<PAGE> 1
UNITED STATES
SECURITIES & EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended: March 31, 1998
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from: to
------------------------ -------------------
Commission file number: 0-23494
------------------------------------------------
BRIGHTPOINT, INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
Delaware 35-1778566
- --------------------------------------------------------------------------------------------------------
State or other jurisdiction of incorporation or organization (I.R.S. Employer Identification No.)
6402 Corporate Drive, Indianapolis, Indiana 46278
- --------------------------------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(317) 297-6100
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
</TABLE>
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. [X] Yes [ ] No
Number of shares of common stock outstanding at May 12, 1998: 51,921,518
shares
<PAGE> 2
BRIGHTPOINT, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
ITEM 1
------
Consolidated Statements of Income
Three Months Ended March 31, 1997 and 1998 ..... 3
Consolidated Balance Sheets
December 31, 1997 and March 31, 1998 .......... 4
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1998 ..... 5
Notes to Consolidated Financial Statements .......... 6
ITEM 2
------
Management's Discussion and Analysis of
Financial Condition and Results of Operations . 10
PART II. OTHER INFORMATION
ITEM 6
------
Exhibits and Reports on Form 8-K ................... 16
Signatures ..................................................... 17
</TABLE>
<PAGE> 3
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31
-------------------------------
1997 1998
-------- --------
<S> <C> <C>
Net sales $199,169 $343,333
Cost of sales 183,167 313,256
-------- --------
Gross profit 16,002 30,077
Selling, general and administrative expenses 8,096 14,657
-------- --------
Income from operations 7,906 15,420
Net investment gain 1,432 572
Interest expense 1,123 3,412
-------- --------
Income before income taxes and minority interest 8,215 12,580
Income taxes 2,443 3,774
-------- --------
Income before minority interest 5,772 8,806
Minority interest 356 (37)
-------- --------
Net income $ 5,416 $ 8,843
======== ========
Net income per share:
Basic $ 0.12 $ 0.17
======== ========
Diluted $ 0.12 $ 0.17
======== ========
Weighted average common shares outstanding:
Basic 44,006 51,215
======== ========
Diluted 46,374 53,435
======== ========
</TABLE>
See accompanying notes.
3
<PAGE> 4
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
December 31, 1997 March 31, 1998
----------------- --------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,941 $ 36,489
Accounts receivable (less allowance for
doubtful accounts of $3,394 in 1997
and $3,574 in 1998) 212,946 210,417
Contract financing receivables 49,470 39,744
Inventories 95,716 121,642
Marketable securities 3,478 --
Other current assets 26,960 31,473
-------- --------
Total current assets 391,511 439,765
Property and equipment 23,420 33,415
Goodwill and other intangibles 31,161 61,208
Other assets 10,610 18,047
-------- --------
Total assets $456,702 $552,435
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $110,191 $154,892
-------- --------
Total current liabilities 110,191 154,892
Long-term debt 146,963 173,344
Minority interest 257 220
Stockholders' equity:
Preferred stock, $0.01 par value: 1,000 shares
authorized; no shares issued or outstanding -- --
Common stock, $0.01 par value: 100,000 shares
authorized; 50,396 and 51,613 issued and
outstanding, respectively 504 517
Additional paid-in capital 160,387 175,591
Retained earnings 42,891 51,734
Accumulated other comprehensive income (loss) (4,491) (3,863)
-------- --------
Total stockholders' equity 199,291 223,979
-------- --------
Total liabilities and stockholders' equity $456,702 $552,435
======== ========
</TABLE>
See accompanying notes.
4
<PAGE> 5
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998
-------- --------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 5,416 $ 8,843
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Minority interest 356 (37)
Depreciation and amortization 660 1,591
Net investment gain (1,432) (572)
Deferred taxes -- (49)
Changes in operating assets and liabilities:
Accounts receivable 2,117 7,998
Inventories 7,199 (21,009)
Other current assets 176 1,252
Accounts payable and accrued expenses (47,018) 11,462
-------- --------
Net cash provided (used) by operating activities (32,526) 9,479
INVESTING ACTIVITIES
Capital expenditures (4,655) (8,388)
Sale of marketable securities, net of transaction costs 18,528 3,263
Acquisitions, net of cash acquired (750) (10,686)
Decrease in contract financing receivables,
net of unfunded portion -- 14,191
Increase in other assets (860) (8,012)
-------- --------
Net cash provided (used) by investing activities 12,263 (9,632)
FINANCING ACTIVITIES
Net proceeds from (payments on) revolving credit
facility 22,732 (146,684)
Proceeds from issuance of subordinated, convertible
notes, net of issue costs -- 166,438
Proceeds and tax benefits from exercise of stock
options and warrants 2,398 13,604
-------- --------
Net cash provided by financing activities 25,130 33,358
Effect of exchange rate changes on cash and cash
equivalents 31 343
-------- --------
Net increase in cash and cash equivalents 4,898 33,548
Cash and cash equivalents at beginning of period 14,255 2,941
-------- --------
Cash and cash equivalents at end of period $ 19,153 $ 36,489
======== ========
</TABLE>
See accompanying notes.
5
<PAGE> 6
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X of the Securities Exchange Act of 1934.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of the Company, all adjustments (consisting of only normal
recurring accruals) considered necessary to present fairly the consolidated
financial statements have been included.
The consolidated financial statements include the accounts of the Company and
its majority-owned subsidiaries. Significant intercompany accounts and
transactions have been eliminated in consolidation. Certain amounts in the
1997 consolidated financial statements have been reclassified to conform to
the 1998 presentation.
The consolidated balance sheet at December 31, 1997 has been derived from the
audited consolidated financial statements at that date, but does not include
all of the information and footnotes required by generally accepted accounting
principles for complete financial statements. The unaudited consolidated
statement of income for the three months ended March 31, 1998 is not
necessarily indicative of the results that may be expected for the entire
year.
For further information reference is made to the audited consolidated
financial statements and the footnotes thereto included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1997.
The Company offers financing of inventory and receivables to certain network
operator customers under contractual arrangements. These financing services
are complementary to the inventory management and other value-added logistics
services provided by the Company. The amount financed pursuant to these
arrangements is recorded as a current asset under the caption "Contract
financing receivables."
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share, which
replaces the presentation of primary earnings per share (EPS) with basic EPS
and replaces fully diluted EPS with diluted EPS. Basic net income per share is
based on the weighted average number of common shares outstanding during each
period and diluted net income per share is based on the weighted average
number of common shares and dilutive common share equivalents outstanding
during each period. The Company's dilutive common share equivalents consist of
shares of common stock issuable upon exercise of outstanding stock options and
stock warrants. The subordinated, convertible notes issued in the first
quarter of 1998, although common share equivalents, were not dilutive for the
three months ended March 31, 1998. The weighted average number of common
shares outstanding for diluted EPS includes only the dilutive common share
equivalents as defined above.
6
<PAGE> 7
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
2. Comprehensive Income
On January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income (SFAS No. 130) which
establishes new rules for the reporting and display of comprehensive income
and its components (Net income and "Other comprehensive income"). Adoption of
this Statement had no impact on the Company's net income or stockholders'
equity. The statement requires that unrealized gains or losses on the
Company's available-for-sale securities and foreign currency translation
adjustments, which prior to adoption were reported separately in stockholders'
equity, be included as components of "Other comprehensive income."
During the first quarter of 1997 and 1998, comprehensive income totaled
$1,521,000 and $9,471,000, respectively.
3. Acquisitions
During the three months ended March 31, 1998, the Company made four
acquisitions of businesses separately located in (i) Brazil; (ii) the United
Kingdom; (iii) the Netherlands, Germany and Poland; and (iv) the United States.
Each of these transactions was accounted for as a purchase and accordingly the
consolidated financial statements include the operating results of each
business from the effective date of acquisition. The aggregate purchase price
for these businesses consisted of 190,285 unregistered shares of the Company's
common stock (valued at $2.6 million), $27.9 million in cash, the assumption of
certain liabilities and contingent consideration of up to $6.0 million in cash
and $15.0 million in common stock based upon future operating results of the
applicable business over the next two years. The resulting goodwill of $26.1
million from these acquisitions is being amortized over 30 years.
The impact of the Company's acquisitions was not material in relation to the
Company's results of operations for the three months ended March 31, 1997 and
1998. Consequently, pro forma information is not presented.
7
<PAGE> 8
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. Long-term debt
On March 11, 1998, the Company completed the issuance of zero-coupon,
subordinated, convertible notes due in the year 2018 (the "Bonds") with an
aggregate face value of $380.0 million ($1,000 per bond) and a yield to
maturity of 4.00%. The Bonds are subordinated to all existing and future
Senior Indebtedness of the Company and all other liabilities, including trade
payables, of the Company's subsidiaries. The Bonds resulted in gross proceeds
to the Company of approximately $172.1 million (issue price of $452.89 per
Bond) and require no periodic cash payments of interest. The proceeds were
used to reduce borrowings under the Company's revolving credit facility and to
invest in highly-liquid, short-term investments pending use in operations.
Each Bond is convertible at the option of the holder any time prior to
maturity. Upon conversion, the Company, at its option, will deliver to the
holder 19.109 shares of common stock per Bond or cash equal to the market
value of such shares. On or after March 11, 2003, the Bonds may be redeemed at
any time by the Company for cash equal to the issuance price plus accrued
original discount through the date of redemption. In addition, each Bond may
be redeemed at the option of the holder on March 11, 2003, 2008 or 2013. The
purchase price for each Bond at these redemption dates is approximately $552,
$673 and $820, respectively, which is equal to the issue price plus amortized
original discount through the date of redemption. The Company may elect at its
option to pay for such redemption in cash or common stock, or any combination
thereof equaling the purchase price.
On June 24, 1997, the Company entered into a $200 million five-year senior
secured revolving line of credit facility with The First National Bank of
Chicago and Bank One, Indiana, NA, as co-agents for a group of banks
(collectively, the "Banks"). This credit facility replaced the Company's two
previous bank credit facilities which provided for $125 million in the
aggregate. The credit facility matures in June 2002 and generally bears
interest, at the Company's option, at (i) the greater of The First National
Bank of Chicago's corporate base rate and the Federal funds effective rate
plus 0.50% (the "Base Rate") or (ii) the rate at which deposits in United
States dollars or Eurocurrencies are offered by The First National Bank of
Chicago to first-class banks in the London interbank market plus a spread
ranging from 40 to 112.5 basis points (based on the Company's leverage ratio)
plus a spread reserve, if any. Borrowings by the Company's non-United States
subsidiaries bear interest at various rates based on the type and term of
advance selected and the prevailing interest rates of the country in which the
subsidiary is domiciled. At March 31, 1998, there was less than $1.0 million
outstanding under this line of credit and an aggregate of $12.0 million in
letters of credit issued, leaving $187.0 million of credit available.
8
<PAGE> 9
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. Long-term debt (continued)
All of the Company's assets located in the United States and 65% of the
capital stock of the Company's subsidiaries domiciled outside of the United
States are pledged to the Banks as collateral for the revolving line of credit
facility, and the Company is substantially prohibited from incurring
additional indebtedness. In addition to certain net worth and other financial
covenants, the Company's loan agreement with the Banks limits or prohibits the
Company, subject to certain exceptions, from declaring or paying cash
dividends, making capital distributions or other payments to stockholders,
merging or consolidating with another corporation or selling portions of its
assets.
5. Net Investment Gain
During the first quarter of 1997 and 1998, the Company realized gains on sales
of marketable equity securities, representing income of a non-recurring
nature. The net gains after related transaction costs were approximately $1.4
million and $0.6 million in 1997 and 1998, respectively. Excluding the impact
of the net investment gains and related income taxes, net income for the first
quarter of 1997 would have been $4.6 million or $0.10 per share and net income
for the first quarter of 1998 would have been $8.5 million or $0.16 per share.
6. Subsequent Events
Subsequent to March 31, 1998, the Company made two acquisitions of businesses
separately located in Taiwan and New Zealand. Both of these transactions are
being accounted for using the purchase method. The aggregate purchase price for
these businesses consisted of approximately 53,368 unregistered shares of the
Company's common stock (valued at $0.8 million), $2.5 million in cash, the
assumption of certain liabilities and contingent consideration of up to $12.1
million payable in a combination of common stock and cash based upon future
operating results of the applicable business over the next two years.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
Comparison of Three Months Ended March 31, 1997 to Three Months Ended March 31,
1998
OVERVIEW
This discussion and analysis should be read in conjunction with the
accompanying consolidated financial statements and related notes. Certain
statements made in this report may contain forward-looking statements. For a
description of risks and uncertainties relating to such forward-looking
statements, see Exhibit 99 and the Company's Annual Report on Form 10-K for the
year ended December 31, 1997.
During the first quarter of 1998, the Company acquired either all of the equity
interests or certain net assets of the following four businesses that were
accounted for as purchases. Accordingly, the consolidated financial statements
include the operating results of each business from the effective date of
acquisition:
o Matel-Tecnologia de Teleinformatica S.A.-Matec - a wireless telephone
distributor located in Sao Paulo, Brazil.
o WAVETech Limited - a wireless telephone distributor in the United Kingdom.
o Wireless Fulfillment Services, LLC - a provider of wireless accessory
end-user fulfillment services for North American network operators.
o Axess Communications Benelux B.V. - a provider of accessory distribution
services for the wireless communications industry with operations in the
Netherlands, Germany and Poland.
RESULTS OF OPERATIONS
NET SALES
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998 Change
-------- -------- ------
<S> <C> <C> <C>
Net sales $199,169 $343,333 72%
</TABLE>
Net sales for the three months ended March 31, 1998 increased significantly
over net sales for the same period in 1997 reflecting the continuing growth in
worldwide demand for wireless handsets and related accessories. The increase in
net sales is primarily attributable to volume growth in all of the Company's
divisions as demand for wireless handsets, accessories and the Company's
value-added logistics services continued to grow. In addition, the Company
believes that it continued to increase its share of the wireless handset market
in various markets around the world.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
RESULTS OF OPERATIONS (CONTINUED)
<TABLE>
<CAPTION>
Three Months Ended March 31
--------------------------------------
1997 1998
----------------- -----------------
<S> <C> <C> <C> <C>
Net sales by division:
Asia-Pacific $ 85,643 43% $129,718 38%
Europe, Middle East
and Africa 37,621 19% 106,259 31%
North America 70,772 35% 73,555 21%
Latin America 5,133 3% 33,801 10%
-------- ---- -------- ----
$199,169 100% $343,333 100%
-------- ---- -------- ----
</TABLE>
The Company experienced net sales increases in all of its divisions as it
continued to penetrate markets outside the United States by increasing its
in-country presence in targeted growth markets.
<TABLE>
<CAPTION>
Three Months Ended March 31
--------------------------------------
1997 1998
----------------- -----------------
<S> <C> <C> <C> <C>
Net sales by service line:
Wireless handset sales $180,430 91% $295,858 86%
Wireless accessories sales 14,161 7% 26,058 8%
Value-added logistics services 4,578 2% 21,417 6%
-------- ---- -------- ----
$199,169 100% $343,333 100%
-------- ---- -------- ----
</TABLE>
Net sales for the three months ended March 31, 1998 as compared to the same
period in 1997 includes a greater proportion of revenues from higher-margin
value-added logistics services as the Company continues to develop and grow its
service offerings and acquire new customers in this area.
GROSS PROFIT
<TABLE>
<CAPTION>
Three Months Ended March 31
----------------------------
1997 1998 Change
------- ------- ------
<S> <C> <C> <C>
Gross profit $16,002 $30,077 88%
Gross margin percentage 8.0% 8.8%
</TABLE>
Gross profit for the three months ended March 31, 1998 improved significantly
over the same period in 1997 due to increased sales and increased gross margin
percentage. The increase in gross margin percentage is primarily due to an
increase in the amount of higher margin value-added logistics services provided
by the Company.
11
<PAGE> 12
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
RESULTS OF OPERATIONS (CONTINUED)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998 Change
------ ------- ------
<S> <C> <C> <C>
Selling, general and
administrative expenses $8,096 $14,657 81%
As a percent of net sales 4.1% 4.3%
</TABLE>
The increase in selling, general and administrative expenses for the three
months ended March 31, 1998 as compared to the same period in 1997 is due
primarily to increased levels of business activities, and includes the addition
of extensive managerial resources in all of the Company's operating divisions.
These planned additions to available resources are necessary to support the
increasing demand for the Company's value-added logistics services. Additional
costs associated with the increased level of business activities include
depreciation and amortization expenses resulting from investments associated
with information systems, leasehold improvements and acquisitions, as well as,
increased rent expense due to expanded facilities and growth in various
marketing costs including travel, promotions and commissions.
INCOME FROM OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998 Change
------ ------- ------
<S> <C> <C> <C>
Income from operations $7,906 $15,420 95%
As a percent of net sales 4.0% 4.5%
</TABLE>
The increase in income from operations and operating margin (income from
operations as a percent of net sales) for the three months ended March 31, 1998
compared to the same period in 1997 is primarily attributable to the increase
in net sales and gross profit partially offset by the increase in selling,
general and administrative expenses.
12
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
NET INCOME
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998 Change
------- ------- ------
<S> <C> <C> <C>
Net income $ 5,416 $ 8,843 63%
Adjusted net income (1) $ 4,568 $ 8,500 86%
Adjusted net income as
a percent of net sales 2.3% 2.5%
Adjusted net income
per share (diluted) $ 0.10 $ 0.16 60%
Weighted average
shares outstanding 46,374 53,435
</TABLE>
- --------
(1) Adjusted to exclude the after-tax effect of non-recurring net
investment gains of $1,432 and $572 for the three months ended March
31, 1997 and 1998, respectively.
The increase in net income and adjusted net income for the three months ended
March 31, 1998 over the same period in 1997 is the result of increased income
from operations, partially offset by an increase in interest expense relating
to bank debt obtained for working capital purposes. During the first quarter
of 1997 and 1998, the Company realized gains on sales of marketable equity
securities, representing income of a non-recurring nature. The net gains after
related transaction costs were approximately $1.4 million and $0.6 million in
1997 and 1998, respectively.
The increase in weighted average shares outstanding is due primarily to shares
issued in connection with the Company's public offering of 5,400,000 shares in
August 1997 as well as certain acquisition activity and the exercise of stock
options and warrants.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
December 31, 1997 March 31, 1998
----------------- --------------
<S> <C> <C>
Cash, cash equivalents and marketable
securities $ 6,419 $ 36,489
Working capital $ 281,320 $ 284,873
Current ratio 3.55 : 1 2.84 : 1
</TABLE>
The Company's primary cash requirements have been to fund increased levels of
accounts receivable and inventories. The Company has historically satisfied its
working capital requirements principally through cash flow from operations,
vendor financing, bank borrowings and the issuance of equity securities.
13
<PAGE> 14
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Net cash provided by operating activities was $9.5 million for the three months
ended March 31, 1998 as compared to net cash used by operating activities of
$32.5 in the comparable prior period. The increase in net cash provided by
operating activities was primarily attributable to an increase in accounts
payable and a decrease in accounts receivable, offset by an increase in
inventories. Net cash used by investing activities for the three months ended
March 31, 1998 was $9.6 million as compared to net cash provided by investing
activities of $12.3 million in the comparable prior period. Cash used by
investing activities during the three months ended March 31, 1998 was primarily
attributable to capital expenditures relating to the purchase of information
systems and software and acquisitions completed in the period, partially offset
by the Company's contract financing activity and proceeds from the sale of
marketable securities. Cash provided by investing activities for the three
months ended March 31, 1997 was primarily attributable to the sale of
marketable securities partially offset by capital expenditures relating to the
purchase of information systems equipment and software, the expansion of its
warehouse facility in Indianapolis, Indiana, the opening of its west coast
distribution center in Sparks, Nevada and the continued expansion of its
international operations. The net cash provided by financing activities for the
three months ended March 31, 1998 is primarily due to the issuance of the Bonds
discussed below and proceeds from the exercise of stock options. The net cash
provided by financing activities for the three months ended March 31, 1997 was
primarily due to advances against the Company's line of credit and proceeds
from the exercise of stock options.
On March 11, 1998, the Company completed the sale of zero-coupon, subordinated,
convertible notes (the "Bonds") with an aggregate principal amount at maturity
of $380.0 million ($1,000 face value per Bond). The Bonds are due in the year
2018, have a yield to maturity of 4.00% and are convertible into Brightpoint
common stock at a rate of 19.109 shares per bond. The Bonds were placed for the
Company by Merrill Lynch & Co. and resulted in gross proceeds to the Company of
approximately $172.1 million. The proceeds were used to reduce borrowings under
the Company's revolving credit facility and to invest in highly-liquid,
short-term investments pending use in operations. The Bonds are subordinated to
all existing and future Senior Indebtedness of the Company and all other
liabilities, including trade payables, of the Company's subsidiaries.
Through 1997 the Company generated a 5-year compounded annual growth rate in
net sales and pro forma net income in excess of 60% and 80% respectively. In
order to fund the working capital necessary for this level of growth, the
Company successfully raised over $350 million of capital through the end of
1997 (using an appropriate combination of both debt and equity capital). The
Company anticipates that to maintain similar growth in the future, it would be
necessary to raise additional capital during 1998, while maintaining
appropriate leverage ratios.
14
<PAGE> 15
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
FOREIGN OPERATIONS AND FOREIGN CURRENCY
The Company transacts business in worldwide markets and is exposed to foreign
currency exchange rate risk inherent in its assets, liabilities and results of
operations denominated in currencies other than the U.S. dollar, as well as
interest rate risk inherent in the Company's debt. The Company's subsidiaries
do not typically have significant amounts of assets, liabilities or commitments
that are denominated in currencies other than the respective operation's
functional currency. The Company periodically utilizes derivative financial
instruments, including forwards, swaps and purchased options as well as
borrowings denominated in foreign currencies to hedge certain foreign currency
and interest rate exposures, with the intent of offsetting gains and losses on
the financial instruments against the gains and losses that occur on the
underlying exposures. The Company does not enter into derivatives for
speculative or trading purposes and at March 31, 1998 did not have a
significant position in derivative instruments.
15
<PAGE> 16
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
The list of exhibits is hereby incorporated by reference to the Exhibit
Index on page 18 of this report
(b) Reports on Form 8-K
None
16
<PAGE> 17
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Brightpoint, Inc.
(Registrant)
Date May 13, 1998 /s/ Phillip A. Bounsall
----------------- ----------------------------------
Phillip A. Bounsall
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
Date May 13, 1998 /s/ John P. Delaney
----------------- ----------------------------------
John P. Delaney
Vice President, Corporate
Controller (Principal
Accounting Officer)
17
<PAGE> 18
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(10.1) Third Amendment to Multicurrency Credit Agreement dated March
20, 1998
(10.2) Lease Agreement between the Company and Madonna Management
Company, Inc., dated March 17, 1998
(10.3) Lease Agreement between the Company and SCI North Carolina
Limited Partnership, dated March 20, 1998
(10.4) Lease Agreement between the Company and IP Properties, A Wyoming
Limited Liability Company, dated March 31, 1998
(11) Statement Re: Computation of Earnings Per Share
(27) Financial Data Schedule for the Three Months ended March
31, 1998
(27.1) Restated Financial Data Schedule for the Three Months ended
March 31, 1997
(27.2) Restated Financial Data Schedule for the Six Months ended June
30, 1997
(27.3) Restated Financial Data Schedule for the Nine Months ended
September 30, 1997
(99) Cautionary Statements
</TABLE>
18
<PAGE> 1
Exhibit (11) Statement Re: Computation of Earnings Per Share
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31
---------------------------
1997 1998
------- -------
<S> <C> <C>
Basic:
Weighted average shares outstanding 44,006 51,215
------- -------
Income before income taxes and minority interest $ 8,215 $12,580
Deduct income taxes 2,443 3,774
Deduct (add) minority interest 356 (37)
------- -------
Net income $ 5,416 $ 8,843
======= =======
Per share amount $0.12 $0.17
======= =======
Diluted:
Average shares outstanding 44,006 51,215
Net effect of stock options and warrants -
based on the treasury stock method using
average market price 2,368 2,220
------- -------
Total weighted average shares outstanding 46,374 53,435
======= =======
Income before income taxes and minority interest $ 8,215 $12,580
Deduct income taxes 2,443 3,774
Deduct (add) minority interest 356 (37)
------- -------
Net income $ 5,416 $ 8,843
======= =======
Per share amount $ 0.12 $ 0.17
======= =======
</TABLE>
19
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1998 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 36,489
<SECURITIES> 0
<RECEIVABLES> 253,735
<ALLOWANCES> 3,574
<INVENTORY> 121,642
<CURRENT-ASSETS> 439,765
<PP&E> 39,262
<DEPRECIATION> 5,847
<TOTAL-ASSETS> 552,435
<CURRENT-LIABILITIES> 154,892
<BONDS> 172,481
<COMMON> 517
0
0
<OTHER-SE> 223,462
<TOTAL-LIABILITY-AND-EQUITY> 552,435
<SALES> 343,333
<TOTAL-REVENUES> 343,333
<CGS> 313,256
<TOTAL-COSTS> 313,256
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,031
<INTEREST-EXPENSE> 3,412
<INCOME-PRETAX> 12,580
<INCOME-TAX> 3,774
<INCOME-CONTINUING> 8,843
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,843
<EPS-PRIMARY> .17
<EPS-DILUTED> .17
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY FORM 10-Q FOR THE PERIOD ENDED MARCH 31, 1997 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 19,153
<SECURITIES> 0
<RECEIVABLES> 111,985
<ALLOWANCES> 1,063
<INVENTORY> 105,790
<CURRENT-ASSETS> 244,073
<PP&E> 14,185
<DEPRECIATION> 1,788
<TOTAL-ASSETS> 276,258
<CURRENT-LIABILITIES> 72,300
<BONDS> 0
<COMMON> 221
0
0
<OTHER-SE> 100,277
<TOTAL-LIABILITY-AND-EQUITY> 276,258
<SALES> 199,169
<TOTAL-REVENUES> 199,169
<CGS> 183,167
<TOTAL-COSTS> 183,167
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,123
<INCOME-PRETAX> 8,215
<INCOME-TAX> 2,443
<INCOME-CONTINUING> 5,416
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,416
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1997 AND IS QUALIFIED IN ITS
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 16,939
<SECURITIES> 0
<RECEIVABLES> 121,504
<ALLOWANCES> 2,161
<INVENTORY> 98,729
<CURRENT-ASSETS> 245,366
<PP&E> 19,175
<DEPRECIATION> 2,369
<TOTAL-ASSETS> 286,157
<CURRENT-LIABILITIES> 77,802
<BONDS> 0
<COMMON> 223
0
0
<OTHER-SE> 110,012
<TOTAL-LIABILITY-AND-EQUITY> 286,157
<SALES> 419,196
<TOTAL-REVENUES> 419,196
<CGS> 385,180
<TOTAL-COSTS> 385,180
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,106
<INCOME-PRETAX> 15,206
<INCOME-TAX> 4,540
<INCOME-CONTINUING> 10,283
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 10,283
<EPS-PRIMARY> .23
<EPS-DILUTED> .22
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY FORM 10-Q FOR THE PERIOD ENDED SEPTEMBER 30,1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 20,220
<SECURITIES> 0
<RECEIVABLES> 163,302
<ALLOWANCES> 1,882
<INVENTORY> 93,593
<CURRENT-ASSETS> 294,073
<PP&E> 20,068
<DEPRECIATION> 3,381
<TOTAL-ASSETS> 343,531
<CURRENT-LIABILITIES> 83,749
<BONDS> 0
<COMMON> 503
0
0
<OTHER-SE> 193,501
<TOTAL-LIABILITY-AND-EQUITY> 343,531
<SALES> 662,406
<TOTAL-REVENUES> 662,406
<CGS> 607,756
<TOTAL-COSTS> 607,756
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 4,389
<INCOME-PRETAX> 23,721
<INCOME-TAX> 7,097
<INCOME-CONTINUING> 16,211
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,211
<EPS-PRIMARY> .36
<EPS-DILUTED> .34
</TABLE>
<PAGE> 1
EXHIBIT 99
CAUTIONARY STATEMENTS
Certain statements in this Form 10-Q constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995.
Such forward-looking statements involve known and unknown risks, uncertainties
and other factors which may cause the actual results, performance or
achievements of the Company to be materially different from any future results,
performance or achievements expressed or implied by such forward-looking
statements. Such factors include, among others, the following: the ability to
hire and retain key personnel; successful completion and integration of future
acquisitions; relationships with and dependence on third-party wireless
communications equipment suppliers; uncertainties relating to economic
conditions in markets in which the Company operates; uncertainties relating to
government and regulatory policies; uncertainties relating to customer plans
and commitments; dependence on the wireless communications industry; pricing
and availability of wireless communications equipment materials and
inventories; rapid technological developments and obsolescence in the wireless
communications industry; potential performance issues with suppliers and
customers; governmental export and import policies; global trade policies;
worldwide political stability and economic growth; the highly competitive
environment in which the Company operates; potential entry of new,
well-capitalized competitors into the Company's markets; changes in the
Company's capital structure and cost of capital; and uncertainties inherent in
international operations and foreign currency fluctuations. The words
"believe," "expect," "anticipate," "intend," "forecast," and "plan" and similar
expressions identify forward-looking statements. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only as
of the date of the statement was made.
24
<PAGE> 1
EXECUTION COPY
AMENDMENT NO. 3
TO MULTICURRENCY CREDIT AGREEMENT
Dated as of March 20, 1998
THIS AMENDMENT NO. 3 TO MULTICURRENCY CREDIT AGREEMENT ("AMENDMENT") is
made as of March 20, 1998 by and among BRIGHTPOINT, INC. ("BRIGHTPOINT"),
BRIGHTPOINT INTERNATIONAL LTD., the subsidiary borrowers from time to time
party thereto (collectively, the "BORROWERS"), the guarantors from time to time
party thereto (the "GUARANTORS"), the financial institutions listed on the
signature pages hereof as lenders (the "LENDERS"), BANK ONE, INDIANA, NATIONAL
ASSOCIATION, in its individual capacity as a Lender and as syndication agent
(the "SYNDICATION AGENT"), and THE FIRST NATIONAL BANK OF CHICAGO, in its
individual capacity as a Lender and as administrative agent (the
"ADMINISTRATIVE AGENT"; and together with the Syndication Agent, the "AGENTS")
on behalf of the Lenders under that certain Multicurrency Credit Agreement
dated as of June 24, 1997 by and among the Borrowers, the Guarantors, the
Lenders and the Agents, as amended by that certain Waiver and Amendment No. 1
dated as of November 15, 1997, that certain Amendment No. 2 dated as of
February 25, 1998, and by the letter agreement dated August 8, 1997, (as so
modified, and as further amended, modified or restated, the "CREDIT
AGREEMENT"). Defined terms used herein and not otherwise defined herein shall
have the meaning given to them in the Credit Agreement.
WITNESSETH
WHEREAS, the Borrowers, the Guarantors, the Lenders and the Agents are
parties to the Credit Agreement;
WHEREAS, the Borrowers have requested that the Lenders amend the Credit
Agreement in certain respects; and
WHEREAS, the Lenders and the Agents are willing to amend the Credit
Agreement on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises set forth above, the
terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged,
the Borrowers, the Guarantors, the Lenders and the Agents have agreed to the
following amendments to the Credit Agreement.
1. Amendments to Credit Agreement. Effective as of the date hereof and
subject to the satisfaction of the conditions precedent set forth in Section 2
below, the Credit Agreement is hereby amended as follows:
1.1. Applicable Margins. The pricing grid used to determine the
"Applicable Margins", "Applicable Facility Fee" and "Applicable Letter of
Credit Fee" as set forth in Section 2.8(b) (i) of the Credit Agreement shall
be amended and restated to read as follows:
<PAGE> 2
<TABLE>
<CAPTION>
Level I Level II Level III Level IV Level V
<S> <C> <C> <C> <C> <C>
Leverage Ratio 4.00 to 1.00 > 4.00 to 1.00 3.00 to 1.00 > 2.00 to 1.00 1.00 to 1.00
and and and
3.00 to 1.00 2.00 to 1.00 > 1.00 to 1.00
Applicable Facility
Fee 0.25% 0.20% 0.15% 0.125% 0.10%
Applicable Fixed
Rate Margin 1.125% 0.925% 0.725% 0.50% 0.40%
Applicable Floating
Rate Margin 0% 0% 0% 0% 0%
Applicable Letter
of Credit Fee 1.125% 0.925% 0.725% 0.50% 0.40%
</TABLE>
1.2. Section 6.4 (D) of the Credit Agreement is hereby amended and
restated to read in its entirety as follows:
(D) Maximum Leverage and Senior Debt Ratios.
(1) Brightpoint shall not permit the ratio ("LEVERAGE RATIO") of (i)
the sum of (a) Indebtedness of Brightpoint and its consolidated
Subsidiaries for borrowed money and (b) Capitalized Lease Obligations to
(ii) EBITDA to be greater than 5.00 to 1.00 at the end of each fiscal
quarter ending on or after December 31, 1997 through and including
December 31, 1998 and 4.50 to 1.00 at the end of each fiscal quarter
thereafter. The Leverage Ratio shall be calculated, in each case,
determined as of the last day of each fiscal quarter based upon (A) for
Indebtedness (including Permitted Subordinated Indebtedness),
Indebtedness as of the last day of each such fiscal quarter; and (B) for
EBITDA, the actual amount for the two-quarter period ending on such day
times two.
(2) Brightpoint shall not permit the ratio ("SENIOR DEBT RATIO") of
(i) the sum of (a) Indebtedness other than the Permitted Subordinated
Indebtedness of Brightpoint and its consolidated Subsidiaries for
borrowed money and (b) Capitalized Lease Obligations to (ii) EBITDA to be
greater than 3.50 to 1.00 at the end of each fiscal quarter ending on or
after December 31, 1997. The Senior Debt Ratio shall be calculated, in
each case, determined as of the last day of each fiscal quarter based
upon (A) for Indebtedness, Indebtedness other than the Permitted
Subordinated Indebtedness as of the last day of each such fiscal quarter;
and (B) for EBITDA, the actual amount for the two-quarter period ending
on such day times two.
<PAGE> 3
1.3 Section 6.4 (E) of the Credit Agreement is hereby amended and restated
to read in its entirety as follows:
(E) Current Asset Coverage Ratio. Brightpoint shall maintain a ratio
("CURRENT ASSET COVERAGE RATIO") of (i) the sum of (a) Receivables (including
Receivables generated through contract financing engaged in by Brightpoint, but
excluding Receivables owing from any consolidated Subsidiary), (b) Inventory
(excluding any Inventory held with respect to contract financing engaged in by
Brightpoint) and (c) cash and Cash Equivalents in each case maintained by
Brightpoint and BPI in the United States to (ii) the sum of (a) Indebtedness
other than Permitted Subordinated Indebtedness of Brightpoint and its
consolidated Subsidiaries for borrowed money and (b) Capitalized Lease
Obligations to be greater than 0.75 to 1.00 at the end of any fiscal quarter.
2. Conditions of Effectiveness. This Amendment shall become effective and
be deemed effective as of the date hereof, if, and only if, the Administrative
Agent shall have received each of the following:
(a) duly executed originals of this Amendment from the Borrowers,
the Guarantors and each of the Lenders; and
(b) such other documents, instruments and agreements as the
Administrative Agent may reasonably request.
3. Representations and Warranties of the Borrowers. As of the
effectiveness of this Amendment, the Borrowers hereby represent and warrant:
(a) This Amendment and the Credit Agreement as previously executed and as
amended hereby, constitute legal, valid and binding obligations of the
Borrowers and are enforceable against the Borrowers in accordance with their
terms.
(b) Upon the effectiveness of this Amendment, the Borrowers hereby
reaffirm all representations and warranties made in the Credit Agreement and
other Loan Documents, and agree that all such representations and warranties
shall be deemed to have been remade as of the effective date of this Amendment.
5. Reference to the Effect on the Credit Agreement.
(a) Upon the effectiveness of Section 1 hereof, on and after the date
hereof, each reference in the Credit Agreement to "this Agreement,"
"hereunder," "hereof," "herein" or words of like import shall mean and be a
reference to the Credit Agreement, as amended previously and as amended hereby.
(b) Except as specifically amended above, the Credit Agreement and all
other documents, instruments and agreements executed and/or delivered in
connection therewith shall remain in full force and effect, and are hereby
ratified and confirmed.
3
<PAGE> 4
(c) The execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of any right,
power or remedy of the Administrative Agent or any of the Lenders, nor
constitute a waiver of any provision of the Credit Agreement or any other
documents, instruments and agreements executed and/or delivered in connection
therewith.
6. Costs and Expenses. The Borrowers agree to pay all reasonable costs,
fees and out-of-pocket expenses (including attorneys' fees and expenses charged
to the Administrative Agent) incurred by the Administrative Agent in connection
with the preparation, arrangement, execution and enforcement of this Amendment.
7. GOVERNING LAW. THIS AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (AS OPPOSED TO THE CONFLICT OF LAW
PROVISIONS) OF THE STATE OF ILLINOIS.
8. Headings. Section headings in this Amendment are included herein for
convenience of reference only and shall not constitute a part of this Amendment
for any other purpose.
9. Counterparts. This Amendment may be executed by one or more of the
parties to the Amendment on any number of separate counterparts and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.
10. No Strict Construction. The parties hereto have participated jointly
in the negotiation and drafting of this Amendment, the Credit Agreement and the
other Loan Documents. In the event an ambiguity or question of intent or
interpretation arises, this Amendment, the Credit Agreement and the other Loan
Documents shall be construed as if drafted jointly by the parties hereto and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Amendment, the Credit
Agreement or any of the other Loan Documents.
11. Reaffirmation of Guaranties and other Loan Documents. Each of the
Guarantors, without in any way establishing a course of dealing, as evidenced
by its signature below, hereby consents to the execution and delivery of this
Amendment by the parties hereto, (ii) agrees that this Amendment shall not
limit or diminish the obligations of such Guarantor under the Credit Agreement
or any other Loan Documents, (iii) reaffirms its obligations under the Credit
Agreement and other Loan Documents, and (iv) agrees that such obligations
remain in full force and effect and is hereby ratified and confirmed.
4
<PAGE> 5
IN WITNESS WHEREOF, this Amendment has been duly executed as of the day
and year first above written.
BRIGHTPOINT, INC.
as a Borrower and Guarantor
By: /s/ Steven E. Fivel
-------------------------------
Name: Steven E. Fivel
Title: E.V.P. General Counsel and
Secretary
BRIGHTPOINT INTERNATIONAL LTD.
as a Borrower and Guarantor
By: /s/ Steven E. Fivel
-------------------------------
Name: Steven E. Fivel
Title: E.V.P. General Counsel and
Secretary
BRIGHTPOINT (UK) LIMITED,
as a Subsidiary Borrower and Guarantor
By: /s/ Steven E. Fivel
-------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
BRIGHTPOINT AUSTRALIA PTY. LIMITED,
as a Subsidiary Borrower and Guarantor
By: /s/ Steven E. Fivel
-------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
<PAGE> 6
BRIGHTPOINT CHINA LIMITED,
as a Subsidiary Borrower and Guarantor
By: /s/ Steven E. Fivel
-----------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
BRIGHTPOINT EMA LIMITED,
as a Guarantor
By: /s/ Steven E. Fivel
-----------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
BRIGHTPOINT AUSTRALASIA PTY. LIMITED,
as a Guarantor
By: /s/ Steven E. Fivel
-----------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
BRIGHTPOINT INTERNATIONAL (ASIA
PACIFIC) PTE LTD., as a Guarantor
By: /s/ Steven E. Fivel
-----------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
BRIGHTPOINT F.S.C. INC.,
as a Guarantor
By: /s/ Steven E. Fivel
-----------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
<PAGE> 7
RPS INDUSTRIES COMPANY LIMITED,
as a Guarantor
By: /s/ Steven E. Fivel
--------------------------------
Name: Steven E. Fivel
Title: Authorized Signatory
<PAGE> 8
THE FIRST NATIONAL BANK OF CHICAGO
as the Administrative Agent, an
Issuing Lender, the Swing Line Lender,
an Alternate Currency Agent and
as a Lender
By: /s/
-----------------------------------
Name:
Title:
BANK ONE, INDIANA, NATIONAL ASSOCIATION
as the Syndication Agent, an Issuing
Lender and as a Lender
By: /s/
-----------------------------------
Name:
Title:
BANK BOSTON, N.A.
as a Lender
By: /s/
-----------------------------------
Name:
Title:
CORESTATES BANK, N.A.
as a Lender
By: /s/
-----------------------------------
Name:
Title:
SUNTRUST BANK OF CENTRAL FLORIDA,
NATIONAL ASSOCIATION
as a Lender
By: /s/
-----------------------------------
Name:
Title:
THE BANK OF NOVA SCOTIA
as a Lender
By: /s/
-----------------------------------
Name:
Title:
<PAGE> 9
CREDIT LYONNAIS CHICAGO BRANCH
as a Lender
By: /s/
----------------------------------
Name:
Title:
THE BANK OF TOKYO-MITSUBISHI, LTD.
CHICAGO BRANCH
as a Lender
By: /s/
----------------------------------
Name:
Title:
THE FUJI BANK, LIMITED
as a Lender
By: /s/
----------------------------------
Name:
Title:
<PAGE> 1
Approximately 100,320 Square Feet In
2994 Samuel Drive
Cornwells Heights, Pennsylvania
* * *
LEASE
BETWEEN
MADONNA MANAGEMENT COMPANY, INC.
a Delaware corporation ("Landlord")
AND
BRIGHTPOINT NORTH AMERICA, INC., an Indiana corporation ("Tenant")
DATED: March 17, 1998
<PAGE> 2
2994 Samuel Drive
Cornwells Heights, Pennsylvania
SUMMARY OF LEASE TERMS
This is a summary of the terms of the Lease respecting the Premises (as further
identified in Exhibit "A" to the Lease) located in Cornwells Heights, Bucks
County, Pennsylvania, which is owned by Madonna Management Company, Inc., a
Delaware corporation ("Landlord").
<TABLE>
<S> <C>
TENANT:BRIGHTPOINT NORTH AMERICA, INC.
GUARANTOR:Brightpoint, Inc.
PREMISES:Approximately 100,320 Square Feet, 2994
Samuel Drive, Cornwells Heights, Pennsylvania
TENANT'S ADDRESS: BRIGHTPOINT NORTH AMERICA, INC.
6402 Corporate Drive
Indianapolis, IN 46278
TERM:April 16, 1998 to April 30, 2003, unless
extended or sooner terminated, all as provided in the
Lease.
BASIC RENT: Annual Monthly
Time PeriodBase Rent Base Rent
------------------------------------------------------
5/1/98-4/30/00 $396,264.00 $33,022.00
5/1/00-4/30/03 $411,312.00 $34,276.00
</TABLE>
Renewal Rent: The greater of Market Rent or the Base Rent at expiration of
Initial Term
<TABLE>
<S> <C>
RENEWAL OPTION:One term of Sixty Months
COMMON AREA EXPENSE ALLOWANCE: $20,064.00 ($0.20 per square foot)
INSURANCE ALLOWANCE: $7,022.40 ($0.07 per square foot)
TAX ALLOWANCE: $38,121.60 ($0.38 per square foot)
TENANT'S PROPORTIONATE SHARE: 46.81%
SECURITY DEPOSIT: $33,022
</TABLE>
This summary is for reference purposes only and should not be relied upon as a
complete and accurate statement of the terms of this Lease.
<PAGE> 3
TABLE OF CONTENTS
<TABLE>
<CAPTION>
<S> <C> <C> <C>
BACKGROUND 1
TERMS OF AGREEMENT 1
1. Premises, Definitions 1
1.1 Premises 1
1.2 Definitions 1
2. Term 1
2.1 Term 1
2.2 Delivery of Premises; Condition of Premises 2
2.2.1 Landlord's Work 2
2.2.2 No Further Obligations to Improve 2
2.2.3 No Adjustment of Commencement Date 2
2.3 Lease Year 2
2.4 Option to Extend Lease Term 2
2.4.1 Extension Option 2
2.4.2 Exercise of Option 3
2.4.3 Rent During Extension Term 3
2.4.4Payment of New Basic Rent 3
2.4.5Confirmation of Change in Basic Rent 3
3. Rent 3
3.1 Basic Rent 3
3.2 Rental Adjustments 4
3.2.1 Common Area Expense Allowance; Real
Estate Taxes Allowance; Insurance Allowance 4
3.2.2 Adjustments for Operating Expenses and
Real Estate Taxes 4
3.2.3End of Term Adjustment 7
3.3 Fixed Rent; Additional Rent 7
3.4 Demand; Time; Late Charge 7
4. Use of Premises and Common Areas 8
4.1 Use of Premises 8
4.2 Use of Common Areas 8
5. Assignment and Subletting 8
5.1 Landlord's Prior Consent Required 8
5.2 Qualifications of Subtenant; Landlord's Right to
Reacquire Premises 8
5.3No Waiver or Release 10
5.4Acts Deemed an Assignment 10
6. Maintenance of the Premises 11
6.1Obligations of Tenant 11
6.1.1Tenant's Maintenance 11
6.1.2Landlord's Right to Cure 12
6.1.3Surrender of Premises 12
6.2Obligations of Landlord 12
6.2.1Landlord's Maintenance. 12
6.2.2No Other Services. 12
6.3Notice of Defective Condition 12
7. Tenant Alterations 13
7.1Alterations 13
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
<S> <C> <C>
7.1.1Consent of Landlord. 13
7.1.2Heavy Equipment or Fixtures 13
7.1.3Utility Systems Changes 13
7.2Indemnification 13
7.3Removal of Property 13
8. Signs 14
9. Inspection 14
10. Insurance 14
10.1Insurance Rating 14
10.2Required Insurance; Waiver of Subrogation 14
10.3Insurance Certificate 15
10.4 Landlord's Insurance. 15
12. Liability 15
12.1No Liability 15
12.2Indemnity 16
12.3Landlord's Indemnity 16
13. Rules and Regulations 17
14. Damage; Condemnation 17
14.1Damage to the Premises 17
14.2Condemnation 18
14.2.1Reduction of Rent. 18
14.2.2Claims of Tenant. 18
15. Environmental Matters 19
15.1Hazardous Materials 19
15.2Compliance with Environmental Laws 19
15.3Indemnity 19
15.4Landlord's Right to Perform 20
15.5Survival 20
16. Default of Tenant 20
16.1Events of Default 20
16.2Landlord's Remedies 21
16.2.1Liquidated Damages 21
16.2.2Termination of Lease 22
16.2.3Suit for Possession/Reletting of Premises 22
16.2.4Confession of Judgment 22
16.3Measure of Damages 23
16.4 Intentionally Omitted. 23
16.5No Responsibility to Relet 24
16.6Intentionally omitted. 24
16.7Judicial Remedy 24
16.8Late Payment 24
16.9Right of Landlord to Cure Tenant's Default 24
16.10Interest on Late Payments 24
16.11Ejectment and Entry of Judgment 24
16.12Remedies Cumulative 25
16.13No Waiver 25
17. Holding Over 25
18. Americans With Disabilities Act 26
19. Quiet Enjoyment 26
20. Independent Covenants 26
21. Miscellaneous 26
21.1Security Deposit 26
</TABLE>
<PAGE> 5
<TABLE>
<Captin>
<S> <C> <C>
21.2Tenant's Financial Statements 27
21.3No Representations by Landlord 27
21.4No Partnership 28
21.5Brokers 28
21.6Estoppel Certificate 28
21.7Waiver of Jury Trial 29
21.8Notices 29
21.9Force Majeure 30
21.10 Invalidity of Particular Provisions 30
21.11Gender and Number 30
21.12Benefit and Burden 30
21.13Subordination 30
21.14Entire Agreement 31
21.15Construction 31
21.16Governing Law 31
21.17Venue 31
21.18 INTENTIONALLY OMITTED. 31
21.19 Landlord's Liability 31
</TABLE>
<PAGE> 6
Exhibits
Exhibit "A" - Legal Description of the Land
Exhibit "B" - Definitions
Exhibit "C" - Landlord's Work
Exhibit "D" - Rules and Regulations
<PAGE> 7
LEASE
THIS LEASE ("Lease") is made this day of March, 1998, by and
between MADONNA MANAGEMENT COMPANY, INC., a Delaware corporation, with an
address at c/o TC Northeast Metro, Inc., 1810 Chapel Avenue West, Suite 220,
Cherry Hill, New Jersey 08002 ("Landlord") and BRIGHTPOINT NORTH AMERICA, INC.,
an Indiana corporation, with an address at 6402 Corporate Drive, Indianapolis,
Indiana 46278, Attention: John Sullivan and Steven Fivel, Esquire ("Tenant").
BACKGROUND
A. Landlord is the owner of certain land (the "Land"), a legal description
of which is attached hereto as Exhibit "A" and made a part hereof, upon which
is constructed a building known as 2994 Samuel Drive (the "Building"),
consisting of approximately 214,320 rentable square feet located in Cornwells
Heights, Bucks County, Pennsylvania. The Land and the Building are sometimes
referred to hereinafter as the "Property."
B. Tenant desires to lease space in the Building, and Landlord is willing
to rent space in the Building to Tenant, upon and subject to the terms,
conditions, covenants and agreements set forth herein.
TERMS OF AGREEMENT
NOW, THEREFORE, the parties hereto, in consideration of the mutual
promises herein contained, and intending to be legally bound hereby, covenant
and agree as set forth below:
1. PREMISES, DEFINITIONS.
1.1 PREMISES. Landlord hereby leases to Tenant, and Tenant hereby leases
from Landlord, for the term and upon and subject to the terms, conditions,
covenants and agreements hereinafter provided, approximately 100,320 rentable
square feet of space identified on Exhibit "A" attached hereto and made a part
hereof (the "Premises"). This Lease also includes the right of Tenant,
together with the other tenants of the Building to use and enjoy hallways and
other Common Areas in the Building and on the Land, but includes no other
rights not specifically set forth herein. Parking areas and loading docks in
the area outlined and cross-hatched on Exhibit "A" shall be considered part of
the Premises.
. DEFINITIONS. Capitalized terms used and not otherwise defined herein
shall have the meanings set forth in Exhibit "B" attached hereto and made a
part hereof.
2. TERM.
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2.1 TERM. The term of this Lease (the "Term") shall be for a period equal
to sixty (60) months, fifteen (15) days, commencing on April 16, 1998 (the
"Commencement Date"). The Term shall expire at 11:59 p.m. on April 30, 2003
(the "Expiration Date"). The Term, without reference to any extensions or
renewals, is sometimes referred to herein as the "Initial Term."
2.2 DELIVERY OF PREMISES; CONDITION OF PREMISES.
2.2.1 LANDLORD'S WORK. Landlord will work diligently to prepare the
Premises so that the Work set forth on Exhibit "C" hereof ("Landlord's Work") is
substantially complete on or before April 16, 1998; provided, however, that if
Landlord is unable to substantially complete such improvements on or before
April 16, 1998 or for any reason is unable to give Tenant possession of the
Premises, on or before April 16, 1998, this Lease shall not be void or voidable,
nor shall Landlord be liable to Tenant for any loss or damage resulting
therefrom; provided, further, however, that the Commencement Date, the Rent
Commencement Date (as hereinafter defined) and the Expiration Date shall each be
extended by one (1) day for each day beyond April 16, 1998 that Landlord's Work
has not been substantially completed. For purposes of this Lease, the term
"substantially complete" shall mean the state of completion which will permit
Tenant to reasonably and conveniently use and occupy the Premises for the
conduct of its ordinary business even though minor details, decorations and
mechanical adjustments remain to be completed by Landlord.
2.2.2 NO FURTHER OBLIGATIONS TO IMPROVE. It is understood and agreed that
Landlord will not make, and is under no obligation to make, any structural or
other alterations, decorations, additions or improvements in or to the Premises,
or otherwise to the Building, except as expressly set forth in Exhibit "C"
attached hereto. Nothing in this Section 2.2.2 shall limit Landlord's
obligations set forth in Section 6.2 hereof.
2.2.3 NO ADJUSTMENT OF COMMENCEMENT DATE. It is further understood and
agreed that if Tenant does not take possession of the Premises on the
Commencement Date for any reason other than Landlord's failure to substantially
complete Landlord's Work, then the Commencement Date shall not be extended and
the obligations hereunder shall commence as of such date. If Landlord permits
Tenant to take possession of the Premises prior to the Commencement Date, the
Commencement Date shall not be changed and Tenant shall comply fully with all
other terms and provisions of this Lease.
2.3 LEASE YEAR. For all purposes of this Lease, the term "Lease Year"
shall mean any period of twelve (12) consecutive calendar months during the Term
which begins on the Commencement Date or an anniversary thereof; provided
however that the first "Lease Year"shall commence on the Commencement Date and
expire on December 31, 1999.
2.4 OPTION TO EXTEND LEASE TERM.
2.4.1 EXTENSION OPTION. Provided no Event of Default has occurred and is
continuing either at the time the extension option provided herein is exercised
or on the date on which the Extension Term is to commence, Tenant shall have the
option to extend the Term of this Lease for an additional period of sixty (60)
months(the "Extension Term"), upon the same terms, covenants and conditions
contained in this Lease which were in effect during the Initial Term except that
Basic Rent for the Extension Term shall be in the amount and shall be payable as
2
<PAGE> 9
specified in subsection 2.4.3 hereof. This option to extend is personal to the
named Tenant and shall not apply to any assignee of Tenant.
2.4.2 EXERCISE OF OPTION. Tenant may exercise its option to extend this
Lease only by giving Landlord written notice of its intention to extend on or
before May 1, 2002.
2.4.3 RENT DURING EXTENSION TERM. If Tenant extends this Lease pursuant to
subsection 2.4.2 hereof, the annual Basic Rent for the Extension Term shall be
the greater of (i) the Basic Rent payable by Tenant immediately prior to the
commencement date of that Extension Term (without regard to any temporary
abatement, adjustment or suspension of Basic Rent), or (ii) the then Market Rent
of the Premises as determined pursuant to this subsection. In the event that
Tenant fails to give notice to Landlord as herein provided, this Lease shall
automatically terminate at the end of the Term and Tenant shall have no further
right or option to extend this Lease. As used herein, the term "Market Rent" is
agreed to be the amount of rent expressed in U.S. dollars and cents per rentable
square foot, with no credit for Tenant being in possession, which Landlord has
established as the base rent to be charged for new leases of comparable space in
the Property, or, if no space is available in the Property, at the Property's
then scheduled Base Rent. Tenant shall have the right, at any time after
February 1, 2002, to ask Landlord to quote the Market Rent, as hereinafter
defined, and Landlord shall respond to such request within thirty (30) days.
2.4.4 PAYMENT OF NEW BASIC RENT. Once determined as above set forth, Basic
Rent for the Extension Term shall be payable without notice or demand, in equal
monthly installments of one-twelfth (1/12th) of the annual Basic Rent calculated
in accordance with this Section, in advance on the first day of each calendar
month of the Extension Term.
2.4.5 CONFIRMATION OF CHANGE IN BASIC RENT. Once Basic Rent for the
Extension Term is determined as above set forth, Landlord shall notify Tenant of
the amount of Basic Rent due during such Extension Term. Until receipt of such
notice, Tenant shall continue to pay Basic Rent at the rate in effect
immediately prior to the Commencement Term; provided, however, that once such
notice is given, the amount of Basic Rent payable shall relate back to the
commencement of the Extension Term, and Tenant shall pay the difference, if any,
in the amount already paid for the elapsed portion of the Extension Term and the
amounts payable therefor.
3. RENT. Tenant shall pay as rent for the Premises during the Term the
following amounts (which amounts shall be considered Fixed Rent or Additional
Rent (as each such term is defined in subsection 3.3 hereof), as the case may
be, and all of which, unless the context requires otherwise, are collectively
referred to herein as "Rent"):
3.1 BASIC RENT. Tenant shall pay as the basic rent ("Basic Rent") the
annual base rent as follows:
A. From May 1, 1998 (the "Rent Commencement Date") through April 30, 2000,
annual Basic Rent shall be Three Hundred Ninety-Six Thousand Two Hundred Sixty
Four Dollars ($396,264.00), payable in advance in monthly installments of
Thirty Three Thousand Twenty Two Dollars ($33,022.00).
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<PAGE> 10
B. From May 1, 2000 through the expiration of the Initial Term, annual
Basic Rent shall be Four Hundred Eleven Thousand Three Hundred Twelve Dollars
($411,312), payable in advance in monthly installments of Thirty Four Thousand
Two Hundred Seventy-six Dollars ($34,276.00).
The Basic Rent for the first month of the term of this Lease shall be payable
upon the execution of this Lease by Tenant. Rent shall be made payable to
Landlord, at the address set forth on the first page hereof or to such other
party or at such other address as Landlord may designate from time to time by
written notice to Tenant.
Notwithstanding that Basic Rent shall not be payable prior to February 1,
1998, Tenant shall pay, from the Commencement Date through January 31, 1998,
the Tax Allowance and Operating Expense Allowance, as hereinafter defined.
3.2 RENTAL ADJUSTMENTS.
3.2.1 COMMON AREA EXPENSE ALLOWANCE; REAL ESTATE TAXES ALLOWANCE; INSURANCE
ALLOWANCE.
A. COMMON AREA EXPENSE ALLOWANCE. A common area expense allowance of
$20,064 annually (which number is calculated by multiplying $0.20 x 100,320)
(the "Common Area Expense Allowance") is included in the Basic Rent payable
under this Lease.
B. REAL ESTATE TAX ALLOWANCE. A real estate tax allowance of $38,121.60
annually (which number is calculated by multiplying $0.38 x 100,320) (the "Real
Estate Tax Allowance") is included in the Basic Rent payable under this Lease.
C. INSURANCE ALLOWANCE. An insurance expense allowance of $7,022.40
annually (which number is calculated by multiplying $0.07 x 100,320) (the
"Insurance Expense Allowance") is included in the Basic Rent payable under this
Lease.
D. OPERATING EXPENSE ALLOWANCE DEFINED; PARTIAL MONTH. The Common Area
Expense Allowance and the Insurance Expense Allowance are hereinafter referred
to, collectively, as the "Operating Expense Allowance."
3.2.2 ADJUSTMENTS FOR OPERATING EXPENSES AND REAL ESTATE TAXES.
A. ADJUSTMENT FOR OPERATING EXPENSES. If Tenant's proportionate share of
the Operating Expenses for any Operating Year (as such terms are defined in
subsection 3.2.2(F) hereof) shall be greater than the Operating Expense
Allowance, then Tenant shall pay to Landlord as Additional Rent an amount equal
to the difference (the amount of such difference is hereinafter referred to as
the "Operating Expense Adjustment").
B. ADJUSTMENT FOR REAL ESTATE TAXES. If Tenant's proportionate share of
Real Estate Taxes (as such term is defined in subsection 3.2.2(F) hereof) for
any Operating Year shall be greater than the Real Estate Tax Allowance, then
Tenant shall pay to Landlord as Additional Rent an amount equal to the
difference (the amount of such difference is hereinafter referred to as the
"Real Estate Tax Adjustment").
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<PAGE> 11
C. PARTIAL OPERATING YEAR. If Tenant occupies the Premises, or any
portion thereof, for less than a full Operating Year, or if Landlord changes
the Operating Year, the Operating Expense Adjustment and Real Estate Tax
Adjustment will be calculated in proportion to the amount of time during such
Operating Year that Tenant occupies the Premises, or any portion thereof.
D. PAYMENT OF ADDITIONAL RENT. Such Additional Rent shall be paid in the
following manner: approximately one hundred twenty (120) days following the
end of each Operating Year (or partial Operating Year, if applicable), Landlord
shall furnish to Tenant a statement (each, an "Operating Expense and Real
Estate Tax Statement") setting forth Tenant's Operating Expense Adjustment for
such Operating Year, and Tenant's Real Estate Tax Adjustment for such Operating
Year (or partial Operating Year, if any). Within fifteen (15) days following
the receipt of such Operating Expense and Real Estate Tax Statement (the
"Expense Adjustment Date"), Tenant shall pay to Landlord as Additional Rent the
Tenant's Operating Expense Adjustment and Tenant's Real Estate Tax Adjustment
for such Operating Year.
E. ESTIMATED OPERATING EXPENSE AND REAL ESTATE TAX PAYMENTS. Commencing
with the first month of the second Operating Year, and thereafter commencing on
the second month of each succeeding Operating Year, Tenant shall pay to
Landlord, in addition to the Basic Rent, on account of the Operating Expense
Adjustment and the Real Estate Tax Adjustment for such Operating Year, monthly
installments in advance equal to one-twelfth (1/12th) of the estimated
Operating Expense Adjustment and Real Estate Tax Adjustment for such Operating
Year. On the next succeeding Expense Adjustment Date, Tenant shall pay to
Landlord (or Landlord shall credit to Tenant) any deficiency (or excess)
between the installments paid on account of the preceding year's Operating
Expense Adjustment and Real Estate Tax Adjustment and the actual Operating
Expense Adjustment and Real Estate Tax Adjustment for such Operating Year.
F. DEFINITIONS. As used in this subsection 3.2, the following words and
terms shall be defined as hereinafter set forth:
(1) "Operating Year" shall mean each calendar year, or other period of
twelve (12) months as hereafter may be adopted by Landlord as its fiscal year,
occurring during the Term, as the same may change from time to time.
(2) "Operating Expenses" shall mean the following expenses incurred by
Landlord in connection with the operation, repair and maintenance of the
Property:
(a) Premiums and fees for insurance, including, but not limited to, fire
and extended coverage insurance, insurance against loss of rentals for space in
the Building and public liability insurance, all in amounts and coverages (with
additional policies against additional risks) as may be required by Landlord or
the holder, now or hereafter, of any mortgage on the Building;
(b) intentionally omitted.
(c) To the extent performed by or on behalf of Landlord, maintenance and
repair costs, including, but not limited to, repairs and replacements described
in subsection 6.2 hereof, repairs and replacements of
5
<PAGE> 12
supplies and equipment and paving, walkways, lawn and general grounds upkeep,
maintenance and repair, and the costs of all labor, material and supplies
incidental thereto;
(d) Wages, salaries, fees and other compensation and payments and payroll
taxes and contributions to any social security, unemployment insurance,
welfare, pension or similar fund and payments for other fringe benefits
required by law, union agreement or otherwise made to or on behalf of all
employees of Landlord performing services rendered in connection with the
operation, cleaning and maintenance of the Building or the Land, including,
without limitation, payments made directly to or through independent
contractors for performance of such services;
(e) Reasonable and actual management fees payable to the managing agent
for the Building or the Property up to a maximum of two percent (2%) of all
gross receipts from the property;
(f) Assessments paid by Landlord in respect of the repair, maintenance and
upkeep of common facilities located in or on the Property;
(g) The cost of any capital improvements made for the primary purpose of
reducing operating expenses, or which may be required by governmental authority
under any governmental laws or regulations that were not applicable to the
Property at the time the Building was constructed, which cost shall be
amortized over such period as is reasonably determined by Landlord, together
with interest on the unamortized balance at the rate equal to the announced
"prime rate" then in effect at CitiBank, N.A., New York, New York (or its
successor) on short-term unsecured loans to its largest and most creditworthy
commercial customers (the "Prime Rate"); and
(h) Any and all other actual expenditures of Landlord incurred in
connection with the operation, repair or maintenance of the Premises or the
Building which are properly expensed in accordance with generally accepted
accounting principles consistently applied in the operation of the Property;
provided, however, that expenses for services provided directly by Landlord or
an affiliate of Landlord shall not be deemed to be Operating Expenses to the
extent they are in excess of the prevailing rate in the Bucks County,
Pennsylvania area.
(3) "Real Estate Taxes" shall mean real estate taxes and other taxes or
charges levied in lieu of such taxes, general and special public assessments,
charges imposed by any governmental authority pursuant to anti-pollution or
environmental legislation, taxes on the rentals of the Building or the use,
occupancy or renting of space therein. "Real Estate Taxes" shall also include
all out-of-pocket fees, expenses and costs actually incurred by Landlord in
investigating, protesting, contesting or in any way seeking to reduce or avoid
any assessments or increases in assessments, taxes or the tax rate pertaining
to the Land, the Building or the Premises.
(4) "Tenant's proportionate share" is the ratio of the number of rentable
square feet of the Premises divided by the number of rentable square feet in
the Building (100,320 - 214,320), equal to 46.81%.
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<PAGE> 13
G. ALLOCATIONS; EXCLUSIONS FROM OPERATING EXPENSES AND REAL ESTATE TAXES.
Items of Operating Expenses and Real Estate Taxes which are not exclusively
incurred with respect to the Property by reason of the nature of the items or
otherwise shall be equitably allocated by Landlord among the various pieces of
real property to which the same relate or for whose benefit the same have been
incurred, and only the portion allocated to the Property shall be included in
calculating the Operating Expenses for the Property. Except as otherwise
expressly provided herein, the terms "Operating Expenses" and "Real Estate
Taxes" shall not include depreciation on the Building or equipment therein; net
income, franchise or capital stock taxes payable by Landlord; salaries above
the level of property manager; costs reimbursed by insurance or condemnation
proceeds; interest and principal, points, fees or expenses on any financing
related to the Building; real estate brokers' commissions or the costs of
services provided specially for any particular tenant and not uniformly
available to all tenants of the Building; lease negotiation or enforcement
expenses; and expenses for services provided directly by Landlord or an
affiliate of Landlord which are in excess of the prevailing rate in the Bucks
County, Pennsylvania area.
3.2.3 END OF TERM ADJUSTMENT. During the calendar year in which the Term
ends, Landlord shall have the right to submit to Tenant a statement of
Landlord's reasonable estimate of the Operating Expense Adjustment and Real
Estate Tax Adjustment during the period (the "final period") beginning on the
first day of the final Operating Year of the Term or, if later, the date of the
immediately preceding Operating Expense Adjustment and Real Estate Tax
Adjustment, and ending on the final day of the Term. On or before the final day
of the Term, Tenant shall pay to Landlord said estimated Operating Expense
Adjustment and Real Estate Tax Adjustment minus the total amount of payments
previously made by Tenant pursuant to subsection 3.2.2 hereof during the final
period. If requested by Tenant, Landlord shall submit to Tenant a statement
setting forth the actual amount of said Operating Expense Adjustment and Real
Estate Tax Adjustment after Landlord's final calculation of same, and within
fifteen (15) days after Tenant's receipt of such statement, Tenant shall pay to
Landlord any deficiency, or, as the case may be, Landlord shall refund to Tenant
any overpayment occasioned by Tenant's payment of the aforesaid estimate.
3.3 FIXED RENT; ADDITIONAL RENT. Fixed Rent shall consist of Basic Rent
(including the Operating Expense Allowance and Real Estate Tax Allowance).
Additional Rent shall consist of all sums not included in Fixed Rent which
Tenant is obligated to pay to Landlord or third parties from time to time
pursuant to the terms of this Lease, including, but not limited to, any
Operating Expense Adjustment and any Real Estate Tax Adjustment.
3.4 DEMAND; TIME; LATE CHARGE. Each of the foregoing amounts of Rent shall
be paid to Landlord in United States dollars, without prior notice of demand and
without deduction, set-off or counterclaim, in advance on the first day of every
month during the Term. If Landlord shall at any time or times accept Rent after
it shall become due and payable, such acceptance shall not excuse a delay upon
subsequent occasion, or constitute, or be construed as or deemed to be, a waiver
of any or all of Landlord's rights hereunder. In order to partially compensate
Landlord for the extra expense in the handling of delinquent payments, Tenant
agrees to pay Landlord the late charge as defined in subsection 16.6 hereof.
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USE OF PREMISES AND COMMON AREAS.
4.1 USE OF PREMISES. Tenant will use and occupy the Premises solely for
warehousing and distribution of wireless communications products, communications
products and related equipment, parts and products and incidental office use
related thereto, but not including Hazardous Materials, as hereinafter defined,
except new or used packaged batteries for wireless communications equipment and
other substances other than new and used packaged batteries as provided above in
de minimus quantities. Any batteries or other Hazardous Materials permitted in
accordance with the preceding sentence shall not be stored in significant
quantities intended for disposal and shall be stored, used, handled and disposed
of in strict accordance with all Environmental Laws. Tenant will use and occupy
the Premises only in accordance with the uses permitted under relevant zoning
and other municipal regulations and permits applicable to the Property, and also
in accordance with any other restrictions and conditions of record. The
Premises will not be used for any other purpose. Tenant will not use or occupy
the Premises for any unlawful purpose, and will comply with all present and
future laws, ordinances, regulations and orders of the United States of America,
the Commonwealth of Pennsylvania, and any other public or quasi-public authority
having jurisdiction over the Premises.
4.2 USE OF COMMON AREAS. Tenant shall have the right, non-exclusive and in
common with others, to use (i) any common hallways, entrances and rest room
facilities of the Building for the purposes for which the same were designed and
(ii) any common facilities located or to be located in or on the Property,
including the exterior paved driveways, walkways and other amenities of the
Property for vehicular and pedestrian access to the Building. Notwithstanding
the foregoing, Tenant shall also have the exclusive right to use (a) the parking
areas made a part of the Premises under Section 1 hereof for parking of
automobiles and other vehicles of Tenant and its employees and business
visitors, and (b) the loading docks made part of the Premises pursuant to
Section 1 hereof, incident to Tenant's permitted use of the Premises. Landlord
shall have the right to establish such other reasonable regulations, applicable
to all tenants, governing the use of any interior or exterior common areas; and
such regulations, when communicated in written notification from Landlord to
Tenant, shall be incorporated by reference herein as part of this Lease.
5.0 ASSIGNMENT AND SUBLETTING.
5.2 LANDLORD'S PRIOR CONSENT REQUIRED. Except as expressly permitted
pursuant to this Section 5, Tenant shall not, without the prior written consent
of Landlord, assign or hypothecate this Lease or any interest herein or sublet
the Premises, or any part thereof. Except as hereinafter provided in this
Section 5, this Lease shall not, nor shall any interest herein, be assignable as
to the interest of Tenant by operation of law without the prior written consent
of Landlord. Any of the foregoing acts, without the prior written consent of
Landlord, shall constitute an Event of Default hereunder.
. QUALIFICATIONS OF SUBTENANT; LANDLORD'S RIGHT TO REACQUIRE PREMISES. If
at any time or from time to time during the Term, Tenant desires to sublet or
assign all or any part of the Premises, Tenant shall give sixty (60) days'
notice to Landlord of such intent, which notice shall contain the name, address
and description of the business of the proposed assignee or subtenant, its most
recent financial statement prepared by a certified public accountant and other
evidence of financial responsibility, its intended use of the Premises, and the
terms and conditions of the proposed assignment or subletting, including,
without limitation,
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<PAGE> 15
the amount of rents and other economic consideration to be received by Tenant
thereunder. Landlord shall have the option, exercisable by notice given to
Tenant within twenty (20) days after receipt of Tenant's notice, of reacquiring
the portion of the Premises proposed to be sublet or assigned and terminating
this Lease with respect thereto. If the Landlord does not exercise such
option, Tenant shall be free to sublet or assign such space to such third party
subject to the following conditions:
(a) Landlord shall have consented to such subletting or assignment, which
consent shall not be unreasonably withheld, it being understood and agreed by
the parties hereto, however, that Landlord shall not withhold consent if the
following conditions are met: (i) none of the proposed assignee, any one
owning, controlled by or controlling such assignee, or any entity under common
control with such assignee shall be insolvent or have a history of defaulting
on its lease obligations, (ii) the intended use by the proposed assignee or
subtenant is a permitted use under this Lease or is for general warehouse
purposes and otherwise does not involve the use of Hazardous Materials except
as permitted by Article 15 hereof, (iii) the amount of rents and other economic
consideration to be received by Tenant thereunder (after adjustment for rental
allowances, free rent periods and other similar financial concessions) is not
less than the then fair market rental rate for comparable space in the
Building, (iv) assignee or subtenant may not be a tenant, subtenant, or other
occupant of any other Building owned by Landlord; and (v) the Tenant may not be
in default under this Lease at the time of the request for subletting or
assignment or at the time of the commencement of the sublease term or effective
date of assignment, nor may Tenant have committed two (2) defaults hereunder
during the twelve (12) month period immediately preceding any request for a
subletting or assignment, whether cured or not. Notwithstanding anything to
the contrary contained herein, if the assignee or subtenant is at least 51%
owned, directly or indirectly, by Brightpoint, Inc., or by any assignee which
acquires at least 51% of the outstanding stock of Brightpoint, Inc., Landlord's
consent shall not be required for the assignment or sublease to such entity.
(b) If the space is not subleased or assigned within ninety (90) days from
the expiration of Landlord's option as set forth above, or any subsequent
option as provided in this subsection 5.2 (b), Tenant, shall, prior to entering
into a sublease or an assignment of said space, once again give Landlord
reasonable written notice and Landlord shall have twenty (20) days after the
receipt thereof of reacquiring that portion of the Premises and terminating
this Lease with respect thereto;
(c) No sublease or assignment shall be valid and no subtenant or assignee
shall take possession of the Premises subleased or assigned until an executed
counterpart of such sublease or assignment has been delivered to Landlord;
(d) No subtenant or assignee shall have a right further to sublet or
assign;
(e) Any sums or other economic consideration received by Tenant as a
result of such subletting or assignment whether denominated rentals under the
sublease or otherwise, which exceed, in the aggregate, the total sums which
Tenant is obligated to pay Landlord under this Lease (pro-rated to reflect
obligations allocable to that portion of the premises subject to such sublease
or assignment) shall be payable to Landlord as Additional Rent under this Lease
without affecting or reducing any other obligation of Tenant hereunder; and
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(f) The sublease or assignment instrument shall be in a form approved by
Landlord, shall be expressly subject and subordinate to this Lease, shall
provide that any subtenant or assignee assume, comply with and abide by all of
the terms of this Lease (including, but not limited to, the prohibitions of
this subsection 5.2), and shall provide that any termination of this Lease
shall extinguish the sublease or assignment instrument as well.
5.3 NO WAIVER OR RELEASE. Regardless of Landlord's consent, no subletting
or assignment shall release Tenant of Tenant's obligation or alter the primary
liability of Tenant to pay the rental and to perform all other obligations to be
performed by Tenant hereunder, and no sublease or assignment shall release
Guarantor of Guarantor's obligation under the Guaranty or alter the liability of
Guarantor as surety under the Guaranty to pay the rental and to perform all
other obligations to be performed by Tenant hereunder. The acceptance of rent
by Landlord from any other person shall not be deemed to be a waiver by Landlord
of any provision hereof. Consent to one assignment or subletting shall not be
deemed consent to any subsequent assignment or subletting. In the event of
default by any assignee or subtenant of Tenant, or any other successor of
Tenant, in the performance of any of the terms hereof, Landlord may proceed
directly against Tenant, Guarantor or any other person or entity liable for any
obligations under this Lease without the necessity of exhausting remedies
against such assignee, subtenant or other successor. Landlord may consent to
subsequent assignment or subletting of this Lease or amendments or modifications
to this Lease with assignees of Tenant, without notifying Tenant, or any
successor of Tenant, and without obtaining its or their consent thereto, and
such action shall not relieve Tenant of liability under this Lease or relieve
Guarantor of liability under the Guaranty.
5.4 ACTS DEEMED AN ASSIGNMENT.
(a) If Tenant is a corporation, any dissolution, liquidation, merger,
consolidation or other reorganization of such corporation, or any transfer of a
controlling percentage of the corporate stock of Tenant (whether in a single
transaction or cumulatively), shall constitute an assignment of this Lease for
all purposes of this Section 5. Notwithstanding anything to the contrary
contained herein, if (1) the assignee or subtenant is at least fifty-one
percent (51%) owned, directly or indirectly, by Brightpoint, Inc., (2) the
assignee acquires at least fifty-one percent (51%) of the outstanding stock of
Brightpoint, Inc., or (3) Brightpoint, Inc., or any assignee which has acquired
at least fifty-one percent (51%) of the outstanding stock of Brightpoint, Inc.,
undertakes a full guarantee, in form and substance satisfactory to Landlord, of
the obligations of the Tenant then Landlord's consent shall not be required for
such an assignment or sublease, and Landlord's right to reacquire the portion
of the Premises relating to such assignment or sublease, and the termination of
this Lease with respect thereto, shall not be applicable to such an assignment
or sublease.
(b) If Tenant is a partnership and if at any time during the Term, or any
extension or renewal thereof, the person, or persons who, at the time of the
execution of this Lease, own the general partners' interest cease to own the
general partners' interest (except as a result of transfers by bequest or
inheritance), such cessation of ownership shall constitute an assignment of
this Lease for all purposes of this Section 5.
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MAINTENANCE OF THE PREMISES.
6.1 OBLIGATIONS OF TENANT.
6.1.1 TENANT'S MAINTENANCE. Tenant shall, throughout the term, at its sole
cost and expense, keep the Premises clean, remove all refuse, trash and debris
therefrom, keep waste and drain pipes open and generally maintain the Premises
and the improvements now or hereafter comprising all or any part of the Premises
and the fixtures and appurtenances thereto (and the portion of the plumbing,
heating, air conditioning, ventilating equipment and fixtures located in or
affecting only the Premises) in good order, repair and condition. Tenant shall
promptly, at Tenant's own cost and expense, make all repairs and replacements
necessary to maintain such good order, repair and condition, except for repairs
and replacements which Landlord agrees to make pursuant to subsection 6.2.
Tenant shall obtain, at its sole cost and expense, an annual maintenance
contract for utility systems and heating, ventilating and air conditioning
equipment and systems serving only the Premises. Tenant further agrees, at its
sole cost and expense, to promptly repair all damage or injury to the Premises,
making replacements, if necessary, including any portion of the Premises for
which Landlord is responsible pursuant to subsection 6.2, caused by (i) the
negligence or willful misconduct of Tenant or its employees, agents, invitees,
licensees, subtenants, or contractors, or (ii) the act of moving in or out of
the Premises or the installation or removal of any furniture, fixtures or other
property, which repairs and replacements shall be in quality and class equal to
the original work or installations. Tenant further agrees to maintain the
parking areas and loading docks which are part of the Premises in good condition
and repair, including, but not limited to, periodic and customary maintenance
thereof, and shall return the same to Landlord in a condition which is at least
as good as its state of repair on the date the work under Exhibit "C" has been
completed other than reasonable wear and tear on the parking area and reasonable
wear and tear on the loading docks which does not materially and adversely
affect the functioning thereof. Notwithstanding the foregoing, Tenant shall have
no obligation to bring any physical aspect of the Premises or the Property into
compliance with legal requirements to the extent such aspect is not in
compliance on the date hereof; provided, however, that Tenant shall at all times
remain responsible for compliance required by reason of any change in law, by
reason of any improvements made by Tenant or by reason of Tenant's particular
use of the Property; and provided further, however, that Sections 15 and 18
hereof shall control over any inconsistent language in this sentence.
Notwithstanding anything to the contrary contained herein, Tenant shall have no
responsibility under this Lease for repairing or replacing any defective
condition in the initial construction of the roof, exterior walls or foundation.
Tenant's obligations to maintain the HVAC system and the parking areas is
hereby limited as follows: Tenant shall have no obligation to make or pay for
any individual repair the cost of which exceeds $10,000. As to any individual
repair the cost of which exceeds $10,000, Landlord shall perform such repair or
cause such repair to be made, and Tenant shall reimburse Landlord for the
Amortized Portion of the cost of the repair. The "Amortized Portion" shall be
equal to (i) the cost of the repair multiplied by a fraction equal to (i) the
period remaining on the Term of the Lease at the time the repair is made,
together with any exercised renewals divided by (ii) such period as is
reasonably determined by Landlord to be the useful life of such repair. In
addition to and not in limitation of the forgoing, Landlord warrants the HVAC
system to be in good working order
as of the Commencement Date, which warranty shall remain in effect for a period
of one (1) year after the Commencement Date.
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6.1.2 LANDLORD'S RIGHT TO CURE. If Tenant fails to make such repairs or
replacements required by Section 6.1.1 hereof within thirty (30) days after
written notice from Landlord (with the exception of emergencies, which shall not
require any notice), Landlord may, but shall not be obligated to, make the
required repairs or replacements and all costs and expenses incurred by Landlord
in connection therewith, together with interest in accordance with the terms of
subsection 16.9 hereof, shall be collectible as Additional Rent and shall be
paid by Tenant with the monthly installment of Rent next becoming due.
6.1.3 SURRENDER OF PREMISES. At the expiration or other termination of the
Term, surrender the same broom clean, in the same order and condition in which
it is on the Commencement Date, ordinary wear and tear excepted.
6.2 OBLIGATIONS OF LANDLORD. So long as Tenant is not in default
hereunder, Landlord shall:
6.2.1 LANDLORD'S MAINTENANCE. Provided that Tenant shall give Landlord
written notice of the need for the following repairs, Landlord shall: (i) at
its sole cost and expense, keep the roof, foundations and exterior walls of the
Building in good order and repair and to repair any defective condition in the
original construction thereof, and (ii) as an Operating Expense, keep in good
order and repair the Common Areas, sewage system outside of the Premises,
utility lines to the Premises, down spouts, gutters, any loading docks or
platforms utilized by more than one occupant of the Building, lawns, driveways
for use of more than one tenant and those portions of the plumbing, heating,
electrical, air conditioning, ventilating and sprinkler systems, if any,
relating to the Common Areas or the entire Building. Subject to the waivers of
subrogation set forth herein, in no event shall Landlord be obligated under this
paragraph to repair any damage caused by any act, omission or negligence of
Tenant or its employees, agents, invitees, licensees, subtenants, or
contractors. Landlord shall not be liable by reason of any injury or
interference with Tenant's business arising from the making of any repairs,
alterations, additions or improvements in or to the Premises, the Building or
the Property, or to any appurtenances or equipment therein. There shall be no
abatement of Rent because of such repairs, alterations, additions or
improvements. At any time when Landlord requires access to the Premises to
perform improvements, maintenance or repairs, Landlord shall (except in cases of
emergency) contact Tenant at least twenty-four (24) hours in advance. Landlord
shall use reasonable measures in such event to avoid interference with Tenant's
operations. Landlord shall use professional, licensed contractors in all
maintenance and repairs performed by Landlord.
6.2.2 NO OTHER SERVICES. Landlord shall not be required to render any
services to Tenant or to make any repairs or replacement to the Premises, except
as provided in this subsection 6.2.
6.3 NOTICE OF DEFECTIVE CONDITION. Tenant shall give Landlord prompt
notice of any defective condition in any plumbing or heating system or any
electrical lines located in, servicing or passing through the Premises. No such
notice shall give rise to any obligation of Landlord to repair any item which
Landlord is not otherwise expressly required to maintain under subsection 6.2 of
this Lease.
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TENANT ALTERATIONS.
7.1 ALTERATIONS.
7.1.1 CONSENT OF LANDLORD. Tenant will not make or permit others to make
any alterations, additions or improvements, to the structure of or systems in
the Premises, without prior written consent of Landlord, which consent may be
withheld or granted in Landlord's sole and absolute discretion. Without
limiting the foregoing, (a) Landlord shall have the right to withhold approval
of any alterations or additions which may delay completion of Landlord's Work
under Exhibit "C" or the improvements to the Property, require unusual expense
to readapt the Premises to normal industrial use upon termination of this Lease
or increase taxes or cost of construction or insurance, and (b) Landlord may
condition its consent upon receipt and approval of plans and specifications,
contracts, permits, mechanics' lien waivers and releases, insurance policies and
modifications to this Lease.
7.1.2 HEAVY EQUIPMENT OR FIXTURES. Landlord shall have the right to
prescribe the weight and position of heavy equipment or fixtures. Landlord
shall have the right to require additional structural supports to be installed,
at Tenant's cost and expense, for any heavy equipment or fixtures used or
installed by Tenant. Tenant may, without the consent of Landlord, at its own
cost and expense and in a good and workmanlike manner erect such shelves, bins,
machinery and trade fixtures as it desires without altering the basic character
of the Building or improvements without overloading or damaging such Building or
improvements and in each case complying with all applicable governmental laws,
ordinances, regulations and other requirements.
7.1.3 UTILITY SYSTEMS CHANGES. Without limiting the generality of anything
contained in this subsection 7.1, for purposes of this Lease, any changes to the
electrical plumbing, heating, air-conditioning or ventilating systems (together
with any or all additional equipment necessary to operate the same) shall be
considered an "alteration" as used in this Section 7.
7.2 INDEMNIFICATION. Tenant will indemnify, defend and hold Landlord
harmless from and against any and all expenses, liens, claims or injuries
(including death) to persons or damage to property which may or might arise
directly or indirectly by reason of making any such alterations, decorations,
additions or improvements, unless such expenses, liens, claims or damages arise
out of the negligence of the Landlord. If any such alteration, decoration,
addition or improvement is made without the prior written consent of Landlord as
required in subsection 7.1, Landlord may correct or remove the same, and Tenant
shall be liable for any and all expenses incurred by Landlord in the performance
of such work. Tenant shall indemnify, defend and hold Landlord harmless from
and against mechanics' and materialmen's liens.
7.3 REMOVAL OF PROPERTY. All alterations, decorations, additions, fixtures
or improvements in or to the Premises or the Building made by either party shall
immediately become the property of Landlord and shall remain upon and be
surrendered with the Premises as a part thereof at the end of the Term without
disturbance, molestation or injury. Landlord shall have the right to remove and
dispose of all property remaining on the Premises at the expiration of the Term,
retain the proceeds therefrom and have no obligation to account therefor to
Tenant. Upon removal of any equipment, machinery, bins or trade fixtures, which
shall remain the property of Tenant from the Premises, Tenant shall restore the
Premises to the
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condition which existed at commencement of the Term, reasonable wear and tear
excepted.
8.0 SIGNS. Tenant shall have no right to place any signs on the Property or
the outside of the Premises without Landlord's consent, which may be granted or
withheld in Landlord's sole discretion. All signs placed on the Property by
Tenant shall be treated the same as trade fixtures for the purpose of Section
7.3 hereof.
9.0 INSPECTION. After 24 hours' prior written notice to Tenant (except in
case of emergencies), Landlord, or its agents or other representatives, shall
have the right to enter the Premises, without charge therefor to Landlord and
without diminution of the Rent payable by Tenant, to examine, inspect and
protect the Premises and the Building and to make such alterations and/or
repairs as in the reasonable judgment of Landlord may be deemed necessary, or to
exhibit the same to prospective tenants during the last one hundred eighty (180)
days of the Term. Landlord shall use reasonable measures in such event to avoid
interference with Tenant's operations.
10.0 INSURANCE.
10.1 INSURANCE RATING. Tenant will not conduct or permit to be conducted
any activity, or place any equipment in or about the Premises, the Building or
the Property which will, in any way, invalidate the insurance coverage in effect
or increase the rate of fire insurance or other insurance on the Building; and
if any invalidation of coverage or increase in the rate of fire insurance or
other insurance is stated by any insurance company or the applicable Insurance
Rating Bureau to be due to any activity or by equipment of Tenant in or about
the Premises, the Building or the Property, such statement shall be conclusive
evidence that the increase in such rate is due to such activity or equipment
and, as a result thereof, Tenant shall be liable for such increase and shall
reimburse Landlord therefor upon demand and any such sum shall be considered
Additional Rent payable with the monthly installment of Rent next becoming due.
10.2 REQUIRED INSURANCE; WAIVER OF SUBROGATION. Tenant, at Tenant's
expense, shall carry comprehensive general public liability insurance in a
company or companies licensed to do business in the Commonwealth of Pennsylvania
and approved by Landlord. Said insurance shall be in minimum amounts for a
combined single limit for bodily injury (including death) and property damage
equal to no less than Two Million Dollars ($2,000,000) per occurrence. Landlord,
in its sole judgment reasonably exercised, may require Tenant to increase such
limits of liability from time to time in order adequately to protect its
interests under the circumstances which are similar limits as are required by
Landlord for new leases of similar size and scope in the metropolitan area
including Philadelphia, Pennsylvania. Each such policy shall name Landlord as
an additional insured, as its interests may appear. Tenant shall carry property
damage insurance for all of its equipment and other personalty and for all
leasehold improvements above the building standard which are made by Landlord or
Tenant in and to the Premises and such other insurance as may be reasonably
required by the holder, now or hereafter, of a mortgage on the Building, as well
as business interruption insurance by reason of any casualty. Landlord and
Tenant agree that in the event the Premises or the Building or the contents
thereof are damaged or destroyed by fire or other casualty, the rights, if any,
of either party against the other with respect to such damage or destruction are
waived, and that all policies of fire and/or extended coverage or other
insurance carried by Landlord or Tenant covering the Premises or the Building or
the contents thereof shall contain a clause or endorsement providing in
substance
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that such insurance shall not be prejudiced if the assureds thereunder have
waived the right of recovery from any person or persons prior to the date and
time of loss or damage, if any.
10.3 INSURANCE CERTIFICATE. Certificates of insurance and receipts
evidencing the coverage provided by, and payment for, said insurance shall be
delivered to Landlord upon the written request of Landlord at least annually by
Tenant and each policy and certificate thereof shall contain an endorsement that
will prohibit its cancellation prior to the expiration of thirty (30) days after
written notice of such proposed cancellation, reduction in coverage or
expiration, as the case may be, to Landlord.
10.4 LANDLORD'S INSURANCE. Throughout the Term, Landlord shall cause the
buildings on the Property to be insured against loss or damage by fire and the
perils commonly covered under the standard extended coverage endorsement
("builder's risk" form during periods of construction) to the extent of not less
than 80% of the "full replacement cost" thereof, including all improvements,
alterations, additions and changes made by Landlord, but excluding foundations,
footings and excavation, and excluding fixtures and equipment owned by Landlord
or its other Tenants. Landlord shall maintain, or cause to be maintained,
liability insurance insuring its interests against claims for personal injury,
bodily injury, death and property damage occurring on, in or about the Property
and the ways immediately adjoining the Property, with a "Combined Single Limit"
(covering personal injury liability, bodily injury liability and property damage
liability) of not less than Two Million Dollars ($2,000,000) for total claims.
11.0 UTILITIES. Tenant shall pay for all water, gas, heat, light, power,
telephone and sewer charges and other utilities and services used on the
Premises, which are separately metered, together with any taxes, penalties and
surcharges or the like pertaining thereto and any maintenance charges for such
utilities. Any such charges paid by Landlord and assessed against Tenant shall
be immediately payable to Landlord on demand and shall be additional rent
hereunder.
12.0 LIABILITY.
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12.1 NO LIABILITY. Landlord shall not be liable to Tenant, its employees,
agents, contractors, business invitees, licensees, customers, suppliers,
clients, family members or guests for any damage, compensation or claim based on
loss, inconvenience or annoyance arising from the necessity of repairing any
portion of the Premises, the Building or the Property, the interruption in the
use of the Premises, accident or damage resulting from the use or operation (by
Landlord, Tenant or any other person or persons whatsoever) or for failure to
furnish, or for delay, suspension or interruption in furnishing any of the
utilities, including, but not limited to, heating, cooling, electrical or
plumbing equipment or apparatus, or the termination of this Lease by reason of
the destruction of the Premises, or from any fire, robbery, theft, mysterious
disappearance and/or any other casualty, or from any leakage in any part or
portion of the Premises, the Building or the Property, or from water, rain or
snow that may leak into, or flow from any part of the Premises, the Building or
the Property, or from drains, pipes or plumbing work in the Building, or from
any other cause whatsoever, or for any personal injury (including death) arising
from the use, occupancy and condition of the Premises, unless any of the
foregoing is caused by the negligence of Landlord or a willful act or failure to
act on the part of the Landlord. Tenant shall not be entitled to any abatement
or diminution of rent as a result of any of the foregoing occurrences, nor shall
the same release Tenant from its obligations hereunder or constitute an
eviction. Any goods, property or personal effects of Tenant, its employees,
agents, contractors, business invitees, licensees, customers, clients, family
members or guests, stored or placed in or about the Premises or the Building
shall be at their risk, and the Landlord shall not in any manner be held
responsible therefor. The employees of the Landlord who may be located on the
Property from time to time are prohibited from receiving any packages or other
articles delivered to the Building by, to or on behalf of Tenant, and if any
such employee receives any such package or articles, such employee shall be the
agent of the Tenant for such purposes and not of the Landlord. Tenant
acknowledges that Landlord will not carry insurance on Tenant's furniture,
furnishings, fixtures, equipment and/or improvements in or to the Premises.
Tenant shall give written notice forthwith to Landlord of any accident, damage,
casualty, injury or emergency on or affecting the Premises and of any claim,
action, threat or other proceeding against, arising from, or affecting Tenant,
the Premises or the use or occupancy of the Premises by Tenant (or, to the
extent an emergency occurs, by telephone or other means of immediate
communication, to be followed promptly thereafter by a confirmatory writing). It
is expressly understood and agreed that Tenant shall look to its business
interruption and property damage insurance policies, and not to Landlord, or its
agents or employees, for reimbursement for any damages or losses incurred as a
result of any of the foregoing occurrences, that said policies must contain
waiver of subrogation clauses and that Tenant shall at least annually deliver to
Landlord evidence of the foregoing.
12.2 INDEMNITY. Tenant hereby agrees to indemnify and hold Landlord
harmless from and against any cost, damage, claim, liability or expense
(including attorney's fees) incurred by or claimed against Landlord, directly or
indirectly, which is occasioned by or result from any default hereunder or any
willful or negligent act on the part of the Tenant, its agents, employees,
contractors, invitees, licensees, customers, clients, family members and guests,
or as a result of or in any way arising from Tenant's use and occupancy of the
Premises or any breach of this Lease by Tenant or in any other manner which
relates to the business of Tenant unless any of the foregoing is caused by the
negligence of Landlord or a willful act or failure to act on the part of the
Landlord. Any such cost, damage, claim, liability or expense incurred by
Landlord for which Tenant is obligated to reimburse Landlord shall be deemed
Additional Rent due and payable in accordance
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with subsection 16.9 hereof. It is expressly understood and agreed that
Tenant's liability under this Lease extends to the willful and negligent acts,
commissive or omissive, of any subtenant and any agent, employee, contractor,
invitee, licensee, customer, client, family member and guest of any subtenant.
The liability imposed by this Section 12.2 is further limited by Section 12.4
hereof.
12.3 LANDLORD'S INDEMNITY. Landlord shall indemnify, defend and hold
Tenant, harmless of, from and against any and all costs, expenses (including
reasonable counsel fees), liabilities, losses, damages, suits, actions, fines,
penalties, claims or demands of any kind and asserted by or on behalf of any
person or governmental authority, arising out of or in any way connected with
any accident, bodily injury (including death resulting therefrom), or damage to
or loss or theft of property, which shall occur in or about the Premises or the
Building caused by reason of any negligent act or willful misconduct of Landlord
or willful breach of this Lease by Landlord, or any of its agents, contractors,
licensees or employees.
12.4 LIABILITY COVERED BY INSURANCE. Notwithstanding anything to the
contrary contained herein, neither Tenant nor Landlord shall be responsible to
indemnify or reimburse the other for any damages to property owned by Tenant or
Landlord and covered by the insurance policy of the party asserting damages or
required by this Lease. The indemnities contained in this Section and all other
indemnities contained in this Lease shall survive termination or expiration of
this Lease.
13.0 RULES AND REGULATIONS. Tenant, its agents, employees, contractors,
invitees, licensees, customers, clients, family members and guests shall at all
times abide by and observe the rules and regulations attached hereto as Exhibit
"D" and made a part hereof, as Landlord may hereafter amend such rules and
regulations as provided therein. In addition, Tenant, its agents, employees,
contractors, invitees, licensees, customers, clients, family members and guests
shall abide by and observe such other rules or regulations as may be promulgated
from time to time by Landlord, with a copy sent to Tenant, for the operation and
maintenance of the Building and the Property; provided, however, that the same
shall be in conformity with common practice and usage in similar buildings and
shall not be inconsistent with the provisions of this Lease. Landlord shall not
be liable to Tenant for violation of the rules and regulations by any other
tenant, its employees, agents, contractors, invitees, licensees, customers,
clients, family members or guests. If there is any inconsistency between this
Lease and any current or future rules and regulations, this Lease shall govern.
14.0 DAMAGE; CONDEMNATION.
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14.1 DAMAGE TO THE PREMISES. If the Premises shall be partially damaged by
fire or other cause without the fault or neglect of Tenant, its employees,
agents, contractors, invitees, licensees, customers, clients, family members or
guests, this Lease shall not be terminated and Landlord shall diligently and as
soon as practicable after such damage occurs repair such damage to the Premises
(but not any of Tenant's property therein or improvements or alterations made by
Tenant but expressly including such portion of Landlord's Work as does not
constitute betterments and improvements under a standard policy of insurance of
a tenant), at the expense of Landlord if Landlord is required to be insured
hereunder with respect thereto or at the expense of Tenant if Tenant is
required to be insured hereunder with respect to such damage (in either case
taking into account the time necessary to effectuate a satisfactory settlement
with any insurance company involved and for such other delays as may result from
government restrictions, controls on constructions, if any, and from strikes,
emergencies and other conditions beyond the control of the Landlord); provided,
however, that if the Premises or the Building is damaged by fire or other cause
to such extent that the damage cannot be fully repaired within ninety (90) days
from the date of settlement of the insurance claims, or if the insurance
proceeds (excluding rent insurance) which Landlord anticipates receiving must be
applied to repay any mortgages, now or hereafter, encumbering the Building or
are otherwise inadequate to pay the cost of such repair, then Landlord, upon
fifteen (15) days' written notice to Tenant, may terminate this Lease, in which
event the Rent shall be apportioned and paid to the date of such damage. If the
damage or destruction or renders the Premises entirely unsuitable for Tenant's
operations, then Tenant may terminate this Lease by giving notice to Landlord
within thirty (30) days after such damage or destruction, such termination to be
effective as of the date specified in such notice. During the period that Tenant
is deprived of the use of the damaged portion of the Premises, to the extent
Tenant is able to operate from any other portion of the Premises, Tenant shall
be required to pay Rent (as set forth in Section 3 hereof) covering only that
part of the Premises that Tenant is able to occupy and the Rent for such space
shall be that portion of the total Rent which the amount of square foot area
remaining that can be occupied by Tenant bears to the total square floor area of
the Premises. In any event, no compensation, claim or diminution in Rent, other
than as provided in this subsection 14.1, will be allowed or paid by Landlord,
by reason of interruption, delay, inconvenience, annoyance, or injury to
business arising from repairing the Premises or any portion of the Building.
14.2 CONDEMNATION. If the whole of the Premises (or use or occupancy of
the Premises) shall be taken or condemned by any governmental or
quasi-governmental authority for any public or quasi-public use or purpose
(including sale under threat of such a taking), or if Landlord elects to convey
title to the condemnor by a deed in lieu of condemnation, then the terms of this
Lease shall cease and terminate as of the date when title vests in such
governmental or quasi-governmental authority and the Rent shall be abated on the
date when such title vests in such governmental or quasi-governmental authority.
If (i) only a part of the Premises is taken or condemned by any governmental or
quasi-governmental authority for any public or quasi-public use or purpose
(including sale under threat of such a taking), and the condemnation award is
insufficient to restore the remaining portion of the Premises or if such award
must be applied to repay any mortgages, now or hereafter, encumbering the
Building or the Property, or (ii) whether or not a portion of the Premises is
taken, a portion of the Building or the Property is taken and Landlord deems it
commercially unreasonable to continue leasing all or a portion of the remaining
space in the Building, or (iii) a substantial portion of the Premises is so
taken, and it is commercially impossible for Tenant to continue its business
within the Premises, then Landlord in the case
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of (i) and (ii) above and Tenant in the case of (iii) above, shall have the
right to terminate this Lease on the date when title vests in such governmental
or quasi-governmental authority; provided, however, that such right is
exercisable by the permitted party only if such party notifies the other party
no later than thirty (30) days prior to the date on which the condemned portion
of the Premises is to be delivered to the condemning authority. For purposes
of this subsection 14.2, a substantial part of the Premises shall be considered
to have been taken if more than fifty percent (50%) of the Premises are
unusable by Tenant as a direct result of such taking. If this Lease is not
terminated in accordance with this paragraph, Landlord shall apply condemnation
proceeds toward restoration of the Property as is commercially reasonable and
in a manner to permit Tenant to operate from the Premises as closely as
possible to its previous manner of operation.
14.2.1 REDUCTION OF RENT. If this Lease is not so terminated after a
partial condemnation, then after the date when the condemned portion of the
premises is delivered to the condemnor, the Basic Rent and Additional Rent shall
be reduced in the proportion which the condemned area bears to the entire area
of the Premises.
14.2.2 CLAIMS OF TENANT. Tenant shall have the right to claim against the
condemnor only for removal and moving expenses and business dislocation damages
which may be separately payable to tenants in general under Pennsylvania law,
provided such payment does not reduce the award otherwise payable to Landlord.
Subject to the foregoing, Tenant hereby waives all claims against Landlord with
respect to a condemnation, and hereby assigns to Landlord all claims against the
condemnor, including, without limitation, all claims for leasehold damages and
diminution in the value of Tenant's leasehold estate.
15.0 ENVIRONMENTAL MATTERS.
15.1 HAZARDOUS MATERIALS
15.1.1 Tenant shall not engage in operations at the Premises which involve
the generation, manufacture, refining, transportation, treatment, storage,
handling or disposal of any Hazardous Materials as hereinafter defined, except
new and used packaged batteries for wireless communications equipment and other
substances in de minimus quantities which are stored, used, handled and disposed
of in strict accordance with all Environmental Laws.
15.1.2 Tenant further covenants that it will not cause or permit to exist,
as a result of an intentional or unintentional action or omission on its part,
the releasing, spilling, leaking, pumping, pouring, emitting, emptying or
dumping on or about the Premises of any Hazardous Materials.
15.1.3 As between Landlord and Tenant, Landlord shall be responsible for
the presence of Hazardous Materials on the Premises (if any) which first became
present on the Premises prior to the date hereof. This Section 15.1.3 shall
not be construed to impose liability upon Landlord to any person or entity
other than Tenant.
15.2 COMPLIANCE WITH ENVIRONMENTAL LAWS.
15.2.1 In addition to and not in limitation of all other obligations of
Tenant to comply with laws contained in this Lease or otherwise contained in
this Section 15, Tenant shall comply with all Environmental Laws
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applicable to its use or occupancy of the Premises and with all permits,
licenses, registrations, approvals or authorizations required under any
Environmental Law.
15.2.2 Upon written request of Landlord, Tenant shall cooperate with
Landlord in obtaining evidence of compliance with Environmental Laws, which
cooperation shall include, without limitation, providing affidavits, reports or
responses to questions.
15.3 INDEMNITY. Tenant shall indemnify and hold harmless Landlord, its
successors and assigns, and any partner, shareholder, member of the board of
directors, officer and any other agent or employee of Landlord or its successors
or assigns (collectively, the "Indemnified Parties"), from and against any and
all liability, damages, losses, claims, suits, actions, legal or administrative
proceedings, interest, expenses, and attorney's fees (including any such fees
and expenses incurred in enforcing this indemnity) (collectively, "Liabilities")
resulting from, arising out of, or in any way connected with injury to or the
death of any person (including any Indemnified Party) or physical damage to
property of any kind wherever located and by whomever owned (including that of
any Indemnified Party) arising out of or in any way connected with the presence
on, in or under the Premises of any Hazardous Materials (other than Hazardous
Materials existing on the Premises as of the date hereof or resulting from any
act on the part of Landlord) or any violation by Tenant of its obligations under
this Section 15. Without limiting the generality of the foregoing, Tenant shall
indemnify and hold harmless the Indemnified Parties from and against all
liability arising out of Tenant's generation, transportation or arrangement for
the disposal of Hazardous Materials.
15.4 LANDLORD'S RIGHT TO PERFORM. In the event of Tenant's failure to
comply in full with this Section 15, Landlord may, at its option, perform any
and all of Tenant's obligations as aforesaid and all reasonable costs and
expenses incurred by Landlord in the exercise of this right, together with
interest as set forth in Section 16.9 hereof, shall be deemed to be Additional
Rent payable upon demand.
15.5 SURVIVAL. This Section 15 shall survive the expiration or sooner
determination of this Lease.
16.0 DEFAULT OF TENANT.
16.1 EVENTS OF DEFAULT. The following shall be "Events of Default" under
this Lease:
A. If Tenant shall fail to pay any monthly (or annual) installment of
Rent or any other payment required under this Lease (including but not limited
to payments required by Section 3 or subsection 16.2.1 hereof) within ten (10)
days after the date Landlord has given Tenant notice that such payment is due
and unpaid; provided, however, that Tenant shall be entitled to no more than
two (2) notices of non-payment within any twelve month period, after which the
failure of Tenant to pay Rent or any other payment when due shall be an Event
of Default without notice or demand; or
B. If Tenant shall violate or fail to perform any of the other terms,
conditions, covenants or agreements herein made by Tenant, thirty (30) days
after Landlord's written notice thereof to Tenant, provided that no such notice
shall be required if Landlord has sent Tenant a similar notice within ninety
(90) days prior to such failure; or
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C. If Tenant abandons the Premises during the Term; or
D. If Tenant assigns or hypothecates this Lease or any interest herein, or
sublets the Premises, or any part thereof, or if Tenant attempts to do any of
the foregoing, in contravention of the terms, covenants, provisions and
conditions of Section 5 hereof; or
E. Tenant's becoming insolvent, as the term is defined in Title 11 of the
United States Code, entitled Bankruptcy, 11 U.S.C. Section 101 et seq. (the
"Bankruptcy Code"), or under the insolvency laws of any State, District,
Commonwealth or Territory of the United States (the "Insolvency Laws"); or
F. The appointment of a receiver, trustee or custodian for all or a
substantial portion of Tenant's property or assets and the failure of Tenant to
obtain the dismissal of such receiver, trustee or custodian within sixty (60)
days after the appointment thereof, or the institution of a foreclosure action
upon all or a substantial portion of Tenant's real or personal property; or
G. The filing of a voluntary petition under the provisions of the
Bankruptcy Code or Insolvency Laws or the filing of a petition for
reorganization thereunder or, if Tenant is then a banking or other organization
governed by special insolvency laws, the filing of an application for voluntary
liquidation or dissolution applicable to banking institutions or such other
institutions; or
H. The filing of an involuntary petition against Tenant as the subject
debtor under the Bankruptcy Code or Insolvency Laws, which is either not
dismissed within sixty (60) days of filing, or results in the issuance of an
order for relief against the debtor, whichever is earlier; or
I. Any failure to perform Tenant's obligations under, or other violations
of, Section 15 hereof and the failure of Tenant to cure such failure to the
satisfaction of Landlord, in its sole discretion, within thirty days after the
first event giving rise to such failure; or
J. Tenant's making or consenting to an assignment for the benefit of
creditors or a common law composition of creditors.
16.2. LANDLORD'S REMEDIES. Should an Event of Default occur under this
Lease, Landlord (notwithstanding any former breach of covenant or waiver thereof
in a former instance), in addition to all other rights and remedies available to
it by law or equity or by any other provisions hereof, may at any time
thereafter pursue, once or more often, any or all of the following remedies:
16.2.1 LIQUIDATED DAMAGES. If Landlord has elected to terminate this
Lease, upon ten (10) days' notice to Tenant, declare to be immediately due and
payable, as liquidated damages and not as a penalty (it being understood that
such damages are foreseeable but not now readily ascertainable in amount), on
account of the Rent and other charges herein reserved for the balance of the
Term (taken without regard to any early termination of the Term on account of
default), a sum equal to the Liquidated Damage Amount (as hereinafter defined).
For purposes hereof, the Liquidated Damage Amount shall mean the net present
value, discounted at a rate the discount rate of the Federal Reserve Bank of
Philadelphia at the time an event becomes an Event of Default, of the aggregate
of:
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A. The Basic Rent reserved for the then entire unexpired balance of the
Term (taken without regard to any early termination of the Term by virtue of
any default), or, if earlier, through the date which is two years after the
date the Liquidated Damage Amount is paid, plus all other charges, payments,
costs and expenses herein agreed to be paid by Tenant up to the end of the Term
(or, if earlier, through the end of two years following the date Landlord
elects to recover the Liquidated Damage Amount) which shall be capable of
precise determination at the time of Landlord's election to recover the
Liquidated Damage Amount; and
B. Landlord's good faith estimate of all charges, payments, costs and
expenses herein agreed to be paid by Tenant up to the end of the Term (or, if
earlier, the date which is two years following the date Landlord elects to
recover the Liquidated Damage Amount) which shall not be capable of precise
determination as aforesaid (and for such purposes no estimate of any component
of Additional Rent to accrue pursuant to the provisions of Section 3 hereof
shall be less than the amount which would be due if each such component
continued at the highest monthly rate or amount in effect during the twelve
(12) months immediately preceding the default; and
C. An amount equal to the sum of the rental allowance provided to Tenant
pursuant to subsection 3.1 hereof and all moving and other allowances (if any)
provided by Landlord to Tenant hereunder, which, for purposes of this Section
16.2.1, shall be deemed to have been expended on the date Landlord elects to
recover the Liquidated Damage Amount.
D. If, after Landlord has elected to recover the entire Accelerated Rent
Component, Landlord actually relets the Premises for the unexpired balance of
the Term (taken without regard to any extension thereof which has not commenced
and without regard to any early termination by reason of Tenant's default),
Landlord shall remit to Tenant all sums paid under such reletting through such
unexpired balance up to the amount of the Accelerated Rent Component less all
repossession costs, brokerage and management commissions, operating and legal
expenses and fees, alteration costs and expenses of preparation for reletting.
16.2.2 TERMINATION OF LEASE. Whether or not Landlord has elected to
recover the Liquidated Damage Amount, terminate this Lease after ten (10) days'
notice to Tenant and, on the date specified in said notice, this Lease and the
Term hereby demised and all rights of Tenant hereunder shall expire and
terminate without any right of Tenant to save the forfeiture, and Tenant shall
thereupon quit and surrender possession of the Premises to Landlord in the
condition elsewhere herein required and Tenant shall remain liable to Landlord
as hereinafter provided. Any acceleration of the Rent by Landlord shall not
constitute a waiver of any right or remedy of Landlord, and if Tenant shall fail
to pay the Liquidated Damage Amount upon Landlord's demand, then Landlord may
thereafter terminate this Lease as aforesaid.
16.2.3 SUIT FOR POSSESSION/RELETTING OF PREMISES. In any case in which
this Lease shall have been terminated, or in any case in which Landlord shall
have elected to recover the Liquidated Damage Amount and any portion of such sum
shall remain unpaid, Landlord may, without further notice, enter upon and
repossess the Premises, by due process of law, by summary proceedings, ejectment
or otherwise, and may dispossess Tenant and remove Tenant and all other persons
and property from the Premises and may have, hold and enjoy the Premises and the
rents
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and profits therefrom. Landlord may, in its own name, as agent for Tenant,
if this Lease has not been
terminated, or in its own behalf, if this Lease has been terminated, relet the
Premises, or any part thereof, for such term or terms (which may be greater or
less than the period which would otherwise have constituted the balance of the
Term) and on such terms (which may include concessions or free Rent) as
Landlord in its sole discretion and good faith may determine. Landlord may, in
connection with any such reletting, cause the Premises to be redecorated,
altered, divided, consolidated with other space or otherwise changed or
prepared for reletting. No reletting shall be deemed a surrender and
acceptance of the Premises.
16.2.4 CONFESSION OF JUDGMENT. When this Lease and the Term or any
extension or renewal thereof shall have expired, or terminated on account of any
default by Tenant hereunder, or upon an Event of Default, it shall be lawful for
any attorney of any court of record to appear as attorney for Tenant as well as
for all persons claiming by, through or under Tenant (and Tenant hereby appoints
Landlord as the attorney-in-fact of Tenant, coupled with an interest in Tenant's
name, place and stead as if signed and delivered by Tenant), and in any action
or proceeding in any court of competent jurisdiction confess judgment in
ejectment (and otherwise enter judgment for possession of the Premises) against
Tenant and against all persons claiming by, through or under Tenant, for the
recovery by Landlord of possession of the Premises, for which this Lease and the
appointments herein shall be sufficient warrant; thereupon, if Landlord so
desires, an appropriate writ of possession may issue forthwith, without any
prior writ or proceeding whatsoever, and provided that if for any reason after
such action shall have been commenced it shall be determined that possession of
the Premises should remain in or be restored to Tenant, Landlord shall have the
right for the same default and upon any subsequent default or defaults, or upon
the termination of this Lease or of Tenant's right of possession as hereinbefore
set forth, to bring one or more further amicable action or actions as
hereinbefore set forth to recover possession of the Premises and to confess
judgment (and otherwise agree on behalf of Tenant to the entry of judgment) for
the recovery of possession of the Premises by Landlord as hereinbefore provided.
In any action, a true copy of this Lease (and of the truth of the copy
such affidavit or verified complaint shall be sufficient evidence) shall be
sufficient warrant, and it shall not be necessary to file the original as a
warrant of attorney, any rule of court, custom or practice to the contrary
notwithstanding.
TENANT ACKNOWLEDGES AND AGREES THAT THIS LEASE CONTAINS PROVISIONS UNDER
WHICH LANDLORD MAY ENTER JUDGMENT BY CONFESSION AGAINST TENANT. BEING FULLY
AWARE OF TENANT'S RIGHTS TO PRIOR NOTICE AND A HEARING ON THE VALIDITY OF ANY
JUDGMENT OR OTHER CLAIMS THAT MAY BE ASSERTED AGAINST HIM/HER BY LANDLORD
HEREUNDER BEFORE JUDGMENT IS ENTERED, TENANT HEREBY FREELY, KNOWINGLY AND
INTELLIGENTLY WAIVES THESE RIGHTS AND EXPRESSLY AGREES AND CONSENTS TO
LANDLORD'S ENTERING JUDGMENT AGAINST TENANT BY CONFESSION PURSUANT TO THE TERMS
OF THIS LEASE.
16.3 MEASURE OF DAMAGES. Tenant shall, with respect to all periods of time
up to and including the expiration of the Term (or what would have been the
expiration date in the absence of default or breach) remain liable to Landlord
as follows:
A. If Landlord has not elected to obtain the Liquidated Damage Amount, in
the event of termination of this Lease on account of Tenant's default or
breach, Tenant shall remain liable to Landlord as agreed liquidated
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damages (and not as a penalty) an amount equal to the Rent and other charges
payable under this Lease by Tenant as if this Lease were still in effect, less
the net proceeds of any reletting actually collected, after deducting all costs
incident thereto (including, without limitation, all repossession costs,
brokerage and management commissions, operating and legal expenses and fees,
alteration costs and expenses of preparation for reletting), and such
liquidated damages shall be payable to Landlord from time to time upon
presentation to Tenant of a bill for the amount due.
B. In the event and so long as this Lease shall not have been terminated
after default or breach by Tenant, the Rent and all other charges payable under
this Lease shall be reduced by the net proceeds of any reletting by Landlord
(after deducting all costs incident thereto as above set forth), and any amount
due to Landlord shall be payable monthly upon presentation to Tenant of a bill
for the amount due.
16.4 INTENTIONALLY OMITTED.
16.5 NO RESPONSIBILITY TO RELET. Landlord shall in no event be responsible
or liable for any failure to relet the Premises, or any part thereof, or for any
failure to collect any Rent due upon a reletting except and then only to the
extent required by the law of the Commonwealth of Pennsylvania.
16.6 INTENTIONALLY OMITTED.
16.7 JUDICIAL REMEDY. In the event of any default or occurrence by which
Landlord shall have any right or remedy specified in this Lease, Landlord's
rights and remedies shall be exercised in accordance with applicable
Pennsylvania statutes and prevailing case law.
16.8 LATE PAYMENT. If Tenant fails to pay any installment of Fixed Rent
and/or Additional Rent (in either case in accordance with Section 3 hereof) on
or before the first (1st) day of the calendar month when such installment
becomes due and payable, Tenant shall pay to Landlord a late charge of six
percent (6%) of the amount of such installment and, in addition, if any such
installment shall be overdue for more than fifteen (15) days after notice from
Landlord, interest thereon shall be charged as set forth in subsection 16.10
hereof from the date such installment became due and payable to the date of
payment thereof by Tenant. Such late charge and interest shall constitute
Additional Rent hereunder due and payable with the next monthly installment of
Rent due, or if payments have been accelerated pursuant to subsection 16.2.1
hereof, due and payable immediately.
16.9 RIGHT OF LANDLORD TO CURE TENANT'S DEFAULT. If Tenant defaults in the
making of any payment or in the doing of any act herein required to be made or
done by Tenant, then Landlord may, but shall not be required to, make such
payment or do such act, and charge the amount of the expense thereof, if made or
done by Landlord, with interest thereon at the rate per annum which is two
percent (2%) greater than the Prime Rate, from the date paid by Landlord to the
date of payment thereof by Tenant; provided, however, that nothing herein
contained shall be construed or implied to charge interest in excess of the
maximum legal rate than allowed by law. Such payment and interest shall
constitute Additional Rent hereunder due and payable with the next monthly
installment of Rent; but the making of such payment or the making of such action
by Landlord shall not operate to cure such default or to estop Landlord from the
pursuit of any remedy to which Landlord would otherwise be entitled.
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16.10 INTEREST ON LATE PAYMENTS. If Rent or any sum due from Tenant to
Landlord shall be overdue for more than fifteen (15) days after notice from
Landlord, Tenant agrees to pay Landlord interest thereon at the rate of twelve
percent (12%) per annum (or, if lower, the highest legal rate) until paid, in
order to compensate Landlord for extra administrative expenses.
16.11 EJECTMENT AND ENTRY OF JUDGMENT. The right to enter judgment against
Tenant and to enforce all of the other provisions of this Lease hereinabove
provided for may be exercised by any assignee of Landlord's right, title and
interest in this Lease, in such assignee's own name, notwithstanding the fact
that any or all assignments of said right, title and interest may not be
executed and/or witnessed in accordance with the Act of Assembly of May 28,
1715, 1 Sm.L.94, and all supplements and amendments thereto that have been or
may hereafter be passed, and Tenant hereby expressly waives the requirements of
said Act of Assembly and any and all laws regulating the manner or form in which
such assignments shall be executed and witnessed. If proceedings shall be
commended by Landlord to recover possession under the Acts of Assembly, either
at the end of the Demised Term or sooner termination thereof, or for non-payment
of Rent or any other reasons, Tenant specifically waives the right to the three
(3) months notice and the fifteen (15) or thirty (30) days notice required by
the Act of April 6, 1951, P.L. 69, and agrees that five (5) days notice shall be
sufficient in either or any such case.
16.12 REMEDIES CUMULATIVE. No right, power or remedy herein conferred upon
or reserved to Landlord is intended to be exclusive of any other right, power or
remedy herein or by law provided, but each shall be cumulative and in addition
to every other right, power or remedy given herein or now or hereafter existing
at law, in equity, or by statute. No single, partial or full exercise of any
right hereunder by Landlord shall preclude other or further exercise thereof.
16.13 NO WAIVER. No waiver by Landlord of any breach by Tenant of any of
Tenant's obligations, agreements or covenants herein shall be a waiver of any
subsequent breach or of any obligation, agreement or covenant, nor shall any
forbearance, delay or failure by Landlord to seek a remedy for any breach by
Tenant be a waiver by Landlord of any rights, powers or remedies with respect to
any subsequent breach.
17.0 HOLDING OVER. If Tenant retains possession of the Premises, or any
part thereof, after termination of this Lease by expiration of the Term or
otherwise, Tenant shall, by virtue of the provisions hereof, become a tenant by
the month. Such monthly tenancy shall commence with the first day next after
the expiration of this Lease. If such holding over exists with the prior
written consent of Landlord, Tenant shall continue to pay rent at the greater of
(I) the Fixed Rent required under Section 3 and Additional Rent due hereunder,
or (ii) a rental to be agreed to in writing between Landlord and Tenant. If
such holding over exists without prior written consent of Landlord, Tenant shall
pay Landlord: (I) as agreed liquidation damages (and not as a penalty) for such
wrongful retention, an amount equal to one hundred fifty percent (150%) of the
annual Basic Rent required under subsection 3.1 and twice the Additional Rent
then in effect for the time Tenant thus remains in possession, and (ii) all
other damages, costs and expenses sustained by Landlord by reason of Tenant's
wrongful retention. Except as otherwise provided above with respect to the
payment of Rent, Tenant shall, as a monthly tenant, be subject to all of the
terms, conditions, covenants and agreements of this Lease. Where Tenant's
occupancy is based upon this Section 17 and with Landlord's
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consent, Tenant shall give Landlord at least thirty (30) days' written notice
of its intention to quit the Premises, and Tenant shall be entitled to thirty
(30) days' written notice from Landlord to quit the premises; provided,
however, that if Tenant is in default hereunder, Tenant shall not be entitled
to any notice to quit, the thirty (30) days' notice to quit being hereby
expressly waived. Notwithstanding the foregoing provisions of this Section 18,
in the event that Tenant shall hold over after the expiration of the Term
without prior written permission, and if Landlord shall desire to regain
possession of the Premises promptly at the expiration of the Term, then at any
time prior to Landlord's acceptance of Rent from Tenant as a monthly tenant
hereunder, Landlord, at its option, may forthwith reenter and take possession
of the Premises or by any legal process in force in the Commonwealth of
Pennsylvania.
18.0 AMERICANS WITH DISABILITIES ACT.
(a) Landlord makes no representation or warranty that, as of the date of
this Lease of the Commencement Date, the Premises or Property is or will be in
compliance with the provisions of the Americans with Disabilities Act (the
"Act") or with any other existing federal, state or local laws, statutes,
ordinances or requirements requiring the provision of accommodations or access
for disabled or other persons (collectively with the Act and with all rules and
regulations promulgated pursuant to the Act or any other such law, statute,
ordinance or regulation, as the same may be amended or supplemented from time
to time, the "ADA").
(b) Tenant covenants that it will not use the Premises as a place of
"public accommodation" as defined in the Act.
(c) Tenant and Landlord acknowledge and agree that neither has any
obligation to the employees of the other to assure that the building is
accessible to the such employees.
(d) Tenant shall indemnify, defend and hold Landlord harmless from and
against any and all costs, damages, liabilities, expenses (including attorneys'
fees), fines, penalties, and claims of every kind and nature arising out of any
failure of Tenant to comply with the ADA as set forth in this Section 18. This
indemnification by Tenant shall survive the expiration or sooner termination of
this Lease.
(e) Tenant shall have no obligation to indemnify Landlord against any
violation of the ADA which first occurred prior to the date of this Lease.
19.0 QUIET ENJOYMENT. Landlord covenants that it has the right to make
this Lease for the Term aforesaid, and that if Tenant shall pay the Rent and
perform all of the covenants, terms, conditions and agreements of this Lease to
be performed by Tenant, Tenant shall, during the Term hereby created, freely,
peaceably and quietly occupy and enjoy the full possession of the Premises
without molestation or hindrance by Landlord, or any party claiming through or
under Landlord, subject, nevertheless, to the terms, covenants, conditions and
provisions of this Lease (including, without limitation, the terms of subsection
21.2 hereof) and to all mortgages, agreements, conditions, restrictions and
encumbrances of record.
20.0 INDEPENDENT COVENANTS. The covenants and obligations of Landlord and
Tenant hereunder are separate and independent from one another. Tenant's
obligations to pay Rent and other amounts payable hereunder, and to perform its
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obligations hereunder, shall be fully enforceable and shall not be impaired or
excused, notwithstanding any breach by Landlord hereunder. No Rent or other
amounts payable hereunder shall be subject to reduction, delay, offset,
withholding or other defense to Landlord.
21.0 MISCELLANEOUS.
21.1 SECURITY DEPOSIT. Tenant has deposited with Landlord the sum of
Thirty-three thousand twenty-two dollars ($33,022) as a security deposit. Such
security deposit (which shall not bear interest to Tenant unless required to do
so by provision of law) shall be considered as security for the payment and
performance by Tenant of all of Tenant's obligations, covenants, conditions and
agreements under this Lease. The security deposit shall not be considered an
advance payment of rental or a measure of Landlord's damages in case of default
by Tenant. Within sixty (60) days after the expiration of the Term (or any
renewal or extension thereof in accordance with this Lease), Landlord (provided
that Tenant is not in default under the terms hereof) shall return and pay back
such security deposit to Tenant, less such portion thereof as Landlord shall
have retained to make good any default by Tenant with respect to any of Tenant's
aforesaid obligations, covenants, conditions or agreements. In the event of any
default by Tenant hereunder during the Term, Landlord shall have the right, but
shall not be obligated, to apply, from time to time and without prejudice to any
other remedy, all or any portion of the security deposit to cure such default,
in which event Tenant shall be obligated promptly to deposit with Landlord the
amount necessary to restore the security deposit to the amount held by Landlord
immediately prior to such advance by Landlord. In the event of the sale or
transfer of Landlord's interest in the Building, Landlord shall have the right
to transfer the security deposit to the purchaser or transferee and upon such
transfer Tenant shall look only to the new landlord for the return of the
security deposit and Landlord shall thereupon be automatically released from all
liability to Tenant for the return of or accounting for such security deposit.
21.2 TENANT'S FINANCIAL STATEMENTS. If this lease shall be assigned or
sublet in accordance with the terms of Section 5 hereof (unless such assignment
is to an entity at least 51% of which is owned, directly or indirectly, by
Brightpoint, Inc.), then, within ninety (90) calendar days following the end of
the assignee(s)' or subtenant(s)' respective fiscal years, the assignee(s) or
subtenant(s) shall deliver to Landlord a copy of the assignee(s)' or
subtenant(s)' respective financial statements (consisting, at a minimum, of he
assignee(s)' or subtenant(s)' respective balance sheets and income statements)
for the assignee(s)' or subtenant(s)' fiscal year just ended, certified by an
independent certified public accountant as presenting fairly, in all material
respects, the financial position of the assignee(s) and subtenant(s) and the
results of its operations in accordance with generally accepted accounting
principles. In the event the assignee(s) or subtenant(s) do not have its
financial statements certified by an independent certified public accountant,
then the assignee(s) or subtenant(s) shall deliver to Landlord, within such
ninety (90) calendar day period, copies of its financial statements for the
assignee(s)' or subtenant(s)' fiscal year just ended, certified by the President
or Chief Financial Officer of the assignee(s) or subtenant(s) to be true and
correct and to present fairly, in all material respects, the financial position
and results of operations of the assignee(s) or subtenant(s) in accordance with
generally accepted accounting principles. If the assignee(s) or subtenant(s) do
not make their financial statements available to the public, the assignee(s) or
subtenant(s) shall have the right to require Landlord to agree to keep such
financial statements confidential and not to disclose them, except to
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Landlord's lenders or prospective lenders, purchasers or prospective
purchasers, partners or prospective partners or other persons or entities doing
business with Landlord, which business might be affected by the assignee(s)' or
subtenant(s)' credit.
21.3 NO REPRESENTATIONS BY LANDLORD. Tenant acknowledges (a) that neither
Landlord nor any broker, agent or employee of Landlord has made any
representations or promises with respect to the Premises or the Building except
as herein expressly set forth, and no rights, privileges, easements, or licenses
are acquired by Tenant except as herein expressly set forth; (b) by taking
possession of the Premises, shall accept the same "as is", and such taking of
possession shall be conclusive evidence that the Premises and the Building are
in good satisfactory condition at the time of such taking of possession; (c)
that it has been advised by Landlord and its agents that Tenant should satisfy
itself with respect to the condition of the Premises, including, but not limited
to, the electrical and fire sprinkler systems, security, environmental aspects,
in compliance with applicable laws and the present and future suitability of the
Premises for Tenant's intended use, and (d) that Tenant has made such
investigation as it deems necessary with reference to such matters and assumes
all responsibility therefor as the same relate to Tenant's occupancy of the
Premises or the term of this Lease.
21.4 NO PARTNERSHIP. Nothing contained in this Lease shall be deemed or
construed to create a partnership or joint venture of or between Landlord and
Tenant, or to create any other relationship between the parties hereto other
than that of Landlord and Tenant.
21.5 BROKERS. Tenant represents that it has dealt with no broker other
than TC Northeast Metro, Inc. and Summit Realty Group ("Landlord's Broker") with
regard to this Lease. Landlord shall pay Landlord's Broker a commission
therefor in the aggregate amount of $151,984, one-half of which is payable upon
the execution and delivery of this Lease by both parties and receipt of first
month's rent and the balance of which is due on the date Tenant takes occupancy
of the Premises. There shall be no commissions owed to Landlord's Broker on any
renewals, extensions or expansions except as Landlord shall agree in its sole
discretion. Landlord and Tenant represent and warrant that, except as set forth
herein, they have not employed any broker, agent or finder in locating the
Building or the Premises, or in carrying on the negotiations relating to this
Lease. The parties hereto shall indemnify and hold one another harmless, from
and against any claim or claims for brokerage or other commission arising from
or out of any breach of the foregoing representation and warranty by the
respective indemnitors.
21.6 ESTOPPEL CERTIFICATE. Tenant agrees, at any time, and from time to
time, during the Term, upon not less than twenty (20) days' prior written notice
by Landlord, to execute, acknowledge and deliver to Landlord a statement in
writing which shall contain substantially the following provisions: (i) a
statement that this Lease is unmodified and in full force and effect (or if
there have been modifications, that this Lease is in full force and effect as
modified and stating the modifications), (ii) a statement of the dates to which
the Rent and any other charges hereunder have been paid by Tenant, (iii) a
statement of whether or not, to the best knowledge of Tenant, Landlord is in
default in the performance of any covenant, agreement or condition contained in
this Lease, and if so, specifying each such default of which Tenant may have
knowledge, (iv) a statement of the address to which notices to Tenant should be
sent, (v) a statement that Tenant has accepted the Premises and the improvements
therein, (vi) a statement that Tenant will not attempt to terminate this Lease
by reason of Landlord's default or omission without giving
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<PAGE> 35
written notice of such default or omission to Landlord and any mortgagee, now
or hereafter, of which Tenant has knowledge, and (vii) such other statement or
statements as Landlord, any prospective purchaser of the Building or the Land,
any mortgagee or prospective mortgagee of the Building or the Land or of
Landlord's interest in either and/or any prospective assignee of any such
mortgagee, may reasonably request. Tenant's failure to deliver such statement
within said twenty (20) day period shall be conclusive upon Tenant that this
Lease is in full force and effect and unmodified, that there are no uncured
defaults in Landlord's performance hereunder, and that not more than one (1)
month's rent has been paid in advance. Any such statement delivered pursuant
hereto, may be relied upon by any owner of the Building or the Land, any
prospective purchaser of the Building or the Land, any mortgagee or prospective
mortgagee of the Building or the Land or of Landlord's interest in either, or
any prospective assignee of any such mortgagee.
21.7 WAIVER OF JURY TRIAL. Landlord and Tenant hereby waive trial by jury
in any action, proceeding or counterclaim brought by either of the parties
hereto against the other on or in respect of any matter whatsoever arising out
of or in any way connected with this Lease, the relationship of Landlord and
Tenant hereunder, Tenant's use or occupancy of the Premises, and/or any claim of
injury or damage.
21.8 NOTICES. Any bills, statements, notices, demands, requests, consents,
approvals or other communications hereunder shall be effective only if rendered
or given in writing, sent by certified or registered mail, return receipt
requested, first-class postage prepaid, or national overnight courier
guarantying overnight delivery addressed as follows:
A. If to Landlord:
Madonna Management Company, Inc.
c/o TC Northeast Metro, Inc.
1810 Chapel Avenue West, Suite 220
Cherry Hill, NJ 08002
With a copy to:
Hangley Aronchick Segal & Pudlin
One Logan Square, 12th Floor
Philadelphia, PA 19103
Attention: David M. Scolnic, Esquire
or to such other address as Landlord may designate by written notice to Tenant.
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<PAGE> 36
B. If to Tenant:
BRIGHTPOINT NORTH AMERICA, INC.
6402 Corporate Drive
Indianapolis, IN 46278
Attention: John Sullivan
Steven Fivel, Esq.
With a copy to:
Karl P. Haas, Esquire
Baker & Daniels
300 North Meridian Street, Suite 2700
Indianapolis, IN 46204
or to such other address as Tenant may designate by written notice to Landlord.
Any such bill, statement, notice, demand, request, consent, approval or
other communication shall be deemed to have been rendered or given on the date
which is two days after deposited in certified or registered mail or one day
after the date when it shall have been delivered to an overnight courier as
provided herein.
21.9 FORCE MAJEURE. In the event that Landlord or Tenant shall be delayed,
hindered in or prevented from the performance of any act required to be
performed hereunder by reason of Force Majeure (as defined in the next
sentence), then performance of such act shall be excused for the period of the
delay and the period for the performance of any such act shall be extended for a
period equivalent to the period of such delay, but not beyond one hundred eighty
(180) days. Force Majeure in the preceding sentence shall mean acts of God,
strikes, lock-outs, labor troubles, inability to procure materials, failure of
power, restrictive legal requirements, riots and insurrection, acts of the
public enemy, wars, earthquakes, hurricanes and other natural disasters, fires,
explosions, any act, failure to act or default of the other party to this Lease
or any other reason beyond the control of any party to this Lease; provided,
however, lack of money shall not be deemed to constitute Force Majeure, nor
shall the failure of Tenant to make any payment of Rent be excused by reason of
this provision.
21.10 INVALIDITY OF PARTICULAR PROVISIONS. If any provision of this Lease
or the application thereof to any person or circumstances shall to any extent be
invalid or unenforceable, the remainder of this Lease, or the application of
such provision to persons or circumstances other than those as to which it is
invalid or unenforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and be enforced to the fullest extent permitted by
law.
21.11 GENDER AND NUMBER. Feminine, neuter or masculine pronouns shall be
substituted for one another and the plural and the singular shall be substituted
for each other, in any place or places herein in which the context may require
such substitution.
21.12 BENEFIT AND BURDEN. The provisions of this Lease shall be binding
upon, and shall inure to the benefit of, Landlord and Tenant, and each of their
respective representatives, successors and assigns; provided, however, that no
rights shall inure to the benefit of any assignee of Tenant unless the
assignment to
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<PAGE> 37
such assignee has been made in accordance with Section 5 hereof. If Landlord
conveys the Building all liability of Landlord hereunder will end at the time
of sale as to all matters arising thereafter.
21.13 SUBORDINATION. This Lease is and shall be subject and subordinate at
all times to the lien of all mortgages and other encumbrances which now or
hereafter encumber or otherwise affect the Land and the Building of which the
Premises form a part, to the rights of the owners of the Building and the Land,
and to Landlord's leasehold interest therein, and to all and any renewals,
extensions, modifications, recastings or refinancing thereof, provided that the
holder of any such mortgage dated after the date hereof executes and delivers an
agreement in writing on such lender's standard form stating, among other things,
that the holder or such mortgage will not disturb Tenant's occupancy under this
Lease if Tenant is not in default of this Lease. Tenant shall, upon not less
than five (5) days' prior written notice by Landlord, promptly execute,
acknowledge and deliver to Landlord any written statement or agreement
confirming such subordination reasonably required by Landlord or any of its
lenders. Tenant agrees that in the event that any proceedings are brought for
the foreclosure of any such mortgage, Tenant shall attorn to the purchaser at
such foreclosure sale, if requested to do so by such purchaser, and shall
recognize such purchaser as the landlord under this Lease, and Tenant waives the
provisions of any statute or rule of law, now or hereafter in effect, which may
give or purport to give Tenant any right to terminate or otherwise adversely
affect this Lease and the obligations of Tenant hereunder in the event that any
such foreclosure proceeding is prosecuted or completed.
21.14 ENTIRE AGREEMENT. This Lease, together with the Exhibits attached
hereto, contains and embodies the entire agreement between the parties hereto,
and supersedes all prior agreements between the parties, no representations
(prior or contemporaneous), inducements or agreements between the parties, oral
or otherwise, not contained in this Lease and the Exhibits, shall be of any
force or effect. This Lease may not be modified, supplemented or terminated in
whole or in part in any manner other than by an agreement in writing duly signed
by both parties hereto.
21.15 CONSTRUCTION. "Landlord" means the Landlord named herein and all
persons acting for it. "Tenant" means all names which appear before that term
at the beginning hereof, irrespective of the pronoun used with respect to that
term. Any headings preceding the text of the various Sections and subsections
hereof are inserted solely for convenience of reference and shall not constitute
a part of this Lease, nor shall they affect its meaning, construction or effect.
If Tenant shall be more than one person or entity, the liability of all persons
or entities constituting Tenant shall be joint and several
21.16 GOVERNING LAW. This Lease shall be governed by and construed in
accordance with the laws of the Commonwealth of Pennsylvania.
21.17 VENUE. Claims, disputes or other matters in question between
Landlord and Tenant arising out of or relating to this Lease or the breach
thereof shall be submitted for resolution to the United States District Court
for the Eastern District of Pennsylvania, provided that, if jurisdiction cannot
be had in such federal court, then the action shall be submitted to any state
court in Bucks County, Pennsylvania. The parties hereto expressly consent to
the jurisdiction over them of such courts and waive any defense based on lack of
personal jurisdiction.
21.18 INTENTIONALLY OMITTED.
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<PAGE> 38
21.19 LANDLORD'S LIABILITY. Anything in this Lease to the contrary
notwithstanding, all covenants, undertakings and agreements herein made on the
part of Landlord are made and intended not as personal covenants, undertakings
and agreements or for the purpose of binding Landlord personally or the assets
of Landlord, except Landlord's interest in the Property and the rents, issues,
and profits therefrom, but are made and intended for the purpose of binding only
Landlord's interest in the Property, as the same may from time to time be
encumbered. No personal liability or personal responsibility is assumed by, nor
shall at any time be asserted or enforceable against, Landlord or its partners,
or any officers or employees thereof, or their respective heirs, legal
representatives, successors and assigns on account of the Lease or on account of
any covenant, undertaking or agreement by Landlord in this Lease contained.
IN WITNESS WHEREOF, the Landlord and Tenant have executed this
Lease, as a sealed instrument, on the day and year first written above.
LANDLORD:
MADONNA MANAGEMENT COMPANY, INC.
By: /s/ Stephen J. Spey
Vice President
TENANT:
BRIGHTPOINT NORTH AMERICA, INC.
By: /s/ J. Mark Howell
President
32
<PAGE> 39
EXHIBIT "B"
DEFINITIONS
All capitalized terms used but not defined in the Lease shall have the
meanings set forth below.
"Additional Rent" shall mean all sums not included in Fixed Rent which Tenant
is obligated to pay to Landlord or third parties from time to time pursuant to
the terms of the Lease, including, but not limited to, any Operating Expense
Adjustment and any Real Estate Tax Adjustment.
"Bankruptcy Code" shall mean Title 11 of the United States Code.
"Basic Rent" shall have the meaning set forth in Section 3.1, unless increased
pursuant to the terms hereof.
"Building" shall have the meaning set forth in the background hereof.
"CERCLA" shall mean the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as the same is amended, from time to time.
"Collateral" shall have the meaning set forth in Section 21.19 hereof.
"Commencement Date" shall have the meaning set forth in Section 2.1 hereof.
"Completion Date" shall have the meaning set forth in Section 2.1 hereof.
"Common Area Expense Allowance" shall have the meaning set forth in Section
3.2.1 hereof.
"Common Areas" shall mean all areas of the Property not included as part of the
Premises or any premises located on the Property and made available for rent to
tenants from time to time.
"Environmental Laws" shall mean any and all existing or future federal, state
and local statutes, ordinances, regulations, rules, standards and requirements,
including the requirements imposed by common law, concerning or relating to
industrial hygiene or the protection of health and the environment, as the same
may be amended from time to time.
"Events of Default" shall have the meaning set forth in Section 16.1 hereof.
"Expense Adjustment Date" shall mean the date which is 15 days following
receipt of each year's Operating Expense Statement.
"Expiration Date" shall have the meaning set forth in Section 2.1 hereof.
"Final period" shall have the meaning set forth in Section 3.2.2 hereof.
"Fixed Rent" shall mean Basic Rent, including the Operating Expense Allowance
and Real Estate Tax Allowance.
"Guarantor" - Brightpoint, Inc., an Indiana corporation.
1
<PAGE> 40
"Guaranty" - That certain Lease Guaranty executed by Guarantor in favor of
Landlord of even date herewith.
"Hazardous Materials" shall have the following meaning: Any substance which is
or becomes regulated under any Environmental Law, including, without
limitation, any substance which is (1) gasoline, petroleum products,
explosives, radioactive materials, including byproduct, source and/or special
nuclear material and solid wastes, polychlorinated biphenyls or related or
similar materials ("PCBs"), asbestos or material containing asbestos; (2)
defined, designated or listed as a "Hazardous Substance," Hazardous Material,"
"Hazardous Waste" or "Industrial Waste" under any of the Environmental Laws,
including, without limitation, (A) Sections 307 and 311 of the Clean Water Act,
33 U.S.C. Sections 1317 and 1321; (B) Section 101(14) of the Comprehensive
Environmental Response, Compensation and Liability Act of 1980, 42 U.S.C.
Section 9601(14) ("CERCLA"); (C) the Hazardous Materials Transportation Act, as
amended, 49 U.S.C. Sections 1801-1812; (D) Section 1004(5) of RCRA; (E) the
Pennsylvania Solid Waste Management Act (Pa. Stat. Ann. tit. 35 Section 6018.01
et seq.), (F) the Pennsylvania Clean Streams Law (Pa. Stat. Ann. tit. 35
Section Section 691.1 et seq.), (G) The Hazardous Sites Cleanup Act, 35 P.S.
6020.101-6020.1305 et seq., or (H) the regulations adopted and publications
promulgated pursuant to any of the foregoing.
"Indemnified Parties" shall mean Landlord, its successors and assigns, and any
partner, shareholder, member of the Board of Directors, officer and any other
agent or employee of Landlord or its successors or assigns.
"Initial Term" shall mean the Term initially set forth in Section 2.1, without
considering any Extension Terms.
"Insolvency Laws" shall mean the insolvency laws of any state, district,
commonwealth or territory of the United States.
"Insurance Expense Allowance" shall have the meaning set forth in Section 3.2.1
hereof.
"Land" shall have the meaning set forth in the background hereof.
"Landlord" shall have the meaning set forth in the caption hereof.
"Landlord's Broker" shall mean TC Northeast Metro, Inc. and Summit Realty
Group.
"Lease" shall mean the Lease to which this Exhibit is attached, as the same may
be amended from time to time in accordance with the terms thereof.
"Liquidated Damage Amount" shall have the meaning set forth in Section 16.2.1
hereof.
"Operating Expense Adjustment" shall mean the amount paid by Tenant to Landlord
as Additional Rent in accordance with Section 3.2 hereof.
"Operating Expense Allowance" shall have the meaning set forth in Section 3.2.1
hereof.
"Operating Expense and Real Estate Tax Statement" shall have the meaning set
forth in Section 3.2.2 hereof.
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<PAGE> 41
"Operating Expenses" shall mean the expenses incurred by Landlord in connection
with the operation, repair, insurance and maintenance of the Property, as more
particularly set forth in Section 3.2 hereof.
"Operating Year" shall mean each calendar year, or other period of 12 months as
hereafter may be adopted by Landlord as its fiscal year, occurring during the
term, as the same may be extended in accordance with Section 2.5.
"Premises" shall mean the approximately 100,320 rentable square feet of space
identified on Exhibit "A" attached hereto and made a part hereof.
"Prime Rate" shall mean the rate announced from time to time by CitiBank, N.A.,
New York, New York (or its successor) on short-term unsecured loans to its
largest and most credit-worthy customers (it being understood that such Prime
Rate shall not necessarily be the lowest rate offered by CitiBank, N.A. to its
customers).
"Property" shall have the meaning set forth in the background hereof.
"RCRA" shall mean the Resource Conservation Recovery Act, 42 U.S.C. Section
6903(5).
"Real Estate Tax Adjustment" shall have the meaning set forth in Section 3.2.2
hereof.
"Real Estate Tax Allowance" shall have the meaning set forth in Section 3.2.1
hereof.
"Real Estate Taxes" shall have the meaning set forth in Section 3.2.2 hereof.
"Rent" shall mean all amounts considered to be Fixed Rent or Additional Rent,
unless the context otherwise requires, as more particularly set forth in
Section 3 hereof.
"Security Interest" shall mean the security interest granted by Tenant to
Landlord pursuant to Section 21.19 hereof.
"Tenant" shall have the meaning set forth in the caption hereof.
"Tenant's proportionate share" shall have the meaning set forth in Section
3.2.1(2) hereof.
"Term" shall mean the term of this Lease, as the same may be extended from time
to time.
3
<PAGE> 42
EXHIBIT "C"
1. Complete refurbishment of existing office area including new carpet,
paint and replacement of ceiling system.
2. All HVAC, lighting, and loading doors will be serviced and delivered to
tenant in good working order.
3. Installation of metal halide lighting fixtures (400 watt or greater)
which will deliver 30' candle at 36" above finished floor.
4. Retrofit existing office area and construct new General Lunch Area (as
shown on attached plan).
<PAGE> 43
EXHIBIT "D"
RULES AND REGULATIONS
Reference is made to a certain Agreement of Lease dated ____________, (the
"Lease") to which these Rules and Regulations are attached. Whenever, in these
rules and regulations the word "Tenant" is used, it shall be taken to apply to
and include the Tenant and his agents, employees, invitees, licensees,
subtenants and contractors. The word "Landlord" shall be taken to include the
employees and agents of Landlord. All other definitions of terms are as set
forth in the Lease.
1. Purpose. The following rules and regulations have been formulated for
the safety and well-being of all tenants of the Building and the Property
generally and to insure compliance with all municipal, insurance and other
requirements. Strict adherence to these rules and regulations is necessary to
guarantee that each and every tenant will enjoy a safe and unannoyed occupancy
in the Building in accordance with its lease. Any continuing violation of
these rules and regulations by Tenant, after notice from Landlord, shall be
deemed to be an Event of Default under its Lease.
2. Common Areas. The streets, sidewalks, pathways, entrances, passages,
courts, elevators, vestibules, stairways, corridors, halls or other common
areas of the Building and the Property shall not be obstructed or encumbered by
any tenant or used for any purpose other than ingress and egress to and from
the Premises or other purposes for which they were constructed. Landlord shall
have the right to control and operate the public portions of the Building and
the Property and the facilities furnished for common use of the tenants in such
manner as Landlord deems best for the benefit of the tenants generally. No
Tenant shall permit the visit to the Premises of persons in such numbers or
under such conditions as to interfere with the use and enjoyment by other
tenants of the common areas, entrances, corridors, elevators and other public
portions or facilities of the Building and the Property. No showcases or other
articles shall be put in front of or affixed to any part of the exterior of the
Building, nor placed in the halls, corridors or vestibules without the prior
written consent of Landlord. Mats, trash or other objects shall not be placed
in public corridors.
3. Building Exterior; Window Covering. No awnings, room setbacks, window
ledges or other projections shall be attached to the outside walls of the
Building without the prior written consent of Landlord. No drapes, blinds,
shades or screens shall be attached to or hung in, or used in connection with,
any window or door of the Premises, without the prior written consent of
Landlord. Such awnings, projections, curtains, blinds, shades, screens or
other fixtures must be of a quality, type, design and color, and attached in
the manner, approved by Landlord. Drapes installed by Landlord for
the use of Tenant or drapes installed by Tenant, which are visible from the
exterior of the Building, must be cleaned by Tenant, at least once a year,
without notice, at Tenant's own expense. Tenant shall not hang, drop or shake
anything out of or from any window, door, stairway or
<PAGE> 44
parapet or down the corridors or stairs, or open any window at its
Premises or in the common area of the Building.
4. Washrooms. The water and wash closets and other plumbing fixtures
shall not be used for any purposes other than those for which they were
constructed, and no sweepings, rubbish, rags, chemicals, paints, cleaning
fluids or other substances shall be thrown therein. All damages resulting from
any misuse of the fixtures shall be borne by the Tenant who, or whose servants,
employees, agents, visitors or licensees, shall have caused the same.
5. Alterations; Sound Systems. There shall be no marking, painting,
drilling into or in any way defacing the water closets, toilet rooms, walls,
windows, doors or any other part of the Building or any part of the Premises
visible from public areas of the Building without the consent of the Landlord.
Tenant shall not fasten any article, drill holes, drive nails or screws into
the walls, floors, woodwork or partitions; nor shall the same be painted,
papered or otherwise covered by or in any way marked or broken without
Landlord's consent. Tenant shall not construct, maintain, use or operate
within the Premises any electrical device, wiring or apparatus in connection
with a loud speaker system or other sound system, except as reasonably required
for its communication system and approved prior to the installation thereof by
Landlord. No such loud speaker or sound system shall be constructed,
maintained, used or operated outside of the Premises.
6. Vehicles; Animals; Heating Devices; Odors; Vending Machines. No
bicycles, vehicles or animals, birds or pets of any kind shall be brought into
or kept in or about the Premises. No electrical heating devices shall be used
without Landlord's permission or permitted by any Tenant on the Premises. No
Tenant shall cause or permit any unusual or objectionable odors to be produced
upon or permeate from the Premises. No Tenant shall install any vending
machines on its Premises, without prior consent of Landlord.
7. Prohibited Uses. The use of the Premises by each Tenant was approved
by Landlord prior to execution of the Lease and such use may not be changed
without the prior written approval of Landlord.
8. Dangerous Materials. No flammable, combustible, radioactive,
infectious or explosive fluid, chemical or substance shall be brought or kept
upon the Premises without the prior written approval of Landlord.
9. Locks. No additional locks or bolts of any kind shall be placed upon
any of the doors or windows by any Tenant, nor shall any changes be made in
existing locks or the mechanism thereof. The doors leading to the corridors or
main halls shall be kept closed during business hours except as they may be
used for ingress or egress. The Tenant shall, and shall cause its employees
to, lock the doors to the Premises as they leave at the end of each working day
and, if after
ordinary business hours (as described in subsection 13.1 of the Lease),
ascertain that the doors of the Building by which it and they leave are locked
securely. The Tenant shall not secure duplicate keys for rooms or toilets
except from Landlord. Each Tenant shall, upon the termination of its tenancy,
restore to Landlord all keys of stores,
<PAGE> 45
offices, storage and toilet rooms either furnished to, or otherwise procured
by, such Tenant, and in the event of the loss of any keys so furnished, such
Tenant shall pay to Landlord the cost thereof. Tenant shall have the right to
modify the locks on the Premises so long as Tenant simultaneously provides
Landlord with a key therefor.
10. Security. Landlord reserves the right to exclude from the Building at
all times any person who is not known or does not give proper and satisfactory
identification to the Building management, security guard on duty or security
system monitor. Landlord may, at its option, require all persons admitted to
or leaving the Building between the hours of 6:00 p.m. and 8:00 a.m. on Monday
through Friday, and at any hour on Saturdays, Sundays and legal holidays, to
register. Each Tenant shall be responsible for all persons for whom it
authorizes entry into or exit out of the Building, and shall be liable to
Landlord for all acts or omissions of such persons. Each Tenant, before
closing and leaving the Premises at any time, shall see that all windows are
closed and all lights turned off.
11. Lodging. The Premises shall not, at any time, be used for lodging or
sleeping or for any immoral or illegal purpose.
12. Cleaning, Maintenance and Repairs. No Tenant shall obtain any
services to its Premises from any entity not approved in advance by Landlord
and no Tenant shall pay any employee on the Premises, except those actually
working for such Tenant on the Premises.
13. Solicitation. Canvassing, soliciting and peddling in the Building is
prohibited and each Tenant shall cooperate to prevent the same.
14. Deliveries. Tenant shall be responsible to Landlord for any loss or
damage resulting from any deliveries of Tenant to the Building.
15. Roof. No one except Landlord and its employees and agents shall be
allowed on the roof of the Building without the consent of the Landlord, and
Tenant shall not give such permission to his employees or other persons.
16. Insurance Regulations. Tenant shall not do anything in the Premises,
the Building or on the Property, or bring or keep anything therein which will
in any way increase or tend to increase the risk of fire or the rate of fire
insurance, or which will conflict with the regulations of the local Fire
Department or the fire laws, or with any insurance policy on the Building or
any part thereof, or with any law, ordinance, rule or regulation affecting the
occupancy and use of the Premises, now existing or hereafter enacted or
promulgated by any public authority or by the Board of Fire Underwriters.
17. Signs. Tenant shall not, without prior written consent of Landlord,
paint, place or erect any signs on the exterior doors or walls of the Premises.
18. Publicity. Tenant shall not use the name of the Building or the
Property in any way in connection with his business except as the
<PAGE> 46
address therefor. Landlord also shall have the right to prohibit any
advertising by Tenant, which in Landlord's opinion, tends to impair the
reputation of the Building; and upon written notice from Landlord, Tenant shall
refrain from or discontinue such advertising.
19. Trash Disposal and Recycling. Tenant shall at all times during the
Term, or any extension or renewal thereof, fully comply with the provisions and
requirements of any statute, code, ordinance, rule, regulation, order or other
law, now or hereafter enacted, adopted or issued by any governmental authority
having jurisdiction over the Property, pertaining to the disposal or recycling
of trash and other disposable materials. In furtherance and not in limitation
of the foregoing, Tenant shall, to the extent required by any such laws,
separate its trash and other disposable materials into categories (i.e., paper,
glass, cans, etc.), procure and maintain separate containers for the disposal
of each such category of refuse, and satisfy any and all record keeping and
reporting requirements established by any such laws. Tenant shall be
responsible for the payment of all fines imposed as a result of its failure to
comply with any aspect of applicable trash disposal and recycling laws.
20. Waivers. Landlord may, upon request by any Tenant, waive the
compliance by such Tenant with any of these rules and regulations, provided
that (i) no waiver shall be effective unless signed by Landlord or Landlord's
authorized agent, (ii) any such waiver shall not relieve such Tenant from the
obligation to comply with such rule or regulation in the future unless
expressly consented to by Landlord, (iii) no waiver granted to any Tenant shall
relieve any other tenant from the obligation of complying with the rules and
regulations unless such other tenant has received a similar waiver in writing
from the Landlord, and (iv) any such waiver by Landlord shall not relieve
Tenant from any obligation or liability of Tenant to Landlord pursuant to the
Lease for any loss or damage occasioned as a result of Tenant's failure to
comply with any such rule or regulation.
21. Regulation Changes. Landlord shall have the right to make such other
and further reasonable rules and regulations as, in the reasonable judgment of
Landlord, may from time to time be needful for the safety, appearance, care and
cleanliness of the Building and for the preservation of good order therein.
Landlord shall not be responsible to Tenant for any violation of rules and
regulations by other
<PAGE> 1
[Gross Lease with Stops]
LEASE AGREEMENT
THIS LEASE AGREEMENT is made this 20th day of March, 1998, between SCI
North Carolina Limited Partnership ("Landlord"), and the Tenant named below.
<TABLE>
<S> <C>
TENANT: Brightpoint North America, Inc.
TENANT'S REPRESENTATIVE, Mr. Steven E. Fivel
ADDRESS, AND PHONE NO.: 8210 Allison Avenue
Indianapoilis, IN 46268
(317) 297-6100
PREMISES: That portion of
the Building, containing approximately 72,600
rentable square feet, as determined by Landlord,
as shown on Exhibit A.
PROJECT: Park 100 Industrial Center, Building 9
BUILDING: Park 100 Industrial Center, Building 9
TENANT'S PROPORTIONATE SHARE
OF PROJECT: 39.29%
TENANT'S PROPORTIONATE SHARE
OF BUILDING: 39.29%
LEASE TERM: Beginning on the
Commencement Date and ending on the last day of
the 18th full calendar month thereafter.
COMMENCEMENT DATE: April 1, 1998
INITIAL MONTHLY BASE RENT: $22,687.50
BASE YEAR: 1998
SECURITY DEPOSIT: $0.00
BROKER: Browning Investments, Inc.
ADDENDA: Exhibit A and B, Addenda A, B, C, D
</TABLE>
1. GRANTING CLAUSE. In consideration of the obligation of Tenant to pay
rent as herein provided and in consideration of the other terms, covenants, and
conditions hereof, Landlord leases to Tenant, and Tenant takes from Landlord,
the Premises, to have and to hold for the Lease Term, subject to the terms,
covenants and conditions of this Lease.
2. ACCEPTANCE OF PREMISES. Tenant shall accept the Premises in its
condition as of the Commencement Date, subject to all applicable laws,
ordinances, regulations, covenants and restrictions. Landlord has made no
representation or warranty as to the suitability of the Premises for the
conduct of Tenant's business, and Tenant waives any implied warranty that the
Premises are suitable for Tenant's intended purposes. Except as provided in
Paragraph 10, in no event shall Landlord have any obligation for any defects in
the Premises or any limitation on its use. The taking of possession of the
Premises shall be conclusive evidence that Tenant accepts the Premises and that
the Premises were in good condition at the time possession was taken except for
items that are Landlord's responsibility under Paragraph 10 and any punchlist
items agreed to in writing by Landlord and Tenant.
3. USE. The Premises shall be used only for the purpose of storage of
wireless communication products and accessories and/or receiving, storing,
shipping and selling (but limited to wholesale sales) products,
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materials and merchandise made and/or distributed by Tenant and for such other
lawful purposes as may be incidental thereto; provided, however, with
Landlord's prior written consent, Tenant may also use the Premises for light
manufacturing. Tenant shall not conduct or give notice of any auction,
liquidation, or going out of business sale on the Premises. Tenant will use
the Premises in a careful, safe and proper manner and will not commit waste,
overload the floor or structure of the Premises or subject the Premises to use
that would damage the Premises. Tenant shall not permit any objectionable or
unpleasant odors, smoke, dust, gas, noise, or vibrations to emanate from the
Premises, or take any other action that would constitute a nuisance or would
disturb, unreasonably interfere with, or endanger Landlord or any tenants of
the Project. Outside storage, including without limitation, storage of trucks
and other vehicles, is prohibited without Landlord's prior written consent.
The Premises shall not be used as a place of public accommodation under the
Americans With Disabilities Act or similar state statutes or local ordinances
or any regulations promulgated thereunder, all as may be amended from time to
time. Tenant shall, at its expense, make any alterations or modifications,
within or without the Premises, that are required by Legal Requirements related
to Tenant's use or occupation of the Premises. Tenant will not use or permit
the Premises to be used for any purpose or in any manner that would void
Tenant's or Landlord's insurance, increase the insurance risk, or cause the
disallowance of any sprinkler credits. If any increase in the cost of any
insurance on the Premises or the Project is caused by Tenant's use or
occupation of the Premises, or because Tenant vacates the Premises, then Tenant
shall pay the amount of such increase to Landlord. Any occupation of the
Premises by Tenant prior to the Commencement Date shall be subject to all
obligations of Tenant under this Lease.
4. BASE RENT. Tenant shall pay Base Rent in the amount set forth above.
The first month's Base Rent and the Security Deposit shall be due and payable
on the date hereof, and Tenant promises to pay to Landlord in advance, without
demand, deduction or set-off, monthly installments of Base Rent on or before
the first day of each calendar month succeeding the Commencement Date.
Payments of Base Rent for any fractional calendar month shall be prorated. All
payments required to be made by Tenant to Landlord hereunder shall be payable
at such address as Landlord may specify from time to time by written notice
delivered in accordance herewith. The obligation of Tenant to pay Base Rent
and other sums to Landlord and the obligations of Landlord under this Lease are
independent obligations. Tenant shall have no right at any time to abate,
reduce, or set-off any rent due hereunder except as may be expressly provided
in this Lease. If Tenant is delinquent in any monthly installment of Base Rent
or of estimated Excess Operating Expenses (as hereinafter defined) for more
than 5 days, Tenant shall pay to Landlord on demand a late charge equal to 5
percent of such delinquent sum. The provision for such late charge shall be in
addition to all of Landlord's other rights and remedies hereunder or at law and
shall not be construed as a penalty.
5. SECURITY DEPOSIT. The Security Deposit shall be held by Landlord as
security for the performance of Tenant's obligations under this Lease. The
Security Deposit is not an advance rental deposit or a measure of Landlord's
damages in case of Tenant's default. Upon each occurrence of an Event of
Default (hereinafter defined), Landlord may use all or part of the Security
Deposit to pay delinquent payments due under this Lease, and the cost of any
damage, injury, expense or liability caused by such Event of Default, without
prejudice to any other remedy provided herein or provided by law. Tenant shall
pay Landlord on demand the amount that will restore the Security Deposit to its
original amount. Landlord's obligation respecting the Security Deposit is that
of a debtor, not a trustee; no interest shall accrue thereon. The Security
Deposit shall be the property of Landlord, but shall be paid to Tenant when
Tenant's obligations under this Lease have been completely fulfilled. Landlord
shall be released from any obligation with respect to the Security Deposit upon
transfer of this Lease and the Premises to a person or entity assuming
Landlord's obligations under this Paragraph 5.
6. OPERATING EXPENSE PAYMENTS. During each month of the Lease Term
subsequent to the Base Year, on the same date that Base Rent is due, Tenant
shall pay Landlord an amount equal to 1/12 of the annual cost, as estimated by
Landlord from time to time, of Tenant's Proportionate Share (hereinafter
defined) of Excess Operating Expenses for the Project. Payments thereof for
any fractional calendar month shall be prorated. The term "Excess Operating
Expenses" means Operating Expenses for the applicable year in excess of
Operating Expenses for the Base Year. The term "Operating Expenses" means all
costs and expenses incurred by Landlord with respect to the ownership,
maintenance, and operation of the Project including, but not limited to costs
of: Taxes (hereinafter defined) and fees payable to tax consultants and
attorneys for consultation and contesting taxes; insurance; utilities;
maintenance, repair and replacement of all portions of the Project, including
without limitation, paving and parking areas, roads, roofs, alleys, and
driveways, mowing, landscaping, exterior painting, utility lines, heating,
ventilation
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and air conditioning systems, lighting, electrical systems and other mechanical
and building systems; amounts paid to contractors and subcontractors for work
or services performed in connection with any of the foregoing; charges or
assessments of any association to which the Project is subject; property
management fees payable to a property manager, including any affiliate of
Landlord, or if there is no property manager, an administration fee of 15
percent of the total amount of Operating Expenses; security services, if any;
trash collection, sweeping and removal; and additions or alterations made by
Landlord to the Project or the Building in order to comply with Legal
Requirements (other than those expressly required herein to be made by Tenant)
or that are appropriate to the continued operation of the Project or the
Building as a bulk warehouse facility in the market area, provided that the
cost of such additions or alterations that are required to be capitalized for
federal income tax purposes shall be amortized on a straight line basis over a
period equal to the lesser of the useful life thereof for federal income tax
purposes or 10 years. Operating Expenses do not include costs, expenses,
depreciation or amortization for capital repairs and capital replacements
required to be made by Landlord under Paragraph 10 of this Lease, debt service
under mortgages or ground rent under ground leases, costs of restoration to the
extent of net insurance proceeds received by Landlord with respect thereto,
leasing commissions, or the costs of renovating space for tenants.
If Tenant's total payments of Operating Expenses for any year are less
than Tenant's Proportionate Share of Excess Operating Expenses for such year,
then Tenant shall pay the difference to Landlord within 30 days after demand
and, if more, then Landlord shall retain such excess and credit it against
Tenant's next payments. For purposes of calculating Tenant's Proportionate
Share of Excess Operating Expenses, a year shall mean a calendar year except
the last year, which shall end on the expiration of this Lease. For purposes
of calculating Excess Operating Expenses for the last year of the Lease Term,
Operating Expenses for the Base Year shall be reduced proportionately based
upon the number of days that this Lease is in effect during such last year.
With respect to Operating Expenses which Landlord allocates to the entire
Project, Tenant's "Proportionate Share" shall be the percentage set forth on
the first page of this Lease as Tenant's Proportionate Share of the Project as
reasonably adjusted by Landlord in the future for changes in the physical size
of the Premises or the Project; and, with respect to Operating Expenses which
Landlord allocates only to the Building, Tenant's "Proportionate Share" shall
be the percentage set forth on the first page of this Lease as Tenant's
Proportionate Share of the Building as reasonably adjusted by Landlord in the
future for changes in the physical size of the Premises or the Building.
Landlord may equitably increase Tenant's Proportionate Share for any item of
expense or cost reimbursable by Tenant that relates to a repair, replacement,
or service that benefits only the Premises or only a portion of the Project or
Building that includes the Premises or that varies with occupancy or use.
7. UTILITIES. Tenant shall pay for all water, gas, electricity, heat,
light, power, telephone, sewer, sprinkler services, refuse and trash
collection, and other utilities and services used on the Premises, all
maintenance charges for utilities, and any storm sewer charges or other similar
charges for utilities imposed by any governmental entity or utility provider,
together with any taxes, penalties, surcharges or the like pertaining to
Tenant's use of the Premises. Landlord may cause at Tenant's expense any
utilities to be separately metered or charged directly to Tenant by the
provider. Tenant shall pay its share of all charges for jointly metered
utilities based upon consumption, as reasonably determined by Landlord. No
interruption or failure of utilities shall result in the termination of this
Lease or the abatement of rent. Tenant agrees to limit use of water and sewer
for normal restroom use.
8. TAXES. Landlord shall pay all taxes, assessments and governmental
charges (collectively referred to as "Taxes") that accrue against the Project
during the Lease Term, which shall be included as part of the Operating
Expenses charged to Tenant. Landlord may contest by appropriate legal
proceedings the amount, validity, or application of any Taxes or liens thereof.
All capital levies or other taxes assessed or imposed on Landlord upon the
rents payable to Landlord under this Lease and any franchise tax, any excise,
transaction, sales or privilege tax, assessment, levy or charge measured by or
based, in whole or in part, upon such rents from the Premises and/or the
Project or any portion thereof shall be paid by Tenant to Landlord monthly in
estimated installments or upon demand, at the option of Landlord, as additional
rent; provided, however, in no event shall Tenant be liable for any net income
taxes imposed on Landlord unless such net income taxes are in substitution for
any Taxes payable hereunder. If any such tax or excise is levied or assessed
directly against Tenant, then Tenant shall be responsible for and shall pay the
same at such times and in such manner as the taxing authority shall require.
Tenant shall be liable for all taxes levied or assessed against any personal
property or fixtures placed in the Premises, whether levied or assessed against
Landlord or Tenant.
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9. INSURANCE. Landlord shall maintain all risk property insurance
covering the full replacement cost of the Building. Landlord may, but is not
obligated to, maintain such other insurance and additional coverages as it may
deem necessary, including, but not limited to, commercial liability insurance
and rent loss insurance. All such insurance shall be included as part of the
Operating Expenses charged to Tenant. The Project or Building may be included
in a blanket policy (in which case the cost of such insurance allocable to the
Project or Building will be determined by Landlord based upon the insurer's
cost calculations). Tenant shall also reimburse Landlord for any increased
premiums or additional insurance which Landlord reasonably deems necessary as a
result of Tenant's use of the Premises.
Tenant, at its expense, shall maintain during the Lease Term: all risk
property insurance covering the full replacement cost of all property and
improvements installed or placed in the Premises by Tenant at Tenant's expense;
worker's compensation insurance with no less than the minimum limits required
by law; employer's liability insurance with such limits as required by law; and
commercial liability insurance, with a minimum limit of $1,000,000 per
occurrence and a minimum umbrella limit of $1,000,000, for a total minimum
combined general liability and umbrella limit of $2,000,000 (together with such
additional umbrella coverage as Landlord may reasonably require) for property
damage, personal injuries, or deaths of persons occurring in or about the
Premises. Landlord may from time to time require reasonable increases in any
such limits. The commercial liability policies shall name Landlord as an
additional insured, insure on an occurrence and not a claims-made basis, be
issued by insurance companies which are reasonably acceptable to Landlord, not
be cancelable unless 30 days prior written notice shall have been given to
Landlord, contain a hostile fire endorsement and a contractual liability
endorsement and provide primary coverage to Landlord (any policy issued to
Landlord providing duplicate or similar coverage shall be deemed excess over
Tenant's policies). Such policies or certificates thereof shall be delivered
to Landlord by Tenant upon commencement of the Lease Term and upon each renewal
of said insurance.
The all risk property insurance obtained by Landlord and Tenant shall
include a waiver of subrogation by the insurers and all rights based upon an
assignment from its insured, against Landlord or Tenant, their officers,
directors, employees, managers, agents, invitees and contractors, in connection
with any loss or damage thereby insured against. Neither party nor its
officers, directors, employees, managers, agents, invitees or contractors shall
be liable to the other for loss or damage caused by any risk coverable by all
risk property insurance, and each party waives any claims against the other
party, and its officers, directors, employees, managers, agents, invitees and
contractors for such loss or damage. The failure of a party to insure its
property shall not void this waiver. Landlord and its agents, employees and
contractors shall not be liable for, and Tenant hereby waives all claims
against such parties for, business interruption and losses occasioned thereby
sustained by Tenant or any person claiming through Tenant resulting from any
accident or occurrence in or upon the Premises or the Project from any cause
whatsoever, including without limitation, damage caused in whole or in part,
directly or indirectly, by the negligence of Landlord or its agents, employees
or contractors.
10. LANDLORD'S REPAIRS. Landlord shall maintain, at its expense, the
structural soundness of the roof, foundation, and exterior walls of the
Building in good repair, reasonable wear and tear and uninsured losses and
damages caused by Tenant, its agents and contractors excluded. The term
"walls" as used in this Paragraph 10 shall not include windows, glass or plate
glass, doors or overhead doors, special store fronts, dock bumpers, dock plates
or levelers, or office entries. Tenant shall promptly give Landlord written
notice of any repair required by Landlord pursuant to this Paragraph 10, after
which Landlord shall have a reasonable opportunity to repair.
11. TENANT'S REPAIRS. Landlord, at Tenant's expense as provided in
Paragraph 6, shall maintain in good repair and condition the parking areas and
other common areas of the Building, including, but not limited to driveways,
alleys, landscape and grounds surrounding the Premises. Subject to Landlord's
obligation in Paragraph 10, Tenant, at its expense, shall repair, replace and
maintain in good condition all portions of the Premises and all areas,
improvements and systems exclusively serving the Premises including, without
limitation, dock and loading areas, truck doors, plumbing, water, and sewer
lines up to points of common connection, fire sprinklers and fire protection
systems, entries, doors, ceilings and roof membrane, windows, interior walls,
and the interior side of demising walls, and heating, ventilation and air
conditioning systems. Such repair and replacements include capital
expenditures and repairs whose benefit may extend beyond the Term. Heating,
ventilation and air conditioning systems and other mechanical and building
systems serving the Premises shall be maintained at Tenant's expense
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pursuant to maintenance service contracts entered into by Tenant or, at
Landlord's election, by Landlord. The scope of services and contractors under
such maintenance contracts shall be reasonably approved by Landlord. At
Landlord's request, Tenant shall enter into a joint maintenance agreement with
any railroad that services the Premises. If Tenant fails to perform any repair
or replacement for which it is responsible, Landlord may perform such work and
be reimbursed by Tenant within 10 days after demand therefor. Subject to
Paragraphs 9 and 15, Tenant shall bear the full cost of any repair or
replacement to any part of the Building or Project that results from damage
caused by Tenant, its agents, contractors, or invitees and any repair that
benefits only the Premises.
12. TENANT-MADE ALTERATIONS AND TRADE FIXTURES. Any alterations,
additions, or improvements made by or on behalf of Tenant to the Premises
("Tenant-Made Alterations") shall be subject to Landlord's prior written
consent, which shall not be unreasonably withheld, provided that such
Tenant-Made Alterations doe not affect the structural, electrical (except for
de minimis changes), or roof components of the Premises. Tenant shall cause,
at its expense, all Tenant-Made Alterations to comply with insurance
requirements and with Legal Requirements and shall construct at its expense any
alteration or modification required by Legal Requirements as a result of any
Tenant-Made Alterations. All Tenant-Made Alterations shall be constructed in a
good and workmanlike manner by contractors reasonably acceptable to Landlord
and only good grades of materials shall be used. All plans and specifications
for any Tenant-Made Alterations shall be submitted to Landlord for its
approval. Landlord may monitor construction of the Tenant-Made Alterations.
Tenant shall reimburse Landlord for its costs in reviewing plans and
specifications and in monitoring construction. Landlord's right to review
plans and specifications and to monitor construction shall be solely for its
own benefit, and Landlord shall have no duty to see that such plans and
specifications or construction comply with applicable laws, codes, rules and
regulations. Tenant shall provide Landlord with the identities and mailing
addresses of all persons performing work or supplying materials, prior to
beginning such construction, and Landlord may post on and about the Premises
notices of non-responsibility pursuant to applicable law. Tenant shall furnish
security or make other arrangements satisfactory to Landlord to assure payment
for the completion of all work free and clear of liens and shall provide
certificates of insurance for worker's compensation and other coverage in
amounts and from an insurance company satisfactory to Landlord protecting
Landlord against liability for personal injury or property damage during
construction. Upon completion of any Tenant-Made Alterations, Tenant shall
deliver to Landlord sworn statements setting forth the names of all contractors
and subcontractors who did work on the Tenant-Made Alterations and final lien
waivers from all such contractors and subcontractors. Upon surrender of the
Premises, all Tenant-Made Alterations and any leasehold improvements
constructed by Landlord or Tenant shall remain on the Premises as Landlord's
property, except to the extent Landlord requires removal at Tenant's expense of
any such items or Landlord and Tenant have otherwise agreed in writing in
connection with Landlord's consent to any Tenant-Made Alterations. Tenant
shall repair any damage caused by such removal.
Tenant, at its own cost and expense and without Landlord's prior approval,
may erect such shelves, bins, machinery and trade fixtures (collectively "Trade
Fixtures") in the ordinary course of its business provided that such items do
not alter the basic character of the Premises, do not overload or damage the
Premises, and may be removed without injury to the Premises, and the
construction, erection, and installation thereof complies with all Legal
Requirements and with Landlord's requirements set forth above. Tenant shall
remove its Trade Fixtures and shall repair any damage caused by such removal.
13. SIGNS. Tenant shall not make any changes to the exterior of the
Premises, install any exterior lights, decorations, balloons, flags, pennants,
banners, or painting, or erect or install any signs, windows or door lettering,
placards, decorations, or advertising media of any type which can be viewed
from the exterior of the Premises, without Landlord's prior written consent.
Upon surrender or vacation of the Premises, Tenant shall have removed all signs
and repair, paint, and/or replace the building facia surface to which its signs
are attached. Tenant shall obtain all applicable governmental permits and
approvals for sign and exterior treatments. All signs, decorations,
advertising media, blinds, draperies and other window treatment or bars or
other security installations visible from outside the Premises shall be subject
to Landlord's approval and conform in all respects to Landlord's requirements.
14. PARKING. Tenant shall be entitled to park in common with other
tenants of the Project in those areas designated for nonreserved parking.
Landlord may allocate parking spaces among Tenant and other tenants in
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the Project if Landlord determines that such parking facilities are becoming
crowded. Landlord shall not be responsible for enforcing Tenant's parking
rights against any third parties.
15. RESTORATION. If at any time during the Lease Term the Premises are
damaged by a fire or other casualty, Landlord shall notify Tenant within 60
days after such damage as to the amount of time Landlord reasonably estimates
it will take to restore the Premises. If the restoration time is estimated to
exceed 6 months, either Landlord or Tenant may elect to terminate this Lease
upon notice to the other party given no later than 30 days after Landlord's
notice. If neither party elects to terminate this Lease or if Landlord
estimates that restoration will take 6 months or less, then, subject to receipt
of sufficient insurance proceeds, Landlord shall promptly restore the Premises
excluding the improvements installed by Tenant or by Landlord and paid by
Tenant, subject to delays arising from the collection of insurance proceeds or
from Force Majeure events. Tenant at Tenant's expense shall promptly perform,
subject to delays arising from the collection of insurance proceeds, or from
Force Majeure events, all repairs or restoration not required to be done by
Landlord and shall promptly re-enter the Premises and commence doing business
in accordance with this Lease. Notwithstanding the foregoing, either party may
terminate this Lease if the Premises are damaged during the last year of the
Lease Term and Landlord reasonably estimates that it will take more than one
month to repair such damage. Tenant shall pay to Landlord with respect to any
damage to the Premises the amount of the commercially reasonable deductible
under Landlord's insurance policy (currently $10,000) within 10 days after
presentment of Landlord's invoice. If the damage involves the premises of
other tenants, Tenant shall pay the portion of the deductible that the cost of
the restoration of the Premises bears to the total cost of restoration, as
determined by Landlord. Base Rent and Operating Expenses shall be abated for
the period of repair and restoration in the proportion which the area of the
Premises, if any, which is not usable by Tenant bears to the total area of the
Premises. Such abatement shall be the sole remedy of Tenant, and except as
provided herein, Tenant waives any right to terminate the Lease by reason of
damage or casualty loss.
16. CONDEMNATION. If any part of the Premises or the Project should be
taken for any public or quasi-public use under governmental law, ordinance, or
regulation, or by right of eminent domain, or by private purchase in lieu
thereof (a "Taking" or "Taken"), and the Taking would prevent or materially
interfere with Tenant's use of the Premises or in Landlord's judgment would
materially interfere with or impair its ownership or operation of the Project,
then upon written notice by Landlord this Lease shall terminate and Base Rent
shall be apportioned as of said date. If part of the Premises shall be Taken,
and this Lease is not terminated as provided above, the Base Rent payable
hereunder during the unexpired Lease Term shall be reduced to such extent as
may be fair and reasonable under the circumstances. In the event of any such
Taking, Landlord shall be entitled to receive the entire price or award from
any such Taking without any payment to Tenant, and Tenant hereby assigns to
Landlord Tenant's interest, if any, in such award. Tenant shall have the
right, to the extent that same shall not diminish Landlord's award, to make a
separate claim against the condemning authority (but not Landlord) for such
compensation as may be separately awarded or recoverable by Tenant for moving
expenses and damage to Tenant's Trade Fixtures, if a separate award for such
items is made to Tenant.
17. ASSIGNMENT AND SUBLETTING. Without Landlord's prior written consent
which shall not be unreasonably withheld, Tenant shall not assign this Lease or
sublease the Premises or any part thereof or mortgage, pledge, or hypothecate
its leasehold interest or grant any concession or license within the Premises
and any attempt to do any of the foregoing shall be void and of no effect. For
purposes of this paragraph, a transfer of the ownership interests controlling
Tenant shall be deemed an assignment of this Lease unless such ownership
interests are publicly traded. Notwithstanding the above, Tenant may assign or
sublet the Premises, or any part thereof, to any entity controlling Tenant,
controlled by Tenant or under common control with Tenant (a "Tenant
Affiliate"), without the prior written consent of Landlord. Tenant shall
reimburse Landlord for all of Landlord's reasonable out-of-pocket expenses in
connection with any assignment or sublease. Upon Landlord's receipt of
Tenant's written notice of a desire to assign or sublet the Premises, or any
part thereof (other than to a Tenant Affiliate), Landlord may, by giving
written notice to Tenant within 30 days after receipt of Tenant's notice,
terminate this Lease with respect to the space described in Tenant's notice, as
of the date specified in Tenant's notice for the commencement of the proposed
assignment or sublease.
Notwithstanding any assignment or subletting, Tenant and any guarantor or
surety of Tenant's obligations under this Lease shall at all times remain fully
responsible and liable for the payment of the rent and for compliance with all
of Tenant's other obligations under this Lease (regardless of whether
Landlord's approval has
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been obtained for any such assignments or sublettings). In the event that the
rent due and payable by a sublessee or assignee (or a combination of the rental
payable under such sublease or assignment plus any bonus or other consideration
therefor or incident thereto) exceeds the rental payable under this Lease, then
Tenant shall be bound and obligated to pay Landlord as additional rent
hereunder all such excess rental and other excess consideration within 10 days
following receipt thereof by Tenant.
If this Lease be assigned or if the Premises be subleased (whether in
whole or in part) or in the event of the mortgage, pledge, or hypothecation of
Tenant's leasehold interest or grant of any concession or license within the
Premises or if the Premises be occupied in whole or in part by anyone other
than Tenant, then upon a default by Tenant hereunder Landlord may collect rent
from the assignee, sublessee, mortgagee, pledgee, party to whom the leasehold
interest was hypothecated, concessionee or licensee or other occupant and,
except to the extent set forth in the preceding paragraph, apply the amount
collected to the next rent payable hereunder; and all such rentals collected by
Tenant shall be held in trust for Landlord and immediately forwarded to
Landlord. No such transaction or collection of rent or application thereof by
Landlord, however, shall be deemed a waiver of these provisions or a release of
Tenant from the further performance by Tenant of its covenants, duties, or
obligations hereunder.
18. INDEMNIFICATION. Except for the negligence of Landlord, its agents,
employees or contractors, and to the extent permitted by law, Tenant agrees to
indemnify, defend and hold harmless Landlord, and Landlord's agents, employees
and contractors, from and against any and all losses, liabilities, damages,
costs and expenses (including attorneys' fees) resulting from claims by third
parties for injuries to any person and damage to or theft or misappropriation
or loss of property occurring in or about the Project and arising from the use
and occupancy of the Premises or from any activity, work, or thing done,
permitted or suffered by Tenant in or about the Premises or due to any other
act or omission of Tenant, its subtenants, assignees, invitees, employees,
contractors and agents. The furnishing of insurance required hereunder shall
not be deemed to limit Tenant's obligations under this Paragraph 18.
19. INSPECTION AND ACCESS. Landlord and its agents, representatives, and
contractors may enter the Premises at any reasonable time to inspect the
Premises and to make such repairs as may be required or permitted pursuant to
this Lease and for any other business purpose. Landlord and Landlord's
representatives may enter the Premises during business hours for the purpose of
showing the Premises to prospective purchasers or, during the last year of the
Lease Term, to prospective tenants. Landlord may erect a suitable sign on the
Premises stating the Premises are available to let or that the Project is
available for sale. Landlord may grant easements, make public dedications,
designate common areas and create restrictions on or about the Premises,
provided that no such easement, dedication, designation or restriction
materially interferes with Tenant's use or occupancy of the Premises. At
Landlord's request, Tenant shall execute such instruments as may be necessary
for such easements, dedications or restrictions.
20. QUIET ENJOYMENT. If Tenant shall perform all of the covenants and
agreements herein required to be performed by Tenant, Tenant shall, subject to
the terms of this Lease, at all times during the Lease Term, have peaceful and
quiet enjoyment of the Premises against any person claiming by, through or
under Landlord.
21. SURRENDER. Upon termination of the Lease Term or earlier termination
of Tenant's right of possession, Tenant shall surrender the Premises to
Landlord in the same condition as received, broom clean, ordinary wear and tear
and casualty loss and condemnation covered by Paragraphs 15 and 16 excepted.
Any Trade Fixtures, Tenant-Made Alterations and property not so removed by
Tenant as permitted or required herein shall be deemed abandoned and may be
stored, removed, and disposed of by Landlord at Tenant's expense, and Tenant
waives all claims against Landlord for any damages resulting from Landlord's
retention and disposition of such property. All obligations of Tenant
hereunder not fully performed as of the termination of the Lease Term shall
survive the termination of the Lease Term, including without limitation,
indemnity obligations, payment obligations with respect to Excess Operating
Expenses and all obligations concerning the condition and repair of the
Premises.
22. HOLDING OVER. If Tenant retains possession of the Premises after the
termination of the Lease Term, unless otherwise agreed in writing, such
possession shall be subject to immediate termination by Landlord at any time,
and all of the other terms and provisions of this Lease (excluding any
expansion or renewal option or other
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similar right or option) shall be applicable during such holdover period,
except that Tenant shall pay Landlord from time to time, upon demand, as Base
Rent for the holdover period, an amount equal to 1.5 times the Base Rent in
effect on the termination date, computed on a monthly basis for each month or
part thereof during such holding over. All other payments shall continue under
the terms of this Lease. In addition, Tenant shall be liable for all damages
incurred by Landlord as a result of such holding over. No holding over by
Tenant, whether with or without consent of Landlord, shall operate to extend
this Lease except as otherwise expressly provided, and this Paragraph 22 shall
not be construed as consent for Tenant to retain possession of the Premises.
23. EVENTS OF DEFAULT. Each of the following events shall be an event of
default ("Event of Default") by Tenant under this Lease:
(i) Tenant shall fail to pay any installment of Base Rent or any
other payment required herein when due, and such failure shall continue
for a period of 5 days from the date such payment was due.
(ii) Tenant or any guarantor or surety of Tenant's obligations
hereunder shall (A) make a general assignment for the benefit of
creditors; (B) commence any case, proceeding or other action seeking to
have an order for relief entered on its behalf as a debtor or to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, liquidation, dissolution or composition of it or
its debts or seeking appointment of a receiver, trustee, custodian or
other similar official for it or for all or of any substantial part of
its property (collectively a "proceeding for relief"); (C) become the
subject of any proceeding for relief which is not dismissed within 60
days of its filing or entry; or (D) die or suffer a legal disability (if
Tenant, guarantor, or surety is an individual) or be dissolved or
otherwise fail to maintain its legal existence (if Tenant, guarantor or
surety is a corporation, partnership or other entity).
(iii) Any insurance required to be maintained by Tenant pursuant to
this Lease shall be cancelled or terminated or shall expire or shall be
reduced or materially changed, except, in each case, as permitted in this
Lease.
(iv) Tenant shall not occupy or shall vacate the Premises or shall
fail to continuously operate its business at the Premises for the
permitted use set forth herein, whether or not Tenant is in monetary or
other default under this Lease.
(v) Tenant shall attempt or there shall occur any assignment,
subleasing or other transfer of Tenant's interest in or with respect to
this Lease except as otherwise permitted in this Lease.
(vi) Tenant shall fail to discharge any lien placed upon the
Premises in violation of this Lease within 30 days after any such lien or
encumbrance is filed against the Premises.
(vii) Tenant shall fail to comply with any provision of this Lease
other than those specifically referred to in this Paragraph 23, and
except as otherwise expressly provided herein, such default shall
continue for more than 30 days after Landlord shall have given Tenant
written notice of such default.
24. LANDLORD'S REMEDIES. Upon each occurrence of an Event of Default and
so long as such Event of Default shall be continuing, Landlord may at any time
thereafter at its election: terminate this Lease or Tenant's right of
possession, (but Tenant shall remain liable as hereinafter provided) and/or
pursue any other remedies at law or in equity. Upon the termination of this
Lease or termination of Tenant's right of possession, it shall be lawful for
Landlord, without formal demand or notice of any kind, to re-enter the Premises
by summary dispossession proceedings or any other action or proceeding
authorized by law and to remove Tenant and all persons and property therefrom.
If Landlord re-enters the Premises, Landlord shall have the right to keep in
place and use, or remove and store, all of the furniture, fixtures and
equipment at the Premises.
If Landlord terminates this Lease, Landlord may recover from Tenant the
sum of: all Base Rent and all other amounts accrued hereunder to the date of
such termination; the cost of reletting the whole or any part of the Premises,
including without limitation brokerage fees and/or leasing commissions incurred
by Landlord, and
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costs of removing and storing Tenant's or any other occupant's property,
repairing, altering, remodeling, or otherwise putting the Premises into
condition acceptable to a new tenant or tenants, and all reasonable expenses
incurred by Landlord in pursuing its remedies, including reasonable attorneys'
fees and court costs; and the excess of the then present value of the Base Rent
and other amounts payable by Tenant under this Lease as would otherwise have
been required to be paid by Tenant to Landlord during the period following the
termination of this Lease measured from the date of such termination to the
expiration date stated in this Lease, over the present value of any net
amounts which Tenant establishes Landlord can reasonably expect to recover by
reletting the Premises for such period, taking into consideration the
availability of acceptable tenants and other market conditions affecting
leasing. Such present values shall be calculated at a discount rate equal to
the 90-day U.S. Treasury bill rate at the date of such termination.
If Landlord terminates Tenant's right of possession (but not this Lease),
Landlord may, but shall be under no obligation to, relet the Premises for the
account of Tenant for such rent and upon such terms as shall be satisfactory to
Landlord without thereby releasing Tenant from any liability hereunder and
without demand or notice of any kind to Tenant. For the purpose of such
reletting Landlord is authorized to make any repairs, changes, alterations, or
additions in or to the Premises as Landlord deems reasonably necessary or
desirable. If the Premises are not relet, then Tenant shall pay to Landlord as
damages a sum equal to the amount of the rental reserved in this Lease for such
period or periods, plus the cost of recovering possession of the Premises
(including attorneys' fees and costs of suit), the unpaid Base Rent and other
amounts accrued hereunder at the time of repossession, and the costs incurred
in any attempt by Landlord to relet the Premises. If the Premises are relet
and a sufficient sum shall not be realized from such reletting [after first
deducting therefrom, for retention by Landlord, the unpaid Base Rent and other
amounts accrued hereunder at the time of reletting, the cost of recovering
possession (including attorneys' fees and costs of suit), all of the costs and
expense of repairs, changes, alterations, and additions, the expense of such
reletting (including without limitation brokerage fees and leasing commissions)
and the cost of collection of the rent accruing therefrom] to satisfy the rent
provided for in this Lease to be paid, then Tenant shall immediately satisfy
and pay any such deficiency. Any such payments due Landlord shall be made upon
demand therefor from time to time and Tenant agrees that Landlord may file suit
to recover any sums falling due from time to time. Notwithstanding any such
reletting without termination, Landlord may at any time thereafter elect in
writing to terminate this Lease for such previous breach.
Exercise by Landlord of any one or more remedies hereunder granted or
otherwise available shall not be deemed to be an acceptance of surrender of the
Premises and/or a termination of this Lease by Landlord, whether by agreement
or by operation of law, it being understood that such surrender and/or
termination can be effected only by the written agreement of Landlord and
Tenant. Any law, usage, or custom to the contrary notwithstanding, Landlord
shall have the right at all times to enforce the provisions of this Lease in
strict accordance with the terms hereof; and the failure of Landlord at any
time to enforce its rights under this Lease strictly in accordance with same
shall not be construed as having created a custom in any way or manner contrary
to the specific terms, provisions, and covenants of this Lease or as having
modified the same. Tenant and Landlord further agree that forbearance or
waiver by Landlord to enforce its rights pursuant to this Lease or at law or in
equity, shall not be a waiver of Landlord's right to enforce one or more of its
rights in connection with any subsequent default. A receipt by Landlord of
rent or other payment with knowledge of the breach of any covenant hereof shall
not be deemed a waiver of such breach, and no waiver by Landlord of any
provision of this Lease shall be deemed to have been made unless expressed in
writing and signed by Landlord. To the greatest extent permitted by law,
Tenant waives the service of notice of Landlord's intention to re-enter as
provided for in any statute, or to institute legal proceedings to that end, and
also waives all right of redemption in case Tenant shall be dispossessed by a
judgment or by warrant of any court or judge. The terms "enter," "re-enter,"
"entry" or "re-entry," as used in this Lease, are not restricted to their
technical legal meanings. Any reletting of the Premises shall be on such terms
and conditions as Landlord in its sole discretion may determine (including
without limitation a term different than the remaining Lease Term, rental
concessions, alterations and repair of the Premises, lease of less than the
entire Premises to any tenant and leasing any or all other portions of the
Project before reletting the Premises). Landlord shall not be liable, nor
shall Tenant's obligations hereunder be diminished because of, Landlord's
failure to relet the Premises or collect rent due in respect of such reletting.
25. TENANT'S REMEDIES/LIMITATION OF LIABILITY. Landlord shall not be in
default hereunder unless Landlord fails to perform any of its obligations
hereunder within 30 days after written notice from Tenant specifying
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such failure (unless such performance will, due to the nature of the
obligation, require a period of time in excess of 30 days, then after such
period of time as is reasonably necessary). All obligations of Landlord
hereunder shall be construed as covenants, not conditions; and, except as may
be otherwise expressly provided in this Lease, Tenant may not terminate this
Lease for breach of Landlord's obligations hereunder. All obligations of
Landlord under this Lease will be binding upon Landlord only during the period
of its ownership of the Premises and not thereafter. The term "Landlord" in
this Lease shall mean only the owner, for the time being of the Premises, and
in the event of the transfer by such owner of its interest in the Premises,
such owner shall thereupon be released and discharged from all obligations of
Landlord thereafter accruing, but such obligations shall be binding during the
Lease Term upon each new owner for the duration of such owner's ownership. Any
liability of Landlord under this Lease shall be limited solely to its interest
in the Project, and in no event shall any personal liability be asserted
against Landlord in connection with this Lease nor shall any recourse be had to
any other property or assets of Landlord.
26 WAIVER OF JURY TRIAL. TENANT AND LANDLORD WAIVE ANY RIGHT TO TRIAL BY
JURY OR TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT, OR OTHERWISE, BETWEEN LANDLORD AND TENANT ARISING OUT OF
THIS LEASE OR ANY OTHER INSTRUMENT, DOCUMENT, OR AGREEMENT EXECUTED OR
DELIVERED IN CONNECTION HEREWITH OR THE TRANSACTIONS RELATED HERETO.
27 SUBORDINATION. This Lease and Tenant's interest and rights hereunder
are and shall be subject and subordinate at all times to the lien of any first
mortgage, now existing or hereafter created on or against the Project or the
Premises, and all amendments, restatements, renewals, modifications,
consolidations, refinancing, assignments and extensions thereof, without the
necessity of any further instrument or act on the part of Tenant. Tenant
agrees, at the election of the holder of any such mortgage, to attorn to any
such holder. Tenant agrees upon demand to execute, acknowledge and deliver
such instruments, confirming such subordination and such instruments of
attornment as shall be requested by any such holder. Tenant hereby appoints
Landlord attorney in fact for Tenant irrevocably (such power of attorney being
coupled with an interest) to execute, acknowledge and deliver any such
instrument and instruments for and in the name of the Tenant and to cause any
such instrument to be recorded. Notwithstanding the foregoing, any such holder
may at any time subordinate its mortgage to this Lease, without Tenant's
consent, by notice in writing to Tenant, and thereupon this Lease shall be
deemed prior to such mortgage without regard to their respective dates of
execution, delivery or recording and in that event such holder shall have the
same rights with respect to this Lease as though this Lease had been executed
prior to the execution, delivery and recording of such mortgage and had been
assigned to such holder. The term "mortgage" whenever used in this Lease shall
be deemed to include deeds of trust, security assignments and any other
encumbrances, and any reference to the "holder" of a mortgage shall be deemed
to include the beneficiary under a deed of trust.
28 MECHANIC'S LIENS. Tenant has no express or implied authority to create
or place any lien or encumbrance of any kind upon, or in any manner to bind the
interest of Landlord or Tenant in, the Premises or to charge the rentals
payable hereunder for any claim in favor of any person dealing with Tenant,
including those who may furnish materials or perform labor for any construction
or repairs. Tenant covenants and agrees that it will pay or cause to be paid
all sums legally due and payable by it on account of any labor performed or
materials furnished in connection with any work performed on the Premises and
that it will save and hold Landlord harmless from all loss, cost or expense
based on or arising out of asserted claims or liens against the leasehold
estate or against the interest of Landlord in the Premises or under this Lease.
Tenant shall give Landlord immediate written notice of the placing of any lien
or encumbrance against the Premises and cause such lien or encumbrance to be
discharged within 30 days of the filing or recording thereof; provided,
however, Tenant may contest such liens or encumbrances as long as such contest
prevents foreclosure of the lien or encumbrance and Tenant causes such lien or
encumbrance to be bonded or insured over in a manner satisfactory to Landlord
within such 30 day period.
29 ESTOPPEL CERTIFICATES. Tenant agrees, from time to time, within 10
days after request of Landlord, to execute and deliver to Landlord, or
Landlord's designee, any estoppel certificate requested by Landlord, stating
that this Lease is in full force and effect, the date to which rent has been
paid, that Landlord is not in default hereunder (or specifying in detail the
nature of Landlord's default), the termination date of this Lease and such
other matters pertaining to this Lease as may be requested by Landlord.
Tenant's obligation to furnish each estoppel
certificate in a timely fashion is a material inducement for Landlord's
execution of this Lease. No cure or grace period provided in this Lease shall
apply to Tenant's obligations to timely deliver an estoppel certificate.
Tenant
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<PAGE> 11
hereby irrevocably appoints Landlord as its attorney in fact to execute on its
behalf and in its name any such estoppel certificate if Tenant fails to execute
and deliver the estoppel certificate within 10 days after Landlord's written
request thereof.
30 ENVIRONMENTAL REQUIREMENTS. Except for Hazardous Material contained in
products used by Tenant in de minimis quantities for ordinary cleaning and
office purposes, and purposes associated with the storage of wireless
communication products and accessories in their unopened and sealed containers,
Tenant shall not permit or cause any party to bring any Hazardous Material upon
the Premises or transport, store, use, generate, manufacture or release any
Hazardous Material in or about the Premises without Landlord's prior written
consent. Tenant, at its sole cost and expense, shall operate its business in
the Premises in strict compliance with all Environmental Requirements and shall
remediate in a manner satisfactory to Landlord any Hazardous Materials released
on or from the Project by Tenant, its agents, employees, contractors,
subtenants or invitees. Tenant shall complete and certify to disclosure
statements as requested by Landlord from time to time relating to Tenant's
transportation, storage, use, generation, manufacture, or release of Hazardous
Materials on the Premises. The term "Environmental Requirements" means all
applicable present and future statutes, regulations, ordinances, rules, codes,
judgments, orders or other similar enactments of any governmental authority or
agency regulating or relating to health, safety, or environmental conditions
on, under, or about the Premises or the environment, including without
limitation, the following: the Comprehensive Environmental Response,
Compensation and Liability Act; the Resource Conservation and Recovery Act; and
all state and local counterparts thereto, and any regulations or policies
promulgated or issued thereunder. The term "Hazardous Materials" means and
includes any substance, material, waste, pollutant, or contaminant listed or
defined as hazardous or toxic, under any Environmental Requirements, asbestos
and petroleum, including crude oil or any fraction thereof, natural gas, or
synthetic gas usable for fuel (or mixtures of natural gas and such synthetic
gas). As defined in Environmental Requirements, Tenant is and shall be deemed
to be the "operator" of Tenant's "facility" and the "owner" of all Hazardous
Materials brought on the Premises by Tenant, its agents, employees, contractors
or invitees, and the wastes, by-products, or residues generated, resulting, or
produced therefrom.
Tenant shall indemnify, defend, and hold Landlord harmless from and
against any and all losses (including, without limitation, diminution in value
of the Premises or the Project and loss of rental income from the Project),
claims, demands, actions, suits, damages (including, without limitation,
punitive damages), expenses (including, without limitation, remediation,
removal, repair, corrective action, or cleanup expenses), and costs (including,
without limitation, actual attorneys' fees, consultant fees or expert fees and
including, without limitation, removal or management of any asbestos brought
into the Premises or disturbed in breach of the requirements of this Paragraph
30, regardless of whether such removal or management is required by law) which
are brought or recoverable against, or suffered or incurred by Landlord as a
result of any release of Hazardous Materials for which Tenant is obligated to
remediate as provided above or any other breach of the requirements under this
Paragraph 30 by Tenant, its agents, employees, contractors, subtenants,
assignees or invitees, regardless of whether Tenant had knowledge of such
noncompliance. The obligations of Tenant under this Paragraph 30 shall survive
any termination of this Lease.
Landlord shall have access to, and a right to perform inspections and
tests of, the Premises to determine Tenant's compliance with Environmental
Requirements, its obligations under this Paragraph 30, or the environmental
condition of the Premises. Access shall be granted to Landlord upon Landlord's
prior notice to Tenant and at such times so as to minimize, so far as may be
reasonable under the circumstances, any disturbance to Tenant's operations.
Such inspections and tests shall be conducted at Landlord's expense, unless
such inspections or tests reveal that Tenant has not complied with any
Environmental Requirement, in which case Tenant shall reimburse Landlord for
the reasonable cost of such inspection and tests. Landlord's receipt of or
satisfaction with any environmental assessment in no way waives any rights that
Landlord holds against Tenant.
31 RULES AND REGULATIONS. Tenant shall, at all times during the Lease
Term and any extension thereof, comply with all reasonable rules and
regulations at any time or from time to time established by Landlord covering
use of the Premises and the Project. The current rules and regulations are
attached hereto. In the event of any conflict between said rules and
regulations and other provisions of this Lease, the other terms and provisions
of
this Lease shall control. Landlord shall not have any liability or obligation
for the breach of any rules or regulations by other tenants in the Project.
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<PAGE> 12
32 SECURITY SERVICE. Tenant acknowledges and agrees that, while Landlord
may patrol the Project, Landlord is not providing any security services with
respect to the Premises and that Landlord shall not be liable to Tenant for, and
Tenant waives any claim against Landlord with respect to, any loss by theft or
any other damage suffered or incurred by Tenant in connection with any
unauthorized entry into the Premises or any other breach of security with
respect to the Premises.
33 FORCE MAJEURE. Landlord shall not be held responsible for delays in
the performance of its obligations hereunder when caused by strikes, lockouts,
labor disputes, acts of God, inability to obtain labor or materials or
reasonable substitutes therefor, governmental restrictions, governmental
regulations, governmental controls, delay in issuance of permits, enemy or
hostile governmental action, civil commotion, fire or other casualty, and other
causes beyond the reasonable control of Landlord ("Force Majeure").
34 ENTIRE AGREEMENT. This Lease constitutes the complete and entire
agreement of Landlord and Tenant with respect to the subject matter hereof. No
representations, inducements, promises or agreements, oral or written, have
been made by Landlord or Tenant, or anyone acting on behalf of Landlord or
Tenant, which are not contained herein, and any prior agreements, promises,
negotiations, or representations are superseded by this Lease. This Lease may
not be amended except by an instrument in writing signed by both parties
hereto.
35 SEVERABILITY. If any clause or provision of this Lease is illegal,
invalid or unenforceable under present or future laws, then and in that event,
it is the intention of the parties hereto that the remainder of this Lease
shall not be affected thereby. It is also the intention of the parties to this
Lease that in lieu of each clause or provision of this Lease that is illegal,
invalid or unenforceable, there be added, as a part of this Lease, a clause or
provision as similar in terms to such illegal, invalid or unenforceable clause
or provision as may be possible and be legal, valid and enforceable.
36 BROKERS. Tenant represents and warrants that it has dealt with no
broker, agent or other person in connection with this transaction and that no
broker, agent or other person brought about this transaction, other than the
broker, if any, set forth on the first page of this Lease, and Tenant agrees to
indemnify and hold Landlord harmless from and against any claims by any other
broker, agent or other person claiming a commission or other form of
compensation by virtue of having dealt with Tenant with regard to this leasing
transaction.
37 MISCELLANEOUS. (a) Any payments or charges due from Tenant to
Landlord hereunder shall be considered rent for all purposes of this Lease.
(b) If and when included within the term "Tenant," as used in this
instrument, there is more than one person, firm or corporation, each shall be
jointly and severally liable for the obligations of Tenant.
(c) All notices required or permitted to be given under this Lease shall
be in writing and shall be sent by registered or certified mail, return receipt
requested, or by a reputable national overnight courier service, postage
prepaid, or by hand delivery addressed to the parties at their addresses below,
and with a copy sent to Landlord at 14100 East 35th Place, Aurora, Colorado
80011. Either party may by notice given aforesaid change its address for all
subsequent notices. Except where otherwise expressly provided to the contrary,
notice shall be deemed given upon delivery.
(d) Except as otherwise expressly provided in this Lease or as otherwise
required by law, Landlord retains the absolute right to withhold any consent or
approval.
(e) At Landlord's request from time to time Tenant shall furnish Landlord
with true and complete copies of its most recent annual and quarterly financial
statements prepared by Tenant or Tenant's accountants and any other financial
information or summaries that Tenant typically provides to its lenders or
shareholders.
(f) Neither this Lease nor a memorandum of lease shall be filed by or on
behalf of Tenant in any public record. Landlord may prepare and file, and upon
request by Landlord Tenant will execute, a memorandum of lease.
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(g) The normal rule of construction to the effect that any ambiguities are
to be resolved against the drafting party shall not be employed in the
interpretation of this Lease or any exhibits or amendments hereto.
(h) The submission by Landlord to Tenant of this Lease shall have no
binding force or effect, shall not constitute an option for the leasing of the
Premises, nor confer any right or impose any obligations upon either party
until execution of this Lease by both parties.
(i) Words of any gender used in this Lease shall be held and construed to
include any other gender, and words in the singular number shall be held to
include the plural, unless the context otherwise requires. The captions
inserted in this Lease are for convenience only and in no way define, limit or
otherwise describe the scope or intent of this Lease, or any provision hereof,
or in any way affect the interpretation of this Lease.
(j) Any amount not paid by Tenant within 5 days after its due date in
accordance with the terms of this Lease shall bear interest from such due date
until paid in full at the lesser of the highest rate permitted by applicable
law or 15 percent per year. It is expressly the intent of Landlord and Tenant
at all times to comply with applicable law governing the maximum rate or amount
of any interest payable on or in connection with this Lease. If applicable law
is ever judicially interpreted so as to render usurious any interest called for
under this Lease, or contracted for, charged, taken , reserved, or received
with respect to this Lease, then it is Landlord's and Tenant's express intent
that all excess amounts theretofore collected by Landlord be credited on the
applicable obligation (or, if the obligation has been or would thereby be paid
in full, refunded to Tenant), and the provisions of this Lease immediately
shall be deemed reformed and the amounts thereafter collectible hereunder
reduced, without the necessity of the execution of any new document, so as to
comply with the applicable law, but so as to permit the recovery of the fullest
amount otherwise called for hereunder.
(k) Construction and interpretation of this Lease shall be governed by the
laws of the state in which the Project is located, excluding any principles of
conflicts of laws.
(l) Time is of the essence as to the performance of Tenant's obligations
under this Lease.
(m) All exhibits and addenda attached hereto are hereby incorporated into
this Lease and made a part hereof. In the event of any conflict between such
exhibits or addenda and the terms of this Lease, such exhibits or addenda shall
control.
38 LANDLORD'S LIEN/SECURITY INTEREST. Tenant hereby grants Landlord a
security interest, and this Lease constitutes a security agreement, within the
meaning of and pursuant to the Uniform Commercial Code of the state in which
the Premises are situated as to all of Tenant's property situate in, or upon,
or used in connection with the Premises (except merchandise sold in the
ordinary course of business) as security for all of Tenant's obligations
hereunder, including without limitation, the obligation to pay rent. Such
personalty thus encumbered includes specifically all trade and other fixtures
for the purpose of this Paragraph and inventory, equipment, contract rights,
accounts receivable and the proceeds thereof. In order to perfect such
security interest, Tenant shall execute such financing statements and file the
same at Tenant's expense at the state and county Uniform Commercial Code filing
offices as often as Landlord in its discretion shall require; and Tenant hereby
irrevocably appoints Landlord its agent for the purpose of executing and filing
such financing statements on Tenant's behalf as Landlord shall deem necessary.
39 LIMITATION OF LIABILITY OF TRUSTEES, SHAREHOLDERS, AND OFFICERS OF
SECURITY CAPITAL INDUSTRIAL TRUST. Any obligation or liability whatsoever of
Security Capital Industrial Trust, a Maryland real estate investment trust,
which may arise at any time under this Lease or any obligation or liability
which may be incurred by it pursuant to any other instrument, transaction, or
undertaking contemplated hereby shall not be personally binding upon, nor shall
resort for the enforcement thereof be had to the property of, its trustees,
directors, shareholders, officers, employees or agents, regardless of whether
such obligation or liability is in the nature of contract, tort, or otherwise.
IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the
day and year first above written.
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<TABLE>
<S> <C>
TENANT: LANDLORD:
Brightpoint North America, Inc. SCI North Carolina Limited Partnership
- --------------------------------------------------- --------------------------------------
By: /s/ Steve E. Fivel By: /s/ Walter C. Rakowich
- --------------------------------------------------- --------------------------------------
Title:Steven E. Fivel, Executive Vice President and Title:Managing Director
General Counsel
Address: Address:
6402 Corporate Drive 100 Division Street
- --------------------------------------------------- --------------------------------------
Suite 101
- --------------------------------------------------- --------------------------------------
Indianapolis, IN 46278 Bensenville, IL 60106
- --------------------------------------------------- --------------------------------------
</TABLE>
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<PAGE> 15
Rules and Regulations
1 The sidewalk, entries, and driveways of the Project shall not be
obstructed by Tenant, or its agents, or used by them for any purpose other
than ingress and egress to and from the Premises.
2. Tenant shall not place any objects, including antennas, outdoor
furniture, etc., in the parking areas, landscaped areas or other areas
outside of its Premises, or on the roof of the Project.
3. Except for seeing-eye dogs, no animals shall be allowed in the offices,
halls, or corridors in the Project.
4. Tenant shall not disturb the occupants of the Project or adjoining
buildings by the use of any radio or musical instrument or by the making
of loud or improper noises.
5. If Tenant desires telegraphic, telephonic or other electric connections
in the Premises, Landlord or its agent will direct the electrician as to
where and how the wires may be introduced; and, without such direction, no
boring or cutting of wires will be permitted. Any such installation or
connection shall be made at Tenant's expense.
6. Tenant shall not install or operate any steam or gas engine or boiler, or
other mechanical apparatus in the Premises, except as specifically
approved in the Lease. The use of oil, gas or inflammable liquids for
heating, lighting or any other purpose is expressly prohibited.
Explosives or other articles deemed extra hazardous shall not be brought
into the Project.
7. Parking any type of recreational vehicles is specifically prohibited on
or about the Project. Except for the overnight parking of operative
vehicles, no vehicle of any type shall be stored in the parking areas at
any time. In the event that a vehicle is disabled, it shall be removed
within 48 hours. There shall be no "For Sale" or other advertising signs
on or about any parked vehicle. All vehicles shall be parked in the
designated parking areas in conformity with all signs and other markings.
All parking will be open parking, and no reserved parking, numbering or
lettering of individual spaces will be permitted except as specified by
Landlord.
8. Tenant shall maintain the Premises free from rodents, insects and other
pests.
9. Landlord reserves the right to exclude or expel from the Project any
person who, in the judgment of Landlord, is intoxicated or under the
influence of liquor or drugs or who shall in any manner do any act in
violation of the Rules and Regulations of the Project.
10 Tenant shall not cause any unnecessary labor by reason of Tenant's
carelessness or indifference in the preservation of good order and
cleanliness. Landlord shall not be responsible to Tenant for any loss of
property on the Premises, however occurring, or for any damage done to the
effects of Tenant by the janitors or any other employee or person.
11 Tenant shall give Landlord prompt notice of any defects in the water,
lawn sprinkler, sewage, gas pipes, electrical lights and fixtures, heating
apparatus, or any other service equipment affecting the Premises.
12 Tenant shall not permit storage outside the Premises, including without
limitation, outside storage of trucks and other vehicles, or dumping of
waste or refuse or permit any harmful materials to be placed in any
drainage system or sanitary system in or about the Premises.
13 All moveable trash receptacles provided by the trash disposal firm for
the Premises must be kept in the trash enclosure areas, if any, provided
for that purpose.
14 No auction, public or private, will be permitted on the Premises or the
Project.
15 No awnings shall be placed over the windows in the Premises except with
the prior written consent of Landlord.
16 The Premises shall not be used for lodging, sleeping or cooking or for
any immoral or illegal purposes or for any purpose other than that
specified in the Lease. No gaming devices shall be operated in the
Premises.
17 Tenant shall ascertain from Landlord the maximum amount of electrical
current which can safely be used in the Premises, taking into account the
capacity of the electrical wiring in the Project and the Premises and the
needs of other
tenants, and shall not use more than such safe capacity. Landlord's
consent to the installation of electric equipment shall not relieve
Tenant from the obligation not to use more electricity than such safe
capacity.
- 15 -
<PAGE> 16
18 Tenant assumes full responsibility for protecting the Premises from
theft, robbery and pilferage.
19 Tenant shall not install or operate on the Premises any machinery or
mechanical devices of a nature not directly related to Tenant's ordinary
use of the Premises and shall keep all such machinery free of vibration,
noise and air waves which may be transmitted beyond the Premises.
- 16 -
<PAGE> 17
ADDENDUM A
CONSTRUCTION
(TURNKEY)
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED MARCH 20, 1998, BETWEEN
SCI NORTH CAROLINA LIMITED PARTNERSHIP
and
BRIGHTPOINT NORTH AMERICA, INC.
(a) Landlord agrees to furnish or perform at Landlord's sole cost and
expense those items of construction and those improvements (the "Tenant
Improvements") specified below:
1. Provide one (1) opening in the block demising
wall between 8210 and 8220 Allison Avenue.
(b) If Tenant shall desire any changes, Tenant shall so advise Landlord in
writing and Landlord shall determine whether such changes can be made in a
reasonable and feasible manner. Any and all costs of reviewing any requested
changes, and any and all costs of making any changes to the Tenant Improvements
which Tenant may request and which Landlord may agree to shall be at Tenant's
sole cost and expense and shall be paid to Landlord upon demand and before
execution of the change order.
(c) Landlord shall proceed with and complete the construction of the
Tenant Improvements. As soon as such improvements have been Substantially
Completed, Landlord shall notify Tenant in writing of the date that the Tenant
Improvements were Substantially Completed. Such date, unless an earlier date
is specified as the Commencement Date in this Lease or otherwise agreed to in
writing between Landlord and Tenant, shall be the "Commencement Date," unless
the completion of such improvements was delayed due to any act or omission of,
or delay caused by, Tenant including, without limitation, Tenant's failure to
approve plans, complete submittals or obtain permits within the time periods
agreed to by the parties or as reasonably required by Landlord, in which case
the Commencement Date shall be the date such improvements would have been
completed but for the delays caused by Tenant. The Tenant Improvements shall
be deemed substantially completed ("Substantially Completed") when, in the
opinion of the construction manager (whether an employee or agent of Landlord
or a third party construction manager), the Premises are substantially
completed except for punch list items which do not prevent in any material way
the use of the Premises for the purposes for which they were intended. After
the Commencement Date Tenant shall, upon demand, execute and deliver to
Landlord a letter of acceptance of delivery of the Premises.
(d) The failure of Tenant to take possession of or to occupy the Premises
shall not serve to relieve Tenant of obligations arising on the Commencement
Date or delay the payment of rent by Tenant. Subject to applicable ordinances
and building codes governing Tenant's right to occupy or perform in the
Premises, Tenant shall be allowed to install its tenant improvements,
machinery, equipment, fixtures, or other property on the Premises during the
final stages of completion of construction provided that Tenant does not
thereby interfere with the completion of construction or cause any labor
dispute as a result of such installations, and provided further that Tenant
does hereby agree to indemnify, defend, and hold Landlord harmless from any
loss or damage to such property, and all liability, loss, or damage arising
from any injury to the Project or the property of Landlord, its contractors,
subcontractors, or materialmen, and any death or personal injury to any person
or persons arising out of such installations, unless such loss, damage,
liability, death, or personal injury was caused by Landlord's negligence. Any
such occupancy or performance in the Premises shall be in accordance with the
provisions governing Tenant-Made Alterations and Trade Fixtures in the Lease,
and shall be subject to Tenant providing to Landlord satisfactory evidence of
insurance for personal injury and property damage related to such installations
and satisfactory payment arrangements with respect to installations permitted
hereunder. Delay in putting Tenant in
- 17 -
<PAGE> 18
possession of the Premises shall not serve to extend the term of this Lease or
to make Landlord liable for any damages arising therefrom.
(e) Except for incomplete punch list items, Tenant upon the Commencement
Date shall have and hold the Premises as the same shall then be without any
liability or obligation on the part of Landlord for making any further
alterations or improvements of any kind in or about the Premises.
- 18 -
<PAGE> 19
ADDENDUM B
ONE RENEWAL OPTION AT MARKET
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED MARCH 20, 1998, BETWEEN
SCI NORTH CAROLINA LIMITED PARTNERSHIP
and
BRIGHTPOINT NORTH AMERICA, INC.
(a) Provided that as of the time of the giving of the Extension Notice and
the Commencement Date of the Extension Term, (x) Tenant is the Tenant
originally named herein, (y) Tenant actually occupies all of the Premises
initially demised under this Lease and any space added to the Premises, and (z)
no Event of Default exists or would exist but for the passage of time or the
giving of notice, or both; then Tenant shall have the right to extend the Lease
Term for an additional term of 3 years (such additional term is hereinafter
called the "Extension Term") commencing on the day following the expiration of
the Lease Term (hereinafter referred to as the "Commencement Date of the
Extension Term"). Tenant shall give Landlord notice (hereinafter called the
"Extension Notice") of its election to extend the term of the Lease Term at
least 3 months, but not more than 6 months, prior to the scheduled expiration
date of the Lease Term.
(b) The Base Rent payable by Tenant to Landlord during the Extension Term
shall be $3.95/sf.
(c) The determination of Base Rent does not reduce the Tenant's obligation
to pay or reimburse Landlord for Operating Expenses and other reimbursable
items as set forth in the Lease, and Tenant shall reimburse and pay Landlord as
set forth in the Lease with respect to such Operating Expenses and other items
with respect to the Premises during the Extension Term without regard to any
cap on such expenses set forth in the Lease.
(d) Except for the Base Rent as determined above, Tenant's occupancy of
the Premises during the Extension Term shall be on the same terms and
conditions as are in effect immediately prior to the expiration of the initial
Lease Term; provided, however, Tenant shall have no further right to any
allowances, credits or abatements or any options to expand, contract, renew or
extend the Lease.
(e) If Tenant does not give the Extension Notice within the period set
forth in paragraph (a) above, Tenant's right to extend the Lease Term shall
automatically terminate. Time is of the essence as to the giving of the
Extension Notice.
(f) Landlord shall have no obligation to refurbish or otherwise improve
the Premises for the Extension Term. The Premises shall be tendered on the
Commencement Date of the Extension Term in "as-is" condition.
(g) If the Lease is extended for the Extension Term, then Landlord shall
prepare and Tenant shall execute an amendment to the Lease confirming the
extension of the Lease Term and the other provisions applicable thereto (the
"Amendment").
(h) If Tenant exercises its right to extend the term of the Lease for the
Extension Term pursuant to this Addendum, the term "Lease Term" as used in the
Lease, shall be construed to include, when practicable, the Extension Term
except as provided in (d) above.
- 19 -
<PAGE> 20
ADDENDUM C
MISCELLANEOUS PROVISIONS
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED MARCH 20, 1998, BETWEEN
SCI NORTH CAROLINA LIMITED PARTNERSHIP
and
BRIGHTPOINT NORTH AMERICA, INC.
1. Option to Expand - From May 1, 1998, through July 31, 1998, Tenant has
the exclusive right to lease 8196 Allison Avenue (hereinafter described as
"Expansion Space"). The Expansion Space will be offered at $3.75/sf
during the Option Period; Landlord will provide one (1) opening in the
block demising wall between 8210 Allison Avenue and the Expansion Space,
otherwise the Expansion Space will be provided on an "as-is" basis; the
lease term for the Expansion Space will terminate on September 30, 1999,
with Tenant having a right to renew for an additional three (3) months @
$3.95/sf as described in Addendum B. All other terms and conditions shall
be the same as the Lease.
2. Landlord will have HVAC equipment checked and serviced prior to Tenant's
occupancy (office air conditioning will be checked and serviced in
appropriate outside temperatures).
3. Any capital expenditures required to be made by Tenant under Paragraph 11
will be made by Landlord and its own cost, and such cost will be amortized
over its useful life and such amortized costs will be charged back to
Tenant as operating expenses over the remaining lease term.
- 20 -
<PAGE> 21
ADDENDUM D
LANDLORD'S OBLIGATIONS TO PERFORM MODIFICATIONS REQUIRED BY LAW
ATTACHED TO AND A PART OF THE LEASE AGREEMENT
DATED MARCH 20, 1998, BETWEEN
SCI NORTH CAROLINA LIMITED PARTNERSHIP
and
BRIGHTPOINT NORTH AMERICA, INC.
Landlord shall make such modifications as may be required by order or
directive of applicable governmental authority in order to bring the Building
(but not the Premises' interior) into compliance with applicable laws as of the
Commencement Date without cost or expense to Tenant and without including such
cost or expense as an Operating Expense. Any exterior modifications made by
Landlord that are required by applicable laws or regulations that become
effective after the Commencement Date or that are required as a result of the
Tenant's use of the Premises shall be chargeable to Landlord.
Any interior modifications made by Landlord that are required by
applicable laws or regulations that become effective after the Commencement
Date or that are required as a result of the Tenant's use of the interior will
be amortized over a five (5) year amortization schedule, and the Landlord will
charge the amortized costs back to the Tenant as operating expenses over the
remaining Lease Term.
<PAGE> 22
LEASE SURRENDER AGREEMENT
THIS AGREEMENT is executed as of the 9th day of March, 1998, by and
between SCI North Carolina Limited Partnership ("Landlord") and Brightpoint,
Inc. ("Tenant").
RECITALS:
WHEREAS, Lessor, by a Lease dated 21st day of October, 1997, leased to
Lessee certain premises known as 5801 West 82nd Street, Suite 105,
Indianapolis, Indiana (hereinafter the "Demised Premises"), and being more
particularly described in said Lease, and;
WHEREAS, Landlord and Tenant executed that certain Extension Agreement
dated January 14, 1998, whereby Landlord leased the premises ("Leased
Premises") described therein to Tenant.
WHEREAS, Tenant desires to terminate the Lease in order to be relieved of
all liability for future rentals thereunder, and Landlord has agreed to
terminate the Lease and release Tenant in accordance with the terms hereof.
AGREEMENT:
The parties hereto hereby acknowledge, confirm and agree that the
foregoing recitals are true.
Effective as of April 30, 1998 ("Termination Date"), the Tenant hereby
surrenders the Lease and the Leased Premises demised by the Lease, and all
rights thereunder, with the intent that the unexpired residue of the term of
the Lease and any renewals shall be merged and extinguished in the reversion to
the Landlord; and the Tenant hereby releases, as of the Termination Date, all
of its rights, title and interest in, and in respect of, the Lease and the
Leased Premises. Tenant covenants, agrees and represents that it shall have no
further right to possession of the Leased Premises from and after the
Termination Date.
The Tenant covenants and agrees that it has good right, full power and
authority to assign and surrender the Lease and the Leased Premises in the
manner aforesaid, and that, as of the Termination Date, it had not and, as of
the date hereof, it has not executed any other instruments, deeds, or other
documents pursuant to which the Lease and the unexpired residue of the term
thereof, including any renewals, shall in any way be charged, encumbered,
transferred, or assigned.
The effect of this agreement is that the Termination Date is the
expiration of the Lease Term, and the parties shall remain obligated under the
Lease for any obligations that survive the expiration of the Lease Term as
provided therein.
As of the Termination Date, the Tenant confirms and represents that it
does not have any claims against the Landlord in respect of any default or
obligation of the Landlord pursuant to the terms of the Lease or otherwise,
that the Landlord does not hold any deposits of any nature against which the
Tenant has a claim now or against which the Tenant may have a claim in the
future, and that the Tenant has not permitted any mechanics' lien to be
attached to its interest in the Leased Premises.
This Agreement shall be binding upon and enure to the benefit of Landlord
and Tenant and their respective successors and assigns.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the day
and year set forth above.
LANDLORD:
SCI North Carolina Limited Partnership
- 22 -
<PAGE> 23
By: /s/ Walter C. Rakowich
-------------------------
Name: Walter C. Rakowich
-----------------------
Title: Managing Director
----------------------
TENANT:
Brightpoint, Inc.
------------------
By: /s/ Steven E. Fivel
-------------------------
Name: Steven E. Fivel
-----------------------
Title: Executive Vice President/General Counsel
----------------------------------------
- 23 -
<PAGE> 1
INDUSTRIAL LEASE
between
IP PROPERTIES,
A WYOMING LIMITED LIABILITY COMPANY
(Landlord)
and
Brightpoint North America, Inc.,
an Indiana Corporation
(Tenant)
<PAGE> 2
TABLE OF CONTENTS
INDUSTRIAL LEASE
<TABLE>
<CAPTION>
Article Title Page
- ------- ----- ----
<S> <C> <C>
1 Definitions 1
2 Premises 2
3 Term 2
4 Rental; Adjustments 2
5 Security Deposit 5
6 Use of Premises 6
7 Utilities and Services 7
8 Maintenance and Repairs 8
9 Alterations, Additions and Improvements 9
10 Indemnifications and Insurance 10
11 Damage or Destruction 12
12 Condemnation 12
13 Relocation 13
14 Assignment and Subletting 13
15 Default and Remedies 14
16 Attorneys' Fees; Costs of Suit 16
17 Subordination and Attornment 16
18 Quiet Enjoyment 17
19 Parking 17
20 Rules and Regulations 18
21 Estoppel Certificates 18
22 Entry by Landlord 18
Landlord's Lease Undertakings-Exculpation from
23 Personal Liability; Transfer of Landlord's Interest 18
24 Surrender; Holdover Tenancy 19
25 Notices 19
26 Brokers 20
27 Electronic Services 20
28 Miscellaneous 21
29 Floor Load Limits 23
</TABLE>
<PAGE> 3
<TABLE>
<S> <C> <C>
30 Landlord's Lien 23
31 Uniform Commercial Code 23
</TABLE>
EXHIBITS
<TABLE>
<S> <C>
Exhibit A Floor Plan
Exhibit B Work Letter Agreement
Exhibit C Suite Acceptance Agreement
Exhibit D Tenant Operations Inquiry
Schedule 1
to Exhibit D List of Permissible Hazardous Materials and Quantities for Tenant
Exhibit E List of Additional Insureds
Exhibit F Rules and Regulations
Exhibit G Guaranty
</TABLE>
2
<PAGE> 4
INDUSTRIAL LEASE
INDIANAPOLIS INDUSTRIALS
[FORM GROSS LEASE/MULTI-TENANT]
THIS LEASE ("Lease"), dated __________________________________, is made
and entered into by and between IP PROPERTIES, a Wyoming Limited Liability
Company ("Landlord") and Brightpoint North America, Inc., an Indiana
Corporation ("Tenant") upon the following terms and conditions:
ARTICLE I - DEFINITIONS
Unless the context otherwise specifies or requires, the following terms
shall have the meanings specified herein;
1.01 BUILDING. The term "Building" shall mean that certain
office/warehouse building located at: 6049 Lakeside Blvd., Indianapolis,
Indiana 46278, together with any related site land, improvements, parking
facilities, common areas, driveways, sidewalks and landscaping. If the
Building is in a development containing one or more other buildings, such
buildings together with all related site land, improvements, parking
facilities, common areas, driveways, sidewalks and landscaping, and together
with the Building, shall be referred to herein as the "Project".
1.02 PREMISES. The term "Premises" shall mean Space No. 6049 in the
Building, as more particularly outlined on the drawing attached hereto as
Exhibit A and incorporated herein by reference.
1.03 RENTABLE AREA OF THE PREMISES. The term "Rentable Area of the
Premises" shall mean 23,990 square feet, which Landlord and Tenant have
stipulated as the Rentable Area of the Premises. Tenant acknowledges that the
Rentable Area of the Premises includes the usable area, without deduction for
columns or projections, multiplied by a load factor to reflect a share of
certain areas, which may include lobbies, corridors, mechanical, utility,
janitorial, boiler and service rooms and closets, restrooms and other public,
common and service areas of the Building.
1.04 LEASE TERM. The term "Lease Term" or "Term" shall mean the period
between the Commencement Date and the Expiration Date (as such terms are
hereinafter defined), unless sooner terminated or renewed as otherwise provided
in this Lease.
1.05 COMMENCEMENT DATE. The term "Commencement Date" shall mean April 1,
1998.
1.06 EXPIRATION DATE. The term "Expiration Date" shall mean December 31,
1999.
1.07 BASE RENT. Subject to adjustment as provided in Article 4, the term "
Base Rent" shall mean eighteen thousand nine hundred ninety two and
08/100 Dollars ($18,992.08) per month.
1.08 TENANT'S PERCENTAGE SHARE. The term "Tenant's Percentage Share"
shall mean 27.3 percent (27.3%) with respect to Operating Expenses (as
hereinafter defined), 27.3 percent (27.3%) with respect to Property Taxes (as
hereinafter defined), 27.3 percent (27.3%) with respect to Insurance Expenses
(as hereinafter defined) and 27.3 percent (27.3%) with respect to Tenant's law
compliance obligations under Section 6.02(C) of this Lease and for all other
purposes under this Lease. Landlord may reasonably redetermine Tenant's
Percentage Share from time to time to reflect reconfigurations, additions or
modifications to the Building.
1.09 SECURITY DEPOSIT. The term "Security Deposit" shall mean $0.00.
1.10 TENANT'S PERMITTED USE. The term "Tenant's Permitted Use" shall
mean general office and storage of wireless/cellular equipment and related
products and no other use.
1
<PAGE> 5
1.11 LANDLORD'S ADDRESS FOR NOTICES. The term "Landlord's Address for
Notices" shall mean Heitman Properties of Indiana Ltd., 5925 West 71st Street,
Suite A, Indianapolis, Indiana 46278, with a copy to Heitman Properties Ltd.,
180 North LaSalle Street, Suite 3600, Chicago, Illinois 60601, Attn: Property
Management.
1.12 TENANT'S ADDRESS FOR NOTICES. The term "Tenant's Address for
Notices" shall mean
Attention: Mr. Steve Fivel, Brightpoint, Inc., Corporate Headquarters 6402
Corporate Drive, Indianapolis, Indiana 46278 with copy to Mr. Karl P. Haas,
Baker and Daniels, 300 North Meridian Street, Suite 2700, Indianapolis, Indiana
46204-1782.
1.13 BROKER. The term "Broker" shall mean Heitman Properties of Indiana
Ltd. and Browning Investments, Inc.
1.14 GUARANTOR. The term "Guarantor" shall mean (N/A).
ARTICLE II - PREMISES
2.01 LEASE OF PREMISES. Landlord hereby leases the Premises to Tenant,
and Tenant hereby leases the Premises from Landlord, upon all of the terms,
covenants and conditions contained in this Lease. On the Commencement Date
described herein, Landlord shall deliver the Premises to Tenant in the
condition described in Section 2.02 below and in substantial conformance with
the Work Letter Agreement attached hereto as Exhibit B, if any.
2.02 ACCEPTANCE OF PREMISES. Tenant acknowledges that Landlord has not
made any representation or warranty with respect to the condition of the
Premises or the Building or with respect to the suitability or fitness of
either for the conduct of Tenant's Permitted Use or for any other purpose,
except that Landlord shall ensure that any existing heating, ventilating and
air conditioning ("HVAC") equipment serving the Premises is in good working
order and repair as of the Commencement Date (and Tenant shall thereafter keep
such equipment in good working order and repair as provided in Section 8.02
hereof). Prior to Tenant's taking possession of the Premises, Landlord or its
designee and Tenant will walk the Premises for the purpose of reviewing the
condition of the Premises (and the condition of completion and workmanship of
any tenant improvements which Landlord is required to construct in the Premises
pursuant to this Lease); after such review, Tenant shall execute a Suite
Acceptance Letter in the form and content of Exhibit C attached hereto,
accepting the Premises. Except as is expressly set forth in this Section 2.02
or the Work Letter Agreement attached hereto, if any, or as may be expressly
set forth in said Suite Acceptance Letter, Tenant agrees to accept the Premises
in its "as is" physical condition without any agreements, representations,
understandings or obligations on the part of Landlord to perform any
alterations, repairs or improvements (or to provide any allowance for same).
SEE ADDENDUM TO LEASE ITEM #2
2.03 COMMON AREAS. Tenant and Tenant's employees and invitees may use the
common areas of the Building, and the Project, if applicable, on a
non-exclusive basis in common with all other parties to whom the right to use
such common areas has been or is hereafter granted. Tenant shall not interfere
in any way with the use of the common areas by such other parties, and Tenant's
use of the common areas shall be subject to the other provisions of this Lease.
Landlord shall administer, operate, clean, maintain and repair the common
areas of the Building, and the Project, if applicable, and the costs and
expenses thereof shall be included in the definition of "Operating Expenses"
set forth below. If the Building is in a Project containing one or more other
buildings, Landlord may designate separate common areas for the Building, for
the Project as a whole ("Project Common Areas"), and for other portions of the
Project ("Other Common Areas"). In such case, Tenant and Tenant's employees
and invitees shall not use the Other Common Areas.
2
<PAGE> 6
ARTICLE III - TERM
3.01 Except as otherwise provided in this Lease, the Lease Term shall be
for the period described in Section 1.04 of this Lease, commencing on the
Commencement Date described in Section 1.05 of this Lease and ending on the
Expiration Date described in Section 1.06 of this Lease.
ARTICLE IV - RENTAL; ADJUSTMENTS
4.01 DEFINITIONS. As used herein,
(A) "Base Year" shall mean the 1998 calendar year.
(B) "Property Taxes" shall mean the aggregate amount of all real
estate taxes, assessments (whether they be general or special), sewer
rents and charges, transit taxes, taxes based upon the receipt of rent
and any other federal, state or local governmental charge, general,
special, ordinary or extraordinary (but not including delinquent taxes or
income or franchise taxes, capital stock, inheritance, estate, gift, or
any other taxes imposed upon or measured by Landlord's gross income or
profits, unless the same shall be imposed in lieu of real estate taxes or
other ad valorem taxes), which Landlord shall pay or become obligated to
pay in connection with the Building or the Project, if applicable, or any
part thereof. Property Taxes shall also include all fees and costs,
including attorneys' fees, appraisals and consultants' fees, incurred by
Landlord in seeking to obtain a reassessment, reduction of, or a limit on
the increase in, any Property Taxes, regardless of whether any reduction
or limitation is obtained. Property Taxes for any calendar year shall be
Property Taxes which are due for payment or paid in such year. Property
Taxes shall include any tax, assessment, levy, imposition or charge
imposed upon Landlord and measured by or based in whole or in part upon
the Building or the Project, if applicable, or the rents or other income
from the Building or the Project, if applicable, to the extent that such
items would be payable if the Building or the Project, if applicable, was
the only property of Landlord subject to same and the income received by
Landlord from the Building or the Project, if applicable, was the only
income of Landlord. Property Taxes shall also include any personal
property taxes imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems and appurtenances of Landlord used solely
in connection with the Building or the Project, if applicable.
(C) "Operating Expenses" shall mean all costs, fees, disbursements
and expenses paid or incurred by or on behalf of Landlord in the
operation, ownership, maintenance, administration, insurance, management,
replacement and repair of the Building or the Project, if applicable,
(excluding Property Taxes and Insurance Expenses). If the Building is
part of a Project containing one or more other buildings: (i) Landlord
may reasonably allocate expenses (or categories thereof) incurred in
connection with the Project Common Areas between such buildings (based on
the relative square footage thereof or such other factors as Landlord
reasonably deems appropriate), in which case the amount allocated to the
Building shall be added to "Operating Expenses" for the Building for such
year, or (ii) Landlord may determine expenses (or categories thereof)
incurred in connection with the Project Common Areas as a whole, in which
case Tenant's Percentage Share of "Operating Expenses" shall be based on
the Rentable Area of the Premises as a percentage of the total rentable
area in all buildings in the Project (excluding single tenant buildings
for which the tenants maintain the Other Common Areas applicable thereto)
and Tenant shall pay Tenant's Percentage Share of Operating Expenses for
the Project.
Operating Expenses shall not include costs of alteration of the
premises of tenants of the Building or the Project, if applicable,
depreciation charges, interest and principal payments on mortgages,
ground rental payments, real estate brokerage and leasing commissions,
expenses incurred in enforcing obligations of tenants of the Building or
the Project, if applicable, salaries and other compensation of executive
officers of the managing agent of the Building or the Project, if
applicable, senior to the Building manager, costs of any special service
provided to any one tenant of the Building or the Project, if applicable,
but not
3
<PAGE> 7
to tenants of the Building or the Project, if applicable, generally, and
costs of marketing or advertising the Building or the Project, if
applicable. SEE ADDENDUM TO LEASE ITEM #4
(D) "Insurance Expenses" shall mean all costs, fees, disbursements
and expenses paid or incurred by or on behalf of Landlord for premiums
for hazard, "all risk", casualty, rent interruption and liability
insurance and all other insurance, obtained by Landlord in connection
with or relating to the Building or the Project, if applicable.
4.02 BASE RENT. During the Lease Term, Tenant shall pay to Landlord as
rental for the Premises the Base Rent described in Section 1.07 above, subject
to the following annual adjustments (herein called the "Rent Adjustments"):
(A) INTENTIONALLY OMITTED
(B) During each calendar year during the Lease Term, the Base Rent
payable by Tenant to Landlord, as adjusted pursuant to this Lease, shall
be increased by Tenant's Percentage Share of the dollar increase, if any,
in Property Taxes for such year over Property Taxes for the Base Year
(the "Tax Adjustment").
(C) During each calendar year during the Lease Term, the Base Rent
payable by Tenant to Landlord, as adjusted pursuant to this Lease, also
shall be increased by Tenant's Percentage Share of the dollar increase,
if any, in Operating Expenses for such year over Operating Expenses for
the Base Year (the "Operating Expense Adjustment").
(D) During each calendar year during the Lease Term, the Base Rent
payable by Tenant to Landlord, as adjusted pursuant to this Lease, also
shall be increased by Tenant's Percentage Share of the dollar increase,
if any, in Insurance Expenses for such year over Insurance Expenses for
the Base Year (the "Insurance Adjustment").
(E) The Tax Adjustment, the Operating Expense Adjustment and the
Insurance Adjustment are hereinafter referred to collectively as the
"Tax, Operating Expense and Insurance Adjustments").
4.03 ADJUSTMENT PROCEDURE; ESTIMATES. The Tax, Operating Expense and
Insurance Adjustments specified in Sections 4.02(B), 4.02(C) and 4.02(D) shall
be determined and paid as follows:
(A) During each calendar year subsequent to the Base Year,
Landlord shall give Tenant written notice of Landlord's estimate of any
increased Tax Adjustment, Operating Expense Adjustment and Insurance
Adjustment amounts for that calendar year. During each calendar year
during the Lease Term, Landlord shall give Tenant written notice of
Landlord's estimate of any increased Operating Expense Adjustment amount
for that calendar year. On or before the first day of each calendar
month during the calendar year, Tenant shall pay to Landlord one-twelfth
(1/12th) of such estimated amounts; provided, however, that, not more
often that quarterly, Landlord may, by written notice to Tenant, revise
its estimate for such year, and subsequent payments by Tenant for such
year shall be based upon such revised estimate.
(B) Within one hundred twenty (120) days after the close of each
calendar year in which any Rent Adjustment is made or as soon thereafter
as is practicable, Landlord shall deliver to Tenant a statement of that
year's Property Taxes, Operating Expenses and Insurance Expenses, and the
actual Tax, Operating Expense and Insurance Expense Adjustments to be
made pursuant to Sections 4.02(B), 4.02(C) and 4.02(D) for such calendar
year, as determined and certified by Landlord (the "Landlord's
Statement") and such Landlord's Statement shall be binding upon Tenant,
except as provided in Section 4.04 below. If the amount of the actual
Tax Adjustment, Insurance Adjustment or Operating Expense Adjustment is
more than the estimated payments for the Tax Adjustment, Insurance
Adjustment or Operating Expense Adjustment for such calendar year made by
Tenant, Tenant shall pay the deficiency to Landlord within 20 days of
receipt of Landlord's Statement. If the amount of the actual Tax
Adjustment, Insurance
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Adjustment or Operating Expense Adjustment is less than the estimated
payments for such calendar year made by Tenant, any excess shall be
credited against Rent (as hereinafter defined) next payable by Tenant
under this Lease or, if the Lease Term has expired, any excess thereof
shall be paid to Tenant. No delay in providing the statements described
in this Section 4.03(B) shall act as a waiver of Landlord's right to
payment under Sections 4.02(B), 4.02(C) or 4.02(D) above.
Notwithstanding the foregoing, Tenant's right to receive any credit or
payment pursuant to the preceding sentences of this Section 4.03(B) is
conditioned on this Lease either then being in full force and effect and
Tenant not being in default under this Lease on the date such credit or
payment is due or if the Term shall have expired, Tenant not having been
in default on the date of such expiration unless such default is first
cured by the withholding of all or part of such payment.
(C) If this Lease shall terminate on a day other than the end of a
calendar year, the amount of the Tax, Operating Expense and Insurance
Adjustments to be paid pursuant to Sections 4.02(B), 4.02(C) and 4.02(D)
that is applicable to the calendar year in which such termination occurs
shall be prorated on the basis of the number of days from January 1 of
the calendar year to the termination date bears to 365. The termination
of this Lease shall not affect the obligations of Landlord and Tenant
pursuant to Sections 4.03(B) and 4.03(C) to be performed after such
termination.
4.04 REVIEW OF LANDLORD'S STATEMENT. Provided this Lease is in full
force and effect and that Tenant is not then in default under this Lease and
provided further that Tenant strictly complies with the provisions of this
Section 4.04, Tenant shall have the right, once each calendar year, to
reasonably review supporting data for any portion of a Landlord's Statement
that Tenant claims is incorrect, in accordance with the following procedure:
(A) Tenant shall, within thirty (30) business days after any such
Landlord's Statement is delivered, deliver a written notice to Landlord
specifying the portions of the Landlord's Statement that are claimed to
be incorrect, and Tenant shall simultaneously pay to Landlord all amounts
due from Tenant to Landlord as specified in the Landlord's Statement.
Except as expressly set forth in subsection (C) below, in no event shall
Tenant be entitled to withhold, deduct, or offset any monetary obligation
of Tenant to Landlord under the Lease (including, without limitation,
Tenant's obligation to make all payments of Base Rent including the CPI
Adjustment and all payments of Tenant's Tax, Operating Expense and
Insurance Adjustments) pending the completion of and regardless of the
results of any review of records under this Section 4.04. The right of
Tenant under this Section 4.04 may only be exercised once for any
Landlord's Statement, and if Tenant fails to meet any of the above
conditions as a prerequisite to the exercise of such right, the right of
Tenant under this Section 4.04 for a particular Landlord's Statement
shall be deemed waived.
(B) Tenant acknowledges that Landlord maintains its records for
the Building or the Project, if applicable, at Landlord's manager's
corporate offices and Tenant agrees that any review of records under this
Section 4.04 shall be at the sole expense of Tenant and shall be
conducted by an independent firm of certified public accountants of
national standing. Tenant acknowledges and agrees that any records
reviewed under this Section 4.04 constitute confidential information of
Landlord, which shall not be disclosed to anyone other than the
accountants performing the review and the principals of Tenant who
receive the results of the review. The disclosure of such information to
any other person, whether or not caused by the conduct of Tenant, shall
constitute a material breach of this Lease.
(C) Any errors disclosed by the review shall be promptly corrected
by Landlord, provided, however, that if Landlord disagrees with any such
claimed errors, Landlord shall have the right to cause another review to
be made by an independent firm of certified public accountants of
national standing. In the event of a disagreement between the two
accounting firms, the review that discloses the least amount of deviation
from the Landlord's Statement shall be deemed to be correct. In the
event that the results of the review of records (taking into account, if
applicable, the results of any additional review caused by Landlord)
reveal that Tenant has overpaid obligations for a preceding period, the
amount of such overpayment shall be credited against Tenant's subsequent
installment obligations to pay the estimated Tax, Operating Expense and
Insurance Adjustments, if any, or paid to Tenant. In the event that such
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results show that Tenant has underpaid its obligations for a preceding
period, Tenant shall be liable for Landlord's actual accounting fees, and
the amount of such underpayment shall be paid by Tenant to Landlord with
the next succeeding installment obligation of estimated Tax, Operating
Expense and Insurance Adjustment.
4.05 PAYMENT. Concurrently with the execution hereof, Tenant shall pay
Landlord Base Rent for the first calendar month of the Lease Term. Thereafter
the Base Rent described in Section 1.07, as adjusted in accordance with Section
4.02, shall be payable in advance on the first day of each calendar month. If
the Commencement Date is other than the first day of a calendar month, the
prepaid Base Rent for such partial month shall be prorated in the proportion
that the number of days this Lease is in effect during such partial month bears
to the total number of days in the calendar month. All Rent, and all other
amounts payable to Landlord by Tenant pursuant to the provisions of this Lease,
shall be paid to Landlord, without notice, demand, abatement, deduction or
offset, in lawful money of the United States at Landlord's office in the
Building or to such other person or at such other place as Landlord may
designate from time to time by written notice given to Tenant. No payment by
Tenant or receipt by Landlord of a lesser amount than the correct Rent due
hereunder shall be deemed to be other than a payment on account; nor shall any
endorsement or statement on any check or any letter accompanying any check or
payment be deemed to effect or evidence an accord and satisfaction; and
Landlord may accept such check or payment without prejudice to Landlord's right
to recover the balance or pursue any other remedy in this Lease or at law or in
equity provided.
4.06 LATE CHARGE; INTEREST. Tenant acknowledges that the late payment of
Base Rent or any other amounts payable by Tenant to Landlord hereunder (all of
which shall constitute additional rental to the same extent as Base Rent) will
cause Landlord to incur administrative costs and other damages, the exact
amount of which would be impracticable or extremely difficult to ascertain.
Landlord and Tenant agree that if Landlord does not receive any such payment on
or before five (5) days after the date the payment is due, Tenant shall pay to
Landlord, as additional rent, (a) a late charge equal to five percent (5%) of
the overdue amount to cover such additional administrative costs; and (b)
interest on the delinquent amounts at the lesser of the maximum rate permitted
by law if any or twelve percent (12%) per annum from the date due to the date
paid.
4.07 ADDITIONAL RENT. Any amounts due Landlord shall sometimes be
referred to in this Lease as "Rent" or "Base Rent".
4.08 ADDITIONAL TAXES. In addition to the Rent and other charges to be
paid by Tenant hereunder, Tenant shall reimburse Landlord upon demand for all
taxes payable by or imposed upon Landlord, subject to the limitations set forth
elsewhere in this Article IV, upon or with respect to: any fixtures or
personal property located in the Premises; any leasehold improvements made in
or to the Premises by or for Tenant; the Rent payable hereunder, including,
without limitation, any gross receipts tax, license fee or excise tax levied by
any governmental authority; the possession, leasing, operation, management,
maintenance, alteration, repair, use or occupancy of any portion of the
Premises (including, without limitation, any applicable possessory interest
taxes); or this transaction or any document to which Tenant is a party creating
or transferring an interest or an estate in the Premises.
ARTICLE V - SECURITY DEPOSIT
5.01 INTENTIONALLY OMITTED
ARTICLE VI - USE OF PREMISES
6.01 TENANTS PERMITTED USE. Tenant shall use the Premises only for
Tenant's Permitted Use as set forth in Section 1.10 above and shall not use or
permit the Premises to be used for any other purpose. Tenant shall, at its
sole cost and expense, obtain all governmental licenses and permits required to
allow Tenant to conduct Tenant's Permitted Use. Landlord disclaims any
warranty that the Premises are suitable for Tenant's use and Tenant
acknowledges that it has had a full opportunity to make its own determination
in this regard.
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6.02 COMPLIANCE WITH LAWS AND OTHER REQUIREMENTS.
(A) Tenant shall cause the Premises to comply in all material
respects with all laws, ordinances, regulations and directives of any
governmental authority having jurisdiction including, without limitation,
any certificate of occupancy and any law, ordinance, regulation,
covenant, condition or restriction affecting the Building or the Premises
which in the future may become applicable to the Premises (collectively
"Applicable Laws") to the extent that such Applicable Laws result from
Tenant's specific use of the Premises as set forth in Section 1.10.
(B) Tenant shall not use the Premises, or permit the Premises to
be used, in any manner which: (a) violates any Applicable Law; (b)
causes or is reasonably likely to cause damage to the Building or the
Project, if applicable, or the Premises; (c) violates a requirement or
condition of any fire and extended insurance policy covering the Building
or the Project, if applicable, and/or the Premises, or increases the cost
of such policy; (d) constitutes or is reasonably likely to constitute a
nuisance, annoyance or inconvenience to other tenants or occupants of the
Building or the Project, if applicable, or their equipment, facilities or
systems; (e) interferes with, or is reasonably likely to interfere with,
the transmission or reception of microwave, television, radio, telephone
or other communication signals by antennae or other facilities located in
the Building or the Project, if applicable; or (f) violates the Rules and
Regulations described in Article XX. Upon the commencment date, Landlord
shall deliver the Premises to Tenant in such condition that the same
shall not be in violation of any applicable building codes, laws or
regulations.
(C) In addition to any other amounts payable by Tenant to Landlord
hereunder, Tenant shall pay to Landlord, as and when billed to Tenant and
as additional rental, Tenant's Percentage Share of the cost of any
improvements, capital expenditures, repairs or replacements to the
Building or the Project, if applicable, or any equipment or machinery
used in connection with the Building or the Project, if applicable, if
any such item is required under any Applicable Law as of the date of this
Lease and throughout the Lease Term; provided, however, that any such
costs which are properly charged to a capital account (together with
reasonable financing charges) shall be amortized for purposes of this
Lease over the shorter of (i) their useful lives, or (ii) three (3)
years, and only the annual amortization amount (prorated based on the
number of days of the Lease term in the calendar year) shall be payable
by the Tenant with respect to any calendar year.
6.03 HAZARDOUS MATERIALS.
(A) No Hazardous Materials (as defined herein) shall be Handled
(as defined herein) upon, about, above or beneath the Premises or any
portion of the Building or the Project, if applicable, by or on behalf of
a Responsible Party (as defined herein) unless the Hazardous Materials
are listed in Exhibit D hereto and then only in the quantities listed in
the exhibit. Any such Hazardous Materials so Handled, or the presence or
migration of which is a result of the act or omission of a Responsible
Party, shall be known as Tenant's Hazardous Materials. Notwithstanding
the foregoing, Landlord acknowledges that, due to Tenant's permitted use
of the Premises, as indicated in Paragraph 6.01 of this Lease, Tenant
will occasionally Handle Hazardous Materials on the Premises which are in
transit to their final destination; however, such presence and Handling
of Hazardous Materials shall be in compliance with all applicable
federal, state, local and environmental laws and regulations and the
following guidelines: (i) no nuclear or explosive materials will be
Handled by Tenant on the Premises, except such radioactive isotopes as
Tenant may Handle from time to time; provided that such Handling shall be
in accordance with the U.S. Department of Transportation regulations and
the International Airtransport Association Dangerous Goods regulations;
(ii) all Hazardous Materials will be Handled in a well-marked area which
is segregated from other storage and handling areas and is used
exclusively for hazardous materials; (iii) Hazardous Materials will be
Handled in such a way that any such Materials which are incompatible or
reactive to each other shall be kept separate at all times such Materials
are on the Premises; (iv) Hazardous Materials shall only be Handled on
the Premises for a maximum period of twenty-four (24) hours; (v) Tenant
shall provide written documents or other written evidence to Landlord
upon execution of the Lease that all personnel
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who are responsible for the Handling or other contact with Hazardous
Materials have been properly trained, in accordance with any applicable
laws and/or regulations, to handle spills of Hazardous Materials and that
the required, appropriate spill response equipment is maintained on site;
(vi) Tenant will provide Landlord with written evidence that it is
maintaining the appropriate insurance coverage for the occasional
presence of such Hazardous Materials on the Premises upon execution of
this Lease; and (vii) Tenant will provide Landlord with written evidence
that all of its employees whose responsibilities include driving Tenant's
trucks or other vehicles are licensed in accordance with state, federal
and local laws and regulations to transport and Handle Hazardous
Materials. Also, notwithstanding the foregoing, normal quantities of
those Tenant Hazardous Materials customarily used in the conduct of
general administrative and executive office activities (e.g., copier
fluids and cleaning supplies) may be Handled at the Premises without
Landlord's prior written consent.
(B) Tenant's Hazardous Materials shall be Handled at all times in
compliance with the manufacturer's instructions therefore and all
applicable Environmental Laws (as defined herein). Tenant's Hazardous
Materials shall not be disposed of, released, discharged or permitted to
spill, leak or migrate upon about, above or beneath the Premises or any
portion of the Building.
(C) Tenant agrees to maintain only the Hazardous Materials listed
in Schedule 1 to Exhibit D in or at the Premises or the Building an only
in the quantities listed in Schedule 1 to Exhibit D. Tenant further
agrees that changes to the type and quantities of such Tenant's Hazardous
Materials may be done only with the prior written consent of the
Landlord, which consent shall not be unreasonably withheld. Tenant
further agrees that Landlord shall have the right to inspect the Building
to verify the types and quantities of the materials stored therein.
(D) Notwithstanding the obligation of Tenant to indemnify Landlord
pursuant to this Lease, Tenant shall, at its sole cost and expense,
promptly take all actions required by any Regulatory Authority, or
necessary for Landlord to make full economic use of the Premises or any
portion of the Building or the Project, if applicable, which requirements
or necessity arises from the Handling, presence or migration of Tenant's
Hazardous Materials upon, about, above or beneath the Premises or any
portion of the Building or Project, if applicable. Such actions shall
include, but not be limited to, the investigation of the environmental
condition of the Premises or any portion of the Building, or the Project,
if applicable, the preparation of any feasibility studies or reports and
the performance of any cleanup, remedial, removal or restoration work.
Tenant shall take all actions necessary to restore the Premises or any
portion of the Building or the Project, if applicable, to the condition
existing prior to the introduction of Tenant's Hazardous Materials,
notwithstanding any less stringent standards or remediation allowable
under applicable Environmental Laws. Tenant shall nevertheless obtain
Landlord's written approval prior to undertaking any actions required by
this Section, which approval shall not be unreasonably withheld so long
as such actions would not potentially have a material adverse long-term
or short-term effect on the Premises or any portion of the Building or
the Project, if applicable.
(E) Tenant shall immediately notify Landlord of; (i) its knowledge
of any disposal, release, discharge, spill, leak on, about, above, or
beneath, or any migration to or from the Premises or the Building of
Hazardous Materials, (ii) any inspection, enforcement, cleanup or other
regulatory action taken or threatened by any Regulatory Authority with
respect to any Hazardous Materials on, about, above, beneath or from the
Premises or the Building or the migration thereof from or to other
property, (iii) any demands or claims made or threatened by any party
relating to any loss or injury claimed to have resulted from any
Hazardous Materials on, about, above, beneath or from the Building, and
(iv) any matters where Tenant is required by Law to give a notice to any
Regulatory Authority concerning Hazardous Materials on or from the
Premises or the Building. Landlord shall have the right but not the
obligation to notify Regulatory Authorities concerning actual and claimed
violations of this Article.
(F) Tenant agrees to execute affidavits, representations and the
like from time to time at Landlord's request stating Tenant's best
knowledge and belief regarding the presence of Hazardous Materials in the
Premises or in or at the Building.
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(G) "Environmental Laws" means and includes all now and hereafter
existing statutes, laws, ordinances, codes, regulations, rules, rulings,
orders, decrees, directives, policies and requirements by any federal,
state or local governmental authority regulating, relating to, or
imposing liability or standards of conduct concerning public health and
safety or the environment.
(H) "Hazardous Materials" means: (a) any material or substance:
(i) which is defined or becomes defined as a "hazardous substance,"
"hazardous waste," "infectious waste," "chemical mixture or substance,"
or "air pollutant" under Environmental Laws; (ii) containing petroleum,
crude oil or any fraction thereof; (iii) containing polychlorinated
biphenyls (PCB's); (iv) containing asbestos; (v) which is radioactive;
(b) any other material or substance displaying toxic, reactive, ignitable
or corrosive characteristics, as all such terms are used in their
broadest sense, and are defined, or become defined by Environmental Laws;
or (c) materials which cause a nuisance upon or waste to the Premises or
any portion of the Building or the Project, if applicable.
(I) "Handle," "handle," "Handled," "handled," "Handling," or
"handling" shall mean any installation, handling, generation, storage,
treatment, use, disposal, discharge, release, manufacture, refinement,
emission, abatement, removal, transportation, or any other activity of
any type in connection with or involving Hazardous Materials.
(J) "Responsible Party" shall mean Tenant, its subtenants and its
assignees, and their respective contractors, clients, officers,
directors, employees, agents, and invitees, or any of them, as the case
may be.
(K) "Regulatory Authority" shall mean any federal, state or local
governmental agency, commission, board or political subdivision.
ARTICLE VII - UTILITIES AND SERVICES
7.01 SERVICES. Landlord shall permit Tenant to use any existing utility
service connection into the Premises and Tenant, at its sole expense, shall
arrange with the appropriate utility company to install all necessary
connections and without fail to maintain in continuous operation during the
entire term of the Lease, all such utility service, whether or not Tenant is in
actual possession of the Premises. Tenant shall pay to the appropriate utility
company or other provider directly, or at Landlord's election as provided in
Section 7.02 below, to Landlord, for all water, gas, heat, electricity, light,
power, sweeping and other janitorial services, rubbish and trash disposal, pest
and rodent control, sewer, steam, fire protection, alarm or other security
services and any other utilities and services supplied in, about or related to
the Premises, together with any taxes thereon, connection charges and deposits,
and also shall pay for all electrical light bulbs, lamps and tubes in
connection therewith. Landlord reserves the right during the Term of this
Lease to grant easements or public utility purposes on, over, or below the
Premises without any abatement in rent, provided that said easements do not
unreasonably interfere with the normal operation of the business conducted by
Tenant in the Premises. Landlord shall not be required to pay for any service,
supplies or upkeep in connection with the Premises. Tenant shall arrange for
and pay for all telephone and other communication services and equipment,
including any additions or alterations to the existing telephone service boards
and conduit, which shall be completed without interference to the service
and/or equipment of other tenants in the Building or the Project, if
applicable, and which shall be appropriately labeled upon the termination of
this Lease.
7.02 SEPARATE METERING. If any utilities are not separately metered for
the Premises, Landlord may: require that Tenant make reasonable arrangements
to share such utilities with the other parties whose premises are on such meter
and require that Tenant pay Landlord a share of such utilities based on the
Rentable Area of the Premises as a percentage of the total rentable area of
occupied space that is jointly metered. In such case, either Landlord or
Tenant may elect to install separate meters (but the costs of installing,
maintaining and reading such meters shall be borne by Tenant). Landlord may
reasonably estimate in advance any amounts payable by Tenant to Landlord
hereunder and Tenant shall pay such amounts within twenty (20) days after the
same are billed, subject to
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periodic adjustment (and additional payment by Tenant or credit or refund by
Landlord) after the actual amounts have been determined.
7.03 INSTALLATION, CONNECTION AND USE OF UTILITY EQUIPMENT. Tenant shall
install and connect all equipment and lines required to supply such utilities
to the extent not already available at or serving the Premises, or at
Landlord's option shall repair, alter or replace any such existing items (or
Tenant shall share the costs thereof for any equipment shared with other
tenants), subject to the terms of Section 2.02 hereof. Tenant shall maintain,
repair and replace all such items, operate the same, and keep the same in good
working order, condition and repair, as provided in Section 8.02. Tenant shall
not install any equipment or fixtures, or use the same, so as to exceed the
safe and lawful capacity of any utility equipment or lines serving the same.
The installation, alteration, replacement or connection of any utility
equipment and lines shall be subject to the requirements for Alterations of the
Premises set forth in Article 9. Tenant shall ensure that any supplemental
HVAC equipment is installed and all HVAC equipment is operated at all times in
a manner to prevent roof leaks, damage or noise due to vibrations or improper
installation, maintenance or operation. Tenant shall at all times keep the
Premises sufficiently heated to avoid freezing of pipes.
7.04 INTERRUPTION OF SERVICES. Landlord shall not be liable for any
failure to furnish, stoppage of, or interruption in furnishing any of the
services or utilities described in Section 7.01, when such failure is caused by
accident, breakage, repairs, strikes, lockouts, labor disputes, labor
disturbances, governmental regulation, civil disturbances, acts of war,
moratorium or other governmental action, or any other cause beyond Landlord's
reasonable control, and, in such event, Tenant shall not be entitled to any
damages nor shall any failure or interruption abate or suspend Tenant's
obligation to pay Base Rent and additional rent required under this Lease or
constitute or be construed as a constructive or other eviction of Tenant.
Further, in the event any governmental authority or public utility promulgates
or revises any law, ordinance, rule or regulation, or issues mandatory controls
or voluntary controls relating to the use or conservation of energy, water,
gas, light or electricity, the reduction of automobile or other emissions, or
the provision of any other utility or service, Landlord may take any reasonably
appropriate action to comply with such law, ordinance, rule, regulation,
mandatory control or voluntary guideline and Tenant's obligations hereunder
shall not be affected by any such action of Landlord. The parties acknowledge
that safety and security devices, services and programs provided by Landlord,
if any, while intended to deter crime and ensure safety, may not in given
instances prevent theft or other criminal acts, or ensure safety of persons or
property. The risk that any safety or security device, service or program may
not be effective, or may malfunction, or be circumvented by a criminal, is
assumed by Tenant with respect to Tenant's property and interests, and Tenant
shall obtain insurance coverage to the extent Tenant desires protection against
such criminal acts and other losses, as further described in this Lease.
Tenant agrees to cooperate in any reasonable safety or security program
developed by Landlord or required by Law.
Any amounts which Tenant is required to pay to Landlord pursuant to this
Article VII shall be payable upon demand by Landlord and shall constitute
additional rent or Rent under this Lease.
ARTICLE VIII - MAINTENANCE AND REPAIRS
8.01 LANDLORD'S OBLIGATIONS.
(A) During the Lease Term, Landlord shall, at its expense,
maintain only the foundation and the structural soundness of the exterior
walls (excluding all windows, plate glass, doors and pest control and
extermination) of the portion of the Building containing the Premises in
good working order, repair and condition except for reasonable wear and
tear. Landlord also shall maintain, at its expense, subject to
reimbursement as part of Operating Expenses, the roof, downspouts and
fire safety sprinkler system of the Building. If Tenant determines that
any such repair or maintenance by Landlord is required, Tenant shall
promptly give written notice to Landlord of the need for such repair or
maintenance and unless Landlord in good faith disagrees with such
determination by Tenant, Landlord shall proceed with reasonable
promptness to perform such maintenance. Landlord shall not be liable to
Tenant, except as otherwise expressly provided in this Lease, for any
damage or inconvenience. Tenant shall not be entitled to any
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abatement or reduction of Rent by reason of any repairs, alterations or
additions made by Landlord under this Lease. Landlord shall use
reasonable efforts in fullfilling its obligations under this Lease to
minimize the interference with Tenant's operations, however Landlord
shall have no liability for any such interference unless resulting from
the willful actions of Landlord.
(B) Tenant shall, at its sole cost, pay for any damage to the
foundation and/or external walls of the Building, or the Project, if
applicable, caused by any act, omission, negligence or fault of Tenant or
any employee, agent or contractor of Tenant.
8.02 TENANT'S OBLIGATIONS. During the Lease Term, Tenant shall, at its
risk and at its sole cost and expense, maintain all other parts of the Building
and other improvements in or on the Premises in good working order, repair and
condition (including all necessary replacements), including, but not limited
to, HVAC systems, all glass elements, doors (including dock doors), dock
bumpers, light bulbs, light fixtures, Landlord shall perform lawn and other
common area maintenance (including, without limitation, exterior painting and
maintenance of any HVAC system serving the common areas of the Building or
serving the Premises as well as other premises in the Building) and in such
instance Tenant agrees to pay Landlord for lawn and other common area
maintenance (including, without limitation, exterior painting and HVAC
maintenance) based on Tenant's Percentage Share with respect to Operating
Expenses, as provided in Article IV hereof (or, with respect to HVAC
maintenance, based on the ratio of the Rentable Area of the Premises to the
rentable area of all premises served by said HVAC system). Tenant shall take
good care of all property and its fixtures, including all landscaping, and
suffer no waste. Tenant shall engage a certified pest control firm to perform
regular (not less frequent than monthly but more frequent if Landlord
determines the need therefor) extermination for pests including, but not
limited to, roaches, rodents and termites. Should Tenant neglect to keep and
maintain the Premises as required herein, the Landlord shall have the right,
but not the obligation, to have the work done and any reasonable costs plus a
ten percent (10%) overhead charge therefor shall be charged to Tenant as
additional rental and shall become payable by Tenant with the payment of the
rental next due under this Lease. In connection with Tenant's maintenance and
repair of the HVAC systems, Tenant shall provide Landlord during the Term of
this Lease and any renewal hereof with a duplicate original of a maintenance
contract, in form and substance acceptable to Landlord, with an HVAC
maintenance firm acceptable to Landlord. Further, Tenant shall be responsible
for, and upon demand by Landlord shall promptly reimburse Landlord for, any
damage to any portion of the Project, if applicable, the Building or the
Premises caused by (a) Tenant's activities in the Building or the Premises; (b)
the performance or existence of any alterations, additions or improvements made
by Tenant in or to the Premises; (c) the installation, use, operation or
movement of Tenant's property in or about the Building or the Premises; or (d)
any act or omission by Tenant or its officers, partners, employees, agents,
contractors or invitees.
8.03 REPAIR DAMAGE. Tenant shall, at its own cost and expense, repair
or replace any damage or injury to all or any part of the Premises, the
Building and the Project, if applicable, caused by Tenant or Tenant's agents,
employees, invitees, licensees or visitors; provided, however, if Tenant fails
to make such repairs or replacements promptly, Landlord may, at its option,
make such repairs or replacements and Tenant shall reimburse the cost, plus a
ten percent (10%) overhead charge therefor, to Landlord on demand.
8.04 NO WASTE. Tenant shall not commit or allow any waste or damage to
be committed on any portion of the Premises.
8.05 LANDLORD'S RIGHTS. Landlord and its contractors shall have the
right, at all reasonable times and upon prior oral or telephonic notice to
Tenant at the Premises, other than in the case of any emergency in which case
no notice shall be required, to enter upon the Premises to make any repairs to
the Premises or the Building reasonably required or deemed reasonably necessary
by Landlord and to erect such equipment, including scaffolding, as is
reasonably necessary to effect such repairs. During the pendency of such
repairs, Landlord shall use reasonable efforts to minimize any material
interruption of Tenant's business; provided, that if such repairs by Landlord
are required to remedy an emergency situation or to cure a breach or default by
Tenant under this Lease, Landlord shall not be obligated to minimize such
interference.
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ARTICLE IX - ALTERATIONS, ADDITIONS AND IMPROVEMENTS
9.01 LANDLORD'S CONSENT; CONDITIONS. Tenant shall not make or permit to
be made any alterations, additions, or improvements in or to the Premises
("Alterations") without the prior written consent of Landlord, which consent,
with respect to non-structural alterations, shall not be unreasonably withheld.
Notice is required to Landlord, but not Landlord's approval, for minor,
non-structural alterations of less than $5,000.00 each. Landlord may impose as
a condition to making any Alterations such requirements as Landlord in its sole
discretion deems necessary or desirable including without limitation: Tenant's
submission to Landlord, for Landlord's prior written approval, of all plans and
specifications relating to the Alterations; Landlord's prior written approval
of the time or times when the Alterations are to be performed; Landlord's prior
written approval of the contractors and subcontractors performing work in
connection with the Alterations; employment of union contractors and
subcontractors who shall not cause labor disharmony; Tenant's receipt of all
necessary permits and approvals from all governmental authorities having
jurisdiction over the Premises prior to the construction of the Alterations;
Tenant's delivery to Landlord of such bonds and insurance as Landlord shall
reasonably require; and Tenant's payment to Landlord of all costs and expenses
incurred by Landlord because of Tenant's Alterations, including but not limited
to costs incurred in reviewing the plans and specifications for, and the
progress of, the Alterations. Tenant is required to provide Landlord written
notice of whether the Alterations include the Handling of any Hazardous
Materials and whether these materials are of a customary and typical nature for
industry practices. Upon completion of the Alterations, Tenant shall provide
Landlord with copies of as-built plans. Neither the approval by Landlord of
plans and specifications relating to any Alterations nor Landlord's supervision
or monitoring of any Alterations shall constitute any warranty by Landlord to
Tenant of the adequacy of the design for Tenant's intended use or the proper
performance of the Alterations.
9.02 PERFORMANCE OF ALTERATIONS WORK. All work relating to the
Alterations shall be performed in compliance with the plans and specifications
approved by Landlord, all applicable laws, ordinances, rules, regulations and
directives of all governmental authorities having jurisdiction and the
requirements of all carriers of insurance on the Premises and the Building, the
Board of Underwriters, Fire Rating Bureau, or similar organization. All work
shall be performed in a diligent, first class manner and so as not to
unreasonably interfere with any other tenants or occupants of the Building.
All costs incurred by Landlord relating to the Alterations shall be payable to
Landlord by Tenant as additional rent upon demand. No asbestos-containing
materials shall be used or incorporated in the Alterations. No lead-containing
surfacing material, solder, or other construction materials or fixtures where
the presence of lead might create a condition of exposure not in compliance
with Environmental Laws shall be incorporated in the Alterations.
9.03 LIENS. Tenant shall pay when due all costs for work performed and
materials supplied to the Premises. Tenant shall keep Landlord, the Premises
and the Building free from all liens, stop notices and violation notices
relating to the Alterations or any other work performed for, materials
furnished to or obligations incurred by or for Tenant and Tenant shall protect,
indemnify, hold harmless and defend Landlord, the Premises and the Building of
and from any and all loss, cost, damage, liability and expense, including
attorneys' fees, arising out of or related to any such liens or notices.
Further, Tenant shall give Landlord not less then seven (7) business days prior
written notice before commencing any Alterations in or about the Premises to
permit Landlord to post appropriate notices of non-responsibility. Tenant
shall also secure, prior to commencing any Alterations, at Tenant's sole
expense, a completion and lien indemnity bond, or other security reasonably
satisfactory to Landlord, for such work. During the progress of such work,
Tenant shall, upon Landlord's request, furnish Landlord with sworn contractor's
statements and lien waivers covering all work theretofore performed. Tenant
shall satisfy or otherwise discharge all liens, stop notices or other claims or
encumbrances within thirty five (35) days after Landlord notifies Tenant in
writing that any such lien, stop notice, claim or encumbrance has been filed.
If Tenant fails to pay and remove such lien, claim or encumbrance within such
thirty (35) days, Landlord, at its election, may pay and satisfy the same and
in such event the sums so paid by Landlord, with interest from the date of
payment at the rate set forth in Section 4.06 hereof for amounts owed Landlord
by Tenant shall be deemed to be additional rent due and payable by Tenant at
once without notice or demand.
9.04 REMOVAL OF ALTERATIONS. All Alterations shall become a part of the
Premises and shall become the property of Landlord upon the expiration or
earlier termination of this Lease, unless Landlord shall, by written
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notice given to Tenant, require Tenant to remove some or all of Tenant's
Alterations, (whether installed during the Term of this Lease or any previous
occupancy of the Premises by Tenant) in which event Tenant shall promptly
remove the designated Alterations and shall promptly repair any resulting
damage, all at Tenant's sole expense. All business and trade fixtures,
machinery and equipment, furniture, movable partitions and items of personal
property owned by Tenant or installed by Tenant at its expense in the Premises
shall be and remain the property of Tenant; upon the expiration or earlier
termination of this Lease, Tenant shall, at its sole expense, remove all such
items and repair any damage to the Premises or the Building caused by such
removal. If Tenant fails to remove any such items or repair such damage
promptly after the expiration or earlier termination of the Lease, Landlord
may, but need not, do so with no liability to Tenant, and Tenant shall pay
Landlord the cost thereof upon demand. Notwithstanding the foregoing to the
contrary, in the event that Landlord gives its consent, pursuant to the
provisions of Section 9.01 of this Lease, to allow Tenant to make an Alteration
in the Premises, Landlord agrees, upon Tenant's written request, to notify
Tenant in writing at the time of the giving of such consent whether Landlord
will require Tenant, at Tenant's cost, to remove such Alteration at the end of
the Lease Term. The wiring installed by Tenant as a part of the Work, as
defined in the Work Letter Agreement, which is attached as Exhibit B need not
be removed by Tenant upon the Expiration Date as defined in Article 1.06. At
the expiration of this Lease, Tenant may remove all modular work station and
furniture.
ARTICLE X - INDEMNIFICATION AND INSURANCE
10.01 INDEMNIFICATION.
(A) Tenant agrees to protect, indemnify, hold harmless and defend
Landlord and any Mortgagee, as defined herein, and each of their respective
partners, directors, officers, agents and employees, successors and assigns,
regardless of any negligence imputed to Landlord as owner of the Building,
Premises or underlying real property, from and against:
(i) any and all loss, cost, damage, liability or expense as
incurred (including but not limited to actual attorneys' fees and
legal costs) arising out of or related to any claim, suit or
judgment brought by or in favor of any person or persons for
damage, loss or expense due to, but not limited to, bodily injury,
including death, or property damage sustained by such person or
persons which arises out of, is occasioned by or is in any way
attributable to the use or occupancy of the Premises or any portion
of the Building or the Project, if applicable, by Tenant or the
acts or omission of Tenant or its agents, employees, contractors,
clients, invitees or subtenants except that caused by the
negligence or willful misconduct of Landlord or its agents or
employees. Such loss or damage shall include, but not be limited
to, any injury or damage to, or death of, Landlord's employees or
agents or damage to the Premises or any portion of the Building or
the Project, if applicable.
(ii) any and all environmental damages which arise from: (i)
the Handling, presence or migration of any Tenant's Hazardous
Materials, as defined in Section 6.03 or (ii) the breach of any of
the provisions of this Lease. For the purpose of this Lease,
"environmental damages" shall mean (a) all claims, judgments,
damages, penalties, fines, costs, liabilities, and losses
(including without limitation, diminution in the value of the
Premises or any portion of the Building or the Project, if
applicable, damages for the loss of or restriction on use of
rentable or usable space or of any amenity of the Premises or any
portion of the Building or the Project, if applicable, and from any
adverse impact of Landlord's marketing of space); (b) all
reasonable sums paid for settlement of claims, attorneys' fees,
consultants' fees and experts' fees; and (c) all costs incurred by
Landlord in connection with investigation or remediation relating
to the Handling of Tenant's Hazardous Materials, whether or not
required by Environmental Laws, necessary for Landlord to make full
economic use of the Premises or any portion of the Building or the
Project, if applicable, or otherwise required under this Lease. To
the extent that Landlord is held strictly liable by a court or
other governmental agency of competent jurisdiction under any
Environmental Laws, Tenant's obligation to Landlord and the other
indemnities under the foregoing indemnification shall likewise be
without regard to fault on Tenant's part with respect
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to the violation of any Environmental Law which results in
liability to the indemnitee. Tenant's obligations and liabilities
pursuant to this Section 10.01 shall survive the expiration or
earlier termination of this Lease.
(iii) any and all testing or investigation as may be requested
by any governmental agency or lender for the purpose of
investigating the presence of Tenant's Hazardous Materials that may
not be in compliance with Environmental Laws.
(B) Notwithstanding anything to the contrary contained herein, nothing
shall be interpreted or used to in any way affect, limit, reduce or abrogate
any insurance coverage provided by any insurers to either Tenant or Landlord.
(C) Notwithstanding anything to the contrary contained in this Lease,
nothing herein shall be construed to infer or imply that Tenant is a partner,
joint venturer, agent, employee, or otherwise acting by or at the direction of
Landlord.
10.02 PROPERTY INSURANCE.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, "all-risk" property insurance, for damage or
other loss caused by fire or other casualty or cause including, but not limited
to, vandalism and malicious mischief, theft, water damage of any type,
including sprinkler leakage, bursting of pipes, explosion, in an amount not
less than one hundred percent (100%) of the replacement cost covering (a) all
leasehold improvements in and to the Premises and (b) Tenant's trade fixtures,
equipment, business records and other personal property from time to time
situated in the Premises, including, without limitation, all floor and wall
coverings. The proceeds of such insurance shall be used for the repair or
replacement of the property so insured, except that if not so applied or if
this Lease is terminated following a casualty, the proceeds applicable to the
leasehold improvements shall be paid to Landlord and the proceeds applicable to
Tenant's personal property shall be paid to Tenant.
(B) At all times during the Lease Term, Tenant shall procure and
maintain business interruption insurance in such amount as will reimburse
Tenant for direct or indirect loss of earnings attributable to all perils
insured against in Section 10.02(A).
(C) Landlord shall, at all times during the Lease Term, procure and
maintain "all-risk" property insurance in the amount not less than ninety
percent (90%) of the insurable replacement cost covering the Building in which
the Premises are located and such other insurance as may be required by a
Mortgagee or otherwise desired by Landlord.
10.03 LIABILITY INSURANCE.
(A) At all times during the Lease Term, Tenant shall procure and
maintain, at its sole expense, commercial general liability insurance applying
to the use and occupancy of the Premises and the business operated by Tenant.
Such insurance shall have a minimum combined single limit of liability of at
least Two Million Dollars ($2,000,000) per occurrence and a general aggregate
limit of at least Two Million Dollars ($2,000,000). All such policies shall be
written to apply to all bodily injury, property damage, personal injury losses
and shall be endorsed to include Landlord and its agents, beneficiaries,
partners, employees, and any deed of trust holder or mortgagee of Landlord or
any ground lessor as additional insureds. (A list of the current persons and
entities to be named as additional insureds is attached hereto as Exhibit E).
Such liability insurance shall be written as primary policies, not excess or
contributing with or secondary to any other insurance as may be available to
the Landlord or additional insureds with respect to Tenant's obligations under
this Lease.
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(B) Prior to the sale, storage, use or giving away of alcoholic
beverages on or from the Premises by Tenant or another person, Tenant, at its
own expense, shall obtain a policy or policies of insurance issued by a
responsible insurance company and in a form acceptable to Landlord saving
harmless and protecting Landlord and the Premises against any and all damages,
claims, liens, judgments, expenses and costs, including actual attorneys' fees,
arising under any present or future law, statute, or ordinance of the State of
Indiana or other governmental authority having jurisdiction of the Premises, by
reason of any storage, sale, use or giving away of alcoholic beverages on or
from the Premises. Such policy or policies of insurance shall have a minimum
combined single limit of One Million ($1,000,000) per occurrence and shall
apply to bodily injury, fatal or nonfatal; injury to means of support; and
injury to property of any person. Such policy or policies of insurance shall
name the Landlord and its agents, beneficiaries, partners, employees and any
mortgagee of Landlord or any ground lessor of Landlord as additional insureds.
(A list of the current persons and entities to be named as additional insureds
is attached hereto as Exhibit E).
(C) Landlord shall, at all times during the Lease Term, procure and
maintain commercial general liability insurance for the Building and Common
Area in which the Premises are located. Such insurance shall have minimum
combined single limit of liability of at least Two Million Dollars ($2,000,000)
per occurrence, and a general aggregate limit of at least Two Million Dollars
($2,000,000).
10.04 WORKERS' COMPENSATION INSURANCE. At all times during the Lease
Term, Tenant shall procure and maintain Workers' Compensation Insurance in
accordance with the laws of the State of Indiana, and Employer's Liability
insurance with a limit not less than One Million Dollars ($1,000,000) Bodily
Injury Each Accident; One Million Dollars ($1,000,000) Bodily Injury By Disease
- - Each Person; and One Million Dollars ($1,000,000) Bodily Injury by Disease -
Policy Limit.
10.05 AUTOMOBILE LIABILITY INSURANCE. INTENTIONALLY OMITTED
10.06 PLATE GLASS INSURANCE. At any time during the Lease Term when
there is plate glass in or on the Premises, Tenant shall procure and maintain,
at its sole expense, plate glass insurance covering all the plate glass of the
Premises in amounts satisfactory to Landlord.
10.07 WAREHOUSEMAN'S INSURANCE. INTENTIONALLY OMITTED
10.08 POLICY REQUIREMENTS. All insurance required to be maintained by
Landlord or Tenant shall be issued by insurance companies authorized to do
insurance business in the State of Indiana and rated not less than A-VIII in
Best's Insurance Guide or a Standard and Poor's claims paying ability rating of
not less than AA. A certificate of insurance (or, at Landlord's option, copies
of the applicable policies) evidencing the insurance required under this
Article X shall be delivered to Landlord not less than thirty (30) days prior
to the Commencement Date. No such policy shall be subject to cancellation or
modification without thirty (30) days prior written notice to Landlord and to
any deed of trust holder, mortgagee or ground lessor designated by Landlord to
Tenant. Tenant shall furnish Landlord with a replacement certificate with
respect to any insurance not less than thirty (30) days prior to the expiration
of the current policy. Tenant shall have the right to provide the insurance
required by this Article X pursuant to blanket policies, but only if such
blanket policies expressly provide coverage to the Premises and the Landlord as
required by this Lease.
10.09 WAIVER OF CLAIMS. Except for claims arising from Landlord's
negligent acts that are not covered by Tenant's insurance hereunder, Tenant
waives all claims against Landlord for injury or death to persons, damage to
property or to any other interest of Tenant sustained by Tenant or any party
claiming through Tenant resulting from: (i) any occurrence in or upon the
Premises, (ii) leaking of roofs, bursting, stoppage or leaking of water, gas,
sewer or steam pipes or equipment, including sprinklers, (iii) wind, rain,
snow, ice, flooding, freezing, fire, explosion, earthquake, excessive heat or
cold, fire or other casualty, (iv) the Building, Premises, systems or equipment
therefor being defective, out of repair, or failing, subject to the other terms
of this Lease, and (v) vandalism, malicious mischief, theft or other acts or
omissions of any other parties including, without limitation, other tenants,
contractors and invitees. To the extent that Tenant is required to or does
carry insurance hereunder, Tenant agrees that Tenant's property loss risks
shall be borne by such insurance, and Tenant agrees to look solely to
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and seek recovery only from its insurance carriers in the event of such losses;
for purposes hereof, any deductible amount shall be treated as though it were
recoverable under such policies.
10.10 WAIVER OF SUBROGATION. Each party hereby waives any right of
recovery against the other for injury or loss due to hazards covered by
insurance or required to be covered, to the extent of the injury or loss
covered thereby. Any policy of insurance to be provided by Tenant or Landlord
pursuant to this Article X shall contain a clause denying the applicable
insurer any right of subrogation against the Landlord or Tenant as applicable.
10.11 FAILURE TO INSURE. If Tenant fails to maintain any insurance which
Tenant is required to maintain pursuant to this Article X, Tenant shall be
liable to Landlord for any loss or cost resulting from such failure to
maintain. Tenant may not self-insure against any risks required to be covered
by insurance without Landlord's prior written consent.
ARTICLE XI - DAMAGE OR DESTRUCTION
11.01 TOTAL DESTRUCTION. Except as provided in Section 11.03 below, this
Lease shall automatically terminate if the Building is totally destroyed.
11.02 PARTIAL DESTRUCTION OF PREMISES. If the Premises are damaged by
any casualty and, in Landlord's opinion, the Premises (exclusive of any
Alterations made to the Premises by Tenant) can be restored to its pre-existing
condition within one hundred fifty (150) days after the date of the damage or
destruction using only the insurance proceeds made available to Landlord,
Landlord shall, upon written notice from Tenant to Landlord of such damage,
except as provided in Section 11.03, promptly and with due diligence use
available insurance proceeds to repair any damage to the Premises (exclusive of
any Alterations to the Premises made by Tenant, which shall be promptly
repaired by Tenant at its sole expense) and, until such repairs are completed,
the Rent shall be abated from the date of damage or destruction in the same
proportion that the rentable area of the portion of the Premises which is
unusable by Tenant in the conduct of its business bears to the total rentable
area of the Premises. If such repairs cannot, in Landlord's opinion, either
(i) be made within said one hundred fifty (150) day period, or (ii) be
completed using only the insurance proceeds made available to Landlord, then
Landlord may, at its option, exercisable by written notice given to Tenant
within thirty (30) days after the date of the damage or destruction, elect to
make the repairs within a reasonable time after the damage or destruction, in
which event this Lease shall remain in full force and effect but the Rent shall
be abated as provided in the preceding sentence; if Landlord does not so elect
to make the repairs, then either Landlord or Tenant shall have the right, by
written notice given to the other within sixty (60) days after the date of the
damage or destruction, to terminate this Lease as of the date of the damage or
destruction.
11.03 EXCEPTIONS TO LANDLORD'S OBLIGATIONS. Notwithstanding anything to
the contrary contained in this Article XI, Landlord shall have no obligation to
repair the Premises if either: (a) the Building in which the Premises are
located is so damaged as to require repairs to the Building exceeding twenty
percent (20%) of the full insurable value of the Building; or (b) Landlord
elects to demolish the Building in which the Premises are located; or (c) the
damage or destruction occurs less than two (2) years prior to the Expiration
Date, exclusive of option periods. In addition, Landlord's obligation to
repair as set forth in this Article XI shall be limited to the extent of
insurance proceeds made available to Landlord. Further, Tenant's Rent shall
not be abated if either (i) the damage or destruction is repaired within five
(5) business days after Landlord receives written notice from Tenant of the
casualty, or (ii) Tenant, or any officers, partners, employees, agents or
invitees of Tenant, or any assignee or subtenant of Tenant, is, in whole or in
part, responsible for the damage or destruction.
11.04 WAIVER. The provisions contained in this Lease shall supersede any
contrary laws (whether statutory, common law or otherwise) now or hereafter in
effect relating to damage, destruction, self-help or termination.
ARTICLE XII - CONDEMNATION
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12.01 TAKING. If the entire Premises or so much of the Premises or the
common areas as to render the balance unusable by Tenant for its use under
section 1.10, shall be taken by condemnation, sale in lieu of condemnation or in
any other manner for any public or quasi-public purpose (collectively
"Condemnation"), and if Landlord, at its option, is unable or unwilling to
provide substitute premises containing at least as much rentable area as
described in Section 1.02 above, then this Lease shall terminate on the date
that title or possession to the Premises is taken by the condemning authority,
whichever is earlier.
12.02 AWARD. In the event of any Condemnation, the entire award for such
taking shall belong to Landlord. Tenant shall have no claim against Landlord
or the award for the value of any unexpired term of this Lease or otherwise.
Tenant shall be entitled to independently pursue a separate award in a separate
proceeding for Tenant's relocation costs directly associated with the taking,
provided such separate award does not diminish Landlord's award.
12.03 TEMPORARY TAKING. No temporary taking of the Premises shall
terminate this Lease or entitle Tenant to any abatement of the Rent payable to
Landlord under this Lease; provided, further, that any award for such temporary
taking shall belong to Tenant to the extent that the award applies to any time
period during the Lease Term and to Landlord to the extent that the award
applies to any time period outside the Lease Term.
ARTICLE XIII - RELOCATION
13.01 RELOCATION. INTENTIONALLY OMITTED
ARTICLE XIV - ASSIGNMENT AND SUBLETTING
14.01 RESTRICTION. Without the prior written consent of Landlord, Tenant
shall not, either voluntarily or by operation of law, assign, encumber, or
otherwise transfer this Lease or any interest herein, or sublet the Premises or
any part thereof, or permit the Premises to be occupied by anyone other than
Tenant or Tenant's employees (any such assignment, encumbrance, subletting,
occupation or transfer is hereinafter referred to as a "Transfer"). For
purposes of this Lease, the term "Transfer" shall also include (a) if Tenant is
a partnership, the withdrawal or change, voluntary, involuntary or by operation
of law, of a majority of the partners, or a transfer of a majority of
partnership interests, within a twelve month period, or the dissolution of the
partnership, (b) if Tenant is a closely held corporation (i.e. whose stock is
not publicly held and not traded through an exchange or over the counter) or a
limited liability company, the dissolution, merger, consolidation, division,
liquidation or other reorganization of Tenant, or within a twelve month period:
(i) the sale or other transfer of more than an aggregate of 50% of the voting
securities of Tenant (other than to immediate family members by reason of gift
or death) or (ii) the sale, mortgage, hypothecation or pledge of more than an
aggregate of 50% of Tenant's net assets and (c) any change by Tenant in the
form of its legal organization under applicable state law (such as, for
example, a change from a general partnership to a limited partnership or from a
corporation to a limited liability company). An assignment, subletting or
other action in violation of the foregoing shall be void and, at Landlord's
option, shall constitute a material breach of this Lease. Notwithstanding
anything contained in this Article XIV to the contrary, Tenant shall have the
right to assign the Lease or sublease the Premises, or any part thereof, to an
"Affiliate" without the prior written consent of Landlord, but upon at least
twenty (20) days' prior written notice to Landlord, provided that said
Affiliate is identical to the use in Section 1.10 of the Lease, and provided
further that said Affiliate is not in default under any other lease for space
in a property that is managed by Heitman Properties Ltd. or any of its
affiliates. For purposes of this provision, the term "Affiliate" shall mean
any corporation or other entity controlling, controlled by, or under common
control with (directly or indirectly) Tenant, including, without limitation,
any parent corporation controlling Tenant or any subsidiary that Tenant
controls. The term "control," as used herein, shall mean the power to direct
or cause the direction of the management and policies of the controlled entity
through the ownership of more than ten percent (10%) of the voting securities
in such controlled entity. Notwithstanding anything contained
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in this Article XIV to the contrary, Tenant expressly covenants and agrees not
to enter into any lease, sublease, license, concession or other agreement for
use, occupancy or utilization of the Premises which provides for rental or other
payment for such use, occupancy or utilization based in whole or in part on the
net income or profits derived by any person from the property leased, used,
occupied or utilized (other than an amount based on a fixed percentage or
percentages of receipts or sales), and that any such purported lease, sublease,
license, concession or other agreement shall be absolutely void and ineffective
as a conveyance of any right or interest in the possession, use, occupancy or
utilization of any part of the Premises.
14.02 NOTICE TO LANDLORD. If Tenant desires to assign this Lease or any
interest herein, or to sublet all or any part of the Premises, then at least
thirty (30) days but not more than one hundred eighty (180) days prior to the
effective date of the proposed assignment or subletting, Tenant shall submit to
Landlord in connection with Tenant's request for Landlord's consent:
(A) A statement containing (i) the name and address of the
proposed assignee or subtenant; (ii) such financial information with
respect to the proposed assignee or subtenant as Landlord shall
reasonably require; (iii) the type of use proposed for the Premises; and
(iv) all of the principal terms of the proposed assignment or subletting;
and
(B) Four (4) originals of the assignment or sublease on a form
approved by Landlord and four (4) originals of the Landlord's Consent to
Sublease or Assignment and Assumption of Lease and Consent.
14.03 LANDLORD'S RECAPTURE RIGHTS. At any time within twenty (20)
business days after Landlord's receipt of all (but not less than all) of the
information and documents described in Section 14.02 above, Landlord may, at
its option by written notice to Tenant, elect to: (a) sublease the Premises or
the portion thereof proposed to be sublet by Tenant upon the same terms as
those offered to the proposed subtenant; (b) take an assignment of the Lease
upon the same terms as those offered to the proposed assignee; or (c) terminate
the Lease in its entirety or as to the portion of the Premises proposed to be
assigned or sublet, with a proportionate adjustment in the Rent payable
hereunder if the Lease is terminated as to less than all of the Premises. If
Landlord does not exercise any of the options described in the preceding
sentence, then, during the above-described twenty (20) business day period,
Landlord shall either consent or deny its consent to the proposed assignment or
subletting. This provision does not apply to any transfer to Affiliates, as
provided in Section 14.01.
14.04 LANDLORD'S CONSENT; STANDARDS. Landlord's consent to a proposed
assignment or subletting shall not be unreasonably withheld; but, in addition
to any other grounds for denial, Landlord's consent shall be deemed reasonably
withheld if, in Landlord's good faith judgment: (i) the proposed assignee or
subtenant does not have the financial strength to perform its obligations under
this Lease or any proposed sublease; (ii) the business and operations of the
proposed assignee or subtenant are not of comparable quality to the business
and operations being conducted by other tenants in the Building; (iii) the
proposed assignee or subtenant intends to use any part of the Premises for a
purpose not permitted under this Lease; (iv) either the proposed assignee or
subtenant, or any person which directly or indirectly controls, is controlled
by, or is under common control with the proposed assignee or subtenant occupies
space in the Building or the Project, if applicable, or is negotiating with
Landlord to lease space in the Building or the Project, if applicable; (v) the
proposed assignee or subtenant is disreputable; or (vi) the use of the Premises
or the Building by the proposed assignee or subtenant would, in Landlord's
reasonable judgment, impact the Building in a negative manner including but not
limited to significantly increasing the pedestrian traffic, parking capacity
and requirements, and truck traffic in and out of the Building or requiring any
alterations to the Building to comply with applicable laws; (vii) the subject
space is not regular in shape with appropriate means of ingress and egress
suitable for normal renting purposes; (viii) the transferee is a government (or
agency or instrumentality thereof) or (ix) Tenant has failed to cure a default
at the time Tenant requests consent to the proposed Transfer.
14.05 ADDITIONAL RENT. If Landlord consents to any such assignment or
subletting, all sums or other economic consideration received by Tenant in
connection with such assignment or subletting, whether denominated as rental or
otherwise, exceeds, in the aggregate, the total sum which Tenant is obligated
to pay Landlord under this Lease (prorated to reflect obligations allocable to
less than all of the Premises under a sublease) shall be paid to
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Landlord promptly after receipt as additional Rent under the Lease without
affecting or reducing any other obligation of Tenant hereunder.
14.06 LANDLORD'S COSTS. If Tenant shall Transfer this Lease or all or
any part of the Premises or shall request the consent of Landlord to any
Transfer, Tenant shall pay to Landlord as additional rent Landlord's costs
related thereto, including Landlord's reasonable attorneys' fees and a minimum
fee to Landlord of Five Hundred Dollars ($500.00).
14.07 CONTINUING LIABILITY OF TENANT. Notwithstanding any Transfer,
including an assignment or sublease to an affiliate, Tenant shall remain as
fully and primarily liable for the payment of Rent and for the performance of
all other obligations of Tenant contained in this Lease to the same extent as
if the Transfer had not occurred; provided, however, that any act or omission
of any transferee, other than Landlord, that violates the terms of this Lease
shall be deemed a violation of this Lease by Tenant.
14.08 NON-WAIVER. The consent by Landlord to any Transfer shall not
relieve Tenant, or any person claiming through or by Tenant, of the obligation
to obtain the consent of Landlord, pursuant to this Article XIV, to any further
Transfer. In the event of an assignment or subletting, Landlord may collect
rent from the assignee or the subtenant without waiving any rights hereunder
and collection of the rent from a person other than Tenant shall not be deemed
a waiver of any of Landlord's rights under this Article XIV, an acceptance of
assignee or subtenant as Tenant, or a release of Tenant from the performance of
Tenant's obligations under this Lease. If Tenant shall default under this
Lease and fail to cure within the time permitted, Landlord is irrevocably
authorized, as Tenant's agent and attorney-in-fact, to direct any transferee to
make all payments under or in connection with the Transfer directly to Landlord
(which Landlord shall apply towards Tenant's obligations under this Lease)
until such default is cured.
ARTICLE XV - DEFAULT AND REMEDIES
15.01 EVENTS OF DEFAULT BY TENANT. The occurrence of any of the
following shall constitute a material default and breach of this Lease by
Tenant:
(A) The failure by Tenant to pay Base Rent or make any other
payment within five (5) business days after notice that is required to be
made by Tenant hereunder as and when due. Notice to be given no more
than twice during any given calendar year.
(B) The abandonment of the Premises by Tenant for fourteen (14)
consecutive days (with or without the payment of Rent).
(C) The making by Tenant of any assignment of this Lease or any
sublease of all or part of the Premises, except as expressly permitted
under Article XIV of this Lease.
(D) The failure by Tenant to observe or perform any other
provision of this Lease to be observed or performed by Tenant, other than
those described in Sections 15.01(A), 15.01(B) or 15.01 (C) above, if
such failure continues for thirty (30) days after written notice thereof
by Landlord to Tenant; provided, however, that if the nature of the
default is such that it cannot be cured within the thirty (30) day
period, no default shall be deemed to exist if Tenant commences the
curing of the default promptly within such thirty (30) day period and
thereafter diligently prosecutes the same to completion and achieves the
same within sixty (60) days after the occurrence of such default. The
thirty (30) day notice described herein shall be in lieu of, and not in
addition to, any notice required under law now or hereafter in effect
requiring that notice of default be given prior to the commencement of an
unlawful detainer or other legal proceeding.
(E) The making by Tenant or its Guarantor of any general
assignment for the benefit of creditors, the filing by or against Tenant
or its Guarantor of a petition under any federal or state bankruptcy or
insolvency laws (unless, in the case of a petition filed against Tenant
or its Guarantor the same is dismissed
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within sixty (60) days after filing); the appointment of a trustee or
receiver to take possession of substantially all of Tenant's assets at
the Premises or Tenant's interest in this Lease or the Premises, when
possession is not restored to Tenant within sixty (60) days; the
attachment, execution or other seizure of substantially all of Tenant's
assets located at the Premises or Tenant's interest in this Lease or the
Premises, if such seizure is not discharged within sixty (60) days; or
the death or the dissolution of Tenant or any one or more of the
Guarantors, if any.
(F) Any material misrepresentation herein, or material
misrepresentation or omission in any financial statements or other
materials provided by Tenant or any Guarantor in connection with
negotiating or entering into this Lease or in connection with any
Transfer under Section 14.01.
15.02 LANDLORD'S RIGHT TO TERMINATE UPON TENANT DEFAULT. In the event of
any default by Tenant as provided in Section 15.01 above, Landlord shall have
the right without notice or demand to Tenant (Tenant hereby irrevocably waiving
all notices and demands, statutory or otherwise, including without limitation,
any notice otherwise required in connection with any forcible entry and
detainer action), to terminate this Lease or to terminate Tenant's right to
possession of the Premises without terminating this Lease, and in either event
Landlord shall be entitled to receive from Tenant:
(A) The worth at the time of award of any unpaid Rent which had
been earned at the time of such termination; plus
(B) The worth at the time of award of the amount by which the
unpaid Rent which would have been earned after termination until the time
of award exceeds the amount of such rental loss Tenant proves could have
been reasonably avoided; plus
(C) The worth at the time of award of the amount by which the
unpaid Rent for the balance of the term after the time of award exceeds
the amount of such rental loss that Tenant proves could be reasonably
avoided; plus
(D) Any other amount necessary to compensate Landlord for all the
detriment proximately caused by Tenant's failure to perform its
obligations under this Lease or which in the ordinary course of things
would be likely to result therefrom; and
(E) At Landlord's election, such other amounts in addition to or
in lieu of the foregoing as may be permitted from time to time by
applicable law.
As used in subparagraphs (A) and (B) above, "worth at the time of award"
shall be computed by allowing interest on such amounts at the then highest
lawful rate of interest, but in no event to exceed one percent (1%) per annum
plus the rate established by the Federal Reserve Bank of Chicago on advances
made to member banks under Sections of the Federal Reserve Act ("discount
rate") prevailing at the time of the award. As used in paragraph (C) above,
"worth at the time of award" shall be computed by discounting such amount by
(i) the discount rate of the Federal Reserve Bank of Chicago prevailing at the
time of award plus (ii) one percent (1%).
15.03 MITIGATION OF DAMAGES. If Landlord terminates this Lease or
Tenant's right to possession of the Premises, Landlord shall have no obligation
to mitigate Landlord's damages except to the extent required by applicable
law. If Landlord has not terminated this Lease or Tenant's right to possession
of the Premises, Landlord shall have no obligation to mitigate under any
circumstances and may permit the Premises to remain vacant or abandoned. If
Landlord is required to mitigate damages as provided herein: (i) Landlord
shall be required only to use reasonable efforts to mitigate, which shall not
exceed such efforts as Landlord generally uses to lease other space in the
Building, (ii) Landlord will not be deemed to have failed to mitigate if
Landlord or its affiliates lease any other portions of the Building, Project or
other projects owned by Landlord or its affiliates in the same geographic area,
before reletting all or any portion of the Premises, and (iii) any failure to
mitigate as described herein with respect to any period of time shall only
reduce the Rent and other amounts to which Landlord is entitled hereunder by
the reasonable rental value of the Premises during such period. In recognition
that the value of the
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Building depends on the rental rates and terms of leases therein, Landlord's
rejection of a prospective replacement tenant based on an offer of rentals below
Landlord's published rates for new leases of comparable space at the Building at
the time in question, or at Landlord's option, below the rates provided in this
Lease, or containing terms less favorable than those contained herein, shall not
give rise to a claim by Tenant that Landlord failed to mitigate Landlord's
damages.
15.04 LANDLORD'S RIGHT TO CONTINUE LEASE UPON TENANT DEFAULT. In the
event of a default of this Lease and abandonment of the Premises by Tenant, if
Landlord does not elect to terminate this Lease as provided in Section 15.02
above, Landlord may from time to time, without terminating this Lease, enforce
all of its rights and remedies under this Lease. Without limiting the
foregoing, Landlord may continue this Lease in effect after Tenant's default
and abandonment and recover Rent as it becomes due. In the event Landlord
re-lets the Premises, to the fullest extent permitted by law, the proceeds of
any reletting shall be applied first to pay to Landlord all costs and expenses
of such reletting (including without limitation, costs and expenses of retaking
or repossessing the Premises, removing persons and property therefrom, securing
new tenants, including expenses for redecoration, alterations and other costs
in connection with preparing the Premises for the new tenant, and if Landlord
shall maintain and operate the Premises, the costs thereof) and receivers' fees
incurred in connection with the appointment of and performance by a receiver to
protect the Premises and Landlord's interest under this Lease and any necessary
or reasonable alterations; second, to the payment of any indebtedness of Tenant
to Landlord other than Rent due and unpaid hereunder; third, to the payment of
Rent due and unpaid hereunder; and the residue, if any, shall be held by
Landlord and applied in payment of other or future obligations of Tenant to
Landlord as the same may become due and payable, and Tenant shall not be
entitled to receive any portion of such revenue.
15.05 RIGHT OF LANDLORD TO PERFORM. All covenants and agreements to be
performed by Tenant under this Lease shall be performed by Tenant at Tenant's
sole cost and expense. If Tenant shall fail to pay any sum of money, other
than Rent, required to be paid by it hereunder or shall fail to perform any
other act on its part to be performed hereunder, Landlord may, subject to
notice, cure and grace periods as provided in this Lease, but shall not be
obligated to, make any payment or perform any such other act on Tenant's part
to be made or performed, without waiving or releasing Tenant of its obligations
under this Lease. Any sums so paid by Landlord and all necessary incidental
costs, together with interest thereon at the lesser of the maximum rate
permitted by law if any or twelve percent (12%) per annum from the date of such
payment, shall be payable to Landlord as additional rent on demand and Landlord
shall have the same rights and remedies in the event of nonpayment as in the
case of default by Tenant in the payment of Rent.
15.06 DEFAULT UNDER OTHER LEASES. If the term of any lease, other than
this Lease, heretofore or hereafter made by Tenant for any space in the
Building or the Project, if applicable, shall be terminated or terminable after
the making of this Lease because of any default by Tenant under such other
lease, such fact shall empower Landlord, at Landlord's sole option, to
terminate this Lease by notice to Tenant or to exercise any of the rights or
remedies set forth in Section 15.02.
15.07 NON-WAIVER. Nothing in this Article shall be deemed to affect
Landlord's rights to indemnification for liability or liabilities arising prior
to termination of this Lease or Tenant's right to possession of the Premises
for personal injury or property damages under the indemnification clause or
clauses contained in this Lease. No acceptance by Landlord of a lesser sum
than the Rent then due shall be deemed to be other than on account of the
earliest installment of such rent due, nor shall any endorsement or statement
on any check or any letter accompanying any check or payment as rent be deemed
an accord and satisfaction, and Landlord may accept such check or payment
without prejudice to Landlord's right to recover the balance of such
installment or pursue any other remedy in the Lease provided. The delivery of
keys to any employee of Landlord or to Landlord's agent or any employee thereof
shall not operate as a termination of this Lease or a surrender of the
Premises, unless Landlord in writing both accepts such surrender and
acknowledges such termination.
15.08 CUMULATIVE REMEDIES. The specific remedies to which Landlord may
resort under the terms of the Lease are cumulative and are not intended to be
exclusive of any other remedies or means of redress to which it may be lawfully
entitled in case of any breach or threatened breach by Tenant of any provisions
of the Lease. In addition to the other remedies provided in the Lease,
including the right to terminate this Lease or to terminate
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Tenant's right of possession of the Premises and reenter and repossess the
Premises and remove all persons and property from the Premises without
terminating this Lease as provided in Section 15.02, Landlord shall be entitled
to a restraint by injunction of the violation or attempted or threatened
violation of any of the covenants, conditions or provisions of the Lease or to a
decree compelling specific performance of any such covenants, conditions or
provisions.
15.09 DEFAULT BY LANDLORD. Landlord's failure to perform or observe any
of its obligations under this Lease shall constitute a default by Landlord
under this Lease only if such failure shall continue for a period of thirty
(30) days (or the additional time, if any, that is reasonably necessary to
promptly and diligently cure the failure) after Landlord receives written
notice from Tenant specifying the default. The notice shall give in reasonable
detail the nature and extent of the failure and shall identify the Lease
provision(s) containing the obligation(s). If Landlord shall default in the
performance of any of its obligations under this Lease (after notice and
opportunity to cure as provided herein), Tenant may pursue any remedies
available to it under the law and this Lease, except that, in no event, shall
Landlord be liable for punitive damages, lost profits, business interruption,
speculative, consequential or other such damages. In recognition that Landlord
must receive timely payments of Rent and operate the Building, Tenant shall
have no right of self-help to perform repairs or any other obligation of
Landlord, and shall have no right to withhold, set-off, or abate Rent.
ARTICLE XVI - ATTORNEYS' FEES: COSTS OF SUIT
16.01 ATTORNEYS FEES. If either Landlord or Tenant shall commence any
action or other proceeding against the other arising out of, or relating to,
this Lease or the Premises, the prevailing party shall be entitled to recover
from the losing party, in addition to any other relief, its actual attorneys'
fees irrespective of whether or not the action or other proceeding is
prosecuted to judgment and irrespective of any court schedule of reasonable
attorneys' fees. In addition, Tenant shall reimburse Landlord, upon demand,
for all reasonable attorneys' fees incurred in collecting Rent, resolving any
actual default by Tenant, securing indemnification as provided in Article X and
paragraphs, 16.02, 24.01 and 26.01 herein or otherwise seeking enforcement
against Tenant, its sublessees and assigns, of Tenant's obligations under this
Lease.
16.02 INDEMNIFICATION. Should Landlord be made a party to any litigation
instituted by Tenant against a party other than Landlord, or by a third party
against Tenant, Tenant shall indemnify, hold harmless and defend Landlord from
any and all loss, cost, liability, damage or expense incurred by Landlord,
including attorneys' fees, in connection with the litigation, unless a final
non-appealable judgment is rendered against Landlord in such litigation.
ARTICLE XVII - SUBORDINATION AND ATTORNMENT
17.01 SUBORDINATION. This Lease, and the rights of Tenant hereunder, are
and shall be subject and subordinate to the interest of (i) all present and
future ground leases and master leases of all or any part of the Building; (ii)
present and future mortgages and deeds of trust encumbering all or any part of
the Building or the underlying real estate; (iii) all past and future advances
made under any such mortgages or deeds of trust; and (iv) all renewals,
modifications, replacements and extensions of any such ground leases, master
leases, mortgages and deeds of trust; provided, however, that any lessor under
any such ground lease or master lease or any mortgagee or beneficiary under any
such mortgage or deed of trust ( any such lessor, mortgagee or beneficiary is
hereinafter referred to as a "Mortgagee") shall have the right to elect, by
written notice given to Tenant, to have this Lease made superior in whole or in
part to any such ground lease, master lease, mortgage or deed of trust (or
subject and subordinate to such ground lease, master lease, mortgage or deed of
trust but superior to any junior mortgage or junior deed of trust). Upon
demand, Tenant shall execute, acknowledge and deliver any instruments
reasonably requested by Landlord or any such Mortgagee to effect the purposes
of this Section 17.01. Such instruments may contain, among other things,
provisions to the effect that such Mortgagee (hereafter, for the purposes of
this Section 17.01, a "Successor Landlord") shall (i) not be liable for any act
or omission of Landlord or its predecessors, if any, prior to the date of such
Successor Landlord's succession to Landlord's interest under this Lease; (ii)
not be subject
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to any offsets or defenses which Tenant might have been able to assert against
Landlord or its predecessors, if any, prior to the date of such Successor
Landlord's succession to Landlord's interest under this Lease; (iii) not be
liable for the return of any security deposit under the Lease unless the same
shall have actually been deposited with such Successor Landlord; (iv) be
entitled to receive notice of any Landlord default under this Lease plus a
reasonable opportunity to cure such default prior to Tenant having any right or
ability to terminate this Lease as a result of such Landlord default; (v) not be
bound by any rent or additional rent which Tenant might have paid for more than
the current month to Landlord; (vi) not be bound by any amendment or
modification of the Lease or any cancellation or surrender of the same made
without Successor Landlord's prior written consent; (vii) not be bound by any
obligation to make any payment to Tenant which was required to be made prior to
the time such Successor Landlord succeeded to Landlord's interest and (viii) not
be bound by any obligation under the Lease to perform any work or to make any
improvements to the demised Premises. Any obligations of any Successor Landlord
under its respective lease shall be non-recourse as to any assets of such
Successor Landlord other than its interest in the Premises and improvements.
SEE ADDENDUM TO LEASE ITEM #5
17.02 ATTORNMENT. If requested to do so, Tenant shall attorn to and
recognize as Tenant's landlord under this Lease any superior Mortgagee or other
purchaser or person taking title to the Building by reason of the termination
of any superior lease or the foreclosure of any superior mortgage or deed of
trust, and Tenant shall, upon demand, execute any documents reasonably
requested by any such person to evidence the attornment described in this
Section 17.02. SEE ADDENDUM TO LEASE ITEM #5
17.03 MORTGAGEE AND GROUND LESSOR PROTECTION. Tenant agrees to give any
Mortgagee, by registered or certified mail, a copy of any notice of default
served upon Landlord by Tenant, provided that prior to such notice Tenant has
been notified in writing (by way of service on Tenant of a copy of Assignment
of Rents and Leases, or otherwise) of the address of such Mortgagee (hereafter
the "Notified Party"). Tenant further agrees that if Landlord shall have
failed to cure such default within twenty (20) days after such notice to
Landlord (or if such default cannot be cured or corrected within that time,
then such additional time as may be necessary if Landlord has commenced within
such twenty (20) days and is diligently pursuing the remedies or steps
necessary to cure or correct such default), then the Notified Party shall have
an additional thirty (30) days within which to cure or correct such default (or
if such default cannot be cured or corrected within that time, then such
additional time as may be necessary if the Notified Party has commenced within
such thirty (30) days and is diligently pursuing the remedies or steps
necessary to cure or correct such default). Until the time allowed, as
aforesaid, for the Notified Party to cure such default has expired without
cure, Tenant shall have no right to, and shall not, terminate this Lease on
account of Landlord's default. SEE ADDENDUM TO LEASE ITEM #5
ARTICLE XVIII - QUIET ENJOYMENT
18.01 Provided that Tenant performs all of its obligations hereunder,
Tenant shall have and peaceably enjoy the Premises during the Lease Term free
of claims by or through Landlord, subject to all of the terms and conditions
contained in this Lease.
ARTICLE XIX - PARKING
19.01 Tenant, its employees and invitees, are hereby granted the
non-exclusive privilege to use parking spaces in Lakeside Building - Corporate
Center Lakeside - Building A. Tenant shall abide by all rules and regulations
regarding the use of the parking area as may now exist or as may hereinafter be
promulgated by Landlord. Landlord reserves the right to modify, restripe and
otherwise change the location of drives, parking spaces and parking area in
Lakeside Building - Corporate Center Lakeside - Building A. Landlord may, but
shall have no obligation to, designate certain parking spaces for trucks,
handicapped persons or designated tenants as Landlord, in its sole discretion,
may deem necessary for the professional and efficient operation of the parking
area and the Building or the Project, if applicable. Landlord shall have the
right to reasonably restrict the number and location of truck/tractor trailers
for the overall benefit of all tenants, it being agreed by Tenant that it is
not the intent of this Lease to provide unrestricted parking for truck/tractor
trailers. Tenant agrees not to overburden the parking
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facilities and agrees to cooperate with Landlord and other tenants in the use of
the parking facilities. Tenant will reimburse Landlord upon demand for any
damage caused to the parking surfaces or facilities caused by Tenant's or any of
its employees', agents' or invitees' trucks/tractor trailers or any other
vehicles. Landlord reserves the right in its absolute discretion to determine
whether parking facilities are becoming crowded and, in such event, to allocate
parking spaces among Tenant and other tenants. At no time shall the parking of
any vehicle be permitted in the fire lanes or handicapped parking areas
servicing the Building or the Project, if applicable. SEE ADDENDUM TO LEASE
ITEM #3
ARTICLE XX - RULES AND REGULATIONS
20.01 The Rules and Regulations attached hereto as Exhibit F are hereby
incorporated by reference herein and made a part hereof. Tenant shall abide
by, and faithfully observe and comply with the Rules and Regulations and any
reasonable and non-discriminatory amendments, modifications and/or additions
thereto as may hereafter be adopted and published by written notice to tenants
by Landlord for the safety, care, security, good order and/or cleanliness of
the Premises, the Building and/or the Project, if applicable. Landlord shall
not be liable to Tenant for any violation of such rules and regulations by any
other tenant or occupant of the Building or the Project, if applicable.
ARTICLE XXI - ESTOPPEL CERTIFICATES
21.01 Tenant agrees at any time and from time to time upon not less than
twenty (20) days' prior written notice from Landlord to execute, acknowledge
and deliver to Landlord a statement in writing addressed and certifying to
Landlord, to any current or prospective Mortgagee or any assignee thereof, to
any prospective purchaser of the land, improvements or both comprising the
Building, and to any other party designated by Landlord, that this Lease is
unmodified and in full force and effect (of if there have been modifications,
that the same is in full force and effect as modified and stating the
modifications); that Tenant has accepted possession of the Premises, which are
acceptable in all respects, and that any improvements required by the terms of
this Lease to be made by Landlord have been completed to the satisfaction of
Tenant; that Tenant is in full occupancy of the Premises; that no rent has been
paid more than thirty (30) days in advance; that the first month's Base Rent
has been paid; that Tenant is entitled to no free rent or other concessions
except as stated in this Lease; that Tenant has not been notified of any
previous assignment of Landlord's or any predecessor landlord's interest under
this Lease; the dates to which Base Rent, additional rental and other charges
have been paid; that Tenant, as of the date of such certificate, has no charge,
lien or claim of setoff under this Lease or otherwise against Base Rent,
additional rental or other charges due or to become due under this Lease; that
Landlord is not in default in performance of any covenant, agreement or
condition contained in this Lease; or any other matter relating to this Lease
or the Premises or, if one or more of the above statements are true, the facts
relating to such statements, specifying each such default. If there is a
Guaranty under this Lease, said Guarantor shall confirm the validity of the
Guaranty by joining in the execution of the Estoppel Certificate or other
documents so requested by Landlord or Mortgagee. In addition, in the event
that such certificate is being given to any Mortgagee, such statement may
contain any other provisions customarily required by such Mortgagee including,
without limitation, an agreement on the part of Tenant to furnish to such
Mortgagee, written notice of any Landlord default and a reasonable opportunity
for such Mortgagee to cure such default prior to Tenant being able to terminate
this Lease. Any such statement delivered pursuant to this Section may be
relied upon by Landlord or any Mortgagee, or prospective purchaser to whom it
is addressed and such statement, if required by its addressee, may so
specifically state. If Tenant does not execute, acknowledge and deliver to
Landlord the statement as and when required herein, Landlord is hereby granted
an irrevocable power-of-attorney, coupled with an interest, to execute such
statement on Tenant's behalf, which statement shall be binding on Tenant to the
same extent as if executed by Tenant (and such grant shall not be in limitation
of Landlord's other remedies for such failure by Tenant). Landlord must
provide a similar Estoppel Certificate if so requested by Tenant.
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ARTICLE XXII - ENTRY BY LANDLORD
22.01 Landlord may enter the Premises at all reasonable times and with
reasonable notice except in the case of an emergency to: inspect the same;
exhibit the same to prospective purchasers, Mortgagees or tenants; determine
whether Tenant is complying with all of its obligations under this Lease;
supply janitorial and other services to be provided by Landlord to Tenant under
this Lease; post notices of non-responsibility; and make repairs or
improvements in or to the Building or the Premises; provided, however, that all
such work shall be done as promptly as reasonably possible and so as to cause
as little interference to Tenant as reasonably possible. Tenant hereby waives
any claim for damages for any injury or inconvenience to, or interference with,
Tenant's business, any loss of occupancy or quiet enjoyment of the Premises or
any other loss occasioned by such entry. As provided for in clause (xii) of
Section 28.19 of this Lease, Landlord shall at all times have the right, but
not the obligation, to obtain from Tenant and retain a key with which to unlock
all of the doors in, on or about the Premises (excluding Tenant's vaults, safes
and similar areas designated by Tenant in writing in advance), and if such key
is not provided, Landlord shall have the right to use any and all means by
which Landlord may deem proper to open such doors to obtain entry to the
Premises, and any entry to the Premises obtained by Landlord by any such means,
or otherwise, shall not under any circumstances be deemed or construed to be a
forcible or unlawful entry into or a detainer of the Premises or an eviction,
actual or constructive, of Tenant from any part of the Premises. Such entry by
Landlord shall not act as a termination of Tenant's duties under this Lease.
If Landlord shall be required to obtain entry by means other than a key
provided by Tenant, the cost of such entry shall by payable by Tenant to
Landlord as additional rent.
ARTICLE XXIII
LANDLORD'S LEASE UNDERTAKINGS-EXCULPATION FROM PERSONAL LIABILITY;
TRANSFER OF LANDLORD'S INTEREST
23.01 LANDLORD'S LEASE UNDERTAKINGS. Notwithstanding anything to the
contrary contained in this Lease or in any exhibits, Riders or addenda hereto
attached (collectively the "Lease Documents"), it is expressly understood and
agreed by and between the parties hereto that: (a) the recourse of Tenant or
its successors or assigns against Landlord with respect to the alleged breach
by or on the part of Landlord of any representation, warranty, covenant,
undertaking or agreement contained in any of the Lease Documents or otherwise
arising out of Tenant's use of the Premises or the Building or the Project, if
applicable (collectively, "Landlord's Lease Undertakings") shall extend only to
Landlord's interest in the real estate of which the Premises demised under the
Lease Documents are a part ("Landlord's Real Estate") and not to any other
assets of Landlord or its members; and (b) except to the extent of Landlord's
interest in Landlord's Real Estate, no personal liability or personal
responsibility of any sort with respect to any of Landlord's Lease Undertakings
or any alleged breach thereof is assumed by, or shall at any time be asserted
or enforceable against, Landlord, Heitman Capital Management Corporation,
HRC-LLC, Inc., Heitman Properties Ltd., or Heitman Properties of Indiana Ltd.,
or against any of their respective directors, officers, employees, agents,
constituent partners, beneficiaries, trustees or representatives.
23.02 TRANSFER OF LANDLORD'S INTEREST. In the event of any transfer of
Landlord's interest in the Building, Landlord shall be automatically freed and
relieved from all applicable liability with respect to performance of any
covenant or obligation on the part of Landlord, provided any deposits or
advance rents held by Landlord are turned over to the grantee and said grantee
expressly assumes, subject to the limitations of this Section 23, all the
terms, covenants and conditions of this Lease to be performed on the part of
Landlord, it being intended hereby that the covenants and obligations contained
in this Lease on the part of Landlord shall, subject to all the provisions of
this Section 23, be binding on Landlord, its successors and assigns, only
during their respective periods of ownership.
ARTICLE XXIV - SURRENDER; HOLDOVER TENANCY
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24.01 CONDITION OF PREMISES AND REMOVAL OF PROPERTY. At the expiration
or earlier termination of this Lease or Tenant's right to possession of the
Premises, Tenant shall: (a) surrender possession of the Premises in
broom-clean condition and good repair, free of debris, and otherwise in the
condition required under Section 8.02, ordinary wear and tear excepted, (b)
ensure that all signs, movable trade fixtures and personal property (except
items originally provided by Landlord) have been removed from the Premises as
required under Section 9.04 hereof (subject to Article XXIX hereof), (c) ensure
that all Alterations required to be removed from the Premises pursuant to
Section 9.04 have been removed from the Premises, (d) ensure that any damage
caused by such removal has been repaired in a good and workmanlike manner as
required under Section 9.04 hereof (and Landlord may deny permission to remove
items where such removal may damage the structural integrity of the Building),
and (e) ensure that all actions required under the Rules and Regulations set
forth in Exhibit F to this Lease have been taken. Tenant understands that
"ordinary wear and tear" does not mean Tenant shall be relieved of performing
its obligations under this Lease relating to maintenance, repairs and
replacements as provided for in the Lease. The cost and expense of any repairs
necessary to restore the condition of the Premises shall be borne by Tenant,
and if Landlord undertakes to restore the Premises, it shall have a right of
reimbursement against Tenant.
24.02 ABANDONED PROPERTY. If Tenant shall fail to perform any repairs
or restoration, or fail to remove any items from the Premises as required
hereunder, Landlord may do so at Tenant's expense as provided in Sections 9.04
and 15.04 hereof and Tenant shall pay Landlord's charges therefor upon demand.
All property removed from the Premises by Landlord hereunder may be handled,
discarded or stored by Landlord at Tenant's expense, and Landlord shall in no
event be responsible for the value, preservation or safekeeping thereof. All
such property shall at Landlord's option be conclusively deemed to have been
conveyed by Tenant to Landlord as if by bill of sale without payment by
Landlord. If Landlord arranges for storage of any such property, Landlord
shall have a lien against such property for costs incurred in removing and
storing the same.
24.03 HOLDOVER TENANCY. If Tenant holds possession of the Premises after
the expiration or termination of the Lease Term without the consent of
Landlord, by lapse of time or otherwise, Tenant shall become a tenant at
sufferance upon all of the terms contained herein, except as to Lease Term and
Rent. During such holdover period, Tenant shall pay to Landlord a monthly
rental equivalent to two hundred percent (200%) of the Rent Payable by Tenant
to Landlord with respect to the last month of the Lease Term. The monthly rent
payable for such holdover period shall in no event be construed as a penalty or
as liquidated damages for such retention of possession. Without limiting the
foregoing, Tenant hereby agrees to indemnify, defend and hold harmless
Landlord, its beneficiary, and their respective agents, contractors and
employees, from and against any and all claims, liabilities, actions, losses,
damages (including without limitation, direct, indirect, incidental and
consequential) and expenses (including, without limitation, court costs and
reasonable attorneys' fees) asserted against or sustained by any such party and
arising from or by reason of such retention of possession, which obligations
shall survive the expiration or termination of the Lease Term.
ARTICLE XXV - NOTICES
25.01 All notices which Landlord or Tenant may be required, or may desire,
to serve on the other may be served, as an alternative to personal service, by
mailing the same by registered or certified mail, postage prepaid, or may be
sent by overnight courier, addressed to Landlord at the address for Landlord
set forth in Section 1.11 above and to Tenant at the address for Tenant set
forth in Section 1.12 above, or, from and after the Commencement Date, to
Tenant at the Premises whether or not Tenant has departed from, abandoned or
vacated the Premises, or addressed to such other address or addresses as either
Landlord or Tenant may from time to time designate to the other in writing.
Any notice shall be deemed to have been given and served three (3) days after
when delivered personally or otherwise at the time the same was posted, except
that any notice given by overnight courier shall be deemed given on the first
business day following the date such notice is delivered by such courier
provided such courier verifies delivery proof.
ARTICLE XXVI - BROKERS
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<PAGE> 30
26.01 The parties recognize as the broker(s) who procured this Lease the
firm(s) specified in Section 1.13 and agree that Landlord shall be solely
responsible for the payment of any brokerage commissions to said Broker(s), and
that Tenant shall have no responsibility therefor unless written provision to
the contrary has been made a part of this Lease. If Tenant or Landlord has
dealt with any other person or real estate broker in respect to leasing,
subleasing or renting space in the Building or the Project, if applicable,
Tenant or Landlord, as applicable shall be solely responsible for the payment
of any fee due said person or firm and Tenant shall protect, indemnify, hold
harmless and defend Landlord from any liability in respect thereto.
ARTICLE XXVII ELECTRONIC SERVICES
27.01 TENANT'S LINES. Tenant may, in a manner consistent with the
provisions and requirements of this Lease, install, maintain, replace, remove
or use any communications or computer or other electronic service wires, cables
and related devices (collectively the "Lines") at the Building in or serving
the Premises, provided: (a) Tenant shall obtain Landlord's prior written
consent, which consent may be conditioned as required by Landlord, (b) if
Tenant at any time uses any equipment that may create an electromagnetic field
exceeding the normal insulation ratings of ordinary twisted pair riser cable or
cause radiation higher than normal background radiation, the Lines therefor
(including riser cables) shall be appropriately insulated to prevent such
excessive electromagnetic fields or radiation, and (c) Tenant shall pay all
costs in connection therewith. Landlord reserves the right to require that
Tenant remove any Lines which are installed in violation of these provisions.
Tenant shall not, without the prior written consent of Landlord in each
instance, grant to any third party a security interest or lien in or on the
Lines, and any such security interest or lien granted without Landlord's
written consent shall be null and void.
27.02 DEFINITION OF ELECTRONIC SERVICES. As used herein "Electronic
Services Provider" means a business which provides telephone, telegraph, telex,
video, other telecommunications or other services which permit Tenant to
receive or transmit information by the use of electronics and which require the
use of wires, cables, antennas or similar devices in or on the Building. The
services of Electronic Services Providers are sometime referred to herein as
"Electronic Services."
27.03 NO RIGHT TO SPECIFIC SERVICES. Landlord shall have no obligation (i)
to install any Electronic Services equipment or facilities, (ii) to make
available to Tenant the services of any particular Electronic Services
Provider, (iii) to allow any particular Electronic Services Provider access to
the Building, (iv) to continue to grant access to an Electronic Services
Provider once such provider has been given access to the Building. Landlord
may (but shall not have the obligation to): (x) install new Lines at the
property, (y) create additional space for Lines at the property, and (z) adopt
reasonable and uniform rules and regulations with respect to Lines.
27.04 LIMITATION OF LANDLORD'S RESPONSIBILITY. Tenant acknowledges and
agrees that all Electronic Services desired by Tenant shall be ordered and
utilized at the sole expense of Tenant. Unless Landlord otherwise requests or
consents in writing, all of Tenant's Electronic Services equipment shall be and
remain solely in the Tenant's premises and the telephone closet(s) on the
floor(s) on which the Tenant's premises is located, in accordance with rules
and regulations adopted by Landlord from time to time. Unless otherwise
specifically agreed to in writing, Landlord shall have no responsibility for
the maintenance of Tenant's Electronic Services equipment, including Lines; nor
for any Lines or other infrastructure to which Tenant's Electronic Services
equipment may be connected. Tenant agrees that, to the extent any Electronic
Services are interrupted, curtailed or discontinued, Landlord shall have no
obligation or liability with respect thereto and it shall be the sole
obligation of Tenant at its own expense to obtain substitute service. Except to
the extent arising from the intentional or grossly negligent acts of Landlord
or Landlord's agents or employees, Landlord shall have no liability for damages
arising from, and Landlord does not warrant that Tenant's use of any Lines will
be free from the following (collectively called "Line Problems"): (x) any
eavesdropping or wire-tapping by unauthorized parties, (y) any failure of any
Lines to satisfy Tenant's requirements, or (z) any shortages, failures,
variations, interruptions, disconnections, loss or damage caused by the
installation, maintenance, replacement, use or removal of Lines by or for other
tenants or occupants at the property. Under no circumstances shall any Line
Problems be deemed an actual or constructive eviction of Tenant, render
Landlord liable to Tenant for abatement of Rent, or relieve Tenant from
performance of Tenant's
27
<PAGE> 31
obligations under this Lease. Landlord in no event shall be liable for damages
by reason of loss of profits, business interruption or other consequential
damage arising from any Line Problems.
27.05 NECESSARY SERVICE INTERRUPTIONS. Landlord shall have the right,
upon reasonable prior notice to Tenant, to interrupt or turn off Electronic
Services facilities in the event of emergency or as necessary in connection
with maintenance, repairs or construction at the Building or installation of
Electronic Services equipment for other Tenants of the Building or on account
of violation by the Electronic Services Provider or owner of the Electronic
Services equipment of any obligation to Landlord or in the event that Tenant's
use of the Electronic Services infrastructure of the Building materially
interferes with the Electronic Services of other tenants of the Building.
27.06 REMOVAL OF EQUIPMENT, WIRING AND OTHER FACILITIES. Any and all
Electronic Services equipment installed in the Tenant's Premises or elsewhere
in the Building by or on behalf of Tenant, including Lines, or other facilities
for Electronic Services reception or transmittal, shall be removed prior to the
expiration or earlier termination of the Lease term, by Tenant at its sole cost
or, at Landlord's election, by Landlord at Tenant's sole cost, with the cost
thereof to be paid as additional rent. Landlord shall have the right, however,
upon written notice to Tenant given no later than thirty (30) days prior to the
expiration or earlier termination of the Lease term (except that the notice
period shall extend to thirty (30) days beyond the date of termination of the
Lease if it is terminated by either party due to a default by the other), to
require Tenant to abandon and leave in place, without additional payment to
Tenant or credit against rent, any and all Electronic Services Lines and
related infrastructure, or selected components thereof, whether located in the
Tenant's premises or elsewhere in the Building.
27.07 NEW PROVIDER INSTALLATIONS. In the event that Tenant wishes at any
time to utilize the services of an Electronic Services Provider whose equipment
is not then servicing the Building, no such Electronic Services Provider shall
be permitted to install its Lines or other equipment within the Building
without first securing the prior written approval of the Landlord. Landlord's
approval shall not be deemed any kind of warranty or representation by
Landlord, including, without limitation, any warranty or representation as to
the suitability, competence, or financial strength of the Electronic Services
Provider. Without limitation of the foregoing standard, unless all of the
following conditions are satisfied to Landlord's satisfaction, it shall be
reasonable for Landlord to refuse to give its approval: (i) Landlord shall
incur no current expense or risk or future expense whatsoever with respect to
any aspect of the Electronic Services Provider's provision of its Electronic
Services, including without limitation, the costs of installation, materials
and services; (ii) prior to commencement of any work in or about the Building
by the Electronic Services Provider, the Electronic Services Provider shall
supply Landlord with such written indemnities, insurance, financial statements,
and such other items as Landlord reasonably determines to be necessary to
protect its financial interests and the interests of the Building relating to
the proposed activities of the Electronic Services Provider; (iii) the
Electronic Services Provider agrees to abide by such rules and regulations,
Building and other codes, job site rules and such other requirements as are
reasonably determined by Landlord to be necessary to protect the interests of
the Building, the Tenants in the Building and Landlord, in the same or similar
manner as Landlord has the right to protect itself and the Building with
respect to proposed alterations as described in Article IX of this Lease; (iv)
Landlord reasonably determines that, considering other potential uses for space
in the Building, there is sufficient space in the Building for the placement of
all of the provider's equipment, conduit, Lines and other materials; (v) the
Electronic Services Provider agrees to abide by Landlord's requirements, if
any, that provider use existing Building conduits and pipes or use Building
contractors (or other contractors approved by Landlord); (vi) Landlord receives
from the Electronic Services Provider such compensation as is reasonably
determined by Landlord to compensate it for space used in the Building for the
storage and maintenance of the Electronic Services Provider's equipment, for
the fair market value of a Electronic Services Provider's access to the
Building, for the use of common or core space within the Building and the costs
which may reasonably be expected to be incurred by Landlord; (vii) the provider
agrees to deliver to Landlord detailed "as built" plans immediately after the
installation of the provider's equipment is complete; and (viii) all of the
foregoing matters are documented in a written license agreement between
Landlord and the provider, the form and content of which is reasonably
satisfactory to Landlord."
27.08 LIMIT OF DEFAULT OR BREACH. Notwithstanding any provision of the
proceeding paragraphs to the contrary, the refusal of Landlord to grant its
approval to any prospective Electronic Services Provider shall not be deemed a
default or breach by Landlord of its obligation under this Lease unless and
until Landlord is adjudicated to
28
<PAGE> 32
have acted recklessly or maliciously with respect to Tenant's request for
approval, and in that event, Tenant shall still have no right to terminate the
Lease or claim an entitlement to rent abatement, but may as Tenant's sole and
exclusive recourse seek a judicial order of specific performance compelling
Landlord to grant its approval as to the prospective provider in question. The
provisions of this paragraph may be enforced solely by Tenant and Landlord, are
not for the benefit of any other party, and specifically but without
limitation, no telephone or other Electronic Services Provider shall be deemed
a third party beneficiary of this Lease.
27.09 INSTALLATION AND USE OF WIRELESS TECHNOLOGIES. Tenant shall not
utilize any wireless Electronic Services equipment (other than usual and
customary cellular telephones), including antennae and satellite receiver
dishes, within the Tenant's premises, within the Building or attached to the
outside walls or roof of the Building, without Landlord's prior written
consent. Such consent may be conditioned in such a manner so as to protect
Landlord's financial interests and the interests of the Building, and the other
tenants therein, in a manner similar to the arrangements described in the
immediately preceding paragraphs.
27.10 LIMITATION OF LIABILITY FOR EQUIPMENT INTERFERENCE. In the event
that Electronic Services equipment, Lines and facilities or satellite and
antennae equipment of any type installed by or at the request of Tenant within
the Tenant's premises, on the roof, or elsewhere within or on the Building
causes interference to equipment used by another party, Tenant shall cease
using such equipment, Lines and facilities or satellite and antennae equipment
until the source of the interference is identified and eliminated and Tenant
shall assume all liability related to such interference. Tenant shall
cooperate with Landlord and other parties, to eliminate such interference
promptly. In the event that Tenant is unable to do so, Tenant will substitute
alternative equipment which remedies the situation. If such interference
persists, Tenant shall, at Landlord's sole discretion, remove such equipment.
ARTICLE XXVIII - MISCELLANEOUS
28.01 ENTIRE AGREEMENT. This Lease contains all of the agreements and
understandings relating to the leasing of the Premises and the obligations of
Landlord and Tenant in connection with such leasing. Landlord has not made,
and Tenant is not relying upon, any warranties, or representations, promises or
statements made by Landlord or any agent of Landlord, except as expressly set
forth herein. This Lease supersedes any and all prior agreements and
understandings between Landlord and Tenant and alone expresses the agreement of
the parties.
28.02 AMENDMENTS. This Lease shall not be amended, changed or modified
in any way unless in writing executed by Landlord and Tenant. Landlord shall
not have waived or released any of its rights hereunder unless in writing and
executed by Landlord.
28.03 SUCCESSORS. Except as expressly provided herein, this Lease and
the obligations of Landlord and Tenant contained herein shall bind and benefit
the successors and assigns of the parties hereto.
28.04 FORCE MAJEURE. Landlord shall incur no liability to Tenant with
respect to, and shall not be responsible for any failure to perform, any of
Landlord's obligations hereunder if such failure is caused by any reason beyond
the control of Landlord including, but not limited to, strike, labor trouble,
governmental rule, regulations, ordinance, statute or interpretation, or by
fire, earthquake, civil commotion, or failure or disruption of utility
services. The amount of time for Landlord to perform any of Landlord's
obligations shall be extended by the amount of time Landlord is delayed in
performing such obligation by reason of any force majeure occurrence whether
similar to or different from the foregoing types of occurrences.
28.05 SURVIVAL OF OBLIGATIONS. Any obligations of Tenant accruing prior
to the expiration of the Lease shall survive the expiration or earlier
termination of the Lease, and Tenant shall promptly perform all such
obligations whether or not this Lease has expired or been terminated.
29
<PAGE> 33
28.06 LIGHT AND AIR. No diminution or shutting off of any light, air or
view by any structure now or hereafter erected shall in any manner affect this
Lease or the obligations of Tenant hereunder, or increase any of the
obligations of Landlord hereunder.
28.07 GOVERNING LAW. This Lease shall be governed by, and construed in
accordance with, the laws of the State of Indiana.
28.08 SEVERABILITY. In the event any provision of this Lease is found to
be unenforceable, the remainder of this Lease shall not be affected, and any
provision found to be invalid shall be enforceable to the extent permitted by
law. The parties agree that in the event two different interpretations may be
given to any provision hereunder, one of which will render the provision
unenforceable, and one of which will render the provision enforceable, the
interpretation rendering the provision enforceable shall be adopted.
28.09 CAPTIONS. All captions, headings, titles, numerical references and
computer highlighting are for convenience only and shall have no effect on the
interpretation of this Lease.
28.10 INTERPRETATION. Tenant acknowledges that it has read and reviewed
this Lease and that it has had the opportunity to confer with counsel in the
negotiation of this Lease. Accordingly, this Lease shall be construed neither
for nor against Landlord or Tenant, but shall be given a fair and reasonable
interpretation in accordance with the meaning of its terms and the intent of
the parties.
28.11 INDEPENDENT COVENANTS. Each covenant, agreement, obligation or
other provision of this Lease to be performed by Tenant are separate and
independent covenants of Tenant, and not dependent on any other provision of
the Lease.
28.12 NUMBER AND GENDER. All terms and words used in this Lease,
regardless of the number or gender in which they are used, shall be deemed to
include the appropriate number and gender, as the context may require.
28.13 TIME IS OF THE ESSENCE. Time is of the essence of this Lease and
the performance of all obligations hereunder.
28.14 JOINT AND SEVERAL LIABILITY. If Tenant comprises more than one
person or entity, or if this Lease is guaranteed by any party, all such persons
shall be jointly and severally liable for payment of rents and the performance
of Tenant's obligations hereunder. If Tenant comprises more than one person or
entity and fewer than all of the persons or entities comprising Tenant abandon
the Premises, Landlord, at its sole option, may treat the abandonment by such
person or entities as an event of default and exercise with respect to such
persons the rights and remedies provided in Article XV without affecting the
right or obligations of the persons or entities comprising Tenant which have
not abandoned the property.
28.15 EXHIBITS. Exhibits A (Outline of Premises), B (Work Letter
Agreement), C (Suite Acceptance Letter), D (Tenant Operations Inquiry), E (List
of Additional Insureds), F (Rules and Regulations), and G (Guaranty), and
Schedule 1 to Exhibit D (List of Permissible Hazardous Materials and
Quantities) are incorporated into this Lease by reference and made a part
hereof.
28.16 OFFER TO LEASE. The submission of this Lease to Tenant or its
broker or other agent, does not constitute an offer to Tenant to lease the
Premises. This Lease shall have no force and effect until (a) it is executed
and delivered by Tenant to Landlord and (b) it is fully reviewed and executed
by Landlord; provided, however, that, upon execution of this Lease by Tenant
and delivery to Landlord, such execution and delivery by Tenant, shall, in
consideration of the time and expense incurred by Landlord in reviewing the
Lease and Tenant's credit, constitute an offer by Tenant to lease the Premises
upon the terms and conditions set forth herein (which offer to Lease shall be
irrevocable for ten (10) business days following the date of delivery).
30
<PAGE> 34
28.17 WAIVER; NO COUNTERCLAIM; CHOICE OF LAWS. To the extent permitted
by applicable law, Tenant hereby waives the right to a jury trial in any action
or proceeding regarding this Lease and the tenancy created by this Lease. It
is mutually agreed that in the event Landlord commences any summary proceeding
for non-payment of Rent, Tenant will not interpose any counterclaim of whatever
nature or description in any such proceeding. In addition, Tenant hereby
submits to local jurisdiction in the State of Indiana and agrees that any
action by Tenant against Landlord shall be instituted in the State of Indiana
and that Landlord shall have personal jurisdiction over Tenant for any action
brought by Landlord against Tenant in the State of Indiana. To the extent
permitted by applicable law, Tenant hereby waives any and all rights of
redemption granted by any present or future laws.
28.18 ELECTRICAL SERVICE TO THE PREMISES. Anything set forth in Section
7.01 or elsewhere in this Lease to the contrary notwithstanding, electricity to
the Premises shall not be furnished by Landlord, but shall be furnished by the
approved electric utility company serving the Building. Landlord shall permit
Tenant to receive such service directly from such utility company at Tenant's
cost (except as otherwise provided herein) and shall permit Landlord's wire and
conduits, to the extent available, suitable and safely capable, to be used for
such purposes.
28.19 RIGHTS RESERVED BY LANDLORD. Landlord reserves the following
rights exercisable without notice (except as otherwise expressly provided to
the contrary in this Lease) and without being deemed an eviction or disturbance
of Tenant's use or possession of the Premises or giving rise to any claim for
set-off or abatement of Rent: (i ) to change the name or street address of the
Building; (ii) to install, affix and maintain all signs on the exterior and/or
interior of the Building; (iii) to designate and/or approve prior to
installation, all types of signs, window shades, blinds, drapes, awnings or
other similar items, and all internal lighting that may be visible from the
exterior of the Premises; (iv) to change the arrangement of entrances, doors,
corridors, elevators and/or stairs in the Building, provided no such change
shall materially adversely affect access to the Premises; (v) to grant any
party the exclusive right to conduct any business or render any service in the
Building, provided such exclusive right shall not operate to prohibit Tenant
from using the Premises for the purposes permitted under this Lease; (vi) to
prohibit the placement of vending or dispensing machines of any kind in or
about the Premises other than for use by Tenant's employees; (vii) to prohibit
the placement of video or other electronic games in the Premises; (viii) to
have access for Landlord and other tenants of the Building to any mail chutes
and boxes located in or on the Premises according to the rules of the United
States Post Office; (ix) to close the Building after normal business hours,
except that Tenant and its employees and invitees shall be entitled to
admission at all times under such rules and regulations as Landlord prescribes
for security purposes; (x) to install, operate and maintain security systems
which monitor, by close circuit television or otherwise, all persons entering
or leaving the Building; (xi) to install and maintain pipes, ducts, conduits,
wires and structural elements located in the Premises which serve other parts
or other tenants of the Building; but Landlord will use reasonable efforts to
minimize interference with Tenant's operations, however, Landlord shall have no
liability for any such interference unless resulting from the willful actions
of Landlord; and (xii) to retain at all times master keys or pass keys to the
Premises.
28.20 TENANT OPERATIONS INQUIRY. As a material inducement to Landlord to
enter into this Lease (i) Tenant has completed Exhibit D hereto, and (ii)
Tenant represents and warrants to Landlord that Exhibit D is true and correct
in all material respects and is not misleading.
28.21 GUARANTY. Simultaneously with execution and delivery of this
Lease, the Guarantors shall execute and deliver to Landlord the Guaranty in the
form and content of Exhibit G hereto.
ARTICLE XXIX - FLOOR LOAD LIMITS
29.01 FLOOR LOAD LIMITS. Tenant shall not place a load upon any floor of
the Premises exceeding the floor load per square foot area which it was
designed to carry and which is allowed by law. Landlord reserves the right to
prescribe the weight and position of all safes, business machines and
mechanical equipment in the Building. Such installations shall be placed and
maintained by Tenant, at Tenant's expense, in settings sufficient, in
Landlord's judgment, to absorb and prevent vibration, noise and annoyance to
occupants of the Building, the Project, if applicable, or any adjacent
property.
ARTICLE XXX - LANDLORD'S LIEN
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30.01 LANDLORD'S LIEN. INTENTIONALLY OMITTED
ARTICLE XXXI - UNIFORM COMMERCIAL CODE
31.01 UNIFORM COMMERCIAL CODE. INTENTIONALLY OMITTED
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IN WITNESS WHEREOF, the parties hereto have executed this lease as of the
date first above written.
<TABLE>
<S> <C>
LANDLORD:
---------
IP PROPERTIES, a Wyoming
Limited Liability Company
By: HRC-LLC, INC., a Wyoming
TENANT: corporation, its manager
- ------- By: /s/
Brightpoint North America, Inc. -----------------------------
an Indiana Corporation
- ------------------------------------ Its: Vice President
By: /s/ Steven E. Fivel -----------------------------
-------------------------------
Its: Vice President
-------------------------------
*ATTEST:
- ------------------------------------
- ------------------------------------
</TABLE>
* Completion necessary only if Tenant's
organizational documents require dual signature.
<PAGE> 37
ADDENDUM TO LEASE, dated March 31, 1998 between IP PROPERTIES, a
Wyoming Limited Liability Company, (hereinafter referred to as "Landlord"), and
Brightpoint North America, Inc., an Indiana Corporation (Hereinafter referred
to as "Tenant")
1. When Landlord's or Tenant's consent is required throughout this Lease,
said consent shall not be unreasonably withheld or delayed.
2. LATENT DEFECTS
--------------
Notwithstanding anything to the contrary contained herein, Tenant shall
not be required to take any corrective action with respect to any
condition or design which constitutes a latent defect in the Premises by
virtue of Tenant's acceptance of the Premises. If any latent defect
materially adversely affects Tenant's quiet enjoyment of the Premises,
constitutes a dangerous condition or is required to be correctedby law,
then Landlord will promptly undertake the corrective action at Landlord's
cost and such cost shall not become a part of the operating expenses of
the Building as relative to expenses for which Tenant is obligated to pay
its percentage share. Nothing contained in this paragraph shall be
construed to impose on Tenant or subject Tenant to any liability to any
third party for injury to property or persons arising out of latent
defects unless such latent defects were created by Tenant or its employees
, agents or contractors in the course of repair work or physical
improvements or alterations to the Premises performed by Tenant or its
employees, agents or contractors, in which case Tenant shall promptly
undertake the appropriate corrective action, at Tenant's sole cost and
expense. Nothing contained in this paragraph shall be construed to
impose on Landlord or subject Landlord to any liability to any third party
for injury to property or persons arising out of latent defects unless
such latent defects were created by Landlord or its agents, employees or
contractors.
3. Landlord shall provide 110 parking spaces in the area shown on Schedule 1
to this Addendum to Lease for Tenant's exclusive use for the duration of
the Lease, but Landlord shall have no duty to enforce such exclusive use
by Tenant.
4. OPERATING EXPENSE EXCLUSIONS. Notwithstanding anything herein to the
contrary, the following shall not be included as part of the Operating
Expenses:
1) The cost of repairs or restoration necessitated by condemnation.
2) Franchise taxes and income taxes of Landlord.
3) The cost of any item or items for which Landlord is reimbursed by
insurance or reimbursed by other tenants of the Building.
4) The cost of any electric current furnished separately to any other
tenant through metering.
5) Any cost stated in Operating Expenses representing an amount paid to
a corporation or entity which is controlled by or under common
control with Landlord which is in excess of the amounts
which would be paid in the absence of such relationship.
6) The cost of installing, operating and maintaining any specialty such
as observatory, broadcasting facility, luncheon club, athletic or
recreational club, theater or cafeteria.
7) The cost of correcting defects in construction of the Building, or
other part of the Premises.
8) Any insurance premium to the extent that Landlord is entitled to be
reimbursed therefor by Tenant pursuant to this Lease or by any other
occupant of the Building.
9) The cost of any architectural additions to the Building that result
in a larger building.
10) Capital expenditures for depreciable Building improvements,
structural repairs, tenant improvements or initial landscaping.
11) Expenditures and capital outlays to bring the Building into
compliance with the ADA or other similar act.
12) Any expenses resulting from the gross negligence of Landlord, its
agents, servants or employees.
13) Any bad-debt loss, rent loss or reserves for bad debts or rent loss.
14) All interest or penalties incurred as a result of Landlord's gross
negligence failing to pay any
<PAGE> 38
Operating Expenses, Insurance Expense or Property Taxes as the
same shall become due, unless such delay shall be caused by
Tenant or Tenant's agents.
15) Any and all costs associated with the operation of Landlord as
a limited liability company or other legal entity, as the same
are distinguished from the costs of operation of the Building
or Premises.
16) All charges for complying with laws, codes, regulations, or
ordinances relating to Hazardous Materials.
17) Any mark up of the cost of utilities as billed by the utility
service beyond a reasonable charge for administration, if
administration is actually performed.
5. NON-DISTURBANCE
---------------
At Tenant's written request, Landlord agrees to use diligent, commercially
reasonable efforts to obtain a Non-Disturbance Agreement from the holder
of any future Mortgage. Such Non-Disturbance Agreement may be embodied in
the Mortgagee's customary form of Subordination and Non-Disturbance
Agreement. If, after exerting diligent, commercially reasonable efforts,
Landlord is unable to obtain a Non-Disturbance Agreement from any such
holder, Landlord shall have no further obligation to Tenant with respect
thereto.
6. If there is a conflict between this Lease and the Rules and Regulations in
Exhibit F of this Lease, the Lease shall prevail.
7. The terms and conditions of this Lease shall be in full force and effect
upon Tenant taking possession of the Premises. However, the base rent due
and payable shall not begin until the Commencement Date as defined in
Section 1.05 of this Lease.
<PAGE> 39
EXHIBIT A
FLOOR PLAN OR LAYOUT OF PREMISES
(Approximately 23,990 Sq. Ft.)
(Office 20,112 Sq. Ft.)
(Warehouse 3,878 Sq. Ft.)
TENANT: BRIGHTPOINT NORTH AMERICA, INC., AN INDIANA CORPORATION
<PAGE> 40
EXHIBIT B
WORK LETTER AGREEMENT
[TENANT PERFORMS WORK]
This Work Letter Agreement ("Work Letter") is executed simultaneously with
that certain Lease (the "Lease") between Brightpoint North America, Inc., an
Indiana Corporation, as "Tenant", and IP PROPERTIES, a Wyoming Limited
Liability Company, as "Landlord", relating to demised premises ("Premises") at
the building commonly known as INDIANAPOLIS INDUSTRIALS (the "Building"), which
Premises are more fully identified in the Lease. Capitalized terms used
herein, unless otherwise defined in this Work Letter, shall have the respective
meanings ascribed to them in the Lease.
For and in consideration of the agreement to lease the Premises and the
mutual convenants contained herein and in the Lease, Landlord and Tenant hereby
agree as follows:
1. WORK. Tenant, at its sole cost and expense, shall perform, or cause
to be performed, the work (the "Work") in the Premises provided for in the
Approved Plans (as defined in Paragraph 2 hereof). Subject to Tenant's
satisfaction of the conditions specified in this Work Letter Agreement, Tenant
shall be entitled to Landlord's Contribution (as defined in Paragraph 8[b]
below.
2. PRE-CONSTRUCTION ACTIVITIES.
(a) On or before March 15, 1998, Tenant shall submit the following
information and items to Landlord for Landlord's review and approval:
(i) A detailed critical path construction schedule containing the major
components of the Work and the time required for each, including the scheduled
commencement date of construction of the Work, milestone dates and the
estimated date of completion of construction.
(ii) An itemized statement of estimated construction cost, including fees
for permits and architectural and engineering fees.
(iii) Evidence satisfactory to Landlord in all respects of Tenant's
ability to pay the cost of the Work as and when payments become due.
(iv) The names and addresses of Tenant's contractors (and said
contractor's subcontractors) and materialmen to be engaged by Tenant for the
Work (individually, a "Tenant Contractor," and collectively, "Tenant's
Contractors"). Landlord has the right to approve or disapprove all or any one
or more of Tenant's Contractors. Landlord may, at its election, designate a
list of approved contractors for performance of those portions of work
involving electrical, mechanical, plumbing, heating, air conditioning or life
safety systems, from which Tenant must select its contractors for such
designated portions of work.
(v) Certified copies of insurance policies or certificates of insurance
as hereinafter described. Tenant shall not permit Tenant's Contractors to
commence work until the required insurance has been obtained and certified
copies of policies or certificates have been delivered to Landlord.
(vi) Payment and performance bonds for all of Tenant's Contractors naming
Landlord (or an agent, designee or representative appointed by Landlord's
written notice to Tenant given prior to Tenant's procurement of paid bonds) as
dual obligee.
(vii) The Plans (as hereinafter defined) for the Work, which Plans shall
be subject to Landlord's approval in accordance with Paragraph 2(b) below.
Tenant will update such information and items by notice to Landlord of any
changes.
1
<PAGE> 41
(b) As used herein the term "Approved Plans" shall mean the Plans (as
hereinafter defined), as and when approved in writing by Landlord. As used
herein, the term "Plans" shall mean the full and detailed architectural and
engineering plans and specifications covering the Work (including, without
limitation, architectural, mechanical and electrical working drawings for the
Work). The Plans shall be subject to Landlord's approval and the approval of
all local governmental authorities requiring approval of the work and/or the
Approved Plan. Landlord shall give its approval or disapproval (giving general
reasons in case of disapproval) of the Plans within three (3) days after their
delivery to Landlord. Landlord agrees not to unreasonably withhold its
approval of said Plans; provided, however, that Landlord shall not be deemed to
have acted unreasonably if it withholds its approval of the Plans because, in
Landlord's reasonable opinion: the Work as shown in the Plans is likely to
adversely affect Building systems, the structure of the Building or the safety
of the Building and/or its occupants; the Work as shown on the Plans might
impair Landlord's ability to furnish services to Tenant or other tenants; the
Work would increase the cost of operating the Building; the Work would violate
any governmental laws, rules or ordinances (or interpretations thereof); the
Work contains or uses hazardous or toxic materials or substances; the Work
would adversely affect the appearance of the Building; the Work might adversely
affect another tenant's premises; or the Work is prohibited by any mortgage or
trust deed encumbering the Building. The foregoing reasons, however, shall not
be exclusive of the reasons for which Landlord may withhold consent, whether or
not such other reasons are similar or dissimilar to the foregoing. If Landlord
notifies Tenant that changes are required to the final Plans submitted by
Tenant, Tenant shall, within three (3) business days thereafter, submit to
Landlord, for its approval, the Plans amended in accordance with the changes so
required. The Plans shall also be revised, and the Work shall be changed, all
at Tenant's cost and expense, to incorporate any work required in the Premises
by any local governmental field inspector. Landlord's approval of the Plans
shall in no way be deemed to be (i) an acceptance or approval of any element
therein contained which is in violation of any applicable laws, ordinances,
regulations or other governmental requirements, or (ii) an assurance that work
done pursuant to the Approved Plans will comply with all applicable laws (or
with the interpretations thereof) or satisfy Tenant's objectives and needs.
(c) No Work shall be undertaken or commenced by Tenant in the Premises
until (i) Tenant has delivered, and Landlord has approved, all items set forth
in Paragraph 2(a) above, (ii) all necessary building permits have been applied
for and obtained by Tenant, and (iii) proper provision has been made by Tenant
for payment in full of the cost of the Work, which is satisfactory to Landlord
and which, if applicable, shall be in the form of the construction escrow
referred to in Paragraph 9 hereof or an irrevocable and unconditional letter of
credit issued by a bank acceptable to Landlord, which letter of credit shall be
satisfactory in all respects by Landlord.
(d) Tenant agrees to use its best efforts to obtain or cause to be
obtained a "no-lien" contract from each of Tenant's Contractors. Each such
no-lien Tenant's Contract shall be recorded in the Office of the Recorder of
Deeds of the county in which the Premises is located within 10 days after the
execution of such contract, and all subcontractors under each of such contracts
shall be given a notice of such no-lien contract before any labor or materials
is furnished by such subcontractor. If Tenant is unable to obtain or cause to
be obtained a no-lien contract from any proposed Tenant Contractor, Tenant
shall give written notice of such fact to Landlord and Landlord shall have the
right to disapprove the Tenant Contract with such Tenant Contractor, which
disapproval shall be deemed to be reasonable in all respects.
3. DELAYS. In the event Tenant fails to deliver or deliver in sufficient
and accurate detail the information required under Paragraph 2 above on or
before the respective dates specified in said Paragraph 2, or in the event
Tenant, for any reason, fails to complete the Work on or before the
Commencement Date, Tenant shall be responsible for Rent and all other
obligations set forth in the Lease from the Commencement Date regardless of the
degree of completion of the Work on such date, and no such delay in completion
of the Work shall relieve Tenant of any of its obligations under the Lease.
4. CHARGES AND FEES. INTENTIONALLY OMITTED
5. CHANGE ORDERS. All changes to the Approved Plans requested by Tenant
must be approved by Landlord in advance of the implementation of such changes
as part of the Work. All delays caused by Tenant-initiated change orders,
including, without limitation, any stoppage of work during the change order
review process,
<PAGE> 42
are solely the responsibility of Tenant and shall cause no delay in the
commencement of the Lease or the Rent and other obligations therein set forth.
All increases in the cost of the Work resulting from such change orders shall
be borne by Tenant.
6. STANDARDS OF DESIGN AND CONSTRUCTION AND CONDITIONS OF TENANT'S
PERFORMANCE. All work done in or upon the Premises by Tenant shall be done
according to the standards set forth in this Paragraph 6, except as the same
may be modified in the Approved Plans approved by or on behalf of Landlord and
Tenant.
(a) Tenant's Approved Plans and all design and construction of the Work
shall comply with all applicable statutes, ordinances, regulations, laws, codes
and industry standards, including, but not limited to, requirements of
Landlord's fire insurance underwriters.
(b) Tenant shall, at its own cost and expense, obtain all required
building permits and occupancy permits. Tenant's failure to obtain such
permits shall not cause a delay in the commencement of the Lease Term or the
obligation to pay Rent or any other obligations set forth in the Lease.
(c) Tenant's Contractors shall be licensed contractors, possessing good
labor relations, capable of performing quality workmanship and working in
harmony with Landlord's contractors and subcontractors and with other
contractors and subcontractors in the Building. All work shall be coordinated
with any other construction or other work in the Building in order not to
adversely affect construction work being performed by or for Landlord or its
tenants.
(d) Landlord shall have the right, but not the obligation, to perform, on
behalf of and for the account of Tenant, subject to reimbursement by Tenant,
any work which pertains to patching of the Work and other work in the Building.
(e) Tenant shall use only new, first-class materials in the Work, except
where explicitly shown in the Approved Plans, All Work shall be done in a good
and workmanlike manner. Tenant shall obtain contractors' warranties of at
least one (1) year duration from the completion of the Work against defects in
workmanship and materials on all work performed and equipment installed in the
Premises as part of the Work.
(f) Tenant and Tenant's Contractors shall make all efforts and take all
steps appropriate to assure that all construction activities undertaken comport
with the reasonable expectations of all tenants and other occupants of a
fully-occupied (or substantially fully occupied) first-class office building
and do not unreasonably interfere with the operation of the Building or with
other tenants and occupants of the Building. In any event, Tenant shall comply
with all reasonable rules and regulations existing from time to time at the
Building. Tenant and Tenant's Contractors shall take all precautionary steps
to minimize dust, noise and construction traffic, and to protect their
facilities and the facilities of others affected by the Work and to properly
police same. Construction equipment and materials are to be kept within the
Premises and delivery and loading of equipment and materials shall be done at
such locations and at such time as Landlord shall direct so as not to burden
the construction or operation of the Building. If and as required by Landlord,
the Premises shall be sealed off from the balance of the office space on the
floor(s) containing the Premises so as to minimize the dispersement of dirt,
debris and noise.
(g) Landlord shall have the right to order Tenant or any of Tenant's
Contractors who violate the requirements imposed on Tenant or Tenant's
Contractors in performing work to cease work and remove its equipment and
employees from the Building. No such action by Landlord shall delay the
commencement of the Lease or the obligation to pay Rent or any other
obligations therein set forth.
(h) Utility costs or charges for any service (including HVAC, hoisting or
freight elevator and the like) to the Premises shall be the responsibility of
Tenant from the date Tenant is obligated to commence or commences the Work and
shall be paid for by Tenant at Landlord's standard rates then in effect.
Tenant shall apply and pay for all utility meters required. Tenant shall pay
for all support services provided by Landlord's contractors at Tenant's request
or at Landlord's discretion resulting from breaches or defaults by Tenant under
this Work Letter Agreement. All use of freight elevators is subject to
scheduling by Landlord and the rules and regulations of the
3
<PAGE> 43
Building. Tenant shall arrange and pay for removal of construction debris and
shall not place debris in the Building's waste containers. If required by
Landlord, Tenant shall sort and separate its waste and debris for recycling
and/or environmental law compliance purposes.
(i) Tenant shall permit access to the Premises, and the Work shall be
subject to inspection, by Landlord and Landlord's architects, engineers,
contractors and other representatives, at all times during the period in which
the Work is being constructed and installed and following completion of the
Work.
(j) Tenant shall proceed with its work expeditiously, continuously and
efficiently, and shall use its best efforts to complete the same on or before
sixty (60) days after the date Landlord tenders possession of the Premises to
Tenant for the construction of the Work. Tenant shall notify Landlord upon
completion of the Work and shall furnish Landlord and Landlord's title
insurance company with such further documentation as may be necessary under
Paragraphs 8 and 9 below.
(k) Tenant shall have no authority to deviate in a material manner as
reasonably determined by Landlord from the Approved Plans in performance of the
Work, except as authorized by Landlord and its designated representative in
writing. Tenant shall furnish to Landlord "as-built" drawings of the Work
within thirty (30) days after completion of the Work.
(l) Landlord shall have the right at Landlord's sole expense to run
utility lines, pipes, conduits, duct work and component parts of all mechanical
and electrical systems where necessary or desirable through the Premises, to
repair, alter, replace or remove the same, so long as Tenant's work is not
materially disrupted and to require Tenant to install and maintain proper
access panels thereto.
(m) Tenant shall impose on and enforce all applicable terms of this Work
Letter Agreement against Tenant's architect and Tenant's Contractors.
7. INSURANCE AND INDEMNIFICATION.
(a) In addition to any insurance which may be required under the Lease,
Tenant shall secure, pay for and maintain or cause Tenant's Contractors to
secure, pay for and maintain during the continuance of construction and
fixturing work within the Building or Premises, insurance in the following
minimum coverages and the following minimum limits of liability:
(i) Worker's Compensation and Employer's Liability Insurance with limits
of not less than $500,000.00, or such higher amounts as may be required from
time to time by any Employee Benefit Acts or other statutes applicable where
the work is to be performed, and in any event sufficient to protect Tenant's
Contractors from liability under the aforementioned acts.
(ii) Comprehensive General Liability Insurance (including Contractors'
Protective Liability) in an amount not less than $1,000,000.00 per occurrence,
whether involving bodily injury liability (or death resulting therefrom) or
property damage liability or a combination thereof with a minimum aggregate
limit of $2,000,000.00, and with umbrella coverage with limits not less than
$5,000,000.00. Such insurance shall provide for explosion and collapse,
completed operations coverage and broad form blanket contractual liability
coverage and shall insure Tenant's Contractors against any and all claims for
bodily injury, including death resulting
4
<PAGE> 44
therefrom, and damage to the property of others and arising from its operations
under the contracts whether such operations are performed by Tenant's
Contractors or by anyone directly or indirectly employed by any of them.
(iii) Comprehensive Automobile Liability Insurance, including the
ownership, maintenance and operation of any automotive equipment, owned, hired,
or non-owned in an amount not less than $500,000.00 for each person in one
accident, and $1,000,000.00 for injuries sustained by two or more persons in
any one accident and property damage liability in an amount not less than
$1,000,000.00 for each accident. Such insurance shall insure Tenant's
Contractors against any and all claims for bodily injury, including death
resulting therefrom, and damage to the property of others arising from its
operations under the contracts, whether such operations are performed by
Tenant's Contractors, or by anyone directly or indirectly employed by any of
them.
(iv) "All-risk" builder's risk insurance upon the entire Work to the full
insurable value thereof. This insurance shall include the interests of
Landlord and Tenant (and their respective contractors and subcontractors of any
tier to the extent of any insurable interest therein) in the Work and shall
insure against the perils of fire and extended coverage and shall include
"all-risk" builder's risk insurance for physical loss or damage including,
without duplication of coverage, theft vandalism and malicious mischief. If
portions of the Work are stored off the site of the Building or in transit to
said site are not covered under said "all-risk" builder's risk insurance, then
Tenant shall effect and maintain similar property insurance on such portions of
the Work. Any loss insured under said "all-risk" builder's risk insurance is
to be adjusted with Landlord and Tenant and made payable to Landlord, as
trustee for the insureds, as their interests may appear.
All policies (except the worker's compensation policy) shall be endorsed to
include as additional insured parties the parties listed on, or required by,
the Lease, Landlord's contractors, Landlord's architects, and their respective
beneficiaries, partners, directors, officers, employees and agents, and such
additional persons as Landlord may designate. The waiver of subrogation
provisions contained in the Lease shall apply to all insurance policies (except
the workmen's compensation policy) to be obtained by Tenant pursuant to this
paragraph. The insurance policy endorsements shall also provide that all
additional insured parties shall be given thirty (30) days' prior written
notice of any reduction, cancellation or non-renewal of coverage (except that
ten (10) days' notice shall be sufficient in the case of cancellation for
non-payment of premium) and shall provide that the insurance coverage afforded
to the additional insured parties thereunder shall be primary to any insurance
carried independently by said additional insured parties. Additionally, where
applicable, each policy shall contain a cross-liability and severability of
interest clause.
(b) Without limitation of the indemnification provisions contained in the
Lease, to the fullest extent permitted by law Tenant agrees to indemnify,
protect, defend and hold harmless Landlord, the parties listed, or required by,
the Lease to be named as additional insureds, Landlord's contractors,
Landlord's architects, and their respective beneficiaries, partners, directors,
officers, employees and agents, from and against all claims, liabilities,
losses, damages and expenses of whatever nature arising out of or in connection
with the Work or the entry of Tenant or Tenant's Contractors into the Building
and the Premises, including, without limitation, mechanic's liens, the cost of
any repairs to the Premises or Building necessitated by activities of Tenant or
Tenant's Contractors, bodily injury to persons (including, to the maximum
extent provided by law, claims arising under the Indiana Structural Work Act)
or damage to the property of Tenant, its employees, agents, invitees, licenses
or others. It is understood and agreed that the foregoing indemnity shall be
in addition to the insurance requirements set forth above and shall not be in
discharge of or in substitution for same or any other indemnity or insurance
provision of the Lease.
8. LANDLORD'S CONTRIBUTION; EXCESS AMOUNTS.
(a) Upon completion of the Work, Tenant shall furnish Landlord with full
and final waivers of liens and contractors' affidavits and statements, in such
form as may be required by Landlord, Landlord's title insurance company and
Landlord's construction or permanent lender, if any, from all parties
performing labor or supplying materials or services in connection with the Work
showing that all of said parties have been compensated in full and waiving all
liens in connection with the Premises and Building. Tenant shall submit to
Landlord a detailed breakdown of Tenant's total construction costs, together
with such evidence of payment as is reasonably satisfactory to Landlord.
(b) Upon completion of the Work and Tenant's satisfaction of all
requirements set forth in this Work Letter Agreement, Landlord shall make a
dollar contribution in the amount of $0.00 (Landlord's Contribution") (which is
$0.00 per square foot of Rentable Area of the Premises) for application to the
extent thereof to the cost of the Work. If the cost of the Work exceeds
Landlord's Contribution, Tenant shall have sole responsibility for the payment
of such excess cost. If the cost of the Work is less than Landlord's
Contribution, Tenant shall not be entitled to any payment or credit for such
excess amount. Notwithstanding anything herein to
5
<PAGE> 45
the contrary, Landlord may deduct from Landlord's Contribution any amounts due
Landlord or its architects or engineers under this Work Letter before disbursing
any other portion of Landlord's Contribution. Landlord shall be entitled to a
payment of 5% of the actual cost of the construction costs as submitted by
Tenant's contractor performing the work. This payment is for Landlord's
coordination of the activities associated with completion of Tenant's space,
including, but not limited to, the plan review and coordination of Tenant's
contractors and Landlord's contractors, if applicable.
9. CONSTRUCTION ESCROW. INTENTIONALLY OMITTED
10. MISCELLANEOUS.
(a) If the Plans for the Work require the construction and installation of
more fire hose cabinets or telephone/electrical closets than the number
regularly provided by Landlord in the core of the Building in which the
Premises are located, Tenant agrees to pay all costs and expenses arising from
the construction and installation of such additional fire hose cabinets or
telephone/electrical closets.
(b) Time is of the essence of this Work Letter Agreement.
(c) Any person signing this Work Letter Agreement on behalf of Landlord
and Tenant warrants and represents he has authority to sign and deliver this
Work Letter Agreement and bind the party on behalf of which he has signed.
(d) If Tenant fails to make any payment relating to the Work as required
hereunder, Landlord, at its option, may complete the Work pursuant to the
Approved Plans and continue to hold Tenant liable for the costs thereof and all
other costs due to Landlord. Tenant's failure to pay any amounts owed by
Tenant hereunder when due or Tenant's failure to perform its obligations
hereunder shall also constitute a default under the Lease and Landlord shall
have all the rights and remedies granted to Landlord under the Lease for
nonpayment of any amounts owed thereunder or failure by Tenant to perform its
obligations thereunder.
(e) Notices under this Work Letter shall be given in the same manner as
under the Lease.
(f) The liability of Landlord hereunder or under any amendment hereto or
any instrument or document executed in connection herewith (including, without
limitation, the Lease) shall be limited to and enforceable solely against
Landlord's interest in the Building.
(g) The headings set forth herein are for convenience only.
(h) This Work Letter sets forth the entire agreement of Tenant and
Landlord regarding the Work. This Work Letter may only be amended if in
writing, duly executed by both Landlord and Tenant.
(i) All amounts due from Tenant hereunder shall be deemed to be Rent due
under the Lease.
11. ON-SITE PROJECT MANAGER.
As a condition of Tenant's right to commence and perform the Work, Tenant
shall engage the services of an on-site project manager approved in advance by
and reasonably acceptable to Landlord, who will be charged with the task of
performing daily supervision of the Work. Such on-site manager shall be
familiar with all rules and regulations and procedures of the Building and all
personnel of the Building engaged directly or indirectly in the management,
operation and construction of the Building. Such on-site project manager shall
be accountable and responsible to Tenant and to Landlord and, where necessary,
shall serve as a liaison between Landlord and Tenant with respect to the Work.
The entire cost and expense of the on-site project manager shall be borne and
paid for by Tenant (subject to Tenant's right to use all or any part of
Landlord's Contribution to reimburse Tenant for the same.)
6
<PAGE> 46
12. EXCULPATION OF LANDLORD AND HEITMAN.
Notwithstanding anything to the contrary contained in this Work Letter
Agreement, it is expressly understood and agreed by and between the parties
hereto that:
(a) The recourse of Tenant or its successors or assigns against Landlord
with respect to the alleged breach by or on the part of Landlord of any
representation, warranty, convenant, undertaking or agreement contained in this
Work Letter Agreement (collectively, "Landlord's Work Letter Undertakings")
shall extend only to Landlord's interest in the real estate of which the
Premises demised under this Lease Documents are a part (hereinafter,
"Landlord's Real Estate") and not to any other assets of Landlord or its
members;
(b) Except to the extent of Landlord's interest in Landlord's Real Estate,
no personal liability or personal responsibility of any sort with respect to
any of Landlord's Work Letter Undertakings or any alleged breach thereof is
assumed by, or shall at any time be asserted or enforceable against, Landlord,
Heitman Capital Management Corporation, HRC-LLC, Inc., Heitman Properties Ltd.,
or Heitman Properties of Indiana Ltd., or against any of their respective
directors, officers, employees, agents, constituent partners, beneficiaries,
trustees or representatives.
IN WITNESS WHEREOF, this Work Letter Agreement is executed as of this
31st day of March, 1998.
LANDLORD:
IP PROPERTIES, a Wyoming
Limited Liability Company
By:
HRC-LLC, INC., a Wyoming
corporation, its manager
By: /s/
-------------------------
Its: Vice President
-------------------------
TENANT:
Brightpoint North America, Inc.,
an Indiana Corporation
By: /s/ Steve Fivel
-------------------------------
Its: Vice President
-------------------------------
7
<PAGE> 47
EXHIBIT C
SUITE ACCEPTANCE AGREEMENT
BUILDING NAME/ADDRESS: 6049 LAKESIDE BLVD., INDIANAPOLIS, INDIANA 46278
TENANT NAME: BRIGHTPOINT NORTH AMERICA, INC. AN INDIANA CORPORATION
TENANT CODE: SUITE NUMBER: 6049
----------------------------------
MANAGEMENT'S TENANT CONTACT: MR. STEVE FIVEL PHONE:
--------------------
Gentlemen:
As a representative of the above referenced tenant, I/we have physically
inspected the suite noted above and its improvements with Don Ballard, a
representative of Heitman Properties of Indiana Ltd. (name of HPL Corporation).
I/we accept the suite improvements as to compliance with all the requirements
indicated in our lease, also including the following verified information
below:
<TABLE>
<S> <C>
Lease Commencement Date: 4/1/98, Occupancy Date 4/1/98**
Lease Rent Start Date*:4/1/98, Actual Rent Start*: 4/1/98
Lease Expiration Date: 12/31/99, Actual Expiration Date: 12/31/99
Date Keys Delivered:
------------------------------
Items requiring attention: Tenant accepts Premises in "as-is" condition.
</TABLE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
*If these dates are not the same, attach documentation.
** Occupancy before the April 1, 1998 commencement date is under the same
terms and conditions as defined in the
Lease.
NOTE: This inspection is to be made prior to tenant move-in.
Very truly yours,
Brightpoint North America, Inc.
an Indiana Corporation
By: /s/ Steve Fivel
----------------------------------
Its: Vice President
----------------------------------
Date: 3/30/98
----------------------------------
7
<PAGE> 48
Distribution
Tenant
Tenant Lease File
Leasing Manager: _____________________________
HPL Document Control: _____________________________
Regional Construction Manager: _____________________________
Regional Engineering Manager: _____________________________
2
<PAGE> 49
EXHIBIT D
TENANT OPERATIONS
INQUIRY FORM
1
<PAGE> 50
SCHEDULE 1 TO EXHIBIT D
LIST OF PERMISSIBLE
HAZARDOUS MATERIALS AND QUANTITIES
CHEMICAL/PRODUCT MAXIMUM QUANTITY
---------------- ----------------
NONE NONE
2
<PAGE> 51
EXHIBIT E
ADDITIONAL INSUREDS
Additional insureds pursuant to the requirements outlined in Article X of the
Lease:
IP Properties, a Wyoming Limited Liability Company;
HRC-LLC, Inc., a Wyoming corporation;
Heitman Capital Management Corporation, an Illinois corporation;
Heitman Properties Ltd., an Illinois corporation;
Heitman Properties of Indiana Ltd., an Indiana corporation;
and their respective members, owners, agents and employees.
The Insurance Certificate should be sent to:
Heitman Properties of Indiana Ltd.
5925 West 71st Street, Suite A
Indianapolis, IN 46278
Attn: Property Manager
<PAGE> 52
EXHIBIT F
RULES AND REGULATIONS
0.0.1 No storage outside the Premises of any material, pallets, disabled
vehicles, showcases or other items will be permitted, including but not limited
to trash, except in containers approved by Landlord. Tenant, its officers,
agents, servants and employees shall not allow anything to remain in any common
area passageway, hallway, stairway, sidewalk, court, corridor, ramp, entrance,
exit, loading area, or other area outside the Premises, or permit such areas to
be used at any time except for ingress or egress of Tenant, its officers,
agents, servants, employees, patrons, licensees, customers, visitors or
invitees. Common utility closets, telephone closets, and other such closets,
rooms and areas shall be used only for the purposes and in the manner
designated by Landlord, and may not be used by Tenant, or its contractors,
agents, employees, or other parties without Landlord's prior written consent.
0.0.2 The movement of furniture, equipment, machines, merchandise or
materials within, into or out of the Premises or the Building not in the
ordinary course of Tenant's business as permitted herein, shall be restricted
to time, method and routing of movement as determined by Landlord upon request
from Tenant and Tenant shall assume all liability and risk to property, the
Premises, the Building and, if applicable, the Project in such movement. The
movement of furniture, equipment, machines, merchandise or materials within,
into or out of the Premises in the ordinary course of Tenant's permitted
business shall also be at Tenant's sole risk and responsibility and shall be
conducted in such a fashion as not to cause damage or injury to the Premises or
the Building or to disturb other occupants thereof. Tenant shall not move
furniture, machines, equipment, merchandise or materials within, into or out of
the Premises or the Building not in the ordinary course of Tenant's permitted
business without having first obtained a written permit from Landlord
twenty-four (24) hours in advance. Safes and other heavy fixtures, equipment
or machines intended to be kept permanently in the Premises shall be moved into
the Premises or the Building only with Landlord's written consent and placed
where directed by Landlord.
0.0.3 Landlord will not be responsible for lost or stolen personal
property, equipment, money or any article taken from Premises, regardless of
how or when loss occurs.
0.0.4 Tenant, its officers, agents, servants and employees shall not
install or operate any refrigerating or HVAC apparatus or carry on any
mechanical operation without written permission of Landlord. Tenant shall give
Landlord prompt notice of all damage to or defects in HVAC equipment, plumbing,
electric facilities or any part of appurtenance of the Premises.
0.0.5 Tenant, its officers, agents, servants or employees shall not use
the Premises for housing, lodging or sleeping purposes or for the cooking or
preparation of food without written permission of Landlord.
0.0.6 Tenant, its officers, agents, servants, employees, patrons,
licensees, customers, visitors or invitees shall not bring into the Premises or
keep on Premises any fish, fowl, reptile, insect or animal without the prior
written consent of the Landlord.
0.0.7 No locks shall be placed on any door in the Building without the
prior written consent of Landlord. Landlord will furnish two keys to each lock
on doors in the Premises and Landlord, upon request of Tenant, shall provide
additional duplicate keys at Tenant's expense. Tenant, its officers, agents,
servants and employees shall, before leaving the Premises unattended, close and
lock all doors and shut off all lights, business equipment and machinery.
Damage resulting from failure to do so shall be paid by Tenant.
0.0.8 Tenant, its officers, agents, servants or employees shall do no
painting or decorating in the Premises; or mark, paint or cut into, drive nails
or screw into nor in any way deface any part of the Premises or the Building
without the prior written consent of Landlord. If Tenant desires signal,
communication, alarm or other utility or service connection installed or
changed, such work shall only be done at expense of Tenant, with the written
approval and under the direction of Landlord. Tenant, without the prior
written consent of Landlord, shall not lay linoleum or other similar floor
covering within the Premises. Tenant shall not install any antenna, satellite
dish or aerial wires, radio or television equipment or any other type of
equipment inside or outside of the Building,
<PAGE> 53
without Landlord's prior approval in writing. No showcases, awnings or other
articles or projections shall be affixed to any part of the exterior of the
Building, without the prior written consent of Landlord.
0.0.9 Tenant, its officers, agents, servants and employees shall not
permit the operation of any musical or sound-producing instruments or device
which may be heard outside the Premises, or which may emanate electrical waves
or x-rays or other emissions which will be hazardous to health, well-being or
condition of persons or property.
0.0.10 All plate and other glass now in the Premises or Building which is
broken through cause attributable to Tenant, its officers, agents, servants,
employees, patrons, licensees, customers, visitors or invitees shall be
replaced by and at expense of Tenant under the direction of Landlord.
0.0.11 The plumbing facilities (including, without limitation, toilet
rooms, urinals, wash bowls, drains and sewers) shall not be used for any other
purpose than that for which they are constructed, and no foreign substance of
any kind shall be thrown therein, and the expense of any breakage, stoppage or
damage resulting from a violation of this provision shall be borne by Tenant,
who shall, or whose officers, employees, agents, servants, patrons, customers,
licensees, visitors or invitees shall, have caused it. Landlord shall not be
responsible for any damage due to stoppage, backup or overflow of the drains or
other plumbing fixtures.
0.0.12 All contractors and/or technicians performing work for Tenant
within the Premises, Building or Project shall be referred to Landlord for
written approval before performing such work. This shall apply to all work
including, but not limited to, installation of telephones, telegraph equipment,
electrical devices and attachments, and all installations affecting floors,
walls, windows, doors, ceilings, equipment or any other physical feature of the
Building, the Premises or the Project. None of this work shall be done by
Tenant without Landlord's prior written approval.
0.0.13 Neither Tenant nor any officer, agent, employee, servant, patron,
customer, visitor, licensee or invitee of any Tenant shall go upon the roof of
the Building, without the written consent of the Landlord.
0.0.14 Canvassing, soliciting, distribution of hand-bills or any other
written material peddling in the Building or the Project are prohibited, and
Tenant shall cooperate to prevent the same. Tenant shall not advertise the
business, profession or activities of Tenant in any manner which violates the
letter or spirit of any code of ethics adopted by any recognized association or
organization pertaining thereto, use the name of the Building for any purpose
other than that of the business address of Tenant or use any picture or
likeness of the Building or the Project name in any letterheads, envelopes,
circulars, notices, advertisements, containers or wrapping material without
Landlord's express consent in writing.
0.0.15 Tenant shall not conduct its business and/or control its officers,
agents, employees, servants, patrons, customers, licensees and visitors in such
a manner as to commit waste or suffer or permit waste to be committed in
Premises. Tenant shall not do or permit anything in or about the Premises that
is immoral, obscene, pornographic, disreputable or dangerous to life, limb or
property, or do any act tending to injure the reputation of the Project. No
activity creating dust or fumes that may be hazardous shall be performed in the
Premises except in an environment controlled by air-handling equipment properly
and lawfully designed and utilized, which shall be maintained and operated at
all times to prevent hazardous accumulations of pollutants in the atmosphere
within the Premises or Project.
0.0.16 Tenant shall not install in the Premises any equipment which uses a
substantial amount of electricity without the advance written consent of the
Landlord. The Tenant shall ascertain from the Landlord the maximum amount of
electrical current which can safely be used in the Premises, taking into
account the capacity of the electric wiring in the Building and the Premises
and the needs of other tenants in the Building and the Project and shall not
use more than such safe capacity. The Landlord's consent to the installation
of electric equipment shall not relieve the Tenant from the obligation not to
use more electricity than such safe capacity.
2
<PAGE> 54
0.0.17 Tenant shall not use, or permit any other party to use, the Premises
for any distress, fire, bankruptcy, close-out, "lost our lease" or
going-out-of-business sale or auction. Tenant shall not display any signs
advertising the foregoing anywhere in or about the Premises. This prohibition
shall also apply to Tenant's creditors.
0.0.18 Tenant agrees to park in only those parking stalls designated as
tenant parking. Tenant shall hold Landlord harmless for the removal and
charges related thereto when Tenant, or its employees, park in spaces
designated as reserved parking (other than reserved for Tenant), visitor
parking, handicapped parking, or red or yellow curb areas. Tenant shall not
park or allow to be kept any vehicle on the Premises, either company or
personnel, which is not being used on a daily basis.
0.0.19 Tenant shall not maintain armed security in or about the Premises
nor possess any weapons, explosives, combustibles or other hazardous devices in
or about the Building and/or Premises.
0.0.20 All of Tenant's signs shall: (i) be professionally designed,
prepared and installed, (ii) not advertise any product, (iii) comply with any
sign criteria developed by Landlord from time to time, and (iv) be subject to
all Applicable Laws and any covenants, conditions and restrictions applicable
to the Project or Building. Tenant shall maintain all signs hereunder in good
repair and sightly first class condition. Tenant shall not use strobe or
flashing lights in or on the Premises or in any signs therefor.
0.0.21 Tenant shall conduct its labor relations and relations with
employees so as to avoid strikes, picketing, and boycotts of, on or about the
Premises or Project. If any employees strike, or if picket lines or boycotts
or other visible activities objectionable to Landlord are established,
conducted or carried out against Tenant, other occupants of the Premises or
their employees, agents, transferees or contractors in or about the Premises or
Project, Tenant shall immediately close the Premises and remove or cause to be
removed all such occupants, employees, agents, transferees and contractors
until the dispute has been settled.
0.0.22 Upon expiration or earlier termination of this Lease, in addition
to the requirements under Article 24 of this Lease, Tenant shall ensure that:
a. All interior and exterior lights and bulbs are operational.
b. All exhaust, ceiling and overhead fans are operational.
c. Warehouse floor areas are broom swept and clean of all trash and
materials.
d. Warehouse floor areas are cleaned of oils, fluids and other foreign
materials.
e. All electrical, plumbing and other utilities which are terminated are
disconnected, capped and/or terminated according to applicable building
codes and all other governmental requirements.
f. All electrical and telecommunications conduit and wiring installed by
or for Tenant specifically for Tenant's equipment is removed to the
originating panel if Landlord so requires.
g. Overhead interior and exterior doors are operational and in good
condition.
h. Any bolts secured to the floor are cut off flush and sealed with epoxy.
i. Warehouse fencing or partitions are removed if Landlord so requires.
j. All furniture, trash and debris are removed.
k. All signs and pictures, posters, signage, stickers and all similar
items of Tenant and any other occupant of the Premises are removed from
all walls, windows, doors and all other interior and exterior surfaces
of the Premises and other locations of the Project.
3
<PAGE> 55
l. All carpet areas are vacuumed.
m. All uncarpeted office floors are swept, and any excess wax build-up on
tile and vinyl floors is properly removed.
n. All computer cable and conduit installed by or for Tenant is removed to
point of origin.
o. All windows and miscellaneous hardware are operational and in good
condition.
p. All HVAC and mechanical systems and equipment are operational and in
good condition.
q. Ceiling tiles, grid, light lenses, air grills and diffusers are in
place with no holes or stains.
r. There are no broken windows or other glass items.
s. Bathroom walls, floors, and fixtures are clean and in good condition.
t. All plumbing fixtures are intact, operational free of leaks and in good
condition.
u. All gutters and downspouts are undamaged and operational.
v. Walls (internal and external) are clean and any holes are properly and
permanently patched.
w. All keys to all locks to or within the Premises, any key cards and
parking stickers, the combination to any vaults that Landlord permits or
requires Tenant to leave on the Premises, all plans and specifications
for all leasehold improvements made to the Premises, and all reports,
studies and other materials relating to Hazardous Materials that were
ever on the Premises, shall be turned over to Landlord.
x. If Tenant is the only occupant of the Building, all lawns have recently
been mowed and edged and shrubbery trimmed; all plants, trees and
shrubbery are intact and healthy; all lawn sprinkler equipment is
operational with no water leaks; and the roof is in good condition and
repair (in accordance with NRCA guidelines) with no apparent leaks.
0.0.23 Landlord may waive any one or more of these Rules and Regulations
for the benefit of any particular tenant or landlords, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other tenant or landlords, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any or all of the tenants of
the Project.
0.0.24 These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease on premises in the Building
or the Project. Tenant shall be responsible for ensuring compliance with these
Rules and Regulations as they may be amended, by Tenant's employees and as
applicable, by Tenant, any other occupant of the Premises and their respective
agents, employees, invitees, transferees and contractors.
4
<PAGE> 56
EXHIBIT G
GUARANTY BY A CORPORATION
FOR VALUE RECEIVED, and in consideration for, and as an inducement to IP
PROPERTIES, a Wyoming Limited Liability Company, as Landlord, to enter into the
foregoing Lease dated March 31, 1998 (the "Lease"), with Brightpoint
North America, Inc. an Indiana Corporation, as Tenant, the undersigned
corporation Brightpoint, Inc. hereby absolutely and unconditionally guarantees
to Landlord, its successors and assigns, the prompt and full payment of all
rent and all other payments to be made by Tenant under this Lease, and the full
performance and observance by Tenant of all the other terms, covenants,
conditions and agreements therein provided to be performed and observed by
Tenant, for which the undersigned shall be jointly and severally liable with
Tenant. The undersigned hereby waives any notice of nonpayment, nonperformance
or nonobservance, or proof of notice or demand. The undersigned agrees that in
the event of a default by Tenant under the Lease, Landlord may proceed against
the undersigned before, after or simultaneously with proceeding against Tenant.
This Guaranty shall not be terminated, affected, or impaired in any manner by
reason of: (1) the assertion by Landlord against Tenant of any of the rights or
remedies reserved to Landlord pursuant to the provisions of the Lease; (2) the
commencement of summary or other proceedings against Tenant; (3) the failure of
Landlord to enforce any of its rights against Tenant; or (4) the granting by
Landlord of any extensions of time to Tenant. The undersigned further
covenants and agrees that: (1) the undersigned shall be bound by all the
provisions, terms, conditions, restrictions and limitations contained in the
Lease which are to be observed or performed by Tenant thereunder, the same as
if the undersigned were named therein as Tenant; and (2) this Guaranty shall be
absolute and unconditional and shall be in full force and effect with respect
to any amendment, addition, assignment, sublease transfer or other modification
of the Lease, whether or not the undersigned shall have knowledge or have been
notified of or agreed or consented thereto. If Landlord at any time is
compelled to take action, by legal proceedings or otherwise, to enforce or
compel compliance with the terms of this Guaranty, the undersigned shall, in
addition to any other rights or remedies to which Landlord may be entitled
hereunder or as a matter of law or in equity, pay to Landlord all costs,
including reasonable attorneys' fees, incurred or expended by Landlord in
connection therewith. In the event the Lease is disaffirmed by a Trustee in
Bankruptcy for Tenant, the undersigned agrees that it shall, at the election of
Landlord, either assume the Lease and perform all of the convenants, terms and
conditions of Tenant thereunder or enter into a new lease, which said new lease
shall be in form and substance identical to the Lease. All duties and
obligations of the undersigned pursuant to this Guaranty shall be binding upon
the successors and assigns of the undersigned. For purposes of this Guaranty,
the word "Tenant" shall include the successors and assigns of the undersigned.
This Guaranty shall be governed by and construed in accordance with the laws of
the State of Indiana.
The undersigned further agrees that, to the extent that Tenant makes a
payment or payments to Landlord or Landlord receives any proceeds of
collateral, which payment or payments or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or otherwise
is required to be repaid to Tenant, its estate, trustee, receiver or any other
party, including, without limitation, under any bankruptcy law, state or
federal law, common law or equitable cause, then to the extent of such payment
or repayment, the obligations of Tenant or part thereof which has been paid,
reduced or satisfied by such amount shall be reinstated and continued in full
force and effect as of the date such initial payment, reduction or satisfaction
occurred. The undersigned shall defend and indemnify Landlord of and from any
claim or loss under this paragraph including Landlord's attorneys and paralegal
fees and expenses and other expenses in the defense of any such action or suit.
The undersigned waives and shall have no right of subrogation,
indemnification, reimbursement or exoneration with respect to the liabilities
of Tenant under the Lease or any rights of contribution from any other
guarantors of such liabilities.
Dated: March 31, 1998
-------------------------------
/s/ Steven E. Fivel
- ------------------------------------------------
Signature Title: Steven E. Fivel
Executive Vice President and General
Counsel - Brightpoint, Inc.
Corporate Address:
6402 Corporate Drive
- ------------------------------------------------
<PAGE> 57
________________________________________________
I, ______________________________________, a Notary Public in and for the
County of ____________________________________ in the State of
_____________________________________, do hereby certify that
______________________________________________, a(n)_________________
____________________ corporation, personally known to me to be the same person
whose name is subscribed to the foregoing instrument as such respective
officer, appeared before me this day in person and acknowledged that he/she
signed and delivered such instrument as his/her own free and voluntary act and
as the free and voluntary act of said corporation, for the uses and purposes
set forth therein.
GIVEN under my hand and notarial seal this ________________ day of
________________________, 19______.
_____________________________________________
Notary Public
My Commission Expires: ____________________
