OFFICE LEASE

 

 

TABLE OF CONTENTS

 

Section 1:		Basic Definitions and Provisions
	a.	Premises
	b.	Term
	c.	Permitted Use
	d.	Occupancy Limitation
	e.	Base Rent
	f.	Rent Payment Address
	g.	Security Deposit
	h.	Business Hours
	i.	Electrical Service
	j.	After Hours HVAC Rate
	k.	Parking
	l.	Notice Addresses
	m.	Brokers
Section 2.		Leased Premises
	a.	Premises
	b.	Rentable Square Foot Determination
	c.	Common Areas
Section 3:		Term
	a.	Commencement and Expiration Dates
	b.	Adjustments to Commencement Date
	c.	Termination by Tenant for Failure to Deliver Possession
	d.	Delivery of Possession
	e.	Adjustment of Expiration Date
	f.	Right to Occupy
	g.	Commencement Agreement
Section 4:		Use
	a.	Permitted Use
	b.	Prohibited Uses
	c.	Prohibited Equipment in Premises
Section 5:		Rent
	a.	Payment Obligations
	b.	Base Rent
	c.	Additional Rent
Section 6:		Security Deposit
	a.	Amount of Deposit
	b.	Application of Deposit
	c.	Refund of Deposit
Section 7:		Services by Landlord
	a.	Base Services
	b.	Landlord’s Maintenance
	c.	No Abatement
	d.	Tenant’s Obligation to Report Defects
	e.	Limitation on Landlord’s Liability
Section 8:		Tenant’s Acceptance and Maintenance of Premises
	a.	Acceptance of Premises
	b.	Move-in Obligations
	c.	Tenant’s Maintenance
	d.	Alterations to Premises
	e.	Restoration of Premises

 

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	f.	Landlord’s Performance of Tenant’s Obligations
	g.	Construction Liens
	h.	Communications Compliance
	i.	Mold
Section 9:		Property of Tenant
	a.	Property Taxes
	b.	Removal
Section 10:		Signs
Section 11:		Access to Premises
	a.	Tenant’s Access
	b.	Landlord’s Access
	c.	Emergency Access
Section 12:		Tenant’s Compliance
	a.	Laws
	b.	Rules and Regulations
Section 13:		ADA Compliance
	a.	Tenant’s Compliance
	b.	Landlord’s Compliance
	c.	ADA Notices
Section 14:		Insurance Requirements
	a.	Tenant’s Liability Insurance
	b.	Tenant’s Property Insurance
	c.	Certificates of Insurance
	d.	Insurance Policy Requirements
	e.	Landlord’s Property Insurance
	f.	Mutual Waiver of Subrogation
Section 15:		Indemnity
	a.	Indemnity
	b.	Defense Obligation
Section 16:		Quiet Enjoyment
Section 17:		Subordination; Attornment; Non-Disturbance; and Estoppel Certificate
	a.	Subordination and Attornment
	b.	Non-Disturbance
	c.	Estoppel Certificates
Section 18:		Assignment — Sublease
	a.	Landlord Consent
	b.	Definition of Assignment
	c.	Permitted Assignments/Subleases
	d.	Notice to Landlord
	e.	Prohibited Assignments/Sublease
	f.	Limitation on Rights of Assignee/Sublessee
	g.	Tenant Not Released
	h.	Landlord’s Right to Collect Sublease Rents Upon Tenant Default
	i.	Excess Rents
	j.	Landlord’s Fees
	k.	Unauthorized Assignment or Sublease
Section 19:		Damages to Premises
	a.	Landlord’s Restoration Obligations
	b.	Termination of Lease by Landlord
	c.	Termination of Lease by Tenant
	d.	Tenant’s Restoration Obligations
	e.	Rent Abatement
	f.	Waiver of Claims
Section 20:		Eminent Domain

 

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	a.	Effect on Lease
	b.	Right to Condemnation Award
Section 21:		Environmental Compliance
	a.	Environmental Laws
	b.	Tenant’s Responsibility
	c.	Tenant’s Liability
	d.	Limitation on Tenant’s Liability
	e.	Inspections by Landlord
	f.	Landlord’s Liability
	g.	Property
	h.	Tenant’s Liability after Termination of Lease
Section 22:		Default
	a.	Tenant’s Default
	b.	Landlord’s Remedies
	c.	Attorneys Fees
	d.	No Accord and Satisfaction
	e.	No Reinstatement
	f.	Summary Ejectment
Section 23:		Multiple Defaults
	a.	Loss of Option Rights
	b.	Increased Security Deposit
	c.	Effect on Notice Rights and Cure Periods
Section 24:		Bankruptcy
	a.	Trustee’s Rights
	b.	Adequate Assurance
	c.	Assumption of Lease Obligations
Section 25:		Notices
	a.	Addresses
	b.	Form; Delivery; Receipt
	c.	Address Changes
	d.	Notice by Legal Counsel
Section 26:		Holding Over
Section 27:		Right to Relocate
	a.	Substitute Premises
	b.	Notice
	c.	Upfit of Substitute Premises
	d.	Relocation Costs
	e.	Lease Terms
	f.	Limitation on Landlord’s Liability
Section 28:		Right of First Offer
Section 29:		Right to Renew
Section 30:		Termination Option
Section 31:		Broker Commissions
	a.	Brokers
	b.	Landlord’s Obligation
	c.	Indemnity
Section 32:		Miscellaneous
	a.	No Agency
	b.	Force Majeure
	c.	Building Standard Improvements
	d.	Limitation on Damages
	e.	Satisfaction of Judgments Against Landlord
	f.	Interest
	g.	Legal Costs

 

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	h.	Sale of Premises or Building
	i.	Time of the Essence
	j.	Transfer of Security Deposit
	k.	Tender of Premises
	l.	Tenant’s Financial Statements
	m.	Recordation
	n.	Severability
	o.	Binding Effect
	p.	Entire Agreement
	q.	Good Standing
	r.	Terminology
	s.	Headings
	t.	Choice of Law
	u.	Effective Date
	v.	Landlord’s Lien
	w.	Joint and Several
	x.	No Construction Against Preparer
Section 33:		Special Conditions
Section 34:		Addenda and Exhibits
	a.	Lease Addendum Number One — Landlord’s Work
	b.	Lease Addendum Number Two — Operating Expense Pass Throughs
	c.	Exhibit A — Premises
	d.	Exhibit B — Rules and Regulations
	e.	Exhibit C — Commencement Agreement
	f.	Exhibit D — Insurance Certificate
	g.	Exhibit E — Liens and Encumbrances
	h.	Exhibit F — Temporary Space and Additional Landlord’s Work
	i.	Exhibit G — Parapet Sign

 

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State of North Carolina:

County of Wake:

 

OFFICE LEASE

 

THIS LEASE (“Lease”), made this 31st day of July, 2009, by and between A & G/Slater Road, Inc., a North Carolina corporation (“Landlord”) and Quixote Transportation Technologies, Inc., a Delaware corporation (“Tenant”), provides as follows:

 

1.                               BASIC DEFINITIONS AND PROVISIONS. The following basic definitions and provisions apply to this Lease:

 

a.	Premises.
		Rentable Square Feet:		10,000
		Usable Square Feet:		9,091
		Core Area Factor (R/U ratio)		1.10
		Suite:		200
		Building:		Slater Road Office Building
		Street Address:		2880 Slater Road
		City/County:		Morrisville/Wake
		State/Zip Code:		North Carolina/ 27560
b.	Term.	Number of Months:		67
		Commencement Date:		December 1, 2009
		Expiration Date:		June 30, 2015, as the same may be shortened or extended as herein provided
c.	Permitted Use.			General office, including an electronic equipment laboratory not to exceed 400 square feet and located as shown on the attached Exhibit “F” and containing work benches, one to two soldering stations, computers, special electrical and radio testing frequency equipment for the sole purpose of building circuit board prototypes, in conjunction with Tenant’s business of transportation management and any other lawful office use consented to by Landlord, such consent not to be unreasonably withheld, delayed or conditioned
d.	Occupancy Limitation.			No more than four persons per one thousand (1,000) rentable square feet.

 

e.                                       Base Rent. The minimum base rent for the Term is $760,241.92, payable in monthly installments on the 1 st  day of each month in accordance with the following Base Rent Schedule:

 

TERM		RATE			MONTHLY RENT			CUMULATIVE RENT
12/1/09-2/28/10									Rent Abated
3/1/10-11/30/10		$	14.50		$	12,083.34			$108,750.06
12/1/10-12/31/10									Rent Abated
1/1/11-11/30/11		$	14.50		$	12,083.34			$132,916.74
12/1/11-12/31/11									Rent Abated
1/1/12-11/30/12		$	14.94		$	12,450.00			$136,950.00
12/1/12-12/31/12									Rent Abated
1/1/13-11/30/13		$	15.39		$	12,825.00			$141,075.00
12/1/13-12/31/13									Rent Abated
1/1/14-11/30/14		$	15.85		$	13,208.34			$145,291.74
12/1/14-6/30/15		$	16.33		$	13,608.34			$95,258.38
					BASE RENT:  $ 760,241.92

 

 

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If Tenant is in default of this Lease after any applicable notice and cure period, then in addition to all other rights and remedies of Landlord contained herein, all abated rent shall immediately become due and payable in full by Tenant to Landlord, including without limitation abated rent for any period both before and after the date of such default.  If, during the period that Base Rent is to be abated as provided in this Section 1e, Base Rent is abated, in whole or in part, pursuant to any other provisions of this Lease, then such period of time shall be extended to the extent that such Base Rent are otherwise so abated.

 

f.	Rent Payment Address.			A & G/Slater Road, Inc.
				c/o Atlantic Investment Management, LLC
				4104 Atlantic Avenue, Suite 140
				Raleigh, North Carolina 27604
				Attn: Rental Business Manager
				Facsimile #: 919/876-2448
g.	Security Deposit.			$12,083.34
h.	Business Hours.			8:00 A.M. to 6:00 P.M. Monday through Friday (excluding National and State Holidays).
i.	Electrical Service.			Electrical circuits for convenience outlets as exist in the Premises on the Commencement Date.
j.	After Hours HVAC Rate.			$18.00 per hour, per zone, with a minimum of two (2) hours per occurrence.
k.	Parking.			Not less than four unreserved spaces per 1000 rentable square feet of the Premises.  In addition, Landlord will provide four reserved parking spaces for Tenant’s sole use at a mutually agreeable location.  Landlord will not bear any additional responsibility or liability due to Tenant’s sole use of the spaces.
l.	Notice Addresses.
		LANDLORD:		A & G/Slater Road, Inc.
				c/o Atlantic Investment Management, LLC
				4104 Atlantic Avenue, Suite 140
				Raleigh, North Carolina 27604
				Attn: Rental Business Manager
				Facsimile #: 919/876-2448
		TENANT:		Prior to Commencement Date:
				Quixote Transportation Technologies, Inc.
				4021 Stirrup Creek Drive
				Suite 100
				Durham, North Carolina 27703
				Attn:  Mike Corbett
				From and after Commencement Date:
				Quixote Transportation Technologies, Inc.
				2880 Slater Road, Suite 200
				Morrisville, NC 27560
				Attn:  Mike Corbett
m.	Brokers.			Ryan Lawrence
				Jones Lang LaSalle — Carolinas, LLC
				Fred Dickens
				Coldwell Banker Trademark Commercial

 

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2.                                 LEASED PREMISES .

 

a.                                       Premises. Subject to the terms and conditions of this Lease, Landlord leases to Tenant and Tenant leases from Landlord the Premises identified in Section 1a and as more particularly shown on Exhibit A , attached hereto.  The foregoing notwithstanding, so long as this Lease remains in full force and effect and Tenant is not in default hereunder beyond any applicable notice and cure period, until another bona fide third-party tenant leases the corner suite as shown on Exhibit A and the space is needed by Landlord in preparation therefor, and upon at least ten (10) days prior notice to Tenant and the Landlord constructing the walls to create the two additional offices shown on Exhibit F as provided below, the Premises shall include the two offices within such space as set forth in Exhibit F (the “Temporary Offices”) together with ingress and egress rights thereto.  Tenant shall not be obligated to pay any Base Rent or Additional Rent for such additional space, but all other obligations, provisions, covenants, insurance requirements and indemnities set forth herein shall apply to such Temporary Offices as if such were part of the Premises, but such Temporary Offices shall not be included in any memorandum of lease recorded in connection with this Lease.  Upon the Temporary Offices no longer being available to Tenant based on Landlord leasing such additional space, and Landlord needing such space in preparation therefor, and upon at least ten (10) days prior notice to Tenant, Landlord, at its cost and expense, shall, prior to Tenant being obligated to vacate the same, construct the walls to create the two additional offices shown on Exhibit F.

 

b.                                      Rentable Square Foot Determination. The parties acknowledge that all square foot measurements are approximate and agree that the square footage figures in Section 1a shall be conclusive for all purposes with respect to this Lease, provided that, anything to the contrary contained in this Lease notwithstanding, if Landlord adds to the rentable square footage of the Building at any time, then Tenant’s Proportionate Share shall be proportionately reduced, using the same method of calculating rentable square footage as was used to determine the rentable square footage of the Building and Premises initially.

 

c.                                        Common Areas. Tenant shall have non-exclusive access to the common areas of the Building. The common areas generally include space that is not included in portions of the Building set aside for leasing to tenants or reserved for Landlord’s exclusive use, including entrances, hallways, lobbies, elevators, restrooms, walkways, parking areas and plazas (“Common Areas”). Landlord has the exclusive right, to be exercised reasonably, to (i) designate the Common Areas, (ii) change the designation of any Common Area and otherwise modify the Common Areas, and (iii) permit special use of the Common Areas, including temporary exclusive use for special occasions. Tenant shall not interfere with the rights of others to use the Common Areas.  All use of the Common Areas shall be subject to any rules and regulations promulgated by Landlord attached hereto as Exhibit B or any additional reasonable rules and regulations of which Tenant has reasonable advance notice and which are not contrary to the express terms of this Lease and uniformly applicable to all tenants in the Building.

 

3.                               TERM .

 

a. Commencement and Expiration Dates. The Lease Term commences on the Commencement Date and expires on the Expiration Date, as set forth in Section 1b.

 

b. Adjustments to Commencement Date. The Commencement Date shall be adjusted as follows:

 

i.                                 If Tenant requests possession of the Premises or a portion thereof prior to the Commencement Date, and Landlord consents, which consent shall not be unreasonably withheld, delayed or conditioned, the Commencement Date shall be the date of possession.  All Rent and other obligations under this Lease shall begin on the date of possession (proportionately, if only a portion of the Premises is occupied by Tenant), but the Expiration Date shall remain the same; provided that if Tenant is only occupying a portion of the Premises as of the date that otherwise would be the Commencement Date but for the earlier partial possession, then full Rent and other obligations under this Lease shall commence on the date that otherwise would have been the Commencement Date but for the earlier partial possession.

 

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ii.                              If Landlord, for any reason, cannot deliver possession of the Premises to Tenant on the Commencement Date, then the Commencement Date, Expiration Date, and all other dates that may be affected by their change (including without limitation the dates set forth in Section 1(e) above), shall be revised to conform to the date of Landlord’s delivery of possession of the Premises to Tenant and delayed by the same number of days that the Commencement Date is delayed. Any such delay shall not relieve Tenant of its obligations under this Lease, and neither Landlord nor Landlord’s agents shall be liable to Tenant for any loss or damage resulting from the delay in delivery of possession.

 

c.  Termination by Tenant for Failure to Deliver Possession. In the event Landlord is unable to deliver possession of the Premises within ninety (90) days after the original Commencement Date set forth in the first sentence of this Section 3 (excluding any delays resulting from force majeure (not to exceed thirty (30) additional days) or caused by Tenant “Excused Delays”), then Tenant may terminate this Lease by giving notice to Landlord within one hundred twenty (120) days of the original Commencement Date (excluding any delays resulting from force majeure (not to exceed thirty (30) additional days) and Excused Delays); provided that if Landlord tenders possession of the Premises to Tenant prior to Tenant exercising such termination right, such termination right shall be deemed waived and of no further force or effect.

 

d.   Delivery of Possession. Unless otherwise specified in the Workletter attached as Lease Addendum Number One, “delivery of possession” of the Premises shall mean the earlier of: (i) the date Landlord has the Premises ready for occupancy by Tenant as evidenced by a permanent or temporary Certificate of Occupancy issued by proper governmental authority with all of the work in the Workletter substantially completed and in broom clean condition and otherwise in the same condition as of the date hereof, ordinary wear and tear excepted, free of other occupants, or (ii) the date Landlord could have had the Premises ready had there been no Excused Delays.

 

e.  Adjustment of Expiration Date. If the Expiration Date does not occur on the last day of a calendar month, then Landlord, at its option, may extend the Term by the number of days necessary to cause the Expiration Date to occur on the last day of the last calendar month of the Term provided that Landlord notifies Tenant of such election within thirty (30) days after the Commencement Date.  Tenant shall pay Base Rent and Additional Rent for such additional days at the same rate payable for the portion of the last calendar month immediately preceding such extension.

 

f. Right to Occupy. Tenant shall not occupy the Premises until Tenant has complied with all of the following requirements to the extent applicable under the terms of this Lease: (i) delivery of all certificates of insurance, (ii) payment of Security Deposit, (iii) execution and delivery of any required Guaranty of Lease, and (iv) if Tenant is an entity, receipt of a good standing certificate from the State where it was organized and a certificate of authority to do business in the State in which the Premises are located (if different). Tenant’s failure to comply with these (or any other of Tenant’s conditions precedent to occupancy under the terms of this Lease) shall not delay the Commencement Date.

 

g.  Commencement Agreement. The Commencement Date, Term, and Expiration Date may be set forth in a Commencement Agreement similar to Exhibit C, attached hereto, to be prepared by Landlord and executed by the parties.

 

4.                               USE.

 

a.                                       Permitted Use. The Premises may be used only for general office purposes, including an electronic equipment laboratory not to exceed 400 square feet and located as shown on the attached Exhibit “F” and containing work benches, one to two soldering stations, computers, special electrical and radio testing frequency equipment for the sole purpose of building circuit board prototypes, in conjunction with Tenant’s business of transportation management, and otherwise in connection with Tenant’s Permitted Use as defined in Section 1c and in accordance with the Occupancy Limitation as set forth in Section 1d.

 

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b.                                      Prohibited Uses. Tenant shall not use the Premises:

 

i.                                 In violation of any restrictive covenants which apply to the Premises as identified on Exhibit E attached hereto and made a part hereof, and future restrictions upon reasonable advance notice to Tenant provided the same do not unreasonably interfere with the use and enjoyment of the Premises and Common Areas by Tenant for its Permitted Use (“Restrictive Covenants”).

 

ii.                              In any manner that constitutes a nuisance or trespass;

 

iii.                           In any manner other than normal office usage which increases any insurance premiums, or makes such insurance unavailable to Landlord on the Building; provided that, in the event of an increase in Landlord’s insurance premiums which results from Tenant’s use of the Premises other than normal office usage, Landlord may elect to permit the use and charge Tenant for the increase in premiums, and Tenant’s failure to pay Landlord, within five (5) business days after demand, the amount of such increase shall be an event of default;

 

iv.                          In any manner that creates unusual demands for electricity, heating or air conditioning, unless consented to by Landlord, which consent shall not be unreasonably withheld, delayed or conditioned; or

 

v.                             For any purpose except the Permitted Use, unless consented to by Landlord in writing.

 

c.                                       Prohibited Equipment in Premises. Tenant shall not install any equipment in the Premises that places unusual demands on the electrical, heating or air conditioning systems (“High Demand Equipment”) without Landlord’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned.  No such consent will be given if Landlord determines, in its reasonable opinion, that such equipment may not be safely used in the Premises or that electrical service is not adequate to support the equipment. Landlord’s consent may be conditioned, without limitation, upon separate metering of the High Demand Equipment and Tenant’s payment of all engineering, equipment, installation, maintenance, removal and restoration costs and utility charges associated with the High Demand Equipment and the separate meter. If High Demand Equipment used in the Premises by Tenant affect the temperature otherwise maintained by the heating and air conditioning system, Landlord shall have the right to install supplemental air conditioning units in the Premises with the cost of engineering, installation, operation and maintenance of the units to be paid by Tenant, provided reasonable advance notice is given to Tenant and Tenant fails to cure the same within such time period prior to Landlord’s incurring any such expenses. All costs and expenses relating to High Demand Equipment and Landlord’s administrative costs (such as reading meters and calculating invoices) shall be Additional Rent, payable by Tenant within five (5) business days after demand.  If Tenant installs a supplemental HVAC unit in its Premises, the supplemental HVAC unit will be considered High Demand Equipment, be separately metered with metered charges being paid by Tenant, and both the meter and unit shall be maintained by Tenant.

 

5.                               RENT.

 

a.                                       Payment Obligations.   Tenant shall pay Base Rent and Additional Rent (collectively, “Rent”) on or before the first day of each calendar month during the Term, as follows:

 

i.                               Rent payments shall be sent to the Rent Payment Address set forth in Section 1f.

 

ii.                            Rent shall be paid without previous demand or notice and without set off or deduction except to the extent otherwise herein provided. Tenant’s obligation to pay Rent under this Lease is completely separate and independent from any of Landlord’s obligations under this Lease except to the extent otherwise provided herein.

 

iii.                         If the Term commences on a day other than the first day of a calendar month, then Rent for such month shall be (i) prorated for the period between the Commencement Date and the last day of the month in which the

 

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7.                              SERVICES BY LANDLORD .

 

a.                                       Base Services. Provided that Tenant is not then in default, Landlord shall cause to be furnished to the Building, or as applicable, the Premises, in common with other tenants the following services:

 

i.                              Water for drinking, lavatory and toilet purposes.

 

ii.                           Electricity for the building standard fluorescent lighting and for the operation of general office machines, such as electric typewriters, desk top computers, dictating equipment, adding machines and calculators, and general service non-production type office copy machines; provided that Landlord shall have no obligation to provide more than the amount of power for convenience outlets and the number of electrical circuits as set forth in Section 1i.

 

iii.                       Operatorless elevator service.

 

iv.                       Building standard fluorescent lighting composed of 2’ x 4’ fixtures;  Tenant shall service, replace and maintain at its own expense any incandescent fixtures, table lamps, or lighting other than the building standard fluorescent light, and any dimmers or lighting controls other than controls for the building standard fluorescent lighting.

 

v.                           Heating and air conditioning for the reasonably comfortable use and occupancy of the Premises during Business Hours as set forth in Section 1h (sometimes herein referred to as “business hours”).

 

vi.                        After Business Hours, weekend and holiday heating and air conditioning at the After Hours HVAC rate set forth in Section 1j, with such charges subject to commercially reasonable annual increases as determined by Landlord.

 

vii.                     Janitorial services five (5) days a week (excluding National and State holidays) after Business Hours.

 

viii.                 A reasonable pro-rata share of the unreserved parking spaces of the Building, equal to the Parking specified in Section 1k, for use by Tenant’s employees and visitors in common with the other tenants and their employees and visitors. In addition, Tenant shall have four (4) reserved parking spaces of the Building as provided in Section 1k; provided that Tenant hereby waives and releases Landlord from any liability arising in connection with the use of such reserved parking spaces by Tenant, its employees, officers, principals, agents, contractors or invitees, except for liability arising from the gross negligence or willful misconduct of Landlord; provided further that Tenant hereby indemnifies Landlord for any loss, cost, claim, suit or expense (including reasonable attorneys’ fees) relating to the use of the reserved parking spaces by Tenant, its employees, officers, principals, agents, contractors or invitees, except for liability arising from the gross negligence or willful misconduct of Landlord.

 

Notwithstanding the foregoing, Landlord shall not be liable to Tenant for any disruption in utilities unless such disruption is caused by Landlord’s or its agents, employees and contractor’s gross negligence or willful misconduct.  In the event of such an interruption (and except as set forth in the immediately preceding sentence), Landlord’s sole obligation shall be to exercise commercially reasonable efforts to cause the utility to once again be provided by the applicable utility provider.

 

b.                                       Landlord’s Maintenance. Landlord shall maintain and shall make all repairs and replacements reasonably necessary to the Building (including Building fixtures and equipment), Common Areas and Building Standard Improvements in the Premises, except for repairs and replacements that Tenant must make under Section 8. The foregoing notwithstanding, Landlord’s maintenance, repair and replacement obligations shall, without limitation, include the roof, foundation, exterior walls, interior structural walls, all structural components, and all Building systems, such as mechanical, electrical, HVAC, and plumbing. Repairs or replacements shall be made within a reasonable time (depending on the nature of the repair or replacement needed) after receiving notice from Tenant or Landlord having actual knowledge of the need for a repair or replacement.  Landlord shall maintain, repair and operate the Building and Common Areas in a manner as similar properties in the area are maintained, repaired and operated.

 

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c.                                        No Abatement. There shall be no abatement or reduction of Rent by reason of any of the foregoing services not being continuously provided to Tenant.  The foregoing notwithstanding, (a) if any such service is not continuously provided as a result of the negligence or intentional misconduct of Landlord or its agents, employees or contractors such that the Premises are untenantable in whole or in part for more than five (5) consecutive business days, then Tenant shall notify Landlord in writing that Tenant intends to abate rent, and (b) if such utilities or services have not been restored within five (5) days of Landlord’s receipt of Tenant’s notice, without regard to Section 22(g) below, then Rent shall abate proportionately on a per diem basis for each day during which the Premises are so untenantable and, if such discontinuance is material and continues beyond seventy five (75) days, without regard to the provisions of Section 22(g) below, Tenant shall be entitled to terminate this Lease at any time thereafter upon notice to Landlord. Landlord agrees to cooperate reasonably with Tenant to restore any such discontinued service as soon as reasonably practicable.  Landlord shall have the right to shut down the Building systems (including electricity and HVAC systems) to the extent reasonably necessary for required maintenance and safety inspections, and in cases of emergency; however, Landlord shall not allow such shut downs to occur during Business Hours except in the case of an emergency or extraordinary circumstances and for any shut down Landlord shall make reasonable efforts to minimize the impact on Tenant’s use and enjoyment of the Premises and Common Areas.

 

d.                                      Tenant’s Obligation to Report Defects. Tenant shall report to Landlord promptly any defective condition in or about the Premises known to Tenant and if such defect is not so reported and such failure to promptly report results in other damage, Tenant shall be liable for same.

 

e.                                       Limitation on Landlord’s Liability. Landlord shall not be liable to Tenant for any damage caused to Tenant and its property due to the Building or any part or appurtenance thereof being improperly constructed or being or becoming out of repair, or arising from the leaking of gas, water, sewer or steam pipes, or from problems with electrical service, unless such damage is a result of Landlord’s failure to repair in a timely manner or take reasonable steps to have such items repaired in a timely manner, after Landlord has written notice of such defects or necessary repairs from Tenant, or otherwise due to the gross negligence or intentional misconduct of Landlord or its agents, employees or contractors.

 

8.                              TENANT’S ACCEPTANCE AND MAINTENANCE OF PREMISES .

 

a.                                       Acceptance of Premises. Except as may be specifically set forth in this Lease and subject to the terms of the attached Workletter, if any, Tenant’s occupancy of the Premises is Tenant’s representation to Landlord that (i) Tenant has examined and inspected the Premises, (ii) finds the Premises to be as represented by Landlord and satisfactory for Tenant’s intended use, and (iii) constitutes Tenant’s acceptance of the Premises “as is”.  Landlord makes no representation or warranty as to the condition of the Premises except as may be specifically set forth in the Workletter or the remainder of this Lease.

 

b.                                      Move-In Obligations. Tenant shall schedule its move-in with Atlantic Investment Management, LLC, or any other property manager of which Landlord gives Tenant at least five (5) business days advance notice (the Landlord’s “Property Manager”). Unless otherwise approved by Landlord’s Property Manager, such approval not to be unreasonably withheld, delayed or conditioned, move-in shall not take place during Business Hours. During Tenant’s move-in, a representative of Tenant must be on-site with Tenant’s moving company to insure proper treatment of the Building and the Premises. Elevators, entrances, hallways and other Common Areas must remain in use for the general public during business hours. Any specialized use of elevators or other Common Areas must be reasonably coordinated with Landlord’s Property Manager. Tenant must properly dispose of all packing material and refuse in accordance with the Rules and Regulations.  Any damage or destruction to the Building or the Premises due to moving by Tenant will be the sole responsibility of Tenant.

 

c.                                       Tenant’s Maintenance. Tenant shall: (i) keep the Premises and fixtures in the same order as when delivered to Tenant or after any work which Tenant is not obligated to remove (subject to Tenant’s right to remove the same) is completed, ordinary wear, loss or damage by fire or other casualty, damage or loss from a taking or sale in lieu thereof, damage resulting from the negligence or willful acts of Landlord or its employees, contractors or agents and any other maintenance, repairs and replacements for which Landlord is responsible or Tenant is excused under this Lease excepted; (ii) make repairs and replacements to the

 

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Premises or Building needed because of Tenant’s or any officer, agent, employee, contractor, servant, invitee or guest of Tenant’s misuse or negligence; (iii) repair and replace Non-Standard Improvements, including any special equipment or decorative treatments, installed by or at Tenant’s request that serve the Premises (unless the Lease is ended because of casualty loss or condemnation); and (iv) not commit waste.  Except to the extent otherwise provided in this Lease, Tenant shall also be solely responsible for maintaining the following items, if installed in the Premises: (i) ice machines; (ii) sump pumps; (iii) refrigerators; (iv) dishwashers; (v) garbage disposals; (vi) coffee machines and microwaves; (v) sinks and faucets; (vi) water filter and purification systems; (vii) all kitchen drain lines; (viii) executive restrooms; (ix) Simplex (or key pad) locks; (x) security access systems or alarm systems; (xi) Tenant specific hot water heaters; and (xii) showers and spas.  Tenant shall maintain these items in good working order except to the extent otherwise provided in this Lease.

 

d.                                      Alterations to Premises. Tenant shall make no structural or interior alterations to the Premises unless consented to by Landlord, which consent shall not be unreasonably withheld, delayed or conditioned; provided that Landlord shall be entitled to approve or disapprove in its sole and absolute discretion any proposed alterations to the structure of the Premises or Building, the exterior of the Premises or the mechanical, electrical or plumbing systems of the Premises or Building. If Tenant requests such alterations, then Tenant shall provide Landlord’s Property Manager with a complete set of construction drawings. If Landlord consents to the alterations, then the Property Manager shall determine the actual cost of the work to be done (to include a construction supervision fee to be paid to Landlord in the amount of 10% of the cost of the construction). Tenant may then either agree to pay Landlord to have the work done or withdraw its request for alterations.  All such alterations are subject to the prior written approval of Landlord, which approval shall not be unreasonably withheld, delayed or conditioned; provided that Landlord shall be entitled to approve or disapprove in its sole and absolute discretion any proposed alterations to the structure of the Premises or Building, the exterior of the Premises or the mechanical, electrical or plumbing systems of the Premises or Building. Notwithstanding the foregoing, Landlord’s consent shall not be required for alterations to painting and carpeting or other interior, non-structural alterations that do not exceed $25,000 in value, so long as the alterations do not affect the Building systems or decrease the value of the Premises, Tenant uses contractors reasonably approved by Landlord, Tenant provides Landlord with “as built” or working drawings for any material modifications and Tenant notifies Landlord prior to making such alterations.

 

e.                                       Restoration of Premises. At the expiration or earlier termination of this Lease, Tenant shall (i) deliver each and every part of the Premises in the condition it is required to maintain the same pursuant to Section 8(c) above, and (ii) restore the Premises at Tenant’s sole expense to such condition. If Tenant has required or installed Non-Standard Improvements, such improvements shall be removed as part of Tenant’s restoration obligation. Landlord, however, may elect to require Tenant to leave any Non-Standard Improvements in the Premises provided that Tenant is given at least thirty (30) days prior written notice thereof prior to the expiration of the Lease or, if the Lease, is terminated, as soon as reasonably possible, unless at the time of such Non-Standard Improvements were installed, Landlord agreed in writing that Tenant could remove such improvements. Tenant shall repair any damage caused by its removal of any Non-Standard Improvements. “Non-Standard Improvements” means such items installed by or for Tenant (not including any work performed by Landlord under the Workletter) such as (i) High Demand Equipment and separate meters, (ii) all wiring and cabling from the point of origin to the termination point, (iii) raised floors for computer or communications systems, (iv) telephone equipment, security systems, and UPS systems, (v) equipment racks, (vi) alterations installed by or at the request of Tenant after the Commencement Date, and (vii) any other improvements that are not part of the Building Standard Improvements.

 

f.                                         Landlord’s Performance of Tenant’s Obligations. If Tenant does not perform its maintenance or restoration obligations in a timely manner, commencing the same within five (5) days after receipt of notice from Landlord specifying the work needed, and thereafter diligently and continuously pursuing the work until completion, then Landlord shall have the right, but not the obligation, to perform such work. Any amounts expended by Landlord on such maintenance or restoration shall be Additional Rent to be paid by Tenant to Landlord within thirty (30) days after demand.

 

g.                                      Construction Liens. Tenant shall have no power to do any act or make any contract that may create or be the foundation of any lien, mortgage or other encumbrance upon the reversionary or other estate of Landlord, or any interest of Landlord in the Premises.  NO CONSTRUCTION LIENS OR OTHER LIENS FOR ANY LABOR, SERVICES OR MATERIALS

 

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FURNISHED TO THE PREMISES SHALL ATTACH TO OR AFFECT THE INTEREST OF LANDLORD IN AND TO THE PREMISES OR THE BUILDING.  Tenant shall keep the Premises and the Building free from any liens arising out of any work performed, materials furnished, or obligations incurred by or on behalf of Tenant. Should any lien or claim of lien be filed against the Premises or the Building by reason of any act or omission of Tenant or any of Tenant’s agents, employees, contractors or representatives, then Tenant shall cause the same to be canceled and discharged of record by bond or otherwise within ten (10) days after Tenant receives notice of the filing thereof.  Should Tenant fail to discharge the lien within such ten (10) day period, then Landlord may discharge the lien.  The amount paid by Landlord to discharge the lien (whether directly or by bond), plus all administrative and legal costs incurred by Landlord, shall be Additional Rent payable on demand.  The remedies provided herein shall be in addition to all other remedies available to Landlord under this Lease or otherwise.

 

h.                                      Communications Compliance. Tenant acknowledges and agrees that any and all telephone and telecommunication services desired by Tenant shall be ordered and utilized at the sole expense of Tenant.  Unless Landlord requests otherwise or consents in writing, which  consent shall not be unreasonably withheld, delayed or conditioned, all of Tenant’s telecommunications equipment shall be located and remain solely in the Premises.  Landlord shall not have any responsibility for the maintenance of Tenant’s telecommunications equipment, including wiring; nor for any wiring or other infrastructure to which Tenant’s telecommunications equipment may be connected except to the extent arising from Landlord’s or its agents’, employees’, or contractors’ negligence or intentional misconduct.  Tenant agrees that, to the extent any telecommunications service is interrupted, curtailed or discontinued, Landlord shall have no obligation or liability with respect thereto except to the extent arising from Landlord’s or its agents’, employees’, or contractors’ negligence or intentional misconduct.  Landlord shall have the right, upon reasonable prior oral or written notice to Tenant, to interrupt or turn off telecommunications facilities to the extent reasonably necessary in the event of emergency or as necessary in connection with repairs to the Building or installation of telecommunications equipment for other tenants of the Building, provided that Landlord shall make reasonable efforts to minimize the impact on Tenant’s use and enjoyment of the Premises and Common Areas.  In the event that Tenant wishes at any time to utilize the services of a telephone or telecommunications provider whose equipment is not then servicing the Building, the provider shall not be permitted to install its lines or other equipment within the Building without first securing the prior written approval of Landlord, which approval shall not be unreasonably withheld, delayed or conditioned.  Landlord’s approval may be conditioned in such a manner to as to reasonably protect Landlord’s financial interests, the interest of the Building, and the other tenants therein.  The refusal of Landlord to grant its approval to any prospective telecommunications provider shall not be deemed a default or breach by Landlord of its obligation under this Lease if reasonable.  The provision of this paragraph may be enforced solely by Tenant and Landlord, are not for the benefit of any other party, and specifically but without limitation, no telephone or telecommunications provider shall be deemed a third party beneficiary of this Lease.  Tenant shall not utilize any wireless communications equipment (other than usual and customary cellular telephones and wireless modems), including antennae and satellite receiver dishes, within the Premises or the Building, without Landlord’s prior written consent, which consent shall not be unreasonably withheld, delayed or conditioned.  Landlord’s consent may be conditioned in such a manner so as to reasonably protect Landlord’s financial interests, the interests of the Building, and the other tenants therein.  At Landlord’s option, Tenant may be required to remove any and all telecommunications equipment (including wireless equipment) installed in the Premises or elsewhere in or on the Building by or on behalf of Tenant, including wiring, or other facilities for telecommunications transmittal at the expiration or termination of the Lease and at Tenant’s sole cost, provided that Tenant is given at least thirty (30) days prior written notice thereof prior to the expiration of the Lease or, if the Lease, is terminated, as soon as reasonably possible.

 

i.                                          Mold .  Tenant shall be responsible for taking appropriate and timely measures to prevent the growth of mold and mildew within the Premises that result from its use or occupancy of the Premises, including but not limited to (1) preventing moisture accumulation in the Premises by Tenant’s personal equipment, including on windows, walls and other surfaces; (2) promptly reporting any malfunction of the heating or air conditioning system in the Premises of which Tenant becomes aware; (3) not obstructing the heating and air conditioning system from performing as designed; (4) promptly reporting any water intrusion or accumulation or other moisture accumulation in or about the Premises of which Tenant becomes aware; and (5) promptly reporting any visible mold in the Premises.  Except for matters arising from the negligence or willful acts of Landlord, and its employees, agents, contractor, invitees or licensees, Tenant shall indemnify Landlord and hold Landlord harmless from and against any

 

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and all losses, liabilities, including strict liability, obligations, damages, injuries, costs, expenses, including reasonable attorneys’ fees, costs of settlement or judgments and claims of any kind whatsoever paid, incurred or suffered by, or asserted against Landlord by any person, entity, or governmental agency for, with respect to, or as a direct or indirect result of the presence of mold or mildew in the Premises or any adjacent portions of the Building as a result of the acts or omissions of Tenant.

 

9.                              PROPERTY OF TENANT.

 

a.                                       Property Taxes. Tenant shall pay when due all taxes levied or assessed upon Tenant’s equipment, fixtures, furniture, leasehold improvements and personal property located in the Premises.

 

b.                                      Removal. Provided Tenant is not in default and subject to the terms and provisions of Section 8(e), Tenant may remove all fixtures and equipment which it has placed in the Premises; provided, however, Tenant must repair all damages caused by such removal. If Tenant does not remove its property from the Premises upon the expiration or earlier termination (for whatever cause) of this Lease, such property shall be deemed abandoned by Tenant, and Landlord may dispose of the same in whatever manner Landlord may elect without any liability to Tenant.

 

10.                        SIGNS.

 

Tenant may not erect, install or display any sign or advertising material upon the exterior of the Building or Premises (including any exterior doors, walls or windows) without the prior written consent of Landlord, which consent shall not be unreasonably withheld, delayed or conditioned; provided that, Landlord shall be deemed to be reasonable in disapproving any signage that is larger than, more numerous than, of a differing style from or in a location the differs from signage ordinarily and customarily provided to comparably sized tenants of comparable office buildings.  The foregoing notwithstanding, the exterior building parapet signage may be similar to that shown on Exhibit G attached hereto and made a part hereof.  Door, one monument panel of the same size as a single current panel on the Building’s monument sign, and directory signage shall be provided and installed by the Landlord in accordance with building standards at Landlord’s expense, unless otherwise provided in the Workletter attached as Lease Addendum Number One.  In the event that Tenant elects to utilize any exterior building parapet signage, Landlord will contribute three thousand dollars ($3,000.00) towards Tenant’s building parapet signage cost promptly after request by Tenant.  Any exterior signage shall be subject to building standards, Town ordinances, and codes.  Prior to the Commencement Date, Landlord shall install one monument panel of the same size a single current panel on the Building’s monument sign and door and directory signage as set forth above at Landlord’s sole cost, in locations and designs reasonably acceptable to the parties.

 

11.                        ACCESS TO PREMISES .

 

a.                                       Tenant’s Access. Tenant, its agents, employees, invitees, and guests, shall have access to the Premises and reasonable ingress and egress to common and public areas of the Building twenty-four hours a day, seven days a week; provided, however, Landlord by reasonable regulation may control such access for the comfort, convenience, safety and protection of all tenants in the Building, or as needed for making repairs and alterations.  Tenant shall be responsible for providing access to the Premises to its agents, employees, invitees and guests after business hours and on weekends and holidays, but in no event shall Tenant’s use of and access to the Premises during non-business hours compromise the security of the Building.

 

b.                                      Landlord’s Access. Landlord shall have the right, at all reasonable times and upon reasonable oral notice, either itself or through its authorized agents, to enter the Premises (i) to make repairs, alterations or changes as Landlord deems necessary, provided that Landlord shall exercise reasonable efforts to not unreasonably interfere with Tenant’s use and enjoyment of the Premises and the Common Areas, to the extent reasonably possible, (ii) to inspect the Premises, mechanical systems and electrical devices, and (iii) to show the Premises to prospective mortgagees and purchasers.  Within one hundred eighty (180) days prior to the Expiration Date, Landlord shall have the right, either itself or through its authorized agents, to enter the Premises at all reasonable times upon reasonable oral notice to show prospective tenants.

 

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c.                                       Emergency Access. Landlord shall have the right to enter the Premises at any time without notice in the event of an emergency that does not allow for any advance notice provided that Landlord shall give Tenant notice thereof promptly thereafter.

 

12.                        TENANT’S COMPLIANCE.

 

a.                                       Laws. Tenant shall comply with all applicable laws, ordinances and regulations affecting Tenant’s use and occupancy of the Premises or affecting alterations to the Premises made by Tenant, whether now existing or hereafter enacted.

 

b.                                      Rules and Regulations. Tenant shall comply with the Rules and Regulations attached as Exhibit B.   The Rules and Regulations may be reasonably modified from time to time by Landlord, effective ten (10) days after the date delivered to Tenant, provided such rules are uniformly applicable to all tenants in the Building.  Any conflict between this Lease and the Rules and Regulations shall be governed by the terms of this Lease.

 

13.                        ADA COMPLIANCE .

 

a.                                        Tenant’s Compliance. After the Commencement Date, Tenant, at Tenant’s sole expense, shall comply with all laws, rules, orders, ordinances, directions, regulations and requirements of federal, state, county and municipal authorities now in force, which shall impose any duty upon Landlord or Tenant with respect to the use or occupation of the Premises by Tenant or alteration of the Premises made by Tenant to accommodate persons with special needs, including using all reasonable efforts to comply with The Americans With Disabilities Act (the “ADA”) with respect thereto.  Landlord represents that the Premises and the Common Areas are in compliance with the ADA as of the Commencement Date as such relate to ordinary and customary office use for comparable buildings.

 

b.                                       Landlord’s Compliance. Landlord, at Landlord’s sole expense, shall use all reasonable efforts to meet the requirements of the ADA as it applies to the Common Areas and restrooms of the Building; but Landlord shall have no responsibility for ADA compliance with respect to the Premises except to the extent otherwise herein provided. Landlord shall not be required to make changes to the Common Areas or restrooms of the Building to comply with ADA standards adopted after construction of the Building unless specifically required to do so by law.

 

c.                                        ADA Notices. If Tenant receives any notices alleging a violation of ADA relating to any portion of the Building or Premises (including any governmental or regulatory actions or investigations regarding non-compliance with ADA), then Tenant shall notify Landlord in writing within ten (10) days of such notice and provide Landlord with copies of any such notice.

 

14.                        INSURANCE REQUIREMENTS .

 

a.                                       Tenant’s Liability Insurance. Throughout the Term, Tenant, at its sole cost and expense, shall keep or cause to be kept for the mutual benefit of Landlord, Landlord’s Property Manager, and Tenant, Commercial General Liability Insurance (current ISO Form or its equivalent) with a combined single limit of at least ONE MILLION DOLLARS each Occurrence and at least TWO MILLION DOLLARS ($2,000,000) General Aggregate-per policy year, which policy shall insure against liability of Tenant, arising out of and in connection with Tenant’s use of the Premises, and which shall include contractual liability coverage.  Not more frequently than once every three (3) years, Landlord may require the limits to be increased if in its reasonable judgment (or that of its mortgagee) the coverage is insufficient.

 

b.                                      Tenant’s Property Insurance. Tenant shall also carry the equivalent of ISO Special Form Property Insurance on Tenant’s Property at the Premises for full replacement value and with coinsurance waived.  For purposes of this provision, “Tenant’s Property” shall mean Tenant’s personal property and fixtures at the Premises, and any Non-Standard Improvements to the Premises.  Tenant shall neither have, nor make, any claim against Landlord for any loss or damage to the Tenant’s Property, regardless of the cause of the loss or damage, to the extent provided in Section 14(g) below.

 

c.                                       Certificates of Insurance. Prior to occupying the Premises, and prior to any cancellation thereof during the Term, Tenant shall deliver to Landlord certificates similar to that provided in Exhibit D attached to this Lease and incorporated here for reference or other

 

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evidence of insurance reasonably satisfactory to Landlord.  All such policies shall be non-assessable to Landlord and shall contain language to the extent obtainable that: (i) names Lessor as an additional insured by means of an endorsement at least as broad as the ISOs “Additional Insured-Managers or Lessors of Premises” Endorsement, (ii) that the policies are primary and non-contributing with any insurance that Landlord may carry, and (iii) that the insurer shall endeavor to provide thirty (30) days notice to Landlord prior to policy being cancelled or non-renewed.  If Tenant fails to provide Landlord with such certificates or other evidence of insurance coverage, Landlord may obtain such coverage and the cost of such coverage shall be Additional Rent payable by Tenant upon demand.

 

d.                                      Insurance Policy Requirements. Tenant’s insurance policies required by this Lease shall: (i) be issued by insurance companies licensed to do business in the state in which the Premises are located with, unless otherwise reasonably agreed to by Landlord, a general policyholder’s ratings of at least A- and a financial rating of at least VI in the most current Best’s Insurance Reports available on the Commencement Date, or if the Best’s ratings are changed or discontinued, the parties shall agree to a comparable method of rating insurance companies; (ii) name Landlord as an additional insured on the liability policies as its interest may appear [provided that other landlords or tenants may be added as additional insureds in a blanket policy]; (iii) provide that the insurer shall endeavor to provide thirty (30) days notice to Landlord prior to policy being cancelled or non-renewed; (iv) be primary policies; (v) name Lessor as an additional insured to the liability insurance by means of an endors