LEASE EXPANSION AND FIFTH AMENDMENT TO LEASE AGREEMENT
THIS LEASE EXPANSION AND FIFTH AMENDMENT TO LEASE AGREEMENT
("Fifth Amendment") is entered into as of the 25th day of
March, 1998, between KAB PLAZA PARTNERS, L.P., a Texas
limited partnership ("Landlord"), and AMRESCO, INC., a
Delaware corporation ("Tenant").
WITNESSETH:
WHERAS, K-P Plaza Limited Partnership, a Texas limited
partnership ("K-P Plaza"), and Tenant entered into that
certain Office Lease dated February 9, 1996, as amended by
that certain First Amendment to Office Lease dated July 17,
1996 ("First Amendment"), covering approximately 130,606
rentable square feet of area ("Original Premises") located
on the entire 17th 22nd, 23rd, 24th, and 25th floors and
part of the 16th floor as more particularly described in the
Lease and commonly referred to as Suite 2400 in the office
building located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ (the "North
Tower") within the development commonly known as the Plaza
of the Americas situated on Blocks 257 and 258 in the City
of Dallas, Texas;
WHEREAS, K-P Plaza and Tenant entered into that Second
Amendment to Lease Agreement dated May 27, 1997 ("Second
Amendment"), whereby Tenant leased 3,858 rentable square
feet of area located on the 16th floor of the North Tower on
a temporary basis until December 31, 1997 (the "Temporary
Premises"), all as set forth in the Second Amendment.
WHEREAS, K-P Plaza and Tenant entered into that Third
Amendment to Lease Agreement dated September 22, 1997
("Third Amendment"), whereby Tenant leased an additional
3,128 rentable square feet of area located on the 16th floor
of the North Tower on a temporary basis until March 31, 1998
("Additional Temporary Premises"), all as set forth in the
Third Amendment;
WHEREAS, Landlord succeeded to the interest of K-P
Plaza and assumed all of K-P Plaza's obligations under the
Lease;
WHEREAS, Landlord and Tenant entered into the Fourth
Amendment to Lease Agreement dated January 6, 1998 ("Fourth
Amendment"), whereby Tenant expanded the Premises by 32,139
rentable square feet of area - some of which space included
the Temporary Space and the Additional Temporary Space - on
the 16th and 19th floors of the North Tower ("Fourth
Amendment Expansion Premises") so that the Premises
thereafter totaled 162,745 rentable square feet of area
(such Office Lease Agreement, as amended by the First,
Second, Third, and Fourth Amendments, is hereafter referred
to as the "Lease"); and
WHEREAS, Landlord and Tenant desire to amend the Lease
further to, among other things, expand the Premises by an
additional 34,856 rentable square feet of area on the 4th
and 18th floors of the North Tower commonly identified as
suite 400 and Suite 1850, respectively, as shown on
Exhibit "A-1" and Exhibit "A-2" to this Fifth Amendment, all
as more fully set forth in this Fifth Amendment;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged,
Landlord and Tenant hereby agree to amend the Lease as
follows:
1. Definitions. Unless otherwise defined, all defined
terms in the Fifth Amendment have the same meaning as in the
Lease.
2. Rent Commencement Date for Fourth Amendment Expansion
Premises. The Rent Commencement Date for Expansion as
defined in Section 4 of the Fourth Amendment and all
references thereto are hereby changed so that the Rent
Commencement Date for Expansion for purposes of the Fourth
Amendment will be the earlier of: (i) Tenant's occupancy of
any portion of the Expansion Premises (as defined in the
Fourth Amendment) for the conduct of business, or (ii) May
1, 1998.
3. Premises. Beginning on April 1, 1998 ("Commencement
Date for 18th Floor Expansion"), the Premises will expand to
include the 11,393 rentable square feet of area located on
the 18th floor of the North Tower commonly known as Suite
1850 and as shown on Exhibit "A-1" to this Fifth Amendment
("18th Floor Expansion Premises"). Beginning on the earlier
of (i) the date of Tenant's occupancy of the 23,463 rentable
square feet on the 4th floor of the North Tower commonly
known as Suite 400 and as shown on Exhibit "A-2" (4th Floor
Expansion Premises") for the conduct of business or (ii)
August 1, 1998 (such earlier date hereafter referred to as
the "Commencement Date for 4th Floor Expansion"), the
Premises will expand to include the 4th Floor Expansion
Premises. Thereafter, the Premises as described in the
Basic Office Lease Information incorporated into the lease
will total 197,601 rentable square feet of area - which
Premises will include the Original Premises, the Fourth
Amendment Expansion Premises, the 18th Floor Expansion
Premises, and the 4th Floor Expansion Premises. Tenant
shall execute and deliver to Landlord, within 10 days after
Landlord has requested same, a letter confirming (i) the
Tenant's acceptance of the 4th Floor and the 18th Floor
expansion Premises, (ii) the Commencement Date for 4th Floor
and 18th Floor Expansion Premises, and (iii) that Landlord
has performed all of its obligations with respect to the 4th
Floor and the 18th Floor Expansion Premises. The 4th Floor
and the 18th Floor Expansion Premises are subject to
remeasurement by Landlord's architect in accordance with the
BOMA Standard Method of Measurement following completion of
the tenant improvement work described herein.
4. Term. The Term of the Lease (i) remains unchanged by
this Fifth Amendment and (ii) applies to the 4th Floor and
the 18th Floor Expansion Premises.
5. Basic Rental. Beginning on the Commencement Date for
18th Floor Expansion and continuing until the end of the
Term, the Basic Rental applicable to the 18th Floor
Expansion Premises is set forth in the following schedule
and is payable in the manner provided in Article 4 of the
Lease:
Rental Rate Per
Square Foot of
Rentable Area of 18th
Months Floor Expansion Rent Due
Commencement Date for 18th Floor
Expansion-October 31, 1998 $19.35 $18,371.21 per month
Nov. 1, 1998 - Oct. 31, 1999 $19.60 $18,608.57 per month
Nov. 1, 1999 - Oct. 31, 2000 $19.85 $18,845.92 per month
Nov. 1, 2000 - Oct. 31, 2001 $20.10 $19,083.28 per month
Nov. 1, 2001 - Oct. 31, 2002 $20.35 $19,320.63 per month
Nov. 1, 2002 - Oct. 31, 2003 $20.60 $19,557.98 per month
Nov. 1, 2003 - Oct. 31, 2004 $20.85 $19,795.34 per month
Nov. 1, 2004 - Oct. 31, 2005 $21.10 $20,032.69 per month
Nov. 1, 2005 - Oct. 31, 2006 $21.35 $20,270.05 per month
Provided that no Event of Default exists, Tenant will
receive an abatement of Basic Rental and all other charges
under the Lease for the period of time beginning on April 1,
1998, and ending May 31, 1998, with respect to the 18th
Floor Expansion Premises. Beginning on June 1, 1998, Tenant
will begin paying regular payments of Basic Rental, together
with all other charges due under the Lease, with respect to
the 18th Floor Expansion Premises whether or not Tenant is
then occupying the 18th Floor Expansion Premises for the
conduct of business. Beginning on the commencement Date for
4th Floor Expansion and continuing until the end of the
Term, the Basic Rental applicable to the 4th Floor Expansion
Premises is set forth in the following schedule and is
payable in the manner provided in Article 4 of the Lease:
Rental Rate Per
Square Foot of
Rentable Area of 4th
Months Floor Expansion Rent Due
Commencement Date for 4th Floor
Expansion-October 31,1998 $16.91 $33,063.28 per month
Nov. 1, 1998 - Oct. 31, 1999 $17.16 $33,552.09 per month
Nov. 1, 1999 - Oct. 31, 2000 $17.41 $34,040.90 per month
Nov. 1, 2000 - Oct. 31, 2001 $17.66 $34,529.72 per month
Nov. 1, 2001 - Oct. 31, 2002 $17.91 $35,018.53 per month
Nov. 1, 2002 - Oct. 31, 2003 $18.16 $35,507.34 per month
Nov. 1, 2003 - Oct. 31, 2004 $18.41 $35,996.15 per month
Nov. 1, 2004 - Oct. 31, 2005 $18.66 $36,484.97 per month
Nov. 1, 2005 - Oct. 31, 2006 $18.91 $36,973.78 per month
The Basic Rental set forth above applicable to the 18th
Floor and the 4th Floor Expansion Premises includes Tenant's
Proportionate Share of Basic Costs for the calendar year
commencing January 1, 1998, and ending December 31, 1998,
but does not include Tenant's share of electrical and other
utility charges described in Section 4.c of the Lease and
elsewhere. In addition to the Basic Rental applicable to the
18th Floor and the 4th Floor Expansion Premises set forth
above, Tenant shall pay Landlord in the manner provided for
in the Lease all other amounts due under the Lease,
including, without limitation, (i) Tenant's share of the
Excess described in Exhibit "C" to the Lease for the years
after 1998 and (ii) the Electrical Costs as set forth in
Section 4.c of the Lease. Except as otherwise expressly
provided herein, nothing in this Fifth Amendment effects the
payment of Basic Rental or other sums due under the Lease.
For the purposes of calculating the Excess applicable to the
18th Floor and the 4th Floor Expansion Premises under
Exhibit "C" of the Lease, the cap on Controllable Expenses
applies, but the Expense Stop applicable to the 18th Floor
and the 4th Floor Expansion Premises will be calculated
using Basic Cost for the calendar year 1998.
6. Tenant's Proportionate Share. Landlord and Tenant
stipulate and agree that for all purposes under this Lease,
effective from and after the Commencement Date for 18th
Floor Expansion until the Commencement Date for the 4th
Floor Expansion, the Tenant's Proportionate Share is
16.655%. Landlord and Tenant further stipulate and agree
that for all purposes under this Lease, effective from and
after the Commencement Date for 4th Floor Expansion, the
Tenant's Proportionate Share is 18.899%. It is further
stipulated and agreed that for all purposes under this
Lease, the Tenant's Proportionate Share is obtained by
dividing (i) the rentable square feet in the Premises at the
time (which includes a pro rata share of the Common Areas)
by (ii) 1,045,551. The foregoing numbers of rentable square
feet are stipulations and establish a material part of the
economic basis for the execution of this Lease by Landlord
and shall not be adjusted unless the rentable area of
Premises is increased or decreased by the addition or
deletion of rentable area within the Buildings and an
appropriate amendment to this Lease is executed.
7. Tenant Improvements: As Is.
A. TENANT AGREES TO ACCEPT THE 18TH FLOOR AND THE 4TH
FLOOR EXPANSION PREMISES IN THEIR "AS IS" CONDITION AS OF
THE DATE OF THIS FIFTH AMENDMENT WITHOUT REPRESENTATION OR
WARRANTY OF ANY KIND BY LANDLORD, INCLUDING ANY WARRANTY OF
HABITABILITY OR FITNESS FOR ANY PARTICULAR USE. Tenant shall
construct all tenant improvements to the 18th floor and the
4th Floor Expansion Premises (collectively, the "Work")
pursuant to plans and specifications to be prepared and
agreed upon by Landlord and Tenant (the "Plans"). The Work
includes, among other things, the demolition of existing
leasehold improvements and the construction of new leasehold
improvements, the refurbishment of existing leasehold
improvements, making alterations to the Premises to comply
with the American with Disabilities Act of 1990 ("ADA"),
including, without limitation, bringing the restrooms
located on the 18th floor of the North Tower in compliance
with the requirements of the ADA, and performing certain
improvements within the multi-tenant corridor on the 18th
floor of the North Tower. Approval by Landlord of the Plans
is not a representation or warranty of Landlord that such
drawings are adequate for any use, purpose, or condition, or
that such drawings comply with any applicable law or code,
but is merely the consent of Landlord to the performance of
the Work. All changes in the Work must receive the prior
written approval of Landlord, and in the event of any such
approved change Tenant shall, upon completion of the Work,
furnish Landlord with an accurate, reproducible "as-built"
plan (e.g., sepia) of the improvements as constructed, which
plan shall be incorporated into this Lease by this reference
for all purposes.
B. Tenant shall perform all Work using contractors
approved by Landlord in writing prior to the commencement of
the Work, which approval must not be unreasonably withheld
or delayed. Additionally, Landlord must approve in writing
all major subcontractors performing any portion of the Work
involving the structural, mechanical, electrical, and
plumbing components of the Work, which approval may be
granted or withheld in Landlord's sole discretion. Landlord
must approve the construction contract entered into by
Tenant and its general contractor, which approval shall not
be unreasonably withheld, conditioned or delayed, and such
contract must provide for a 10% retainage to be withheld by
Tenant throughout the progress of the Work and for the final
payment to such contractor of such retainage to be made no
earlier than 30 days following the completion of the Work.
All Work must be performed in a good and workmanlike manner
that is free of defects and is in strict conformance with
the Plans and all applicable laws, ordinances, regulations,
and codes. The Work must be performed in such a manner and
at such times as to maintain harmonious labor relations and
not to interfere with or delay Landlord's other contractors,
the operation of the Buildings, and the occupancy thereof by
other tenants. All contractors and subcontractors shall
contact Landlord and schedule time periods during which they
may use Buildings' facilities in connection with the Work
(e.g., elevators, excess electricity, etc.)
C. Tenant shall bear the entire cost of performing the
Work (including, without limitation, design of the Work,
preparation of the Plans, and the payment of demolition
costs, applicable taxes, and insurance costs) - all of which
costs are herein collectively called the "Total Construction
Costs"; provided, however, Tenant will receive a
construction allowance from Landlord equal to sum of: (i)
$17.00 multiplied by the 11,393 rentable square feet of area
within the 18th Floor Expansion Premises (i.e., $193,681.00)
- which amount may be used solely for the portion of the
Work relating to the 18th Floor Expansion Premises and (ii)
$16.00 multiplied by the 23,463 rentable square foot of area
within 4th Floor Expansion Premises (i.e., $375,408.00) -
which amount may be used solely for the portion of the Work
relating to the 4th Floor Expansion Premises (such sum being
the "Construction Allowance"). Tenant must use the
Construction Allowance solely for paying the applicable
portion of the Total Construction Costs relating to the 18th
Floor or the 4th Floor Expansion Premises, as the case may
be; provided, however, Tenant may use, out of the total
Construction Allowance, an amount up to but not exceeding
$3.00 multiplied by the number of rentable square foot of
area within the 4th Floor and the 18th Floor Expansion
Premises (i.e., $104,568.00) for paying for costs associated
with the preparation of the Plans; Tenant's actual,
documented out-of-pocket relocation expenses; and Tenant's
actual, documented out-of-pocket costs for telecommunication
cabling within the 18th Floor and the 4th Floor Expansion
Premises. Landlord shall pay the Construction Allowance to
Tenant no more frequently than once per month on or before
30 days following Landlord's receipt of the following items
from Tenant: (i) an Application and Certificate for Payment
(AIA Document G702) fully executed by Tenant's architect,
(ii) paid invoices from architects, subcontractors, and
suppliers evidencing the cost of performing the Work, (iii)
lien waivers from Tenant's general contractor and all
parties referenced in item (ii) above, and (iv) with respect
to the final payment of the Construction Allowance, a
certificate of occupancy from the appropriate governmental
authority, if applicable to the Work, or evidence of
governmental inspection and approval of the Work.
D. Tenant, its contractors, and their subcontractors
shall, at their sole expense, maintain in effect at all
times during the full term of the Work, insurance coverages
with limits not less than those set forth below with
insurers licensed to do business in Texas and acceptable to
Landlord and under forms of policies satisfactory to
Landlord. None of the requirements contained herein as to
types, limits, and Landlord's approval of insurance coverage
to be maintained by the above-mentioned parties are intended
to and shall not in any manner limit or qualify the
liabilities and obligations assumed by Tenant under the
Lease.
Minimum Amounts
Coverage And Limits
1. Worker's Compensation
a) Workers' Compensation Statutory Limits
Employer's Liability $100,000
This policy shall contain a Subrogation in favor of Waiver of Landlord.
2. Commercial General Liability
a) Bodily Injury/Property Damage $500,000 each occurrence
Or equivalent/$500,000
aggregate
This policy shall be on a form acceptable to Landlord,
endorsed to include Landlord as an additional insured during
the term of the contract, state that this insurance is
primary insurance as regards to any other insurance carried
by Landlord, and shall include the following coverages:
a) Premises/Operations
b) Independent Contractors
c) Completed Operations for a period of two years following
acceptance of contractor's work
d) Broad Form Contractual Liability in support of the
Indemnity section of this Lease.
e) Broad Form Property Damage
f) Personal Injury Liability with contractual and employee
exclusions removed
3. Comprehensive Automobile Liability
a) Bodily Injury $250,000 per person
$500,000 per occurrence
b) Property Damage $100,000 per occurrence
4. Umbrella Excess Liability Insurance
a) Bodily Injury/Property $5,000,000 per occurrence
$5,000,000 aggregate
5. Builder's Risk Policy
Unless otherwise provided, Tenant shall purchase and
maintain property insurance upon the Work at the site
to the full insurable value thereof. This insurance
shall include the interest of Landlord, Tenant,
contractor, and subcontractors in the Work and shall be
written on an all risk form.
The policy shall be written on an excess basis above
coverages as described in 1, 2, and 3 above, naming
Landlord as additional insured.
6. Contractor's Equipment Policy
Any such insurance policy covering contractor or its
subcontractor's equipment and tools against loss by physical
damage shall include an endorsement waiving the insurer's
right of subrogation against Landlord.
7. Tenant's architect and engineer shall, at their sole
expense, maintain in effect at all times during the full
term of the Work, insurance coverages with limits not less
than those set forth in 1, 2, and 3 above, as well as
professional liability insurance with a limit of not less
than $1,000,000 per occurrence and $1,000,000 aggregate and
with Landlord named as an additional insured.
Evidence of the above coverages, represented by Certificates
of Insurance issued by the insurance carrier must be
furnished to Landlord prior to the contractor's starting
work. Certificates of Insurance shall specify the additional
insured status mentioned above as well as the Waivers of
Subrogation. Such Certificates of Insurance shall state that
Landlord will be notified in writing 30 days prior to
cancellation, material change, or renewal of insurance.
E. If a delay in the performance of the Work occurs (a)
because of any change by Tenant to the Plans, (b) because of
any specification by Tenant of materials or installations in
addition to or other than Landlord's standard finish-out
materials, or (c) if Tenant otherwise delays completion of
the Work, then, notwithstanding any provision to the
contrary in this Lease, Tenant's obligation to pay Rent with
respect to the 18th Floor and 4th Floor Expansion Premises
will commence on the scheduled Commencement Date for 18th
Floor Expansion or the scheduled commencement Date for 4th
Floor Expansion, as the case may be.
F. To the extent not inconsistent with this Exhibit,
Section 8.a of the Lease governs the performance of the Work
and the Landlord's and Tenant's respective rights and
obligations regarding the improvements installed pursuant
thereto.
8. Parking. In addition to Tenant's right to utilize
certain parking spaces in the Parking Garage as set forth in
Exhibit "G" to the Lease and in the Fourth Amendment and for
so long as Tenant is not in material default under this
Lease (nor does any condition exists that with the passage
of time or the giving of notice, or both, will constitute a
default), Tenant is permitted (but not obligated to) utilize
during the Term (i) seven (7) additional undesignated
parking spaces in the Parking Garage from and after Tenant's
occupancy of the 18th Floor Expansion Premises for the
conduct of business and (ii) sixteen (16) additional
undesignated parking spaces in the Parking Garage from and
after Tenant's occupancy of the 4th Floor Expansion Premises
for the conduct of business, all subject to such rates,
terms, conditions and regulations as are from time to time
charged or applicable to patrons of the Parking Garage. The
current market rate being charged patrons of the Parking
Garage for undesignated parking spaces is $115 a month per
space. Except as otherwise set forth in this Fifth
Amendment, the terms of Exhibit "G" to the Lease will apply
to Tenant's use of such spaces.
9. Brokerage. Tenant warrants that it has had no dealings
with any broker or agent in connection with the negotiation
or execution of the Lease or this Fifth Amendment other than
with ▇▇▇▇▇▇▇▇ Properties Limited, Inc. and ▇▇▇▇▇▇▇ &
Wakefield of Texas, Landlord shall pay such brokers all
lease commissions arising out of this Fifth Amendment
pursuant to a separate agreement. Both Landlord and Tenant
agree to indemnify each other and hold each other harmless
from and against any and all costs (including investigation
and defense costs) and expenses, claims for commissions or
other payments by any broker or agent who alleges to have
performed services on behalf of the indemnifying party.
10. Termination Option Costs. If Tenant exercises its
termination right under Exhibit "S" of the Lease
"Termination Option," Landlord and Tenant agree that
although Tenant must reimburse Landlord of all of Landlord's
all unamortized upfront costs associated with the Premises
as provided in such exhibit (including, without limitation,
all construction allowances and leasing commissions paid by
Landlord throughout the Term), Tenant will not in such event
have to reimburse Landlord for the (i) unamortized costs of
multi-tenant corridor improvements on the 18th floor of the
North Tower, and (ii) unamortized costs to bring the
restrooms located on the 18th floor of the North Tower in
compliance with the requirements of the ADA.
11. Management Company. Tenant acknowledges that ▇▇▇▇▇▇▇▇
Properties Limited, Inc. is the Landlord's management and
leasing representative.
12. Authority. Each individual signing below represents
that he/she has been duly authorized to execute and deliver
this Fifth Amendment and that same shall be binding on
Landlord and Tenant (as applicable) on whose behalf he/she
is signing.
13. Entire Agreement. This Fifth Amendment, together with
the provisions of the Lease, embody the entire agreement
between the parties with respect to the subject matter
hereof and cannot be varied except by written agreement of
the parties.
14. Successors and Assigns. All of the terms, covenants,
provisions, and conditions of this Fifth Amendment are
hereby made binding on the executors, heirs, administrators,
successors, and permitted assigns of both parties hereto.
15. Headings. The captions used in connection with the
sections of this Fifth Amendment are for convenience only
and shall not be deemed to construe or limit the meaning of
the language of this Fifth Amendment.
16. Conflict. In the event of any conflict between the
provisions of this Fifth Amendment and the provisions of the
Lease, the provisions of this Fifth Amendment will govern
and control.
17. Drafting. Landlord and Tenant acknowledge and confirm
that each of their respective attorneys have participated
jointly in the review and revision of this Fifth Amendment
and that it has not been written solely by counsel for one
party. Landlord and Tenant therefore stipulate and agree
that the rule of construction to the effect that any
ambiguities are to be or may be resolved against the
drafting party shall not be employed in the interpretation
of this Fifth Amendment to favor any party against another.
18. Lease. As amended hereby, the Lease will govern the
4th Floor and the 18th Floor Expansion Premises and will
continue in full force and effect and is ratified and
confirmed by Landlord and Tenant. From and after the date
of this Fifth Amendment, the term "Lease", when used in the
Lease, will mean the Lease, as further amended by this Fifth
Amendment.
19. Counterparts. This Fifth Amendment may be executed in
multiple counterparts and signature pages from any
counterpart may be appended to any other counterpart. All
counterparts shall constitute a single, unified instrument.
WITNESS THE EXECUTION HEREOF, effective as of the date
set forth above.
AMRESCO, INC., a Delaware corporation
By: //▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
By: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice
President and CFO
KAB PLAZA PARTNERS, L.P.
A Texas limited partnership
By: AB Sub II, Inc.,
Its general partner
By:
Title:
Exhibit "A-1"
18th Floor Expansion Premises
Exhibit "▇-▇"
▇▇▇ ▇▇▇▇▇ Expansion Premises
