1
FOURTH AMENDMENT TO LEASE AGREEMENT
EXHIBIT 10.39
THIS FOURTH AMENDMENT TO LEASE AGREEMENT, is made and entered into as of
this 30th day of June, 1998, and is effective as of July 1, 1998 ("Effective
Date"), by and between 1155 BREWERY PARK LIMITED PARTNERSHIP, a Michigan limited
partnership, as landlord, and UNITED AMERICAN HEALTHCARE CORPORATION, a Michigan
corporation, as Tenant.
WITNESSETH:
WHEREAS, on July 24, 1991, Landlord and Tenant did make and enter into a
certain Lease Agreement covering premises located in the building commonly
known as "1155 Brewery Park Boulevard" situated in the City of Detroit, Xxxxx
County, Michigan, and which premises are more particularly described in the
Lease as the original premises of approximately 54,168 rentable square feet;
and
WHEREAS, on April 15, 1993, Landlord and Tenant did make and enter into a
certain First Amendment to Lease Agreement ("First Amendment") amending certain
terms of the Lease Agreement to include a reduction of the expansion space
option; and
WHEREAS, on December 8, 1993, Landlord and Tenant did make and enter into
a certain Second Amendment to Lease Agreement ("Second Amendment") for the
purpose of incorporating Suite 350 (approximately 3,591 rentable square feet)
as expansion premises; thereby increasing the square footage (original premises
and expansion premises) to approximately 57,759 rentable square feet; and
WHEREAS, on July 1, 1995, Landlord and Tenant did make and enter into a
certain Third Amendment to Lease Agreement ("Third Amendment") for the purpose
of incorporating Suites 333, 343 and 353 (approximately 5,826 rentable square
feet) as expansion premises; thereby increasing the square footage (original
premises and expansion premises) to 63,585 rentable square feet (which Third
Amendment, together with the First Amendment, Second Amendment and the Lease,
is herein collectively referred to as the "Lease"); and
NOW, THEREFORE, in consideration of the foregoing, the parties hereto do
hereby mutually agree as follows:
1. From and after the Effective Date of this Agreement, the provisions of
subparagraph B of Paragraph 1 of the Lease, shall be amended to provide that
the following space shall be deleted from the Premises ("Deleted Premises") and
the Premises shall thereafter consist of approximately 54,168 rentable square
feet:
(a) Suite No. 333 located on
the third (3rd) floor containing approximately
2,130 rentable square feet.
(b) Suite No. 343 located on
the third (3rd) floor containing approximately
1,329 rentable square feet.
(c) Suite No. 350 located on
the third (3rd) floor containing approximately
3,591 rentable square feet.
(d) Suite No. 353 located on
the third (3rd) floor containing approximately
2,367 rentable square feet.
Rentable square footage for the above shall be determined in accordance with
the provisions of Paragraph 34 of the Lease. The Premises, giving effect to
the Deleted Premises, shall be referred to as the "Premises" and is shown on
Exhibit A attached.
2. From and after the Effective Date, Tenant hereby remises, releases,
quitclaims, and surrenders to Landlord, its successors and assigns forever, all
rights of Tenant in and to the Deleted Premises, however acquired, together
with all of its right and interest (and title, if any)
2
in and to any and all improvements therein contained, and all of the estate and
rights of Tenant in and to the Deleted Premises.
3. Tenant, for itself and its successors and assigns, subject to the
warranties herein made by Landlord, hereby forever releases and discharges
Landlord from any and all obligations and liabilities under the Lease with
respect to the Deleted Premises and from and all claims, demands, or causes of
action whatsoever against Landlord, its successors and assigns, arising from
and after the Effective Date out of the surrender of the Deleted Premises.
4. Landlord, for itself and its successors and assigns, subject to the
warranties herein made by Tenant, hereby forever releases and discharges Tenant
from any and all obligations and liabilities under the Lease with respect to
the Deleted Premises and from any and all claims, demands, or causes of action
whatsoever against Tenant, its successors and assigns, arising from and after
the Effective Date out of the surrender of the Deleted Premises.
5. From and after the Effective Date, the Base Rent for the Premises shall
be reduced by $3.20 per rentable square foot for a period of twelve (12) months
ending May 31, 1999. The parties acknowledge that such rental reduction shall
amount to $173,241 for the twelve month period. As of May 31, 1999, Landlord
shall determine, in its discretion, and based upon publicly disclosed financial
statements of Tenant, whether the rental reduction shall continue, and if so,
the additional period of time for such reduction.
6. In consideration of the rental reduction, Tenant agrees, subject to the
approval of Tenant's Board of Directors, to issue to Landlord and register in
the name of Landlord 22,500 shares of the Common Stock of Tenant ("Shares").
In connection with the acquisition of the Shares, Landlord represents and
warrants the following to Tenant:
(a) Accredited Investor. Landlord is an "accredited investor" as
such term is defined in Rule 501 of Regulation D promulgated
under the Securities Act of 1933, as amended (the "Securities
Act"). Landlord is a Michigan limited partnership, and the
information checked below is correct and complete:
(i) X Landlord's net worth is in excess of $5,000,000.
---
(ii) X Landlord's income was in excess of $1,000,000 for
--- each of 1996 and 1997 and is reasonably expected
to be so for 1998.
(b) Sophistication. Landlord has substantial prior investment
experience, including investments in non-listed and
non-registered securities, and either (I) Landlord has such
knowledge and experience in financial and business matters
that it is capable of evaluating the merits and risks of the
potential purchase of the Shares, or (ii) Landlord has
employed the services of an independent investment advisor,
attorney or accountant who qualifies as a "purchaser
representative", as such term is defined in Rule 501
promulgated under the Securities Act, to evaluate the merits
and risks of such an investment on its behalf.
(c) Economic Risk. Landlord acknowledges and recognizes that an
investment in the Shares involves a high degree of risk in
that, although other Common Stock of Tenant is publicly traded
on the New York Stock Exchange ("NYSE"), the Shares have not
been registered with the U.S. Securities and Exchange
Commission nor listed with NYSE and, consequently, (i)
Landlord may not be able to liquidate the investment, (ii)
transferability is extremely limited, (iii) there is currently
no market for the Shares, nor is a market likely to develop,
and (iv) Landlord could sustain the loss of the entire
investment. The total purchase price of the Shares that
Landlord might purchase would represent less than 10% of
Landlord's net worth. Landlord is able to bear the economic
risk it would assume by buying the Shares.
(d) Investment Intent; Resale. Landlord would purchase the Shares
for investment, for Landlord's own account, and not with a
view to, or for sale in connection with, any distribution of
the Shares. Landlord acknowledges and recognizes that the
Shares would not be registered under the Securities Act, the
Michigan Uniform Securities Act or the
3
securities statutes of any other state or jurisdiction,
that there is no present intention of so registering
the Shares or any right of Landlord to cause them
to be registered, that the Shares cannot be resold (and
Landlord covenants that it will not resell them) unless they
are subsequently registered under applicable Federal and
state securities laws or unless exemptions from all such
applicable registration requirements (including, without
limitation, after a one-year holding period as provided in
SEC Rule 144) are available, and, consequently, Landlord
would have to bear the economic risk of the investment during
such restricted time. Tenant agrees that, upon notification
from Landlord of its intent to sell the Shares after the
one-year holding period, Tenant shall take such necessary
action, at Tenant's expense, to cause the Shares to be listed
with the NYSE. Landlord acknowledges and recognizes that the
certificates evidencing any of the Shares purchased by
Landlord will be legended to indicate the foregoing
restrictions.
7. As provided in subparagraph D of Paragraph 1 of the Lease, the Base
Rent to be paid by Tenant during the balance of the Lease Term, will be in
accordance with the Lease Rate Schedule. Such Lease Rate Schedule shall be
applicable to the Premises (excluding the Deleted Premises):
LEASE RATE SCHEDULE
PERIOD RATE
------ ----
6/01/98 - 5/31/99 $10.06
6/01/99 - 5/10/00 13.26
5/11/00 - 5/10/02 13.78
5/11/02 - 5/10/05 15.69
8. From and after the Effective Date, Tenant shall relinquish fifteen
percent (15%) of its parking spaces under the Lease for the balance of the
Lease Term, and the rent for the parking spaces shall be reduced by fifteen
percent (15%) from the level provided under the Lease as of the Effective Date.
The parties acknowledge that the reduction in parking space rental shall
amount to $19,440 for the twelve month period ending May 31, 1999.
9. The parties acknowledge that the reductions in payments due from Tenant
under the Lease for the twelve month period commencing on the Effective Date
and ending May 31, 1999 shall be:
(a) Base Rent for Deleted Premises $207,362
(b) Base Rent reduction for remaining Premises 173,241
(c) Parking rent reduction 19, 440
--------
$400,043
10. Landlord hereby warrants to Tenant that it is the owner of the
Premises and of the lessor's interest in the Lease, with full power and
authority to amend and modify the Lease.
11. Except as expressly amended herein, all other terms and conditions of
the Lease shall remain in full force and expect and are hereby ratified and
confirmed by the parties hereto.
12. This Agreement is executed in duplicate, either counterpart of which
is to be considered an original.
13. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective heirs, successors assigns.
4
IN WITNESS WHEREOF, the parties hereto have caused these presents to be
duly executed as of the day and year first above written.
WITNESSES: 1155 BREWERY PARK LIMITED PARTNERSHIP
a Michigan limited partnership
By its General Partner:
BREWERY PARK ASSOCIATES
LIMITED PARTNERSHIP,
a Michigan limited partnership
By one of its General Partners:
AMK ASSOCIATES LIMITED PARTNERSHIP,
a Michigan limited partnership
--------------------------- By:
---------------------------------
Xxxx X. Xxxxxxx, General Partner
"LANDLORD"
UNITED AMERICAN HEALTHCARE CORPORATION,
a Michigan corporation
--------------------------- By:
---------------------------------
Its:
--------------------------------
"TENANT"
