FIRST AMENDMENT TO LEASE AGREEMENT
THIS FIRST AMENDMENT TO LEASE, entered into this 29th day of December,
1997, by and between University Development Company, a Michigan partnership,
whose address is 0000 X. Xxx Xxxxxx Xxxx, Xxxx, Xxxxxxxx 00000, as Landlord
and Champion Enterprises, Inc., whose address is 0000 Xxxxxxxxxx Xxxxx, Xxxxxx
Xxxxx, Xxxxxxxx 00000, as Tenant.
WITNESSETH:
WHEREAS, Landlord and Tenant entered into that certain Lease dated
November 21, 1991, covering certain premises situated in the City of Auburn
Hills, County of Oakland, State of Michigan, as is more particularly described
in said Lease; and,
WHEREAS, the parties are now desirous of amending the said Lease in the
manner set forth;
NOW, THEREFORE, in consideration of the premises, it is agreed by and
between the parties hereto as follows:
1. Tenant presently occupies 15,946 rentable square feet, commonly known as
Suites 300 and 320, Existing Premises, as delineated in red on the site plan
attached, and Tenant desires to lease 6,528 rentable square feet, commonly
known as Suites 323 and 325, and the common areas on the third (3rd) floor,
Addition, all as delineated in green on the site plan attached, for a revised
rentable square footage of 22,474 rentable square feet, which Existing
Premises and Addition shall hereinafter be known as the Leased Premises for
all purposes of the Lease. Such Leased Premises are located within the
Building commonly known as 0000 Xxxxxxxxxx Xxxxx. Lessee's Leased Premises, as
delineated in blue on the site plan attached, for all purposes of the Lease
effective upon the later of January 1, 1998, or the date of substantial
completion of Tenant's renovation of the Leased Premises but in no event later
than January 31, 1998, and continuing throughout the unexpired term of this
Lease as amended shall be 22,474 square feet.
2. Lessor shall deliver possession of the Addition to Lessee in an "as is"
condition, broom-clean and free of any occupant or right of any occupancy.
Lessee will accept same in an "as is" condition without any representations or
warranties as to the condition thereof by Lessor.
3. Pursuant to Section 2 of this Lease, Term, the Lease Term is hereby
extended for a period of five (5) years eight (8) months commencing May 1,
2002 and terminating December 31, 2007, such Lease term as extended, April 6,
1992, through December 31, 2007, shall be called the initial term of this
Lease.
4. The Annual Rental, as provided for in Section 3 of the Lease, shall be
modified and Tenant shall pay such revised Annual Rental to Landlord as
follows:
Commencing the April 1, 1995, and continuing through September 30, 1997,
Tenant shall pay to Landlord as Annual Rental, the annual sum of Three Hundred
Two Thousand One Hundred Seventy-Six and 80/100 Dollars ($302,176.80) in equal
monthly installments in advance of Twenty-Five Thousand One Hundred Eighty-One
and 40/100 Dollars ($25,181.40) each.
Commencing October 1, 1997, and continuing through December 30, 1997,
Tenant shall not pay to Landlord any Annual Rental.
Commencing January 1, 1998, and continuing through April 30, 1998,
Tenant shall not pay to Landlord any Annual Rental.
Commencing May 1, 1998, and continuing through May 31, 1998, Tenant
shall pay to Landlord as Annual Rental, the sum of Twenty-Five Thousand Four
Hundred Eighty-Nine and 35/100 Dollars ($25,489.35) payable in advance on the
first day of May 1, 1998. This dollar value is based on the assumption of
Tenant's Leased Premises being 22474 rentable square feet as of January 1,
1998, which may need to be adjusted based on paragraph 1 above which may
postpone Tenant's rentable square feet of 22,474 to be no later than January
31, 1998.
Commencing June 1, 1998, and continuing through December 31, 2002,
Tenant shall pay to Landlord as Annual Rental, the annual sum of Four Hundred
Sixty Thousand Seven Hundred Seventeen and 00/100 Dollars ($460,717.00) in
equal monthly installments in advance of Thirty-Eight Thousand Three Hundred
Ninety-Three and 08/100 Dollars ($38,393.08) each.
Commencing January 1, 2003, and continuing through December 31, 2007,
Tenant shall pay to Landlord as Annual Rental, the annual sum of Five Hundred
Five Thousand Six Hundred Sixty-Five and 00/100 Dollars ($505,665.00) in equal
monthly installments in advance of Forty-Two Thousand One Hundred Thirty-Eight
and 75/100 Dollars ($42,138.75) each.
All such monthly rental shall be payable in advance on the first day of
each and every month at the office of the Building Manager, or such other
place as Landlord may designate in writing without any prior demand therefore
and without any deductions or setoffs whatsoever, except as otherwise
permitted under the Lease or any Amendments thereto.
5. Tenant shall at its sole cost and expense, pursuant to plans and
specifications dated August 20, 1997, by Xxxxxxx Associates, construct and
alter the Leased Premises to conform to said plans and specifications.
Landlord shall not be obligated to make any alterations or improvements to the
Existing Premises, the Addition, or the Leased Premises, the full cost of
which, including architectural fees, permits, demolition and all of the
construction shall be at the sole expense of Tenant.
Landlord hereby approves the plans dated August 20, 1997, by Xxxxxxx
Associates for the renovation of the Leased Premises. Landlord hereby approves
the construction of the Leased Premises by Xxxxxxxxx Xxxxxxxx at the sole
expense of Tenant. Substantially, all such construction will be performed
between the hours of 5:00 P.M. and 5:00 A.M. Approval of such plans and
specifications by Landlord shall not constitute the assumption of any
responsibility by Landlord for their accuracy or sufficiency, and Tenant shall
be solely responsible for such matters.
Tenant shall perform all such alterations and improvements to the Leased
Premises as expeditiously as possible, commencing no later than September
29th, 1997, and without unreasonable interference or nuisance to any other
occupant of Cambridge Court. All material shall be stored within the Leased
Premises and all debris shall be removed from the Leased Premises and stored
within a fully enclosed dumpster in a location agree upon by Landlord and
Tenant and Tenant shall provide for the regular pick-up of such dumpster and
keep the area surrounding such dumpster reasonably clean at all times.
Tenant's use of elevators shall not unreasonably conflict with or interfere
with other occupants of Cambridge Court's use of the elevators during normal
business hours; the use of one elevator shall predominantly be used after the
hour of 5:00 P.M. and before the hour of 7:00 A.M. and Tenant shall only use
one (1) elevator. Tenant shall keep Cambridge Court clean and neat and free
from construction debris as much as possible.
6. Landlord and Tenant both acknowledge that the free rent for the period
October 1, 1997, through April 30, 1998, and the discounted rent for the month
of May 1998, in the amount of Twelve Thousand Nine Hundred Three and 73/00
Dollars ($12,903.73) is an inducement to Tenant to expand their Leased
Premises and extend the Lease term and includes the Forty-Eight Thousand and
00/100 Dollars ($48,000.00) refurbishment allowance, Three and 00/100 Dollars
($3.00) per rentable square foot, to be provided to Tenant during the first
thirty (30) days of the sixth (6th) Lease Year of the initial term of this
Lease, pursuant to Section 44(a) of this Lease.
Within a reasonable time frame after final completion of all of the
Tenant improvements, Tenant shall provide to Landlord (a) a fully-completed
and executed Contractor's Statement from Tenant's general contractor
delineating all contractors, subcontractors and material suppliers and full
unconditional waivers of lien from all; (b) a final unconditional Certificate
of Occupancy from the appropriate municipal agency; and (c) a certificate from
Tenant's architect certifying that all Tenant alterations and improvements
have been completed in full compliance with the final working drawings and
specifications. Tenant shall indemnify and hold harmless Landlord from any and
all claims, lawsuits, or damages directly arising out of or attributable to
such Tenant alterations and improvements, and Tenant shall promptly pay all
costs and expenses attributable to such alterations and improvements. In no
event will Tenant allow a lien or claim to be filed against the Landlord or
Cambridge Court, and if such claim or lien is filed, Tenant shall promptly
discharge any such claim or lien and indemnify Landlord for any costs or
damages directly incurred by Landlord as a result of such lien or claim.
7. Section 42, option to Extend, shall be modified specifically only as
follows:
42. (a) Tenant shall have the option to renew the term of this
Lease for a maximum of two (2) additional periods of either one (1) year or
five (5) years each as follows:
(1) Upon the expiration of the initial term of this Lease as extended
herein to December 31, 2007, by this First Amendment to Lease,
Tenant shall have the option to renew the term of this Lease for a
period of either one (1) year or five (5) years (the "First
Renewal Term") , by delivering written notice to Landlord of
Tenant's exercise of such option not less than twelve (12) months
prior to the expiration of the initial term of this Lease as
extended to December 31, 2007.
(2) Upon the expiration of the First Renewal Term, Tenant shall have
the option to renew the term of this Lease for a consecutive
period of either one (1) year or five (5) years (the "Second
Renewal Term") by delivering written notice to Landlord of Tenant
exercising of such option not less than twelve (12) months prior
to the expiration of the First Renewal Term.
All other terms and conditions of Section 42, option to Extend, shall remain
as is and shall not be modified or altered and shall remain in full force and
effect.
8. Section 44, Refurbishment Allowance, shall be modified specifically only
as follows:
Landlord agrees to pay Tenant a refurbishment allowance in accordance with the
following schedule:
(a) during the first thirty (30) days of calendar year 2003, upon
written demand by Tenant, three and 00/100 Dollars ($3.00) per rentable square
foot shall be paid to Tenant within thirty (30) days of receipt of said
written notice from Tenant to Landlord;
(b) during the first thirty (30) days of the First Renewal Term, if
applicable, provided such First Renewal Term is for a full five (5) years,
upon written demand by Tenant, Three and 50/100 Dollars ($3.50) per rentable
square foot shall be paid to Tenant within thirty (30) days of receipt of said
written notice from Tenant to Landlord;
(c) during the first thirty (30) days of the Second Renewal Term, if
applicable, provided such Second Renewal Term is for a full five (5) years,
upon written demand by Tenant, Four and 00/100 Dollars ($4.00) per rentable
square foot shall be paid to Tenant within thirty (30) days of receipt of said
written notice from Tenant to Landlord.
The refurbishment allowance shall only be paid by Landlord to Tenant if
Tenant or any permitted subtenant or assignee (including, without limitation,
any successive corporation by way of consolidation, merger , or otherwise), is
occupying an area of the Leased Premises which is equal to or greater than
seventy-five percent (75%) of the total Leased Premises at the time the
allowance is required to be paid. The balance of this paragraph shall remain
as is and shall not be modified.
9. Section 41, Right of First Refusal, shall be modified specifically only as
follows:
Provided Tenant is not in default under the terms of this Lease, Tenant
shall have the right of first refusal through December 31, 2006, and through
December 31, 2011, if Tenant exercises its First Renewal Term for the full
five (5) year period, and through December 31, 2016, if Tenant exercises it
Second Renewal Term for the full five (5) year period): (a) to lease
additional space on the first, second, fourth, or fifth floors of the Building
subject to any current existing rights of any existing occupant or its
successor or assigns of expansion rights or current existing rights of first
refusal; or (b) to lease additional space on any floor in any future other
office building in Cambridge Court owned by University Development Company,
subject to any right or any future right of any occupant or its successors or
assigns of such building of expansion rights or right of first refusal. If at
any time Landlord receives an offer from any third person other than the
existing occupant or its successors or assigns, to lease space on the first,
second, fourth or fifth floors of the Building subject to any current existing
rights of any existing occupant or its successors or assigns of expansion
rights or current existing rights of first refusal; or any floor in any other
building in Cambridge Court owned by University Development Company subject to
any right or any future right of any present or future occupant or its
successors or assigns of such building of expansion rights or rights of first
refusal which offer Landlord intends to accept ("Offer"), Landlord shall
promptly deliver to Tenant a summary of all material terms and conditions of
the summary and Tenant may, within five (5) business days of Tenant's receipt
of the Offer, elect to lease the premises described in the offer on the same
terms as those set forth in the offer; provided, however, any occupant of the
Building or any future building of Cambridge Court owned by University
Development Company or its successor or assigns shall have the first right to
renew or modify their Lease to extend their occupancy within the premises they
lease without regard to any right of Tenant to such premises.
At the Lease expiration of any occupant or its successors or assigns of
any space within this Building or any other building of Cambridge Court owned
by University Development Company and such occupant or its successors or
assigns has an existing option to extend and/or expand for this Building or
such occupant has any present or future right to extend or expand in any other
building in Cambridge Court owned by University Development Company, such
occupant shall have the right to exercise such option to extend and/or expand,
and Tenant shall have no rights to such space if occupant exercises such
option to extend or expand, provided, however, if such occupant or its
successors or assigns has no existing option to extend, then if comparable
space is otherwise immediately available in either this Building or any other
building within Cambridge Court owned by University Development Company, and
if requested by Tenant, then Landlord shall try to relocate such occupant to
such comparable space. If Landlord is successful in relocating said occupant
and if the comparable space has previously been occupied, then Tenant,
Champion Enterprises, shall pay the full cost of all alterations to the
comparable space to satisfy the occupant's requirements; and, in addition,
Tenant, Champion Enterprises, shall reimburse occupant all other reasonable
costs of such relocation. If, however, such comparable space has previously
never been occupied, then Landlord and Tenant, Champion Enterprises shall
share 50/50 the full cost of all alterations to the comparable space to
satisfy the occupant's requirement, and, in addition, Landlord and Tenant,
Champion Enterprises, shall share 50/50 all other reasonable costs of such
relocation. If Landlord is not successful in relocating said occupant, then
said occupant shall have the right to extend its Lease within said occupant's
existing premises without regard to any right to Tenant, Champion Enterprises.
If Tenant fails to exercise its right of first refusal and Landlord fails to
lease the premises described in the summary to the third party submitting the
Offer on substantially the same terms as contained in the Offer, then Tenant's
right of first refusal shall remain applicable to subsequent offers for such
premises (including material modifications, if any, to the Offer). If Tenant
does not timely exercise its right of first refusal, then Landlord shall be
free to lease the premises to the third party on substantially the same terms
and conditions as contained in the Offer. If Tenant exercises its right of
first refusal under this paragraph, then Landlord and Tenant shall, within ten
(10) days of the date of such exercise, execute a written amendment to the
Lease in order to incorporate the Offer into the terms of this Lease. If:
(a) Tenant assigns this Lease or sublets all of the Leased Premises for
the balance of the Term in accordance with Section 10 of the Lease, and
(b)under the terms Of such assignment or sublease, Tenant grants such
assignee or subtenant the right to exercise Tenant's right of first refusal,
then such assignee or subtenant shall have the right to exercise such right of
first refusal. Except as provided in the preceding sentence, Tenant's rights
under this Section 41 shall be deemed personal to Tenant and shall not be
exercised by any assignee or subtenant.
10. Xxxxxxx 0, xxxxxxxxx 0, xxxxx xx modified specifically only as follows:
The words "one hundred ten (110)" shall be substituted for the words
"seventy (70)" in the first (1st) and fifth (5th) lines of this paragraph, and
the word "vehicle" shall be substituted for the word "car" in the second (2nd)
and fifth (5th) line of this paragraph.
11. Section 32, Fixtures and Equipment. Paragraph 2 shall be modified
specifically only as follows:
All furnishings, equipment and fixtures, including all furniture
(excluding built-in furniture), work stations, computers, and
telecommunications equipment, other than those specified above which are paid
for and placed in the Leased Premises by Tenant from time to time (other than
those which are replacements for fixtures or equipment originally paid for by
Landlord), shall remain the property of the Tenant and may be removed at any
time during this Lease term by Tenant provided Tenant shall be responsible for
any and all damage resulting from such removal.
12. Section 33, Compliance with Laws. Paragraph (b) shall be modified
specifically only as follows:
(b) Tenant's Compliance. Tenant shall comply at its sole cost and
expense with all Applicable Laws (1) regarding the physical condition of the
Leased Premises, but only to the extent that the Applicable Laws pertain to
the particular manner in which Tenant uses the leased Premises, or relate to
any construction or alterations performed by or for Tenant within the Leased
Premises; or (ii) that do not relate to the physical condition of the Leased
Premises, but relate to the lawful use of the Leased Premises and with which
only the occupant can comply, such as laws governing maximum occupancy,
workplace smoking, and illegal business operations, such as gambling.
13. Section 15, Increased Real Property Taxes and Operational and
Maintenance Expenses.
The last paragraph on page 20 shall be modified specifically only as
follows:
Tenant's pro rata share of any increase in the operational and
maintenance expenses, excluding insurance, utilities and Taxes, in any
one calendar year over the base calendar year 1992 for such amounts
shall be limited to any increase in the operational and maintenance
expenses but not more than seven percent (7%) from the prior year
through the calendar year 1998 and ten percent (10%) from the prior year
through the calendar year 2002, and fifteen percent (l5%) from the prior
year through calendar year 2007; provided, however, the seven percent
(7%), ten percent (10%), and fifteen percent (15%) limitation shall not
apply to insurance, utilities, or Taxes, and Tenant shall be obligated
to pay its full pro rata share of any increase in insurance, utilities,
and Taxes over the 1992 base calendar year for such insurance, utilities
and Taxes.
Tenant shall continue to pay its full pro rata share of increased
insurance utilities and Taxes over base calendar year 1992 however, the
seven percent (7%) cap through December 31, 1998, ten percent (10%) cap
from January 1, 1999, through December 31, 2002, and fifteen percent
(15%) cap from January 1, 2003, through December 31, 2007, for all other
increases in operational and maintenance expenses ("AOOME) over the base
calendar year 1992 shall be applied as follows:
For example: assume that Tenant's pro rata share equals one hundred percent
(100%) Tenant's pro rata share for such increase over 1992 base calendar year
shall be computed as follows:
1992 "Base AOOME" $1,000.00
1993 "AOOME" $1,500.00
1993 -increase over "Base AOOME" $500.00
-capped portion of "increased" AOOME"
($1000.00 x 107%) $1,070.00
-pro rata share of such increase
($1,070.00 - $1,000.00) x % pro rata share $70.00
=========
1994 -"AOOME" $1,700.00
-increase over "Base AOOME" 700.00
-capped portion of increased "AOOME"
($1,070.00 x 107%) $1,145.00
-pro rata share of such increase
($1145.00 - $1000.00) x % pro rata share $145.00
=========
1995 -"AOOME" $1,600.00
-increase over "Base AOOME" 600.00
-capped portion of increased "AOOME"
($1,145.00 x 107%) $1,225.00
-pro rata share of such increase
($1225.00 - $1000.00) x % pro rata share $225.00
=========
14. Section 46, Security. The following paragraph shall be added as new
Section 46, Security, as follows:
Tenant shall have permission to install monitoring cameras in the lobby
of the third floor to monitor the third floor. Tenant shall also have
permission to install card access devices at each suite entrance door
from the third floor lobby; provided, however, Landlord, its personnel,
cleaning contractor and emergency service contractors shall have access
through the card access doorways at all times in order to have complete
access to the third floor so that Landlord, its personnel, cleaning
contractor, and emergency service contractors can perform their
obligations pursuant to the Lease. Both the camera and card access
systems shall not be connected to the Building alarm system and Tenant
shall connect such systems to its own alarm system and be responsible
for monitoring same.
Tenant shall have permission to install on the east third floor
stairwell door an alarm and locking device similar to the one on the
west third floor stairwell door in order to signal access from the
stairwell to the third floor. No such alarm or locking device shall be
permitted to be installed on the third floor stairwell center door. The
stairwell alarms may be connected to the Tenant alarm system.
Landlord shall install, at its own cost and expense, lock guards, if
available, on the first floor east, west, and center Building entrance
doors.
Tenant shall have permission to rekey the third-floor lavatory doors so
that they shall be separately keyed; Tenant to supply keys to Landlord.
15. Section 7, Repairs. The second (2nd) sentence of the second (2nd)
paragraph of Section 7, Repairs, shall be modified only as follows:
Notwithstanding anything contained in this Lease to the contrary, in the
event that the Leased Premises become untenantable for three (3)
consecutive days as a result of actions taken by Landlord, its agents,
or contractors under this Section, which are beyond Landlord's
reasonable control, then commencing on the fourth (4th) day, Tenant
shall be entitled to an equitable abatement of base and additional rent.
The abatement shall end when the Leased Premises are no longer
untenantable.
16. The following paragraphs or portions thereof of this Lease shall be
deleted in total as having been previously fully satisfied and complied with:
a) Section 2, Term
first paragraph of Section 2, Term, starting with the third
(3rd)sentence: "On the day..." and continuing through the entire
balance of the paragraph, "... a Purchase Agreement dated November
___, 0000,(xxx Xxxxxxxx Agreement)."
b) Xxxxxxx 0, Xxxx
the entire second (2nd)paragraph of Section 2, Term.
c) Section 2, Term
the entire third (3rd) paragraph of Xxxxxxx 0, Xxxx.
d) Section 3, Annual Rental
the entire fourth (4th) , last paragraph of Section 3, Annual
Rental.
e) Section 40, Moving Expense Allowance
the entire paragraph of Section 40, Moving Expense Allowance.
f) Section 45, Computer Room Allowance
the entire paragraph of Section 45, Computer Room Allowance.
17. Landlord and Tenant represent and warrant to each other that neither has
dealt with a broker regarding the expansion of the Leased Premises and
extension of the Lease for the Leased Premises in Cambridge Court, and
Landlord and Tenant agree to indemnify and hold the other harmless from any
claims for brokerage commissions or finders fees which may be claimed arising
out of the expansion and/or extension of Lease for the Leased Premises in
Cambridge Court.
18.Except as expressly amended herein, all other terms and conditions of said
Lease as amended shall remain in full force and effect.
19.This Amendment shall be binding upon the parties hereto, their respective
successors, and assigns.
IN WITNESS WHEREOF, the parties hereto have caused their presence to be
duly executed the day and year first above written.
WITNESSES:
/s/ Xxx X. Xxxxxx
Landlord: University Development Company,
a Michigan Partnership
By:/s/ Xxxxxx Xxxxxxx
Xxxxxx Xxxxxxx
Tenant: Champion Enterprises, Inc.
By:/s/ Xxxxxx X. Xxxxx, Xx.
COMPUTATION OF FREE RENT
October - December 1997
$27,174.65 x 3 = $81,523.95
15,946 square feet x $20.45 per square foot=
$326,095.70
---------- =$27,174.65
12
January April 1998
$38.393.08 x 4 = $153,572.32
22,474 square feet x $20.50 per square foot=
$460,717.00
---------- =$38,393.08
12
Portion of May 1998 $12,903.73
---------
$248,000.00
===========
