Exhibit 10.20
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE ("Amendment") is made to be effective as of
the 17th day of July, 2002 (the "Amendment Effective Date"), between TIMCO
AVIATION SERVICES, INC., a Delaware corporation, formerly known as Aviation
Sales Company ("Landlord") and XXXXXXXXX INDUSTRIES, INC., a Delaware
corporation ("Tenant").
R E C I T A L S
WHEREAS, Landlord and Tenant executed that certain Lease dated December 1,
2000 (the "Lease"), for certain property located at 0000 Xxxxxxxx Xxxx, Xxxxxxx,
Xxxxxxx Xxxxxx, Xxxxxxx, and being more particularly described therein; and
WHEREAS, Landlord has, prior to the Amendment Effective Date, assigned,
transferred and conveyed to a third party the property located at 0000 Xxxxxxxx
Xxxx, Xxxxxxx, Xxxxxxx Xxxxxx, Xxxxxxx (the "Adjoining Property"), and
heretofore owned by Landlord; and
WHEREAS, the parties have agreed to amend the Lease to change the Term,
Minimum Rental and certain other provisions of the Lease identified below; and
NOW, THEREFORE, based upon the foregoing mutual premises and the sum of Ten
Dollars ($10.00), the adequacy, sufficiency and receipt of which are hereby
acknowledged, it is agreed as follows:
1. Defined Terms. Capitalized terms in this Amendment shall have the same
meaning as such capitalized terms have in the Lease, unless otherwise noted in
this Amendment.
2. Term. All of Paragraph 2 of the Lease is hereby deleted and replaced by
the following:
The term of this Lease shall be for a period commencing on December 1, 2000
and terminating on the twentieth (20th) anniversary of the Amendment Effective
Date, plus the number of days necessary to end the term on the last day of a
calendar month or on such earlier date upon which said term may expire or be
terminated pursuant to any of the conditions of limitation or other provisions
of this Lease or pursuant to the provisions of any present or future
constitution, law, statute, ordinance, rule, regulation, other governmental
order or controlling judicial determination of any federal, state, local,
municipal or other governmental body, agency or authority having or asserting
jurisdiction and all departments, commissions, boards and officers thereof
(hereinafter collectively referred to as the "Laws").
3. Minimum Rental. Schedule "B" to the Lease is hereby deleted and replaced
by the Schedule "B" attached hereto and made a part hereof. Notwithstanding the
foregoing, the Schedule "B" to the Lease in effect as of December 1, 2000 shall
remain effective for periods prior to the Amendment Effective Date.
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4. Options to Terminate. Provided that Tenant is not in default under the
Lease beyond any applicable grace period at the time that Tenant exercises its
termination option, Tenant shall have the one-time right and option to terminate
this Lease effective as of the end of the seventh (7th) Lease Year after the
Amendment Effective Date (the "Termination Date") only and strictly upon the
following terms and conditions:
To exercise its option to terminate, Tenant shall give Landlord written
notice (in accordance with Section 32(a) of the Lease) of Tenant's unqualified,
irrevocable exercise of the option to terminate the Lease not less than twelve
(12) months prior to the Termination Date.
If Tenant elects to exercise its termination option, Tenant shall be
responsible for all Lease obligations up to the Termination Date, at which time
Tenant shall deliver the Leased Premises to Landlord in accordance with the
terms and provisions of Section 22 of the Lease, and upon such termination of
this Lease, Landlord shall have the right to re-enter and resume possession of
the Leased Premises. Thereafter, neither party shall have any further rights or
obligations to the other except to the extent that any provisions of this Lease
specifically provide that they are intended to survive termination and for any
Lease obligation, including but not limited to any accrued but unpaid rent, not
satisfied prior to the Termination Date.
5. Notice. The address for Notice to Landlord under paragraph 32(a)(i) of
the Lease is amended to be:
Aviation Sales Company
000 Xxxxx Xxxx
Xxxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attn: Xxx X. Xxxxxx, Xx.
Chairman / Chief Executive Officer
With a copy to:
Xxxxx & Xxxxxx
0000 Xxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxx Xxxxx
6. Authority. The parties warrant and represent to each other that each has
full right and authority to enter into this Amendment, and that the person
signing the Amendment on behalf of each party is duly authorized by all
necessary corporate and legal action to do so.
7. No Brokers. Landlord and Tenant each warrant to the other that no broker
or agent has been employed with respect to this Amendment and each agrees to
indemnify and hold the other harmless from any claims by any broker or agent
claiming compensation in respect of this Amendment alleging an agreement by
Landlord or Tenant, as the case may be.
8. Multiple Originals; Facsimile. This Amendment may be executed in any
number of separate counterparts, each of which will be deemed to be an original,
but all of which together
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shall constitute one and the same instrument. A facsimile signature on any
counterpart hereto will be deemed an original for all purposes hereof.
9. Binding Effect. This Amendment will inure to the benefit of, and be
binding upon, the respective successors and the permitted assigns of the parties
hereto.
10. Miscellaneous. The Lease is hereby amended to effectuate the intent of
this Amendment. In the event of any conflict between the terms of the Lease and
this Amendment, the terms of this Amendment shall prevail and control in the
interpretation, operation and effect thereof.
11. No Other Amendments. Except as otherwise specifically amended by this
Amendment, all of the terms of the Lease shall remain in full force and effect
and are hereby ratified and confirmed by the parties hereto.
12. Lease Year. For purposes of this Amendment, the definition of the term
"Lease Year" in Section 35 of the Lease shall be changed, for the period from
and after the Amendment Effective Date, to mean each successive twelve (12)
month period during the term of this Lease commencing on the Amendment Effective
Date.
13. Time. Time is of the essence in all matters pertaining to the
performance of this Amendment and the Lease.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment
effective as of the day and year first written above.
WITNESSES: TENANT:
XXXXXXXXX INDUSTRIES, INC., a
Delaware corporation
/s/ By: /s/
--------------------------------- ------------------------------------
Signature of Witness Name:_______________________________
/s/ Its:________________________________
---------------------------------
Printed Name of Witness
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LANDLORD:
TIMCO AVIATION SERVICES, INC., a
Delaware corporation
/s/ By: /s/
--------------------------------- ------------------------------------
Signature of Witness Name:_______________________________
/s/ Its:________________________________
---------------------------------
Printed Name of Witness
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SCHEDULE B
MINIMUM RENTAL
Lease Year after Monthly Minimum Rental
Amendment Effective Date
1 through 5 $229,167.00 ($2,750,000.00 per Annum)
6 through 10 $250,000.00 ($3,000,000.00 per Annum)
11 through 15 Fair Market Rental as determined below
16 through 20 Fair Market Rental as determined below
COST OF LIVING BASE RENT INCREASES. Landlord and Tenant mutually agree that for
each Lease Year of this Lease other than the Lease Year immediately following
the Amendment Effective Date and the Lease Years commencing on Lease Years 6, 11
and 16 of the Term of this Lease (collectively, the Designated Rent Increase
Years or individually, a Designated Rent Increase Year), the Minimum Rental
stated herein shall be adjusted on the basis of any increase in the cost of
living as reported in the Consumer Price Index, All Items and Major Group
Figures for all Urban Consumers (1967 = 100) (the "Index") published by the
Bureau of Labor Statistics (the "Bureau") of the United States Department of
Labor, between the level in effect i) two months prior to the Amendment
Effective Date, or ii) two months prior to the commencement date of the
Designated Rent Increase Years, which ever year immediately precedes the year of
the adjustment (the "Base Level") and a level in effect two months before the
first day of the Lease Year that is subject to an adjustment hereunder (for each
such year, the "Adjustment Level"). The Annual Adjusted Minimum Rental (the
"Adjusted Minimum Rental") for each Lease Year of this Lease other than the
initial Lease Year following the Amendment Effective Date and the Designated
Rent Increase Years of the Term of this Lease shall be computed by multiplying
the Minimum Rental for the initial Year of this Lease following the Amendment
Effective Date or the Minimum Rental charged in the Designated Rent Increase
Years of the Term as adjusted on this Schedule "B", which ever year is
immediately prior to the year of the adjustment, by a fraction, the numerator of
which shall be the Adjustment Level, and the denominator of which shall be the
Base Level. Stated as a mathematical formula, the Adjusted Minimum Rental shall
be computed as follows:
Adjusted Minimum Rental =
Adjustment Level
Base Level x Minimum Rental (for the initial Year
following the Amendment Effective Date
or for the respective Designated Rent
Increase Year, whichever is immediately
prior to the year of the adjustment)
In no event shall the annual Adjusted Minimum Rental for any Lease Year computed
in the above manner exceed three percent (3%) of the prior year's Minimum Rental
or Adjusted Minimum Rental as the case may be. If the annual Adjusted Minimum
Rental for a Lease Year
B-1
would exceed 3% of the prior year's rent, then, the annual Adjusted Minimum
Rental for the new year shall be the amount that is equal to one hundred and
three percent (103%) of the prior year's annual Minimum Rental or Adjusted
Minimum Rental.
If the annual Adjusted Minimum Rental for any Lease Year computed in the above
manner shall be less than the annual Adjusted Minimum Rental for the immediately
preceding Lease Year, the annual Adjusted Minimum Rental for the Lease Year in
question shall be the annual Adjusted Minimum Rental for the immediately
preceding Lease Year. In no event shall the annual Adjusted Minimum Rental be
less than the preceding Lease Year's annual Minimum Rental or annual Adjusted
Minimum Rental as the case may be.
If the compilation and/or publication of the Index shall be transferred to any
other department, bureau or agency of the United States government, or if the
Bureau shall adopt a successor Index, the index published by such successor
department, bureau or agency shall be adopted and used as a standard for
computing adjustments to the Minimum Rental. As soon as possible after
publication of all statistics necessary for calculation of the annual Adjusted
Minimum Rental applicable to any year of this Lease after the first year of the
amended Term of this Lease as provided herein, Landlord shall compute the amount
of annual Adjusted Minimum Rental to be paid by Tenant during such Lease Year
and shall notify Tenant thereof in writing, setting forth the manner in, and
statistics upon, which the annual Adjusted Minimum Rental was computed. If the
amount of the annual Adjusted Minimum Rental payable during any Lease Year has
not or cannot be computed by the due date of the first installment thereof,
Tenant shall continue to pay monthly installments of Minimum Rent at the rate
applicable during the preceding Lease Year until the amount of the new
installments have been computed. If the new installments shall be greater than
the installments due during the preceding Lease Year, Tenant shall pay the
deficiency with the installments next maturing.
DETERMINATION OF FAIR MARKET RENTAL RATE. If, within one hundred fifty (150)
days prior to the start of Lease Years 11 or 16, Landlord and Tenant are unable
to agree in writing upon the prevailing fair market rental rate to apply during
Lease Years 11 or 16, the fair market rental rate applicable to such Lease Years
11 or 16 shall be determined through arbitration as follows. The fair market
rental rate agreed upon by the Landlord and Tenant for Lease Years 11 and 16, or
as determined below for those two Lease Years, shall be the Minimum Rental for
the five (5) year period immediately following the commencement of Lease Years
11 and 16 respectively except as such may be modified by the cost of living base
rent increases identified above.
The Landlord and Tenant shall attempt to agree upon a single appraiser to make
such determination within thirty (30) days after a demand for arbitration has
been made by either the Tenant or Landlord. If the Tenant and Landlord are
unable to agree upon a single arbitrator within such thirty (30) day period,
then the parry giving the notice of demand for arbitration shall give notice to
the other of a person selected to act as appraiser on its behalf. Within ten
(10) days after such notice, the Tenant (or Landlord, as the case may be) shall
by notice to the Landlord (or the Tenant, as the case may be) appoint a second
person as appraiser on its behalf. The appraisers thus appointed, each of whom
must be a member of the American Institute of Real Estate Appraisers (or any
successor organization thereto) and experienced in appraising warehouse
facilities (or reasonably similar facilities), shall, within forty-five (45)
days after the
B-2
date of the notice appointing the first appraiser, proceed to appraise the
relevant facility to determine the fair market rental thereof as of the relevant
date (giving effect to the impact, if any, of inflation from the date of their
decision to the relevant date); provided, however, that if only one appraiser
has been so appointed, or if two appraisers have been so appointed but only one
such appraiser has made such determination within the later to occur of 10
business days following delivery of such appraisal to the other party or fifty
(50) days after the making of Landlord's or the Tenant's request, then the
determination of such appraiser shall be final and binding upon the parties. If
two appraisers have been appointed and have made their determinations within the
respective requisite periods set forth above and if the difference between the
amounts so determined does not exceed ten percent (10%) of the lesser of such
amounts, then the fair market rental shall be an amount equal to fifty percent
(50%) of the sum of the amounts so determined. If the difference between the
amounts so determined exceeds ten percent (10%) of the lesser of such amounts,
then such two appraisers shall have twenty (20) days to appoint a third
appraiser. If no such appraiser has been appointed within such twenty (20) days
or within ninety (90) days of the original request for a determination of fair
market rental, whichever is earlier, either the Tenant or Landlord may apply to
any court having jurisdiction to have such appointment made by such court. Any
appraiser appointed by the original appraisers or by such court shall be
instructed to determine the fair market rental within forty-five (45) days after
appointment of such appraiser. The determination of the appraiser which differs
most in terms of dollar amount from the other two appraisers shall be excluded,
and the average of the sum of the remaining two determinations shall be final
and binding upon the Tenant and Landlord as the fair market rental of the
Facility. This provision for determining by appraisal shall be specifically
enforceable to the extent such remedy is available under applicable law, and any
determination hereunder shall be final and binding upon the parties and judgment
may be entered upon such determination in any court having jurisdiction of the
matter. The Tenant and Landlord shall each pay the fees and expenses of the
appraiser appointed by it and each shall pay one-half (1/2) of the fees and
expenses of the third appraiser and one-half (1/2) of all other costs and
expenses incurred in connection with each appraisal.
In the event this Lease is modified to provide for renewal terms that include
the determination of Basic Rental through the process described above, then
notwithstanding any provision of this Lease to the contrary, Tenant shall have
the right in its discretion to revoke its exercise to renew the Term of the
Lease by delivering written notice of such revocation to Landlord by the date
that is no later than ten (10) days after the final determination of the rental
rate applicable to such renewal period; provided, however, that any such
revocation shall not release Tenant of its obligation to pay its share of
expenses incurred in connection with the determination of the applicable rental
rate.
B-3
