EXHIBIT 10.17
STANDARD LEASE
Xxxxxx Xxxxxxxx Xxxxxx - Xxxxxxxx 000 and 308
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This Lease is made by and between the Landlord and Tenant named below.
ARTICLE 1. - BASIC LEASE TERMS
For purposes of this Lease, the following terms shall have the meanings set
forth below:
1.1 Landlord. Xxxxxx-Xxxxxxx Development XXX, LLC
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1.2 Tenant. Lipomed, Inc. a Delaware corporation
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1.3 Manager. Parker Lincoln Developers, Inc.
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1.4 Building. The Buildings, including the Premises) known as 2500 Xxxxxx
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Xxxxxxxxx, Xxxxxxx, Xxxxx Xxxxxxxx 00000, located on that tract of land (the
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"Land") described on Exhibit A hereto, together with all other buildings,
structures, fixtures and other improvements (the "Buildings") located thereon
from time to time, being presently as depicted on the drawing (the "Site Plan")
attached hereto as Exhibit B. The Building, Buildings and the Land are
collectively referred to herein as the "Property."
1.5 Premises. The floor space and interior wall and ceiling space of that
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portion of the Buildings outlined in red or highlighted on Exhibit C attached
hereto, resulting in an aggregate of approximately 85,000 square feet of gross
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leasable area known as Buildings 307 (39,820 square feet) and 308 (33,180 square
feet) and a 12,000 square foot connector (the "Connector") between the Buildings
all as shown on Exhibit C. Landlord will construct the "Improvements" (as
defined in the Addendum) and deliver Building 307 to Tenant first. The
Commencement Date for Building 307 is anticipated to be December 15, 2001. Prior
to completion of the Improvements in Building 307, Landlord will begin
construction of the Improvements in Building 308 and the Connector. The
Commencement Date for the Connector and Building 308 is anticipated to be July
1, 2002.
1.6 Lease Term. 10 years, 6 months and 14 days beginning on the
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Commencement Date for Building 307.
1.7 Commencement Date. The "Commencement Date" for each Building shall be
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the earlier of the date that Tenant takes possession of the Premises or ten (10)
days after Landlord notifies Tenant that the Building is, or will be by a date
certain, ready for Tenant to take possession. The Commencement Date shall
constitute the commencement of the Lease Term for all purposes, whether or not
Tenant has actually taken possession as evidenced by a Certificate of Occupancy.
By mutual agreement of the parties, the Commencement Date may be changed. Within
thirty (30) days after the Commencement Date for each Building, Landlord will
provide to Tenant a letter acknowledging the Commencement, Rental Commencement
(if different) Expiration Dates, and the square footage of the Building which
letter will then be attached hereto as Exhibit D. Notwithstanding anything
herein to the contrary, the Lease Term shall extend through and end on the last
day of the last month of the Term. If Tenant is permitted access to the Premises
prior to the Commencement Date, such early entry will be subject to all the
terms and provisions of this Lease as though the Commencement Date had occurred,
unless otherwise agreed to in writing by Landlord. The Rental Commencement for
each Building shall be the fifteenth (15 th) day after the Commencement Date
except as provided in the Addendum.
1.8 Base Rent. Base Rent is:
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Months Per Square Foot Annually Monthly
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1 through 6 - Building 307 $11.85 N/A $ 39,322.25
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Approximately 7 through 12 - $11.85 N/A $ 83,937.50
Building 308 and the Connector
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13 through 24 $12.15 $1,032,750.00 $ 86,062.50
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25 through 36 $12.45 $1,058,250.00 $ 88,187.50
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37 through 48 $12.76 $1,084,600.00 $ 90,383.33
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49 through 60 $13.08 $1,111,800.00 $ 92,650.00
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61 through 72 $13.41 $1,139,850.00 $ 94,987.50
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73 through 84 $13.75 $1,168,750.00 $ 97,395.83
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85 through 96 $14.09 $1,197,650.00 $ 99,804.17
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97 through 108 $14.44 $1,227,400.00 $102,283.33
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109 through 120 $14.80 $1,258,000.00 $104,833.33
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121 through 126 + 14 days $15.17 $694,870.34 (6 months, 14 days) $107,454.17
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1.9 Security Deposit. Security Deposit is a $1,500,000.00 letter of credit
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in the form specified in the Addendum, due at execution of the Lease.
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1.10 Addresses.
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Landlord's Address: Tenant's Address: Manager's Address:
UNTIL THE Commencement Date AS OF THE Commencement Date
Xxxx Xxxxxx Xxx 00000 0000 Xxx Xxxx Xxxxxx 0000 Xxxxxx Xxxxxxxxx Xxxx Xxxxxx Xxx 00000
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Xxxxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
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ATTN: Legal Department ATTN: Xxxxxxx X. Xxxxxx ATTN: Xxxxxxx X. Xxxxxx ATTN: Accounting Department
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Landlord, Tenant and Manager, by written notice to the others may change from
time to time the foregoing addresses, and Landlord, by written notice to Tenant,
may notify Tenant from time to time of the appointment of a new Manager and such
new Manager's address.
1.11 Permitted Use: laboratory, testing and related assembly, distribution
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and offices.
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1.12 Common Areas. Such parking areas, streets, driveways, aisles,
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sidewalks, curbs, delivery passages, loading areas, lighting facilities, and all
other areas situated on or in the Property which are designated by Landlord,
from time to time, for use by all tenants of the Property in common.
1.13 Proportionate Share. The proportion, expressed as a percentage, that
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the gross leasable area in square feet in the Premises, as determined by
Landlord, bears to the total number of constructed gross leasable area in square
feet in the Building or Buildings (measured outside wall to outside wall), as
reasonably determined by Landlord, as of the date that the computation is made.
The Connector and Building 307 shall be measured upon completion but prior to
the Commencement Date. Landlord shall adjust the computation if additional
square footage is added to the Building or Buildings or to the Premises.
1.14 Estimated Initial Common Area Costs Payment (Includes Common Area
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Maintenance, Taxes and Insurance):
PSF 2002 rate to be determined Annual $ TBD Monthly $ TBD
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1.15 Total Rental:
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(The total of the Base Rent for Year One and the Estimated Initial
Common Area Costs Payments for the balance of the calendar year in
which the lease commences.)
Annual $ TBD Monthly $ TBD
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1.16 Guarantor(s). The guarantor(s) of Tenant's obligations under this
Lease is (are)
N/A
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ARTICLE 2. - GRANTING CLAUSE AND RENT PROVISIONS
2.1 Grant of Premises. In consideration of the obligation of Tenant to
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pay the Base Rent and other charges as provided in this Lease and in
consideration of the other terms and provisions of this Lease, Landlord hereby
leases the Premises to Tenant during the Lease Term, subject to the terms and
provisions of this Lease.
2.2 Base Rent. Tenant agrees to pay monthly as Base Rent during the term
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of this Lease the sum of money set forth in Section 1.8 of this Lease, which
amount shall be payable to Landlord at the address shown above or at such other
address that Landlord in writing shall notify Tenant. One (1) monthly
installment of Base Rent for Building 307 shall be due and payable on the date
of execution of this Lease by Tenant for the first month's rent and a like
monthly installment shall be due and payable on or before the first day of each
calendar month succeeding the Commencement Date during the term of this Lease,
without demand, offset or deduction; provided, if the Commencement Date should
be a date other than the first day of a calendar month, the monthly rental set
forth above shall be prorated to the end of that calendar month, and all
succeeding installments of rent shall be payable on or before the first day of
each succeeding calendar month during the term of this Lease. The first month's
Base Rent for Building 308 and the Connector shall be due at the Commencement
Date thereof and thereafter, as set forth above. Tenant shall pay, as
"Additional Rent," all other sums due under this Lease. Base Rent and Additional
Rent are sometimes collectively referred to herein as "Rent."
2.3 Common Area Costs. As used in this Lease, the term "Common Area
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Costs" shall mean all expenses of Landlord with respect to the maintenance,
servicing, repairing and operation of the Property, including, but not limited
to the following: maintenance, repair, and replacement costs; electricity, fuel,
water, sewer, gas and other utility charges; security, window washing and
janitorial services; trash and snow and ice removal; landscaping and pest
control; management fees payable to Landlord, Landlord's affiliates or third
parties; wages and benefits payable to employees of Landlord whose duties are
directly connected with the operation and maintenance of the Property; all
services, supplies, repairs, replacement or other expenses for maintaining and
operating the Property; the cost, including interest, amortized over its useful
life, of any capital improvement made to the Property by Landlord after the date
of this Lease which is required under any governmental law or regulation that
was not applicable to the Property at the time it was constructed; the cost,
including interest, amortized over its useful life, of installation of any
device or other equipment which improves the operating efficiency of any system
within the Premises and thereby reduces operating expenses; all other expenses
which generally would be regarded as operating and maintenance expenses which
would reasonably be amortized over a period not to exceed five (5) years; all
real property taxes and installments of special assessments, including dues and
assessments by means of deed restrictions and/or owner's association which
accrue against the Property during the term of this Lease; governmental levies
or charges of any kind or nature assessed or imposed on the Property, whether by
state, county, city or any political subdivision thereof; and all insurance
premiums Landlord is required to pay or deems necessary to pay, including public
liability insurance, with respect to the Property. The term operating expenses
does not include the following: expenses for repairs, restoration or other work
occasioned by fire, wind, the elements or other casualty that are covered by
insurance; income and franchise taxes of Landlord; expenses incurred in leasing
to or procuring of tenants, leasing commissions, advertising expenses and
expenses for the renovating of space for new tenants; interest or principal
payments on any mortgage or other indebtedness of Landlord; compensation paid to
any employee of Landlord above the grade of property manager; any depreciation
allowance or expenses; or operating expenses which are the responsibility of
Tenant, or any other tenant. Prior to the Commencement Date, and from time to
time thereafter, Landlord shall deliver to Tenant its estimate of the Common
Area Costs to be incurred during the then-current calendar year. Landlord may
adjust the estimate from time to time during the year to which it relates.
Tenant shall have the right to audit Landlord's Books and Records as set forth
in the Addendum.
2.4 Common Area Costs Payments. Tenant, on the first day of each month
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during the Lease Term shall pay to Landlord, as Additional Rent, without offset
or deduction, an amount equal to one-twelfth (1/12) of Tenant's Proportionate
Share of the estimated Common Area Costs as calculated by Landlord (prorated for
any partial month). The Estimated Initial Common Area Costs Payment due from
Tenant for the balance of the calendar year in which the Lease commences shall
be the sum set forth in Section 1.14 above. All sums payable as Additional Rent
under the terms of this Section shall be subject to adjustment as provided in
Section 2.5.
2.5 Adjustments to Common Area Costs. Within one hundred twenty (120)
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days following the end of each calendar year, Landlord shall furnish to Tenant a
statement showing the total actual Common Area Costs for the calendar year just
expired, the amount of Tenant's Proportionate Share of the Common Area Costs,
and payments made by Tenant during such calendar year under Section 2.4. If
Tenant's Proportionate Share of the actual Common Area Costs for such calendar
year exceeds the aggregate of Tenant's monthly payments made during the calendar
year just expired, Tenant shall pay to Landlord the deficiency within thirty
(30)
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days after receipt of said statement. If Tenant's payments exceed Tenant's
Proportionate Share of the actual Common Area Costs as shown on such statement,
Tenant shall be entitled to offset the excess against payments thereafter
becoming due as Tenant's Proportionate Share of Common Area Costs. No portion of
the Common Area Costs paid by Tenant under this Article 2 shall be credited
against Base Rent or any other rental obligations hereunder. If such excess
occurs during the last year of the Lease Term, Landlord shall be obligated to
pay any such excess to Tenant within ninety (90) days after expiration of the
Lease. This obligation survives termination of Lease. Common Area Costs
(excluding Taxes and Insurance) shall not increase by more than ten percent
(10%) per square foot, per year.
2.6 Late Payment. Other remedies for nonpayment of Rent notwithstanding,
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if any payment of Base Rent or Additional Rent is not received by Landlord on or
before the fifth (5th) business day of the month for which the Rent is due, or
if any other payment hereunder due Landlord by Tenant is not received by
Landlord on or before the fifth (5th) business day of the month next following
the month in which Tenant was invoiced, Tenant shall also pay (a) a late payment
charge of five percent (5%), but not less than $100.00, of such past due amount
and (b) interest of eighteen percent (18%) per annum or the maximum then allowed
by applicable law, whichever is less, on the remaining unpaid balance,
retroactive to the date originally due until paid. Notwithstanding the
foregoing, Landlord shall not invoke its rights to late payment fees unless
Tenant is late in payment on more than one (1) occasion per year in each Lease
year and provided such payment is made by the fifteenth (15 th) of that month.
2.7 Increase in Insurance Premiums. If an increase in any insurance
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premiums paid by Landlord for the Property is caused by Tenant's use of the
Premises, or if Tenant vacated the Premises and caused an increase in such
premiums, then Tenant shall pay as Additional Rent the amount of such increase
to Landlord. Tenant agrees to pay any amounts due under this Section within ten
(10) days following receipt of the invoice showing the Additional Rent due.
Tenant shall be given written notice of the increase in premiums and a right to
cure the cause of such increase prior to being obligated to pay such additional
premiums, if possible.
2.8 Security Deposit. This provision shall only apply in the event that
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Tenant substitutes a cash deposit in accordance with Paragraph 4 of the
Addendum. The Security Deposit set forth in Section 1.9 (if any) shall be held
by Landlord for the performance of Tenant's covenants and obligations under this
Lease, it being expressly understood that the Security Deposit shall not be
considered an advance payment of Rent or a measure of Landlord's damage in case
of default hereunder by Tenant, and shall be held by Landlord without payment of
any interest thereon. Upon the occurrence of any event of default by Tenant
under this Lease, Landlord may, from time to time, without prejudice to any
other remedy, use the Security Deposit to the extent necessary to make good any
arrears of Rent, or to repair any damage or injury, or pay any expense or
liability incurred by Landlord as a result of the event of default or breach of
covenant, and any remaining balance of the Security Deposit shall be returned by
Landlord to Tenant upon the termination of this Lease. If any portion of the
Security Deposit is so used or applied, Tenant shall upon ten (10) days written
notice from Landlord, deposit with Landlord by cash or cashier's check an amount
sufficient to restore the Security Deposit to its original amount. The Security
Deposit may be assigned and transferred by Landlord to the successor in interest
of Landlord and, upon acknowledgment by such successor of receipt of such
security and its assumption of the obligation to account to Tenant for such
security in accordance with the terms of this Lease, Landlord shall thereby be
discharged of any further obligation relating thereto.
2.9 Notice to Vacate. (SEE ADDENDUM.)
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2.10 Holding Over. If Tenant does not vacate the Premises upon the
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expiration or earlier termination of this Lease, Tenant shall be a tenant at
sufferance for the holdover period and all of the terms and provisions of this
Lease shall be applicable during that period, except that Tenant shall pay
Landlord (in addition to Additional Rent payable under Section 2.3 and any other
sums payable under this Lease) as Base Rent for the period of such holdover an
amount equal to one and one-half times the Base Rent which would have been
payable by Tenant had the holdover period been a part of the original term of
this Lease (without waiver of Landlord's right to recover damages as permitted
by law). Upon the expiration or earlier termination of this Lease, Tenant agrees
to vacate and deliver the Premises, and all keys thereto, to Landlord upon
delivery to Tenant of notice from Landlord to vacate. The rental payable during
the holdover period shall be payable to Landlord on demand. No holding over by
Tenant, whether with or without the consent of Landlord shall operate to extend
the term of this Lease. If Tenant holds over without Landlord's consent, Tenant
shall indemnify Landlord against all claims made by any tenant or prospective
tenant against Landlord resulting from delay by Landlord in delivering
possession of the Premises to such other tenant or prospective tenant.
ARTICLE 3. - OCCUPANCY, USE AND OPERATIONS
3.1 Use and Operation of Tenant's Business. Tenant warrants and
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represents to Landlord that the Premises shall be used and occupied only for the
purpose as set forth in Section 1.11. Tenant shall occupy the Premises, conduct
its business and control its agents, employees, invitees and visitors in such a
manner as is lawful, reputable and will not create a nuisance to other tenants
in the Property. Tenant shall at all times operate its business in a first class
manner. Tenant shall not conduct any auction or fire or bankruptcy sale in the
Premises. Tenant shall not solicit business, distribute handbills or display
merchandise within the Common Areas, or take any action, which would interfere
with the rights of other persons to use the Common Areas. Tenant shall not
permit any operation which emits any odor or matter which intrudes into other
portions of the Property, use any apparatus or machine which makes undue noise
or causes vibration in any portion of the Property or otherwise interfere with,
annoy or disturb any other tenant in its normal business operations or Landlord
in its management of the Property. Tenant shall neither permit any waste on the
Premises nor allow the Premises to be used in any way that would in the opinion
of Landlord, be extra hazardous on account of fire or which would in any way
increase or render void the fire insurance on the Property.
3.2 Signs. Tenant shall be responsible for the installation of a sign
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within thirty (30) days of occupancy in accordance with the sign criteria
attached hereto as Exhibit G. No other sign of any type or description shall be
erected, placed or painted in or about the Premises or the Property without
Landlord's prior written consent, which consent shall not be unreasonably
withheld, conditioned, or delayed and Landlord reserves the right to remove, at
Tenant's expense, all signs other than signs approved in writing by Landlord
under this Section 3.2, without notice to Tenant and without liability to Tenant
for any damages sustained by Tenant as a result thereof. Tenant shall be liable
to Landlord for any cost or expense incurred by Landlord in removing such sign
and for any damage caused by the removal of such sign unless caused by
Landlord's negligence in the removal. Landlord reserves the right, in Landlord's
discretion, to permit a sign or signs which deviate from the Landlord's
then-established sign criteria, and such permission by Landlord to any tenant or
tenants shall not give rise to any rights in any other tenants to object thereto
or to require Landlord to permit such other tenant to deviate from the criteria.
Nothing contained herein shall limit Landlord's right to modify or amend such
criteria from time to time.
3.3 Compliance with Laws, Rules and Regulations.
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(a) Landlord represents that the Premises will comply with all
applicable laws, regulations and codes at the Commencement Date. Thereafter,
Tenant, at Tenant's sole cost and expense, shall comply with all laws,
ordinances, orders, rules and regulations of state, federal, municipal or other
agencies or bodies having jurisdiction over the use, condition or occupancy of
the
Page 3 of 12
Premises. Tenant shall procure at its own expense all permits and licenses
required for the transaction of its business in the Premises.
(b) The "Americans with Disabilities Act of 1990" (the "ADA") is a
federal law that prohibits discrimination on the basis of disability. The
requirements of this act vary with the type of business the Tenant is engaged in
and the number of employees the Tenant has both at this, and other locations.
The Landlord is not qualified to determine which provisions of the ADA apply to
Tenant. Therefore, the Tenant shall determine if the Premises complies with the
accessibility guidelines under ADA and advise the Landlord if any physical
modifications to this Premises are required to meet the Tenants needs under this
law, or any other law, code or regulations. Modifications requested by Tenant to
the Premises shall be made by the Landlord, and the Tenant shall pay Landlord
the full cost of the modifications requested. The Tenant shall indemnify and
hold harmless the Landlord and its agents and employees from and against all
claims, damages, losses and expenses, including but not limited to reasonable
Attorney's fees, arising out of or resulting from the Tenants compliance or
failure to comply with the ADA or other laws, codes or regulations. Tenant shall
not be responsible for ADA compliance in the Common Areas or the exterior of the
Building unless required in connection with Tenant's use of the Premises or
resulting from Tenant's seeking a building permit.
(c) Tenant will comply with the rules and regulations of the Property
adopted by Landlord attached hereto as Exhibit E. If Tenant is not complying
with such rules and regulations, or if Tenant is in any way not complying with
this Article 3, then, notwithstanding anything to the contrary contained herein,
Landlord may, at its election, enter the Premises without liability therefor and
fulfill Tenant's obligations.
Tenant shall reimburse Landlord on demand, as Additional Rent, for any expenses,
which Landlord may incur in effecting compliance with Tenant's obligations, and
agrees that Landlord shall not be liable for any damages resulting to Tenant
from such action except due to Landlord's negligence or willful misconduct.
Landlord shall have the right at all times to change and amend the rules and
regulations in any reasonable manner as it may deem advisable for the safety,
care, cleanliness, preservation of good order and operation or use of the
Property or the Premises. All changes and amendments to the rules and
regulations of the Property will be forwarded by Landlord to Tenant in writing
and shall thereafter be carried out and observed by Tenant.
3.4 Warranty of Possession. Landlord and Tenant each warrants that it has
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the right and authority to execute this Lease, and Landlord warrants to Tenant,
that upon payment of the required rents by Tenant and subject to the terms,
conditions, covenants and agreements contained in this Lease, Tenant shall have
possession of the Premises during the full term of this Lease, as well as any
extension or renewal thereof, without hindrance from Landlord or any person or
persons lawfully claiming the Premises by, through or under Landlord (but not
otherwise); subject, however, to all mortgages, deeds of trust, leases and
agreements to which this Lease is subordinate and to all laws, ordinances,
orders, rules and regulations of any governmental authority. Landlord shall not
be responsible for the acts or omissions of any other lessee or third party that
may interfere with Tenant's use and enjoyment of the Premises but shall make
reasonable efforts (as determined by Landlord) to correct the problem.
3.5 Inspection. With reasonable prior notice and subject to accompaniment
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by Tenant, except in the event of an emergency. Landlord or its authorized
agents shall at any and all reasonable times have the right to enter the
Premises to inspect the same, to supply janitorial service or any other service
to be provided by Landlord, to show the Premises to prospective mortgagees,
purchasers or prospective tenants (within the last six (6) months of the Lease
Term), and to alter, improve or repair the Premises or any other portion of the
Property provided that such entry does not unreasonably interfere with Tenant's
use or occupancy of the Premises. Tenant hereby waives any claim for abatement
or reduction of rent, or for any damages for injury, or inconvenience to, or
interference with, Tenant's business, for any loss or occupancy or use of the
Premises, and for any other loss occasioned thereby unless such loss was caused
by the negligence or willful misconduct of Landlord. Landlord shall have the
right at all times to enter the Premises by any means in the event of an
emergency without liability therefor.
3.6 Personal Property Taxes. Tenant shall be liable for all taxes levied
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against leasehold improvements, merchandise, personal property, trade fixtures
and all other taxable property located in the Premises. If any such taxes for
which Tenant is liable are levied against Landlord or Landlord's property and if
Landlord elects to pay the same or if the assessed value of Landlord's property
is increased by inclusion of personal property and trade fixtures placed by
Tenant in the Premises and Landlord elects to pay the taxes based on such
increase, Tenant shall pay to Landlord, upon demand, that part of such taxes for
which the Tenant is primarily liable pursuant to the terms of this Section.
Tenant shall pay when due any and all taxes related to Tenant's use and
operation of its business in the Premises.
3.7 Garbage. All garbage and refuse shall be kept in an area designated
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by Landlord and in the kind of container specified by Landlord and shall be
placed outside of the Premises daily, prepared for collection in the manner and
at the times and places specified by Landlord. If Landlord provides or
designates a service for collection of refuse and garbage, Tenant shall use it,
at Tenant's expense, provided the cost thereof is competitive with any identical
service available to Tenant.
ARTICLE 4. - UTILITIES AND SERVICE
4.1 Utility Services. Landlord shall provide or cause to be provided the
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mains, conduits and other facilities necessary to supply water, gas,
electricity, telephone service and sewage service to the Premises. Tenant shall,
however, be responsible, at its expense, to make provisions for connecting or
hooking up to such utilities, directly with the appropriate utility company
furnishing same.
4.2 Tenant Responsible for Charges. Tenant shall promptly pay all charges
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and deposits for electricity, water, gas, telephone service and sewage service
and other utilities furnished to the Premises. Landlord may, if it so elects,
furnish one or more utility services to Tenant, and in such event, Tenant shall
purchase the use of such services as are tendered by Landlord, and shall pay on
demand the rates established therefor by Landlord which shall not exceed the
rate which would be charged for the same services if furnished to Tenant
directly by the local public utility furnishing the same to the public at large
and including any discounts or credits obtained by Landlord. Landlord may at any
time discontinue furnishing any such service without obligation to Tenant other
than to connect the Premises to the public utility, if any, furnishing such
service.
4.3 Landlord's Services. Landlord shall provide routine maintenance,
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painting and electrical lighting service for all Common Areas and special
service areas of the Property in the manner and to the extent deemed by Landlord
to be standard in the Raleigh, North Carolina market. Landlord may, in its sole
discretion, provide additional services not enumerated herein.
4.4 No Liability. Landlord shall not be liable for any interruption
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whatsoever in utility services not furnished by it, nor for interruption in
utility service furnished by it which are due to fire, accident, strikes, acts
of God, riot, civil commotion, terrorist act, national emergency, shortage of
labor or materials or other causes beyond the control of Landlord or in order to
make alterations, repairs or improvements unless such interruption was because
of the negligence or willful misconduct of Landlord. Moreover, Landlord shall
not be liable for any interruption of such utility services, which continues
during any reasonable period necessary to restore such service upon the
occurrence of any of the foregoing conditions unless due to Landlord's
negligence or willful misconduct. Failure by Landlord to any extent to provide
any services of Landlord specified herein or any other services not specified,
or any cessation thereof,
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shall not render Landlord liable in any respect for damages to either person or
property, be construed as an eviction of Tenant, or an abatement of rent or
relieve Tenant from fulfillment of any covenant in this Lease unless such
interruption was because of the negligence or willful misconduct of Landlord. If
any of the equipment or machinery necessary or useful for provision of any
utility services, and for which Landlord is responsible, breaks down, or for any
cause ceases to function properly, shall use reasonable diligence to repair the
same promptly, but Tenant shall have no claim for rebate of rent or damages on
account of any interruption in service occasioned from the repairs unless such
failure to function was because of the negligence or willful misconduct of
Landlord.
4.5 Theft or Burglary. Unless due to the negligence or willful misconduct
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of Landlord, Landlord shall not be liable to Tenant for losses to Tenant's
property or personal injury caused by criminal acts or entry by unauthorized
persons into the Premises or the Property.
ARTICLE 5. - REPAIRS AND MAINTENANCE
5.1 Landlord Repairs. Landlord shall not be required to make any
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improvements, replacements or repairs of any kind or character to the Premises
during the Term of this Lease except as are set forth in this Section or the
Addendum. Landlord shall maintain only the roof, foundation, parking and Common
Areas, and the structural soundness of the Buildings. Landlord's cost of
maintaining and repairing the items set forth in this Section are subject to the
additional rent provisions in Section 2.3 and 2.4. Landlord shall not be liable
to Tenant, except as expressly provided in this Lease, for any damage or
inconvenience, and Tenant shall not be entitled to any damages nor to any
abatement or reduction of rent by reason of any repairs, alterations or
additions made by Landlord under this Lease unless caused by Landlord's
negligence or willful misconduct.
5.2 Tenant Repairs. Tenant shall maintain, at its sole and direct cost,
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the Premises in a first-class condition (except for those items listed under
Section 5.1). Without limiting the generality of the foregoing, Tenant shall
maintain and keep in good repair except for normal wear and tear (including
replacement when necessary):
(a) the interior of the Premises, including walls, floors and
ceilings;
(b) all windows and doors, including frames, glass, molding and
hardware;
(c) all wires and plumbing within the Premises which serve the
Premises (as distinguished from those serving the Building generally);
(d) all signs, air conditioning and heating equipment (see attached
Rules and Regulations for service requirements), mechanical doors and other
mechanical equipment situated on or in the Premises or serving the Premises (as
distinguished from those serving the Building generally); and
(e) those utility facilities that are not maintained by Landlord
hereunder. Tenant shall further make all other repairs to the Premises made
necessary by Tenant's failure to comply with its obligations under this Section.
All fixtures installed by Tenant shall be new or shall have been completely and
recently reconditioned.
On the Commencement Date, Landlord shall assign to Tenant the warranty covering
the new HVAC unit and any other warranties on any portions or components of the
Premises, which Tenant is required to maintain or repair under this Lease.
5.3 Request for Repairs. All requests for repairs or maintenance to
-------------------
Landlord pursuant to Section 5.1 of this Lease must be made in writing to
Landlord at the address in Section 1. except, in an emergency situation, a
telephone call shall be acceptable with a written follow-up. All repairs must be
completed within a reasonable period of time.
5.4 Tenant Damages. Tenant shall not allow any damage to be committed on
--------------
any portion of the Premises or Property, and at the termination of this Lease,
by lapse of time or otherwise, Tenant shall deliver the Premises to Landlord in
as good condition as existed at the Commencement Date of this Lease, ordinary
wear and tear, and loss by insured casualty excepted. The cost and expense of
any repairs necessary to restore the condition of the Premises shall be borne by
Tenant.
ARTICLE 6. - ALTERATIONS AND IMPROVEMENTS
6.1 Construction. If any construction of tenant improvements is necessary
------------
for the initial occupancy of the Premises, such construction shall be
accomplished and the cost of such construction shall be borne by Landlord and/or
Tenant in accordance with Exhibit F and/or the Addendum (if any) attached
hereto. Except as expressly provided in this Lease, Tenant acknowledges and
agrees that Landlord has not undertaken to perform any modification, alteration
or improvements to the Premises, and Tenant further waives any defects in the
Premises and acknowledges and accepts (1) the Premises as suitable for the
purpose for which they are leased and (2) the Property and every part and
appurtenance thereof as being in good and satisfactory condition subject to a
"Punch List" to be prepared and agreed upon by Landlord and Tenant at occupancy.
If any improvements, modifications or alterations, beyond those specified on
Exhibit F or the Addendum, are required for Tenant's initial occupancy of the
Premises, due solely to Tenant's use of the Premises, by any governmental or
municipal body or agency or are required by any law, rule, regulation,
ordinance, code or order, Tenant shall be solely responsible for all associated
costs. After the Commencement Date, if any improvements, modifications or
alterations are required by any governmental or municipal body or agency or due
to any law, rule, regulation, code, ordinance or order, as a result of Tenant's
use of the Premises, Tenant shall be solely responsible for all associated
costs. Upon the request of Landlord, Tenant shall deliver to Landlord a
completed Acceptance of Premises Memorandum in Landlord's prescribed form. If
Landlord pays for the cost of construction of any Tenant improvements and the
cost is amortized over the Lease Term and included in the Base Rent, Landlord
shall be entitled to collect the unpaid balance in the event that the Lease is
terminated or Tenant's right to possession of the Premises is terminated due to
a default by Tenant.
6.2 Tenant Improvements. Tenant shall not make or allow to be made any
-------------------
alterations, physical additions or improvements in or to the Premises without
first obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned, or delayed. Any alterations, physical
additions or improvements to the Premises made by or installed by either party
hereto shall remain upon and be surrendered with the Premises and become the
property of Landlord upon the expiration or earlier termination of this Lease
without credit to Tenant; provided, however, Landlord, at its option, may
require Tenant to remove any physical improvements or additions and/or repair
any alterations in order to restore the Premises to the condition existing at
the time Tenant took possession, all costs of removal and/or alterations to be
borne by Tenant. Notwithstanding the foregoing, Tenant may request in writing
that Landlord make a determination at the time of consent as to whether the
Tenant improvements will have to be removed at the end of the Lease Term. This
clause shall not apply to moveable equipment, furniture or moveable trade
fixtures owned by Tenant, which may be removed by Tenant at the end of the term
of this Lease. Tenant shall have no authority or power, express or
Page 5 of 12
implied, to create or cause any mechanic's or materialmen's lien, charge or
encumbrance of any kind against the Premises, the Property or any portion
thereof. Tenant shall promptly cause any such liens that have arisen by reason
of any work claimed to have been undertaken by or through Tenant to be released
by payment, bonding or otherwise within thirty (30) days after request by
Landlord, and shall indemnify Landlord against losses arising out of any such
claim (including, without limitation, reasonable legal fees and court costs).
6.3 Common and Service Area Alterations. Landlord shall have the right to
-----------------------------------
decorate and to make repairs, alterations, additions, changes or improvements,
whether structural or otherwise, in, about or on the exterior of the Property,
or any part thereof exclusive of the Premises, and to change, alter, relocate,
remove or replace service areas and/or Common Areas, and to otherwise alter or
modify the Property exclusive of the Premises, and for such purposes, to take
such measures for safety or for the expediting of such work as may be required,
in Landlord's judgment, all without affecting any of Tenant's obligations
hereunder, provided such changes do not unreasonably interfere with Tenant's use
and enjoyment of the Premises.
ARTICLE 7. - CASUALTY AND INSURANCE
7.1 Substantial Destruction. If in the reasonable determination of
-----------------------
Landlord the Premises should be totally destroyed by fire or other casualty, or
if in the reasonable determination of Landlord the Premises should be damaged so
that rebuilding cannot reasonably be completed substantially within one hundred
and eighty (180) working days after Landlord's receipt of written notification
by Tenant of the destruction, or if the Premises are damaged or destroyed by
casualty not covered by the standard broad form of fire and extended coverage
insurance then in common use in the State of North Carolina, then, at Landlord's
and Tenant's option, this Lease shall terminate and, in such case, the rent
shall be abated for the unexpired portion of the Lease, effective as of the date
of the written notification.
7.2 Partial Destruction. If following damage or destruction to the
-------------------
Premises by fire or other casualty, this Lease is not terminated pursuant to
Section 7.1 hereof, this Lease shall not terminate, and Landlord shall proceed,
to the extent of insurance proceeds actually received by Landlord after the
exercise by any mortgagee of the Property of an option to apply proceeds against
Landlord's debt to such mortgagee, with reasonable diligence to rebuild or
repair the Building or other improvements to substantially the same conditions
in which they existed as of the Commencement Date, normal wear and tear
excepted. If the Premises are to be rebuilt or repaired and are untenantable in
whole or in part following the damage, and the damage or destruction was not
caused or contributed to by act or negligence of Tenant, its agents, employees,
invitees or those for whom Tenant is responsible, the Base Rent payable under
this Lease during the period for which the Premises are untenantable until the
Premises are returned to the condition that existed as of the Commencement Date
shall be reduced to an amount determined by multiplying the Base Rent that would
otherwise be payable but for this provision by the ratio that the portion of the
Premises not rendered untenantable bears to the total net rentable area of the
Premises prior to the casualty. Landlord's obligation to rebuild or restore
under this Section shall be limited to restoring the Premises to substantially
the condition in which the same existed prior to the casualty including the
Improvements as defined in the Addendum, exclusive of improvements constructed
by Tenant , and Tenant shall, promptly after the completion of such work by
Landlord, proceed with reasonable diligence and at Tenant's sole cost and
expense to restore those improvements for which Tenant is responsible to
substantially the condition in which the same existed prior to the casualty and
to otherwise make the Premises suitable for Tenant's use. If Landlord fails to
substantially complete the necessary repairs or rebuilding within one hundred
and eighty (180) working days from the date of Landlord's receipt of written
notification by Tenant of the destruction, Tenant may at its own option
terminate this Lease by delivering written notice of termination to Landlord,
whereupon all rights and obligations under this Lease shall cease to exist.
7.3 Property Insurance. Landlord shall at all times during the term of
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this Lease insure the Property against all risk of direct physical loss in an
amount and with such deductibles as Landlord considers reasonably appropriate;
provided, Landlord shall not be obligated in any way or manner to insure any
personal property (including, but not limited to, any furniture, machinery,
goods or supplies) of Tenant upon or within the Premises, any fixtures installed
or paid for by Tenant upon or within the Premises, or any improvements which
Tenant may construct on the Premises. Tenant shall have no right in or claim to
the proceeds of any policy of insurance maintained by Landlord even if the cost
of such insurance is borne by Tenant as set forth in Article 2. Landlord shall
have the right to self-insure against the above-described risk provided Landlord
gives advance written notice to Tenant. Tenant at all times during the term of
this Lease shall, at its own expense, keep in full force and effect insurance
against fire and such other risks as are from time to time included in standard
all-risk insurance policy (including coverage against vandalism, theft,
burglary, and malicious mischief) for the Premises and the full replacement cost
of Tenant's trade fixtures, furniture, supplies and all items of personal
property of Tenant located on or within the Premises. Tenant's policy shall also
include business interruption/extra expense coverage in sufficient amounts.
Landlord shall be a named insured on said policy.
7.4 Waiver of Subrogation. Anything in this Lease to the contrary
---------------------
notwithstanding, Landlord and Tenant hereby waive and release each other of and
from any and all right of recovery, claim, action or cause of action, against
each other, their agents, officers and employees, for any loss or damage that
may occur to the Premises, improvements to the Property, or personal property
within the Property, by reason of fire or the elements, regardless of cause or
origin, including negligence of Landlord or Tenant and their agents, officers
and employees. Landlord and Tenant agree immediately to give their respective
insurance companies which have issued policies of insurance covering all risk of
direct physical loss, written notice of the terms of the mutual waivers
contained in this Section, and to have the insurance policies properly endorsed,
if necessary, to prevent the invalidation of the insurance coverages by reason
of the mutual waivers.
7.5 Hold Harmless. Unless and to the extent caused by Landlord's
-------------
negligence or willful misconduct, Landlord shall not be liable to Tenant or to
Tenant's customers, employees, agents, guests or invitees, or to any other
person whomever, for any injury to persons or damage to property on or about the
Premises, including but not limited to, consequential damage, (1) caused by any
act or omission of Tenant, its employees, subtenants, licensees and
concessionaires or of any other person entering the Property or the Premises by
express or implied invitation of Tenant, or (2) arising out of the use of the
Premises or the Property by Tenant, its employees, subtenants, licensees,
concessionaires or invitees, or (3) arising out of any breach or default by
Tenant in the performance of its obligations hereunder, or (4) caused by the
improvements located in the Premises becoming out of repair or by defect in or
failure of equipment, pipes, or wiring, or by broken glass, or by the backing up
of drains, or by gas, water, steam, electricity or oil leaking, escaping or
flowing into the Premises or Property, or (5) arising out of the failure or
cessation of any service provided by Landlord (including security service and
devices), and Tenant hereby agrees to indemnify Landlord and hold Landlord
harmless from any liability, loss, expense or claim (including, but not limited
to reasonable attorneys' fees) arising out of such damage or injury. Nor shall
Landlord be liable to Tenant for any loss or damage that may be occasioned by or
through the acts or omissions of other tenants of the Property or of any other
persons whomsoever, excepting only duly authorized employees and agents of
Landlord acting within the scope of their authority. Further, Tenant
specifically agrees to be responsible for and indemnify and hold Landlord
harmless from any and all damages or expenses of whatever kind arising out of or
caused by a burglary, theft, vandalism, malicious mischief or other illegal acts
performed in, at or from the Premises unless caused by Landlord's negligence or
willful misconduct. Landlord hereby agrees to
Page 6 of 12
indemnify Tenant and hold Tenant harmless from any liability, loss, expense or
claim (including, but not limited to reasonable attorneys' fees) arising out of
the negligence or willful misconduct of Landlord.
7.6 Insurance. Tenant at all times during the Lease shall, at its own
---------
expense, keep in full force and effect the following policies:
(a) commercial general liability insurance with "personal injury" coverage
and contractual liability coverage, with minimum combined bodily injury and
property damage limit of $1,000,000 per occurrence per location subject to no
deductible.
(b) Affording coverage under the Workers Compensation laws of the State of
North Carolina and Employers Liability coverage subject to a limit of no less
than $100,000 each employee, $100,000 each accident, $500,000 policy limit.
(c) Tenant shall maintain umbrella liability insurance at not less than a
$1,000,000 limit providing excess coverage over all limits and coverages noted
in 7.6.a and 7.6.b above.
(d) At all times when a "boiler," as that term is defined for the purposes
of boiler insurance, is located within the Premises, Tenant shall carry, at its
expense, boiler insurance with policy limits of not less than One Hundred
Thousand Dollars ($100,000.00) insuring both Landlord and Tenant against loss or
liability caused by the operation or malfunction of such boiler.
These policies shall be written on an occurrence basis. All policies noted
above shall be written with insurance companies licensed to do business in the
State of North Carolina and rated no lower than A: 10 in the most current
edition of A.M. Best's Casualty Key Rating Guide. All policies shall be endorsed
to provide that in the event of cancellation, non-renewal or material
modification, Landlord shall receive thirty (30) days written notice thereof.
Landlord shall be an additional insured on the policies . Definition of
additional insured shall include all partners, officers, directors, employees,
agents and representatives of the named entities including its managing agent.
Further, coverage for additional insured shall apply on a primary basis
irrespective of any other insurance, whether collectible or not. All insurance
policies or duly executed certificates for the same required to be carried by
Tenant under this Lease, together with satisfactory evidence of the payment of
the premium thereof, shall be deposited with Landlord on the date Tenant first
occupies the Premises and upon renewals of such policies not less than fifteen
(15) days prior to the expiration of the term of such coverage. All insurance
required to be carried by Tenant under this Lease shall be in form and content,
and written by insurers acceptable to Landlord, in its reasonable discretion. If
Tenant shall fail to comply with any of the requirements contained relating to
insurance, Landlord may obtain such insurance and Tenant shall pay to Landlord,
on demand as additional rent hereunder, the premium cost thereof.
7.8 Hazardous Materials. Throughout the term of this Lease, Tenant shall
-------------------
prevent the presence, use, generation, release, discharge, storage, disposal, or
transportation of any Hazardous Materials (as hereinafter defined) on, under,
in, above, to, or from the Premises other than in strict compliance with all
applicable federal, state, and local laws, rules, regulations and orders. For
purposes of this provision, the term "Hazardous Materials" shall mean and refer
to any wastes, materials, or other substances of any kind or character that are
or become regulated as hazardous or toxic, or which require special handling or
treatment, under any applicable local, state or federal law, rule, regulation or
order. In addition, the term "Hazardous Materials" includes (i) oil of any kind
and in any form, including, but specifically not limited to, petroleum, crude
oil, diesel oil, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed with
other waste, oil sludge, petroleum related products or by-products, and all
other liquid hydrocarbons, regardless of specific gravity, whether singly or in
combination with other substances; and (ii) natural gas, synthetic gas usable
for fuel, and mixtures of natural gas and such synthetic gas. If Tenant, its
employees, agents contractors, subtenants, licensees, concessionaires, invitees
or guests shall violate this provision, Tenant shall indemnify, defend, and hold
Landlord, its affiliates and their employees, agents, officers, directors,
members and managers, harmless from and against the following:
(a) any loss, cost, expense, claim, liability, injury or damage
(incidental, consequential, indirect and direct), including, but not limited to,
reasonable attorneys fees and expert and consulting fees, arising out of any
investigation, monitoring, clean-up, containment, removal, storage, or
restoration work (herein referred to as "Remedial Work") required by, or
incurred by Landlord or any other person or party in a reasonable belief that
such Remedial Work is required by any applicable federal, state or local law,
rule, regulation or order, or by any governmental agency, authority, or
political subdivision having jurisdiction over the Premises, and
(b) any claims of third parties for any loss, cost, expense, claim,
liability, injury or damage (incidental, consequential, indirect and direct),
including, but not limited to, reasonable attorneys fees and expert and
consulting fees, arising out of the presence, release, threatened release or
discharge of any Hazardous Materials on, under, in, above, to, or from the
Premises.
In the event any Remedial Work is required under any applicable federal,
state, or local law, rule, regulation or order, as a result of any violation by
-------------------------------
Tenant of the foregoing, Tenant shall promptly perform or cause to be performed
-----------------------
such Remedial Work in compliance with such law, rule, regulation, or order. In
the event Tenant shall fail to commence the Remedial Work in a timely fashion,
or shall fail to prosecute diligently the Remedial Work to completion, such
failure shall constitute an Event of Default on the part of Tenant under the
terms of this Lease, and Landlord, in addition to any other rights or remedies
afforded it hereunder, may, but shall not be obligated to, upon thirty (30) days
prior notice to Tenant (except in the event of exigent circumstances), cause the
Remedial Work to be performed, and Tenant shall promptly reimburse Landlord for
the cost and expense thereof upon demand.
Landlord represents and warrants to Tenant that, to the best of Landlord's
knowledge, as of the Commencement Date, no Hazardous Materials are present on,
under, in or above the Property in violation of any applicable federal, state or
local laws, rules, regulations or orders. Landlord shall indemnify, defend and
hold Tenant, its directors, employees, and officers harmless from and against
any loss, cost or damage arising out of any Hazardous Materials being present
on, under, in or above the Property as of the Commencement Date, or arising out
of any Hazardous Materials present, released or discharged following the
Commencement Date which are the result of the acts or omissions of Landlord.
ARTICLE 8. - CONDEMNATION
8.1 Substantial Taking. If in the reasonable determination of Landlord
------------------
all or a substantial part of the Premises are taken for any public or
quasi-public use under any governmental law, ordinance or regulation, or by
right of eminent domain or by purchase in lieu thereof, and in the reasonable
determination of Landlord and Tenant the taking would prevent or materially
interfere with the use of the Premises for the purpose for which it is then
being used, this Lease shall, at the option of either Landlord or Tenant,
terminate and the Rent shall be abated during the unexpired portion of this
Lease effective on the date physical possession is taken by the condemning
authority.
8.2 Partial Taking. If in the reasonable determination of Landlord a
--------------
portion of the Premises shall be taken for any public or quasi-public use under
any governmental law, ordinance or regulation, or by right of eminent domain or
by purchase in lieu thereof,
Page 7 of 12
and this Lease is not terminated as provided in Section 8.1 above, Landlord
shall restore and reconstruct, to the extent of condemnation proceeds (excluding
any proceeds for land) actually received after the exercise by any mortgagee of
the Property of an option to apply such proceeds against Landlord's debt to such
mortgagee, the Property and other improvements on the Premises to the extent
necessary to make it reasonably tenantable. The Base Rent payable under this
Lease during the unexpired portion of the term shall be reduced to an amount
determined by multiplying the Base Rent that would otherwise be payable but for
this provision by the ratio that the portion of the Premises not rendered
untenantable bears to the total net rentable area of the Premises prior to the
casualty. If Landlord fails to substantially complete such restoration and
reconstruction within one hundred and eighty (180) working days of the date of
the physical possession by the condemning authority, Tenant may at its option
terminate this Lease by delivering written notice of termination to Landlord,
whereupon all rights and obligations of this Lease shall cease to exist.
8.3 Condemnation Proceeds. All compensation awarded for any taking (or
---------------------
the proceeds of private sale in lieu thereof), whether for the whole or a part
of the Premises, shall be the property of Landlord (whether such award is
compensation for damages to Landlord's or Tenant's interest in the Premises) and
Tenant hereby assigns all of its interest in any such award to Landlord;
provided, however, Landlord shall have no interest in any award made to Tenant
for loss of business or for taking of Tenant's fixtures and other property
within the Premises if a separate award for such items is made to Tenant.
ARTICLE 9. - ASSIGNMENT OR SUBLEASE
9.1 Tenant Assignment. Tenant shall not assign, in whole or in part, this
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Lease, or allow it to be assigned, in whole or in part, by operation of law or
otherwise (including without limitation by merger, dissolution or transfer of a
controlling interest in any partnership or corporate Tenant unless such transfer
of control occurs in connection with any public offering of the Shares of Common
Stock of the Tenant or if such transfer of control results from additional debt
or equity financings, which merger, dissolution or transfer shall be deemed an
assignment) or mortgage or pledge the same, or sublet the Premises, in whole or
in part, without the prior written consent of Landlord, not to be unreasonably
withheld, conditioned, or delayed, and in no event shall any such assignment or
sublease ever release Tenant or any guarantor from any obligation or liability
hereunder. No assignee or sublessee of the Premises or any portion thereof may
assign or sublet the Premises or any portion thereof without also obtaining such
---------------------------
consent from Landlord. Notwithstanding the foregoing, Tenant may, without
---------------------
Landlord's consent but upon notice to Landlord, assign this Lease or sublet the
Premises, in whole or in part, to any entity controlled by, controlling or under
common control with Tenant or to any entity succeeding to Tenant or Tenant's
business by merger or purchase of assets, provided the assignee's credit is at
least as good as Tenant's at the time of the Commencement Date.
9.2 Conditions of Tenant Assignment. If Tenant desires to assign or
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sublet all or any part of the Premises, it shall so notify Landlord in writing
at least thirty (30) days in advance of the date on which Tenant desires to make
such assignment or sublease. Tenant shall provide Landlord with a copy of the
proposed assignment or sublease and such information as Landlord might
reasonably request concerning the proposed sublessee or assignee to allow
Landlord to make informed judgments as to the financial condition, reputation,
operations and general desirability of the proposed sublessee or assignee.
Within fifteen (15) days after Landlord's receipt of Tenant's proposed
assignment or sublease and all required information concerning the proposed
sublessee or assignee, Landlord shall have the following options:
(1) cancel this Lease as to the Premises or portion thereof
proposed to be assigned or sublet;
(2) consent to the proposed assignment or sublease, and, if the
rent due and payable by any assignee or sublessee under any such permitted
assignment or sublease (or a combination of the rent payable under such
assignment or sublease plus any bonus or any other consideration or any payment
incident thereto) exceeds the rent payable under this Lease for such space,
Tenant shall pay to Landlord one-half of all such excess rent and other excess
consideration within ten (10) days following receipt thereof by Tenant; or
(3) refuse, in its reasonable discretion and judgment, to
consent to the proposed assignment or sublease, which refusal shall be deemed to
have been exercised unless Landlord gives Tenant written notice stating
otherwise.
Upon the occurrence of an event of default by Tenant under this Lease, if
all or any part of the Premises are then assigned or sublet, Landlord, in
addition to any other remedies provided by this Lease or provided by law, may,
at its option, collect directly from the assignee or sublessee all rents
becoming due to Tenant by reason of the assignment or sublease, and Landlord
shall have a security interest in all properties belonging to Tenant on the
Premises to secure payment of such sums. No collection directly by Landlord from
the assignee or sublessee shall be construed to constitute a novation or a
release of Tenant or any guarantor from the further performance of its
obligations under this Lease. All reasonable legal fees and expenses incurred by
Landlord in connection with the review by Landlord of Tenant's requested
assignment or sublease pursuant to this Section, together with any reasonable
legal fees and disbursements incurred in the preparation and/or review of any
documentation, shall be the responsibility of Tenant and shall be paid by Tenant
within five (5) days of demand for payment thereof, as rental hereunder. If the
rent due and payable by any assignee or sublessee under any such permitted
assignment or sublease (or a combination of the rent payable under such
assignment or sublease plus any bonus or any other consideration or any payment
incident thereto) exceeds the Rent payable under this Lease for such space,
Tenant shall pay to Landlord one-half of such excess rent and other excess
consideration within ten (10) days, following receipt thereof by Tenant.
9.3 Landlord Assignment. Landlord shall have the right to sell, transfer
-------------------
or assign, in whole or in part, its rights and obligations under this Lease and
in the Property. Any such sale, transfer or assignment shall operate to release
Landlord from any and all liabilities under this Lease arising after the date of
such sale, assignment or transfer except to the extent that Landlord fails to
transfer the Security Deposit.
9.4 Rights of Mortgagee. Tenant accepts this Lease subject and
-------------------
subordinate to any recorded lease, mortgage or deed of trust lien presently
existing, if any, or hereafter encumbering the Property and to all existing
ordinances and recorded restrictions, covenants, easements, and agreements with
respect to the Property. Landlord hereby is irrevocably vested with full power
and authority to subordinate Tenant's interest under this Lease to any mortgage
or deed of trust lien hereafter placed on the Property. Upon any foreclosure,
judicially or non-judicially, of any such mortgage, or the sale of the Property
in lieu of foreclosure, or any other transfer of Landlord's interest in the
Property, whether or not in connection with a mortgage, Tenant hereby does, and
hereafter agrees to attorn to the purchaser at such foreclosure sale or to the
grantee under any deed in lieu of foreclosure or to any other transferee of
Landlord's interest, and shall recognize such purchaser, grantee, or other
transferee as Landlord under this Lease, and no further attornment or other
agreement shall be required to effect or evidence Tenant's attornment to and
recognition of such purchaser or grantee as Landlord hereunder provided Tenant
is given a Non-Disturbance and Attornment Agreement. Such agreement of Tenant to
attorn
Page 8 of 12
shall survive any such foreclosure sale, trustee's sale, conveyance in lieu
thereof, or any other transfer of Landlord's interest in the Property. Tenant,
upon demand, at any time, before or after any such foreclosure sale, trustee's
sale, conveyance in lieu thereof, or other transfer shall execute, acknowledge,
and deliver to the prospective transferee and/or mortgage a Lease Subordination,
Non-Disturbance and Attornment Agreement and any additional written instruments
and certificates evidencing such attornment as the mortgagee or other
prospective transferee may reasonably require. Notwithstanding anything to the
contrary implied in this Section, any mortgagee under any mortgage shall have
the right at any time to subordinate any such mortgage to this Lease on such
terms and subject to such conditions as the mortgagee in its discretion may
consider appropriate.
9.5 Estoppel Certificates. Tenant agrees to furnish, from time to time,
---------------------
within ten (10) days after receipt of a request from Landlord or Landlord's
mortgagee, a statement certifying, if applicable, all or some of the following:
Tenant is in possession of the Premises; the Lease is in full force and effect;
the Lease is unmodified (except as disclosed in such statement); Tenant claims
no present charge, lien, or claim of offset against Rent; the Rent is paid for
the current month, but it is not prepaid for more than one (1) month and will
not be prepaid for more than one (1) month in advance; there is no existing
default by reason of some act or omission by Landlord; that Landlord has
performed all inducements required of Landlord in connection with this Lease,
including construction obligations, and Tenant accepts the Premises as
constructed; an acknowledgment of the assignment of rentals and other sums due
hereunder to the mortgagee and agreement to be bound thereby; an agreement
requiring Tenant to advise the mortgagee of damage to or destruction of the
Premises by fire or other casualty requiring reconstruction; an agreement by
Tenant to give the mortgagee written notice of Landlord's default hereunder and
to permit the mortgagee to cure such default within a reasonable time after such
notice before exercising any remedy Tenant might possess as a result of such
default; and such other matters as may be reasonably required by Landlord's
mortgagee. Tenant's failure to deliver such statement, in addition to being a
default under this Lease, shall be deemed to establish conclusively that this
Lease is in full force and effect except as declared by Landlord, that Landlord
is not in default of any of its obligations under this Lease, and that Landlord
has not received more than one (1) month's Rent in advance.
ARTICLE 10. - LIENS
10.1 INTENTIONALLY DELETED
10.2 INTENTIONALLY DELETED
10.3 Upon request of Tenant or Tenant's assignees or any subtenant,
Landlord shall execute and deliver a Landlord Waiver in the form attached hereto
as Exhibit H.
ARTICLE 11. - DEFAULT AND REMEDIES
11.1 Default by Tenant. The following shall be deemed to be events of
-----------------
default by Tenant under this Lease:
(1) Tenant shall fail to pay within five (5) days of written
notice any installment of Rent or any other payment required pursuant to this
Lease;
(2) Tenant shall vacate, abandon or cease to operate its
business for a period of more than 5 business days in any substantial portion of
the Premises (other than for renovation or casualty) (If Tenant vacates or
ceases to operate its business in the Premises it must continue to comply with
all other obligations of the Lease and maintain one (1) full-time security guard
in the Premises during normal business hours.);
(3) Tenant or any guarantor of Tenant's obligations hereunder
shall file a petition or be adjudged bankrupt or insolvent under any applicable
federal or state bankruptcy or insolvency law or admit that it cannot meet its
financial obligations as they become due, or a receiver or trustee shall be
appointed for all or substantially all of the assets of Tenant or any guarantor
of Tenant's obligations hereunder;
(4) Tenant or any guarantor of Tenant's obligations hereunder
shall make a transfer in fraud of creditors or shall make an assignment for the
benefit of creditors;
(5) Tenant shall do or permit to be done any act which results
in a lien being filed against the Premises or the Property;
(6) the liquidation, termination, dissolution or (if the Tenant
is a natural person) the death of Tenant or any guarantor of Tenant's
obligations hereunder;
(7) Tenant shall be in default of any other term, provision or
covenant of this Lease, and such default is not cured within thirty (30) days
after written notice thereof to Tenant.
11.2 Remedies for Tenant's Default. Upon the occurrence of any event of
-----------------------------
default set forth in this Lease, Landlord shall have the option to pursue any
one or more of the remedies set forth in this Section 11.2 without any
additional notice or demand:
(1) Without declaring the Lease terminated, Landlord may enter
upon and take possession of the Premises, by picking or changing locks if
necessary, and lock out, expel or remove Tenant and any other person who may be
occupying all or any part of the Premises without being liable for any claim for
damages, and relet the Premises and receive the rent directly by reason of the
reletting. Tenant agrees to pay Landlord on demand all amounts then due under
this Lease, any deficiency that may arise by reason of any reletting of the
Premises and the unpaid balance of any amortized construction cost of Tenant
improvements; further, Tenant agrees to reimburse Landlord for any reasonable
expenditure made by it in order to relet the Premises, including, but not
limited to, remodeling and repair costs, brokerage commissions free rent or
rental concessions and attorneys' fees.
(2) Without declaring the Lease terminated, Landlord may enter
upon the Premises, by picking or changing locks if necessary, without being
liable for any claim for damages, and do whatever Tenant is obligated to do
under the terms of this Lease. Tenant agrees to reimburse Landlord on demand for
any reasonable expenses which Landlord may incur in effecting compliance with
Tenant's obligations under this Lease; further, Tenant agrees that Landlord
shall not be liable for any damages resulting to Tenant from effecting
compliance with Tenant's obligations under this Lease caused by the negligence
of Landlord or otherwise.
(3) Landlord may terminate this Lease, in which event Tenant
shall immediately surrender the Premises to Landlord, and if Tenant fails to
surrender the Premises, Landlord may, without prejudice to any other remedy
which it may have for
Page 9 of 12
possession or arrearages in rent, enter upon and take possession of the
Premises, by picking or changing locks if necessary, and lock out, expel or
remove Tenant and any other person who may be occupying all or any part of the
Premises without being liable for any claim for damages. Tenant agrees to pay on
demand the amount of all loss and damage which Landlord may suffer for any
reason due to the termination of this Lease under this Section 11.2, including
(without limitation) past due amounts, any remaining unpaid balance of amortized
construction costs, loss and damage due to the failure of Tenant to maintain
and/or repair the Premises as required hereunder and/or due to the inability of
Landlord to relet the Premises on reasonably satisfactory terms or otherwise.
Landlord's exercise, following a default by Tenant under this Lease, of any
right granted hereunder or under any applicable law to lock out or change the
locks securing the Premises shall not impose upon Landlord any duty to notify
Tenant of the name and address or telephone number of the individual or company
from whom a new key may be obtained, nor shall Landlord have any duty to provide
Tenant with a new key or any other means of access to the Premises. To the
maximum extent permitted by law, Landlord and Tenant agree that the parties
hereto intend that all rights and remedies of Landlord under this Lease shall
supersede any conflicting provisions of the General Statutes of North Carolina,
and any amendments, modifications, recodification or other changes thereto.
Notwithstanding any other remedy set forth in this Lease, if Landlord has
made rent concessions of any type or character, or waived any Base Rent, and
Tenant fails to take possession of the Premises on the Commencement Date or
otherwise defaults at any time during the term of this Lease beyond any
applicable cure periods, the rent concessions, including any waived Base Rent,
shall be canceled and the amount of the Base Rent or other rent concessions
shall be due and payable immediately as if no rent concessions or waiver of any
Base Rent had ever been granted. A rent concession or waiver of the Base Rent
shall not relieve Tenant of any obligation to pay any other charge due and
payable under this Lease. Notwithstanding anything contained in this Lease to
the contrary, this Lease may be terminated by Landlord only by written notice of
such termination to Tenant given in accordance with Section 13.7 below, and no
other act or omission of Landlord shall be construed as a termination of this
Lease.
11.3 Remedies Cumulative. All rights and remedies of Landlord herein or
-------------------
existing at law or in equity are cumulative and the exercise of one or more
rights or remedies shall not be taken to exclude or waive the rights to the
exercise of any other.
ARTICLE 12. - DEFINITIONS
12.1 Abandon. "Abandon" means the vacating of all or a substantial portion
-------
of the Premises by Tenant or of any Landlord approved assignee or sublet tenant,
whether or not Tenant is in default of the rental or other payments due under
this Lease.
12.2 Act of God or Force Majeure. An "act of God" or "force majeure" is
---------------------------
defined for purposes of this Lease as strikes, lockouts, sitdowns, material or
labor restrictions by any governmental authority, unusual transportation delays,
riots, floods, washouts, explosions, earthquakes, fire storms, weather
(including wet grounds or inclement weather which prevents construction), acts
of the public enemy, wars, insurrections, and/or any other cause not reasonably
within the control of a party or which by the exercise of due such party is
----------
unable wholly or in part, to prevent or overcome.
ARTICLE 13. - MISCELLANEOUS
13.1 Waiver. Failure of Landlord to declare an event of default
------
immediately upon its occurrence, or delay in taking any action in connection
with an event of default, shall not constitute a waiver of the default, but
Landlord shall have the right to declare the default at any time and take such
action as is lawful or authorized under this Lease. Pursuit of any one or more
of the remedies set forth in Article 11 above shall not preclude pursuit of any
one or more of the other remedies provided elsewhere in this Lease or provided
by law, nor shall pursuit of any remedy hereunder or at law constitute
forfeiture or waiver of any rent or damages accruing to Landlord by reason of
the violation of any of the terms, provisions or covenants of this Lease.
Failure by Landlord to enforce one or more of the remedies provided hereunder or
at law upon any event of default shall not be deemed or construed to constitute
a waiver of the default or of any other violation or breach of any of the terms
provisions and covenants contained in this Lease. Waiver by Landlord of any
default by Tenant hereunder shall in no event be deemed or construed to be a
waiver of identical or similar future defaults. Landlord may collect and receive
rent due from Tenant without waiving or affecting any rights or remedies that
Landlord may have at law or in equity or by virtue of this Lease at the time of
such payment. To the maximum extent allowable pursuant to applicable law,
institution of a summary ejectment action to re-enter the Premises shall not be
construed to be an election by Landlord to terminate this Lease.
13.2 Act of God. Neither party shall be required to perform any covenant
----------
or obligation in this Lease, or be liable in damages to the other party, so long
as the performance or non-performance of the covenant or obligation is delayed,
caused or prevented by an act of God, force majeure or by such other party.
13.3 Attorney's Fees. If either party defaults in the performance of any
---------------
of the terms, covenants agreements or conditions contained in this Lease and the
non-defaulting party places in the hands of any attorney the enforcement of all
or any part of this Lease, the collection of any rent or other sums due or to
become due or recovery of the possession of the Premises, the defaulting party
agrees to pay the non-defaulting party's cost of collection, including
reasonable attorneys' fees, whether suit is actually filed or not.
13.4 Successors. This Lease shall be binding upon and inure to the benefit
----------
of Landlord and Tenant and their respective heirs, personal representatives,
successors and assigns.
13.5 Rent Tax. If applicable in the jurisdiction where the Premises are
--------
situated, Tenant shall pay and be liable for all rental, sales and use taxes or
other similar taxes, if any, levied or imposed by any city, state, county or
other governmental body having authority, such payments to be in addition to all
other payments required to be paid to Landlord by Tenant under the terms of this
Lease. Any such payment shall be paid concurrently with the payment of the Base
Rent, Additional Rent, Common Area Costs, or other charge upon which the tax is
based as set forth above.
13.6 Interpretation. The captions appearing in this Lease are for
--------------
convenience only and in no way define, limit, construe or describe the scope or
intent of any Section. Grammatical changes required to make the provisions of
this Lease apply (1) in the plural sense where there is more than one tenant and
(2) to either corporations, associations, partnerships or individuals, males or
females, shall in all instances be assumed as though in each case fully
expressed. The laws of the State of North Carolina shall govern the validity,
performance and enforcement of this Lease. This Lease shall not be construed
more or less favorably with respect to either party as a consequence of the
Lease or various provisions hereof having been drafted by one of the parties
hereto.
13.7 Notices. All rent and other payments required to be made by Tenant
-------
shall be payable to Landlord, in care of Manager, at Manager's address set forth
on page 1 (or if no address be set forth for Manager, to Landlord at Landlord's
address set forth on page 1). All payments required to be made by Landlord to
Tenant shall be payable to Tenant at Tenant's address set forth on
Page 10 of 12
page 1. Any notice or document (other than rent) required or permitted to be
delivered by the terms of this Lease shall be deemed to be delivered when
deposited in the United States Mail, postage prepaid, certified mail, return
receipt required, addressed to the parties at the respective addresses set forth
on page 1, or to such other addresses as the parties may have designated by
written notice to each other, with copies of notices to Landlord being sent to
Landlord's address as shown on page 1. Manager shall be a co-addressee with
Landlord on all notices sent to Landlord by Tenant hereunder, and any notice
sent to Landlord and not to Manager, also, in accordance with this section shall
be deemed ineffective.
13.8 Submission of Lease. SUBMISSION OF THIS LEASE TO TENANT FOR SIGNATURE
-------------------
DOES NOT CONSTITUTE A RESERVATION OF SPACE OR AN OPTION TO LEASE. THIS LEASE IS
NOT EFFECTIVE UNTIL EXECUTION BY BOTH LANDLORD AND TENANT.
13.9 Corporate Authority. If Tenant executes this Lease as a corporation
-------------------
or a partnership (general or limited), Tenant represents and warrants that:
Tenant is a duly authorized and existing corporation or partnership (general or
limited), Tenant is qualified to do business in the state in which the Premises
are located, the corporation or partnership (general or limited) has full right
and authority to enter into this Lease, each person signing on behalf of the
corporation or partnership (general or limited) is authorized to do so, and the
execution and delivery of the Lease by Tenant will not result in any breach of,
or constitute a default under any mortgage, deed of trust, lease, loan, credit
agreement, partnership agreement, or other contract or instrument to which
Tenant is a party or by which Tenant may be bound.
13.10 Multiple Tenants. If this Lease is executed by more than one person
----------------
or entity as "Tenant," each such person or entity shall be jointly and severally
liable hereunder. It is expressly understood that any one of the named Tenants
shall be empowered to execute any modification, amendment, exhibit, floor plan,
or other document herein referred to and bind all of the named Tenants thereto;
and Landlord shall be entitled to rely on same to the extent as if all of the
named Tenants had executed same.
13.11 Tenant's Financial Statements. Tenant represents and warrants to
-----------------------------
Landlord that, as of the date of execution of this Lease by Tenant, the
financial statements, if any, of Tenant provided to Landlord prior to or
simultaneously with the execution of this Lease accurately represent the
financial condition of Tenant as of the dates and for the periods indicated
therein, such financial statements are true and do not contain any untrue
statement of a material fact or omit to state any material fact necessary in
order to make the statements included therein not misleading and there has been
no material adverse change in the financial condition or business prospects of
Tenant since the respective dates of such financial statements. If there is a
material adverse change in Tenant's financial condition, Tenant will give
immediate notice of such material adverse change to Landlord. If Tenant fails to
give such immediate notice to Landlord, such failure shall be deemed an event of
default under this Lease. Landlord agrees to keep all financial or other
information received from Tenant strictly confidential and will not disclose
such information to any person other than Landlord's mortgagees, accountants,
attorneys or employees who have a need to know such information.
13.12 Severability. If any provision of this Lease or the application
------------
thereof to any person or circumstances shall be invalid or unenforceable to any
extent, the remainder of this Lease and the application of such provisions to
other persons or circumstances shall not be affected thereby and shall be
enforced to the greatest extent permitted by law. Each covenant and agreement
contained in this Lease shall be construed to be a separate and independent
covenant and agreement, and the breach of any such covenant or agreement by
Landlord shall not discharge or relieve Tenant from Tenant's obligation to
perform each and every covenant and agreement of this Lease to be performed by
Tenant.
13.13 Landlord's Liability. If Landlord shall be in default under this
--------------------
Lease and, if as a consequence of such default, Tenant shall recover a money
judgment against Landlord, such judgment shall be satisfied only out of the
right, title and interest of Landlord in the Property as the same may then be
encumbered and neither Landlord nor any other person or entity comprising
Landlord shall be liable for any deficiency. In no event shall Tenant have the
right to levy execution against any property of Landlord other than the
Property, nor any person or entity comprising Landlord other than its interest
in the Property as herein expressly provided.
13.14 Sale of Property. Upon any conveyance, sale or exchange of the
----------------
Premises or assignment of this Lease, Landlord shall be and is hereby entirely
free and relieved of all liability under any and all of its covenants and
obligations contained in or derived from this Lease arising out of any act,
occurrence, or omission relating to the Premises or this Lease occurring after
the consummation of such sale or exchange and assignment.
13.15 Time is of the Essence. The time of the performance of all of the
----------------------
covenants, conditions and agreements of this Lease is of the essence.
13.16 Subtenancies. At Landlord's option, the voluntary or other surrender
------------
of this Lease by Tenant, or a mutual cancellation thereof, shall not work a
merger of estates and shall operate as an assignment of any or all permitted
subleases or subtenancies.
13.17 Common Areas. Landlord reserves the right to change, from time to
------------
time, the dimensions and location, identity and type of any buildings comprising
the Building, and to construct additional buildings or additional stories on
existing buildings or other improvements on the Property, provided that such
changes and additional construction do not materially or adversely affect
parking and signage for the Premises. Landlord reserves the right to change,
from time to time, the dimensions and location of the Common Area and to allow
the Common Area to be put to such uses, as Landlord shall, from time to time,
deem desirable, provided that Tenant's use and enjoyment of, access to and
parking for the Premises and/or the Common Areas is not materially adversely
affected thereby for an unreasonable period of time and during such time Tenant
has an alternate means of access to the Premises. Tenant and its employees and
customers shall have the nonexclusive right to use the Common Area in common
with Landlord, other tenants of the Property and other persons designated by
Landlord, subject to reasonable rules and regulations governing use that
Landlord from time to time prescribes. Tenant shall not solicit business,
distribute handbills or display merchandise within the Common Area, or take any
action, which would interfere with the rights of other persons to use the Common
Area. Landlord may temporarily close any part of the Common Area to make repairs
or alterations. Tenant acknowledges that Landlord may be required to grant to
major tenants of the Property the right to display and sell merchandise and
services on portions of the Common Area, and the rights herein granted to Tenant
shall be inferior to any such rights granted to major tenants. The Common Area
shall be under Landlord's sole operation and control. Tenant shall be
responsible for and shall indemnify and hold Landlord harmless from any
liability, loss or damage arising out of or caused by Tenant, its employees,
subtenants, licensees, concessionaires, agents, suppliers, vendors, or service
contractors, to any part of the Common Area, or to the Property whether such
damages be structural or nonstructural.
13.18 Parking. Landlord will provide, at no additional cost, as many
-------
parking spaces as required by the City of Raleigh (for the square footage of the
Premises' but in no event less than two and one-half (2.5) spaces per one
thousand (1,000) square feet. Landlord may, from time to time, designate
specific areas in which vehicles owned by Tenant and its employees shall be
parked, and Tenant shall use best efforts to see that such vehicles are parked
in such areas. Upon request, Tenant shall furnish to Landlord a
Please Initial
Page 11 of 12
complete list of the license numbers of all vehicles operated by Tenant and its
employees.
13.19 Tenant's Indemnities. All representations, warranties and indemnities
--------------------
given by Tenant or Landlord pursuant to this Lease shall survive the expiration
or earlier termination of the Lease Term.
ARTICLE 14. - AMENDMENT AND LIMITATION OF WARRANTIES
14.1 Entire Agreement. IT IS EXPRESSLY AGREED BY TENANT, AS A MATERIAL
----------------
CONSIDERATION FOR THE EXECUTION OF THIS LEASE, THAT THIS LEASE, WITH THE
SPECIFIC REFERENCES TO EXTRINSIC DOCUMENTS, IS THE ENTIRE AGREEMENT OF THE
PARTIES; THAT THERE ARE, AND WERE, NO VERBAL REPRESENTATIONS, WARRANTIES,
UNDERSTANDINGS, STIPULATIONS, AGREEMENTS OR PROMISES PERTAINING TO THE SUBJECT
MATTER OF THIS LEASE OR OF ANY EXPRESSLY MENTIONED EXTRINSIC DOCUMENTS THAT ARE
NOT INCORPORATED IN WRITING IN THIS LEASE OR IN SUCH DOCUMENTS.
14.2 Amendment. THIS LEASE MAY NOT BE ALTERED, WAIVED, AMENDED OR EXTENDED
---------
EXCEPT BY AN INSTRUMENT IN WRITING SIGNED BY LANDLORD AND TENANT.
14.3 Limitation of Warranties. LANDLORD AND TENANT EXPRESSLY AGREE THAT
------------------------
THERE ARE AND SHALL BE NO IMPLIED WARRANTIES OF MERCHANTABILITY, HABITABILITY,
SUITABILITY, FITNESS FOR A PARTICULAR PURPOSE OR OF ANY OTHER KIND ARISING OUT
OF THIS LEASE, AND THERE ARE NO WARRANTIES WHICH EXTEND BEYOND THOSE EXPRESSLY
SET FORTH IN THIS LEASE. WITHOUT LIMITING THE GENERALITY OF THE FOREGOING,
TENANT EXPRESSLY ACKNOWLEDGES THAT LANDLORD HAS MADE NO WARRANTIES OR
REPRESENTATIONS CONCERNING ANY HAZARDOUS SUBSTANCES OR OTHER ENVIRONMENTAL
MATTERS AFFECTING ANY PART OF THE PROPERTY, AND LANDLORD HEREBY EXPRESSLY
DISCLAIMS AND TENANT WAIVES ANY EXPRESS OR IMPLIED WARRANTIES WITH RESPECT TO
ANY SUCH MATTERS.
14.4 Waiver and Releases. TENANT SHALL NOT HAVE THE RIGHT TO WITHHOLD OR
-------------------
TO OFFSET RENT OR TO TERMINATE THIS LEASE EXCEPT AS EXPRESSLY PROVIDED HEREIN.
TENANT WAIVES AND RELEASES ANY AND ALL STATUTORY LIENS AND OFFSET RIGHTS.
14.5 Non-Disclosure of Lease Terms. NOTWITHSTANDING ANYTHING CONTAINED
-----------------------------
WITHIN THIS LEASE TO THE CONTRARY, IF TENANT DISCLOSES ANY OF THE MATERIAL TERMS
AND/OR PROVISIONS OF THIS LEASE, INCLUDING BUT NOT LIMITED TO THE BASE RENT,
TENANT'S COMMON AREA COSTS OR ANY CAPS ON SUCH COSTS, THE TENANT FINISH OUT
ALLOWANCE, TENANT'S PROPORTIONATE SHARE OF GENERAL TAXES OR ANY CAP ON SUCH
EXPENSE, TENANT'S PROPORTIONATE SHARE OF INSURANCE PREMIUMS OR ANY CAP ON SUCH
EXPENSE, OR THE LEASE TERM TO ANY PERSON OR ENTITY NOT A PARTY TO THIS LEASE,
EXCEPT TENANT'S ATTORNEY AND TENANT'S REAL ESTATE REPRESENTATIVE (BUT ONLY TO BE
USED FOR PURPOSES OF THIS TRANSACTION AND NO OTHER), THEN TENANT SHALL BE LIABLE
FOR ALL DAMAGE OR INJURY TO LANDLORD RESULTING FROM TENANT'S FAILURE TO KEEP ALL
SUCH INFORMATION CONFIDENTIAL AND TENANT SHALL INDEMNIFY AND HOLD LANDLORD
HARMLESS FROM ANY DAMAGE, LOSS OR INJURY OCCASIONED THEREBY. IN THE ALTERNATIVE,
AND AT LANDLORD'S SOLE OPTION, IF DAMAGES ARE DIFFICULT TO CALCULATE, TENANT
SHALL PAY LIQUIDATED DAMAGES EQUAL TO ONE (1) MONTH'S BASE RENT AS DEFINED IN
ARTICLE 1 HEREOF.
14.6 The parties shall prepare, execute and record a memorandum of this
Lease, which shall include a summary of the basic terms of the Lease, including
the names of the parties, the Lease Term, and all extended term periods, a
description of the Premises.
15.1 Addendum. The Addendum attached hereto is incorporated herein by
--------
reference as if set forth verbatim. In the event of a conflict between the terms
and conditions of the Addendum and the Lease, the Addendum shall govern and
control. All terms defined herein have the same meaning in the Addendum as
herein.
IN WITNESS WHEREOF, the parties have executed this Lease causing their
respective seals to be affixed hereto.
EXECUTED by Tenant on ________________________________________, 2001, and
by Landlord on October 4, 2001, to be effective upon full execution by Landlord
---------
and Tenant.
LANDLORD:
XXXXXX-XXXXXXX DEVELOPMENT XXX, LLC
By: Parker Lincoln Developers, Inc.,
its Managing Agent
ATTEST:
/s/ Xxxxxx X. Poor By: /s/ Xxxxx X. Xxxxx, CEO (SEAL)
------------------------------- -------------------------
Asst. Secretary Vice President
---- ----
(CORPORATE SEAL)
TENANT:
LIPOMED, INC.,
a Delaware corporation
ATTEST:
/s/ Xxxx X. Xxxxxxxxx By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
------------------------------- -------------------------
Asst. Secretary _____________ Chairman
-----
(CORPORATE SEAL) Name: ______________________
Type or Print
Please Initial
Page 12 of 12
Exhibit A
Legal Description
Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx #000
0000 Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
BEING all of lot 16 (consisting of 3.507 acres) as shown on Plat entitled
"Subdivision and Right of Way Dedication Map of Xxxxxx Business Center" prepared
by Xxxxxxx Close, Inc., Land Surveying and recording in Book of Maps 1998, Page
201, Wake County Registry.
Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxx #000
0000 Xxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
BEING all of Lot 17 (consisting of 3.016 acres) as shown on Plat entitled
"Recombination Map of Xxxxxx Business Center Lots 17 - 19" prepared by Xxxxxxx
Close, Inc., Land Surveying and recording in Book of Maps 2000, Page 201, Wake
County Registry.
Please Initial
EXHIBIT B
SITE PLAN
Xxxxxx Business Center
Raleigh, North Carolina
[MAP APPEARS HERE]
Please Initial
EXHIBIT X
XXXXXXXX XXXX
Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx 000, 000 and the Connector
0000 Xxxxxx Xxxxxxxxx, Xxxxxxx, XX 00000
[TO BE FORTHCOMING.]
Please Initial
EXHIBIT D
Commencement Letter
[TO BE FORTHCOMING.]
Please Initial
EXHIBIT E
RULES & REGULATIONS
The following rules and regulations will remain in full force and affect until
Landlord notifies Tenant of any changes in writing.
1. Access to the Building. Access to the Premises shall be gained by use of
----------------------
a key to the outside doors of the Premises. Landlord may, from time to
time, establish security controls for the purpose of regulating access to
the Building. Tenant shall abide by all such security regulations to be
established.
2. Protecting Premises. Before leaving the Premises unattended, Tenant shall
-------------------
close and securely lock all doors or other means of entry to the
Premises. Tenant must maintain an adequate number of suitable fire
extinguisher on the Premises at all times for use in case of fire,
including electrical or chemical fires.
3. Large Articles. Furniture, freight and other large or heavy articles may
--------------
be brought into the Building only at times and in the manner designated
by Landlord and always at Tenant's sole responsibility. All damage to the
Building, its furnishing, fixtures or equipment by moving or maintaining
such furniture, freight or articles shall be repaired at the expense of
Tenant.
4. Signs. Tenant shall not paint, display, inscribe, maintain or affix any
-----
sign, placard, picture, advertisement, name, notice, lettering or
direction on any part of the outside or inside of the Building, or any
part of the inside of the Premises which can be seen from the outside of
the Premises, without the written consent of the Landlord, and then only
such name or names or matter and in such color, size, style, character
and material as shall be first approved Landlord in writing. Landlord
reserves the right to remove, at the Tenant's expense, all matter other
than that above provided for without notice to Tenant. Under no
circumstances shall Tenant display or cause or allow to be displayed, on
or in the Premises, any sign for a real estate company, broker, brokerage
company or person or company engaged in the leasing of real property
other than Parker Lincoln Commercial Realty, Inc. Further, Tenant shall
not place a "For Rent" or "For Lease" sign in or on the Premises.
5. Compliance with Laws. Tenant shall comply with all applicable laws,
--------------------
ordinances, governmental orders or regulations and applicable orders or
directions from any public office or body having jurisdiction, whether
now existing or hereinafter enacted with respect to the Premises and the
use or occupancy thereof. Tenant shall not make permit any use of the
Premises which directly or indirectly is forbidden by law, ordinance,
governmental regulations or order or direction of applicable public
authority, or which may be dangerous to person or property.
6. Waste Disposal. Tenant must keep, and prepare for collection, all garbage
--------------
and refuse in a container approved by Landlord. Landlord must also
approve the location of the container. Tenant will be responsible for the
cost of container and the cost of trash removal. Tenant must not burn
trash or garbage of any kind on or about the Premises or the Building or
Property where located.
7. Antenna or satellite dish. Tenant may not erect any aerial, antenna or
-------------------------
satellite dish on the roof or exterior walls of the Premises or on the
grounds. Any such installation will be subject to removal without notice
at any time.
8. Obstruction of Public Areas. Tenant may not place or permit any
---------------------------
obstructions, materials or equipment in the outside areas adjoining the
Premises without the written consent of the Landlord. All equipment,
merchandise, freight or other materials must be moved inside the Premises
at the end of each business day. Tenant shall not, whether temporarily,
accidentally or otherwise, allow anything to remain in, place or store
anything in, or obstruct in any way, any sidewalk, court, passageway,
entrance, or shipping area. Tenant shall lend its full cooperation to
keep such areas free from all obstruction and in a clean and sightly
condition, and move all supplies, furniture and equipment as soon as
received directly to the Premises, and shall move all such items and
waste (other than waste customarily removed by the Building employees)
that are any time being taken from the Premises directly to the areas
designated for disposal. All courts, passageways, entrances, exits,
elevators, escalators, stairways, corridors, halls and roofs are not for
the use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence
in the judgement of Landlord shall be prejudicial to the safety,
character, reputation and interest of the Building and its tenants;
provided, however, that nothing herein contained shall be construed to
prevent such access to persons with whom Tenant deals within the normal
course of Tenant's business unless such persons are engaged in illegal
activities.
9. Defacing Premises and Overloading. Tenant shall not place anything or
---------------------------------
allow anything to be placed in the Premises near the glass of any door,
partition, wall or window, which may be unsightly from outside the
Premises. Tenant shall not place or permit to be placed any article of
any kind on any window ledge or on the exterior walls: blinds, shades,
awnings or other forms of inside or outside window ventilators or similar
devices shall not be placed in or about the outside windows in the
Premises. Tenant shall not do any painting or decorating in the Premises
or install any floor coverings in the Premises or make, paint, cut or
drill into, or in any way deface any part of the Premises or Building
without in each instance obtaining the prior written consent of Landlord.
Tenant shall not overload any floor or part thereof in the Premises, or
any facility in the Building or any public corridors or elevators therein
by bringing in or removing any large or heavy articles and Landlord may
direct and control the location of safes, files, and all other heavy
articles and, if considered necessary by Landlord, require supplementary
supports at Tenant's expense of such material and dimensions necessary to
properly distribute the weight.
10. Additional Locks. Tenant shall not attach or permit to be attached
----------------
additional locks or similar devices to any door or window, change
existing locks or the mechanism thereof, or make or permit to be made any
keys for any door
Please Initial
Page 1 of 3
other than those provided by Landlord. Upon termination of this lease or
termination of Tenant's possession, Tenant shall surrender all keys to
the Premises.
11. Communication or Utility Connections. If Tenant desires signal, alarm or
------------------------------------
other utility or similar service connections installed or changed, Tenant
shall not install or change the same without the approval of Landlord,
and then only under the direction of Landlord and at Tenant's expense.
Tenant shall not install in the Premises any equipment, which requires a
substantial amount of electrical current without the advance written
consent of Landlord. Tenant shall ascertain from Landlord the maximum
amount of load or demand for or use of electrical current, which can
safely be permitted in the Premises, taking into account the capacity of
the electric wiring in the Building, and shall not in any event connect a
greater load that which is safe.
Tenant shall not operate any electrical device from which may emanate
electrical waves, which may interfere with or impair radio or television
broadcasting or reception from or in the Building or elsewhere and/or
cause distributing noises or vibrations. Tenant shall not use any
illumination or power for the operation of any equipment or device other
than electricity.
12. Parking. Parking is in designated parking areas only. There should not be
-------
any parking in the "no parking" zones or at curbs. Handicapped spaces are
for handicapped persons and the Police Department will ticket unauthoriz-
ed (unidentified) cars in handicapped spaces. Tenant's employees should
not use visitor parking spaces. Storage of vehicles on the parking lot is
prohibited except with the written consent of the Landlord. Landlord will
designate tenant employee parking.
13. Pest Control. Tenant must keep the Premises free from pests, insects and
------------
rodents by using a professional pest-exterminating contractor when
needed, at Tenant's expense.
14. Restrooms. The restrooms, toilets, urinals, vanities and the other
---------
apparatus shall not be used for any purpose other than that for which
they were constructed and no foreign substance of any kind whatsoever
shall be thrown therein and the expense of any breakage, stoppage, or
damage resulting form the violation of this rule shall be borne by Tenant
who, or whose employees or invitees, shall have caused it.
15. Solicitation. Tenant shall not make any room-to-room canvass to solicit
------------
business from other tenants in the Building or on the Property and shall
not exhibit, sell or offer to sell, use, rent or exchange any products or
services in or from the Premises unless ordinarily embraced within the
Tenant's use of the Premises specified herein and specific authority
granted in the Lease. Tenant, his employees, and agents, may not solicit
business in the parking lot or other common areas and may not distribute
handbills or other advertising matter in automobiles parked in the
parking area or other common area.
16. Energy Conservation. Tenant shall not waste electricity, water, heat or
-------------------
air conditioning and agrees to cooperate fully with Landlord to assure
the most effective operation of the Building's heating and air
conditioning, and shall not allow the adjustment (except by Landlord's
authorized Building personnel) of any controls.
17. Intoxication. Landlord reserves the right to exclude or expel from the
------------
Property any person who, in the judgement of Landlord, is intoxicated or
under the influence of liquor or drugs, or who shall in any manner do any
act in violation of any of the rules and regulations of the Property.
18. Nuisances and Certain Other Prohibited Uses. Tenant shall not:
-------------------------------------------
(a) engage in any mechanical business, utilize any article or thing, or
engage in any service in or about the Premises or Property, except
those ordinarily embraced within the permitted use of the Premises;
(b) use the Premises for housing, lodging, or sleeping purposes;
(c) create excessive noise, place a musical or sound producing
instrument or device inside or outside the Premises which may be
heard outside the Premises;
(d) bring or permit to be in the Building any bicycle or other vehicle,
or dog (except in the company of a blind person) or other animal or
bird;
(e) cause or permit any noxious or offensive odors, fumes, gases, smoke,
dust, steam or vapors;
(f) do anything in or about the Premises tending to create or maintain a
nuisance or do any act tending to injure the reputation of the
Property.
19. HVAC Equipment. All heating and air conditioning equipment must be
--------------
maintained by Tenant and inspected and serviced by a qualified, licensed
contractor on a quarterly basis. The quarterly inspections and service
must occur no later than March 31, June 30, September 30, and December 31
of each calendar year. Within ten (10) days of each quarterly inspection
and service date, Tenant must provide to Landlord a report from the
contractor performing such inspection and service. If the Commencement
Date of Tenant's Lease is less than sixty-day (60 days) from the next
scheduled quarterly inspection and service date, Tenant shall be
permitted to skip such inspection and service and begin on the following
date. If Tenant fails to have the quarterly inspection and service
performed in accordance with this provision or fails to provide the
required report to Landlord, Landlord may have the inspection and service
performed and xxxx Tenant for the cost thereof plus a 15% administrative
cost.
Please Initial
Page 2 of 3
20. Window Treatments. If Tenant desires to install window coverings,
-----------------
Landlord must approve them in writing before installation.
21. Amendment of Rules & Regulations. Landlord reserves the right to amend or
--------------------------------
waive any of the foregoing rules or regulation at any time when, in its
judgement, it is in the property's best interests and the Tenant's best
interests. No such amendment or waiver of any rules and regulation in
favor of one Tenant operates as an alteration or waiver in favor of any
other Tenant. Landlord is not responsible to any Tenant for the
non-observance or violation by any other Tenant of any of these rules and
regulations at any time.
Please Initial
Page 3 of 3
EXHIBIT X
XXXXX XXXX
Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx 000, 000 and the Connector
0000 Xxxxxx Xxxxxxxxx, Xxxxxxx, XX 00000
[TO BE FORTHCOMING.]
Please Initial
EXHIBIT G
Sign Criteria
Xxxxxx Xxxxxxxx Xxxxxx
Xxxxxxxxx 000, 000 and the Connector
0000 Xxxxxx Xxxxxxxxx, Xxxxxxx, XX 00000
[TO BE FORTHCOMING.]
Please Initial
ADDENDUM
This Addendum is attached to and incorporated by reference in the lease by
and between XXXXXX-XXXXXXX DEVELOPMENT XXX, LLC ("Landlord") and LIPOMED, INC.
("Tenant") dated October 4, 2001 (the "Lease"). In the event of a conflict
between the terms and conditions of this Addendum and the Lease, this Addendum
shall govern and control. All terms defined in the Lease shall have the same
meaning herein. Except as modified herein, all provisions of the Lease shall be
in full force and effect.
The following shall constitute additional provisions or conditions to the
Lease:
1. Construction of the Premises. The Premises are comprised of Buildings
----------------------------
307 and 308 and the Connector between the Buildings. Tenant desires, and
Landlord has agreed, to construct improvements (the "Improvements") to
the exterior and interior of the Premises to meet the needs of Tenant's
business operations. Landlord will construct the Connector and the
Improvements in accordance with construction plans (the "Construction
Plans") to be prepared by Landlord's architects and engineers. The
Construction Plans for Building 307 will be submitted to Tenant for
review and approval within ten (10) days of execution hereof and Tenant
shall respond to Landlord with all comments within five (5) days of
receipt. Both Landlord and Tenant must approve the Construction Plans
within twenty (20) days of execution hereof.
Within forty-five (45) days of the execution of the Lease, Landlord will
deliver to Tenant the Construction Plans for Building 308 and the
Connector. Tenant shall have ten (10) days to review and comment on the
Construction Plans for Building 308 and the Connector. The parties must
agree on the Building 308 and the Connector Construction Plans within
sixty (60) days of execution of the Lease. Upon approval, the
Construction Plans for Xxxxxxxx 000, Xxxxxxxx 000, and the Connector
will be attached to the Lease as an exhibit and incorporated herein by
reference. Landlord and Tenant will work in good faith to agree on the
Construction Plans for all the Buildings.
Interior Improvements: Landlord will provide to Tenant a construction
allowance not to exceed thirty dollars ($30) per square foot of the
Premises (85,000 square feet) (the "Interior Fit-Up Allowance") for the
construction of the interior Improvements. Landlord will construct the
interior Improvements in accordance with the Construction Plans. If the
cost of the interior Improvements exceeds the Interior Fit-Up Allowance,
the excess shall be at Tenant's sole expense. Upon completion of the
interior Improvements for each Building and prior to occupancy of each
Building, if there is any excess costs over the Interior Fit-Up
Allowance, Tenant shall reimburse Landlord in current funds for
Landlord's expenses of every kind and nature in connection with
construction of the interior Improvements, including, but not limited
to, all amounts paid by Landlord to the general contractor for
materials, labor, and services, plus overhead and profit of sixteen
percent (16%). In the event that the total cost of the interior
Improvements is less than the Interior Fit-Up Allowance, the difference
shall be applied to Tenant's monthly Base Rent under the Lease.
Prior to commencement of construction of the interior Improvements for
each Building, Landlord will submit to Tenant a breakdown of the
construction costs. Within five (5) days of receipt of the breakdown,
Tenant may review, in Landlord's offices, Landlord's supporting
documentation. The final cost of the interior Improvements for Building
307 must be agreed upon between Landlord and Tenant within thirty (30)
days of full execution hereof. The final cost of the interior
Improvements for Building 308 and the Connector must be agreed upon
within sixty (60) days of execution hereof.
Exterior Improvements: Landlord will construct the following
Improvements to the exterior of the Buildings as shown on the
Construction Plans:
(a) install edge levelers on four (4) existing docks;
(b) replace all other existing dock overhead doors with windows;
(c) install "spandrel glass" on the exterior ends of the Buildings and the
side of the Connector facing Xxxxxx Boulevard;
(d) construct the "special entry feature"; and
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(e) construct two outside break areas (each with one thousand (1,000)
square feet of concrete pad and two hundred (200) square feet of
awning.
2. Construction Delays. In the event that completion of the Buildings is
-------------------
delayed due to any act or omission of Tenant or its agents, including
but not limited to, design changes, change orders, failure to timely
give an approval or improperly timed activities which are Tenant's
responsibility ("Tenant Delay") then, in that event, the Rental Waiver
for both Buildings shall be reduced on a day-for-day basis. If the
Tenant Delay is longer than fourteen (14) days, Rent shall commence on
the anticipated completion dates for each Building (December 15, 2001,
for Building 307 and July 1,2002, for Building 308 and the Connector)
irrespective of completion of the Improvements or occupancy by Tenant.
In the event that completion of the Buildings is delayed for any reason
other than a Tenant Delay, Rent shall not commence until fifteen (15)
days after the Commencement Date for each Building, and otherwise there
shall be no other penalty to Landlord.
3. Rental Waiver. As consideration for Tenant's performance of all
-------------
obligations under the Lease, Landlord hereby conditionally waives the
Base Rent for the first fourteen (14) days of the Lease Term for each
Building, provided Tenant shall not be in default hereunder. Should
Tenant at any time during the Lease Term be in default, the total sum of
such Base Rent so conditionally waived shall become immediately due and
payable by Tenant to Landlord. If at the expiration of this Lease,
including any option or renewal periods, Tenant is not in default
hereunder, Landlord shall permanently waive payment of the conditionally
waived Base Rent. This waiver does not include Common Area Costs
Payment, which Tenant shall begin paying on the Commencement Date.
4. Letter of Credit. Simultaneously with the execution of the Lease, Tenant
----------------
will provide to Landlord a clean, unconditional, irrevocable,
payable-at-sight letter of credit, which shall conform, in all material
respects, to the form attached hereto as Exhibit H in the stated
principal amount of $1,500,000.00, drawn on a bank chartered in North
Carolina and approved by Landlord (the "Letter of Credit").
The Letter of Credit shall name Landlord as its beneficiary and shall
remain outstanding until thirty (30) days after the expiration of the
Lease Term, including all extensions and renewals. If there shall be an
event of default under the Lease, in addition to the remedies set forth
in Section 11.2 of the Lease, Landlord shall have the right immediately,
without further notice, to draw on the Letter of Credit in whole or in
part at Landlord's sole discretion to reimburse Landlord for the default
and all related costs. If Landlord elects to allow Tenant to cure the
event of default, which Landlord shall not be obligated to do, Tenant
must provide to Landlord a replacement letter of credit in the same
amount and with the same terms, and pay to Landlord a nonrefundable fee
of $5,000.00 to reimburse Landlord for its costs associated with drawing
upon the Letter of Credit.
The Letter of Credit may be reduced as follows:
(a) on January 1, 2003: to $1,000,000.00 on the condition that Tenant
had not less than $2,500,000.00 in gross sales each month for the
year 2002 and 2002 annual net income of not less than
$5,400,000.00 for 2002, solely from its United States operations,
coronary heart disease division (the "US Heart Division");
(b) on July 1, 2003: to $500,000.00 on the condition that the
requirements of (a) were timely met and, in addition, the US Heart
Division had not less than $4,000,000.00 in gross sales each month
and $6,960,000.00 in net income for the first six (6) months of
2003;
(c) on January 1, 2004: to an amount equal to two (2) months of the
then current Rent on the condition that the requirements of (a)
and (b) were timely met and, in addition, that the US Heart
Division had not less than $5,000,000.00 in gross sales each
month and a net income of $8,700,000.00 for the last six (6)
months of 2003. (Subparagraphs (a), (b), (c) are collectively the
"Financial Benchmarks").
The Financial Benchmarks must exclude all inter-company sales,
transfers, and other such transactions. The Financial Benchmarks must be
based upon examination, by an independent certified public accountant
("CPA") reasonably acceptable to Landlord, of Tenant's audited
(unqualified) balance sheets, statements of income, retained earnings
and statement of cash flow (collectively "Tenant's Financial
Statements") for the years in question. The examination must be made in
accordance with generally accepted auditing standards. The CPA must
determine in his or her opinion that the Financial Statements present
fairly the financial
Page 2 of 6
position of the Tenant in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis. The CPA must express
an unqualified opinion based on agreed upon procedures, verifying that
Tenant's US Heart Division has achieved the applicable Financial
Benchmarks. Landlord will respond to Tenant within ten (10) days of
receipt of the audited Financial Statements and an acceptable CPA
verification. Immediately upon receipt of the audited Financial
Statements and Landlord's acceptance of the CPA verification, Tenant may
reduce the Letter of Credit.
The Letter of Credit will remain at two (2) months Rent for the balance
of the Lease Term including any renewals and extensions. Tenant may
substitute a cash deposit of an equal amount for the Letter of Credit in
which case Section 2.8 of the Lease shall apply.
5. Renewal Options. On the condition that Tenant has fully complied with
---------------
all the terms and conditions of the Lease, and on the further condition
that Tenant gives Landlord one hundred eighty (180) days advance written
notice of its desire to exercise its option to renew (failure to give
notice being an absolute bar to any right on the part of the Tenant to
so renew), Landlord hereby gives to Tenant the right to renew this Lease
for two (2) terms of five (5) additional years each at the then current
Base Rent plus three percent (3%). Thereafter, the Base Rent shall
increase annually by three percent (3%). The Common Area Costs shall be
at Landlord's then current rate. Except as provided above for Base Rent,
the same terms and conditions as set forth in the Lease shall govern the
parties' rights and obligations during the renewal term.
6. Expansion Options. To accommodate Tenant's expansion needs, Landlord
-----------------
hereby gives Tenant an option to lease (the "Expansion Option") up to
one hundred percent (100%), but not less than fifty percent (50%), of a
building of approximately one-hundred thousand ( 100,000) square feet,
or of whatever size the City of Raleigh will allow (the "Expansion
Building") to be constructed by Landlord on the land shown on the
attached Exhibit B-1. The initial term of the Expansion Option shall
commence upon the Commencement Date hereof and shall automatically
expire on January 1, 2003. The Expansion Option shall be at no cost to
Tenant for the initial term.
If Tenant elects to lease the Expansion Building, such lease shall
contain substantially the same terms and conditions as in this Lease
with the specific business terms to be agreed upon between the parties
within thirty (30) days of receipt of detailed plans and specifications
for the Tenant Improvements. Landlord will provide to Tenant a "bid" to
construct the new building and all improvements. If Tenant elects to
lease one hundred percent (100%) of the Expansion Building, Tenant may
obtain bids for the construction from two other qualified, licensed,
general contractors. If Tenant wishes to use one of the other
contractors, Tenant must submit the bid and all supporting and related
documentation to Landlord. Upon receipt of the competing bid with
supporting documentation, Landlord will have thirty (30) days to notify
Tenant as to whether Landlord will match the bid or allow Tenant to use
the other contractor. If Landlord elects to allow Tenant to use the
other contractor, Tenant must do so and, prior to commencing
construction, must deliver to Landlord a letter of credit in the amount
of the bid and in the form required by the Lease as shown on Exhibit H.
If Tenant elects to lease less than one hundred percent (100%) of the
Expansion Building, Tenant must use Landlord for all construction.
All negotiations concerning the Expansion Option must be conducted in
good faith with the parties using their best efforts to reach an
agreement. All negotiations and a fully executed lease must be completed
prior to the expiration of the Expansion Option term (initial or
extended, as applicable), failure to do so being an absolute bar of
Tenant's rights under the Expansion Option. Time is of the essence with
regard to the Expansion Option
7. Tenant's Right to Audit. Tenant shall have the right to audit Landlord's
-----------------------
Books and Records upon the following conditions:
a. So long as no event of default by Tenant has occurred beyond any
applicable cure periods, nor any other event with which the passage of
time or the giving of notice, or both, would constitute an event of
default by Tenant, under this Lease, Tenant, or its representative,
shall have the right, at Tenant's sole expense, to inspect and copy
Landlord's books and records relating to any Common Area Cost
reconciliation statement (the "Reconciliation Statement") for the
purpose of verifying the information contained therein (the "Tenant
Audit"), provided that:
Page 3 of 6
i. Tenant shall have sent notice, in writing, no later than ninety
(90) days after receipt of the Reconciliation Statement to be
verified, of its desire to conduct the Tenant Audit (the "Audit
Notice");
ii. The Audit Notice identifies with specificity the particular
item(s) in the Reconciliation Statement that the Tenant believes
is/are incorrect; and,
iii. Tenant has paid the Reconciliation Statement in full.
b. Procedures for Review.
i. The Tenant Audit shall be conducted only:
(A) By an independent firm of certified public accountants of
national standing that is not being compensated by Tenant
on a contingency fee basis; and
(B) During regular business hours at the office where Landlord
maintains its books and records.
ii. The Tenant Audit shall commence by no later than thirty (30)
days after Landlord's receipt of the Audit Notice, and shall be
completed within five (5) business days after such commencement.
iii. A copy of the results of the Tenant Audit shall be delivered to
Landlord within thirty (30) days after the completion of the
Tenant Audit.
c. Waiver. If Tenant fails to timely request the Tenant Audit as required
by subparagraph (a) hereof, or the results of the Tenant Audit are not
timely delivered to Landlord as required by subparagraph (b) hereof,
or Tenant fails to follow any of the procedures set forth in
subparagraph (b) hereof, then such Reconciliation Statement shall be
deemed to have been approved and accepted by Tenant as correct.
d. Limitations on Tenant Audit.
i. The Tenant Audit shall be limited strictly to those items in the
Reconciliation Statement that Tenant has specifically identified
in writing as being allegedly incorrect.
ii. Tenant shall not be entitled to inspect any of Landlord's books
and records that apply to any prior Reconciliation Statements or
to any calendar year other than the year covered by the most
recent Common Area Cost Reconciliation Statement delivered to
Tenant unless Tenant was due a credit for an overpayment
(pursuant to subparagraph (f) hereof) in a Tenant Audit of a
Reconciliation Statement, and then solely:
(A) in connection with the same specific item that was the
subject of the previous Tenant Audit in which Tenant was
due a credit; and
(B) for the two (2) years immediately preceding the calendar
year for which Tenant was due a credit in such inspection,
but in no event shall Tenant be entitled to conduct an
inspection for a period earlier than three (3) years prior
to the year in which Landlord delivers the most recent
Reconciliation Statement.
iii. Tenant shall be entitled to no more than one (1) Tenant Audit
per calendar year.
iv. no subtenant has any right to conduct a Tenant Audit and no
assignee shall conduct a Tenant Audit for any period during
which such assignee was not in possession of the Premises.
v. once having conducted a Tenant Audit with respect to a specific
item of a Reconciliation Statement in any year, Tenant shall
have no right to conduct another Tenant Audit of the same
specific item for such year.
vi. if Tenant violates this Lease at any time during the Tenant
Audit, the Tenant Audit shall immediately cease and the matters
originally set forth in the Common Area Cost Reconciliation
Statement shall be deemed to be correct.
e. Confidential Information. Tenant acknowledges and agrees that any
records reviewed under this Clause constitute confidential information
of Landlord, which shall not be disclosed to anyone other than:
i. the auditor performing the Tenant Audit;
ii. the principals of Tenant who receive the results of the Tenant
Audit. Tenant further acknowledges and agrees that the
disclosure of information to any other person, whether by Tenant
or anyone acting on behalf of Tenant, shall constitute a
material
Page 4 of 6
breach of this Lease. Accordingly, Tenant and its auditor shall execute and
deliver to Landlord a confidentiality agreement prepared by Landlord, in
favor of Landlord, prior to any Tenant Audit.
f. Overpayment. In the event that the results of the Tenant Audit
reveal that Tenant has overpaid its obligations and is due a
credit for a preceding period, Landlord shall credit the amount
due against Tenant's next installment(s) of its obligations of
estimated Common Area Costs Payments. Tenant will not have the
right to terminate the Lease on account of an overpayment.
g. Under-billing. In the event that, as a result of the Tenant
Audit, it is ascertained that Tenant has been under-billed for a
preceding period, Tenant shall pay the amount of such
under-billing to Landlord with the next installment obligation of
estimated Common Area Costs Payments.
h. Costs of Tenant Audit. Tenant shall pay Landlord, on demand and
as Additional Rent, Landlord's invoice for:
i. the photocopying of documents;
ii. the retrieval of documents from Landlord's storage archives;
iii. the time spent by Landlord's employees in supervising,
coordinating, and cooperating with the Tenant Audit;
iii. any other expenses of Landlord incidental to the Tenant
Audit: and,
iv. in the event the Tenant Audit reflects that Tenant has been
overcharged by Landlord by an amount greater than five
percent (5%) of the total charge, Landlord shall reimburse
Tenant for the reasonable cost of the Tenant Audit.
[END OF DOCUMENT; SIGNATURE PAGE FOLLOWS.]
Page 5 of 6
IN WITNESS WHEREOF, the parties have executed this Addendum causing their
respective seals to be affixed hereto.
EXECUTED by Tenant on ___________________, 2001, and by Landlord on October
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4, 2001, to be effective upon full execution by Landlord and Tenant.
-
LANDLORD:
XXXXXX-XXXXXXX DEVELOPMENT XXX, LLC
By: Parker Lincoln Developers, Inc.,
its Managing Agent
ATTEST:
/s/ Xxxxxx X. Poor By:/s/ Xxxxx X. Xxxxx, CEO (SEAL)
--------------------------- -----------------------------
Asst. Secretary Vice President
(CORPORATE SEAL)
TENANT:
LIPOMED, INC.,
a Delaware corporation
ATTEST:
/s/ Xxxxx Xxxxx By: /s/ Xxxxxxx X. Xxxxxx (SEAL)
--------------------------- -----------------------------
Xxxxx Xxxxx Secretary Chairman
(CORPORATE SEAL) Name: Xxxxxxx X. Xxxxxx
--------------------------
Type or Print
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