Exhibit 10.67
THIRD AMENDMENT TO LEASE
Third Amendment dated as of this 7th day of August, 2003, by and
between MRM INVESTMENTS, --- L.L.P., an Arizona limited liability partnership
("Lessor"), and INSURANCE AUTO AUCTIONS, INC., an Illinois corporation
("Lessee").
RECITALS:
A. WHEREAS, Xxxxxx X. Xxxxxx and MASP Acquisition Corp. previously
entered into a certain Lease of Commercial Space dated January 17, 1992, an
Amendment of Lease Agreement dated August 1994, and a Second Amendment to Lease
dated August 1, 2000 (collectively "Lease"), concerning the premises commonly
known as 0000 Xxxx Xxxxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000 ("Premises").
B. WHEREAS, Lessor is the successor or assignee of Xxxxxx X. Xxxxxx and
Lessee is the successor or assignee of MASP Acquisition Corp.
C. WHEREAS, the parties desire to amend said Lease as described below.
NOW, THEREFORE, in consideration of the mutual promises and covenants
contained herein, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties agree as follows:
1. RECITALS. The recitals set forth above are incorporated herein and
made a part hereof.
2. CONFLICT. In the event of any conflict between the terms of this
Third Amendment and the terms of the Lease, the terms of this Third
Amendment shall control.
3. DEFINED TERMS. All defined terms contained in this Third Amendment
shall have the meanings and definitions as set forth in the Lease.
4. PROJECT. The architectural firm of Xxxxx Xxxxxxxx & Associates has
designed certain improvements for the Premises as set forth in the revised
architectural plans dated April 7, 2003, together with certain landscape plans
and civil engineering drawings and plans (the improvements and work depicted in
said plans and drawings and other related plans and drawings, as revised from
time to time, are hereinafter referred to as the "Project"). Lessee shall
submit to Lessor any revisions and modifications to the Project's architectural
drawings and plans, for Lessor's reasonable approval, which approval shall not
be unreasonably withheld, conditioned or delayed. Lessee shall be solely
responsible for causing the Project to be constructed and Lessor shall have no
responsibility for same, except for the payment responsibilities described
below.
5. PAYMENT FOR PROJECT. Lessor agrees to pay up to $2,000,000 to pay
for the cost of the Project (excluding the cost of asphalt, which cost Lessee
shall pay). Lessor's payments for
the cost of the Project shall be paid by Lessor into a construction escrow, no
more frequently than once a month, during the course of construction as and when
payments are due to the architects, engineers, consultants, contractors,
subcontractors, suppliers and others working on the Project. In the event that
the cost of the Project exceeds $2,000,000, then Lessee shall be responsible for
the payment of any and all such excess costs. The total amount paid by Lessor
during each calendar quarter during the course of the Project is hereinafter
referred to as the "Total Quarterly Project Payments."
6. AMORTIZED PAYMENTS. As of the end of each calendar quarter during
the Project, the rent shall be increased as follows. The Total Quarterly Project
Payments for each calendar quarter, together with interest at the rate of 10%
per annum, amortized over the period of time from the end of the subject
calendar quarter through December 31, 2013, results in a certain monthly
amortized payment of principal and interest, hereinafter called the "Amortized
Payment." The current monthly base rent of $30,000 shall be increased by the
amount of each Amortized Payment effective on the first day of the month
following each calendar quarter. The foregoing calculation shall be made as of
the end of each calendar quarter, and the Amortized Payment resulting from such
calculation shall be added to the monthly base rent and shall be payable as
additional rent for the entire amortization period through December 31, 2013.
Accordingly, all Amortized Payments for the Project shall be paid in full as of
December 31, 2013. Lessee may prepay and pay off the remaining principal balance
for any or all Amortized Payments, at any time, without any prepayment penalty.
Notwithstanding anything to the contrary contained in the Lease, there shall
be no rental escalations (as described in paragraph 8 below) in the portion of
the rent that constitutes the Amortized Payments.
7. TERM AND RENEWAL OPTIONS. The Term of the Lease currently ends on
January 31, 2007. The Term of the Lease is hereby extended so that it runs for
an additional period of ten (10) years through and including January 31, 2017.
Furthermore, Lessee shall have the option to renew the Lease for three (3)
successive periods of five (5) years upon the same terms and conditions of the
Lease with the exception of the base rent, which shall be subject to the
increases described below.
8. BASE RENT INCREASES. The amount of the current monthly base rent of
$30,000 shall remain fixed through January 31, 2007. Effective as of the
following "Adjustment Dates," February 1, 2007, and February 1 of each year
thereafter during the Term and during any renewal Term, the base rent shall be
increased as follows. The base rent for the next twelve (12) months of the Term
or renewal Term, as the case may be, shall be determined by multiplying the base
rent for the lease year ending on January 31 immediately prior to the Adjustment
Date, by a fraction, the numerator of which shall be the Consumer Price Index,
All Urban Consumers, West Region, as published by the U.S. Department of Labor,
Bureau of Labor Statistics ("CPI Index"), for the month of November immediately
prior to the Adjustment Date, and the denominator of which will be the CPI Index
for the month of November which is one (1) year prior to the Adjustment Date.
Notwithstanding the foregoing, the base rent on each Adjustment Date shall
increase at a rate no greater than a maximum of five percent (5%) per year.
9. RIGHT OF FIRST REFUSAL. If Lessor enters into a written contract to
sell the leased premises, or any part thereof, or to sell any partnership
interest in Lessor, then Lessor shall notify Lessee in writing, enclosing a copy
of the fully executed contract ("Third-Party Contract"), and Lessee shall have a
right of first refusal to match the Third-Party Contract and enter into a
written contract with Lessor containing all of the same terms and conditions of
the Third-Party Contract.
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If Lessee fails to deliver its written offer containing all of the same terms
and conditions as the Third-Party Contract within thirty (30) days after
Lessee's receipt of Lessor's written notification of the Third-Party Contract,
then this right of first refusal shall expire and Lessor may proceed to sell the
leased premises or partnership interest, subject to this Lease, pursuant to said
Third-Party Contract. If Lessor does not consummate the foregoing sale pursuant
to said Third-Party Contract, then the right of first refusal described above
shall again apply to any subsequent contracts entered into by Lessor concerning
same. Notwithstanding the foregoing, it is acknowledged and agreed that
transfers of partnership interest in Lessor between existing partners, or to
family members of existing partners, or to trusts, estates or other entities
under which such family members or existing partners are the sole beneficiaries
or owners thereof, shall not trigger the foregoing right of first refusal,
provided, however, that the right of first refusal shall continue and remain in
full force and effect as to any other sales or transfers of the leased premises
or partnership interest.
10. PURCHASE OPTION. The Purchase Option contained in paragraph 6.6, in
the Addendum A to the Lease dated January 17, 1992, shall remain and continue in
full force and effect, except that the purchase price described therein shall be
increased by the sum of any unpaid Amortized Payments remaining at the time
Lessee exercises the subject Purchase Option. Lessor and Lessee acknowledge that
the Purchase Option provisions contained in the January 17, 1992 Lease pertain
only to the original leased premises consisting of approximately 35 acres.
11. IMPROVEMENTS REMAIN. Upon the termination of this Lease, Lessee
shall not be obligated to remove any of the improvements which comprise the
Project, but Lessee may elect, in Lessee's sole discretion, to remove any of
Lessee's trade fixtures and personal property.
12. TITLE INSURANCE. Lessee, at its own cost, may purchase leasehold
title insurance, and Lessor shall cooperate with same, including, but not
limited to, the execution of a Memorandum of Lease for recording.
13. LEASE CONTINUES. Except as modified by this Third Amendment, all
terms and conditions set forth in the Lease shall remain and continue in full
force and effect.
14. CONDITION. This Third Amendment is subject to the condition that
Lessee is able to obtain all necessary governmental approvals to proceed with
the Project as desired by Lessee. Lessee may elect to waive this condition.
IN WITNESS WHEREOF, this Third Amendment was executed as of the date
first above written.
LESSOR: LESSEE:
MRM INVESTMENTS, L.L.P. INSURANCE AUTO AUCTIONS, INC.
By: /s/ Xxxxxx X. Xxxxxx By: /s/ Xxxxx X. Xxxxxx
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Xxxxxx X. Xxxxxx, General Partner Xxxxx X. Xxxxxx
Chief Financial Officer
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