TABLE OF CONTENTS

Exhibit 10.1

BRIER CREEK OFFICE PARK

WAKE COUNTY, NORTH CAROLINA

LEASE BETWEEN

BRIER CREEK CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP

Landlord,

AND

INSPIRE PHARMACEUTICALS, INC.,

Tenant

DATED JUNE 28, 2010

--------------------------------------------------------------------------------

TABLE OF CONTENTS

TABLE OF CONTENTS

 

          Page

1.

   Principal Terms    1

2.

   Premises    4

3.

   Term    5

4.

   Rent    5

5.

   Operating Expense Payments    6

6.

   Use    7

7.

   Assignment, Mortgaging and Subletting    9

8.

   Repairs    9

9.

   Access    10

10.

   Common Facilities/Landlord’s Maintenance    10

11.

   Utilities and Services    11

12.

   Alterations    13

13.

   Insurance    14

14.

   Non-Liability and Indemnification    15

15.

   Casualty Damage    15

16.

   Eminent Domain    16

17.

   Events of Default    16

18.

   Landlord’s Remedies    17

19.

   Landlord’s Defaults    18

20.

   Subordination and Attornment    18

21.

   Surrender    18

22.

   Holding Over    19

23.

   Quiet Enjoyment    19

24.

   Security Deposit    19

 

i

--------------------------------------------------------------------------------

TABLE OF CONTENTS

25.

   Rules and Regulations    19

26.

   Guaranty    20

27.

   Miscellaneous    20

28.

   Exhibits    23    Exhibit A - Description of Premises    A-1    Exhibit B -
Rules and Regulations    B-1    Exhibit C - Work Letter Agreement    C-1   
Exhibit D - Operating Expenses    D-1    Exhibit E - Basic Rent    E-1   
Exhibit F – Intentionally Deleted    F-1    Exhibit G - Other Terms    G-1   
Exhibit H - Description of the Land    H-1    Exhibit I – Commencement Date
Stipulation    I-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

LEASE AGREEMENT

THIS LEASE AGREEMENT is made and entered into as of this 28th day of June, 2010
(the “Effective Date”) by and between BRIER CREEK CORPORATE CENTER ASSOCIATES
LIMITED PARTNERSHIP, a North Carolina limited partnership (“Landlord”), and
INSPIRE PHARMACEUTICALS, INC., a Delaware corporation (“Tenant”).

W I T N E S S E T H :

1. Principal Terms. The following terms shall have the meanings set forth below
for all purposes in this Lease:

(a) Additional Rent means all sums of money whatsoever, including an increase in
Operating Expenses above the Base Factor, other than Basic Rent, due and payable
by Tenant to Landlord under this Lease.

(b) Base Factor means the actual annual Operating Expenses for the Building
during calendar year 2012, and which is included in Basic Rent.

(c) Basic Rent means that amount set forth on Exhibit E attached hereto.

(d) Building means the building improvements commonly known as “Brier Creek
Office #6” located or to be located upon the Land. The Building contains (or,
once constructed, will contain) approximately 121,388 Rentable Square Feet.

(e) Building Standard means the materials and work which Landlord, in its sole
discretion, purchases or obtains, from time to time and at any time, from its
suppliers or contractors for general use in finishing premises in the Building
for individual tenants.

(f) Business Days means all days other than Saturdays, Sundays and days
proclaimed as legal holidays by the State of North Carolina, the City of Raleigh
or the Federal Government, provided that upon such holidays, professional
businesses, such as law firms or accounting firms, are not generally open for
business.

(g) Business Hours means the hours from 6:30 a.m. to 6:30 p.m., on Business
Days, and from 8:00 a.m. to 1:00 p.m. on Saturdays and Sundays, exclusive of
(i) New Year’s Day, (ii) Memorial Day, (iii) Independence Day, (iv) Labor Day,
(v) Thanksgiving Day, and (vi) Christmas Day.

(h) Commencement Date shall mean January 1, 2011 provided that Landlord has
delivered the Premises to Tenant “Ready for Occupancy” as defined Paragraph
3(b); provided, however, if Tenant shall first occupy any part of the Premises
for any purpose other than in connection with Tenant’s Work as described on
Exhibit C annexed hereto or for installation of furniture fixtures and equipment
in accordance with Section 3(b), the Commencement Date, for all purposes
hereunder, shall be deemed to be the date of such occupancy by Tenant. In the
event that the Premises are not Ready for Occupancy on January 1, 2011, the
Commencement Date and the Rent Commencement Date and all other dates that may be
affected by their change shall be revised to conform to Landlord’s delivery of
the Premises to Tenant in accordance with this Lease.

(i) Development means that certain commercial development known as “Brier Creek
Office Park,” which Development includes the Land.

(j) Expiration Date means December 31, 2017.

 

1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(k) Hazardous Substance means any substance which is toxic, ignitable, reactive,
or corrosive and which is regulated by any local government, the state of North
Carolina, or the United States Government, and includes any and all materials or
substances which are defined as “hazardous waste,” “extremely hazardous waste,”
or a “hazardous substance” pursuant to state, federal, or local governmental
law, including but not limited to asbestos, polychlorobiphenyls (“PCB’s”) and
petroleum.

(l) Insurance Requirements means all requirements of any insurance policy
covering or applicable to all or any part of the Land, the Building or the
Premises or the use thereof, all requirements of the issuer of any such policy
and all orders, rules, regulations, recommendations and other requirements of
the local board of fire underwriters or any other body exercising the same or
similar functions and having jurisdiction or cognizance of all or any part of
the Land, the Building or the Premises.

(m) Land means that certain parcel of land within the Development which is
described on Exhibit H attached hereto and incorporated herein by reference.

(n) Landlord means Brier Creek Corporate Center Associates Limited Partnership.

(o) Landlord’s Notice Address means c/o American Asset Corporation, 3700 Arco
Corporate Drive, Suite 350, Charlotte, North Carolina 28273, or such other
address as Landlord shall give in accordance with Paragraph 27(k).

(p) Landlord’s Work shall have the definition for such term set forth in the
Work Letter Agreement.

(q) Latent Defects means any defects in Landlord’s Work that were not known or
reasonably discoverable by Tenant by observation or inspection within 60 days
after the Commencement Date.

(r) Legal Requirements means all laws, statutes and ordinances (including
building codes and zoning regulations and ordinances) and the orders, rules,
regulations, directives and requirements of all federal, state, county and city
departments, bureaus, boards, agencies, offices, commissions and other
subdivisions thereof, or of any official thereof, or of any other governmental,
public or quasi-public authority, whether now or hereafter in force, which may
be applicable to the Land, the Building or the Premises, or any part thereof,
and all requirements, obligations and conditions of all instruments of record
affecting the Land and the Building.

(s) Operating Expenses means all expenses relating to the Building and Public
Areas, and all expenses and costs (but not specific costs which are allocated or
separately billed to and paid by specific tenants) of every kind and nature
which Landlord shall pay or become obligated to pay because of or in connection
with owning, operating, managing, painting, repairing, insuring, cleaning,
maintaining, decorating, securing, and replacing components or systems in the
Building and Public Areas, computed on an accrual basis and in accordance with
generally accepted accounting principles consistently applied, including, but
not limited to, all Taxes and the items enumerated in Exhibit D annexed hereto;
provided, however, notwithstanding anything herein to the contrary or in Exhibit
D, the following shall be excluded from Operating Expenses: (i) depreciation or
amortization (except as otherwise provided above), (ii) debt service or interest
(paid or accrued) or financing charges associated with the Building,
(iii) leasing commissions, brokerage fees, or special tenant inducements,
(iv) repairs to the Premises and any demised premises where the occurrence
causing the damage or loss necessitating repair is reimbursed by insurance
carried by Landlord, (v) costs incurred by Landlord for Tenant’s alterations,
(vi) the cost of capital improvements other than those that result in a
reduction to Operating Expenses, (vii) costs of correcting building code
violations which violations were in existence on the Commencement Date,
(viii) repairs and replacements for which and to the extent that Landlord has
been reimbursed by insurance and/or paid pursuant to warranties,
(ix) advertising, marketing and promotional expenses, (x) costs representing
amounts paid to an affiliate of

 

2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Landlord for services or materials which are in excess of the amounts which
would have been paid in the absence of such relationship, (xi) reserves for
anticipated future expenses, (xii) accounting services rendered for the benefit
of Landlord; (xiii) any costs or expenses incurred by Landlord in bringing the
Premises or Building, or any portion thereof, into compliance with any
applicable federal, state or local statutes, codes, ordinances or rules and
(ix) costs related to remediation or clean up of hazardous materials.

(t) Partnership Tenant means a partnership of two (2) or more persons or
entities, individually, or as joint ventures or as co-partners of a partnership.

(u) Premises means approximately 42,854 rentable square feet rentable square
feet on the 1st, 4th and 5th floors of the Building, said Premises being more
particularly depicted on Exhibit A attached (the parties hereto agree that
Exhibit A is used solely to depict the general Premises and the actual floor
plan for construction purposes shall be mutually agreed upon by Landlord and
Tenant pursuant to Exhibit C hereof), subject, however, to the right to
re-measure per BOMA standards as set forth in Paragraph 2.

(v) Public Areas means the sidewalks, driveways, public entrances, passageways,
doors, doorways, corridors, elevators, stairs, toilets, parking areas, parking
decks, entrance drives and other public portions of the Building and the Land.

(w) Ready for Occupancy has the definition ascribed to it in Paragraph 3(b)
hereof.

(x) Rent means Basic Rent and Additional Rent.

(y) Rent Commencement Date means the date which is 8 months after the
Commencement Date.

(z) Rentable Square Feet of the Premises means 42,854 rentable square feet,
subject to the terms of Paragraph 2 hereof.

(aa) Rules and Regulations means those attached to this Lease as Exhibit B and
such reasonable changes therein as Landlord hereafter may make and communicate
in writing to Tenant.

(bb) Security Deposit means the sum of $142,847.00, to be held and used in
accordance with Paragraph 24 hereof.

(cc) Taxes means all taxes, assessments, and governmental charges, whether or
not directly paid by Landlord, whether federal, state, county, or municipal and
whether assessed by taxing district or authorities presently taxing the Building
and the Land or by others subsequently created or otherwise, and any other taxes
and assessments attributable to the Land and the Building or its operation,
excluding, however, federal and state taxes on income, death taxes, franchise
taxes, and any taxes imposed or measured on or by the income of Landlord from
the operation of the Building or imposed on Landlord’s profit in connection with
any change of ownership of the Building; provided, however, that if at any time
during the Term the present method of taxation or assessment shall be so changed
that the whole or any part of the taxes, assessments, levies, impositions, or
charges so levied, assessed, or imposed on real estate and the improvements
thereof shall be discontinued and as a substitute therefor, or in lieu of or in
addition thereto, taxes, assessments, levies, impositions, or charges shall be
levied, assessed and/or imposed wholly or partially as a capital levy or
otherwise on the rents received from the Building, such substitute or additional
taxes, assessments, levies, impositions, or charges, to the extent so levied,
assessed, or imposed, shall be deemed to be included within Taxes.

(dd) Tenant means Inspire Pharmaceuticals, Inc.

 

3

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(ee) Tenant’s Notice Address means 4222 Emperor Boulevard, Suite 200, Durham, NC
27703 prior to the Commencement Date and the address of the Premises thereafter.

(ff) Tenant’s Operating Payment means an amount equal to Tenant’s Proportionate
Share of the amount by which Operating Expenses for a calendar year exceeds the
Base Factor.

(gg) Tenant’s Plans means the plans and specifications for the build-out or
upfit of the Premises as approved by Landlord and Tenant in accordance with and
as contemplated in the Work Letter Agreement.

(hh) Tenant’s Proportionate Share means, as of the date hereof, 33.6%.,
provided, however, such percentage may be adjusted in the event the Building is
re-measured in accordance with Paragraph 2 hereof.

(ii) Tenant’s Work shall have the definition for such term set forth in the Work
Letter Agreement attached hereto as Exhibit C.

(jj) Term means that certain term of this Lease, commencing and expiring as set
forth in Paragraph 3(a) hereof, subject to Tenant’s renewal rights as set forth
on Exhibit G.

(kk) Unavoidable Delays means any delays caused by other tenants, war, civil
commotion, riot, acts of God, strikes or other labor disputes, governmental
restrictions, regulations or actions, fire or other casualty, shortage or
unavailability of labor or materials obtainable on reasonable terms, adverse
weather conditions or unusual inclement weather or any other factors beyond the
reasonable control of Landlord, whether similar or not to any of those listed
above.

(ll) Intentionally Deleted.

2. Premises

Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the
Premises, together with the right to the use of and benefit from, in common with
others, the Public Areas. Notwithstanding the provisions of the immediately
preceding sentence, (i) Tenant and Tenant’s guests and invitees shall not, at
any given time, be entitled to use more than four (4) parking spaces within the
Development for each 1,000 Rentable Square Feet within the Premises, and
(ii) Landlord shall have the right during the Term to reserve parking spaces on
the Land for the exclusive use of other tenants in the Building, provided the
reservation of such spaces for the exclusive use of other tenants in the
Building does not have the effect of denying Tenant the non-exclusive use of 4
parking spaces for each 1,000 square feet of Rentable Square Feet within the
Premises. Tenant acknowledges that parking for the Building at the rate of four
(4) parking spaces for each 1,000 Rentable Square Feet within the Premises shall
be made available beginning on the Commencement Date through the expiration of
the Lease as follows: (i) within the Building’s parking lot, 2 designated spaces
expressly reserved for Tenant and 6 designated spaces expressly reserved for
visitors to the Building and 3.6 parking spaces for each 1,000 square feet of
Rentable Square Feet in the Premises and (ii) the balance of parking spaces
shall be through the entire Brier Creek Urban Park through cross-parking
easements and interconnectivity with the adjacent buildings and land in the
park.

Landlord and Tenant acknowledge that, at any time within ninety (90) days of the
Commencement Date, Landlord or Tenant shall be entitled to cause the Rentable
Square Feet within the Premises to be measured by BOMA. In the event that
Landlord or Tenant exercises such option, and in the event that such
measurement, performed in accordance with BOMA, reveals, in Landlord’s and
Tenant’s reasonable discretion, that the number of Rentable Square Feet within
the Premises differs from 42,854 rentable square feet by (a) one percent (1%) or
more, then the amount of Basic Rent payable hereunder, Tenant’s Proportionate
Share hereunder, and all other amounts payable and computations made hereunder
based on the number of Rentable Square Feet in the Premises shall be adjusted
(upward or downward, as the case may be) to reflect such measurement and
(b) being

 

4

--------------------------------------------------------------------------------

TABLE OF CONTENTS

reduced by five percent (5%) or more, then the cost of such measurement shall be
paid by Landlord, in all other cases by Tenant.

3. Term

(a) The Term of this Lease shall commence on the Commencement Date, and shall
end on the Expiration Date, unless the Term shall sooner terminate pursuant to
any of the terms of this Lease or pursuant to law or shall be extended pursuant
to the renewal terms set forth on Exhibit G. Within ten (10) days following the
Commencement Date, Tenant shall execute and deliver to Landlord duplicate
originals of a stipulation in the form attached to this Lease as Exhibit I (with
the blanks properly completed, to the extent possible). Subject to Landlord’s
reasonable approval of the information inserted by Tenant in the blanks,
Landlord shall execute the duplicate originals of the stipulation and shall
promptly return one (1) fully executed original to Tenant.

(b) Tenant shall be granted access to the Premises when the Premises are Ready
for Occupancy in order to install Tenant’s furniture, fixtures and equipment.
“Ready for Occupancy” shall mean that (i) Landlord’s Work is sufficiently
complete so as to allow Tenant to occupy the Premises for the use and purposes
intended without unreasonable disturbance or interruption as reasonably
determined by the Landlord and Tenant and (ii) a certificate of occupancy (which
may be temporary in nature) or its equivalent has been issued for the Premises.
In the event Landlord is unable to deliver possession of the Premises to Tenant
on or before January 1, 2011, then Tenant shall be entitled to one (1) day of
free Basic Rent for each calendar day occurring between January 2, 2011 and the
date Landlord delivers possession.

4. Rent

(a) Tenant shall pay to Landlord without notice or demand or set-off, in lawful
money of the United States of America at the office of Landlord or at such other
place as Landlord may designate, Rent as follows:

(i) Basic Rent, which shall be payable in advance in monthly installments
beginning on the Rent Commencement Date and continuing on the first day of each
calendar month thereafter during the Term; and

(ii) Additional Rent, which shall be payable within the time limitations
elsewhere provided in this Lease, or if no such time limit is elsewhere
provided, within fifteen (15) days after receipt of notice from Landlord as to
the amount due and payable, beginning on the Commencement Date.

The Basic Rent together with Additional Rent shall constitute the “contract
rent”, as such term is used in N.C.G.S. § 42-34(b).

(b) Notwithstanding and not to the exclusion of any other remedies for Tenant’s
default, if any installment of Basic Rent or Additional Rent payable under
Paragraph 5(c) remains unpaid for a period of five (5) days after such
installment shall have become due, or if any payment of Additional Rent (other
than that payable under Paragraph 5(c)) remains unpaid for a period of fifteen
(15) days after such installment or payment shall have become due, Tenant shall
pay interest thereon at a rate equal to the lesser of 2% per annum above the
prime rate as announced by Bank of America, N.A., or its successors, or the
maximum contractual rate permitted by applicable North Carolina law, from the
date on which such installment or payment is due to the date of payment thereof.
Such interest shall be deemed Additional Rent. If the Rent Commencement Date
shall occur on a day other than the first day of a calendar month, the monthly
installment of Basic Rent and any monthly installment of Additional Rent payable
under Paragraph 5(c) for the unexpired portion of the month in which the Rent
Commencement Date occurs shall be prorated on the basis of the actual number of
calendar days in such month.

 

5

--------------------------------------------------------------------------------

TABLE OF CONTENTS

5. Operating Expense Payments

(a) Subject to Paragraph 5(e), if Operating Expenses payable in any calendar
year falling wholly or partially within the Term shall be in such amount as
shall constitute an increase above the Base Factor, Tenant shall pay as
Additional Rent for such calendar year Tenant’s Operating Payment. Tenant
acknowledges and agrees that upon verification of the Base Factor, Tenant shall
pay with the next scheduled payment of Basic Rent, the retroactive amounts owed
to Landlord for 2013 based on the actual Base Factor.

(b) Notwithstanding any other provision contained herein to the contrary, if the
Building is not fully occupied during any calendar year or if the entire
Building is not provided with complete building standard services during any
calendar year, then for purposes of the computation of Tenant’s Operating
Payment, each component of Operating Expenses which are “variable”, may be
computed for such year as though 100% of the entire Building had been fully
occupied and provided with complete building standard services during such year
and the adjusted amount of such “variable” Operating Expenses shall be used in
determining Operating Expenses for each calendar year, including the calendar
year 2012. Such adjustment shall not, however, result in Landlord receiving from
Tenant and other tenants in connection with such “variable” Operating Expenses
more than 100% of the cost of such “variable” Operating Expenses. Operating
Expenses which are “variable” shall include those expenses that vary based upon
occupancy levels and shall not include such expenses as are fixed, including,
but not limited to, expenses related to the common areas including electrical
power, landscaping, and janitorial expenses, management fees, taxes and
insurance, on-site labor and maintenance contracts.

(c) Landlord may, with respect to any calendar year, furnish to Tenant an
estimate of Tenant’s Operating Payment for such year, and upon receipt of such
estimate, Tenant will thereafter pay to Landlord on the first (1st) day of each
month during such year an amount equal to one-twelfth of such estimate. Landlord
may revise such estimate from time to time twice per year. Until such estimate
has been furnished to Tenant relative to any calendar year, Tenant shall pay to
Landlord, on the first day of each month during such year, an amount equal to
one-twelfth of the Tenant’s Operating Payment for the previous calendar year. On
or before April 30 of each calendar year, Landlord shall furnish Tenant with a
reconciliation statement, with reasonable supporting documentation (i.e., a
worksheet that lists all relevant Operating Expenses), setting forth the
Tenant’s Operating Payment for such prior calendar year and the amounts paid to
date by Tenant on account thereof. Any additional amount payable as Tenant’s
Operating Payment as set forth on such statement shall be payable within thirty
(30) days after Tenant’s receipt of such statement, and the amount of any
overpayment by Tenant shall be applied to the next month’s installment of
Tenant’s Operating Payment then due, with the residual, if any, refunded by
Landlord to Tenant within thirty (30) days after delivery of such statement.

(d) Any Additional Rent payable by Tenant pursuant to this Paragraph 5 shall be
collectible by Landlord in the same manner as Basic Rent.

(e) If the Commencement Date or the Expiration Date shall occur on a date other
than January 1 or December 31, respectively, Tenant’s Operating Payment for the
calendar year in which the Commencement Date or Expiration Date shall occur, as
the case may be, shall be prorated based upon the actual number of days in the
particular calendar year. In no event shall Basic Rent ever be reduced by
operation of this Paragraph 5. The rights and obligations of Landlord and Tenant
under the provisions of this Paragraph 5 with respect to any Additional Rent
shall survive the Expiration Date or any sooner termination of the Term.

(f) Landlord has advised Tenant that presently Progress Energy (the “Electric
Service Provider”) is the utility company selected by Landlord to provide
electricity service for the Building. Notwithstanding the foregoing, if
permitted by applicable law, Landlord shall have the right at any time and from
time to time during the Term to either contract for service from a different
company or companies providing electricity service (each such company being
hereinafter referred to as an “Alternative Service Provider”) or continue to
contract for service from the Electric Service Provider; provided, however,
before contracting with an Alternative Service Provider, Landlord shall use good
faith efforts to ensure that such provider’s rates shall be customary and in
line

 

6

--------------------------------------------------------------------------------

TABLE OF CONTENTS

with rates for the Raleigh/Durham market area. In the event that Landlord shall
contract with an Alternate Service Provider during the Term, Landlord shall
reimburse Tenant for any losses, costs or charges incurred by Tenant directly
related to any interruption in service arising from such change. Tenant shall
cooperate with Landlord, the Electric Service Provider, and any Alternative
Service Provider at all times and, as reasonably necessary, shall allow
Landlord, Electric Service Provider, and any Alternative Service Provider
reasonable access to the Building’s electric lines, feeders, risers, wiring, and
any other machinery within the Premises. Except as otherwise provided for
herein, unless due to Landlord, its agents or employee’s negligence or willful
misconduct, Landlord shall in no way be liable or responsible for any loss,
damage, or expense that Tenant may sustain or incur by reason of any change,
failure, interference, disruption, or defect in the supply or character of the
electric energy furnished to the Premises, or if the quantity or character of
the electric energy supplied by the Electric Service Provider or any Alternative
Service Provider is no longer available or suitable for Tenant’s requirements,
and no such change, failure, defect, unavailability, or unsuitability shall
constitute an actual or constructive eviction, in whole or in part, or entitle
Tenant to any abatement or diminution of rent, or relieve Tenant from any of its
obligations under the Lease.

(g) Tenant will be responsible for ad valorem taxes on its personal property and
on the value of the leasehold improvements in the Premises to the extent the
same exceed Building Standard.

(h) Notwithstanding anything in this Lease to the contrary, for each calendar
year after the Controllable Base Year which is 2012, Tenant’s Controllable
Operating Expenses shall not exceed the Controllable Cap. The “Controllable Base
Year” shall mean the total, actual Controllable Operating Expenses for the
calendar year of 2012. The “Controllable Cap” shall mean: (i) with respect to
the calendar year 2013, the amount obtained by multiplying the amount of
Controllable Operating Expenses for the Controllable Base Year by 1.05; and
(ii) relative to each calendar year subsequent thereto, the amount obtained by
multiplying the higher of the Controllable Cap for the previous calendar year or
Tenant’s actual proportionate share for the previous calendar year by 1.05, on a
cumulative basis. “Controllable Operating Expenses” shall be those expenses
reasonably determined by Landlord to be within its control with respect to price
and not set or determined by a governmental agency or other third party.

(i) Landlord shall maintain complete and accurate records of all expenses
incurred in the operation of the Building and the furnishing of services to
tenants, including those which Landlord intends to include in Operating
Expenses. Landlord’s records of its Operating Expenses shall be kept using
accounting practices consistently maintained on a year-to-year basis, in
accordance with good accounting practices, consistently applied and shall be
made available to Tenant once per year at any reasonable time, within one year
(1) year after Landlord’s reconciliation statement for any given year, for
inspection and audit at Landlord’s offices at Tenant’s expense; provided that
Tenant gives Landlord three (3) days prior telephonic or written notice and that
the inspection rights are performed by an employee or CPA on a non-contingency
basis and the results of which are kept strictly confidential. If the audit
reveals that the charges to Tenant for a particular calendar year was overstated
by more than five percent (5%), the reasonable costs of the audit shall be borne
by Landlord.

6. Use

(a) Tenant covenants that throughout the Term it will use the Premises for
general, clerical, administrative, and executive offices consistent with a first
class office building in the area in which the Building is located, for research
and the development and commercializing of pharmaceutical products and for no
other purpose.

(b) Subject to Landlord’s Warranties set forth on Exhibit G, Tenant, at its sole
cost and expense, shall comply with all Legal Requirements and all Insurance
Requirements relating to or affecting Tenant’s use of the Premises. Without
limiting the generality of the foregoing, in the event the Premises must be
modified or any other action relating to the Premises must be undertaken in the
future to comply with any regulation concerning

 

7

--------------------------------------------------------------------------------

TABLE OF CONTENTS

the Americans With Disabilities Act or any similar federal, state or local
statute, law, or ordinance taking effect subsequent to the Commencement Date,
the responsibility for such modification or action (including the payment of all
costs incurred in connection therewith) shall belong to Tenant provided that
such modification or action is solely due to Tenant’s unique use or activity in
the Premises. If the Public Areas must be modified or any other action relating
to the Public Areas must be undertaken in the future to comply with the
Americans With Disabilities Act or any similar federal, state or local statute,
law, or ordinance and if such modification or action is required because of
(i) any special or unique use or activity in the Premises or (ii) the
performance of any alterations within the Premises, the responsibility for such
modification or action (including the payment of all costs incurred in
connection therewith) shall belong to Tenant. Except as provided in the
immediately preceding sentence, in the event the Public Areas must be modified
or any other action relating to the Public Areas must be undertaken in the
future to comply with the Americans With Disabilities Act or any similar
federal, state or local statute, law, or ordinance, the responsibility for such
modification or action (including the payment of all costs incurred in
connection therewith, subject to the terms and provisions of this Lease relating
to the pass-through of Operating Expenses) shall belong to Landlord.

(c) If anything is done, omitted to be done, or suffered to be done by Tenant,
or kept or suffered by Tenant to be kept in, upon or about the Premises that
shall cause the rate of fire or other insurance on the Premises or the Building
procured by Landlord to be increased, Tenant shall be provided written notice by
Landlord of such rate increase (as well as the schedule referred to herein) and
either (i) discontinue those activities which account for the increased rates or
(ii) continue such activities and pay the entire amount of such increase
promptly upon Landlord’s demand therefor as Additional Rent. In determining
whether increased premiums are a result of something done, omitted or suffered
to be done or kept or suffered to be kept in, upon or about the Premises solely
by Tenant, a schedule issued by the organization computing the insurance rate
for the Building showing the various components of such rate shall be conclusive
evidence of the several items and charges which make up such rate.

(d) Tenant shall not place a load upon any floor that exceeds the floor load per
square foot that such floor was designed to carry or violates any Legal
Requirement; provided that neither the file room nor any other area approved by
Landlord shall be deemed in violation of this subsection (d). All mechanical
equipment and other applicable property of Tenant in the Premises shall be
placed and maintained by Tenant, at Tenant’s sole expense, in such manner as
shall be sufficient, in Landlord’s reasonable judgment, to prevent vibration,
noise, annoyance or inconvenience to Landlord and the other tenants.

(e) Tenant shall not cause or permit any Hazardous Substance to be used, stored,
generated or disposed of on or in the Premises, the Building, or the Land in
violation of any applicable law by Tenant or Tenant’s agents, employees,
contractors or invitees. If Hazardous Substances are used, stored, generated or
disposed of by Tenant on or in the Premises, the Building or the Land, or if the
Premises, the Building, or the Land become contaminated in any manner for which
Tenant is legally liable, Tenant shall indemnify and hold harmless Landlord from
any and all claims, damages, fines, judgments, penalties, costs, liabilities or
losses (including, without limitation, a decrease in value of the Building or
the Land, damages due to loss or restriction of rentable or usable space, or any
damages due to adverse impact on marketing of the Building, and any and all sums
paid for settlement of claims, reasonable attorneys’ fees, consultant and expert
fees) arising during or after the Term and arising as a result of such
contamination by Tenant. This indemnification includes, without limitation, any
and all costs incurred due to any investigation of the site or any cleanup,
removal or restoration mandated by a federal, state or local agency or political
subdivision, and shall expressly survive expiration or termination of this
Lease. Without limitation of the foregoing, if Tenant causes or permits the
presence of any Hazardous Substance on the Premises, the Building or the Land in
violation of any applicable law, and same results in contamination, Tenant shall
promptly, at its sole expense, take any and all necessary actions to return the
Premises to the condition existing prior to the presence of any such Hazardous
Substance on the Premises, the Building or the Land. Tenant shall first obtain
Landlord’s approval, however, for any such remedial action.

 

8

--------------------------------------------------------------------------------

TABLE OF CONTENTS

7. Assignment, Mortgaging and Subletting

(a) Except as otherwise set forth in this Section 7, Tenant shall not (i) wholly
or partially assign or otherwise transfer this Lease or any rights herein
granted, (ii) sublet all or part of the Premises or allow the same to be used or
occupied by others or in violation of Paragraph 6 hereof, or (iii) mortgage,
pledge, or encumber this Lease or all or any part of the Premises in any manner
by reason of any act or omission on the part of Tenant, without the prior
written consent of Landlord in each instance, which consent shall not be
unreasonably withheld, delayed or conditioned. If Tenant or any assignee of
Tenant is a corporation or partnership, the terms “assign” and “assignment”
shall, for purposes of this Lease, be deemed to include the aggregate transfer
of effective control of the applicable entity and/or a majority of the stock or
partnership interest, as the case may be, of Tenant or such assignee of Tenant.
Tenant shall reimburse Landlord an administrative fee of $500.00 in connection
with any request by Tenant for Landlord’s consent to an assignment, sublease or
any other transfer or encumbrance as provided above in this Paragraph 7(a).
Notwithstanding the foregoing, Tenant may assign or sublet all or any portion of
the Premises without advance notice to Landlord (i) to an entity controlled by
Tenant or which controls Tenant, (ii) in connection with a merger or
consolidation or (iii) pursuant to a sale of all or substantially all of the
business and assets or stock of Tenant and any such assignment or subletting
shall not be subject to the provisions of Paragraph 7(d) below.

(b) If this Lease is assigned, whether or not in violation of the terms of this
Lease, Landlord may collect rent from the assignee with written notice. If the
Premises or any part thereof be sublet or be used or occupied by any person
other than Tenant, whether or not in violation of this Lease, Landlord may,
after default by Tenant and expiration of Tenant’s time to cure such default, if
any, collect rent from the subtenant or occupant. In either event, Landlord may
apply the net amount collected to the Rent herein reserved. The consent by
Landlord to an assignment, transfer, encumbering or subletting pursuant to any
provision of this Lease shall not in any way be considered to relieve Tenant
from obtaining the express prior consent of Landlord to any other or further
assignment, transfer, encumbering or subletting. Neither any assignment of this
Lease nor any subletting, occupancy or use of the Premises or any part thereof
by any person other than Tenant, nor any collection of rent by Landlord from any
person other than Tenant, nor any application of any Rent as provided in this
Paragraph 7 shall, under any circumstances be deemed a waiver of any of the
provisions of Paragraph 7(a) hereof, or relieve, impair, release, or discharge
Tenant of its obligations fully to perform the terms of this Lease on Tenant’s
part to be performed, and Tenant shall remain fully and primarily liable
therefor.

(c) No assignment (whether or not consented to by Landlord) shall be valid
unless, within ten (10) days after the execution thereof, Tenant shall deliver
to Landlord a duplicate original instrument of assignment and assumption in form
and substance reasonably satisfactory to Landlord, duly executed by Tenant and
by the assignee, pursuant to which such assignee shall assume performance of all
terms of this Lease on Tenant’s part to be performed.

(d) Except as otherwise provided for in Paragraph 7(a) above, in the event of
any assignment, sale or other transfer of Tenant’s interest in this Lease or
subletting of the Premises (in whole or in part), whether consented to by
Landlord or not, Tenant shall pay to Landlord one-half of any and all
consideration, money or items of value received by Tenant or payable to Tenant
less any costs incurred by Tenant in connection with such assignment, subletting
or other transaction that is in excess of rental payable by Tenant hereunder
(computed on a per rentable square foot basis).

8. Repairs

Provided Tenant has received written notice from Landlord of the need for
repair, replacement or alteration and reasonable time to effectuate the same,
Tenant shall pay to Landlord, promptly upon demand, all reasonable costs and
expenses incurred by Landlord in connection with all repairs, replacements and
alterations to the Premises and the Building whether such repairs, replacements,
and alterations are interior or exterior, structural, or otherwise, ordinary or
extraordinary, the need for which arises out of (i) the installation, use,
operation, or existence of Tenant’s alterations (other than Landlord’s Work) or
personal property, or the moving

 

9

--------------------------------------------------------------------------------

TABLE OF CONTENTS

of the same in or out of the Building or the Premises by Tenant or any of its
subtenants, or any of such parties’ employees, agents, contractors, licensees or
invitees or (ii) the acts, omissions or negligence of Tenant or any of its
subtenants, or any of such parties’ employees, agents, contractors, licensees or
invitees, but excluding such repairs, replacements or alterations attributable
to Landlord, its agents and employees. Tenant, at its sole cost and expense,
shall promptly replace scratched, damaged or broken doors and glass in and about
the Premises and shall be responsible for all repairs and maintenance of wall
and floor coverings in the Premises, normal wear and tear, acts of Landlord, its
agents and employees and casualty excluded.

9. Access

(a) Except in the event of emergency, Landlord or its representatives or
designees may enter the Premises at all reasonable times, with twenty four hours
notice to Tenant and accompanied by a representative of Tenant, to inspect the
Premises, to enforce any provisions of this Lease, to make or cause to be made
such repairs as Landlord may deem necessary or desirable, to cure any uncured
defaults of Tenant notice and cure periods have expired and pursuant to the
rights granted Landlord under this Lease, to repair any utility lines or systems
servicing other parts of the Building, to rectify any condition in the Premises
adversely affecting other occupants of the Building, or, upon prior reasonable
notice to Tenant, to exhibit the Premises to others during the last nine
(9) months of the Term (as same may be extended from time to time). If Tenant,
its agents or employees shall not elect to be present or shall not permit an
entry into the Premises at any time when such entry shall be permissible, or in
the case of an emergency, Landlord may use a master key (or master code, card or
switch if Tenant’s security system is other than conventional locks and keys),
or, solely in the event of an emergency, forcibly enter the Premises.

(b) Landlord has installed, and shall be entitled to expand, at any time during
the Term, and from time to time, a card access system or other similar access
system (the “Access System”) regulating access to and from the Building or the
Premises or both. Tenant shall be permitted to tie Tenant’s access system
control box and panels (“Access Equipment”) to the existing Access System in
order to program access cards (or other access devices) to the Building and the
Premises (if applicable) for its employees. Landlord shall install, in
connection with Landlord’s Work, at Tenant’s sole cost and expense (subject,
however, to reimbursement from the Upfit Allowance), such connections as are
required to permit Tenant to tie its Access Equipment to the Access System.
Except for a reasonable number of access devices for issuance to guests and
visitors, in no event shall Tenant produce or issue more access devices to the
Building and the Premises (if applicable) than the number of full-time
employees, contractors or agents Tenant has working in the Premises at any time.
Landlord, at Tenant’s sole cost and expense, shall provide Tenant with a
reasonable number of unprogrammed access devices, which Tenant may program for
use by its full-time employees, contractors or agents as provided in the
immediately preceding sentence. Tenant shall obtain additional unprogrammed
access devices only from Landlord, and all access devices obtained by Tenant
during the Term and the Access System control box shall be returned to Landlord
immediately upon the expiration or earlier termination of the Term. Tenant shall
pay to Landlord (as Additional Rent), within thirty (30) days after Tenant
receives an invoice therefor, Ten and No/100 Dollars ($10.00) for each
unprogrammed access device obtained by Tenant during the Term that is not
returned to Landlord immediately upon the expiration or earlier termination of
the Term as provided above in this Paragraph 9. At the expiration or termination
of this Lease, Tenant shall not be required to remove, or to pay for the removal
of, the Access Equipment which if remaining on the Premises at such time shall
become the property of Landlord.

10. Common Facilities/Landlord’s Maintenance

(a) Landlord shall have the right at any time, without the same constituting an
eviction and without incurring liability to Tenant therefor, to change the
arrangement and/or location of the Public Areas, provided such changes do not
materially interfere with or adversely impact Tenant’s access to the Building,
or Tenant’s use of the Premises or materially diminish Tenant’s proportionate
share of parking spaces set forth in Paragraph 2. The Public Areas shall at all
times be maintained by Landlord in good condition comparable to other similar
buildings in the market area and be subject to the exclusive control and
management of Landlord. Tenant shall

 

10

--------------------------------------------------------------------------------

TABLE OF CONTENTS

share pro-rata with other tenants of the Building any reduction in Operating
Expenses attributable to any such change to the arrangement and/or location of
the Public Areas.

(b) Except for the obligations of Tenant as set forth herein, Landlord shall
repair, replace, manage, insure and maintain the Building as follows which shall
in all ways be commensurate with comparable class A buildings in the RTP,
Raleigh area taking into account the location, age quality and fit up of the
Premises:

(i) Landlord shall purchase all standard supplies and materials used and labor
charges incurred, in performing its duties hereunder related to the operation,
maintenance, decoration, repairing, and cleaning of the Building.

(ii) Landlord shall purchase such insurance coverage for the Building as
Landlord shall deem in its discretion desirable, which insurance may include
casualty, rental abatement, and liability insurance no less than full
replacement cost of Building.

(iii) Landlord shall perform all repairs, replacements and general maintenance
to the Building, structural or non-structural, including without limitation the
roof and mechanical, electrical and heating, ventilating and air-conditioning
equipment and/or systems, in a manner consistent with other comparable office
buildings in the market area (provided, however, Tenant shall be responsible for
the maintenance, repair and replacement, such that the Premises remains at all
times in good and tenantable condition, of the non-structural portions of the
Premises, of any alterations, additions, changes or other improvements to the
Premises constructed by Tenant and of any mechanical, electrical, heating,
ventilating, air-conditioning and other systems and equipment which serve the
Premises exclusively).

(iv) Landlord shall provide for the removal of trash, rubbish, garbage, and
other refuse from the Building, as well as removal of ice and snow from the
sidewalks on or adjacent to the Land.

(v) Landlord shall provide janitorial service, including service to areas of the
Building leased to tenants, as more particularly set forth in Paragraph 11
below.

The cost of performance of such obligations of Landlord shall be paid from the
Operating Expenses collected from Tenant and the other tenants of the Building.

11. Utilities and Services

(a) Except as otherwise provided herein, Landlord shall maintain and operate the
heating, ventilating and air-conditioning systems and shall furnish heat and
air-conditioning to the Premises during Business Hours at temperatures customary
and usual for similar office space in the RTP, Raleigh market area, except to
the extent reduced service is required by any governmental body.

(b) If Tenant requests heating, ventilating, or air-conditioning services during
other than Business Hours, Landlord shall make the same available to Tenant in
accordance with such request, provided that Tenant shall pay to Landlord, as
Additional Rent, Landlord’s charges therefor, which must approximate actual
electricity cost plus a reasonable allowance for equipment wear and tear and
overhead and in no event constitute a profit to Landlord.

(c) Notwithstanding the foregoing provisions of this Paragraph 11, Landlord
shall not be responsible if the normal operation of the Building heating,
ventilating and air-conditioning system shall fail to provide conditioned air at
reasonable temperatures, pressures or degrees of humidity or in reasonable
volumes or velocities in any portion of the Premises (i) which shall have an
electrical load in excess of six (6) watts per square foot of usable area of the
Premises for all purposes (including lighting and power), or which shall have a
human occupancy factor in excess of one person per 100 square feet of usable
area of the Premises (i.e., the

 

11

--------------------------------------------------------------------------------

TABLE OF CONTENTS

average electrical load and human occupancy factors for which such system is
designed), or (ii) because of any rearrangement of partitioning or other
improvements, alterations, changes, additions or use of the Premises by Tenant
which directly impact such systems ability to provide such reasonable
temperatures. Tenant shall cooperate fully with Landlord at all times and abide
by all regulations and requirements which Landlord may reasonably prescribe for
the proper functioning and protection of the heating, ventilating, and
air-conditioning system.

(d) Landlord shall provide elevator service during Business Hours with and
without card access and shall have at least one passenger elevator subject to
call at all other times with card access.

(e) Landlord shall provide such janitorial services to the Premises after normal
business hours consistent with those services currently being provided to the
Building, a schedule for which shall be furnished to Tenant upon request.

(f) Landlord shall furnish water to each floor on which the Premises are located
for normal drinking, lavatory, and cleaning purposes.

(g) Landlord shall furnish electrical energy reasonably required, subject to the
provisions herein, in connection with Tenant’s use and occupancy of the Premises
for the operation of such lighting, electrical appliances and equipment as
Tenant shall require in connection with its business operations and Use as
described in Section 6. As part of this subsection (g), Landlord shall provide
such electrical energy as required to accommodate Tenant’s server room, which
shall be located within the Premises as mutually agreed by Landlord and Tenant.
Tenant shall cause the server room to be separately metered and Landlord shall
bill Tenant for the actual electricity cost for the server room on a monthly
basis.

(h) Other than Tenant’s electrical use associated with Tenant’s server room
described in subsection (g) above, Tenant covenants that at no time shall the
use of electrical energy in the Premises exceed six (6) watts per square foot of
usable area (consisting of 5.5.0 watts per square foot for lighting and 0.5
watts per square foot for power (i.e., electric outlets)). Tenant shall not,
without the prior consent of Landlord, (i) make or perform, or permit the making
or performing of, any alteration to wiring installations or other electrical
facilities in or serving the Premises or any additions to the electrical
fixtures other than the initial improvements to the Premises; or (ii) install
and/or use business machines, office equipment, or other appliances in the
Premises which utilize electrical energy other than small business machines
normally used in Tenant’s business operations and consistent with Tenant’s Use
described in Section 6. Should Landlord grant such consent, all additional
risers or other equipment required therefor, including, without limitation,
air-conditioning equipment, unless otherwise required by Landlord, shall be
provided by Landlord and the reasonable cost thereof shall be paid by Tenant
within fifteen (15) days after being billed therefor. Landlord may grant such
consent subject to such terms and conditions as are necessary in the opinion of
the Landlord to ensure that Landlord will be reimbursed by Tenant as applicable
for Landlord’s installation of any relevant alterations, wiring, fixtures,
appliances, or equipment, as well as Landlord’s provision of any additional
electrical service.

(i) Landlord reserves the right to stop, interrupt or reduce the level of
services required of Landlord under this Lease, whenever and for so long as may
be necessary, by reason of accidents, emergencies, introduction of foreign
substances, laws, regulations, controls, or guidelines, strikes, maintenance,
repairs or changes which Landlord is required by this Lease or by law to make or
in good faith deems necessary, or by reason of difficulty in securing proper
supplies of fuel, water, electricity, or labor, or by reason of any other cause
beyond Landlord’s reasonable control. In each instance, Landlord shall exercise
reasonable diligence to eliminate the cause of stoppage and to effect
restoration of service and shall give Tenant reasonable notice, when
practicable, of the commencement and anticipated duration of such stoppage,
interruption or reduction in service. Tenant shall not be entitled to any
diminution or abatement of Rent or other compensation by reason of any such
stoppage, interruption or reduction unless resulting from Landlord’s wrongful
acts or gross negligence.

 

12

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Notwithstanding the foregoing, in the event Tenant’s ability to conduct its
business operations is materially impacted by a service interruption and
Landlord has failed to commence repair within three (3) days of such
interruption, Tenant shall be entitled to undertake necessary repairs, the cost
of which Landlord shall pay to Tenant upon demand therefor.

12. Alterations.

(a) Tenant shall make no improvements, alterations, changes, or additions to the
Premises, other than those which are cosmetic in nature and the costs of which
do not exceed $25,000.00 for which Landlord consent is expressly not required,
without the prior written consent of Landlord, not to be unreasonably withheld,
delayed or conditioned. As to any such permitted, cosmetic improvements,
alterations, changes, or additions, Tenant shall provide Landlord with notice of
such alterations along with a copy of plans related thereto. For any alterations
for which Landlord consent is required hereunder, Tenant shall provide Landlord
working drawings for Landlord’s review and approval thereof. Landlord shall
provide Tenant with any comments to such working drawings within fifteen
(15) days of Landlord’s receipt of same, provided such deadline is clearly noted
on Tenant’s requesting cover letter. Tenant shall reimburse Landlord for all
reasonable expenses incurred by Landlord in connection with approving and
inspecting said improvements, alterations, changes or additions, including
Landlord’s reasonable and actual legal fees, if any, and an administrative fee
of $500.00.

(b) All alterations, additions or improvements (excluding, however, any trade
fixtures of Tenant) made by, for, or at the direction of Tenant shall, when
made, become the property of Landlord, at Landlord’s sole election, and shall,
unless otherwise specified by Landlord at the time Landlord gives its consent
thereto or within thirty (30) days of notice of any alteration not requiring
Landlord’s consent, remain upon the Premises at the expiration or earlier
termination of this Lease.

(c) Tenant shall cause no damage to the Premises and the Building from removal
of Tenant’s personal property from the Building. Any such damage or injury to
the Premises and the Building shall be promptly repaired by Tenant at its sole
cost and expense. Any personal property of Tenant not removed by Tenant prior to
the Expiration Date or date of sooner termination of this Lease shall, at
Landlord’s option, either become the property of Landlord or shall be disposed
of or stored by Landlord at Tenant’s risk and expense.

(d) No approval of plans or specifications by Landlord or consent by Landlord
allowing Tenant to make improvements, alterations, changes or additions to the
Premises shall in any way be deemed to be an agreement by Landlord that the
contemplated work complies with any Legal Requirements or Insurance
Requirements, or the certificate of occupancy for the Building, or deemed to be
a waiver by Landlord of any of the provisions of this Lease. Tenant shall
construct all approved improvements, alterations, changes or additions in a good
and workmanlike manner, free of all defects and in compliance with all Legal
Requirements and Insurance Requirements. Tenant is not acting as an agent for
Landlord and neither Landlord, Landlord’s agents, nor the holder of any mortgage
on the Land and Building shall be liable for any labor or materials furnished or
to be furnished to Tenant upon credit, and no mechanic’s or materialman’s or
other liens for such labor or materials shall attach to or affect any estate or
interest of Landlord or any other such party in and to the Premises, the Land
and the Building. Tenant shall not permit any mechanic’s or materialmen’s lien
to attach, be placed or filed against the Premises, the Building or the Land
arising out of such work prosecuted under the Work Letter Agreement or this
Paragraph 12; and if such a lien is filed, Tenant shall satisfy, bond off, or
otherwise cause such lien to be cancelled or discharged immediately. Tenant
agrees that any damage to the Premises caused by Tenant’s Work shall be repaired
at Tenant’s sole cost and expense. No later than thirty (30) days after
completion of any work in the Premises by Tenant (including, but not limited to,
the addition of equipment, cables or any material that must be inspected),
Tenant shall provide to Landlord (i) an affidavit from the general contractor
performing the work that same has been substantially completed in accordance
with the approved plans and specifications and that all mechanics and
materialmen in

 

13

--------------------------------------------------------------------------------

TABLE OF CONTENTS

connection therewith have been paid in full; (ii) a waiver of lien with respect
to such construction work executed by the general contractor and each
subcontractor, except as to any contractor for which Tenant has obtained a bond
to pay any claims by such persons; and (iii) a certificate of occupancy from the
applicable governmental authorities evidencing completion of such work in
accordance all applicable laws, codes and ordinances. In the event a certificate
of occupancy cannot be obtained for the Premises due to any action or inaction
by Tenant, Tenant shall be in default hereunder and must immediately comply with
any and all requirements to obtain a certificate of occupancy.

13. Insurance.

(a) Tenant shall, during the Term and during any period (if any) of rent
abatement or period of occupancy prior to the Commencement Date, at its sole
cost and expense, obtain, maintain and keep in full force and effect, with
Landlord and the holder of any mortgage or deed of trust (if Tenant has been
notified of the name of such holder) on the Land and Building named as
additional insureds therein or as their respective interests may appear, as
appropriate, the following insurance:

(i) hazard insurance, including extended coverage, vandalism and malicious
mischief, upon property owned by Tenant or anyone claiming through or under
Tenant and located in the Building, or for which Tenant is legally liable, or
which was installed by or on behalf of Tenant or anyone claiming through or
under Tenant, including, without limitation, Tenant’s personal property and all
other improvements, alterations, changes and additions, in an amount not less
than the full insurable value thereof;

(ii) commercial general liability insurance (occurrence coverage), to include
personal injury, bodily injury, broad form property damage, operations hazard,
contractual liability and products and completed operations liability in
combined single limits not less than $2,000,000 inclusive; and

(iii) worker’s compensation in no less than statutory limits and employer’s
liability insurance in limits of $1,000,000 each Accident/$1,000,000 by
Disease-Policy Limit/$1,000,000 by Disease-Each Employee.

(b) All policies shall be taken out with insurers whose AM Best rating is no
less than A-X and in form that is consistent with and available in the
commercial insurance marketplace at the current time. Tenant agrees that
certificates of insurance will be delivered to Landlord as soon as practicable
after the placing of the required insurance. All policies shall contain an
undertaking by the insurers to notify Landlord in writing not less than 30 days
prior to any material change or reduction in coverage or cancellation or
termination thereof.

(c) In the event of damage to or destruction of the Premises and the termination
of this Lease as provided for pursuant to Paragraph 15 hereof, Tenant shall pay
to Landlord all of its insurance proceeds relating to any improvements,
alterations, changes and additions made by Tenant to the Premises, except for
any such proceeds paid on (i) items installed by Tenant and which Landlord has
agreed may be removed from the Premises upon the expiration of the Term, and
(ii) any personal property of Tenant (iii) any above standard building
improvements Tenant’s insurance has been paying for.

(d) Landlord shall not carry insurance of any kind on any improvements,
alterations, changes or additions made by Tenant to the Premises or on any of
Tenant’s personal property, and Landlord shall not be obligated to repair any
damage thereto or replace the same.

(e) Any policy or policies of hazard, extended coverage, or similar casualty
insurance which either party obtains in connection with the Premises or Building
shall include a clause or endorsement denying the insurer any rights of
subrogation against the other party to the extent rights have been waived by the
insured prior

 

14

--------------------------------------------------------------------------------

TABLE OF CONTENTS

to the occurrence of injury or loss. Tenant and Landlord waive any rights of
recovery against the other for injury or loss due to hazards covered by the
hazard insurance that either party is required to maintain hereunder or
otherwise elects to maintain, but only to the extent of the injury or loss
covered thereby.

(f) Landlord shall carry (i) hazard insurance covering full replacement cost of
the Building (exclusive of foundations and footings) and (ii) commercial general
liability insurance (occurrence coverage) with limits of not less than
$10,000,000.00 at all times.

14. Non-Liability and Indemnification

(a) Unless caused by Landlord’s gross negligence or intentional misconduct, or
that of Landlord’s employees, agents or contractors, Tenant shall indemnify and
hold harmless Landlord and its agents from and against any and all claims for
damage to the person or property of anyone or any entity arising from Tenant’s
negligent use of the Premises, or from any negligence or intentional misconduct
of Tenant in or about the Premises or elsewhere, and shall further indemnify and
hold harmless Landlord from and against any and all claims, costs, and expenses
arising from any breach or default in the performance of any obligation on
Tenant’s part to be performed under the terms of this Lease, or arising from any
other negligent act or omission of Tenant or any of Tenant’s agents,
contractors, employees, or invitees, and from and against all costs, reasonable
attorney’s fees, expenses and liabilities incurred by Landlord as the result of
any such use, breach, default, misconduct or negligence, and in dealing
reasonably therewith, including, but not limited to, the defense or pursuit of
any claim or any action or proceeding involved therein; and in case any action
or proceeding be brought against Landlord by reason of any such matter, Tenant
upon notice from Landlord shall defend the same at Tenant’s expense by counsel
reasonably satisfactory to Landlord and Landlord shall cooperate with Tenant in
such defense. Landlord need not have first paid any such claim in order to be so
indemnified. This indemnity shall expressly survive expiration or termination of
this Lease. Tenant, as a material part of the consideration to Landlord, hereby
assumes all risk of damage to property of Tenant or injury to person, in, upon,
or about the Premises arising from any cause, except for the negligence or
intentional misconduct of Landlord, its agents, employees and contractors, and
Tenant hereby waives all claims in respect thereof against Landlord.

(b) Unless caused by Tenant’s gross negligence or intentional misconduct, or
that of Tenant’s agents, employees, or contractors, Landlord shall indemnify and
hold harmless Tenant and its agents from and against any and all claims for
damage to the person or property of anyone or any entity arising from Landlord’s
negligent operation of the Building, or from any negligence or intentional
misconduct of Landlord in or about the Building, and shall further indemnify and
hold harmless Tenant from and against any and all claims, costs, and expenses
arising from any breach or default in the performance of any obligation on
Landlord’s part to be performed under the terms of this Lease, or arising from
any other negligent act or omission of Landlord or any of Landlord’s agents,
contractors or employees, and from and against all costs, reasonable attorney’s
fees, expenses and liabilities incurred by Tenant as the result of any such use,
breach, default, misconduct, or negligence, and in dealing reasonably therewith,
including, but not limited to, the defense or pursuit of any claim or any action
or proceeding involved therein; and in case any action or proceeding be brought
against Tenant by reason of any such matter, Landlord upon notice from Tenant
shall defend the same at Landlord’s expense by counsel reasonably satisfactory
to Tenant and Tenant shall cooperate with Landlord in such defense. Tenant need
not have first paid any such claim in order to be so indemnified. This indemnity
shall expressly survive expiration or termination of this Lease.

15. Casualty Damage

(a) Tenant shall give immediate notice (by telephone, confirmed in writing) to
Landlord of any damage caused to the Premises by fire or other casualty, and if
neither party elects to terminate this Lease as provided in Paragraph 15(b),
Landlord shall proceed with reasonable diligence and at its sole cost and
expense to repair and restore the Premises (other than any improvements beyond
the initial Tenant Improvements , alterations, changes and additions to the
Premises performed by Tenant and any personal property of Tenant) to
substantially the same condition as immediately prior to said damage or
destruction.

 

15

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(b) If (i) the Building or the Premises shall be destroyed or substantially
damaged by a casualty not covered by Landlord’s insurance; or (ii) 25% or more
of the Premises is damaged or rendered untenantable by a casualty covered by
Landlord’s insurance; or (iii) the Premises are not affected but 25% of the
Building or such portion of the Public Areas as shall render the Premises or the
Building untenantable is damaged or rendered untenantable, then in any such
event either Landlord or Tenant may elect to terminate this Lease. Any party so
electing to terminate this Lease shall provide the non-terminating party written
notice of such election within ninety (90) days after the occurrence of such
casualty. If such notice of termination shall be given, this Lease shall
terminate as of the date provided in such notice of termination (whether or not
the Term shall have commenced) with the same effect as if that date were the
Expiration Date. If neither party shall elect to terminate this Lease, Landlord
shall commence to repair and reconstruct the Building and/or the Premises
(subject to the limitations set forth in Paragraph 15(a) above), provided,
however, in the event such repair or reconstruction is not complete within one
hundred eighty (180) days of such damage or casualty, then Tenant shall have the
right upon notice to Landlord to terminate this Lease.

(c) If the Premises are damaged and the Lease is not terminated pursuant to
Paragraph 15(b), the Basic Rent and the Additional Rent payable pursuant to
Paragraph 4 hereof shall be abated in proportion to the degree in which Tenant’s
ability to use the Premises is impaired during the period of any damage, repair
or restoration provided for in this Paragraph 15 (i.e., until such time as
Landlord has satisfied its restoration obligations under this Paragraph 15).
Except for such abatement, Tenant shall not be entitled to any compensation or
damage for loss in the use of the whole or any part of the Premises and/or any
inconvenience or annoyance occasioned by damage, destruction, repair or
restoration.

16. Eminent Domain

(a) Subject to the rights of Landlord to relocate Tenant pursuant to Paragraph
27(n), if the whole or any portion of the Premises shall be acquired or
condemned by eminent domain for any public or quasi-public use or purpose, this
Lease shall terminate as of the date of the vesting or acquisition of title in
the condemning authority with the same effect as if said date were the
Expiration Date. In addition, if the whole or any portion of the Building other
than the Premises shall be acquired or condemned by eminent domain for any
public or quasi-public use or purpose, this Lease shall, at the option of
Landlord, terminate as of the date of the vesting or acquisition of title in
such condemning authority with the same effect as if such date were the
Expiration Date.

(b) The proceeds of any condemnation award 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, that Landlord shall have no interest
in any award made to Tenant for loss of business, relocation expenses, or for
the taking of Tenant’s personal property if a separate award for such items is
made to Tenant.

17. Events of Default. The occurrence of any one or more of the following events
shall constitute a material default of this Lease by Tenant:

(a) The failure by Tenant to make any payment on or before the due date of
(i) Basic Rent and such payment shall not have been received by Landlord by the
sixth day following such due date or (ii) Additional Rent payable in monthly
installments pursuant to Paragraph 5(c) hereof, provided such default is not
remedied within five (5) days of Landlord providing Tenant written notice of
such default.

(b) The failure by Tenant to make any payment of Additional Rent (other than
pursuant to Paragraph 5(c) hereof) or any other payment required to be made by
Tenant hereunder other than that described in Paragraph 17(a), as and when due,
where such failure shall continue for a period of twenty (20) days after written
notice thereof from Landlord to Tenant. If Landlord serves Tenant with a Notice
to Pay Additional Rent

 

16

--------------------------------------------------------------------------------

TABLE OF CONTENTS

or Quit, such Notice to Pay Additional Rent or Quit shall also constitute the
notice required by this Paragraph 17(b).

(c) The failure of Tenant to execute the documents contemplated in Paragraphs
20(b) or 27(e) hereof, and such failure shall continue for a period of ten
(10) days after written notice thereof from Landlord to Tenant.

(d) The failure by Tenant to observe or perform any of the covenants, conditions
or provisions of this Lease to be observed or performed by Tenant other than
those referenced above, where such failure shall continue for a period of thirty
(30) days after written notice thereof from Landlord to Tenant; provided,
however, that if the nature of Tenant’s noncompliance is such that more than
thirty (30) days are reasonably required for its cure, then Tenant shall not be
deemed to be in default if Tenant commenced such cure within said thirty
(30) day period and thereafter diligently pursues such cure to completion. To
the extent permitted by law, such thirty (30) day notice shall constitute the
sole and exclusive notice required to be given to Tenant under applicable
statutes.

(e) (i) The making by Tenant of any general arrangement or general assignment
for the benefit of creditors; (ii) Tenant becoming a “debtor” as defined in 11
U.S.C. §101 or any successor statute thereto (unless, in the case of a petition
filed against Tenant, the same is dismissed within sixty (60) days); (iii) the
appointment of a trustee or receiver to take possession of substantially all of
Tenant’s assets located at the Premises or of Tenant’s interest in this Lease;
or (iv) the attachment, execution, or other judicial seizure of substantially
all of Tenant’s assets located at the Premises or of Tenant’s interest in this
Lease, where such seizure is not discharged within thirty (30) days.

(f) The discovery by Landlord that any financial statement given to Landlord by
Tenant, by Tenant’s successor in interest, or by any guarantor of Tenant’s
obligations hereunder was materially false when presented to Landlord.

18. Landlord’s Remedies. In the event of any material default or breach of this
Lease by Tenant, Landlord may at any time thereafter, without further notice or
demand and without limiting Landlord in the exercise of any right or remedy
which Landlord may have by reason of such default:

(a) Terminate this Lease or terminate Tenant’s right to possession of the
Premises, and in either event, accelerate all obligations of Tenant owed
Landlord under the Lease throughout the remainder of the Term such that all such
obligations are immediately due and payable, and force Tenant to immediately
surrender the Premises to Landlord. Tenant agrees to pay to Landlord on demand
the costs which Landlord may suffer by reason of such termination including, but
not limited to, the cost of recovering possession of the Premises. Immediately
upon any termination Landlord shall be entitled to recover from Tenant all
outstanding and unpaid Rent as of the date of such termination and all future
Rent due using a customary and reasonable present value formula; and/or

(b) Pursuant to judicial process, enter upon and take possession of the Premises
and expel or remove Tenant and any other person who may be present, by
reasonable force if necessary (to the extent allowed by law), without
terminating the Lease or being liable for prosecution or any claim for damages,
and, if Landlord so elects, relet the Premises on such terms as Landlord may
determine and receive from Tenant any difference between the aggregate rentals
to be collected under such replacement lease during the remainder of the Term
and the aggregate rentals payable under this Lease for the remainder of the Term
(discounted using a customary and reasonable present value formula). Tenant
agrees to pay to Landlord on demand any such deficiency that may arise by reason
of such reletting and any and all costs (including, without limitation, any
reasonable costs of upfitting the Premises for any replacement tenant and any
applicable brokerage commissions) expended by Landlord in connection with such
reletting; and/or

 

17

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(c) Pursuant to judicial process, enter the Premises at any time to cure any
default without thereby incurring any liability to Tenant or anyone claiming
through or under Tenant. Any expenses incurred by Landlord in connection with
any such performance or involved in collecting or endeavoring to collect rent or
enforcing or endeavoring to enforce any rights against Tenant under or in
connection with this Lease or pursuant to law shall be paid by Tenant as
Additional Rent on demand; and/or

(d) Pursue any other remedies now or hereafter available to Landlord under
applicable laws or judicial decisions and/or under this Lease.

The remedies provided under this Paragraph 18 are non-exclusive and may be
combined with other remedies hereunder available to Landlord for Tenant’s
material default or breach hereunder.

19. Landlord’s Defaults. Landlord shall not be in default under this Lease
unless Landlord fails to perform obligations required of Landlord within thirty
(30) days after written notice by Tenant to Landlord (and Tenant shall use
reasonable efforts to provide such notice to the holder of any first mortgage or
deed of trust covering the Premises whose name and address shall have
theretofore been furnished to Tenant in writing), specifying wherein Landlord
has failed to perform such obligation; provided, however, that if the nature of
Landlord’s obligation is such that more than thirty (30) days are required for
performance, then Landlord shall not be in default if Landlord commences
performance within such 30-day period and thereafter diligently pursues the same
to completion. Tenant shall have the right to cure any such failure by Landlord
to perform its obligations as set forth herein and Landlord shall reimburse
Tenant for actual and reasonable expenses incurred in connection with such cure
of Landlord’s default.

20. Subordination and Attornment.

(a) This Lease shall be automatically subordinate to any ground lease, mortgage,
deed of trust, or any other hypothecation or security now or hereafter placed
upon the Premises and to any and all advances made on the security thereof and
to all renewals, modifications, consolidations, replacements and extensions
thereof. Notwithstanding the foregoing, if any mortgagee, trustee or ground
lessor shall elect to have this Lease prior to the lien of such mortgage, deed
of trust, or ground lease, and shall give written notice thereof to Tenant, this
Lease shall be deemed prior to such mortgage, deed of trust, or ground lease,
whether this Lease is dated prior or subsequent to the date of said mortgage,
deed of trust, or ground lease or the date of recording thereof.

(b) Tenant agrees, upon the request of Landlord, to execute any reasonable
documents required to effectuate an attornment or a subordination, or to make
this Lease prior to the lien of any mortgage, deed of trust, or ground lease, as
the case may be, provided such mortgagee, deed of trust beneficiary or ground
lessor agrees, in writing, not to disturb Tenant in its use and enjoyment of the
Premises for the remainder of the Term, , including any renewals properly
exercised, as long as Tenant is not in default under this Lease beyond any
applicable cure period. Tenant’s failure to execute such documents within twenty
(20) days after written demand shall constitute a material default by Tenant
hereunder without further notice to Tenant.

(c) Landlord shall use its best efforts to obtain from any existing lender
within thirty (30) days of the Effective Date (and as to any future lender
within thirty (30) days of Tenant’s request therefore), a written
subordination/attornment agreement agreeing not to disturb Tenant in its in its
use and enjoyment of the Premises for the remainder of the Term, including any
renewals properly exercised, as long as Tenant is not in default under this
Lease beyond any applicable cure period.

21. Surrender. On the Expiration Date or upon the sooner termination of this
Lease or upon re-entry by Landlord upon the Premises in accordance with
Section 18, Tenant shall surrender, vacate,

 

18

--------------------------------------------------------------------------------

TABLE OF CONTENTS

and deliver to Landlord the Premises, including all improvements, additions,
alterations, and replacements thereon, “broom clean” and in good order,
condition and repair except for ordinary wear, tear, and damage by fire or other
casualty and the acts of Landlord, its agents and employees. If the Premises are
not surrendered upon the expiration or termination of this Lease, Tenant hereby
indemnifies Landlord against liability resulting from delay by Tenant in so
surrendering the Premises, including any claims made by any succeeding tenant or
prospective tenant founded upon such delay. Tenant’s obligations under this
Paragraph 21 shall survive the termination of this Lease.

22. Holding Over. If Tenant shall hold over the Premises after the expiration or
earlier termination of the Term, then Tenant waives all notice to quit and
agrees to pay Landlord for the period that Tenant is in possession after the
Expiration Date or earlier termination date, monthly rent which is one hundred
twenty five percent (125%) of the Rent applicable to the last full month of the
Term. Tenant expressly agrees to hold Landlord harmless from all direct loss and
damages which Landlord may suffer in defense of claims by any parties against
Landlord arising out of the holding over by Tenant, including, without
limitation, reasonable attorneys’ fees which may be incurred by Landlord in
defense of such claims. Acceptance of Rent by Landlord subsequent to the
Expiration Date or earlier termination of this Lease shall not constitute
consent to any holding over. Landlord shall have the right to apply all payments
received after the Expiration Date or earlier termination of this Lease toward
payment for use and occupancy of the Premises subsequent to the Expiration Date
or earlier termination of this Lease and toward any other sums owed by Tenant to
Landlord.

23. Quiet Enjoyment. Tenant, if and so long as it pays the Rent and performs and
observes the other terms and covenants as provided in this Lease, shall have the
peaceable and quiet possession of the Premises during the Term free of the
claims of Landlord or anyone claiming by, through or under Landlord, subject to
the terms of this Lease and any ground lease, mortgage or deed of trust as set
forth in Paragraph 20 hereof. This covenant shall be construed as a covenant
running with the land and shall not be construed as a personal covenant or
obligation of Landlord.

24. Security Deposit. Tenant shall deposit with Landlord simultaneously with the
execution of this Lease, the amount stipulated in Paragraph 1 as a security
deposit. Provided Tenant is not in default in the payment of any Rent or any
other charges due Landlord and further provided the Premises are left in the
condition described in Paragraph 21 upon the Expiration Date or earlier
termination of this Lease, the Security Deposit (which shall not bear interest
to Tenant) shall be returned to Tenant within forty-five (45) days after the
Expiration Date or earlier termination of this Lease. If the Tenant is in
default under this Lease or the Premises are not left in good condition,
reasonable wear and tear accepted, then the Security Deposit shall be applied to
the extent available on account of sums due Landlord or to the cost of repairing
damages to the Premises. If all or any part of the Security Deposit is applied
to an obligation of the Tenant hereunder while Tenant is in possession of the
Premises, Tenant shall immediately upon request of Landlord, restore the
Security Deposit to its original amount. Tenant shall not have the right to call
upon Landlord to apply any or all of the Security Deposit to cure any default or
fulfill any obligation of Tenant, but such use shall be solely in the discretion
of Landlord. Upon any conveyance by Landlord of its fee simple interest in the
Building, the Security Deposit may be delivered by Landlord to Landlord’s
grantee or transferee, and upon such delivery, Landlord shall thereupon be
released of any and all liability with respect to the Security Deposit, its
application and return, and the Tenant agrees to look solely to such grantee or
transferee.

25. Rules and Regulations. Except as provided elsewhere in this Lease, Tenant
and its employees, agents, invitees and licensees shall faithfully observe and
strictly comply with, and shall not permit violation of, the Rules and
Regulations attached hereto as Exhibit B and incorporated herein by reference.
In case of any conflict or inconsistency between the provisions of this Lease
and any Rules and Regulations, the provisions of this Lease shall control.
Landlord shall have no duty or obligation to

 

19

--------------------------------------------------------------------------------

TABLE OF CONTENTS

enforce any Rule or Regulation, or any term, covenant or condition of any other
lease, against any other tenant, and Landlord’s failure or refusal to enforce
any Rule or Regulation or any term, covenant or condition of any other lease
against any other tenant shall not result in any liability of Landlord to
Tenant. Landlord will make reasonable efforts to uniformly apply the rules and
regulations consistently to all comparably sized tenants.

26. Intentionally Deleted.

27. Miscellaneous.

(a) No agreement to accept a surrender of this Lease or possession of the
Premises shall be valid unless in writing signed by Landlord. The delivery of
keys or possession to Landlord or any agent or employee of Landlord shall not
operate as a termination of this Lease or a surrender of the Premises.

(b) No provision of this Lease shall be deemed to have been waived by Landlord
or Tenant unless such waiver be in writing signed by the party making such
waiver. The failure of Landlord or Tenant to seek redress for violation of, or
to insist upon the strict performance of, any covenant or condition of this
Lease, shall not be deemed a waiver thereof or prevent a subsequent act, which
would have originally constituted a violation, from having all the force and
effect of an original violation.

(c) The receipt by Landlord of Rent with knowledge of the breach of any
covenant, warranty, or obligation by Tenant contained in this Lease shall not be
deemed a waiver of such breach. No payment by Tenant or receipt by Landlord of a
lesser amount than the Basic Rent herein stipulated shall be deemed to be other
than on account of the earliest Basic Rent reserved hereby which is due and
owing at the time such payment is received by Landlord. No payment by Tenant or
receipt by Landlord of a lesser amount than the Additional Rent herein
stipulated shall be deemed to be other than on account of the earliest
Additional Rent reserved hereby which is due and owing at the time such payment
is received by Landlord. No endorsement or statement on any check or any letter
accompanying any check or payment of any such Rent shall be deemed an accord and
satisfaction, and Landlord may accept such check or payment without prejudice to
Landlord’s right to remedies provided in this Lease. If Tenant is in arrears in
payment of Rent, Tenant waives Tenant’s right, if any, to designate the items
against which any payments made by Tenant are to be credited, irrespective of
and notwithstanding any designation or requests by Tenant as to the items
against which any such payments shall be credited.

(d) This Lease and all attachments and exhibits hereto contain the entire
agreement between the parties, and no agreement, representation or inducement
shall be effective to change, modify or terminate this Lease in whole or in part
unless such agreement, representation or inducement is in writing and signed by
both parties hereto.

(e) Tenant at any time or from time to time at the request of Landlord or at the
request of the holder of any ground lease, mortgage or deed of trust referred to
in Paragraph 20 hereof, shall execute, acknowledge and deliver to the party so
requesting, a certificate by Tenant, certifying (i) that this Lease has not been
modified, changed, altered or amended in any respect and is in full force and
effect (or, if there have been modifications, stating the modifications and that
the Lease is in full force and effect as modified); (ii) that this Lease is the
only Lease between Landlord and Tenant affecting the Premises (or specifying any
other leases); (iii) that Tenant has accepted the Premises (or a part thereof),
is in occupancy of the Premises (or a part thereof) and is paying all Rent
hereunder, for which it is then liable on a current basis; (iv) that there are
then existing no credits, offsets or defenses against the enforcement of any
provisions of this Lease (or, if any of same exist, specifying the same);
(v) the dates, if any, to which the Rent or other charges due hereunder have
been paid in advance and that there has been no prepayment of Rent other than as
provided for in this Lease; (vi) that there are no known existing defaults

 

20

--------------------------------------------------------------------------------

TABLE OF CONTENTS

by Landlord or Tenant under this Lease (or, if any such default exists,
specifying such default); (vii) whether or not Tenant has exercised any renewal
options or other options which may be provided in this Lease; (viii) that there
are no actions, whether voluntary or otherwise, pending against Tenant under the
bankruptcy laws of the United States or any insolvency laws of any state
thereof; and (ix) such further information with respect to the Lease or the
Premises as Landlord, or such lessor, mortgagee or deed of trust beneficiary,
may request. Any such certificate may be relied upon by any prospective
purchaser of the Land and Building or of the interest of Landlord in any part
thereof, by any mortgagee or prospective mortgagee thereof, by any deed of trust
beneficiary or any prospective deed of trust beneficiary thereof, by any lessor
or prospective lessor thereof, by any lessee or prospective lessee thereof, or
by any prospective assignee of any mortgage or deed of trust thereof.

(f) If any provision of this Lease should be held to be invalid or
unenforceable, such invalid and unenforceable provisions shall be stricken and
the validity and enforceability of the remaining provisions of this Lease shall
not be affected thereby.

(g) The terms, provisions and covenants contained in this Lease shall apply to,
inure to the benefit of, and be binding upon the parties hereto and their
respective heirs, personal representatives, successors and permitted assigns.

(h) In the event of any default or breach by Landlord with respect to any of the
terms, covenants and conditions of this Lease to be observed and performed by
Landlord, Tenant shall look solely to the estate and property of Landlord in the
Land and Building for the collection of any sum of money on a judgment, or for
the payment or expenditure of any money under any decree of specific
performance, injunctive relief or other equitable relief (or other judicial
process) requiring performance by Landlord of any obligation under this Lease.
No other property or assets of the Landlord, Landlord’s agents, partners,
principals (disclosed or undisclosed) or affiliates shall be subject to levy,
execution or other enforcement procedure for the satisfaction of Tenant’s
remedies.

(i) The term “Landlord” shall mean only the owner at the time in question of the
present Landlord’s interest in the Building, and in the event of a sale or
transfer of the Building (by operation of law or otherwise) the transferor shall
be and hereby is automatically and entirely released and discharged, from and
after the date of such sale or transfer, of all liability in respect of the
performance of any of the terms of this Lease arising from and after such date
of transfer or sale on the part of Landlord thereafter to be performed.

(j) Tenant, at its expense, may record a memorandum of the Lease; provided the
memorandum contains only such information as is necessary to provide adequate
record notice of the existence of the Lease, including the parties, the term,
the property involved and whether options to renew or purchase exist and Tenant
shall pay all transfer taxes, recording fees and other charges in connection
with such recording. Upon a termination of the Lease, Landlord, on its own
signature, may record a termination of any recorded memorandum.

(k) Except as otherwise expressly set forth herein all notices, requests,
demands, approvals or consents required hereunder or by law shall be in writing
and shall be given by personal delivery, by overnight courier service, or by
mailing the same, certified or registered mail, return receipt requested,
postage prepaid, addressed, if to Landlord, to Landlord’s Notice Address, and if
to Tenant, to Tenant’s Notice Address. Such notices, requests, demands,
approvals or consents shall be deemed given upon such personal delivery; if sent
by overnight courier service, one (1) business day after deposit with such
service; and if mailed, two (2) business days after mailing. The persons
designated for the receipt of such, and the addresses to which such may be given
or made by either party, may be changed or supplemented by notice given by such
party to the other and notwithstanding the preceding sentence, such notice (and
therefore such new notice address) shall be effective ten (10) days after
mailing or delivery.

 

21

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(l) Tenant warrants that it has not employed nor had any dealings or discussions
with any broker or agent other than Cassidy Turley in connection with the
negotiation or execution of, relative to the Premises or Building, an agreement
to lease, a letter of intent to lease, or this Lease. Tenant and Landlord agree
to indemnify the other and hold it harmless from and against any and all
liability for commissions or other compensation or charges due to any other
brokers claiming compensation through such party and all costs and expenses
incurred in defense of the claim if this warranty is breached. In the event of a
suit on any such claim, Landlord shall notify and implead Tenant, or Tenant may
intervene. This warranty shall survive termination or expiration of this Lease.
Landlord shall pay a commission to Cassidy Turley in accordance with a separate
commission agreement.

(m) If Tenant is a Partnership Tenant or if Tenant’s interest in this Lease
shall be assigned (in accordance with the provisions of Paragraph 7 hereof) to a
Partnership Tenant, the following provisions shall apply to such Partnership
Tenant: (i) the liability of each of the parties comprising Partnership Tenant
shall be joint and several, (ii) each of the parties comprising Partnership
Tenant hereby consents in advance to and agrees to be bound by, any
modifications, termination, discharge, or surrender of this Lease which may
hereafter be made and by any notices, demands, requests, or other communications
which may hereafter be given, by Partnership Tenant or by any of the parties
comprising Partnership Tenant, (iii) any bills, statements, notices, demands,
requests, or other communications given or rendered to Partnership Tenant or to
any of the parties comprising Partnership Tenant shall be deemed given or
rendered to Partnership Tenant or to any of the parties comprising Partnership
Tenant and shall be binding upon Partnership Tenant and all such parties,
(iv) if Partnership Tenant shall admit new partners, all such new partners
shall, by their admission to Partnership Tenant, be deemed to have assumed
performance of all of the terms, covenants, and conditions of this Lease on
Tenant’s part to be observed and performed, and (v) Partnership Tenant shall
give prompt notice to Landlord of the admission of any such new partners.

Similarly, if Tenant is comprised of two (2) or more individuals or if Tenant’s
interest in this Lease shall be assigned (in accordance with the provisions of
Paragraph 7 hereof) to two (2) or more individuals, the following provisions
shall apply: (i) the liability of each of the individuals comprising Tenant
shall be joint and several, (ii) each of the individuals comprising Tenant
hereby consents in advance to and agrees to be bound by any modifications,
termination, discharge, or surrender of this Lease which may hereafter be made,
and by any notices, demands, requests, or other communications which may
hereafter be given, by Tenant or by any of the individuals comprising Tenant,
and (iii) any bills, statements, notices, demands, requests, or other
communications given or rendered to Tenant or to any of the individuals
comprising Tenant shall be deemed given or rendered to Tenant or to any of the
individuals comprising Tenant, and shall be binding upon Tenant and all such
individuals.

(n) Intentionally Deleted.

(o) This Lease shall be deemed to be made under and shall be construed in
accordance with and governed by the internal laws of the State of North
Carolina, without regard to principles of conflicts of laws.

(p) Tenant expressly acknowledges that neither Landlord nor Landlord’s agents
has made or is making any warranties, representations, promises, or statements,
except to the extent that the same are expressly set forth in this Lease, that
Tenant, in executing and delivering this Lease, is not relying upon any such
warranties, representations, promises, or statements, and that no rights,
easements, or licenses are or shall be acquired by Tenant by implication or
otherwise unless expressly set forth in this Lease.

 

22

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(q) Intentionally Deleted.

(r) During the Term, should a real estate investment trust become Landlord
hereunder, all provisions of this Lease shall remain in full force and effect
except as modified by this Paragraph 27(r). If Landlord in good faith determines
that its status as a real estate investment trust under the provisions of the
Internal Revenue Code of 1986, as heretofore or hereafter amended, will be
jeopardized because of any provision of this Lease, Landlord may request
reasonable amendments to this Lease and Tenant will not unreasonably withhold,
delay or defer its consent thereto, provided that such amendments do not
(a) increase the monetary obligations of Tenant pursuant to this Lease or (b) in
any other manner adversely affect Tenant’s interest in the Premises.

(s) Whenever a period of time is herein prescribed for the taking of any action
by either party, the party required to take such action shall not be liable or
responsible for, and there shall be excluded from the computation of such period
of time, any delays due to any Unavoidable Delay.

(t) If, following the execution of this Lease, Tenant requests that Landlord
execute any document or instrument that is other than (i) a document or
instrument the form of which is attached hereto as an exhibit, or (ii) a
document that solely sets forth facts or circumstances that are then existing
and reasonably ascertainable by the requested party with respect to the lease,
then Tenant shall be responsible for paying the out-of-pocket costs and
expenses, including without limitation, reasonable attorneys fees, and an
administrative fee of $500.00, incurred by Landlord in connection with the
review (and, if applicable, the negotiations) related to such document(s) or
instrument(s), regardless of whether such document(s) or instrument(s) is (are)
ever executed by Landlord. All such costs and expenses incurred by Landlord in
connection with its review and negotiation of any such document(s) or
instrument(s) shall be deemed to be additional rental due hereunder and shall be
payable by Tenant promptly upon demand.

(u) Landlord and Tenant have agreed to additional terms of this Lease, which are
more fully set forth on Exhibit G attached hereto and made a part hereof. In the
event of a conflict between the provisions of this Lease and the provisions of
Exhibit G, the provisions of Exhibit G shall control.

(v) Whenever a party is in default under the Lease, the non-defaulting party
shall use commercially reasonable efforts to mitigate the damages resulting from
the default.

(w) Tenant shall have the right to file this lease with the Securities Exchange
Commission.

(x) “Reasonable Attorneys Fees” shall be deemed to be those fees actually
charged based upon time actually spent at customary and reasonable charges
normally incurred for those type of services, as opposed to any statutory
presumption which may then be in effect.

28. Exhibits. Except as noted on the Table of Contents of this Lease, the
following exhibits are attached hereto and are made a part of this Lease as if
fully set out herein: (a) description of the Premises as set forth in Exhibit A,
“Description of Premises”; (b) rules and regulations governing Tenant’s
occupancy of the Premises as set forth in Exhibit B, “Rules and Regulations”;
(c) upfitting obligations as set forth in Exhibit C, “Work Letter Agreement”;
(d) enumerated operating expenses as set forth in Exhibit D, “Operating
Expenses”; (e) a schedule of Basic Rent as set forth in Exhibit E, “Basic Rent”;
(f) (intentionally deleted); (g) other terms as set forth in Exhibit G, “Other
Terms”; (h) a description of the Land as set forth in Exhibit H, “Description of
the Land”; and (i) a commencement date stipulation as set forth in Exhibit I,
“Commencement Date Stipulation”.

[SIGNATURES BEGIN ON FOLLOWING PAGE]

 

23

--------------------------------------------------------------------------------

TABLE OF CONTENTS

IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal on
the day and year first above written.

 

LANDLORD:

BRIER CREEK CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP,

a North Carolina limited partnership

 

By:

  AAC-Corporate Center Development GP, LLC, a North Carolina limited liability
company, its General Partner     By:  

/s/ Paul L. Herndon

      Name: Paul L. Herndon       Title: Vice President

TENANT:

INSPIRE PHARMACEUTICALS, INC

a Delaware corporation

By:    

/s/ Thomas R. Staab, II

Name:     Thomas R. Staab, II Title:     Chief Financial Officer & Treasurer

 

24

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT A

DESCRIPTION OF PREMISES

 

A-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT B

RULES AND REGULATIONS

1. The Public Areas shall not be obstructed or encumbered by any tenant or used
for any purpose other than ingress and egress to and from the Premises, and no
tenant shall permit any of its employees, agents, licensees or invitees to
congregate or loiter in any of the Public Areas. Tenant shall not invite to, or
permit to visit, the Premises persons in such numbers or under such conditions
as may interfere with the use and enjoyment by others of the Public Areas. Fire
exits and stairways are for emergency use only, and they shall not be used for
any other purposes by any tenant, or the employees, agents, licensees or
invitees of any tenant. Landlord reserves the right to control and operate, and
to restrict and regulate the use of, the Public Areas and the public facilities,
as well as other facilities furnished for the common use of the tenants, in such
manner as it deems best for the benefit of the tenants generally, including the
right to allocate certain elevators for delivery service, and the right to
designate which Building entrances shall be used by persons making deliveries in
the Building. No doormat of any kind whatsoever shall be placed or left in any
public hall or outside any entry door of the Premises.

2. No awnings or other projections shall be attached to the outside walls of the
Building. No curtains, blinds, shades or screens shall be attached to or hung
in, or used in connection with, any window or door of the Premises, without the
consent of Landlord. Such curtains, blinds, shades or screens must be of a
quality, type, design and color, and attached in the manner, approved by
Landlord. In order that the Building can and will maintain a uniform appearance
to those persons outside of the Building, each tenant occupying the perimeter
areas of the Building shall (a) use only building standard lighting in areas
where lighting is visible from the outside of the Building and (b) use only
building standard blinds in window areas which are visible from the outside of
the Building.

3. No sign, insignia, advertisement, lettering, notice or other object shall be
exhibited, inscribed, painted or affixed by Tenant on any part of the outside or
inside of the Premises or the Building (including, without limitation, any
patios or balconies that are part of, or that are connected to, the Building) or
on doors, corridor walls, the Building directory or in the elevator cabs without
the prior approval of Landlord as to size, color, style, content and location,
and Tenant shall obtain all necessary approvals and permits from governmental or
quasi-governmental authorities in connection with such signs. Tenant shall
submit sign drawings to Landlord for approval prior to fabrication and
installation. The following submission requirements, in duplicate, constitute
the minimum data required: (i) layout, size, location and color of test;
(ii) layout of additional symbols or logo; (iii) installation details; and
(iv) lighting details, if applicable. Such signs shall, at the expense of
Tenant, be inscribed, painted or affixed by signmakers approved by Landlord. In
the event of the violation of the foregoing by any tenant, Landlord may remove
such signs without any liability, and may charge the expense incurred in such
removal to the tenant or tenants violating this rule. Only the Tenant named in
the Lease shall be entitled to appear on the directory tablet. Additional names
may be added in Landlord’s sole discretion under such terms and conditions as
Landlord may approve.

4. No object (including, without limitation, furniture, signs, insignia,
lettering, flags, and banners) shall be placed, stored or exhibited outside of
the Premises or the Building (including, without limitation, any patios or
balconies that are part of, or that are connected to, the Building) by Tenant,
without the prior written consent of Landlord, which may be granted, withheld or
conditioned in Landlord’s sole and absolute discretion.

5. Neither the sashes, sash doors, skylights or windows that reflect or admit
light and air into the halls, passageways or other public places in the Building
nor the heating, ventilating and air conditioning vents and doors shall be
covered or obstructed by any tenant, nor shall any bottles, parcels or other
articles be placed on the window sills on the peripheral heating enclosures.
Whenever the heating, ventilating or air conditioning systems are in operation,
Tenant agrees to draw the shades, blinds or other window coverings, as
reasonably

 

B-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

required because of the position of the sun. Tenant shall have no right to
remove or change shades, blinds, or other window-coverings within the Premises
without Landlord’s consent.

6. No showcases or other articles shall be placed by Tenant in front of or
affixed to any part of the exterior of the Building, nor placed in the Public
Areas.

7. No acids, vapors, or other harmful materials shall be discharged, or
permitted to be discharged, into the waste lines, vents, or flues of the
Building. The water and wash closets and other plumbing fixtures shall not be
used for any purposes other than those for which they were designed and
constructed, and no sweepings, rubbish, rags, acids, or other foreign substances
shall be thrown or deposited therein. Nothing shall be swept or thrown into the
Public Areas or other areas of the Building, or into or upon any heating or
ventilating vents or registers or plumbing apparatus in the Building, or upon
adjoining buildings or land or the street. The cost of repairing any damage
resulting from any misuse of such fixtures, vents, registers, and apparatus and
the cost of repairing any damage to the Building, or to any facilities of the
Building, or to any adjoining building or property, caused by Tenant, or the
employees, agents, licensees or invitees of Tenant, shall be paid by Tenant. Any
cuspidors or similar containers or receptacles shall be emptied, cared for and
cleaned by and at the expense of such tenant.

8. Tenant shall not mark, paint, drill into, or in any way deface, any part of
the Premises or the Building. No boring, cutting, or stringing of wires shall be
permitted, except with the prior written consent of, and as directed by,
Landlord. No telephone, telegraph, or other wires or instruments shall be
introduced into the Building by Tenant except in a manner approved by Landlord.
Tenant shall not lay linoleum, or other similar floor covering, so that the same
shall come in direct contact with the floor of the Premises, and, if linoleum or
other similar floor covering is desired to be used, an interlining of builder’s
deadening felt shall be first affixed to the floor, by a paste or other
material, soluble in water, the use of cement or other similar adhesive material
being expressly prohibited.

9. No bicycles, vehicles, animals (except seeing eye dogs), fish or birds of any
kind shall be brought into, or kept in or about, the Premises.

10. No noise, including, but not limited to, music, the playing of musical
instruments, recordings, radio or television, which, in the judgment of
Landlord, might disturb other tenants in the Building, shall be made or
permitted by Tenant. Nothing shall be done or permitted by any tenant which
would impair or interfere with the use or enjoyment by any other tenant of any
other space in the Building.

11. Nothing shall be done or permitted in the Premises, and nothing shall be
brought into, or kept in or about the Premises, which would impair or interfere
with any of the Building equipment or the services of the Building or the proper
and economic heating, cleaning or other services of the Building or the
Premises, nor shall there be installed by Tenant any ventilating,
air-conditioning, electrical, or other equipment of any kind which, in the
judgment of Landlord, might cause any such impairment or interference. Neither
Tenant, nor the employees, agents, licensees, or invitees of Tenant, shall at
any time bring or keep upon the Premises any inflammable, combustible, or
explosive fluid, chemical, or substance not generally used in similar office
buildings.

12. No additional locks or bolts of any kind shall be placed upon any of the
doors or windows by any tenant, nor shall any changes be made in locks or the
mechanism thereof. Duplicate keys for the Premises and toilet rooms shall be
procured only from Landlord, and Landlord may make a reasonable charge therefor.
Each tenant shall, upon the expiration or sooner termination of the Lease of
which these Rules and Regulations are a part, turn over to Landlord all keys to
stores, offices and toilet rooms, either furnished to, or otherwise procured by,
Tenant, and in the event of the loss of any keys furnished by Landlord, Tenant
shall pay to Landlord the cost of replacement locks. Notwithstanding the
foregoing, Tenant may, with Landlord’s prior written

 

B-2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

consent, install a security system on the Premises which uses master codes or
cards instead of keys provided that Tenant shall provide Landlord with the
master code or card for such system.

13. All removals, or the carrying in or out of, any safes, freight, furniture,
packages, boxes, crates, or any other object or matter of any description shall
take place only during such hours and in such elevators as Landlord may from
time to time determine, which may involve overtime work for Landlord’s
employees. Tenant shall reimburse Landlord for extra costs incurred by Landlord
including but not limited to the cost of such overtime work. Landlord reserves
the right to inspect all objects and matter to be brought into the Building and
to exclude from the Building all objects and matter which violate any of these
Rules and Regulations or the Lease of which these Rules and Regulations are a
part. Landlord may require any person leaving the Building with any package or
other object or matter to submit a pass, listing such package or object or
matter, from the tenant from whose premises the package or object or matter is
being removed, but the establishment and enforcement of such requirement shall
not impose any responsibility on Landlord for the protection of any tenant
against the removal of property from the premises of such tenant. Landlord shall
in no way be liable to Tenant for damages or loss arising from the admission,
exclusion or ejection of any person to or from the Premises or the Building
under the provisions of this Rule 13 or of Rule 16 hereof.

14. Tenant shall not use or occupy, or permit any portion of the Premises to be
used or occupied, as an office for a public stenographer or public typist, or
for the possession, storage, manufacture, or sale of narcotics or other illegal
substances or as a barber, beauty, or manicure shop, telephone or telegraph
agency, telephone or secretarial service, messenger service, travel or tourist
agency, retail, wholesale or discount shop for sale of merchandise, retail
service shop, labor union, or for a public finance (personal loan) business, or
as a hiring or employment agency, or as a stock brokerage board room. Tenant
shall not engage or pay any employee on the Premises, except those actually
working for Tenant on the Premises, nor advertise for laborers giving an address
at the Building. Tenant shall not use the Premises or any part thereof, or
permit the Premises or any part thereof to be used as a restaurant, shop, booth
or other stand, or for the conduct of any business or occupation which
predominantly involves direct patronage of the general public, or for
manufacturing, or for the sale at retail or auction of merchandise, goods, or
property of any kind.

15. Landlord shall have the right to prohibit any advertising or identifying
sign by Tenant which, in the judgment of Landlord, tends to impair the
appearance or reputation of the Building or the desirability of the Building,
and upon written notice from Landlord, Tenant shall refrain from and discontinue
such advertising or identifying sign.

16. Landlord reserves the right to exclude from the Building at all times other
than Business Hours all persons without authorization from Tenant for admission
to the Building. Each Tenant shall be responsible for all persons for whom it
authorizes admission to the Building and shall be liable to the Landlord for all
acts of such person or persons. Landlord shall in no case be liable for damages
for any error with regard to the admission to or exclusion from the Building of
any person. Landlord reserves the right to exclude or expel from the Building
any person who, in the judgment 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 Building. In the event of invasion,
riot, public excitement or other commotion, Landlord may prevent all access to
the Building during the continuance of the same by closing the doors or
otherwise, for the safety of tenants and the protection of property in the
Building.

17. Tenant, before closing and leaving the Premises at any time, shall see that
all lights, typewriters, copying machines and other electrical equipment are
turned off. All entrance doors in the Premises shall be kept locked by Tenant
when the Premises are not in use. Entrance doors shall not be left open at any
time.

 

B-3

--------------------------------------------------------------------------------

TABLE OF CONTENTS

18. Tenant shall, at its expense, provide light, power and water for the
employees of Landlord, and the agents, contractors and employees of Landlord,
while performing janitorial service or other cleaning in the Premises and while
making repairs or alterations in the Premises.

19. The Premises shall not be used for lodging or sleeping or for any immoral or
illegal purpose.

20. Unless otherwise expressly provided in the Lease, Tenant shall not use,
occupy or permit any portion of the Premises to be used or occupied for the
manufacture or sale of liquor.

21. The requirements of Tenant will be attended to only upon application at the
office of the Building. Employees of Landlord shall not perform any work or do
anything outside of their regular duties, unless under special instructions from
Landlord.

22. Canvassing, soliciting, and peddling in the Building are prohibited, and
Tenant shall cooperate to prevent the same.

23. The employees, agents, licensees and invitees of Tenant shall not loiter
around the Public Areas or the front, roof, or any part of the Building used in
common by other occupants of the Building.

24. There shall not be used in any space, or in the Public Areas, either by
Tenant or by others, in the moving or delivery or receipt of safes, freight,
furniture, packages, boxes, crates, paper, office material or any other matter
or thing, any hand trucks except those equipped with rubber tires, side guards
and such other safeguards as Landlord shall require.

25. Tenant shall not cause or permit any odor of cooking or other processes, or
any unusual or objectionable odors, to emanate from the Premises which would
annoy other tenants or create a public or private nuisance. No cooking shall be
done in the Premises except as is expressly permitted in the Lease of which
these Rules and Regulations are a part.

26. All paneling, doors, trim or other wood products not considered furniture
shall be of fire-retardant materials. Before installation of any such materials,
certification of the materials’ fire-retardant characteristics shall be
submitted to and approved by Landlord, and all such materials shall be installed
in a manner approved by Landlord.

27. Whenever Tenant shall submit to Landlord any plan, agreement, or other
document for the consent or approval of Landlord, Tenant shall pay to Landlord,
on demand, a processing fee in the amount of the reasonable fees for the review
thereof, including the services of any outside architect, engineer or attorney
employed by Landlord to review such plan, agreement, or document.

28. All employees of the Tenant will park in their assigned or designated areas,
as may be determined by Landlord from time to time. Tenant will insure that its
employees are prohibited from utilizing the visitor parking areas.

29. Landlord will direct electricians as to where and how telephone and
telegraph wires are to be introduced. No boring or cutting for wires or
stringing of wires will be allowed without written consent of Landlord. The
location of telephones, call boxes and other office equipment affixed to the
Premises shall be subject to the approval of Landlord. All such work shall be
effected pursuant to permits issued by all applicable governmental authorities
having jurisdiction.

 

B-4

--------------------------------------------------------------------------------

TABLE OF CONTENTS

30. All Public Areas shall be under the sole and absolute control of Landlord,
with Landlord having the exclusive right to regulate and control these areas.
Tenant agrees to conform to the rules and regulations that may be established by
Landlord for these areas from time to time.

31. Smoking is prohibited in all common areas including, without limitation, all
restrooms, hallways, stairwells, elevators, lobbies, etc.

32. All Tenant move-ins and move-outs will be limited to Monday through Friday:
5:30 p.m. until 6:00 a.m., or anytime on Saturday or Sunday. Tenant must notify
Landlord of moving arrangements in advance.

33. Landlord reserves the right to rescind, alter, waive, or add, as to one or
more or all tenants, any rule or regulation at any time prescribed for the
Building when, in the judgment of Landlord, Landlord deems it necessary or
desirable for the reputation, safety, character, security, care, appearance, or
interests of the Building, or the preservation of good order therein, or the
operation or maintenance of the Building, or the equipment thereof, or the
comfort of tenants or others in the Building. No rescission, alteration, waiver,
or addition of any rule or regulation in respect of one tenant shall operate as
a rescission, alteration, or waiver in respect of any other tenant.

 

B-5

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT C

WORK LETTER AGREEMENT

This Work Letter Agreement (“Work Letter”) is executed simultaneously with that
certain Lease (“Lease”) between Inspire Pharmaceuticals, Inc., as Tenant, and
Brier Creek Corporate Center Associates Limited Partnership, a North Carolina
limited partnership, as Landlord, relating to leased premises (“Premises”) at
the building commonly known as Brier Creek Office #6 (the “Building”), which
Premises are more fully identified in the Lease. Capitalized terms used herein,
unless otherwise defined in this Work Letter, shall have the respective meanings
ascribed to them in the Lease.

For and in consideration of the agreement to lease the Premises and the mutual
covenants contained herein and in the Lease, Landlord and Tenant hereby agree as
follows:

1. WORK. Landlord, at Tenant’s sole cost and expense, is obligated to perform,
or cause to be performed, Landlord’s Work (“Landlord’s Work”) relative to the
initial upfit of the Premises as provided for in the Approved Landlord Plans (as
defined in Paragraph 2 hereof) and upon the terms and conditions set forth
herein and shall deliver the Premises to Tenant Ready for Occupancy (as defined
in Section 1 of the Lease). Subject to Tenant’s satisfaction of the conditions
specified in this Work Letter Agreement, Tenant shall receive, as a credit
against the costs of Landlord’s Work payable by Tenant hereunder (including,
without limitation, all architectural, engineering, design, planning,
permitting, administrative and hard and soft construction costs, all of which
shall count against the Upfit Allowance), up to a maximum amount of $30.00 per
square foot (the “Upfit Allowance”). Any costs of Landlord’s Work incurred by
Landlord in excess of the Upfit Allowance shall be paid to Landlord by Tenant,
fifty percent (50%) of such excess costs upon the start of construction and the
balance when the Premises are Ready for Occupancy, upon written demand therefore
accompanied by invoices detailing the additional costs incurred. In the event
the total costs of Landlord’s Work are less than the Upfit Allowance, Tenant
shall be entitled to apply the balance to any other costs associated directly
with Tenant’s relocation to the Premises including Tenant’s furniture, fixtures
and equipment.

2. PRE-CONSTRUCTION ACTIVITIES. As used herein the term “Approved Landlord
Plans” shall mean the Landlord Plans (as hereinafter defined), as and when
approved in writing by Landlord and Tenant which shall be incorporated herein
and made a part hereof. As used herein, the term “Landlord Plans” shall mean the
full and detailed architectural and engineering plans and specifications
covering Landlord’s Work (including, without limitation, architectural,
mechanical and electrical working drawings for Landlord’s Work). As used herein,
“Landlord’s Work” shall mean the construction and installation of such
improvements to the Premises as set forth in the Approved Landlord Plans. The
Landlord Plans shall be subject to Landlord’s and Tenant’s approval and the
approval of all local governmental authorities requiring approval of Landlord’s
Work and/or the Approved Landlord Plans. Tenant shall give its approval or
disapproval (giving reasons in case of disapproval) of the Landlord Plans within
ten (10) days after their delivery to Tenant. Tenant agrees not to unreasonably
withhold its approval of said Landlord Plans. If Tenant notifies Landlord that
changes are required to the Landlord Plans submitted by Landlord, and if, in
Landlord’s reasonable estimation, such required changes are commercially
reasonable, Landlord shall, within ten (10) business days thereafter, submit to
Tenant, for its approval, the Landlord Plans amended in accordance with the
changes so required. In the event that Landlord and Tenant have not mutually
approved the Landlord Plans on or before July 15, 2010, Landlord and Tenant
shall meet to promptly resolve any disputes in good faith.

3. LANDLORD’S WORK. Utilizing a general contractor (“Contractor”) selected by
Tenant and reasonably approved by Landlord, not to be unreasonably withheld or
delayed, Landlord shall diligently prosecute the Landlord’s Work using materials
identified in the Approved Landlord Plans, subject to compliance with all
governmental laws, regulations and requirements. Landlord shall make the
Premises Ready for Occupancy (as defined in Section 3(b)) no later than
December 15, 2010. Once

 

C-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Landlord has notified Tenant that the Premises are Ready for Occupancy, Landlord
and Tenant shall mutually agree on a punch list of items, if any, which remain
to be completed and, upon mutual agreement of the same, Landlord agrees to
promptly commence and complete such items. Landlord and the Contractor shall be
allowed to enter upon the Premises at any reasonable times after the Premises
are Ready for Occupancy as necessary to complete any unfinished details and the
punch list, and such entry shall not constitute an actual or constructive
eviction of Tenant, in whole or in part, nor shall it entitle Tenant to any
abatement or diminution of rentals or relieve Tenant from any obligation under
the Lease.

4. TENANT’S WORK. As used herein, “Tenant’s Work” shall mean the wiring of the
Premises for Tenant’s use and occupancy and other minor “move-in” work required
for Tenant’s use and occupancy of the Premises. Tenant and Tenant’s agents shall
be permitted to enter the Premises upon commencement of Landlord’s Work by the
Contractor in order that Tenant may do Tenant’s Work and such other work as may
be required by Tenant to make the Premises ready for Tenant’s use and occupancy.
All work done in or upon the Premises by Tenant shall be done according to the
standards set forth in this Paragraph 4.

(a) Tenant’s Work shall comply with all applicable statutes, ordinances,
regulations, laws, codes and industry standards, including, but not limited to,
requirements of Landlord’s fire insurance underwriters.

(b) Tenant shall, at its own cost and expense, obtain all required building
permits and other permits associated with Tenant’s Work, if any. Tenant’s
failure to obtain such permits shall not cause a delay in the Commencement Date
or the obligation to pay Rent or any other obligations set forth in the Lease.

(c) Tenant shall use only new, first-class materials in performing Tenant’s
Work. All of Tenant’s Work shall be done in a good and workmanlike manner.

(d) Without limitation of the indemnification provisions contained in the Lease,
to the fullest extent permitted by law, Tenant agrees to indemnify, protect,
defend and hold harmless Landlord, the parties listed in, or required by, the
Lease to be named as additional insureds, Landlord’s contractors, Landlord’s
architects, and their respective beneficiaries, partners, directors, officers,
employees and agents, from and against all claims, liabilities, losses, damages
and expenses of whatever nature arising out of or in connection with Tenant’s
Work or the entry of Tenant or Tenant’s contractors into the Building and the
Premises, including, without limitation, mechanic’s liens, the cost of any
repairs to the Premises or Building necessitated by activities of Tenant or
Tenant’s contractors, bodily injury to persons or damage to the property of
Tenant, its employees, agents, invitees, licensees or others. It is understood
and agreed that the foregoing indemnity shall be in addition to the insurance
requirements set forth above and shall not be in discharge of or in substitution
for same or any other indemnity or insurance provision of the Lease.

5. DELAYS. In the event Tenant fails to deliver or deliver in sufficient and
accurate detail the information required under Paragraph 2 above on or before
the respective dates specified in said Paragraph 2, or in the event Landlord,
for any reason associated with delays solely caused by Tenant or its employees,
agents, contractors, subcontractors and/or licensees, fails to deliver the
Premises as required in paragraph 3 hereof, Tenant shall be responsible for Rent
and all other obligations set forth in the Lease from and after the date that
Landlord would have delivered the Premises but for such delays (regardless of
the degree of completion of Landlord’s Work on such date), and no such delay in
completion of Landlord’s Work shall relieve Tenant of any of its obligations
under the Lease.

6. CHANGE ORDERS. All changes to the Approved Landlord Plans requested by Tenant
must be approved by Landlord in advance of the implementation of such changes as
part of Landlord’s Work. All delays caused by Tenant-initiated change orders,
including, without limitation, any stoppage of work during the change order
review process, are solely the responsibility of Tenant; and, in the event of
any such delays Tenant shall be responsible for Rent and all other obligations
set forth in the Lease from and after the date that Landlord

 

C-2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

would have delivered the Premises to Tenant in accordance with Paragraph 3
hereof but for such delays (regardless of the degree of completion of Landlord’s
Work on such date), and no such delay in completion of Landlord’s Work shall
relieve Tenant of any of its obligations under the Lease. All increases in the
cost of Landlord’s Work resulting from such change orders shall be borne by
Tenant. Landlord shall have no authority to deviate from the Approved Landlord
Plans in performance of Landlord’s Work except as authorized by Tenant
hereunder. If required by Tenant, Landlord shall provide Tenant “as-built”
drawings of Landlord’s Work within thirty (30) days of completion thereof.

7. MISCELLANEOUS.

(a) Time is of the essence of this Work Letter Agreement.

(b) Any person signing this Work Letter Agreement on behalf of Landlord and
Tenant warrants and represents he/she has authority to sign and deliver this
Work Letter Agreement and bind the party on behalf of which he/she has signed.

(c) If Tenant fails to make any payment relating to Landlord’s Work as required
hereunder, such failure shall also constitute a default under the Lease and
Landlord shall have all the rights and remedies granted to Landlord under the
Lease for nonpayment of any amounts owed thereunder or failure by Tenant to
perform its obligations thereunder, provided such default is not remedied within
five (5) days of Landlord providing Tenant written notice of such default.

(d) Notices under this Work Letter shall be given in the same manner as under
the Lease.

(e) The headings set forth herein are for convenience only.

(f) This Work Letter, together with the applicable provisions of the Lease, sets
forth the entire agreement of Tenant and Landlord regarding Landlord’s Work and
Tenant’s Work. This Work Letter may only be amended if in writing, duly executed
by both Landlord and Tenant. Tenant acknowledges that Landlord’s Work consists
solely of hiring a contractor and/or designer, competitively biding the upfit
contract, administering the upfit contract and coordinating completion of all
punch list items and that Landlord shall manage and oversee Landlord’s Work
without charge to Tenant. The Contractor and designer shall be solely liable for
all work performed. Tenant shall have the right, but not the obligation, to hire
a technical expert to oversee construction of Landlord’s Work or hire Landlord
directly to perform additional services.

(g) All amounts due from Tenant hereunder shall be deemed to be Rent due under
the Lease.

(h) Landlord shall obtain from the Contactor a one year warranty, transferable
to Tenant, for defective workmanship and materials.

8. EXCULPATION OF LANDLORD. Notwithstanding anything to the contrary contained
in this Work Letter Agreement, it is expressly understood and agreed by and
between the parties hereto that:

(a) the recourse of Tenant or its successors or assigns against Landlord with
respect to the alleged breach by or on the part of Landlord of any
representation, warranty, covenant, undertaking or agreement contained in this
Work Letter Agreement (collectively, “Landlord’s Work Letter Undertakings”)
shall extend only to Landlord’s interest in the Building, as same may be
encumbered from time to time, and not to any other assets of Landlord or of its
partners; and

 

C-3

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(b) except to the extent of Landlord’s interest in the Building, no personal
liability or personal responsibility of any sort with respect to any of
Landlord’s Work Letter Undertakings or any alleged breach thereof is assumed by,
or shall at any time be asserted or enforceable against, Landlord, its partners,
Landlord’s property managers or against any of their respective directors,
officers, employees, agents, partners, beneficiaries, trustees or
representatives.

 

C-4

--------------------------------------------------------------------------------

TABLE OF CONTENTS

IN WITNESS WHEREOF, this Work Letter Agreement is executed as of this 28th day
of June 2010.

 

LANDLORD:

BRIER CREEK CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP,

a North Carolina limited partnership

  By:   AAC-Corporate Center Development GP, LLC, a North Carolina limited
liability company, its General Partner     By:  

/s/ Paul L. Herndon

      Name: Paul L. Herndon       Title: Vice President

TENANT:

INSPIRE PHARMACEUTICALS, INC.

a Delaware corporation

By:    

/s/ Thomas R. Staab, II

Name:     Thomas R. Staab, II Title:     Chief Financial Officer & Treasurer

 

C-5

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT D

OPERATING EXPENSES

(i) all supplies and materials used, and labor charges incurred, in the
operation, maintenance, decoration, repairing, and cleaning of the Building and
the Public Areas;

(ii) cost of all equipment purchased or rented which is utilized in the
performance of Landlord’s obligations hereunder, other than in connection with
the upfitting of the Premises, and the cost of maintenance and operation of any
such equipment;

(iii) cost of all management, maintenance, and service agreements for the
Building and the Public Areas and the equipment therein and thereon, including,
without limitation, alarm service, security service, window cleaning, and
elevator maintenance, janitorial service, and landscaping and signage
maintenance;

(iv) accounting costs, including the cost of audits by certified public
accountants, and legal and engineering fees and expenses incurred in connection
with the operation and management of the Land and the Building, other than
incurred in connection with the upfitting of any tenant spaces;

(v) wages, salaries, commissions, and related expenses of all on-site agents or
employees engaged in the operation, maintenance, security and management of the
Building and the Public Areas;

(vi) cost of all insurance coverage for the Building and the Public Areas,
including, but not limited to, the cost of casualty, rental abatement, and
liability insurance applicable to the Building and the Public Areas and
Landlord’s personal property used in connection therewith;

(vii) cost of repairs, replacements and general maintenance to the Building and
the Public Areas, structural or non-structural, including without limitation the
roof and mechanical, electrical and heating, ventilating and air-conditioning
equipment and/or systems of the Building (excluding repairs and general
maintenance paid by proceeds of insurance or by tenants or other third parties,
and alterations attributable solely to tenants), such cost to be included in
Operating Expenses for the calendar year in which such cost is incurred by
Landlord;

(viii) any and all maintenance or redecoration (including repainting) of the
Building and the Public Areas, and exterior and interior landscaping;

(ix) cost of removal of trash, rubbish, garbage, and other refuse from the
Building and the Public Areas, as well as removal of ice and snow from the
sidewalks on or adjacent to the Land;

(x) all supplies, tools, equipment and materials used in the operation and
maintenance of the Building and the Public Areas;

(xi) straight line depreciation of the cost of any capital improvements made to
the Building and the Public Areas subsequent to the Commencement Date
(including, without limitation, legal, architectural and engineering fees
incurred in connection therewith), but only to the extent permitted by the
definition of Operating Expenses in Paragraph 1 of the Lease.

(xii) all charges for gas, water, sewerage service, and other utilities
furnished to the Building and the Public Areas, to the extent not separately
metered for a particular tenant premises;

 

D-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

(xiii) all electricity furnished to the Building and the Public Areas,
including, without limitation, electricity furnished to individual tenants of
the Building (to the extent same is not metered to a particular tenant
premises), and to the machinery and equipment, including, without limitation,
any heating, ventilation, and air-conditioning equipment, used in the operation
and maintenance of the Building and the Public Areas;

(xiv) janitorial service, including service to areas of the Building leased to
tenants;

(xv) every other expense which would be considered an expense of maintaining,
operating, insuring, managing, or repairing the Building and the Public Areas;

(xvi) management fees payable to any managing agent of the Building and the
Public Areas;

(xvii) the Building’s proportionate share of the costs of leasing, operating and
maintaining any on-site leasing and management office within the Development;

(xviii) the Building’s proportionate share of any and all assessments and other
charges payable by Landlord relative to the Development under the terms of any
applicable restrictive covenants, agreements or similar documents; and

(xix) the Building’s proportionate share of the costs of maintenance, repair,
replacement and operation of any common area improvements (including, without
limitation, parking areas, parking decks, roadways, driveways, landscaped areas,
utility facilities, signage and other similar or related improvements) serving
the Building as well as other property within the Development.

 

D-2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT E

BASIC RENT

Beginning January 1, 2013 and on each subsequent January 1 during the Term (each
such date being a “Basic Rent Increase Date”), Basic Rent for the following
twelve month period shall be increased over the Basic Rent for the previous
twelve month period (the “Old Basic Rent”) according to the following formula:

Basic Rent = 1.025 x (Old Basic Rent - Base Factor) + Base Factor

Landlord and Tenant hereby agree that as soon as Landlord is able to accurately
calculate Basic Rent payable for calendar year 2013, Landlord and Tenant shall
enter into an agreement specifying the Basic Rent payable by Tenant under this
Lease in a form substantially as set out in Exhibit E-1 attached hereto. The
failure by Landlord or Tenant to execute such agreement shall not affect
Tenant’s obligation to make any payment of Rent due under this Lease.

 

Lease Year

   Monthly Rent

January 1, 2011 – August 30, 2011

   $ 0.00

September 1, 2011 – December 31, 2011

   $ 71,423.33

January 1, 2012 – December 31, 2012

   $ 73,208.97

January 1, 2013 – December 31, 2013

     TBD

January 1, 2014 – December 31, 2014

     TBD

January 1, 2015 – December 31, 2015

     TBD

January 1, 2016 – December 31, 2016

     TBD

January 1, 2017 – December 31, 2017

     TBD

The actual Basic Rent shall be determined pursuant to the formula set forth
above upon verification by Landlord of the actual Base Factor.

 

E-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT E-1

Basic Rent Confirmation Agreement

This Basic Rent Confirmation Agreement made this      day of             ,
             by and between                                          
            (the “Landlord”) and                                          
                                                                     (the
“Tenant”).

W I T N E S S E T H

WHEREAS, on                     ,             , Landlord and Tenant entered into
a Lease Agreement (the “Lease”) relating to the building and premises located at
                    .

WHEREAS, on                     ,             , the Tenant entered the Premises
(as defined in the Lease) and therefore, pursuant to Section
                     of the Lease, the term of the Lease has commenced; and

WHEREAS, the parties desire to confirm the amount of Basic Rent to be paid by
Tenant under the Lease.

NOW THEREFORE, in consideration of the mutual covenants herein contained,
Landlord and Tenant agree as follows:

1. Basic Rent. Landlord and Tenant hereby agree that Exhibit E of the Lease is
hereby amended to read as follows:

 

Period

   Basic Rent
PRSF    Annual Basic Rent    Basic Rent
Monthly Payment

January 1, 2011 – August 30, 2011

     N/A      N/A      Free

September 1, 2011 – December 31, 2011

   $                 $                 $             

January 1, 2012 – December 31, 2012

   $                 $                 $             

January 1, 2013– December 31, 2013

   $                 $                 $             

January 1, 2014– December 31, 2014

   $                 $                 $             

January 1, 2015– December 31, 2015

   $                 $                 $             

January 1, 2016– December 31, 2016

   $                 $                 $             

January 1, 2017– December 31, 2017

   $                 $                 $             

 

E-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

2. No Further Amendment. Except as expressly modified herein, the Lease remains
in full force and effect and is hereby ratified and confirmed.

IN WITNESS WHEREOF, Landlord and Tenant have caused this Agreement to be duly
executed on the date first written above.

 

LANDLORD:

 

By:  

 

Name:  

 

Title:  

 

TENANT:

INSPIRE PHARMACEUTICALS, INC.

a Delaware corporation

By:  

 

Name:  

 

Title:  

 

 

E-2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT F

INTENTIONALLY DELETED

 

F-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT G

OTHER TERMS

1. Renewal Option. So long as Tenant is not in default under this Lease, Tenant
is hereby granted the option to renew the term of the Lease as to the entire
Premises for two (2) periods (each, a “Renewal Term”) of three (3) years each,
to commence at the expiration of the initial Term or the first Renewal Term.
Tenant shall exercise its option to renew by delivering written notice to
Landlord six (6) months prior to the expiration of the initial Term or first
Renewal Term, time being of the essence. If notification of the exercise of this
option is not so given and received, all options granted hereunder shall
automatically expire. Any such renewal of this Lease shall be upon the same
terms and conditions of this Lease, except there shall be either one or no
further renewal option, as applicable, and the annual Basic Rent during each
Renewal Term shall be at the then prevailing Market Rate for comparable office
buildings in Raleigh, North Carolina.

The “Market Rate” means the rental rate which Landlord and a third party tenant
would agree upon the renewal option, as of the commencement date of such Renewal
Term, taking into consideration the uses permitted under the Lease, the quality,
size, design and location of the Premises, and the rental for the renewal of
leases for comparable space located in the vicinity. The Market Rate shall
include any tenant improvements, tenant improvement allowances, abatement of
rentals or concessions that are then being offered by Landlord or other property
owners for space comparable to the Premises.

In the event Tenant exercises any such Renewal Option, within sixty (60) days
after commencement of each Renewal Term, Landlord shall clean the carpet
throughout the Premises and touch-up the paint on interior walls within the
Premises as needed.

2. Right of First Refusal. In the event Tenant is not in default of this Lease,
Tenant shall be granted an ongoing right of first refusal to lease contiguous
and adjacent space on the third and fourth floors of the Building (the “Vacant
Space”). In the event Landlord receives an offer to lease any portion of the
Vacant Space from a third party, Landlord shall so notify Tenant. Thereupon,
Tenant shall, for a period of twenty (20) days following receipt of such notice,
time being of the essence, have a right and option to lease the applicable
Vacant Space upon the same terms and conditions as this Lease, as the same may
be equitably adjusted based on the additional square footage and the term
remaining on this Lease. Upon addition of space to the Premises pursuant to the
exercise by Tenant of its option hereunder, Landlord and Tenant shall execute
and deliver an amendment to this Lease confirming the same. Notwithstanding
anything in this Lease to the contrary, the right of first refusal granted to
Tenant pursuant to this paragraph is not applicable during the final twelve
(12) months of the initial Term or any Renewal Term, unless Tenant has exercised
its Renewal Term, in which event, this right of first refusal shall not be
applicable during the last twelve (12) months of the Renewal Term. If
notification of the exercise of this option by Tenant is not given and received
as set forth above, Landlord shall be permitted to lease the Vacant Space to any
third party.

Notwithstanding the forgoing, Landlord hereby agrees that it will not actively
market or lease to any party other than Tenant, the fourth floor contiguous
space for a period beginning on the Effective Date and expiring on June 15,
2012.

3. Signage. Tenant may install, at Tenant’s request and sole expense, up to two
(2) exterior building façade signs at a location on the Building to be mutually
acceptable to both Landlord and Tenant. The design of such exterior signs shall
be designated by Tenant and subject to Landlord’s consent, not to be
unreasonably withheld, and all restrictions and applicable ordinances as well as
the architectural review

 

G-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

committee for Brier Creek. Tenant acknowledges that this exterior sign right is
granted to Inspire Pharmaceuticals, Inc. and is specific to Inspire
Pharmaceuticals, Inc In the event this Lease is assigned or sublet, there shall
be no exterior signage right for such successor tenant or subtenant; provided,
however, that if the exterior sign does not require any change, as a result of a
merger or successor company taking over this Lease, it shall be permitted to
remain on the Building. Tenant shall be required to remove its signs, at its
sole cost and expense, and repair the Building if necessary, upon the expiration
or earlier termination of this Lease.

4. Rules and Regulations. Notwithstanding anything to the contrary set forth in
the Rules and Regulations set forth on Exhibit B, as the same may be amended
from time to time, (i) Tenant may install curtains, blinds, shades or screens in
connection with, any window or door of the Premises without consent of Landlord,
(ii) Tenant may keep in or about the Premises, bicycles and fish,
(iii) computers may be left on before, during and after Business Hours
regardless of whether or not in use, (iv) janitorial service shall be provided
during Business Hours, (v) Tenant shall not be charged for the cost of HVAC
service used while Landlord, its agents, contractors or employees are performing
Landlord’s Work or non-routine repair items while Tenant is not in occupancy of
the Premises and (vi) Landlord shall establish a designated smoking area outside
the Building for use by Tenant’s employees, guests and invitees.

5. Landlord’s Warranties. Landlord warrants that as of the Commencement Date:
(i) Landlord’s Work has been substantially completed in accordance with approved
plans and otherwise in a workmanlike manner, is free from any defects, and is in
substantial compliance with all applicable codes and regulations; (b) all the
Premises’ mechanical systems (i.e., HVAC, etc.) are functional and in good
condition; (c) the Premises are suitable for use by Tenant for its Use;
(d) neither the Premises nor the Building contains any Hazardous Substances; and
(e) the Premises and the Building comply with all applicable laws and
regulations, including, but not limited to, the Americans with Disabilities Act.

6. Generator and Scissor Lift. Landlord shall install, in accordance with the
terms and conditions set forth on Exhibit C and according to the specifications
set forth in the Approved Landlord Plans, at such locations shown on the map
attached as an exhibit to Exhibit C, (a) a generator pad and 125KW Natural Gas
Generac (277/480 voltage, 200 AMPS) and (b) a scissor lift. The cost and expense
of (i) the scissor lift and its installation and (ii) installation of the
generator shall be paid by Tenant subject the Upfit Allowance. Notwithstanding
the provisions of Section 12, Alterations, Landlord and Tenant agree that the
generator and the scissor lift are the personal property of Tenant, for Tenant’s
sole use, and Tenant shall have the right to remove such personal property upon
the expiration or earlier termination of this Lease, provided that Tenant shall
repair any damage or repair to the Premises or the Building upon the removal
thereof. Landlord shall take such action as is necessary to prevent use of the
scissor lift by any third party other than the contractors, agents, employees,
licensees or invitees of Tenant. The indemnity and insurance provisions of the
Lease shall specifically apply to the generator area and scissor lift,
regardless of whether the same is within the Premises and Tenant shall at all
times be liable and legally responsible therefor and shall indemnify Landlord
for any costs, damages, loss or liability as a result of the same being placed
on the Land.

 

G-2

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT H

DESCRIPTION OF THE LAND

Lying and being located in the City of Raleigh, Wake County, North Carolina and
being more particularly described as follows:

Being all of Lot 7 containing 6.55 acres as shown on “Brier Creek Corporate
Center – Parcel J Subdivision Ph.1, Open Space Ph. 2-4 & Tree Conservation Area
Ph. 1-4 Plat” recorded in the Wake County Registry in Book of Maps 2008, Pages
1636-1645.

 

H-1

--------------------------------------------------------------------------------

TABLE OF CONTENTS

EXHIBIT I

COMMENCEMENT DATE STIPULATION

Pursuant to that certain Lease Agreement (the “Lease”) Brier Creek Corporate
Center Associates Limited Partnership, a North Carolina limited partnership (the
“Landlord”) and Inspire Pharmaceuticals, Inc., a Delaware corporation (“Tenant”)
for certain premises in the Brier Creek Office #6 Building located at 8051 Arco
Corporate Drive, Raleigh, North Carolina, Landlord and Tenant hereby stipulate
and certify that:

1. Commencement Date. The Commencement Date of the term of the Lease shall be at
12:01 o’clock A.M. on the      day of             , 2010.

2. Termination Date. The Termination Date of the term of the Lease shall be at
12:00 o’clock Midnight on the                     , 2017; provided, however,
Tenant has the option to extend the term of the Lease for two additional terms
of three years.

3. Confirmation Of Square Footage. The verified square footage of the Premises
is                     . All square footage references in the Lease are hereby
amended to read “                    ” and all calculations based on the square
footage are hereby amended to be calculated based on a square footage of
                    .

4. Rent. The total monthly rent payment due under the Lease for the first year
of the term is $71,423.33 (Fixed Minimum Rent is $              and Additional
Rent is $             ). Rent shall commence on             , 2011.

5. Occupancy Date. Tenant occupied the Premises on              and by execution
of this agreement acknowledges that it has accepted the Premises in its “as-is”
condition, Landlord’s turnover requirements have been met and all Landlord’s
Work and any other construction obligations have been completed to Tenant’s full
satisfaction.

6. Effect. This Commencement Date Acknowledgment in no way alters, modifies, or
amends the Lease, and the Lease continues uninterrupted, unabated and in full
force and effect.

The terms and provisions of this Commencement Date Stipulation are hereby
incorporated into the Lease and modify any and all provisions to the contrary
contained therein.

 

I

--------------------------------------------------------------------------------

TABLE OF CONTENTS

Executed under seal as of the      day of                     , 2010.

TENANT:

 

INSPIRE PHARMACEUTICALS, INC.

a Delaware corporation

By:

 

 

Name:

 

 

Title:

 

 

LANDLORD:

 

BRIER CREEK CORPORATE CENTER ASSOCIATES LIMITED PARTNERSHIP,

a North Carolina limited partnership

    By:  

AAC-Corporate Center Development GP, LLC, a

North Carolina limited liability company, its General Partner

    By:  

 

      Name:   Paul L. Herndon       Title:   Vice President  

 

I