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EXHIBIT 10.20
LEASE
LANDLORD: SDS Properties Liberty Lake L.L.C. (the "Landlord")
TENANT: Spectrum Integrated Services, Inc., a Texas corporation, d/b/a Software
Spectrum (the "Tenant")
DATE OF LEASE: FEBRUARY 28, 2000
The Landlord hereby leases to the Tenant and the Tenant hereby leases from the
Landlord, the premises described herein on the following terms and conditions:
1. PREMISES: The term "Premises" shall refer to the approximately 36,550
square feet of the building, commonly known as 22820 East Appleway,
Liberty Lake, Washington and more specifically described in the floor
plan attached hereto as Exhibit A, being a part of the real property
situated in the unincorporated area of Spokane County, State of
Washington, described as follows:
TR 1 BSP 87 - 18
The parties understand and agree, however, that Tenant will not have
full possession of the Premises, and therefore is not leasing the
entire Premises, from the commencement of this Lease. The parties
further agree that Tenant shall lease the Premises in accordance with
the following schedule, and that, prior to August 1, 2000, the term
"Premises" shall mean that portion of the above-referenced building
actually leased by Tenant:
(a) 16,615 square feet labeled as Areas No. 1 and 2 on Exhibit A
commencing April 1, 2000;
(b) an additional 9,038 square feet labeled as Area No. 3 on
Exhibit A, commencing May 1, 2000; and
(c) an additional 10,889 square feet labeled as Area No. 4 on
Exhibit A, commencing August 1, 2000.
2. PARKING, COMMON AREAS AND ACCESS: The Tenant and its invitees shall
have the non-exclusive right to the use of the common areas, including
parking areas, sidewalks and such other areas and facilities Landlord,
all subject to the terms and conditions of this lease and further
subject to the rules and regulations for the use thereof as from time
to time prescribed by the Landlord and provided to the Tenant in
writing. Notwithstanding the foregoing, no rules or regulations
prescribed by Landlord shall materially decrease Tenant's rights or
increase Tenant's obligations hereunder. Landlord has the right, from
time to time, to close any part of the common areas as may be necessary
for the purposes of making improvements, performing maintenance or
doing repairs; provided, however, that Landlord shall first provide
Tenant with ten (10) business days written notice of such closure, and
further provided that no such closure shall occur during Tenant's
regular business hours. Landlord will at all times make available to
the Tenant and its employees and invitees, reasonable access to the
parking areas of the property on which the Premises are located,
including, without limitation, at least 147 parking spaces. The parties
agree and acknowledge that 17 of such spaces will be in the north lot
(fronting Appleway Road), and that Landlord has applied for and is
using its best efforts to secure a right to use such land for parking
under a license agreement with Spokane County that can be revoked by
Spokane County at its option. Landlord does not assume any liability or
responsibility for loss of such parking spaces if Spokane County should
revoke such privilege; if such privilege is revoked, the minimum number
of parking spaces Landlord shall provide hereunder will be 130, and the
parties will negotiate in good faith an appropriate adjustment in Rent
payable hereunder as a result of such reduction in parking spaces.
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3. CLEANING COMMON AREAS: The Landlord will cause the parking lot and
other common areas to be maintained in good repair and in a clean,
sanitary and safe condition and will cause snow and ice to be removed,
all according to the general standards of the community. Landlord shall
cause the sidewalks to be kept free from snow, ice and debris.
4. TERM OF LEASE: This lease shall commence April 1st, 2000 and shall
terminate on the last day of March 31st, 2005.
5. SURRENDER ON TERMINATION: At the expiration of the term of this lease,
or of any renewal or extension thereof, or on the earlier termination
of this lease, the Tenant will surrender the leased premises in a clean
and neat condition and in as good condition as when received,
reasonable wear and tear and damage by fire and casualty excepted. The
Tenant may remove its trade fixtures and if the Landlord so directs,
shall remove its trade fixtures and if such fixtures are removed shall
cause the Premises to be repaired or will pay to the Landlord such
reasonable sum as will defray the cost of repair necessitated by such
removal. Landlord shall have the right to advertise and place for rent
or for sale signs on the premises within three months of the expiration
of this lease.
6. HOLDING OVER: If the Tenant shall hold over after the expiration of
this lease without a new lease having been entered into, then the
Tenant shall be on a month-to-month tenancy, but otherwise on all of
the same terms and conditions as provided in this lease except that all
rents, including the base rent, and all additional charges, will be 20
percent greater than they were on a monthly basis immediately prior to
the expiration of this lease.
7. RENT: "Rent" shall mean Basic Rent and Additional Rent, as defined
herein:
(a) BASIC RENT: The Tenant agrees to pay to the Landlord as basic
rent ("Basic Rent") the following amounts which have been
calculated in accordance with Exhibit D:
$13,222.77 PER MONTH BEGINNING APRIL 1ST, 2000 -
APRIL 31ST, 2000 THEN,
$20,415.51 PER MONTH BEGINNING MAY 1ST, 2000 -
JULY 31ST, 2000 THEN,
$29,087.71 PER MONTH BEGINNING AUGUST 1ST, 2000 -
SEPTEMBER 30TH, 2001 THEN,
$29,818.71 PER MONTH BEGINNING OCTOBER 1ST, 2001 -
MARCH 31ST, 2003 THEN,
$30,571.64 PER MONTH BEGINNING APRIL 1ST, 2003 -
SEPTEMBER 30TH, 2004 THEN,
$31,347.16 PER MONTH BEGINNING OCTOBER 1ST, 2004 -
MARCH 31ST, 2005
(b) ADDITIONAL RENT: Beginning January 1, 2002, as additional
rent, the Tenant will pay one hundred percent (100%) of the
amount by which the real property taxes and fire insurance
premiums on the Premises for the year 2002 exceed the amount
of such taxes and premiums for the base year 2001 (the
"Additional Rent"). Landlord shall furnish Tenant with a
written statement of the Estimated Additional Rent for the
Premises on or before December 1, 2001 and each December 1
thereafter. Tenant shall pay Landlord the Additional Rent in
equal monthly installments, based upon the Estimated
Additional Rent provided by Landlord. Within ninety (90) days
after the close of each calendar year during the lease term
during which Tenant is paying Additional Rent, the Landlord
shall deliver to the Tenant a written statement setting forth
the Actual Additional Rent for the preceding calendar year. If
such Actual Additional Rent exceeds the Estimated Additional
Rent for such year, Tenant shall pay the amount of such excess
to Landlord as Additional Rent within forty-five (45) days
after receipt of such statement by Tenant. If such statement
shows such costs to be less than the Estimated Additional
Rent, then the amount of such overpayment by Tenant shall be
credited by Landlord to the next immediate Rent payable by
Tenant. Tenant shall have the right, at Tenant's expense, to
audit Landlord's books and records regarding Actual Additional
Rent. If the audit reveals that Landlord's statement is
determined to be in error by more than three percent (3%), the
amount of Additional Rent payable by Tenant shall be
recalculated based on the results of such audit. If this lease
terminates during the middle of a calendar year, the amount of
any adjustment between Actual Additional Rent and Estimated
Additional Rent with respect to the year in which such
termination occurs shall be prorated. Any amount payable by
Landlord to Tenant or by Tenant to Landlord with respect to
such adjustment shall be payable within forty-five (45) days
of the delivery by Landlord to Tenant of the Statement of
Actual Additional Rent with respect to such year.
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8. PAYMENT OF RENT: All Rent and other sums due to the Landlord under the
provisions of this lease shall be paid to the Landlord or agent. Rent
shall be considered paid when received in good funds by the Landlord or
his authorized agent at STS Properties Liberty Lake L.L.C. c/o SDS
Realty, 202 East Trent, Spokane, Washington 99202. All Rent shall be
paid in advance on the first business day of each calendar month. The
Rent for any partial month at the beginning or ending of this lease
shall be pro-rated on a daily basis. Any Rent not paid within 5 days of
the due date shall be subject to interest at the rate of ten percent
(10%) or the maximum rate allowed by law, whichever is greater, with
said interest to be paid at the same time the Rent is paid. All Rent
paid shall apply to the first Rent coming due.
9. TENANT DEPOSIT: The Landlord acknowledges receipt from the Tenant of
the sum of $25,000.00, which sum will be retained by the Landlord and
held in escrow as a deposit to guarantee performance by the Tenant of
all the Tenant's obligations under this lease. If, after the completion
of the first year of this lease, the Tenant is not indebted to the
Landlord for any past-due rent, the Landlord will apply the deposit to
the next month's Rent when such Rent becomes due or otherwise will
refund such deposit to the Tenant. The amount of the deposit, or the
retaining of the deposit, does not in any way limit the rights of
either of the parties or any other legal remedies which they may have.
10. INTEREST ON DELINQUENCIES: Any delinquent rent or other charges owed by
the Tenant shall bear interest from the date due until paid at the
maximum rate allowed by law.
11. UTILITIES AND COMMON AREA EXPENSES: The Tenant shall arrange and be
responsible and pay for gas, electricity, heat, air conditioning,
janitorial and window cleaning used by Tenant. The Landlord shall be
responsible for and pay property taxes and insurance, refuse removal,
water, sewer, snow removal, landscape maintenance and all other common
area expenses. These expenses will be paid by the Landlord and are
included in the monthly Basic Rent per Paragraph 7(a). Landlord shall
not be liable for the failure of any such services for any reason
whatsoever, unless due to Landlord's failure to arrange or pay for such
services, or Landlord's negligence.
12. SIGNS: The Tenant may maintain such individual signs as are consistent
with the general design and decor of the area and are approved by the
Landlord prior to their erection, which consent shall not be
unreasonably withheld or delayed. If, with the Landlord's approval, the
Tenant's signs are integrated with the general identifying sign
established by the Landlord, then Tenant will be responsible for the
maintenance of its sign, but for that purpose must engage the sign
company designated by the Landlord. Signing within the Premises shall
be subject to the prior written consent of Landlord, which consent
shall not be unreasonably withheld or delayed.
13. PREMISES NOT COMPLETED: The parties hereto agree and acknowledged that
at the time of entry into this lease, the Premises have not been
completed, and the Landlord agrees that it will complete the Premises
in accordance with paragraph 61 below.
14. USE OF PREMISES: The Premises will be used by the Tenant only for the
following purpose of office space and a telephone call center and for
such other lawful purpose as may be consented to by the Landlord in
writing, which consent shall not be unreasonably withheld or delayed.
15. SOLICITATIONS OF HANDBILLS: The Tenant will not solicit business or
distribute handbills in any common areas.
16. MUSIC, NOISE: The Tenant will not broadcast announcements, music or
otherwise in a manner that can be heard outside of the Premises.
17. FIRE RISK: The Tenant shall not engage in any activity nor store any
materials which are prohibited by law or regulation or the rulings of
the fire district or the fire marshal or the reasonable regulations
promulgated by the Landlord and communicated to Tenant in writing. If,
with the consent of the Landlord, the Tenant
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lawfully maintains any material which increases the fire insurance
rates, the Tenant shall pay such increased cost to the Landlord on
written demand.
18. REPAIRS AND MAINTENANCE BY LANDLORD: The Landlord shall be responsible
for the maintenance and repair of the roof, walls, foundation, and
structural parts of the Premises, provided that the Tenant shall be
liable for any damage thereto occasioned by the Tenant's use and
occupancy of the Premises or by the negligence of the Tenant, its
agents or employees or invitees.
19. MAINTENANCE AND REPAIRS BY TENANT: The Tenant shall, at his own
expense, keep and maintain the interior of the Premises in a neat,
clean condition and in good repair including promptly replacing any
broken or cracked window glass including glass located in both interior
and exterior walls or partitions. Tenant shall replace all necessary
lighting ballasts, bulbs or tubes and furnace filters. The Tenant shall
be responsible for the maintenance and repair of the heating and
cooling systems, interior plumbing and electrical systems; provided,
however, that Tenant shall have no responsibility for the maintenance
and repair of such systems until Landlord has provided Tenant with a
certificate of an independent inspector, reasonably satisfactory to
Tenant, that such systems are in reasonably good operating condition.
20. TENANT REPAIRS BY LANDLORD: If the Tenant fails or refuses to perform
any repair or maintenance required of it under this lease promptly
after written notice from the Landlord, then the Landlord may make or
cause to be made such repairs or maintenance, and the Tenant will
promptly reimburse the Landlord therefor.
21. TENANT ALTERATIONS: The Tenant shall have the right to make
alterations, additions and improvements to the interior of the
Premises, according to designs approved by the Landlord in writing,
which approval shall not be unreasonably withheld or delayed. No
structural alterations may be made by Tenant without Landlord's prior
written consent, which consent shall not be unreasonably withheld or
delayed. Any alterations, additions and improvements which may be made
or installed by Tenant shall remain upon the Premises and, at the
termination of this lease, shall be surrendered with the Premises as a
part thereof, provided, however, that all personal property, fixtures
and equipment placed on the Premises by the Tenant may or shall be
removed as herein provided. Any increase in real estate taxes resulting
from Tenant alterations or improvements shall be paid by Tenant as
Additional Rent. Notwithstanding the foregoing, Tenant shall have the
right to make nonstructural alterations which do not exceed Ten
Thousand Dollars ($10,000) in any one instance and minor decorations to
the Premises, without obtaining Landlord's written consent, but Tenant
shall deliver to Landlord copies of all plans and drawings related to
any such alterations. Further, Tenant shall have the right to construct
an underground trench from the Premises to the edge of the property on
which the Premises are situated, as reflected in the plans attached
hereto as Exhibit B.
22. INSURANCE DURING ANY TENANT CONSTRUCTION: In the performance of any
such alterations or improvements by Tenant under paragraph 21, the
Tenant will carry public liability insurance and workman's compensation
insurance and will in all respects comply with all applicable laws and
regulations and will indemnify and save the Landlord harmless from any
liens for labor, materials, or supplies which may arise by reason of
such alterations or improvements.
23. LIABILITY INSURANCE AND INDEMNITY:
(a) BY TENANT: The Tenant agrees to secure and maintain property
damage insurance and personal liability insurance with limits
of at least $100,000 property damage and $1,000,000/$3,000,000
bodily injury, naming the Landlord and Landlord's agent as an
additional insured and providing the Landlord or his agent
with a certificate of insurance in force including the name of
the insurance company, the effective date of the policy,
coverage and limits provided. Said insurance shall require 30
days notification to Landlord by the insurance company prior
to cancellation. The Tenant agrees to indemnify and save the
Landlord and Landlord's agent harmless from and against any
and all claims of any nature whatsoever arising from any act,
omission or negligence of the Tenant or the Tenant's
contractors, licensees, agents, servants, employees or
invitees or arising from any accident, injury or damage caused
to any person or property occurring in or about the Premises
if such accident, damage or injury is claimed to have resulted
from an act for which the
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Tenant is allegedly responsible; except to the extent that any
such accident, damage or injury results from the negligence or
acts or omissions of the Landlord. This indemnity and hold
harmless agreement includes reasonable costs and reasonable
expenses of defense.
(b) BY LANDLORD: The Landlord agrees to secure and maintain in
full force and effect adequate insurance for damage to or
destruction of the building in which the Premises are located,
in such amounts as may be reasonably satisfactory to both
parties. Landlord will provide Tenant with a certificate of
insurance evidencing such coverage as soon as practicable
following the execution of this lease, but in any event by
April 1, 2000.
24. TENANT RISK: The Tenant will use and occupy the leased premises and the
common areas with respect to which it has a right of use at its own
risk and agrees that the Landlord shall have no responsibility or
liability for any loss or damage sustained by the Tenant including loss
or damage of or to its fixtures or its personal property, except to the
extent caused by the negligence or acts or omissions of the Landlord.
25. WAIVER OF SUBROGATION: Each party hereto waives any and every claim
which arises or may arise in its favor and against the other party
hereto during the term of this lease or any renewal or extension
thereof for any and all loss of, or damage to, any of its property
located within or upon, or constituting a part of, the premises leased
to Tenant hereunder, which loss or damage is covered by valid and
collectible fire and extended coverage insurance polices, to the extent
that such loss or damage is recoverable under said insurance policies.
Said mutual waivers shall be in addition to, and not in limitation or
derogation of, any other waiver or release in this lease with respect
to any loss of, or damage to, property of the parties hereto. In as
much as the above mutual waivers preclude the assignment of any
aforesaid claim by way of subrogation (or otherwise) to an insurance
company (or any other person), each party hereto hereby agrees
immediately to give each insurance company which has issued to it
policies of fire and extended coverage insurance, written notice of the
terms of said mutual waivers, and to have said insurance policies
properly endorsed, if necessary, to prevent the invalidation of said
insurance overages by reason of said waivers.
26. DAMAGE OR DESTRUCTION: If the Premises shall be damaged, destroyed or
rendered untenantable by fire or other casualty, either wholly or in
part, such that Tenant cannot reasonably continue to carry out its
business activities from the Premises until such damage is repaired,
which repairs Landlord reasonably believes can be carried out within
one hundred eighty (180) days from the casualty, and provided such
repairs do not actually require more than two hundred ten (210) days
from the date of the casualty to be completed, then this lease shall
not terminate as a result of such casualty. In the event that Landlord
does elect to rebuild or repair said Premises, it shall give notice to
Tenant within thirty (30) days of such casualty having occurred, and
will proceed diligently and with all reasonable dispatch to make and
complete such repairs or to rebuild. Otherwise, each party may, by
written notice to the other, either (a) terminate this lease within
sixty (60) days after (i) such casualty or (ii) the end of such two
hundred ten (210) day period, as applicable; or (b) keep this lease in
effect, in which case Landlord shall restore the Premises to their
previous condition. During any period in which any part or all of the
Premises is destroyed or untenantable, Basic Rent and any Additional
Rent shall be abated in the same proportion as the untenantable portion
of the Premises bears to the whole thereof. If this lease is terminated
as a result of any such damage or destruction, the lease shall be
considered terminated as of the date of said casualty.
27. ASSIGNMENT AND SUBLETTING: The Tenant shall not assign or sublet the
whole or any part of the Premises without the prior written consent of
the Landlord, which consent shall not be unreasonably withheld or
delayed, and in giving or withholding consent, the Landlord will take
into consideration the effect of such assignment or subletting on the
entire property described above. In the event that consent is given to
an assignment or subletting, the Tenant shall nevertheless remain
liable to the Landlord for the full amount of rent due according to the
terms of this lease and the Tenant's liability shall continue despite
any modification in this lease which shall be made at the request of,
or by agreement with, any assignee or sub-Tenant.
In the event that the Tenant should desire to assign this lease or
sublet the Premises or any part thereof, the Tenant shall give the
Landlord written notice at least thirty (30) days in advance of the
date on which Tenant desires to make such assignment or sublease, which
notice shall specify: (a) the name and business
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of the proposed assignee or sublessee, (b) the amount and location of
the space affected, (c) the proposed effective date and duration of the
subletting or assignment, and (d) the proposed rental to be paid to
Tenant by such sublessee or assignee. Landlord shall then have a period
of fifteen (15) days following receipt of such notice within which to
notify Tenant in writing that Landlord elects either (i) to permit
Tenant to assign or sublet such space, or (ii) to withhold consent to
Tenant's assignment or subleasing such space and to continue this Lease
in full force and effort as to the entire Premises.
If Tenant is a corporation, then any transfer of this Lease by
operation of law, merger, consolidation or liquidation shall constitute
an assignment for the purpose of this paragraph; provided, however,
that as long as Tenant is a publicly owned company, Landlord's consent
to an assignment of this Lease will not be required as a result of
merger, consolidation or liquidation, or any change in the ownership
of, or power to vote, the majority or controlling interest of Tenant's
outstanding voting stock unless: (a) such change is the result of any
reorganization or merger by which the Tenant's rights under this Lease
are transferred to a subsidiary or affiliate or any other entity in
which Tenant has controlling interest (in which case Tenant agrees to
guaranty performance under this Lease and upon receipt of such
guaranty, in form and content satisfactory to Landlord, Landlord's
consent will automatically be deemed to be given) or (b) such change
results from Tenant's merger with, or purchase by, any competitor of
Landlord.
Notwithstanding the foregoing, the Landlord's consent to an assignment
of this lease will not be required for any assignment to Tenant's
ultimate parent company or to any entity that is a wholly-owned
subsidiary of the Tenant's ultimate parent company.
28. LANDLORD'S RIGHT OF ENTRY: The Landlord and its authorized agent shall
have the right to enter the Premises during normal business hours for
the purpose of inspecting the general condition and state of repair of
the Premises and for the purpose of making any repairs required of the
Landlord; provided, that the Landlord first gives Tenant twenty-four
(24) hours written notice of its intent to enter. Further, during any
period of month-to-month tenancy and during the final three (3) months
of the term of this lease (or any renewal thereof) upon twenty-four
(24) hours written notice, the Landlord and its authorized agent shall
have the right to enter the Premises to show the Premises to any
prospective tenant, unless Tenant has renewed this lease. Landlord
shall indemnify and hold Tenant harmless from and against all loss,
cost, expense, claim or damage arising from any negligent act or
omission of Landlord or any employee, agent or invitee of Landlord
while in the Premises.
29. EMERGENCY ENTRY: In the event of an emergency the Landlord and its
authorized agents or public authorities shall have the right to enter
the Premises at any time to prevent damage to the Premises or other
parts of the above described property or to preserve the public peace.
Landlord shall have a key to the Premises; if the Tenant changes locks,
Tenant shall provide Landlord new keys. Landlord shall indemnify and
hold Tenant harmless from and against all loss, cost, expense, claim or
damage arising from any negligent act or omission of Landlord or any
employee, agent or invitee of Landlord while in the Premises.
30. SUBSTANTIAL CONDEMNATION: If during the term of this lease or any
extension or renewal thereof, all or a substantial part of the Premises
should be taken for any public or quasi-public use under any
governmental law, ordinance or regulation or by right of eminent
domain, or should be sold to the condemning authority under threat of
condemnation, this lease shall terminate, effective as of the date of
taking said premises by the condemning authority or purchaser, and
Tenant shall have no further obligations hereunder, including any
obligation to pay Rent, from such effective date forward.
31. PART CONDEMNATION: If less than a substantial part of the Premises
shall be taken for any public or quasi-public use under any
governmental law, ordinance or regulation, or by right of eminent
domain, or should be sold to the condemning authority under threat of
condemnation, this lease shall not necessarily terminate but the
Landlord may forthwith, at its sole expense, restore and reconstruct
the buildings and other improvements situated on the Premises provided
such restoration and reconstruction shall make the same reasonable
Tenantable and suitable for the uses for which the Premises are leased
as provided above. The rent payable hereunder during such
reconstruction and the unexpired portion of this lease shall be
adjusted equitably. If the Landlord does not so restore or reconstruct,
this lease shall then terminate with any obligation of one party to the
other ended.
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32. PROCEEDS OF CONDEMNATION: The Landlord and Tenant shall each be
entitled to receive and retain such separate awards and portions of
lump sum awards as may be allocated to their respective interests in
any condemnation proceedings. The termination of this lease shall not
affect the rights of the respective parties to such awards.
33. DEFAULT BY TENANT: The following events shall constitute events of
default by Tenant:
(a) The failure of the Tenant to pay any installment of rent or
any other sums which are due from the Tenant to the Landlord
in accordance with any provisions of this lease within 5 days
after written notice from Landlord;
(b) The failure of the Tenant to comply with any term, condition
or covenant of this lease if the same is not remedied within
30 days after written notice from the Landlord, or, if such
failure cannot reasonably be remedied within 30 days, if the
Tenant shall not have commenced remedial action within 30 days
and thereafter pursued remedial action with diligence and
dispatch;
(c) If the Tenant shall become insolvent or shall make a transfer
in fraud of creditors or shall make a general assignment for
the benefit of creditors or commit any act of bankruptcy;
(d) If the Tenant shall file a petition under any section or
chapter of the bankruptcy laws of the United States of America
or shall be adjudged a bankrupt or insolvent in any
proceedings filed by or against the Tenant; or
(e) If a receiver shall be appointed for the Tenant or for all or
substantially all of the assets of the Tenant.
34. REMEDIES OF THE LANDLORD: Upon the occurrence of any such event of
default by the Tenant, the Landlord shall have the option to pursue any
one of the following remedies without further notice or demand:
(a) Terminate all rights of the Tenant under this lease, in which
event the Tenant shall immediately surrender the Premises to
the Landlord and if the Tenant fails to do so the Landlord
may, without prejudice to any other remedy, enter upon the
Premises by any lawful means and remove the Tenant and its
property therefrom or retain the property asserting whatever
lien for rent the Landlord may have upon such property, and
the Tenant agrees to pay to the Landlord upon demand the
amount of all loss or damage which the Landlord may suffer by
reason of such termination whether through inability to relet
the premises on the same or more favorable terms to the
Landlord or otherwise; or
(b) The Landlord may enter upon the Premises and do or perform
whatever the Tenant was obligated to do under the terms of the
lease and the Tenant shall forthwith reimburse the Landlord
the cost thereof and the Landlord shall, in such event, incur
no liability to the Tenant for any such action, whether caused
by the negligence of the Landlord or otherwise.
35. ATTORNEY FEES: In pursuing any remedies (including the giving of
notices of default) the prevailing party shall be entitled to recover
from the other party all of its costs and reasonable expenses incurred,
including reasonable attorney fees, through and including appeal. The
pursuit of any remedy provided by this lease shall not limit or
preclude any other remedies provided by law.
36. RENTS AFTER DEFAULT: If this lease shall be terminated as herein
provided, the Tenant shall nevertheless remain liable for all rents due
the Landlord and agrees to pay the same on the dates that the same are
due, together with all other sums due the Landlord as provided herein,
but less the net amount of any rents which the Landlord may receive as
result of reletting all or any part of the leased premises. In the
alternative at the election of the Landlord, the Landlord may recover
from the Tenant as damages such a sum as, at the time of such
termination, represents the amount of the excess, if any, of the then
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value of the total rents reserved from the remainder of the lease term,
less the amount of the reasonable rental value of the premises for the
remainder of the lease term.
37. QUIET ENJOYMENT: The Tenant, subject to the terms of this lease and on
payment of the rent reserved and other sums due the Landlord as herein
provided, and upon observing, keeping and performing all of the terms
and conditions of this lease required of the Tenant, shall peaceably
and quietly have, hold and enjoy the Premises during the full term of
this lease and any extension or renewal hereof, provided that with
respect to any services to be furnished by the Landlord, the Landlord
shall in no event be liable for failure to furnish the same if
prevented from so doing by strike, walkout, unavailability of labor or
supplies or other cause beyond the Landlord's reasonable control or for
any cause due to the act or neglect of the Tenant or its agents or
employees or any person claiming by, through or under the Tenant.
38. SUCCESSOR LANDLORD: Any covenants and agreements binding upon the
Landlord as provided in this lease shall be binding upon the Landlord
only with respect to and during his ownership of the premises, and if
the ownership of the premises shall be transferred, then from and after
the effective date of the transfer all obligations of the Landlord
shall be the sole obligation of the successor Landlord.
39. MORTGAGES: The Landlord has full authority to subordinate the interest
of the Tenant to any mortgage, deed of trust or other lien placed upon
the Premises and the Tenant will, upon receipt of a reasonable request
from Landlord, execute any subordination instruments as may be
appropriate to carry out this subparagraph provided that in such
subordination this lease shall be recognized by the mortgagee or
beneficiary under a deed of trust, and the rights of the Tenant shall
remain in full force and effect during the term of this lease so long
as the Tenant shall continue to perform all of its agreements under
this lease.
40. WAIVER OF DEFAULT: No waiver by the parties hereto of any default or
breach of any term, condition or covenant of this lease shall be deemed
to be a waiver of any subsequent default of breach of the same or any
other term, condition or covenant of this lease
41. DEFAULT BY LANDLORD: Landlord shall in no event be in default in the
performance of any of its obligations under this lease unless (a)
Landlord has received written notice of its default from the Tenant and
(b) Landlord either (i) has failed to perform such obligation within 30
days after receipt of such notice or (ii) if such obligation can not
reasonably be performed within such thirty (30) day period, has failed
to commence performance of such obligation and/or to diligently pursue
completion of such performance within such thirty (30) day period.
42. APPLICABLE LAW: This lease shall be construed and enforced according to
the laws of the State of Washington, without regard to the conflicts of
law principles thereof, and the venue of any action brought with
respect to this lease may be laid in Spokane County, Washington.
43. FORCE MAJEURE: Landlord or Tenant shall not be required to perform any
term, condition or covenant in this lease so long as such performance
is delayed or prevented by force majeure, which shall mean Acts of God,
strikes, lockouts, material or labor restrictions by any governmental
authority, civil riot, floods and any other cause not reasonably within
the control of Landlord or Tenant and which, by the exercise of due
diligence, Landlord or Tenant is unable, wholly or in part, to prevent
or overcome.
44. EXHIBITS: All exhibits, attachments, annexed instruments and addenda
referred to herein shall be considered a part hereof for all purposes
with the same force and effect as if copies at full length herein. The
following exhibits are part of this lease: Exhibit A, Exhibit B, and
Exhibit C.
45. USE OF LANGUAGE: Words of any gender used in this lease shall be held
and construed to include any other gender, and words in the singular
shall be held to include the plural, unless the context otherwise
requires.
46. CAPTIONS: The captions or headings of paragraphs in this lease are
inserted for convenience only, and shall not be considered in
construing the provisions hereof if any questions of intent should
arise.
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47. SUCCESSORS: The terms, conditions and covenants contained in this
lease, shall apply to, inure to the benefit of, and be binding upon the
parties hereto and their respective successors in interest and legal
representatives except as otherwise herein expressly provided. All
rights, powers, privileges, immunities and duties of Landlord under
this lease, including but not limited to any notices required or
permitted to be delivered by Landlord to Tenant hereunder, may, at
Landlord's option, be exercised or performed by Landlord's agent or
attorney.
48. TIME IS OF THE ESSENCE.
49. NOTICES: Any notice or document required or permitted to be delivered
pursuant to this lease shall be deemed to have been delivered, whether
actually received or not, when the same is deposited in the United
States Mail, first class, postage prepaid, registered or certified
mail, return receipt requested, addressed to the Landlord or the Tenant
at his address stated below, or at such other address as may have been
specified by notice given herein provided. Notice given in any other
manner shall be effective only if given in the manner in which legal
process may be served provided by law or if receipt thereof is
acknowledged in writing.
(a) LANDLORD'S ADDRESS: SDS Properties Liberty Lake L.L.C. c/o SDS
Realty, 202 East Trent, Suite 202 Spokane, WA 99202.
(b) TENANT'S ADDRESS: Software Spectrum, 2140 Merritt Drive,
Garland, Texas 75041, Attention: Facilities Director, with a
copy to General Counsel at the same address.
50. TELEPHONE SERVICE: Tenant shall, at his own expense, install and
maintain his own telephone service.
51. TENANT'S AGENT: Larry Callahan is designated as Tenant's agent with
respect to this lease, until Landlord is notified in writing of change.
52. ESTOPPELS: If requested by Landlord, Tenant shall execute estoppel
certificates stating the status of this lease.
53. RIDERS: None.
54. LANDLORD'S IMPROVEMENTS: Prior to April 1, 2000, Landlord shall, at its
own expense, undertake the modifications, decoration and improvements
(the "Improvements") described and detailed on Exhibit C of this lease.
Landlord's plans and specifications for such Improvements are attached
as part of Exhibit C. If Landlord does not complete the Improvements
prior to April 1, 2000, then Landlord and Tenant shall negotiate in
good faith an equitable abatement of Rent during the time from April 1,
2000 until such Improvements are complete, but in no event will the
commencement date and expiration date of this lease be extended or
adjusted as a result of such delay.
55. ENVIRONMENTAL: Landlord shall comply, and take all necessary actions to
cause the building to comply, with all applicable federal, state and
local requirements relating to the protection of public health, safety
and welfare, and with all applicable environmental laws relating to the
building. Landlord is responsible for, and agrees to hold harmless,
indemnify and defend Tenant from any and all claims, costs and
liabilities related to the presence of toxic or hazardous substances,
in or on the leased premises or the building, unless caused by Tenant.
Tenant shall comply, and take all necessary actions to cause its
operations on the Premises to comply, with all applicable federal,
state and local requirements relating to the protection of public
health, safety and welfare, and with all applicable environmental laws
relating to the Premises. Tenant is responsible for, and agrees to hold
harmless, indemnify and defend lessor from any and all claims, costs
and liabilities related to Tenant's delivery of toxic or hazardous
substances onto the Premises of Tenant's acts which solely result in
the violations of any such laws. The indemnification obligations set
forth in this paragraph shall survive the termination or expiration of
this lease.
56. OPTION TO EXTEND: Landlord hereby grants to Tenant an option to extend
the term of this lease, upon the same terms and conditions, for one (1)
renewal term of five (5) years (except that the Basic Rent shall be
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adjusted in accordance with this paragraph), which extended term shall
commence on April 1st, 2005, and end on March 31st, 2010. The monthly
Basic Rent for such renewal term shall be negotiated by Tenant and
Landlord, acting in good faith. Tenant shall exercise its option to
extend no later than 150 days prior to the expiration of the current
term by delivery of written notice to Landlord of Tenants decision to
extend the lease. In the event that the Tenant is in default of any of
the terms and conditions of said lease then this option to extend shall
be void and non-binding by the Landlord.
57. AUTHORIZED SIGNERS: The person signing this Agreement on behalf of the
Tenant and on behalf of the Landlord, respective, specifically
represents that he or she has the authority to do so.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, this lease, consisting of this and the 10 preceding pages,
on the date first written on page one hereof was executed at Spokane, Washington
by the Landlord and the Tenant. The riders and exhibits referred to herein are
incorporated into this document by this reference.
LANDLORD: SDS PROPERTIES LIBERTY LAKE TENANT: SPECTRUM INTEGRATED SERVICES,
L.L.C. INC., D/B/A SOFTWARE SPECTRUM
By: /s/ STEVE SCHMAUTZ By: /s/ ROBERT D. GRAHAM
--------------------------------- ----------------------------------
Name: Steve Schmautz Name: Robert D. Graham
------------------------------- --------------------------------
Title: Gen Ptnr Title: Vice President
------------------------------ -------------------------------
STATE OF WASHINGTON )
County of Spokane ) ss.
)
On this 10th day of March, 2000, before me, the undersigned, a Notary
Public in and for the State of Washington, duly commissioned and sworn,
personally appeared Steve Schmautz to me known to be the Gen Ptnr of SDS
Properties Liberty Lake L.L.C., the limited liability company that executed the
foregoing instrument, and acknowledged the said instrument to be the free and
voluntary act and deed of said limited liability company, for the uses and
purposed herein mentioned, and on oath stated that he is authorized to execute
the said instrument.
Witness my hand and official seal hereto affixed the day and year first written
above.
/s/ SHERI L. MYERS Sheri L. Myers
- ---------------------------------------------------
Notary Public in and for the State of Washington
Residing at Spokane County
--------------
Commission Expires 9/15/00
-------
STATE OF TEXAS )
County of Spokane ) ss.
)
On this 14th day of March, 2000, before me, the undersigned, a Notary
Public in and for the State of TEXAS, duly commissioned and sworn personally
appeared Robert D. Graham to me known to be the Vice President of Spectrum
Integrated Services, Inc., d/b/a Software Spectrum, the corporation that
executed the foregoing instrument, and acknowledged the said instrument to be
the free and voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that he is authorized to execute
the said instrument.
Witness my hand and official seal hereto affixed the day and year first written
above.
/s/ CHRISTI M. BAKER Christi M. Baker
- -----------------------------------------------------
Notary Public in and for the State of Texas
Residing at Dallas County
-------------
Commission Expires 9/16/02
-------
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EXHIBIT A
FLOOR PLAN OF PREMISES
[A diagram setting forth a floor plan of the premises subject to the lease is
attached.]
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EXHIBIT B
SPECIFICATIONS FOR TRENCH
[A diagram setting forth the specifications for the Trench to be constructed is
attached.]
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EXHIBIT C
LANDLORD'S IMPROVEMENTS
The requirement of these improvements is to meet any applicable federal, state
or local code, including, without limitation, all requirements under the
Americans With Disabilities Act, as amended. In addition, Landlord will ensure
that the improvements outfit the Premises with such additional supply of
electricity, restrooms, HVAC, and emergency exits as are necessary to adequately
support 355 people and equipment (including, without limitation, two desktop
computers per person). The improvements shall be as detailed herein.
DOORS
1. Convert all exterior doors (except three employee entrances, exit to
patio and front entrance) to emergency exits: add signs stating
"Emergency Exit Only - Alarm Will Sound"
2. Rekey building with Keymark master system; specifics to be provided by
Tenant. Keys to be duplicated only by Tenant's Facilities Manager.
3. Change double doors in southwest office (server room) to one with
locking pin, one with always-locked handle.
4. Add storefront door to south break room (non-locking).
5. Add locking (single) door to southeast (non-brick) storage room.
6. Remove east door (fill in wall) of 12'x23' conference room.
7. Remove door to hallway towards server/wiring room.
8. Change patio door and three employee entrance doors to industrial
strength, half-lites with safety glass.
WALLS
1. Closet electrical areas along north wall of Areas 4, 3 and 2, and along
the west wall of Area 2, all with double door entrance hinged to 270
degrees; add door stops and hooks.
2. Drywall, seal, prime and paint throughout, to include some accent
walls, color to be specified by Tenant. Remaining paint to be left on
premises.
3. Add 6'x10' vestibule for employee entrance, southwest doors of Area 2
and 3, and southeast door of Area 4.
4. Remove existing door on south wall of Area 2; replace adjacent overhead
door with double doors, opening north.
5. Remove 31'x12' room in Area 3.
6. Install accordion-style partition wall to create two equal-size rooms
in the southeast room of Area 3.
7. Install walls in northwest corner of Area 3 to include existing
overhead door to create a delivery room. Double doors along east wall.
8. Closet existing ladder along north wall of Area 3.
9. Install walls along east wall of Area 4 restrooms for janitor closet,
to include sink. Move water fountain to north wall outside new room.
10. Remove several walls in Area 4 as indicated on plan.
RESTROOMS
1. Install restrooms in northeast corner of Area 3; remove outside door.
Add "hallway" to west side with recessed area for coffee bar.
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MISCELLANEOUS
1. Carpet throughout (except break-rooms, restrooms, janitor closets,
vestibules, electrical rooms and wiring rooms).
2. HVAC upgrade.
3. Replace stained ceiling tiles; repair roof leaks.
4. Remove sink on southeast wall of storage closet.
5. Ensure adequate electrical in northwest corner office for vending
machines, microwaves; same in south break room.
6. Ensure adequate electrical in training rooms (Areas 1 and 3).
7. Install driveway and sidewalk access to connect parking lot with that
of adjacent property leased by Tenant at 22721 East Mission, Liberty
Lake, Washington, which shall be completed on or before June 1, 2000.
8. Level the southwest corner floor of Area 3.
9. Replace lighting/ballasts as necessary throughout with prismatic
fixtures.
10. Complete parking area with asphalt and landscape on the un-developed
lot on the east side of building and the north end of building per site
plan, which shall be completed on or before June 1, 2000. The parties
agree that the completion by June 1, 2000 of the seventeen parking
spaces at the north end of the building (as described in Paragraph 2 of
the lease as being situated on land to be leased or licensed from
Spokane County) is subject to Landlord's timely receipt of a license of
such property from Spokane County.
11. Move existing drinking fountain from wall adjacent to southwest
restrooms to wall on new janitorial room per plan.
12. Install one (1) awning over employee entrance.
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EXHIBIT D
CALCULATION OF BASIC RENT
START DATE END DATE RENTABLE COST PER NET RENT CAM MONTHLY
SQUARE FEET SQUARE FOOT BASIC RENT
Apr-00 Apr-00 16,615 $8.00 $11,076.67 $1.55 $13,222.77
May-00 Jul-00 25,653 $8.00 $17,102.22 $1.55 $20,415.51
Aug-00 Sep-01 36,550 $8.00 $24,366.67 $1.55 $29,087.71
Oct-01 Mar-03 36,550 $8.24 $25,097.67 $1.55 $29,818.71
Apr-03 Sep-04 36,550 $8.49 $25,850.60 $1.55 $30,571.64
Oct-04 Mar-05 36,550 $8.74 $26,626.11 $1.55 $31,347.16
Cost per Square Foot includes 3% increase every 18 months.
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