ASSIGNMENT AND ASSUMPTION OF LEASE

Exhibit 10.19

ASSIGNMENT AND ASSUMPTION OF LEASE

THIS ASSIGNMENT AND ASSUMPTION OF LEASE (the “Assignment”), made and entered into as of the 20 day of March, 2009, by and between JOHN SMART AND PAM SMART, NOT INDIVIDUALLY BUT AS TRUSTEES OF THE JOHN AND PAM SMART FAMILY TRUST (“Assignor”), and BLUEGRASS VALLEY, LLC , a Georgia limited liability company (“Assignee”).

W I T N E S S E T H:

WHEREAS, Assignor owns and holds the interest of landlord for that certain Lease Agreement by and between Assignor and Healthport Technologies, LLC, as Tenant, dated as of August 1, 2008, a copy of which is attached hereto as Exhibit “B” (the “Lease”) in connection with that certain improved real property located in Forsyth County, Georgia, which property is more particularly described on Exhibit “A ” (the “Property”); and

WHEREAS, Assignor has agreed to sell, and Assignee has agreed to purchase the Property and the improvements thereon and related thereto; and

WHEREAS, in connection with the above-referenced sale of the Property, Assignor has agreed to assign its interest in the Lease to Assignee and Assignee has agreed to take assignment of Assignor’s interest in the Lease; and

WHEREAS, the parties hereto desire to enter into this Assignment to evidence and confirm the assignment of the Lease by Assignor to Assignee.

NOW, THEREFORE, for and in consideration of TEN DOLLARS ($10.00) in hand paid and of the premises, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

1. Assignment and Assumption . Assignor does hereby absolutely and unconditionally grant, convey, transfer, assign, set over and deliver unto Assignee, all of Assignor’s right, title and interest in and to the Lease. Assignor has the right to assign the Lease and has not previously transferred, assigned, or hypothecated its interest in the Lease, and has not amended the Lease. Assignor has no actual knowledge that, as of the date of this Assignment, (i) the tenant under the Lease is in default which remains uncured beyond any applicable period for notice and cure, or (ii) Assignor is in default which remains uncured beyond any applicable period for notice and cure. There is no security deposit being held by Assignor under the Lease.

2. Acceptance of Assignment . Assignee hereby accepts this Assignment and as part of the consideration therefor, assumes all of the obligations of Assignor, as landlord under the Lease, arising and to be performed from and after the date hereof.

3. Indemnity . Assignor hereby agrees to indemnify and hold Assignee harmless from and against all claims, demands, losses, damages, expenses and costs including, but not limited to, reasonable attorneys’ fees and expenses actually incurred, arising out of or in connection with Assignor’s failure to observe, perform and discharge each and every one of the

 

1

covenants, obligations and liabilities of the lessor under the Lease to be observed, performed or discharged on, or relating to, or accruing with respect to the period prior to the date of this Assignment.

Assignee hereby agrees to indemnify and hold Assignor harmless from and against all claims, demands, losses, damages, expenses and costs including, but not limited to, reasonable attorneys’ fees and expenses actually incurred, arising out of or in connection with Assignee’s failure to observe, perform and discharge each and every one of the covenants, obligations and liabilities of the lessor under the Lease to be observed, performed or discharged on, or relating to, or accruing with respect to the period from and after the date of this Assignment.

(Signature Page Follows)

 

2

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment effective as of the day and year first written above.

 

(Signatures Continued On Following Page)

 

EXHIBIT “A” TO ASSIGNMENT AND ASSUMPTION OF LEASE

LEGAL DESCRIPTION OF PROPERTY

ALL THAT TRACT OR PARCEL OF LAND lying and being in Land Lots 909 and 910 of the 2 ^nd District and 1 ^st Section of Forsyth County, Georgia containing 5.549 acres or 241,724 square feet and being more particularly described as follows:

To find the True Point of Beginning commence at a concrete right-of-way monument at the Southeastern most mitered corner at the intersection of the Northeast right-of-way of McFarland Road (R/W varies) with the southeast right-of-way of Bluegrass Valley Parkway (R/W varies);

THENCE North 02 degrees 34 minutes 47 seconds West for a distance of 79.18 feet along said mitered corner to a concrete right-of-way monument;

THENCE North 44 degrees 31 minutes 05 seconds West for a distance of 3.66 feet along an offset in the Northeasterly right-of-way of McFarland Road to a point on the Southeast right-of-way of Bluegrass Valley Parkway;

THENCE along a curve to the right having a radius of 88.00 feet and an arc length of 19.70 feet, being subtended by a chord of North 37 degrees 24 minutes 27 seconds East for a distance of 19.66 feet along the Southeast right-of-way of Bluegrass Valley Parkway to a point;

THENCE North 43 degrees 49 minutes 07 seconds East for a distance of 179.26 feet along said Southeast right-of-way to a point;

THENCE North 41 degrees 31 minutes 55 seconds East for a distance of 35.95 feet along said Southeast right-of-way to an iron pin found and THE TRUE POINT OF BEGINNING;

Thence from the True Point of Beginning thus established run North 41 degrees 31 minutes 55 seconds East for a distance of 214.67 feet along said Southeast right-of-way to an iron pin placed;

THENCE along a curve to the right having a radius of 662.05 feet and an arc length of 103.83 feet, being subtended by a chord of North 45 degrees 32 minutes 52 seconds East for a distance of 103.72 feet along said Southeast right-of-way to an iron pin placed;

THENCE along a curve to the right having a radius of 665.05 feet and an arc length of 263.53 feet, being subtended by a chord of North 64 degrees 08 minutes 28 seconds East for a distance of 261.81 feet along said Southeast right-of-way to an iron pin placed;

THENCE along a curve to the right having a radius of 665.00 feet and an arc length of 37.69 feet, being subtended by a chord of North 77 degrees 07 minutes 02 seconds East for a distance of 37.69 feet along said Southeast right-of-way to an iron pin placed;

THENCE leave said Southeast right-of-way and run South 32 degrees 05 minutes 15 seconds East for a distance of 472.50 feet to an iron pin placed;

EXHIBIT “B” TO ASSIGNMENT AND ASSUMPTION OF LEASE

LEASE

Lease Agreement between Assignor, as “Landlord”, and Healthport Technologies, LLC, as “Tenant”, dated as of August 1, 2008.

LEASE AGREEMENT

between

JOHN A. SMART AND PAM SMART, not individually, but as TRUSTEES of the

JOHN AND PAM SMART FAMILY TRUST, as Landlord

and

HEALTHPORT TECHNOLOGIES, LLC,

a Georgia limited liability company f/k/a Smart Document Solutions, LLC as

Tenant

dated as of August 1, 2008

TABLE OF CONTENTS

 

 

i

EXHIBITS

 

SCHEDULES

 

 

ii

LEASE AGREEMENT

THIS LEASE AGREEMENT , is made and entered into as of the 1 ^st day of August, 2008, by and between JOHN A. SMART AND PAM SMART, not individually, but as TRUSTEES of the JOHN AND PAM SMART FAMILY TRUST (“ Landlord ”) and HEALTHPORT TECHNOLOGIES, LLC , a Georgia limited liability company f/k/a Smart Document Solutions, LLC (“ Tenant ”);

W I T N E S S E T H :

WHEREAS, Landlord is the owner of the land which is described in Exhibit A attached hereto together with the building located thereon; and

WHEREAS, Tenant is the current tenant under that certain Lease Agreement dated June 13, 2002, by and between John A. Smart and Pam Smart, not individually, but as Trustees of the John and Pam Smart Family Trust to Smart Document Solutions, LLC, a Georgia limited liability company, as supplemented by that certain Supplemental Agreement (“ Supplemental Agreement ”) between the same parties dated June 13, 2002, the aforesaid Lease Agreement being as renewed by letter dated August 31, 2006 (the foregoing Lease Agreement and Supplemental Agreement as renewed being collectively, the “ Original Agreement ”); and

WHEREAS, Landlord and Tenant desire to amend the Original Agreement and restate the Original Agreement by executing this Lease Agreement;

NOW, THEREFORE, for and in consideration of the sum of Ten and No/100 Dollars ($10.00), the mutual covenants and agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree that the term of Original Agreement expires this date (the obligations of the Tenant under the Original Agreement accruing prior to the aforesaid expiration not terminating) and this Lease Agreement is hereby entered into in accordance with the terms and provisions hereof.

 

1

ARTICLE A

TERMS AND DEFINITIONS

Additional Improvements. As defined in Section 7.01 hereof.

Additional Rent. As defined in Section 3.02 hereof.

Base Rent. As defined in Section 3.01 hereof.

Building. The building located at 120 Bluegrass Valley Parkway, Alpharetta, Forsyth County, Georgia containing approximately 57,354 square feet of floor area located on the Land and any replacement of all or any portion of the aforesaid building.

Condemnation. As defined in Section 12.01 hereof.

Deed Restrictions. Restrictions and covenants contained in that certain Limited Warranty Deed (With Restrictive Covenants and Reservation of Non-Exclusive Sanitary Sewer Easement) by and between R&A Land Holdings and Landlord, dated as of October 24, 1996, and recorded in the Office of the Clerk of the Superior Court of Forsyth County, Georgia in Deed Book 1047, Page 635, and any restrictions and covenants contained in any instruments of record pertaining to the Land and/or the Improvements.

Default. As defined in Section 15.01 hereof.

Default Rate. As defined in Section 3.04 hereof.

Effective Date. The date of this Lease as set forth on the front page of this Lease.

Environmental Law. As defined in Section 17.01 hereof.

Event of Default. As defined in Section 15.01 hereof.

Force Majeure. An Act of God, event of casualty, strike, declared war, Condemnation, governmental prohibition, unavailability of materials or suitable substitutes, or any act or omission of the other party. As to rain delays, Force Majeure shall mean delays caused by rain measured in days and inches which exceed the twenty-year average as measured by the National Weather Bureau for the Atlanta, Georgia area. Notwithstanding the foregoing, no party shall be entitled to an extension of the time for performance of any of its obligations under this Lease as a result of Force Majeure unless such party shall give notice to the other party of its claim to such extension within sixty (60) days after the event giving rise to such claim shall have occurred.

Hazardous Substance. As defined in Section 17.01 hereof.

Improvements. The Building together with all improvements located on the Land other than trade fixtures of Tenant existing as of the Effective Date.

 

2

Land. The real property described in Exhibit A attached hereto and by this reference made a part hereof.

Lease. This Lease Agreement.

Lease Year. As defined in Section 2.03 hereof.

Landlord. John A. Smart and Pam Smart, not individually, but as Trustees of the John and Pam Smart Family Trust.

Partial Taking. As defined in Section 12.03 hereof.

Potentially Responsible Party. As defined in Section 17.01 hereof.

Premises. The Land, the Improvements and all parking areas, connections for sewers, waterline, electricity, telephone lines and other utilities and areas located on the Land.

Registered Mortgage. Any mortgage affecting the Premises or this Lease executed by Landlord and written notice thereof delivered to Tenant.

Registered Mortgagee. The holder of any Registered Mortgage provided Landlord has delivered to Tenant the address to which all notice to the holder are to be delivered.

Rent. As defined in Section 3.03 hereof.

Rent Commencement Date. The Effective Date.

Taxable Property. As defined in Section 5.01 hereof.

Taxes and Assessments. As defined in Section 5.01(a) hereof.

Tenant. Healthport Technologies, LLC, a Georgia limited liability company f/k/a Smart Document Solutions, LLC, and its successors and assigns.

Tenant Affiliate. Any individual, partnership, limited liability company, corporation, trust, or other entity which directly or indirectly through one or more intermediaries controls, or is controlled by, or is under common control with, Tenant. For purposes of this definition, the term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of an entity, whether through the ownership of voting securities, by contract or otherwise.

Tenant Permitted Users. Collectively, Tenant and its authorized principals, agents, employees, contractors, subcontractors, and invitees performing services relating to the Building, but shall not include any subtenants or licensees.

Tenant’s Maintenance Obligations. As defined in Section 3.02 hereof.

Total Taking. As defined in Section 12.02 hereof.

 

3

Trustee. As defined in Section 11.02 hereof.

ARTICLE I

PREMISES

Section 1.01 Grant. For the Rent and upon the terms stated in this Lease, Landlord lets and leases unto Tenant, and Tenant lets and leases from Landlord the Premises.

ARTICLE II

TERM

Section 2.01 Term. The term (“ Term ”) of this Lease commenced on the Effective Date, and shall expire at 6:00 PM on July 31, 2018 (the “Expiration Date”) unless this Lease is sooner terminated or extended as herein provided.

Section 2.02 Extended Term. The Tenant shall have the extension options set forth in Rider One to this Lease.

Section 2.03 Definition of Lease Year. The term “ Lease Year ” as used in this Lease shall mean a calendar year. Notwithstanding the foregoing, the parties acknowledge that the initial Lease Year will be the calendar year in which the Effective Date occurs and shall not be a period of twelve (12) full calendar months and that the final Lease Year of the Term may not be a period of twelve (12) full calendar months, and that the final Lease Year will expire on the expiration date of the Term, as extended as provided in Rider One to this Lease, regardless of the number of calendar months between the commencement of such final Lease Year and the expiration date of the Term.

ARTICLE III

RENT

Section 3.01 Base Rent. Tenant covenants and agrees to pay to Landlord an annual base rental (“ Base Rent ”) from the Effective Date to the end of the Term in accordance with Schedule A attached hereto and by this reference made a part hereof. Base Rent commences on the Rent Commencement Date. Except as otherwise provided in this Section 3.01, Base Rent shall be payable to Landlord in advance in equal monthly installments on the first day of each calendar month. In the event that the Rent Commencement Date is other than the first day of a calendar month, the Rent will be prorated on a daily basis on the number of days in such calendar month and shall be due as of the Rent Commencement Date. If the Term shall end on a day other than the last day of a calendar month, the Rent shall be prorated based upon the number of days in such calendar month in which the Term terminates.

Section 3.02 Net Lease. Landlord shall have no cost, obligation, responsibility or liability whatsoever for repairing, maintaining, operating or owning the Premises or Additional Improvements, or for any utility or drainage lines or facilities installed by or for the benefit of Tenant, the Premises or Additional Improvements, including, without limitation, the compliance

 

4

with any governmental law, ordinance, rule or regulation, the Deed Restrictions (including payment of all fees and expenses pursuant thereto), except as otherwise expressly set forth in Section 8.03 (which provides for Landlord to be responsible to maintain the roof, foundation, and exterior walls) and Section 17.02 hereof (Tenant waiving and releasing Landlord from claims for Hazardous Substances as provided in Section 17.02). Except as provided in Section 8.03 (which provides for Landlord to be responsible for and maintain the roof, foundation, and exterior walls), Section 11.03, Section 12.07 and Section 17.02, Tenant shall pay as additional rent during the Term, all costs and expenses (i) in connection with repairing, maintaining, operating, restoring or owning (without regard as to actual owner) the Premises and Additional Improvements, including, but not limited to, all real estate and personal property taxes, insurance, utility and maintenance costs and costs of repair or replacement of the Improvements and Additional Improvements, (ii) in connection with the construction, maintenance and repair of all utility lines and sewer and drainage lines and facilities which are for the benefit of the Premises or Additional Improvements and (iii) in connection with the performance of Tenant’s obligations under Tenant’s Maintenance Obligations. The foregoing amounts, together with all other amounts payable to Landlord by Tenant under the terms of this Lease, including, without limitation, the payments pursuant to any final award pursuant to any arbitration proceeding conducted pursuant to Section 18.15 hereof or pursuant to any final judgment entered in any court having jurisdiction, are collectively referred to as “ Additional Rent .” The Base Rent and Additional Rent shall be paid without notice, demand, counterclaim, set-off, deduction or defense and, without abatement, suspension, deferment, diminution or reduction whatsoever.

Section 3.03 Definition of Rent. The Base Rent, Additional Rent, and any other amounts payable by Tenant to Landlord under this Lease, including any award pursuant to Section 18.15, are sometimes referred to collectively as the “ Rent ”. All amounts received by Landlord to apply to Rent shall be applied as Landlord determines in its sole discretion.

Section 3.04 Rent Payments. Tenant shall pay to Landlord the Rent payable to Landlord and any other amounts due Landlord at the address provided in Section 17.02. Any payment of Rent which is made more than ten (10) days after the date when due shall, at the option of Landlord, and to the extent permitted by applicable law, be increased by a late charge to compensate Landlord for inconvenience and additional administrative expense in an amount equal to (i) the sum of five percent (5%) of the amount of such Rent as a late charge; and (ii) if such Rent is not paid within thirty (30) days of the due date thereof, the sum of one percent (1%) of the amount of such Rent for each 30-day period for which such amount is due (the “ Default Rate ”) and Landlord’s entitlement to said late charge shall be in addition to, and not in lieu of or a waiver of, any other remedies to which Landlord is entitled hereunder, at law or in equity, as a result of said late payment of rent. Acceptance of any payment of Rent that does not include the late charges, and acceptance of a partial payment of Rent or Rent without the late charges, shall not be a waiver of such late charges. Payments received by Landlord, no matter how designated by Tenant, shall be applied as Landlord determines in its sole discretion.

 

5

ARTICLE IV

COVENANT OF QUIET ENJOYMENT

Section 4.01 Quiet Enjoyment. Landlord warrants that it owns the Premises, Landlord covenants and agrees that, so long as Tenant is not in default hereunder beyond any applicable notice and cure period, Tenant may peaceably and quietly have, hold, occupy and enjoy the Premises and every part thereof and all the appurtenances appertaining thereto with exclusive control and possession during the Term.

ARTICLE V

REAL ESTATE TAXES, ASSESSMENTS AND OTHER PAYMENTS

Section 5.01 Taxes.

(a) As a part of the consideration for this Lease, and in addition to the Base Rent, Tenant covenants and agrees to return and to pay, before any fine, penalty or cost is added thereto for failure to return or for nonpayment, the following taxes and assessments that become payable or accrue during the Term: (i) all real estate taxes, assessments, rates and charges that are levied, assessed or imposed against the Premises and any Additional Improvements (the “ Taxable Property ” ) , whether imposed against the interest of Landlord or the interest of Tenant, (ii) all assessments, either imposed by any applicable governmental authority, including, but not limited to, any sanitary sewer assessments that are levied, assessed or imposed against the Taxable Property, or that become a lien upon any one or more of the foregoing, (iii) all taxes, assessments and other impositions that are incurred by and as an obligation of Tenant as a result of its operations on the Premises which may at any time be levied on, be assessed against or become a lien upon the Taxable Property or Tenant’s interest or rights in the Premises, or Landlord’s interest or rights in the Taxable Property, (iv) all taxes and assessments that are levied, assessed or imposed on or become a lien upon the personal property of Tenant or any other party other than Landlord located upon the Premises and (v) any interest, penalties or other charges that are assessed or imposed on any of the foregoing. Landlord and Tenant agree that the taxes for which Tenant shall be responsible under this Section 5.01(a) shall be only those taxes, assessments, rates, charges and other governmental impositions that are commonly known as real estate or personal property taxes or real estate or personal property assessments, and that are assessed against the Taxable Property, whether imposed against the interest of Landlord or Tenant. The items payable as described in (i) through (v) are sometimes collectively referred to as “ Taxes and Assessments .” Tenant shall provide to Landlord written evidence in the form of a paid receipt from the applicable taxing authority or payee showing the payment of all Taxes and Assessments, on or before the respective due dates of any such Taxes and Assessments. If payment is permitted or provided to be made in installments over a period of years for certain Taxes and Assessments, Tenant shall have the right to elect with Landlord’s written approval to pay those Taxes and Assessments in installments as permitted by the assessing authority or payee; provided, however, such payments are not extended beyond sixty (60) days prior to the end of the Term. Any installment of Taxes and Assessments not paid sixty (60) days prior to the end of the Term shall be paid by Tenant to Landlord on demand but not later than at the end of the Term.

 

6

(b) Tenant shall not be obligated to pay any income, excess profits, inheritance, gift, franchise, corporation, sales, value-added, successor, transfer, gift or estate tax that may be at any time levied or assessed against Landlord, or that may become a lien upon the Taxable Property or the Rent. In the event, however, that the State of Georgia or any taxing authority thereunder should, subsequent to the execution of this Lease, change or modify the present system of taxing real estate so as to tax the rental income from real estate in lieu of real estate taxes, Tenant shall be liable under this Lease for the payment of the taxes imposed upon Landlord at any time during the Term to the same extent as though the alternative tax was a tax upon the value of the Land and the Improvements.

Section 5.02 Taxes and Assessments Contest. Tenant may, at its sole cost and expense, dispute and contest the imposition of any of the Taxes and Assessments which shall be reasonably deemed by Tenant to be improper, illegal, or excessive. Contested items need not be paid until adjudged to be valid; provided, however, that Tenant shall, upon Landlord’s reasonable request, provide Landlord with such security as may be reasonably necessary to prevent a sale or forfeiture of the Taxable Property as a result or during the pendency of the contest, and further provided contested items must be paid in full by Tenant sixty (60) days prior to the end of the Term. Tenant hereby indemnifies and holds harmless Landlord from and against fines, penalties or loss of property which may result from such contest, and hereby agrees to deliver to Landlord such additional indemnity agreements as Landlord may reasonably request to evidence and confirm such indemnification. All such Taxes and Assessments, if contested and adjudged to be valid, shall be paid within the time permitted by applicable law but not later than sixty (60) days prior to the end of the Term.

Section 5.03 Association Assessments. As part of the consideration for this Lease, Landlord covenants and agrees to pay the assessment on the Taxable Property to the Association established pursuant to that certain Amendment and Restatement of Declaration of Covenants, Conditions and Restrictions for Bluegrass Lakes and Bluegrass Ferry, dated as of October 20, 1998, recorded in Deed Book 1380, Page 608, in the Office of the Clerk of the Superior Court of Forsyth County, Georgia.

Section 5.04 Utilities. During the Term, Tenant will contract for, in its own name, and pay or cause to be paid, on a timely basis, any and all charges for utilities and other outside services furnished to the Building, and Improvements, including, without limitation, electricity, water, gas, trash and garbage disposal, security system, television and telephone. Landlord shall have no liability for the interruption or unavailability of any such utilities and services except to the extent arising out of the gross negligence or willful misconduct of Landlord.

Section 5.05 Landlord’s Right to Pay or Perform for Tenant. If Tenant fails to pay any Taxes and Assessments, maintenance charges, insurance premiums, utility charges or any other charges required to be paid by Tenant under this Lease, Landlord, at Landlord’s option, shall have the right, without obligation, after thirty (30) calendar days’ written notice to Tenant, to make any such payment or payments on behalf of Tenant. Landlord may give less than thirty (30) days’ notice if the deadline for payment would otherwise expire. If Tenant fails or refuses to make or to have made any repairs to the Premises or Additional Improvements, or fails to perform any Tenant’s Maintenance Obligations, or to perform any other obligation under this Lease, then Landlord, at Landlord’s option and (except in cases of emergency) after thirty (30)

 

7

days’ written notice to Tenant, shall have the right, without obligation, to make such payments or to cause such repairs to be made or to perform or cause the other obligations to be performed. Tenant shall pay to Landlord, on demand, Landlord’s out-of-pocket costs in performing such repairs or other obligations (together with interest thereon from the date of payment until repayment at the Default Rate), as Additional Rent under this Lease. Any amounts expended by Landlord pursuant to this Section 5.05 shall be due and payable immediately to Landlord following demand therefor.

Section 5.06 Net Lease. This Lease shall be deemed and constructed to be a completely net lease except for the obligations of Landlord specifically set forth in this Lease. Tenant shall pay to Landlord, throughout the Term of this Lease, the Rent hereunder free of any offset, abatement or other deduction whatsoever and without notice of demand. Tenant shall be responsible for paying all expenses, costs and amounts in connection with the operation of its business on the Premises, except as otherwise set forth herein.

ARTICLE VI

COMPLIANCE WITH LAWS, COVENANTS AND USE

Section 6.01 Compliance with Laws. Tenant, in its maintenance, repair, construction, use, occupation and control of the Premises and Additional Improvements and any installations made by Tenant and in its prosecution or conduct of any business on the Premises and Additional Improvements or therein, shall, at Tenant’s own cost and expense and without contribution from Landlord comply (except for those obligations of Landlord under this Lease) with (a) all requirements of all laws, orders, ordinances, zoning requirements and conditions and rules and regulations of the federal, state, county and municipal authorities; (b) any certificate of occupancy; (c) any direction, pursuant to law, of any public officer or officers, that shall impose any duty upon Landlord or Tenant with respect to the Premises, the Additional Improvements or installations made by Tenant; (d) the Deed Restrictions; and (e) any insurance requirements (subsections (a) – (e) are hereinafter collectively referred to as the “ Requirements ”).

Section 6.02 Contest. Tenant shall have the right, at its sole expense, to contest or dispute the validity, legality or applicability of any law, order, ordinance, rule, regulation, certificate of occupancy or provision of the Deed Restrictions; provided, however, Tenant shall indemnify and hold harmless Landlord from and against any loss, claims or damage suffered or sustained by Landlord as a result of such contest or dispute. Tenant shall, upon Landlord’s reasonable request, provide Landlord with such security as may be reasonably necessary to prevent a forfeiture or termination of the rights of Landlord in and to the Premises as a result or during the pendency of the contest.

Section 6.03 Use. Tenant shall use and occupy the Premises only for office purposes and other incidental uses related thereto. Tenant shall not use the Premises for any other purpose without the prior written approval of Tenant, which shall not be unreasonably withheld, conditioned or delayed. Tenant shall not use or occupy the Premises, or permit the Premises to be used or occupied; (i) for any unlawful purpose; (ii) in violation of any governmental requirements, insurance requirement or easements, restrictive covenants or other encumbrances affecting the Premises; (iii) in any manner that would cause or would be likely to cause material

 

8

damage to the Premises; (iv) in any manner that would constitute a public or private nuisance; or (v) in any manner that would increase the premium cost of, or invalidate, any insurance policy maintained pursuant to this Lease with respect to the Premises, or adversely affect the ability of Landlord or Tenant to obtain such insurance. Tenant shall not abandon, vacate or cease to use the Premises during the Term.

Section 6.04 Enforcement of Use Restrictions. In the event any prohibited use of the Premises or Additional Improvements occurs, Tenant shall promptly after obtaining knowledge of such prohibited use commence action and cause such use to be discontinued immediately, including, without limitation, the bringing of legal action, as shall be reasonably necessary to cause such prohibited use to cease.

Section 6.05 Consent to Zoning Applications. Tenant (a) shall support any zoning applications filed by Landlord on property adjacent to the Land, and (b) waives any right it may now or later have to object to any zoning applications filed by Landlord. Tenant further agrees to memorialize its support of any zoning applications in writing within fifteen (15) days of Landlord’s request for written support, and in the event Tenant does not deliver its written support of a zoning applications to Landlord within the fifteen day period, Tenant grants Landlord a power of attorney coupled with an interest to execute a letter of support on behalf of Tenant.

ARTICLE VII

ADDITIONAL IMPROVEMENTS

Section 7.01 Landlord’s Work. Tenant hereby takes and accepts the Premises as of the Effective Date in their present “as is” condition and agrees that as of the Effective Date the Premises are in satisfactory condition and suitable for the use intended by Tenant. Notwithstanding the foregoing, Landlord agrees on or before October 1, 2008 to make certain parking lot repairs as specified in the proposal set forth on Exhibit C attached hereto and by this reference made a part hereof from Dykes Paving (the “ Parking Lot Work ”), and to complete certain HVAC replacement work as specified in the proposal set forth on Exhibit D attached hereto and by this reference made a part hereof from Shumate Mechanical (the “ HVAC Work ”). Landlord shall be responsible for the cost of the Parking Lot Work not to exceed Seventy-Nine Thousand Nine Hundred Eighty-Nine and No/100 Dollars ($79,989.00) (the “ Parking Lot Contribution ”), and for the cost of the HVAC Work not to exceed One Hundred Eight Thousand Eight Hundred Seventy-Five and No/100 Dollars ($108,875.00) (the “ HVAC Contribution ”). If the cost of the Parking Lot Work exceeds the Parking Lot Contribution, the amount of such overage shall be deducted from the HVAC Contribution. After completion of the HVAC Work and any deduction from the HVAC Contribution for excess costs of the Parking Lot Work as stated above, Tenant may use any remaining amount of the HVAC Contribution for the installation of carpeting in the office area of the Premises, and Landlord shall reimburse Tenant for the cost of such carpeting, not to exceed such remaining amount of the HVAC Contribution, upon Landlord’s receipt of reasonably detailed invoices and proof of payment therefor.

 

9

Section 7.02 Tenant, with the prior written consent of Landlord (which consent shall not be unreasonably withheld), and only with such consent, and subject to the conditions set forth in this Lease and subject to any additional conditions and restrictions which Landlord may in its reasonable discretion impose, may, at Tenant’s sole cost and expense, make non-structural alterations, additions and modifications to the Building during the Term hereof (hereinafter referred to as the “ !Additional Improvements ”) provided , however , that Landlord’s consent shall not be required for any improvements that do not adversely affect either the structural components of the Building or the building systems and are anticipated to cost less than $50,000.00 in the aggregate for such improvements. For the avoidance of doubt, this $50,000.00 amount shall apply in each instance where improvements are made or to be made by Tenant as long as each instance is not done as a subterfuge to avoid having to comply with the provisions of this Lease relating to improvements that cost $50,000.00 or more. Landlord shall cooperate with Tenant, at no cost to Landlord, in securing the building and other permits and authorizations necessary for any work required or permitted to be done by Tenant under this Lease. Tenant may only erect such signs on the Premises as shall be in number, size, height, location, format and color acceptable to, and approved in writing by Landlord, which approval shall not be unreasonably withheld, delayed or denied. Tenant will not use or permit to be used on the Premises any moving or flashing signs, flags, pennants, garlands, garish colors, or other eye-attracting devices. Within fifteen (15) days after the receipt from Landlord of a demand to remove any eye-attracting device reasonably objected to by Landlord, Tenant will remove or cause to be removed such device. Tenant retains and will at all times retain ownership of signs that Tenant installs. As a condition to any application, Landlord must execute any applications or consents that governmental authorities require with respect to any signs and advertising matter that Tenant desires to erect and that Landlord has approved; provided, however, that any such applications or consents will not impose any liability on Landlord for the erection or maintenance of the signs.

In the event Tenant desires to make structural changes to the Building or that affect the Building systems, or if Tenant desires to construct additions to the Building or to construct additional buildings on other portions of the lot (if and to the extent owned by Landlord), Landlord will in good faith discuss such changes or construction with Tenant.

Landlord specifically approves the conversion of the visitor waiting area, which is located to the right of the entrance and the lobby, to an open cubical office space.

Notwithstanding the foregoing, Tenant shall have the right to construct, at Tenant’s sole cost and expense, additional office space in the warehouse area of the Premises (provided, that Tenant shall not construct any mezzanine improvements or any second floor improvements), subject to the following conditions:

(a) Prior to making such additions, Tenant shall submit to Landlord for its approval, detailed plans and specifications (“ Plans ”) for the proposed improvements;

(b) Tenant shall obtain all permits, approvals and certificates required by any governmental authorities;

 

10

(c) All work shall be performed in a good, workmanlike and lien-free manner, in accordance with the Plans and all Requirements, by contractors meeting the requirements set forth in Section 7.04 below;

(d) Tenant shall furnish to Landlord duplicate original policies or certificates of worker’s compensation (covering all persons to be employed by Tenant, and Tenant’s contractors and subcontractors in connection with the improvements) and commercial general liability (including property damage coverage) insurance and Builder’s Risk coverag, for such periods and in such amounts as Landlord may reasonably require, naming Landlord as an additional insured;

(e) Tenant shall not alter or modify any structural components, systems, or the exterior of the Building;

(f) Such improvements shall be constructed in the same finish as, and the materials used in such construction shall be of at least equal quality as, the improvements existing on the Effective Date; and

(g) Upon the expiration or earlier termination of this Lease, Tenant shall, at Tenant’s sole expense, remove all such office alterations and shall repair and restore, in a good and workmanlike manner, any damage to the Premises as a result of such removal; and upon default thereof, Tenant shall reimburse Landlord for Landlord’s cost of repairing and restoring such damage.

Section 7.03 Title to Improvements. Title to the Additional Improvements and all renewals and replacements thereof, when made, erected, constructed, installed or placed upon the Premises by Tenant, shall be and remain in Tenant until the expiration of the Term of this Lease, unless sooner terminated as provided herein. Upon the expiration or sooner termination of this Lease, if Tenant does not remove the Additional Improvements as provided in Section 16.01 below, title to the Additional Improvements and all changes, additions and alterations therein, shall immediately pass to, vest in and belong to Landlord.

Section 7.04 Tenant’s Contractors. Construction of Additional Improvements shall be performed by contractors that are reputable, licensed, bondable, insured in the State of Georgia and experienced in the work to be performed, and approved by Landlord, which approval shall not be withheld or delayed unreasonably. Tenant, at its expense, shall cause payment and performance bonds to be issued for all construction work in excess of $100,000. Tenant shall cause Landlord to be named as a beneficiary under each payment and performance bond issued with respect to any construction contracts for Additional Improvements. Further, such construction contracts shall specifically provide that such contracts may be assumed by Landlord, and all contractor agreements and warranties thereunder will be also for the benefit of Landlord.

Section 7.05 Signs. Provided Landlord approves the signs, Tenant may erect and maintain on the Land or Building, at its expense, signs, so long as such signs satisfy the applicable zoning ordinances and all other governmental requirements laws, ordinances or regulations applicable to the Land. Tenant must obtain the prior written approval of Landlord

 

11

with respect to all such signage or promotional displays placed on the Land prior to the placement of same on the Land or Building, which approval may be granted or denied in Landlord’s sole discretion.

Section 7.06 Liens. Tenant shall not permit or suffer to exist any lien, encumbrance or charge against the Premises, and Tenant shall at all times maintain the Premises free and clear of all liens for services or labor performed or rendered, or for materials delivered, supplied or furnished, to or in connection with any improvements made by Tenant. In any lien, encumbrance or charge is filed against all or any part of the Premises for improvements made by Tenant, Tenant shall cause the same to be discharged by payment, satisfaction or posting of bond within thirty (30) days after the date filed. If Tenant fails to cause any such lien, encumbrance or charge to be discharged within the permitted time, Landlord may cause it to be discharged and may make any payment which Landlord, in Landlord’s sole judgment, considers necessary, desirable or proper in order to do so. If Landlord makes any such payment, all amounts paid by Landlord shall be payable by Tenant to Landlord upon demand. The liens, encumbrances and charges covered by this Section 7 shall include, without limitation, liens for federal taxes, state taxes and assessments, county taxes and assessments, local taxes and assessments, security interests and liens filed by mechanics, laborers, materialmen, architects, surveyors, attorneys or engineers for work, labor, services or materials performed, rendered, supplied or furnished (or alleged to have been performed, rendered, supplied or furnished) with respect to the Premises.

Notice is hereby given that Landlord shall not be liable for any labor or services performed or rendered, or materials supplied or furnished, to the Premises at the instance of Tenant or any party claiming by, through or under Tenant, and no mechanics or other liens with respect thereto shall attach to or affect the interest of Landlord in and to the Premises. Landlord shall have the right at all times to post and keep posted on the Premises any notices permitted or required by law, or which Landlord shall deem reasonably necessary, for the protection of Landlord, the Premises and any other party having an interest therein, from mechanics’ and materialmen’s liens. Nothing in this Lease and no action or inaction by Landlord shall be deemed or construed to mean that Landlord has granted to Tenant any right, power or permission to do any act or to make any agreement which may create, give rise to, or be the foundation for, any right, title, interest or lien in or upon the reversion or other estate or interest of Landlord in and to the Premises.

Section 7.07 Trade Fixtures of Tenant. Tenant is entitled to install in or upon the Premises its trade fixtures, equipment and other property and to place liens on such trade fixtures, equipment and other property, all of which shall remain the property of Tenant, and grant security interests therein. At Tenant’s reasonable request, Landlord shall, at no cost to Landlord, execute instruments in favor of any party having ownership or security interest in any of Tenant’s personal property for the purposes of (a) subordinating any Landlord’s lien or right to levy thereon or (b) acknowledging that the property, including the Improvements, remains Tenant’s personal property notwithstanding Tenant’s installing the property on the Premises.

 

12

ARTICLE VIII

MAINTENANCE AND REPAIRS

Section 8.01 Tenant’s Acceptance of Premises. Tenant hereby accepts the Premises as it now exists in its current condition “ AS-IS ” and “ WITH ALL FAULTS. ” Except as may be expressly set forth in this Lease, Landlord has made no representations or warranties and makes no representation or warranty, and no responsibility has been or is assumed by Landlord, with respect to the Premises or with respect to Additional Improvements or the value, expense of operation or income potential thereof or as to any other fact or condition which has or might affect the Premises or Additional Improvements or the condition, repair, value, expense of operation or income potential of the Premises or the Additional Improvements or any portion thereof. Landlord and Tenant agree that all understandings and agreements heretofore made between them or their respective agents or representatives with respect to the subject matter of this Lease, except for the obligations of Tenant under the Original Lease accruing or arising prior to the Effective Date, are merged into this Lease which fully and completely expresses their agreement as of the Effective Date. Tenant acknowledges that Landlord has no obligation under or accruing from the Original Agreement. Tenant hereby further accepts the Premises and will accept Additional Improvements (as exist in the future) including the Land as zoned, and except for the obligations of Landlord under this Lease agrees, at Tenant’s sole cost, to abide by and comply and cause all parties having any rights under Tenant or permitted, authorized or allowed by Tenant to use the Premises and Additional Improvements only in a manner so as to comply with the terms of this Lease, the Deed Restrictions and all laws, rules, regulations and conditions imposed by any governmental authority, including, but not limited to, the City of Alpharetta, Forsyth County and the State of Georgia.

Section 8.02 Tenant’s Maintenance Obligations. Tenant covenants and agrees unto Landlord that this Lease is net to Landlord with Tenant obligated to cause the Premises and all Additional Improvements to be maintained in good repair and condition and to release and deliver to Landlord at the end of the Term the Premises and Additional Improvements in good repair and condition at the termination of this Lease except for obligations pursuant to the terms of Section 8.03, Section 11.03 and Section 12.07. In furtherance of the foregoing and not by way of limitation, Tenant shall maintain at its expense in good repair all equipment and systems serving the Premises, exterior glass, all utilities and utility lines, water and sewer connections, plumbing, wiring, landscaping, all HVAC equipment (including, without limitation, all systems, equipment and compressors), the parking lot, and Additional Improvements. Tenant at its expenses shall provide (i) preventative and routine maintenance of the heating, ventilation and air conditional systems of the Premises and Additional Improvements, including periodic filter change and routine service and adjustment at least four (4) times per year. Tenant shall enter into preventative maintenance agreements with a service firm approved by Landlord, to provide all the aforesaid maintenance and service during the Term, at Tenant’s sole expense, which agreements shall also benefit Landlord. Tenant agrees to indemnify and hold harmless Landlord for any failure of Tenant to comply with the foregoing. The maintenance obligations of Tenant under this Section 5.05 shall be deemed to be “ Tenant’s Maintenance Obligations. ” Tenant shall be responsible for all cleaning, remodeling, including interior painting and carpeting) and all cosmetic maintenance of the Premises.

 

13

Section 8.03 Landlord’s Maintenance Obligations. Landlord shall only have the duty of maintenance for the roof, foundation, and exterior walls located on the Land but not the Additional Improvements. Tenant hereby waives any and all right to require Landlord to maintain or cause to be maintained any other portion of the Premises or Additional Improvements. Landlord shall have no duty for cleaning, remodeling or cosmetic repairs or maintenance to the Premises.

Section 8.04 Failure of Tenant to Pay. In the event Tenant fails to comply with its obligations of maintenance or obligation of maintenance to maintain service agreements as provided in this Lease, Landlord shall have the right, but not the obligation, to enter into any service agreements Tenant is required to maintain at Tenant’s expense and to perform at Tenant’s expenses any maintenance not timely performed by Tenant. The cost for such maintenance and service agreements plus interest thereon at the Default Rate shall be due by Tenant to Landlord on demand.

ARTICLE IX

INDEMNIFICATION

Section 9.0 1 Indemnification by Tenant. Except as set forth in Section 17.02 hereof, Tenant agrees to be responsible for, to indemnify and hold harmless Landlord and Registered Mortgagee from any and all liabilities, damages, claims or demands related to the Premises or Additional Improvements arising out of any condition, accident or occurrence causing injury or death to any person whomever or damage to any property whatsoever, arising during the Term from the condition of the Premises, Additional Improvements or any part thereof or the use or occupancy of the Premises or Additional Improvements or any part thereof. Tenant shall defend Landlord and Registered Mortgagee against any such liability, damage, claim or demand and reimburse Landlord and any Registered Mortgagee, for any costs reasonably incurred by Landlord or any Registered Mortgagee of Landlord in connection therewith, including reasonable attorneys’ fees actually incurred. Tenant shall also indemnify and hold harmless Landlord for any Default of Tenant under this Lease.

Section 9.02 Indemnified Parties. The indemnities in favor of Landlord set forth in Section 9.01 above, together with any other indemnities in favor of Landlord provided elsewhere in this Lease, shall be deemed to include and be in favor of Landlord, and its respective officers, directors, employees, successors and assigns, including any entity resulting by reason of merger or consolidation of any of the foregoing parties

ARTICLE X

INSURANCE

Section 10.01 Public Liability Coverage. Tenant, at Tenant’s sole cost and expense, shall obtain and at all times during the Term maintain in force with regard to the Premises and Additional Improvements a valid policy or policies of commercial general and umbrella liability insurance (including personal injury liability coverage, employee liability coverage, and contractual liability coverage for all indemnification obligations of Tenant hereunder), and workers compensation coverage as required by law, meeting the requirements hereof. Tenant’s

 

14

general and umbrella liability policies shall have a total combined single limit per occurrence of not less than $10,000,000.00. Landlord and Registered Mortgagee shall be named as an additional insureds under such policies of insurance, and there shall be no exclusion for liability applicable to Landlord, Tenant or Registered Mortgagee on the basis of being jointly insured.

Section 10.02 Casualty Insurance. Tenant, at Tenant’s sole costs and expense, shall obtain and at all times during the Term maintain in force a valid policy or policies of insurance which insures 100% of the replacement cost of the Improvements and Additional Improvements. Such policy shall insure against loss or damage to the Improvements and Additional Improvements by fire and other such casualties as are included in all risk replacement cost commercial property insurance coverage and shall provide for deductibles of not more than $10,000 in the aggregate. Such insurance shall include a waiver of coinsurance by an “agreed amount endorsement” or otherwise.

Section 10.03 Form and Requirements of Insurance.

(a) The policy to be provided as set forth in Section 10.01 of this Lease shall provide that the coverage provided thereby to any additional insured party shall neither be invalidated nor subject to cancellation by reason of any act or negligence of the named insured party nor by any breach or violation by the named insured of any warranties, declarations or covenants contained in such policies. All of the insurance policies provided for in Section 10.02 of this Lease shall be issued in the name of Tenant and Landlord as their interests may appear and provide that all insurance proceeds shall be paid pursuant to Section 11.02 below. All insurance policies of Tenant shall be issued by an insurance company licensed to do business in the State of Georgia and having a Best rating of A-/X or better. Landlord shall have the right, no more than once every twenty-four (24) months during the Term, based upon the written recommendations of Landlord’s insurance consultants, to require that the coverage and limits of any insurance required to be maintained by Tenant under this Lease be increased in compliance with such recommendations of Landlord’s consultants. If insurance consultants retained by Tenant disagree with the required increase, and if the insurance amounts are within ten percent (10%) of the higher, the insurance shall be issued in an increased amount equal to the amount recommended by Tenant’s insurance consultants plus one-half (  ¹ / 2 ) of the difference between the amount recommended by Tenant’s insurance consultants and the amount recommended by Landlord's insurance consultants. Notwithstanding the foregoing, all insurance shall satisfy the requirement of Section 10.01 and Section 10.02 hereof. Otherwise, the dispute shall be resolved through the arbitration provisions contained in this Lease. All policies required under Section 10.01 and Section 10.02 shall provide that the insurer shall give Landlord and any Registered Mortgagee at least thirty (30) calendar days’ prior written notice of any cancellation or expiration thereof or of any reduction or change in coverage under the policy or policies. All or any portion of the insurance provided for in this Lease may be taken out under a blanket insurance policy or policies covering other properties of Landlord or Tenant in addition to the Premises and Additional Improvements. Tenant shall furnish Landlord with certificates that required insurance is in full force and effect, copies of all insurance policies, and exhibit receipts for payment of premiums on such insurance policies. Upon annual written request of Tenant received by Landlord, Landlord shall cause to be delivered to Tenant similar certificates as to insurance required to be maintained by Landlord. Without limitation, Tenant shall evidence renewal or replacement of all such policies (and payment of premiums therefore) ten (10) days

 

15

prior to expiration of the then current policy, with copies of such renewal or replacement policies or certificates of insurance with respect thereto being delivered to Landlord within thirty (30) days after the date of renewal or replacement.

(b) Loss, if any, under the insurance policy maintained pursuant to Section 10.02 above, shall be adjusted with the insurance company or companies by Tenant, Landlord and with participation by Registered Mortgagee, unless Tenant exercises its right under Section 17.02, in which event Tenant shall have no right to exercise any right. The loss, as so adjusted, shall be paid to Landlord and made available to Tenant for restoration or repair, or paid to a Registered Mortgagee for the purpose of reconstructing and repairing any damage as provided for herein, all as more particularly provided in Article XI.

Section 10.04 Waiver of Subrogation. Tenant hereby releases Landlord from any and all liability for any loss or damage caused by any casualty, even if the casualty is brought about by the fault or negligence of Landlord. Tenant agrees that it shall have its fire and extended coverage insurance policies endorsed to allow the release contemplated by this Section 10.04, and, if such endorsement is necessary to allow such release, Tenant shall indemnify and hold harmless Landlord from any failure to obtain the foregoing endorsement. Except as specifically otherwise provided in this Section 10.04, nothing in this Lease shall be construed to release either party hereto from any liability arising from the fault, acts, omissions or negligence of said Party.

ARTICLE XI

DAMAGE OR DESTRUCTION

Section 11.01 Damage or Destruction. If any portion of the Improvements or Additional Improvements shall be damaged or destroyed from any cause, regardless if covered by insurance, then the Rent shall not abate. Except as provided in Section 11.03 hereof, Tenant shall at Tenant’s own cost and expense within ninety (90) calendar days following the date of such damage or destruction co