FIFTH AMENDMENT TO COMMERCIAL LEASE AGREEMENT
THIS FIFTH AMENDMENT TO COMMERCIAL LEASE AGREEMENT, (the "Amendment") is
entered into by and between KANCRO, L.P., a Delaware limited partnership (the
"Lessor") and SOFTWARE SPECTRUM, INC., a Texas corporation (the "Lessee"),
effective as of the 9th day of March, 1998.
W I T N E S S E T H:
WHEREAS, pursuant to the terms of that certain Commercial Lease Agreement
dated April 19, 1993, as amended by that certain Third Amendment to Commercial
Lease Agreement dated to be effective April 1, 1995 and that certain Fourth
Amendment to Commercial Lease Agreement dated to be effective November 25, 1996
(collectively, the "Lease"), Lessee has heretofore leased from the Lessor
certain premises located within the industrial warehouse project commonly known
as Northgate IV, Garland, Texas (the "Project") and containing (a) approximately
70,390 square feet of space, more or less, within Building 15 at 2220 Merritt
Drive, Garland, Texas; and (b) approximately 38,286 square feet of space, more
or less, within Building 14 at 2260 Merritt Drive, Garland, Texas;
WHEREAS, the parties desire to further amend certain provisions of the
Lease, all as more particularly set forth herein.
NOW, THEREFORE, in consideration of the foregoing premises, and the mutual
covenants and agreements contained herein, and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. DEFINED TERMS. Terms defined in the Lease and delineated herein by
initial capital letters shall have the same meaning ascribed thereto
in the Lease, except to the extent that the meaning of such term is
specifically modified by the provisions hereof. In addition, other
terms not defined in the Lease, but defined herein shall when
delineated with initial capital letters have the meaning ascribed
thereto in this Amendment. Terms and phrases which are not delineated
by initial capital letters shall have the meaning commonly ascribed
thereto.
2. AMENDMENTS TO THE LEASE.
(a) SECTION 1 of the Lease shall be modified in its entirety as
follows:
"Section 1 PREMISES AND TERM.
(A) In consideration of the mutual obligations of Lessor and
Lessee set forth herein, Lessor leases to Lessee, and Lessee
hereby takes from Lessor certain leased premises (the "Original
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Premises"), consisting of 70,390 square feet of space, more or
less, in Building 15 situated within the Project, and being more
particularly described on EXHIBIT "A-1" attached hereto and
incorporated herein for all purposes, together with all rights,
privileges, easements, appurtenances and amenities granted to the
Lessee in this Lease, to have and to hold, subject to the terms,
covenants and conditions of this Lease. The term of this Lease
shall commence on April 1, 1995 (the "Commencement Date") and
shall end on the last day of the month that is one hundred twenty
(120) months after the Commencement Date (the "Lease Term");
provided, that if the Commencement Date is a date other than the
first day of a calendar month, the Lease Term shall be extended
for the remainder of the calendar month in which the Commencement
Date occurs.
(B) In consideration of the mutual obligations of Lessor and
Lessee set forth herein, Lessor leases to Lessee, and Lessee
hereby takes from Lessor certain leased premises (the "Initial
Expansion Premises"), consisting of 38,286 square feet of space,
more or less, in Building 14 situated within the Project, and
being more particularly described on EXHIBIT "A-2" attached
hereto and incorporated for all purposes, together with all
rights, privileges, easements, appurtenances and amenities
granted to the Lessee in this Lease, to have and to hold subject
to the terms, covenants and conditions of this Lease. The term
of the Lease of the Initial Expansion Premises shall commence on
December 1, 1996, and shall end on the last day of the month that
is coterminous with the date of expiration of the term of the
lease of the Original Premises.
(C) In consideration of the mutual obligations of Lessor and
Lessee set forth herein, Lessor leases to Lessee, and Lessee
hereby takes from Lessor certain leased premises (the "Expansion
Premises"), consisting of approximately 24,561 square feet of
space, more or less, in Building 14 situated within the Project
and being more particularly described on EXHIBIT "A-3" attached
hereto and incorporated herein for all purposes, together with
all rights, privileges, easements, appurtenances and amenities
granted to the Lessee in this Lease, to have and to hold subject
to the terms, covenants and conditions of this Lease. The term of
the Lease of the Expansion Premises shall commence on July 1,
1998, and shall end on the last day of the month that is
coterminous with the date of expiration of the term of the lease
of the Original Premises and the Initial Expansion Premises. The
Original Premises, Initial
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Expansion Premises and the Expansion Premises are hereinafter
sometimes collectively referred to as the "Premises".
(b) The last sentence of SECTION 2(c) of the Lease is hereby amended
in its entirety as follows:
"The amount of the monthly rental and the initial monthly escrow
payments for the Original Premises and the Initial Expansion
Premises are as follows:
Months Months
1-60 61-120
---------- ----------
Base Rent (Original Premises) $21,996.88 $32,086.11
Base Rent (Initial Expansion Premises) 12,762.00 17,452.04
Tax Escrow Payment (Original Premises) 3,519.50 *
Tax Escrow Payment (Initial Expansion
Premises) 2,252.19 *
Insurance Escrow Payment (Original Premises) 410.61 *
Insurance Escrow Payment (Initial
Expansion Premises) 233.07 *
Common Area Expenses (Original Premises) 1,055.85 *
Common Area Expenses (Initial Expansion
Premises) 708.80 *
---------- ----------
Monthly Payment Total: $42,938.90 $
The amount of the monthly rental and the initial monthly escrow payment for
the Expansion Premises is as follows:
Months Months
1-21 22-82
---------- ----------
Base Rent (Expansion Premises) $ 9,210.38 $11,195.72
Tax Escrow Payment (Expansion Premises) 1,473.66 *
Insurance Escrow Payment (Expansion
Premises) 81.87 *
Common Area Expenses (Expansion
Premises) 450.29 *
---------- ----------
Monthly Payment Total: $11,216.20 $
- ---------------------
* To be determined as of April 1, 2000
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(c) A new SECTION 27 shall be added to the Lease, and shall read in its
entirety as follows:
"27. CONSTRUCTION OF IMPROVEMENTS TO PREMISES: CONSTRUCTION ALLOWANCE.
Lessee shall proceed to construct certain improvements within the
Premises in compliance with certain plans and specifications prepared
on behalf of the Lessee (the "Plans"). The Plans for the construction
of the improvements to the Premises shall be mutually approved by the
parties in writing prior to commencement of construction. The
improvements to the Premises shall include all costs associated with
the interior finish-out construction, construction of a backup
generator and related screening at a location adjacent to the Premises
as depicted on EXHIBIT "A-4" attached hereto and incorporated herein,
any architectural drawings prepared on behalf of the Lessee, and a fee
payable to Compass Management and Leasing, Inc. ("Compass") as the
co-construction manager to be retained by the Lessor to supervise the
construction, in an amount equal to four percent (4%) of the
Construction Allowance (as hereinafter defined). Lessee has retained
The Staubach Company ("TSC") as a co-construction manager. Compass and
TSC shall jointly manage the construction of the improvements to the
Premises. The parties shall mutually endeavor to complete the
construction of the improvements on or before May 1, 1998. The design
and materials to be utilized for the screening surrounding the backup
generator shall be subject to the written approval of the Lessor, such
approval not to be unreasonably withheld or delayed. Such screening
shall include, at a minimum, the construction of bollards and
aggregate tilt walls surrounding the generator. Lessee shall be solely
responsible for the removal of the generator and screening upon the
expiration or earlier termination of this Lease, and shall repair all
damages to the Premises or the surrounding areas occasioned by such
removal. Lessee shall not permit Lessee's contractors or any
subcontractor to commence any work in connection with the construction
of the improvements to the Premises until appropriate insurance has
been obtained and certificates evidencing such insurance coverage have
been delivered to and approved by Lessor. Lessee agrees to indemnify,
defend and hold Lessor harmless from and against all claims,
liabilities, costs, damages and expenses of whatever nature, including
those to the property of Lessee, arising out of or in conjunction with
the performance of the construction of the improvements to the
Premises.
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Lessor shall provide the Lessee with a Construction Allowance (herein
so called) in an amount equal to the lesser of (a) the actual cost of
construction of the improvements to the Premises; or (b) the sum of
$400,000.00. Lessor's obligation to pay the Construction Allowance
shall be subject to the Lessor's prior receipt of invoices and lien
waivers from any third parties providing construction services to the
Premises, together with such other documentation as the Lessor shall
reasonably require. Lessor shall have the option of either paying
amounts due to such third parties either to the Lessee or directly to
such third parties. Lessee shall be responsible for the timely payment
of all construction costs in excess of the Construction Allowance.
Lessee shall have sole responsibility for compliance with all
applicable statutes, codes, ordinances and other regulations for all
construction performed on behalf of Lessee within the Premises,
including without limitation, any applicable environmental regulations
related thereto. In addition, the improvements to be constructed by
the Lessee within the Premises shall be constructed and installed in
compliance with the requirements of the Americans With Disabilities
Act of 1990, as amended, any applicable state statute, and all rules
and regulations promulgated thereunder (collectively, the "ADA").
Lessee, at Lessee's sole cost and expense, shall be responsible for
compliance with all provisions of the ADA with respect to the use,
occupation or alteration of the Expansion Premises. Lessor, at
Lessor's sole cost and expense, shall be responsible for compliance
with the ADA with respect to all common areas of the Project and with
respect to the exterior of the Expansion Premises, to the extent, but
only to the extent that such compliance is not caused by Lessee's use,
occupation or alteration of the Expansion Premises.
Lessee acknowledges that (i) it has inspected and accepts the
Expansion Premises, (ii) the buildings and improvements comprising the
same are suitable for the purpose for which the Expansion Premises are
leased, (iii) the Expansion Premises are in good and satisfactory
condition, and (iv) no representations as to the condition of the
Expansion Premises, nor any other promises to alter, remodel or
improve the Expansion Premises have been made by the Lessor (unless
otherwise expressly set forth in this Amendment. The taking of
possession of the Expansion Premises by the Lessee shall be deemed
evidence that the Expansion Premises were in a satisfactory condition
at the time of possession; provided, however, that nothing herein
shall relieve the Lessor of
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its obligations under SECTION 4 of the Lease with respect to the
Premises."
(d) A new SECTION 28 shall be added to the Lease, and shall read in its
entirety as follows:
"28. LETTER OF CREDIT IN ADDITION TO SECURITY DEPOSIT. Lessee agrees
to provide, in addition to the Security Deposit provided by the terms
of SECTION 2B of the Lease, an irrevocable unconditional letter of
credit in the amount of $150,000.00 (the "Letter of Credit"), as
security for the performance of the Lessee's monetary obligations
under the Lease. The Letter of Credit shall be in a form and issued
by a bank or other financial institution reasonably acceptable to the
Lessor. The term of the Letter of Credit shall expire seventeen (17)
months after the commencement date of the term of the Expansion
Premises (the "Expiration Date"). The Letter of Credit shall be
delivered to the Lessor three (3) business days prior to the
commencement of the term of the Expansion Premises. In the event of an
uncured monetary default under the terms of this Lease, Lessor shall
deliver a statement to the Financial institution issuing the Letter of
Credit certifying that (a) the Lease is in full force and effect; (b)
a monetary default has occurred under the Lease; and (c) the Lessor is
entitled to payment under the Letter of Credit. Upon delivery of such
statement, Lessor shall be entitled to draw upon the Letter of Credit.
The proceeds of the Letter of Credit shall be applied by Lessor first
to cure any monetary default by the Lessee under the terms of the
Lease, and the balance of the proceeds shall be utilized to prepay the
Lessee's base rent obligations accruing under the terms of this Lease.
In the event Lessee fully satisfies all of its obligations to pay base
rent under this Lease as provided in this SECTION 28, Lessor shall
deliver the original Letter of Credit to the lessee on the Expiration
Date."
3. EFFECT OF AMENDMENT. Except as specifically amended by the provisions
hereof, the terms, covenants and provisions of the Lease shall continue to
govern the rights and obligations of the parties thereunder, and all
rights, covenants and provisions of the Lease shall remain in full force
and effect as stated therein. This Amendment and the Lease shall be
construed as one instrument. The terms, covenants and provisions of this
Amendment shall inure to the benefit and be binding upon the parties hereto
and their respective successors and permitted assigns.
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IN WITNESS WHEREOF, Lessor and Lessee have executed this Amendment in
multiple counterparts as of the day and year first above written.
LESSOR:
KANCRO, L.P.,
A DELAWARE LIMITED PARTNERSHIP
By: KPERS Realty Holding #23, Inc.,
a Kansas corporation, general partner
By: /s/ Stephen S. Williams
------------------------------------------
Title: STEPHEN S. WILLIAMS
---------------------------------------
VICE PRESIDENT
LESSEE:
SOFTWARE SPECTRUM, INC.
A TEXAS CORPORATION
By: /s/ Robert D. Graham
------------------------------------------
Title: Vice President and General Counsel
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EXHIBIT "A-1"
Site Plan of Original Premises
[SITE PLAN]
EXHIBIT "A-2"
Site Plan of Initial Expansion Premises
[SITE PLAN]
EXHIBIT "A-3"
Site Plan of Expansion Premises
[SITE PLAN]
EXHIBIT "A-4"
Location of Back-up Generator
[LOCATION]
[LOCATION]