LEASE AGREEMENT AMENDMENT
Exhibit 99.1
LEASE AGREEMENT AMENDMENT
THIS LEASE AGREEMENT AMENDMENT (the “Amendment”), entered into by and between Xxxxxxx Xxxxxxx
Xxxxxxx (“Lessor”), Motorcar Parts de Mexico, S.A. de C.V., hereby represented by Xx. Xxxxxx Xxxxxx
Joffe, (“Lessee”) and Motorcar Parts of America, Inc., a New York Corporation, hereby represented
by Xx. Xxxxxx Xxxxxx Xxxxx (“Guarantor”).
RECITALS
| A. | The Lessor and Lessee entered into a certain Lease Agreement dated as of October 28th, 2004 (“the Agreement”) with respect to premises identified as Xxx 000, Xxxxx 00 (Polygon 19), in Colonia El Lago, in Tijuana, Baja California, Mexico, with an area of 49,951.715 square meters (the “Initial Leased Premises”). | ||
| B. | Motorcar Parts of America Inc, (“Guarantor”) guarantees the Lessee’s obligations under the Agreement pursuant to certain Guaranty dated as of October 28th, 2004 (the “Guaranty”). Guarantor desires to guaranty certain obligations of the Lessee hereunder pursuant to the Lease Guaranty Agreement in the form attached to the Agreement as Exhibit “I”. | ||
| C. | The Lessor desires to lease to Lessee approximately 125,000 square feet of Lessor’s Property (“Expansion Facility”), in addition to the 186,000 square feet to which are referred in the Agreement. Consequently, the total area to be leased by Lessor to Lessee shall be approximately 311,000 square feet. The Expansion Facility shall be leased in phases, pursuant to the terms of this Agreement. |
NOW, THEREFORE, in consideration of the premises and the mutual covenants hereinafter
contained, the receipt and sufficiency of which are hereby acknowledged, the parties agree as
follows:
CLAUSES
FIRST. OCCUPANCY BY LESSEE. Lessor and Lessee agree that the occupancy of the Expansion Facility
shall take place in two phases. The First Phase occupancy shall occur on October 9th,
2006 (“First Phase Occupancy”) and the
Second Phase Occupancy shall occur on January 31st, 2007 (“Second Phase Occupancy”).
SECOND. TERM OF THE LEASE AND DELIVERY OF THE EXPANSION FACILITY. Lessor hereby leases to the
Lessee and the Lessee hereby leases from Lessor the Expansion Facility. Lessor covenants to deliver
the Expansion Facility in strict accordance with the terms of this Amendment. The Term of this
lease for the Expansion Facility shall be for a period ending concurrently with the Agreement. The
Term for the First Phase Occupancy shall commence on October 16th, 2006 for
approximately 80,000 square feet (“First Phase Commencement Date”). The Term for the Second Phase
Occupancy shall commence on or before January 31st, 2007 for approximately 45,000 square
feet (“Second Phase Commencement Date”). From and after the date hereof, Lessor expressly
acknowledges and agrees that Lessee, its employees, agents, and representatives may enter into the
Expansion Facility at any time with the purpose of installing lessee improvements and related
tasks, provided the same do not thereby unreasonably interfere with Lessor’s obligation to its
present tenants.
THIRD. TERMINATION. After a written request from Lessor to Lessee, at least 180 days before the end
of the original term or any of its extensions, the Lessee shall notify the Lessor in writing, at
least 150 days before the end of the original term or of any of its extensions, of Lessee’s intent
to extend or terminate the Lease Agreement for the Expansion Facility. The Lessee shall have the
right to extend this Lease for two (2) additional extensions for independent five (5) year terms,
unless the LESSEE informs the LESSOR otherwise, in writing, and at least 150 (One hundred and
Fifty) days, of its intent of terminating this Amendment on such original date of termination or on
the date of termination of any such extensions.
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FOURTH. RENT. Lessor hereby agrees to grant to Lessee 1 (one) 30-day period of free rent (“Free
Rent Period”) commencing on the First Phase Commencement Date. Upon expiration of the Free Rent
Period, which shall occur on November 15th, 2006 (“Expiration Date of the Free Rent Period”), from
the first day following to the Expiration Date of the Free Rent Period, and payable within the
first 10 business days of each rental period, the Lessee shall pay to the Lessor, as monthly rent,
at its address set forth herein, or any other address as instructed in writing to Lessees at the
address set forth herein, the initial amount of $30,400 (Thirty Thousand four Hundred Dollars and
00/100) in U.S. Dollars or as converted to its Mexican Pesos equivalency as set forth in the
Agreement for the First Phase of the Expansion Facility. From the first day of the Second Phase
Term, and payable within the first 10 business days of each month, the Lessee shall pay to the
Lessor, as monthly rent, at its address set forth herein, or any other address as instructed in
writing to Lessees at the address set forth herein, an additional amount of $17,100 (Seventeen
Thousand One Hundred Dollars and 00/100) in U.S. Dollars or as converted to its Mexican Pesos
equivalency as set forth in the original Lease Agreement. No payments shall be due on any day which
is a legal holiday for either Banco Nacional de Mexico, Bancomer, or Banca Serfin, or on a day on
which any of the foregoing are permitted by law to be closed for business. If the first day or the
last day of the Term of this Amendment is a day other than the first day of a calendar month, the
amount of the first or last monthly rental payment and/or all other amounts due under this
Amendment shall be prorated accordingly. For purposes of calculating the monthly rent if paid in
Mexican Pesos, the parties shall use the average rate of exchange for currency conversion quoted by
Banco Nacional de Mexico, Bancomer, and Banca Serfin, on the day of payment or on the immediately
preceding business day in case the day of payment is a day on which any of the aforementioned banks
is legally closed for business. In case of late payment of rent pursuant to this Amendment Lessee
agrees to pay to the Lessor a late fee at the rate of 3% per month of any rent delinquent past all
applicable notice and cure periods. The rent shall be indexed as set forth in the Agreement such
that the lessee shall pay lessor the same rent, on a pro-rata basis, with respect to the Expansion
Facility as is paid for the Initial Leased Premises.
FIFTH. INSURANCE. During the Term, the Lessee shall obtain and maintain in full force and effect
the following increased or additional insurance policies, which cost shall be paid by the Lessee. A
certificate of each policy shall be made available to Lessor upon the latter’s demand; Insurance to
cover Lessee, and naming Lessor as an additional insured and, if applicable, Lender shall be named
the loss payee, against any civil liability claims, demands, lawsuits, or actions, or
against the accidents or decease of any person injured or deceased at the Expansion Facility or
from any damages to the goods of any third party in connection with the use by the LESSEE of the
Expansion Facility. The corresponding insurance policy shall cover an insurable value of at least
$1,000,000.00 dollars (One Million Dollars and 00/100 U.S. Cy.) per occurrence During Term, the
Lessee, shall obtain and maintain in full force and effect the following insurance policies, which
cost shall be paid by the Lessee. A certificate of each policy shall promptly be made available to
Lessor and otherwise upon request. Insurance in favor of the Lessee, and naming Lessor as an
additional insured and, if applicable, Lender shall be named the loss payee, which shall cover the
Leased Premises against fire, lightning, explosion, falling aircraft collision, smoke, storms,
hail, vehicle damage, earthquakes, volcanic eruption, strikes, riots, civil commotion, vandalism,
flood, one year rental interruption and/or any others risks covered under the so called “extended
coverage” (including windows and gas tanks). The corresponding insurance policy shall cover an
insurable value of at least $4,750,000 Dollars (Four Million Seven Hundred Fifty Thousand Dollars
and 00/100 U.S. Cy.). The insurance policies referred to in this Article above shall be obtained
with any insurance company authorized to do business in Mexico or insure liabilities arising in
Mexico and acceptable to the Lessor and Lessee in their reasonable discretion. Likewise, the
policies shall provide that the same may not be amended without prior written notice to Lessor or
Lessee, as applicable. Additionally, said insurance policies shall provide that they shall not be
subject to cancellation or change, except after at least 30 (thirty) days written notice to the
Lessor or Lessee, as applicable.
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SIXTH. DEPOSIT AND GUARANTY. Lessee hereby agrees to pay to Lessor an additional lease security
deposit, in the amount of $95,000.00 (Ninety-five Thousand Dollars 00/100 U.S. Cy.) within the
following 15 (fifteen) days of the execution of this Amendment. Such amount shall remain as
Security Deposit for the term of the Lease for the Expansion Facility and any of its extensions and
be returned to Lessee, without interest, and minus any possible deductions for damage or repairs,
after the Lessor carries out a thorough inspection of the condition of the Expansion Facility. As
an inducement for Lessor to enter into this Amendment, Motorcar Parts of America, Inc. has,
simultaneously executed herewith, the Lease Guaranty Agreement for the benefit of Lessor for the
Expansion Facility.
SEVENTH. BROKERS. Neither Lessor nor Lessee has engaged or dealt with any broker or finder in
connection with the matters set forth in this Amendment, Lessor and Lessee shall indemnify and hold
one another harmless from any claims, costs, damages or liabilities (including attorney’s fees)
arising from any breach of the representations set forth in this Article or if the same shall be
based on any statement, representation or agreement by Lessor or Lessee with respect to the payment
of any brokerage commissions or finders fees.
EIGHT. AUTHORITY TO SIGN. The Lessor and the Lessee each has necessary power and authority to
execute and deliver this Amendment and perform its obligations hereunder. In Lessee’s and Guarantor
case, said authority has not been limited or revokes in any manner whatsoever.
NINTH.
The parties agree that except as modified by this Amendment, the Agreement remains in full
force and effect.
IN WITNESS WHEREOF, the parties have executed this Amendment in as of the date first set forth
above.
Xxxxxx
Xxxxxxx Xxxxxxx Xxxxxxx
By:
|
/s/ Xxxxxxx Xxxxxxx Xxxxxxx | |
| Name: Xxxxxxx Xxxxxxx Xxxxxxx | ||
Date:
|
10/12/06 | |
Lessee
Motorcar Parts de Mexico, S.A. de C.V.
By:
|
/s/ Xxxxxx Xxxxxx Joffe | |
| Name: Xxxxxx Xxxxxx Xxxxx | ||
Date:
|
10/12/06 | |
| Guarantor | ||||
| Motorcar Parts of America, Inc. | ||||
By:
|
/s/ Xxxxxx Xxxxxx Joffe | |||
| Name: Xxxxxx Xxxxxx Xxxxx | ||||
Date:
|
10/12/06 | |||
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