CORNERSTONE BIOPHARMA HOLDINGS,
INC.
© 2006 Capital Associates. All
rights reserved.
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ARTICLE 1 - LEASED PREMISES
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1
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1
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ARTICLE 2 - BASIC LEASE
PROVISIONS
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1
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2.01 Basic Lease Provisions.
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1
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ARTICLE 3 - TERM AND POSSESSION
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3
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3
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3
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4
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3.04 Tenant’s Possession.
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4
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3.05 Acceptance of Leased
Premises.
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4
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4
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ARTICLE 4 - RENT AND SECURITY FOR THE
LEASE
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4
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4
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5
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5
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5
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4.04 Operating Expense
Adjustment.
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5
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4.05 Cost of Living Adjustment.
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8
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4.06 Security for the Lease.
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8
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10
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10
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10
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ARTICLE 6 - USE AND OCCUPANCY
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12
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12
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6.02 Care of the Leased
Premises.
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13
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6.03 Hazardous or Toxic
Materials.
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13
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6.04 Entry for Repairs and
Inspection.
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14
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6.05 Compliance with Laws; Rules of
Building.
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14
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14
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15
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15
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ARTICLE 7 - CONSTRUCTION, ALTERATIONS AND
REPAIRS
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15
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7.01 Tenant Improvements.
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15
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15
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7.03 Maintenance and Repairs by
Landlord.
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16
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7.04 Maintenance and Repairs by
Tenant.
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16
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ARTICLE 8 - CONDEMNATION, CASUALTY, INSURANCE
AND INDEMNITY
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17
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17
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8.02 Damages from Certain
Causes.
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17
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8.03 Fire or Other Casualty.
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17
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18
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8.05 Waiver of Subrogation
Rights.
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19
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8.06 Indemnity/Waiver of
Liability.
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19
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8.07 Limitation of Landlord’s Personal
Liability.
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20
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8.08 Survival of Article 8.
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20
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ARTICLE 9 - LANDLORD’S LIEN, DEFAULT,
REMEDIES AND SUBORDINATION
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20
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20
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20
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9.03 Landlord’s Remedies.
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21
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9.04 Mitigation of Damages.
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22
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9.05 Rights of Landlord in
Bankruptcy.
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22
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9.06 Default by Landlord.
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23
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23
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23
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9.09 Subordination; Estoppel
Certificate.
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23
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23
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9.11 Accord and Satisfaction.
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24
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9.12 Survival of Article 9.
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24
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ARTICLE 10 - ASSIGNMENT AND
SUBLEASE
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24
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10.01 Assignment or Sublease.
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24
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10.02 Assignment by Landlord.
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25
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ARTICLE 11 –TENANT WARRANTIES;
INCORPORATION OF EXHIBITS; COMMISSION(S), CONFIDENTIALITY,
SURVIVAL, NOTICES, BINDING EFFECT AND MISCELLANEOUS
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26
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26
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11.02 Incorporation of Exhibits.
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27
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27
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27
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27
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27
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27
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27
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ARTICLE 12 - ENTIRE AGREEMENT AND LIMITATION OF
WARRANTIES
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29
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12.01 ENTIRE AGREEMENT AND LIMITATION OF
WARRANTIES.
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29
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-
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Floor Plan(s)
of the Leased Premises
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-
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The
Land
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The
Project
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-
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Acceptance of
Leased Premises Memorandum
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-
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Workletter
Agreement
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Schematic Space
Plan
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Building
Rules
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-
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Release
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-
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Form of
Estoppel Certificate
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-
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HVAC
Schedule
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-
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Renewal
Option
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THIS LEASE
AGREEMENT (this
“Lease”) is made and entered into as of this 1
st day of May, 2008 (the “Execution
Date”), by and between Crescent Lakeside, LLC, a North
Carolina limited liability company (“Landlord”), and
Cornerstone BioPharma Holdings, Inc. , a Delaware
corporation authorized to conduct business in the State of North
Carolina (“Tenant”). In consideration of the
representations and covenants contained herein and other good and
valuable consideration, lie receipt and sufficiency of which is
hereby acknowledged, Landlord and Tenant hereby agree as
follows:
ARTICLE 1 — LEASED
PREMISES
Landlord leases
to Tenant and Tenant leases from Landlord the space (the
“Leased Premises”) set forth in Subsections (a)
and (b) of the Basic Lease Provisions below and shown on the
floor plan(s) attached hereto as Exhibit A-l upon the
terms and conditions set forth in this Lease. The office building
in which the Leased Premises are located, parcel “05”
on which the office building is located (the “Land”, as
described on Exhibit A-2 attached hereto), the parking
facilities and all improvements and appurtenances to the building
are collectively referred to as the “Building”. The
Building and the larger complex of which the Building is a part are
collectively referred to as the “Project”, as shown on
the map attached hereto as Exhibit A-3 . Included within the
Project are the Building and the Crescent Lakeside I building
located at 1225 Crescent Green, Cary, North Carolina 27518 (the
“1225 Building”) (the Building and the 1225 Building
are collectively, the “Crescent Lakeside Complex”). No
easement for light, air or view is granted hereunder or included
within or appurtenant to the Leased Premises.
ARTICLE 2 — BASIC LEASE
PROVISIONS
2.01 Basic
Lease Provisions.
The following
provisions set forth various basic terms of this Lease and are
sometimes referred to as the “Basic Lease
Provisions”.
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Building
Name:
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Crescent
Lakeside II
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Building
Address:
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1255 Crescent
Green
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Cary, North
Carolina 27518
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Floor(s):
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Second
(2 nd
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Suite Number:
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250, subject to
approval by the Town of Cary, North Carolina
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Square Feet
Area in the Leased Premises:
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14,863
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Total Area of
Building:
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Approximately
144,000 square feet
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Base
Rent:
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Initial per Square
Foot/Annum:
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$23.25 per
Square Foot leased
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Initial Annual
Base Rent:
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$345,564.72
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Initial Monthly
Base Rent:
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$28,797.06
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Payment
Schedule:
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See chart on
the following page:
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1
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Price Per
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Annual (or for
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Full Month(s) of
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Square Foot,
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Square
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time period noted)
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Monthly Base
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The Term
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Targeted Date(s)
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Per annum
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Feet
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Base Rent
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Rent
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Landlord and Tenant specifically
acknowledge and agree that the Base Rent set forth below shall be
adjusted by Landlord’s
obligation to nay Tenant the Base Rent Abatement (defined in
Section 4.01 ).
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I through 2
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12/1/08 through 1/31/09
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$0.00
($23.25/SF
Base Rent abated)
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14,863
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$0.00
($23.25/SF
Base Rent abated)
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$0.00
($23.254/SF
Base Rent abated)
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3 through 14
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2/1/09 through 1/31/10
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$23.25
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14,863
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$345,564.72
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$28,797.06
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15 through 26
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2/1/10 through 1/31/11
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$23.83
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14,863
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$354,185.28
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$29,515.44
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27 through 38
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2/1/11 through 1/31/12
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$24.43
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14,863
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$363,103.08
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$30,258.59
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39 through 50
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2/1/12 through 1/31/13
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$25.04
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14,863
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$372,169.56
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$31,014.13
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51 through 62
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2/1/13 through 1/31/14
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$25.67
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14,863
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$381,533.16
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$31,794.43
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63 through 74
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2/1/14 through 1/31/15
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$26.31
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14,863
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$391,045.56
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$32,587.13
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75 through 86
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2/1/15 through 1/31/16
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$26.96
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14,863
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$400,706.52
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$33,392.21
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87 through 88
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2/1/16 through 3/31/16
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$27.63
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14,863
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$68,444.12
($for 2 months)
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$34,222.06
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Base Operating
Expense Factor:
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Year 2009
actual Operating Expenses expressed by a
price per square foot leased
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Parking:
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3 unreserved
parking spaces per each 1,000 Square Foot leased (rounded down to
the nearest whole number) subject to Subsection
6.01(f)
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Monthly Rent
per Parking Space:
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N/A
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Term:
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7
Year(s)
4 Month(s)
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Target
Commencement Date:
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December 1, 2008
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Target
Expiration Date:
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March 31,
2016
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Security for
the Lease:
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$29,000.00 cash
or Letter of Credit (defined and set forth in
Section 4.06 )
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Permitted
Use:
Permitted Occupancy:
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General
business offices for a biopharmaceuticals firm 52 persons (rounded
down to the nearest whole number), subject to
Section 6.01(b ).
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(k)
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Addresses for
notices and other communications (including Rent payments) under
this Lease:
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Landlord:
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Tenant:
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Prior to the
Commencement Date:
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Prior to the
Commencement Date:
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Crescent
Lakeside, LLC
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Cornerstone
BioPharma Holdings, Inc.
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c/o Capital
Associates
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2000 Regency
Parkway
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1100 Crescent
Green, Suite 250
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Suite 255
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Cary, North
Carolina 27518
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Cary, North
Carolina 27518
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(919)
233-9901
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(888)
466-6505
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After the
Commencement Date:
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After the
Commencement Date:
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Crescent
Lakeside, LLC
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Cornerstone
BioPharma Holdings, Inc.
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c/o Capital
Associates
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1255 Crescent
Green, Suite 250
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1100 Crescent
Green, Suite 250
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Cary, North
Carolina 27518
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Cary, North
Carolina 27518
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Attn: Chenyqua
Baldwin
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2
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(919)
233-9901
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Ph:
(888) 466-6505
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Broker:
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Capital
Associates
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Co-Broker:
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The Staubach
Company
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ARTICLE 3 — TERM AND
POSSESSION
(a) This
Lease shall be and continue in full force and effect for the term
set forth in Subsection 2.01(g) . as it may be modified,
renewed and extended pursuant to Exhibit G or by written
agreement between Landlord and Tenant (the “Term”).
Subject to the remaining provisions of this Article, the
“Commencement Date” shall be the date on which Landlord
tenders possession of the Leased Premises to Tenant, which such
date is anticipated to be the Target Commencement Date shown in
Subsection 2.01(h) . The Term shall commence on the
Commencement Date and shall expire, without notice to Tenant, on
the last day of the last month of the Term (the “Expiration
Date”) (i.e. if the Commencement Date is other than the first
(1st) day of the month, the Expiration Date shall nevertheless be
the last day of the last month of the Term).
(b) If the
Commencement Date and Expiration Date are different from the Target
Commencement Date and the Target Expiration Date, respectively, as
set forth in Subsection 2.01(h) . Landlord and Tenant shall
execute an amendment to the Lease setting forth such actual dates,
and adjusting any Base Rent payment schedule, if applicable. If
such amendment is not executed, the Commencement Date and
Expiration Date shall be conclusively deemed to be the Target
Commencement Date and the Target Expiration Date set forth in
Subsection 2.01(h) .
(c) Upon the
expiration or other termination of this Lease, Landlord shall have
the right to immediately re-enter and take possession of the Leased
Premises.
(a) Subject
to Section 3.03 hereof, if, (i) any of the work
described in Exhibit C that is required to be performed by
Landlord or Landlord’s contractors) to prepare the Leased
Premises for occupancy has not been substantially completed (as set
forth below) on or before the Target Commencement Date or
(ii) Landlord is unable to tender possession of the Leased
Premises to Tenant on the Target Commencement Date, then the
Commencement Date (and commencement of installments of Base Rent)
shall be postponed until Landlord is able to tender possession of
the Leased Premises to Tenant with the work to be performed in the
Leased Premises having been substantially completed, and the
postponement shall operate to extend the Expiration Date in order
to give full effect to the stated duration of the Term.
(b) The
deferment of installments of Base Rent shall be Tenant’s
exclusive remedy for postponement of the Commencement Date, and
Tenant shall have no, and waives any, claim against Landlord
because of any such delay.
(c) Notwithstanding
the foregoing, if the Leased Premises are not substantially
completed on or before March 1, 2009, due solely to delays
caused by Landlord, then Landlord shall provide Tenant with notice
as to the cause(s) for the delay in substantial completion of the
Leased Premises. Tenant may then by giving Landlord notice on or
before March 10, 2009, terminate this Lease so long as the
Leased Premises are not substantially complete prior to the date
notice is given. If Tenant does not provide notice on or before
March 10, 2009, Tenant shall waive its right to terminate this
Lease in accordance with this provision. The Leased Premises shall
be deemed to be substantially complete the day after inspection and
approval for occupancy for the intended use, whether permanent,
conditional, or temporary, by the Town of Cary, North Carolina,
provided said approval is subsequently evidenced by a certificate
of occupancy, whether permanent, conditional, or temporary, issued
by said municipality, which such certificate of occupancy may be
dated when actually processed by such municipality, rather than the
date of the inspection and approval for occupancy. Further
notwithstanding, Tenant shall not have the right to terminate the
Lease if Tenant has taken possession of any part of the Leased
Premises.
3
No delay in the
completion of the Leased Premises resulting from delay or failure
on the part of Tenant in furnishing information or other matters
required in Exhibit C . and no delay resulting from any
cause set forth in Section 6 of Exhibit C . shall
delay the Commencement Date, Expiration Date or commencement of
payment of Rent (as defined in Section 4.02
below).
3.04
Tenant’s Possession.
If, prior to the
Commencement Date, Tenant shall enter into possession of all or any
part of the Leased Premises, the Term, the payment of monthly
installments of Base Rent and all other obligations of Tenant to be
performed during the Term shall commence on, and the Commencement
Date shall be deemed to be, the date of such entry; provided, no
such early entry shall operate to change the Expiration
Date.
3.05
Acceptance of Leased Premises.
Tenant shall
confirm its acceptance of the Leased Premises by execution of the
Acceptance of Leased Premises Memorandum attached hereto as
Exhibit B . Tenant shall execute and deliver such
Acceptance of Leased Premises Memorandum to Landlord within ten
(10) business days of receipt thereof, and Tenant’s
failure to do same shall be considered an event of default under
this Lease.
If Tenant shall
remain in possession of the Leased Premises after the expiration or
earlier termination of this Lease, without the execution of a new
lease or an amendment to this Lease or other written agreement by
and between Landlord and Tenant extending the Term, Tenant shall
become a tenant-at-sufferance, and for a period of sixty
(60) calendar days after such termination or expiration, as
the case may be, shall pay daily rent at one hundred fifty percent
(150%) of the per day Rent (as defined in Section 4.02
) payable with respect to the last full calendar month immediately
prior to the end of the Term or termination of this Lease, but
otherwise shall be subject to all of the terms, conditions,
provisions and obligations of this Lease, and such tenancy may be
terminated by Landlord or Tenant at any time on seven
(7) calendar days’ prior notice. After such sixty
(60) day period Tenant shall continue to be a
tenant-at-sufferance, terminable on one (1) day’s
notice, and shall pay daily rent at double the per day Rent payable
with respect to the last full calendar month immediately prior to
the end of the Term or termination of this Lease, but otherwise
shall be subject to all of the obligations of Tenant under this
Lease. Tenant shall indemnify Landlord (i) against all claims
for damages by any other tenant to whom Landlord may have leased
all or any part of the Leased Premises effective upon the
termination or expiration of this Lease, and (ii) for all
other losses, costs and expenses, including consequential damages
and reasonable attorneys’ fees, sustained or incurred by
reason of such holding over. In the event of any holdover and
failure of Tenant to pay the holdover rent set forth herein,
Landlord shall have the right to immediately apply the Security (as
defined and set forth in Section 4.06 ) to the Rent, at
the holdover rate set forth herein, for as many days as would be
represented by the amount of the Security. Nothing contained herein
shall be construed as a consent by Landlord to any holding over by
Tenant. The rights and obligations contained in this Section shall
survive the expiration or other termination of this
Lease.
ARTICLE 4 — RENT AND
SECURITY FOR THE LEASE
Tenant shall pay
to Landlord rent (“Base Rent”) beginning on the
Commencement Date and throughout the Term in the amount of the
Annual Base Rent set forth in Subsection 2.01(d) . Base Rent
shall be payable in monthly installments in the amount set forth in
Subsection 2.01(d) (“Monthly Base Rent”) in
advance and without demand, on the first day of each and every
calendar month during the Term. If the Commencement Date is not the
first day of a month, Tenant shall be required to pay on the
Commencement Date a pro rata portion of the Initial Monthly Base
Rent for the first partial month of the Term. However, any
references to any “month” of the Term elsewhere in this
Lease shall mean a full month of the Term. Notwithstanding anything
to the contrary contained in this Lease, Tenant shall pay Landlord
Base Rent as set forth in Section 2.01(d) . and Landlord
shall reimburse Tenant in the amounts set forth in the chart below
within five (5) calendar days of the first (1st) day of each
appropriate month (individually or collectively as the sense
requires, the “Base Rent Abatement"’) without demand,
deduction or offset Further notwithstanding anything contained in
this Lease, Landlord, in its sole discretion, reserves the right to
accelerate and pay any unpaid portion of the Base Rent Abatement
prior to the time scheduled to make a Base Rent
Abatement
4
payment. Tenant
shall not be entitled to a Base Rent Abatement payment if it has
not paid Rent for the month in which the payment is to
occur.
|
|
|
|
|
|
|
|
|
|
|
Month of the Term
|
|
Percent Abatement
|
|
Base Rent Abatement
Amount
|
|
|
|
|
100
|
%
|
|
$
|
28,797.06
|
|
|
|
|
|
100
|
%
|
|
$
|
28,797.06
|
|
|
|
|
|
100
|
%
|
|
$
|
29,515.44
|
|
|
|
|
|
100
|
%
|
|
$
|
29,515.44
|
|
|
|
|
|
100
|
%
|
|
$
|
30,258.59
|
|
|
|
|
|
100
|
%
|
|
$
|
30,258.59
|
|
|
|
|
|
50
|
%
|
|
$
|
15,129.30
|
|
|
|
|
|
50
|
%
|
|
$
|
15,507.06
|
|
|
|
|
|
50
|
%
|
|
$
|
15,507.06
|
|
|
|
|
|
50
|
%
|
|
$
|
15,507.06
|
|
|
|
|
|
50
|
%
|
|
$
|
15,507.06
|
|
|
|
|
|
50
|
%
|
|
$
|
15,897.22
|
|
As used in this
Lease, “Rent” shall mean the Base Rent, Additional Rent
(defined below), late charges, and all other amounts required to be
paid by Tenant pursuant to this Lease. The Rent shall be paid at
the times and in the amounts provided herein by check drawn on a
United States of America bank to Landlord at its address specified
in Subsection 2.0l(k) above, or to such other person or at
such other address as Landlord may from time to time designate in
writing. The Rent shall be paid without notice, demand, abatement,
deduction or offset except as may be expressly set forth in this
Lease.
The term
“Additional Rent” shall mean the total of the
“Operating Expense Adjustment”, as such term is defined
below, and any other amounts in addition to Base Rent which Tenant
is required to pay to Landlord under this Lease.
4.04
Operating Expense Adjustment
(a) Commencing
January 1, 2010, if the Operating Expenses (defined below) for
the Building for any calendar year, expressed on a per square foot
basis, exceed the Base Operating Expense Factor specified in
Subsection 2.01(e) . Tenant shall pay to Landlord increased
Rent (an “Operating Expense Adjustment”) in an amount
equal to the product of such excess times the square feet of the
Leased Premises as stated in Subsection 2.01(b) . The
Operating Expense Adjustment shall be payable in monthly
installments on the first day of each calendar month based on
Landlord’s estimate of the Operating Expenses for the then
current year. Landlord and Tenant specifically acknowledge and
agree that the Operating Expense Adjustment shall not be subject to
any Base Rent Abatement.
(b) Landlord
may at any time give Tenant written notice specifying
Landlord’s estimate of the Operating Expenses for the then
current calendar year or the subsequent calendar year and
specifying the Operating Expense Adjustment to be paid by Tenant
for each such year, and Tenant shall adjust its payments
accordingly beginning with the monthly installment immediately
following Landlord’s notice.
(c) Within
one hundred twenty (120) calendar days after the end of each
calendar year, Landlord shall give written notice to Tenant
specifying the actual Operating Expenses for the prior calendar
year and any necessary adjustment to the Operating Expense
Adjustment paid by Tenant for that calendar year. Tenant shall pay
any deficit amount to Landlord within fifteen (15) business
days after receipt of Landlord’s written notice. Any excess
payment by Tenant for the prior calendar year shall be applied
towards Tenant’s obligation to pay its proportionate share of
adjusted Operating Expenses for the following calendar year, or, if
the Lease has expired or terminated, be returned to Tenant by
Landlord.
(d) Tenant
shall have the right, one (1) time per year, upon written
notice to Landlord, within sixty (60) calendar days of receipt
of the Operating Expense statement, to have Landlord’s books
and records relating solely to Operating Expenses contained in the
statement for the prior year, reviewed. If Landlord’s
calculation of
5
Operating
Expenses fails to comply with the requirements of this
Section 4.04 or contains any other error, as determined
by the review, Tenant’s past payments of its proportionate
share of Operating Expenses for the subject year shall be adjusted
in accordance with the results of the review, and appropriate
payments shall be made by Landlord or Tenant, as the case may be,
within forty-five (45) calendar days after completion of the
review.
(e) All books
and records necessary to accomplish any review permitted under this
Section 4.04 shall be retained by Landlord for a period of one
(1) year, and shall be made available to the person conducting
the review at the Building, Project or the office of
Landlord’s property manager, during normal business hours.
All of Landlord’s and Tenant’s costs of the review
shall be paid by Tenant unless the review reveals that total
Operating Expenses were misstated by seven and one-half percent
(7.5%) or more in the calendar year reviewed, in which case
Landlord shall reimburse Tenant for Tenant’s reasonable costs
of the review, not to exceed Two Thousand Five Hundred Dollars
($2,500.00). The rights and obligations contained in this Section
shall survive the expiration or other termination of this
Lease.
(f) The term
“Operating Expenses” shall mean, except as otherwise
specified in this definition, all expenses, costs, and
disbursements of every kind and nature, computed on an accrual
basis, which Landlord shall pay or become obligated to pay because
of or in connection with the ownership and operation of the
Building, or Landlord’s efforts to reduce Operating Expenses,
including, without limitation:
|
|
(1)
|
|
wages and salaries of all employees
to an extent commensurate with such employees’ involvement in
the operation, repair, replacement, maintenance, and security of
the Building, including, without limitation, amounts attributable
to the employer’s Social Security Tax, unemployment taxes,
and insurance, and any other amount which may be levied on such
wages and salaries, and the cost of all insurance and other
employee benefits related thereto;
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|
|
|
|
|
|
(2)
|
|
all
supplies and materials used in the operation, maintenance, repair,
replacement and security of the Building;
|
|
|
|
|
|
|
|
(3)
|
|
the
rental costs of any and all leased capital improvements and the
annual amortization of any and all capital improvements made to the
Building which, although capital in nature, can reasonably be
expected to reduce the normal operating costs of the Building, to
the extent of the lesser of such expected reduction in Operating
Expenses or the annual amortization of such capital improvements,
as well as all capital improvements made in order to comply with
any legal requirement hereafter promulgated by any governmental
authority including, but not limited to, requirements relating to
the environment, energy, conservation, public safety, access for
the disabled or security, as amortized over the useful life of such
improvements by Landlord for federal income tax
purposes;
|
|
|
|
|
|
|
|
(4)
|
|
the
cost of all utilities, other than the cost of electricity supplied
to tenants of the Building which is separately metered and
reimbursed to Landlord by such tenants;
|
|
|
|
|
|
|
|
(5)
|
|
the
cost of all maintenance and service agreements with respect to the
operation of the Building or any part thereof, including, without
limitation, management fees, alarm service, equipment, window
cleaning, elevator maintenance, landscape maintenance, and parking
area maintenance and operation;
|
|
|
|
|
|
|
|
(6)
|
|
the
cost of all insurance relating to the Building and each of the
premises contained therein, including, without limitation, casualty
and liability insurance applicable to the Building and
Landlord’s personal property used in connection
therewith;
|
|
|
|
|
|
|
|
(7)
|
|
all
taxes and assessments and governmental charges, whether federal,
state, county, or municipal, and whether by taxing districts or
authorities presently taxing or by others, subsequently created or
otherwise, including all taxes levied or assessed against or for
leasehold improvements and any other taxes and assessments
attributable to the Building and/or the operation thereof, together
with the reasonable cost (including attorneys, consultants and
appraisers) of any negotiation, contest or appeal pursued by
Landlord in an effort to reduce any such tax, assessment or charge,
excluding, however, federal and state taxes on Landlord’s
income, but including all rental, sales, use and occupancy taxes or
other similar taxes, if any, levied or imposed by any city, state,
county, or other governmental body having jurisdiction;
and
|
|
|
|
|
|
|
|
(8)
|
|
the
cost of all repairs, replacements, removals and general maintenance
with respect to the Building.
|
6
(g) Specifically
excluded from Operating Expenses are:
|
|
(1)
|
|
expenses for capital improvements
made to the Building, other than capital improvements described in
Section 4.04(f)(3) above and except for items which, though
capital for accounting purposes, are properly considered
maintenance and repair items, such as painting and/or wallpapering
of common areas, replacement of carpet in elevator lobbies and like
items;
|
|
|
|
|
|
|
|
(2)
|
|
expenses for repair, replacement and
general maintenance paid by proceeds of insurance or by Tenant or
other third parties;
|
|
|
|
|
|
|
|
(3)
|
|
alterations attributable solely to
tenants of the Building including the initial Tenant Improvements
and those made on Tenant’s behalf;
|
|
|
|
|
|
|
|
(4)
|
|
increases in taxes resulting from
higher valuations of the Building attributable to Tenant’s
Tenant Improvements (defined in Exhibit C ) or alterations
made by Tenant in excess of typical fitups in the Building, which
increase shall be paid by Tenant as Additional Rent;
|
|
|
|
|
|
|
|
(5)
|
|
depreciation of the
Building;
|
|
|
|
|
|
|
|
(6)
|
|
leasing commissions; and
|
|
|
|
|
|
|
|
(7)
|
|
federal and state income taxes
imposed on Landlord.
|
Notwithstanding
anything to the contrary in the specific exclusions from Operating
Expenses set forth above, Operating Expenses shall, also, not
include the following:
|
|
(i)
|
|
Landlord’s general corporate
overhead and general administrative expenses, other than charges
for property management and in-house labor provided for maintenance
of the Building;
|
|
|
|
|
|
|
|
(ii)
|
|
costs arising from Landlord’s
charitable or political contributions;
|
|
|
|
|
|
|
|
(iii)
|
|
federal and state income and
franchise taxes of Landlord or any other such taxes not in the
nature of real estate taxes, except taxes on Rent;
|
|
|
|
|
|
|
|
(iv)
|
|
management fees to the extent they
exceed the greater of (a) reasonable, similar costs incurred in
comparable office buildings in the Raleigh, North Carolina area, or
(b) five percent (5%) of the gross rent received for the
Building;
|
|
|
|
|
|
|
|
(v)
|
|
salaries, wages or other
compensation paid to officers or executives of Landlord above the
level of property manager in their respective
capacities;
|
|
|
|
|
|
|
|
(vi)
|
|
overhead and profit increments paid
to subsidiaries or affiliates of Landlord for services on or to the
Building or Project, to the extent only that the costs of such
services exceed competitive costs of such services were they not
rendered by a subsidiary or affiliate;
|
|
|
|
|
|
|
|
(vii)
|
|
any
compensation paid to clerks, attendants or other persons in
commercial concessions operated by Landlord;
|
|
|
|
|
|
|
|
(viii)
|
|
capital expenditures required by
Landlord’s gross negligence or willful misconduct to comply
with laws enacted on or before the Commencement Date of the
Lease;
|
|
|
|
|
|
|
|
(ix)
|
|
costs incurred by Landlord for the
repair of damage to the Building, to the extent Landlord is
reimbursed by insurance proceeds;
|
|
|
|
|
|
|
|
(x)
|
|
renovating or otherwise improving or
decorating, painting or redecorating space leased to other tenants
or other occupants of the Building;
|
|
|
|
|
|
|
|
(xi)
|
|
costs for sculpture, paintings or
other objects of art;
|
7
|
|
(xii)
|
|
electrical power costs and other
services for which any tenant directly contracts with the local
service company;
|
|
|
|
|
|
|
|
(xiii)
|
|
expenses in connection with services
or other benefits which are not available to Tenant or for which
Tenant is charged directly, but which are not made available to
another tenant or occupant of the Building;
|
|
|
|
|
|
|
|
(xiv)
|
|
all
items and services for which Tenant has reimbursed Landlord or has
paid to third persons;
|
|
|
|
|
|
|
|
(xv)
|
|
any
ground lease rental;
|
|
|
|
|
|
|
|
(xvi)
|
|
interest, principal, points and fees
on debts, or amortization on any mortgage or other debt instrument
encumbering the Building or the Land;
|
|
|
|
|
|
|
|
(xvii)
|
|
legal and other costs associated
with the mortgaging, refinancing or sale of the Building, Land or
Project or any interest therein;
|
|
|
|
|
|
|
|
(xviii)
|
|
tax
penalties incurred as a result of Landlord’s gross
negligence, willful misconduct or inability to make payments when
due;
|
|
|
|
|
|
|
|
(xix)
|
|
any
costs and expenses related to or incurred in connection with
disputes with tenants of the Building or Land or any lender for the
Building or Land; and
|
|
|
|
|
|
|
|
(xx)
|
|
costs associated with leasing or
marketing space in the Building, including tenant improvements,
advertising, lease commissions, legal fees to negotiate leases,
space planning and marketing materials.
|
(h) If the
average occupancy rate for the Building is less than ninety-five
percent (95%) in any calendar year of the Term, or if Landlord is
providing less than ninety-five percent (95%) of the Building with
any item or items of work or service which would constitute an
Operating Expense hereunder, then the amount of the Operating
Expenses for such period shall be adjusted to include any and all
items enumerated under the definition of Operating Expenses set
forth in this Subsection which Landlord reasonably determines
Landlord would have incurred if the Building had been at least
ninety-five percent (95%) leased and occupied with all tenant
improvements constructed or if Landlord had been providing such
item or items of work or service to at least ninety-five percent
(95%) of the Building. If the actual occupancy rate for the
Building is ninety-five percent (95%) or greater, then the actual
Operating Expenses shall be used for purposes of determining the
Operating Expense Adjustment described in this
Section 4.04 . The parties agree that since the
Building is under construction and will not be completed until
around September 2008, Operating Expenses for 2009 shall be
adjusted so that they are consistent with Operating Expenses for a
stabilized class “A” office building in the greater
Raleigh, Durham and Chapel Hill areas of North Carolina.
4.05 Cost of
Living Adjustment
4.06
Security for the Lease.
(a) Tenant
shall deposit with Landlord on or before October 31, 2008,
security for the payment of all Rent and other charges owed by
Tenant pursuant to this Lease and the performance by Tenant of all
of Tenant’s obligations under this Lease in the amount
specified in Subsection 2.01(i ) (the
“Security”), which Security may be in the form of cash
or a Letter of Credit (defined below) on the understanding that:
(i) the Security or any portion thereof may be applied to the
curing of any default, or the payment of any damages sustained by
Landlord due to Tenant’s failure to perform its obligations,
including, but not limited to, the payment of Rent and any
alteration and repair obligations under Article 7 herein,
without prejudice to any other remedy or remedies at law or in
equity which Landlord may have on account thereof, and upon such
application Tenant shall pay Landlord on demand, by check drawn on
a United States of America bank, the amount so applied which shall
be added to the remaining balance of the Security so the same will
be restored to its original amount; (ii) Landlord shall not be
obligated to
8
hold the
Security as a separate fund, and may commingle it with other funds;
and (iii) within thirty (30) calendar days after the
expiration of the Term, provided Tenant is not in default at the
expiration of the Term and has delivered exclusive possession of
the Leased Premises to Landlord, the remaining balance of the
Security shall be returned to Tenant, without interest, which shall
belong to Landlord.
(b) In the
event Tenant elects to provide Landlord with a Letter of Credit in
lieu of cash Security, then prior to October 31, 2008, Tenant
shall provide Landlord with and shall maintain in effect at all
times during the Term of this Lease, security in the form of a
clean, unconditional and irrevocable letter of credit
(“Letter of Credit”) as described below. Landlord may
draw on the Letter of Credit, in whole or in part (at
Landlord’s option), if: (i) Tenant defaults with respect
to any of the terms, conditions or provisions of this Lease on the
Tenant’s part to be observed or performed, including but not
limited to, the payment of Rent or Additional Rent, and such
default continues beyond the applicable cure period, if any, or
(ii) Tenant, or anyone holding possession of the Leased
Premises through Tenant, holds over in the Leased Premises after
the expiration or sooner termination of the Term of this Lease, or
(iii) Landlord is given notice that the bank issuing the
Letter of Credit is terminating the Letter of Credit, or
(iv) the Letter of Credit is scheduled to expire as of the
stated date by its terms and is not replaced with a Letter of
Credit meeting the criteria set forth in this
Section 4.06 at least sixty (60) calendar days
prior to the Letter of Credit’s stated expiration
date.
(c) Landlord
shall have the right to draw down the Letter of Credit and apply
the proceeds of the Letter of Credit to the curing of any default
by Tenant, including, but not limited to, the payment of Rent or
Additional Rent, or the payment of any damages sustained by
Landlord due to Tenant’s failure to perform its obligations,
including, but not limited to, alteration and repair obligations
under Article 7 herein, without notice to Tenant and prejudice
to any other remedy or remedies at law or in equity which Landlord
may have on account thereof. Landlord’s right to draw upon
the Letter of Credit shall be based upon Landlord’s written
statement to the issuer that Tenant is in default under the terms
of the Lease and presentation of a sight draft. Upon any such
application, Tenant shall, within ten (10) calendar days after
Landlord gives Tenant notice thereof, cause the Letter of Credit to
be reissued for the full face amount required herein, so that the
Letter of Credit will be restored to its original amount. In the
event that any of the proceeds of the Letter of Credit are not
applied to cure such default of Tenant, Landlord shall hold such
unapplied proceeds as cash security for the full and faithful
performance by Tenant of its obligations under this
Lease.
(d) Any cash
proceeds received by Landlord and held as security may be
commingled with other funds of Landlord without Landlord being
responsible to Tenant for the payment of any interest thereon. If
Tenant fully and faithfully complies with all of the terms,
covenants and provisions of this Lease, the Letter of Credit and/or
any unapplied cash proceeds drawn from the Letter of Credit and
held as security for this Lease shall be returned to Tenant,
without interest, within thirty (30) calendar days after the
expiration of the Term of this Lease and delivery of exclusive
possession of the Leased Premises to Landlord.
(e) The
Letter of Credit shall be an unconditional, irrevocable, clean
Letter of Credit (which permits partial draws), payable on sight in
cash, in favor of Landlord, Landlord’s lender or an assignee
of Landlord, at Landlord’s election and shall be in the
amount of Twenty-nine Thousand Dollars ($29,000.00). The Letter of
Credit shall be acceptable to Landlord, acting reasonably with
regard to both form and content, and shall be executed by a
third-party nationally recognized banking institution
(“Bank”) with local offices, acceptable to Landlord,
acting reasonably, and Bank shall have an office in Raleigh, North
Carolina, available as a designated payment center in order that
Landlord may present the Letter of Credit for same-day payment. The
Letter of Credit shall be transferable by Landlord or any other
beneficiary. The Letter of Credit shall be governed by the
International Standby Practices set forth by the International
Chamber of Commerce. The Letter of Credit shall either:
(i) have an expiration date no earlier than thirty
(30) calendar days after the expiration date of the Term of
this Lease, or (ii) have an expiration date no earlier than
the first anniversary of the date of issuance therefor and shall
provide that it shall be automatically renewed from year to year
unless terminated by Bank by notice to Landlord given not less than
sixty (60) calendar days prior to the then expiration date
thereof by certified or registered mail, in which such event Tenant
shall, within fifteen (15) calendar days after notice is given
to Tenant by Landlord, deliver to Landlord either a substitute
letter of credit meeting the requirements herein or cash Security
in the Letter of Credit amount. The final expiration date of the
Letter of Credit (including any renewals) shall be no earlier than
thirty (30) calendar days after the expiration date of this
Lease. Tenant’s failure to provide Landlord with the Letter
of Credit when due, including any renewal(s) of the Letter of
Credit, shall be deemed an event of monetary default under this
Lease.
9
(f) If
Landlord at any time requests any reasonable change in the terms,
conditions or provisions of the Letter of Credit, Tenant shall
promptly cause such Letter of Credit to be so modified. If the
Letter of Credit is lost, mutilated, stolen or destroyed while in
Landlord’s possession, Tenant shall cooperate with
Landlord’s efforts to cancel the lost, mutilated, stolen or
destroyed Letter of Credit and to replace such Letter of Credit at
Landlord’s expense. If the Bank becomes unacceptable to
Landlord, at Landlord’s reasonable discretion, Tenant shall,
within fifteen (15) calendar days after notice is given to
Tenant by Landlord, deliver to Landlord either a substitute letter
of credit meeting the requirements herein or cash security in the
Letter of Credit amount. In the event Landlord transfers its
interest in the Land and Building to another owner, Landlord may
transfer the Letter of Credit to the new owner. If the Letter of
Credit is so transferred, Landlord shall thereupon be released by
Tenant from all liability for the return of the Letter of Credit,
and Tenant shall look solely to the new owner for the return of the
Letter of Credit in accordance with the terms of this Lease. If
Landlord desires to transfer the Letter of Credit to such new
owner, Tenant shall cooperate in effecting such transfer; provided
that Landlord shall pay the Bank’s usual and customary fee
for transferring such Letter of Credit.
(g) The
rights and obligations contained in this Section 4.06
shall survive the expiration or other termination of this
Lease.
If Tenant fails or
refuses to pay any installment of Rent when due, Landlord, shall
have the right to collect a late charge of five percent (5%) of the
amount of the late payment to compensate Landlord for the
additional expense involved in handling delinquent payments and not
as interest; provided, however, that Tenant shall be allowed one
(1) late payment of Rent in each calendar year of the Term,
which late payment shall not be subject to a late charge hereunder
so long as such Rent is paid within five (5) calendar days of
the due date. If the payment of a late charge required by this
Section is found to constitute interest notwithstanding the
contrary intention of Landlord and Tenant, the late charge shall be
limited to the maximum amount of interest that lawfully may be
collected by Landlord under applicable law, and if any payment is
determined to exceed such lawful amount, the excess shall be
applied to any unpaid Rent then due and payable hereunder and/or
credited against the next succeeding installment of Rent payable
hereunder. If all Rent payable hereunder has been paid in full, any
excess shall be refunded to Tenant. Tenant shall reimburse Landlord
for any processing fees charged to Landlord as a result of
Tenant’s checks having been returned for insufficient
funds.
(a) Landlord
shall furnish Tenant while occupying the Leased Premises, subject
to curtailment as required by governmental laws, rules or
regulations, the following:
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(1)
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central heat and air conditioning in
season, at such times as Landlord normally furnishes these services
to other tenants in the Building and at such temperatures and in
such amounts as are considered by Landlord to be standard for other
class “A” office buildings in the greater Raleigh,
Durham and Chapel Hill areas of North Carolina, but such service on
Saturday afternoons, Sundays and the holidays listed in the
“Building Rules” (which such Building Rules are
attached hereto as Exhibit D and are incorporated
herein by reference in their entirety), shall be furnished only
upon request of Tenant, who shall bear the cost thereof as provided
in Exhibit F attached hereto;
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(2)
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elevator service;
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(3)
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routine maintenance for the Building
pursuant to Section 7.03, in the manner and to the extent
deemed by Landlord to be standard for other class “A”
office buildings in the greater Raleigh, Durham and Chapel Hill
areas of North Carolina;
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(4)
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Building-standard electric lighting
service for the Building;
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(5)
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janitor service on a five
(5) day week basis, provided, however, if Tenant’s floor
coverings or other improvements require special care, Tenant shall
pay the additional cleaning cost attributable to same;
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(6)
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water and sewer service that is
considered standard for other class “A” office
buildings in the greater Raleigh, Durham and Chapel Hill areas of
North Carolina, but in no event
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more than
Tenant’s pro rata share of water and sewer service that is
available to the Building;
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(7)
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proper electrical facilities to
furnish sufficient power for personal computers, fax machines,
desktop computer printers, calculating machines and other machines
of similar low electrical consumption, but not including
electricity required for any equipment or machine which
(individually) consumes more than 0.25 kilowatts per hour at a
rated capacity or requires a voltage other than 120 volts single
phase. Tenant shall not use more than its pro rata share of
electrical circuits for power and lighting available for all
tenants on the floor of the Building where the Leased Premises are
located;
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(8)
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general landscaping for the
Building;
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(9)
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snow and ice removal from Building
parking lots.
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(b) Tenant
shall not contract with janitor, window washing or maintenance
services.
(c) If
Landlord’s engineer determines that Tenant’s
electrical, water or sewer usage exceeds the usage set forth in
Subsection 5.01(a) , or that maintenance and repair costs
have increased because Tenant’s use is excessive, then Tenant
shall pay Landlord for all increased costs related to the excess
use or usage, including increased utility charges, janitorial costs
and maintenance and repair costs. Tenant shall pay any excess use
costs immediately upon receipt of notice from Landlord which notice
shall include any relevant invoices and supporting documentation
therefor. For the purposes of this Lease, excess usage or use shall
include, but not be limited to, continuous occupancy of the Leased
Premises above the Permitted Occupancy number shown in Subsection
2.01(j) and Section 6.01(b) , use or occupancy of the
Leased Premises more than twenty (20) straight hours per day,
and continuous operation (24/7) of Building systems.
(d) If Tenant
uses any heat generating machines, equipment, fixtures or other
devices of any nature whatsoever in the Leased Premises which
affect the temperature otherwise maintained by the Building
standard air conditioning, Tenant shall pay the additional cost
necessitated by Tenant’s use of such machines, equipment,
fixtures or other devices, including the cost of installation of
any necessary additional air conditioning equipment and the cost of
operation and maintenance thereof. Tenant shall pay such additional
cost immediately upon receipt of notice from Landlord which notice
shall include any relevant invoices and supporting documentation
therefor.
(e) Should
any of Landlord’s equipment or machinery break down, or for
any cause cease to function properly, Landlord shall use reasonable
diligence during normal business hours to repair same promptly, but
Tenant shall have no claim for rebate of rent or damages on account
of any interruptions in service occasioned thereby or resulting
therefrom, except as otherwise set forth herein or if such
breakdown or malfunction resulted solely from Landlord’s
negligence or willful misconduct.
(f) Landlord
shall, as an Operating Expense hereunder, provide receptacles and
containers as necessary for Tenant to comply with all orders,
requirements and conditions now or hereafter imposed by any
ordinances, laws, orders and/or regulations (hereinafter
collectively called “Recycling Regulations”) of any
governmental body having jurisdiction over the Leased Premises or
the Building regarding the collection, sorting, separation and
recycling of waste products, garbage, refuse and trash.
(g) Failure
by Landlord to any extent to commence or continue the furnishing of
services in accordance with this Section 5.01 which
results from causes beyond the reasonable control of Landlord shall
not render Landlord liable in any respect for damages to either
person or property, nor be construed as an eviction of Tenant, nor
work an abatement of rent, nor relieve Tenant from its obligation
to fulfill any covenant or agreement hereof.
(h) If
(i) the services which Landlord is obligated to provide are
continuously interrupted for four (4) consecutive business
days after Landlord’s receipt of notice from Tenant
(“Interruption”), and (ii) Tenant is unable to
conduct business in the Leased Premises as a result of the
Interruption, and (iii) Tenant has notified Landlord
immediately in writing that Tenant is unable to conduct its
business, and (iv) the Interruption is due to the gross
negligence or willful misconduct of Landlord, its employees or
agents, and such services are not restored by Landlord, if under
Landlord’s reasonable control, Tenant shall be entitled to an
abatement of Rent for each day Tenant is unable to conduct its
business operations in the Leased Premises. The abatement shall
begin on the fifth
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(5th)
consecutive business day after Tenant’s delivery to Landlord
of the notice of the Interruption and shall end automatically when
the services are restored.
ARTICLE 6 — USE AND
OCCUPANCY
(a) Tenant
(and its permitted assignees, subtenants, invitees, customers, and
guests) shall use and occupy the Leased Premises solely for the
purpose that is specified in Subsection 2.01(j) , and Tenant
may not change said purpose absent Landlord’s prior written
agreement, in Landlord’s reasonable discretion.
(b) Tenant
shall not use or occupy the Leased Premises, or permit any portion
of the Leased Premises to be used or occupied, for any business or
purpose, or in any manner, other than that specified in Subsection
2.01(j) and/or by any number of persons greater man that specified
in Subsection 2.01(j) . Notwithstanding the foregoing,
Tenant may, from time to time but not as a consistent and regular
occurrence, exceed the occupancy limitation set forth above, as
long as such excess occupancy does not have an adverse effect upon
Landlord or the other tenants in the Building, in Landlord’s
sole, reasonable discretion. For the purposes of this Section, it
shall not be consistent or regular if the occupancy limitation is
exceeded less than five (5) consecutive days or ten
(10) cumulative days, per month in order for Tenant to conduct
training in the Leased Premises.
(c) Tenant
shall not use or occupy the Leased Premises, or permit any portion
of the Leased Premises to be used or occupied, for any business or
purpose, or in any manner, which (i) is unlawful, disreputable
or deemed to be extra-hazardous on account of fire or exposure to
or interference from electromagnetic rays and/or fields,
(ii) violates the Building Rules, (iii) increases the rate of
fire insurance coverage on the Building or its contents, and/or
(iv) is inconsistent with the first-class nature of the
Building.
(d) Tenant
shall conduct its business and control its employees and agents and
all other persons entering the Building under the express or
implied invitation of Tenant, in such manner as not to create any
nuisance, or interfere with, annoy or disturb any other tenant or
Landlord in its operation of the Building.
(e) Tenant
shall not grant any concession or license within the Leased
Premises or allow any person other than Tenant, its partners,
managers, members, officers, directors, employees, contractors and
agents to occupy or use the Leased Premises or any portion
thereof.
(f) Landlord
shall provide Tenant with the number of unreserved parking spaces
set forth in Subsection 2.01(f) of this Lease (which number
includes Tenant’s pro rata share of the total number of
spaces for the Building designated for handicapped or visitors), at
no additional charge. The parties acknowledge that Tenant will use
more spaces than the pro rata share of parking when it conducts
training in the Leased Premises in accordance with Subsection 6.01
(b) above. Landlord agrees that Tenant may use more than its
allotment of parking during the training, so long as Tenant’s
excess parking does not occur more than five (5) consecutive
days or ten (10) cumulative days per month or Tenant’s excess
parking does not prevent other Building tenants from being able to
use their pro rata share of parking spaces. In the event that
Tenant’s excess parking does not comply with this Section,
Landlord shall have the right immediately upon notice to Tenant to
require Tenant to cease its excess parking and use only the spaces
allotted to it in Subsection 2.01(l). Tenant shall notify Landlord
promptly of any additional parking needs, which needs may, in
Landlord’s sole but reasonable discretion, be considered on a
case-by-case basis.
(g) (i) Landlord
shall include up to two (2) listings for Tenant’s name
and suite number on (i) the Building directory(ies) located
inside the Building, and (ii) up to two (2) Building-standard
suite sign(s) to be located at the entrance to the Leased Premises.
For Tenant’s initial listing, the cost of such directory(ies)
and suite signage shall be paid for by Landlord. Any subsequent
changes to directory(ies) and suite signage requested by Tenant
shall be paid for by Tenant within ten (10) calendar days of
receipt of Landlord’s invoice therefor.
(ii) In
addition to the foregoing, when the Building becomes nine-five
percent (95%) leased, and provided Tenant is one of the four
(4) largest tenants in the Building based upon the amount of
square footage leased, is not and has not been in default of the
Lease beyond any applicable cure period, and has not vacated or
assigned the Leased Premises, then Tenant will be entitled to a
non-exclusive position on one (1) slot of the
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monument sign
for the Building with the priority of signage right being
determined by the amount of space leased by the tenant(s) in the
Building. Landlord shall pay for the initial placement of
Tenant’s name or legally assumed name on the monument sign,
and Tenant shall pay for any changes to Tenant’s name or
legally assumed name on such monument sign thereafter. Any monument
signage shall be (I) non-exclusive, (II) designed,
installed, constructed, maintained and removed at the expiration or
other termination of this Lease, at Landlord’s sole cost and
expense, and (III) with regard to design (size, style and font
of the lettering), location, construction and all other aspects,
subject to prior written approval from Landlord (which approval
shall not be unreasonably withheld), the Town of Cary, North
Carolina, and any other governing entity having jurisdiction with
regard to signage at the Building. This type of signage shall not
automatically apply to any subtenant of the Leased Premises, unless
agreed to by Landlord, in its sole discretion.
6.02 Care of
the Leased Premises.
(a) Tenant
shall not commit or allow to be committed any waste or damage to
any portion of the Leased Premises or the Building. Except as
provided otherwise in Section 7.02 of this Lease, at
the expiration or other termination of this Lease, or at the
termination of any holdover, Tenant shall deliver the Leased
Premises to Landlord in the same condition as existed on the
Commencement Date, ordinary wear and tear and loss by insured
casualty and condemnation excepted.
(b) Tenant
shall notify Landlord at least ten (10) business days prior to
vacating the Leased Premises and shall arrange to meet with
Landlord to jointly inspect the Leased Premises. If Tenant does not
give such notice or meet for such joint inspection, then
Landlord’s inspection of the Leased Premises shall be deemed
accurate for the purpose of determining Tenant’s
responsibility for repair and restoration of the Leased
Premises.
(c) In the
event Tenant has not removed all of its equipment and personal
property from the Leased Premises at the expiration or other
termination of this Lease, then Landlord shall have the right to
(i) remove Tenant equipment and personal property from the
Leased Premises, and/or (ii) retain, dispose of or sell any or all
of Tenant’s equipment and personal property, all without
incurring any liability to Tenant whatsoever, and in the event of
any such sale, Landlord shall have the right to immediately apply
the proceeds of the sale and/or the Security to any amount(s) due
under this Lease, including the costs of such removal, retention,
disposal and/or sale.
(d) The
rights and obligations contained in this Section 6.02 shall
survive the expiration or other termination of this
Lease.
6.03
Hazardous or Toxic Materials.
(a) Tenant,
or any of Tenant’s agents, officers or employees, shall not
cause or allow the receipt, storage, use, location, handling,
production, refinement or disposal anywhere in the Building or the
Project of any product, material or merchandise which is explosive,
highly flammable, injurious to health, or a hazardous or toxic
material, as hereafter defined. “Hazardous or Toxic
Materials)” shall include all materials and substances which
have been determined to be hazardous to health or the environment
and are regulated by any applicable federal, state or local laws,
ordinances or regulations.
(b) Notwithstanding
the foregoing, Tenant shall not be in breach of this provision as a
result of the presence in the Leased Premises of minor amounts of
Hazardous or Toxic Materials which are in compliance with all
applicable laws, ordinances and regulations and are customarily
used in a general office environment (e.g., copying machine
chemicals and kitchen cleansers), provided Tenant properly stores,
uses and disposes such Hazardous or Toxic Materials in accordance
with all applicable governmental laws and in accordance with this
Section.
(c) If
requested by Landlord or any ground lessor, Tenant shall identify,
in writing, any or all of Tenant’s Hazardous or Toxic
Materials at the Leased Premises and their quantity(ies),
purpose(s), method(s) of disposal and other related
information.
(d) Landlord
represents and warrants to Tenant, to the best of Landlord’s
actual knowledge and based upon no independent investigation, that,
as of the date of this Lease, the Leased Premises and Building are
free from any Hazardous or Toxic Materials which are prohibited by
any federal, state or local law or regulation. In the event that
Hazardous or Toxic Materials are discovered upon the Leased
Premises after the Commencement Date and the
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Hazardous or
Toxic Materials were not placed in the Leased Premises by Landlord
or any of Landlord’s agents, officers or employees, Tenant
shall bring the Leased Premises into compliance with all relevant
statutes, ordinances and regulations at Tenant’s sole
cost.
(e) The
rights and obligations contained in this Section 6.03
shall survive the expiration or other termination of this
Lease.
6.04 Entry
for Repairs and Inspection.
Tenant shall, upon
reasonable advance oral notice in regards to janitorial and routine
maintenance services and otherwise with advance notice by Landlord
(which such notice may be sent by electronic mail), except in the
case of an emergency when no notice is required, permit Landlord
and its contractors, agents and representatives to enter into and
upon any part of the Leased Premises at all reasonable hours to
inspect and clean the same, make repairs, alterations and additions
thereto, show the same to prospective tenants, lenders or
purchasers, and for any other purpose as Landlord may reasonably
deem necessary or desirable. Landlord shall use commercially
reasonable efforts to minimize disruption to Tenant’s
business in entering the Leased Premises. Tenant shall not be
entitled to any abatement or reduction of Rent by reason of any
such entry. In the event of an emergency, when entry to the Leased
Premises shall be necessary, and if Tenant shall not be personally
present to open and permit entry into the Leased Premises, Landlord
or Landlord’s agent may enter the same by master key, code,
card or switch, or may forcibly enter the same, without rendering
Landlord or such agents liable therefor, and without, in any
manner, affecting the obligations and covenants of this
Lease.
6.05
Compliance with Laws; Rules of Building.
(a) Tenant
shall comply with, and Tenant shall cause its employees and agents
and all other persons entering the Building under the express or
implied invitation of Tenant to comply with, all laws, ordinances,
orders, rules, regulations (state, federal, municipal and other
agencies or bodies having any jurisdiction thereof), and any
recorded covenants, conditions and restrictions of the Project,
which relate to the use, condition or occupancy of the Leased
Premises, the Building or the Project, including, without
limitation, all local, state and federal environmental laws, and
the Building Rules, as such are reasonably altered by Landlord from
time to time and provided to Tenant in writing.
(b) Landlord
represents and warrants, to the best of its knowledge and based
upon no independent investigation that, as of the date of this
Lease, Landlord has complied with all laws, ordinances, orders,
rules and regulations (state, federal, municipal and other agencies
or bodies having any jurisdiction thereof) relating to the use,
condition or occupancy of the Building, including the Americans
with Disabilities Act of 1990 (“ADA”).
(a) Subject
to Section 6.01 and the other terms and conditions set
forth below, Tenant and its employees shall have access to the
Building and the Leased Premises twenty-four (24) hours a day,
three hundred sixty-five (365) days per year. Tenant shall
have no right of access to the roof of the Leased Premises or the
Building or to the roof of any building in the Project.
(b) Tenant
expressly agrees that neither Landlord nor Landlord’s
partners, managers, members, agents, officers, directors, or
employees shall be liable to Tenant or Tenant’s partners,
managers, members, agents, officers, directors and employees or to
any person entering the Leased Premises, Building or Project under
the express or implied invitation of Tenant for any injury, death,
loss or damage arising out of any crime attempted or committed in
the Leased Premises, Building or Project, except as may be provided
otherwise in Section 8 of this Lease.
(c) Landlord
shall have the right to limit access to the Building after normal
business hours. Landlord expressly reserves the right, in its sole
discretion, to temporarily or permanently change the location of,
close, block and otherwise alter any entrances, corridors,
skywalks, tunnels, doorways and walkways leading to or providing
access to the Building or any part thereof and otherwise restrict
the use of same, and, provided such activities do not unreasonably
impair Tenant’s access to, or use of, the Leased Premises,
Landlord shall not incur any liability whatsoever to Tenant as a
consequence thereof. Such activities shall not be deemed to be a
breach of any of Landlord’s obligations hereunder. Landlord
shall exercise good faith in notifying Tenant a reasonable time in
advance of any alterations, modifications or other actions of
Landlord under this Section.
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Tenant shall and
may peacefully have, hold and enjoy the Leased Premises without
interference from any party claiming by or through Landlord,
subject to the terms of this Lease, provided Tenant pays the Rent
and other sums required to be paid by Tenant and performs all of
Tenant’s covenants and agreements herein contained. This
covenant and any and all other covenants of Landlord contained in
this Lease shall be binding upon Landlord and its successors only
with respect to breaches occurring during its and their respective
ownership of Landlord’s interest in the Building. Landlord
shall not be responsible for the acts or omissions of any other
tenant or third party that may interfere with Tenant’s use
and enjoyment of the Leased Premises; provided, however, that
Landlord shall use its reasonable best efforts to enforce the
Building Rules.
Landlord shall
have the option to relocate the Tenant to alternative space in the
Project in accordance with this Section. The alternative space
shall be of comparable size to the Leased Premises, and shall have
approximately the same number of windows and view of the lake.
Landlord shall give Tenant not less than ninety (90) calendar
days’ prior written notice of any such relocation, which
notice shall include the date on which Tenant shall be required to
relocate or move and a description of the space to which Tenant
will be relocated. Landlord shall pay reasonable out-of-pocket
costs and expenses of relocating Tenant, including the cost of
reconstruction of all Tenant furnished and Landlord furnished
improvements to the same standards of quantity and quality as in
the Leased Premises, telephone transfer charges, data cabling,
moving expenses, business stationery and printing charges for
relocation notice. In the event of such relocation, the alternative
space shall be deemed the Leased Premises hereunder, and this Lease
shall continue in full force and effect without any change in the
other terms and conditions hereof, including the payment of Rent
based upon the original size of the Leased Premises and not based
upon the size of the premises to which Tenant is relocated;
provided, however, that upon Landlord’s request, Tenant shall
execute an amendment to this Lease substituting such alternative
space for the space previously occupied by Tenant.
ARTICLE 7 — CONSTRUCTION,
ALTERATIONS AND REPAIRS
7.01 Tenant
Improvements.
The Leased
Premises shall be delivered to Tenant “as is” and
without improvements or alterations, except as provided otherwise
in Exhibit C attached herein. Any increases in taxes
resulting from higher valuations of the Building attributable to
Tenant’s Tenant Improvements, as defined in
Exhibit C , or alterations in excess of typical fitups
in the Building shall be paid by Tenant as Additional
Rent.
(a) Tenant
shall make no alterations, installations, additions or improvements
(including demolition of existing walls) (any of the foregoing, the
“Alterations”) in, on or to the Leased Premises without
Landlord’s prior written consent, which consent shall not be
unreasonably withheld, conditioned or delayed. Tenant shall notify
Landlord in the event that it wants to make Alterations to the
Leased Premises. A description of the desired Alterations shall be
included with the notice. Unless Landlord agrees otherwise, any
approved Alterations shall be completed on Tenant’s behalf by
architects, engineers, workmen and/or contractors hired by
Landlord. Tenant shall have the right to approve pricing for any
Alterations completed on its behalf. If Landlord grants Tenant the
right to hire its own architects, engineers, workmen or contractors
to complete the Alterations, all such work shall be designed and
made in a manner (including, but not limited to, obtaining all
applicable permits), by architects, engineers, workmen and
contractors, reasonably satisfactory to Landlord and completed in
accordance with the requirements of (c) below. Except as
provided otherwise herein, all Alterations (including, without
limitation, partitions, millwork, fixtures and heating, ventilating
and air conditioning modifications) made to the Leased Premises by
or for Tenant shall remain upon and be surrendered with the Leased
Premises and become the property of Landlord at the expiration or
termination of this Lease or the termination of Tenant’s
right to possession of the Leased Premises. Upon the expiration or
termination of the Lease or Tenant’s right to possess the
Leased Premises, Tenant shall be required to remove (or reconstruct
in the instance of the demolition of walls) any Alterations made
and restore the area from which the removal (or reconstruction)
occurred with regard to any Alterations, unless otherwise requested
or agreed to by Landlord at such time Landlord approves such
Alterations.
(b) In
addition to the foregoing, Tenant shall, prior to or as of the
Expiration Date or termination date, remove all telephone, data
wiring and fire suppression systems installed by Tenant from and
for the Leased
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Premises, and
Tenant shall repair any damage to the Leased Premises or Building
caused by any such removal. Tenant shall bear the costs of removal
of Tenant’s property from the Building and of all resulting
repairs thereto.
(c) All
Alterations performed in, on or to the Leased Premises must have
Landlord’s prior approval and shall (i) not alter the
exterior appearance of the Building or adversely affect the
structure, safety, systems or services of the Building;
(ii) comply with all (A) Building safety, fire and other
regulations, (B) governmental codes and permitting
requirements and (C) insurance requirements; (iii) not
result in any usage in excess of Building-standard of water,
electricity, gas, heating, ventilating or air conditioning, (either
during or after such work) unless prior written arrangements
satisfactory to Landlord are entered into; (iv) be completed
promptly and in a good and workmanlike manner; (v) be
performed in a manner that does not cause interference or
disharmony with any labor used by Landlord, Landlord’s
contractors or mechanics or by any other tenant or such other
tenant’s contractors or mechanics; and (vi) not cause
any mechanic’s, materialman’s or other liens to attach
to Tenant’s leasehold estate. Tenant shall not permit, or be
authorized to permit, any liens (valid or alleged) or other claims
to be asserted against Landlord or Landlord’s rights, estates
and interests with respect to the Building, the Project or this
Lease in connection with any work done by or on behalf of Tenant,
and Tenant shall indemnify and hold Landlord harmless against any
such liens.
(d) The
rights and obligations contained in this Section 7.02
shall survive the expiration or other termination of this
Lease.
7.03
Maintenance and Repairs by Landlord.
(a) Landlord
shall maintain and keep in good repair, as determined by Landlord
in its reasonable discretion and as is customary in other class
“A” office buildings in the greater Raleigh, Durham and
Chapel Hill areas of North Carolina, the following portions of the
Building which are not contained within the Leased Premises:
parking lots (including snow and ice removal), Building
landscaping, indoor and outdoor lighting (including parking lot
lighting facilities), driveways, sidewalks, fences, all structural
portions (including but not limited to foundations, roof, roof
membrane, windows with respect to settling issues, walls and
floors), common areas inside the Building (including corridors,
stairs and restrooms), elevators, heating ventilation and air
conditioning systems, and all electrical, water, plumbing and other
utility equipment connections and facilities.
(b) Landlord
shall perform routine maintenance and repairs necessitated by
ordinary wear and tear only for Building-standard leasehold
improvements in the Leased Premises.
(c) Notwithstanding
any provisions of this Lease to the contrary, all maintenance,
repairs, alterations, installations, additions or improvements to
the Building and/or Tenant’s leasehold improvements, which
affect the Building’s structural components or mechanical,
electrical or plumbing systems, shall be made by Landlord or its
contractor only, and, if on behalf of Tenant, shall be paid for by
Tenant in an amount equal to Landlord’s costs plus fifteen
percent (15%) (except for the initial Tenant
Improvements).
(d) Landlord
shall not be liable to Tenant, except as expressly provided in this
Lease, for any damage or inconvenience, and Tenant shall not be
entitled to any abatement or reduction of rent by reason of any
maintenance, repairs, alterations, installations, additions or
improvements to any part of the Building. Landlord shall use
commercially reasonable efforts to complete Tenant’s repairs
in an efficient manner.
7.04
Maintenance and Repairs by Tenant
(a) Tenant
shall maintain and keep in good repair all non-Building-standard
leasehold improvements, but at Tenant’s written request,
Landlord will perform said maintenance and repairs at
Tenant’s expense, at a cost or charge equal to the costs
incurred in such maintenance or repairs plus an additional charge
of fifteen percent (15%). The necessity for and adequacy of said
maintenance and repairs shall be measured by the standards of other
class “A” office buildings, located in the greater
Raleigh, Durham and Chapel Hill areas of North Carolina, for
improvements of similar construction. Prior to the Commencement
Date, but after all construction drawings have been prepared,
Landlord shall provide Tenant with notice of any items included in
the initial Tenant Improvements that are not Building-standard and
therefore subject to Tenant’s maintenance and/or
repair.
(b) Tenant
shall be responsible for immediately notifying Landlord of any
damage done to (i) the Leased Premises, (ii) Tenant’s
Building-standard and/or non-Building-standard leasehold
improvements, (iii) the
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