FOURTH AMENDMENT
This Fourth Amendment (the "Amendment") is made and entered into as of
the 24th day of October, 1996, by and between ZML - North Central Plaza Three
Limited Partnership, a Delaware limited partnership ("Landlord") by its
agent, Equity Office Holdings, L.L.C., a Delaware limited liability company
and Management Alliance Corporation, a Texas corporation Tenant").
WITNESSETH
A. WHEREAS, Landlord and Tenant are parties to that certain lease dated the
19th day of December, 1994 currently containing approximately 41,600 rentable
square feet of space described as Suite Nos. 220, 350, 400, and 1170 on the
second (2nd), third (3rd), fourth (4th) and eleventh (11th) floors ("Original
Premises") of the building commonly known as North Central Plaza Three the
address of which is 00000 Xxxxx Xxxxxxx Xxxxxxxxxx, Xxxxxx, Xxxxx (the
"Building"), which lease has been previously amended by instruments dated
February 20, 1995, February 22, 1995, and November 3, 1995 collectively, the
"Lease"); and
B. WHEREAS, Tenant has requested that additional space consisting of
approximately 6,069 rentable square feet on the first (1st) floor of the
Building shown on Exhibit A attached hereto (the "Fourth Expansion Space") be
added to the Premises and that the Lease be appropriately amended, and
Landlord is willing to do the same on the terms and conditions hereinafter
set forth; and
C. WHEREAS, the Lease by its terms shall expire on January 31, 2003 ("Prior
Termination Date") and, the parties desire to extend the Lease, all on the
terms and conditions hereinafter set forth; and
D. WHEREAS, Space consisting of 4,043 rentable square feet on the first
(1st) floor of the Building shown on Exhibit B attached hereto (the "Must
Take Space") shall be added to the Premises and space consisting of
approximately 2,350 rentable square feet in the Building (the "Optional Must
Take Space") may be added to the Premises and that the Lease be appropriately
amended, and Landlord is willing to do the same on the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, Landlord and Tenant agree as
follows:
I. FOURTH EXPANSION SPACE.
A. Effective as of the Fourth Expansion Effective Date (as hereinafter
defined), the Premises is increased from 41,600 rentable square
feet on the second (2nd), third (3rd), fourth (4th) and eleventh
(11th) floors to 47,669 rentable square feet on the first (1st),
second (2nd), third (3rd), fourth (4th) and eleventh (11th) floors
by the addition of the Fourth Expansion Space. The Lease Term for
the Fourth Expansion Space shall commence on the Fourth Expansion
Effective Date and end on the Extended Termination Date
(hereinafter defined). The Fourth Expansion Space is subject to
all the terms and conditions of the Lease except as expressly
modified herein and except that Tenant shall not be entitled to
receive any allowances, abatement or other financial concession
granted with respect to the Premises unless such concessions are
expressly provided for herein with respect to the Fourth Expansion
Space.
During any period that Tenant shall be permitted to enter the
Fourth Expansion Space prior to the Fourth Expansion Effective Date
to perform alterations or improvements, Tenant shall comply with
all terms and provisions of the Lease, except those provisions
requiring payment of Base Rental or Additional Base Rental as to
the Fourth Expansion Space. If Tenant takes possession of the
Fourth Expansion Space prior to the Fourth Expansion Effective Date
for any reason whatsoever (other than the performance of work in
the Fourth Expansion Space with Landlord's prior approval), such
possession shall be subject to all the terms and conditions of the
Lease and this Amendment, and Tenant shall pay Base Rental and
Additional Base Rental as applicable to the Fourth Expansion Space
to Landlord on a per diem basis for each day of occupancy prior to
the Fourth Expansion Effective Date.
B. The Fourth Expansion Effective Date shall be DECEMBER 1, 1996.
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C. In addition to Tenant's obligation to pay Base Rental for the
Premises Tenant shall pay Landlord the sum of Five Hundred Fifty-
Five Thousand Nine Hundred Thirty-Five and 85/100 Dollars
($555,935.85) as Base Rental for the Fourth Expansion Space in
seventy-five (75) monthly installments as follows:
(i) Fifteen (15) equal installments of $6,863.03 (i.e. $13.57
per rentable square foot) each payable on or before the
first day of each month during the period beginning
December 1, 1996 and ending February 28, 1998.
(ii) Twenty-four (24) equal installments of $7,206.94 (i.e.
$14.25 per rentable square foot) each payable on or before
the first day of each month during the period beginning
March 1, 1998 and ending February 29, 2000.
(iii) Thirty-six (36) equal installments of $7,778.44 (i.e. $15.38
per rentable square foot) each payable on or before the
first day of each month during the period beginning March 1,
2000 and ending February 28, 2003.
All such Base Rental shall be payable by Tenant in accordance with
the terms of Article V. of the Lease.
D. Tenant shall, on or before FEBRUARY 1, 1997, pay $6,863.03 (the
"Additional Security Deposit") to Landlord which shall be added to
and become part of the Security Deposit held by Landlord as
provided under the Lease as security for payment of Rent and the
performance of other terms and conditions of the Lease by Tenant.
Notwithstanding the foregoing, Tenant OR THE Guarantor may provide
Landlord on or before January 31, 1997 its then current UNAUDITED
financial statement prepared in accordance with generally accepted
accounting principles for Landlord's review. If such financial
statement shows that Tenant's net worth as of December 31, 1996 is
at least $800,000.00, Tenant's obligation to provide the Additional
Security Deposit shall be waived. If audited statements during
calendar year 1997 reflect that the net worth requirement has been
met at December 31, 1996, then the Landlord will give back to
Tenant the Security Deposit of $6,863.03.
E. For the period commencing with the Fourth Expansion Effective Date
and ending on the Second Extended Termination Date, Tenant's Pro
Rata Share for the Fourth Expansion Space is one and seventy-five
hundredths percent (1.75%) and the Base Year for the computation of
Tenant's Pro Rata Share of Basic Costs applicable to the Fourth
Expansion Space shall be in accordance with Exhibit B-2 of the
Lease.
F. IMPROVEMENTS TO FOURTH EXPANSION SPACE. Tenant has inspected the
Fourth Expansion Space and agrees to accept the same "as is"
without any agreements, representations, understandings or
obligations on the part of Landlord to perform any alterations,
repairs or improvements, except as may be expressly provided
otherwise in this Amendment.
G. COST OF IMPROVEMENTS TO FOURTH EXPANSION SPACE. Provided Tenant is
not in default, Tenant shall be entitled to receive an improvement
allowance (the "Fourth Expansion Improvement Allowance") in an
amount not to exceed Seventy-Eight Thousand Eight Hundred Ninety-
Seven and No/100 Dollars ($78,897.00) to be applied toward the cost
of performing initial construction, alteration or improvement of
the Fourth Expansion Space, including but not limited to the cost
of space planning, design and related architectural and engineering
services (the "Fourth Expansion Space Improvements"). In the event
the total cost of the initial improvements to the Fourth Expansion
Space exceeds the Fourth Expansion Improvement Allowance, Tenant
shall pay for such excess upon demand. The entire unused balance of
the Fourth Expansion Improvement Allowance, if any, shall accrue to
the sole benefit of Landlord. Landlord shall pay such Fourth
Expansion Improvement Allowance directly to the contractors
retained to perform the construction, design or related improvement
work to the Fourth Expansion Space.
H. RESPONSIBILITY FOR IMPROVEMENTS TO FOURTH EXPANSION SPACE.
Landlord shall enter into a direct contract for the initial
improvements to the Fourth Expansion Space with a general
contractor selected by Tenant, subject to Landlord's reasonable
approval. Tenant shall devote such time in consultation with
Landlord or Landlord's architect as may be require provide all
information Landlord deems necessary in order to enable
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Landlord to complete, and obtain Tenant's written approval of, the
plans for the initial improvements to the Fourth Expansion Space in
a timely manner. All plans for the initial improvements to the
Fourth Expansion Space shall be subject to Landlord's consent,
which consent shall not be unreasonably withheld. If the cost of
such improvements exceeds the Fourth Expansion Improvement
Allowance, then prior to commencing any construction of
improvements to the Fourth Expansion Space, Landlord shall submit
to Tenant a written estimate setting forth the anticipated cost,
including but not limited to the cost of space planning, design and
related architectural and engineering services, labor and
materials, contractor's fees, and permit fees. Within a reasonable
time thereafter, Tenant shall either notify Landlord in writing of
its approval of the cost estimate or specify its objections thereto
and any desired changes to the proposed improvements. In the event
Tenant notifies Landlord of such objections and desired changes,
Tenant shall work with Landlord to reach a mutually acceptable
alternative cost estimate.
I. PARKING. Effective as of the Fourth Expansion Effective Date,
Landlord shall provide Tenant, with respect to the Fourth Expansion
Space, twenty-two (22) parking Permits in the Building Garage. Of
said twenty-two (22) Permits, three (3) Permits shall be reserved
and nineteen (19) Permits shall be unreserved. Landlord, subject to
availability, shall lease to Tenant on a month-to-month basis,
additional unreserved Permits at $25.00 per space, per month (plus
applicable tax).
II. EXTENSION. The Lease Term is hereby modified from expiring on the
Prior Termination Date to expiring on February 28, 2003 ("Extended
Termination Date"), unless sooner terminated in accordance with the
terms of the Lease. That portion of the Lease Term commencing the day
immediately following the Prior Termination Date ("Extension Date")
and ending on the Extended Termination Date shall be referred to herein
as the "Extended Term."
III. MONTHLY BASE RENTAL.
A. ORIGINAL PREMISES THROUGH PRIOR TERMINATION DATE. The Base
Rental, Additional Base Rental and all other charges under the
Lease shall be payable as provided therein with respect to the
Original Premises through and including the Prior Termination Date.
B. ORIGINAL PREMISES FROM AND AFTER EXTENSION DATE. As of the
Extension Date, the monthly installment of Base Rental payable with
respect to the Original Premises for the Extended Lease Term is one
(1) installment of $55,466.67 payable on or before February 1,
2003.
IV. BASE YEAR. For the period commencing with the Extension Date and
ending on the Extended Termination Date, Tenant shall pay for its Pro
Rata Share of Basic Costs applicable to the Original Premises in
accordance with the terms of Exhibit B-2 of the Lease.
V. MUST TAKE SPACE.
A. Tenant hereby leases from Landlord and Landlord hereby leases to
Tenant the 4,043 square feet of Rentable Area on the first (1st)
floor of the Building comprised of suites 150 and 180 and shown
on Exhibit B attached hereto (collectively referred to as the
"Must Take Space"). The Lease Term with respect to the Must Take
Space shall commence on the earlier to occur of (i) August 1, 1998,
and (ii) the date Landlord regains the legal right to possession of
suite 150 (the "Must Take Commencement Date"). In no event will the
Must Take Commencement Date be earlier than July 1, 1997.
B. The Must Take Space is leased by Tenant pursuant to all of the
terms and conditions of the Lease, except that the financial terms
and conditions (i.e. Base Rental, Additional Base Rental and any
improvement allowance) for the Must Take Space shall be as follows:
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1. Tenant shall pay Landlord the sum of Three Hundred Thirty-Eight
Thousand Three Hundred Forty-Five and 20/100 Dollars ($338,345.20)
as Base Rental for the Must Take Space in sixty-eight (68)
installments as follows:
a. Eight (8) installments of $4,571.96 payable on or before
July 1, 1997, calculated on the basis of $13.57 per square foot
of Rentable Area per annum for the period from July 1,1997 to
February 28, 1998; and
b. Twenty-four (24) installments of $4,801.06 payable on or
before February 1,1998, calculated on the basis of $14.25 per
square foot of Rentable Area per annum for the period from
March 1, 1998 to February 28, 2000; and
c. Thirty-Six (36) installment of $5,181.78 payable on or
before February 1, 2000, calculated on the basis of $15.38 per
square foot of Rentable Area per annum for the period from
March 1, 2000 to February 28, 2003.
The foregoing schedule is based on the assumption that the Lease
Term with respect to the Must Take Space commences on July 1, 1997
(the "Must Take Target Commencement Date"). If the Lease Term for
the Must Take Space does not commence on the Must Take Target
Commencement Date, the beginning and ending dates set forth above
with respect to the payment of any installment(s) of Base Rental
shall be appropriately adjusted on a per diem basis and set forth
in a Commencement Letter for the Must Take Space to be prepared by
Landlord. In the event that the Base Rental rate adjusts (up or
down) on any day other than the first day of the month, Base Rental
for the month in which such adjustment occurs shall be determined
based on the number of days in such month for which each particular
Base Rental rate is applicable.
2. Tenant shall pay Additional Base Rental (i.e. Basic Costs) for
the Must Take Space on the same terms and conditions set forth in
Exhibit B-2 of this Lease, provided that effective as of the Must
Take Commencement Date, Tenant's Pro Rata Share shall increase by
1.17% to account for the addition of the Must Take Space.
C. 1. IMPROVEMENTS TO MUST TAKE SPACE. Tenant has inspected the Must
Take Space and agrees to accept the same "as is" without any
agreements, representations, understandings or obligations on the
part of Landlord to perform any alterations, repairs or
improvements, except as may be expressly provided otherwise in this
Amendment.
2. COST OF IMPROVEMENTS TO MUST TAKE SPACE. Provided Tenant is
not in default, Tenant shall be entitled to receive an improvement
allowance (the "Must Take Improvement Allowance") in an amount not
to exceed Forty-Four Thousand Four Hundred Seventy-Three and No/100
Dollars ($44,473.00) to be applied toward the cost of performing
initial construction, alteration or improvement of the Must Take
Space, including but not limited to the cost of space planning,
design and related architectural and engineering services (the
"Must Take Space Improvements"). In the event the total cost of the
initial improvements to the Must Take Space exceeds the Must Take
Improvement Allowance, Tenant shall pay for such excess upon
demand. The entire unused balance of the Must Take Improvement
Allowance, if any, shall accrue to the sole benefit of Landlord.
Landlord shall pay such Must Take Improvement Allowance directly to
the contractors retained to perform the construction, design or
related improvement work to the Must Take Space.
3. RESPONSIBILITY FOR IMPROVEMENTS TO MUST TAKE SPACE.
Landlord shall enter into a direct contract for the initial
improvements to the Must Take Space with a general contractor
selected by Tenant, subject to Landlord's reasonable approval.
Tenant shall devote such time in consultation with Landlord or
Landlord's architect as may be required to provide all information
Landlord deems necessary in order to enable
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Landlord to complete, and obtain Tenant's written approval of, the
plans for the initial improvements to the Must Take Space in a
timely manner. All plans for the initial improvements to the Must
Take Space shall be subject to Landlord's consent, which consent
shall not be unreasonably withheld. If the cost of such
improvements exceeds the Must Take Improvement Allowance, then
prior to commencing any construction of improvements to the Must
Take Space, Landlord shall submit to Tenant a written estimate
setting forth the anticipated cost, including but not limited to
the cost of space planning, design and related architectural and
engineering services, labor and materials, contractor's fees, and
permit fees. Within a reasonable time thereafter, Tenant shall
either notify Landlord in writing of its approval of the cost
estimate or specify its objections thereto and any desired changes
to the proposed improvements. In the event Tenant notifies
Landlord of such objections and desired changes, Tenant shall work
with Landlord to reach a mutually acceptable alternative cost
estimate.
III. OPTIONAL MUST TAKE SPACE.
A. Subject to the availability of the Optional Must Take Space
(hereinafter defined) as determined by Landlord in its sole
discretion, Tenant hereby leases from Landlord and Landlord hereby
leases to Tenant approximately 2,350 square feet of Rentable Area
(plus or minus up to 10% as determined by Landlord) of space, the
exact location of which shall be determined by Landlord anywhere
in the Building (the "Optional Must Take Space"). On or before
September 30, 1997 ("Optional Must Take Space Notice"), Landlord
shall advise Tenant of the location and the terms under which
Landlord will lease the Optional Must Take Space to Tenant.
Provided Landlord has given Tenant the Optional Must Take Space
Notice, the Lease Term with respect to the Optional Must Take Space
shall commence on January 1, 1998 (the "Optional Must Take
Commencement Date"). In the event Landlord fails to give Tenant the
Optional Must Take Space Notice by the date set forth above, Tenant
shall not be required to take the Optional Must Take Space and
Landlord shall have no further obligation to offer such space to
Tenant.
B. The Optional Must Take Space is leased by Tenant pursuant to all of
the terms and conditions of the Lease, except that the Base Rental
for the Optional Must Take Space shall be the greater of: a) the
Base Rental rate per square foot for the Fourth Expansion Space on
the date the term for the Optional Must Take Space commences; and
b) the prevailing market rate (as reasonably determined by
Landlord) per square foot for the Optional Must Take Space. If Base
Rental is based upon the rate per square foot for the Fourth
Expansion Space, the Base Rental rate for the Optional Must Take
Space shall increase at such times and in such amount as Base
Rental for the Fourth Expansion Space so that the Base Rental rate
per rentable square foot for the Optional Must Take Space shall
always be the same as the Base Rental rate per rentable square foot
for the Fourth Expansion Space. If Base Rental is based upon the
prevailing market rate, Base Rental shall increase, if at all, in
accordance with the increases assumed in the determination of the
prevailing market rate. Notwithstanding the foregoing, if the Base
Rental is based on the prevailing market rate, in no event shall
the Base Rental rate be greater than 110% of the Base Rental
payable for the Fourth Expansion Space. Tenant shall be entitled to
receive an improvement allowance for the Optional Must Take Space
in an amount determined as part of the prevailing market rate (as
reasonably determined by Landlord).
C. Subject to any improvement allowance provided to Tenant as part of
the prevailing market rate, Landlord shall have no obligation to
perform any demolition or improvement work in the Optional Must
Take Space, it being agreed that any improvements to such space
shall be performed by Tenant in accordance with the terms and
conditions of Section X.B. of the Lease. The term for the Optional
Must Take Space and, accordingly, Tenant's obligation to pay Rent
for such space, shall commence on the Optional Must Take Space
Commencement Date as described above regardless of whether Tenant
has completed the initial improvements with respect to the
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Optional Must Take Space. The Optional Must Take Space shall be
considered Premises, subject to all the terms and conditions of
this Lease, except that no allowances, credits, abatements or other
concessions (if any) set forth in this Lease for the initial
Premises shall apply to the Optional Must Take Space.
IV. OTHER PERTINENT PROVISIONS. Landlord and Tenant agree that the
Lease shall be in the following additional respects:
A. Effective as of the Fourth Expansion Effective Date, Article V.,
Right of First Offer, of the Third Amendment shall be deleted in
its entirety and of no further force or effect.
B. Effective as of the date of this Amendment, Subparagraph (a) of
Paragraph IV. A. of the Third Amendment to the Lease is deleted in
its entirety. Paragraph IV. A. of the Third Amendment to the Lease
is hereby amended by replacing the three (3) references to
"December 31, 1997" with "July 1, 1997" and replacing
Subparagraph (d) with the following:
"(d) Tenant is in occupancy of at least 47,669 rentable
square feet in the Building;"
Paragraph IV. B of the Third Amendment to Lease is hereby amended
by replacing the reference to "July 1, 1998" with "November 1,
1997." In addition, the second sentence of the second paragraph of
Paragraph IV. B shall be amended by adding the following at the end
of the sentence: or (5) Tenant ceases to occupy at least 47,669
rentable square feet of space in the Building", or (6) Tenant's OR
THE GUARANTOR'S net worth FOR June 30, 1997 as shown on Tenant's
then current financial statements prepared in accordance with
generally accepted accounting principles and submitted to Landlord
upon Landlord's request is less than $800,000.00, or at any time
thereafter, Tenant's net worth as shown on Tenant's or the
Guarantor's then current financial statements prepared in
accordance with generally accepted accounting principles and
submitted to Landlord from time to time upon Landlord's request is
less than $500,000.00.
V. MISCELLANEOUS.
A. This Amendment sets forth the entire agreement between the parties
with respect to the matters set forth herein. There have been no
additional oral or written representations or agreements.
B. Except as herein modified or amended, the provisions, conditions
and terms of the Lease shall remain unchanged and in full force
and effect.
C. In the case of any inconsistency between the provisions of the
Lease and this Amendment, the provisions of this Amendment shall
govern and control.
D. Submission of this Amendment by Landlord is not an offer to enter
into this Amendment but rather is a solicitation for such an offer
by Tenant. Landlord shall not be bound by this Amendment until
Landlord has executed and delivered the same to Tenant.
E. The capitalized terms used in this Amendment shall have the same
definitions as set forth in the Lease to the extent that such
capitalized terms are defined therein and not redefined in this
Amendment.
F. This Amendment shall be of no force and effect unless and until
accepted by any guarantors of the Lease, who by signing below shall
agree that their guarantee shall apply to the Lease as amended
herein, unless such requirement is waived by Landlord in writing.
G. Tenant hereby represents to Landlord that Tenant has dealt with no
broker other than Xxxx X. Xxxxxx in connection with this Amendment.
Tenant agrees to indemnify and hold Landlord and the Landlord
Related Parties harmless from all claims of any brokers claiming
to have represented Tenant in connection with this Amendment.
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H. TENANT HEREBY WAIVES ALL RIGHTS TO PROTEST THE APPRAISED VALUE OF
THE PROPERTY OR TO APPEAL THE SAME AND ALL RIGHTS TO RECEIVE
NOTICES OF REAPPRAISALS AS SET FORTH IN SECTIONS 41.413 AND 42.015
OF THE TEXAS TAX CODE.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this
Amendment as of the day and year first above written.
WITNESSES; ATTESTATION LANDLORD: ZML - North Central Plaza Three
Limited Partnership, a Delaware limited
partnership
BY: EQUITY OFFICE HOLDINGS, L.L.C., a Delaware
limited liability company as Agent
By: /s/ XXX X. XXXXX
------------------------------------------
---------------------------- Name: Xxx X. Xxxxx
---------------------------- Title: Senior Vice President - Asset Management
TENANT: Management Alliance Corporation, a
Texas corporation
/s/ XXXXX X. XXXXX By: /s/ ??????
---------------------------- ------------------------------------------
Its: SECRETARY
---------------------------- -----------------------------------------
GUARANTOR: Diversified Corporate Resources,
Inc., a Texas corporation (as successor-in-
interest to Diversified Human Resources Group,
Inc., a Texas corporation)
/s/ XXXXX X. XXXXX By: /s/ ??????
---------------------------- ------------------------------------------
Its: C.F.O.
---------------------------- -----------------------------------------
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EXHIBIT A
OUTLINE AND LOCATION OF FOURTH EXPANSION SPACE
[MAP]
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EXHIBIT B
OUTLINE AND LOCATION OF THE MUST TAKE SPACE
[MAP]
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