<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD
ENDED MARCH 31, 1996, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD
FROM __________ TO _______
Commission file number 1-14342
NOVA Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2209575
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Five Concourse Parkway, Suite 700, Atlanta, Georgia 30328
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(770) 396-1456
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
(Former name, former address and former fiscal year, if changed since
last report)
- --------------------------------------------------------------------------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such report(s), and (2) has been subject to such filing
requirements for the past 90 days.) Yes x No
----- -----
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years: N/A
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
----- -----
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 28,683,401 shares of common
stock outstanding as of May 31, 1996.
<PAGE>
NOVA CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 1996
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
March 31, 1996 (unaudited) and December 31,
1996...................................................... 3
Condensed Consolidated Statements of Income (unaudited) -
Three months ended March 31, 1996 and
1995...................................................... 4
Condensed Consolidated Statements of Cash Flows (unaudited) -
Three months ended March 31, 1996 and
1995...................................................... 5
Notes to Condensed Consolidated Financial
Statements................................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K............................. 9
Signatures................................................... 10
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
NOVA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 1995 and March 31, 1996
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
December 31, March 31,
1995 1996
------------ -----------
<S> <C> <C>
A S S E T S (Unaudited)
CURRENT ASSETS:
Cash and cash equivalents.............................. $ 630 $ 441
Trade receivables, less allowance for doubtful accounts
of $440 and $890, respectively......................... 6,466 5,266
Accounts receivable from affiliate..................... 719 513
Inventory.............................................. 1,080 944
Deferred tax asset..................................... 3,065 2,757
Other current assets................................... 694 742
------- -------
Total current assets......................... 12,654 10,663
Merchant and customer contracts........................ 20,603 20,125
Property and equipment, net............................ 7,403 7,822
Excess cost of businesses acquired..................... 13,795 13,672
Deferred tax asset..................................... 1,671 1,682
Other non-current assets............................... 1,992 1,901
------- -------
Total Assets........................................... $58,118 $55,865
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITES:
Accounts payable....................................... $ 4,180 $ 2,326
Accrued compensation and related costs................. 996 864
Reserve for credit losses.............................. 883 752
Other accrued liabilities.............................. 3,120 2,639
Capital lease obilgations due within one year.......... 1,083 834
Long-term debt obligations due within one year......... 4,101 3,470
------- -------
Total current liabilities...................... 14,363 10,885
Capital lease obligations.............................. 725 597
Long-term debt obligations............................. 17,013 16,087
STOCKHOLDERS' EQUITY:
Preferred Stock....................................... 33,571 33,571
Common Stock, $.01 par value, 50,000,000 shares
authorized, 11,378,120 and 12,364,236
shares issued, respectively...................... 114 124
Additional paid in capital............................ 2,615 3,769
Accumulated deficit................................... (10,283) (9,168)
------- -------
Total Stockholders' equity.................... 26,017 28,296
------- -------
Total Liabilities and Stockholders' Equity............ $58,118 $55,865
======= =======
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
3
<PAGE>
Item 1. Financial Statements (continued)
NOVA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, Except Share and Per Share Data)
For the three months ended
March 31,
1995 1996
-------- ---------
REVENUE.......................................... $ 29,841 $ 60,199
OPERATING COST
Cost of Service................................ 23,753 46,634
Conversion Cost................................ 1,281 1,573
Selling, General and Administrative............ 4,501 8,030
Depreciation and Amortization.................. 1,315 1,679
----------- -----------
TOTAL OPERATING COST............................. 30,850 57,916
OPERATING INCOME (LOSS).......................... (1,009) 2,283
Interest expense, net.......................... 590 490
----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME TAXES.. (1,599) 1,793
Provision for Income Tax....................... --- 678
----------- -----------
NET INCOME (LOSS)................................ $ (1,599) $ 1,115
=========== ===========
Proforma weighted average common and common
equivalent shares outstanding.................. 13,546,922 25,970,798
=========== ===========
Proforma net income (loss) per share common and
common equivalent share........................ $ (0.13) 0.04
=========== ===========
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
Item 1. Financial Statements (continued)
NOVA CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
(In Thousands)
For the three months ended
March 31,
1995 1996
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).............................. $ (1,599) $ 1,115
Adjustments to reconcile net income
(loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization.................. 1,315 1,679
Changes in assets and liabilities, net of the
effects of business acquisitions:
Trade receivables.......................... (638) 1,406
Inventory.................................. 104 136
Other assets............................... 551 165
Accounts payable........................... 162 (1,854)
Accrued liabilities........................ 73 (744)
----------- ----------
Net cash provided by (used in) operating
activities................................... (32) 1,903
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses........................ (642) (161)
Additions to property and equipment............ (185) (1,161)
----------- -----------
Net cash provided by (used in) investing
activities................................. (827) (1,322)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit and notes payable. 550 5,100
Payment of long-term debt and capital leases... (903) (7,034)
Proceeds from stock options exercised.......... 0 1,164
----------- -----------
Net cash provided by (used in) financing
activities................................. (353) (770)
----------- ----------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.................................... (1,212) (189)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD.. $ 2,031 630
----------- ----------
CASH AND CASH EQUIVALENTS, END OF PERIOD........ $ 819 $ 441
=========== ===========
Supplemental Cash Flow Information
Supplemental cash flow disclosures, including non-cash investing and financing
activities, are:
For the three months ended
March 31,
1995 1996
----------- -----------
Interest Paid.................................... $672 $539
Acquisition of equipment in exchange for debt
or capital leases.............................. 147 ---
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
NOVA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. These financial statements should be read in conjunction
with the Company's audited financial statements included in the Company's Form
S-1 filed with the Securities and Exchange Commission (333-1788). The
results for the quarter ended March 31, 1996 are not necessarily indicative of
the results that may be expected for the year ending December 31, 1996.
NOTE 2 - CONTINGENCIES
The Company is from time to time subject to claims and suits arising in the
ordinary course of its business. In the opinion of management, the ultimate
resolution of any such pending matters will not have a material effect on the
Company's financial position and results of operations.
NOTE 3 - SUBSEQUENT EVENT
In May 1996, the Company consummated an initial public offering (the "Offering")
of 3,793,415 shares of common stock. In connection with the Offering, the
Company received net proceeds of approximately $65.7 million, after deducting
underwriting discounts and commissions and expenses of the Offering. The net
proceeds were used (i) to pay all accrued and unpaid dividends of approximately
$11.7 million on the outstanding shares of preferred stock of the Company, (ii)
to redeem all outstanding shares of Series D Preferred Stock of $5.0 million,
and (iii) to repay all of the Company's outstanding bank debt of $15.7 million.
In addition, all shares of Series A, B, and C convertible preferred stock were
converted into the Company's common stock automatically upon the consummation of
the Offering.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the percentage of
revenues represented by certain line items in the Company's consolidated
statement of income:
<TABLE>
<CAPTION>
Three Month Period Percentage/Increase
Ended March 31, (Decrease)
-------------------- --------------------
1995 1996
--------- ---------
<S> <C> <C> <C>
Revenues 100.0% 100.0% 101.7%
Cost of service 79.6 77.5 96.3
Conversion costs 4.3 2.6 22.8
Selling, general and
administrative expenses 15.1 13.3 78.4
Depreciation and amortization 4.4 2.8 27.7
----- ----- -----
103.4 96.2 87.7
Operating income (loss) (3.4) 3.8 -
Interest expense, net 2.0 0.8 (16.9)
----- ----- -----
Income (loss) before provision
for income taxes (5.4) 3.0 -
Provision for income taxes - 1.1 -
----- ----- -----
Net Income (loss) (5.4)% 1.9% -
===== ===== =====
</TABLE>
REVENUES
Revenue increased 101.7% to $60.2 million for the quarter ended March
31, 1996 compared with $29.8 million for the same period in 1995. This increase
resulted from an 101.0% increase in merchant sales volume processed to $2.8
billion for 1996, compared to $1.4 billion in 1995. This increased sales volume
was primarily attributable to $1.2 billion from the transaction with First Union
Corporation and each of its principal banking subsidiaries (the "First Union
Alliance") and new merchants added as a result of Company sales efforts.
COST OF SERVICE
Cost of service increased 96.3% to $46.6 million for the quarter ended
March 31, 1996 compared with $23.8 million for the same period in 1995. The
increase resulted from additional interchange and assessment fees and other
processing costs associated with the higher volume of merchant sales. Cost of
service as a percent of revenues declined from 79.6% to 77.5%, reflecting
continuing cost efficiencies realized from the consolidation of the operations
relating to the acquisition of the merchant portfolio of the Bank of Boulder
(the "Boulder Acquisition"), consummated in December, 1994.
CONVERSION COSTS
Conversion costs increased 22.8% to $1.6 million for the quarter ended
March 31, 1996 compared with $1.3 million for the same period in 1995. The
increase resulted primarily from the ongoing conversion of the First Union
portfolio, acquired in December, 1995.
7
<PAGE>
SELLING, GENERAL, AND ADMINISTRATIVE
Selling, general and administrative expenses increased 78.4% to $8.0
million for the quarter ended March 31, 1996 compared with $4.5 million for the
same period in 1995. Higher expenses in 1996 resulted from the addition of
personnel in the Company's operations center to support the increased merchant
sales volume processed. Additionally, sales and marketing expenses increased to
support the Company's growing number of merchants and bank alliance
relationships. Selling, general and administrative expenses declined to 13.3% of
revenues for the quarter ended March 31, 1996 compared with 15.1% for the same
period in 1995, reflecting operational efficiencies.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased 27.7% to $1.7 million for the
quarter ended March 31, 1996 compared with $1.3 million for the same period in
1995. The increase was principally due to greater depreciation for point-of-sale
and system equipment purchased subsequent to the first quarter of 1995. To a
lesser extent this expense increased due to additional amortization of certain
intangible assets related to the acquisition of merchant portfolios.
OPERATING INCOME (LOSS)
For the foregoing reasons, operating income for the quarter ended
March 31, 1996 increased $3.3 million to $2.3 million compared with an operating
loss of $1.0 million.
INTEREST EXPENSE
Interest expense decreased 16.9% to $490,000 for the quarter ended
March 31, 1996 compared with $590,000 for the same period in 1995, due to
reduced levels of bank notes payable and purchase note obligations incurred
principally in connection with the Boulder Acquisition, as well as a decrease in
the Company's interest rate on bank notes.
INCOME TAXES
As a result of the Company's profitability for the first quarter of
fiscal year 1996, income tax expense was recorded at an effective tax rate of
approximately 38%.
NET INCOME
Net income increased $2.7 million to $1.1 million for the quarter
ended March 31, 1996 compared with a net loss of $1.6 million for the same
period in 1995, due to the factors discussed above.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $1.9 million for the
three months ended March 31, 1996, compared to net cash used by operating
activities of $32,000 for the same period in 1995.
Cash used in investing activities was $1.3 million compared to
$827,000 for the same period in 1995. In addition to normal capital expenditures
the Company invested in upgrades to its computer systems for transaction
processing as well as enhancing systems within the Knoxville operations center.
Net cash used by financing activities was $770,000 due primarily to
the payment of the Company's revolving debt, partially offset by the funds
provided from the exercise of stock options.
The Company typically has relatively low working capital requirements
because discount fees charged to merchants are collected in an average of 15
days, while normal payables are paid in 30 days or longer in the case of point
of sale terminal purchases. In addition , increasing acquisition activity may
cause variations in working capital due to conversion-period operating costs.
Because of the seasonality of the Company's business, capital requirements may
be greater in certain months.
The Company expects that cash generated from operations will be the
principle source of funds for its cash requirements. The Company intends to use
its $25.0 million credit facility, net proceeds generated from the initial
public offering and cash generated from operations to fund future merchant
portfolio acquisitions and working capital requirements.
PART II. OTHER INFORMATION
ITEM 6 - EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits
10.1 Lease Agreement dated May 31, 1996 by and between Concourse I,
LTD. and NOVA Information Systems, Inc.
10.2 First Amendment and Waiver to Amended and Restated Credit
Agreement dated as of May 1, 1996 by and among NOVA Information
Systems, Inc., Bank of America National Trust and Savings
Association, as Agent, and the lenders named therein.
11.1 Statement regarding Computation of Pro Forma Earnings Per Share
11.2 Statement regarding Computation of Historical Earnings Per Share
27. Financial Data Schedule
(b) Reports on Form 8-K
None.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NOVA Corporation
(Registrant)
By: /s/ James M. Bahin
----------------------------------
James M. Bahin
Vice Chairman, Chief Financial
Date: June 18, 1996 Officer and Secretary
---------------------
By: /s/ Edward Grzedzinski
------------------------
Edward Grzedzinski
Date: June 18, 1996 Chairman, President and Chief
--------------------- Executive Officer
(Principal Executive Officer)
By: /s/ James M. Bahin
------------------
James M. Bahin
Vice Chairman, Chief Financial
Officer and Secretary
(Principal Accounting Officer)
10
<PAGE>
Exhibit 10.1
LEASE AGREEMENT
---------------
CONCOURSE
---------
ATLANTA, GEORGIA
----------------
LANDLORD: CONCOURSE I, LTD.
TENANT: NOVA INFORMATION SYSTEMS, INC.
BUILDING: CORPORATE CENTER ONE
SUITE: 300
SQ. FT.: APPROXIMATELY 38,311 RENTABLE
TERM: SIXTY-FOUR (64) MONTHS
<PAGE>
TABLE OF CONTENTS
-----------------
Item Page
- ---- ----
1. PREMISES AND TERM........................................... 1
-----------------
2. RENT........................................................ 2
----
3. REIMBURSEMENT FOR INCREASES IN OPERATING EXPENSES AND TAXES. 2
-----------------------------------------------------------
4. DELIVERY OF THE PREMISES.................................... 5
------------------------
5. ACCEPTANCE OF THE PREMISES.................................. 6
--------------------------
6. USE......................................................... 6
---
7. TENANT'S CARE OF THE PREMISES............................... 6
-----------------------------
8. SERVICES.................................................... 7
--------
9. DESTRUCTION OR DAMAGE TO PREMISES........................... 10
---------------------------------
10. DEFAULT BY TENANT; LANDLORD'S REMEDIES...................... 11
--------------------------------------
11. ASSIGNMENT AND SUBLETTING................................... 13
-------------------------
12. CONDEMNATION................................................ 15
------------
13. INSPECTIONS................................................. 16
-----------
14. SUBORDINATION............................................... 16
-------------
15. INDEMNIFICATION AND HOLD HARMLESS........................... 17
---------------------------------
16. TENANT'S INSURANCE.......................................... 18
------------------
17. REMEDIES CUMULATIVE......................................... 19
-------------------
18. ENTIRE AGREEMENT - NO WAIVER................................ 19
----------------------------
19. HOLDING OVER................................................ 19
------------
20. HEADINGS.................................................... 19
--------
21. NOTICES..................................................... 19
-------
22. HEIRS, SUCCESSORS, AND ASSIGNS - PARTIES.................... 20
----------------------------------------
23. ATTORNEY'S FEES............................................. 20
---------------
24. TIME OF ESSENCE............................................. 20
---------------
25. NO ESTATE IN LAND........................................... 20
-----------------
26. SECURITY DEPOSIT............................................ 21
----------------
27. COMPLETION OF THE PREMISES.................................. 21
--------------------------
28. PARKING ARRANGEMENTS........................................ 21
--------------------
29. RULES AND REGULATIONS....................................... 22
---------------------
<PAGE>
30. RIGHT TO RELOCATE........................................... 22
-----------------
31. LATE PAYMENTS............................................... 22
-------------
32. ESTOPPEL CERTIFICATE........................................ 23
--------------------
33. SEVERABILITY AND INTERPRETATION............................. 23
-------------------------------
34. TENANTS..................................................... 23
-------
35. FORCE MAJEURE............................................... 23
-------------
36. QUIET ENJOYMENT............................................. 24
---------------
37. BROKERAGE COMMISSION; INDEMNITY............................. 24
-------------------------------
38. EXCULPATION OF LANDLORD..................................... 24
-----------------------
39. ORIGINAL INSTRUMENT......................................... 24
-------------------
40. GEORGIA LAW................................................. 24
-----------
41. NO RECORDATION OF LEASE..................................... 24
-----------------------
42. HAZARDOUS WASTES............................................ 24
----------------
43. LEASE BINDING UPON DELIVERY................................. 25
---------------------------
44. SPECIAL STIPULATIONS........................................ 25
--------------------
Exhibit "A" - Location of Premises Within Building
Exhibit "B" - Space Plan of Premises
Exhibit "C" - Work Letter
Exhibit "D" - Rules and Regulations
Exhibit "E" - Description of the Property
Exhibit "F" - Location of Expansion Space Within Building
Exhibit "G" - Acceptance of Premises Agreement
-ii-
<PAGE>
DEFINITIONS
-----------
Defined Term Paragraph
- ------------ ---------
Additional Electrical Equipment. . . . . . . . . . . . .8(b)(iv)
Building . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Commencement Date. . . . . . . . . . . . . . . . . . . .1(b)
Concourse. . . . . . . . . . . . . . . . . . . . . . . .30
Fairchild Service. . . . . . . . . . . . . . . . . . . .8(e)
Faison . . . . . . . . . . . . . . . . . . . . . . . . .37
Initial Operating Costs. . . . . . . . . . . . . . . . .3(a)
Landlord . . . . . . . . . . . . . . . . . . . . . . . .Caption
Lease. . . . . . . . . . . . . . . . . . . . . . . . . .Caption
Lease Year . . . . . . . . . . . . . . . . . . . . . . .1(c)
Monthly Rental . . . . . . . . . . . . . . . . . . . . .2(a)
Mortgagee. . . . . . . . . . . . . . . . . . . . . . . .14(a)
Operating Costs. . . . . . . . . . . . . . . . . . . . .3(b)
Premises . . . . . . . . . . . . . . . . . . . . . . . .1(a)
Property . . . . . . . . . . . . . . . . . . . . . . . .1(d) and
Exhibit "E"
Rent . . . . . . . . . . . . . . . . . . . . . . . . . .2(c)
Rules. . . . . . . . . . . . . . . . . . . . . . . . . .6 and
Exhibit "D"
Tenant . . . . . . . . . . . . . . . . . . . . . . . . .Caption
Tenant's Share . . . . . . . . . . . . . . . . . . . . .3(c)
Term. . . . . . . . . . . . . . . . . . . . . . . . . .1(b)
-iii-
<PAGE>
LEASE AGREEMENT
CONCOURSE
THIS LEASE AGREEMENT (the "Lease"), made this 31st day of May, 1996,
by and between CONCOURSE I, LTD. ("Landlord"), a Georgia limited partnership
which has as its address for all purposes hereunder as follows:
Concourse I, Ltd.
c/o Faison & Associates
Five Concourse Parkway
Suite 2000
Atlanta, Georgia 30328-6111
and NOVA INFORMATION SYSTEMS, INC. ("Tenant"), a corporation of the State of
Georgia, which has as its address:
Prior to the Commencement Date:
Nova Information Systems, Inc.
Five Concourse Parkway
Suite 700
Atlanta, Georgia 30328
After the Commencement Date:
Nova Information Systems, Inc.
One Concourse Parkway
Suite 300
Atlanta, Georgia 30328-5346
WITNESSETH:
----------
1. PREMISES AND TERM
-----------------
(a) Landlord hereby rents and leases to Tenant, and Tenant hereby
rents and leases from Landlord, the following described space (the "Premises"):
Floor: 3rd
Suite: 300
Square Feet: Approximately 38,311 Rentable
located at the herein called "Building":
Building: Corporate Center One
Address: One Concourse Parkway, Fulton County, Georgia
Total Building Rentable Area: 287,929
(b) The Premises are more particularly shown and outlined on the space
plans attached hereto as Exhibit "B", and made a part hereof, and are located in
-----------
that portion of the Building shown on Exhibit "A", attached hereto and by this
-----------
reference incorporated herein. The term of this Lease (the "Term") shall
commence, subject to the provisions of Paragraph 4 herein, on the 1st day of
August, 1996, (the "Commencement Date"), and end at midnight on the 30th day of
November, 2001, unless sooner terminated as herein provided. This Lease shall
be effective and enforceable upon its execution and delivery, whether such
execution and delivery occurs on, prior to, or after the Commencement Date.
(c) "Lease Year" as used herein shall mean (i) each and every twelve
(12) month period during the Term of this Lease, or (ii) in the event of Lease
expiration or termination, the period between the last twelve (12) month period
<PAGE>
and said expiration or termination. The first such twelve (12) month period
shall commence on the Commencement Date.
(d) The Building and the land upon which said Building is located,
more particularly described on Exhibit "E" (the "Land"), attached hereto and by
-----------
this reference incorporated herein, is herein sometimes collectively referred to
as the "Property".
(e) The Premises shall include the appurtenant right to use, in common
with others, public lobbies, entrances, stairs, corridors, elevators, and other
public portions of the Building. All the windows and outside walls of the
Premises, and any space in the Premises used for shafts, pipes, conduits, ducts,
telephone ducts and equipment, electric or other utilities, sinks or other
Building facilities, and the use thereof and access thereto through the Premises
for the purposes of operation, maintenance, inspection, display and repairs are
hereby reserved to Landlord. No easement for light, air or view is granted or
implied hereunder, and the reduction or elimination of Tenant's light, air or
view will not affect this Lease.
2. RENT
----
(a) Tenant shall pay to Landlord at the address of
Landlord indicated herein, or at such other place Landlord
designates without demand, deduction or setoff, rental due and
payable in monthly installments (the "Monthly Rental") in advance
on the first (1st) day of each calendar month during the Term, in
the following amounts:
Per Rentable Monthly Annual
Lease Year Square Foot Rental Base Rental
- ---------- --------------- ------------- --------------
1 $21.75 $69,438.69 $833,264.25
2 $22.29 $71,162.68 $853,952.19
3 $22.85 $72,950.53 $875,406.35
4 $23.42 $74,770.30 $897,243.62
5 $24.01 $76,653.93 $919,847.11
6 $24.61 $78,569.48 $314,277.92
(4 months)
provided, however, that this provision shall not eliminate or be deemed to
eliminate Tenant's obligation to pay any other amounts or charges due of Tenant
under this Lease, including, but not limited to, the amounts and charges due of
Tenant under Paragraphs 3 and 8(c) of this Lease, and Landlord does not waive
the right to collect any such sums.
(b) If the Term commences at any time other than
the first day of a month or terminates at any time other than the last day of a
month, the amount of Rent due from Tenant shall be proportionately adjusted
based on that portion of the month that this Lease is in effect.
(c) The term "Rent", as used herein, shall mean
Monthly Rental, "Tenant's Share" of "Operating Costs" (as those terms are
defined herein) and any other amounts due of Tenant hereunder.
3. REIMBURSEMENT FOR INCREASES IN OPERATING EXPENSES AND TAXES
-----------------------------------------------------------
(a) Tenant hereby covenants and agrees and shall be
obligated to pay to Landlord, in addition to and not in lieu of the other
-2-
<PAGE>
amounts specified herein, "Tenant's Share" of the increases in "Operating Costs"
over the "Initial Operating Costs" (as those terms are hereinafter defined).
The Monthly Rental provided for herein is based, in part, upon Landlord's
estimate of Operating Costs. The "Initial Operating Costs" are stipulated to be
the actual Operating Costs for the calendar year 1996.
(b) The term "Operating Costs" shall mean all operating
expenses of the Property and Building, computed on an accrual basis and
including all expenses, costs, and disbursements of every kind and nature, which
Landlord (i) shall pay; and/or (ii) become obligated to pay, including, but not
limited to, the following:
(i) Wages and salaries of all employees engaged in the
operation and maintenance of the Property and Building,
including, but not limited to, taxes, insurance and benefits
relating thereto;
(ii) All supplies and materials used in the operation
and maintenance of the Property and Building;
(iii) Cost of water, sewage, electricity and other
utilities furnished in connection with the operation of the
Building;
(iv) Cost of all service agreements and maintenance for
the Property and Building and the equipment therein, including,
but not limited to, trash removal, security services, alarm
services, window cleaning, janitorial service, HVAC maintenance,
elevator maintenance, and grounds maintenance;
(v) Cost of all insurance relating to the Property and
Building including, but not limited to, the cost of casualty and
liability insurance applicable to the Property and Building and
Landlord's personal property used in connection therewith;
(vi) All taxes (ad valorem and otherwise), assessments,
and governmental charges whether federal, state, county, or
municipal, and whether by taxing districts or authorities
presently taxing the Property and Building or by others,
subsequently created or otherwise, and any other taxes (other
than federal and state income taxes), and assessments
attributable to the Property and Building or its operation and
any reasonable consultants fees incurred with respect to issues
or concerns involving the taxes or the Building, the Property, or
both;
(vii) Cost of repairs and general maintenance of the
interior and exterior of the Property and Building (including,
but not limited to, glass breakage), parking areas, and
landscaping;
(viii) A management fee for general operation and
management of the Property and Building, such management fee to
be consistent with the management fee paid for the management of
other first-class office buildings in the area of the Building;
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(ix) An amortization cost (over the useful life of the
improvements) due to any capital expenditures incurred (i) which
have the effect of reducing or limiting Operating Costs of the
Property and Building, if such reduction or limitation inures to
Tenant's benefit (but only to the extent and in the amount that
such Operating Costs of the Property and Building are reduced),
or (ii) which may be required by governmental authority or by
Landlord's insurance carrier;
(x) All assessments made, charged, levied, assessed or
accrued against Landlord by The Concourse Office Park
Association, Inc.; provided, however, that the capital
expenditures incorporated in such assessments shall be amortized
over the useful life of the improvements.
Excluded from "Operating Costs" are:
(i) Replacement of capital investment items (excepting
those expenditures referred to above);
(ii) Landlord's home office expense;
(iii) Leasing commissions;
(iv) Specific costs billed to and paid by specific
tenants or other third parties;
(v) Depreciation;
(vi) Principal, interest, and other costs directly
related to financing the Building or Land;
(vii) The cost of any repairs or general
maintenance paid by the proceeds of insurance policies carried by
Landlord on the Property and Building;
(viii) The wages and salaries of any supervisory or
management employee of Landlord not involved in the day-to-day
operation and maintenance of the Property and Building,
including, without limitation, salaries of executives above the
grade of "Senior Property Management Associate" or its
equivalent;
(ix) Cost of correcting initial construction defects;
(x) Repairs caused by the gross negligence or willful
misconduct of Landlord;
(xi) Advertising;
(xii) Ground lease payments;
(xiii) Landlord's legal fees incurred in connection
with (A) leasing space at the Property other than the Premises,
(B) enforcement of Landlord's rights against other tenants of the
Property, and (C) tax matters (unless Operating Costs are reduced
thereby).
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(c) The term "Tenant's Share" shall mean the
proportion that the Square Feet in the Premises bears to ninety-five percent
(95%) of the Total Building Rentable Area, or the average percentage of the
Total Building Rentable Area actually leased in the Building for any calendar
year, if such average is greater than ninety-five percent (95%) of the Total
Building Rentable Area. The average shall be determined by adding together the
total leased space on the last day of each month during the calendar year in
question and dividing by twelve (12). Tenant's Share is used in this Lease to
determine the portion of Operating Costs payable by Tenant, on a per square foot
per annum basis. Notwithstanding anything to the contrary contained herein, if
the Building is not fully occupied during any calendar year, appropriate
adjustments shall be made to determine Operating Costs as though the Building
had been fully occupied in such calendar year, but Tenant shall not be required
to pay more than Tenant's Share of Operating Costs.
(d) Landlord shall, within one hundred twenty (120)
days (or as soon thereafter as practical) after the close of the calendar year
1997 and each subsequent calendar year during the Term, give Tenant an unaudited
statement of such year's actual Operating Costs and a comparison with the
Initial Operating Costs, and if an additional amount is due, Tenant shall pay
Tenant's Share of such additional amount to Landlord within thirty (30) days of
statement receipt.
(e) If this Lease commences at any time other than the
first day of a calendar year or terminates at any time other than the last day
of a calendar year the amount of additional rent due from Tenant shall be
proportionately adjusted based on that portion of the year that this Lease was
in effect.
(f) Within ninety (90) days of its receipt of the
operating statement, Tenant at its sole cost and expense shall have the right to
review in Landlord's offices and during normal business hours Landlord's records
of Operating Costs. If within such ninety (90) day period, Tenant does not give
notice stating in detail reasonable objections to such additional Rent
calculations, Tenant shall be deemed to have given approval of such
calculations. Failure to pay such additional Rent, whether or not under
protest, within thirty (30) days of receipt of such statement shall constitute a
default hereunder.
(g) Tenant's payments of Operating Costs shall not be
deemed payments of base rental under any governmental wage and price controls or
analogous governmental actions affecting the amount of Rent which Landlord may
charge Tenant for the Premises.
4. DELIVERY OF THE PREMISES
------------------------
Landlord shall deliver possession of the Premises to Tenant, with the
improvements to be constructed pursuant to Exhibit "C" attached hereto and by
-----------
this reference incorporated herein, "Substantially Complete" (as defined in
Exhibit "C") on the Commencement Date. If Landlord for any reason whatsoever
- -----------
cannot deliver possession of the Premises, with the improvements to be
constructed pursuant to Exhibit "C" Substantially Complete to Tenant at the
-----------
Commencement Date, this Lease shall not be void or voidable, nor shall Landlord
be liable to Tenant for any loss or damage resulting therefrom. If the delay is
not due to "Tenant Delay" (as defined in Section 4.03 of Exhibit "C"), Monthly
-----------
Rental shall be waived for the period between the Commencement Date and the date
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which Landlord delivers possession of the Premises to Tenant. If the delay is
due to Tenant Delay, Monthly Rental shall commence as of the Commencement Date.
5. ACCEPTANCE OF THE PREMISES
--------------------------
The taking of possession of Premises by Tenant shall be conclusive
evidence that Tenant accepts the same "as is" and that said Premises and the
Building were in good and satisfactory condition for the use intended at the
time such possession was taken, subject to "punch-list" items which must be
remedied after Tenant's acceptance of the Premises. Tenant shall execute and
deliver an "Acceptance of Premises" agreement upon the taking of possession of
the Premises, in the form attached hereto as Exhibit "G" and made a part hereof.
-----------
6. USE
---
Tenant shall use the Premises only for professional, executive office
purposes, data processing, and otherwise generally in accordance with the manner
of use by other tenants in the Building. Tenant's use of the Premises shall not
violate any ordinance, law or regulation of any governmental body or the "Rules
and Regulations" of Landlord (the "Rules") as set forth in Exhibit "D" attached
-----------
hereto and made a part hereof, or cause an unreasonable amount of use of any of
the services provided in the Building. Tenant shall conduct its business in the
manner and according to the generally accepted business principles of the
business or profession in which Tenant is engaged. Tenant shall have access to
the Premises at all times, subject to Landlord's Rules (as hereinafter defined)
and security measures which may be imposed from time to time, casualty,
condemnation and force majeure (as described in Paragraph 35 hereof).
7. TENANT'S CARE OF THE PREMISES
-----------------------------
(a) Except as provided to the contrary in Paragraph 8
hereof, Tenant will maintain the Premises and the fixtures and appurtenances
therein in a first-class condition, normal wear and tear excepted, and will
neither commit nor suffer waste or injury thereof. Any repair work, maintenance
and any alterations permitted by Landlord in the Premises (i) shall be done at
Tenant's sole cost and expense (except for damage resulting from the gross
negligence or willful misconduct of Landlord); (ii) shall be done by Landlord's
employees or agents or, with Landlord's consent, by persons requested by Tenant;
and (iii) shall first be consented to by Landlord. Tenant shall, at Tenant's
expense, but under the direction of Landlord and performed by Landlord's
employees or agents, or with Landlord's consent, by persons requested by Tenant
and consented to by Landlord, promptly repair any injury or damage to the
Premises or Building caused by the misuse or neglect thereof by Tenant, by
Tenant's contractors, subcontractors, customers, employees, licensees, agents,
or invitees.
(b) Tenant will not, without Landlord's prior consent,
make alterations, additions or improvements (including, but not limited to,
structural alterations, additions or improvements) in or about Premises and will
not do anything to or on the Premises which will increase the rate of insurance
on the Building or the Property. Except for trade fixtures installed by Tenant,
all alterations, additions or improvements of a permanent nature made or
installed by Tenant to the Premises shall become the property of Landlord at the
expiration or early termination of this Lease. Tenant shall not be obligated to
remove any improvements or additions made to the Premises by Tenant, including,
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without limitation, the "Tenant Improvements" (as defined in Exhibit "C"), or to
-----------
repair and restore the Premises to their condition prior to such alteration,
addition or improvement, unless at or prior to the time Tenant requests the
right to make such alteration, addition or improvement Landlord notifies Tenant
in writing that such item must be removed by Tenant at the expiration or early
termination of the Term.
(c) No later than the last day of the Term, Tenant
will remove Tenant's personal property and trade fixtures and repair injury done
by or in connection with installation or removal of said property and surrender
the Premises (together with all keys, access cards or entrance passes to the
Premises and/or the Building) in as good a condition at the beginning of the
Term, reasonable wear and tear excepted. All property of Tenant remaining in
the Premises after expiration of the Term shall be deemed conclusively abandoned
and may be removed by Landlord, and Tenant shall reimburse Landlord for the cost
of removing the same, subject however, to Landlord's right to require Tenant to
remove any improvements or additions made to the Premises by Tenant pursuant to
the preceding Paragraph.
(d) In doing any work on the installation of Tenant's
furnishings, fixtures, or equipment in the Premises, Tenant will use only
contractors or workers consented to by Landlord prior to the time such work is
commenced, which consent shall not be unreasonably withheld or delayed.
Landlord may condition its consent upon its receipt from such contractors or
workers of acceptable (i) lien waivers; and (ii) evidence of liability and
personal property insurance coverage in amounts and with insurance carriers
satisfactory to Landlord. Tenant shall promptly remove any lien or claim of
lien for material or labor claimed against the Premises or Building, or both, by
such contractors or workers if such claim should arise, and hereby indemnifies
and holds Landlord harmless from and against any and all loss, cost, damage,
expense or liabilities including, but not limited to, reasonable attorney's
fees, incurred by Landlord, as a result of or in any way related to such claims
or liens.
(e) All personal property brought into the Premises by
Tenant, its employees, licensees and invitees shall be at the sole risk of
Tenant, and Landlord shall not be liable for theft thereof or of money deposited
therein or for any damages thereto, such theft or damage being the sole
responsibility of Tenant.
8. SERVICES
--------
(a) Provided Tenant is in compliance with the terms
and conditions of this Lease, Landlord shall furnish the following services (the
cost of which services shall be reimbursed to Landlord in accordance with
Paragraph 3 herein):
(i) Elevator service for passenger and delivery needs.
(ii) Air conditioning during summer operations and heat
during winter operations at temperature levels similar to other
first class office buildings in the Atlanta area, but consistent
with and subject to all Federal and local energy conservation
regulations.
(iii) Public restrooms, including the furnishing of soap,
paper towels, and toilet tissue.
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(iv) Either hot and cold or tempered running water for all
restrooms and lavatories.
(v) Janitorial service, including sanitizing, dusting,
cleaning, mopping, vacuuming, and trash removal, each Monday
through Friday, and floor waxing and polishing, window washing,
smudge removal and venetian blind cleaning as appropriate.
(vi) The replacement of building standard fluorescent lamps
and ballasts as needed.
(vii) Repairs and maintenance, for maintaining in good order
at all times the exterior walls, exterior windows, structural and
foundation elements of the Building, exterior doors and roof of
the Building, public corridors, stairs, elevators, storage rooms,
restrooms, the heating, ventilating and air conditioning systems,
electrical and plumbing systems of the Building, and the walks,
paving and landscaping surrounding the Building.
(viii) Grounds care, including the sweeping of walks and
parking areas and the maintenance of landscaping in an attractive
manner.
(ix) General management, including supervision, inspections
and management functions.
(x) Electricity for the Premises, Building and Property.
(b) The services provided in Paragraph 8(a) are predicated on and
are in anticipation the use of the Premises as follows:
(i) Services shall be provided for the Building during
normal business hours as described in the Rules.
(ii) HVAC design is based on sustained outside temperatures
being no higher than 95 degrees Fahrenheit and no lower than 14
degrees Fahrenheit with sustained occupancy of the Premises by no
more than one person per 150 square feet of floor area and heat
generated by electrical lighting and fixtures not to exceed 3.0
watts per square foot.
(iii) Electric power usage and consumption for the Premises
shall be based on lighting of the Premises during normal business
hours on a level suitable for normal office use and power for
small desk-top machines, personal computers and other devices
using no more than 110 volt, 20 amp circuits (allowable load of 15
amps). Heavier use items shall not be used or installed, unless
expressly permitted elsewhere herein or by consent of Landlord.
(iv) Should Tenant's total rated electrical design load per
square foot in the Premises exceed the Building standard rated
electrical design load, on a per square foot basis, as determined
by Landlord from time to time, for either low or high voltage
electrical consumption, or if Tenant's electrical design requires
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<PAGE>
low voltage or high voltage circuits in excess of Tenant's share
of the Building standard circuits, as such share is determined by
Landlord in Landlord's reasonable judgment, Landlord may (at
Tenant's expense), if reasonably possible, install within the
Building one (1) additional high voltage panel and/or one (1)
additional low voltage panel with associated transformer (the
"Additional Electrical Equipment") as necessary to accommodate the
aforesaid requirements. If the Additional Electrical Equipment is
installed because Tenant's low or high voltage rated electrical
design load exceeds the applicable Building standard rated
electrical design load (on a per square foot basis), then a meter
may also be added by Landlord (at Tenant's expense) to measure the
electricity provided through the Additional Electrical Equipment.
(c) If Landlord establishes that Tenant uses any services in an
amount or for a period in excess of that provided for herein, Landlord also
reserves the right to charge Tenant reimbursement for the cost of such added
services, and to install separate metering devices to determine such excessive
periods and/or amounts, at Tenant's sole cost and expense. If there is
disagreement as to such additional charge, the opinion of the appropriate local
utility company or an independent professional engineering firm shall prevail.
(d) Absent the gross negligence or willful misconduct of Landlord,
Landlord shall not be liable for any damages directly or indirectly, and Tenant
shall have no right of set-off or reduction in Rent, resulting from the
installation, use, malfunction, or interruption of use of any equipment in
connection with the furnishing of services referred to herein, including, but
not limited to, any interruption in services by any cause beyond the immediate
control of the Landlord; provided however, Landlord shall exercise due care in
furnishing adequate and uninterrupted services. Without limitation on the
foregoing, absent the gross negligence or willful misconduct of Landlord,
Landlord shall not incur liability for damages caused directly or indirectly by
any malfunction of Tenant's computer systems resulting from or arising out of
the failure or malfunction of any electrical, air conditioning or other system
serving the Building, and Tenant hereby expressly waives the right to make any
such claim against Landlord.
(e) There is available in the Building a Fairchild Communications
Systems Service (the "Fairchild Service"), upon terms, conditions and fees to be
agreed upon by Tenant and the party providing such Fairchild Service. Neither
Landlord nor any manager of the Building shall be liable to Tenant for any
damages should the furnishing of any or all of such Fairchild Service be
disrupted, terminated or diminished in any manner, nor shall any disruption,
diminution, or cessation relieve Tenant from the performance of any of Tenant's
covenants, conditions and agreements under this Lease, nor shall any disruption,
diminution or cessation constitute constructive eviction or entitle Tenant to an
abatement of Rent. Tenant holds Landlord and any such manager harmless from any
claims Tenant may have arising out of or connected with such cessation or
interruption. If Tenant elects not to use the Fairchild Service, and Tenant has
telephone or other such equipment installed at Tenant's own direction, such
system shall not (i) cause the Building not to be in compliance with any
municipal safety codes or ordinances, including, but not limited to, fire safety
codes; (ii) cause damage to the Building; (iii) require an amount of electrical
or other services unreasonably in excess of the requirements for customary
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business-telephone systems; or (iv) impact upon the normal use, function and
operation of the Fairchild Service. If Tenant elects not to use or be a part of
the Fairchild Service, Tenant shall not use any wiring or other equipment which
is a part of the Fairchild Service without the prior, written consent of the
provider of such services. If Tenant uses any such wiring or equipment without
such consent, Tenant shall be liable for, and shall pay to the provider of such
services on demand, (i) the cost of such use; (ii) the cost of repairing or
replacing any wiring or equipment damaged or altered by such use; and (iii) any
and all other damages caused by such use.
9. DESTRUCTION OR DAMAGE TO PREMISES
---------------------------------
(a) If the Premises or the Building are totally destroyed (or so
substantially damaged as to be untenantable in the determination of the
"Landlord's Architect" (as defined in Exhibit "C" or any successor architect
-----------
engaged by Landlord to provide general services in the Building) by storm, fire,
earthquake or other casualty, Landlord shall have the option to:
(i) Terminate this Lease as of the date of the occurrence
of the storm, earthquake, fire or other casualty by giving notice
to Tenant within sixty (60) days from the date of such damage or
destruction; or
(ii) Commence the process of restoration of the Premises to
a tenantable condition within sixty (60) days from the date of
receipt by Landlord of all of the insurance proceeds paid with
respect to such casualty, and proceed with due diligence to
complete said restoration of the Premises. If Landlord chooses to
restore the Premises, Rent shall abate with respect to the
untenantable portion of the Premises from the date of such
casualty until the date of substantial restoration thereof.
Within sixty (60) days of the date of any such casualty, Landlord shall deliver
to Tenant an estimate of the time period required to complete the restoration of
the Premises and/or the Building, and if such estimated period is greater than
one hundred eighty (180) days, Tenant shall have the right to terminate this
Lease upon ten (10) days' prior written notice to Landlord. If Landlord fails
to complete such restoration within one hundred eighty (180) days of the date of
the casualty, this Lease may be terminated as of the date of the casualty upon
notice from either party to the other, given not more than ten (10) days
following the expiration of said one hundred eighty (180) day period. If such
notice is not given, this Lease shall remain in force and effect and Rent shall
commence upon delivery of the Premises to Tenant in a tenantable condition
(evidenced by notice to Tenant that the Premises are substantially completed).
If such damage or destruction occurs within six (6) months of the expiration of
the Term, Tenant may, at its option on notice to Landlord within thirty (30)
days of such destruction or damage, terminate this Lease as of the date of such
destruction or damage.
(b) If the Premises are damaged but not rendered wholly untenantable
by any event set forth in Paragraph 9(a) above, Rent shall abate in the
proportion the Premises have been made untenantable. Landlord shall restore the
Premises expeditiously, and in any event within one hundred eighty (180) days
from the date of such casualty, and upon the date of restoration, full Rent
shall commence.
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10. DEFAULT BY TENANT; LANDLORD'S REMEDIES
--------------------------------------
(a) The occurrence of any of the following shall constitute an Event
of Default hereunder by Tenant:
(i) The Rent or any other sum of money due of Tenant
hereunder is not paid within ten (10) days of the date when due;
(ii) INTENTIONALLY OMITTED;
(iii) Any petition is filed by or against Tenant under any
section or chapter of the National or Federal Bankruptcy Act or
any other applicable Federal or State bankruptcy, insolvency or
other similar law, and, in the case of a petition filed against
Tenant, such petition is not dismissed within sixty (60) days
after the date of such filing; if Tenant shall become insolvent or
transfer property to defraud creditors; if Tenant shall make an
assignment for the benefit of creditors; or if receiver is
appointed for any of Tenant's assets;
(iv) Tenant fails to bond off or otherwise remove any lien
filed against the Premises or the Building by reason of Tenant's
actions, within twenty (20) days after Tenant has notice of the
filing of such lien;
(v) Tenant fails to observe, perform and keep the
covenants, agreements, provisions, stipulations, conditions and
Rules herein contained to be observed, performed and kept by
Tenant (other than the failure to pay when due any Rent or any
other sum of money becoming due Landlord hereunder, which under
all circumstances is governed by and subject to Paragraph 10(a)(i)
herein), and persists in such failure after thirty (30) days
written notice by Landlord requiring that Tenant remedy, correct,
desist or comply (or if any such failure to comply on the part of
Tenant would reasonably require more than thirty (30) days to
rectify, unless Tenant commences rectification within ten (10)
days of such notice from Landlord and thereafter promptly,
effectively and continuously proceeds with the rectification of
the failure to comply on the part of Tenant and, in all such
events, cures such failure to comply on the part of Tenant no
later than sixty (60) days after such notice).
(b) Upon the occurrence of an Event of Default, Landlord shall have
the option to do and perform any one or more of the following:
(i) Terminate this Lease, in which event Tenant shall
immediately surrender the Premises to Landlord. If Tenant shall
fail to do so, Landlord may, without further notice and without
prejudice to any other remedy Landlord may have, enter upon the
Premises without the requirement of resorting to the
dispossessory procedures set forth in O.C.G.A. (S)(S) 44-7-50
et seq.
-- ---
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<PAGE>
and expel or remove Tenant and Tenant's effects without being
liable for any claim for trespass or damages therefor. Upon any
such termination, Tenant shall remain liable to Landlord for
damages, due and payable monthly on the day Rent would have been
payable hereunder, in an amount equal to the Rent and any other
amounts which would have been owing by Tenant for the balance of
the Term, had this Lease not been terminated, less the net
proceeds, if any, of any reletting of the Premises by Landlord,
after deducting all of Landlord's costs and expenses (including,
without limitation, advertising expenses and professional fees)
incurred in connection with or in any way related to the
termination of this Lease, eviction of Tenant and such reletting;
and/or
(ii) Declare the entire amount of Rent calculated on the
current rate being paid by Tenant, and other sums which in
Landlord's reasonable determination would become due and payable
during the remainder of the Term (including, but not limited to,
increases in Rent pursuant to Paragraphs 2 and 3 herein),
discounted to present value by using a reasonable discount rate
selected by Landlord, to be due and payable immediately. Upon
such acceleration of such amounts, Tenant agrees to pay the same
at once, together with all Rent and other amounts theretofore due,
less the market value of the Premises for the remainder of the
Term, as determined by Landlord (taking into consideration the
probable costs of marketing and reletting the Premises, then-
current rental rates, probable rental rates for the remainder of
the Term, probable concession packages, the probability of
reletting the Premises and the probable amount of time which will
elapse before the Premises are relet), at Landlord's address as
provided herein; provided however, that such payment shall not
constitute a penalty or forfeiture but shall constitute liquidated
damages for Tenant's failure to comply with the terms and
provisions of this Lease (Landlord and Tenant agreeing that
Landlord's actual damages in such an event are impossible to
ascertain and that the amount set forth above is a reasonable
estimate thereof). The acceptance of such payment by Landlord
shall not constitute a waiver of rights or remedies to Landlord
for any failure of Tenant thereafter occurring to comply with any
term, provision, condition or covenant of this Lease (except for
the amounts liquidated as set forth herein); and/or
(iii) Enter the Premises as the agent of Tenant without the
requirement of resorting to the dispossessory procedures set forth
in O.C.G.A. (S)(S) 44-7-50 et seq. and without being liable for
-- ---
any claim for trespass or damages therefor, and, in connection
therewith, rekey the Premises, remove Tenant's effects therefrom
and store the same at Tenant's expense, without being liable for
any damage thereto, and relet the Premises as the agent of Tenant,
without advertisement, by private negotiations, for any term
Landlord deems proper, and receive the rent therefor. Tenant
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shall pay Landlord on demand any deficiency that may arise by
reason of such reletting, but Tenant shall not be entitled to any
surplus so arising. Tenant shall reimburse Landlord for all costs
and expenses (including, without limitation, advertising expenses
and professional fees) incurred in connection with or in any way
related to the eviction of Tenant and reletting the Premises, and
for the amount of any other Rent which would have been due of
Tenant to Landlord hereunder if not for certain concessions
granted by Landlord to Tenant. Landlord, in addition to but not
in lieu of or in limitation of any other right or remedy provided
to Landlord under the terms of this Lease or otherwise (but only
to the extent such sum is not reimbursed to Landlord in
conjunction with any other payment made by Tenant to Landlord),
shall have the right to be immediately repaid by Tenant the
unamortized (assuming an even, straight-line amortization over the
initial Term) amount of all leasing commissions, the "Allowance"
and the "Design Fee Allowance" (as defined in Exhibit "C") paid by
-----------
Landlord in connection with the Premises, and any and all costs
and expenses incurred in renovating or altering the Premises to
make it suitable for reletting; and/or
(iv) As agent of Tenant, do whatever Tenant is obligated to
do under this Lease, including, but not limited to, entering the
Premises, without being liable to prosecution or any claims for
damages, in order to accomplish this purpose. Tenant agrees to
reimburse Landlord immediately upon demand for any expenses which
Landlord may incur in thus effecting compliance with this Lease on
behalf of Tenant. Landlord shall not be liable for any damages
resulting to Tenant from such action, unless caused by the gross
negligence or willful misconduct of Landlord.
(c) Pursuit by Landlord of any of the foregoing remedies shall not
preclude the pursuit of general or special damages incurred, or of any of the
other remedies provided herein, at law or in equity.
(d) No act or thing done by Landlord or Landlord's employees or
agents during the Term shall be deemed an acceptance of a surrender of the
Premises. Neither the mention in this Lease of any particular remedy, nor the
exercise by Landlord of any particular remedy hereunder, at law or in equity,
shall preclude Landlord from any other remedy Landlord might have under this
Lease, at law or in equity. Any waiver of or redress for any violation of any
covenant or condition contained in this Lease or any of the Rules now or
hereafter adopted by Landlord, shall not prevent a subsequent act, which would
have originally constituted a violation, from having all the force and effect of
an original violation. The receipt by Landlord of Rent with knowledge of the
breach of any covenant in this Lease shall not be deemed a waiver of such
breach.
11. ASSIGNMENT AND SUBLETTING
-------------------------
(a) Tenant shall not sublet any part of the Premises, nor assign this
Lease or any interest herein, without the prior consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. Landlord
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may deny consent to an assignment or sublease if, by way of illustration but not
limitation, the rate of compensation, including, but not limited to, all rent,
for the portion of the Premises to be subleased or for the assignment of the
Lease would be competitive with the then market rate as offered by Landlord for
similar space in the Building (taking into consideration tenant improvements and
other concessions) or if the financial statements of the proposed assignee or
sublessee reasonably reflect an inability to satisfy the obligations under any
such assignment or sublease as and when they become due. Additionally, neither
Tenant nor any other person having an interest in the possession, use, occupancy
or utilization of the Premises shall enter into any lease, sublease, license,
concession, assignment or other agreement for use, occupancy or utilization of
space in the Premises which provides for rental or other payment for such use,
occupancy or utilization based, in whole or in part, on the net income or
profits derived by any person or entity from the Premises leased, used, occupied
or utilized. Any such purported lease, sublease, license, concession,
assignment or other agreement shall be absolutely void and ineffective as a
conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises. If such a sublease is entered into,
neither the rental payable thereunder nor the amount thereof passed on to any
person or entity shall have deducted therefrom any expenses or costs related in
any way to the subleasing of such space.
(b) Consent by Landlord to one assignment or sublease shall not
destroy or waive this provision, and all later assignments and subleases shall
likewise be made only upon prior consent of Landlord. If a sublease or
assignment is consented to by Landlord, any sublessees or assignees shall become
liable directly to Landlord for all obligations of Tenant hereunder without
relieving or in any way modifying Tenant's liability hereunder. If Tenant
notifies Landlord of Tenant's intent to sublease or assign this Lease, Landlord
shall within thirty (30) days from such notice (i) consent to such proposed
subletting; (ii) deny such consent, giving reasons for denying such consent at
the time of the denial; or (iii) elect to cancel this Lease, or to reduce the
Premises by the area requested to be subleased or assigned if the area is less
than the entire Premises (Landlord shall not have the option to cancel this
Lease if Tenant requests the Landlord's consent to an assignment or sublease
under Paragraph 11(c) hereof). If Landlord elects to cancel or to reduce the
area of the Premises, Tenant shall have ten (10) days from such notice to notify
Landlord of Tenant's acceptance of such cancellation or reduction or Tenant's
desire to remain in possession of Premises for the Term. If Tenant fails to so
notify Landlord of Tenant's election to accept termination or reduction or to
continue as Tenant hereunder, such failure shall be deemed an election to
terminate or have the area of Premises reduced, as the case may be, and such
termination or reduction shall be effective as of the end of the ten (10) day
period provided for in Landlord's notice as hereinabove provided. If Landlord
gives its consent to any such assignment or sublease, one-half (1/2) of any rent
or other cost to the assignee or subtenant for all or any portion of the
Premises over and above the Rent payable by Tenant for such space shall be due
and payable, and shall be paid, to Landlord. If this Lease is cancelled, the
area of Premises is reduced or a sublease or assignment is made as herein
provided, Tenant shall pay Landlord a charge equal to the actual costs incurred
by Landlord, in Landlord's reasonable judgment (including, but not limited to,
the use and time of Landlord's personnel), for all of the reasonably necessary
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legal and accounting services required to accomplish such cancellation,
reduction of area of the Premises, assignment or subletting, as the case may be.
(c) Subject to the terms of Paragraph 11(d) hereof and Landlord's
rights to notice and prohibition contained herein, Tenant shall have the right
to assign the Lease or sublet the Premises, or any part thereof, without
Landlord's consent, to any parent (including any entity that acquires all or
substantially all of Tenant's assets), subsidiary, affiliate or controlled
corporation or to any corporation into which Tenant may be converted or with
which it may merge. Tenant shall have the obligation to notify Landlord of its
intent of any such arrangement, and if Landlord reasonably determines that the
proposed assignee or sublessee is engaged in a business which would materially
interfere with the operation of the Property or that permitting the assignment
or subletting would cause a violation by Landlord of its obligations under any
lease covering a portion of the Property, Landlord shall have the right to
prohibit such arrangement based upon the issue of the business of the proposed
assignee or sublessee or the compatibility of the proposed assignee or sublessee
with the businesses in the Building.
(d) Tenant shall have no right to assign this Lease or sublet all or
any part of the Premises to any such assignee or sublessee pursuant to Paragraph
11(c) above if the creditworthiness of such assignee or sublessee (taking into
account net worth, cash on hand and cash available and net cash flow from
operations) is less than Tenant's as of the date of this Lease. Landlord may
request current financial statements from such assignee or sublessee certified
by an officer or partner of such assignee or sublessee, or, if available, an
outside independent auditor, to be true and correct. Tenant shall ensure that
such assignee or sublessee shall provide such information to Landlord upon
request, and Landlord shall have a reasonable time to review and assess such
information prior to granting consent to any such assignment or sublease.
(e) The sale or transfer of shares of stock of Tenant in a nationally
recognized stock exchange shall not be deemed a transfer or assignment
hereunder.
12. CONDEMNATION
------------
If the Premises, or a part of such Premises such that the Premises in
the judgment of the Architect for the Building are untenantable, or parking
available on the Land in such quantities as to reduce the parking ratio below
that which is presently required to be maintained for the project known as
"Concourse" (the "Project") under applicable law (taking into account any
applicable variances), are taken by eminent domain or other similar proceeding
or are conveyed in lieu of such taking, this Lease shall expire on the date when
title or right of possession vests, and Rent paid for any period beyond said
date shall be repaid to Tenant. If there is a partial taking where this Lease
is not terminated, the Rent shall be adjusted in proportion to the square feet
of Premises taken, determined by the Architect for the Building. In either
event, Landlord shall be entitled, and Tenant shall not have any right, to claim
any award made in any condemnation proceeding, action or ruling relating to the
Building or the Property; provided, however, Tenant shall be entitled to make a
claim in any condemnation proceeding, action or ruling relating to the Building
for Tenant's moving expenses, Tenant's interest hereunder, and the unamortized
value of leasehold improvements in the Premises actually paid for by Tenant, to
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the extent such claim does not in any manner impact upon or reduce Landlord's
claim or award in such condemnation proceeding, action or ruling. Landlord
shall have, in Landlord's sole discretion, the option of terminating this Lease
if any such condemnation, action, ruling or conveyance in lieu thereof makes
continuation of Landlord's use of the Building economically unfeasible.
13. INSPECTIONS
-----------
Landlord, its agents or employees may enter the Premises at reasonable
hours and with reasonable prior notice (except in the event of an emergency) to
(a) exhibit the Premises to prospective purchasers or tenants (during the last
nine (9) months of the Term with respect to such tenants) of the Premises or the
Building; (b) inspect the Premises to see that Tenant is complying with its
obligations hereunder; and (c) make repairs (i) required of Landlord under the
terms hereof; (ii) to any adjoining space in the Building; or (iii) to any
systems serving the Building which run through the Premises.
14. SUBORDINATION
-------------
(a) This Lease shall be subject and subordinate to any underlying
land leases or first priority deed to secure debt which may now or hereafter
affect this Lease, the Building or the Property and also to all renewals,
modifications, extensions, consolidations, and replacements of such underlying
land leases and such deeds to secure debt. In confirmation of the subordination
set forth in this Paragraph 14, Tenant shall, at Landlord's request, execute and
deliver such further instruments as may be desired by the holder of the first
priority deed to secure debt (a "Mortgagee") or by any lessor under any such
underlying land leases. Notwithstanding the foregoing, Landlord or such
Mortgagee shall have the right to subordinate or cause to be subordinated, in
whole or in part, any such underlying land leases or first priority deed to
secure debt to this Lease (but not in respect to priority of entitlement of
insurance or condemnation proceeds). If any such underlying land leases or
first priority deed to secure debt terminates for any reason or any such first
deed to secure debt is foreclosed or a conveyance in lieu of foreclosure is made
for any reason, Tenant shall, notwithstanding any subordination, deliver to
Mortgagee within ten (10) days of written request an attornment agreement,
providing that such Tenant shall continue to abide by and comply with the terms
and conditions of this Lease.
(b) If any proceedings are brought for the foreclosure of, or in the
event of exercise of the power of sale or conveyance in lieu of foreclosure
under any deed to secure debt, Tenant shall at the option of the purchaser at
such foreclosure or other sale, attorn to such purchaser and recognize such
person as Landlord under this Lease. The institution of any suit, action or
other proceeding by a Mortgagee or a sale of the Property pursuant to the powers
granted to a Mortgagee under its deed to secure debt, shall not, by operation of
law or otherwise, result in the cancellation or the termination of this Lease or
of the obligations of Tenant hereunder.
(c) If such purchaser requests and accepts such attornment, from and
after such attornment, Tenant shall have the same remedies against such
purchaser for the breach of an agreement contained in this Lease that Tenant
might have had against the prior Landlord if the deed to secure debt had not
been terminated or foreclosed, except such purchaser shall not be (i) liable for
any act or omission of the prior Landlord; (ii) subject to any offsets or
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defenses which Tenant might have against the prior Landlord; or (iii) bound by
any Rent or security deposit which Tenant might have paid in advance to the
prior Landlord; provided, however, that clauses (i), (ii) and (iii) of this
Paragraph 14(c) shall not apply to any such purchaser that is related directly
or indirectly to the prior Landlord.
(d) (i) Notwithstanding any provision contained in this
Lease to the contrary, Landlord shall obtain non-disturbance agreements from all
parties secured by any existing mortgage or deed to secure debt, and from any
and all ground lessors holding an interest in the Land, which agreements shall
provide that Tenant will not be joined as a party defendant in any action to
enforce any mortgage or deed to secure debt, or to terminate any ground lease,
nor will Tenant's rights under this Lease be affected by any such action or any
judgment rendered as a result of such action, so long as there exists no uncured
Event of Default on the part of Tenant under this Lease.
(ii) It is further understood and agreed that this Lease shall not be
subject and subordinate to any mortgages or deeds to secure debt placed on the
Building or Property on or after the date of this Lease unless the Landlord
provides Tenant with such non-disturbance agreement(s).
(iii) All non-disturbance agreements obtained pursuant to
the provisions hereof shall be conditioned upon Tenant's agreement to attorn to
and recognize the purchaser at any foreclosure sale under such mortgage or deed
to secure debt or to recognize any such ground lessor or its successors or
assigns as the successor in interest to Landlord in the event of termination of
such ground lease.
15. INDEMNIFICATION AND HOLD HARMLESS
---------------------------------
(a) Tenant hereby indemnifies and holds Landlord and Landlord's
property manager harmless from and against any injury, expense, damage,
liability or claim, imposed on Landlord by any person whomsoever, whether due to
damage to the Premises, claims for injuries to the person or property of any
other tenant of the Building or of any other person in or about the Building for
any purpose whatsoever, or administrative or criminal action by a governmental
authority, whether such injury, expense, damage, liability or claim results
either directly or indirectly from the act, omission, negligence, misconduct or
breach of any provisions of this Lease by Tenant, the agents, servants, or
employees of Tenant, or any other person entering upon the Premises under
express or implied invitation or consent of Tenant. Tenant further agrees to
reimburse Landlord or Landlord's property manager for any costs or expenses,
including, but not limited to, court costs and reasonable attorney's fees, which
Landlord or Landlord's property manager may incur in investigating, handling or
litigating any such claim or any action by a governmental authority.
(b) Tenant shall give notice to Landlord of any defective condition in
or about the Premises known to Tenant, and further agrees to attempt to contact
Landlord by telephone promptly (immediately in the case of an emergency) in such
instance.
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16. TENANT'S INSURANCE
------------------
Tenant shall carry (at its sole expense during the Term):
(i) all-risk property insurance, insuring Tenant's interest in its
improvements to the Premises and any and all furniture, fixtures, equipment,
supplies, inventory, contents and other property owned, leased, held or
possessed by Tenant and contained therein. Such insurance shall be in an amount
equal to the full replacement cost of such improvements and property, as such
may increase from time to time, without deduction for depreciation, providing
protection against all perils included within the classification of fire,
extended coverage, vandalism, malicious mischief, special extended peril (all
risk), boiler and machinery and sprinkler leakage;
(ii) worker's compensation insurance as required by applicable law;
(iii) comprehensive or commercial general liability insurance on an
occurrence basis for injury to or death of a person or persons and for damage to
property occasioned by or arising out of any construction work being done on the
Premises, or arising out of the condition, use, or occupancy of the Premises, or
other portions of the Building or Property, and covering Tenant's
indemnification obligations imposed by Paragraph 15 of this Lease, the limits of
such policy or policies to be in amounts not less than One Million and No/100
Dollars ($1,000,000) in primary liability coverage and Five Million and No/100
Dollars ($5,000,000) in excess liability coverage; and
(iv) primary automobile liability insurance with limits of not less than
One Million and No/100 Dollars ($1,000,000) per occurrence, covering owned,
hired and non-owned vehicles used by Tenant.
Landlord retains the right, in its reasonable discretion, to increase the
amount of insurance required to be carried by Tenant not more frequently than
annually based on such factors as Tenant's insurance claims history, the advice
of Landlord's insurance advisors and any other relevant factors. Landlord and
Tenant shall each have included in all policies of insurance respectively
obtained by them with respect to the Building or Premises a waiver by the
insurer of all right of subrogation against the other (and, with respect to
Tenant's insurance, against Landlord's property manager) in connection with any
loss or damage insured against. To the full extent permitted by law, Landlord
and Tenant each waives all right of recovery against the other (and, with
respect to Tenant, against Landlord's property manager), and agrees to release
the other from liability for loss or damage to the extent such loss or damage is
covered by valid and collectible insurance in effect at the time of such loss or
damage; provided, however, that the foregoing release by each party is
conditioned upon the other party's carrying insurance with the above described
waiver of subrogation, and if such coverage is not obtained or maintained by
either party, then the other party's foregoing release shall be deemed to be
rescinded until such waiver is either obtained or reinstated. All said
insurance policies shall be carried with companies admitted to do business in
the State of Georgia reasonably satisfactory to Landlord and shall be
noncancellable except after thirty (30) days written notice to Landlord. Each
policy shall name Landlord, Landlord's property manager and any other person
designated by Landlord as additional insureds and provide that it is primary to,
and not contributing with, any policy carried by Landlord, Landlord's property
manager, or other designated person covering the same loss. Tenant shall
deliver duly executed certificates of such insurance to Landlord prior to the
Commencement Date and at least thirty (30) days prior to the expiration of each
respective policy term. No insurance policy or policies required to be carried
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by Tenant will be subject to more than a $25,000.00 deductible limit without
Landlord's prior written consent. Landlord reserves the right to require Tenant
to carry such other insurance (including, without limitation and as applicable,
plate glass insurance, automobile liability insurance, builder's risk insurance)
and endorsements in such amounts as Landlord in its reasonable, good faith
discretion may deem necessary or appropriate. If Tenant fails to take out or
keep in force any insurance required to be carried by Tenant, or to provide
evidence of the same as required herein, Landlord shall have the right, but
shall not be obligated, to obtain such insurance at the sole cost and expense of
Tenant, and Tenant shall reimburse Landlord for the cost thereof upon demand as
additional Rent.
17. REMEDIES CUMULATIVE
-------------------
The rights given to Landlord and Tenant herein are in addition to any
rights that may be given to Landlord or Tenant by any statute or under law.
18. ENTIRE AGREEMENT - NO WAIVER
----------------------------
This Lease contains the entire agreement of the parties hereto and no
representations, inducements, promises or agreements, oral or otherwise, between
the parties not embodied herein shall be of any force and effect. The failure
of either party to insist in any instance on strict performance of any covenant
or condition hereof, or to exercise any option herein contained, shall not be
construed as a waiver of such covenant, condition or option in any other
instance. This Lease cannot be changed or terminated orally, and can be
modified only in writing, executed by each party hereto.
19. HOLDING OVER
------------
If Tenant remains in possession of the Premises after expiration of
the Term, or after any termination of the Lease by Landlord, with Landlord's
acquiescence and without any written agreement between the parties, Tenant shall
be a tenant at sufferance and such tenancy shall be subject to all the
provisions hereof, except that the Monthly Rental for the first three (3) months
of said holdover period shall be one hundred fifty percent (150%) of the amount
of Rent due in the last month of the Term, and thereafter shall be double the
amount of Rent due in the last month of the Term. There shall be no renewal of
this Lease by operation of law. Nothing in this Paragraph shall be construed as
a consent by Landlord to the possession of the Premises by Tenant after the
expiration of the Term or any termination of the Lease by Landlord.
20. HEADINGS
--------
The headings in this Lease are included for convenience only and shall
not be taken into consideration in any construction or interpretation of any
part of this Lease.
21. NOTICES
-------
(a) Any notice, request or consent by either party to the other
hereunder shall be valid only if in writing and shall be deemed to be duly given
only if hand-delivered, or sent by certified mail or by a recognized national
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overnight delivery service which has a receipt of notice as a part of its
delivery function. Such notices shall be addressed (i) if to Tenant, at
Tenant's address set forth above, and (ii) if to Landlord, at Landlord's address
set forth above, or at such other address for either party as that party may
designate by notice to the other. Notice shall be deemed given, if delivered
personally, upon delivery thereof, and if mailed, upon the mailing thereof.
(b) Tenant hereby appoints as its agent to receive service of all
dispossessory or distraint proceedings any employee of Tenant in the Premises at
the time of such service.
22. HEIRS, SUCCESSORS, AND ASSIGNS - PARTIES
----------------------------------------
(a) This Lease shall bind and inure to the benefit of Landlord and
Tenant, and their respective successors, heirs, legal representatives and
assigns. The term "Landlord" as used in this Lease means only the owner (or the
ground lessee) for the time being of the Property and Building of which the
Premises are a part, so that in the event of any sale or sales of said Property
(or of any lease thereof), Landlord named herein shall be and hereby is entirely
released of all covenants and obligations of Landlord hereunder accruing
thereafter, and it shall be deemed without further agreement that the purchaser,
or the lessee, as the case may be, has assumed and agreed to carry out any and
all such covenants and obligations of Landlord hereunder during the period such
party has possession of the Property and Building. If the Land and Building are
severed as to ownership by sale and/or lease, the owner of the entire Building
or lessee of the entire Building that has the right to lease space in the
Building to tenants shall be deemed "Landlord". Tenant shall be bound to any
such succeeding party for performance by Tenant of all the terms, covenants, and
conditions of this Lease and agrees to execute any attornment agreement not in
conflict with the terms and provisions of this Lease at the request of any such
party.
(b) The parties "Landlord" and "Tenant" and pronouns relating
thereto, as used herein, shall include male, female, singular and plural,
corporation, partnership or individual, as may fit the particular parties.
23. ATTORNEY'S FEES
---------------
If any law suit or court action between Landlord and Tenant arises out
of or under this Lease, the prevailing party in such law suit or court action
shall be entitled to and shall collect from the non-prevailing party the
reasonable attorney's fees and court costs actually incurred by the prevailing
party with respect to said lawsuit or court action.
24. TIME OF ESSENCE
---------------
TIME IS OF THE ESSENCE OF THIS LEASE.
25. NO ESTATE IN LAND
-----------------
Tenant has only a usufruct under this Lease, not subject to levy or
sale. No estate shall pass out of Landlord by this Lease.
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26. SECURITY DEPOSIT
----------------
Tenant has deposited with Landlord $69,438.69 as a security deposit
for the performance by Tenant of all the terms, covenants and conditions of this
Lease upon Tenant's part to be performed. Landlord shall place such security
deposit in an interest-bearing account. The security deposit, together with all
interest earned thereon, shall be returned to Tenant within thirty (30) days
after the expiration of the Term, if Tenant has fully performed its obligations
hereunder. Landlord shall have the right to apply any part of said security
deposit to cure any default of Tenant and if Landlord does so, Tenant shall upon
demand deposit with Landlord the amount so applied so that Landlord shall have
the full security deposit on hand at all times during the Term of this Lease.
If there is a sale or lease of the Building subject to this Lease, Landlord
shall transfer the security deposit to the vendee or lessee, and Landlord shall
be released from all liability for the return of such security deposit. Tenant
shall look solely to the successor Landlord for the return of said security
deposit. This provision shall apply to every transfer or assignment made of the
security deposit to a successor Landlord. The security deposit shall not be
assigned or encumbered by Tenant without the prior consent of Landlord and any
such unapproved assignment or encumbrance shall be void.
27. COMPLETION OF THE PREMISES
--------------------------
Landlord shall supervise completion of the work described in Exhibit
-------
"C" subject to payments which may be required of Tenant thereunder. Any work
- ---
required by Tenant as provided for in said Exhibit "C" shall be performed within
-----------
the provisions and according to all standards of said Exhibit "C".
-----------
28. PARKING ARRANGEMENTS
--------------------
(a) Landlord shall maintain four (4) unreserved parking spaces per
1,000 usable square feet leased by Tenant, for the purpose of accommodating the
parking needs of Tenant and Tenant's invitees and employees, at no cost or
expense to Tenant during the initial Term. Such parking shall be available in
the area(s) of the Project designated for parking for the Building (the
"Building Parking Areas"). Said parking shall be maintained on the Property or
on areas located within reasonable proximity of the Property. Five (5) of such
parking spaces shall be located in the Building's parking deck and designated as
"reserved" spaces.
(b) In addition to the parking spaces provided by Landlord pursuant to
Paragraph 28(a) hereof, Landlord shall provide, at no cost or expense to Tenant
during the initial Term, sufficient parking cards for access to the Building
Parking Areas for all persons employed by Tenant at the Premises who desire such
parking cards and who are not provided spaces under said Paragraph 28(a), up to
a maximum of one-hundred ninety (190) less the number of spaces provided to
Tenant under Paragraph 28(a); provided, however, that if in Landlord's
reasonable judgement at any time during the Term the Building Parking Areas
shall become overburdened, and if Landlord has reasonably determined that Tenant
has, on an average daily basis, used more than four (4) parking spaces per 1,000
usable square feet in the Premises during any week that is within one (1) month
of the time that Landlord determines that the Building Parking Areas have become
overburdened, then Landlord shall have the right to reclaim the parking cards
provided under this Paragraph 28(b).
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(c) Tenant's rights under this Paragraph 28 shall be subject to the
limitations and conditions from time to time imposed by Landlord.
29. RULES AND REGULATIONS
---------------------
The Rules set forth on Exhibit "D" are a part of this Lease. Landlord
-----------
may from time to time amend, modify, delete or add additional, reasonable Rules
for the use, operation, safety, cleanliness and care of the Premises and the
Building. Such new or modified Rules shall be effective upon notice to Tenant.
Tenant will cause its employees and agents, or any others permitted by Tenant to
occupy or enter the Premises to at all times abide by the Rules. If there is a
breach of any Rules, Landlord shall have all remedies in this Lease provided for
in the Event of Default by Tenant and shall, in addition, have any remedies
available at law or in equity, including but not limited to, the right to enjoin
any breach of such Rules. Landlord shall use its reasonable efforts to ensure
the observance by other tenants and persons of such Rules, but shall not be
responsible to Tenant for the nonobservance by any other tenant or person of any
such Rules. Landlord shall not discriminate in the enforcement of such Rules.
30. RIGHT TO RELOCATE
-----------------
At any time or from time to time during the term of this Lease or any
renewal thereof, Landlord shall have the unrestricted and unconditional right to
relocate Tenant from the Premises to any other office space in the Building.
Landlord shall deliver notice to Tenant of Landlord's desire to relocate Tenant,
together with a proposal for the area to which such Premises shall be relocated.
Should Landlord exercise its right to relocate Tenant under this Section 30 then
(i) expenses of said relocation or of any necessary renovation or alteration, as
calculated by Landlord acting reasonably and in good faith prior to any
relocation, including moving and stationery costs, shall be paid by Landlord,
and (ii) following such relocation, the substituted space shall for all purposes
thereinafter constitute the Premises and all terms and conditions of this Lease
shall apply with full force and effect to the Premises as so relocated. If
Tenant has not relocated its premises within ten (10) days after the relocated
space is Substantially Complete, Landlord shall have the right to terminate this
Lease by giving notice of such termination to Tenant. Such termination shall be
effective upon any date selected by Landlord in the Termination Notice which is
at least ten (10) days after the termination notice is given by Landlord to
Tenant. Tenant hereby further covenants and agrees to promptly execute and
deliver to Landlord any lease amendment or other such document appropriate to
reflect the changes in the Lease described or contemplated above.
31. LATE PAYMENTS
-------------
Any payment due of Tenant hereunder not received by Landlord within
five (5) days of the date when due shall be assessed a five percent (5%) charge
for Landlord's administrative and other costs in processing and pursuing the
payment of such late payment, and shall be assessed an additional five percent
(5%) charge for the aforesaid costs of Landlord for each month thereafter until
paid in full. Acceptance by Landlord of a payment, and the cashing of a check,
in an amount less than that which is currently due shall in no way affect
Landlord's rights under this Lease and in no way be an accord and satisfaction.
This provision does not prevent Landlord from declaring the non-payment of Rent
when due an event of default hereunder.
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32. ESTOPPEL CERTIFICATE
--------------------
At any time after the date hereof, Tenant shall, within fifteen (15)
days of the request by Landlord, execute, acknowledge and deliver to Landlord,
any Mortgagee, prospective Mortgagee or any prospective purchaser of the
Property, the Building, or both (as designated by Landlord), or any prospective
purchaser or transferee of the Building an Estoppel Certificate in recordable
form, or in such other form as Landlord may from time to time require,
evidencing whether or not (a) this Lease is in full force and effect against
Tenant; (b) this Lease has been amended in any way; (c) Tenant has accepted and
is occupying the Premises; (d) there are any existing defaults on the part of
Landlord hereunder or defenses or offsets against the enforcement of this Lease
to the knowledge of Tenant (specifying the nature of such defaults, defenses or
offsets, if any); (e) the date to which Rent and other amounts due hereunder, if
any, have been paid; and (f) any such other information as may be reasonably
requested by Landlord. Each certificate delivered pursuant to this Paragraph
may be relied on by Landlord, any prospective purchaser or transferee of
Landlord's interest hereunder, or any Mortgagee or prospective Mortgagee.
33. SEVERABILITY AND INTERPRETATION
-------------------------------
(a) If any clause or provision of this Lease shall be deemed illegal,
invalid or unenforceable under present or future laws effective during the Term,
the remainder of this Lease shall not be affected by such illegality, invalidity
or unenforce- ability, and in lieu of each clause or provision of this Lease
that is illegal, invalid or unenforceable, there shall be added as a part of
this Lease a clause or provision as similar in terms to such illegal, invalid or
unenforceable clause or provision as may be possible and be legal, valid and
enforceable.
(b) If any provisions of this Lease require judicial interpretation,
the court interpreting or construing the same shall not apply a presumption that
the terms of any such provision shall be more strictly construed against one
party or the other by reason of the rule of construction that a document is to
be construed most strictly against the party who itself or through its agent
prepared the same, as all parties hereto have participated in the preparation of
this Lease.
34. MULTIPLE TENANTS
----------------
If more than one individual or entity comprises and constitutes
Tenant, then all individuals and entities comprising Tenant are and shall be
jointly and severally liable for the due and proper performance of Tenant's
duties and obligations arising under or in connection with this Lease.
35. FORCE MAJEURE
-------------
Landlord shall be excused for the period of any delay and shall not be
deemed in default with respect to the performance of any of the terms,
covenants, and conditions of this Lease when prevented from so doing by causes
beyond Landlord's control, which shall include, but not be limited to, all labor
disputes, governmental regulations or controls, fire or other casualty,
inability to obtain any material or services (after diligent, good faith efforts
to obtain such material or services), or acts of God.
-23-
<PAGE>
36. QUIET ENJOYMENT
---------------
So long as Tenant is in full compliance with the terms and conditions
of this Lease, Landlord shall warrant and defend Tenant in the quiet enjoyment
and possession of the Premises during the Term against any and all claims made
by, through or under Landlord, subject to the terms of this Lease.
37. BROKERAGE COMMISSION; INDEMNITY
-------------------------------
FAISON & ASSOCIATES ("FAISON") HAS ACTED AS AGENT FOR LANDLORD IN THIS
TRANSACTION AND KOLL HAS ACTED AS AGENT FOR TENANT IN THIS TRANSACTION. BOTH
FAISON AND KOLL ARE TO BE PAID A COMMISSION BY LANDLORD. Tenant warrants that
there are no other claims for broker's commissions or finder's fees in
connection with its execution of this Lease arising out of any act or agreement
of Tenant. Tenant hereby indemnifies Landlord and holds Landlord harmless from
and against all loss, cost, damage or expense, including, but not limited to,
attorney's fees and court costs, incurred by Landlord as a result of or in
conjunction with a claim of any real estate agent or broker, if made by, through
or under Tenant. Landlord hereby indemnifies Tenant and holds Tenant harmless
from and against all loss, cost, damage or expense, including, but not limited
to, attorney's fees and court costs, incurred by Tenant as a result of or in
conjunction with a claim of any real estate agent or broker, if made by, through
or under Landlord.
38. EXCULPATION OF LANDLORD
-----------------------
Landlord's liability to Tenant with respect to this Lease shall be
limited solely to Landlord's interest in the Building. Neither Landlord, any of
the partners of Landlord, any officer, director, or shareholder of Landlord nor
any of the partners of Landlord shall have any personal liability whatsoever
with respect to this Lease.
39. ORIGINAL INSTRUMENT
-------------------
Any number of counterparts of this Lease may be executed, and each
such counterpart shall be deemed to be an original instrument.
40. GEORGIA LAW
-----------
This Lease has been made under and shall be construed and interpreted
under and in accordance with the laws of the State of Georgia.
41. NO RECORDATION OF LEASE
-----------------------
Without the prior consent of Landlord, neither this Lease nor any
memorandum hereof shall be recorded or placed on public record.
42. HAZARDOUS WASTES
----------------
Tenant shall not (either with or without negligence) cause or permit
the escape, disposal or release of any Hazardous Substances (as hereinafter
defined). Tenant shall not allow the storage or use of Hazardous Substances in
any manner not sanctioned by law or by the highest standards prevailing in the
industry for the storage and use of Hazardous Substances, nor allow to be
brought into the Building, the Premises or the Property, any such Hazardous
-24-
<PAGE>
Materials except to use in the ordinary course of Tenant's business, and then
only after notice is given to Landlord of the identity of such Hazardous
Substances; provided, however, that so long as Tenant strictly complies or
causes compliance with all applicable governmental rules and regulations
concerning use, storage, production, transportation and disposal of Hazardous
Substances, such consent shall not be required for customary cleaning and other
supplies used by Tenant in the ordinary course of business. As used herein, the
term "Hazardous Substances" means all hazardous substances and materials,
including without limitation those described in the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Section
9601 et seq., the Resource Conservation and Recovery Act, as amended, 42 U.S.C.
Section 6901 et seq., any applicable state or local laws and the regulations
adopted under these acts. If any governmental agency shall ever require testing
to ascertain whether or not there has been any release of Hazardous Substances,
then the reasonable costs thereof shall be reimbursed by Tenant to Landlord upon
demand as additional charges if such requirement applies to the Premises as a
result of the breach of Tenant's obligations under this Paragraph 42. In
addition, Tenant shall execute affidavits, representations and the like from
time to time at Landlord's request concerning Tenant's best knowledge and belief
regarding the presence of Hazardous Substances on the Premises. In all events,
Tenant shall indemnify Landlord in the manner elsewhere provided in this Lease
from any release of Hazardous Substances on the Premises occurring while Tenant
is in possession, or elsewhere if caused by Tenant or persons acting under
Tenant. The within covenants shall survive the expiration or earlier
termination of the Lease Term.
43. LEASE BINDING UPON DELIVERY
---------------------------
This Lease shall not be binding until and unless all parties have duly
executed said Lease and a fully executed counterpart of said Lease has been
delivered to Tenant.
44. SPECIAL STIPULATIONS
--------------------
The special stipulations attached hereto and made a part hereof, if
any, shall control if in conflict with any of the foregoing provisions of this
Lease.
[Signatures begin on following page]
-25-
<PAGE>
IN WITNESS WHEREOF, Landlord and Tenant have caused this Lease to be
executed under seal, on the day and year first above written.
TENANT:
NOVA INFORMATION SYSTEMS, INC., a Georgia
corporation
By: /s/ Donna Hall
--------------------------------------
Name: /s/ Donna Hall
------------------------------------
Title: Vice President
-----------------------------------
Attest: /s/ Cathy A. Harper
----------------------------------
Name: /s/ Cathy A. Harper
------------------------------------
Title: Vice President General Counsel
-----------------------------------
Date executed by (CORPORATE SEAL)
Tenant: 5/22/96
------------
*Note: If Tenant is a corporation, two authorized corporate officers
must execute this Lease in their appropriate capacities for Tenant,
affixing the corporate seal.
Tenant's Federal Employer Identification Number: 58-1916822
-----------------
"LANDLORD"
CONCOURSE I, LTD., a Georgia limited
partnership
By: State of California Public Employees'
Retirement System, as general partner of
Concourse I, Ltd.
By: LaSalle Advisors Limited Partnership, as
duly authorized agent of State of
California Public Employees' Retirement
System
Date Executed by
Landlord: 5/31/96 By: /s/ John Levy
------------- ----------------------------
John Levy
Senior Vice President
By: /s/ Rebecca S. Smith
----------------------------
Rebecca S. Smith
Vice President
-26-
<PAGE>
SPECIAL STIPULATIONS
TO LEASE AGREEMENT BY AND BETWEEN
CONCOURSE I, LTD., AS LANDLORD, AND
NOVA INFORMATION SYSTEMS, INC., AS TENANT
1. Area of Premises in Building. The rentable areas of the Premises and
----------------------------
Building have been and shall be determined using a loss factor of not more than
sixteen percent (16%) in accordance with the American National Standard Method
of Measuring Floor Area in Office Buildings of the Building Owners and Managers
Association International (ANSI Z65.1 - 1980 [approved July 31, 1980], as
modified and updated from time to time). Landlord certifies the accuracy of the
measurements set forth in this Lease. Tenant shall have the right to
independently verify that the Premises has been measured in accordance with such
standard.
2. Rent. Notwithstanding anything to the contrary contained in Paragraph
----
2 of this Lease, for so long as Tenant is in full compliance with the terms and
conditions of this Lease, and if Tenant pays the first payment of Monthly Rental
on the date of execution of this Lease, Tenant shall be obligated to pay one-
half (1/2) of the Monthly Rental set forth in Paragraph 2 of this Lease for the
four (4) month period beginning on the Commencement Date; provided, however,
that this provision shall not eliminate or be deemed to eliminate Tenant's
obligation to pay any other amounts or charges due of Tenant under this Lease,
including, but not limited to, the amounts and charges due of Tenant under
Paragraph 8(c) of this Lease, and Landlord does not waive the right to collect
any such sums.
3. Operating Costs Cap. Notwithstanding the terms and conditions of
-------------------
Paragraph 3 of this Lease, except as described below, in no event shall Tenant's
Share of Operating Costs for any year exceed what such costs would have been,
had Operating Costs increased by eight percent (8%) over the Operating Costs for
the immediately preceding year in which the Lease was in effect; provided,
however, and notwithstanding the above limitation, that for the purposes of
determining whether or not the aforesaid limit on increases in Tenant's Share of
Operating Costs from year to year is exceeded or not, the components of
Operating Costs related to taxes and assessments attributable to the Property or
Building or its operation, utilities costs to the Building, Property or Premises
and insurance premiums related to or payable in connection with the Building,
Property or Premises shall not be considered or factored into such
determination, and there shall be no limit on the amounts of Operating Costs
related to taxes, utilities and insurance premiums for the Building, Property or
Premises that can be passed on by Landlord to Tenant or that shall be due of
Tenant at any time and from year to year, except as expressly provided for in
this Lease.
4. Augmentation of Allowance. To the extent the costs to complete the
-------------------------
tenant fit-up and finish work in the Premises are greater than the "Allowance"
and the "Design Fee Allowance" (as those terms are defined in Exhibit "C";
-----------
collectively, the "Total Allowance"), then, upon Tenant's request, (a) the
amount of such costs in excess of $15.10 per usable square foot in the Premises
and less than or equal to $18.10 per usable square foot in the Premises shall be
added to the Monthly Rental due of Tenant, amortized over the Term at an
interest rate of twelve percent (12%) per annum, and (b) the amount of such
costs in excess of $18.10 per usable square foot in the Premises shall be paid
by Tenant to Landlord on demand.
5. Right of First Refusal. Provided this Lease is then in full force and
----------------------
effect and Tenant is in full compliance with the terms and conditions of this
Lease, and there is no sublease affecting the Premises and no assignment of
Tenant's interest in the Lease at such time to an unaffiliated third party,
Landlord hereby grants Tenant the right to lease the approximately 10,000
rentable square feet shown on Exhibit "F" attached hereto and by this reference
-----------
incorporated herein (the "Expansion Space") in accordance with the terms and
conditions set forth in this Special Stipulation No. 5 during the first three
(3) Lease Years. Should Landlord receive a bona fide written offer from an
unaffiliated third party to lease all or any portion of the Expansion Space
during such period, upon terms and conditions and at a rental rate acceptable to
Landlord, Landlord shall notify Tenant thereof in writing, and offering to lease
the Expansion Space to Tenant. Tenant shall have ten (10) days to accept or
reject such offer. If Tenant rejects such offer or fails to respond within said
ten (10) day period, then Landlord shall be entitled to rent said space to such
third party. If Tenant accepts said offer, then Tenant shall have leased such
space at the rate of Monthly Rental (on a per rentable square foot per annum
basis) then in effect for the Premises, and upon the other terms and conditions
as contained in this Lease and for a term co-terminus with the Lease, except
that such space shall be leased "as is, where is". The Rent for such space
shall commence on the earlier to occur of (i) ninety (90) days after Tenant
accepts such offer for such space, or (ii) on the date Tenant occupies such
space.
6. Additional Available Space. Provided this Lease is then in full force
--------------------------
and effect and Tenant is in full compliance with the terms and conditions of
this Lease, and there is no sublease affecting the Premises and no assignment of
Tenant's interest in the Lease at such time to an unaffiliated third party, then
at any time during the first three (3) Lease Years, Tenant shall have the one
(1) time right to request in writing that Landlord provide to Tenant up to
10,000 rentable square feet of additional space in the Building and, within ten
(10) days of such request, Landlord shall notify Tenant in writing of the
location of such space and the date on which such space will be available, and
Tenant shall have leased such space at the rate of Monthly Rental (on a per
rentable square foot per annum basis) then in effect for the Premises, and on
the other terms and conditions as contained in the Lease and for a term co-
terminus with the Lease, except that such space shall be leased "as is, where
is". The base rent for such space shall be at the same rate of Monthly Rental
(on a per square foot per annum basis) than being paid by Tenant for the
Premises, and shall commence on the earlier to occur of (i) the date Tenant
first occupies such space, or (ii) ninety (90) days after Landlord gives Tenant
the notice that such space is available.
7. Renewal of Lease. Provided this Lease is then in full force and
----------------
effect and Tenant is in full compliance with the terms and conditions of this
Lease, and there is no sublease affecting the Premises and no assignment of
Tenant's interest in the Lease at such time to an unaffiliated third party,
Landlord hereby grants to Tenant an option to renew this Lease for one (1)
period of five (5) years, at a rental rate equal to the rental rate then being
offered in the Building or in other buildings comparable to the Building located
in the Project, with reasonably comparable on-site amenities and services and
comparable parking rights and privileges, as such rate is established by
Landlord in its reasonable judgment, taking into account tenant improvement
allowances, base year and concessions. Tenant shall notify Landlord no more
than twelve (12) months and no less than nine (9) months prior to the end of the
Term if Tenant desires to renew this Lease under the terms of this Special
Stipulation No. 7. If Tenant does give such notice, Landlord shall indicate to
Tenant at least seven (7) months prior to the end of the Term the rental rate
which shall be in effect for the Term as extended, on the basis as above-
described. Tenant shall have thirty (30) days from the date Landlord makes such
offer to either accept or reject such offer. If Tenant rejects such offer or
fails to respond within such thirty (30) day period, then this Lease shall
terminate as of the end of the Term as established herein. If Tenant accepts
such offer, then the Term shall be extended by said five (5) year period, upon
the same terms and conditions as contained in this Lease, and the rent for such
period shall be the rent as offered by Landlord and accepted by Tenant pursuant
to the terms and conditions of this Special Stipulation No. 7.
8. Conditions on Expansion/Renewal. Notwithstanding anything to the
-------------------------------
contrary contained herein, any right or option to extend the Term of the Lease
or expand the Premises is expressly contingent upon Landlord consenting to such
extension or expansion, with such consent by Landlord to be granted or withheld
solely upon the credit issues described below. Landlord shall not be obligated
to consent to Tenant's exercise of any right or option for an extension or
expansion, and such exercise by Tenant shall be of no force or effect if, at the
time of the exercise in question by Tenant, the creditworthiness of Tenant
(taking into account net worth, cash on hand and cash available and net cash
flow from operations) is materially less than reflected on Tenant's financial
statements presented to Landlord prior to the execution of this Lease. As a
condition to the consent by Landlord to the exercise of any such right or option
by Tenant, Landlord may request current financial statements from Tenant
certified by an officer or partner of Tenant, or, if available, an outside
independent auditor, to be true and correct. Tenant shall provide such
information to Landlord upon request, and Landlord shall have a reasonable time
to review and assess such information prior to granting consent to any such
exercise by Tenant. In addition to the foregoing, any right or option to expand
the Premises is expressly subject to the rights to lease such space now held by
existing tenants of the Building pursuant to their leases with Landlord. Upon
Tenant's request, Landlord shall provide Tenant with a schedule of encumbrances
on such space.
9. Computer Room Emergency Power. Landlord shall use reasonable efforts
-----------------------------
to assist Tenant in reaching an agreement between Fairchild Communications
Services, Inc. and Tenant regarding emergency power for Tenant's Computer Room
(as hereinafter defined). Upon Tenant's request, Landlord shall provide Tenant
with reasonable access to the vertical and horizontal shafts in the Building to
bring such emergency power services to the Computer Room.
10. Allowance for Health Club Initiation Fees. Provided this Lease is in
-----------------------------------------
full force effect and Tenant is in full compliance with the terms and conditions
of this Lease, Landlord hereby covenants and agrees to pay on behalf of Tenant
the initiation fees for six (6) individuals at the Concourse Athletic Club (the
"Club"), provided Tenant requests such payment not later than December 31, 1996.
No provision of this Special Stipulation No. 10 shall mean or be deemed to mean
that Landlord shall be obligated to pay any additional charges which Tenant
might incur in or with respect to the Club, and all such charges shall be the
responsibility of Tenant and/or the individuals incurring such charges. No
provision of this Special Stipulation No. 10 shall mean or be deemed to mean
that Landlord guarantees that the Club shall remain open for business, or that
Landlord would have an obligation or requirement to provide access or membership
to another athletic or health club facility if the Club ceases to operate or
changes its method of operations, and Landlord has not made and does not make
any such agreement.
11. Tenant's Right to Install Satellite Antenna Module. (a) Subject to
--------------------------------------------------
the terms and conditions as described below, Tenant shall have the right
(without the requirement of paying any additional rent, except as set forth to
the contrary in this Special Stipulation No. 11) to place on the roof of the
Building a satellite antenna module (the "Antenna") and related hardware and
cabling, connected to the Premises, to service and serve the Premises and
communications to and from the Premises. Tenant must obtain and pay for all
permits and license fees which may be required to be paid for the erection and
maintenance of any and all such Antenna. The right of Tenant to install such
Antenna is expressly conditioned upon Tenant's Antenna not interfering with any
antennae presently existing on or within the Project, and Tenant hereby
covenants and agrees that the Antenna will not so interfere. Landlord shall use
its reasonable efforts to ensure that no equipment installed on the roof of the
Building after the Commencement Date unreasonably interferes with the operation
and use of the Antenna by Tenant.
(b) Tenant shall furnish detailed plans and specifications for such
Antenna systems to Landlord for Landlord's consent, which consent shall not be
unreasonably withheld, conditioned or delayed, provided Landlord may condition
its consent by requiring that such systems be installed in the least conspicuous
of all acceptable locations on which the systems might be located and that all
components and elements thereof (except the terminal devices and structures) be
concealed from view from within and without the Building. Upon the giving of
such consent, such systems shall be installed at Tenant's expense by a
contractor selected by Tenant and approved by Landlord, such approval not to be
unreasonably withheld, conditioned or delayed. In the installation of such
systems, Tenant shall comply with all applicable laws and keep the Premises,
Building and Property free and clear from liens arising from or related to
Tenant's installation, and shall provide all insurance with respect to or in
connection with the Antenna as Landlord in Landlord's reasonable judgement deems
appropriate or necessary. Tenant shall be entitled to use such portions of the
Building as may be reasonably necessary for the installation, operation and
maintenance of the Antenna, and Tenant shall have reasonable access to such
portions of the Building at all times throughout the term of this Lease for such
purposes; provided however, that except for the roof, any cables, conduits or
other physical connections between such Antenna and the Premises shall be
concealed underground or within permanent walls, floors, columns and ceilings of
the Building and in the shafts of the Building provided for such installations,
not damaging the appearance of the Building or reducing the usable or rentable
space of the Building; and provided further, that except for the roof and
Premises, any installation or maintenance work performed by Tenant or at
Tenant's direction shall be performed without unreasonably interfering with
Landlord's or any other tenant's use of the Building, and upon completion of
such installation and maintenance (initially and from time to time) Tenant shall
restore such portions of the Building to a condition reasonably comparable to
that existing prior to such installation or maintenance. Tenant shall be
responsible for procuring whatever licenses or permits may be required for the
use of such systems or operation of any equipment served thereby, and Landlord
shall cooperate with Tenant, at Tenant's expense, in procuring such licenses or
permits, to the extent required by applicable laws. Landlord makes no
warranties whatsoever as to the permissibility of such systems under applicable
laws. Tenant shall not permit Tenant's Antenna to constitute a nuisance or
unreasonably interfere with the operations of other tenants of the Building or
with the normal use of the area surrounding the Building by occupants thereof;
provided, however, that Tenant's obligation under the foregoing clause with
respect to communications facilities installed by other tenants of the Building
shall only apply to such facilities installed prior to the installation of the
Antenna. Upon termination or expiration of this Lease, Tenant shall remove the
Antenna installed pursuant to this Special Stipulation No. 11 at its expense and
shall repair and restore the Building to a condition comparable to that existing
prior to such installation, normal wear and tear excepted.
(c) Landlord reserves the right to relocate said Antenna at any time
at Landlord's sole expense, provided such relocation shall have no adverse
impact on the operations of such Antenna as a service to the Premises. Tenant
hereby covenants and agrees that such Antenna is designed and shall be installed
in a manner so that it is relocatable without extraordinary or unreasonable
trouble, effort or expense.
12. Hazardous Waste Covenant. (a) To the best of Landlord's knowledge and
------------------------
belief, but without any independent investigation or inquiry of any kind or
nature whatsoever, there are no Hazardous Substances in the Premises other than
"Permitted Hazardous Substances", as that term is defined below. Landlord
covenants and agrees that if any Hazardous Substances other than Permitted
Hazardous Substances are found in the Property in such amounts and locations as
would require Landlord to remove such materials as a matter of law, then
Landlord shall remove or cause to be removed such Hazardous Substances at
Landlord's sole cost and expense, and such cost and expense shall not be
included in Operating Costs. Such removal shall be accomplished in a manner
that does not cause an unreasonable disruption to Tenant's operations in the
Premises.
(b) The term "Permitted Hazardous Substances" shall mean such
Hazardous Substances as are commonly and legally used or stored as a consequence
of using, maintaining or operating the Property, but only so long as the
quantities thereof do not pose a threat to public health or to the environment
or would necessitate a "response action" as that term is defined in CERCLA, and
so long as Landlord strictly complies or causes compliance with all applicable
governmental rules and regulations concerning the use, storage, production,
transportation and disposal of such Hazardous Substances.
13. Loss of Service; Abatement. If Landlord fails to furnish or delays in
--------------------------
furnishing any service Landlord is obligated to provide under this Lease, Tenant
shall be entitled to abate Rent until the service is restored, but only under
the following terms and conditions:
(a) the loss of service was not caused by, through or under
Tenant;
(b) the loss of service must be of a material nature so as to
render the Premises substantially unusable for the purposes
contemplated by this Lease;
(c) Tenant must give written notice promptly to Landlord of
the loss of service and its claim for abatement under this provision
and, if the loss of service is the result of a cause within Landlord's
control, Tenant shall thereafter be entitled to abatement of Rent,
assuming all other conditions of this provision are satisfied,
commencing on the day such service is curtailed, provided that if such
service is restored or replaced within three (3) business days of
Landlord's receipt of such notice, then Tenant shall not be entitled
to any such abatement; and
(d) Landlord may prevent or stop abatement by providing
substantially the same service (i.e., without unreason-able or overly
burdensome interruption) by temporary or alternative means until the
cause of the loss of service can be corrected.
14. Signs. (a) Tenant shall be entitled to install its own graphics and
-----
signage in the elevator lobbies of any floor which Tenant leases in its
entirety, subject to Landlord's prior consent as to the design, size and color
of such graphics, such consent not to be unreasonably withheld or delayed by
Landlord.
(b) So long as Tenant is not in default under this Lease after any
applicable grace or cure periods expressly provided for in this Lease, Tenant
shall also have the right to have a section panel on the Building's existing,
free-standing pylon sign at the entrance to the Building, subject to Landlord's
prior consent as to the design, size and color of such panel, such consent not
to be unreasonably withheld or delayed.
(c) The cost of any sign installed under this Special Stipulation No.
14 shall be charged against the Total Allowance.
(d) Tenant shall receive proportionate space in the Building's lobby
directory.
15. Landlord's Compliance with Laws. Notwithstanding any provision
-------------------------------
contained in this Lease to the contrary, Landlord represents and warrants to
Tenant that on the date of delivery of possession of the Premises to Tenant, the
Premises, Building and Property will be in compliance with all laws, ordinances,
orders, rules, regulations, and other governmental requirements relating to the
use, condition, and occupancy of the same, and all rules, orders, regulations,
and requirements of the board of fire underwriters or insurance service office,
or any similar body having jurisdiction over the same. Landlord further
represents and warrants to Tenant that the uses permitted under this Lease for
Tenant are permitted uses under the zoning for the Building and Property.
16. Security. Landlord shall provide security services for the Building
--------
and Project comparable as to coverage, control and responsiveness (but not
necessarily as to means for accomplishing same) to other similarly situated
first-class, multi-tenant office buildings in the north metropolitan area of
Atlanta, Georgia; provided, however, Landlord shall have no responsibility to
prevent, and shall not be liable to Tenant for, any liability or loss to Tenant,
its agents, employees and visitors arising out of losses due to theft, burglary,
or damage or injury to persons or property caused by persons gaining access to
the Premises, unless caused by the gross negligence or willful misconduct of
Landlord or its agents, and Tenant hereby releases Landlord from all liability
for such losses, damages or injury.
17. Air Conditioning. (a) At no cost to Tenant, Landlord shall provide
----------------
Tenant with condenser water sufficient for (i) the cooling requirements of not
more than two (2) supplemental air conditioning units of up to five (5) tons
each or such other apparatus as may be approved by Landlord (collectively, the
"Computer Room Units") in Tenant's Computer Room, and (ii) the Additional Unit
(as hereinafter defined), on a twenty-four (24) hours per day, three hundred
sixty-five (365) days per year basis; provided, however, that such condenser
water service shall be interrupted for a reasonable time twice per year for
cleaning purposes, and Tenant must make alternate arrangements during such
periods to provide supplemental air conditioning in Tenant's Computer Room.
(b) Tenant shall have the right to install an additional supplemental
air conditioning unit (the "Additional Unit") for approximately 3,000 square
feet of space within the Premises in accordance with plans reasonably acceptable
to Landlord and at Tenant's sole cost and expense.
(c) Landlord shall install separate meters for the Computer Room Units
and the Additional Unit at Tenant's sole cost and expense, and Tenant shall pay
for such air conditioning service in accordance with Paragraph 8 of this Lease,
based on the cost of such service actually incurred by Landlord, with no premium
or surcharge.
(d) Tenant shall maintain the Computer Room Units and the Additional
Unit at Tenant's sole cost and expense in accordance with Paragraph 7(a) of this
Lease.
18. Security Deposit. If Tenant is then in full compliance with this
----------------
Lease, and Landlord has not previously applied any portion of such security
deposit to cure any default of Tenant, then within thirty (30) days after the
date which is thirty-six (36) months after the Commencement Date Landlord shall
return said security deposit, together with all interest earned thereon, to
Tenant.
19. Abandonment of Premises. If Tenant abandons or vacates the Premises
-----------------------
for more than ninety (90) days, Landlord shall have the right, but not the
obligation, to terminate this Lease at any time thereafter by giving Tenant ten
(10) days' advance notice of such termination.
20. Audit. (a) Landlord agrees to keep books and records showing
-----
Operating Costs in accordance with a sound system of accounts and accounting
practices. Tenant or its representative (which shall be a "Big 6" accounting
firm or Tenant's regular accounting firm) shall have the right to examine
Landlord's books and records showing Operating Costs upon reasonable prior
notice and during normal business hours at any time within ninety (90) days
following the furnishing by Landlord to Tenant of any final invoice or
reconciliation statement for any given year. Any information obtained by Tenant
and its auditors and examiners from such examination will be treated as
confidential unless and until such information has been publicly disclosed by
Landlord, and Tenant shall execute and cause its outside auditor or examiner to
execute such confidentiality agreement as Landlord shall reasonably request, to
reflect and effectuate the confidentiality provisions of this Special
Stipulation No. 20. However, nothing herein contained shall limit or impair the
right or obligation of Tenant to disclose such information when required by law
or to appropriate regulatory authorities having jurisdiction over its affairs,
or to use the same in connection with the enforcement of the terms and
conditions of this Lease. Unless Tenant takes written exception to any item
within ninety (90) days after the furnishing of Landlord's invoice or
statements, then such invoices or statements shall be considered as final and
accepted by Tenant.
(b) Tenant shall furnish Landlord with a copy of all information and
material generated for or on behalf of Tenant with respect to such audit,
whether or not Tenant disputes the calculations or charges from Landlord. If
Tenant does dispute such charges, then Tenant shall submit to Landlord, as a
part of the notice of such dispute, a precise and detailed narrative account of
the exact nature of the dispute, with specific reference to the differences
found by Tenant. Such statement shall be certified as true, correct and
accurate by the auditor or examiner making such findings. If Tenant's audit
reveals an underpayment of Operating Costs by Tenant, then Tenant shall pay the
same within thirty (30) days after receipt of the audit results.
(c) If the total Operating Costs as disclosed by such audit are
finally determined to have been overstated by five percent (5%) or more,
Landlord shall promptly reimburse or credit Tenant for the reasonable, actual
costs of such audit (based upon the hourly charges of the personnel involved in
the audit, and not any contingency payment), in addition to refunding all
overpayments previously made by Tenant.
21. Late Delivery of Premises. If the Premises are not Substantially
-------------------------
Complete on or before November 1, 1996 (as such date shall be extended by one
(1) day for every day Landlord is delayed due to Tenant Delay or due to an item
of force majeure) (the "Target Completion Date"), then Tenant shall be entitled
to a day of abatement of Monthly Rental for each day between the Target
Completion Date and the date on which the Premises are Substantially Complete,
and the Term shall also be extended by a like number of days, so there is a full
sixty-four (64) month Term.
22. Locked Computer Room. Notwithstanding any other provisions of this
--------------------
Lease to the contrary, and as long as any insurer does not prohibit such,
Landlord shall have no access to the portion of the Premises designated as the
"Computer Room" on Exhibit "B" unless accompanied by Tenant's authorized
-----------
representatives, except as set forth herein. Landlord, when so accompanied by
Tenant's representative shall have the right to inspect the Computer Room during
Tenant's normal business hours after giving Tenant reasonable prior notice
requesting such an inspection. In cases of emergency where immediate access to
the Computer Room is necessary, Landlord may, after being unable to locate an
employee of Tenant using reasonable means, gain access to the Computer Room by
using force. Landlord shall not be responsible for providing janitorial
services with respect to the Computer Room. Landlord shall not receive copies
of keys, pass cards or cipher lock combinations to the Computer Room.
23. After Hours HVAC Charges. Landlord hereby agrees that should Tenant
------------------------
request that any HVAC services be rendered to the Premises after the normal
Building operating hours set forth in this Lease, Landlord shall supply such
after hours HVAC services upon reasonable advance verbal request by Tenant, with
written confirmation thereof. Tenant shall pay Landlord, as additional rent, an
after hours HVAC charge which is currently in the amount of $38.00 per hour per
floor for said requested services (which charge may increase as set forth
below), which shall be due and payable within thirty (30) days of the use of
such service. After hours HVAC expenses which are charged by Landlord hereunder
shall be consistent with the rates charged to other tenants of the Building and
shall be based on and shall include, by way of illustration but not limitation,
the costs of the power or electricity itself, the costs of running the machinery
and equipment for or in connection with such service, depreciation and wear and
tear, administrative and labor costs and fees, billing and collection costs and
fees, and other such overhead costs and fees.
24. Defaults; Late Payments of Rent. Notwithstanding the terms and
-------------------------------
conditions of Paragraph 10(a)(i) of the Lease, it shall not be an Event of
Default under this Lease unless and until the Rent payable under this Lease or
any other sum of money due of Tenant hereunder is not paid within five (5) days
of the date notice of such late payment is received by Tenant; provided,
however, if one (1) payment due of Tenant hereunder in any one (1) Lease Year is
not made until after notice of such late payment is received by Tenant, then it
shall be an Event of Default hereunder by Tenant if any subsequent payment due
of Tenant hereunder in the same Lease Year is not made within ten (10) days of
the date when due.
25. Landlord's Indemnity. Landlord hereby agrees to indemnify and hold
--------------------
Tenant harmless from and against any and all loss, cost or damage, or claim
thereof, suffered or incurred by Tenant arising out of or resulting from the
willful misconduct or gross negligence of Landlord, its agents, servants,
employees, licensees, contractors or subcontractors.
26. Condition on Landlord's Right to Relocate. Paragraph 30 of this Lease
-----------------------------------------
shall not apply to any portion of the Premises which comprises at least 20,000
rentable square feet on any one (1) floor of the Building.
27. Landlord's Insurance. As a matter of information only, Landlord
--------------------
currently carries, with respect to the Building and Property, (i) casualty
insurance, insuring Landlord's interest in the Building in the amount of
$30,000,000.00, (ii) commercial general liability insurance in the amount of
$2,000,000.00 general aggregate limit per location, and (iii) worker's
compensation insurance in an amount not less than the minimum required by law;
provided, however, that Landlord does not commit to, and shall not be obligated
to, carry such insurance or carry the insurance in the amounts and coverages set
forth above.
28. Electrical Design. Landlord hereby acknowledges that the electrical
-----------------
design to be incorporated into the "Tenant Improvements" (as defined in Exhibit
-------
"C"), as set forth in those certain plans and specifications therefor prepared
- ---
by ________________________ ____________________________, dated ____________,
1996, shall not require the installation of Additional Electrical Equipment
under Paragraph 8(b)(iv) of this Lease.
29. Mortgages. Landlord hereby represents and warrants to Tenant that, as
---------
of the date hereof, there are no mortgages or deeds to secure debt encumbering
the Property.
30. Emergency Generator. Tenant shall have the right to install, at
-------------------
Tenant's sole cost and expense (but without an increase in Monthly Rental), an
emergency electricity generator (the "Generator") in a location on the Property
reasonably acceptable to Landlord and in accordance with plans and
specifications reasonably acceptable to Landlord. Tenant shall maintain the
Generator at Tenant's sole cost and expense in accordance with Paragraph 7(a) of
this Lease. Tenant shall have the right to remove the Generator from the
Property on or before the last day of the Term, subject to the conditions of
Paragraph 7(c) of this Lease. Unless Tenant removes the Generator as set forth
above in this Special Stipulation No. 30, the Generator shall become the
property of Landlord at the expiration or earlier termination of this Lease.
31. Tenant's Access to the Premises. Tenant shall have the right, upon
-------------------------------
reasonable prior notice to Landlord, as part of "Tenant's Work" (as defined in
Exhibit "C"), to enter the Premises during the construction of the Tenant
- -----------
Improvements for the purpose of installing cables and wires in accordance with
plans approved by Landlord in accordance with Exhibit "C"; provided, however,
-----------
that Tenant shall use its reasonable efforts to cause such work to be conducted
in a manner that causes the least amount of disruption to and interference with
the construction of the Tenant Improvements in the Premises, and in the event
such work causes any interference with the construction of the Tenant
Improvements, then it shall be a Tenant Delay to the extent such interference
causes a delay in the completion of the Tenant Improvements.
32. SEC Filing. In the event that Tenant is required by law to refer to
----------
this Lease in any filing with the Securities and Exchange Commission, such
filing shall not be deemed a violation of Paragraph 41 hereof.
-27-
<PAGE>
Initials:
--------
Landlord: _______
Tenant: _______
Initials:
--------
Landlord: _______
Tenant: _______
TABLE OF CONTENTS
-----------------
Item Page
- ---- ----
1. PREMISES AND TERM 1
-----------------
2. RENT 2
----
3. REIMBURSEMENT FOR INCREASES IN OPERATING EXPENSES AND TAXES 2
-----------------------------------------------------------
4. DELIVERY OF THE PREMISES 5
------------------------
5. ACCEPTANCE OF THE PREMISES 6
--------------------------
6. USE 6
---
7. TENANT'S CARE OF THE PREMISES 6
-----------------------------
8. SERVICES 7
--------
9. DESTRUCTION OR DAMAGE TO PREMISES 10
---------------------------------
<TABLE>
<CAPTION>
<S> <C> <C>
10... DEFAULT BY TENANT; LANDLORD'S REMEDIES 11
----------------------------------------
11... ASSIGNMENT AND SUBLETTING 13
----------------------------------------
12... CONDEMNATION 15
----------------------------------------
13... INSPECTIONS 16
----------------------------------------
14... SUBORDINATION 16
----------------------------------------
15... INDEMNIFICATION AND HOLD HARMLESS 17
----------------------------------------
16... TENANT'S INSURANCE 18
----------------------------------------
17... REMEDIES CUMULATIVE 19
----------------------------------------
18... ENTIRE AGREEMENT - NO WAIVER 19
----------------------------------------
19... HOLDING OVER 19
----------------------------------------
20... HEADINGS 19
----------------------------------------
21... NOTICES 19
----------------------------------------
22... HEIRS, SUCCESSORS, AND ASSIGNS - PARTIES 20
----------------------------------------
23... ATTORNEY'S FEES 20
----------------------------------------
24... TIME OF ESSENCE 20
----------------------------------------
25... NO ESTATE IN LAND 20
----------------------------------------
26... SECURITY DEPOSIT 21
----------------------------------------
27... COMPLETION OF THE PREMISES 21
----------------------------------------
28... PARKING ARRANGEMENTS 21
----------------------------------------
29... RULES AND REGULATIONS 22
----------------------------------------
30... RIGHT TO RELOCATE 22
----------------------------------------
31... LATE PAYMENTS 22
----------------------------------------
32... ESTOPPEL CERTIFICATE 23
----------------------------------------
33... SEVERABILITY AND INTERPRETATION 23
----------------------------------------
34... MULTIPLE TENANTS 23
----------------------------------------
35... FORCE MAJEURE 23
----------------------------------------
36... QUIET ENJOYMENT 24
----------------------------------------
37... BROKERAGE COMMISSION; INDEMNITY 24
----------------------------------------
38... EXCULPATION OF LANDLORD 24
----------------------------------------
39... ORIGINAL INSTRUMENT 24
----------------------------------------
40... GEORGIA LAW 24
----------------------------------------
41... NO RECORDATION OF LEASE 24
----------------------------------------
42... HAZARDOUS WASTES 24
----------------------------------------
43... LEASE BINDING UPON DELIVERY 25
----------------------------------------
44... SPECIAL STIPULATIONS 25
----------------------------------------
</TABLE>
Exhibit "A" - Location of Premises Within Building
Exhibit "B" - Space Plan of Premises
Exhibit "C" - Work Letter
Exhibit "D" - Rules and Regulations
Exhibit "E" - Description of the Property
Exhibit "F" - Location of Expansion Space Within Building
Exhibit "G" - Acceptance of Premises Agreement
-28-
<PAGE>
Exhibit 10.2
FIRST AMENDMENT AND WAIVER
TO
AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIRST AMENDMENT AND WAIVER dated as of May 1, 1996 is (but
effective as of April 1, 1996) entered into by and among NOVA Information
Systems, Inc., a Georgia corporation (the "Borrower"), the lenders who are party
to the Credit Agreement referred to below (the "Lenders") and Bank of America
National Trust and Savings Association, as agent for the Lenders (herein, in
such capacity, the "Agent").
W I T N E S E T H:
-----------------
WHEREAS, the Borrower, the Lenders and the Agent are parties to a
certain Credit Agreement dated as of December 8, 1994 as amended and restated as
of January 31, 1996 (herein called the "Credit Agreement");
WHEREAS, the Borrower has requested that the Credit Agreement be
amended;
WHEREAS, subject to the terms and conditions set forth herein, the
Agent and the Lenders are willing to so amend the Credit Agreement.
NOW, THEREFORE, in consideration of the premises, and intending to be
legally bound hereby, the Borrower, the Agent and the Lenders hereby agree as
follows:
SECTION 1. AMENDMENT.
---------
In reliance on the Borrower's warranties set forth in Section 3 below,
---------
as of the date hereof the Credit Agreement is hereby amended as follows:
(a) The definition of "Acquisition Adjustment" set forth in Section 1
of the Credit Agreement is amended by adding the following proviso at the
-------
end of such definition:
"; provided, that no such adjustments may be utilized for more than
--------
eighteen (18) months following consummation of the related
acquisition."
(b) The definition of "Fiscal Year" or "FY" set forth in Section 1 of
the Credit Agreement is amended to read in its entirety as follows:
<PAGE>
""Fiscal Year" or "FY" shall mean any period of twelve consecutive
calendar months ending on December 31st; references to a Fiscal Year
with a number corresponding to any calendar year (e.g., the "1996
Fiscal Year") refer to the Fiscal Year ending on the December 31st
occurring during such calendar year."
(c) The first sentence of Section 3.2 of the Credit Agreement is
amended to read in its entirety as follows:
"The Borrower shall give an irrevocable notice (herein called a
"Borrowing Request") to the Agent of each proposed Borrowing by 10:00
A.M., San Francisco time, in the case of a Base Rate Borrowing, on the
proposed date of such Borrowing, and, in the case of a Eurodollar
Borrowing, on a day which is at least three Business Days prior to the
proposed date of such Borrowing."
(d) Clause (a) set forth in the proviso to Section 6.2 of the Credit
-------
Agreement is amended to read in its entirety as follows:
"(a) in the case of Eurodollar Loans, the Borrower shall give the
Agent (which shall promptly advise each Lender) not less than three
Business Days' prior notice thereof, specifying the Loans to be
prepaid, and the date and amount of prepayment,"
(e) Section 10.1.4 of the Credit Agreement is amended by deleting the
phrase "(including any Fiscal Quarter which is also the end of a Fiscal
Year)" and in its place substituting the following:
"(excluding any Fiscal Quarter which is also the end of a Fiscal
Year)"
(f) With respect to Sections 12.1 through 12.7, inclusive, all
references to "February 29, 1996" are amended to read "March 31, 1996," and
all references to "May 31, 1996" are amended to read "June 30, 1996."
(g) Section 12.5 of the Credit Agreement is amended to read in its
entirety as follows:
-2-
<PAGE>
SECTION 12.5 Capital Expenditures. Not permit Consolidated Capital
--------------------
Expenditures to exceed in any Fiscal Year set forth below the applicable maximum
amount set forth below opposite such Fiscal Year, as follows:
Fiscal Year
Ending Maximum Consolidated
December 31 Capital Expenditures
----------- --------------------
1996 $6,000,000
1997 $7,000,000
1998 and thereafter $7,500,000
provided, that to the extent that Consolidated Capital Expenditures in any
--------
such Fiscal Year are less than the applicable maximum amount set forth
above, the maximum amount set forth above for any subsequent Fiscal Year
may be increased by the amount of such cumulative shortfall up to $500,000.
SECTION 2. WAIVER.
------
In reliance on the Borrower's warranties set forth in Section 3 below,
---------
as of the date hereof the Lenders and the Agent waive the occurrence of any
Default or Event of Default which has resulted from the Borrower's failure (a)
to comply as of December 31, 1995 with the provisions of Section 12.6 of the
Credit Agreement and (b) to deliver a Compliance Certificate with respect to the
fiscal period ending December 31, 1995.
SECTION 3. WARRANTIES.
----------
To induce the Agent and the Lenders to enter into this Amendment, the
Borrower warrants to the Agent and the Lenders as of the date hereof that:
(a) The representations and warranties contained in Section 9 of the
Credit Agreement are materially true and correct with the same effect as
though made on the date hereof;
(b) After giving effect hereto, no Default or Event of Default has
occurred and is continuing; and
(c) No Material Litigation exists except as disclosed on Schedule 9.8
to the Credit Agreement, and since the Effective Date no Material
Litigation Development has occurred with respect to any Litigation so
disclosed on such schedule.
-3-
<PAGE>
SECTION 4. GENERAL.
-------
(a) Terms used but not otherwise defined herein are used herein as
defined in the Credit Agreement.
(b) The terms and provisions of this Amendment shall become effective
upon receipt by the Agent of counterpart signature pages duly executed by
the Borrower and the Required Lenders.
(c) As hereby amended or modified, the Credit Agreement shall remain
in full force and effect and is hereby ratified, approved and confirmed in
all respects.
(d) After the date hereof, all references in the Credit Agreement and
the Loan Documents to "Credit Agreement," "Agreement," "hereof" or the like
shall refer to the Credit Agreement as hereby amended or modified.
(e) This Amendment shall be binding upon the Borrower, the Agent and
the Lenders and shall inure to the benefit of the Borrower, the Lenders and
the Agent and the respective successors and assigns of the Lenders and the
Agent.
(f) This Amendment may be executed in any number of counterparts and
by the different parties on separate counterparts, and each such
counterpart shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same Amendment.
-4-
<PAGE>
Delivered at Chicago, Illinois, as of the date and year first above
written.
NOVA INFORMATION SYSTEMS, INC.
By:
--------------------------------
Title:
--------------------------
BANK OF AMERICA NATIONAL TRUST AND SAVINGS
ASSOCIATION, as agent
By:
--------------------------------
Title:
--------------------------
BANK OF AMERICA ILLINOIS, as lender
By:
--------------------------------
Title:
--------------------------
CREDITANSTALT CORPORATE FINANCE
By:
--------------------------------
Title:
--------------------------
-5-
<PAGE>
EXHIBIT 11.1
NOVA CORPORATION
COMPUTATION OF PRO FORMA EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1995 1996
--------------------------------
<S> <C> <C>
Weighted average Common Stock outstanding during
the period 1,671,296 11,490,802
Cheap Stock (1) 51,022 28,053
Conversion of Preferred Stock into Common Stock 11,876,218 11,876,218
Dilutive effect of common stock equivalents --- 2,575,717
----------- -----------
Total 13,598,536 25,970,790
=========== ===========
Net income (loss) ($1,599,000) $1,115,000
Less: Preferred Stock dividends 140,056 154,595
----------- -----------
Net income (loss) available for Common Stock and
common stock equivalents ($1,739,056) $960,405
=========== ===========
Per share amount ($0.13) $0.04
=========== ===========
</TABLE>
__________
(1) Pursuant to Securities and Exchange Commission Accounting Bulletin No. 83,
common stock and common stock equivalents issued at prices below the
assumed initial public offering price per share ("Cheap Stock") during the
twelve months immediately preceding the initial filing date of the Company's
Registration Statement for its public offering have been included as outstanding
for all periods presented.
<PAGE>
EXHIBIT 11.2
NOVA CORPORATION
COMPUTATION OF HISTORICAL EARNINGS PER SHARE
Three Months Ended
March 31,
-----------------------
1995 1996
---- ----
PRIMARY
Weighted average Common Stock outstanding during
the period 1,671,296 11,490,802
Cheap Stock (1) 51,022 28,053
Dilutive effect of common stock equivalents -- 2,575,717
----------- ----------
Total 1,722,318 14,094,571
=========== ==========
Net income (loss) ($1,599,000) $1,115,000
Less: Preferred Stock dividends 913,826 1,000,388
----------- ----------
Net income (loss) available for Common Stock and
common stock equivalents ($2,512,826) $114,612
=========== ==========
Per share amount ($1.46) $0.01
=========== ==========
FULLY DILUTED
Weighted average Common Stock outstanding during
the period 1,671,296 11,490,801
Cheap Stock(1) 51,022 28,053
Dilutive effect of common stock eqivalents -- 2,575,717
---------- ----------
Total 1,722,318 14,094,571
========== ==========
Net income (loss) $(1,599,000) $1,115,000
Less: Preferred Stock dividends 913,826 1,000,388
---------- ----------
Net income (loss) available for Common Stock and
common stock equivalents $(2,512,826) $114,612
=========== ===========
Pe share amount $(1.46) $0.01
=========== ===========
__________
(1) Pursuant to Securities and Exchange Commission Accounting Bulletin No. 83,
common stock and common stock equivalents issued at prices below the
assumed initial public offering price per share ("Cheap Stock") during the
twelve months immediately preceding the initial filing date of the Company's
Registration Statement for its public offering have been included as outstanding
for all periods presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 441,000
<SECURITIES> 0
<RECEIVABLES> 6,156,000
<ALLOWANCES> 890,00
<INVENTORY> 944,000
<CURRENT-ASSETS> 10,663,000
<PP&E> 7,822,000
<DEPRECIATION> 744,000
<TOTAL-ASSETS> 55,865,000
<CURRENT-LIABILITIES> 10,885,000
<BONDS> 0
0
33,571,000
<COMMON> 124,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 55,865,000
<SALES> 60,199,000
<TOTAL-REVENUES> 60,199,000
<CGS> 46,634,000
<TOTAL-COSTS> 46,634,000
<OTHER-EXPENSES> 11,282,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 490,000
<INCOME-PRETAX> 1,793,000
<INCOME-TAX> 678,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,115,000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
