EXHIBIT 10.55
LEASE AGREEMENT
Lease Agreement, made as of January 1, 1997, between NOVUS Credit Services Inc.
("NCSI", formerly known as Sears Consumer Financial Corporation), a Delaware
Corporation having its principal office at 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, XX
00000 (hereinafter referred to as "Landlord"), and SPS Payment Systems, Inc.
("SPS", formerly known as Sears Payment Systems, Inc.), a Delaware Corporation,
having its principal office at 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000
(hereinafter referred to as "Tenant") .
In consideration of the rents and covenants herein set forth, Landlord hereby
leases to Tenant, and Tenant hereby rents from Landlord premises containing
approximately 2,405 rentable square feet (RSF), (hereinafter called "Leased
Premises"), as shown crosshatched in red on Exhibit A, a copy of which is
attached hereto, located in the office building known as 0000 Xxxx Xxxx Xxxx,
Xxxxxxxxxx, XX 00000 (hereinafter called "Riverwoods Building"), which is
situated on that certain parcel of land (hereinafter called "Riverwoods
Building Area"). The Leased Premises contain the fixtures, improvements, and
certain other property now installed. This lease shall be for the term, upon
the rentals and subject to the terms and conditions set forth in this Lease
Agreement and Exhibits hereto.
Tenant and its agents, employees, and invitees have the nonexclusive right with
others designated by Landlord to the free use of the common areas in the
Riverwoods Building and of the land (hereinafter called "Land") on which the
Riverwoods Building is located for the common areas' intended and normal
purposes. Common areas include elevators, sidewalks, parking areas, cafeteria,
conference rooms (including without limitation conference rooms on the
conference level), driveways, hallways, stairways, public bathrooms, common
entrances, lobby, and other similar public areas and access ways. Landlord may
change common areas if the changes do not materially and unreasonably interfere
with Tenant's access to the premises or use of them.
Subject to Section VII, Tenant and its employees may have the nonexclusive
right with others designated by Landlord, at whatever fee Landlord deems
reasonable and charges any other NCSI subsidiary or affiliate that is
headquartered in the Riverwoods Building (hereinafter called "NCSI Company")
for the use of specially designated areas, not common areas, such as a fitness
center.
Section I
TERM
-----
The term of this Lease Agreement shall commence on January 1, 1997 (hereinafter
called the "Commencement Date") and shall expire thirty-seven (37) months
thereafter on January 31, 2000 (hereinafter called the "Term").
In the event there is mutual agreement between the Landlord and Tenant that the
Term be modified, the parties will amend the Term of this Lease Agreement.
Section II
USE
---
The Leased Premises shall be used by Tenant solely for general office purposes
in keeping with the class and character of the Riverwoods Building and for no
other purposes. Landlord warrants that applicable laws, ordinances, and
regulations permit the Leased Premises to be used for general offices.
Section III
RENT
----
A. Base Rent.
---------
Tenant covenants and agrees to pay Landlord, as rental for the Leased
Premises, base rent (hereinafter called "Base Rent") in monthly
installments, payable in advance on the first business day of each month
for the Term as follows:
Monthly installments of Five Thousand Seven Hundred Thirty Nine and
93/100 Dollars ($5,739.93) or the lowest amount that shall be charged
or allocated per rentable square foot to any other NCSI company, times
the Leased Premises (as stated above) divided by 12, for the period
from January 1, 1997 through January 31, 1997; and
Monthly installments of the lesser of Six Thousand Ninety Four and
67/100 Dollars ($6,094.67) or the lowest amount that shall be charged
or allocated per rentable square foot to any other NCSI Company, times
the Leased Premises (as stated above) divided by 12, for the period
from February 1, 1997 through January 31, 1998; and
Monthly installments of the lesser of Seven Thousand Three Hundred
Fifty Seven and 30/100 Dollars ($7,357.30) or the lowest amount that
shall be charged or allocated per rentable square foot to any other
NCSI Company, times the Leased Premises (as stated above) divided by
12, for the period from February 1, 1998 through January 31, 1999; and
Monthly installments of the lesser of Seven Thousand Six Hundred Forty
Nine and 90/100 Dollars ($7,649.90) or the lowest amount that shall be
charged or allocated per rentable square foot to any other NCSI
Company, times the Leased Premises (as stated above) divided by 12, for
the period from February 1, 1999 through January 31, 2000.
Notwithstanding the above, Landlord shall determine, at its sole discretion
annually, its prior year's actual Base Rent expense for the Leased Premises.
Landlord shall invoice Tenant for the difference between the actual Base
Rent expense, as determined above, and the amount of Base Rent paid to
Landlord if the actual Base Rent is greater. Likewise, Landlord shall
credit Tenant for the difference between the Base Rent paid to Landlord and
the actual Base Rent expense, as determined above, if the Base Rent paid is
greater. However, in no case shall any adjustment for a prior year's actual
Base Rent expense cause Tenant's Base Rent for such prior year to exceed the
applicable amount in the Base Rent schedule set forth above. If Tenant is
invoiced for Base Rent, Tenant agrees to pay said invoice within thirty (30)
days from the date thereof. Landlord shall exercise good business judgment
to contain operating costs within the proposed Base Rent structure.
Additionally, Landlord shall, prior to January of each year of the Term,
advise Tenant of the projected monthly Base Rent for the next period; and
effective on February 1 and the first day of each month for the twelve (12)
months thereafter, Tenant shall pay Landlord said projected monthly Base
Rent.
Included in Base Rent are Real Estate Taxes and Operating Expenses as
defined below:
1. "Real Estate Taxes" shall be deemed to be those real estate taxes
assessed against the land and/or the Riverwoods Building and the
Riverwoods Building Area. Real Estate Taxes shall exclude federal,
state or local income taxes; franchise, gift, transfer, excise, capital
stock, estate, succession, or inheritance taxes; penalties or interest
for late payment of such taxes.
2. "Operating Expenses" shall be the total expenses incurred by the
Landlord in connection with the operation, maintenance and repair of the
Riverwoods Building and the Riverwoods Building Area in accordance with
sound management and accounting principles generally accepted with
respect to the size and quality in the Chicago metropolitan area. These
Operating Expenses shall include but not be limited to: (i) all utility
charges; (ii) materials and supplies used in the operation and
maintenance of the building; (iii) wages and salaries paid to all
building service employees; (iv) all fees and contract costs paid to
independent contractors engaged in such operation, maintenance and the
cleaning of the Building; (v) "fringe benefits" for such employees in
(iii) above including all Social Security taxes, unemployment insurance
as well as all other types of applicable employee insurance, taxes, cost
for providing compensation for disability taxes, cost for any life
insurance, hospital and/or welfare plan or any federal and/or life
expenses included under the provisions of any collective bargaining
agreement covering employees of the Riverwoods Building; and (vi)
replacement of common area equipment furniture and fixtures rendered
unserviceable by normal wear and tear.
All Riverwoods Building and Riverwoods Building Area Real Estate Taxes and
Operating Expenses incurred by the Landlord in the operation of the
Riverwoods Building and the Riverwoods Building Area during the term of this
Lease Agreement shall be included in the Base Rent as set forth in this
Lease Agreement. An example of an expense not included in the Base Rent is
an expense incurred as a result of Tenant's business or operations. Such
expense includes but is not limited to Federal and/or State Clean Air Act
assessments. Any such assessment will be made based on Lessee's actual
performance under the terms of any such Federal or State Clean Air Act.
Insurance is not included in Operating Expenses and is charged directly to
Tenant by Risk Management.
B. Furniture Rent
--------------
Tenant covenants and agrees to pay Landlord as rental for the furniture in
the Leased Premises, (hereinafter called "Furniture Rent") in monthly
installments payable in advance on the first day of the month, to the same
payee and at the same place as the Base Rent according to the following
schedule:
The lesser of $4.10 Per Square Foot in monthly installments of Eight
Hundred Twenty One and 71/100 Dollars ($821.71) or the lowest amount that
shall be charged or allocated per rentable square foot to any other NCSI
Company, times the Leased Premises square footage divided by 12, for the
period from January 1, 1997 through January 31, 1998; and
The lowest amount that shall be charged or allocated per rentable square
foot to any other NCSI Company, times the Leased Premises square footage
divided by 12, for the period from February 1, 1998 through January 31,
1999; and
The lowest amount that shall be charged or allocated per rentable square
foot to any other NCSI Company, times the Leased Premises square footage
divided by 12, for the period from February 1, 1999 through January 31,
2000.
C. Base Rent and Furniture Rent are hereinafter referred to collectively
and/or alternatively as "Rent." Any items or services covered under the
Rent due under this Lease will not be included in the Management Services
Agreement dated as of January 1, 1992, and any successor agreements thereto,
between the parties. Additionally, rent on space available for expansion to
any other NCSI Company (hereinafter called "Riverwoods Expansion Space")
will not be charged to the Tenant during the Term.
D. Rent shall be paid without advance notice, demand, offset, or deduction
unless the offset or deduction is made by Tenant as permitted under this
Lease Agreement or to recover any unpaid (nonappealable) court judgment
Tenant has against Landlord.
All Rent payable by Tenant to Landlord under this Lease Agreement shall be
paid to Landlord at 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000, Attention:
Xxxx X. Xxxxxxx, 1-West, or at such other place as Landlord may from time to
time reasonably designate in writing.
Section IV
IMPROVEMENTS AND ALTERATIONS
----------------------------
A. Landlord's Improvements
-----------------------
Tenant will take the Leased Premises "as is" and Landlord will make no
landlord Improvements to the Leased Premises under this Lease.
B. Tenant Improvements
-------------------
Any alterations to the Leased Premises shall be requested in writing by
Tenant to Landlord in a format reasonably acceptable to Landlord. Then,
upon Landlord's written consent to said alterations, which shall not be
unreasonably withheld, Landlord will coordinate and construct all said
improvements at Tenant's sole expense. Prior to the construction of said
improvements, Landlord shall provide Tenant with an estimate of the cost of
said improvements. The cost of such improvements, alterations or
renovations shall be based on the same then current rates as those offered
to any other tenant or occupant of the Riverwoods Building. Commencement of
construction shall be subject to Tenant's prior approval of the proposed
costs. Tenant shall pay for the cost of said alterations within thirty (30)
days of submission of bills therefor.
Section V
RELOCATION
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Intentionally omitted.
Section VI
MAINTENANCE AND REPAIR
----------------------
Subject to Tenant's liability to pay for repair for damage caused by the
negligence or willful misconduct of its agents, employees, visitors, or
occupants, Landlord shall maintain and keep and repair the Riverwoods Building
Area, the Riverwoods Building, and the Leased Premises including both exterior,
interior, parking lots, driveways and all structural parts, fixtures, wiring,
plumbing, heating, air conditioning, water pipes, plastering and flooring
therein, except only those installations, if any, provided by Tenant. Without
limiting the foregoing, Landlord agrees to keep, to the best of its ability,
heating plant, electrical and water connections and facilities and air
conditioning in operating condition and available for use. Landlord shall
perform such repairs or replacements within a reasonable time after receiving
notice or having actual knowledge of the need for a repair or replacement.
Reasonable time shall mean that amount of time in which like repairs or
replacements are generally performed for any other NCSI Company.
Section VII
HEAT, AIR CONDITIONING, UTILITIES AND OTHER SERVICES
----------------------------------------------------
Landlord shall furnish during "normal operating hours" (which shall include at
least the hours from 8:00 a.m. to 6:00 p.m. on weekdays and 8:00 a.m. to 1:00
p.m. on Saturdays) heat and air conditioning for the Leased Premises necessary
for the comfortable conduct of business; toilet facilities for the use of
employees, customers and other invitees of tenants; janitor service for the
Leased Premises of a quality consistent with such services provided in other
first rate office buildings in the area; electricity for lighting purposes and
a reasonable number of light office machines customarily used for normal office
purposes; adequate elevator services for the use of the employees, customers
and other invitees of tenants. In the event Tenant makes use of these services
at hours other than normal operating hours, Landlord may make reasonable
additional charges for such services.
Landlord shall allow Tenant the use of the following facilities provided Tenant
complies with all rules and regulations established by Landlord from time to
time with regard to the use of said facilities:
1. Full access to the cafeteria and vending areas.
2. Use of conference level facilities as they are available.
3.Use of on-grade employee and visitor parking as available in common.
Landlord shall provide to Tenant the following services at additional cost:
1. Overtime air conditioning.
2. Overtime use of the service elevator.
3. The actual/allocated cost of any special services performed at Tenant's
request.
Section VIII
INDEMNIFICATION
---------------
A. Tenant indemnifies, defends, and holds Landlord harmless from claims caused
by the negligence or willful misconduct of Tenant, its agents, employees, or
invitees.
When the claim is caused by the joint negligence or willful misconduct of
Tenant and Landlord or Tenant and a third party unrelated to Tenant, except
Tenant's agents, employees, or invitees, Tenant's duty to defend, indemnify,
and hold Landlord harmless shall be in proportion to Tenant's allocable
share of the joint negligence or willful misconduct.
B. Landlord indemnifies, defends, and holds Tenant harmless from claims
resulting from the negligence or willful misconduct of Landlord, its agents,
employees, or invitees.
When the claim is caused by the joint negligence or willful misconduct of
Landlord and Tenant or Landlord and a third party unrelated to Landlord,
except Landlord's agents, employees, or invitees, Landlord's duty to defend,
indemnify, and hold Tenant harmless shall be in proportion to Landlord's
allocable share of the joint negligence or willful misconduct.
C. Notwithstanding Paragraphs A and B, the parties release each other from any
claims either party ("Injured Party") has against the other solely to the
extent the claim is covered by the Injured Party's insurance.
Section IX
ASSIGNMENT OF LEASE AND SUBLETTING
----------------------------------
Tenant will not assign or sublease the Leased Premises.
Section X
PANEL FURNITURE SYSTEMS
-----------------------
Tenant shall have the use of all building standard office furniture and Haworth
Panel Furniture Systems in the Leased Premises, hereinafter referred to as the
Furniture, for the term of this Lease. Tenant shall be responsible for
maintaining said Furniture, and for keeping it in a good state of repair.
Landlord will perform any repair and/or maintenance work on the Furniture, and
Tenant will pay Landlord, or Landlord's vendor, within thirty (30) days after
rendition of a xxxx therefore by Landlord.
Section XI
SUBORDINATION
-------------
This Lease Agreement shall be subject and subordinate to the lien of any
mortgage now against said premises or which may hereafter be placed against the
Leased Premises, provided:
A. that the holder thereof shall not be entitled to terminate this Lease
Agreement, by foreclosure or other means, so long as the Tenant or its
successors or assigns shall not be in default hereunder beyond any period
herein given Tenant to cure such default;
B. and that the lien of such mortgage shall not cover any of Tenant's fixtures,
alterations, or improvements, installed at Tenant's expense or which may be
installed or made hereafter, at Tenant's expense, which, by law or the terms
of this Lease Agreement, Tenant is permitted to remove from the Leased
Premises.
In confirmation of such subordination, Tenant shall execute promptly any
reasonable agreement which Landlord or mortgagee may request in writing with
respect thereto.
Section XII
DEFAULT AND REMEDIES
--------------------
A. Event of Default Defined
------------------------
It shall be an "Event of Default" if a party shall default in the
performance or observance of any covenant or condition of this Lease
Agreement to be performed or observed by such party, and such default shall
continue for thirty (30) days after written notice of such default has been
given to such party by the other non-defaulting party.
B. Landlord's Remedies
1. Termination of Lease. Upon occurrence of any Event of Default by Tenant,
Landlord may, at its option, in addition to any other remedy or right
given hereunder or by law, give written notice to Tenant that this Lease
Agreement shall terminate upon the date specified in the notice, which
date shall not be earlier than twenty (20) days after the giving of such
notice, and upon the date specified in such notice or in any other notice
pursuant to law, this Lease Agreement and the term thereof shall
terminate.
2. Repossession. Upon termination of this Lease Agreement as hereinabove
provided, or pursuant to statute, or by summary proceedings, the Landlord
may enter forthwith without further demand or notice upon any part of the
Leased Premises, in the name of the whole, if it has not heretofore done
so, and resume possession either by summary proceedings, or by action at
law or equity, as the Landlord may determine. In no event shall such
reentry or resumption of possession or reletting as hereafter provided be
deemed an acceptance or surrender of this Lease Agreement or a waiver of
the rights or remedies of Landlord hereunder.
C. Tenant's Remedies
-----------------
If Landlord commits a default, resulting in an Event of Default as defined
in A above, Tenant may pursue any remedy under the law.
Section XIII
SURRENDER OF PREMISES
---------------------
Tenant covenants to quit and surrender up the Leased Premises and Furniture to
the Landlord at the end of the term of this Lease Agreement in the same
condition as at the date of the commencement of this Lease Agreement, ordinary
use and wear thereof excepted; provided however, that the Tenant shall not be
liable for any damage caused by fire, windstorm, hail, or any other casualty,
or explosion, riot, riot attending a strike, civil commotion, aircraft, motor
vehicles, smoke, vandalism, and malicious mischief, or any other damage not
caused by the negligence or willful act of the Tenant. In the event the Tenant
shall for any reason remain in possession after the expiration of either the
term hereby granted or after the date specified in any written notice of
termination given by either the Landlord or Tenant, such possession shall be as
a month-to-month tenant during which time Tenant shall pay monthly Rent equal
to 150 percent of that accruing during the last month of the preceding term.
Section XIV
TERMS OF RENEWAL
----------------
Tenant shall have the option of one (1) renewal period of three (3) years and
shall notify Landlord 180 days prior to the expiration of this Lease Agreement
of its intent to renew the Lease Agreement as provided herein. All terms of
this Lease Agreement, including Furniture Rent, shall remain in effect during
the option renewal period, except the Base Rent for the three (3) years of the
option shall be as follows:
The terms during the Option will be consistent with those in place during the
lease term, except for Base Rent. Base Rent shall be increased each year at
the then-current CPI, All Urban Consumers, All Items, index for the Chicago-
Xxxx-Lake County area (or any subsequent index which may replace or supersede
it) for the preceding 12-month period ending December 31 of the year preceding
the then-current rent year. For example, the Base Rent rate increase for the
first 12-month period (February 1, 2000 - January 31, 2001) shall be the CPI
rate as of December 31, 1999 for the previous 12-month period.
Notwithstanding the foregoing terms of renewal, the Base Rent shall be the
lesser of the amounts described above or the lowest amount that shall be
charged or allocated per rentable square foot to any other NCSI Company for the
same period, provided that this provision shall not apply if at any time during
the Option Tenant is no longer under the control of NCSI or any of its
affiliates.
Section XV
EXPANSION SPACE
---------------
Landlord will make available additional space to Tenant on an "as available"
basis, to be reasonably determined by Landlord, under the same lease terms and
conditions as those in this Lease and any amendments, if any, thereto.
Additionally, Landlord shall use its best efforts to ensure that Tenant is
accorded the same right and ability to expand its Leased Premises as any other
NCSI Company.
Notwithstanding the above, any relocation costs and expenses pertaining to
expansion space will be subject to a separate agreement to be negotiated
between Landlord and Tenant.
Tenant will not be charged for non-Tenant Riverwoods expansion space during any
term of this Lease Agreement.
Section XVI
APPRECIATION RECAPTURE
----------------------
Intentionally Omitted
Section XVII
MISCELLANEOUS PROVISIONS
------------------------
A. Persons Bound. The agreements herein contained shall be binding upon and
shall inure to the benefit of the parties hereto, their respective
successors, assigns, heirs, devisees and personal representatives.
B. Captions Contained in Lease. The captions contained herein are for
reference purposes only and shall not be deemed to be a part hereof nor to
modify or qualify any of the terms, covenants or conditions hereof.
C. Partial Invalidity of Lease. The invalidity or unenforceability of any
provision of this Lease Agreement shall in no way affect the validity or
enforceability of any other provision hereof.
D. Notices. All notices at any time to be served by Landlord upon Tenant shall
be in writing and sent by registered or certified mail with postage prepaid
or be hand delivered and signed for, addressed to Tenant at the Riverwoods
Building to the attention of Tenant's President, or to such other persons
and addresses as may hereafter be designated by Tenant in writing. All
notices at any time to be served by Tenant upon Landlord shall be in writing
and sent by registered or certified mail with postage prepaid or be hand
delivered and signed for, addressed to Xxxx X. Xxxxxxx, NOVUS Credit
Services Inc., 0000 Xxxx Xxxx Xxxx, Xxxxxxxxxx, XX 00000, or to such other
trustee or agent as may be so designated by it in writing from time to time
and addressed as directed by it.
E. Signs. Landlord will not unreasonably withhold consent to Tenant's
installation of interior signs as are reasonably necessary to Tenant's
business and are in keeping with the reasonable standards maintained in the
Riverwoods Building.
F. Relocation. Subject to Tenant's prior written approval, Landlord may, at
the Landlord's expense, relocate the Tenant within the Riverwoods Building
to a location of similar size space and quality.
G. Rules and Regulations. Tenant and Tenant's servants, employees and agents
shall observe and comply with the rules and regulations set forth in
Exhibit B attached hereto and made a part hereof, entitled "Rules and
Regulations" and such other and further reasonable rules and regulations as
Landlord or Landlord's agents may from time to time adopt for the Riverwoods
Building or the Riverwoods Building Area. In the event of any conflict
between these Rules and Regulations and the Lease, the terms of the Lease
shall prevail.
H. Asbestos. Landlord warrants that, to the best of its knowledge, asbestos is
not contained in the Riverwoods Building.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed this Lease
Agreement as of the date and year first above written by their duly authorized
officers.
TENANT: LANDLORD:
By: Xxxxxx X. Xxxxxxxxx By: Xxxxx X. Xxxxxxx
Its: President Its: Vice President
leasedoc\spsrwd3.lse - created 11-18-96
