Exhibit 10.29
SEVENTH AMENDMENT TO LEASE
DATED: August 24, 2006
LANDLORD: ELEVEN INKSTER, L.L.C.
TENANT: TECHTEAM GLOBAL, INC., FORMERLY KNOWN AS
NATIONAL TECHTEAM, INC., A DELAWARE CORPORATION
PREMISES: SPACE IN THE BUILDINGS AT CUMBERLAND TECH CENTER,
11 MILE AND INKSTER ROADS, SOUTHFIELD, MICHIGAN
LEASE: DATED SEPTEMBER 27, 1993, AS AMENDED BY
FIRST AMENDMENT TO LEASE DATED DECEMBER 7, 1993,
SECOND AMENDMENT TO LEASE DATED JANUARY 23, 1995,
THIRD AMENDMENT TO LEASE DATED MARCH 29, 1996,
FOURTH AMENDMENT TO LEASE DATED MARCH 13, 2000,
FIFTH AMENDMENT TO LEASE DATED OCTOBER 13, 2000, AND
SIXTH AMENDMENT TO LEASE DATED JUNE 24, 2003
THE CIRCUMSTANCES OF THIS AMENDMENT ARE:
A. Landlord and Tenant are parties to the above referenced Lease for the
above described Premises which presently includes 69,840 square feet of Rentable
Floor Area located in the Cumberland Tech Center (the "Center") at the southeast
corner of Eleven Mile and Inkster Roads in the City of Southfield, Oakland
County, Michigan. Landlord is the successor to Eleven Inkster Associates.
B. Landlord and Tenant desire to further amend the Lease to (i) increase
the Premises by the addition of certain space effective September 1, 2006, (ii)
reduce the Basic Monthly Rent, (iii) extend the term of the Lease, and (iv)
provide to Tenant a right of first offer to lease certain space in Building D,
all pursuant to the terms of this Amendment.
THE PARTIES THEREFORE AGREE AS FOLLOWS:
1. Effective on September 1, 2006, the Premises will be increased by the
addition of 3,782 square feet of Rentable Floor Area located at the northwest
corner of the Building as shown on the drawing attached as Exhibit A (the
"Additional Space"). The Premises will then be 73,622 square feet of Rentable
Floor Area which is 68.49% of the Rentable Floor Area of the Center.
2. Tenant will have no obligation for payment of Basic Monthly Rent or
Additional Rent for the Additional Space from September 1, 2006 to December 31,
2006. Commencing on January 1, 2007, Tenant will pay Basic Monthly Rent and
Additional Rent for the Additional Space as provided in Paragraph 5 below.
3. Tenant will accept the Additional Space "as is" in its present
condition. Landlord will pay to Tenant an allowance for improvements in the
amount of $60,000 not later than January 15,
2007 and following the date on which Tenant commences payment of Basic Monthly
Rent and Additional Rent for the Additional Space.
4. The term of the Lease is extended to expire on August 31, 2016.
5. Effective on September 1, 2006, Basic Monthly Rent and Additional Rent,
based on Tenant's Portion of the Real Estate Taxes and Operating Expense for the
Center, will be payable as follows:
TENANT'S PORTION
PREMISES (PERCENTAGE OF BASIC
(RENTABLE RENTABLE MONTHLY
DATES SQUARE FEET) FLOOR AREA) RENT
----- ------------ ---------------- ----------
September 1, 2006 - December 31, 2006 73,622 64.97% $71,877.00
January 1, 2007 - December 31, 2007 73,622 68.49% $76,192.67
January 1, 2008 - December 31, 2008 73,622 68.49% $77,419.70
January 1, 2009 - December 31, 2009 73,622 68.49% $78,646.73
January 1, 2010 - December 31, 2010 73,622 68.49% $79,873.77
January 1, 2011- December 31, 2011 73,622 68.49% $81,100.80
January 1, 2012 - December 31, 2012 73,622 68.49% $82,327.83
January 1, 2013 - December 31, 2013 73,622 68.49% $83,554.87
January 1, 2014 - December 31, 2014 73,622 68.49% $84,781.90
January 1, 2015 - December 31, 2015 73,622 68.49% $86,008.93
January 1, 2016 - August 31, 2016 73,622 68.49% $87,235.97
The foregoing has been determined as shown on the schedule attached as
Exhibit B.
6. During the period commencing September 1, 2006 and ending August 31,
2016, and provided that this Lease is in effect and Tenant is not in default,
Tenant will have a right of first offer to lease the First Offer Space in the
Center consisting of the approximately 14,000 square feet of Rentable Floor Area
in Building D as shown on the drawing attached as Exhibit A and subject to the
rights of the existing tenant in Building D, if any. In the event that Landlord
proposes to lease the First Offer Space to others, Landlord will provide written
notice to Tenant specifying the terms upon which Landlord proposes to lease the
space, including the rental rate, term, availability date, and any allowance for
improvements. Tenant may exercise its right to lease the First Offer Space by
written notice to Landlord received by Landlord not later than 10 days following
Landlord's notice to Tenant. If Tenant exercises its right by notice to
Landlord, the First Offer Space will be included in the leased Premises
effective on the availability date in accordance with all of the terms of the
notice from Landlord. If Tenant does not exercise its right as provided herein,
Landlord then may proceed to lease the space to others.
7. While this Lease is in effect and Tenant is not in default, Tenant will
have the option to extend the term of the Lease for an additional five (5) years
(the "Extended Term") following the expiration of the current term of the Lease
upon all of the terms and conditions of this Lease, except that Basic Monthly
Rent for the initial twelve (12) months of the Extended Term will be adjusted to
the "Fair Market Rental Rate" (as defined herein) and Basic Monthly Rent for
each subsequent twelve (12) month period of the Extended Term shall be further
adjusted pursuant to the "Fair Market Rent Escalator" (as defined herein),
provided in no event shall Basic Monthly Rent during the Extended Term be less
than the Basic Monthly Rent applicable during the last month of the
-2-
initial term of the Lease. Tenant may exercise this option to extend by written
notice to Landlord received by Landlord not later than one hundred eighty (180)
days prior to the expiration of the current term of the Lease on August 31,
2016.
As used herein, the term "Fair Market Rental Rate" shall mean the
prevailing base rental rate per square foot of rentable area for "Comparable
Lease Renewals" (as defined herein) and the term "Fair Market Rent Escalator"
shall mean the prevailing base rent escalator for Comparable Lease Renewals. As
used herein, the term "Comparable Lease Renewals" shall mean lease renewals of
similar space in the Southfield, Michigan market, as determined by Landlord in
good faith, taking into account (i) comparable leases (on the basis of factors
such as, but not limited to, size and location of space, commencement date and
term of lease), if any, recently executed for improved space in the Southfield,
Michigan market or (ii) if no such leases for comparable space have been
executed in the Southfield, Michigan market, then leases for comparable (on the
basis of factors such as, but not limited to, size and location of space,
commencement date and term of lease) improved space in similar Class and age
buildings in the geographical area in which the Center is located which are
comparable to the Center in reputation, quality, age, size, location, and level
and quality of services provided and which have reached economic stabilization
and are not offering, for any other reason, below-market rents (the foregoing
factors not being exclusive in identifying comparable buildings).
Within 30 days after receipt of notice that Tenant desires to exercise its
option to extend the term of the Lease, Landlord shall notify Tenant of its
determination of the Basic Monthly Rent for the initial twelve (12) months of
the Extended Term as well as its determination of the Fair Market Rent Escalator
to be applied to the Basic Monthly Rent for each subsequent twelve (12) month
period during the Extended Term. If Tenant objects to Landlord's determination
of the Fair Market Rental Rate or the Fair Market Rent Escalator, Tenant shall
give Landlord notice of such objection within ten (10) business days following
the date upon which Landlord gives Tenant notice of such determination, and
Landlord and Tenant shall negotiate in good faith for a period of thirty (30)
days thereafter to determine the Fair Market Rental Rate and/or Fair Market Rent
Escalator, as applicable, for the Extension Term. In the event Landlord and
Tenant are unable to agree upon the Fair Market Rental Rate and/or the Fair
Market Rent Escalator, as applicable, for the Extension Term within said thirty
(30) day period, then the foregoing shall be determined by a board of three (3)
licensed real estate brokers, one of whom shall be named by the Landlord, one of
whom shall be named by Tenant, and the two so appointed shall select a third.
Each real estate broker so selected shall be licensed in the State of Michigan
as a real estate broker specializing in the field of office leasing in the
Southfield, Michigan market, having no fewer than ten (10) years' experience in
such field, and recognized as ethical and reputable within the field. Landlord
and Tenant agree to make their appointments promptly within ten (10) days after
the expiration of the thirty (30) day period, or sooner if mutually agreed upon.
The two (2) brokers selected by Landlord and Tenant shall promptly select a
third broker within ten (10) days after they both have been appointed, and each
broker, within fifteen (15) days after the third broker is selected, shall
submit his or her determination of the Fair Market Rental Rate and/or the Fair
Market Rent Escalator, as applicable. The Fair Market Rental Rate shall be the
mean of the two closest rental rate determinations and the Fair Market Rent
Escalator shall be the mean of the two closest rental rate escalator
determinations. Landlord and Tenant shall each pay the fee of the broker
selected by it, and they shall equally share the payment of the fee of the third
broker.
-3-
8. As amended hereby, all other terms, conditions and provisions of the
Lease as previously amended shall remain in full force and effect.
ELEVEN INKSTER, L.L.C. TECHTEAM GLOBAL, INC.
By: Levine Interests Limited
Partnership II, a Michigan
limited partnership, Manager
By: /s/ DOUGLAS LEVINE By: /s/ L.W. GRANGER
--------------------------------- ------------------------------------
Its: GENERAL PARTNER Its: SVP SERVICE DELIVERY
-------------------------------- -----------------------------------
"LANDLORD" "TENANT"
-4-