EXHIBIT 10.5
THIRD AMENDMENT TO AGREEMENT FOR
PURCHASE AND SALE AND LEASEBACK BETWEEN
SPI HOLDINGS, LLC AND THE SPORTS AUTHORITY, INC.
This Third Amendment to Agreement for Purchase and Sale and Leaseback
("Amendment") is made as of August 31. 1999, by and between THE SPORTS
AUTHORITY, INC, a Delaware corporation, and THE SPORTS AUTHORITY FLORIDA, INC.,
collectively as "Seller," and SPI HOLDINGS, LLC, a Delaware limited liability
company or its nominee, as "Buyer,". Buyer and Seller have previously entered
into that certain Agreement for Purchase and Sale and Leaseback dated as of May
14, 1999, as amended by that certain letter agreement dated June 14, 1999, and
that certain Second Amendment to Agreement for Purchase and Sale and Leaseback
dated as of July 29, 1999, (the "Second Amendment"). The Agreement for Purchase
and Sale and Leaseback, as so amended, is referred to herein as the "Agreement".
1. INCORPORATION. The terms and provisions of this Amendment are hereby
incorporated by this reference in the Agreement as though fully set forth
therein.
2. DEFINITIONS. Terms not otherwise defined in this Amendment shall
have the meanings ascribed to them in the Agreement.
3. FINAL DATE FOR EXPIRATION OF APPROVAL PERIOD FOR CERTAIN BUILDINGS.
Seller and Buyer agree that the date for the expiration of the Approval Period
with respect to each of the Buildings located in Arrowhead, Arizona, Chula
Vista, California, E. Fort Lauderdale and Fresno, California (the "Four
Buildings"), shall be the later of (a) the date established for expiration of
the Approval Period for such Buildings under Section 3 of the Second Amendment,
or (b) September 30, 1999. In addition to the extension of the date for the
expiration of the Approval Period with respect to each of the Four Buildings,
Buyer shall also have until the expiration date of the extended Approval Period
to provide Seller the written notifications of any unacceptable exceptions in
the Title Reports and Surveys for the Chula Vista and Fresno Buildings.
4. TIMING AND EXTENSION OF CLOSING. Subject to the satisfaction of all
conditions precedent to the Closing of Escrow as set forth in the Agreement, the
Closing of Escrow for the St. Petersburg and Norwalk Buildings shall occur on or
before September 30, 1999. Subject to the satisfaction of all conditions
precedent to the Closing of Escrow as set forth in the Agreement, the Closing of
Escrow for each of the Four Buildings shall take place through up to four
separate Escrows, each of which shall occur within 30 days of the date of the
expiration of the Approval Period with respect to such Four Buildings, as
extended by Section 3 of this Amendment (the "Extended Outside Closing Date").
At the election of Buyer, which shall be exercised at least seven
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business days prior to the Extended Outside Closing Date, Buyer may extend such
Extended Outside Closing Date by 30 days by paying an additional deposit (the
"Four Buildings Extension Deposit") into Escrow. The Four Buildings Extension
Deposit shall be equal to the sum of the amounts designated on EXHIBIT B to the
Agreement for the Prorata Extension Deposits for the Four Buildings, if Buyer
elects to extend the Extended Outside Closing Date as to all of the Four
Buildings. If Buyer elects to extend the Extended Outside Closing Date for less
than all of the Four Buildings, then the applicable Prorata Extension Deposit
shall be paid as to each of the Four Buildings for which the Extended Outside
Closing Date is extended, with each such payment to be in the respective amount
shown on EXHIBIT B attached to the Agreement. The election to extend shall be
effective for all of the Four Buildings, unless at the time Buyer makes the Four
Buildings Extension Deposit, Buyer notifies Seller that the extension does not
apply to one or more of the Four Buildings. Escrow Holder shall place the Four
Buildings Extension Deposit in an interest-bearing account for the benefit of
Buyer. The Four Buildings Extension Deposit, excluding the interest earned
thereon, shall be included in the "Deposit" and shall be non-refundable, except
as expressly provided in the Agreement with respect to the Extension Deposit.
The Deposit as so increased shall be credited to the Purchase Price as to each
of the Four Buildings at Closing, such credit to be in the amounts shown on
EXHIBIT B (as such amounts may be adjusted pursuant to Section 11.3 of the
Agreement).
5. PHASED CLOSINGS. Subject to the provisions of Section 4 of this
Amendment as to dates by which Escrow must close on the remaining Buildings,
Section 4.1 of the Agreement is deleted and it is agreed that Buyer may close
Escrow on each of the remaining Buildings on separate Closing Dates.
6. ADJUSTED RENT SCHEDULE.
6.1 It is agreed that the Basic Rent for each of the Buildings
which Buyer purchases from Seller after the date of this Amendment shall be as
set forth in the Rent Schedule attached hereto. Accordingly, Exhibit B to the
Agreement is hereby amended to reflect as to each of such Buildings the Basic
Rent as shown on such Rent Schedule. The net effect of the foregoing adjustments
to Basic Rent shall be to increase the rent for each year during the initial
Term by the amount shown on the attached Rent Schedule as the annual "Rent
Adjustment" for each such Building. The foregoing adjustments shall be in effect
only during the initial Term. Such adjustments shall not affect the Basic Rent
during any Renewal Term, so that Basic Rent during each Renewal Term shall be in
the amounts established by the Agreement prior to this Amendment.
6.2 If and only if Buyer closes escrow on all three of the St.
Petersburg, Norwalk and E. Ft. Lauderdale Buildings, then the Leases for the
Braintree, Boca Raton and Naples Buildings shall be amended effective as of
September 1, 1999, to increase the Basic Rent for each such Building to the
amount shown on the Rent Schedule attached
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hereto. Such adjustments shall be in effect only during the initial Term and
shall not affect the Basic Rent during any Renewal Term. Basic Rent during each
Renewal Term shall be in the amounts established by the Lease prior to such
amendment. By way of example, Exhibit B to the Lease for Braintree would be
amended as shown on the ▇▇▇▇-up of said Exhibit B attached hereto. If Buyer
closes escrow on all three of the St. Petersburg, Norwalk and E. Ft. Lauderdale
Buildings, concurrent with or promptly after the close of escrow of the last of
the three such Buildings (the "Third Closing Date"), Buyer shall deliver to
Seller amendments to each of the Leases for the Braintree, Boca Raton and Naples
Buildings, executed in duplicate by the respective Landlords of such Buildings.
Promptly upon receipt of such amendments, Seller shall cause the amendments to
be executed by The Sports Authority Florida, Inc. or The Sports Authority, Inc.,
as applicable, and return to Buyer one fully executed original of each
amendment. Each of the lease amendments shall be in the form attached as Exhibit
X hereto, modified to reflect the correct Landlord as to each of the three
Buildings. As such rental increase shall be effective as of September 1, 1999,
within 15 days after the Third Closing Date, Seller shall pay to the respective
landlords under the three Leases, the amount of the increase in Basic Rent for
the period commencing September 1, 1999 through the last day of the month in
which the Third Closing Date occurs, and all subsequent payments of Basic Rent
during the initial Term shall reflect such increases in Basic Rent.
7. MATERIAL ADVERSE CHANGE. In consideration for Seller entering into
this Amendment, Buyer agrees that from the date of the Agreement through the
date of this Amendment, there has not occurred a material adverse change in the
financial condition of Seller. The text of Section 9.1.6 shall be amended to
read in full: "There shall not have occurred a material adverse change in the
financial condition of Seller after the date of the Third Amendment to this
Agreement."
8. CONFLICTS. In the event of any conflict between the terms and
provisions of this Amendment and those of the Agreement, the terms and
provisions of this Amendment shall control.
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9. EFFECT. Except as modified hereby, the Agreement shall remain in
full force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment effective
as of the date first above written.
"SELLER" "BUYER"
THE SPORTS AUTHORITY, INC., SPI HOLDING, LLC
a Delaware corporation a Delaware limited liability company
By:__________________
Name:________________ By
Title:_______________ ----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇, Manager
THE SPORTS AUTHORITY FLORIDA,
INC., a Florida corporation
By:_________________
Name:_______________
Title:______________
SPI Sports Authority: 1999 Purchase Transaction:
Docs: 3rd Amdt PSA v.5 7522.10
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TSA
ADJUSTED RENT SCHEDULE
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PROPERTY ORIGINAL TOTAL RENT RENT ADJUSTMENT NEW TOTAL RENT ORIGINAL RENT NEW RENT PER SF
PER SF
------------------------------------------------------------------------------------------------------------------------
Arrowhead $407,000.00 $40,700.00 $447,700.00 $10.00 $11.00
Chula Vista $533,724.00 $44,477.00 $578,201.00 $12.00 $13.00
Fresno $512,076.00 $42,673.00 $554,749.00 $12.00 $13.00
Boca Raton $647,640.00 $75,558.00 $723,198.00 $15.00 $16.75
E. Ft. Lauderdale $424,295.00 $84,858.90 $509,153.40 $8.50 $10.20
Naples $559,325.00 $61,525.75 $620,850.75 $13.00 $14.43
St. Petersburg $425,000.00 $42,500.00 $467,500.00 $10.00 $11.00
Norwalk $865,538.00 $56,203.75 $921,741.50 $19.25 $20.50
Braintree $859,160.00 $42,958.00 $902,118.00 $20.00 $21.00
TOTAL $5,233,758.00 $491,454.40 $5,725,211.65 $14.54
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BRAINTREE
EXHIBIT B
BASIC RENT DURING TERM
AND RENEWAL TERMS
1. Basic Rent for the first five (5) years (the first 60 full calendar
months) of the initial Term shall be at the annual rate of $859,160 [REVISED TO
$902,118.00], in monthly installments of $71,596.67 [REVISED TO $75,176.50]
each. If the first month of the Term is a partial month, the monthly installment
shall be prorated on the basis of the number of days in such month.
2. Basic Rent for years six (6) through ten (10) of the initial Term
shall be at an annual rate equal to the lesser of (x) the Adjusted Rental (as
defined below), but in no event less than the Basic Rent in effect in year five
(5), or (y) $945,076.00[REVISED TO $988,034.00], payable in equal monthly
installments.
3. Basic Rent for years eleven (11) through fifteen (15) of the initial
Term shall be at an annual rate equal to the lesser of (x) the Adjusted Rental
(as defined below), but in no event less than the Basic Rent in effect in year
ten (10), or (y) $1,039,583.60[REVISED TO $1,082,541.60], payable in equal
monthly installments.
4. Basic Rent for years sixteen (16) through twenty (20) of the initial
Term shall be at an annual rate equal to the lesser of (x) the Adjusted Rental
(as defined below), but in no event less than the Basic Rent in effect in year
fifteen (15), or (y) $1,143,541.90[REVISED TO $1,186,499.90], payable in equal
monthly installments.
5. Basic Rent for the first Renewal Term shall be at the annual rate of
$1,286,484.60, in monthly installments of $107,207.05, each.
6. Basic Rent for the second Renewal Term shall be at the annual rate
of $1,447,295.10, in monthly installments of $120,607.92, each.
7. Basic Rent for the third Renewal Term shall be at the annual rate of
$1,628,206.90, in monthly installments of $135,683.90, each.
8. Basic Rent for the fourth Renewal Term shall be at the annual rate
of $1,831,732.70, in monthly installments of $152,644.39, each.
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ADJUSTED RENTAL shall mean an amount equal to the product of (a) the Basic Rent
in effect immediately prior to the date of the adjustment, and (b) 2.5 times the
CPI Fraction. Computation of Adjusted Rental shall be made as soon as
practicable after the CPI for the applicable period is published or otherwise
made available, and Landlord shall give Tenant notice of the applicable
adjustment in Basic Rent.
The CPI FRACTION shall be determined as follows: Landlord, in its sole
discretion shall select any two years of the previous five year period for
purposes of identifying the percentage increase in the CPI, and the amount so
determined shall be divided by two and then multiplied by five. For example, if
the CPI increases by 1% in each of the first two years of the five year period,
decreases by 1% in the third year, and increases by 1.25% in year four and by
1.75% in year five, Landlord would select years four and five and the CPI
Fraction would therefore be 7.5% (1.25% +1.75% =3%; 3% divided by 2 = 1.5%; 1.5%
x 5 = 7.5%).
The CPI shall mean the "Consumer Price Index" each year for the month in which
the Commencement Date occurs as published by the Bureau of Labor Statistics of
the United States Department of Labor (1982-84=100), U.S. City Average, or any
successor index thereof. The percentage increase in the CPI shall be computed on
an annual basis from year to year for purposes of determining the CPI Factor. If
the CPI is converted to a different standard reference base or otherwise
revised, then whenever the determination of a CPI figure is called for herein,
it shall be made with the use of such conversion factor, formula or table for
converting the CPI as may be published by the U. S. Department of Labor, Bureau
of Labor Statistics, or if not published by said organization, as may be
published by ▇▇▇▇▇▇▇▇-▇▇▇▇, Inc. or any other nationally recognized publisher of
similar statistical information. If the CPI ceases to be published on a monthly
basis, then the most recent month to the month in which the Commencement Date
occurs for which the CPI is published shall be used in lieu of such specified
month. If the CPI ceases to be published, and there is no successor thereto,
such other index as Landlord and Tenant shall agree upon in writing shall be
substituted for the CPI.
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EXHIBIT X
LEASE AMENDMENT
THIS LEASE AMENDMENT ("Amendment") dated as of , 1999, is entered into
by and between TSA/SPI BOCA RATON, LLC, a Florida limited liability company, as
landlord ("Landlord") and THE SPORTS AUTHORITY FLORIDA, INC. a Florida
corporation, as tenant("Tenant").
RECITALS
A. Landlord and Tenant have entered into that certain Lease Agreement,
dated on or about August 12, 1999 (the "Lease") pursuant to which Landlord has
leased to Tenant and Tenant has leased from Landlord that certain real property
more particularly described in Exhibit A of the Lease.
B. Landlord and Tenant desire to amend the Lease in certain respects,
as set forth below.
NOW, THEREFORE, for mutual consideration, the receipt and adequacy of
which is hereby acknowledged, Landlord and Tenant hereby amend the Lease as
follows:
AGREEMENT
1. BASIC RENT. Effective as of September 1, 1999, Exhibit B of the
Lease is hereby deleted in its entirety and replaced with Schedule A attached
hereto and incorporated herein. Pursuant to separate agreement, the increase in
Basic Rent accruing from September 1, 1999 through the end of the month in which
this Amendment is executed shall be paid by Tenant within 15 days of the date of
this Amendment.
2. MISCELLANEOUS.
2.1. This Amendment may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
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2.2. Except as amended or modified herein, all the terms of
the Lease shall remain in full force and effect and shall apply with the same
force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment
as of the date first written above.
LANDLORD:
SPI/TSA BOCA RATON, LLC
a Florida limited liability company
Witness: ________________ By__________________________________________
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Manager
Witness: ________________ By__________________________________________
TENANT:
THE SPORTS AUTHORITY FLORIDA, INC.,
a Florida corporation
Witness: ________________ By:__________________________________________
Name:_____________________________________
Title:____________________________________
Witness: ________________ By:__________________________________________
Name:_____________________________________
Title:____________________________________
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SCHEDULE A
EXHIBIT B
BASIC RENT DURING TERM
AND RENEWAL TERMS
1. Basic Rent for the first five (5) years (the first 60 full calendar
months) of the initial Term shall be at the annual rate of $723,198.00, in
monthly installments of $60,266.50 each. If the first month of the Term is a
partial month, the monthly installment shall be prorated on the basis of the
number of days in such month.
2. Basic Rent for years six (6) through ten (10) of the initial Term
shall be at an annual rate equal to the lesser of (x) the Adjusted Rental (as
defined below), but in no event less than the Basic Rent in effect in year five
(5), or (y) $787,962.00, payable in equal monthly installments.
3. Basic Rent for years eleven (11) through fifteen (15) of the initial
Term shall be at an annual rate equal to the lesser of (x) the Adjusted Rental
(as defined below), but in no event less than the Basic Rent in effect in year
ten (10), or (y) $859,202.40, payable in equal monthly installments.
4. Basic Rent for years sixteen (16) through twenty (20) of the initial
Term shall be at an annual rate equal to the lesser of (x) the Adjusted Rental
(as defined below), but in no event less than the Basic Rent in effect in year
fifteen (15), or (y) $937,566.84, payable in equal monthly installments.
5. Basic Rent for the first Renewal Term shall be at the annual rate of
$969,759.95, in monthly installments of $80,813.33, each.
6. Basic Rent for the second Renewal Term shall be at the annual rate
of $1,090,979.94 in monthly installments of $90,915.00 each.
7. Basic Rent for the third Renewal Term shall be at the annual rate of
$1,227,352.43, in monthly installments of $102,279.37, each.
8. Basic Rent for the fourth Renewal Term shall be at the annual rate
of $1,380,771.48, in monthly installments of $115,064.29, each.
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ADJUSTED RENTAL shall mean an amount equal to the product of (a) the Basic Rent
in effect immediately prior to the date of the adjustment, and (b) 2.5 times the
CPI Fraction. Computation of Adjusted Rental shall be made as soon as
practicable after the CPI for the applicable period is published or otherwise
made available, and Landlord shall give Tenant notice of the applicable
adjustment in Basic Rent.
The CPI FRACTION shall be determined as follows: Landlord, in its sole
discretion shall select any two years of the previous five year period for
purposes of identifying the percentage increase in the CPI, and the amount so
determined shall be divided by two and then multiplied by five. For example, if
the CPI increases by 1% in each of the first two years of the five year period,
decreases by 1% in the third year, and increases by 1.25% in year four and by
1.75% in year five, Landlord would select years four and five and the CPI
Fraction would therefore be 7.5% (1.25% +1.75% =3%; 3% divided by 2 = 1.5%; 1.5%
x 5 = 7.5%).
The CPI shall mean the "Consumer Price Index" each year for the month in which
the Commencement Date occurs as published by the Bureau of Labor Statistics of
the United States Department of Labor (1982-84=100), U.S. City Average, or any
successor index thereof. The percentage increase in the CPI shall be computed on
an annual basis from year to year for purposes of determining the CPI Factor. If
the CPI is converted to a different standard reference base or otherwise
revised, then whenever the determination of a CPI figure is called for herein,
it shall be made with the use of such conversion factor, formula or table for
converting the CPI as may be published by the U. S. Department of Labor, Bureau
of Labor Statistics, or if not published by said organization, as may be
published by ▇▇▇▇▇▇▇▇-▇▇▇▇, Inc. or any other nationally recognized publisher of
similar statistical information. If the CPI ceases to be published on a monthly
basis, then the most recent month to the month in which the Commencement Date
occurs for which the CPI is published shall be used in lieu of such specified
month. If the CPI ceases to be published, and there is no successor thereto,
such other index as Landlord and Tenant shall agree upon in writing shall be
substituted for the CPI.
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