agreement; and (v)
together with the Lease, embodies the entire agreement and
understanding between the parties with respect to the subject matter
hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter. All capitalized terms
used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Lease.
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89
IN WITNESS WHEREOF, this Amendment is executed in multiple
counterparts by Landlord and Tenant effective as of the date first written
above.
TENANT:
PAYMENT SERVICES COMPANY,
a Delaware corporation
By: Barry W. Burt
---------------------------------
Barry W. Burt, Vice President
LANDLORD:
VPM 1988 1, LTD.,
a Texas limited partnership
By: VERIOUEST REAL ESTATE SERVICES, INC.,
its General Partner
By: Larry A. Stickland, President
---------------------------------
Larry A. Stickland, President
Exhibit A4-1- Parcel 5 and Parcel 6
Schedule 1 - Base Rental for Entire Leased Premises
Schedule 2 - Adjustments to Base Rental
for Allowance Used by Tenant
-Page 8 of 8-
90
FIFTH AMENDMENT TO LEASE AGREEMENT
This Fifth Amendment to Lease Agreement ("Amendment") is made and entered into
effective as of December 15, 1993, by and between VPM 1988-1, LTD., a Texas
limited partnership, ("Landlord") and TELECHECK SERVICES, INC. ("Tenant"), as
successor in interest to Payment Services Company, a Delaware corporation, as
successor in interest by merger to Payment Services, a Texas corporation
("PSC-Texas").
W I T N E S S E T H :
RECITALS:
A. Landlord and PSC-Texas previously entered into that certain Lease
Agreement ("Original Lease") dated April 13, 1990, covering 4,171
square feet of Net Rentable Area in the basement and all of the fifth
(5th), seventh (7th), tenth (1Oth), and eleventh (11th) floors so that
Tenant leased an aggregate of 76,481 square feet of Net Rentable Area
in a building known as 5251 Westheimer or TeleCheck Plaza (the
"Building").
B. Subsequent to the execution of the Original Lease, Landlord and Tenant
executed that certain First Supplement To and Amendment Of Lease
Agreement ("First Amendment") dated July 9, 1990, wherein Landlord
agreed to lease to Tenant the Sixth Floor Space covering 10,232 square
feet of Net Rentable Area of the sixth (6th) floor of the Building
which increased the total Net Rentable Area in the Building leased by
PSC-Texas to 86,713 square feet of Net Rentable Area.
C. As part of the consideration for leasing the Sixth Floor Space,
Landlord gave PSC-Texas a credit equal to $100,000.00 amortized over
the balance of the Lease Term on additional space PSC-Texas leased
from Landlord within the Building prior to August 15, 1993, all as
more particularly set forth in the Original Lease which $100,000.00
credit was paid to PSC-Texas in the form of a Base Rental reduction as
more particularly set forth in the First Amendment.
D. Landlord and PSC-Texas have executed that certain Second Amendment to
Lease Agreement dated February 21, 1992, ("Second Amendment") in order
(i) to provide for PSC-Texas to lease the Remaining Sixth Floor Space
in two parcels consisting of two (2) equal parcels each having 4,518
square feet of Net Rentable Area and each parcel being referred to as
"Parcel 1" and "Parcel 2", (ii) to provide for a change in the Base
Rental (which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the tenant improvements,
(iii) to provide for Landlord to fund a Leasehold Improvement
Allowance and Architectural and Engineering Allowance for tenant
improvements for the Leased Premises, provided the Base Rental is
increased to cover any portion of the allowance expended in the design
and construction of the improvements, (iv) to provide for a 1991 Base
Year for Parcel 1 and, depending upon when PSC-Texas occupied Parcel
2, either a 1992 or 1993 Base Year for Parcel 2, (v) to provide for
the relocation of the existing exterior signage and to permit PSC-
-Page 1 of 8-
91
Texas to add comparable signage on the east face of the Building; and
(vi) to ratify the parking provisions of the Lease Agreement.
E. Tenant is now a wholly-owned subsidiary of Payment Services
Company-U.S. which company is a wholly-owned subsidiary of First
Financial Management Corporation ("FFMC"). Landlord has executed that
certain Release dated July 28, 1992, which released John D. Chaney
from his obligations to guarantee the Lease.
F. Landlord and PSC-Texas have executed that certain Third Amendment to
Lease Agreement dated October 5, 1992, ("Third Amendment") in order
(i) to increase the Base Rental Tenant is required to pay pursuant to
Section 5(c) of the Second Amendment in order to reflect the monies
advanced to Tenant to construct the improvements contemplated by the
Second Amendment, (ii) to provide for Tenant to lease the space
located on the fourth (4th) floor of the Building in two parcels, the
first parcel consisting of 9,865 square feet of Net Rentable Area
("Parcel 3") and the second parcel consisting of 5,538 square feet of
Net Rentable Area ("Parcel 4") and to provide for Tenant to lease
space located in the basement of the Building consisting of 2,125
square feet of Net Rentable Area (the "Additional Basement Space"),
(iii) to provide for a change in the Base Rental for Parcel 3 and
Parcel 4 which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the Tenant improvements,
(iv) to provide for Landlord to fund a Leasehold Improvement Allowance
and Architectural and Engineering Allowance for tenant improvements
for the Leased Premises, provided the Base Rental is increased to
cover any portion of the allowance expended in the design and
construction of the improvements, (v) to provide for a 1992 Base Year
for Parcel 3 and the Additional Basement Space, and a 1992 Base Year
for Parcel 4, (vi) to provide for the deletion of Landlord's
obligation to provide the First Expansion Area to Tenant, (vii) to
provide for the extension of the Term of the Lease for Parcel 3 and
Parcel 4, and (viii) to ratify the parking provisions of the Lease.
G. Landlord and PSC-Texas have executed that certain Fourth Amendment to
Lease Agreement dated April 5, 1993 ("Fourth Amendment") in order (i)
to increase the Base Rental Tenant is required to pay, (ii) to provide
for Tenant to lease the space located on the fourth (4th) floor of the
Building in two parcels, the first parcel, being Suite 440, consisting
of 2999 square feet of Net Rentable Area ("Parcel 5") and the second
parcel, being Suite 420, consisting of 1,000 square feet of Net
Rentable Area ("Parcel 6"), (iii) to provide for a change in the Base
Rental for Parcel 5 and Parcel 6 which will be adjusted to reflect the
total dollars expended by Landlord in the design and construction of
the Tenant improvements, (iv) to provide for Landlord to fund a
leasehold improvement allowance and architectural and engineering
allowance for tenant improvements for the Leased Premises and to
provide for the relocation of Small Business Loan Services currently
occupying Parcel 5 and Parcel 6, provided the Base Rental is increased
to cover any portion of the allowance expended in the design and
construction of the improvements and the relocation of Small Business
Loan Services, (v) to permit Tenant to install a permanent emergency
generator and to store fuel for the generator at a location approved
by Landlord, (vi) to provide for a 1993 Base Year for Parcel 5 and
Parcel 6, (vii) to provide for the extension of the Term of the Lease
for Parcel 5 and Parcel 6, and (viii) to ratify the parking provisions
of the Lease.
-Page 2 of 8-
92
H. Landlord and Tenant now desire to amend the Lease (i) to increase
the Base Rental Tenant is required to pay, (ii) to provide for Tenant
to lease the space located on the eighth (8th) floor of the Building,
being Suite 850, consisting of 3,858 square feet of Net Rentable Area
("Parcel 7"), (iii) to provide for a change in the Base Rental for
Parcel 7 which will be adjusted to reflect the total dollars expended
by Landlord in the design and construction of the Tenant improvements,
(iv) to provide for Landlord to fund a Leasehold Improvement Allowance
and Architectural and Engineering Allowance for tenant improvements
for the Leased Premises, provided the Base Rental is increased to
cover any portion of the allowance expended in the design
and construction of the improvements, (v) to provide for a 1993 Base
Year for Parcel 7, (vii) to provide for the extension of the Term of
the Lease for Parcel 7, and (viii) to ratify the parking provisions of
the Lease. The Original Lease, as amended by the terms and provisions
of the First Amendment, Second Amendment, Third Amendment, Fourth
Amendment and this Amendment, shall hereinafter be referred to as the
"Lease", which Lease is incorporated herein by this reference for all
purposes. Words with initial capital letters used in this Amendment
but not defined herein shall have the respective meanings assigned to
such defined terms in the Lease.
AGREEMENT:
IN CONSIDERATION OF THE PREMISES and the mutual agreements herein set forth and
for other good and valuable considerations, the receipt and sufficiency of
which are hereby acknowledged, Landlord and Tenant hereby agree as follows:
1. Lease of Parcel 7.
Subject to the terms contained herein and in the Lease as amended by
the terms of this Amendment, Landlord does hereby lease and demise to
Tenant and Tenant does hereby lease and take from Landlord those
certain premises containing approximately 3,858 square feet of Net
Rentable Area (being Parcel 7), located on the eighth (8th) floor of
the Building. Parcel 7 is depicted on the floor plan attached hereto
as EXHIBIT A5-1. By this reference, EXHIBIT A5-1 is hereby
incorporated in and made a part of EXHIBIT B to the Lease.
Parcel 7 shall constitute Office Space and from and after the date
hereof shall constitute a part of the Leased Premises and otherwise be
included in the Net Rentable Area of the Lease. Except as otherwise
provided herein, the lease of Parcel 7 shall be subject to all the
terms and conditions of the Lease, as amended hereby, as if the same
had been originally included therein. Tenant's right to occupy Parcel
7 shall be from the Parcel 7 Commencement Date until November 24,
2002. The total Net Rentable Area of the Leased Premises after
Inclusion of Parcel 7 shall be 121,134 square feet of Net Rentable
Area.
2. Rental Accrual Date for Parcel 7.
The lease of Parcel 7 shall be effective as of the date of this
Amendment; provided, however (a) Base Rental and other sums due under
the Lease for Parcel 7 shall not commence to accrue for Parcel 7
("Parcel 7 Rent Commencement Date") until the earlier of (i) the date
-Page 3 of 8-
93
Tenant takes occupancy of Parcel 7 and commences to conduct its normal
and customary business therefrom, or (ii) November 15, 1993.
3. Lease Term and Base Rental for Parcel 7.
The Term of the Lease for Parcel 7 and the Base Rental for Parcel 7 is
set forth on Schedule-1 of this Fifth Amendment to Lease Agreement
attached hereto which is incorporated by this reference. Subject to
the adjustments as hereinafter set forth in the event Tenant uses the
Allowance (defined below), commencing on the Parcel 7 Rent
Commencement Date and continuing thereafter during the Term of the
Lease, Tenant shall pay the Base Rental for Parcel 7 as set forth on
Schedule-1 of this Fifth Amendment to Lease Agreement.
The Base Rental rates have been established assuming Tenant leases
Parcel 7 on an AS-IS basis with Landlord not providing any allowance
or other concessions to Tenant.
Landlord will advance to Tenant the Allowance to be used to fully
design, construct and install the Landlord's Work and the Tenant's
Work provided the Base Rental for Parcel 7 is increased by $0.1682 per
year per square foot of Net Rentable Area for every $1.00 of costs
incurred by Landlord to design, construct and install the Landlord's
Work and Tenant's Work which increase in Base Rental is reflected in
Schedule 2 attached hereto.
In accordance with the provisions of Paragraph 5 below, Landlord has
agreed to advance to Tenant an Allowance ("Allowance") not to exceed
Eighteen and 00/100 Dollars ($18.00) per square foot of Net Rentable
Area of Office Space contained in Parcel 7 for Tenant to use in the
design and construction of the Landlord's Work and Tenant's Work for
Parcel 7.
4. Base Year for the calculation of Tenant's Additional Rental.
In order to calculate Tenant's Share of Operating Expenses for the
Leased Premises, the following different Base Years will be utilized.
The Base Year for Parcel 1 shall be 1991 with Tenant's Percentage
Share for Parcel 1 being calculated as (2.4637%). The Base Year for
Parcel 2 shall be 1992 with Tenant's Percentage Share for Parcel 2
being calculated as (1.7678%). The Base Year for Parcel 3 and the
Additional Basement Space shall be 1992 with Tenant's Percentage Share
for Parcel 3 being calculated as (4.6198%) and Tenant's Percentage
Share for the Additional Basement Space being calculated as (0.9951%).
The Base Year for Parcel 4 shall be 1992, with Tenant's Percentage
Share for Parcel 4 being calculated as (2.5934%). The Base Year for
Parcel 5, Parcel 6 and Parcel 7 shall be 1993 with Tenant's Percentage
Share for Parcel 5, Parcel 6 and Parcel 7 collectively being
(3.6794%). The Base Year for the remainder of the Leased Premises
shall continue to be 1990 with Tenant's Percentage Share being
calculated as (40.6076%) for such remainder.
5. Leasehold Improvements.
(a) Tenant shall have prepared at Tenant's cost for Landlord's
approval drawings, plans and specifications ("Working
Drawings") indicating all changes and improvements
("Landlord's Work") which Tenant desires to have constructed
and installed in the Leased Premises. The terms and
provisions of the Work Letter attached to the
-Page 4 of 8-
94
Original Lease shall govern the construction of the Landlord's
Work and Tenant's Work except as may be expressly provided
otherwise in this Paragraph 5. As soon as the Working Drawings
have been approved by Landlord and Tenant, a copy of a
schedule of the Working Drawings shall be appended to this
Amendment and the Working Drawings shall be deemed
incorporated herein for all purposes. Landlord shall diligently
pursue towards completion the Landlord's Work depicted in the
Working Drawings in accordance with the Construction Schedule.
Tenant's Architect shall be an architectural firm selected by
Tenant subject to Landlord's approval, which approval shall
not be unreasonably withheld, provided such architectural
firm is duly licensed by the State of Texas. Tenant shall pay
Landlord a one time coordination fee equal to Five Thousand
Five Hundred and 00/100 Dollars ($5,500.00) for the
supervision of construction of Landlord's Work and Tenant's
Work for Parcel 7.
(b) Landlord shall immediately proceed to prepare Parcel
7 in accordance with the Working Drawings (with such minor
variations as Landlord and Tenant agree upon in writing).
Parcel 7 will be deemed "completed" when (i) all Landlord's
Work has been substantially completed in accordance with the
Working Drawings, except for punch list items which do not
materially interfere with Tenant's use thereof, and (ii)
Landlord certifies in writing to Tenant as to such
completion. By accepting possession of the leasehold
improvements contained in Parcel 7, Tenant shall be deemed to
have accepted the same in its As-Is condition and to have
acknowledged that the same fully complies with Landlord's
covenants and obligations hereunder (subject to any punch
list items which remain to be completed).
(c) All costs and expenses of the Landlord's Work and
Tenant's Work shall be paid by Tenant; provided, however,
Landlord shall advance to Tenant an allowance for the design
and construction of the Landlord's Work and Tenant's Work
("Allowance") up to a maximum of Eighteen and 00/100 Dollars
($18.00) per square foot of Net Rentable Area in Parcel 7 or
a total amount equal to Sixty-Nine Thousand Four Hundred
Forty-Four and 00/100 Dollars ($69,444.00) to be advanced by
Landlord to Tenant and credited against such costs and
expenses as incurred. Tenant acknowledges and agrees Landlord's
covenant to advance the Allowance to Tenant is not a rent
concession or an inducement of any kind because if the
Allowance is advanced to Tenant, the Base Rental Tenant is
required to pay for Parcel 7 will be increased by $0.1682 per
square foot of Net Rentable Area within Parcel 7 per year for
every dollar per square foot of Net Rentable Area in Parcel 7
that Landlord advances to Tenant in the form of the Allowance.
In the event the total costs of (i) Tenant's Work, (ii)
Landlord's Work and (iii) the installation of any
improvements or personalty which were not depicted on the
approved Working Drawings exceeds the amount of the
Allowance (such amount being called the "Overage") Tenant
shall pay the Overage in cash to Landlord, upon demand, or,
at Tenant's election, Landlord will amortize the Overage
in equal monthly installments over five (5) years of the Term
at an interest rate of ten percent (10%) per annum commencing
on the Parcel 7 Commencement Date. Landlord shall advise
Tenant of the amount of the Overage, if any, and Tenant shall
either pay the Overage in cash or elect to have the Overage
amortized over five (5) years of the Lease Term, such
election to be made within three (3) days after receipt of
Landlord's notification of the Overage. If Tenant elects to pay
-Page 5 of 8-
95
the Overage as additional Base Rental, Landlord shall prepare an
amendment to the Lease reflecting the new Base Rental for the
Leased Premises for Tenant's execution. The Landlord's
$5,500.00 Coordination Fee may be paid from the Allowance.
In the event any portion of the Allowance is not used ("Unused
Allowance"), the Unused Allowance may be used prior to January
1, 1995 to renovate or construct additional improvements to
the Leased Premises provided appropriate Working Drawings are
approved by the Landlord. Any use of the Unused Allowance will
cause an increase in the Base Rental for Parcel 7 as set forth
in this Paragraph 5. After construction of the improvements
and a final determination of how much of the Allowance Tenant
desires to use, Landlord and Tenant agree to enter into an
appropriate amendment to the Lease to confirm the adjusted
Base Rental for Parcel 7.
6. Parking.
Landlord and Tenant ratify and confirm that the parking provisions of
the Original Lease as set forth in Section 3.04 remain in full force
and effect. Landlord and Tenant acknowledge that Tenant will continue
to have all Parking Rent abate for the Leased Premises until September
1, 1994. In addition, to the extent the Net Rentable Area of the
Leased Premises changes as a consequence of Tenant leasing Parcel 7,
then Parcel 7 shall be deemed part of the Initial Leased Premises (and
not space obtained pursuant to Section 2.10 or Section 2.11) and the
number of parking permits and the charges therefor for Parcel 7 are
set forth in Section 3.04 (a) through (d) of the Original Lease.
Notwithstanding anything herein to the contrary, Landlord and Tenant
agree that Tenant shall not pay rental for any parking permits
provided to Tenant for Parcel 7 until November 25, 1995. Landlord and
Tenant acknowledge that the Parking Facilities have been re-striped
and the current parking ratio is 4.00. The attached Schedule 3
identifies the parking permits allocated Tenant.
7. Termination Option.
Notwithstanding anything contained herein to the contrary, so long as
Tenant is not in default under the Lease beyond any applicable grace
period, Tenant shall have the right by giving written notice to
Landlord no later than February 28, 2000, to terminate its lease of
Parcel 7 effective as of August 31, 2000, provided Tenant pays to
Landlord the termination fee (hereinafter defined).
Tenant's notice to terminate its lease of Parcel 7 must be received by
Landlord no later than February 27, 2000. If Tenant shall terminate
its lease of Parcel 7, Tenant shall pay to Landlord a termination fee
(the "Termination Fee") equal to (a) the unamortized cost of the
leasehold improvements paid for by landlord for Parcel 7 (using an
interest rate of ten percent (10%) over the term of this Amendment to
Lease Agreement, plus (b) the unamortized cost of any leasing
commissions paid by Landlord for Parcel 7 (using an interest rate of
ten percent (10%) over the term of this Amendment to Lease Agreement).
-Page 6 of 8-
96
8. Tenant hereby covenants, represents and warrants to Landlord that:
(a) Tenant is solvent; that no bankruptcy or insolvency
proceedings are pending or contemplated by or against Tenant;
and that this Amendment is the legal, valid and binding
obligation of Tenant enforceable against Tenant in accordance
with its terms, except as enforceability hereof may be
limited by bankruptcy, insolvency, reorganization or
moratorium or other similar laws relating to Landlord's
rights and by general principles which may limit the right
to obtain equitable remedies.
(b) Except as expressly amended by this Amendment, the Lease is in
all respects ratified and confirmed, and the terms, provisions,
representations, warranties, covenants and conditions thereof
shall be and remain in full force and effect.
(c) The covenants, representations and warranties contained in the
Lease are true and correct in all material respects on and as
of the date hereof as though made on and as of this date, and
to the best of its knowledge and belief Tenant is not in
default in any manner under the Lease or under any document,
writing or instrument executed in connection therewith or
herewith.
(d) All information, reports, statements and other data furnished
by or on behalf of Tenant prior to, contemporaneously with, or
subsequent to the execution of the Lease or this Amendment
are and shall be true and correct to the best of its
knowledge and belief and do not and shall not omit to state
any fact or circumstance necessary to make the information
contained therein or herein not misleading. Upon request of
Landlord, Tenant shall provide to Landlord on a quarterly
basis company prepared financial statements and on an annual
basis annual audited financial statements of the Tenant and
FFMC.
(e) To the best of its knowledge and belief Tenant has no claims,
demands, counterclaims, defenses, allowances, adjustments or
offsets arising out of or in any way related to the Lease (as
amended hereby) or arising out of any document, writing or
instrument executed in connection therewith or herewith.
9. This Amendment (i) shall be binding upon the Landlord and Tenant and
their respective heirs, legal representatives, successors and
permitted assigns; (ii) may be renewed, modified or amended only by a
writing signed by each party hereto; (iii) shall be governed by and
construed in accordance with the laws of the State of Texas and the
United States of America; (iv) may be executed in several
counterparts, and each counterpart when so executed and delivered
shall constitute an original agreement, and all such separate
counterparts shall constitute one and the same agreement; and (v)
together with the Lease, embodies the entire agreement and
understanding between the parties with respect to the subject matter
hereof and supersedes all prior agreements, consents and
understandings relating to such subject matter. All capitalized terms
used herein and not otherwise defined herein shall have the meanings
ascribed to them in the Lease.
-Page 7 of 8-
97
IN WITNESS WHEREOF, this Amendment is executed in multiple
counterparts by Landlord and Tenant effective as of the date first written
above.
TENANT:
TELECHECK SERVICES, INC.
By: Barry W. Burt
-----------------------------
Barry W. Burt, Vice President
LANDLORD:
VPM 1988-1, LTD.,
a Texas limited partnership
By: VERIQUEST REAL ESTATE SERVICES, INC.,
its General Partner
By: Larry A. Strickland
---------------------------
Larry A. Strickland, President
Exhibit A5-1 - Parcel 7
Schedule 1 - Lease Term and Base Rental for Parcel 7
Schedule 2 - Adjustments to Base Rental for Allowance Used by Tenant
Schedule 3 - Parking Allocation
Working Drawings - To be appended
-Page 8 of 8-