BUILD-TO-SUIT NET LEASE
BETWEEN
OPUS SOUTH CORPORATION
AS LANDLORD
AND
ADS ALLIANCE DATA SYSTEMS, INC.,
AS TENANT
JANUARY ___, 1998
BUILD-TO-SUIT NET LEASE
THIS BUILD-TO-SUIT NET LEASE ("LEASE") is entered into as of January __,
1998 by and between the Landlord and Tenant identified in SECTION 1.1.
1. DEFINITIONS AND EXHIBITS
1.1 DEFINITIONS. In this Lease, the following defined terms have the meanings set forth for them below or in the section of this Lease indicated below:
"ADA" means the Americans with Disabilities Act, as amended from time to time.
"ADDITIONAL RENT" means all amounts required to be paid by Tenant
under this Lease in addition to Basic Rent including, without limitation,
Taxes and insurance premiums.
"AFFILIATES" means, with respect to any party, any entities or
individuals that control, are controlled by or are under common control
with such party, together with its and their respective partners,
venturers, directors, officers, shareholders, trustees, trustors,
beneficiaries, agents, employees and spouses.
"ALLOWANCE" has the meaning set forth in SECTION 3.10.
"APPROVED EXPANSION BASE BUILDING PLANS" has the meaning set forth
in SECTION 18(b).
"APPROVED EXPANSION COSTS" has the meaning set forth in SECTION
18(d).
"APPROVED EXPANSION LEASEHOLD IMPROVEMENTS PLANS" has the meaning
set forth in SECTION 18(c).
"APPROVED EXPANSION RENTABLE SQUARE FEET" has the meaning set
forth in SECTION 18(f).
"APPROVED ORIGINAL BASE BUILDING PLANS" has the meaning set forth
in SECTION 3.2.
"APPROVED ORIGINAL LEASEHOLD IMPROVEMENTS PLANS" has the meaning
set forth in SECTION 3.3.
"APPROVED ORIGINAL RENTABLE SQUARE FEET" has the meaning set forth
in SECTION 3.6.
"APPROVED TENANT'S COSTS" has the meaning set forth in SECTION
3.4.
"BASIC RENT" means the Original Basic Rent and, if applicable, the
Expansion Basic Rent.
"BUILDING" means the Original Building and the Expansion Building.
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"CORE BUILDING SYSTEMS" means the items delineated on EXHIBIT K.
"DEADLINE EXTENSION" has the meaning set forth in SECTION 3.2.
"ENVIRONMENTAL LAWS" means the Resource Conservation and Recovery
Act, 42 U.S.C. Section 6901 ET SEQ., the Comprehensive Environmental
Response, Compensation and Liability Act, U.S.C. Section 9601 ET SEQ.
(including the so-called "Superfund" amendments thereto), any other
applicable Laws governing or pertaining to any hazardous substances,
hazardous wastes, chemicals or other materials, including, without
limitation, asbestos, polychlorinated biphenyls, radon, petroleum and any
derivative thereof or any common law theory based on nuisance or strict
liability.
"EVENT OF DEFAULT" has the meaning set forth in SECTION 15.2.
"EXPANSION BASE BUILDING" has the meaning set forth in SECTION
18(a).
"EXPANSION BASE BUILDING PLANS" has the meaning set forth in
SECTION 18(b).
"EXPANSION BASIC RENT" has the meaning set forth in SECTION
18(j)(II)(B).
"EXPANSION BUILDING" has the meaning set forth in SECTION 18(a).
"EXPANSION CHANGE ORDER" has the meaning set forth in SECTION
18(e).
"EXPANSION COMMENCEMENT DATE" has the meaning set forth in SECTION
18(j)(I).
"EXPANSION COSTS" means the actual amount of those costs described
on EXHIBIT J which Landlord incurs in connection with the construction of
the Expansion Building. Expansion Costs specifically do not include any
acquisition or carrying costs for any portion of the Land, it being
understood that those costs are included in the Original Basic Rent for
the Original Premises. Landlord and Tenant further agree that Expansion
Costs will include (a) the cost of general conditions and insurance, not
to exceed three percent (3%) of the cost of the construction work,
excluding soft costs, (b) overhead, not to exceed three percent (3%) of
the cost of the construction work, excluding soft costs and the general
conditions and insurance and (c) a general contractor's fee payable to
Landlord in an amount equal to five percent (5%) of the construction
work, excluding soft costs and overhead.
"EXPANSION LEASEHOLD IMPROVEMENTS" has the meaning set forth in
SECTION 18(a).
"EXPANSION LEASEHOLD IMPROVEMENTS PLANS" has the meaning set forth
in SECTION 18(c).
"EXPANSION PUNCH LIST" has the meaning set forth in SECTION 18(h).
"FAIR MARKET RENT" has the meaning set forth in SECTION 2.5.
"FINAL COMPLETION" means that all Landlord's Original Work or
Landlord's Expansion Work, as the case may be, has been fully and finally
completed.
"FINANCED AMOUNT" has the meaning set forth in SECTION 3.10.
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"FIRST RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"FIRST STAGE COMPLETION" means that Landlord's Original Work on
the first floor of the Original Building has been Substantially
Completed and the first floor of the Original Building is ready for and
can be occupied by Tenant.
"FORCE MAJEURE" means any delays due to strikes, riots, acts of
God, war, or any other causes of any kind whatsoever which are beyond the
control of Landlord or Tenant at any time during the term of this Lease,
it being agreed that the inability to perform financial obligations
(including, without limitation, paying the Basic Rent and other charges
due under this Lease), shortages of labor or materials, and governmental
laws, rules or restrictions shall not constitute events beyond the
reasonable control of Landlord or Tenant.
"GUARANTOR" means Alliance Data Systems Corporation, a Delaware
corporation, but the term "GUARANTOR" means any then-existing guarantor
of Tenant's obligations under this Lease pursuant to a guaranty agreement
substantially similar to the form attached to this Lease as EXHIBIT G or
another form reasonably acceptable to Landlord.
"HAZARDOUS SUBSTANCE" means any substance, chemical or material
declared to be, or regulated as, hazardous or toxic under any
Environmental Law or the presence of which may give rise to liability
under any Environmental Law.
"IMPROVEMENTS" means the Building, the Leasehold Improvements, and
any other structures, pavement, landscaping, lighting fixtures or other
improvements now or later constructed or installed upon the Land.
"INTEREST RATE" means the prime interest rate (as published from
time to time by THE WALL STREET JOURNAL, and with any changes in such
rate to be effective on the date such change is published) plus 5% per
annum, but if such rate exceeds the maximum interest rate permitted by
law, such rate will be reduced to the highest rate allowed by law under
the circumstances.
"LAND" means the real property located on Waterview Parkway in the
City of Dallas, Collin County, Texas (including all of its appurtenant
rights and easements) and legally described on EXHIBIT A.
"LANDLORD" means Opus South Corporation, a Florida corporation.
"LANDLORD'S EXPANSION WORK" has the meaning set forth in SECTION
18(a).
"LANDLORD'S NOTICE ADDRESS" means:
12225 Greenville Avenue
Suite 900
Dallas, Texas 75243-9363
Telecopy: (972) 669-2216
with a copy to:
700 Opus Center
9900 Bren Road East
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Minnetonka,
Minnesota 55343
Attention: Legal Department
Telecopy: (612) 936-9808
"LANDLORD'S ORIGINAL WORK" means the construction and installation
of the Original Base Building and the Original Leasehold Improvements.
"LANDLORD'S RENT ADDRESS" means:
5401 Corporate Woods Drive
Suite 100
Pensacola, Florida 32504
"LANDLORD'S REPRESENTATIVE" means Lamar Lawson.
"LAWS" means any and all present or future federal, state or local
laws, statutes, ordinances, rules, regulations or orders of any and all
governmental or quasi-governmental authorities having jurisdiction.
"LEASEHOLD IMPROVEMENTS" means the Original Leasehold Improvements
and the Expansion Leasehold Improvements.
"ORIGINAL BASE BUILDING" means those portions of the Original
Building and the associated site Improvements on the Land (such as
driveways, parking areas, landscaping and exterior lighting) that are
specified on EXHIBIT B and are identified with an asterisk (*) on EXHIBIT
C under the column "Base Building Core & Shell".
"ORIGINAL BASE BUILDING PLANS" has the meaning set forth in
SECTION 3.2.
"ORIGINAL BASIC RENT" means the rent payable according to SECTION
4.1.
"ORIGINAL BUILDING" means the building containing approximately
114,419 rentable square feet to be constructed by Landlord for Tenant
upon the Land according to SECTION 3 and includes both the Original Base
Building and the Original Leasehold Improvements.
"ORIGINAL CHANGE ORDER" has the meaning set forth in SECTION 3.5.
"ORIGINAL COMMENCEMENT DATE" means the first day of the Term,
which will be the Third Stage Completion Date, unless the Original
Commencement Date is extended according to SECTION 3.6.
"ORIGINAL LEASEHOLD IMPROVEMENTS" means all leasehold improvements
and installations, in addition to the Original Base Building, that are to
be constructed or installed by Landlord for Tenant according to
SECTION 3, and which are identified with an asterisk (*) on EXHIBIT C
under the column "Tenant Improvement".
"ORIGINAL LEASEHOLD IMPROVEMENTS PLANS" means construction plans
and specifications for the Original Leasehold Improvements.
"ORIGINAL PREMISES" means the Land and the Original Building.
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"ORIGINAL PUNCH LIST" has the meaning set forth in SECTION 3.8.
"ORIGINAL TERM" means the period between the Original Commencement
Date and the Expiration Date.
"PERMITTED EXPANSION FORCE MAJEURE DELAYS" has the meaning set
forth in SECTION 18(g).
" PERMITTED ORIGINAL FORCE MAJEURE DELAYS" has the meaning set
forth in SECTION 3.7.
"PLAN APPROVAL DELAY" has the meaning set forth in SECTION 3.2 AND
SECTION 3.3.
"PREMISES" means the Land and all then-existing Improvements.
"PROJECTED EXPANSION COMPLETION DATE" has the meaning set forth in
SECTION 18(f).
"RELEASE CONDITIONS" means all of the following conditions have
been met: (a) the assignee of this Lease or sublessee of all of the
Premises has a net worth (excluding goodwill) of at least $75 million,
(b) if such assignee or sublessee is a subsidiary of any entity, Tenant
has obtained and delivered to Landlord a guaranty by such parent entity
of the assignee or sublessee's obligations under this Lease, and (c) in
the event Tenant subleases the entire Premises (it being understood and
agreed that this condition does not apply in the case of an assignment),
Tenant has obtained and delivered to Landlord a written agreement from
such sublessee assuming the obligations of Tenant under this Lease from
and after the effective date of such sublease.
"RENEWAL NOTICE" has the meaning set forth in SECTION 2.5.
"RENEWAL NOTICE DATE" has the meaning set forth in SECTION 2.5.
"RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"RENT" means Basic Rent, Expansion Basic Rent (if applicable), and
all Additional Rent.
"RENTABLE SQUARE FEET" means the standard for "Rentable Area" as
promulgated by the Building Owners and Managers Association International
and approved by the American National Standards Institute, Inc. on June
7, 1996 (reference number ANSI/BOMA Z65.1-1996).
"REPORT" has the meaning set forth in SECTION 6.3(c).
"SECOND RENEWAL TERM" has the meaning set forth in SECTION 2.5.
"SECOND STAGE COMPLETION" means that the Landlord's Original Work
on the first floor and the second floor of the Original Building has
been Substantially Completed and the first floor and second floor of the
Original Building are ready for occupancy and can be occupied by Tenant.
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"SUBSTANTIALLY COMPLETED" or "SUBSTANTIAL COMPLETION" or
"SUBSTANTIALLY COMPLETE" means that the applicable portion of the
Premises is broom clean, free of construction tools and materials, and
Landlord's Original Work has been completed according to the Approved
Original Base Building Plans and the Approved Original Leasehold
Improvements Plans or Landlord's Expansion Work has been completed
according to the Approved Expansion Base Building Plans and the Approved
Expansion Leasehold Improvements Plans, as the case may be, with only
minor punch list items that will not interfere to more than a minor
extent with Tenant's use and enjoyment of the Premises remaining to be
completed or corrected pursuant to the terms of this Lease; that an
unconditional certificate of occupancy for the applicable portion of the
Premises has been issued (unless the issuance thereof is conditioned upon
any work or installations the responsibility of which is not included
within Landlord's Original Work or Landlord's Expansion Work, as the
case may be) and not suspended or revoked or amended in a manner that
would prevent Tenant from occupying the applicable portion of the
Premises for the purposes for which they were designed; and that all
utilities called for in the Approved Original Base Building Plans or
Approved Expansion Base Building Plans, as the case may be, or the
Approved Original Leasehold Improvements Plans or the Approved Expansion
Leasehold Improvements Plans, as the case may be, are installed and
operable with all hook-up, tap or similar fees paid.
"TAXES" means, subject to the terms of SECTION 5.3 below, all ad
valorem real and personal property taxes and assessments, special or
otherwise, levied upon or with respect to the Premises, the personal
property used in operating the Premises, and the rents and additional
charges payable by Tenant according to this Lease, and imposed by any
taxing authority having jurisdiction; and all taxes, levies and charges
which may be assessed, levied or imposed in replacement of, or in
addition to, all or any part of ad valorem real or personal property
taxes or assessments as revenue sources, and which in whole or in part
are measured or calculated by or based upon the Premises, the leasehold
estate of Landlord or Tenant in and to the Premises, or the rents and
other charges payable by Tenant according to this Lease. Taxes will not
include any net income, franchise, inheritance or similar taxes of
Landlord.
"TAX YEAR" means a 12-month period for which Taxes are assessed.
"TENANT" means ADS Alliance Data Systems, Inc., a Delaware
corporation.
"TENANT'S COST" means the total cost of preparing the Original
Leasehold Improvements Plans, obtaining all necessary permits for, and
constructing and installing, the Original Leasehold Improvements in the
Original Base Building, and providing any required services during
construction of the Original Leasehold Improvements (such as electricity
and other utilities and refuse removal). Landlord and Tenant agree that
Tenant's Cost will include (a) the cost of general conditions and
insurance, not to exceed three percent (3%) of the cost of the
construction work, excluding soft costs, (b) overhead, not to exceed
three percent (3%) of the cost of the construction work, excluding soft
costs and the general conditions and insurance and (c) a general
contractor's fee payable to Landlord in an amount equal to five percent
(5%) of the construction work, excluding soft costs and overhead.
"TENANT'S COST PROPOSAL" has the meaning set forth in SECTION 3.9.
"TENANT'S EXPANSION COST PROPOSAL" has the meaning set forth in
SECTION 18(d).
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"TENANT ORIGINAL DELAY" has the meaning set forth in SECTION 3.7.
"TENANT EXPANSION DELAY" has the meaning set forth in SECTION
18(g).
"TENANT'S NOTICE ADDRESS" means,
for notices given before the Original Commencement
Date:
5001 Spring Valley Road
Dallas, Texas 75244
Attention: Mr. Robert S. Murphy
Telecopy: (972) 960-5275
with a copy at the same time to:
4590 East Broad Street
Columbus, Ohio 43213
Attention: General Counsel
Telecopy: (614) 863-5965
and
Harriet Anne Tabb
Tabb & Associates
8333 Douglas Avenue
Suite 1250
Dallas, Texas 75225
and for notices given after the Original
Commencement Date:
Tenant's address at the Premises, with a copy at the
same time to:
4590 East Broad Street
Columbus, Ohio 43213
Attention: General Counsel
and
Harriet Anne Tabb
Tabb & Associates
8333 Douglas Avenue
Suite 1250
Dallas, Texas 75225
"TENANT'S REPRESENTATIVE" means Robert S. Murphy.
"TERM" means the duration of this Lease, which will be
approximately 11 years beginning on the Original Commencement Date and
ending on the "EXPIRATION DATE" (as defined below), unless terminated
earlier or extended further as provided in this Lease. The "EXPIRATION
DATE" means (i) if the Original Commencement Date is the first day of a
month, the 11-year anniversary of the day immediately preceding the
Original Commencement
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Date; or (ii) if the Original Commencement Date is not the first day
of a month, the 11-year anniversary of the last day of the month in
which the Original Commencement Date occurs. The Term will also
include any exercised Renewal Term.
"THIRD STAGE COMPLETION" means that all of Landlord's Original
Work in the Original Building is Substantially Completed and all of the
Original Building is ready for and can be occupied by Tenant.
1.2 EXHIBITS. The Exhibits listed below are attached to and incorporated in this Lease. In the event of any inconsistency between such Exhibits and the terms and provisions of this Lease, the terms and provisions of the Exhibits will control, but the terms of this Lease may specifically modify the exhibits. The Exhibits to this Lease are:
Exhibit A - Legal Description of the Land
Exhibit B - Base Building Specifications (including
Building Elevation, Site Plan, Floor Plan and
Building Specifications)
Exhibit C - Base Building/Tenant Matrix
Exhibit D - Matters Affecting Landlord's Title
Exhibit E - Memorandum of Lease
Exhibit F - NDA
Exhibit G - Lease Guaranty
Exhibit H - 2-Story Plan
Exhibit I - 3-Story Plan
Exhibit J - Expansion Cost Summary
Exhibit K - Core Building Systems
2. GRANT OF LEASE; RENEWAL OPTIONS
2.1 DEMISE. Subject to the terms, covenants, conditions and provisions of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises for the Term.
2.2 QUIET ENJOYMENT. Landlord covenants that Tenant, upon paying the Basic Rent and Additional Rent and performing all other obligations of Tenant under this Lease, will have quiet and peaceful possession of the Premises during the Term, and such possession will not be disturbed by Landlord or anyone claiming by, through or under Landlord. Upon Landlord's acquisition of the Land, Landlord will own the Land in fee simple, subject only to the matters set forth on EXHIBIT D. Landlord hereby represents and warrants that the execution of this Lease, the construction of the Original Building, and the construction of the Expansion Building will not violate the terms of any of the items described on EXHIBIT D and that Landlord has received or will receive all approvals necessary for the construction of the Original Building and the Expansion Building.
2.3 LANDLORD AND TENANT COVENANTS. Landlord covenants to observe and perform all of the terms, covenants and conditions applicable to Landlord in this Lease. Tenant covenants to pay the Rent when due, and to observe and perform all of the terms, covenants and conditions applicable to Tenant in this Lease.
2.4 MEMORANDUM OF LEASE. Promptly after execution of this Lease, Landlord and Tenant will execute and acknowledge a recordable memorandum of lease on the form attached as EXHIBIT E, which memorandum must be recorded immediately after the deed into Landlord (i.e., with no intervening document). After the occurrence of the Original Commencement Date, either party will, upon the other's request, execute and acknowledge a recordable memorandum setting forth
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the date on which the Original Commencement Date occurred and the date on which the Expiration Date is scheduled to occur.
2.5 TENANT'S RENEWAL OPTIONS. Subject to the terms and provisions of this SECTION 2.5, Tenant, at its option, may extend the Original Term of this Lease for one five-year period at the end of the Original Term (the "FIRST RENEWAL TERM") and, if Tenant exercises its option with respect to the First Renewal Term, for an additional five-year period at the end of the First Renewal Term (the "SECOND RENEWAL TERM"). The First Renewal Term and the Second Renewal Term are individually referred to herein as a "RENEWAL TERM." To exercise each such option, Tenant must deliver written notice of the exercise thereof (a "RENEWAL NOTICE") to Landlord no later than nine months prior to the expiration of (i) the Original Term, in the case of Tenant's option with respect to the First Renewal Term, or (ii) the First Renewal Term, in the case of Tenant's option with respect to the Second Renewal Term. The dates by which Tenant is required to deliver its Renewal Notices will each be referred to hereinafter as a "RENEWAL NOTICE DATE." If Tenant fails to give its Renewal Notice with respect to either Renewal Term by the applicable Renewal Notice Date, such Renewal Notice Date will be extended until the first to occur of (A) the 15th day after Landlord gives Tenant notice that Tenant has failed to exercise its option with respect to the subject Renewal Term; or (B) the last day of the then-current Term. Landlord and Tenant agree that once Tenant has delivered a Renewal Notice, both parties will be responsible for their respective obligations under this Lease for the subject Renewal Term, regardless of the outcome of the Basic Rent determination for such Renewal Term as described below. During each Renewal Term, all of the terms and provisions of this Lease will apply, except that after the Second Renewal Term there will be no further right of renewal, and except that the Basic Rent payable for each month of the First Renewal Term will be 90% of the "FAIR MARKET RENT" (as defined below), but in no event less than 100%, or more than 118%, of the monthly Basic Rent payable during the last year of the initial Term, and the Basic Rent payable for each month of the Second Renewal Term will be 90% of the Fair Market Rent, but in no event less than 100%, or more than 118%, of the monthly Basic Rent payable during the last year of the First Renewal Term. As used herein, "FAIR MARKET RENT" will mean an amount of rent per month equal to the prevailing monthly rent then being obtained by landlords of premises comparable to the Land and the Base B ...