<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: September 30, 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
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BRIGHTPOINT, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 35-1778566
State or other jurisdiction (I.R.S. Employer
of incorporation or organization Identification No.)
6402 Corporate Drive, Indianapolis, Indiana 46278
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(317) 297-6100
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(Registrant's telephone number, including area code)
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 November 11, 1998:
52,386,576 shares
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BRIGHTPOINT, INC.
INDEX
<TABLE>
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1
Consolidated Statements of Income
Three and Nine Months Ended September 30, 1997 and 1998.......................3
Consolidated Balance Sheets
December 31, 1997 and September 30, 1998......................................4
Consolidated Statements of Cash Flows
Nine Months Ended September 30, 1997 and 1998.................................5
Notes to Consolidated Financial Statements.............................................6
ITEM 2
Management's Discussion and Analysis of
Financial Condition and Results of Operations................................11
PART II. OTHER INFORMATION
ITEM 2
Changes in Securities.................................................................19
ITEM 6
Exhibits and Reports on Form 8-K......................................................19
Signatures.....................................................................................20
</TABLE>
<PAGE> 3
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Amounts in thousands, except per share data)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1997 1998 1997 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $ 243,210 $ 445,772 $ 662,406 $ 1,118,918
Cost of sales 222,576 407,698 607,756 1,020,262
----------- ----------- ----------- -----------
Gross profit 20,634 38,074 54,650 98,656
Selling, general and administrative
expenses 10,836 21,577 27,972 50,835
----------- ----------- ----------- -----------
Income from operations 9,798 16,497 26,678 47,821
Net investment gain -- -- 1,432 572
Interest expense, net 1,283 3,110 4,389 9,549
----------- ----------- ----------- -----------
Income before income taxes and
minority interest 8,515 13,387 23,721 38,844
Income taxes 2,557 4,016 7,097 11,653
----------- ----------- ----------- -----------
Income before minority interest 5,958 9,371 16,624 27,191
Minority interest 30 (47) 413 (128)
----------- ----------- ----------- -----------
Net income $ 5,928 $ 9,418 $ 16,211 $ 27,319
=========== =========== =========== ===========
Net income per share:
Basic $ 0.12 $ 0.18 $ 0.36 $ 0.53
=========== =========== =========== ===========
Diluted $ 0.12 $ 0.18 $ 0.34 $ 0.51
=========== =========== =========== ===========
Weighted average common
shares outstanding:
Basic 47,626 52,232 45,374 51,811
=========== =========== =========== ===========
Diluted 49,651 53,268 47,092 53,427
=========== =========== =========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
BRIGHTPOINT, INC.
CONSOLIDATED BALANCE SHEETS
(AMOUNTS IN THOUSANDS)
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1998
----------------- ------------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,941 $ 37,204
Accounts receivable (less allowance for
doubtful accounts of $3,394 in 1997
and $3,891 in 1998) 212,946 234,632
Contract financing receivables 49,470 16,163
Inventories 95,716 153,363
Marketable securities 3,478 --
Other current assets 26,960 39,264
--------- ---------
Total current assets 391,511 480,626
Property and equipment 23,420 45,567
Goodwill and other intangibles 31,161 78,816
Other assets 10,610 27,773
--------- ---------
Total assets $ 456,702 $ 632,782
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 110,191 $ 104,344
--------- ---------
Total current liabilities 110,191 104,344
Long-term debt 146,963 280,407
Minority interest 257 130
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 52,377 shares issued and
outstanding, respectively 504 524
Additional paid-in capital 160,387 182,916
Retained earnings 42,891 70,211
Accumulated other comprehensive loss (4,491) (5,750)
--------- ---------
Total stockholders' equity 199,291 247,901
--------- ---------
Total liabilities and stockholders' equity $ 456,702 $ 632,782
========= =========
</TABLE>
See accompanying notes
4
<PAGE> 5
BRIGHTPOINT, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30
1997 1998
------------- -------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 16,211 $ 27,319
Adjustments to reconcile net income to net cash
used by operating activities:
Depreciation and amortization 2,583 6,864
Amortization of debt discount -- 3,832
Net investment gain (1,432) (572)
Minority interest and deferred taxes 413 (175)
Changes in operating assets and liabilities:
Accounts receivable (16,162) (13,095)
Inventories 20,350 (50,830)
Other current assets (9,502) (8,505)
Accounts payable and accrued expenses (39,261) (2,411)
--------- ---------
Net cash used by operating activities (26,800) (37,573)
INVESTING ACTIVITIES
Capital expenditures (13,479) (23,907)
Sale of marketable securities, net of transaction costs 18,528 3,263
Acquisitions, net of cash acquired (6,257) (35,894)
Decrease (increase) in contract financing receivables,
net of unfunded portion (30,306) 3,655
Increase in other assets (3,249) (11,969)
--------- ---------
Net cash used by investing activities (34,763) (64,852)
FINANCING ACTIVITIES
Net payments on revolving credit facility (14,265) (43,816)
Net proceeds from stock offering 75,600 --
Proceeds from issuance of subordinated, convertible
notes, net of issue costs -- 166,088
Proceeds and tax benefits from exercise of stock options
and warrants 5,661 15,253
--------- ---------
Net cash provided by financing activities 66,996 137,525
Effect of exchange rate changes on cash and cash
equivalents 532 (837)
--------- ---------
Net increase in cash and cash equivalents 5,965 34,263
Cash and cash equivalents at beginning of period 14,255 2,941
--------- ---------
Cash and cash equivalents at end of period $ 20,220 $ 37,204
========= =========
</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 statements of income for the three and nine months ended
September 30, 1998 are 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, as amended, for the year ended December 31, 1997.
2. Accounting Changes
EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share,
which replaced the presentation of primary earnings per share (EPS) with
basic EPS and replaced 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 (see Note 4) issued in the first quarter of 1998, although common share
equivalents, were not dilutive for the three and nine months ended September
30, 1998 and, therefore, are not included as dilutive common share
equivalents.
6
<PAGE> 7
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
2. Accounting Changes (continued)
COMPREHENSIVE INCOME
On January 1, 1998, the Company adopted Statement of Financial Accounting
Standards No. 130, Reporting Comprehensive Income (SFAS No. 130) which
established 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 three months ended September 30, 1997 and 1998, comprehensive
income totaled $5,698,000 and $9,672,000, respectively and during the nine
months ended September 30, 1997 and 1998 totaled $12,310,000 and $26,060,000,
respectively.
DERIVATIVE FINANCIAL INSTRUMENTS
In June 1998, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards No. 133, Accounting for
Derivative Instruments and Hedging Activities. The Statement is effective for
all fiscal quarters of all fiscal years beginning after June 15, 1999; the
Company has elected to adopt the Statement early on July 1, 1998. The early
adoption of this Statement did not result in a cumulative-effect adjustment
to earnings. The Statement requires that all derivative instruments be
recorded on the balance sheet at fair value. Changes in the fair value of
derivatives are recorded in each period in current earnings or other
comprehensive income, depending on whether a derivative is designated as part
of a hedge transaction and, if it is, depending on the type of hedge
transaction. For fair value hedge transactions in which the Company is
hedging changes in the fair value an asset, liability or firm commitment,
changes in fair value of the derivative instrument will generally be offset
in the income statement by changes in the hedged item's fair value. For
cash-flow hedge transactions in which the Company is hedging the variability
of cash flows related to a variable-rate asset, liability, or forecasted
transaction, changes in the fair value of the derivative instrument will be
reported in other comprehensive income. The gains and losses on the
derivative instrument that are reported in other comprehensive income will be
reclassified to earnings in the periods in which earnings are impacted by the
variability of the cash flows of the hedged item. The ineffective portion of
all hedges will be recognized in current period earnings.
At September 30, 1998, the fair value of the Company's derivative instruments
was not significant.
7
<PAGE> 8
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
3. Acquisitions
During the nine months ended September 30, 1998, the Company made nine
separate acquisitions of businesses located in (i) Brazil; (ii) the United
Kingdom; (iii) the Netherlands, Germany and Poland; (iv) the United States;
(v) Taiwan; (vi) Poland; (vii) France; (viii) Mexico; and (ix) New Zealand.
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 357,074 unregistered shares of the
Company's common stock (valued at $4.9 million), $38.4 million in cash, the
assumption of certain liabilities and contingent consideration of up to $10.7
million in cash and $16.0 million in common stock based upon future operating
results of the applicable business over the next two years. Goodwill of $39.1
million resulting from these acquisitions is being amortized over 30 years.
During the nine months ended September 30, 1997, the Company acquired the
remaining minority interests of three majority-owned subsidiaries and certain
net assets of two businesses separately located in Sweden and Hong Kong. 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
consisted of 683,934 unregistered shares of the Company's common stock
(valued at $5.5 million), $6.5 million in cash, the assumption of certain
liabilities and contingent consideration based on the operating results of
the applicable operating units. As of September 30, 1998 all contingent
consideration amounts related to these acquisitions have been settled and
paid in full. Goodwill of $16.5 million resulting 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 nine months ended September 30, 1997
and 1998. Consequently, pro forma information is not presented.
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 million ($1,000 per bond) and a yield to
maturity of 4.00%. The Bonds are subordinated to all existing and future
senior indebtedness (as defined in the indenture pursuant to which the Bonds
were issued) 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 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.
At September 30, 1998, the Bonds had a carrying value of $176 million.
8
<PAGE> 9
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
4. Long-term debt (continued)
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). On May 13, 1998, the Company and the Banks amended
and restated this agreement resulting in a $225 million facility with
substantially the same terms (Restated Facility). The Restated Facility
matures in June 2002 and generally bears interest, at the Company's option,
at (i) the greater of the agent bank's corporate base rate and the Federal
Funds effective rate plus 0.50% or (ii) the rate at which deposits in United
States dollars or Eurocurrencies are offered by the agent bank 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 September 30, 1998, there was approximately $104 million
outstanding under this line of credit at interest rates ranging from 6.1% to
8.5% (a weighted average rate of 6.6%) and an aggregate of $13 million in
letters of credit issued.
All of the Company's assets located in the United States and 65% of the
capital stock of certain of the Company's subsidiaries domiciled outside of
the United States are pledged to the Banks as collateral for the Restated
Facility, and the Company is substantially prohibited from incurring
additional indebtedness. In addition to certain net worth and other financial
covenants, the Company's Restated Facility 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 nine
months ended September 30, 1997 would have been $15.4 million or $0.33 per
share (diluted) and net income for the nine months ended September 30, 1998
would have been $27.0 million or $0.50 per share (diluted).
9
<PAGE> 10
BRIGHTPOINT, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
6. Recently Issued Accounting Pronouncement
In April 1998, the American Institute of Certified Public Accountants (AICPA)
issued Statement of Position 98-5, Reporting the Costs of Start-up
Activities, which requires that such costs (as broadly defined in the
statement) be expensed as incurred. The Statement is effective for years
beginning after December 15, 1998 and the initial application must be
reported as the cumulative effect of a change in accounting principle. The
Company is currently evaluating the effect that this pronouncement might have
on its results of operations and financial position.
7. Subsequent Event
On October 2, 1998, the Company announced that it will be eliminating its
trading division during the fourth quarter of 1998, consistent with its
strategy of emphasizing relationships with wireless equipment manufacturers
and network operators. The trading division engages in the purchase of
products from suppliers other than the manufacturers and the sale of those
products to customers other than network operators or their dealers and other
representatives.
The Company will recognize, in the fourth quarter of 1998, a one-time charge
which is expected to range from $13 million to $18 million ($9 million to $13
million, or $0.17 to $0.23 per share, after giving effect to taxes) related
to the elimination of the trading division, which will include the loss on
the sale of certain assets, severance payments for terminated employees and
write-off of certain assets including leasehold improvements and certain
information systems costs. Also included in the charge will be a reserve for
estimated accrued liabilities.
10
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
OVERVIEW AND RECENT DEVELOPMENTS
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 the
accompanying Exhibit 99 and the Company's Annual Report on Form 10-K, as
amended, for the year ended December 31, 1997.
On October 2, 1998, the Company issued a press release announcing that it will
be eliminating its trading division during the fourth quarter of 1998,
consistent with its strategy of emphasizing relationships with wireless
equipment manufacturers and network operators. The trading division engages in
the purchase of products from suppliers other than the manufacturers and the
sale of those products to customers other than network operators or their
dealers and other representatives. The Company believes that its established
global infrastructure allows it to provide the requisite services to the
manufacturers and network operators without the trading business.
The Company intends to accelerate its migration to a services-based
organization, focusing on providing integrated services to wireless equipment
manufacturers and network operators. The services will be designed to assist
these customers in performing mission critical business functions in the most
efficient and effective manner.
The Company will recognize, in the fourth quarter of 1998, a one-time charge
which is expected to range from $13 million to $18 million ($9 million to $13
million, or $0.17 to $0.23 per share, after giving effect to taxes) related to
the elimination of the trading division, which will include the loss on the sale
of certain assets, severance payments for terminated employees and write-off of
certain assets including leasehold improvements and certain information systems
costs. Also included in the charge will be a reserve for estimated accrued
liabilities.
The elimination of the trading division is expected to reduce 1999 selling,
general and administrative expenses by an amount ranging from approximately $4
million to $5 million from previously planned spending levels. In addition,
sales of products purchased directly from the manufacturers generally result in
higher margins than the sales of products obtained through trading activities.
Excluding the impact of the one-time charge, the elimination of the trading
division is not expected to have a negative impact on the future operating
results of 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)
OVERVIEW AND RECENT DEVELOPMENTS (CONTINUED)
During the first nine months of 1998, the Company acquired either all of the
equity interests or certain net assets of the following nine 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:
- - Matel-Tecnologia de Teleinformatica S.A.-Matec - a wireless telephone
distributor located in Sao Paulo, Brazil.
- - WAVETech Limited - a wireless telephone distributor in the United Kingdom.
- - Wireless Fulfillment Services, LLC - a provider of wireless accessory
end-user fulfillment services for North American network operators.
- - Axess Communications Benelux B.V. - a provider of accessory distribution
services for the wireless communications industry with operations in the
Netherlands, Germany and Poland.
- - Cell Direct Limited - a wireless telephone distributor located in Auckland,
New Zealand.
- - Function Communications Co., Ltd. - a wireless products distributor
headquartered in Taipei, Taiwan.
- - Euro-Phone Sp. Z o.o. - a wireless products distributor in Warsaw, Poland.
- - Communicaciones ASBE, S.A. de C.V. - a wireless telephone and accessories
distributor located in Mexico City, Mexico.
- - Eurocom Systems S.A. - a provider of distribution and integrated logistics
services in France.
RESULTS OF OPERATIONS
NET SALES
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
----------------------------------------- --------------------------------------------
1997 1998 Change 1997 1998 Change
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net sales $ 243,210 $ 445,772 83% $ 662,406 $ 1,118,918 69%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
Net sales for the three and nine months ended September 30, 1998 increased
significantly over net sales for the same periods in 1997 reflecting the
continued 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
global wireless handset market.
12
<PAGE> 13
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 September 30 Nine Months Ended September 30
----------------------------------------------- -------------------------------------------------
1997 1998 1997 1998
----------------------------------------------- -------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales by division:
Asia-Pacific $ 100,988 42% $ 144,978 33% $ 284,598 43% $ 382,029 34%
Europe, Middle 30%
East and Africa 59,959 24% 129,955 29% 146,196 22% 331,888
North America 58,482 24% 112,698 25% 188,009 28% 278,521 25%
Latin America 23,781 10% 58,141 13% 43,603 7% 126,480 11%
--------------------------------------- -----------------------------------------
$ 243,210 100% $ 445,772 100% $ 662,406 100% $ 1,118,918 100%
--------------------------------------- -----------------------------------------
</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 and as it increased its service
and accessory offerings worldwide.
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
----------------------------------------------- ------------------------------------------------
1997 1998 1997 1998
----------------------------------------------- ------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net sales by service line:
Wireless handset sales $ 209,770 86% $ 364,191 82% $ 585,135 88% $ 925,294 83%
Wireless accessories
sales 17,966 7% 35,933 8% 46,783 7% 91,303 8%
Value-added
logistics services 15,474 7% 45,648 10% 30,488 5% 102,321 9%
------------------------------------------- --------------------------------------------
$ 243,210 100% $ 445,772 100% $ 662,406 100% $1,118,918 100%
------------------------------------------- --------------------------------------------
</TABLE>
GROSS PROFIT
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
---------------------------------------- -------------------------------------
1997 1998 Change 1997 1998 Change
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Gross profit $ 20,634 $ 38,074 85% $ 54,650 $ 98,656 81%
Gross margin percentage 8.5% 8.5% 8.3% 8.8%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Gross profit for the three and nine months ended September 30, 1998, improved
over the same periods in 1997 due to increased sales, and for the nine months
ended September 30, 1998 also due to increased gross margin percentage. The
increase in gross margin percentage realized in the first nine months of 1998 is
primarily due to an increase in the amount of higher-margin value-added
logistics services provided by all four of the Company's divisions.
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)
RESULTS OF OPERATIONS (CONTINUED)
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
-------------------------------------------- -------------------------------------------
1997 1998 Change 1997 1998 Change
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Selling, general and administrative
expenses $ 10,836 $ 21,577 99% $ 27,972 $ 50,835 82%
As a percent of net sales 4.5% 4.8% 4.2% 4.5%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The increase in selling, general and administrative expenses is due principally
to sales growth during the period. The increase in selling, general and
administrative expenses as a percent of net sales for the three and nine months
ended September 30, 1998 as compared to the same periods in 1997 is due
primarily to costs incurred to integrate the various acquisitions made by the
Company in 1998, as well as, planned increases in managerial, information
technology and other resources necessary to support the increased demand for the
Company's services in markets around the world.
INCOME FROM OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended September 30 Nine Months Ended September 30
------------------------------------------- ------------------------------------------
1997 1998 Change 1997 1998 Change
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Income from operations $ 9,798 $ 16,497 68% $ 26,678 $ 47,821 79%
As a percent of net sales 4.0% 3.7% 4.0% 4.3%
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>
The increase in income from operations for the three and nine months ended
September 30, 1998 compared to the same periods 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. The decrease in
operating margins (income from operations as a percent of net sales) for the
three months ended September 30, 1998 is due to the increase in selling, general
and administrative expenses as a percent of net sales. The increase in operating
margins for the nine months ended September 30, 1998, compared to the same
period in 1997, is due primarily to the increase in gross margin, which is
partially offset by an increase in selling, general and administrative expenses
as a percent of net sales.
14
<PAGE> 15
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 September 30 Nine Months Ended September 30
-------------------------------------------------------------------------
1997 1998 Change 1997 1998 Change
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net income $ 5,928 $ 9,418 59% $16,211 $27,319 69%
Adjusted net income (1) $ 5,928 $ 9,418 59% $15,363 $26,976 76%
Adjusted net income as a
percent of net sales 2.4% 2.1% 2.3% 2.4%
Adjusted net income per share
(diluted) $ 0.12 $ 0.18 50% $ 0.33 $ 0.50 52%
Weighted average shares outstanding
(diluted) 49,651 53,268 47,092 53,427
- ---------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Adjusted to exclude the after-tax effect of net investment gains of $1,432
and $572 for the nine months ended September 30, 1997 and 1998,
respectively.
The increase in net income and adjusted net income for the three and nine months
ended September 30, 1998 over the same periods in 1997 is the result of
increased income from operations, partially offset by an increase in interest
expense relating to long-term debt obtained for working capital and acquisition
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 and certain acquisition activity as well as the impact of stock
options and warrants.
LIQUIDITY AND CAPITAL RESOURCES
<TABLE>
<CAPTION>
December 31, 1997 September 30, 1998
- --------------------------------------------------------------------------------------------------
<S> <C> <C>
Cash, cash equivalents and marketable
securities $ 6,419 $ 37,204
Working capital $ 281,320 $ 376,282
Current ratio 3.55 : 1 4.61 : 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 debt and equity
securities.
The increase in working capital is primarily attributable to an increase in
cash, inventories and accounts receivable partially offset by a decrease in
contract financing receivables. The increase in working capital was funded
principally by the issuance of zero-coupon, subordinated, convertible bonds in
March 1998.
15
<PAGE> 16
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 used by operating activities was $37.6 million for the nine months
ended September 30, 1998 versus $26.8 million in the comparable prior period.
The increase in net cash used by operating activities was primarily attributable
to an increase in inventories partially offset by increases in net income,
depreciation and amortization and amortization of debt discount as well as the
change in accounts payable.
Net cash used by investing activities for the nine months ended September 30,
1998 was $64.9 versus $34.8 million in the comparable prior period. Cash used by
investing activities during the nine months ended September 30, 1998 was
primarily attributable to acquisitions completed in the period, capital
expenditures relating to the purchase of information systems and software and
other long-term investment activity. Net cash used by investing activities for
the nine months ended September 30, 1997 was primarily attributable to the
Company's contract financing activity, acquisitions completed in the period and
capital expenditures relating to the purchase of information systems equipment
and software, the expansion of the Company's warehouse facility in Indianapolis,
Indiana, the opening of its west coast distribution center in Sparks, Nevada and
the continued expansion of its international operations partially offset by
proceeds from the sale of marketable securities.
Net cash provided by financing activities for the nine months ended September
30, 1998 results from the issuance of the bonds discussed below and proceeds
from the exercise of stock options partially offset by principal reductions on
the Company's line of credit. Net cash provided by financing activities for the
nine months ended September 30, 1997 results from proceeds from the Company's
public offering of its common stock and proceeds from the exercise of stock
options partially offset by repayments on the Company's line of credit.
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 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 the Company's 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 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). In addition, during
the three months ended March 31, 1998, the Company raised approximately $172
million in capital from the issuance of the Bonds discussed above. The Company
believes that additional debt or equity capital could be necessary to fund
working capital needs associated with anticipated future growth.
16
<PAGE> 17
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. Certain of the Company's
subsidiaries have a portion of their assets, liabilities or commitments
denominated in currencies other than the respective operations' functional
currencies. 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.
YEAR 2000 UPDATE
OVERVIEW AND BACKGROUND
The Company is implementing a project (the Project) to address the Year 2000
readiness of its information technology as well as non-information technology
systems (e.g., telephones, alarm systems, copy machines, elevators, etc.) which
have embedded technology (collectively referred to as Systems). Additionally,
the Project includes the assessment of the Year 2000 readiness of the Company's
significant suppliers and customers.
STATUS OF THE PROJECT
The Project is divided into four separate phases - Planning and Awareness,
Inventory, Assessment, and Remediation.
The Planning and Awareness phase began in June 1998 and was completed in
early October 1998. This phase included: (i) development and approval of the
Project charter, (ii) formation of a Project management team to carry out the
Project charter, (iii) identification and assessment of overall Project risks
and (iv) development of a Project budget.
The Inventory phase began in August 1998 and is substantially complete. This
phase involves: (i) identification of significant Systems to be assessed and
(ii) identification of all significant suppliers and customers.
17
<PAGE> 18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (CONTINUED)
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)
YEAR 2000 UPDATE (CONTINUED)
The Assessment phase began in September of 1998 and is scheduled for completion
by the end of March 1999. This phase involves: (i) contacting vendors of
significant Systems to assess the Year 2000 readiness of those Systems, (ii)
testing of the assertions made by significant Systems' vendors, (iii) contacting
significant suppliers and customers in order to understand their state of Year
2000 readiness, (iv) assessment of assertions made by significant suppliers and
customers, (v) determination of the extent to which remediation will be required
to insure Year 2000 readiness and (vi) development of contingency plans to the
extent considered necessary.
The Remediation phase began concurrently with the Assessment phase. Systems
identified during the Assessment phase as not Year 2000 compliant immediately
enter the Remediation phase. The Remediation phase is projected to be completed
by mid 1999. The activities that will be undertaken during this phase include:
(i) repairing, replacing or reprogramming all significant Systems that are not
Year 2000 compliant, (ii) validation and testing of remediated Systems and (iii)
establishment and completion of action plans to address any Year 2000 issues
with significant customers and suppliers.
To date, none of the Company's other information technology projects or
initiatives have been delayed or materially affected due to the implementation
of the Project.
COSTS
The Company will utilize primarily internal resources to carryout the Project.
Costs incurred to insure the Company's Systems are Year 2000 compliant are not
expected to be material to the Company's results of operations, financial
position or cash flows and costs incurred to date have not been significant.
Project costs are expensed as incurred.
RISKS AND CONTINGENCIES
The Company believes that the Project will meet its Year 2000 objectives in a
timely manner. However, the Company has not yet completed all necessary phases
of its Year 2000 initiative. The ability of suppliers and customers with which
the Company interacts to timely convert their systems to be Year 2000 compliant
is somewhat uncertain and not directly under the control of the Company. Lastly,
disruptions in the economy generally resulting from Year 2000 issues could also
have an adverse affect on the Company's operations. Such failures could
materially and adversely affect the Company's results of operations, liquidity
and financial position.
The Company is dependent on wireless equipment manufacturers for supply of
wireless handsets and accessories. Additionally, demand for the Company's
products (wireless handsets and accessories) by the Company's customers is
dependent on the ability of network operators to provide wireless network
services to the end-users of those products. Failure in the products and/or
systems of the wireless equipment manufacturers or network operators, including
those resulting from a lack of Year 2000 compliance, could have a material
adverse effect on the Company.
The Company currently has no contingency plans in place should it not complete
the Project in a timely manner, however, development of such contingency plans,
to the extent necessary, is scheduled for completion by March 1999.
The estimated percentage of completion of the Project, the estimated completion
dates for the various phases and estimated costs are dependent upon management's
assumptions of certain future events, such as compliance efforts, the
availability of personnel trained in this area and the ability to locate and
correct all relevant computer codes in all Systems. There can be no assurance
that third parties on which the Company relies will succeed in their Year 2000
compliance efforts or that failure by a third party would not have a material
adverse effect on the Company's results of operations or financial condition.
18
<PAGE> 19
PART II. OTHER INFORMATION
Item 2. Changes in Securities
During the quarter ended September 30, 1998, the Company issued to the
respective sellers, unregistered shares of the Company's common stock as follows
in connection with the payment of contingent consideration for prior acquisition
activities:
<TABLE>
<CAPTION>
DATE ENTITY ACQUIRED SHARES ISSUED VALUE
- ---------------------- ------------------------------------------------------------------------------------------
<S> <C> <C> <C>
July 14, 1998 Legend International (Asia) Limited 200,000 $ 2,231,250
August 27, 1998 Function Communications Co., Ltd. 76,632 $ 1,135,112
</TABLE>
The foregoing securities issuances were made in reliance on the exemptions from
registration provided by Section 4(2) (issuances not involving a public
offering) of the Securities Act of 1933, as amended. No underwriter fees or
commissions were paid by the Company in connection with such issuances.
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 21 of this report.
(b) Reports on Form 8-K
None.
19
<PAGE> 20
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 November 11, 1998 /s/ Phillip A. Bounsall
-------------------------------- -----------------------------
Phillip A. Bounsall
Executive Vice President,
Chief Financial Officer
(Principal Financial Officer)
Date November 11, 1998 /s/ John P. Delaney
-------------------------------- -----------------------------
John P. Delaney
Vice President, Corporate
Controller (Principal
Accounting Officer)
20
<PAGE> 21
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
(10.1) Lease Agreement between the Company and New World Partners Joint
Venture Number Five, dated July 30, 1998
(10.2) Lease Agreement between the Company and Airtech Parkway Associates,
LLC, dated September 18, 1998
(11) Statement Re: Computation of Earnings Per Share
(27) Financial Data Schedule for the Nine Months ended September 30, 1998
(99) Cautionary Statements
</TABLE>
21
<PAGE> 1
EXHIBIT 10.1
LANDLORD: NEW WORLD PARTNERS JOINT VENTURE
NUMBER FIVE, a Florida general partnership
c/o Codina Real Estate Management, Inc.
8323 N.W. 12th Street, Suite 115
Miami, Florida 33126
TENANT: BRIGHTPOINT NORTH AMERICA, INC., an Indiana
corporation
6402 Corporate Drive
Indianapolis, Indiana 46278
DATE OF EXECUTION: JULY 30 , 1998
---------------------------
- --------------------------------------------------------------------------------
LEASE-INDUSTRIAL COMMERCIAL
- --------------------------------------------------------------------------------
Revised Form 8/12/96
<PAGE> 2
LEASE SUMMARY
The following is a summary of basic lease provisions with
respect to the Lease. It is an integral part of the Lease, and terms defined or
dollar amounts specified in this Summary shall have the meanings or amounts as
stated, unless expanded upon in the text of the Lease and its Exhibits, which
are attached to and made a part of this Summary.
1. Date of Lease Execution: July 30, 1998
2. "Landlord": New World Partners Joint Venture Number
Five
3. Landlord's Address: c/o Codina Real Estate Management, Inc.
8323 N.W. 12th Street, Suite 115
Miami, Florida 33126
Attention: Property Manager
4. "Tenant": Brightpoint North America, Inc.
5. Tenant's Address: 6402 Corporate Drive
Indianapolis, Indiana 46278
6. "Guarantor": N/A
7. Guarantor's Address: N/A
8. Premises (section 1.1): As shown on Exhibit "A"
9. Building No.: 13
10. Gross Rentable Area of
Premises (section 1.1): Approximately 26,970 rentable square feet
11. Gross Rentable Area of
Building (section 1.1): Approximately 90,233 rentable square feet
12. Tenant's Proportionate
Share (section 2.3): 29.9%
13. Permitted Use of
Premises (section 3.1): Commercial warehouse, with incidental office
use
14. Term of Lease (section 1.1): Five (5) years and two (2) months
"Commencement Date": Date of Substantial
Completion
"Expiration Date": Five (5) years and two
(2) months after the Commencement Date
15. Option to Renew (Rider 1): One (1) term of five (5) years
<PAGE> 3
16. "Minimum Rent" (section 2.2):
<TABLE>
<CAPTION>
ANNUAL MINIMUM RENT MONTHLY PAYMENT
LEASE YEAR RATE PER SQUARE FOOT (PLUS SALES TAX)
---------- -------------------- -------------------
<S> <C> <C>
1 $7.25 $16,294.38*
2 $7.54 $16,946.15
3 $7.84 $17,620.40
4 $8.15 $18,317.13
5 (plus last $8.48 $19,058.80
2 months)
</TABLE>
*Notwithstanding the foregoing, Minimum Rent shall be abated
for the first sixty (60) days of the Term, commencing on the Commencement Date.
<TABLE>
<S> <C> <C>
17. Prepaid Rent: $17,353.51 (includes sales tax) (due upon
execution of Lease; to be applied to first full
month Minimum Rent is due)
18. Security Deposit (section 2.6): $32,588.76 (excludes sales tax) (due upon
execution of Lease)
19. Cost Pass-Throughs (section 2.3): Tenant's share of Operating Costs, Taxes
20. Base Year (section 2.3): 1998
21. Comprehensive General
Liability Insurance (section 6.1): $1,000,000.00
22. No. of Parking Spaces: Thirty-nine (39) unassigned
23. Broker(s) (section 13.12): Codina Bush Klein--Oncor International; CB
Commercial Real Estate Group, Inc.
</TABLE>
-1-
<PAGE> 4
THIS LEASE (the "Lease"), dated the 30th day of July, 1998, is made
between New World Partners Joint Venture Number Five, a Florida general
partnership (the "Landlord"), and BRIGHTPOINT north AMERICA, INC., an Indiana
corporation (the "Tenant").
ARTICLE I. TERM.
1.1 Grant; Term. In consideration of the performance by the Tenant of
its obligations under this Lease, the Landlord leases to the Tenant, and the
Tenant leases from the Landlord, for the Term, the "Premises," which Premises
are shown outlined on the floor plan attached hereto and made a part hereof as
Exhibit "A." The Premises are located in that certain building in Beacon Centre
(the "Building"), located in Dade County, Florida, as more particularly
described in Exhibit "B," attached hereto and made a part hereof. The gross
rentable area of the Premises and Building are approximately as shown on the
Lease Summary.
The "Term" of the Lease is the period from the Commencement
Date as specified in the Lease Summary, through the Expiration Date, as
specified in the Lease Summary. If the Premises are ready for occupancy prior to
the Commencement Date, then Tenant shall take occupancy on such date and
Tenant's obligations to pay Minimum Rent and all other charges shall commence on
such date. If Landlord cannot deliver possession of the Premises to Tenant on
the Commencement Date, this Lease shall not be void or voidable, nor shall
Landlord be liable to Tenant for any loss or damage resulting therefrom, but in
that event, this Lease shall in all ways remain in full force and effect except
that Minimum Rent and other charges shall be waived for the period between the
Commencement Date and the time when Landlord can deliver possession; provided,
however, if delivery of possession is delayed more than ninety (90) days past
the scheduled Commencement Date, Tenant may terminate this Lease upon fifteen
(15) days' written notice to Landlord, whereupon both parties shall be relieved
of all further obligations hereunder. Notwithstanding the foregoing, if delivery
of possession is delayed due to any act or omission of Tenant, then the
Commencement Date shall be the date Landlord would have delivered possession,
but for Tenant's delay.
The Landlord shall have no construction or improvement
obligations with respect to the Premises unless expressly set forth in a work
letter agreement, which, if executed by Landlord and Tenant, shall be
incorporated as an exhibit to this Lease. Upon the expiration of five (5)
business days following the Commencement Date, the Premises shall be
conclusively deemed to be accepted by Tenant unless Tenant shall have given
Landlord written notice of any contended defects in the Premises.
ARTICLE II. RENT.
2.1 Covenant to Pay. The Tenant shall pay to Landlord all sums due
hereunder from time to time from the Commencement Date without prior demand,
together with all applicable Florida sales tax thereon; however, unless
otherwise provided in this Lease, payments other than Tenant's regular monthly
payments of Minimum Rent, Operating Costs, and Taxes shall be payable by Tenant
to Landlord within five (5) days following demand. All rent or other charges
that are required to be paid by Tenant to Landlord shall be payable at
Landlord's address indicated on the Lease Summary. Minimum Rent and Additional
Rent for any "Lease Year" consisting of less than twelve (12) months shall be
prorated on a per diem basis, based upon a period of 365 days. "Lease Year"
means the twelve (12) full calendar months commencing on the Commencement Date.
However, the final Lease Year may contain less than twelve (12) months due to
expiration or sooner termination of the Term. The Tenant agrees that its
covenant to pay rent and all other sums under this Lease is an independent
covenant and that all such amounts are payable without counterclaim, set-off,
deduction, abatement, or reduction whatsoever, except as expressly provided for
in this Lease.
2.2 Minimum Rent. Subject to any escalation which may be provided for
in this Lease, the Tenant shall pay Minimum Rent for the Term in the initial
amount specified in the Lease Summary, which, except for the first installment,
shall be payable throughout the Term in equal monthly installments in advance on
the first day of each calendar month of each year of
-2-
<PAGE> 5
the Term, such monthly installments to be in the amounts (subject to escalation)
specified in the Lease Summary. The first monthly installment of Minimum Rent
shall be due on the date of this Lease. The Minimum Rent described above shall
be adjusted at the beginning of the second and each succeeding Lease Year during
the Term of this Lease as provided in the Lease Summary.
2.3 Operating Costs; Taxes.
(a) The Tenant shall pay to the Landlord the Tenant's
proportionate share of the amount by which the annual Operating Costs, as
hereinafter defined, for each calendar year exceed the Operating Costs incurred
during the Base Year specified in the Lease Summary. Such excess is referred to
for purposes of this Lease as the "Increased Operating Costs." Tenant's
obligation to pay its proportionate share of Increased Operating Costs shall
commence as of the beginning of the first full calendar year following the Base
Year. The amount of Increased Operating Costs payable to the Landlord may be
estimated by the Landlord for such period as the Landlord determines from time
to time (not to exceed twelve (12) months), and the Tenant agrees to pay to the
Landlord the amounts so estimated in equal installments, in advance, on the
first day of each month during such period. Notwithstanding the foregoing, when
bills for all or any portion of Increased Operating Costs so estimated are
actually received by Landlord, the Landlord may bill the Tenant for the Tenant's
proportionate share thereof, less any amount previously paid by Tenant to
Landlord on account of such item(s) by way of estimated Increased Operating
Costs payments.
(b) Within a reasonable period of time after the end of the
period for which estimated payments have been made, the Landlord shall submit to
the Tenant a statement from the Landlord setting forth the actual amounts
payable by the Tenant based on actual costs. If the amount the Tenant has paid
based on estimates is less than the amount due based on actual costs, the Tenant
shall pay such deficiency within five (5) days after submission of such
statement. If the amount paid by the Tenant is greater than the amount actually
due, the excess may be retained by the Landlord to be credited and applied by
the Landlord to the next due installments of the Tenant's proportionate share of
Increased Operating Costs, or as to the final Lease Year, provided Tenant is not
in default, Landlord will refund such excess to Tenant.
(c) For purposes of this Lease, Tenant's proportionate share
shall be a fraction, the numerator of which is the gross rentable area of the
Premises, and the denominator of which is the gross rentable area of the
Building (which is as set forth in the Lease Summary). Tenant's proportionate
share is as set forth in the Lease Summary. The term "Operating Costs" shall
mean any amounts paid or payable whether by the Landlord or by others on behalf
of the Landlord, arising out of Landlord's maintenance, operation, repair,
replacement (if such replacement increases operating efficiency) and
administration of the Building and Common Areas, including, without limitation:
(i) the cost of insurance which the Landlord is obligated or permitted to obtain
under this Lease and any deductible amount applicable to any claim made by the
Landlord under such insurance; (ii) the cost of security, (iii) the cost of
landscaping, and (iv) a reasonable management fee.
(d) In addition to Tenant's proportionate share of Operating
Costs, the Tenant shall pay to the Landlord the Tenant's proportionate share of
the amount by which the annual Taxes, as hereinafter defined, for each calendar
year exceed the Taxes incurred during the Base Year specified in the Lease
Summary. Such excess is referred to for purposes of this Lease as the "Increased
Taxes." Tenant's obligation to pay its proportionate share of Increased Taxes
shall commence as of the beginning of the first full calendar year following the
Base Year. The amount of Increased Taxes payable to the Landlord may be
estimated by the Landlord for such period as the Landlord determines from time
to time (not to exceed twelve (12) months), and the Tenant agrees to pay to the
Landlord the amounts so estimated in equal installments, in advance, on the
first day of each month during such period. Notwithstanding the foregoing, when
bills for all or any portion of Increased Taxes so estimated are actually
received by Landlord, the Landlord may bill the Tenant for the Tenant's
proportionate share thereof, less any amount previously paid by Tenant to
Landlord on account of such item(s) by way of estimated Increased Taxes
payments.
-3-
<PAGE> 6
(e) Within a reasonable period of time after the end of the
period for which estimated payments have been made, the Landlord shall submit to
the Tenant a statement from the Landlord setting forth the actual amounts
payable by the Tenant based on actual Taxes. If the amount the Tenant has paid
based on estimates is less than the amount due based on actual Taxes, the Tenant
shall pay such deficiency within five (5) days after submission of such
statement. If the amount paid by the Tenant is greater than the amount actually
due, the excess may be retained by the Landlord to be credited and applied by
the Landlord to the next due installments of the Tenant's proportionate share of
Increased Taxes, or as to the final Lease Year, provided Tenant is not in
default, Landlord will refund such excess to Tenant.
(f) Tenant's proportionate share shall be a fraction, the
numerator of which is the gross rentable area of the Premises, and the
denominator of which is the gross rentable area of the Building. The term
"Taxes" shall mean the cost of all real estate, personal property and other ad
valorem taxes, and any other levies, charges, local improvement rates, and
assessments whatsoever assessed or charged against the Building and Common
Areas, the equipment and improvements therein contained, and including any
amounts assessed or charged in substitution for or in lieu of any such taxes,
excluding only income or capital gains taxes imposed upon Landlord, and
including all costs associated with the appeal of any assessment on Taxes.
(g) The Tenant's proportionate share of actual Increased
Operating Costs and Increased Taxes for the final estimate period of the Term of
this Lease shall be due and payable even though it may not be finally calculated
until after the expiration of the Term. Accordingly, Landlord shall have the
right to continue to hold Tenant's security deposit following expiration of the
Term until Tenant's share of actual Increased Operating Costs and Increased
Taxes has been paid.
2.4 Payment of Personal Property Taxes. Tenant shall pay, when
due, all taxes attributable to the personal property, trade fixtures, business,
occupancy, or sales of Tenant or any other occupant of the Premises and to the
use of the Building by Tenant or such other occupant.
2.5 Rent Past Due. If any payment due from Tenant shall be
overdue, a late charge of five (5%) percent of the delinquent sum may be charged
by Landlord. If any payment due from Tenant shall remain overdue for more than
fifteen (15) days, an additional late charge in an amount equal to the lesser of
the highest rate permitted by law or one and one-half (1 1/2%) percent per month
(eighteen (18%) percent per annum) of the delinquent amount may be charged by
Landlord, such charge to be computed for the entire period for which the amount
is overdue and which shall be in addition to and not in lieu of the five (5%)
percent late charge or any other remedy available to Landlord.
2.6 Security Deposit. The Landlord acknowledges receipt of a
security deposit in the amount specified on the Lease Summary to be held by the
Landlord, without any liability for interest thereon, as security for the
performance by the Tenant of all its obligations under this Lease. Landlord
shall be entitled to commingle the security deposit with Landlord's other funds.
If Tenant defaults in any of its obligations under this Lease, the Landlord may
at its option, but without prejudice to any other rights which the Landlord may
have, apply all or part of the security deposit to compensate the Landlord for
any loss, damage, or expense sustained by the Landlord as a result of such
default. If all or any part of the security deposit is so applied, the Tenant
shall restore the security deposit to its original amount on demand of the
Landlord. Subject to the provisions of section 2.3, within thirty (30) days
following termination of this Lease, if the Tenant is not then in default, the
security deposit will be returned by the Landlord to the Tenant.
2.7 Landlord's Lien. To secure the payment of all rent and other
sums of money due and to become due hereunder and the faithful performance of
this Lease by Tenant, Tenant hereby gives to Landlord an express first and prior
contract lien and security interest on all property now or hereafter acquired
(including fixtures, equipment, chattels, and merchandise)
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which may be placed in the Premises and also upon all proceeds of any insurance
which may accrue to Tenant by reason of destruction of or damage to any such
property. Such property shall not be removed therefrom without the written
consent of Landlord until all arrearages in rental and other sums of money then
due to Landlord hereunder shall first have been paid. All exemption laws are
hereby waived in favor of said lien and security interest. This lien and
security interest is given in addition to Landlord's statutory lien and shall be
cumulative thereto. Landlord shall, in addition to all of its rights hereunder,
also have all of the rights and remedies of a secured party under the Uniform
Commercial Code as adopted in the State in which the Premises is located. To the
extent permitted by law, this Lease shall constitute a security agreement under
Article 9 of the Florida Uniform Commercial Code. Notwithstanding the foregoing,
Landlord agrees to subordinate its lien to a bona fide institutional lender
providing acquisition financing or lease financing for Tenant's furniture,
fixtures, and equipment, so that Landlord will have a second lien on such
furniture, fixtures, and equipment.
ARTICLE III. USE OF PREMISES.
3.1 Permitted Use. The Premises shall be used and occupied only for the
use specified in the Lease Summary. Tenant shall carry on its business on the
Premises in a reputable manner and shall not do, omit, permit, or suffer to be
done or exist upon the Premises anything which shall result in a nuisance,
hazard, or bring about a breach of any provision of this Lease or any applicable
municipal or other governmental law or regulation. Tenant shall observe all
reasonable rules and regulations established by Landlord from time to time for
the Building. The rules and regulations in effect as of the date hereof are
attached to and made a part of this Lease as Exhibit "C." The names for the
Building and the business park of which the Building is a part, which the
Landlord may from time to time adopt, and every name or mark adopted by the
Landlord in connection with the Building shall be used by the Tenant only in
association with the business carried on in the Premises during the Term and the
Tenant's use thereof shall be subject to such regulation as the Landlord may
from time to time impose.
3.2 Compliance with Laws. The Premises shall be used and occupied in a
safe, careful, and proper manner so as not to contravene any present or future
governmental or quasigovernmental laws, regulations, or orders, or the
requirements of the Landlord's or Tenant's insurers. If due to the Tenant's use
of the Premises, repairs, improvements, or alterations are necessary to comply
with any of the foregoing, the Tenant shall pay the entire cost thereof.
3.3 Signs. Except with the prior written consent of the Landlord, the
Tenant shall not erect, install, display, inscribe, paint, or affix any signs,
lettering, or advertising medium upon or above any exterior portion of the
Premises. Any exterior signage shall be installed by Tenant at Tenant's expense,
and such signage shall comply with Landlord's sign criteria as adopted from time
to time. The design and specification of such signage (including camera-ready
artwork) shall be submitted for Landlord's prior written approval.
3.4 Environmental Provisions. Tenant shall give written notice to
Landlord at least seven (7) days in advance of any production, generation,
handling, storage, treatment, transportation, disposal, release, or removal of
hazardous waste or hazardous substances from or on the Premises. Tenant warrants
and represents that it will not use or employ the Landlord's and/or the Building
property, facilities, equipment, or services to handle, transport, store, treat,
or dispose of any hazardous waste or hazardous substance, whether or not it was
generated or produced on the Premises; and, Tenant further warrants and
represents that any activity on or relating to the Premises shall be conducted
in full compliance with all applicable laws. Tenant agrees to defend, indemnify,
and hold harmless Landlord against any and all claims, costs, expenses, damages,
liability, and the like, which Landlord may hereafter be liable for, suffer,
incur, or pay arising under any applicable laws and resulting from or arising
out of any breach of the warranties and representations contained in this
section 3.4, or out of any act, activity, or violation of any applicable laws on
the part of Tenant, its agents, employees, or assigns. Tenant's liability under
this section 3.4 shall survive the expiration or any termination of this Lease.
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ARTICLE IV. ACCESS AND ENTRY.
4.1 Right of Examination. The Landlord shall be entitled at all
reasonable times and upon reasonable notice (but no notice is required in
emergencies) to enter the Premises to examine them; to make such repairs,
alterations, or improvements thereto as the Landlord considers necessary or
reasonably desirable; to have access to underfloor facilities and access panels
to mechanical shafts and to check, calibrate, adjust, and balance controls and
other parts of the heating, air conditioning, ventilating, and climate control
systems. The Landlord reserves to itself the right to install, maintain, use,
and repair pipes, ducts, conduits, vents, wires, and other installations leading
in, through, over, or under the Premises and for this purpose, the Landlord may
take all material into and upon the Premises which is required therefor. The
Tenant shall not unduly obstruct any pipes, conduits, or mechanical or other
electrical equipment so as to prevent reasonable access thereto. The Landlord
reserves the right to use all exterior walls and roof area. The Landlord shall
exercise its rights under this section, to the extent possible in the
circumstances, in such manner so as to minimize interference with the Tenant's
use and enjoyment of the Premises.
4.2 Right to Show Premises. The Landlord and its agents have the right
to enter the Premises at all reasonable times and upon reasonable notice to show
them to prospective purchasers, lenders, or anyone having a prospective interest
in the Building, and, during the last six months of the Term (or the last six
(6) months of any renewal term if this Lease is renewed), to show them to
prospective tenants.
ARTICLE V. MAINTENANCE, REPAIRS, AND ALTERATIONS.
5.1 Maintenance and Repairs by Landlord. The Landlord covenants to keep
the following in good repair as a prudent owner: (i) the structure of the
Building including exterior walls and roofs; and (ii) the entrances, sidewalks,
corridors, parking areas and other facilities from time to time comprising the
Common Areas. The cost of such maintenance and repairs shall be included in
Operating Costs. So long as the Landlord is acting in good faith, the Landlord
shall not be responsible for any damages caused to the Tenant by reason of
failure of any equipment or facilities serving the Building or delays in the
performance of any work for which the Landlord is responsible pursuant to this
Lease. Notwithstanding any other provisions of this Lease, if any part of the
Building is damaged or destroyed or requires repair, replacement, or alteration
as a result of the act or omission of the Tenant, its employees, agents,
invitees, licensees, or contractors, Landlord shall have the right to perform
same and the cost of such repairs, replacement, or alterations shall be paid by
the Tenant to the Landlord upon demand. In addition, if, in an emergency, it
shall become necessary to make promptly any repairs or replacements required to
be made by Tenant, Landlord may re-enter the Premises and proceed forthwith to
have the repairs or replacements made and pay the costs thereof. Upon demand,
Tenant shall reimburse Landlord for the cost of making the repairs.
5.2 Maintenance and Repairs by Tenant. The Tenant shall, at its sole
cost, repair and maintain the Premises including, but not limited to, base
building mechanical and electrical systems, all to a standard consistent with a
first class building, with the exception only of those repairs which are the
obligation of the Landlord pursuant to this Lease. Without limiting the
generality of the foregoing, Tenant is specifically required to maintain and
make repairs to (i) the portion of any pipes, lines, ducts, wires, or conduits
contained within the Premises; (ii) windows, plate glass, doors, and any
fixtures or appurtenances composed of glass; (iii) Tenant's sign; (iv) any
heating or air conditioning equipment serving the Premises ("HVAC") (which shall
include, without limitation, a preventive maintenance HVAC service contract,
which service contract shall be entered into between Tenant and one of
Landlord's approved HVAC contractors. Such service contract shall include,
without limitation, preventive HVAC maintenance no less than quarterly); (v) the
Premises or the Building when repairs to the same are necessitated by any act or
omission of Tenant, or the failure of Tenant to perform its obligations under
this Lease. All repair and maintenance performed by the Tenant in the Premises
shall be performed by contractors or workmen designated or approved by the
Landlord. At the expiration or earlier termination of the Term, the Tenant shall
surrender the Premises to the Landlord in as good condition and repair as the
Tenant is required to maintain the Premises throughout the Term. Tenant shall
also furnish, maintain, and replace all electric
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light bulbs, tubes, and tube casings located within or serving the Premises and
Tenant's signage, all at Tenant's sole cost and expense. Landlord will assign to
Tenant the benefit of any manufacturer's warranties with respect to the
mechanical, electrical, and plumbing systems.
5.3 Approval of Tenant's Alterations. No alterations (including,
without limitation, repairs, replacements, additions, or modifications to the
Premises by Tenant), other than minor or cosmetic alterations which are interior
and nonstructural, shall be made to the Premises without the Landlord's written
approval, which, as to exterior or structural alterations may be withheld in
Landlord's sole discretion. Any alterations by Tenant shall be performed at the
sole cost of the Tenant, by contractors and workmen approved by the Landlord, in
a good and workmanlike manner, and in accordance with all applicable laws and
regulations.
5.4 Removal of Improvements and Fixtures. All leasehold improvements
(other than unattached, movable trade fixtures which can be removed without
damage to the Premises) shall at the expiration or earlier termination of this
Lease become the Landlord's property. The Tenant may, during the Term, in the
usual course of its business, remove its trade fixtures, provided that the
Tenant is not in default under this Lease; and the Tenant shall, at the
expiration or earlier termination of the Term, at its sole cost, remove such of
the leasehold improvements (except for improvements installed by Landlord prior
to the Commencement Date) and trade fixtures in the Premises as the Landlord
shall require to be removed and restore the Premises to the condition existing
prior to such removal. The Tenant shall at its own expense repair any damage
caused to the Building by such removal. If the Tenant does not remove its trade
fixtures at the expiration or earlier termination of the Term, the trade
fixtures shall, at the option of the Landlord, become the property of the
Landlord and may be removed from the Premises and sold or disposed of by the
Landlord in such manner as it deems advisable without any accounting to Tenant.
5.5 Liens. The Tenant shall promptly pay for all materials supplied and
work done in respect of the Premises so as to ensure that no lien is recorded
against any portion of the Building or against the Landlord's or Tenant's
interest therein. If a lien is so recorded, the Tenant shall discharge it
promptly by payment or bonding. If any such lien against the Building or
Landlord's interest therein is recorded and not discharged by Tenant as above
required within fifteen (15) days following recording, the Landlord shall have
the right to remove such lien by bonding or payment and the cost thereof shall
be paid immediately from Tenant to Landlord. Landlord and Tenant expressly agree
and acknowledge that no interest of Landlord in the Premises or the Building
shall be subject to any lien for improvements made by Tenant in or for the
Premises, and the Landlord shall not be liable for any lien for any improvements
made by Tenant, such liability being expressly prohibited by the terms of this
Lease. In accordance with applicable laws of the State of Florida, Landlord has
filed in the public records of Dade County, Florida, a public notice containing
a true and correct copy of this paragraph, and Tenant hereby agrees to inform
all contractors and materialmen performing work in or for or supplying materials
to the Premises of the existence of said notice.
5.6 Utilities. The Tenant shall pay to the Landlord, or as the Landlord
directs, all gas, electricity, water, and other utility charges applicable to
the Premises as separately metered or, if not so metered, as part of Tenant's
proportionate share of Increased Operating Costs. The Tenant shall pay the cost
of janitorial, garbage removal, and trash removal services for the Premises and
the cost of heating, ventilating, and air conditioning the Premises.
ARTICLE VI. INSURANCE AND INDEMNITY.
6.1 Tenant's Insurance. The Tenant shall, throughout the Term (and any
other period when Tenant is in possession of the Premises), maintain at its sole
cost the following insurance:
(A) All risks property insurance, naming the Tenant and the
Landlord as insured parties, containing a waiver of subrogation rights which the
Tenant's insurers may have against the Landlord and against those for whom the
Landlord is in law responsible including, without limitation, its directors,
officers, agents, and employees, and (except with respect to the
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Tenant's chattels) incorporating a standard New York mortgagee endorsement
(without contribution). Such insurance shall insure property of every kind owned
by the Tenant in an amount not less than the full replacement cost thereof
(new), with such cost to be adjusted no less than annually.
(B) Comprehensive general liability insurance. Such policy
shall contain inclusive limits per occurrence of not less than the amount
specified in the Lease Summary; provide for cross liability; and include the
Landlord and any mortgagee of Landlord as additional insureds.
(C) Worker's compensation and employer's liability insurance
in compliance with applicable legal requirements.
(D) Any other form of insurance which the Tenant or the
Landlord, acting reasonably, requires from time to time in form, in amounts, and
for risks against which a prudent tenant would insure.
All policies referred to above shall: (i) be taken out with
insurers licensed to do business in Florida and reasonably acceptable to the
Landlord; (ii) be in a form reasonably satisfactory to the Landlord; (iii) be
non-contributing with, and shall apply only as primary and not as excess to any
other insurance available to the Landlord or any mortgagee of Landlord; (iv)
contain an undertaking by the insurers to notify the Landlord by certified mail
not less than thirty (30) days prior to any material change, cancellation, or
termination, and (v) with respect to subsection (A), contain replacement cost,
demolition cost, and increased cost of construction endorsements. Certificates
of insurance on the Landlord's standard form or, if required by a mortgagee,
copies of such insurance policies certified by an authorized officer of Tenant's
insurer as being complete and current, shall be delivered to the Landlord
promptly upon request. If a) the Tenant fails to take out or to keep in force
any insurance referred to in this section 6.1, or should any such insurance not
be approved by either the Landlord or any mortgagee, and b) the Tenant does not
commence and continue to diligently cure such default within forty-eight (48)
hours after written notice by the Landlord to the Tenant specifying the nature
of such default, then the Landlord has the right, without assuming any
obligation in connection therewith, to effect such insurance at the sole cost of
the Tenant and all outlays by the Landlord shall be paid by the Tenant to the
Landlord without prejudice to any other rights or remedies of the Landlord under
this Lease. The Tenant shall not keep or use in the Premises any article which
may be prohibited by any fire or casualty insurance policy in force from time to
time covering the Premises or the Building.
6.2 Loss or Damage. The Landlord shall not be liable for any death or
injury arising from or out of any occurrence in, upon, at, or relating to the
Building or damage to property of the Tenant or of others located on the
Premises or elsewhere in the Building, nor shall it be responsible for any loss
of or damage to any property of the Tenant or others from any cause, UNLESS SUCH
DEATH, INJURY, LOSS, OR DAMAGE RESULTS FROM THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE LANDLORD. Without limiting the generality of the foregoing,
the Landlord shall not be liable for any injury or damage to persons or property
resulting from fire, explosion, falling plaster, falling ceiling tile, falling
fixtures, steam, gas, electricity, water, rain, flood, or leaks from any part of
the Premises or from the pipes, sprinklers, appliances, plumbing works, roof,
windows, or subsurface of any floor or ceiling of the Building or from the
street or any other place or by dampness, or by any other cause whatsoever. The
Tenant agrees to indemnify the Landlord and hold it harmless from and against
any and all loss (including loss of Minimum Rent and additional rent payable in
respect to the Premises), claims, actions, damages, liability, and expense of
any kind whatsoever (including attorneys' fees and costs at all tribunal
levels), UNLESS CAUSED BY THE GROSS NEGLIGENCE OR WILLFUL MISCONDUCT OF LANDLORD
OR ITS AGENTS, arising from any occurrence in, upon, or at the Premises, or the
occupancy, use, or improvement by the Tenant or its agents or invitees of the
Premises or any part thereof, or occasioned wholly or in part by any act or
omission of the Tenant its agents, employees, and invitees or by anyone
permitted to be on the Premises by the Tenant.
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6.3 Landlord's Insurance. The Landlord shall throughout the Term carry:
(i) "all risks" insurance on the Building and the machinery and equipment
contained therein or servicing the Building and owned by the Landlord (excluding
any property with respect to which the Tenant and other tenants are obliged to
insure pursuant to section 6.1 or similar sections of their respective leases);
(ii) public liability and property damage insurance with respect to the
Landlord's operations in the Building; and (iii) such other forms of insurance
as the Landlord or its mortgagee reasonably considers advisable. Such insurance
shall be in such reasonable amounts and with such reasonable deductibles as
would be carried by a prudent owner of a similar building, having regard to
size, age, and location.
ARTICLE VII. DAMAGE AND DESTRUCTION.
7.1 Damage to Premises. If the Premises are partially destroyed due to
fire or other casualty, the Landlord shall diligently repair the Premises, to
the extent of its obligations under section 5.1, and Minimum Rent shall abate
proportionately to the portion of the Premises, if any, rendered untenantable
from the date of destruction or damage until the Landlord's repairs have been
substantially completed. If the Premises are totally destroyed due to fire or
other casualty, the Landlord shall diligently repair the Premises to the extent
only of its obligations pursuant to section 5.1, and Minimum Rent shall abate
entirely from the date of destruction or damage to such date which is the
earlier of (i) the date tenantable, or (ii) thirty (30) days after Landlord's
repairs have been substantially completed. Upon being notified by the Landlord
that the Landlord's repairs have been substantially completed, the Tenant shall
diligently perform all other work required to fully restore the Premises for use
in the Tenant's business, in every case at the Tenant's cost and without any
contribution to such cost by the Landlord, whether or not the Landlord has at
any time made any contribution to the cost of supply, installation, or
construction of leasehold improvements in the Premises. Tenant agrees that
during any period of reconstruction or repair of the Premises, it will continue
the operation of its business within the Premises to the extent practicable. If
all or any part of the Premises shall be damaged by fire or other casualty and
the fire or other casualty is caused by the fault or neglect of Tenant or
Tenant's agents, guest, or invitees, rent and all other charges shall not abate.
7.2 Termination for Damage. Notwithstanding section 7.1, if damage or
destruction which has occurred to the Premises or the Building is such that in
the reasonable opinion of the Landlord such reconstruction or repair cannot be
completed within one hundred twenty (120) days of the happening of the damage or
destruction, the Landlord may, at its option, terminate this Lease on notice to
the Tenant given within thirty (30) days after such damage or destruction and
the Tenant shall immediately deliver vacant possession of the Premises in
accordance with the terms of this Lease.
ARTICLE VIII. ASSIGNMENT, SUBLEASES, AND TRANSFERS.
8.1 Transfer by Tenant. The Tenant shall not enter into, consent to, or
permit any Transfer, as hereinafter defined, without the prior written consent
of the Landlord in each instance, which consent shall not be unreasonably
withheld. For purposes of this Lease, "Transfer" means an assignment of this
Lease in whole or in part; a sublease of all or any part of the Premises; any
transaction whereby the rights of the Tenant under this Lease or to the Premises
are transferred to another; any mortgage or encumbrance of this Lease or the
Premises or any part thereof or other arrangement under which either this Lease
or the Premises become security for any indebtedness or other obligations; and
if Tenant is a corporation or a partnership, the transfer of a controlling
interest in the stock of the corporation or partnership interests, as
applicable. If there is a permitted Transfer, the Landlord may collect rent or
other payments from the transferee and apply the net amount collected to the
rent or other payments required to be paid pursuant to this Lease but no
acceptance by the Landlord of any payments by a transferee shall be deemed a
waiver of any provisions hereof regarding Tenant. Notwithstanding any Transfer,
the Tenant shall not be released from any of its obligations under this Lease.
The Landlord's consent to any Transfer shall be subject to the further condition
that if the Minimum Rent and additional rent pursuant to such Transfer exceeds
the Minimum Rent and additional rent payable under this Lease, the amount of
such excess shall be paid to the Landlord. If, pursuant to a permitted Transfer,
the Tenant receives from the transferee, either directly or indirectly, any
consideration other than Minimum Rent
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and additional rent for such Transfer, either in the form of cash, goods, or
services, the Tenant shall, upon receipt thereof, pay to the Landlord an amount
equivalent to such consideration.
8.2 Assignment by Landlord. The Landlord shall have the unrestricted
right to sell, lease, convey, or otherwise dispose of the Building or any part
thereof and this Lease or any interest of the Landlord in this Lease. To the
extent that the purchaser or assignee from the Landlord assumes the obligations
of the Landlord under this Lease, the Landlord shall thereupon and without
further agreement be released of all further liability under this Lease. If the
Landlord sells its interest in the Premises, it shall deliver the security
deposit to the purchaser and the Landlord will thereupon be released from any
further liability with respect to the security deposit or its return to the
Tenant and the purchaser shall become directly responsible to Tenant.
ARTICLE IX. DEFAULT.
9.1 Defaults. A default by Tenant shall be deemed to have occurred
hereunder, if and whenever: (i) any Minimum Rent or Tenant's proportionate share
of Increased Operating Costs or Increased Taxes is not paid when due whether or
not any notice or demand for payment has been made by the Landlord; (ii) any
other additional rent is in arrears and is not paid within five (5) days after
written demand by the Landlord; (iii) the Tenant has breached any of its
obligations in this Lease (other than the payment of rent) and the Tenant fails
to remedy such breach within fifteen (15) days (or such shorter period as may be
provided in this Lease), or if such breach cannot reasonably be remedied within
fifteen (15) days (or such shorter period), then if the Tenant fails to
immediately commence to remedy and thereafter proceed diligently to remedy such
breach, in each case after notice in writing from the Landlord; (iv) the Tenant
becomes bankrupt or insolvent; (v) any of the Landlord's policies of insurance
with respect to the Building are cancelled or adversely changed as a result of
Tenant's use or occupancy of the Premises; or (vi) the business operated by
Tenant in the Premises shall be closed by governmental or court order for any
reason.
9.2 Remedies. In the event of any default hereunder by Tenant, then
without prejudice to any other rights which it has pursuant to this Lease or at
law or in equity, the Landlord shall have the following rights and remedies,
which are cumulative and not alternative:
(A) Landlord may cancel this Lease by notice to the Tenant and
retake possession of the Premises for Landlord's account. Tenant shall then quit
and surrender the Premises to Landlord. Tenant's liability under all of the
provisions of this Lease shall continue notwithstanding any expiration and
surrender, or any re-entry, repossession, or disposition hereunder.
(B) Landlord may enter the Premises as agent of the Tenant to
take possession of any property of the Tenant on the Premises, to store such
property at the expense and risk of the Tenant or to sell or otherwise dispose
of such property in such manner as the Landlord may see fit without notice to
the Tenant. Re-entry and removal may be effectuated by summary dispossess
proceedings, by any suitable action or proceeding, or otherwise. Landlord shall
not be liable in any way in connection with its actions pursuant to this
section, to the extent that its actions are in accordance with law.
(C) If this Lease is cancelled under subsection (A) above,
Tenant shall remain liable (in addition to accrued liabilities) to the extent
legally permissible for all rent and all of the charges Tenant would have been
required to pay until the date this Lease would have expired had such
cancellation not occurred. Tenant's liability for rent shall continue
notwithstanding re-entry or repossession of the Premises by Landlord. In
addition to the foregoing, Tenant shall pay to Landlord such sums as the court
which has jurisdiction thereover may adjudge as reasonable attorneys' fees with
respect to any successful lawsuit or action instituted by Landlord to enforce
the provisions of this Lease.
(D) Landlord may relet all or any part of the Premises for all
or any part of the unexpired portion of the Term of this Lease or for any longer
period, and may accept any rent
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then attainable; grant any concessions of Rent, and agree to paint or make any
special repairs, alterations, and decorations for any new Tenant as it may deem
advisable in its sole and absolute discretion. Landlord shall be under no
obligation to relet or to attempt to relet the Premises.
(E) If this Lease is cancelled in accordance with subsection
(A) above, and Landlord so elects, the rent hereunder shall be accelerated and
Tenant shall pay Landlord damages in the amount of any and all sums which would
have been due for the remainder of the Term.
(F) Landlord may remedy or attempt to remedy any default of
the Tenant under this Lease for the account of the Tenant and to enter upon the
Premises for such purposes. No notice of the Landlord's intention to perform
such covenants need be given the Tenant unless expressly required by this Lease.
The Landlord shall not be liable to the Tenant for any loss or damage caused by
acts of the Landlord in remedying or attempting to remedy such default and the
Tenant shall pay to the Landlord all expenses incurred by the Landlord in
connection with remedying or attempting to remedy such default. Any expenses
incurred by Landlord shall accrue interest from the date of payment by Landlord
until repaid by Tenant at the highest rate permitted by law.
9.3 Costs. The Tenant shall pay to the Landlord on demand all costs
incurred by the Landlord, including attorneys' fees and costs at all tribunal
levels, incurred by the Landlord in enforcing any of the obligations of the
Tenant under this Lease. In addition, upon any default by Tenant, Tenant shall
be also liable to Landlord for the expenses to which Landlord may be put in
re-entering the Premises; repossessing the Premises; painting, altering, or
dividing the Premises; combining the Premises with an adjacent space for any new
tenant; putting the Premises in proper repair; protecting and preserving the
Premises by placing watchmen and caretakers therein; reletting the Premises
(including attorneys' fees and disbursements, marshall's fees, and brokerage
fees, in so doing); and any other expenses reasonably incurred by Landlord.
9.4 Additional Remedies; Waiver. The rights and remedies of Landlord
set forth herein shall be in addition to any other right and remedy now and
hereinafter provided by law. All rights and remedies shall be cumulative and
non-exclusive of each other. No delay or omission by Landlord in exercising a
right or remedy shall exhaust or impair the same or constitute a waiver of, or
acquiescence to, a default.
9.5 Default by Landlord. In the event of any default by Landlord,
Tenant's exclusive remedy shall be an action for damages, but prior to any such
action Tenant will give Landlord written notice specifying such default with
particularity, and Landlord shall have a period of thirty (30) days following
the date of such notice in which to commence the appropriate cure of such
default. Unless and until Landlord fails to commence and diligently pursue the
appropriate cure of such default after such notice or complete same within a
reasonable period of time, Tenant shall not have any remedy or cause of action
by reason thereof. Notwithstanding any provision of this Lease, Landlord shall
not at any time have any personal liability under this Lease. In the event of
any breach or default by Landlord of any term or provision of this Lease, Tenant
agrees to look solely to the equity or interest then-owned by Landlord in the
Building, and in no event shall any deficiency judgment be sought or obtained
against Landlord.
ARTICLE X. ESTOPPEL CERTIFICATE; SUBORDINATION.
10.1 Estoppel Certificate. Within ten (10) days after written request
by the Landlord, the Tenant shall deliver in a form supplied by the Landlord, an
estoppel certificate to the Landlord as to the status of this Lease, including
whether 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
identifying the modification agreements); the amount of Minimum Rent and
additional rent then being paid and the dates to which same have been paid;
whether or not there is any existing or alleged default by either party with
respect to which a notice of default has been served, or any facts exist which,
with the passing of time or giving of notice, would
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constitute a default and, if there is any such default or facts, specifying the
nature and extent thereof; and any other matters pertaining to this Lease as to
which the Landlord shall request such certificate. The Landlord, and any
prospective purchaser, lender, or ground lessor shall have the right to rely on
such certificate.
10.2 Subordination; Attornment. This Lease and all rights of the Tenant
shall be subject and subordinate to any and all mortgages, security agreements,
or like instruments resulting from any financing, refinancing, or collateral
financing (including renewals or extensions thereof), and to any and all ground
leases, made or arranged by Landlord of its interests in all or any part of the
Building), from time to time in existence against the Building, whether now
existing or hereafter created; provided, however, that, so long as no default or
event which, with the passing of time or giving of notice would constitute a
default, exists under this Lease, any such lender or ground lessor shall not
disturb Tenant's possession of the Premises by joining Tenant as a defendant in
a foreclosure or eviction proceeding. Such subordination shall not require any
further instrument to evidence such subordination. However, on request, the
Tenant shall further evidence its agreement to subordinate this Lease and its
rights under this Lease to any and all documents and to all advances made under
such documents. The form of such subordination shall be made as required by the
Landlord, its lender, or ground lessor. Tenant shall, if requested by such
mortgagee, owner, or purchaser, or by any person succeeding to the interest of
such mortgagee, owner, or purchaser, as the result of the enforcement of the
remedies provided by law or the applicable security instrument held by such
mortgagee, owner, or purchaser, automatically become the tenant of any such
mortgagee, owner, purchaser, or successor-in-interest, without any change in the
terms or other provisions of this Lease; provided, however, that said mortgagee,
owner, purchaser, or successor shall not be bound by (a) any payment of rent or
additional rent for more than one month in advance, or (b) any security deposit
or the like not actually received by such mortgagee, owner, or purchaser, or
successor, or (c) any amendment or modification in this Lease made without the
consent of such mortgagee, owner, purchaser, or successor, or (d) any
construction obligation, free rent, or other concession or monetary allowance,
or (e) any set-off, counterclaim, or the like otherwise available against
Landlord, or (f) any act or omission of any prior landlord (including Landlord).
Upon request by said mortgagee, owner, or purchaser, or successor, Tenant shall
execute and deliver an instrument or instruments confirming its attornment.
ARTICLE XI. CONTROL OF BUILDING BY LANDLORD.
11.1 Use and Maintenance of Common Areas. The Tenant and those doing
business with Tenant for purposes associated with the Tenant's business on the
Premises, shall have a non-exclusive license to use the Common Areas for their
intended purposes during normal business hours in common with others entitled
thereto and subject to any rules and regulations imposed by the Landlord. The
Landlord shall keep the Common Areas in good repair and condition and shall
clean the Common Areas when necessary. Subject to all of the terms, provisions,
covenants, and conditions contained herein, Tenant shall have the right to use
the number of parking spaces indicated in the Lease Summary in the parking lot
which Landlord shall provide for the use of tenants of the Building. Landlord
shall not be liable for any damage to automobiles of any nature whatsoever to,
or any theft of, automobiles or other vehicles or the contents thereof, while in
or about the parking lots. The Tenant acknowledges that its non-exclusive right
to use any parking facilities forming part of the Building may be subject to
such rules and regulations as reasonably imposed by the Landlord from time to
time. The Tenant acknowledges that all Common Areas shall at all times be under
the exclusive control and management of the Landlord. For purposes of this
Lease, "Common Areas" shall mean those areas, facilities, utilities,
improvements, equipment, and installations of the Building which serve or are
for the benefit of the tenants of more than one component of the Building and
which are not designated or intended by the Landlord to be leased, from time to
time, or which are provided or designated from time to time by the Landlord for
the benefit or use of all tenants in the Building, their employees, customers,
and invitees, in common with others entitled to the use or benefit of same.
11.2 Alterations by Landlord. The Landlord may (i) alter, add to,
subtract from, construct improvements on, re-arrange, and construct additional
facilities in, adjoining, or
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<PAGE> 15
proximate to the Building; (ii) relocate the facilities and improvements in or
comprising the Building or erected on the land; (iii) do such things on or in
the Building as required to comply with any laws, by-laws, regulations, orders,
or directives affecting the land or any part of the Building; and (iv) do such
other things on or in the Building as the Landlord, in the use of good business
judgment determines to be advisable, provided that notwithstanding anything
contained in this section 11.2, access to the Premises shall be available at all
times. The Landlord shall not be in breach of its covenants for quiet enjoyment
or liable for any loss, costs, or damages, whether direct or indirect, incurred
by the Tenant due to any of the foregoing.
11.3 Covenants, Conditions, and Restrictions. Tenant hereby
acknowledges and agrees that the Building of which the Premises is a part, and
Tenant's occupancy thereof, is subject to that certain Master Declaration of
Covenants, Conditions, and Restrictions for Beacon Centre (the "Declaration"),
which Declaration has been recorded among the Public Records of Dade County,
Florida. Copies of the Declaration are located at Landlord's management office
and may be reviewed by Tenant during Landlord's normal business hours. Tenant
hereby acknowledges the existence of such Declaration and agrees to be bound by
the terms thereof (and any amendments or modifications thereto). Tenant hereby
agrees to reimburse Landlord, within five (5) days after demand therefor, for
the proportionate share of Common Expenses attributable to the Premises, as
described in the Declaration.
11.4 Tenant Relocation. Landlord shall have the right, at any time upon
sixty (60) days' written notice to Tenant, to relocate Tenant into other space
comparable to the Premises within the Building or within the business park of
which the Building is a part. Upon such relocation, such new space shall be
deemed the Premises and the prior space originally demised shall in all respects
be released from the effect of this Lease. If the Landlord elects to relocate
Tenant as above described, (i) the new space shall contain approximately the
same as, or greater usable area than the original space, (ii) the Landlord shall
improve the new space, at Landlord's sole cost, to at least the standards of the
original space, (iii) the Landlord shall pay the reasonable costs of moving
Tenant's trade fixtures and furnishings from the original space to the new
space, (iv) as total compensation for all other costs, expenses, and damages
which Tenant may suffer in connection with the relocation, including but not
limited to, lost profit or business interruption, no Minimum Rent, Operating
Costs, or Taxes shall be due or payable for the first full calendar month of
Tenant's occupancy of the new space, and Landlord shall not be liable for any
further indirect or special expenses of Tenant resulting from the relocation,
(v) Minimum Rent, Tenant's proportionate share of Operating Costs and Taxes, and
all other charges hereunder shall be the same for the new space as for the
original space, notwithstanding that the new space may be larger than the
original space, and (vi) all other terms of this Lease shall apply to the new
space as the Premises, except as otherwise provided in this paragraph.
ARTICLE XII. CONDEMNATION.
12.1 Total or Partial Taking. If the whole of the Premises, or such
portion thereof as will make the Premises unusable for the purposes leased
hereunder, shall be taken by any public authority under the power of eminent
domain or sold to public authority under threat or in lieu of such taking, the
Term shall cease as of the day possession or title shall be taken by such public
authority, whichever is earlier ("Taking Date"), whereupon the rent and all
other charges shall be paid up to the Taking Date with a proportionate refund by
Landlord of any rent and all other charges paid for a period subsequent to the
Taking Date. If less than the whole of the Premises, or less than such portion
thereof as will make the Premises unusable for the purposes leased hereunder,
the Term shall cease only as to the part so taken as of the Taking Date, and
Tenant shall pay rent and other charges up to the Taking Date, with appropriate
credit by Landlord (toward the next installment of rent due from Tenant) of any
rent or charges paid for a period subsequent to the Taking Date. Minimum Rent
and other charges payable to Landlord shall be reduced in proportion to the
amount of the Premises taken.
12.2 Taking For Temporary Use. If there is a taking of the Premises for
temporary use, this Lease shall continue in full force and effect, and Tenant
shall continue to comply with Tenant's obligations under this Lease, except to
the extent compliance shall be rendered impossible or impracticable by reason of
the taking. Minimum Rent and other charges payable
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<PAGE> 16
to Landlord shall be reduced in proportion to the amount of the Premises taken
for the period of such temporary use.
12.3 Award. All compensation awarded or paid upon a total or partial
taking of the Premises or Building including the value of the leasehold estate
created hereby shall belong to and be the property of Landlord without any
participation by Tenant; Tenant shall have no claim to any such award based on
Tenant's leasehold interest. However, nothing contained herein shall be
construed to preclude Tenant, at its cost, from independently prosecuting any
claim directly against the condemning authority in such condemnation proceeding
for damage to, or cost of removal of, stock, trade fixtures, furniture, and
other personal property belonging to Tenant; provided, however, that no such
claim shall diminish or otherwise adversely affect Landlord's award or the award
of any mortgagee.
ARTICLE XIII. GENERAL PROVISIONS.
13.1 Delay. Except as expressly provided in this Lease, whenever the
Landlord or Tenant is delayed in the fulfillment of any obligation under this
Lease, other than the payment of rent or other charges, by an unavoidable
occurrence which is not the fault of the party delayed in performing such
obligation, then the time for fulfillment of such obligation shall be extended
during the period in which such circumstances operate to delay the fulfillment
of such obligation.
13.2 Holding Over. If the Tenant remains in possession of the Premises
after the end of the Term without having executed and delivered a new lease or
an agreement extending the Term, there shall be no tacit renewal of this Lease
or the Term, and the Tenant shall be deemed to be occupying the Premises as a
Tenant from month to month at a monthly Minimum Rent payable in advance on the
first day of each month equal to twice the monthly amount of Minimum Rent
payable during the last month of the Term, and otherwise upon the same terms as
are set forth in this Lease, so far as they are applicable to a monthly tenancy.
13.3 Waiver; Partial Invalidity. If either the Landlord or Tenant
excuses or condones any default by the other of any obligation under this Lease,
this shall not be a waiver of such obligation in respect of any continuing or
subsequent default and no such waiver shall be implied. All of the provisions of
this Lease are to be construed as covenants even though not expressed as such.
If any such provision is held or rendered illegal or unenforceable it shall be
considered separate and severable from this Lease and the remaining provisions
of this Lease shall remain in force and bind the parties as though the illegal
or unenforceable provision had never been included in this Lease.
13.4 Recording. Neither the Tenant nor anyone claiming under the Tenant
shall record this Lease or any memorandum hereof in any public records without
the prior written consent of the Landlord.
13.5 Notices. Any notice, consent, or other instrument required or
permitted to be given under this Lease shall be in writing and shall be
delivered in person, or sent by certified mail, return receipt requested, or
overnight express mail courier, postage prepaid, addressed (i) if to Landlord,
at the address set forth on the Lease Summary; and (ii) if to the Tenant, at the
Premises or, prior to Tenant's occupancy of the Premises, at the address set
forth on the Lease Summary. Any such notice or other instruments shall be deemed
to have been given and received on the day upon which personal delivery is made
or, if mailed, then forty-eight (48) hours following the date of mailing. Either
party may give notice to the other of any change of address and after the giving
of such notice, the address therein specified is deemed to be the address of
such party for the giving of notices. If postal service is interrupted or
substantially delayed, all notices or other instruments shall be delivered in
person or by overnight express mail courier.
13.6 Successors; Joint and Several Liability. The rights and
liabilities created by this Lease extend to and bind the successors and assigns
of the Landlord and the heirs, executors, administrators, and permitted
successors and assigns of the Tenant. No rights, however, shall inure to the
benefit of any transferee unless such Transfer complies with the provisions of
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<PAGE> 17
Article VIII. If there is at any time more than one Tenant or more than one
person constituting the Tenant, their covenants shall be considered to be joint
and several and shall apply to each and every one of them.
13.7 Captions and Section Numbers. The captions, section numbers,
article numbers, and table of contents appearing in this Lease are inserted only
as a matter of convenience and in no way affect the substance of this Lease.
13.8 Extended Meanings. The words "hereof," "hereto," "hereunder," and
similar expressions used in this Lease relate to the whole of this Lease and not
only to the provisions in which such expressions appear. This Lease shall be
read with all changes in number and gender as may be appropriate or required by
the context. Any reference to the Tenant includes, when the context allows, the
employees, agents, invitees, and licensees of the Tenant and all others over
whom the Tenant might reasonably be expected to exercise control. This Lease has
been fully reviewed and negotiated by each party and their counsel and shall not
be more strictly construed against either party.
13.9 Entire Agreement; Governing Law; Time. This Lease and the Exhibits
and Riders, if any, attached hereto are incorporated herein and set forth the
entire agreement between the Landlord and Tenant concerning the Premises and
there are no other agreements or understandings between them. This Lease and its
Exhibits and Riders may not be modified except by agreement in writing executed
by the Landlord and Tenant. This Lease shall be construed in accordance with and
governed by the laws of the State of Florida. Time is of the essence of this
Lease.
13.10 No Partnership. Nothing in this Lease creates any relationship
between the parties other than that of lessor and lessee and nothing in this
Lease constitutes the Landlord a partner of the Tenant or a joint venturer or
member of a common enterprise with the Tenant.
13.11 Quiet Enjoyment. If the Tenant pays rent and other charges and
fully observes and performs all of its obligations under this Lease, the Tenant
shall be entitled to peaceful and quiet enjoyment of the Premises for the Term
without interruption or interference by the Landlord or any person claiming
through the Landlord.
13.12 Brokerage. Landlord and Tenant each represent and warrant one to
the other that except as set forth in the Lease Summary, neither of them has
employed any broker in connection with the negotiations of the terms of this
Lease or the execution thereof. Landlord and Tenant hereby agree to indemnify
and to hold each other harmless against any loss, expense, or liability with
respect to any claims for commissions or brokerage fees arising from or out of
any breach of the foregoing representation and warranty. Landlord recognizes the
broker(s) specified in the Lease Summary as the sole broker(s) with whom
Landlord has dealt in this transaction and agrees to pay any commissions
determined to be due said broker(s). Tenant acknowledges that Codina Bush
KleinoOncor International represents solely the Landlord with respect to this
Lease.
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<PAGE> 18
13.13 TRIAL BY JURY. LANDLORD AND TENANT EACH HEREBY WAIVES ITS RIGHT
TO A JURY TRIAL OF ANY ISSUE OR CONTROVERSY ARISING UNDER THIS LEASE.
EXECUTED as of the day and year first above written.
WITNESSES: LANDLORD:
NEW WORLD PARTNERS JOINT VENTURE NUMBER FIVE,
a Florida general partnership
By: Codina/Tradewind No. 5, Ltd., a Florida
limited partnership, as general partner
By: Codina West Dade Development Corp.
No. 5, as general partner
/s/ By: /s/ Armando Codina
- ----------------------- --------------------------
/s/ Armando Codina, President
- -----------------------
TENANT:
BRIGHTPOINT NORTH AMERICA, INC., an Indiana
corporation
/s/ Elizabeth J. Potter By: /s/ Steven E. Fivel
- ----------------------- ---------------------
Name: Steven E. Fivel
/s/ Deborah A. McQueen Title: Vice President
- -----------------------
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<PAGE> 19
EXHIBIT "A"
Floor Plan of Premises
Cannot be Reproduced
<PAGE> 20
EXHIBIT "B"
Legal Description of Building and Land
Building 13
Tract F, of BEACON CENTER PHASE III, according to the Plat thereof,
recorded in Plat Book 137, Page 19, of the Public Records of Dade County,
Florida
<PAGE> 21
EXHIBIT "C"
RULES AND REGULATIONS
1. Security. The Landlord may from time to time adopt appropriate
systems and procedures for the security or safety of the Building, any persons
occupying, using, or entering the same, or any equipment, furnishings, or
contents thereof, and the Tenant shall comply with the Landlord's reasonable
requirements relative thereto.
2. Return of Keys. At the end of the Term, the Tenant shall promptly
return to the Landlord all keys for the Building and Premises which are in the
possession of the Tenant. In the event any Tenant fails to return keys, Landlord
may retain $50.00 of Tenant's security deposit for locksmith work and
administration.
3. Repair, Maintenance, Alterations, and Improvements. The Tenant shall
carry out Tenant's repair, maintenance, alterations, and improvements in the
Premises only during times agreed to in advance by the Landlord and in a manner
which will not interfere with the rights of other tenants in the Building.
4. Water Fixtures. The Tenant shall not use water fixtures for any
purpose for which they are not intended, nor shall water be wasted by tampering
with such fixtures. Any cost or damage resulting from such misuse by the Tenant
shall be paid for by the Tenant.
5. Personal Use of Premises. The Premises shall not be used or
permitted to be used for residential, lodging, or sleeping purposes or for the
storage of personal effects or property not required for business purposes.
6. Heavy Articles. The Tenant shall not place in or move about the
Premises without the Landlord's prior written consent any safe or other heavy
article which in the Landlord's reasonable opinion may damage the Building, and
the Landlord may designate the location of any such heavy articles in the
Premises.
7. Bicycles, Animals. The Tenant shall not bring any animals or birds
into the Building, and shall not permit bicycles or other vehicles inside or on
the sidewalks outside the Building except in areas designated from time to time
by the Landlord for such purposes.
8. Deliveries. The Tenant shall ensure that deliveries of supplies,
fixtures, equipment, furnishings, wares, and merchandise to the Premises are
made through such entrances, elevators, and corridors and at such times as may
from time to time be designated by the Landlord, and shall promptly pay or cause
to be paid to the Landlord the cost of repairing any damage in the Building
caused by any person making improper deliveries.
9. Solicitations. The Landlord reserves the right to restrict or
prohibit canvassing, soliciting, or peddling in the Building.
10. Food and Beverages. Only persons approved from time to time by the
Landlord may prepare, solicit orders for, sell, serve, or distribute foods or
beverages in the Building, or use the Common Areas for any such purpose. Except
with the Landlord's prior written consent and in accordance with arrangements
approved by the Landlord, the Tenant shall not permit on the Premises the use of
equipment for dispensing food or beverages or for the preparation, solicitation
of orders for, sale, serving, or distribution of food or beverages.
11. Refuse. The Tenant shall place all refuse in proper receptacles
provided by the Tenant at its expense in the Premises or in receptacles (if any)
provided by the Landlord for the Building, and shall keep sidewalks and
driveways outside the Building, and lobbies, corridors, stairwells, ducts, and
shafts of the Building, free of all refuse.
12. Obstructions. The Tenant shall not obstruct or place anything in or
on the sidewalks or driveways outside the Building or in the lobbies, corridors,
stairwells, or other
<PAGE> 22
Common Areas, or use such locations for any purpose except access to and exit
from the Premises without the Landlord's prior written consent. The Landlord may
remove at the Tenant's expense any such obstruction or thing caused or placed by
the Tenant (and unauthorized by the Landlord) without notice or obligation to
the Tenant.
13. Proper Conduct. The Tenant shall not conduct itself in any manner
which is inconsistent with the character of the Building as a first quality
building or which will impair the comfort and convenience of other tenants in
the Building.
14. Employees, Agents, and Invitees. In these Rules and Regulations,
"Tenant" includes the employees, agents, invitees, and licensees of the Tenant
and others permitted by the Tenant to use or occupy the Premises.
15. Parking. If the Landlord designates tenant parking areas for the
Building, the Tenant shall park its vehicles and shall cause its employees and
agents to park their vehicles only in such designated parking areas. The Tenant
shall furnish the Landlord, upon request, with the current license numbers of
all vehicles owned or used by the Tenant or its employees or agents and the
Tenant thereafter shall notify the Landlord of any changes in such numbers
within five (5) days after the occurrence thereof. In the event of failure of
the Tenant or its employees or agents to park their vehicles in such designated
parking areas, the Tenant shall forthwith on demand pay to the Landlord the sum
of Twenty and No/100 ($20.00) Dollars per day per each car so parked. Landlord
may itself or through any agent designated for such purpose, make, administer,
and enforce additional rules and regulations regarding parking by tenants and by
their employees or agents, including, without limitation, rules and regulations
permitting the Landlord or such agent to move any vehicles improperly parked to
the designated tenant or employee parking areas. No disabled vehicle shall be
left in the parking areas of the Building for more than 24 hours.
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<PAGE> 23
EXHIBIT "D"
WORK LETTER AGREEMENT
THIS WORK LETTER AGREEMENT (the "Work Letter"), dated as of July 30 , 1998, is
attached to and made part of that certain Lease by and between New World
Partners Joint Venture Number Five, a Florida general partnership (the
"Landlord"), and Brightpoint North America, Inc., an Indiana corporation (the
"Tenant"). The terms, definitions, and other provisions of the Lease are hereby
incorporated into this Work Letter by reference as if set forth in full.
IN CONSIDERATION OF the execution of the Lease and the mutual covenants and
conditions hereinafter set forth, Landlord and Tenant agree as follows:
(a) Landlord, at its expense (subject to the provisions of
paragraph (e), below), will cause Substantial Completion, as hereinafter
defined, of the tenant improvements (the "Tenant Improvements") to the Premises,
in accordance with plans and specifications for the Premises to be prepared by
Tenant's architect, at Tenant's expense (except as otherwise expressly provided
below). Tenant's architect and engineer for purposes of the plans and
specifications for the Tenant Improvements are subject to the prior written
approval of Landlord, which will not be unreasonably withheld or delayed. If
Tenant elects to retain Landlord's architect and/or engineer, such architect
and/or engineer shall nonetheless be considered to be Tenant's agent(s) for
purposes of this Work Letter. Tenant agrees to furnish to Landlord within five
(5) business days after the date of the Lease, a detailed set of plans and
specifications for the Tenant Improvements, time being of the essence with
respect to the delivery of the plans and specifications (and any revisions
thereto). The plans and specifications shall be in a form sufficient to obtain a
building permit from Metropolitan Dade County, Florida. The plans and
specifications shall be subject to Landlord's review and approval. Landlord
shall accept or notify Tenant of its objections to the plans and specifications
within five (5) days after receipt thereof. If Landlord requires more than five
(5) days to approve the plans and specifications, Landlord shall not be deemed
to be in default hereunder or otherwise liable in damages to Tenant. Should
Tenant fail to submit the plans and specifications within the time period set
forth above, or if Tenant fails to make any modifications Landlord may require
within five (5) days of notice thereof, then each such event shall be deemed to
be a Tenant's delay as described below. Notwithstanding Landlord's review and
approval of the plans and specifications, Landlord assumes no responsibility
whatsoever, and shall not be liable, for the manufacturer's, architect's, or
engineer's design or performance of any structural, mechanical, electrical, or
plumbing systems or equipment of Tenant. Once Landlord approves the plans and
specifications, Tenant shall, at Tenant's expense, provide Landlord with three
(3) sets of the plans and specifications which shall be signed and dated by both
parties, with two sets retained by Landlord and one set retained by Tenant.
Changes to the plans and specifications shall be made only by written addendum
signed by both parties. Tenant, at Tenant's expense, shall provide additional
sets of the plans and specifications upon request by Landlord. "Substantial
Completion" shall mean that a certificate of occupancy has been obtained for the
Premises and that the Tenant Improvements are sufficiently complete so as to
allow Tenant to occupy the Premises for the use and purposes intended without
unreasonable disturbance or interruption; provided that Landlord, its employees,
agents, and contractors, shall be allowed to enter upon the Premises at any
reasonable time(s) following Substantial Completion as necessary to complete any
unfinished details pursuant to a punchlist to be prepared by Tenant and
delivered to Landlord within thirty (30) days following the date of Substantial
Completion.
(b) Within five (5) days following receipt of the final
approved plans and specifications for the Premises, Landlord shall have its
contractor(s) prepare an estimated budget (the "Construction Budget") of the
cost of the Tenant Improvements, and shall submit same to Tenant. The
Construction Budget shall be in reasonable detail and shall reflect a unit cost
for all improvements which is reasonable in amount, given the then current
market conditions pertinent to labor and material costs for such construction.
The cost of the Tenant Improvements, as set forth in the Construction Budget,
shall also include the cost of all
<PAGE> 24
utilities, air conditioning, and other services provided during construction,
plus a construction coordination fee equal to ten (10%) percent of the cost of
all non-Building-standard items reflected in the plans and specifications, in
order to reimburse Landlord for its time and expense involved in the management
and supervision of such non-standard items. The Construction Budget shall be
used as a basis for calculating Tenant's Costs, as hereinafter defined, if any.
Within five (5) days after receipt of the Construction Budget, Tenant shall
either approve the Construction Budget as submitted or provide Landlord with
modifications to the plans and specifications. If Tenant fails to approve the
Construction Budget or submit modifications to the plans and specifications, for
any reason whatsoever, within five (5) days, then either of such events shall be
deemed to be a delay caused by Tenant. If Tenant timely submits modifications to
the plans and specifications, Landlord shall, within five (5) business days,
review and approve the modified plans and specifications (and provide a revised
Construction Budget), or disapprove the modified plans and specifications (and
give Tenant its reasons for disapproval). If Tenant so submits modified plans
and specifications, then the time from such submission until a Construction
Budget is finally acknowledged and approved shall be deemed to be a delay in
Substantial Completion caused by Tenant. Following final completion of the
Tenant Improvements, Landlord shall provide Tenant with a statement of actual
costs thereof, including the cost of any approved change orders. Landlord's
general contractor shall be licensed and insured in the State of Florida and
Dade County.
(c) Upon Substantial Completion of the Premises, Tenant, at
its expense, shall install its furniture, trade fixtures, and equipment so that
Tenant can occupy the Premises for the use and purposes intended. Tenant may
begin to install such items prior to Substantial Completion; provided, however,
that no such pre-Substantial Completion installation shall in any way delay or
interfere with Landlord's work pursuant to this Work Letter and Tenant shall
arrange a meeting to coordinate with Landlord prior to any such pre-Substantial
Completion installation. Any such pre-Substantial Completion installation of
furniture, fixtures, and equipment shall be at Tenant's sole risk, and if at any
time such entry shall cause disharmony, impediment, or interference with
Landlord's work, then Tenant's right to enter the Premises prior to Substantial
Completion may be withdrawn by Landlord upon 48 hours' notice to Tenant. Such
access shall at all times be subject to the Landlord's rules and regulations
regarding such access. If the parties agree that Tenant will undertake to
construct or install some portion of the Tenant Improvements or retain its own
subcontractors to perform any other work, Tenant shall only use contractor(s),
subcontractor(s), or material supplier(s) first approved by Landlord ("Tenant's
Contractors"). Tenant shall be responsible for obtaining all necessary permits
and approvals at Tenant's sole expense in connection with the work performed by
Tenant's Contractors. Tenant shall advise Tenant's Contractors that no interest
of Landlord in the Premises or Building shall be subject to liens to secure
payment of any amount due for work performed or materials installed in the
Premises and that Landlord has recorded a notice to that effect in the public
records of Dade County, Florida. Landlord shall permit Tenant and Tenant's
Contractors to enter the Premises to accomplish any work as agreed, however,
Tenant agrees to insure that Tenant's Contractors do not impede Landlord's
contractor(s) in performance of their respective tasks. Landlord shall not be
liable in any way for any injury, loss, damage, or delay which may be caused by
or arise from such entry by Tenant, its employees, or Tenant's Contractors, and
Tenant agrees to indemnify and hold harmless Landlord, its agents, and employees
from and against any and all costs, expenses, damage, loss, or liability,
including, but not limited to, reasonable attorneys' fees and costs, which arise
out of, is occasioned by, or is in any way attributable to the work being
performed by Tenant's Contractors. Prior to any work being performed by any
Tenant's Contractor, Tenant shall provide to Landlord certificates of insurance
evidencing that Tenant has the required comprehensive general liability
insurance required of Tenant under the Lease, as well as certificates of
insurance in forms and in amounts satisfactory to Landlord evidencing that each
Tenant's Contractor has in effect (and shall maintain at all times during the
course of the work hereunder) workers' compensation insurance to cover full
liability under workers' compensation laws of the State of Florida with
employers' liability coverage and comprehensive general liability and builder's
risk insurance for the hazards of operations, independent contractors, products
and completed operations.
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<PAGE> 25
(d) Tenant shall be responsible for any delay (including
associated costs) in Substantial Completion resulting from any of the following
causes:
(i) Tenant's failure to timely submit (or
submit to Landlord any proposed modifications or additions to) the plans and
specifications, unless such failure is due to causes beyond Tenant's control
(except that delays by Tenant's architect and/or engineer shall be deemed to be
a delay caused by Tenant); or
(ii) Tenant's failure to pay any portion of
Tenant's Costs, as hereinafter defined, when due; or
(iii) Tenant's specification of special materials or
finishes, or special installations, which special items cannot be delivered or
completed within Landlord's construction schedule (subject to Landlord's
obligation to give Tenant prior notice of same at the time of such
specification); or
(iv) any change in the plans and
specifications caused by Tenant once finally approved and accepted by Landlord,
even though Landlord may approve such change (Landlord agrees to estimate the
delay to be caused by a change order, provided Tenant expressly requests such
estimate at the time it requests a change order); or
(v) any other delay in Substantial
Completion directly attributable to the negligent or willful acts or
omissions of Tenant, its employees, or agents.
If any delay caused by Tenant results in or contributes to a
delay in Substantial Completion, then Substantial Completion shall be deemed to
have occurred as of the date Landlord would have otherwise achieved Substantial
Completion, but for Tenant's delay. Landlord will specify in writing to Tenant
the Tenant delay(s) which resulted in or contributed to a delay in Substantial
Completion.
(e) Landlord's Building-standard specifications for the
warehouse portion and the office portion of the Premises are attached hereto and
made a part hereof as Exhibit "D-1." To the extent that the plans and
specifications reflect that the Tenant Improvements are comprised entirely of
Landlord's Building-standard methods and materials, then Landlord will be
responsible to reimburse Tenant for the fees and costs incurred with respect to
preparation of the plans and specifications. In addition, to the extent that the
Tenant Improvements to the Premises are comprised entirely of Landlord's
Building-standard methods and materials, then Landlord's contractors shall
construct the Tenant Improvements, at Landlord's expense. Any and all
non-Building-standard improvements to the Premises (including, without
limitation, the fees and costs incurred with respect to preparation of the plans
and specifications for the non-Building-standard improvements) will be at
Tenant's expense ("Tenant's Costs"). Tenant's Costs shall be paid to Landlord as
follows:
(i) Prior to commencement of construction of the
Tenant Improvements, Tenant shall pay Landlord an amount equal to fifty (50%)
percent of the Tenant's Costs, as such amount is then determined by reference to
the Construction Budget.
(ii) When fifty (50%) of the Tenant Improvements are
complete in accordance with the plans and specifications (as verified in writing
by Landlord's architect), Tenant shall pay Landlord an amount equal to the
remaining unpaid balance of Tenant's Costs, as such amount can then be
reasonably determined by Landlord based on available information.
(iii) Within ten (10) days following Landlord's
submittal to Tenant of a final accounting of Tenant's Costs, Tenant shall pay
Landlord the then remaining balance of Tenant's Costs, or Landlord shall
reimburse Tenant as to any excess amounts previously paid, as the case may be.
Tenant's Costs represent a reimbursement of monies expended by
Landlord on Tenant's behalf. Payment when due shall be a condition to Landlord's
continued performance
-3-
<PAGE> 26
under this Work Letter. Any delay in construction of the Tenant Improvements or
in Tenant taking occupancy of the Premises resulting from Tenant's failure to
make any Tenant's Costs payments when due shall be Tenant's responsibility.
Tenant's failure to pay any portion of Tenant's Costs when due shall constitute
a default under the Lease (subject to any applicable notice requirements or
grace periods), entitling Landlord to all of its remedies thereunder.
(f) Notwithstanding anything to the contrary contained in this
Work Letter, if and only if the Construction Budget exceeds the construction
budget of a third party general contractor selected by Tenant (and approved by
Landlord in its reasonable discretion) to price the construction of the Tenant
Improvements on Tenant's behalf (the "Tenant's Contractor Budget"), then Tenant,
within five (5) business days following receipt of the Construction Budget,
shall have the right to cause the construction and installation of the Tenant
Improvements through its own general contractor. If Tenant so elects, then the
provisions of this subsection (f), as well as subsections (e) through (m), shall
be applicable to Tenant's construction of the Tenant Improvements. If Tenant
elects to cause the construction of the Tenant Improvements, Tenant, within five
(5) days after the date of such election, shall provide to Landlord certificates
of insurance evidencing that Tenant has the required comprehensive general
liability insurance required of Tenant under the Lease. In addition, prior to
selecting the contractor, Tenant shall provide to Landlord certificates of
insurance evidencing that Tenant's general contractor has in effect (and shall
maintain at all times during the course of the work hereunder) workers'
compensation insurance to cover full liability under workers' compensation laws
of the State of Florida with employers' liability coverage; comprehensive
general liability and builder's risk insurance for the hazards of operations,
independent contractors, products and completed operations (for two (2) years
after the date of acceptance of the work by Landlord and Tenant); and
contractual liability specifically covering the indemnification provision in the
construction contract, such comprehensive general liability to include broad
form property damage and afford coverage for explosion, collapse and underground
hazards, and "personal injury" liability insurance and an endorsement providing
that the insurance afforded under the contractor's policy is primary insurance
as respects Landlord and Tenant and that any other insurance maintained by
Landlord or Tenant is excess and non-contributing with the insurance required
hereunder, provided that such insurance may be written through primary or
umbrella insurance policies with a minimum policy limit of $1,000,000.00.
Landlord and Tenant are to be included as an additional insured for insurance
coverages required of the general contractor.
(g) Tenant shall use only licensed contractors and
subcontractors approved in writing by Landlord to complete the construction and
installation of the Tenant Improvements. Tenant shall inform its contractor,
subcontractors, and material suppliers that Landlord's interest in the Premises
and the Building shall not be subject to any lien to secure payment for work
done or materials supplied to the Premises on Tenant's behalf and that Landlord
has filed a notice in the public records of Miami-Dade County, Florida, to that
effect. All inspections and approvals necessary and appropriate to complete the
Tenant Improvements in accordance with the plans and specifications and as
necessary to obtain a certificate of use and occupancy as hereinafter provided
are the responsibility of Tenant and its general contractor. Tenant shall
arrange a meeting prior to the commencement of construction between Landlord and
Tenant's contractors for the purpose of organizing and coordinating the
completion of the Tenant Improvements.
(h) Tenant shall commence construction of the Tenant
Improvements (and shall be required to diligently pursue same) upon receipt of
the building permit therefor. If Tenant has not commenced the Tenant
Improvements by such date, or if Tenant has not substantially completed the
Tenant Improvements within ninety (90) days after receipt of the building
permit, then, in either such event, Tenant shall be in default under the Lease,
and Landlord shall have the option to declare the Lease null and void and
exercise any remedies available under the Lease. Should the Lease be declared
null and void pursuant to this paragraph, Tenant shall forfeit all rights to any
deposits, advance rent, and any other payments made under the Lease, and
Landlord shall have no further liability to Tenant under the Lease.
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<PAGE> 27
(i) Notwithstanding anything to the contrary contained in the
Lease, if Tenant elects to cause the construction of the Tenant Improvements,
then the Commencement Date of the Lease shall be the earlier of (A) the date
that Tenant achieves Substantial Completion of the Premises or (B) one hundred
twenty (120) days after the date that Tenant elects to cause the construction of
the Tenant Improvements.
(j) All of the Tenant Improvements shall be completed in a
good and workmanlike manner and shall be in conformity with the County's
building codes and the South Florida Building Code, Dade Edition, and in
accordance with Landlord's construction rules and regulations pertaining to
contractors. Upon completion of the Tenant Improvements, Tenant shall furnish
Landlord:
(i) a certificate of use and/or occupancy
issued by Miami-Dade County and other evidence satisfactory to Landlord that
Tenant has obtained the governmental approvals necessary to permit occupancy;
and
(ii) a notarized affidavit from Tenant's
contractor(s) that all amounts due for work done and materials furnished in
completing the Tenant Improvements have been paid; and
(iii) releases of lien from any subcontractor or
material supplier that has given Landlord a Notice to Owner pursuant to Florida
law.
(iv) as-built drawings of the Premises,
with a list and description of all work performed by the contractors,
subcontractors, and material suppliers.
(k) Any damage to the existing finishes of the Building shall
be patched and repaired by Tenant, at its expense, and all such work shall be
done to Landlord's satisfaction. If any patched and painted area does not match
the original surface, then the entire surface shall be repainted at Tenant's
expense. Tenant agrees to indemnify and hold harmless Landlord, its agents, and
employees from and against any and all costs, expenses, damage, loss, or
liability, including, but not limited to, reasonable attorneys' fees and costs,
which arise out of, is occasioned by, or is in any way attributable to the
build-out of the Premises by Tenant pursuant to this Work Letter. Tenant, at its
expense, shall be responsible for the maintenance, repair, and replacement of
any and all items constructed by Tenant's contractor.
(l) Tenant shall not alter the existing fire alarm system in
the Premises or the Building. The plans and specifications shall include
detailed drawings and specifications for the design and installation of Tenant's
fire alarm (and security) system(s) for the Premises. Such system(s) shall meet
all appropriate building code requirements, and the fire alarm system shall, at
Tenant's expense, be integrated into Landlord's fire alarm system for the
Building. (Landlord is not required to provide any security system.) Landlord's
electrical contractor and/or fire alarm contractor shall, at Tenant's expense,
make all final connections between Tenant's and Landlord's fire alarm systems.
Tenant shall insure that all work performed on the fire alarm system shall be
coordinated at the job site with the Landlord's representative.
(m) Landlord will provide Tenant with an allowance (the
"Tenant Improvement Allowance") as against the cost of the improvements to the
Premises. The Tenant Improvement Allowance shall be equal to the amount of the
Tenant's Contractor Budget. The Tenant Improvement Allowance shall be paid by
Landlord by joint check to Tenant and its general contractor in monthly
installments, based upon requests for payment submitted by Tenant and its
general contractor not more than monthly. Each request for payment shall be
accompanied by a certification by the architect that all work up to the date of
the request for payment has been substantially completed, along with the items
required under subsection (j), above (except for a certificate of occupancy),
for work done or materials furnished up to the date of Tenant's request for
payment. Upon receipt thereof, Landlord shall pay to Tenant and its general
contractor (by joint check), within thirty (30) days after submission of such
items to Landlord, an amount equal to Landlord's pro-rata share of such request
for payment. Landlord's pro-rata share shall mean the percentage that the Tenant
Improvement Allowance
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<PAGE> 28
bears to the total cost of the Tenant Improvements (plus the architectural and
engineering fees incurred with respect to the plans and specifications) (less
ten (10%) percent of each payment to be retained by Landlord pending final
completion). Upon final completion of the Tenant Improvements and receipt by
Landlord of the items required under subsection (j), above, plus reasonable
evidence indicating that all of Tenant's Costs have been paid, Landlord shall
pay to Tenant and its general contractor (by joint check) within thirty (30)
days the remaining Tenant Improvement Allowance, plus the retainage (provided,
however, that the retainage will not be released by Landlord until all punchlist
items have been completed). Any and all costs for the construction of the
Premises above the Tenant Improvement Allowance (i.e., Tenant's Costs) shall be
paid by Tenant to the applicable contractors, subcontractors, and material
suppliers. Provided a complete request for payment is submitted by the first
(1st) day of a month, Landlord shall make payment by the twentieth (20th) of
such month.
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Work Letter as of the day and first year above written.
WITNESSES: LANDLORD:
NEW WORLD PARTNERS JOINT VENTURE NUMBER FIVE,
a Florida general partnership
By: Codina/Tradewind No. 5, Ltd., a Florida limited
partnership, as general partner
By: Codina West Dade Development Corporation No. 5,
as general partner
/S/ By: /S/ Armando Codina
- ---------------------- -------------------------------------------
Armando Codina, President
/S/
- ----------------------
TENANT:
BRIGHTPOINT North America, Inc., an Indiana corporation
/S/ Elizabeth J. Potter By: /S/ Steven E. Fivel
- ----------------------- -------------------------------
Name: Steven E. Fivel
-----------------------------
/S/ Deborah A. McQueen Title: Vice President
- ----------------------- ----------------------------
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<PAGE> 29
EXHIBIT "D-1"
BUILDING-STANDARD IMPROVEMENTS
GENERAL NOTES:
1. For the purposes of this Work Letter, the rentable area of the
warehouse portion of the Premises shall be as set forth in the Lease and the
rentable area of the office portion of the Premises shall be deemed to fifteen
(15%) percent of the rentable area of the warehouse portion of the Premises.
2. Specifications are intended to denote quality only; the manufacturer
or provider of the items are at the sole discretion of Landlord.
3. Any changes, additions, deletions, or substitutions shall be at the
sole expense of Tenant. No exchanges or credits are given for quantities
requested that are less than those provided by Landlord.
4. Where ratios are given, the standard practice will be to round "up"
from 1/2 or greater, and round "down" for less than 1/2.
5. All above Building-standard items purchased by the Tenant shall meet
minimum state and local codes.
6. All finish selections (whether Building-standard or above) shall be
completed by Tenant prior to the commencement of construction.
WAREHOUSE AREA IMPROVEMENTS:
1. DEMISING PARTITIONS: Those walls that separate the rentable space
from one tenant to another. These one (1) hour fire rated walls shall be
installed from floor to underside of roof deck and shall include 6"-18" gauge
metal studs 12" o/c with 5/8" type "X" wall board, taped, spackled, and painted
white. 1/2" plywood will be applied at a height of 4' and painted white.
2. CEILINGS: Exposed joists with shop coat of primer and roofdeck in
unpainted and unfinished condition.
3. FLOOR: Existing finished and sealed concrete floor.
4. WAREHOUSE LIGHTING FIXTURES: HID or equal light fixtures as required
by code, one (1) fixture per 1,350 warehouse square feet. Fixtures shall be hung
at roof joist height.
5. ELECTRICAL OUTLETS: One (1) wall mounted duplex electrical outlet
shall be provided per single bay of warehouse area. The outlet shall be located
on the wall near the dock height doors, in each bay.
6. LIGHT SWITCHES: One (1) light switch, or minimum to comply
with code, shall be provided, located near the office area.
7. TELEPHONE OUTLETS: One (1) telephone outlet shall be provided in
warehouse area, located near dock doors.
8. EXIT LIGHTS: Lighted, wall mounted exit light signs per minimum code
requirements for standard exits. Exit lights for additional above-standard exits
shall be at Tenant's expense.
<PAGE> 30
9. VENTILATION: Building-standard exhaust fans with no less capacity
than two (2) changes per hour.
10. PRIMARY ENTRANCE: A single primary entrance shall be provided per
the Building-standard for Premises location. The entrance shall consist of one
(1) storefront entrance, approximately 10' wide by 8' high, and shall include
one (1) 3' x 8' glass door and adjoining glazed side panels. One (1) overhead
canopy shall be provided. Signage shall be subject to Landlord's signage
criteria.
11. SECONDARY ENTRANCE/EXIT: One (1) painted metal rated door and frame
assembly will be installed in the warehouse area to comply with minimum code
requirements. Door shall have heavy duty satin finish stainless steel lockset
with single-sided deadbolt, standard "Exit" sign, and concrete stairs and
handrail to comply with code. Entrance will not be the primary handicap entrance
to the Premises, and will not require sidewalk or handicap ramp.
OFFICE SPACE IMPROVEMENTS:
1. PARTITIONS:
(a) Warehouse/Office Partitions: Those walls that separate the office
portion of the Premises from the warehouse. It is assumed that the office will
be located adjacent to one demising wall. Therefore, only two (2)
warehouse/office partitions shall be considered Building-standard. These walls
shall be 3 5/8" - 20 gauge metal studs 24" on center with 5/8" wall board on
each side, taped, spackled, and painted with two (2) coats (minimum) as required
to cover. The height of this wall shall be minimum as required by code.
(b) Standard Partitions: Those walls located inside the office portion
of the Premises. It is assumed that 35% of the office is "open" space, or 12
lineal feet of wall per 100 square feet of the office portion of the Premises.
These walls shall be 2 1/2" - 24 gauge metal studs 24" on center with 5/8" wall
board on each side, taped, spackled, and painted with two (2) coats (minimum) as
required to cover. The height of the walls shall extend to the ceiling grid.
(c) Toilet walls: Those walls in the restroom areas and shall be 5/8"
water resistant wall board on standard partition studs, taped, spackled, and
painted.
2. WALL FINISHES:
(a) All walls shall be painted with two (2) coats flat finish latex
paint as required to cover. All walls shall be painted one (1) color, which
color shall be selected by Tenant from Building-standard color chart.
(b) Toilet walls shall be painted with epoxy high gloss paint to comply
with building code. Color shall be standard white.
(c) Vinyl base shall be standard 4" cove vinyl wall base. The base
shall be one (1) color, to be selected by Tenant from Building-standard.
3. FLOOR COVERING:
(a) General office areas shall be 12" x 12" vinyl composition tile
(VCT) or 28 oz. textured nylon loop carpet glued down to existing concrete floor
slab as selected by Tenant from Building-standard.
(b) Storage, telephone, and lounge areas shall be VCT selected by
Tenant from Building-standard.
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<PAGE> 31
(c) Toilet rooms shall be 8" x 8" Building-standard ceramic tile with
4" ceramic tile base. Color shall be Building-standard white tile with gray
grout. Should a janitorial room be added by Tenant, the floor covering shall be
the same as the toilet rooms.
4. DOORS, FRAMES, AND HARDWARE:
(a) Single swing 6' - 8" x 3' - 0", paint grade, pre-hung hollow core
wood doors and wood frames shall be provided assuming 35% open office space, or
approximately 1 door per 300 square feet of office space. Finish will be two (2)
coats of semi-gloss paint, as selected by Tenant from Building-standard, one (1)
coat throughout.
(b) One (1) 6' - 8" x 3' - 0", paint grade wood, pre-hung solid
core door with wood frame shall be provided from office to warehouse.
(c) Hardware included shall be a satin finish stainless steel lever
passage set (not lockable), one pair of standard steel butt hinges, and a floor
mounted standard steel door stop for every standard interior door. Locksets are
not provided as a standard.
5. WINDOW COVERING:
(a) White 2" PVC solid vertical blinds. Blinds shall be mounted in
exposed aluminum track and will be retractable.
6. CEILINGS:
(a) Entire office portion of the Premises shall be 2' x 4' x 5/8"
fissured flush lay-in acoustical ceiling tile such as Armstrong Minaboard
Designer Fissured #755B (or equal), to be installed in 1" white suspended
ceiling grid, 9' - 0" above finish floor.
7. PLUMBING:
(a) Sprinkler heads to be semi-concealed with a chrome finish.
Sprinkler design to comply with minimum code requirements for standard office
buildout.
(b) A minimum number of restroom(s) shall be provided per current South
Florida Building Code. Each restroom shall have one (1) wall hung lavatory
china, one (1) mirror, one (1) water closet, and accessories. All toilet
fixtures and accessories to be Building-standard, and installed per Americans
with Disabilities guidelines as of the date of the Lease. If more than one
restroom is required by code, they shall be located adjacent to one another. Hot
water is not provided as a standard.
(c) One (1) metal utility sink shall be provided in the warehouse. The
location of the sink shall be on the warehouse/office partition, within ten (10)
feet of the plumbing stack in the toilet rooms. Any location beyond the 10' is
not considered a standard. The sink shall not be enclosed in a closet or a room.
8. CABINETS, CABINETRY:
(a) One (1) 2' x 4' lower "kitchen" cabinet with a fixed single shelf
and laminated counter top shall be provided. The counter top shall include a 4"
backsplash, with mica selection from Building-standard. A single 12" x 18"
stainless steel sink with cold water only shall be provided integral with the
cabinet. The cabinet shall be located so that the plumbing wall shall be shared
with the restroom(s). Hot water is not provided as a standard.
9. LIGHTING:
(a) Fluorescent light fixtures shall be 2' x 4' Lithonia 2SP-332-A
12/120V - GLR/ES - with 3 lamps at 32 watts (3-F32) or equal, color white, with
acrylic lens. One (1) fixture shall be provided for every 85 square feet of
office space.
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<PAGE> 32
(b) One light switch shall be provided for every 300 square feet of
office space. Switches shall be Leviton Single Pole or equal commercial grade,
20 amps, color white.
(c) Emergency/Exit shall be minimum per code for minimum required
entrances only. Exit signs provided for entrances not required by code shall be
at Tenant's expense.
10. ELECTRICAL & COMMUNICATIONS:
(a) One duplex electrical outlet shall be provided for every 125 square
feet of office space. Outlets shall be Leviton Single Pole or equal commercial
grade, 20 amps, color white.
(b) One telephone wall outlet shall be provided for every 200 square
feet of office space. Telephone outlet shall consist of a utility box with "pull
string" only. Conduit shall extend 6" above acoustical ceiling. Telephone wiring
and outlet wall plates shall be provided by Tenant at its expense.
(c) A 4' x 4' telephone equipment "mounting board" painted the same
color as the wall shall be provided with a single duplex outlet. If a dedicated
circuit is required, it shall be at Tenant's expense.
11. HVAC:
(a) Only the office portion of the Premises shall be air conditioned,
through Building-standard packaged roof top A/C units, approximately one (1) ton
per 300 square feet of office space. Supply and return air grills shall be 2' x
2' lay in type Building-standard.
12. EXTERIOR WINDOWS:
(a) Exterior windows as shown on building plans are considered
Building-standard. Any additional windows or doors added to Building are
considered an expense to the Tenant, including but not limited to all window
coverings, hardware, concrete, and landscaping.
-4-
<PAGE> 33
EXHIBIT "E"
Form of TENANT Estoppel Certificate
To:
_____________________
_____________________
_____________________
_____________________
Re: Property Address:________________________________________________
Lease Date:______________________________________________________
Between ________________________________________, as Landlord and
______________________________________________________, as Tenant
Square Footage Leased:___________________________________________
Suite No.:_______________________________________________________
The undersigned Tenant under the above-referenced lease, hereby
certifies to Landlord the following:
(1) The lease has not been cancelled, modified, assigned, extended, or
amended, and there are no other agreements written or oral between Tenant and
the Landlord with respect to the lease and/or the leased
premises and building, except as follows (if None, state "None"):______________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
_______________________________________________________________________________
The original lease, and the instruments referenced above (if any), are
hereinafter collectively referred to as the "Lease."
(2) Rent has been paid to the first day of the current month and all
additional rent (including operating expenses, real estate taxes, and any other
common area charges) has been paid and collected in a current manner. There is
no prepaid rent, except $__________, and the amount of security deposit is
$__________.
(3) The Lease commenced on ___________________, 19___. Rent is
currently payable in the monthly amount of $__________.
(4) The Lease expires on __________________, 19___ and Tenant has the
following renewal option(s) (if None, state "None"): _________________________.
(5) All work to be performed for Tenant by Landlord under the Lease has
been performed as required and has been accepted by Tenant, except as follows
(if None, state "None"):_______________________________________________________.
(6) The base year for operating expenses and real estate taxes,
as defined in the Lease, is 19___.
(7) The Lease is: (a) in full force and effect; (b) free from default
(and no condition exists which with the passing of time or the giving of notice
or both would constitute a default); and (c) Tenant has no claims against the
Landlord or offsets against rent.
(8) The undersigned has received no notice of prior sale, transfer,
assignment, hypothecation, or pledge of the Lease or of the rents received
therein.
<PAGE> 34
(9) Tenant has not assigned the Lease or sublet all or any part of the
leased premises, nor does the Tenant hold the leased premises under an
assignment or a sublease, except as follows (if None, state
"None"): _________________________________________.
(10) Tenant has no right of refusal or option to expand the leased
premises except as follows (if None, state "None"): ________________________
_________________________.
(11) Tenant has no right or option pursuant to the Lease or
otherwise to purchase all or any part of the leased premises or the building of
which the leased premises are a part.
(12) Tenant has, in full force and effect, all insurance coverages
required of Tenant under the Lease.
(13) The statements contained herein may be relied upon by the Landlord
and by any prospective purchaser of the fee of the premises and by any current
or prospective mortgagee of the Landlord or any prospective purchaser.
If Tenant is a corporation, the undersigned is a duly appointed officer
of the corporation signing this certificate and is the incumbent in the office
indicated under his/her name. In any event, the undersigned individual is duly
authorized to execute this certificate.
Dated this ____ day of ____________________________, 19___.
Tenant:
BRIGHTPOINT NORTH AMERICA, INC.
By:____________________________
Name:__________________________
Title:_________________________
<PAGE> 35
RIDER NUMBER 1 TO LEASE
dated July 30 , 1998
---------------
Brightpoint North America, Inc.
OPTION TO RENEW
A. Landlord hereby grants Tenant the option to renew (the "Renewal
Option") the initial Term (not to include, for purposes of this Rider only, the
Renewal Term, as hereinafter defined) for one (1) additional term of sixty (60)
months (the "Renewal Term"), commencing as of the date immediately following the
expiration of the initial Term, such option to be subject to the covenants and
conditions hereinafter set forth in this Rider.
B. Tenant shall give Landlord written notice (the "Renewal Notice") of
Tenant's election to exercise its Renewal Option not later than one hundred
eighty (180) days prior to the expiration of the then-current term of the Lease;
provided that Tenant's failure to give the Renewal Notice by said date, whether
due to Tenant's oversight or failure to cure any existing defaults or otherwise,
shall render the Renewal Option null and void.
C. Tenant shall not be permitted to exercise the Renewal Option at any
time during which Tenant is in default under the Lease, subject to applicable
notice and grace periods (if any). If Tenant fails to cure any default under the
Lease prior to the commencement of the Renewal Term, subject to applicable
notice and grace periods, the Renewal Term shall be immediately cancelled,
unless Landlord elects to waive such default, and Tenant shall forthwith deliver
possession of the Premises to Landlord as of the expiration or earlier
termination of the then-current term of the Lease.
D. Tenant shall be deemed to have accepted the Premises in "as-is"
condition as of the commencement of the Renewal Term, subject to any other
repair and maintenance obligations of Landlord under the Lease, it being
understood and agreed that Landlord shall have no additional obligation to
renovate or remodel the Premises or any portion of the Building as a result of
Tenant's renewal of the Lease.
E. The covenants and conditions of the Lease in force during the
original Term, as the same may be modified from time to time, shall continue to
be in effect during the Renewal Term, except as follows:
(1) The "Commencement Date" for the purpose of the
Lease shall be the first day of the Renewal Term.
(2) The Minimum Rent for the Renewal Term shall be an amount
equal to the then Fair Market Rental Value of the Premises. "Fair Market Rental
Value" of the Premises shall be an amount determined by Landlord on the basis of
the then-prevailing market rental rate for industrial space comparable to the
Premises as reflected in one or more leases executed by Landlord with new
tenants of the Building within the twelve-month period immediately preceding
commencement of the Renewal Term. If Landlord has not executed any lease with
new tenants within said twelve-month period, the new prevailing market rental
rate determination shall be based on new leases for premises comparable to the
Premises herein, as executed within said twelve-month period by owners of other
comparable industrial properties located in west Dade County, Florida. However,
in no event shall Minimum Rent for any year of the Renewal Term be less than the
amount of Minimum Rent for the immediately prior year.
(3) Following expiration of the Renewal Term as provided
herein, Tenant shall have no further right to renew or extend the Lease.
F. Tenant's option to renew the Lease shall not be transferable by
Tenant, except in conjunction with a permissible Transfer in accordance with the
applicable provisions of the Lease.
<PAGE> 36
NOTICE REQUIRED BY CHAPTER 88-285, LAWS
OF FLORIDA
Chapter 88-285, Laws of Florida, requires the following notice
to be provided with respect to the contract for sale and purchase of any
building, or a rental agreement for any building:
"RADON GAS: Radon is a naturally occurring radioactive gas
that, when it has accumulated in a building in sufficient quantities, may
present health risks to persons who are exposed to it over time. Levels of radon
that exceed federal and state guidelines have been found in buildings in
Florida. Additional information regarding radon and radon testing may be
obtained from your county public health unit."
BRIGHTPOINT NORTH AMERICA, INC.
By: /S/ Steven E. Fivel
------------------------------------
Name: Steven E. Fivel
----------------------------------
Title: Vice President
---------------------------------
Date: July 30, 1998
---------------------------------
<PAGE> 37
RECEIPT OF SIGNAGE CRITERIA
Pursuant to that certain Lease entered into between the
undersigned Tenant and New World Partners Joint Venture Number Five
("Landlord"), the undersigned, by its execution below, hereby acknowledges
receipt of Landlord's signage criteria as such criteria exists on the date
hereof.
BRIGHTPOINT NORTH AMERICA, INC.
By: /s/ Steven E. Fivel
---------------------------------
Name: Steven E. Fivel
------------------------------
Title: Vice President
-----------------------------
Date: July 30, 1998
------------------------------
<PAGE> 38
ADDENDUM TO LEASE
THIS ADDENDUM TO LEASE (the "Addendum") is made and entered
into as of July 30, 1998, by and between NEW WORLD PARTNERS JOINT VENTURE
NUMBER FIVE, a Florida general partnership (the "Landlord"), and BRIGHTPOINT
NORTH AMERICA, INC., an Indiana corporation (the "Tenant"), with respect to that
certain Lease of even date herewith (the "Lease"), whereby Landlord leased to
Tenant, and Tenant leased from Landlord, the Premises, as defined in the Lease,
in Beacon Centre, Miami, Florida. All defined terms in this Addendum shall have
the same meaning as in the Lease, except if otherwise noted. Except as amended
and modified by this Addendum, all of the terms, covenants, conditions, and
agreements of the Lease shall remain in full force and effect. In the event of
any conflict between the provisions of the Lease and the provisions of this
Addendum, this Addendum shall control.
1. Grant; Term. In section 1.1 of the Lease:
(a) in the first paragraph, insert the following at the end:
"Upon final approval of the plans and specifications for the Premises pursuant
to Exhibit "D" to this Lease, Tenant may, at its expense, direct the architect
to determine the usable square footage of the Premises as actually designed and
certify as to same to both Landlord and Tenant. If the rentable area of the
Premises as determined by the architect is greater or less than the amount
specified in the Lease Summary due to the remeasurement of the usable area of
the Premises, then the rentable area of the Premises shall be adjusted to equal
the amount as so determined, and the Minimum Rent and any other amounts
specified in this Lease as a function of the rentable area of the Premises shall
be adjusted proportionately. In the event of any dispute as to the measurement
of the usable area of the Premises, the dispute shall be submitted to final and
binding arbitration in accordance with the rules of the American Arbitration
Association and applicable Florida law to the extent not in conflict with the
rules of the American Arbitration Association."
(b) delete the second paragraph in its entirety and replace it
with the following: "The "Term" of the Lease is the period from the Commencement
Date as specified in the Lease Summary, through the Expiration Date, as
specified in the Lease Summary. Landlord shall use its commercially reasonable
efforts to achieve Substantial Completion (as defined in the Work Letter
Agreement between Landlord and Tenant, of even date herewith, attached to and
made a part of this Lease as Exhibit "D" (the "Work Letter")) of the Premises
within one hundred twenty (120) days after the issuance of the building permit
for the Tenant Improvements. Notwithstanding anything to the contrary contained
herein, if Landlord has not achieved Substantial Completion of the Premises
within one hundred eighty (180) days after the issuance of the building permit
for the Tenant Improvements (subject to any delays caused by Tenant as described
in the Work Letter Agreement, and subject to force majeure events and other
delays beyond Landlord's reasonable control), then Tenant shall receive a credit
against the Minimum Rent to become due under this Lease, such credit to be equal
to one (1) days' Minimum Rent for each day of Landlord's delay beyond one
hundred eighty (180) days after the issuance of the building permit that
Landlord has not achieved Substantial Completion. If delivery of possession is
delayed due to any act or omission of Tenant as described in the Work Letter,
then the Commencement Date shall be the date Landlord would have delivered
possession, but for Tenant's delay."
(c) in the third paragraph:
(i) delete the first sentence in its entirety
and replace it with the following: "Landlord shall have no construction or
improvement obligations with respect to the Premises except as expressly set
forth in the Work Letter, subject in all events to the provisions of the Work
Letter."
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(ii) in the last line, insert the following after
"Premises": "(other than latent defects which are not discoverable upon
reasonable investigation by Tenant)."
2. Covenant to Pay. In section 2.1 of the Lease, in the fifth
line, delete "five (5)" and replace it with the following: "ten (10)."
3. Operating Costs; Taxes. In section 2.3 of the Lease:
(a) in subsection (a), insert the following at the end:
"Landlord's estimate of Operating Costs for each year after the Base Year shall
be based on the prior year's actual Operating Costs, if ascertained by Landlord
at the time the estimate is made (or, if actual Operating Costs for the prior
year are not yet ascertained, then the estimate shall be based on a good faith
estimate by Landlord of the actual Operating Costs for the prior year), but in
no event will the estimate exceed ten (10%) percent of the total amount of
Operating Costs used for the estimate for the prior year. Such limitation on the
increases in the estimate have no effect on Tenant's obligation to pay for the
actual increases in Operating Costs."
(b) in subsection (b):
(i) in the second line, insert the following after
"a": "reasonably detailed."
(ii) in the fifth line, delete "five (5)" and replace it
with the following: "ten (10)."
(iii) in the eighth line, insert the following after "of
the": "Minimum Rent and."
(iv) in the penultimate line, insert the following
after "default": "(beyond applicable grace and cure periods)."
(c) in subsection (c):
(i) in the last line, insert the following after
"fee": "which management fee shall not exceed five (5%) percent of the gross
revenues of the Building per annum)."
(ii) insert the following at the end: "Notwithstanding
the foregoing, Operating Costs shall exclude the following:
(1) interest on debt and capital
retirement on debt;
(2) any Operating Costs as are recovered
from insurance proceeds;
(3) costs as determined by Landlord of
acquiring tenants for the Building (including leasing
commissions and tenant improvements);
(4) salaries and benefits in respect of
partners, shareholders, and officers of Landlord and salaries,
wages, and other benefits paid to or on behalf of all
employees above the level of property manager of the Building;
(5) any cost or fee paid to a corporation or
other entity related to or affiliated with Landlord in excess
of the amount which would be paid in the absence of such
relationship, but only to the extent of the excess;
(6) advertising and promotional
expenditures;
(7) the cost of any repairs, alterations,
additions, changes, replacements, and other items which under
generally accepted accounting principles are properly
classified as capital expenditures, unless said capital items
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<PAGE> 40
are intended by Landlord in good faith to achieve a verifiable
expense savings to the Tenant during the Term of the Lease or
are required by laws not in effect as of the date hereof; then
such cost shall be evenly amortized over the life of the
capital improvement with interest imputed on the unamortized
portion at a rate of fifteen (15%) percent;
(8) rent under any ground lease;
(9) the cost of correcting defects in the
initial construction of the Building, except that conditions
(not occasioned by construction defects) resulting from
ordinary wear and tear shall not be deemed defects for the
purposes of this category;
(10) the cost of any additions to the
Building resulting in increased rentable square footage;
(11) expenses resulting from the gross
negligence of Landlord; and
(12) costs associated with the operation of
the Landlord as a partnership, as opposed to the operation of
the Building."
(d) in subsection (d), insert the following at the end:
"Landlord's estimate of Taxes for each year after the Base Year shall be based
on the prior year's actual Taxes, if ascertained by Landlord at the time the
estimate is made (or, if actual Taxes for the prior year are not yet
ascertained, then the estimate shall be based on a good faith estimate by
Landlord of the actual Taxes for the prior year), but in no event will the
estimate exceed ten (10%) percent of the total amount of Taxes used for the
estimate for the prior year. Such limitation on the increases in the estimate
have no effect on Tenant's obligation to pay for the actual increases in Taxes."
(e) in subsection (e):
(i) in the second line, insert the
following after "a": "reasonably detailed."
(ii) in the fifth line, delete "five (5)"
and replace it with the following: "ten (10)."
(iii) in the eighth line, insert the
following after "of the": "Minimum Rent and."
(iv) in the penultimate line, insert
the following after "default": "(beyond applicable grace
and cure periods)."
(f) in subsection (f):
(i) in the seventh line, insert the
following after "income": "gross receipts,."
(ii) in the eighth line, insert the
following after "all": "reasonable."
(g) insert the following as subsection (h): "During the Term
or any extension thereof, but not more than one (1) time per year, and provided
that no default exists under this Lease beyond applicable notice and cure
periods, Tenant, at its sole cost and expense (except as otherwise expressly set
forth below), shall have the right to cause Landlord's books and records with
respect to Operating Costs and Taxes for the twelve (12) month period
immediately preceding the date of the billing in question to be audited by an
independent certified public accountant of Tenant's choosing and reasonably
acceptable to Landlord. Landlord shall cause such books and records to be made
available for such inspection during
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<PAGE> 41
such normal business hours as are prescribed by Landlord and at such location
where Landlord regularly keeps its books and records, upon ten (10) business
days' prior notification to Landlord. Such audit shall be done in accordance
with generally accepted accounting principles, consistently applied. If, at the
conclusion of such audit, Tenant's audit of such expenses for the preceding year
indicates that Tenant made an overpayment to Landlord for such preceding year,
Landlord shall credit such amount to Tenant's subsequent payments of rent, or if
the Lease has terminated, and no default exists under the Lease, remit the
amount of such overpayment to Tenant within thirty (30) days after receipt of
notice from Tenant of the amount of such overpayment. If, at the conclusion of
such audit, such audit reveals an underpayment by Tenant, Tenant will remit the
amount of such underpayment within thirty (30) days of Tenant becoming aware of
such underpayment. Should Landlord disagree with the results of Tenant's audit,
Landlord and Tenant shall refer the matter to a mutually acceptable independent
certified public accountant, who shall work in good faith with Landlord and
Tenant to resolve the discrepancy. The fees and costs of such independent
accountant to which such dispute is referred shall be borne by the unsuccessful
party and shall be shared pro rata to the extent each party is unsuccessful as
determined by such independent certified public account, whose decision shall be
final and binding. Landlord shall pay the cost of Tenant's initial audit if
Tenant's overpayment of such expenses exceeded fifteen (15%) percent or more of
the payment that should properly have been made. With regard to Tenant's initial
audit, Tenant, its employees or agents, may not make any copies thereof, and
such books and records (and the results of any such audit) are to be kept
strictly confidential and are not to be made available or published to anyone."
4. Rent Past Due. In section 2.5 of the Lease, insert the following at
the end: "Notwithstanding anything to the contrary contained herein, the
effective rate of interest on the obligations evidenced by this Lease shall not
exceed the lawful maximum rate of interest permitted to be paid (which is 18%
per annum as of the date hereof)."
5. Landlord's Lien. Delete section 2.7 of the Lease in its entirety and
replace it with the following: "Landlord hereby waives its statutory and common
law "landlord's liens" as against Tenant's property in favor of Tenant's lenders
regarding such property."
6. Permitted Use. In section 3.1 of the Lease, insert the following at
the end: "The rules and regulations will be applied in a nondiscriminatory
manner as to Tenant. Landlord will provide advance written notice of any
amendments to the rules and regulations."
7. Compliance with Laws. In section 3.2 of the Lease:
(a) in the fourth line, insert the following after "the
Tenant's": "specific."
(b) insert the following at the end: "In no event will Tenant
be required to make any structural alterations to the Premises in order to
comply with any of the foregoing. To the extent a structural alteration is
required, Landlord will perform the same, and the amortization thereof will be
passed-through as part of Operating Costs."
8. Signs. In section 3.3 of the Lease, in the last line, insert the
following after "approval": "(which will not be unreasonably withheld if the
proposed signage is in compliance with Landlord's signage criteria in effect
from time to time)."
9. Environmental Provisions. In section 3.4 of the Lease, in the first
line, insert the following before "Tenant": "Except as part of its normal
freight and storage operations (which include, without limitation, the storage
of wireless communications products and accessories, and all of which Tenant
warrants are and shall be in compliance with all applicable environmental laws
and regulations),."
10. Right of Examination. In section 4.1 of the Lease:
(a) in the sixth line, delete "The" and replace it with
the following: "Except as may be otherwise expressly set forth in Article V or
in the Work Letter,."
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<PAGE> 42
(b) in the penultimate line, delete "section" and
replace it with the following: "Article IV."
11. Maintenance and Repairs by Landlord. In section 5.1 of the Lease:
(a) in the second line, insert the following after
"owner": "of a comparable first-class building."
(b) in the fifth line:
(i) insert the following after "Costs":
"(except as expressly excluded therefrom)."
(ii) insert the following after "faith":
"in conducting such repairs and maintenance."
(c) in the eighth line, insert the following after "Lease":
"(provided, however, that if there is a failure of any equipment or facilities
serving the Building or delays in the performance of any work for which the
Landlord is responsible pursuant to this Lease, which failure or delay (i)
materially and substantially impairs Tenant's use of the Premises or the
operation of its business therein and (ii) continues for a period of three (3)
consecutive business days after Landlord's receipt of written notice from
Tenant, and so long as the correction of the problem is within Landlord's
reasonable control, then Tenant shall be entitled to an abatement of rent for
each day that the Premises are untenantable)."
(d) in the tenth line, insert the following after
"result of the": "negligent or intentional."
(e) in the thirteenth line, insert the following after
"demand": "(subject to section 6.4 of this Lease)."
(f) insert the following at the end: "Notwithstanding the
foregoing, a fire or other casualty shall be subject to the provisions of
Article VII of this Lease."
12. Maintenance and Repairs by Tenant. In section 5.2 of the Lease:
(a) in the fifteenth line, insert the following
after "designated or": "reasonably approved."
(b) insert the following at the end: "With respect to the
items set forth in subsection 5.2(i), above, if the need for any such repair is
on a Building-wide basis (such as, without limitation, Building-wide repairs to
the mechanical, electrical, and plumbing systems) and not solely related to
Tenant's Premises, then Landlord (as part of Operating Costs) shall perform such
repair. In addition, subject to the provisions of section 6.4 of this Lease, if
the need for any repair is caused by the Landlord's negligence, then Landlord
will be responsible for such repair."
13. Removal of Improvements and Fixtures. In section 5.4 of the Lease,
insert the following at the end: "As part of a request by Tenant for Landlord's
consent to Tenant performing any alteration or additional improvement to the
Premises, Tenant may also request Landlord's determination as to whether
Landlord will require Tenant to remove the applicable alteration or improvement
upon the expiration or earlier termination of the Term."
14. Liens. In section 5.5 of the Lease, in the third line, insert the
following after "recorded": "as a result of work contracted for by Tenant."
15. Utilities. In section 5.6 of the Lease:
(a) in the second line, insert the following after
"Premises": "and the cost of heating, ventilating, and air conditioning the
Premises."
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<PAGE> 43
(b) in the last line, insert the following after
"Premises": "as set forth herein."
16. Tenant's Insurance. In section 6.1 of the Lease, in the
continuation paragraph, in the thirteenth line, insert the following after
"mortgagee": "(which will not be unreasonably withheld)."
17. Loss or Damage. In section 6.2 of the Lease:
(a) in the fifth and sixteenth lines, delete "GROSS" in
each.
(b) in the twelfth line, insert the following after
"whatsoever": "UNLESS CAUSED BY THE NEGLIGENCE OR WILLFUL MISCONDUCT OF
LANDLORD OR ITS AGENTS."
(c) in the penultimate line, insert the following after
"any": "negligent or intentional."
18. Waiver of Subrogation. Insert the following as section 6.4 of the
Lease: "Landlord and Tenant each hereby waives on behalf of itself and its
insurers (none of which shall ever be assigned any such claim or be entitled
thereto due to subrogation or otherwise) any and all rights of recovery, claim,
action, or cause of action, against the other, its agents, officers, or
employees, for any loss or damage that may occur to the Premises, or any
improvements thereto or the Building of which the Premises are a part, or any
improvements thereto, or any personal property of such party therein, by reason
of fire, the elements, or any other causes which are, or could or should be
insured against under the terms of the standard fire and extended coverage
insurance policies referred to in this Lease, regardless of whether such
insurance is actually maintained and regardless of the cause or origin of the
damage involved, including negligence of the other party hereto, its agents,
officers, or employees."
19. Damage to Premises. In section 7.1 of the Lease:
(a) in the third and seventh lines:
(i) insert the following in each after "5.1":
"plus the reconstruction of the Tenant Improvements constructed by Landlord
pursuant to the Work Letter (subject to the terms and conditions of the Work
Letter; it being understood that the Building shell improvements and Common
Areas will be reconstructed by Landlord in their entirety and that the
reconstruction of the Tenant Improvements to the Premises will be governed by
the Work Letter)."
(ii) insert the following in each after "Rent":
"and Operating Costs and Taxes."
(b) in the sixteenth line, insert the following after
"extent": "reasonably."
20. Termination for Damage. In section 7.2 of the Lease, in the
penultimate line, insert the following after "Premises": "(without any
obligation to repair the same)."
21. Transfer by Tenant. In section 8.1 of the Lease:
(a) in the eighth line, insert the following after
"obligations": "(except as part of a financing of Tenant's personal property not
involving a pledge of this Lease or Tenant's interest herein)."
(b) insert the following at the end: "Notwithstanding anything
to the contrary contained in this section 8.1, Tenant may assign this Lease,
without Landlord's consent, to any bona fide entity (A) controlling, controlled
by, or under common control with Tenant, or (B) resulting from the sale of all
or substantially all of Tenant's assets, or (C) resulting from a merger of
Tenant into such entity; provided that (i) no such assignment shall relieve
Tenant
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<PAGE> 44
from any liability under this Lease, whether accrued to the date of such
assignment or thereafter accruing, and (ii) such assignee expressly assumes, in
writing, all of Tenant's obligations under this Lease, in form and content
reasonably acceptable to Landlord, and (iii) no series of one or more of such
transfers shall be used by Tenant to "spin-off" this Lease to independent third
parties, and (iv) Tenant shall give Landlord thirty (30) days' prior written
notice of any such assignment not requiring Landlord's consent."
22. Assignment by Landlord. In section 8.2 of the Lease, insert the
following at the end: "Without limiting the generality of the foregoing, the new
owner shall be responsible for Landlord's on-going repair and maintenance
obligations under this Lease."
23. Defaults. In section 9.1 of the Lease:
(a) in the third line, delete "when due whether or not
any notice or" and replace it with the following: "within ten (10) days after
written."
(b) in the fifth line, delete "five (5)" and replace it
with the following: "ten (10)."
(c) in the seventh and eighth lines, delete "fifteen
(15)" in each and replace it with the following: "thirty (30)."
(d) in the penultimate line, insert the following after
"Premises": "and the item affecting Landlord's insurance is not corrected by
Tenant within two (2) business days after written notice."
(e) delete subsection (vi).
24. Remedies. In section 9.2 of the Lease:
(a) in subsection (C), in the fourth line, insert
the following after "occurred": "(subject to in subsection (E), below)."
(b) in subsection (D), in the last line, insert the following
after "Premises": "(except as set forth in subsection (E), below)."
(c) in subsection (E), in the last line, insert the following
after "Term": "(reduced to present value using a discount factor equal to the
stated prime lending rate on the date of Tenant's default by Landlord's then
existing mortgagee or, if there is no mortgagee, by NationsBank, Citibank, or
First Union, as chosen by Landlord). Prior to or following payment in full by
Tenant of such discounted sum promptly upon demand, Landlord shall use good
faith efforts to relet the Premises and mitigate its damages, if any. If
Landlord receives consideration as a result of a reletting of the Premises
relating to the same time period for which Tenant has paid accelerated rent,
such consideration actually received by Landlord, less any and all of Landlord's
cost of repairs, alterations, additions, redecorating, and other expenses in
connection with such reletting of the Premises, shall be a credit against such
discounted sum, and such discounted sum shall be reduced if not yet paid by
Tenant as called for herein, or if Tenant has paid such discounted sum, such
credited amount shall be repaid to Tenant by Landlord (provided said credit
shall not exceed the accelerated amount)."
25. Default by Landlord. Delete section 9.5 of the Lease in its
entirety and replace it with the following: "In the event of any default by
Landlord, Tenant's exclusive remedy shall be an action for damages or
injunction, but prior to any such action Tenant will give Landlord written
notice specifying such default with particularity, and Landlord shall have a
period of thirty (30) days following the date of such notice in which to cure
the default (provided, however, that if such default reasonably requires more
than thirty (30) days to cure, Landlord shall have a reasonable time to cure
such default, provided Landlord commences to cure within such thirty (30) day
period and thereafter diligently prosecutes such cure to completion). In
addition, if a default by Landlord renders the Premises untenantable, and such
default is not cured by Landlord within the applicable cure period, and provided
such default is curable wholly within or about the Premises (including, without
limitation, the HVAC equipment serving
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<PAGE> 45
the Premises and the roof directly above the Premises) and so long as the cure
will have no material adverse effect on the other tenants of the Building or the
business park of which the Building is a part, Tenant may, but shall have no
obligation to, upon ten (10) days' written notice to Landlord (or sooner, if a
bona fide emergency), cure the default and bill Landlord for the reasonable
costs incurred by Tenant to cure the default. If Landlord does not pay such
costs within thirty (30) days after receipt of Tenant's bill, Tenant shall have
the option to deduct the amount of such bill from the next due installment(s) of
Minimum Rent and additional rent, until fully credited. Notwithstanding any
provision of this Lease, Landlord shall not at any time have any personal
liability under this Lease. In the event of any breach or default by Landlord of
any term or provision of this Lease, Tenant agrees to look solely to the equity
or interest then-owned by Landlord in the Building (plus the proceeds of sale,
insurance, and condemnation), and in no event shall any deficiency judgment be
sought or obtained against Landlord."
26. Estoppel Certificate. In section 10.1 of the Lease, insert the
following at the end: "Attached to and made a part of this Lease as Exhibit "E"
is a form of a Tenant Estoppel Certificate that is acceptable to Tenant. Such
form is attached for example purposes only and is not intended to be the only
form that would be acceptable to Tenant and/or deemed to be reasonable."
27. Subordination; Attornment. In section 10.2 of the Lease:
(a) in the seventh line, insert the following after
"default": "(subject to applicable notice and cure periods hereunder)."
(b) in the thirteenth line, insert the following after
"as": "reasonably."
(c) in the twenty-sixth line, insert the following after
"Landlord)": "(but the prior landlord (including Landlord) shall remain
responsible therefor)."
(d) insert the following at the end: "Any such subordination
shall be conditioned on the Landlord obtaining a nondisturbance agreement in
favor of Tenant from all mortgagees and ground lessors regarding any financings
or ground leases entered into by Landlord with respect to the Building."
28. Use and Maintenance of Common Areas. In section 11.1 of the Lease,
in the fourth line, insert the following after "any": "reasonable."
29. Alterations by Landlord. In section 11.2 of the Lease, insert the
following at the end: "Landlord shall exercise its rights under this section, to
the extent possible in the circumstances, in such manner so as to minimize
interference with the Tenant's use and enjoyment of the Premises."
30. Covenants, Conditions and Restrictions. In section 11.3 of the
Lease:
(a) in the ninth line, delete "five (5)" and replace it
with the following: "ten (10)."
(b) insert the following at the end: "It is Landlord's
intention not to double charge Tenant for any expenses pursuant to section 2.3
of this Lease and the Declaration. The expenses solely relating to the Building
are intended to be charged pursuant to section 2.3 of this Lease. Those expenses
that are incurred by Landlord on a park-wide basis (such as, by way of example
only and not as a limitation, park-wide security and landscaping of the
perimeter berm) are passed through pursuant to the Declaration, but are also
included within the expenses pursuant to section 2.3 of this Lease."
31. Tenant Relocation. Delete section 11.4 of the Lease in its
entirety.
32. Total or Partial Taking. In section 12.1 of the Lease, in the ninth
line, delete "purposes leased" and replace it with the following: "Tenant's
permitted use of the Premises."
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<PAGE> 46
33. Recording. In section 13.4 of the Lease, in the first line, insert
the following after each appearance of "Tenant": "or Landlord."
34. Notices. In section 13.5 of the Lease:
(a) in the fifth line, delete "or, prior to Tenant's
occupancy of the Premises," and replace it with the following: "from and
after occupancy, and in all cases."
(b) insert the following at the end: "A courtesy copy
of default notices to Tenant shall also be sent to Karl P. Haas, Esq., Baker
& Daniels, 300 Meridian Street, Suite 2700, Indianapolis, Indiana 46204."
35. Heavy Articles. In section 6 of the Rules and Regulations attached
to the Lease as Exhibit "C," in the second line, insert the following after
"consent": "(which will not be unreasonably withheld)."
36. Work Letter Agreement. In the Work Letter Agreement attached to the
Lease as Exhibit "D":
(a) in subsection (a):
(i) in the fifteenth line, insert the
following after "approval": "(which will not be unreasonably withheld)."
(ii) in the eighteenth line, insert the
following after "to Tenant": "(provided, however, that if Landlord fails to
respond within ten (10) business days after Tenant's submission of the plans and
specifications, then Tenant shall notify Landlord of its failure, and if
Landlord fails to respond to Tenant within five (5) days after Tenant's notice,
then Landlord's consent will be deemed to be granted)."
(iii) in the twenty-fifth line, insert the following
after the first appearance of "Tenant": "(subject to the maintenance and repair
obligations of Landlord set forth in the Lease)."
(iv) in the thirtieth line, insert the following
after "upon": "reasonable."
(b) in subsection (b), in the thirteenth and sixteenth lines,
insert the following in each after "five (5)": "business."
(c) in subsection (c):
(i) in the eleventh line, insert the following
after "Landlord's": "reasonable."
(ii) in the fifteenth line, insert the
following after "Landlord": ", which approval will not be unreasonably
withheld."
(iii) in the thirty-second line, insert the following
after "amounts": "reasonably."
(d) in subsection (e), delete subparagraphs (i), (ii), and
(iii) and replace them with the following:
"(i) As part of the Construction Budget, the
parties shall establish a funding schedule for payments to be made by Landlord
to the general contractor, so that Tenant can estimate the amounts to be paid by
Tenant and when such payments will be due. Then, within five (10) days after
Tenant's receipt of an invoice via facsimile (based on an AIA Draw Request
form), Tenant shall pay Landlord an amount equal to Tenant's proportionate share
of each draw request (less a 10% retainage pending Substantial Completion). (The
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<PAGE> 47
original of the invoice sent via facsimile shall also be sent to Tenant for its
files.) Tenant's proportionate share for purposes of this Work Letter shall be a
fraction, the numerator of which shall be Tenant's Costs, as such amount is then
determined by reference to the Construction Budget, and the denominator of which
shall be Tenant's Costs plus the Tenant Improvement Allowance.
(ii) Within ten (10) days following
Landlord's submittal to Tenant of a final accounting of Tenant's Costs, Tenant
shall pay Landlord the then remaining balance of Tenant's Costs plus the
retainage, or Landlord shall reimburse Tenant as to any excess amounts
previously paid, as the case may be."
(e) in subsection (f), in the eighth line, delete "(e)"
and replace it with the following: "(g)."
(f) in subsection (g), in the first line, insert the
following after "subcontractors": "reasonably."
(g) in subsection (h), in the second line, delete "upon" and
replace it with the following: "within five (5) days after."
37. Option to Renew. In Rider Number 1 to the Lease, in subsection
(E)(2), insert the following at the end: "Commencing nine (9) months prior to
the expiration of the initial Term of the Lease, Tenant shall have the right to
request Landlord's determination of the Minimum Rent for the Renewal Term.
Landlord shall notify Tenant of its determination no later than thirty (30) days
after Tenant's request, so that Tenant shall have sufficient time to decide
whether to elect to renew the Lease. If, despite good faith negotiation,
Landlord and Tenant cannot agree on the Minimum Rent for the Renewal Term on or
before one hundred eighty (180) days prior to the expiration date of the
then-current Term, Tenant (if Tenant desires to exercise the Renewal Option)
must nonetheless timely elect to exercise its Renewal Option and be bound by the
result of the appraisal process described below. Upon Tenant's exercise,
Landlord and Tenant (within ten (10) days) shall each select an independent
disinterested MAI appraiser, which appraisers shall mutually select a third
independent disinterested MAI appraiser (within ten (10) days). Landlord and
Tenant shall then each submit for arbitration to the third appraiser their
respective offers of the Fair Market Rental Value of the Premises. Such third
appraiser shall then (within ten (10) days) select only the Landlord's or the
Tenant's offer as the Fair Market Rental Value of the Premises. The decision of
such third appraiser shall be final and binding on the parties and the fees and
costs of such third appraiser shall be borne by the unsuccessful party. At a
minimum, each of the MAI appraisers shall be disinterested commercial real
estate appraisers in Dade County experienced in the commercial leasing field. If
the dispute is not finally resolved as of the commencement of the Renewal Term,
then Tenant shall pay the Minimum Rent for the Renewal Term as determined by
Landlord, until such dispute is finally resolved. Should Tenant ultimately
prevail, then Tenant shall receive a credit against Minimum Rent to become due
during the Renewal Term, such credit to be equal to the difference between the
Minimum Rent then being paid by Tenant and the Minimum Rent that Tenant should
have been paying, as determined by such appraisal process."
[signatures on next page]
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<PAGE> 48
IN WITNESS WHEREOF, Landlord and Tenant have executed this
Addendum as of the day and year first above written.
WITNESSES: LANDLORD:
NEW WORLD PARTNERS JOINT VENTURE
NUMBER FIVE, a Florida general partnership
By: Codina/Tradewind No. 5, Ltd., a
Florida limited partnership, as
general partner
By: Codina West Dade Development
Corporation No. 5, as general
partner
By: /S/ Armando Codina
/s/ -------------------------
- ------------------------------- Armando Codina, President
/s/
- -------------------------------
TENANT:
BRIGHTPOINT NORTH AMERICA, INC., an Indiana
corporation
/S/ Elizabeth J. Potter By: /S/ Steven E. Fivel
- ------------------------------- ---------------------------------------
Name: Steven E. Fivel
--------------------------------------
/S/ Deborah A. McQueen Title: Vice President
- ------------------------------- -------------------------------------
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<PAGE> 1
EXHIBIT 10.2
LEASE
THIS LEASE, made as of the 18th day of September, 1998, by and between
AIRTECH PARKWAY ASSOCIATES, LLC, an Indiana limited liability company (the
"Landlord"), and BRIGHTPOINT NORTH AMERICA, INC., an Indiana corporation (the
"Tenant");
WITNESSETH:
1. LEASED PREMISES. Landlord hereby leases to Tenant, and Tenant hereby
leases from Landlord, a certain building to be constructed by Landlord (the
"Building") that will be located generally at Lot 1 on Airtech Parkway in
Airtech Park (the "Park"), Indianapolis, Indiana, together with: (a) the parcel
of real estate upon which the Building will be constructed (the "Parcel"); and
(b) the related improvements to be constructed on the Parcel and used in
connection with the Building (the "Improvements"). For purposes of this Lease,
the Building shall be deemed to contain approximately 495,740 square feet of
gross leasable area (the "Gross Leasable Area"),100,500 square feet of which
shall be office space (the "Office Space"), and the remainder of which shall be
distribution/warehouse space (the "Warehouse Space"). Tenant shall have the
right, in common with Landlord, to the non-exclusive use of the common easements
and facilities in the Park that benefit the Parcel, subject to the terms and
conditions of any recorded declaration of covenants and restrictions applicable
to the Park (the "Declaration"). The Parcel and the Park are depicted on Exhibit
A-1 attached hereto, the Parcel more particularly is described on Exhibit A-2
attached hereto, and the Building generally is depicted on the site plan
described on Exhibit A-3 attached hereto. The Building, the Parcel and the
Improvements, collectively, are the "Leased Premises".
2. LEASE TERM AND HOLDING OVER. Subject to Subsection 6(f) hereof, the
initial term of this Lease (the "Initial Lease Term") shall be for a period
commencing on the later of: (a) 15 days after the Substantial Completion Date;
or (b) January 1, 2000 (the "Commencement Date"); and ending on the date that is
20 years after the first day of the first calendar month following the
Commencement Date (the "Expiration Date"). So long as Tenant is not in default
hereunder, Tenant shall have the option to extend the term of this Lease for
four consecutive periods of five years (the "Extension Term(s)"); provided that,
if Tenant exercises its option to expand in accordance with the attached Exhibit
J, and the terms and conditions of Exhibit J require that Tenant have the right
to extend the term of this Lease for a fifth Extension Term, then, subject to
the terms and conditions of Exhibit J, Tenant shall have the option to extend
the term of this Lease for a fifth Extension Term. Tenant shall exercise its
option to extend the term of this Lease by providing written notice to Landlord
at least one year prior to the expiration of the Initial Lease Term or the
applicable Extension Term, as the case may be (the "Extension Date"). If Tenant
fails to exercise its option to extend the Initial Lease Term or the applicable
Extension Term, as the case may be, on or before the Extension Date, then the
option of Tenant to extend the term of this Lease automatically shall terminate,
and have no further force or effect, without further notice from Landlord. If
Tenant holds over and remains in possession of the Leased Premises after the
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<PAGE> 2
expiration of the Lease Term (as defined below), and if Rent is paid by Tenant
and accepted by Landlord, then such holding over and continued possession shall
create a tenancy from month to month upon and subject to the same terms and
conditions of this Lease in effect when the Lease Term expires, except for the
length of the term of this Lease. At any time, either party may terminate such
tenancy from month to month upon 30 days written notice delivered to the other
party in accordance with Section 25. If Tenant holds over and remains in
possession of the Leased Premises after the expiration of the Lease Term without
the consent of Landlord, then Tenant shall: (a) pay to Landlord for each day of
such possession 125% of all the Base Rent (as defined in Section 3) in effect
when expiration or termination occurs, computed on a daily basis; and (b)
indemnify and hold harmless Landlord from and against any and all claims,
judgments, liabilities, losses, costs, and expenses (including, without
limitation, reasonable attorneys' fees and court costs) arising from, or in
connection with, such possession. The Initial Lease Term and the Extension
Terms, collectively, are the "Lease Term."
3. RENT. Tenant shall pay to Landlord minimum rent (the "Base Rent") for
the Leased Premises during the Lease Term in accordance with the terms and
conditions of Exhibit B, attached hereto (the "Rent Schedule"). Base Rent shall
be payable in advance on or before the first day of each full and partial
calendar month during the Lease Term; provided that: (a) if the Lease Term
commences or expires on a date other than on the first day or last day of a
calendar month, respectively, then the Base Rent payable for each such partial
calendar month shall be an amount equal to: (i) the Base Rent otherwise then in
effect; divided by (ii) the number of days in the full calendar month during
which the Lease Term commences or expires, respectively; and multiplied by (iii)
the number of days in the partial calendar month after and including the
Commencement Date or before and including the Expiration Date, respectively; and
(b) the Base Rent for any partial calendar month at the commencement of the
Lease Term shall be payable on or before the first day of the first full
calendar month during the Lease Term. In addition to the payment of Base Rent,
Tenant shall pay to Landlord as additional rent (the "Additional Rent") all
other sums of money and charges required to be paid by Tenant to Landlord under
this Lease, regardless of whether the same are designated as Additional Rent.
Base Rent and Additional Rent, collectively, are "Rent". All Rent shall be paid
without relief from valuation and appraisement laws, and shall be payable
without offset for any amount due or claimed to be due from Landlord to Tenant,
except as expressly provided in this Lease.
4. PAST DUE PAYMENTS. If any Rent shall become overdue for a period in
excess of five days, then Tenant shall pay to Landlord on demand interest on the
unpaid Rent from the date due to the date of payment at the rate of 1.5% per
month. Amounts recoverable from Tenant pursuant to this Section shall be in
addition to, and not in lieu of, any other right or remedy that Landlord may
have hereunder, at law, or in equity.
5. PLACE OF PAYMENTS. All payments of Rent required to be made, and all
statements required to be rendered, by Tenant to Landlord shall be delivered to
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<PAGE> 3
Landlord at its address set forth in Section 25, or to such other address as
Landlord specifies to Tenant in accordance with Section 25.
6. PREPARATION OF LEASED PREMISES.
(a) Landlord's Work. Landlord shall construct the Building and
the Improvements, and landscape the Parcel (the "Landlord's Work"),
pursuant to the construction schedule attached hereto as Exhibit C (the
"Construction Schedule"), and in accordance with the plans and
specifications attached hereto as Exhibit D-1 (the "Construction
Plans"). Landlord represents and warrants that, upon substantial
completion of the Building and Improvements, the Building and
Improvements shall comply with all laws, statutes, ordinances, and
governmental rules, regulations, guidelines, orders, and decrees now or
hereafter affecting or relating to the Leased Premises or the use
thereof (the "Applicable Laws"); except for Applicable Laws that are
applicable because of: (i) a special or unusual use of the Leased
Premises; or (ii) alterations or additions made by Tenant to the Leased
Premises. Landlord shall cooperate with efforts by Tenant to determine
the permits or governmental authorizations, if any, that are necessary
for the installation of Tenant's distribution/warehouse fixtures and
equipment; provided that Tenant shall be responsible for obtaining all
such permits and authorizations. Landlord's Work shall be performed
under a timely recorded no-lien construction contract, which, by a
separate document, shall be collaterally assigned to Tenant to secure
the obligation of Landlord to complete Landlord's Work. All change
orders with respect to Landlord's Work shall be requested, implemented,
and paid for in accordance with the terms and conditions of Exhibit
D-4, attached hereto. Landlord shall obtain all permits and
governmental authorizations necessary for the completion of Landlord's
Work.
(b) Tenant Finish Work. As part of Landlord's Work, Landlord
shall complete the Tenant Finish Work (as defined in Exhibit D-2
attached hereto) in accordance with specifications and final selections
to be: (i) prepared by Tenant, (ii) delivered to Landlord on or before
November 30, 1998; and (iii) attached hereto as Exhibit D-3 (the
"Tenant Finish Selections"); provided that, if the Tenant Finish
Selections are not delivered to Landlord by November 30, 1998, then:
(i) the Scheduled Completion Date shall be extended by a period equal
to the number of days after November 30, 1998, that it takes Tenant to
deliver the Tenant Finish Selections to Landlord; and (ii) the
obligation of Tenant to pay Rent shall commence on the Commencement
Date, notwithstanding anything to the contrary set forth therein. The
cost of the Tenant Finish Work shall be paid as provided in Exhibit
D-2. All change orders with respect to the Tenant Finish Work shall be
requested, implemented, and paid for in accordance with the terms and
conditions of Exhibit D-4.
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<PAGE> 4
(c) Substantial Completion. The Building and the Improvements
shall be deemed to be substantially completed when Landlord delivers to
Tenant a copy of an architect's certificate of substantial completion
indicating that the Building and the Improvements have been completed
in accordance with Exhibits D-1 and D-2 (the "Substantial Completion
Date"), subject to identified "punch-list" items that: (i) do not
materially affect the ability of Tenant to use the Building and the
Improvements for the purpose of: (A) conducting its normal business
operations without material interruption or interference; or (B)
completing the installation of its fixtures and equipment; and (ii) are
able to be completed without materially interrupting or interfering
with the conduct of Tenant's normal business operations (the
"Punch-List"). Subject to Subsection 6(b), Landlord shall substantially
complete the Buildings and the Improvements on or before December 15,
1999 (the "Scheduled Completion Date").
(d) Completion Requirements. Notwithstanding anything to the
contrary set forth herein, the Buildings and the Improvements shall not
be deemed to be substantially completed until: (i) there are no
mechanics liens or claims or other similar liens or claims on or
against the Leased Premises with respect to the performance of
Landlord's Work, except for such liens and claims that are able to be
brought to a successful conclusion by the lienor or claimant without
materially interrupting or interfering with the conduct of Tenant's
normal business operations; (ii) the certificate of occupancy with
respect to the Leased Premises has been issued, or all requirements for
the issuance of the certificate of occupancy with respect to the Leased
Premises have been satisfied, and all other permits and governmental
authorizations have been issued with respect to the Building, the
Improvements, and the Park as required so that Tenant is able to
conduct its normal business operations without material interference or
interruption; (iii) the road providing access from Stafford Road to the
Parcel, as shown on the site plan described on Exhibit A-3, has been
paved; provided that if, in Landlord's reasonable determination, the
weather will not permit completed paving, then such access road shall
be deemed to be substantially completed when the base coat of pavement
has been applied, and, in such event, the final coat of pavement shall
be applied, and such access road shall be completed, at such time as
Landlord reasonably determines that the weather permits the completion
of such access road; (iv) all parking lots that are part of Landlord's
Work have been paved and striped; provided that if, in Landlord's
reasonable determination, the weather will not permit paving and
striping of such parking lots, then such parking lots shall be deemed
to be substantially completed when the base coat of pavement has been
applied and striped, and, in such event, the final coat of pavement
shall be applied, and such parking lots shall be completed and striped,
at such time as Landlord reasonably determines that the weather permits
the completion and striping of such parking lots; and (v) at least 15
days have passed since
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<PAGE> 5
Landlord gave Tenant access to the Warehouse Space for the purpose of
installing Tenant's distribution/warehouse fixtures and equipment.
(e) Tenant Access. Landlord shall give Tenant access to the
Warehouse Space for the purpose of installing Tenant's
distribution/warehouse fixtures and equipment as soon as possible after
the date hereof, consistent with the completion of the Warehouse Space;
provided that Tenant shall coordinate the installation of such fixtures
and equipment so that such installation does not interfere with the
performance of Landlord's Work. On the Substantial Completion Date,
Tenant may have full occupancy of the Leased Premises, subject to all
of the terms and conditions of this Lease other than the payment of
Rent.
(f) Non-Completion. Subject to Subsection 6(c), if the Tenant
Finish Selections are delivered to Landlord by November 30, 1998, and
the Buildings and Improvements are not substantially completed on or
before the Scheduled Completion Date, then: (i) the Commencement Date
shall be delayed until the date that is 15 days after the date on which
the Buildings and the Improvements are substantially completed; and
(ii) the Expiration Date shall be extended to the last day of that
calendar month during which the twentieth anniversary of the
Commencement Date occurs.
(g) Tenant's Work. Tenant shall be responsible for all other
work necessary to prepare the Leased Premises for occupancy by Tenant
that is not included expressly as Landlord's Work on Exhibit D or in
Section 12. Upon substantial completion of the Building and the
Improvements, Tenant may have occupancy of the Leased Premises, subject
to continued presence of Landlord on the Leased Premises to correct
"punch-list" items and defects in Landlord's Work. Such occupancy of
the Leased Premises shall be subject to all of the terms and conditions
of this Lease, except that payment of Base Rent shall commence on the
Commencement Date. Tenant shall coordinate any work it performs to
prepare the Leased Premises with the correction by Landlord of
"punch-list" items and defects in Landlord's Work.
(h) Construction Meetings. Commencing on the first full week
after the week in which Landlord commences Landlord's Work, and
continuing each week thereafter until Landlord's Work is completed, a
representative of Landlord and Tenant and the Inspecting Architect
shall attend construction meetings at a mutually acceptable location
during general business hours, for the purposes of discussing the
progress of Landlord's Work in accordance with the Construction
Schedule.
(i) Copies of Drawings. Upon reasonable written notice,
Landlord shall make the Construction Plans, including all drawings,
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<PAGE> 6
available to Tenant or Tenant's Inspecting Architect (as defined in
Subsection 7(a)). Upon completion of Landlord's Work, including
completion of all Punch List items, Landlord shall provide to Tenant
hard copies of as-built drawings of Landlord's Work, together with a
set of such drawings in a reasonably acceptable CAD format.
(j) Selection of Arbitrator. Within 15 days after the date
hereof, Landlord and Tenant jointly shall agree on a party to resolve
any disputes (the "Construction Dispute Arbitrator") with respect to:
(i) defects in Landlord's Work; (ii) deviations of Landlord's Work from
the Construction Plans; (iii) substantial completion; or (iv) the
Punch-List or items to be included in, or excluded from, the Punch-List
(the "Construction Dispute"). The Construction Dispute Arbitrator must:
(i) be a qualified, independent expert on construction of projects
similar to the one contemplated by this Lease; (ii) not have worked for
either Landlord or Tenant, or the affiliates of either, within last
five years; and (iii) have at least ten years of experience as an
arbitrator of construction disputes.
(k) Construction Disputes. If there is any Construction
Dispute, then Landlord and Tenant shall endeavor diligently to resolve
the Construction Dispute within ten days after Landlord or Tenant, as
the case may be, gives notice to the other party of the Construction
Dispute; provided that, if Landlord and Tenant are unable to resolve
the Construction Dispute within such ten day period, then, within two
days after the expiration of such period, Landlord and Tenant shall
present to the Construction Dispute Arbitrator any existing materials
and information with respect to the Construction Dispute. Within three
days after receipt of any such materials and information, the
Construction Dispute Arbitrator shall determine the resolution of the
Construction Dispute, which resolution shall be binding upon Landlord,
Tenant, the general contractor, and the Inspecting Architect.
(l) Completion Delays. On or before November 30, 1998, Tenant
shall deliver to Landlord a written list of those components of the
Office Space that are required for the Warehouse Space to be
sufficiently completed so that the Warehouse Space can be used for the
normal business operations of Tenant. Notwithstanding anything to the
contrary set forth herein, if: (i) the date on which: (A) the Warehouse
Space is completed, so that the Warehouse Space satisfies the
requirements of Subsection 6(c), clauses (i) and (iii) of Subsection
6(d), and clause (iv) of Subsection 6(d), to the extent that the
parking lots are required so that the Warehouse Space can be used for
the normal business operations of Tenant; (B) the Office Space is
sufficiently completed so that the Warehouse Space can be used for the
normal business operations of Tenant (the "Warehouse Completion Date");
and (C) Applicable Laws permit the occupancy by Tenant of the Warehouse
Space, such limited
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<PAGE> 7
use by Tenant of Office Space, and the use of the Warehouse Space for
the normal business operations of Tenant; is delayed until after the
date that is 15 days after the Scheduled Completion Date; (ii) the
delay in the Warehouse Completion Date (the "Warehouse Completion
Delay") results from any cause other than: (A) an act or omission of
Tenant; (B) an Event of Force Majeure (as defined in Subsection 26(g));
or (C) a Casualty (as defined in Subsection 17(a)) with respect to
which the Insurance Proceeds (as defined in Subsection 17(a)) payable
to Landlord exceed all amounts payable to the mortgage lender or lien
holder under, or with respect to, the Mortgage Lien (as defined in
Section 22) (the "Complete Destruction"); and (iii) Tenant is not in
default hereunder; then, for each day of delay from and including the
date 16 days after the Scheduled Completion Date to and including the
day before the Warehouse Completion Date, Landlord shall pay to Tenant
$10,000 as delay damages (the "Delay Payment"); provided that: (i) the
Delay Payment shall be the sole and exclusive remedy of Tenant with
respect to a Warehouse Completion Delay, unless the Warehouse
Completion Delay extends until after the date that is nine months after
the Scheduled Completion Date (the "Outside Completion Date") due to
any cause other than: (A) an act or omission of Tenant; or (B) a
Complete Destruction; and (ii) the maximum amount of the Delay Payment
shall not exceed $500,000, notwithstanding the length of the Warehouse
Completion Delay. If: (i) the Warehouse Completion Date is delayed
until after the Outside Completion Date; (ii) the Warehouse Completion
Delay results from any cause other than: (A) an act or omission of
Tenant; or (B) a Complete Destruction; and (iii) Tenant is not in
default hereunder; then, in addition to requiring Landlord to pay the
Delay Payment, Tenant may terminate this Lease; provided that the Delay
Payment and termination of this Lease shall be the sole and exclusive
remedies of Tenant with respect to a Warehouse Completion Delay that
extends until after the Outside Completion Date. If: (i) a Complete
Destruction occurs prior to substantial completion of the Building and
Improvements; and (ii) as a result of the Complete Destruction, the
Building and Improvements cannot be substantially completed until after
the Outside Completion Date; then, notwithstanding anything herein to
the contrary, Tenant may elect either to: (i) terminate this Lease; or
(ii) require Landlord to substantially complete the Building and
Improvements; provided that the right of Tenant to require Landlord to
substantially complete the Building and Improvements is contingent
upon: (A) there being no material reduction in the creditworthiness of
Tenant at the time of the Complete Destruction from the
creditworthiness of Tenant on the date hereof; and (B) there being no
material increase in the construction and financing costs with respect
to substantial completion of the Building and Improvements by Landlord.
If Tenant elects to require Landlord to substantially complete the
Building and Improvements in accordance with the terms and conditions
of this Subsection, then the Outside Completion Date and the other
applicable dates set forth in this Section 6 for the
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<PAGE> 8
performance of Landlord's Work shall be extended in accordance with the
terms and conditions of Subsection 26(g) hereof.
7. TENANT INSPECTIONS.
(a) Completed Work Inspections. Upon receipt by Tenant of a
written request from Landlord for the inspection of a completed or
substantially completed and specified portion of Landlord's Work (the
"Inspection Request"), and within such period of at least five days as
is specified in the Inspection Request (the "Inspection Period"),
Tenant and/or an architect chosen by Tenant, at its expense, for
purposes of inspecting Landlord's Work (the "Inspecting Architect")
shall conduct with Landlord and/or the general contractor an inspection
(the "Completed Work Inspection") of such completed or substantially
completed and specified portion of Landlord's Work (the "Completed
Landlord's Work"). If neither Tenant nor the Inspecting Architect
conducts a Completed Work Inspection within the Inspection Period, then
the Completed Landlord's Work shall be deemed to be accepted by Tenant.
(b) List of Defects. In conjunction with each Completed Work
Inspection, including the final Completed Work Inspection (the "Final
Work Inspection"), Landlord and/or the general contractor and Tenant
and/or the Inspecting Architect jointly shall prepare a list of items
or components of the Completed Landlord's Work that: (i) are materially
defective or deviate materially from the Construction Plans; (ii) have
not been performed in a good and workmanlike manner; or (iii) have not
been performed materially in accordance with the terms and conditions
of this Lease (the "List of Defects"), and Landlord shall correct, or
cause to be corrected, the items or components on the List of Defects
as soon as reasonably is practicable; provided that Landlord shall have
no obligation to correct, or cause to be corrected, any defective or
deviating items or components expressly accepted by Tenant on a List of
Defects. Subject to Subsection 7(e) and Section 10, each portion of the
Completed Landlord's Work that is not included on the List of Defects
prepared in conjunction with the Completed Work Inspection of such item
or component of Landlord's Work shall be deemed to be accepted by
Tenant, other than items or components that become defective or
deviating after acceptance of such items or components by Tenant,
unless such defect or deviation is a result of actions or omissions of
Tenant or its employees, agents, contractors, invitees or licensees.
(c) Voluntary Inspections. Upon reasonable written notice
delivered to Landlord, Tenant and/or the Inspecting Architect may
perform such additional inspections of Landlord's Work as Tenant and/or
the Inspecting Architect reasonably deem to be necessary or appropriate
(the "Voluntary Inspections"); provided that: (i) Tenant and/or the
Inspecting
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<PAGE> 9
Architect shall specify the portion of Landlord's Work to be inspected;
(ii) Tenant and/or the Inspecting Architect shall comply with all
health and safety rules of which Tenant has been informed that have
been established by Landlord and/or the general contractor for
personnel present on the Premises; and (iii) Tenant and/or the
Inspecting Architect shall coordinate the inspections so that the
inspections do not interfere with the performance of Landlord's Work.
Landlord reserves the right to accompany, and/or to have the general
contractor accompany, Tenant and/or the Inspecting Architect during any
inspection of Landlord's Work. In conjunction with any Voluntary
Inspection, Tenant shall notify Landlord of any item or component of
Landlord's Work that: (i) is materially defective or deviates
materially from the Construction Plans; (ii) has not been performed in
a good and workmanlike manner; or (iii) has not been performed
materially in accordance with the terms and conditions of this Lease;
and Landlord shall correct, or cause to be corrected, such items or
components as soon as reasonably is practicable; provided that, subject
to Subsection 7(e) and Section 10, Landlord shall have no obligation to
correct, or cause to be corrected, any defective or deviating items or
components previously accepted by Tenant, other than items or
components that become defective or deviating after acceptance of such
items or components by Tenant, unless such defect or deviation is a
result of actions or omissions of Tenant or its employees, agents,
contractors, invitees or licensees.
(d) Punch-List Preparation. Upon receipt by Tenant of an
Inspection Request from Landlord for a Final Work Inspection, and
within the Inspection Period: (i) Tenant and/or the Inspecting
Architect shall conduct with the Landlord and the general contractor
the Final Work Inspection; and (ii) the Inspecting Architect and the
general contractor jointly shall prepare the Punch-List. Completion of
the Punch-List shall not be a condition of substantial completion of
the Building and Improvements; provided that, the Building and
Improvements shall not be deemed to be substantially complete if the
Punch-List includes items that: (i) materially affect the ability of
Tenant to use the Building and the Improvements for the purpose of: (A)
conducting its normal business operations without material interruption
or interference; or (B) completing the installation of its fixtures and
equipment; and (ii) are not able to be completed without materially
interrupting or interfering with the conduct of Tenant's normal
business operations. Any dispute with respect to the Punch-List, or
items included in or excluded from the Punch-List, shall be resolved in
accordance with Subsection 6(k).
(e) Tenant Acceptance. Notwithstanding anything to the
contrary set forth herein, no acceptance, or deemed acceptance, by
Tenant pursuant to this Section shall: (i) be applicable with respect
to any Latent Defects; or (ii) relieve Landlord of any of its warranty
obligations
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under Section 10. Deemed acceptance by Tenant of a portion of
Landlord's Work shall mean that, subject to Section 10: (i) the items
and components of such portion of Landlord's Work were installed or
constructed materially in accordance with the Construction Plans and
the terms and conditions of this Lease, to the extent that the same can
be discovered during a reasonably diligent inspection of the Leased
Premises; (ii) the fit, color, and finish of the items and components
of such portion of Landlord's Work are acceptable to Tenant or were
selected by Tenant; and (iii) items and components actually installed
with respect to such portion of Landlord's Work are the items and
components specified in the Construction Plans to be installed with
respect to such portion of Landlord's Work. Deemed acceptance by Tenant
of a portion of Landlord's Work shall not mean that Tenant has any
responsibility for, or has relieved Landlord, the general contractor,
or any other subcontractors from its or their responsibility for: (i)
compliance with the Applicable Laws pursuant to the terms and
conditions of this Lease; or (ii) any warranty obligations.
8. TAXES AND ASSESSMENTS.
(a) Payment of Real Estate Taxes. Tenant shall pay and
discharge when due all real estate taxes and assessments (the "Real
Estate Taxes") levied during the Lease Term on, against, or with
respect to the Leased Premises. Within 20 days after any installment or
payment of such Real Estate Taxes is due, Tenant shall deliver to
Landlord satisfactory evidence that the installment or payment has been
paid and discharged in full. If the Lease Term commences or expires on
a date other than the first day or the last day of a calendar year,
respectively, then: (i) Tenant shall pay and discharge so much of the
Real Estate Taxes levied with respect to such calendar year in which
the Lease Term commences or expires as shall be allocable to Tenant by
proration (based upon the number of days in such calendar year after
and including the Commencement Date or before and including the
expiration date, respectively); and (ii) Landlord shall pay and
discharge the remainder of the Real Estate Taxes levied with respect to
such calendar year in which the Lease Term commences or expires. All
installments and payments of Real Estate Taxes that are the obligation
of Tenant hereunder shall be deemed to be Rent, even though such
installments and payments are made to the public or quasi-public bodies
that levy, charge, or impose Real Estate Taxes. Landlord shall pay and
discharge when due all Real Estate Taxes levied prior to the Lease Term
on, against, or with respect to the Leased Premises, and first due and
payable before or during the Lease Term. Within 20 days after any
installment or payment of such Real Estate Taxes is due during the
Lease Term, Landlord shall deliver to Tenant satisfactory evidence that
the installment or payment has been paid and discharged in full.
Landlord shall: (i) cause the Leased Premises
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to be established as a separate parcel for the purpose of the
assessment of Real Estate Taxes; and (ii) cause to be sent directly to
Tenant the bills, statements, and invoices for, or with respect to,
Real Estate Taxes levied during the Lease Term on, against, or with
respect to the Leased Premises.
(b) Exclusions from Real Estate Taxes. Real Estate Taxes shall
include any tax, levy, or other charge on, against, or with respect to
Landlord's interest hereunder or on, against, or with respect to
ownership interests in the Leased Premises. Real Estate Taxes shall not
include: (i) general gross receipts taxes; (ii) franchise taxes; or
(iii) income taxes. Notwithstanding anything to the contrary set forth
herein, if any governmental authority imposes a general gross receipts
tax, a franchise tax, an income tax, or a tax on rents, any or all or
which are adopted or enacted, as evidenced by the provisions of the
Applicable Laws or the legislative history, in substitution for a real
estate tax or assessment levied on, against, or with respect to: (i)
Landlord's interest hereunder; or (ii) ownership interests in the
Leased Premises; then such taxes, levies, or other charges (the
"Substitute Tax(es)") shall be deemed to constitute Real Estate Taxes
hereunder. If a Substitute Tax is enacted, then Tenant shall pay all
Real Estate Taxes remaining in effect, notwithstanding the enactment of
the Substitute Tax, plus all Substitute Taxes; provided that: (i) the
aggregate amount of: (A) the Real Estate Taxes payable by Tenant during
any year; plus (B) the Substitute Taxes payable by Tenant during that
year; shall not exceed the amount of the Real Estate Taxes payable by
Tenant during the year before the Substitute Tax first is payable by
Tenant (the "Tax Payment Base"); and (ii) the Tax Payment Base shall be
increased annually, on a compounded basis, by the percentage increase
in the Consumer Price Index for Urban Wage Earners and Clerical
Workers, U.S. Cities Average, All Items (Base Year 1982-84=100), from
the prior year. The obligations of Tenant hereunder with respect to the
payment of Real Estate Taxes levied during the final calendar year of
the Lease Term shall survive the termination of this Lease.
(c) Other Taxes and Assessments. Tenant shall pay and
discharge, as and when assessed, all taxes, levies, and charges imposed
on, against, or with respect to: (i) the conduct of its business
operations in, on, or from the Leased Premises; and (ii) its trade
fixtures, equipment, inventory and other personal property in, on or
about the Leased Premises. Tenant also shall pay and discharge, as and
when assessed, all Contribution Payments (including, without
limitation, Common Access Way Expenses, Common Utility Expenses, Common
Drainage and Irrigation Systems Expenses, Pylon Sign Expenses, Common
Security Costs, Common Capital Construction Costs, and Individual
Capital Construction Costs) (all as defined in the Declaration) levied
or assessed during the Lease Term on, against or with respect to, the
Leased
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Premises pursuant to the Declaration (the "Park Assessments"), and
Tenant shall pay all late charges, interest and costs of collection
under the Declaration if any installment or payment of Park Assessments
is not paid or discharged by Tenant when required hereunder. Within 20
days after any installment or payment of such Park Assessments is due,
Tenant shall deliver to Landlord satisfactory evidence that the
installment or payment required to be made by Tenant has been paid and
discharged in full. If the Lease Term commences or expires on a date
other than the first day or the last day of a calendar year,
respectively, then: (i) Tenant shall pay so much of the Park
Assessments levied or assessed with respect to such calendar year in
which the Lease Term commences or expires as shall be allocable to
Tenant by proration (based upon the number of days in such calendar
year after and including the Commencement Date or before and including
the expiration date, respectively); and (ii) Landlord shall pay and
discharge the remainder of the Park Assessments levied or assessed with
respect to such calendar year in which the Lease Term commences or
expires. All installments and payments of Park Assessments that are the
obligation of Tenant hereunder shall be deemed to be Rent, even though
such installments and payments are made to a third party. The
obligations of Tenant hereunder with respect to the payment of such
Park Assessments levied during the final calendar year of the Lease
Term shall survive the termination of this Lease. Landlord shall pay
and discharge all Park Assessments levied prior to the Lease Term and
first due and payable prior to or during the Lease Term (the "Prior
Park Assessments"), and Landlord shall pay all late charges, interest
and costs of collection under the Declaration if any installment or
payment of Prior Park Assessments is not paid or discharged when
required. Within 20 days after any installment or payment of Prior Park
Assessments is due, Landlord shall deliver to Tenant satisfactory
evidence that such installment or payment has been paid and discharged.
Notwithstanding anything to the contrary set forth herein, the maximum
amount of the Park Assessments payable by Tenant shall be limited in
accordance with Exhibit K, attached hereto (the "Assessment Limit
Amount"), and Landlord shall pay and discharge any Park Assessments in
excess of the Assessment Limit Amount.
(d) Contesting Real Estate Taxes. Tenant shall have the right
to contest, in the manner prescribed by law and otherwise in a
reasonable and diligent manner, the calculation of Real Estate Taxes
levied on, against or with respect to the Leased Premises or the
valuation of the Leased Premises for purposes of calculating such Real
Estate Taxes, at Tenant's cost and expense, if: (i) Tenant determines
in good faith that such Real Estate Taxes have been incorrectly
calculated or the Leased Premises has been overvalued for purposes of
calculating such Real Estate Taxes (the "Tax Dispute"); (ii) Tenant
delivers to Landlord a written notice describing the Tax Dispute and
the proposed contest with
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particularity; and (iii) if such contest is to be made during the last
two years of the Initial Lease Term or an Extension Term, as the case
may be, Landlord does not object to the proposed contest within ten
days after receipt of such notice, which objection shall be made only
on a reasonable basis. Pending resolution of the Tax Dispute, Tenant
shall pay the amount of the Real Estate Taxes levied on, against or
with respect to the Leased Premises as may be required by the
Applicable Laws; provided that, if the Applicable Laws do not require
Tenant to pay the full amount of such Real Estate Taxes pending
resolution of the Tax Dispute, then, after resolution of the Tax
Dispute, Tenant shall pay any unpaid amount of such Real Estate Taxes.
If any settlement will result, or reasonably is anticipated by Landlord
to result, in increased Real Estate Taxes at any time, then Tenant
shall not agree to the settlement of a Tax Dispute without Landlord's
prior written consent, which consent shall not be withheld
unreasonably. Notwithstanding anything to the contrary set forth
herein, Tenant shall have the right to make a claim for a refund of
Real Estate Taxes at any time, including after the expiration or
earlier termination of this Lease, if Tenant determines that it has
overpaid Real Estate Taxes. Until such time as the first installment of
Real Estate Taxes is due and payable following the first reassessment
of the Leased Premises after resolution of a contest commenced or
conducted by Tenant, Tenant shall indemnify and hold harmless Landlord
from and against any and all increases in Real Estate Taxes that result
from a contest commenced or conducted by Tenant, together with all
reasonable attorneys' fees and court costs associated therewith.
9. USE OF LEASED PREMISES. The Leased Premises shall be
occupied and used solely as a facility for distribution/warehouse, light
assembly, and general office purposes, and for any other purpose permitted under
zoning classification "I-2", and for no other uses. Tenant shall have no right
to change the zoning classification applicable to the Leased Premises or to
obtain variances from such classification or the requirements thereof; provided
that Tenant may obtain variances from such classification or the requirements
thereof: (a) with respect to use of the Leased Premises, if such variances are
necessary to permit the use of the Leased Premises for light assembly; and/or
(b) with respect to development standards for the Leased Premises, if such
variances are necessary to make alterations or additions permitted to be made
hereunder. Tenant covenants and agrees that:
(a) Tenant shall not permit any waste, damage or nuisance in,
on or about the Leased Premises, or use or permit the use of the Leased
Premises for any unlawful purpose or in any manner that materially
violates the terms and conditions of the Declaration, all subject to
the Assessment Limit Amount;
(b) Tenant shall conduct its business and keep the Leased
Premises in a safe, clean and sightly condition that complies with all
rules,
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regulations and guidelines of the health, fire, building, environmental
and other governmental agencies having jurisdiction over Tenant's
business operations and/or the Leased Premises, and Tenant shall comply
with all Applicable Laws;
(c) Tenant shall not dump, or otherwise dispose of, any
chemicals, metals, garbage, trash or other industrial by-products or
incidentals to Tenant's business in, on or about the Leased Premises,
and Tenant shall use only waste removal facilities on the Leased
Premises that are appropriate, leakproof and fireproof;
(d) Tenant shall comply with the terms and conditions of the
Declaration, use commercially reasonable efforts to cause its agents
and employees to comply with the terms and conditions of the
Declaration, and use reasonable efforts to cause its customers,
invitees, licensees and concessionaires to comply with the terms and
conditions of the Declaration, all subject to the Assessment Limit
Amount; and
(e) Tenant shall not: (i) use the Leased Premises for the
treatment or disposal of any wastes, materials or substances that are
hazardous, toxic or radioactive and are, or become, regulated by any of
the Applicable Laws (including, without limitation, asbestos-containing
materials and electrical transformers or ballasts that contain PCB's)
(the "Hazardous Substances"); or (ii) store or use any Hazardous
Substance on the Leased Premises, except for such storage and usage of
those types and amounts of Hazardous Substances as may be necessary for
the operations permitted under this Lease; provided that Tenant shall
not stockpile Hazardous Substances or otherwise store more Hazardous
Substances on the Leased Premises than may be necessary to conduct the
operations permitted under this Lease to be conducted with reasonable
dispatch. All storage, usage and transportation of Hazardous Substances
shall be conducted in compliance with all Applicable Laws, and Tenant
shall take all necessary and appropriate safety precautions in
connection with such storage, usage and transportation. Tenant shall
not install or locate on the Leased Premises any underground storage
tanks (the "UST's"). Tenant agrees to indemnify, defend (by counsel
reasonably acceptable to Landlord), protect and hold harmless Landlord
and any party affiliated with Landlord from and against any and all
claims, judgments, liabilities, losses, costs and expenses (including,
without limitation, reasonable attorneys' fees and court costs) arising
from, or in connection with: (i) any storage or usage of any Hazardous
Substances by Tenant (or its employees, agents, contractors, invitees
or licensees) in, on or about the Leased Premises; or (ii) any
transportation of any Hazardous Substances to or from the Leased
Premises by Tenant (or its employees, agents, contractors, invitees or
licensees), whether or not such storage, usage or transportation
constitutes a failure of Tenant to observe or
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perform fully its obligations under this Subsection or to comply with
or observe fully the limitations and restrictions under this
Subsection. The claims, judgments, liabilities, losses, costs and
expenses from and against which Tenant has agreed to indemnify, defend,
protect and hold harmless Landlord and any party affiliated with
Landlord under this Subsection shall, to the extent covered by the
preceding indemnity, include the following: (i) any obligation or
liability of Tenant or Landlord under any of the Applicable Laws to
remove any Hazardous Substance or contaminated soil or groundwater from
the Leased Premises, "clean up" any contamination of the soil or the
groundwater in, on or under the Leased Premises, or perform any
remediation of or for the Leased Premises; (ii) all charges, fines or
penalties imposed by governmental authority or under any of the
Applicable Laws governing Hazardous Substances; (iii) any excess of the
fair market value of the Leased Premises without contamination by
Hazardous Substances over the fair market value of the Leased Premises
as so contaminated; and (iv) all claims by, and liabilities to, any
third party. The obligations of Tenant under this Subsection shall
survive the expiration or earlier termination of this Lease.
Tenant shall have the right to contest, in the manner prescribed by the
Applicable Laws, and otherwise in a reasonable and diligent manner, any
allegation by a governmental entity that there exists a violation of any of the
Applicable Laws, if such alleged violation exists as a result of actions or
omissions of Tenant or its employees, agents, contractors, invitees or licensees
(the "Alleged Violation"), and if: (a) Tenant determines in good faith that no
violation exists or that the Applicable Law is inapplicable; and (b) Tenant
delivers to Landlord a written notice describing the Alleged Violation with
particularity; provided that: (a) such contest postpones the enforcement of the
Applicable Law that is the subject of the Alleged Violation until the contest is
completed, postpones any action against Landlord with respect to the Alleged
Violation until the contest is completed, and postpones the imposition of any
charges, fines or penalties until the contest is completed; (b) such contest
shall not result in the imposition of additional charges, fines or penalties if
the contest is unsuccessful; and (c) the Leased Premises shall not deteriorate
or decline in value as a result of, or in connection with, the contest and the
failure to correct the Alleged Violation. Tenant shall not agree to any
settlement of an Alleged Violation without the prior written consent of
Landlord, which consent shall not be withheld unreasonably. Tenant shall
indemnify and hold harmless Landlord from: (a) any and all actions against
Landlord with respect to any contest hereunder or any Alleged Violation that
Tenant is contesting; (b) any and all charges, fines and penalties imposed upon
Landlord as a consequence of any contest hereunder or any Alleged Violation that
Tenant is contesting; and (c) any other claims, judgments, liabilities, losses,
costs and expenses arising from, or incurred in connection with, any contest
hereunder or any Alleged Violation that Tenant is contesting (including, without
limitation, reasonable attorneys' fees and court costs).
10. LANDLORD WARRANTIES.
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(a) Acceptance Letter. On the Commencement Date, Tenant shall
execute and deliver to Landlord a certificate, in the form attached
hereto as Exhibit E (the "Acceptance Letter"), stating that Tenant has
accepted the Leased Premises, subject to the Punch-List, and subject
to: (i) latent defects (the "Latent Defects") that: (A) could not be
discovered during a reasonably diligent inspection of the Leased
Premises, including, without limitation, latent defects in items or
components of Landlord's Work that could not be discovered due to the
inability of Tenant to perform a reasonably diligent inspection or
complete test of such items or components because: (1) the season in
which the Substantial Completion Date occurs is incompatible with an
inspection or test of such items or components; or (2) the load bearing
capabilities of such items or components cannot be tested before the
Commencement Date; and (B) subsequently are discovered and identified
with particularity in a written notice delivered to Landlord within one
year after the Commencement Date (the "Warranty Period"); and (ii)
items or components of Landlord's Work that become defective or require
repair or replacement and are identified with particularity in a
written notice delivered to Landlord during the Warranty Period (the
"Warranty Items"); provided that neither: (A) items or components that
Tenant is required to repair or replace as part of the Preventative
Maintenance (as defined in Section 13 of this Lease); nor (B) items or
components of Landlord's Work that become defective or require repair
or replacement as a result of actions or omissions of Tenant or its
employees, agents, contractors, invitees, or licensees; shall be
Warranty Items. Notwithstanding anything to the contrary set forth
herein, the Warranty Period for identifying Latent Defects and Warranty
Items with respect to the foundation, floor structure, exterior walls,
structural steel, roof, and other structural parts shall be four years
after the Commencement Date. The Acceptance Letter shall confirm the
square footage of the Building for purposes of the Declaration and for
purposes of calculating Base Rent for the Extension Terms.
(b) Correction Obligations. Landlord promptly shall correct
the Punch-List items within 60 days after receipt of the Acceptance
Letter with respect thereto, and Landlord promptly shall correct any
Latent Defects and Warranty Items within 120 days after receipt of the
written notice thereof. If Landlord fails to correct a Punch-List item,
Latent Defect, or Warranty Item within the period specified under this
Section, then Tenant shall have the right to correct such Punch-List
item, Latent Defect, or Warranty Item, and Landlord shall reimburse
Tenant on demand for the reasonable costs and expenses of such
correction; provided that, if Landlord fails to reimburse Tenant on
demand for the reasonable costs and expenses of such correction, then
the terms and conditions of Section 20 shall apply. Landlord shall
attach to the Acceptance Letter a list of all warranties that: (i) are
extended to Landlord by manufacturers, suppliers or subcontractors in
connection with the completion of Landlord's Work;
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and (ii) cover the foundation, exterior walls and those other parts of
the Leased Premises that Tenant is obligated to maintain under Section
13 (the "Contractor Warranties"); and, upon the expiration of the
Warranty Period, Landlord shall assign to Tenant all of the Contractor
Warranties. Landlord also shall attach to the Acceptance Letter a
complete list of all manufacturers, suppliers and subcontractors that
manufactured, supplied or performed any portion of Landlord's Work (the
"Subcontractors"). During the Warranty Period, Landlord shall enforce,
on behalf of Landlord and Tenant, all of: (i) the Contractor
Warranties; (ii) the obligations of the warrantors under all of the
Contractor Warranties; and (iii) any obligations of the Subcontractors
to correct defects in Landlord's Work or deviations from the
Construction Plans. If, for any reason other than: (i) an action or
omission of Tenant or its employees, agents, contractors, invitees or
licensees; or (ii) the bankruptcy, insolvency, or dissolution of the
warrantor; any of the Contractor Warranties become void or
unenforceable, then, during the Warranty Period, Landlord shall honor
any such Contractor Warranties as though the Contractor Warranties
originally had been made by Landlord. If, as a result of an action or
omission of Landlord or its employees, agents, contractors, invitees,
or licensees, any Contractor Warranty becomes void or unenforceable,
then, during the period of such Contractor Warranty, Landlord shall
honor the Contractor Warranty as though the Contractor Warranty
originally had been made by Landlord.
11. TENANT ALTERATIONS. Tenant, at its cost and expense, may
install in the Building such trade fixtures, equipment and other personal
property as Tenant determines to be necessary or appropriate to conduct its
business. Tenant, at its cost and expense, also may make non-structural
alterations or additions to the interior of the Building if: (a) Tenant delivers
to Landlord written notice describing the proposed alteration or addition with
particularity, and provides to Landlord copies of any plans and specifications
for the alteration, and (b) upon the expiration of the Lease Term or earlier
termination of this Lease, Tenant surrenders the portion of the Leased Premises
altered or improved in as good a condition as on the date that Tenant accepts
the Leased Premises, except for ordinary wear and tear, or the effects of damage
to, or the total or partial destruction of, the Building by fire or other
casualty that Landlord is obligated to repair or replace, or for which Landlord
retains the Insurance Proceeds. Tenant shall make no structural alterations,
improvements or additions of or to any part of the Leased Premises, or any
alterations, improvements or additions to the exterior of the Building, without
the prior written consent of Landlord. All alterations and additions to the
Leased Premises, except only Tenant's trade fixtures and personalty, shall
become the sole property of Landlord upon the expiration of the Lease Term or
earlier termination of this Lease. All exterior signs shall be subject to: (a)
satisfaction of the requirements of all applicable governmental authorities; and
(b) compliance with signage standards established with respect to the Park; and
installation thereof shall be the sole responsibility of Tenant. Prior to the
time that Tenant makes any structural alterations or additions to the Leased
Premises, Landlord and Tenant shall agree which
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portions of such alterations and additions shall become the property of Landlord
upon surrender by Tenant of the Leased Premises and which portions of such
alterations and additions shall remain the property of Tenant.
12. UTILITIES. As part of Landlord's Work, Landlord shall
install (or cause installation of) facilities to furnish electricity, water,
sewer and other services specified in Exhibit D-1 to the Building, so that such
utility services are not metered commonly with any other building. Landlord
represents and warrants that the voltages, amperages, volumes, capacities and
amounts of electricity, water, sanitary sewer, storm sewer, and other services
specified in Exhibit D-1 are adequate for use of the Building and the
Improvements for Tenant's normal business operations as conducted in its current
facility located at 6402 Corporate Drive, Indianapolis, Indiana, reflecting the
increased size of the Leased Premises over the size of such current facility.
During the Lease Term, Tenant shall pay all usage and other charges for all
utility services furnished to the Leased Premises (including, without
limitation, electricity, water, sewer and telephone). If any equipment installed
by Tenant requires additional utility facilities, then the costs of installing
such additional facilities shall be paid by Tenant.
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13. REPAIRS AND REPLACEMENTS.
(a) General Repairs. Tenant, at its cost and expense, subject
to Landlord's obligation to complete or correct Punch-List items,
Latent Defects, and Warranty Items, shall keep and maintain (and
provide all repairs and replacements necessary to keep and maintain)
the Leased Premises and every part thereof at all times in good order,
condition and repair (including, without limitation: (a) all interior
and exterior electrical, mechanical and utility fixtures, equipment and
systems; (b) all other fixtures, equipment and systems of any nature
located on the Leased Premises; (c) all interior walls, floors, floor
coverings and ceilings; (d) the foundation, floor structure, exterior
walls, structural steel, roof, and other structural parts of the
Building; and (e) all exterior signs and all landscaped areas,
driveways and parking lots). Without limiting the generality of the
foregoing, Tenant shall implement: (a) a janitorial program of cleaning
sufficient to keep the Leased Premises in a safe, clean and sightly
condition at all times; (b) a program of grass cutting and landscape
maintenance sufficient to keep all landscaped areas in a safe, clean
and sanitary condition at all times; (c) a regularly scheduled program
of preventive maintenance and repair of the roof, the heating,
ventilation and air conditioning system, and all electrical, mechanical
and utility fixtures, equipment and systems serving the Leased
Premises, so that such items are in good order, condition and repair at
all times; and (d) a regularly scheduled program of sealing, re-topping
and striping all driveways and parking lots sufficient to keep all
driveways and parking lots in a safe, clean and sanitary condition at
all times (the "Preventative Maintenance"). Tenant shall not be
responsible for making any repairs occasioned by any negligence,
intentional act or willful misconduct of Landlord or its employees,
contractors or agents, which repairs shall be made promptly by Landlord
at its cost and expense. Notwithstanding anything to the contrary set
forth herein, during the Warranty Period: (i) Landlord shall enforce,
on behalf of Landlord and Tenant, all of the Contractor Warranties, and
the obligations of the warrantors under all of the Contractor
Warranties; and (ii) Tenant shall have no obligation to provide repairs
or replacements that a warrantor is obligated to make under a
Contractor Warranty.
(b) Capital Replacements. Notwithstanding anything to the
contrary set forth herein, if any capital replacement becomes necessary
or appropriate during the final two years of the Lease Term, as
extended by any Extension Term, then Tenant shall notify Landlord, and
Landlord either shall: (i) require Tenant to repair, but not replace,
the item that is in need of replacement, at Tenant's cost and expense;
or (ii) make the needed capital replacement, at Landlord's cost and
expense; provided that, if it is: (i) impractical; (ii) impossible; or
(iii) uneconomical, based upon a comparison of the cost to repair the
item that is in need of replacement
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and the cost to replace such item; for Tenant to repair an item that is
in need of replacement, then Landlord may not opt to require Tenant to
repair such item, and Landlord shall replace such item. If Landlord
makes a needed capital replacement, then: (i) the cost and expense of
such capital replacement shall be amortized over the useful life of the
capital replacement using an interest rate equal to the rate at which
Landlord is able to borrow funds to make the capital replacement; and
(ii) the Base Rent for the remaining Lease Term, as extended by any
Extension Term for which Tenant already has exercised (or subsequently
does exercise) its extension option, and the Minimum Extension Rent (as
defined on Exhibit B) shall be increased to include such cost and
expense, as amortized in accordance with the terms and conditions of
this Subsection.
14. ASSIGNMENT AND SUBLETTING.
(a) Requirements of Landlord's Consent. Tenant shall not
assign this Lease or any interest herein, sublet the whole or any part
of the Leased Premises, or permit any other party, (including, without
limitation, concessionaires or licensees) to operate in, on or from, or
occupy the whole or any part of, the Leased Premises, without the prior
written consent of Landlord, which consent shall not be withheld or
delayed unreasonably; provided that Landlord's consent shall not be
required with respect to an assignment of this Lease or any interest
herein to any entity that is a wholly-owned subsidiary of Brightpoint,
Inc. ("BPI") or of Tenant. Any transfer of this Lease by operation of
law (including, without limitation, a transfer as a result of a change
of control, merger, consolidation or liquidation of Tenant) shall
constitute an assignment for purposes of this Lease. Except as
expressly provided in Subsection 14(b): (i) Tenant shall remain fully
liable to perform all of its obligations under this Lease,
notwithstanding any assignment of this Lease; and (ii) no consent by
Landlord to any Tenant assignment shall release Tenant from such
liability. The consent of Landlord to any assignment or subletting
shall not constitute a waiver of the requirement for such consent to
any subsequent assignment or subletting.
(b) Permitted Transfers. Consent by Landlord shall not be
required with respect to: (i) the merger or consolidation of Tenant
with one or more entities (the "Merger"); (ii) the sale by Tenant of
all or substantially all of its assets, including this Lease, to a
single entity (the "Asset Sale'"); or (iii) the change of control of
Tenant resulting from a sale, transfer, or issuance of stock in Tenant
to another: (A) entity; (B) group of related entities; (C) person;
and/or (D) group of related persons (the "Stock Sale"); if: (i) the
entity to which this Lease is transferred or assigned as a result of a
Merger or Asset Sale (the "Assignee"), or the entity(ies) and/or
person(s) that obtains control of Tenant as a result of a Stock Sale
(the "Purchaser"), as the case may be, has a net worth equal to or
greater than
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the net worth of BPI reflected on the financial statements for the
quarter ending June 30, 1998, and provided to Landlord; (ii) the
Assignee or the Purchaser does not control, is not controlled by, or is
not under common control with Tenant or BPI; (iii) the Assignee
specifically assumes the obligations of Tenant under this Lease, or the
Purchaser assumes the obligations of BPI under that certain Guaranty
Agreement entered into by BPI, dated as of the date of the execution of
this Lease (the "Guaranty Agreement"), and the Assignee or the
Purchaser, as the case may be, agrees to cure any outstanding default
pursuant to such obligations (the "Outstanding Defaults"); and (iv)
Tenant otherwise complies with the terms and conditions of this Section
(collectively, the "Transfer Conditions"). If the Transfer Conditions
are satisfied with respect to a Merger or Asset Sale, then the assignor
Tenant shall be released from its liability to perform any obligations
of Tenant under this Lease that first arise after the date of the
Merger or Asset Sale; provided that the Assignee or the Purchaser, as
the case may be, shall be liable to perform all such obligations.
(c) Guaranty Agreement. After: (i) any assignment of this
Lease or any interest herein (including, without limitation, an
assignment by virtue of a foreclosure of a Leasehold Mortgage (as
defined in Subsection 14(d) or an assignment of this Lease or the
Leasehold under Subsection 14(d)); or (ii) any subletting of the whole
or any part of the Leased Premises; the Guaranty Agreement shall remain
in full force and effect, and BPI shall remain fully liable to perform
all of its obligations pursuant to the Guaranty Agreement; provided
that, if the Transfer Conditions are satisfied with respect to a Merger
or Asset Sale, then the Guaranty Agreement shall terminate in
accordance with its terms and conditions.
(d) Leasehold Mortgage. Notwithstanding anything to the
contrary set forth herein, Tenant shall have the right to mortgage its
leasehold interest under this Lease (the "Leasehold") to a mortgage
lender that is not affiliated with Tenant (the "Leasehold Lender");
provided that: (i) either Tenant or the guarantor under the Guaranty
Agreement is the debtor under the loan secured by such mortgage (the
"Leasehold Loan"); and (ii) the loan documents evidencing and securing
the Leasehold Loan provide that, if Landlord, at its option, either
waives a Tenant Default (as defined in Section 19) or extends the cure
period applicable to a Tenant Default, then the Leasehold Lender shall
not have the right to: (i) take possession of the Leased Premises; (ii)
foreclose the mortgage securing the Leasehold Loan (the "Leasehold
Mortgage"); or (iii) accept an absolute assignment of this Lease or the
Leasehold; on the basis of the Tenant Default, until all cure periods,
including any extended cure periods, applicable to the Tenant Default
have lapsed without the Tenant Default being cured. The consent by
Landlord shall not be required with respect to: (i) a Leasehold Loan or
a Leasehold Mortgage; (ii) the foreclosure of a
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Leasehold Mortgage; or (iii) the absolute assignment of this Lease and
the Leasehold to the Leasehold Lender or its successor or assign after
a default under the Leasehold Loan. If Tenant: (i) mortgages the
Leasehold pursuant to the terms and conditions of this Subsection; and
(ii) provides to Landlord the name and address of the Leasehold Lender;
then: (i) Landlord shall provide to the Leasehold Lender copies of all
notices of Tenant Defaults provided to Tenant pursuant to this Lease;
(ii) Landlord shall accept a cure by either Tenant or the Leasehold
Lender of any such Tenant Default at any time during the cure period,
including any extended cure period, applicable to the Tenant Default
(the "Tenant Cure Period"); and (iii) Landlord shall accept a cure by
the Leasehold Lender of any such Tenant Default at any time during a
period of ten days after the Tenant Cure Period lapses; provided that,
neither the Leasehold Lender nor its successor or assign shall have any
obligation to cure any Tenant Default unless the Leasehold Lender or
its successor or assign: (i) takes possession of the Leased Premises;
or (ii) accepts an absolute assignment of this Lease or the Leasehold.
Upon a Leasehold Lender, or its successor or assign, accepting an
absolute assignment of this Lease or the Leasehold, the Leasehold
Lender, or its successor or assign, may require Landlord to enter into
a replacement lease for the Leased Premises (the "Replacement Lease").
Upon execution of the Replacement Lease, and the cure of all of all
Outstanding Defaults, this Lease shall terminate. The term of the
Replacement Lease shall commence on the date that this Lease
terminates, and continue for the remainder of the Lease Term. The
Replacement Lease otherwise shall contain the same terms and conditions
as this Lease, except for terms and conditions that no longer are
applicable or that previously have been performed.
15. ACCESS TO LEASED PREMISES. Tenant shall permit Landlord
and its agents to enter upon the Leased Premises at all reasonable times and
upon reasonable notice (except in the event of an emergency, with respect to
which such time and notice requirements shall not apply) to: (a) inspect and
examine the Leased Premises; (b) show the Leased Premises to prospective
purchasers and mortgagees, and, during the last 18 months of the Lease Term or
during the continuation of a default by Tenant hereunder, to prospective
tenants; (c) make such repairs and replacements as Landlord may deem necessary,
at its cost and expense; or (d) exercise its rights hereunder in connection with
performing a covenant of Tenant that is in default, without: (i) any such act
constituting any eviction of Tenant in whole or in part; (ii) Rent in any manner
abating by reason of loss or interruption of Tenant's business in the Leased
Premises, unless such loss or interruption results from the negligence,
intentional act, or willful misconduct of Landlord or its employees, agents, or
contractors; and (iii) responsibility for any loss or damage to Tenant's
business or property, other than loss or damage resulting from the negligence,
intentional act, or willful misconduct of Landlord, its agents, employees or
contractors; provided that any repairs and replacements for such negligence,
intentional acts, or willful misconduct shall be made at the cost and expense
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of Landlord. Landlord shall use reasonable care, and shall cause its agents to
use reasonable care, (except in the event of an emergency) not to cause any
material interruption or interference with the conduct of Tenant's business as a
result of the exercise of the Landlord's right of entry. If Landlord and/or its
agents enter upon a portion of the Leased Premises designated by Tenant as a
"secure area" for the purpose of inspecting and/or examining such portion of the
Leased Premises, then, upon request by Tenant, Landlord shall enter into, and/or
cause its agents to enter into, a confidentiality agreement with respect to
confidential or proprietary matters that may be observed by Landlord and/or its
agents in connection with such inspection. Landlord's right of entry shall not
be deemed or construed to impose upon Landlord any obligation or liability
whatsoever for the maintenance or repair of the Leased Premises, except as
expressly provided in this Lease.
16. INSURANCE AND INDEMNIFICATION.
(a) Real Property Insurance. Landlord, at its cost and
expense, shall maintain in full force and effect throughout the Lease
Term fire and extended coverage insurance, which insurance shall name
Landlord, Tenant, Landlord's mortgage lender, and any mortgage lender
of Tenant as insureds, as their respective interests may appear, on:
(i) the Building; and (ii) and any alterations or additions of or to
the Leased Premises; in either case for at least 100% of its insurable
value on a replacement cost basis, less, in the case of the Building,
the replacement cost of the foundation and other structural parts of
the Building that commonly are not covered by policies of fire and
extended coverage insurance; provided that Tenant shall be responsible
for advising Landlord of the replacement cost of the alterations or
additions of or to the Leased Premises. Upon receipt of a written
invoice, Tenant shall reimburse Landlord for the premiums paid and
other costs and expenses incurred by Landlord to obtain and maintain
such insurance and related coverages (including, without limitation,
such coverages as reasonably may be required by Landlord's mortgage
lender or lien holder).
(b) Public Liability Insurance. Tenant, at its cost and
expense, shall maintain in full force and effect throughout the Lease
Term a policy of general public liability insurance naming Landlord as
an additional insured and covering any and all claims for injuries to,
or death of, persons and damage to, or loss of, property occurring in,
on or about the Leased Premises, in an amount not less than: (i)
$2,000,000 for injury to, or death of, any one person; (ii) $5,000,000
for injury to, or death of, more than one person in the same accident
or occurrence; and (iii) $1,000,000 for damaged or lost property
arising out of any one accident or occurrence. If it becomes customary
for other similar businesses in the Indianapolis metropolitan area to
carry higher limits of liability coverage, then Tenant, upon request by
Landlord, shall increase the foregoing coverage to such
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customary limits; provided that Landlord shall not require Tenant to
increase the foregoing coverage more than once in any five year period.
(c) Personal Property Insurance. All of Tenant's trade
fixtures, equipment, inventory and other personal property (including,
without limitation, property that Tenant stores for third parties),
shall be kept in or upon the Leased Premises at Tenant's sole risk and
expense, and Tenant, at its cost and expense, shall maintain in full
force and effect throughout the Lease Term fire and extended coverage
insurance on such trade fixtures, equipment, inventory and other
personal property for their full insurable value on a replacement cost
basis; provided that, so long as Tenant maintains a net worth adequate
to satisfy and discharge fully all of its financial obligations,
including, without limitation, its financial obligations under this
Lease, and to replace all of its trade fixtures, equipment, inventory,
and other personal property, Tenant may "self insure" its trade
fixtures, equipment, inventory, and other personal property. Tenant
shall indemnify and hold harmless Landlord from any and all claims,
judgments, liabilities, losses, costs and expenses (including, without
limitation, reasonable attorneys' fees and court costs) arising from,
or in connection with, damage to, or loss of, such trade fixtures,
equipment, inventory and other personal property, unless such damage is
caused by: (i) the negligence, intentional act, or willful misconduct
of Landlord or its employees, contractors or agents; or (ii) a Landlord
Default (as defined in Section 20); provided that this indemnity shall
not apply to a Landlord Default if it is customary for the insurance
required to be maintained by Tenant hereunder to cover damage arising
from, or connection with, such Landlord Default.
(d) Workmen's Compensation. Tenant shall comply with the
provisions of the applicable worker's compensation laws and insure its
liability thereunder.
(e) Copies of Policies. For each type of insurance required to
be maintained under this Lease, the party required to maintain such
insurance shall furnish to the other party an endorsed copy of such
insurance policy showing that such type of insurance is in full force
and effect and may not be modified or canceled without 30 days prior
written notice to such other party. All insurance policies required to
be maintained under this Lease shall be issued by companies reasonably
satisfactory to the party not responsible for maintaining such
insurance.
(f) Waiver of Subrogation. Landlord and Tenant waive and
release any and all rights of recovery that either may have against the
other for any loss or damage, regardless of whether caused by any
alleged negligence of the other party or the other party's employees,
contractors, agents, invitees or licensees, to the extent that such
loss or
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<PAGE> 25
damage is or would be covered by any insurance required to be
maintained under this Lease. Each policy of insurance required under
this Lease shall contain an endorsement to such effect, waiving the
insurer's right of subrogation against the other party.
(g) Responsibility for Damages. Subject to the terms and
conditions of Subsection 16(f), Tenant assumes all risks and
responsibilities for injuries, death, damages or losses to or of person
or property (including, without limitation, the Building, the
Improvements and any fixtures, equipment or systems that constitute a
part of the Building or the Improvements), unless caused by: (i) the
negligence (to the extent not customarily covered by casualty or
liability insurance), intentional act, or willful misconduct of
Landlord or its employees, contractors or agents; or (ii) a breach of
this Lease by Landlord, including, without limitation, a breach of any
warranty obligation; and, subject to the foregoing limitations, Tenant
agrees to indemnify and hold harmless Landlord from and against any and
all claims, judgments, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and court
costs) arising from, or in connection with, the condition, use or
control of the Leased Premises.
(h) Landlord Indemnity. Subject to the terms and conditions of
the Subsection 16(f), Landlord agrees to indemnify and hold harmless
Tenant from and against any and all claims, judgments, liabilities,
losses, costs and expenses (including, without limitation, reasonable
attorneys' fees and court costs) arising from, or in connection with
the negligence (to the extent not customarily covered by casualty or
liability insurance), intentional act or willful misconduct of Landlord
or its employees, contractors or agents.
17. FIRE AND OTHER CASUALTY.
(a) Casualty Repair. In the event of damage to, or total or
partial destruction of, the Building or any fixtures, equipment or
systems that constitute a part of the Building, by fire or other
casualty (the "Casualty"), the insurance proceeds, if any, that, as a
result of such Casualty, are payable under any fire and extended
coverage insurance maintained by Landlord (the "Insurance Proceeds")
shall be payable to, and be the sole property of, Landlord, and,
subject to the terms and conditions of this Section, Landlord shall
cause the prompt and diligent repair and replacement of the Building as
soon as reasonably possible to substantially the same condition as
existed prior to such damage or destruction; provided that: (i)
Landlord shall not be obligated to repair or replace alterations or
additions of or to the Leased Premises by Tenant; (ii) Landlord shall
be obligated to make the Insurance Proceeds available, in accordance
with the terms and conditions of this Subsection set forth
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below, for the repair and/or replacement of the alterations and/or
additions of or to the Leased Premises by Tenant; and (iii) when
Landlord commences the insurance adjustment process (the "Adjustment
Process"), Landlord shall: (A) deliver notice to Tenant of its
commencement of the Adjustment Process; and (B) provide to Tenant an
opportunity to participate in the Adjustment Process. Landlord shall
make the Insurance Proceeds available, or cause the Insurance Proceeds
to be made available, to pay the costs and expenses to repair or
replace: (i) the Building in accordance with the terms and conditions
of this Section; and (ii) the alterations and additions of or to the
Leased Premises; provided that: (i) Tenant has not caused a default of
the documents evidencing the Mortgage Lien or evidencing the method of
financing or refinancing secured by the Mortgage Lien through a breach
of any of its obligations under this Lease; and (ii) to the extent
applicable to Tenant, Tenant meets the reasonable and customary
conditions for disbursement of the Insurance Proceeds established by
the documents evidencing the Mortgage Lien or evidencing the method of
financing or refinancing secured by the Mortgage Lien. Rent shall abate
proportionately (based upon the proportion that the unusable gross
leasable area of the Building due to damage or destruction bears to the
total Gross Leasable Area) during the time that the Building or any
part thereof is unusable by reason of any damage to, or destruction of,
the Building. Landlord shall use commercially reasonable efforts to
relocate Tenant temporarily during the period of any repair or
replacement of the Building.
(b) Substantial Damage. Notwithstanding anything to the
contrary set forth herein, if substantial damage or destruction occurs
during the last two years of the Lease Term, as extended by any
Extension Term for which Tenant already has exercised (or subsequently
does exercise) its extension option, so that the cost to repair the
Building to substantially the same condition as existed prior to such
damage or destruction equals or exceeds 35% of the cost to replace the
Building, as reasonably determined by the insurance adjusters (the
"Substantial Damage"), then either Landlord or Tenant, at its option,
may terminate this Lease upon written notice delivered to the other
party at least 15 days in advance, and all obligations hereunder,
except those due or mature, shall cease and terminate; provided that:
(i) if: (A) Substantial Damage occurs during the final two years of the
Lease Term, as extended by any Extension Terms; (B) Tenant has not
exercised its rights to extend the Lease Term for all remaining
Extension Terms; and (C) Tenant has not waived (or been deemed to have
waived) its rights to extend the Lease Term for all remaining Extension
Terms; then neither Landlord nor Tenant shall have the right to
terminate this Lease until the date of the earlier of: (A) the
expiration of the period during which Tenant may exercise its rights to
extend the Lease Term for the next Extension Term; or (B) the waiver
(or deemed waiver) by Tenant of its rights to extend the Lease Term for
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the next Extension Term; and (ii) if: (A) Substantial Damage occurs
during the final two years of the Lease Term, as extended by any
Extension Terms; and (B) Tenant exercises its rights to extend the
Lease Term for the next Extension Term; then neither Landlord nor
Tenant shall have the right to terminate this Lease. Notwithstanding
anything to the contrary set forth herein, if: (i) Substantial Damage
occurs during the final two years of the Lease Term, as extended by any
Extension Terms; (ii) Tenant has not exercised its rights to extend the
Lease Term for all remaining Extension Terms; and (iii) Tenant has not
waived (or been deemed to have waived) its rights to extend the Lease
Term for all remaining Extension Terms; then Landlord shall not be
obligated to repair or replace the Building until the date of the
earlier of: (i) the exercise by Tenant of its rights to extend the
Lease Term for the next Extension Term; or (ii) the waiver (or deemed
waiver) by Tenant of its rights to extend the Lease Term for the next
Extension Term; provided that, if Tenant fails to exercise its rights
to extend the Lease Term for the next Extension Term within ten days
after Landlord delivers to Tenant a written estimate of the period
required to repair or replace the Building, then Tenant shall be deemed
to have waived its rights to extend the Lease Term for all remaining
Extension Terms.
18. EMINENT DOMAIN.
(a) Condemnation. In the event that: (i) all or a substantial
part of the Leased Premises is taken or condemned for public or
quasi-public use under any statute or by the right of eminent domain;
or (ii) in lieu thereof, all or a substantial part of the Leased
Premises is conveyed to a public or quasi-public body under threat of
condemnation (the "Condemnation"), and the Condemnation renders the
Leased Premises unsuitable for Tenant's normal business use (the
"Complete Condemnation"), then, at the option of either Landlord or
Tenant exercised within 15 days after the Complete Condemnation occurs:
(i) this Lease shall terminate as of the date possession of all or such
part of the Leased Premises is conveyed to the condemning authority;
and (ii) all obligations hereunder, except those due or mature, shall
cease and terminate. All compensation awarded or paid for any
Condemnation shall belong to and be the sole property of Landlord (the
"Condemnation Award"); provided that: (i) Landlord shall not be
entitled to any award made solely to Tenant for loss of business or
cost and expense of relocation and removing trade fixtures; and (ii)
Landlord shall make the Condemnation Award available, or cause the
Condemnation Award to be made available, to pay the costs and expenses
to repair or replace: (A) the Building; and (B) the alterations and
additions of or to the Leased Premises; provided that: (A) Tenant has
not caused a default of the documents evidencing the Mortgage Lien or
evidencing the method of financing or refinancing secured by the
Mortgage Lien through a breach of any of its obligations under this
Lease;
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and (B) to the extent applicable to Tenant, Tenant meets the reasonable
and customary conditions for disbursement of the Condemnation Award
established by the documents evidencing the Mortgage Lien or evidencing
the method of financing or refinancing secured by the Mortgage Lien.
(b) Allocation of Award. Notwithstanding anything to the
contrary set forth herein, in the event that: (i) there is a Complete
Condemnation; and (ii) as a result of the Complete Condemnation, this
Lease is terminated at the option of either Landlord or Tenant; then
the Condemnation Award shall be allocated as follows: (i) first, to pay
all amounts payable to any mortgage lender or lien holder under, or
with respect to, a Mortgage Lien (the "Mortgage Payoff"); and (ii)
second, divided between Landlord and Tenant in accordance with the
following terms and conditions of this Section. If the Condemnation
Award exceeds the Mortgage Payoff, then Landlord and Tenant jointly
shall appoint a Qualified Appraiser (as defined in Exhibit B). If
Landlord and Tenant are unable to agree upon the Qualified Appraiser
within the specified period, then, within 15 days thereafter: (i)
Landlord and Tenant each shall appoint a Qualified Appraiser; and (ii)
the Qualified Appraisers appointed by Landlord and Tenant jointly shall
appoint an additional Qualified Appraiser to constitute the Appraiser
Panel (as defined in Exhibit B). Within one month after the date on
which the Qualified Appraiser or the Appraiser Panel, as the case may
be, is appointed, the Qualified Appraiser or the Appraiser Panel, as
the case may be, shall determine the Fair Market Value of Landlord's
interest in the Leased Premises and the Fair Market Value of Tenant's
interest in the Leased Premises. The determination of the Qualified
Appraiser or the Appraiser Panel, as the case may be, shall be the Fair
Market Value of Landlord's and Tenant's respective interests in the
Leased Premises for purposes of this Section. "Fair Market Value" with
respect to Landlord's interest in the Leased Premises shall be the
aggregate amount of: (i) the net present value of the Rent to be
received by Landlord for the remainder of the Lease Term (including all
of the remaining Extension Terms, whether or not Tenant has exercised
its option to extend the Lease Term for all of the remaining Extension
Terms); plus (ii) the net present value of the residual value of the
Leased Premises after the expiration of the Lease Term (including all
of the remaining Extension Terms, whether or not Tenant has exercised
its option to extend the Lease Term for all of the remaining Extension
Terms). "Fair Market Value" with respect to Tenant's interest in the
Leased Premises shall be an amount equal to the net present value of
the excess, if any, of the: (i) the fair market rental of the Leased
Premises for the remainder of the Lease Term (including all of the
remaining Extension Terms, whether or not Tenant has exercised its
option to extend the Lease Term for all of the remaining Extension
Terms), as fair market rental is determined in accordance with the
terms and conditions of Exhibit B; over (ii) the Rent to be received by
Landlord for the remainder of the Lease Term (including all
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of the remaining Extension Terms, whether or not Tenant has exercised
its option to extend the Lease Term for all of the remaining Extension
Terms). From any excess of the Condemnation Award over the Mortgage
Payoff (the "Excess Amount"), Landlord shall receive an amount equal to
the Excess Amount multiplied by a fraction: (i) the numerator of which
is the Fair Market Value of Landlord's interest in the Leased Premises;
and (ii) the denominator of which is the total of the Fair Market Value
of Landlord's and Tenant's respective interests in the Leased Premises.
From any Excess Amount, Tenant shall receive an amount equal to the
Excess Amount multiplied by a fraction: (i) the numerator of which is
the Fair Market Value of Tenant's interest in the Leased Premises; and
(ii) the denominator of which is the total of the Fair Market Value of
Landlord's and Tenant's respective interests in the Leased Premises.
All costs and fees incurred to have the Qualified Appraiser or the
Appraiser Panel determine the Fair Market Value of Landlord's and
Tenant's respective interests in the Leased Premises shall be split
equally between Landlord and Tenant.
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19. DEFAULT BY TENANT.
(a) Events of Tenant Default. Each of the following shall be
deemed to be a "Tenant Default":
(i) failure by Tenant to pay any amount of Rent when due, and,
in the case of the first two such failures in any 12 month
period, the continuance of such failure for five days after
written notice from Landlord;
(ii) failure by Tenant to observe or perform any other term or
condition of this Lease to be observed or performed by Tenant,
and the continuance of such failure for 30 days after written
notice from Landlord; provided that it shall not be a "Tenant
Default" if such failure cannot be cured by Tenant within 30
days, despite reasonably diligent effort, so long as Tenant
diligently commences to cure such failure within 15 days, and
continues to pursue such cure to completion.
(iii) the sale of Tenant's leasehold interest hereunder
pursuant to execution;
(iv) the adjudication of Tenant as a bankrupt or insolvent;
(v) the making by Tenant of a general assignment for the
benefit of creditors;
(vi) the appointment of a receiver for Tenant's property, if
such appointment is not vacated or satisfied within 60 days
from the date of such appointment;
(vii) the appointment of a trustee or receiver for Tenant's
property in a reorganization, arrangement, bankruptcy or other
insolvency proceeding, if such appointment is not vacated or
set aside within 60 days from the date of such appointment;
(viii) the filing by Tenant of a voluntary petition in
bankruptcy or for reorganization or arrangement, or the filing
of an involuntary petition in bankruptcy or for reorganization
or arrangement against Tenant if such involuntary petition is
not vacated within 60 days after the filing thereof;
(ix) the filing by Tenant of an answer admitting bankruptcy or
insolvency or agreeing to reorganization or arrangement; or
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(b) Landlord's Remedies. In the event of a Tenant Default,
Landlord, in addition to any other rights or remedies available at law
or in equity, may exercise the following rights and remedies:
(i) elect to terminate this Lease;
(ii) if Tenant has failed to perform any of its obligations
under this Lease (other than the obligation to pay Base Rent),
perform such obligations that Tenant has failed to perform
(entering upon the Leased Premises for such purpose, if
necessary), without such performance being construed as a
waiver of the Tenant Default or of any other right or remedy
of Landlord with respect to such Tenant Default, or as a
waiver of any term or condition of this Lease; or
(iii) immediately re-enter upon the Leased Premises, remove
all persons and property therefrom, and store such property in
a public warehouse or elsewhere at the sole cost and expense
and for the account of Tenant, all: (A) in compliance with the
Applicable Laws; and (B) without being deemed guilty of
trespass or becoming liable for any loss or damage that may be
occasioned thereby;
(c) Re-Letting. If Landlord re-enters upon the Leased Premises
as provided in Subsection 19(b)(iii), or takes possession of the Leased
Premises pursuant to legal proceedings or pursuant to any notice
provided by the Applicable Laws, then Landlord either may terminate
this Lease, or, from time to time without terminating this Lease, make
alterations and repairs for the purpose of re-letting the Leased
Premises and re-let the Leased Premises or any part thereof for such
term or terms (which may extend beyond the term of this Lease) at such
rental and upon such other terms and conditions as Landlord deems
advisable. Upon each re-letting, all rentals received from such
re-letting shall be applied in the following order: (i) first, to
payment of reasonable costs and expenses incurred by Landlord in
connection with such re-entry or taking of possession and making such
reasonable alterations and repairs; (ii) second, to the payment of Rent
and any other outstanding indebtedness of Tenant to Landlord hereunder
or in connection herewith; and (iii) the remainder, if any, shall be
held by Landlord and applied in payment of future Rent as it becomes
due and payable hereunder. If the rentals received from such re-letting
during any month are less than the full amount of Rent payable
hereunder during that month, then Tenant shall pay any such deficiency
to Landlord. Such deficiency shall be calculated and paid monthly. No
re-entry or taking of possession by Landlord of the Leased Premises
shall be construed as an election to terminate this Lease, or as an
acceptance of a surrender of the Leased Premises, unless a written
notice of termination
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or acceptance of surrender is delivered by Landlord to Tenant.
Notwithstanding any re-letting without termination, Landlord at any
time thereafter may elect to terminate this Lease for Tenant's previous
Tenant Default. Landlord shall use reasonable efforts to mitigate its
damages in the event of a Tenant Default; provided that it shall remain
Tenant's burden of proof to establish that Landlord failed to use
reasonable efforts to mitigate such damages.
(d) Damages Upon Termination. If Landlord at any time
terminates this Lease as a result of any Tenant Default, then, in
addition to any other rights and remedies Landlord may have, Landlord
may recover from Tenant, from time to time, all damages Landlord may
incur by reason of such Tenant Default (including, without limitation:
(i) reasonable costs and expenses in connection with a re-entry or
taking of possession; (ii) reasonable attorneys' fees; and (iii) the
present value at the time of such termination of the excess, if any, of
the amount of Rent for the remainder of the Lease Term (excluding any
unexercised Extension Terms) over the then reasonable rental value of
the Leased Premises for the remainder of the Lease Term; provided that
the reasonable rental value of the Leased Premises shall be determined
on the basis that: (i) the Leased Premises is relet in its "as is"
condition on the date of termination; and (ii) no alterations or
repairs have been, or will be, made for the purpose of reletting). All
such amounts shall be immediately due and payable from Tenant to
Landlord.
(e) Indemnification Upon Tenant Default. Upon any Tenant
Default, Tenant shall indemnify and hold harmless Landlord from any and
all claims, judgments, liabilities, losses, costs and expenses
(including, without limitation, reasonable attorneys' fees and court
costs) incurred by Landlord and arising from, or in connection with, a
Tenant Default or the exercise by Landlord of its rights and remedies
with respect to such Tenant Default.
(f) Limitation on Recovery. Landlord shall not be entitled to
recover from Tenant any amount for any particular item of loss, cost,
or expense more than once, notwithstanding that Subsections 19(c),
19(d), and 19(e) each may provide for recovery of such item of loss,
cost, or expense.
20. DEFAULT BY LANDLORD. The following shall be deemed to a
"Landlord Default": (a) failure by Landlord to observe or perform any term or
condition of this Lease to be observed or performed by Landlord; and (b)
continuation of such failure for 30 days after written notice from Tenant;
provided that it shall not be a "Landlord Default" if such failure cannot be
cured by Landlord within 30 days, despite reasonably diligent effort, so long as
Landlord diligently commences to cure such failure within 15 days, and continues
to pursue such cure to completion. In the event of a Landlord Default, Tenant
shall have all rights or remedies available at law or in equity. With
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respect to Landlord Defaults, Tenant shall have the right to perform such
obligations on behalf of Landlord, without such performance being construed as a
waiver of the Landlord Default or of any other right or remedy of Tenant with
respect to such Landlord Default, or as a waiver of any term or condition of
this Lease. Landlord shall pay to Tenant on demand all reasonable costs and
expenses incurred by Tenant to perform any such obligations in accordance with
the terms and conditions of this Section. If any amount due to Tenant by
Landlord hereunder shall become overdue for a period in excess of five days,
then Landlord shall pay the Tenant interest on such unpaid amount from the date
due to the date of payment at the rate of 1.5% per month. Notwithstanding
anything to the contrary set forth herein, if: (a) Landlord fails to maintain
the insurance required to be maintained by it under Subsection 16(a) hereof; (b)
Tenant performs such obligation in accordance with the terms and conditions of
this Section; and (c) Landlord fails to pay to Tenant on demand all reasonable
costs and expenses incurred by Tenant to perform such obligation (the "Tenant
Insurance Costs"); then Tenant may offset the Tenant Insurance Costs against
payments of Rent. Upon any Landlord Default, Landlord shall indemnify and hold
harmless Tenant from any and all claims, judgments, liabilities, losses, costs
and expenses (including, without limitation, reasonable attorneys' fees and
court costs) incurred by Tenant and arising from, or in connection with, a
Landlord Default or the exercise by Tenant of its rights and remedies with
respect to such Landlord Default.
21. SURRENDER. Upon the expiration of the Lease Term or the
earlier termination of this Lease, Tenant shall quit and surrender to Landlord
the Leased Premises and, except as expressly set forth below in this Section,
all property affixed to the Leased Premises, broom clean, and in good order,
condition and repair, except for ordinary wear and tear, the effects of damage
to, or the total or partial destruction of, the Building by fire or other
casualty that Landlord is obligated to repair or replace; provided that Tenant
shall remove any or all of its property that Landlord directs Tenant to remove,
and, upon Tenant's failure to do so, Landlord may cause all or any item of such
property to be removed at Tenant's cost and expense. Notwithstanding anything to
the contrary set forth herein, Tenant shall not be required to surrender any of
Tenant's trade fixtures or personalty, whether or not affixed to the Leased
Premises. Tenant shall pay all costs and expenses of any such removal and of the
repair of any damage to the Leased Premises caused by such removal. Landlord
acknowledges that Tenant shall have the right to grant to any third party a
security interest in and to its personalty and trade fixtures. Tenant's
obligation to observe and perform these covenants shall survive the expiration
of the Lease Term or earlier termination of this Lease.
22. SUBORDINATION. This Lease is and shall be subordinate to
the lien of any mortgage or any other method of financing or refinancing now or
hereafter encumbering the Leased Premises, the Building or the Parcel (the
"Mortgage Lien") and to all advances made, or hereafter to be made, upon the
security thereof, and to any declaration of covenants, restrictions and
easements with respect to the Leased Premises. With respect to the construction
loan or financing, and the first permanent loan or refinancing, such
subordination shall be effective only upon the execution of the
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non-disturbance agreement in the form attached hereto as Exhibit G in favor of
Tenant, which non-disturbance agreement shall be executed fully by Landlord,
Tenant, and the construction lender or the initial permanent lender, as the case
may be. With respect to refinancings with different permanent lenders, Tenant
shall execute and deliver, upon request by Landlord, a subordination agreement
in the form attached hereto as Exhibit G or otherwise in form and substance as
is customary for tenants of comparable size and creditworthiness if such
subordination agreement provides that the rights of Tenant under this Lease and
the possession of the Leased Premises by Tenant shall not be disturbed so long
as Tenant is not in default hereunder. If any proceedings are brought for the
foreclosure of any Mortgage Lien (the "Foreclosure Proceedings"), then Tenant
shall: (a) attorn to the purchaser upon any sale resulting directly or
indirectly from the Foreclosure Proceedings; and (b) recognize the purchaser as
Landlord hereunder. If, as a result of the Foreclosure Proceedings, any Mortgage
Lien is foreclosed, then the foreclosed Landlord shall liable to Tenant
hereunder for any Landlord Defaults that occurred prior to the foreclosure of
the Mortgage Lien. Upon request by Landlord, Tenant shall execute and deliver an
estoppel certificate in the form attached hereto as Exhibit H or otherwise in
form and substance as reasonably requested by Landlord or as reasonably
requested by any purchaser, mortgage lender or lien holder. Upon request by
Tenant, Landlord shall execute and deliver an estoppel certificate in form and
substance as reasonably requested by Tenant or any lender.
23. COVENANT OF QUIET ENJOYMENT. Landlord represents and
warrants that: (a) it has all necessary right, title and interest in the Leased
Premises to enter into this Lease and grant Tenant the tenancy hereunder; (b) as
of the date hereof, Landlord owns the Leased Premises in fee simple, subject
only to the matters identified on Exhibit I, which matters shall constitute
permitted encumbrances (the "Permitted Encumbrances"); (c) the zoning
classification "I-2" applies to the Parcel, and, under that zoning
classification, all of the uses listed on Exhibit L are permitted; and (d) after
the Substantial Completion Date, Landlord shall keep the Leased Premises free
from mechanics liens or claims or other similar liens or claims asserted by
lienors or claimants having performed work for or at the direction of Landlord.
Landlord agrees that if Tenant observes and performs all of its covenants
hereunder, then, at all times during the Lease Term, Tenant shall have the
peaceable and quiet enjoyment of possession of the Leased Premises, without any
manner of hindrance.
24. MECHANIC'S LIENS. Tenant shall not suffer or cause the
filing of any mechanic's lien against the Leased Premises. If any mechanic's
lien is filed against the Leased Premises or any part thereof for work claimed
to have been done for, or material claimed to have been furnished to, Tenant,
other than Landlord's Work, then Tenant shall: (a) cause such mechanic's lien to
be discharged of record within 30 days after notice of the filing by bonding or
as provided or required by law; or (b) provide evidence that the lien is being
contested by proceedings adequate to prevent foreclosure of the lien, together
with a title insurance endorsement over such lien or a satisfactory indemnity
(in either case in an amount equal to at least 150% of the claimed lien) to
Landlord within 30 days after notice of the filing thereof. All liens suffered
or
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caused by Tenant shall attach to Tenant's interest only. Nothing in this Lease
shall be deemed or construed to constitute consent to, or request of, any party
for the performance of any work for, or the furnishing of any materials to,
Tenant, nor as giving Tenant the right or authority to contract for, authorize
or permit the performance of any work or the furnishing of any materials that
would permit the attaching of a mechanic's lien. Landlord shall deliver the
Building and Improvements to Tenant free of liens for work claimed to have been
done for, or materials claimed to have been furnished to, Landlord in the
performance of Landlord's Work. Landlord and Tenant each shall indemnify and
hold harmless the other from all claims, judgments, liabilities, losses, costs
and expenses (including, without limitation, reasonable attorneys' fees and
court costs) incurred by the other as a result of, or in connection with, any
mechanic's lien for work claimed to have been done for, or material claimed to
have been furnished to, Landlord or Tenant, respectively.
25. NOTICES. Any notice, statement, invoice, demand, request,
or consent required or permitted to be given or delivered by either party to
this Lease shall be in writing and shall be deemed to have been duly given or
delivered: (a) on the date of delivery, if delivery is made in person; (b) on
the date of transmission, if delivery is made by electronic facsimile
transmission with electronic confirmation of receipt; or (c) on the date of
deposit, if delivery is made by a national overnight courier service; in any
case if addressed to the other party as follows:
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<PAGE> 36
<TABLE>
<S> <C> <C> <C>
Landlord: c/o Browning Investments, Inc. Tenant: c/o Brightpoint, Inc.
Capital Center North Tower 6402 Corporate Drive
251 N. Illinois Street, Suite 200 Indianapolis, Indiana 46278
Indianapolis, Indiana 46204 Attention: General Counsel
Attention: James C. Snyder Facsimile No. 317-387-5479
Facsimile No. 317-237-2819
</TABLE>
Any party may change its address for notice from time to time by delivering
notice to the other party as provided above.
26. MISCELLANEOUS PROVISIONS.
(a) Memorandum of Lease. The parties hereto shall not record
this Lease in the Hendricks County Recorder's Office, but each party
shall execute upon request of the other a "memorandum of lease"
suitable for recording. All costs and expenses associated with
preparing, executing and recording a "memorandum of lease" shall be
borne by the party requesting execution of such document.
(b) Relationship of Parties. Nothing contained herein shall be
deemed or construed by the parties hereto or by any third party as
creating between the parties hereto the relationship of principal and
agent, partnership, joint venture, or any relationship other than the
relationship of landlord and tenant.
(c) Waivers of Covenants. No waiver of any covenant, term or
condition or the breach of any covenant, term or condition of this
Lease shall be deemed to constitute a waiver of any subsequent breach
of such covenant, term or condition nor justify or authorize a
non-observance upon any occasion of such covenant, term or condition or
any other covenant, term or condition, and the acceptance of Rent by
Landlord at any time when Tenant is in default of any covenant, term or
condition shall not be construed as a waiver of such default or any
right or remedy of Landlord on account of such default.
(d) Accord and Satisfaction. No payment by Tenant or receipt
by Landlord of a lesser amount than the Rent due hereunder shall be
deemed to be other than on account of the Rent first due hereunder;
provided that Landlord shall not apply payments by Tenant to items of
Rent with respect to which there exists a good faith dispute of which
Tenant has delivered to Landlord a written notice describing with
particularity the nature of such dispute. No endorsement or statement
on
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<PAGE> 37
any check or letter accompanying any check or payment of Rent shall be
deemed to be an accord and satisfaction, and Landlord may accept any
such check or payment without prejudice to the right of Landlord to
recover the balance of such Rent or to pursue any other right or
remedy.
(e) Remedies Cumulative. The rights and remedies of Landlord
and Tenant hereunder shall be cumulative, and no one of them shall be
deemed or construed as exclusive of any other or of any right or remedy
provided by law or in equity. The exercise of any one such right or
remedy by the Landlord or Tenant shall not impair its standing to
exercise any other such right or remedy.
(f) Successors and Assigns. Subject to the terms and
conditions of Section 14 hereof, this Lease and all of the covenants,
terms and conditions hereof shall inure to the benefit of, and be
binding upon, the respective heirs, executors, administrators,
successors and assigns of Landlord and Tenant, except as otherwise
expressly provided herein.
(g) Construction of Lease. Whenever in this Lease a singular
word is used, it shall also include the plural wherever required by the
context and vice versa. Exhibits A-1, A-2, A-3, B, C, D-1, D-2, D-3,
D-4, E, G, H, I, J, K, L, and M are incorporated herein by reference.
This Lease shall be construed in accordance with the laws of the State
of Indiana. The captions of this Lease are for convenience only and do
not in any way limit or alter the terms and conditions of this Lease.
All references in this Lease to periods of days shall be construed to
refer to calendar, not business, days. Notwithstanding anything set
forth herein, if Landlord or Tenant, as the case may be, is delayed in,
or prevented from: (i) completing Landlord's Work on or before the
applicable dates set forth in Section 6 hereof; (ii) correcting
Punch-List items within the applicable periods specified under Section
10 hereof; or (iii) otherwise observing or performing any of its
covenants hereunder, other than the payment of money, as the result of
an act or omission of the other party or any other cause that is not
within the control of the delayed or prevented party (including,
without limitation, inclement weather and the unavailability of
materials, equipment, services or labor) (the "Event(s) of Force
Majeure"), then such completion, correction, observation or performance
shall be excused for the period of days that such completion,
correction, observation or performance is delayed or prevented, and the
dates set forth in Section 6 hereof, the periods specified under
Section 10 hereof and other deadlines for observation and performance,
as the case may be, shall be extended for the same period. Landlord or
Tenant, as the case may be, shall deliver to the other party written
notice within ten days after Landlord or Tenant, as the case may be,
becomes aware: (i) of an Event of Force Majeure that will delay or
prevent observance or performance of any of its covenants hereunder
(the "Force Majeure Notice"); and (ii) that such Event of Force Majeure
has ceased to delay or
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<PAGE> 38
prevent observance or performance of its covenants hereunder; provided
that, in the Force Majeure Notice, Landlord or Tenant, as the case may
be, shall describe the Event of Force Majeure with specificity.
(h) Prior Agreements. All prior representations, promises and
undertakings by or between the parties hereto with respect to the
subject matter of this Lease are merged into, and expressed in, this
Lease, and any and all prior agreements between such parties with
respect thereto are hereby canceled. This Lease shall not be amended,
modified, or supplemented, except by a written agreement duly executed
by both Landlord and Tenant.
(i) Severability. The invalidity or unenforceability of any
particular provision of this Lease shall not affect the other
provisions, and this Lease shall be construed in all respects as if
such invalid or unenforceable provision had not been contained herein.
(j) Counterparts. This Lease may be executed in separate
counterparts, each of which when so executed shall be an original, but
all of such counterparts shall together constitute but one and the same
instrument.
(k) Authority. Each person executing this Lease other than on
behalf of themselves represents and warrants that he or she has been
duly authorized to execute and deliver this Lease by the entity for
which he or she is signing, and this Lease is the valid and binding
agreement of such entity, enforceable in accordance with its terms.
(l) Obligation of Reasonableness. Wherever under this Lease
consent or approval is required by either party, such consent or
approval shall not be withheld, conditioned, or delayed unreasonably.
(m) Environmental Condition. Landlord represents and warrants
to Tenant that, to Landlord's actual knowledge and except as disclosed
by the environmental assessment reports prepared with respect to the
Leased Premises and the Park and provided to Tenant: (i) neither the
Leased Premises nor the Park has been used for the treatment, disposal,
or storage of Hazardous Substances; (ii) no Hazardous Substances are
present or were installed, exposed, released or discharged in, on,
under, or from the Leased Premises or the Park at any time during or
prior to Landlord's ownership thereof, and neither Landlord nor any
prior owner or occupant of the Leased Premises or the Park has used
Hazardous Substances therein; (iii) no UST's for petroleum products or
any other Hazardous Substances are or were located on the Leased
Premises or the Park at any time during or prior to Landlord's
ownership thereof; and
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<PAGE> 39
(iv) neither the Leased Premises nor the Park has been used or operated
in violation of Applicable Laws governing Hazardous Substances.
(n) Environmental Indemnity. Landlord agrees to indemnify,
defend (by counsel reasonably acceptable to Tenant), protect and hold
harmless Tenant, BPI, and any party affiliated with Tenant from and
against any and all claims, judgments, liabilities, losses, costs and
expenses (including without limitation, reasonable attorneys' fees and
court costs) arising from, or in connection with: (i) any storage or
usage of any Hazardous Substances by Landlord (or its employees,
agents, contractors, invitees or licensees) in, on or about the Leased
Premises; (ii) any transportation of any Hazardous Substances to or
from the Leased Premises by Landlord (or its employees, agents,
contractors, invitees or licensees); or (iii) the inaccuracy of any of
the representations set forth in Subsection 26(m). The claims,
judgments, liabilities, losses, costs and expenses from and against
which Landlord has agreed to indemnify, defend, protect and hold
harmless Tenant and any party affiliated with Tenant under this
Subsection shall include the following: (i) any obligation or liability
of Landlord or Tenant under any of the Applicable Laws to remove any
Hazardous Substance or contaminated soil or groundwater from the Leased
Premises, "clean up" any contamination of the soil or the groundwater
in, on or under the Leased Premises, or perform any monitoring or
remediation of or for the Leased Premises; (ii) all charges, fines or
penalties imposed by governmental authority or under any of the
Applicable Laws governing Hazardous Substances; and (iii) all claims
by, and liabilities to, any third party. Landlord agrees, at its cost
and expense, and in accordance with Applicable Laws, to monitor,
remediate, and pay any charges, fines, or penalties related to, any
Hazardous Substances or petroleum products present at, on, or under, or
released from the soil or groundwater of, the Leased Premises or the
Park prior to the Commencement Date; provided that the presence of such
Hazardous Substances or petroleum products is not related to any action
or omission of Tenant or its employees, agents, contractors, invitees
or licensees. The obligations of Landlord under this Subsection shall
survive the expiration or earlier termination of this Lease.
(o) Expansion Option. The terms and conditions of Tenant's
option to expand the Leased Premises are set forth on the attached
Exhibit J.
(p) Purchase Option. The terms and conditions of Tenant's
option to purchase the Leased Premises are set forth on the attached
Exhibit M.
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(q) Title Insurance Policy. Landlord shall provide to Tenant a
leasehold policy of title insurance in amounts and with coverages
reasonably acceptable to Tenant.
27. LANDLORD CONVEYANCE. Landlord shall not cause or permit any
conveyance or transfer of fee title to the Leased Premises, without the prior
written consent of Tenant, which consent shall not be withheld or delayed
unreasonably; provided that the terms and conditions of this Section shall not
apply to: (a) any changes in the ownership of Landlord, so long as Michael G.
Browning ("Browning") remains in control of Landlord; (b) conveyances or
transfers to another entity controlled by Browning or that result from the death
of Browning; or (c) conveyances or transfers to an individual or entity that has
the financial wherewithal at the time of the conveyance or transfer to satisfy
the obligations of Landlord under this Lease. Notwithstanding anything set forth
herein, the terms and conditions of this Section shall not apply to, or limit or
affect in any manner: (a) any Mortgage Lien; (b) the right or ability of
Landlord to finance or refinance the Leased Premises, the Building or the Parcel
and encumber the Leased Premises with a Mortgage Lien securing such financing or
refinancing; (c) the rights and remedies of any mortgage lender or lien holder
under, or with respect to, a Mortgage Lien or the financing or refinancing that
the Mortgage Lien secures or the ability of the mortgage lender or lien holder
to exercise such remedies (including without limitation, foreclosure of any
Mortgage Lien or acceptance of a deed in lieu of foreclosure); or (d) the
performance by Tenant of its obligations under Section 22. Notwithstanding
anything set forth herein, after fee title to the Leased Premises has been
conveyed or transferred as permitted by this Section to an individual or entity
who or that is not Browning or controlled by Browning, this Section shall have
no further force or effect.
IN WITNESS WHEREOF, the parties have executed or caused the
execution of this Lease by their respective officers duly authorized as of the
day and year first above written.
LANDLORD:
AIRTECH PARKWAY ASSOCIATES, LLC
By: /S/ Michael G. Browning
-----------------------------------
Printed: Michael G. Browning
------------------------------
Title: Member
--------------------------------
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TENANT:
BRIGHTPOINT NORTH AMERICA, INC.
By: /s/ Steven E. Fivel
----------------------------
Printed: Steven E. Fivel
-----------------------
Title: Vice President
-------------------------
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<PAGE> 42
EXHIBIT A-1
PARCEL & PARK
Brightpoint Lot, Airtech Business Park
Graphic cannot be reproduced
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EXHIBIT A-2
PARCEL DESCRIPTION
LAND DESCRIPTION
A part of the land of Six Points Associates, LLC, recorded in Volume 3, pages
84-93 and a part of the land of Six Points Associates, LLC recorded in Deed Book
337, pages 610-611 in the Office of the Recorder in Hendricks County, Indiana
and a part of the Southeast quarter of Section 30, the Southwest quarter of
Section 29, the Northwest quarter of Section 32 and the Northeast quarter of
Section 31 all in Township 15 North, Range 2 East of the Second Principal
Meridian in Guilford Township, Hendricks County, Indiana more particularly
described as follows:
Commencing at the Southeast corner of said Northeast quarter of Section 31, a
Hendricks County disk found per County Surveyor; thence along the South line of
said Northeast quarter of Section 31, South 89 degrees 38 minutes 49 seconds
West (assumed bearing) 86.51 feet; thence North 00 degrees 19 minutes 50 seconds
East 85.31 feet; thence continue North 00 degrees 19 minutes 50 seconds East
2387.15 feet to the POINT OF BEGINNING; thence continue North 00 degrees 19
minutes 50 seconds East 1194.98 feet; thence South 89 degrees 52 minutes 01
seconds East 1084.14 feet; thence South 00 degrees 07 minutes 59 seconds West
988.42 feet to the South line of said Southwest quarter of Section 29; thence
along said South line South 89 degrees 52 minutes 01 seconds East 331.39 feet to
the East line of the West half of said Northwest quarter of Section 32; thence
along said East line South 00 degrees 21 minutes 12 seconds West 710.48 feet;
thence North 89 degrees 40 minutes 10 seconds West 254.50 feet; thence parallel
with said East line North 00 degrees 21 minutes 12 seconds east 499.03 feet;
thence North 89 degrees 40 minutes 10 seconds West 1164.14 feet to the POINT OF
BEGINNING, containing 34.362 acres.
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EXHIBIT A-3
SITE PLAN WITH BUILDING
Expansion Parcel
Graphic Cannot be Reproduced
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<PAGE> 45
EXHIBIT B
BASE RENT
Base Rent during the Initial Lease Term shall be:
<TABLE>
<CAPTION>
<S> <C>
Commencement Date - Year 3 $2,519,199 per annum
Year 4 - Year 7 $2,782,600 per annum
Year 8 - Year 11 $3,240,063 per annum
Year 12 - Year 15 $3,771,082 per annum
Year 16 - Expiration Date $4,302,626 per annum
</TABLE>
Base Rent during each Extension Term shall be the lower of the Fair Market
Rental (as defined below) or the following amounts (the "Fixed Rental Rate"):
<TABLE>
<CAPTION>
<S> <C>
First Extension Term $9.80 per square foot per annum
Second Extension Term $11.05 per square foot per annum
Third Extension Term $12.57 per square foot per annum
Fourth Extension Term $14.10 per square foot per annum
Fifth Extension Term $16.10 per square foot per annum
</TABLE>
provided that the Base Rent shall not be lower than $3,787,056 per annum during
any Extension Term (the "Minimum Extension Rent").
The "Fair Market Rental" shall be the per annum rate of minimum rent on or about
the Extension Date for comparable office and distribution/warehouse space in
buildings at comparable locations in the Park or within a radius of ten miles
from the Leased Premises, excluding amounts attributable to amortization of
brokerage fees, tenant finish costs, or tenant inducements paid or provided by
landlords of such buildings.
If Tenant exercises its option to extend the term of this Lease pursuant to
Section 2 hereof, then, on or before the date that is one month after the
Extension Date, Landlord shall deliver to Tenant written notice setting forth
its good faith determination of the Fair Market Rental (the "Fair Market Rental
Notice"). Within 15 days after Landlord delivers the Fair Market Rental Notice
to Tenant, Tenant shall deliver to Landlord written notice accepting or
rejecting Landlord's determination of the Fair Market Rental. If Tenant fails to
so notify Landlord, then Tenant shall be deemed to have accepted Landlord's
determination as the Fair Market Rental for the purposes of this Exhibit, and
the Term shall be extended pursuant to Section 2 of this Lease. If Tenant
rejects Landlord's determination of the Fair Market Rental in accordance with
the terms and conditions of this Exhibit, then, within 15 days thereafter,
Landlord and Tenant jointly shall appoint a qualified, independent MAI appraiser
(the "Qualified Appraiser"). If Landlord and Tenant are unable to agree upon the
Qualified Appraiser within the specified period, then, within 15 days
thereafter: (a) Landlord and Tenant each shall appoint a Qualified Appraiser;
and (b) the Qualified Appraisers appointed by Landlord and Tenant jointly shall
appoint an additional Qualified Appraiser (collectively, the "Appraiser Panel").
Within one month after the date on which the Qualified Appraiser or the
Appraiser Panel, as the case may be, is appointed, the Qualified Appraiser or
the Appraiser Panel, as the case may be, shall determine the Fair Market Rental
with respect to the Leased Premises. The determination of the Qualified
Appraiser or the Appraiser Panel, as the
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case may be, shall be the Fair Market Rental for the purposes of this Exhibit.
Within 15 days after the Qualified Appraiser or the Appraiser Panel, as the case
may be, determines the Fair Market Rental, Tenant shall deliver to Landlord
written notice confirming or rescinding the exercise of its option to extend the
Term. If Tenant fails to so notify Landlord, then: (a) Tenant shall be deemed to
have confirmed the exercise of its option to extend the Term; and (b) the Term
shall be extended pursuant to Section 2 of this Lease. All costs and fees
incurred to have the Qualified Appraiser or the Appraiser Panel determine the
Fair Market Rental shall be split equally between Landlord and Tenant; provided
that, if: (a) the Fair Market Rental, as determined by the Qualified Appraiser
or the Appraiser Panel, as applicable, is equal to or greater than Landlord's
determination of the Fair Market Rental, as set forth in the Fair Market Rental
Notice; and (b) Tenant rescinds the exercise of its option to extend the Term;
then Tenant shall pay all such costs and fees.
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EXHIBIT C
CONSTRUCTION SCHEDULE
Graphic Cannot be Reproduced
Brightpoint 2000/Warehouse
Arch/Eng
Excavation/Site Prep.
Site Utilities
Footing & Foundations
Slab on Grade
Order/Fab. & Erect Structural
Precast/Brick/Dryvet
Roof
Caulking
Alum. & Glazing
Door Frames
Doors & Hardware
Interior Wall Framing
Drywall
Ceramic Tile
Carpet
Vinyl Tile
Ceilings
Painting
Overhead Doors
Plumbing Underground
Plumbing
Electrical Underground
Electrical
HVAC
Fire Protection
Signage
Site Concrete
Asphalt Paving
Landscaping
Punch List
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<PAGE> 48
EXHIBIT C
CONSTRUCTION SCHEDULE-PAGE 2
Graphic Cannot be Reproduced
Brightpoint 2000/ Office
Arch/Eng
Slab on Grade
Precast
Roof
Caulking
Alum. & Glazing
Door Frames
Doors & Hardware
Interior Wall Framing
Drywall
Ceramic Tile
Carpet
Vinyl Tile
Ceilings
Painting
Wall covering
Plumbing Underground
Plumbing
Electrical Underground
Electrical
HVAC
Fire Protection
Telephone Install
Punch List
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<PAGE> 49
EXHIBIT D-1
LANDLORD'S WORK
The Landlord will construct the building in accordance with the plans and
specifications prepared by CSO Architects & Interiors, Inc. which include:
<TABLE>
<CAPTION>
Plan Index Last Revision Date
---------- ------------------
<S> <C> <C>
SO/SOA General Notes/Typical Details 07/27/98
S1 Composite Foundation 07/27/98
S1A Foundation Plan, Area A 07/27/98
S1B Foundation Plan, Area B 07/27/98
S1C Foundation Plan, Area C 07/27/98
S1D Foundation Plan, Area D 07/27/98
S1E Foundation Plan, Area E 07/27/98
S1F Foundation Plan, Area F 07/27/98
S2 Composite Mezzanine Plan 07/27/98
S2A Second Floor Framing Plan, Area A 07/27/98
S2B Second Floor Framing Plan, Area B 07/27/98
S3 Composite Roof Framing Plan 07/27/98
S3A Roof Framing Plan, Area A 07/27/98
S3B Roof Framing Plan, Area B 07/27/98
S3C Roof Framing Plan, Area C 07/27/98
S3D Roof Framing Plan, Area D 07/27/98
S3E Roof Framing Plan, Area E 07/27/98
S3F Roof Framing Plan, Area F 07/27/98
S4-S5A Sections and Details 07/27/98
S6 Steel Elevations 07/27/98
A101 Overall Floor Plan 08/05/98
A102 Overall Roof Plan 08/05/98
A201 First Floor Area "A" 08/05/98
A202 First Floor Area "B" 08/05/98
A203 First Floor Area "C" 08/05/98
A204 First Floor Area "D" 08/05/98
A205 First Floor Area "E" 08/05/98
A206 First Floor Area "F" 08/05/98
A207 Enlarged Office Area "G" 08/05/98
A208 Enlarged Office Area "H" 07/06/98
A209 Enlarged Second Floor Office Area "G" 08/05/98
A210 Enlarged Second Floor Office Area "H" 08/05/98
A211 Enlarged Stair Plans and Details 08/05/98
A212 Enlarged Warehouse Restroom Plans 08/05/98
A301 Elevations 08/05/98
A302 Enlarged Elevations 08/05/98
A401 Warehouse Wall Sections 08/05/98
A402 Office Wall Sections 08/05/98
A403 Details 08/05/98
A404 Interior Wall Sections 08/05/98
A501/502 Door and Frame Schedules/Details 08/05/98
</TABLE>
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<PAGE> 50
EXHIBIT D-2
TENANT FINISH WORK
The Landlord will provide the following allowances for completion of the Tenant
Finish Work:
100,500 square feet of office space $3,588,654
395,240 square feet of warehouse space $1,289,504
Any cost savings for the Tenant Improvements as a result of a reduction in scope
will reduce the Base Rent for the Initial Lease Term by the difference between
the Allowances and the total cost of the Tenant Finish Work. Such reduction
shall be calculated in the same manner as the Base Rent. The allowance provides
for the finish out of 90,500 square feet of office. The second floor of the
office will have 10,000 square feet of unfinished space.
-50-
<PAGE> 51
EXHIBIT D-3
TENANT FINISH WORK
The Landlord will complete the Tenant Finish Work for the office in accordance
to the plans prepared by Carson Design Associates, Inc. and dated September 8,
1998, which include:
<TABLE>
<S> <C>
IN201A 1st Floor Plan, South
IN201B 1st Floor Plan, North
IN202A 2nd Floor Plan, South
IN202B 2nd Floor Plan, North
IN211A 1st Floor Ceiling Plan, South
IN211B 1st Floor Ceiling Plan, North
IN212A 2nd Floor Ceiling Plan, South
IN212B 2nd Floor Ceiling Plan, North
IN231A 1st Flr. Floor Pattern Plan, South
IN231B 1st Flr. Floor Pattern Plan, North
IN232A 2nd Flr. Floor Pattern Plan, South
IN232B 2nd Flr. Floor Pattern Plan, North
IN301 Interior Elevations
IN302 Interior Elevations
IN401 Wall Sections/Types
IN402 Miscellaneous Details
IN403 Miscellaneous Details
IN404 Miscellaneous Details
</TABLE>
The Landlord will complete the Tenant Finish Word for the warehouse in
accordance with plans and specifications to be prepared at a subsequent date and
to be attached to this Exhibit D-3 as an amendment.
-51-
<PAGE> 52
EXHIBIT D-4
CHANGE ORDERS
1. Tenant may propose one or more changes to the Construction Plans by
submitting to Landlord a written change order request (the "Change Order
Request"). With respect to the changes proposed in each individual Change Order
Request (the "Proposed Changes"), Landlord may evaluate: (a) all costs that
would be incurred to implement the Proposed Changes (including loan extension
commissions and fees, and additional debt service on construction loans) (the
"Change Order Costs"); (b) all savings that would result from implementing the
Proposed Changes (the "Change Order Savings"); (c) any delay that would result
from completing the Proposed Changes; and (d) whether the Proposed Changes
would: (i) materially affect the number of rentable square feet in the Building;
(ii) materially affect the quality of the materials used in the foundation,
floor structure, exterior walls, structural steel, roof, or other structural
parts of the Building; (iii) materially change the "footprint" of the Building;
or (iv) otherwise materially change the scope of Landlord's Work (collectively,
the "Material Scope Change(s)").
2. Landlord shall approve an individual Change Order Request, unless Landlord
reasonably concludes that: (a) implementing the Proposed Changes will cause a
delay in the completion of Landlord's Work; or (b) the Proposed Changes
constitute a Material Scope Change. Within ten business days after receipt of
the Change Order Request, Landlord shall deliver to Tenant a written notice
stating: (a) whether Landlord approves or disapproves the Change Order Request;
(b) the amount of the Change Order Costs; (c) the amount of the Change Order
Savings; and (d) if Landlord disapproves the Change Order Request, the specific
basis for the disapproval. If: (a) Landlord disapproves the Change Order Request
solely on the basis that implementing the Proposed Changes will cause a delay in
the completion of Landlord's Work; and (b) Tenant agrees to extend the periods,
dates, and deadlines applicable with respect to the completion of Landlord's
Work, including the periods, dates, and deadlines set forth in Subsection 6(l)
with respect to completion delays, one day for each day of delay as a result of
implementing the Proposed Changes; then the Proposed Changes shall be
implemented notwithstanding Landlord's disapproval. If: (a) Landlord approves an
individual Change Order Request; and (b) the Change Order Costs resulting from
the Proposed Changes exceed the Change Order Savings resulting from the Proposed
Changes; then Tenant shall reimburse Landlord on demand for all Change Order
Costs in excess of Change Order Savings, as such Change Order Costs are
incurred. Changes to the Construction Plans proposed by Tenant and approved by
Landlord, or implemented notwithstanding Landlord's disapproval, shall be
implemented on a "cost plus 10%" basis. Such 10% addition shall be: (a) for
overhead and profit of the general contractors and the subcontractors; and (b)
included as a Change Order Cost.
3. If Landlord approves a Change Order Request, then Tenant shall have five
business days within which to deliver to Landlord a written notice stating its
desire to execute a change order finalizing the inclusion of the Proposed
Changes into the
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<PAGE> 53
Construction Plans (the "Change Order"). If Tenant delivers such a written
notice to Landlord within the specified period, then Landlord and Tenant shall
execute the Change Order. If Tenant does not deliver such a written notice to
Landlord within the specified period, then Tenant shall be deemed to have
abandoned its Change Order Request, and Landlord's Work shall be completed in
accordance with the then current Construction Plans. If Tenant abandons, or is
deemed to have abandoned, its Change Order Request, then Tenant promptly shall
reimburse Landlord for any reasonable costs incurred by Landlord as a result of
the evaluation by Landlord of the Change Order Request.
4. Landlord may make changes to the Construction Plans if such changes are
required: (a) by the Applicable Laws; or (b) to correct mistakes or inadequacies
in the Construction Plans (the "Landlord Permitted Change(s)"); by submitting to
Tenant a Change Order Request setting forth the Proposed Changes. If Landlord
delivers to Tenant a Change Order Request with respect to a Landlord Permitted
Change, then Tenant shall have ten business days within which to evaluate the
Change Order Request and confirm that the Proposed Changes are Landlord
Permitted Changes; provided that, if Tenant fails to: (a) object in writing to
the Change Order Request within the stated period; or (b) state in such writing
the specific basis for objecting
-53-
<PAGE> 54
to the Change Order Request; then Tenant shall be deemed to have confirmed that
the Proposed Changes are Landlord Permitted Changes. If Tenant confirms, or is
deemed to have confirmed, that the Proposed Changes are Landlord Permitted
Changes, then Landlord and Tenant shall execute a Change Order. Landlord
Permitted Changes shall be implemented at the expense of Landlord, and shall not
result in an increase in Rent.
-54-
<PAGE> 55
EXHIBIT E
Acceptance Letter
Airtech Parkway Associates, LLC
- --------------------------------
- --------------------------------
RE: Leased Premises located at Airtech Park
Gentlemen:
The undersigned, as "Tenant" under that certain Lease dated
____________________, 1998, made with Airtech Parkway Associates, LLC, an
Indiana limited liability company (the "Landlord"), hereby certifies:
1. That the Leased Premises have been substantially completed in accordance with
the terms and conditions of the Lease, subject to Latent Defects, Punch-List
items listed on Schedule I, attached hereto, and Warranty Items;
1. That Tenant has accepted possession of the Leased Premises, subject to the
terms and conditions of the Lease and to Latent Defects, Punch-List items listed
on Schedule I, and Warranty Items, and Tenant now occupies the Leased Premises;
1. That Tenant has paid to Landlord all required amounts for allowance overages
and change orders, and the final schedule of Base Rent is attached hereto as
Schedule II; and
1. The Commencement Date of the Lease is ______________________________, _____.
Dated: __________________________, 2000
TENANT:
By:
Printed:
Title:
-55-
<PAGE> 56
Accepted and agreed to by: LANDLORD:
By:
Printed:
Title:
-56-
<PAGE> 57
EXHIBIT G
SUBORDINATION, NON-DISTURBANCE AND
ATTORNMENT AGREEMENT
This Subordination, Non-Disturbance, and Attornment Agreement
(the "Agreement"), dated the ____ day of __________, 199__, by and among
______________________________ (the "Mortgagee"), ______________________________
(the "Landlord") and ______________________________, (the "Tenant"), having its
principal place of business at ________________________________, WITNESSES:
WHEREAS, Tenant has entered into a lease dated the ___ day of
__________, 199_ (the "Lease"), pursuant to which Tenant has leased certain
premises located at ___________________________, as more particularly described
in the Lease (the "Leased Premises");
WHEREAS, Mortgagee has agreed to make a mortgage loan in the
amount of $___________ (the "Mortgage") to ____________________, the "Landlord"
under the Lease;
WHEREAS, Tenant desires to be assured of the continued use
and occupancy of the Leased Premises under the terms of the Lease; and
WHEREAS, Mortgagee agrees to such continued use and occupancy
by Tenant; provided that Tenant agrees to recognize and attorn to Mortgagee or
to the purchaser in the event of foreclosure or otherwise;
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, Mortgagee and Tenant
agree as follows:
1. The Lease is and shall be subject and subordinate to the Mortgage and
to all renewals, modifications, consolidations, replacements, and
extension of the Mortgage, to the full extent of amounts secured
thereby and interest thereon.
2. Tenant agrees that, in the event any proceedings are brought for the
foreclosure of the Mortgage, it will attorn to the purchaser at such
foreclosure sale and recognize such purchaser by virtue of such
foreclosure to be deemed to have assumed and agreed to be bound, as
substitute landlord, by the terms and conditions of the Lease, until
the resale or other disposition of its interest by such purchaser,
except that: (a) such assumption shall not be deemed of itself to be an
acknowledgment by such purchaser of the validity of any then
existing claims of Tenant against the prior landlord, or the release
by Tenant of such claims against the prior landlord; and (b) such
purchaser shall remain liable after the resale or other disposition of
its interest for defaults by such purchaser after such foreclosure
sale and before such resale or other disposition. All rights and
obligations herein and hereunder shall continue as though such
foreclosure proceedings had not been brought, except as aforesaid.
Tenant agrees to execute and deliver to any such purchaser such
further assurances and all other documents, including a new lease
upon the same terms and conditions as the Lease, confirming the
foregoing as such purchaser reasonably may request, except that
entering into such new lease shall not be deemed of itself to release
the claims of Tenant against the prior landlord under the Lease.
-57-
<PAGE> 58
3. So long as there is no uncured Tenant Default under the terms and
conditions of the Lease, the right of possession of Tenant to the
Leased Premises, and the terms and conditions of the Lease, shall not
be affected or disturbed by Mortgagee in the exercise of its rights and
remedies under the Mortgage. If it should become necessary to foreclose
the Mortgage, or if Mortgagee otherwise should come into possession of
the Leased Premises, then Mortgagee will not join Tenant under the
Lease in summary or foreclosure proceedings, and will not disturb the
use and occupancy of Tenant under
-58-
<PAGE> 59
the Lease, so long as Tenant is not in default under any of the terms,
covenants, or conditions of the Lease beyond the applicable notice and
cure period, and has not prepaid the rent except monthly in advance as
provided by the terms of the Lease.
4. Tenant agrees to give Mortgagee, by certified mail, a copy of any
notice of default served upon Landlord; provided that, prior to such
notice, Tenant has been notified in writing of the address of
Mortgagee. Tenant further agrees that Mortgagee shall have the right to
cure any such default on behalf of the Landlord.
5. The subordination of Tenant's leasehold estate to the lien of the
Mortgage shall not subordinate in any way the rights of Tenant with
respect to any insurance proceeds payable by reason of a casualty loss
to the Leased Premises or to any of the property of Tenant located
therein or thereon. Such subordination shall not subordinate in any way
any rights of Tenant for recovery of any sums due to Tenant under the
terms and conditions of the Lease as a result of an exercise, or threat
of exercise, of the power of eminent domain. Mortgagee agrees that the
terms and conditions of the Lease shall govern the rights of Tenant
with respect to casualty insurance proceeds and recoveries due to
eminent domain.
6. Mortgagee or the ultimate purchaser shall not be or become subject to
any liability or obligation under the Lease or otherwise by virtue of
this Agreement until Mortgagee or such purchaser shall have acquired
the interest of Landlord in the Leased Premises, by foreclosure or
otherwise, and then only to the extent of liabilities or obligations
accruing subsequent to the date that Mortgagee or such purchaser has
acquired the interest of Landlord in the Leased Premises.
7. Nothing contained in this Agreement shall be construed as limiting the
right of Tenant to offset claims against the Landlord against the
rents, as expressly provided in Section 20 of the Lease.
8. All notices required under this Agreement shall be deemed to be
properly served if such notices are in writing, and are delivered
personally or sent by certified mail, return receipt requested, to
Tenant at: __________________________, Attention: _______________; to
Landlord____________ at: __________________________, Attention:
_______________; and to Mortgagee at:
__________________________, Attention:________________. Any party
hereto may change its address for purposes of
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<PAGE> 60
notice by delivering notice to the other parties in the manner set
forth in this Section. The date of service for notice sent by certified
mail shall be the date on which such notice is deposited with the
United States Postal Service.
The provisions of this Agreement are binding upon, and shall
inure to the benefit of, the successors and assigns of Mortgagee, Landlord, and
Tenant.
IN WITNESS WHEREOF, Mortgagee, Landlord, and Tenant have
executed this Agreement as of the day and year first written above.
MORTGAGEE:
------------------------------
By:
-------------------------------------
Printed:
--------------------------------
Title:
----------------------------------
TENANT:
---------------------------------
By:
-------------------------------------
Printed:
--------------------------------
Title:
----------------------------------
LANDLORD:
-------------------------------
-60-
<PAGE> 61
-------------------------------------
By:
--------------------------------------
Printed:
---------------------------------
Title:
-----------------------------------
-61-
<PAGE> 62
EXHIBIT H
ESTOPPEL CERTIFICATE
TO: _________________________ (the "Mortgagee") and __________________________
(the "Landlord")
THIS IS TO CERTIFY THAT:
1. The undersigned is the tenant (the "Tenant") under that certain lease dated
_______________, 199_ (the "Lease"), by and between Landlord and Tenant, with
respect to that certain premises commonly known as ____________________, and to
which the Lease refers to as the "Leased Premises".
2. The Lease: (a) is valid and in full force and effect on the date hereof; (b)
represents the entire agreement between Tenant and Landlord with respect to the
Leased Premises; (c) is the only agreement between Landlord and Tenant affecting
or relating to the Leased Premises; and (d) has not been modified, changed,
altered, assigned, supplemented, or amended in any respect, except as indicated
below (if none, state "none").
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
3. Tenant has no outstanding options or rights of first refusal to purchase the
Leased Premises or any part thereof, or all or any part of the real property of
which the Leased Premises is a part, except or the option to purchase the Leased
Premises set forth in Exhibit M to the Lease.
4. Tenant has accepted and now occupies the Leased Premises, and is and has been
conducting its business in the Leased Premises since _______________, 199_. The
term of the Lease has commenced on _______________, 199_, and the expiration
date of the term of the Lease (other than unexercised options to extend the
Lease) will occur on _______________, 199_.
5. Tenant has not sublet the Leased Premises or any part thereof, or assigned
any of its rights under the Lease, except as indicated below (if none, state
"none"). _____________________________________
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
6. Tenant has paid rent for the Leased Premises for the period up to and
including _______________, 199_. The current base rent payable by Tenant is
$________ per month. No such rent has been paid more than one month in advance
of its due date, except as indicated below (if none, state "none"). ___________
-62-
<PAGE> 63
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
7. All conditions under the Lease to be performed by Landlord have been
satisfied; no event has occurred, and no condition exists that, with the giving
of notice or the lapse of time or both, will constitute a default under the
Lease; and Tenant has no existing defenses, offsets, or credits against the
enforcement of the Lease by Landlord or the payment of rent for the Leased
Premises, except as indicated below (if none, state "none").
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
8. No actions, whether voluntary or otherwise, are pending against Tenant (or
any general partner of Tenant if Tenant is a partnership) under the bankruptcy
laws of the United States or any state thereof, except as indicated below (if
none, state "none"). ____________________________________________________
- ------------------------------------------------------------------------------
- ------------------------------------------------------------------------------
9. Tenant's current notice address is: _______________________________________
- ------------------------------------------------------------------------------
10. The undersigned is authorized by all necessary action of Tenant to execute
this Estoppel Certificate on behalf of Tenant.
Dated this ____ day of __________, 199_.
TENANT:
-----------------------------
By:
---------------------------------
Printed:
----------------------------
Title:
------------------------------
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<PAGE> 64
EXHIBIT I
PERMITTED ENCUMBRANCES
1. Taxes for 1998 payable 1999, now a lien, not yet due and payable.
2. Subject to the following, as disclosed by preliminary survey, Project
No. 98036, by Fink Roberts & Petrie, Inc.:
(a) Existing fence lying 0.3 feet west of subject tract's surveyed
eastline;
(b) An overlap of 1.58 feet along the north side of tract
adjoining the Carlos L. Stout et al property (Book 266, page
482).
3. Primary and Secondary Plats for Airtech Park.
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<PAGE> 65
EXHIBIT J
OPTION TO EXPAND
During the first five years of the Initial Lease Term (the
"Option Period"), Tenant shall have the option to: (a) require Landlord to
construct a single expansion of the Building (the "Building Expansion") on that
certain parcel of real estate comprised of approximately 13.33 acres and
depicted and/or described on Exhibit A, attached hereto and incorporated herein
by reference (the "Expansion Parcel"); and (b) lease from Landlord the Building
Expansion and the Expansion Parcel (the "Expansion Premises"); all on the
following terms and conditions (the "Expansion Option"):
1. BUILDING EXPANSION. The Building Expansion shall contain a
minimum of 140,176 square feet of distribution/warehouse space; provided that
the square footage of the distribution/warehouse space contained in the Building
Expansion shall not exceed the maximum square footage of the
distribution/warehouse space that can be constructed on the Expansion Parcel:
(a) in accordance with usual and customary site development and construction
standards and techniques; and (b) in compliance with all Applicable Laws.
2. EXERCISE OF OPTION. Tenant may exercise its Expansion
Option at any time during the Option Period, so long as Tenant is not in default
hereunder, by providing written notice thereof to Landlord. If Tenant fails to
exercise its Expansion Option in accordance with the terms and conditions of
this Exhibit on or before the date on which the Option Period expires, then the
Expansion Option shall terminate and shall have no further force or effect,
without further notice from Landlord.
3. EXPANSION RENT. Tenant shall pay to Landlord an initial
base rent (the "Expansion Rent") for the Expansion Premises during the term of
the Expansion Lease in an amount that provides to Landlord a return on the total
investment of Landlord in the Expansion Premises, including, without limitation:
(a) land acquisition costs for the Expansion Parcel at the current market cost
of land when Tenant exercises its Expansion Option in accordance with the terms
and conditions of this Exhibit (including closing and due diligence costs); (b)
leasing commissions; (c) design, construction, and development costs; and (d)
costs to finance the acquisition, construction, and development (including loan
commissions and fees for the construction loan, debt service on the construction
loan until 45 days after the Expansion Completion Date (as defined in Section 9
of this Exhibit), and the loan commissions and fees for the first permanent
loan) (the "Landlord Investment"); with such return on the Landlord Investment
being equal to the market "cap rate" required by institutional real estate
investors at the time of the Expansion Completion Date from comparable
distribution/warehouse projects leased to tenants of creditworthiness comparable
to Tenant; provided that, in no case shall such return on the total investment
be less than 11.4% per annum. The initial Expansion Rent, as determined in
accordance with the terms and conditions of this Section and Sections 4 and 6 of
this Exhibit, shall be increased whenever, during the Initial Lease Term or any
Extension Term, Base Rent
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<PAGE> 66
increases for the Leased Premises, on a compounded basis, to reflect a 2% annual
increase. The Expansion Rent shall be payable in equal monthly installments and
in accordance with the terms and conditions set forth in Section 3 of the Lease.
4. MARKET CAP RATE. If Tenant exercises the Expansion Option in
accordance with the terms and conditions of this Exhibit, then, on or before the
date that is one month after the date on which Tenant exercises the Expansion
Option, Landlord shall deliver to Tenant written notice setting forth its good
faith determination of the market "cap rate" as described in Section 3 of this
Exhibit (the "Market Cap Rate Notice"). Within 15 days after Landlord delivers
the Market Cap Rate Notice to Tenant, Tenant shall deliver to Landlord written
notice accepting or rejecting Landlord's determination of the market "cap rate".
If Tenant fails to so notify Landlord, then Tenant shall be deemed to have
accepted Landlord's determination as the market "cap rate" for the purposes of
this Exhibit. If Tenant rejects Landlord's determination of the market "cap
rate" in accordance with the terms and conditions of this Exhibit, then, within
15 days thereafter, Landlord and Tenant jointly shall appoint a Qualified
Appraiser. If Landlord and Tenant are unable to agree
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<PAGE> 67
upon the Qualified Appraiser within the specified period, then, within 15 days
thereafter: (a) Landlord and Tenant each shall appoint a Qualified Appraiser;
and (b) the Qualified Appraisers appointed by Landlord and Tenant jointly shall
appoint an additional Qualified Appraiser to constitute the Appraiser Panel.
Within one month after the date on which the Qualified Appraiser or the
Appraiser Panel, as the case may be, is appointed, the Qualified Appraiser or
the Appraiser Panel, as the case may be, shall determine the market "cap rate"
as described in Section 3 hereof. The determination of the Qualified Appraiser
or the Appraiser Panel, as the case may be, shall be the market "cap rate" for
the purposes of this Exhibit. All costs and fees incurred to have the Qualified
Appraiser or the Appraiser Panel determine the market "cap rate" shall be split
equally between Landlord and Tenant; provided that, if: (a) market "cap rate",
as determined by the Qualified Appraiser or the Appraiser Panel, as the case may
be, is equal to or greater than Landlord's determination of the market "cap
rate"; and (b) Tenant rescinds the exercise of the Expansion Option; then Tenant
shall pay all such costs and fees.
5. EXPANSION CONSTRUCTION. Landlord, at its cost and expense,
shall construct the Building Expansion in accordance with: (a) plans and
specifications jointly prepared by Landlord and Tenant and a construction
schedule prepared by Landlord and approved by Tenant, all as approved by
Landlord's mortgage lender or lien holder (the "Expansion Plans"); and (b) the
terms and conditions set forth in Subsections 6(a) through and including 6(k) of
the Lease and Section 7 of the Lease. Landlord and Tenant shall cooperate and
act with reasonable diligence to complete such plans and specifications promptly
after Tenant exercises its Expansion Option in accordance with the terms and
conditions of this Exhibit. The general contractor for construction of the
Building Expansion (the "Expansion Contractor") shall be: (a) selected by
Landlord; and (b) subject to the prior written approval of Tenant, which
approval shall not be withheld or delayed unreasonably; provided that, so long
as Browning Construction, Inc., or its successor or assign ("BCI"), is
controlled by its majority shareholder on the date hereof, BCI is approved by
Tenant to be the Expansion Contractor. Landlord shall keep, at its primary place
of business, a complete set of: (a) books and records of accounts with respect
to the Building Expansion; and (b) the Expansion Plans (collectively, the
"Records"). The Records shall be open to inspection and review by Tenant and its
employees and agents at all reasonable times, and upon reasonable notice, during
ordinary business hours.
6. EXPANSION CONTRACT. On or before the date that is one month
after the date on which Tenant exercises the Expansion Option, Landlord and the
Expansion Contractor shall execute a construction contract under which the
Expansion Contractor, as the general contractor, shall construct the Building
Expansion: (a) on a "fixed price" basis, which will include an allowance for
tenant improvements; and (b) in accordance with the Expansion Plans (the
"Expansion Contract"). As the Expansion Plans are completed, the Expansion
Contractor shall: (a) obtain pricing estimates from subcontractors and suppliers
for the work detailed in the Expansion Plans; (b) provide to Tenant copies of
such estimates; and (c) establish the "fixed price" under the Expansion
Contract.
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<PAGE> 68
7. EXPANSION CONFIRMATION. As preliminary amounts of Landlord
Investment and initial Expansion Rent become available, Landlord shall provide
to Tenant written notice of such preliminary amounts. When: (a) the "fixed
price" is established under the Expansion Contract; (b) a firm estimate of the
Landlord Investment is available; and (c) the market "cap rate" has been
established in accordance with the terms and conditions of Section 4 of this
Exhibit, Landlord shall notify Tenant in writing of the "fixed price", the firm
estimate of the Landlord Investment, the market "cap rate", and the initial
Expansion Rent. Within 15 days after Landlord delivers such notice to Tenant,
Tenant shall deliver to Landlord written notice confirming or rescinding the
exercise of the Expansion Option. If Tenant fails to so notify Landlord, then
Tenant shall be deemed to have confirmed the exercise of the Expansion Option.
If Tenant rescinds the exercise of the Expansion Option, then Tenant shall pay:
(a) all costs and expenses of preparing the Expansion Plans; and (b) all other
reasonable out-of-pocket costs and expenses incurred by Landlord with respect to
the Expansion Plans, the Building Expansion or the exercise by Tenant of the
Expansion Option.
8. EXPANSION LEASE. If Tenant confirms (or is deemed to
confirm) the exercise of the Expansion Option, then, within 30 days after such
confirmation (or deemed confirmation), Landlord and Tenant shall execute a lease
of the Expansion Premises on the same terms and conditions as set forth in the
Lease, to the extent applicable (the "Expansion Lease"), including: (a) such
modifications to the form of the Lease as may be required to reflect the terms
and conditions of this Exhibit and the obligations of Landlord and Tenant
hereunder; and (b) terms and conditions providing that the Lease and the
obligations of Tenant under the Expansion Lease are cross-defaulted with one
another; provided that, at the option of Landlord, Landlord and Tenant within
such period shall execute instead of the Expansion Lease an amendment to the
Lease that: (a) expands the Building to include the Building Expansion and
expands the Leased Premises to include the Expansion Parcel; (b) changes the
Base Rent for the Building Expansion to the Expansion Rent (as hereinafter
defined); and (c) includes such modifications to the Lease as may be required to
reflect the terms and conditions of this Exhibit and the obligations of Landlord
and Tenant hereunder.
9. LEASE TERMS. Upon execution by landlord and Tenant of the
Expansion Lease, the Lease Term and the Expiration Date automatically shall be
extended so that the remaining Lease Term is 20 years after the date that
construction of the Building Expansion is substantially completed, as determined
in accordance with the terms and conditions set forth in Subsections 6(c), 6(d),
7(d) and 7(e) of the Lease (the "Expansion Completion Date"). The term of the
Expansion Lease shall be for a period commencing on the Expansion Completion
Date, and ending on the date that the extended Lease Term expires, so that the
Expansion Lease is coterminous with (ends on the same date as) the extended
Lease Term. No act or agreement executed by Landlord or Tenant shall be
necessary to effect an extension of the Lease Term pursuant to the terms and
conditions of this Section; provided that each party shall execute upon request
by the other an amendment to the Lease that memorializes such extension of the
Lease Term. If the Expansion Completion Date occurs before the date that is five
years after the
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Commencement Date, then, during the period from the date that is the original
Expiration Date to the date that is the extended Expiration Date, Base Rent for
the original Leased Premises shall be the Base Rent that would be in effect
under Exhibit B for the First Extension Term, and, if the Expansion Completion
Date occurs on or after the date that is five years after the Commencement Date,
then, during the period from the date that is the original Expiration Date to
the date that is the extended Expiration Date, Base Rent for the original Leased
Premises shall be the Base Rent that would be in effect under Exhibit B for the
First Extension Term and then for the Second Extension Term. If the Expansion
Completion Date occurs before the date that is five years after the Commencement
Date, then the length of the First Extension Term automatically shall be reduced
by the length of the period from the date that is the original Expiration Date
to the date that is the extended Expiration Date. If the Expansion Completion
Date occurs on or after the date that is five years after the Commencement Date,
then: (a) the First Extension Term shall be deemed to have expired before the
extended Expiration Date; (b) the length of the Second Extension Term
automatically shall be reduced by the length of the period from the date that
would have been the expiration of the First Extension Term to the date that is
the extended Expiration Date; and (c) Tenant shall have the option to extend the
Lease Term for a Fifth Extension Term. Tenant shall have no option to extend the
Lease Term for a Fifth Extension Term, unless the Expansion Completion Date
occurs on or after the date that is five years after the Commencement Date.
10. UNDERWRITING CONDITION. The obligations of Landlord under
this Exhibit are contingent upon the ability and willingness of Landlord's
mortgage lenders or lien holders to underwrite and extend to Landlord
construction and permanent loans at market rates of interest, for market loan
terms, and with market amortization periods, based on the creditworthiness of
Tenant at the time that Tenant exercises its Expansion Option in accordance with
the terms and conditions of this Exhibit. If the creditworthiness of Tenant is
adequate for Landlord to obtain such loans, then the contingency set forth in
this Section shall be satisfied, notwithstanding the inability of Landlord to
obtain such loans for any other reason.
11. MISCELLANEOUS PROVISIONS. All capitalized words that are
used in this Exhibit and that are not defined herein shall have the meanings
ascribed to such words in the Lease. Notwithstanding any term or condition of
the Lease, if: (a) the Lease is assigned to a party that is not a wholly-owned
subsidiary of BPI; or (b) the Leased Premises is sublet in whole or in part to
such a party; then the Expansion Option shall terminate and shall have no
further force or effect, without further notice from Landlord.
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PARCEL DESCRIPTION
LAND DESCRIPTION
A part of the land of Six Points Associates, LLC, recorded in Volume 3, pages
84-93 and a part of the land of Six Points Associates, LLC recorded in Deed Book
337, pages 610-611 in the Office of the Recorder in Hendricks County, Indiana
and a part of the Southeast quarter of Section 30, the Southwest quarter of
Section 29, the Northwest quarter of Section 32 and the Northeast quarter of
Section 31 all in Township 15 North, Range 2 East of the Second Principal
Meridian in Guilford Township, Hendricks County, Indiana more particularly
described as follows:
Commencing at the Southeast corner of said Northeast quarter of Section 31, a
Hendricks County disk found per County Surveyor; thence along the South line of
said Northeast quarter of Section 31, South 89 degrees 38 minutes 49 seconds
West (assumed bearing) 86.51 feet; thence North 00 degrees 19 minutes 50 seconds
East 85.31 feet; thence continue North 00 degrees 19 minutes 50 seconds East
2387.15 feet to the POINT OF BEGINNING; thence continue North 00 degrees 19
minutes 50 seconds East 1194.98 feet; thence South 89 degrees 52 minutes 01
seconds East 1084.14 feet; thence South 00 degrees 07 minutes 59 seconds West
988.42 feet to the South line of said Southwest quarter of Section 29; thence
along said South line South 89 degrees 52 minutes 01 seconds East 331.39 feet to
the East line of the West half of said Northwest quarter of Section 32; thence
along said East line South 00 degrees 21 minutes 12 seconds West 710.48 feet;
thence North 89 degrees 40 minutes 10 seconds West 254.50 feet; thence parallel
with said East line North 00 degrees 21 minutes 12 seconds east 499.03 feet;
thence North 89 degrees 40 minutes 10 seconds West 1164.14 feet to the POINT OF
BEGINNING, containing 34.362 acres.
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EXHIBIT K
PARK ASSESSMENT
The Park Assessments for Airtech Park to provide service pursuant to the
Declaration of Covenants & Easements shall be $0.05 for years 1-3 of the Lease.
Such assessments shall not increase by more than $0.01 per year for the
remainder of the Lease Term.
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EXHIBIT L
PERMITTED USES
See the following I-2 Office/Warehouse Distribution, Article 2.13. of the
town of Plainfield, Indiana Zoning Code.
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EXHIBIT M
OPTION TO PURCHASE
So long as Tenant is not in default hereunder, Tenant shall
have a one-time option to purchase the Leased Premises for the Fair Market Value
(as defined below) upon the expiration of the Initial Lease Term and on the
following terms and conditions (the "Purchase Option"):
1. EXERCISE OF OPTION. Tenant shall exercise the Purchase
Option by providing written notice thereof to Landlord at least one year prior
to the expiration of the Initial Lease Term (the "Exercise Date"). If Tenant
fails to exercise the Purchase Option on or before the Exercise Date, then the
Purchase Option shall terminate and have no further force or effect, without
notice from Landlord. Notwithstanding anything to the contrary set forth herein,
Tenant simultaneously may exercise the Purchase Option and its option to extend
the Lease Term for one or more Extension Terms.
2. CLOSING OF PURCHASE. If Tenant exercises the Purchase
Option on or before the Exercise Date and otherwise in accordance with the terms
and conditions of this Exhibit, then, on the date that the Initial Lease Term
expires: (a) Tenant shall pay to Landlord in cash or by wire transfer an amount
equal to the Fair Market Value of the Leased Premises; (b) Landlord shall convey
the Leased Premises to Tenant by warranty deed, subject only to Real Estate
Taxes and Park Assessments, the Permitted Encumbrances and any rights, interests
or matters arising under, by or through Tenant or to which Tenant has consented;
(c) Landlord and Tenant shall execute and deliver such other documents and
instruments as are customary at the time, or required by the Applicable Laws at
the time, to close a sale and purchase of commercial real estate in the
Indianapolis metropolitan area, including, without limitation, a vendor's
affidavit and non-foreign affidavit in the customary forms; (d) Landlord, at its
cost and expense, shall deliver to Tenant an owner's policy of title insurance
insuring that fee title to the Leased Premises is vested in Tenant, subject only
to Real Estate Taxes and Park Assessments, the Permitted Encumbrances and any
rights, interests or matters arising under, by or through Tenant or to which
Tenant has consented; and (e) Real Estate Taxes and Park Assessments shall be
prorated as of such date, and allocated between Landlord and Tenant. Real Estate
Taxes shall be prorated on the basis of when the Real Estate Tax first became a
lien on the Leased Premises.
3. FAIR MARKET VALUE. The "Fair Market Value" of the Leased
Premises shall be the amount on or about the Exercise Date that an independent
third-party purchaser would pay for the Leased Premises in a negotiated
arms-length transaction, presuming that the Leased Premises is leased for the
per annum rates of minimum rent on and after the Exercise Date for comparable
office and distribution/warehouse space in buildings at comparable locations in
the Park or within a radius of ten miles from the Leased Premises. If Tenant
exercises the Purchase Option in accordance with the terms and conditions of
this Exhibit, then, on or before the date that is one month after the date on
which Tenant exercises the Purchase Option, Landlord shall deliver to
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Tenant written notice setting forth its good faith determination of the Fair
Market Value of the Leased Premises (the "Fair Market Value Notice"). Within 15
days after Landlord delivers the Fair Market Value Notice to Tenant, Tenant
shall deliver to Landlord written notice accepting or rejecting Landlord's
determination of the Fair Market Value. If Tenant fails to so notify Landlord,
then Tenant shall be deemed to have accepted Landlord's determination as the
Fair Market Value for the purposes of this Exhibit. If Tenant rejects Landlord's
determination of the Fair Market Value in accordance with the terms and
conditions of this Exhibit, then, within 15 days thereafter, Landlord and Tenant
jointly shall appoint a Qualified Appraiser. If Landlord and Tenant are unable
to agree upon the Qualified Appraiser within the specified period, then, within
15 days thereafter: (a) Landlord and Tenant each shall appoint a Qualified
Appraiser; and (b) the Qualified Appraisers appointed by Landlord and Tenant
jointly shall appoint an additional Qualified Appraiser to constitute the
Appraiser Panel. Within one month after the date on which the Qualified
Appraiser or the Appraiser Panel, as the case may be, is appointed, the
Qualified Appraiser or the Appraiser Panel, as the case may be, shall determine
the Fair Market Value of the Leased Premises. The determination of the Qualified
Appraiser or the Appraiser Panel, as the case may be, shall be the Fair Market
Value for the purposes of this Exhibit. Within 15 days after the Qualified
Appraiser or the Appraiser Panel, as the case may be, determines the Fair Market
Value, Tenant shall deliver to Landlord written notice confirming or rescinding
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the exercise of the Purchase Option. If Tenant fails to so notify Landlord,
then: (a) Tenant shall be deemed to have confirmed the exercise of the Purchase
Option; and (b) Landlord and Tenant shall close the purchase and sale of the
Leased Premises in accordance with the terms and conditions of Section 2 of this
Exhibit. All costs and fees incurred to have the Qualified Appraiser or the
Appraiser Panel determine the Fair Market Value shall be split equally between
Landlord and Tenant; provided that, if: (a) the Fair Market Value of the Leased
Premises, as determined by the Qualified Appraiser or the Appraiser Panel, as
applicable, is equal to or greater than Landlord's determination of the Fair
Market Value of the Leased Premises, as set forth in the Fair Market Value
Notice; and (b) Tenant rescinds the exercise of the Purchase Option; then Tenant
shall pay all such costs and fees.
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LEASE GUARANTY
This LEASE GUARANTY (the "Guaranty"), made as of the 18th day
of September, 1998, by BRIGHTPOINT, INC. (the "Guarantor"), in favor of Airtech
Parkway Associates, LLC (the "Landlord"), WITNESSES:
RECITALS
WHEREAS, Landlord and Brightpoint North America, Inc., an
Indiana corporation (the "Tenant") entered into a Lease, dated September 18,
1998 (the "Lease"), with respect to the Building and Improvements to be
constructed by Landlord on the Parcel;
WHEREAS, Tenant is a wholly-owned subsidiary of Guarantor, and
the financial wherewithal of Guarantor may be required to pay and perform the
obligations of Tenant under the Lease;
WHEREAS, as a condition to entering into the Lease with
Tenant, Landlord has required that Guarantor make and deliver this Guaranty with
respect to the payment and performance by Tenant of its obligations under the
Lease; and
WHEREAS, this Guaranty is made by Guarantor for the purpose of
fulfilling such condition;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, the parties agree as
follows:
1. Absolute Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to Landlord, and its successors and assigns, the full
and prompt payment when due of any and all Rent and the full and prompt
performance when due of any and all obligations of Tenant under the Lease (the
"Lease Obligations"), together with the full and prompt payment of: (a) any and
all claims, liabilities, damages, losses, costs, and expenses (including,
without limitation, attorneys' and paralegals' fees and court costs) arising
from, or in connection with, any failure of Tenant fully and promptly to pay any
Rent or to perform any Lease Obligations; and (b) any and all costs and expenses
(including, without limitation, attorneys' and paralegals' fees and court costs)
incurred by Landlord to collect or enforce, or in connection with collecting or
enforcing, all or any part of the Rent or the Lease Obligations (collectively,
together with Rent and the Lease Obligations, the "Liabilities"); such payment
or performance to be made by Guarantor upon a Tenant Default. Guarantor hereby
further absolutely and unconditionally agrees that Guarantor shall pay to
Landlord upon demand any and all reasonable costs and expenses (including,
without limitation, attorneys' and paralegals' fees and court costs) incurred by
Landlord to enforce, or in connection with enforcing, this Guaranty or to
collect, or in connection with collecting, any amounts payable by Guarantor
hereunder.
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In addition to its other rights and remedies, Landlord shall have the right to
obtain an injunction, specific performance and other equitable remedies to
enforce payment and performance by Guarantor of the Liabilities. Guarantor shall
be released or relieved from its obligations under this Guaranty if, and to the
extent that, Tenant is released or relieved from its obligations under the
Lease.
2. Term of Guaranty. This Guaranty shall: (a) be an absolute
and unconditional guaranty; and (b) remain in full force and effect during the
entire Lease Term, and thereafter so long as any of the Liabilities remain
unsatisfied, even if the Lease has been terminated. Neither an assignment of the
Lease nor any subletting of the Leased Premises or any part thereof (whether or
not by operation of law) shall release, relieve, compromise, impair, or waive
any liability or obligation of Guarantor hereunder; provided that: (a) if: (i)
there is a Merger or Asset Sale; and (ii) the Transfer Conditions are satisfied
with respect to the Merger or Asset Sale; or (b) if: (i) there is a Stock Sale;
(ii) the Transfer Conditions are satisfied with respect to the Stock Sale; and
(iii) the Purchaser of the stock of Tenant agrees to, and does enter into, a
Guaranty
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Agreement on the same terms and conditions as this Guaranty; then this Guaranty
shall terminate with respect to the payment of Rent and the performance of Lease
Obligations that first become due after the Transfer Conditions are satisfied.
Notwithstanding any such termination, Guarantor shall remain obligated under
this Guaranty with respect to the payment of Rent and the performance of Lease
Obligations that first become due before the Transfer Conditions are satisfied.
The validity of this Guaranty, and the liabilities and obligations of Guarantor
hereunder, shall not be released, relieved, compromised, impaired, waived, or
affected by, or as a result of: (a) any action or omission of Landlord with
respect to Tenant; (b) any release, compromise, impairment, or waiver of any
rights or remedies of Landlord; (c) any delay or omission in the enforcement of
any of the rights or remedies of Landlord (whether or not under the Lease); or
(d) any Insolvency Default (whether or not the Lease is terminated as a result
of the Insolvency Default or for any other reason).
3. Rights of Landlord. From time to time, and without notice
to Guarantor, Landlord may: (a) retain or obtain the primary or secondary
liability or obligation of any party or parties for, or with respect to, any or
all of the Liabilities or any or all of the liabilities or obligations of
Guarantor hereunder (the "Other Obligor"); (b) modify, amend, alter, or change
the Lease or the Liabilities, or extend or renew the Lease or the Liabilities,
for any period (whether or not longer than the original period); (c) release,
relieve, compromise, impair, or waive any or all of the Liabilities, the
liabilities or obligations of Guarantor hereunder, or the liabilities or
obligations of any Other Obligor; (d) release, relieve, compromise, impair, or
waive any security interest or lien in any or all property to secure payment or
performance of any or all of the Liabilities or of any or all of the liabilities
or obligations of Guarantor hereunder (the "Security"), and permit any
substitution or exchange for any or all of the Security; and (e) resort to
Guarantor for payment or performance of any or all of the Liabilities (whether
or not Landlord shall have: (i) resorted to any of the Security; (ii) made a
demand on or proceeded against Tenant or any Other Obligor; or (iii) sought or
obtained a judgement with respect to any or all of the Liabilities). No such
action or omission by Landlord shall affect in any manner whatsoever the
liabilities or obligations of Guarantor hereunder. Landlord may apply any amount
received by Landlord from Tenant, Guarantor, any Other Obligor, or any other
party toward the payment and performance of the Liabilities in such order of
application as Landlord may elect from time to time. As amounts become payable
hereunder, Landlord may collect and enforce this Guaranty with respect to those
amounts, without affecting in any manner whatsoever the liabilities or
obligations of Guarantor hereunder with respect to amounts that subsequently may
become payable hereunder. Guarantor may enforce this Guaranty even if the full
amount payable hereunder at the time of enforcement is not known, and, in the
event of such enforcement, Guarantor may collect amounts as they become known
until Guarantor has collected the full amount payable hereunder.
4. Exercise of Rights. No delay or omission by Landlord in the
exercise of any right or remedy shall operate as a waiver thereof, and no final
or partial exercise by Landlord of any right or remedy shall preclude other or
further exercises thereof or the exercise of any other right or remedy.
Guarantor hereby expressly waives: (a) any and
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all notices of the acceptance of this Guaranty; (b) any and all notices of the
existence, creation, modification, amendment, alteration, change, extension, or
renewal of the Lease, the Liabilities, or any part thereof (whether or not such
notice is required to be given to Tenant under the terms and conditions of the
Lease); (c) presentment, demand, notice of dishonor, protest, and any and all
other notices whatsoever (except for any notices required under the Lease and
the requirement of Landlord to make a written demand on Guarantor); (d) any and
all benefit of valuation, appraisement, or other exemption laws or rights
thereof (whether now or hereafter in force or effect) in the jurisdiction of the
court in which Landlord enforces this Guaranty; (e) the invalidity or
unenforceability of the Liabilities, or any part thereof; (f) any and all
diligence in enforcement, collection, perfection, or protection of, or
realization upon: (i) the Liabilities or any part thereof; (ii) any of the
liabilities and obligations of Guarantor hereunder; (iii) any of the liabilities
or obligations of any Other Obligor; or (iv) any of the Security; (g) any and
all rights of subrogation for, or with respect to, any of the liabilities and
obligations of Guarantor hereunder, until all of the Liabilities have been
satisfied in full; and (h) the right to assert the invalidity or
unenforceability of the Lease due to: (i) reorganization, arrangement,
bankruptcy, or insolvency; or (ii) any reason other than reorganization,
arrangement, bankruptcy, or insolvency, except to the extent that such other
reasons could be asserted successfully by Tenant.
5. Miscellaneous. This Guaranty shall be binding upon
Guarantor and its successors and assigns, and shall be governed by the laws of
the State of Indiana. This Guaranty shall be enforced in the courts of the State
of Indiana or in the federal courts of the United States of America located in
the State of Indiana. If any provision of this Guaranty is invalid under, or
prohibited by, the laws of the jurisdiction of the court in which Landlord
enforces this Guaranty, then the invalid or prohibited provision shall be
ineffective to the extent it is invalid or prohibited, and all other provisions
of this Guaranty shall remain enforceable. All capitalized terms that are used,
but not defined, herein shall have the meanings ascribed to such terms in the
Lease. Without notice to Guarantor, Landlord may assign, transfer, or pledge the
Lease, the Liabilities, or any part thereof (whether as a final disposition of
the Lease, the Liabilities, or any part thereof, as security for liabilities or
obligations of Landlord or any other party, or for any other purpose) so long as
the assignment, transfer or pledge was made in accordance with the terms and
conditions of Section 22 of the Lease, and all assignees, transferees, and
pledgees, and their successors and assigns, shall have the full rights of
Landlord to enforce this Guaranty and to collect amounts due hereunder so long
as the assignment, transfer or pledge was made in accordance with the terms and
conditions of Section 22 of the Lease; provided that Landlord may retain
unimpaired rights to enforce this Guaranty on behalf of any assignee,
transferee, or pledgee, or on its own behalf with respect to any part of the
Lease or the Liabilities not assigned, transferred, or pledged.
6. Authority. The person executing and delivering this
Guaranty on behalf of Guarantor represents and warrants that: (a) he or she
fully is empowered by all necessary action to execute and deliver this Guaranty
on behalf of Guarantor; and (b) this Guaranty is the valid and binding
obligation of Guarantor.
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GUARANTOR:
BRIGHTPOINT, INC.
By: /s/ Steven E. Fivel
_____________________________
Printed: Steven E. Fivel
________________________
Title: Vice President
__________________________
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COMPLETION GUARANTY
This COMPLETION GUARANTY (the "Guaranty"), made as of the 18th
day of September, 1998, by MICHAEL G. BROWNING (the "Guarantor"), in favor of
BRIGHTPOINT NORTH AMERICA, INC. (the "Tenant"), WITNESSES:
RECITALS
WHEREAS, Airtech Parkway Associates, LLC (the "Landlord") and
Tenant entered into a Lease, dated September 18, 1998 (the "Lease"), with
respect to the Building and Improvements to be constructed by Landlord on the
Parcel;
WHEREAS, as a condition to entering into the Lease, Tenant has
required that Guarantor make and deliver this Guaranty; and
WHEREAS, this Guaranty is made by Guarantor for the purpose
of fulfilling such condition;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, the parties agree as
follows:
1. Absolute Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to Tenant, and its successors and assigns, that, if:
(a) Landlord fails to satisfy the requirements for substantial completion of the
Building and Improvements, as set forth in Subsections 6(a), 6(b), 6(c), and
6(d) of the Lease (collectively, the "Completion Requirements"); and (b) such
failure is not corrected within any applicable cure periods set forth in the
Lease; then, subject to the same terms and conditions as are set forth in
Subsection 26(g) of the Lease, Guarantor promptly shall cause the Completion
Requirements to be satisfied (the "Construction Obligations"); provided that,
notwithstanding anything to the contrary set forth herein, Guarantor shall be
released or relieved from the Construction Obligations if, and to the extent
that, Landlord is released or relieved from its obligations under the Lease to
satisfy the Completion Requirements. Guarantor hereby further absolutely and
unconditionally guarantees to Tenant and its successors and assigns the full and
prompt payment when due of any Delay Payments that became due and payable under
the Lease (the "Payment Obligations"). Guarantor hereby further absolutely and
unconditionally agrees that Guarantor shall pay to Tenant upon demand any and
all reasonable costs and expenses (including, without limitation, attorneys' and
paralegals' fees and court costs) incurred by Tenant to enforce, or in
connection with enforcing, this Guaranty (the "Enforcement Costs"). Tenant shall
have the right to obtain an injunction, specific performance, or other equitable
remedies to enforce the satisfaction by Guarantor of the Construction
Obligations; provided that, except for satisfaction of the Payment Obligations,
Guarantor shall have no liability to Tenant for any damages, losses, costs, or
expenses arising from, or in connection with, any failure of the Construction
Obligations to be satisfied.
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2. Term of Guaranty. This Guaranty shall: (a) be an absolute
and unconditional guaranty of satisfaction of the Completion Requirements and
the Payment Obligations; and (b) remain in full force and effect until the
Substantial Completion Date, when this Guaranty automatically shall terminate;
provided that, if the Lease has been terminated before the Substantial
Completion Date, then this Guaranty automatically shall terminate simultaneously
with the termination of the Lease. Neither a conveyance or transfer of fee title
to the Leased Premises, nor an assignment or transfer of the interest of
Landlord under the Lease (whether or not by operation of law) shall release,
relieve, compromise, impair, or waive any liability or obligation of Guarantor
hereunder. Except as provided in Section 1 of this Guaranty, the validity of
this Guaranty, and the liabilities and obligations of Guarantor hereunder, shall
not be released, relieved, compromised, impaired, waived, or affected by, or as
a result of: (a) any action or omission of Tenant with respect to Landlord; (b)
any release, compromise, impairment, or waiver of any rights or remedies of
Tenant;
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or (c) any delay or omission in the enforcement of any of the rights or remedies
of Tenant (whether or not under the Lease).
3. Rights of Tenant. From time to time, and without notice to
Guarantor, Tenant may: (a) retain or obtain the primary or secondary liability
or obligation of any party or parties for, or with respect to, satisfaction of
any or all of the Completion Requirements or the Construction Obligations (the
"Other Obligor"); (b) modify, amend, alter, or change the Lease, or extend or
renew the Lease, for any period (whether or not longer than the original
period); (c) release, relieve, compromise, impair, or waive satisfaction of any
or all of the Completion Requirements or the Construction Obligations, or the
liabilities or obligations of any Other Obligor; (d) release, relieve,
compromise, impair, or waive any security interest or lien in any or all
property to secure satisfaction of any or all of the Completion Requirements or
the Construction Obligations (the "Security"), and permit any substitution or
exchange for any or all of the Security; and (e) resort to Guarantor for
satisfaction of any or all of the Construction Obligations or the Payment
Obligations (whether or not Tenant shall have: (i) resorted to any of the
Security; (ii) made a demand on or proceeded against Tenant or any Other
Obligor; or (iii) sought or obtained a judgement with respect to any or all of
the Construction Obligations or the Payment Obligations). No such action or
omission by Tenant shall affect in any manner whatsoever the liabilities or
obligations of Guarantor hereunder, except as provided in Section 1 of this
Guaranty. Tenant may apply any amount received by Tenant as Enforcement Costs in
such order of application as Tenant may elect from time to time. As Enforcement
Costs become payable hereunder, Tenant may collect and enforce this Guaranty
with respect to those Enforcement Costs, without affecting in any manner
whatsoever the liabilities or obligations of Guarantor hereunder with respect to
Enforcement Costs that subsequently may become payable hereunder.
4. Exercise of Rights. No delay or omission by Tenant in the
exercise of any right or remedy shall operate as a waiver thereof, and no final
or partial exercise by Tenant of any right or remedy shall preclude other or
further exercises thereof or the exercise of any other right or remedy.
Guarantor hereby expressly waives: (a) any and all notices of the acceptance of
this Guaranty; (b) any and all notices of the existence, creation, modification,
amendment, alteration, change, extension, or renewal of the Lease (whether or
not such notice is required to be given by Tenant under the terms and conditions
of the Lease); (c) presentment, demand, notice of dishonor, protest, and any and
all other notices whatsoever (except for any notices required under the Lease
and the requirement of Tenant to make a written demand on Guarantor); (d) any
and all benefit of valuation, appraisement, or other exemption laws or rights
thereof (whether now or hereafter in force or effect) in the jurisdiction of the
court in which Tenant enforces this Guaranty; (e) the invalidity or
unenforceability of the Liabilities, or any part thereof; (f) the right to
assert the invalidity or unenforceability of the Lease due to: (i)
reorganization, arrangement, bankruptcy, or insolvency; or (ii) any reason other
than reorganization, arrangement, bankruptcy, or insolvency, except to the
extent that such other reasons could be asserted successfully by Landlord; (g)
any and all diligence in enforcement, collection, perfection, or protection of,
or realization upon: (i) satisfaction
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<PAGE> 84
of any or all of the Completion Requirements or the Construction Obligations;
(ii) any of the liabilities or obligations of any Other Obligor; or (iii) any of
the Security; and (h) any and all rights of subrogation for, or with respect to,
any of the liabilities and obligations of Guarantor hereunder until all of the
Completion Requirements, Payment Obligations, and Construction Obligations have
been satisfied in full.
5. Miscellaneous. This Guaranty shall be binding upon
Guarantor and its successors and assigns, and shall be governed by the laws of
the State of Indiana. This Guaranty shall be enforced in the courts of the State
of Indiana or in the federal courts of the United States of America located in
the State of Indiana. If any provision of this Guaranty is invalid under, or
prohibited by, the laws of the jurisdiction of the court in which Tenant
enforces this Guaranty, then the invalid or prohibited provision shall be
ineffective to the extent it is invalid or prohibited, and all other provisions
of this Guaranty shall remain enforceable. All capitalized terms that are used,
but not defined, herein shall have the meanings ascribed to such terms in the
Lease. If Tenant assigns the Lease, as permitted under Section 14 of the Lease,
then, without notice to Guarantor, Tenant may assign this Guaranty and all of
the Construction Obligations to the assignee, and the assignee (and, as limited
in Subsection 26(f) of the Lease, its successors and assigns) shall have the
full rights of Tenant to enforce this Guaranty and to collect amounts due
hereunder; provided that Tenant may retain unimpaired rights to enforce this
Guaranty on behalf of such assignee.
6. Authority. Guarantor represents and warrants that this
Guaranty is the valid and binding obligation of Guarantor.
GUARANTOR:
/s/ Michael G. Browning
---------------------------------
Michael G. Browning
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<PAGE> 85
CORRECTION GUARANTY
This CORRECTION GUARANTY (the "Guaranty"), made as of the 18th
day of September, 1998, by BROWNING CONSTRUCTION, INC. (the "Guarantor"), in
favor of BRIGHTPOINT NORTH AMERICA, INC. (the "Tenant"), WITNESSES:
RECITALS
WHEREAS, Airtech Parkway Associates, LLC (the "Landlord") and
Tenant entered into a Lease, dated September 18, 1998 (the "Lease"), with
respect to the Building and Improvements to be constructed by Landlord on the
Parcel;
WHEREAS, Guarantor is the general contractor for construction
of the Building and Improvements under a No Lien Construction Agreement, dated
September 18, 1998 (the "Construction Agreement");
WHEREAS, as a condition to entering into the Lease, Tenant has
required that Guarantor make and deliver this Guaranty; and
WHEREAS, this Guaranty is made by Guarantor for the purpose
of fulfilling such condition;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, the parties agree as
follows:
1. Absolute Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to Tenant, and its successors and assigns, that, if:
(a) Landlord fails to correct or complete any Punch-List item, Latent Defect, or
Warranty Item, or to enforce any Contractor Warranty, as the case may be; and
(b) such failure is not corrected within any applicable cure periods set forth
in the Lease; then, subject to the same terms and conditions as are set forth in
Subsection 26(g) of the Lease, Guarantor promptly shall: (a) correct or complete
such Punch-List item, Latent Defect, or Warranty Item, or enforce or honor such
Contractor Warranty, as the case may be; or (b) in the case of Punch-List items
or Latent Defects, cause such Punch-List item or Latent Defect to be corrected
by a subcontractor or supplier (the "Correction Obligations"); provided that,
notwithstanding anything to the contrary set forth herein, Guarantor shall be
released or relieved from the Correction Obligations if, and to the extent that,
Landlord is released or relieved from its obligations under the Lease to correct
any Punch-List item, Latent Defect, or Warranty Item, or to enforce any
Contractor Warranty, as the case may be. Guarantor hereby further absolutely and
unconditionally guarantees that, if: (a) Landlord or Guarantor fails to satisfy
any of the Correction Obligations; and (b) thereafter Tenant performs that
Correction Obligation in accordance with the terms and conditions of Section 20
of the Lease; then Guarantor shall pay to Tenant on demand all
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<PAGE> 86
reasonable costs and expenses incurred by Tenant to perform that Correction
Obligation. Guarantor hereby further absolutely and unconditionally agrees that
Guarantor shall pay to Tenant upon demand any and all reasonable costs and
expenses (including, without limitation, attorneys' and paralegals' fees and
court costs) incurred by Tenant to enforce, or in connection with enforcing,
this Guaranty (the "Enforcement Costs"). Tenant shall have the right to: (a)
obtain an injunction, specific performance, or other equitable remedies to
enforce the satisfaction by Guarantor of the Correction Obligations; and (b) as
a third-party beneficiary, to enforce the terms and conditions of the
Construction Agreement that the require correction of Punch-List items, Latent
Defects, or Warranty Items, or the enforcement of Contractor Warranties, as the
case may be. Guarantor also hereby absolutely and unconditionally guarantees to
Tenant the payment of any amounts relating to the liability of Guarantor under
this Guaranty arising from consequential damages in connection with Guarantor's
failure to satisfy any
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<PAGE> 87
Correction Obligation within 15 days after the time provided to Landlord to
satisfy such Correction Obligation (the "Payment Obligations")
2. Term of Guaranty. This Guaranty shall: (a) be an absolute
and unconditional guaranty of satisfaction of the Correction Obligations and the
Payment Obligations; and (b) remain in full force and effect until the
expiration of the Warranty Period, when this Guaranty automatically shall
terminate; provided that, if the Lease has been terminated before the expiration
of the Warranty Period, then this Guaranty automatically shall terminate
simultaneously with the termination of the Lease. Notwithstanding anything to
the contrary set forth herein, if, at the expiration of the Warranty Period, the
Lease remains in full force and effect, and there are: (a) Punch-List items that
have not been corrected or completed; or (b) Latent Defects or Warranty Items
that have been identified to Landlord in accordance with the terms and
conditions of Section 10 of the Lease and that have not been corrected or
completed; then this Guaranty shall remain in force and effect with respect to
such Punch-List items, Latent Defects, or Warranty Items, until such Punch-List
items, Latent Defects, or Warranty Items are corrected or completed, when this
Guaranty automatically shall terminate. Neither a conveyance or transfer of fee
title to the Leased Premises, nor an assignment or transfer of the interest of
Landlord under the Lease (whether or not by operation of law) shall release,
relieve, compromise, impair, or waive any liability or obligation of Guarantor
hereunder. Except as provided in Section 1 of this Guaranty, the validity of
this Guaranty, and the liabilities and obligations of Guarantor hereunder, shall
not be released, relieved, compromised, impaired, waived, or affected by, or as
a result of: (a) any action or omission of Tenant with respect to Landlord; (b)
any release, compromise, impairment, or waiver of any rights or remedies of
Tenant; or (c) any delay or omission in the enforcement of any of the rights or
remedies of Tenant (whether or not under the Lease).
3. Rights of Tenant. From time to time, and without notice to
Guarantor, Tenant may: (a) retain or obtain the primary or secondary liability
or obligation of any party or parties for, or with respect to, satisfaction of
any or all of the Correction Obligations (the "Other Obligor"); (b) modify,
amend, alter, or change the Lease, or extend or renew the Lease, for any period
(whether or not longer than the original period); (c) release, relieve,
compromise, impair, or waive satisfaction of any or all of the Correction
Obligations, or the liabilities or obligations of any Other Obligor; (d)
release, relieve, compromise, impair, or waive any security interest or lien in
any or all property to secure satisfaction of any or all of the Correction
Obligations (the "Security"), and permit any substitution or exchange for any or
all of the Security; and (e) resort to Guarantor for satisfaction of any or all
of the Correction Obligations (whether or not Tenant shall have: (i) resorted to
any of the Security; (ii) made any demand on or proceeded against Landlord or
any Other Obligor; or (iii) sought or obtained a judgement with respect to any
or all of the Correction Obligations or the Payment Obligations). No such action
or omission by Tenant shall affect in any manner whatsoever the liabilities or
obligations of Guarantor hereunder, except as provided in Section 1 of this
Guaranty. Tenant may apply any amount received by Tenant as Enforcement Costs in
such order of application as Tenant may elect from time to time.
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<PAGE> 88
As Enforcement Costs become payable hereunder, Tenant may collect and enforce
this Guaranty with respect to those Enforcement Costs, without affecting in any
manner whatsoever the liabilities or obligations of Guarantor hereunder with
respect to Enforcement Costs that subsequently may become payable hereunder.
4. Exercise of Rights. No delay or omission by Tenant in the
exercise of any right or remedy shall operate as a waiver thereof, and no final
or partial exercise by Tenant of any right or remedy shall preclude other or
further exercises thereof or the exercise of any other right or remedy.
Guarantor hereby expressly waives: (a) any and all notices of the acceptance of
this Guaranty; (b) any and all notices of the existence, creation, modification,
amendment, alteration, change, extension, or renewal of the Lease (whether or
not such notice is required to be given by Tenant under the terms and conditions
of the Lease); (c) presentment, demand, notice of dishonor, protest, and any and
all other notices whatsoever; (d) any and all benefit of valuation,
appraisement, or other exemption laws or rights thereof (whether now or
hereafter in force or effect) in the jurisdiction of the court in which Tenant
enforces this Guaranty; (e) the invalidity or unenforceability of the Correction
Obligations or the Payment Obligations; (f) any and all diligence in
enforcement, collection, perfection, or protection of, or realization upon: (i)
satisfaction of any or all of the Correction Obligations; (ii) any of the
liabilities or obligations of any Other Obligor; or (iii) any of the Security;
and (g) any and all rights of subrogation for, or with respect to, any of the
liabilities and obligations of Guarantor hereunder until all of the Correction
Obligations and the Payment Obligations have been satisfied in full, and the
Warranty Period has expired.
5. Miscellaneous. This Guaranty shall be binding upon
Guarantor and its successors and assigns, and shall be governed by the laws of
the State of Indiana. This Guaranty shall be enforced in the courts of the State
of Indiana or in the federal courts of the United States of America located in
the State of Indiana. If any provision of this Guaranty is invalid under, or
prohibited by, the laws of the jurisdiction of the court in which Tenant
enforces this Guaranty, then the invalid or prohibited provision shall be
ineffective to the extent it is invalid or prohibited, and all other provisions
of this Guaranty shall remain enforceable. All capitalized terms that are used,
but not defined, herein shall have the meanings ascribed to such terms in the
Lease. If Tenant assigns the Lease, as permitted under Section 14 of the Lease,
then, without notice to Guarantor, Tenant may assign this Guaranty and all of
the Correction Obligations to the assignee, and the assignee (and, as limited in
Subsection 26(f) of the Lease, its successors and assigns) shall have the full
rights of Tenant to enforce this Guaranty and to collect amounts due hereunder;
provided that Tenant may retain unimpaired rights to enforce this Guaranty on
behalf of such assignee. Notwithstanding anything to the contrary set forth
herein, once the Landlord originally named herein: (a) conveys fee simple title
to the Building and Improvements to another person or entity not controlling,
controlled by, or under common control with, the original Landlord; and (b)
delivers to Tenant notice of such conveyance; Tenant thereafter shall give and
deliver to Guarantor a copy of any notice, statement, invoice, demand, request,
or consent given or delivered by Tenant to Landlord with respect to: (a) the
correction of any Punch-List item, Latent Defect, or Warranty Item, or the
enforcement of any Contractor Warranty, as the case
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<PAGE> 89
may be; (b) the failure to correct any Punch-List item, Latent Defect, or
Warranty Item, or the failure to enforce any Contractor Warranty, as the case
may be; or (c) the failure to satisfy any Payment Obligation. Until such a
conveyance, and the delivery of such a notice, by the Landlord originally named
herein, Guarantor agrees that any notice, statement, invoice, demand, request,
or consent given to Landlord pursuant to the terms and conditions of the Lease
with respect to any matter covered by this Guaranty shall be deemed to be notice
to the Guarantor. Any such notice, statement, invoice, demand, request, or
consent shall be: (a) given or delivered to Guarantor in accordance with the
terms and conditions of Section 25 of the Lease; and (b) shall be addressed as
follows: c/o Browning Investments, Inc., Capital Center North Tower, 251 N.
Illinois Street, Suite 200, Indianapolis, Indiana 46204, Attn: James C. Snyder.
6. Authority. The person executing and delivering this
Guaranty on behalf of Guarantor represents and warrants that: (a) he or she
fully is empowered by all necessary action to execute and deliver this Guaranty
on behalf of Guarantor; and (b) this Guaranty is the valid and binding
obligation of Guarantor.
GUARANTOR:
BROWNING CONSTRUCTION, INC.
By: /s/ Michael G. Browning
-----------------------------
Printed: Michael G. Browning
------------------------
Title: President
--------------------------
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<PAGE> 90
COMPLETION GUARANTY FOR BUILDING EXPANSION
This COMPLETION GUARANTY FOR BUILDING EXPANSION (the
"Guaranty"), made as of the 18th day of September, 1998, by MICHAEL G. BROWNING
(the "Guarantor"), in favor of BRIGHTPOINT NORTH AMERICA, INC. (the "Tenant"),
WITNESSES:
RECITALS
WHEREAS, Airtech Parkway Associates, LLC (the "Landlord") and
Tenant entered into a Lease, dated September 18, 1998 (the "Lease"), with
respect to the Building and Improvements to be constructed by Landlord on the
Parcel;
WHEREAS, the Lease includes an option of Tenant to expand the
Leased Premises;
WHEREAS, as a condition to entering into the Lease, Tenant has
required that Guarantor make and deliver this Guaranty; and
WHEREAS, this Guaranty is made by Guarantor for the purpose of
fulfilling such condition;
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the
receipt and sufficiency of which are acknowledged hereby, the parties agree as
follows:
1. Absolute Guaranty. Guarantor hereby absolutely and
unconditionally guarantees to Tenant, and its successors and assigns, that, if:
(a) Landlord fails to satisfy the requirements for substantial completion of the
Building Expansion, as will be set forth in the Expansion Lease (collectively,
the "Completion Requirements"); and (b) such failure is not corrected within any
applicable cure periods set forth in the Expansion Lease; then, subject to the
same terms and conditions as will be set forth in the Expansion Lease, Guarantor
promptly shall cause the Completion Requirements to be satisfied (the
"Construction Obligations"); provided that, notwithstanding anything to the
contrary set forth herein, Guarantor shall be released or relieved from the
Construction Obligations if, and to the extent that, Landlord is released or
relieved from its obligations under the Expansion Lease to satisfy the
Completion Requirements. Guarantor hereby further absolutely and unconditionally
guarantees to Tenant and its successors and assigns the full and prompt payment
when due of any delay payments that may became due and payable under the
Expansion Lease (the "Payment Obligations"). Guarantor hereby further absolutely
and unconditionally agrees that Guarantor shall pay to Tenant upon demand any
and all reasonable costs and expenses (including, without limitation, attorneys'
and paralegals' fees and court costs) incurred by Tenant to enforce, or in
connection with enforcing, this Guaranty (the
-93-
<PAGE> 91
"Enforcement Costs"). Tenant shall have the right to obtain an injunction,
specific performance, or other equitable remedies to enforce the satisfaction by
Guarantor of the Construction Obligations; provided that, except for
satisfaction of the Payment Obligations, Guarantor shall have no liability to
Tenant for any damages, losses, costs, or expenses arising from, or in
connection with, any failure of the Construction Obligations to be satisfied.
2. Term of Guaranty. This Guaranty shall: (a) be an absolute
and unconditional guaranty of satisfaction of the Completion Requirements and
the Payment Obligations; and (b) remain in full force and effect until the
substantial completion date with respect to the Building Expansion, when this
Guaranty automatically shall terminate; provided that, if the Expansion Lease
has been terminated before the substantial completion date with respect to the
Building Expansion, then this Guaranty automatically shall terminate
simultaneously with the termination of the Expansion Lease. Neither a conveyance
or transfer of fee title to the Expansion Parcel or the Leased Premises, nor an
assignment or transfer of the interest of Landlord under the Expansion Lease
(whether or not by operation of law) shall release, relieve, compromise,
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<PAGE> 92
impair, or waive any liability or obligation of Guarantor hereunder. Except as
provided in Section 1 of this Guaranty, the validity of this Guaranty, and the
liabilities and obligations of Guarantor hereunder, shall not be released,
relieved, compromised, impaired, waived, or affected by, or as a result of: (a)
any action or omission of Tenant with respect to Landlord; (b) any release,
compromise, impairment, or waiver of any rights or remedies of Tenant; or (c)
any delay or omission in the enforcement of any of the rights or remedies of
Tenant (whether or not under the Expansion Lease).
3. Rights of Tenant. From time to time, and without notice to
Guarantor, Tenant may: (a) retain or obtain the primary or secondary liability
or obligation of any party or parties for, or with respect to, satisfaction of
any or all of the Completion Requirements or the Construction Obligations (the
"Other Obligor"); (b) modify, amend, alter, or change the Expansion Lease or the
Lease, or extend or renew the Expansion Lease or the Lease, for any period
(whether or not longer than the original period); (c) release, relieve,
compromise, impair, or waive satisfaction of any or all of the Completion
Requirements or the Construction Obligations, or the liabilities or obligations
of any Other Obligor; (d) release, relieve, compromise, impair, or waive any
security interest or lien in any or all property to secure satisfaction of any
or all of the Completion Requirements or the Construction Obligations (the
"Security"), and permit any substitution or exchange for any or all of the
Security; and (e) resort to Guarantor for satisfaction of any or all of the
Construction Obligations or the Payment Obligations (whether or not Tenant shall
have: (i) resorted to any of the Security; (ii) made a demand on or proceeded
against Tenant or any Other Obligor; or (iii) sought or obtained a judgement
with respect to any or all of the Construction Obligations or the Payment
Obligations). No such action or omission by Tenant shall affect in any manner
whatsoever the liabilities or obligations of Guarantor hereunder, except as
provided in Section 1 of this Guaranty. Tenant may apply any amount received by
Tenant as Enforcement Costs in such order of application as Tenant may elect
from time to time. As Enforcement Costs become payable hereunder, Tenant may
collect and enforce this Guaranty with respect to those Enforcement Costs,
without affecting in any manner whatsoever the liabilities or obligations of
Guarantor hereunder with respect to Enforcement Costs that subsequently may
become payable hereunder.
4. Exercise of Rights. No delay or omission by Tenant in the
exercise of any right or remedy shall operate as a waiver thereof, and no final
or partial exercise by Tenant of any right or remedy shall preclude other or
further exercises thereof or the exercise of any other right or remedy.
Guarantor hereby expressly waives: (a) any and all notices of the acceptance of
this Guaranty; (b) any and all notices of the existence, creation, modification,
amendment, alteration, change, extension, or renewal of the Expansion Lease or
the Lease (whether or not such notice is required to be given by Tenant under
the terms and conditions of the Expansion Lease or the Lease); (c) presentment,
demand, notice of dishonor, protest, and any and all other notices whatsoever
(except for except for any notices required under the Expansion Lease or the
Lease and the requirement of Tenant to make a written demand on Guarantor); (d)
any and all benefit of valuation, appraisement, or other exemption laws or
rights thereof (whether now or hereafter in force or effect) in the jurisdiction
of the court in which Tenant enforces this Guaranty; (e) the invalidity or
unenforceability of the Liabilities, or any part thereof; (f) the right to
assert the invalidity or unenforceability of the Expansion Lease or the Lease
due to: (i) reorganization, arrangement, bankruptcy, or insolvency; or (ii) any
reason other than reorganization, arrangement, bankruptcy, or insolvency, except
to the extent that
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<PAGE> 93
such other reasons could be asserted successfully by Landlord; (g) any and all
diligence in enforcement, collection, perfection, or protection of, or
realization upon: (i) satisfaction of any or all of the Completion Requirements
or the Construction Obligations; (ii) any of the liabilities or obligations of
any Other Obligor; or (iii) any of the Security; and (h) any and all rights of
subrogation for, or with respect to, any of the liabilities and obligations of
Guarantor hereunder until all of the Completion Requirements, Payment
Obligations, and Construction Obligations have been satisfied in full.
5. Miscellaneous. This Guaranty shall be binding upon
Guarantor and its successors and assigns, and shall be governed by the laws of
the State of Indiana. This Guaranty shall be enforced in the courts of the State
of Indiana or in the federal courts of the United States of America located in
the State of Indiana. If any provision of this Guaranty is invalid under, or
prohibited by, the laws of the jurisdiction of the court in which Tenant
enforces this Guaranty, then the invalid or prohibited provision shall be
ineffective to the extent it is invalid or prohibited, and all other provisions
of this Guaranty shall remain enforceable. All capitalized terms that are used,
but not defined, herein shall have the meanings ascribed to such terms in the
Lease. If Tenant assigns the Lease, as permitted under Section 14 of the Lease,
then, without notice to Guarantor, Tenant may assign this Guaranty and all of
the Construction Obligations to the assignee, and the assignee (and, as limited
in Subsection 26(f) of the Lease, its successors and assigns) shall have the
full rights of Tenant to enforce this Guaranty and to collect amounts due
hereunder; provided that Tenant may retain unimpaired rights to enforce this
Guaranty on behalf of such assignee.
6. Authority. Guarantor represents and warrants that this
Guaranty is the valid and binding obligation of Guarantor.
GUARANTOR:
/s/ Michael G. Browning
----------------------------
Michael G. Browning
-96-
<PAGE> 1
Exhibit (11) Statement Re: Computation of Earnings Per Share
(Amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30 September 30
1997 1998 1997 1998
-------- -------- -------- ---------
<S> <C> <C> <C> <C>
Basic:
Weighted average common shares outstanding 47,626 52,232 45,374 51,811
======== ======== ======== ========
Income before income taxes and minority interest $ 8,515 $ 13,387 $ 23,721 $ 38,844
Deduct income taxes 2,557 4,016 7,097 11,653
Deduct (add) minority interest 30 (47) 413 (128)
-------- -------- -------- --------
Net income $ 5,928 $ 9,418 $ 16,211 $ 27,319
======== ======== ======== ========
Per share amount $ 0.12 $ 0.18 $ 0.36 $ 0.53
======== ======== ======== ========
Diluted:
Weighted average common shares outstanding 47,626 52,232 45,374 51,811
Net effect of stock options and warrants - based on
the treasury stock method using average market price
2,025 1,036 1,718 1,616
-------- -------- -------- --------
Total weighted average shares outstanding 49,651 53,268 47,092 53,427
======== ======== ======== ========
Income before income taxes and minority interest $ 8,515 $ 13,387 $ 23,721 $ 38,844
Deduct income taxes 2,557 4,016 7,097 11,653
Deduct (add) minority interest 30 (47) 413 (128)
Net income $ 5,928 $ 9,418 $ 16,211 $ 27,319
======== ======== ======== ========
Per share amount $ 0.12 $ 0.18 $ 0.34 $ 0.51
======== ======== ======== ========
</TABLE>
22
<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, 1998 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> SEP-30-1998
<CASH> 37,204
<SECURITIES> 0
<RECEIVABLES> 254,686
<ALLOWANCES> 3,891
<INVENTORY> 153,363
<CURRENT-ASSETS> 480,626
<PP&E> 45,567
<DEPRECIATION> 0
<TOTAL-ASSETS> 632,782
<CURRENT-LIABILITIES> 104,344
<BONDS> 280,407
524
0
<COMMON> 0
<OTHER-SE> 243,377
<TOTAL-LIABILITY-AND-EQUITY> 632,782
<SALES> 1,118,918
<TOTAL-REVENUES> 1,118,918
<CGS> 1,020,262
<TOTAL-COSTS> 1,020,262
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,549
<INCOME-PRETAX> 38,844
<INCOME-TAX> 11,653
<INCOME-CONTINUING> 27,319
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 27,319
<EPS-PRIMARY> .53
<EPS-DILUTED> .51
</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; uncertainties
inherent in international operations and foreign currency fluctuations; and
uncertainties relating to the Company's Year 2000 compliance efforts and the
failure of key suppliers and customers to be Year 2000 compliant. 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
