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Exhibit
10.4
AMENDMENT NO.
1
This Amendment No. 1
(this “Amendment ’”) is executed as of
May 20 , 2006, between iSTAR HQ I, L.P., a Delaware limited
partnership (“ Landlord ”) and ADS ALLIANCE DATA
SYSTEMS, INC., a Delaware corporation (“ Tenant
”), for the purpose of amending the Lease Agreement between
Landlord’s predecessor-in-interest with respect to the Lease
(defined below) and Tenant dated July 16,1997 (as amended by
the letter agreement dated February 17, 2005, regarding the
UPS system, the “Lease ”). Capitalized terms
used herein but not defined shall be given the meanings assigned to
them in the Lease.
RECITALS:
Pursuant to the terms of the
Lease, Tenant is currently leasing the entire building, containing
61,750 rentable square feet of space, located at 17201 N. Waterview
Parkway, Dallas, Texas 75252. Tenant desires to extend the lease
term (the “ Term” ) for a period of 120 months,
and Landlord has agreed to such extension on the terms and
conditions contained herein.
AGREEMENTS:
For valuable consideration,
whose receipt and sufficiency are acknowledged, Landlord and Tenant
agree as follows:
1. Extension of Term .
The Term is hereby extended such that it expires at 5:00 p.m.,
Dallas, Texas, time, on July 31, 2017, rather than
July 31, 2007, on the terms and conditions of the Lease, as
modified hereby. Tenant shall have no further rights to extend or
renew the Term, except as provided in Exhibit A hereto;
accordingly, Exhibit C to the Lease is deleted.
2. Base Rent .
Beginning August 1, 2007 (the “Renewal Commencement
Date ”), the monthly Base Rent shall be
$58,662.50.
3. Condition of
Premises . Tenant hereby accepts the Premises in their
“AS-IS” condition, and, except as provided in
Section 5 of this Amendment, Landlord shall have no obligation
for any construction or finish-out allowance or providing to Tenant
any other tenant inducement.
4. Tenant’s
Cancellation Right Provided no event of default exists when
Tenant delivers the Cancellation Notice or on the Cancellation Date
(as such terms are hereinafter defined), Tenant may cancel the
Lease effective as of July 31, 2014 (the “
Cancellation Date ”), by delivering to Landlord at
least 12 full calendar months before the Cancellation Date
(a) written notice thereof (the “ Cancellation
Notice ”) and (b) the Cancellation Fee (defined
below). The “Cancellation Fee” shall equal the
sum of (1) $351,975 (equal to six months of Base Rent) and
(2) the amount that would be outstanding on a hypothetical
loan on the Cancellation Date assuming (A) an original
principal balance equal to the Leasing Costs (defined below),
(B) an interest rate of 8.5% per annum, (C) the loan
is payable in 120 equal monthly installments of principal and
interest, beginning on the Renewal Commencement Date, and
(D) all payments were made before the Cancellation Date. The
term “Leasing Costs ” means all costs incurred
by Landlord in leasing the space to Tenant under this Amendment
(including leasing commissions,
Allowances other tenant inducements and
attorneys’ fees). As a condition to the effectiveness of
Tenant’s cancellation right, Tenant shall pay to Landlord
prior to the Cancellation Date any past-due amounts then
outstanding under the Lease. If Tenant fails timely to deliver the
Cancellation Fee or the Cancellation Notice or is otherwise unable
to exercise this cancellation option, then Tenant’s right to
cancel the Lease under this Section 4 shall expire; time is of
the essence with respect thereto.
5. Refurbishment
Allowance . Provided that no event of default has occurred
prior to the disbursement thereof, Landlord shall provide to Tenant
a refurbishment allowance not to exceed $30.00 per rentable square
foot in the Premises and not to exceed a total of $1,852,500 (the
“ Refurbishment Allowance” ) not earlier than
August 1, 2006 (the “ Effective Date” ) to
be applied toward the cost of alterations and improvements to the
Premises. The Refurbishment Allowance may be used on any
alterations or improvements to the Premises approved in writing by
Landlord and completed no earlier than 60 days prior to the
Effective Date. Such refurbishment work may include, but shall not
be limited to, the following (it being understood that Tenant must
submit plans and specifications for Landlord’s review and
approval for all such work, even if such items are listed below):
(a) increase height of data center raised floor;
(b) network hub re-cabling; (c) second power transformer;
(d) generator; (e) automatic transfer switch (ATS);
(f) PDU; (g) power re-cabling; (h) fire suppression
system; (i) moisture detection system; and
(j) engineering evaluation costs. The Refurbishment Allowance
may be used on any alterations or improvements to the Premises
approved in writing by Landlord and completed no earlier than 60
days prior to the Effective Date. Prior to commencing any such
work, Tenant shall deliver to Landlord for Landlord’s
approval detailed plans and specifications depicting the
refurbishment work Tenant intends to make to the Premises.
Landlord’s approval of Tenant’s plans and
specifications shall not be a representation or warranty of
Landlord that such drawings are adequate for any use or comply with
any law, but shall merely be the consent of Landlord thereto. After
Tenant’s plans and specifications have been approved, Tenant
shall cause the work to be performed in accordance with the final
version of the plans and specifications that have been approved in
writing by Landlord and in compliance with all Laws. Landlord shall
pay to Tenant (or, at Landlord’s election, to Tenant’s
contractor) the Refurbishment Allowance in multiple disbursements
(but not more than once in any calendar month) following the
receipt by Landlord of the following items: (a) a request for
payment signed by Tenant on the appropriate AIA form or another
form approved by Landlord (indicating what work has been performed
and that the work has been completed, and the name, address and
taxpayer identification number of the requested payee), (b)final or
partial lien waivers, as the case may be, from all persons
performing work or supplying or fabricating materials for the work,
fully executed, acknowledged and in recordable form, and (c) a
certification from Tenant’s architect that the work for which
reimbursement has been requested has been finally completed,
including (with respect to the last application for payment only)
any punch-list items, on the appropriate AIA form or another form
approved by Landlord, and, with respect to the disbursement of the
last 10% of the Refurbishment Allowance: (1) evidence that the
City of Dallas has given its final approval with respect to the
refurbishment work, (2) delivery of the architectural
“as-built” plan for the work as constructed, and
(3) an estoppel certificate confirming such factual matters as
Landlord may reasonably request (collectively, a “
Completed Application for Payment ”), Landlord shall
pay the amount requested in the Completed Application for Payment
within 30 days following Tenant’s submission of the Completed
Application for Payment. If, however, the Completed Application for
Payment is incomplete or incorrect, Landlord’s payment of
such
request shall be deferred
until 30 days following Landlord’s receipt of the Completed
Application for Payment. Notwithstanding anything to the contrary
contained in this Section, Landlord shall not be obligated to make
any disbursement of the Refurbishment Allowance during the pendency
of any of the following: (A) Landlord has received written
notice of any unpaid claims relating to any portion of the
refurbishment work or materials in connection therewith,- other
than claims which will be paid in full from such disbursement,
(B) there is an unbonded lien outstanding against the Building
or the Premises or Tenant’s interest therein by reason of
work done, or claimed to have been done, or materials supplied or
specifically fabricated, claimed to have been supplied or
specifically fabricated, to or for Tenant or the Premises,
(C) the conditions to the advance of the Refurbishment
Allowance are not satisfied, or (D) an event of default by
Tenant exists. After the final completion of the Work and a
reconciliation by Landlord of the Refurbishment Allowance and the
total construction costs, Tenant may use any excess Refurbishment
Allowance (up to a maximum of $10.00 per rentable square foot, in
the Premises) toward the cost of Tenant’s Rent obligations
under the Lease following the Renewal Commencement Date by so
notifying Landlord in writing of Tenant’s election. Following
Landlord’s receipt of Tenant’s election, Landlord shall
apply such excess toward Tenant’s Rent obligation first
accruing after such date until such excess is fully exhausted. The
entire Refurbishment Allowance must be used (that is, the
refurbishment work must be fully complete and the final, complete
Application for Payment received by Landlord) by no later than the
180 th day
following the Effective Date, or shall be deemed forfeited with no
obligation by Landlord with respect thereto; time being of the
essence with respect thereto. The entirety of any Rent credits to
which Tenant may be entitled as provided above must be used by no
later than the first anniversary of the Renewal Commencement Date,
or shall be deemed forfeited with no further obligation by Landlord
with respect thereto; time being of the essence with respect
thereto. Landlord or its affiliate or agent may inspect any work
performed, pursuant to this Section 5, make disbursements
required to be made to the contractor, and act as a liaison between
the contractor and Tenant and coordinate the relationship between
any work performed pursuant to this Section 5, the Building
and the Building’s Systems.
6. Renewal Options .
Tenant shall have the right to renew the Term on the terms and
conditions of Exhibit A hereto.
7. Assignment and
Subletting . Section 14 of the Lease is deleted in its
entirety and replaced with the following:
14. Assignment and
Subletting .
(a) Transfers . Except
as provided in Section 14(h), Tenant shall not, without the
prior written consent of Landlord, (1) assign, transfer, or
encumber this Lease or any estate or interest herein, whether
directly or by operation of law, (2) permit any other entity
to become Tenant hereunder by merger, consolidation, or other
reorganization, (3) permit the change in an ownership interest
in Tenant which results in a change in the current control of
Tenant, (4) sublet any portion of the Premises, (5) grant
any license, concession, or other right of occupancy of any portion
of the Premises to any entity, or (6) permit the use of the
Premises by any parties other than Tenant (any of the events listed
in Section 14(a)(1) through 14(a)(6) being a
“Transfer ”).
(b) Consent Standards
. Landlord shall not unreasonably withhold its consent to any
assignment or subletting of the Premises, provided that the
proposed transferee (1) is creditworthy, (2) has a good
reputation in the business community, (3) will use the
Premises for the Permitted Use (thus., excluding, without
limitation, uses for credit processing and telemarketing) and will
not use the Premises in any manner that would conflict with any
exclusive use agreement or other similar agreement, (4) will
not use the Premises, Building csr Project in a manner that would
materially increase the pedestrian or vehicular traffic to the
Premises, and (5) is not a governmental entity, or subdivision
or agency thereof; otherwise, Landlord may withhold its consent in
its sole discretion. Additionally, Landlord may withhold its
consent in its sole discretion to any proposed Transfer if any
Event of Default by Tenant then exists.
(c) Request for
Consent . If Tenant requests Landlord’s consent to a
Transfer, then, at least 15 business days prior to the effective
date of the proposed Transfer, Tenant shall provide Landlord with a
written description of all terms and conditions of the proposed
Transfer, copies of the proposed documentation, and the following
information about the proposed transferee: name ;and address;
reasonably satisfactory information about its business and business
history; its proposed use of the Premises; banking, financial, and
other credit information; and general references sufficient to
enable Landlord to determine the proposed transferee’s
creditworthiness and character. Concurrently with Tenant’s
notice of any request for consent to a Transfer, Tenant shall pay
to Landlord a fee of $1,000 to defray Landlord’s expenses in
reviewing such request, and Tenant shall also reimburse Landlord
immediately upon request for its reasonable attorneys’ fees
incurred in connection with considering any request for consent to
a Transfer.
(d) Conditions to
Consent . If Landlord consents to a proposed Transfer, then the
proposed transferee shall deliver to Landlord a written agreement
whereby it expressly assumes Tenant’s obligations
hereun
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