Exhibit 10.20
LEASE
AGREEMENT
THIS LEASE (“Lease”)
made and entered into as of the 7 day of July , 1999,
by and between PRIME INVESTMENTS, INC., a Kansas corporation,
(“Landlord”), and KEYSTONE AUTOMOTIVE OPERATIONS
MIDWEST, INC., a Delaware corporation,
(“Tenant”).
WITNESSETH
In consideration of the mutual
covenants and agreements hereinafter set forth, and with intent to
be legally bound, Landlord and Tenant agree and covenant as
follows:
ARTICLE 1—DEMISE OF
PREMISES, USE AND ENJOYMENT;
CONSTRUCTION OF
IMPROVEMENTS
Section 1.01 Description of
Premises . Subject to and upon the terms, conditions, covenants
and undertakings hereinafter set forth, Landlord does hereby demise
and lease to Tenant, and Tenant does hereby lease from Landlord, a
portion of the real property located at Shawnee and Armourdale
Parkway, in the City of Kansas City, State of Kansas, more
specifically described as approximately 162,750 square feet of
warehouse/cross dock facility to be constructed by Landlord
pursuant to Section 1.05 below (the “Improvements”),
and together with all easements, privileges, appurtenances, rights,
alleys, ways, waters and advantages belonging or appertaining to
such Land and Improvements (the foregoing, together with the Land
and Improvements, are collectively called the
“Premises”). Tenant shall have exclusive use of the
Premises, subject to Landlord’s rights under this
Lease.
Section 1.02 Use . The
Premises may be used as a warehouse, a distribution center, an
office, for the parking of motor trucks and trailers and other
motor vehicles, and for any other
purpose incidental to such uses. Tenant’s
activities on the Premises will not be in violation of any laws or
ordinances or any rules, regulations, requirements or orders of all
municipal, county, state or federal authorities or agencies,
respecting the use and occupancy of the Premises.
Section 1.03 Quiet Enjoyment
. Landlord covenants and agrees that upon Tenant paying all rent
and additional rent as provided herein and performing all of the
covenants and conditions herein set forth, Tenant shall and may
peaceably and quietly have, hold and enjoy the Premises hereby
demised for the term or terms herein provided and for the intended
uses and purposes, subject nevertheless to the provisions of this
Lease. Landlord represents and warrants that the Premises are and
will remain zoned so as to allow the full use by Tenant referred to
in Section 1.02 above, and if such full use is substantially
impaired as a result of a zoning requirement this Lease shall, at
Tenant’s option, terminate.
Section 1.04 Condition of
Premises . Landlord represents that at the time Tenant takes
possession, it will own the Premises in fee simple and shall have
the right to Lease the same to Tenant. Landlord agrees to deliver
to Tenant the Premises free from tenancy of any person or party
other than Tenant.
Section 1.05 Construction of the
Improvements .
(a) As used in this Section 1.05,
the following terms shall have the following meanings:
“Basic Construction” a
one hundred, sixty-two thousand, seven hundred fifty (162,750)
square foot general purpose warehouse/cross dock facility, to be
constructed by Landlord on the Land, together with paving,
landscaping, and driveway entrance, all as more fully described in
the Plans and as more fully shown on the Site Plan.
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“Certificate of
Occupancy” means a certificate or permit issued by the
appropriate governmental agency permitting Tenant to occupy and use
the Premises for the purposes described in Section 1.02
above.
“Excusable Delays” means
delays (whether affecting Landlord or Tenant, as the case may be,
directly, or any contractor or subcontractor of Landlord or Tenant)
caused by fire, the elements, strikes, lockouts, or other labor
troubles including the timely delivery of all building materials,
or any other cause, event, or circumstance, whether similar or
dissimilar to the foregoing, beyond the control of Landlord or
Tenant or their respective contractors or subcontractors, as the
case may be.
“Plans” means the set of
construction plans and specifications for the Basic Construction
described on those certain Plans which shall be initialed by both
parties and attached hereto and made a part hereof and labeled as
Exhibit A. The plans shall include a 162,750 square foot building
of which the Tenant shall initially occupy.
“Site Plan” means the
site plan for the Premises, a copy of which is attached hereto as a
part hereof and labeled Exhibit B.
(b) Landlord has commenced the basic
construction on the Land and thereafter shall use its best efforts
to complete the Basic Construction substantially in accordance with
the Plans and the Site Plan no later than February 1, 2000. If the
Basic Construction is delayed due to an Excusable Delay, Landlord
shall give notice to Tenant of the estimated date of completion.
The Basic Construction shall be deemed completed on the date that
the Basic Construction has been completed substantially in
accordance with the Plans and the Site Plan and a Certificate of
Occupancy is issued for the Premises. Landlord shall give Tenant
written notice of the date on
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which Landlord estimates the
foregoing conditions will be met, which notice shall be given no
less than ten (10) days prior to the estimated date set forth
therein; it is agreed, however, that any variance between the
estimated date in such notice and the actual completion date shall
not constitute a default by Landlord hereunder.
(c) If Tenant takes possession of
the Premises and begins operation of its business thereon prior to
completion of the Basic Construction, such possession and operation
shall not relieve Landlord of the obligation to complete the Basic
Construction. Furthermore, Landlord shall be obligated to complete
any items of the Basic Construction not completed at the time the
Basic Construction is otherwise considered completed pursuant to
the terms of this Lease. In either of the circumstances described
in this paragraph (c), Tenant agrees to cooperate with Landlord to
allow it to complete the Basic Construction.
(d) Landlord shall complete the
Basic Construction at its sole cost and expense free of liens, in a
good and workmanlike manner, and in accordance with all applicable
laws, regulations, ordinances, codes, and rules of all applicable
governmental agencies. Landlord, at its sole cost and expense,
shall obtain all necessary building permits, utility permits,
construction permits, certificate of occupancy and any and all
other permits, licenses, and approvals required by applicable laws,
regulations, ordinances, codes, and rules with respect to the
construction of the Basic Construction.
(e) During construction of the Basic
Construction, Landlord shall procure and maintain in full force and
effect, at its sole cost and expense, a policy of builder’s
risk insurance covering the Basic Construction. Such insurance
shall be in an amount and shall be issued by a company licensed and
approved to conduct business in the state of Kansas. Prior to
commencement of construction of the Basic Construction, Landlord
shall deliver to Tenant a
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certificate evidencing the issuance
of such insurance pursuant to which certificate the insurance
company shall agree that such insurance shall not be canceled,
terminated or materially altered without at least thirty (30) days
prior written notice to Tenant. If the Basic Construction is
damaged or destroyed by fire, the elements, accident, or otherwise,
Landlord shall, at its sole cost and expense and regardless of
whether such casualty is covered by the insurance policy described
in this paragraph (e), cause the Basic Construction to be completed
as required in this Section 1.05; however, such event shall be
deemed to be an Excusable Delay and the date set forth herein for
completion of the Basic Construction shall be extended to afford
Landlord the necessary time to complete the Basic
Construction.
(f) Landlord shall prosecute the
construction of the Basic Construction with due diligence, but due
allowance shall be made for interruptions and delays based on
Excusable Delays. Nothing in this Section 1.05 shall require
Landlord to incur overtime charges or premium pay to complete the
Basic Construction, nor shall the incurring of the same be deemed
an element of Landlord’s due diligence.
(g) The Basic Construction, once
completed in accordance with this Section 1.05, shall constitute
the “Improvements” defined in this Lease.
(h) Tenant shall construct its own
offices on the Premises at its own expense. Landlord shall credit
the sum of $148,000.00 to Tenant by the abatement of rent from the
beginning of the Lease term until full credit for such amount has
been credited, to be used for such construction. Tenant agrees to
submit plans and specifications for Landlord’s approval prior
to the commencement of construction. Landlord shall not withhold
its consent unreasonably, however, Tenant may only build such
offices after approval of plans and specifications by Landlord.
Tenant shall build such offices in a good and workmanlike manner,
at least consistent
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in quality with the rest of the
Premises. Tenant shall not allow liens to be placed on the Premises
and will promptly settle all disputes with
contractors/subcontractors or materialmen immediately or file an
appropriate bond to remove or prevent a lien against the Premises.
Tenant will obtain appropriate permits for such construction and
will comply with all laws, ordinances, codes and rules with regard
to such construction.
Section 1.06 Expansion Space
. Tenant may also give notice to Landlord at any time during the
first five (5) years of the Lease term, that it desires that
Landlord expand the existing premises to include 115,500 additional
square feet to be connected to the original structure by a
30’ wide, 50’ long covered walkway. This notice shall
be given in writing to Landlord. Tenant must agree to occupy the
expanded space upon the giving of notice. Landlord shall have nine
(9) months within which to complete such expansion. The
requirements for construction shall be the same as agreed upon
herein for the initial construction. Tenant shall occupy the
expanded space immediately upon completion of construction. The
same terms and conditions of the Lease including all renewal
options thereof, shall apply to the expanded space. Rent shall
convene upon occupancy by Tenant. It is agreed between Landlord and
Tenant that any renewal of this Lease term after the expansion
space has been completed and occupied by Tenant, shall include such
expansion space.
Notwithstanding the above, Landlord
shall have the right to expand the existing structure on its own
without the request of Tenant for up to an additional 115,500
square feet at any time during the Lease term. Provided, however,
Tenant shall not be required to occupy such space unless Tenant
shall give Landlord ninety (90) days written notice of its intent
to occupy such expanded Premises. Tenant’s right to occupy
the expanded Premises whether built by Landlord under its own
initiative or as a result of Tenant’s election hereunder,
shall expire upon the
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completion of the first five (5) years of the
Lease term. In the event Tenant shall occupy the expanded space,
Landlord and Tenant agree to execute an appropriate addendum to
Lease Agreement setting out the terms and conditions of the
expanded space and the occupancy thereof, such terms and
conditions, where applicable, being the same as those in the
original Lease. Tenant shall be given first right of refusal to
lease the expanded space after the expiration of the five (5) year
period should it become available during the lease term.
ARTICLE
II—TERM
Section 2.01 Initial Term .
The initial term of this Lease (the “Initial Term”)
shall be ten (10) years, commencing on the 1
st
day of February, 2000,
or the date of occupancy by Tenant defined as the date of the
issuance of a temporary occupancy permit, (“Commencement
Date”) and ending at 11:59 p.m. local time on the day before
the date that is ten (10) years from the Commencement Date, unless
sooner terminated or renewed pursuant to the provisions hereof.
Once the Commencement Date has been determined, Landlord and Tenant
shall execute a letter or other written instrument confirming the
Commencement Date.
Section 2.02 Renewal Term .
Upon expiration of the Initial Term, Tenant shall have the option
(provided Tenant is not then in default) to renew this Lease for
two additional terms of five (5) years each, commencing on the date
that is ten (10) years from the Commencement Date, or five (5)
years from the first renewal date, whichever shall apply, and
ending (unless sooner terminated or renewed pursuant to the
provisions hereof) at 11:59 p.m. local time on the day before the
date that is five (5) years from the Commencement Date of each
renewal term, (the “Renewal Term”). Tenant shall
exercise its option to renew this Lease as provided above by giving
Landlord written notice of its election to renew this Lease no
later than the date that is 120 days prior to the expiration of the
Initial Term or 120 days prior to the expiration of the
first
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renewal term. All of the terms and conditions of
this Lease shall apply to each of the Renewal Terms, except that
Tenant shall have no rights to renew this Lease, beyond the two
renewal terms. All references in this Lease to the
“Term” shall be deemed to include the Initial Term and
each Renewal Term, unless the context indicates
otherwise.
Section 2.03 Lease Year
Defined . As used in this Lease, “Lease Year” means
the period of twelve (12) consecutive calendar months commencing on
the Commencement Date and ending on the day before the date that is
one (1) year from the Commencement Date, and each corresponding
twelve (12) month period thereafter throughout the balance of the
Term.
Section 2.04. In the event Tenant
shall lease another building larger than the premises from
Landlord, this lease shall cease on the date the lease on the
different structure shall commence.
ARTICLE
III—RENT
Section 3.01 Rent During Term
. Tenant covenants and agrees to pay to Landlord for the use and
occupancy of the Premises during the Term the following monthly
amount during each year of the Initial Term:
Years 1 through 5—$3.42 per
square foot/year
Years 6 through 10—$3.75 per
square foot/year
Section 3.02 Rent During Renewal
Term . Tenant shall receive two (2) options to extend the term
of this Lease for an additional five (5) years each under the same
terms and conditions hereof, except that the base rental rate shall
be an additional .35¢ per square foot/year for each renewal
period..
Section 3.03 Payment of Rent
. Rent is due in advance on the 1 st calendar day for each month during
the Term at the office of Landlord or at such other place or
address as Landlord may
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hereafter designate in writing. Landlord agrees
to send a monthly billing statement to Tenant at least 30 days
prior to due date.
Section 3.04 Security Deposit
. Tenant agrees to deposit on the date hereof the sum of $42,750.00
in cash or irrevocable letter of credit in favor of Landlord, which
sum shall be held by Landlord without obligation for interest as
security for the performance of Tenant’s covenants and
obligations under this Lease. It is expressly understood that such
deposit is not an advanced rental deposit or a measure of
Tenant’s damages in case of Tenant’s default. Upon the
occurrence of any event of default by Tenant, Landlord may, from
time to time, without prejudice to any other remedy provided for
herein or provided by law, use such funds to the extent necessary
to make good any such default, or any damage, expense or liability
caused by such default and Tenant shall promptly pay to Landlord on
demand the amount as applied in order to restore the security
deposit to its original amount. Failure of Tenant to restore the
security deposit as set forth above, within ten (10) days from
demand by Landlord, shall constitute an act of default under this
Lease. If Tenant is not then in default hereunder, the balance of
such deposit shall be returned by Landlord to Tenant within 60 days
after expiration or termination of this Lease and return of the
Premises to Landlord in accordance with the terms
hereof.
ARTICLE
IV—IMPOSITIONS
Section 4.01 Real Estate
Taxes . Landlord agrees to pay all taxes, impositions,
assessments, general and special and payments in lieu of taxes, and
all other impositions, that may be levied or assessed against the
premises occurring from and after the commencement date and
thereafter, throughout the term or any extension
thereof.
Section 4.02 Increase in Real
Estate Taxes and Special Assessments . In the event the real
estate taxes and installments of special assessments, payable with
respect to the Premises during
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any Lease Year shall be greater than the amount
of such taxes and installments due and payable during the base year
of 2000, in the amount levied in December, 2000, or the first fully
assessed year, whether by reason of an increase in tax rate or an
increase in valuation or otherwise, Tenant shall pay the full
amount of such increase as additional rent within thirty (30) days
after notice to Tenant that the same is due. Landlord shall furnish
tax bills and other statements to Tenant in sufficient time so that
Tenant may pay its portion of any such bills and statements if any,
without penalty or loss of discount. For any partial year occupancy
by Tenant, the amount due shall be appropriately prorated for the
portion of the year the Tenant shall occupy the
Premises.
Section 4.03 Right to Contest
. Tenant shall have the right to contest all taxes, assessments,
impositions, and charges levied against the Premises, and Landlord
agrees to join in such contest, if required by law, and to permit
Tenant to contest the same in Landlord’s name; provided,
however, that Tenant shall bear the cost of any such contest, and
provided further that Tenant shall take all reasonable steps
necessary to ensure that Landlord’s interest in the Premises
shall not be subject to lien or forfeiture as a result of such
contest. Landlord shall immediately send Tenant notice of any
increase in the assessment of the Premises.
Section 4.04 Personal Property
Taxes . Tenant agrees to pay all personal property taxes levied
or assessed on all items of personal property, machinery, and
equipment placed on or installed in the Premises by Tenant during
the Term.
ARTICLE V—CONDITION OF
THE PREMISES
Section 5.01 Condition .
Landlord covenants, warrants, and represents to Tenant that on the
Commencement Date (a) the Improvements shall be broom clean, (b)
all of the building systems in the Improvements (including, but not
limited to, the water and sewer system, the electrical system, and
the heating, ventilation, and air conditioning system) shall be
operable and
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in a state of good order and repair, and (c) the
structure of the Improvements (including, but not limited to, the
walls, foundation, and roof) shall be in a state of good
repair.
ARTICLE VI—ALTERATIONS
AND IMPROVEMENTS
Section 6.01 Construction of
Improvements . Tenant shall have the right during the Term, at
its own cost and expense, to erect a sign or signs upon the
Premises. Tenant may make, at its sole cost and expense, any and
all remodeling, paving, fencing, and construction changes and
improvements to the Premises, unless the cost of such changes or
improvements exceeds $10,000.00, in which case Tenant must obtain
the prior written consent of Landlord, which consent shall not be
unreasonably withheld.
Section 6.02 Compliance . Any
removals, additions, alternations, paving, fencing, or improvements
shall be in compliance with all applicable permits and
authorizations, with all building and zoning laws and
