exv10w7



 







EXHIBIT 10.7




AMENDMENT NO. 3 TO LEASE AGREEMENT




     THIS AMENDMENT NO. 3 TO LEASE AGREEMENT (this “Amendment”) is
made and entered into on the 10th day of November, 2004, by and between SAN ANTONIO TECHNOLOGY
CENTER CORPORATION, a Delaware corporation (“Landlord”), successor-in-interest to Medical
Plaza Partners, Ltd. (“Original Landlord”) and PAN AMERICAN ACCEPTANCE CORPORATION, a
Texas corporation (“Tenant”).



WITNESSETH:




     WHEREAS, Original Landlord and Tenant entered into that certain Office Lease (the “Lease
Agreement”) dated February 18, 1997 covering approximately 17,082 square feet of Rentable Area
located in Suite 1400 and Suite 1225 of the building commonly known as One Technology Center (the
“Building”) in San Antonio, Texas;



     WHEREAS, Landlord and Tenant entered into that certain Amendment No. 1 to Lease Agreement
(“Amendment No. 1”) dated June 10, 2002 wherein the Premises were expanded to include
approximately 1,009 square feet of additional Rentable Area in Suite 1220 of the Building, so
that the Premises then contained approximately 18,091 square feet of Rentable Area;



     WHEREAS, Landlord and Tenant entered into that certain Amendment No. 2 to Lease Agreement
(“Amendment No. 2”) dated February 27, 2003 wherein the Premises were expanded to include
approximately 813 square feet of additional Rentable Area in Suite 1215 of the Building, so that
the Premises then contained approximately 18,904 square feet of Rentable Area, comprised of Suites
1400, 1225, 1220 and 1215 in the Building (the Lease Agreement, as so amended, being hereinafter
referred to as the “Lease”); and



     WHEREAS, Landlord and Tenant desire to extend the Term of the Lease and to further modify
the terms of the Lease in accordance with the terms and conditions herein provided.



     NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00) and
other good and valuable consideration paid by each party hereto to the other, the receipt and
sufficiency of which are hereby mutually acknowledged, Landlord and Tenant hereby agree as
follows:



     1. Term. The Term of the Lease is hereby extended so that the Term shall expire on
June 30, 2010. As used herein, the term “Renewal Term” shall mean the period commencing on
July 1, 2007 and ending on June 30, 2010.



     2. Base Rent.



          A. The Lease is hereby amended to reflect that Tenant’s Base Rent for the months of November
2004, December 2004 and January 2005 shall be $0.00, and Tenant shall not be




-1-









 





     obligated to pay Additional Rent for the months of November 2004, December 2004 and January 2005.



B. Tenant’s Base Rent for the Renewal Term shall be as follows:




	 	 	 	 	 	 	 	 	 
	 	 	Annual Base Rent Rate	 	Monthly
	Period	 	Per Rentable Square Foot	 	Base Rent
	7/01/07 - 6/30/08
	 	$	17.25	 	 	$	27,174.50	 
	7/01/08 - 6/30/09
	 	$	17.75	 	 	$	27,962.17	 
	7/01/09 - 6/30/10
	 	$	18.25	 	 	$	28,749.83	 






     3. Expense Stop. The Lease is hereby amended to reflect that effective July
1, 2007, the first sentence of Paragraph A of Exhibit C shall be amended in its entirety to read as
follows:




In the event that during the term hereof the Office Building Operating Expenses adjusted
as necessary to reflect a 95% occupied Office Building during any Calendar Year shall
exceed the product of $7.75 multiplied by the Rentable Area of the Office Building, Lessee
shall pay in addition to Base Rent as described in Paragraph 2.1 as Additional Rent its
Proportionate Share of such excess. Notwithstanding anything in the Lease to the contrary,
for the purpose of calculating Additional Rent each year during the Renewal Term, the
actual Controllable Office Building Operating Expenses shall be deemed not to increase
more than six percent (6%) per year over the prior year’s actual Office Building Operating
Expenses. For purposes hereof, the term ''Controllable Office Building Operating
Expenses”) shall mean Taxes, insurance and utilities.



     4. Refurbishment Allowance. Landlord shall provide Tenant with a refurbishment
allowance (the “Refurbishment Allowance”) in an amount equal to the product of $4.50
multiplied by the number of square feet of Rentable Area in the Premises, to re-paint and
re-carpet the Premises (the “Refurbishment Work”). The Refurbishment Work shall be performed only by
contractors approved by Landlord (such approval not to be unreasonably withheld or delayed). Tenant
shall not become entitled to any portion of the Refurbishment Allowance until such work for which
Tenant is requesting reimbursement has been completed and Tenant has caused to be delivered to
Landlord all invoices from contractors, subcontractors, and suppliers evidencing the cost of
performing the Refurbishment Work, together with unconditional lien waivers from such parties. Any
unused portion of the Refurbishment Allowance as of November 1, 2005 shall be the property of
Landlord.



     5. Partial Termination. If no uncured default exists either at the time of giving
Tenant’s Partial Termination Notice (as defined below) or upon the Effective Partial Termination
Date (as defined below), then Tenant shall the right (“Tenant’s Partial Termination Right”)
to terminate this Lease with respect to the 813 square feet of Rentable Area (the “Surrender
Space”) outlined on Exhibit A attached hereto and made a part hereof for all purposes
upon the



-2-









 




Effective Partial Termination Date by delivering to Landlord, no later than nine (9) months prior
to the Effective Partial Termination Date, (i) written notice (“Tenant’s Partial Termination
Notice”) of such termination setting forth the effective partial termination date (the
“Effective Partial Termination Date”), and (ii) an amount of money equal to the Termination
Fee (as defined below). Notwithstanding Tenant’s early termination of the Lease pursuant to this
paragraph, Tenant shall remain liable for all obligations which accrue up to the Effective Partial
Termination Date. The term “Termination Fee” shall mean an amount of money equal to the
unamortized portion of (a) any amounts paid by Landlord as construction allowances, architectural
allowances, and brokerage commissions in connection with the expansion of the Premises pursuant to
Amendment No. 2, amortized at 10% per annum, plus (b) $3,658.50, amortized without interest
(representing the portion of the Refurbishment Allowance (as defined in Paragraph 4 above) which is
attributable to the Surrender Space), plus (c) the portion of the brokerage commissions
attributable to the Surrender Space paid in connection with this Amendment, amortized without
interest, plus (d) the amount of Base Rent and Additional Rent which would have been payable by
Tenant for November 2004, December 2004 and January 2005, but for the abatement of such rentals
pursuant to Paragraph 1 of this Amendment (collectively, “Landlord’s Costs”).
Notwithstanding anything herein to the contrary, Tenant’s right to terminate the Lease with respect
to the Surrender Space shall expire on October 1, 2006 (the “Expiration Date”). Tenant’s
failure to deliver Tenant’s Partial Termination Notice and/or the Termination Fee prior to the
Expiration Date shall automatically extinguish Tenant’s Partial Termination Right, time being of
the essence with respect to Tenant’s exercise thereof.




     6. Renewal Option. If no uncured default by exists either at the time of giving
Tenant’s renewal notice or upon commencement of the renewal term, Tenant shall have the right to
renew the term of the Lease for one (1) additional period of five (5) years upon the same terms,
conditions and provisions applicable to the then current term of the Lease (unless otherwise
expressly provided herein), except that the annual Base Rent for the additional term of five (5)
years shall be the product of (i) the number of square feet of Rentable Area then contained in the
Premises multiplied by (ii) an amount equal to the then prevailing market base rent rate per
rentable square foot per annum charged for comparable office space in the Building and other
comparable buildings in the vicinity of the Building. Tenant shall evidence its intent to exercise
its right of renewal by delivering to Landlord written notice (“Tenant’s Notice”) of
Tenant’s desire to renew the Term of this Lease as aforesaid no later than January 1, 2010.
Landlord shall deliver to Tenant a written notice (“Landlord’s Notice”) specifying the Base
Rent rate per square foot of Rentable Area per annum for the additional term of five (5) years.
Tenant shall have thirty (30) days following delivery of Landlord’s Notice in which to notify
Landlord of Tenant’s exercise of its rights to renew the Term hereof. Failure to notify Landlord
within such period or to timely deliver Tenant’s Notice shall automatically extinguish Tenant’s
right to renew, time being of the essence with respect to Tenant’s exercise thereof. Tenant shall
have no right to renew the Term of the Lease following the expiration of the renewal term of five
(5) years detailed herein.



     7. Tenant Estoppel. Tenant hereby confirms and ratifies the Lease, as amended
hereby, acknowledges that Landlord is not in default under the Lease as of the date this Amendment
is executed by Tenant and accepts the Premises “AS IS”, without benefit of further



-3-









 




improvements, except as expressly provided in this Amendment, and without warranty of suitability
or fitness for a particular purpose.




     8. Commissions. Tenant represents that it has dealt with no broker, agent or other
person in connection with this Amendment other than Trammell Crow Company and The Pinnacle Group
(collectively, “Broker”) and that no broker, agent or other person brought about this Amendment
(other than Broker), and Tenant shall indemnify and hold Landlord harmless from and against any and
all claims, losses, costs or expenses (including attorneys’ fees and expenses) by any broker, agent
or other person (except those of Broker) claiming a commission or other form of compensation by
virtue of having dealt with Tenant with regard to this transaction contemplated by this Amendment.
The provisions of this paragraph shall survive the expiration of the Lease Term or any renewal or
extension thereof.



     9. Confidentiality Tenant agrees that Tenant shall not disclose, directly or
indirectly, any of the terms, covenants, conditions or agreements set forth in the Lease, this
Amendment or any subsequent amendments hereto, nor shall Tenant provide the Lease, this Amendment
or any subsequent amendments hereto or any copies of same to any person, including, but not limited
to, any other tenants in the Building or any agents or employees of such tenants, except that
Tenant may disclose such information for valid business, legal and accounting purposes.



     10. Miscellaneous.



          (a) Exhibit J to the Lease Agreement is hereby deleted in its entirety. Paragraphs 9, 10 and
11 of Amendment No. 1 are hereby deleted in their entirety. Paragraphs 9 and 10 of Amendment No. 2
are hereby deleted in their entirety.




          (b) Any capitalized term or phrase used in this Amendment shall have the same meaning as the
meaning ascribed to such term or phrase in the Lease unless expressly otherwise defined in this
Amendment.




          (c) In the event that the terms of the Lease conflict or are inconsistent with those of this
Amendment, the terms of this Amendment shall govern.




          (d) Except as amended by this Amendment, the terms of the Lease remain in full force and
effect.




          (e) Submission of this Amendment for examination does not constitute an offer, right of first
refusal, reservation of, or option for, the Premises or any other premises in the Building. This
Amendment shall become effective only upon execution and delivery by both Landlord and Tenant.




-4-









 





     IN WITNESS WHEREOF, Landlord and Tenant have caused this Amendment to be executed on the
date set forth above.



	 	 	 	 	 	 	 	 	 
	 	 	LANDLORD:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	SAN ANTONIO TECHNOLOGY CENTER CORPORATION,	 	 
	 	 	a Delaware corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	Morgan Stanley Real Estate Advisors, Inc.,
Advisor	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	 	 	By:
	 	/s/ Karen Huston	 	 
	 

	 	 	 	 	 	 	 	 
	\

	 	 	 	 	 	Karen Huston	 	 
	 

	 	 	 	 	 	Vice President	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	PAN AMERICAN ACCEPTANCE

CORPORATION,	 	 
	 	 	a Texas corporation	 	 
	 
	 	 	 	 	 	 	 	 
	 	 	By:	 	/s/ Don Cangelosi	 	 
	 	 	 	 	 	 	 
	 	 	Name: DON CANGELOSI	 	 
	 	 	Title: PRESIDENT	 	 






-5-









 





EXHIBIT A




[Outline of Surrender Space]












-6-