Exhibit 10.13

LEASE AGREEMENT

THIS LEASE AGREEMENT (the “Lease”) is made and entered into on this the 7th day
of March, 2008, between LICHTIN/TORINGDON LAND, LLC, a North Carolina limited
liability company (“Landlord”), and CHELSEA THERAPEUTICS, INC., a Delaware
corporation (“Tenant”).

LEASE DEFINITIONS

As used in this Lease, the following specified terms shall have the meanings
ascribed below, unless the context clearly requires otherwise:

Alterations. As defined in Section 4.7.

Base Rent. As defined in Section 2.3.

Broker (if any). None.

Building. Collectively, the four (4) story office building constructed or to be
constructed by or for Landlord, known as “Toringdon VI” subject to alterations
made in the final plans, containing approximately 96,449 rentable square feet
located at 3530 Toringdon Way, Charlotte, North Carolina 28277.

Building Common Areas. Common Areas shall include the lobby of the Building,
corridors, communication shafts, any workout room or facility, building
manager’s offices, elevators, elevator shafts and elevator foyers, stairwells,
entrances, lobbies, public restrooms, mechanical rooms, water holding areas,
janitorial closets, telephone rooms, mail rooms, electrical rooms, elevator
mechanical rooms located above the elevator shafts, and other similar areas of
the Building provided for Building systems or for the common use or benefit of
all tenants primarily or the public generally; provided, however, that the
identity and location of such Common Areas is subject to the terms of
Section 1.2.

Certificate of Occupancy. A certificate of occupancy or a temporary certificate
of occupancy issued by the Building Standards Department or other appropriate
Governmental Authority of Mecklenburg County, North Carolina.

Commencement Date. As set forth in Section 2.1.

Common Areas. Collectively, the Building Common Areas and the Project Common
Areas.

Comparable Space. Comparable office space of similar floor height, and located
in first-class office buildings (including, without limitation, the Building)
with similar parking facilities and with consummated leases achieved in the
applicable perimeter south submarket of Charlotte, North Carolina.

Contract Rate. A rate of interest equal to two percent (2.0%) above the rate of
interest announced from time to time as the “prime rate” by Bank of America,
N.A. or its successors at its home office in Charlotte, North Carolina.

Environmental Condition. As defined in Section 4.3.3.

Environmental Laws. As defined in Section 4.3.1.

Force Majeure. As defined in Section 8.1.

Governmental Authority. The government of the United States of America, the
State of North Carolina and any political subdivision thereof, or any local,
state or national public authority, agency, department, commission, board,
bureau or instrumentality with authority over the Building or the Project.

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With respect to matters pertaining to insurance, boards of fire underwriters
shall be a Governmental Authority to the extent they have power to impose
conditions on the issuance of policies or the coverage thereof.

Hazardous Materials. As defined in Section 4.3.1.

Holidays. New Year’s Day, Memorial Day (observed), Independence Day, Labor Day,
Thanksgiving Day and Christmas Day.

Landlord. As defined on Page 1.

Landlord’s Work. As defined in Exhibit B.

Lease. As defined on Page 1.

Normal Business Hours. Seven o’clock a.m. (7:00 a.m.) to six o’clock p.m. (6:00
p.m.) Monday through Friday and eight o’clock a.m. (8:00 a.m.) through one
o’clock p.m. (1:00 p.m.) Saturdays, excluding Holidays. Landlord may modify the
Normal Business Hours, from time to time, in its reasonable discretion.

Parking Area. The structured and surface parking areas associated with the
Project available for the common use or benefit of all tenants of the Project
primarily or the public generally, as such area may be reconfigured or altered
by Landlord from time to time.

Plans. As defined in Section 3.1 herein.

Premises. That portion of the Building shown or described in Exhibit A including
any exterior balconies and/or patios adjacent to such space, and further
designated in Section 1.1.1 together with any changes made thereto in accordance
with this Lease.

Project. The development known as “Toringdon” owned and constructed or to be
constructed by Landlord, from time to time, on Toringdon Way, Charlotte, North
Carolina 28277. The Project includes the Building, the Parking Area and walkways
and the other office buildings, parking areas, driveways and other Common Areas
owned and operated by Landlord or Landlord’s affiliates within the Project from
time to time.

Project Common Areas. Project Common Areas shall include the Parking Area,
outdoor plazas and walkways, driveways, any workout room or facility within the
Building and all similar areas of the Project available for the common use or
benefit of all tenants of the Project primarily or the public generally.

Rent. The Base Rent payable under Section 2.3 as adjusted plus any other sums
owed by Tenant to Landlord under this Lease.

Rentable Area. The rentable portion of the Premises consisting of 9,956 square
feet and being the sum of 8,768 usable square feet and 1,188 square feet
representing Tenant’s share of a core factor of 13.55%.

Rentable Area in the Building. The aggregate Rentable Area in the Building,
which area shall be calculated prior to the Commencement Date by Landlord’s
architect in accordance with the BOMA American National Standard Z65.1-1996 (the
“BOMA Standard”). As of the date of the execution of this Lease but subject to
confirmation by the Landlord’s architect, Landlord and Tenant agree that the
Rentable Area in the Building is currently estimated to be 96,449 square feet.
At the request and expense of Landlord, the Landlord’s architect shall adjust
this figure from time to time as appropriate to conform to any changes in the
actual Rentable Area in the Building as built.

 

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Rules and Regulations. Attached as Exhibit D.

Tenant. As defined on Page 1.

Tenant Affiliate. As defined in Section 4.9.1.

Tenant’s Work. Work to be completed to prepare the Premises for occupancy by
Tenant at the expense of Tenant with plans and specifications for same approved
by Landlord.

Term. As set forth in Section 2.1.1.

Turnkey Upfit. The initial construction of the Premises which shall include the
Landlord’s Work, the building standard materials and finishes as set forth on
Exhibit A-1 and any agreed upon above-standard item as set forth on Exhibit B-3.

Useable Area of/in the Premises. The useable area within the Premises calculated
in accordance with the BOMA Standard. The Useable Area of the Premises is
approximately 8,768 usable square feet which uses a core factor of 13.55%.

Year, Calendar Year, Lease Year. A Year shall be any period of 365/366
consecutive days. Calendar Year shall mean the period from January 1 to
December 31. Lease Year shall refer to each Year beginning on the Commencement
Date or each anniversary thereof during the Term.

CONSIDERATION

In consideration of the mutual promises and agreements set forth herein, the
legal sufficiency of which the parties hereto expressly acknowledge, Landlord
and Tenant agree as follows:

 

I. LEASE OF PREMISES

1.1 Premises.

1.1.1 Demise of Premises. Subject to and upon the terms, provisions and
conditions hereinafter set forth, and each in consideration of and conditioned
upon the duties, covenants and obligations of the other hereunder, Landlord does
hereby lease, demise and let to Tenant, and Tenant does hereby lease from
Landlord, the Premises more particularly described as approximately 9,956
rentable square feet of the Building as reflected on the floor plan attached
hereto as Exhibit A and incorporated herein by reference.

1.1.2 Warranty of Title. Landlord warrants and represents to Tenant that
Landlord has the right, power, authority and ability to lease all of the
Premises and to undertake all other obligations of Landlord set forth herein.

1.1.3 Expansion Option. Provided that Tenant is not in default hereunder, Tenant
shall have the option at any time during the first eighteen (18) months of
occupancy (the “Option Period”) to expand the Rentable Area in the Premises to
include approximately 3,000 rentable square feet of additional space that is
adjacent to the Premises (the “Additional Space”) on the same terms and
conditions as set forth in this Lease (the “Expansion Option”). Landlord shall
not market the Additional Space during the Option Period in exchange for
Tenant’s paying to Landlord the annual sum of $7.00 per rentable square foot of
area in the Additional Space (the “Option Period Fee”), with such sum to be paid
in equal monthly installments for each month of the Option Period in which
Tenant has not exercised its Expansion Option or until Tenant elects not to
exercise the Expansion Option by written notice to Landlord. Tenant shall pay
such monthly installment of the Option Period Fee with Tenant’s monthly payment
of Base Rent as set forth herein. In the event Tenant wishes to exercise its
Expansion Option during the Option Period, Tenant shall provide Landlord with
written notice of its intention to exercise the Expansion Option. Within ten
(10) days of Landlord’s receipt of Tenant’s exercise of the Expansion Option,
Landlord and Tenant shall execute an amendment to this Lease confirming the
square footage of the Premises as

 

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expanded and Base Rent as increased, by the Additional Space and including any
other such details that Landlord deems reasonably necessary, which do not
materially alter the terms of this Lease except as otherwise provided herein.
Landlord shall provide Tenant the services set forth in Section 3.1 with respect
to the Additional Space, the cost of which shall be borne by Landlord and shall
be equal to the per square footage construction costs for the Turnkey Upfit
prorated by dividing such per square footage construction costs by a fraction
the numerator of which is the number of months remaining in the Term when Tenant
exercised its Expansion Option and the denominator of which shall be sixty-five
(65) (number of months in the Term). Landlord shall configure the Additional
Space so that it has connectivity with the Premises upon Landlord’s delivering
the Additional Space to Tenant.

1.1.4 Right of First Refusal. Subsequent to the expiration or sooner termination
of the Option Period, Landlord hereby grants and Tenant shall have a one-time
right of first refusal to lease the Additional Space upon the same terms and
conditions as provided in the Landlord’s Notice (as hereinafter defined) for
rent and provided that at least three (3) years remain in the Term when Tenant
occupies the Additional Space.

Landlord shall use reasonable efforts to lease other vacant space in the
Building prior to leasing the Additional Space. In the event that Landlord
receives an offer to lease the Additional Space, Landlord shall so notify Tenant
of the terms and conditions of such offer (“Landlord’s Notice”). Within five
(5) business days after the receipt of Landlord’s Notice, Tenant shall provide
written notice to Landlord as to Tenant’s decision to lease or not to lease the
Additional Space. If Tenant provides such notice to lease the Additional Space,
Landlord and Tenant shall execute a lease or an amendment hereto for the
Additional Space within ten (10) days after Landlord’s receipt of Tenant’s
notice of intent to lease on all the same terms as provided in the Landlord’s
Notice except that the lease by Tenant must be for at least three (3) lease
years commencing on the date Tenant occupies the Additional Space and expiring
on the expiration date of this Lease. If Tenant does not provide written notice
within five (5) business days of the receipt of Landlord’s Notice, Tenant shall
have been deemed to have waived its right to lease the Additional Space.
Thereafter, Landlord shall be free to enter into a lease with such third party
(a “Third Party Lease”) on terms no more favorable to the third party than those
identified in the Landlord Notice, and the rights of Tenant in and to the
Additional Space shall be null and void and of no further force and effect.
Landlord shall provide Tenant the services set forth in Section 3.1 with respect
to the Additional Space, the cost of which shall be borne by Landlord and shall
be equal to the per square footage construction costs for the Turnkey Upfit
prorated by dividing such per square footage construction costs by a fraction
the numerator of which is the number of months remaining in the Term when Tenant
exercised its right of first refusal and the denominator of which shall be
sixty-five (65) (number of months in the Term). Landlord shall configure the
Additional Space so that it has connectivity with the Premises upon Landlord’s
delivering the Additional Space to Tenant.

1.2 Common Areas. Tenant, its employees and invitees shall have the
non-exclusive right to use the Common Areas as constituted for general use of
occupants of the Building from time to time (except for mechanical rooms,
janitorial closets and other areas intended for systems maintenance and not for
access by tenants or the general public), such use to be in common with
Landlord, other tenants of the Project and other persons and subject to the
Rules and Regulations set forth in Exhibit D attached hereto and by this
reference made a part hereof, as such Rules and Regulations may be amended from
time to time provided such amendments are nondiscriminatory in nature. Subject
to the limitations set forth in the next sentence, Landlord reserves the right
from time to time to undertake any or all of the activities described below,
provided such reservation of rights shall not: (i) materially affect Tenant’s
use or enjoyment of or access to the Premises, the Parking Area or Tenant’s
other rights under this Lease, or increase the amount of Rentable Area in the
Premises; (ii) increase Tenant’s Rent; or (iii) reduce the number of Tenant’s
parking privileges set forth herein (but the Landlord may grant reserved parking
spaces to one or more tenants). In connection therewith, Landlord reserves the
following rights: to add to, or subtract from, or change from time to time, the
dimensions and location of the Common Areas, it being understood that Landlord
may, at its option, add areas to or remove areas from the Common Areas; to
create any additional improvements in the Common Areas or to alter or remove any
improvements in the Common Areas; to convert areas previously designated by
Landlord as part of the Common Areas to an area leased to one or more tenants or
to designate previously leased space other than the Premises as part of the
Common Areas provided equitable adjustments are made to the Rentable Area in the
Building; to make alterations or additions to the Building and to any other
buildings or improvements within the Project; to operate and/or maintain such
Common Areas in conjunction with other parties; to construct, or permit others
to construct, other buildings or improvements within the Project; and permit
special use of the Common Areas, including temporary exclusive use for special
occasions. Landlord is not obligated to construct or provide for Tenant any
improvements outside the Building except as otherwise expressly provided in this
Lease.

 

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II. TERM; RENT

2.1 Term.

2.1.1 Commencement Date. Subject to and upon the terms and conditions set forth
herein, or in any exhibit or addendum hereto, this Lease shall continue in force
for a term of sixty-five (65) months, beginning on May 15, 2008 (such date, as
it may be extended pursuant to this Lease generally and Section 3.1 of this
Lease in particular, the “Commencement Date”) and ending on October 14, 2013,
adjusted to account for adjustment to the Commencement Date as provided for
herein (the “Term”). On or prior to Landlord’s delivery of the Premises to
Tenant, Tenant shall execute and deliver a certificate or written statement
acknowledging that Tenant has accepted possession of the Premises, reciting the
exact Commencement Date and expiration date of this Lease, certifying that
Landlord has fully complied with all of Landlord’s covenants and obligations
hereunder (to the extent accurate), and acknowledging the Rentable Area of the
Premises as indicated herein.

2.2 Use. The Premises are to be used and occupied by Tenant solely for general
office purposes.

2.3 Base Rent. Subject to the terms of Section 2.4, during the initial Term of
this Lease, Tenant hereby agrees to pay to Landlord base annual rental (as
specified, the “Base Rent”) at the rate of $22.95 per square foot of Rentable
Area in the Premises. Notwithstanding the foregoing, Tenant shall receive a
total abatement of Base Rent for a period of five (5) consecutive months
beginning on the Commencement Date and ending on the date that is five
(5) months thereafter.

The Base Rent then in effect shall be due and payable in twelve (12) equal
monthly installments on the first day of each calendar month during the Term.
Except as elsewhere provided in this Lease, Tenant agrees to pay Rent to
Landlord monthly in advance without demand, reduction, abatement, counterclaim
or setoff at Landlord’s designated address. If the Term commences on a day other
than the first day of a month or terminates on a day other than the last day of
a month, then the Rent for such month or months shall be prorated in accordance
with the actual number of days in the relevant month and the installment or
installments so prorated shall be paid in advance.

2.4 Base Rent Adjustment. Beginning on the one year anniversary of the
Commencement Date, and continuing on each anniversary thereof, Base Rent shall
increase each Lease Year during the Term of this Lease by three percent
(3%) over the previous Lease Year.

2.5 Holding Over. Tenant shall have no right to hold over in the Premises after
the expiration or earlier termination of this Lease, and in the event of such a
holdover without Landlord’s prior written consent, Tenant shall be deemed a
tenant at sufferance, subject to ejectment by Landlord at any time without
notice. In the event of holding over by Tenant after expiration or termination
of this Lease without the written consent of Landlord, Tenant shall (i) pay
Landlord, within thirty (30) days after Landlord’s written demand therefor, all
damages caused by Tenant’s holding over (including, without limitation, all
claims for damages by any other tenant to whom Landlord may have leased all or
any part of the Premises and all losses suffered by Landlord arising out of
other agreements concerning the Premises which Landlord is unable to honor, in
whole or in part, as a result of Tenant’s holding over) and all attorneys’ fees
incurred by Landlord as a result of Tenant’s holding over, and (ii) pay to
Landlord one hundred twenty-five percent (125%) of all Rent owed by Tenant to
Landlord in accordance with the terms of this Lease. Any holding over with
Landlord’s written consent shall constitute a lease from month to month under
all the terms and provisions of this Lease, and unless otherwise agreed in
writing, either Landlord or Tenant may terminate this Lease upon at least thirty
(30) days prior written notice to the other.

2.6 Late Charges. If at any time any Rent is not received by the fifth (5th) day
following the date on which or period within which any monetary obligation of
Tenant under this Lease becomes due (including dishonored checks), then in
addition to the amount owed, Tenant shall pay to Landlord a late charge equal to
ten percent (10%) of the past due obligation. This provision shall not be deemed
to condone the late payment of any monetary obligation, and shall not be
construed as giving Tenant an option to pay late by paying the late charge

 

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provided for herein. Instead, all funds are due at the times specified in this
Lease without any grace period. Failure to pay shall subject Tenant to all
applicable default provisions provided hereunder or by law, and Landlord’s
remedies shall not be abridged by claiming or collecting a late charge.

2.7 Insufficient Funds. If Tenant has insufficient funds to cover a Tenant’s
check presented by the Landlord for payment, Landlord shall be entitled to the
maximum lawful fee chargeable for checks returned for insufficient funds or five
percent (5%) of the amount of such check, whichever amount is less. In addition,
Tenant’s delivery of a check for which Tenant has insufficient funds on account
shall constitute an event of default hereunder; provided however, that Tenant
shall not be considered to be in default hereunder if such returned check was
the result of a bank error and Tenant can provide documentation from such bank
to Landlord supporting Tenant’s assertion of a bank error.

 

III. GENERAL MATTERS

3.1 Initial Construction of the Premises. Prior to the Commencement Date,
Landlord, at Landlord’s sole cost and expense, shall install and furnish all
facilities and materials and perform all work required for the Common Areas and
the core and shell of the Building and shall provide Landlord’s Work as
described in Exhibit B, with such minor variations as Landlord in its sole
discretion may deem advisable; provided, however, any variations in Landlord’s
Work shall not materially interfere with Tenant’s intended use of the Premises
or Tenant’s approved plans and specifications. In addition, Landlord shall
supervise the design, construction and installation of the initial improvements
in the Premises (the “Tenant Improvements”) in accordance with the plans and
specifications for such improvements as set forth in the construction drawings
to be prepared by Landlord’s architect (such drawings, the “Plans”) using
building standard materials as set forth in Exhibit A-1 and including any agreed
upon above-standard items as set forth in Exhibit B-3 (such design, construction
and installation, the “Turnkey Upfit”) and any agreed-upon above-standard items
to be provided at Tenant’s cost as set forth on Exhibit B-4. Landlord shall
provide Tenant with an allowance, not to exceed $10,000.00, to offset the cost
of above-standard items to be constructed in the Premises as set forth in
Exhibit B-4 (the “Above-Standard Items Allowance”). The cost of any
above-standard items in excess of the Above-Standard Items Allowance shall be
the sole responsibility of Tenant. In the event the actual cost to construct the
above-standard items set forth on Exhibit B-4 is less than the Above-Standard
Items Allowance, Tenant shall not be entitled to receive a credit, reimbursement
or otherwise recoup any unused portion of the Above-Standard Items Allowance.
Tenant agrees to cooperate with Landlord to provide Landlord within three
(3) business days after the full execution hereof all information necessary for
Landlord to prepare the Plans. Any space plans and any other preliminary plans
for the upfit of the Premises provided by Tenant shall be subject to Landlord’s
prior approval, not to be unreasonably withheld or delayed, and the Plans to be
prepared by Landlord’s architect shall be materially consistent with Tenant’s
preliminary space plans, as approved by Landlord. Landlord shall bear the cost
of necessary construction documents, the cost of approvals or permits required
by Governmental Authorities as well as the cost of constructing such Tenant
Improvements as part of the Turnkey Upfit on an “as completed” basis in
accordance with the costs computed by Landlord to construct the Premises per the
Plans using standard building materials of Landlord. A preliminary copy of the
floor plan has been approved by the parties hereto and shall be attached hereto
and made a part hereof as Exhibit A. In the event that at any time (i) Tenant
requests any change to the Plans from that shown on Exhibit B-1 which has
resulted or might result in an increase in the cost of the Turnkey Upfit,
including without limitation, an increase in engineering costs associated
therewith, (ii) Tenant or its agents, employees, contractors or subcontractors
(collectively, “Tenant’s Invitees”) shall cause a delay in the completion of the
Turnkey Upfit, (iii) Tenant shall request the use of materials other than
standard building materials of Landlord, or (iv) Tenant shall request the use of
specialty equipment that increases the engineering costs associated with such
Turnkey Upfit, regardless of whether such specialty equipment is purchased and
installed by Tenant, then Tenant shall promptly deliver the necessary funds to
defray any and all such excess costs to Landlord due to any of the aforesaid
acts or omissions by Tenant or Tenant’s Invitees within five (5) business days
after request made by Landlord. Failure of Tenant to comply with any such
request within the time period provided shall be an event of default under this
Lease.

Upfit of the Premises shall proceed in accordance with the schedule, attached
hereto and made a part hereof as Exhibit B-2. Any acts or omissions by Tenant or
any third party (including, any local or State governmental agency) other than
Landlord, or their respective agents, officers, employees, invitees, or
independent contractors that result in delays under the Schedule shall result in
modifications of the Schedule and the Target Date, and Landlord shall not be
liable or responsible for any such delays.

 

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Provided the floor plan has been agreed upon and attached to this Lease, as
provided in Section 1.1.1, Landlord agrees to use reasonable efforts to have the
Premises substantially completed and “Ready for Occupancy” (as hereinafter
defined) on or before May 15, 2008 (the “Target Date”). If Landlord for any
reason whatsoever cannot deliver possession of the Premises to Tenant in
accordance with the terms hereof on or before the Target Date as hereinabove
specified, except for Tenant’s right to terminate if the Premises are not
delivered within one hundred twenty (120) days after the Target Date, this Lease
shall not be void or voidable nor shall Landlord be liable to Tenant for any
loss or damages resulting therefrom; but in that event, except to the extent
that any such delay is attributable to Tenant or Tenant’s Invitees, the
Commencement Date shall be adjusted to be the date when Landlord does in fact
deliver possession of the Premises to Tenant in accordance with the terms
hereof. The postponement of the Commencement Date shall be Tenant’s only remedy
in such event. Notwithstanding the foregoing, in the event of any delays
attributable to Tenant or Tenant’s Invitees (a “Tenant Delay”), the Commencement
Date shall be deemed to be the date upon which Landlord would have delivered the
Premises to Tenant in accordance with the terms hereof but for the delays
attributable to Tenant or Tenant’s Invitees.

Notwithstanding anything herein to the contrary, in the event Landlord is unable
to deliver the Premises with a temporary certificate of occupancy on or before
June 1, 2008 (the “Delayed Target Date”), Tenant shall receive a total abatement
of Base Rent of one (1) day for each day beyond the Delayed Target Date that the
Premises has not been delivered, provided that Landlord shall not be liable for
such abatement if the delay is attributable to a Tenant Delay or Force Majeure.
If Landlord is unable to delivery the Premises by June 26, 2008 for reasons
other than Tenant Delays, Landlord shall provide, through Landlord’s affiliate,
Lichtin Executive Suites, LLC, temporary space for up to twenty (20) of Tenant’s
employees (the “Temporary Space”) in the building known as Toringdon III, which
is within the Project. The Temporary Space shall be provided without charge to
Tenant until such time as the Premises have been delivered or this Lease has
been terminated as provided herein. In the event Landlord has not delivered the
Premises to Tenant within one hundred twenty (120) days of the Target Date for
any reason other than Tenant Delay, Tenant shall have the right to terminate
this Agreement without penalty upon written notice to Landlord, in which event
Tenant’s rights to the Temporary Space shall be automatically terminated. Delays
in construction of the Premises that are attributable to Force Majeure shall not
extend the time periods set forth herein for (i) Landlord to provide Temporary
Space to Tenant or (ii) Tenant’s right to terminate.

The Premises shall be deemed “Ready for Occupancy” on the date on which a
(i) Certificate of Occupancy has been issued with respect to the Premises,
(ii) the Premises have been substantially completed in a good and workmanlike
manner, free of defects, in compliance with laws and in accordance with the
Plans (excepting only minor punchlist items which can be fully completed without
material interference with Tenant and other items which because of the seasonal
weather or the nature of the item are not practicable to do at the time provided
that none of said items is necessary to make the Premises tenantable for the
uses permitted hereunder) and (iii) mechanical systems are functioning and in
good condition; provided, however, that if Landlord is unable to complete
construction due to delay in Tenant’s compliance with the requirements of this
Lease, then the Premises shall be delivered to Tenant on the date upon which
Landlord would have completed the construction but for the Tenant Delays (which
date shall constitute the Commencement Date). Notwithstanding such delivery,
Landlord shall proceed to make the Premises Ready for Occupancy and Tenant shall
have the right to walk-through and inspect the Premises as described herein.
Upon Tenant’s request, which request shall be made within fifteen (15) days
following Landlord’s delivery to Tenant of the Ready for Occupancy notice,
Landlord agrees to participate in a joint walk-through and inspection of the
Premises with Tenant, which joint walk-through and inspection shall occur within
fifteen (15) days following delivery of the Ready for Occupancy notice. When the
Premises are Ready for Occupancy, Tenant agrees to accept possession thereof,
subject to Landlord’s completion of the foresaid punchlist items, and to proceed
to occupy the Premises and conduct its business operations therein. Except with
respect to latent defects and any uncured items contained in an inspection
punchlist delivered by Tenant to Landlord at or prior to occupancy, Tenant’s
occupancy of the Premises shall conclusively establish that the Premises are at
such time in satisfactory condition, order and repair. Landlord shall be
responsible for and shall rectify (i) any patent defects in the core and shell
of the Building identified in writing by Tenant or Tenant’s consultants within
thirty (30) days of Tenant’s possession of the Premises, and (ii) any latent
defects in, or deteriorations of, the core and shell of the Building identified
by Tenant or Tenant’s consultants within one (1) year of Tenant’s possession of
the Premises. Landlord agrees to commence any necessary remedial work
immediately upon receipt of Tenant’s or Tenant’s consultant’s identification of
defects and thereafter shall diligently pursue completion of any necessary
remedial work.

 

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3.2 Services to Be Furnished by Landlord. During the Term during Normal Business
Hours, Landlord shall operate and manage the Building in an efficient,
cost-effective manner; and provide janitorial and other services comparable in
service and quality to those provided for Comparable Space. During the Term,
Landlord shall cause public utilities to furnish electricity and water to the
Building and the Premises and shall furnish Tenant with the other services
described in Exhibit E attached hereto and incorporated herein by reference.
Notwithstanding the foregoing, Landlord shall have the right to shut down the
Building systems (including electricity and HVAC systems) for required
maintenance and safety inspections and, except in cases of emergency, shall
provide 48 hours notice to Tenant of any shutdown and shall use reasonable
efforts to avoid interfering with Tenant’s use of the Premises.

3.3 Access Procedures. There shall be open access to the Building weekdays
(except Holidays) from seven o’clock a.m. (7:00 a.m.) to six o’clock p.m. (6:00
p.m.), from six o’clock p.m. (6:00 p.m.) to seven o’clock a.m. (7:00 a.m.)
Monday through Friday and twenty-four (24) hours per day on weekends and
Holidays, access to the Building will be restricted by use of a card access
system at the front entrance to the Building. On the Commencement Date, Landlord
shall furnish Tenant at no cost up to one (1) access card (or the functional
equivalent thereof) to access the Building and the Premises for each two hundred
fifty (250) square feet of Rentable Area in the Premises and thereafter provide
additional cards at a charge not to exceed Landlord’s cost for each such card
without markup on an order signed by Tenant. Landlord shall replace all
defective access cards without charge. All cards shall remain the property of
Landlord. No additional locks shall be allowed on any door of the Premises
without Landlord’s written permission. If Tenant receives Landlord’s permission
and installs additional locks on the Premises, Tenant shall immediately provide
Landlord with copies of keys for such locks. Landlord shall have the right to
maintain master keys and pass keys to all doors to and within the Premises. Upon
termination of this Lease, Tenant shall surrender to Landlord all access cards
and keys related to the Premises, and give to Landlord the combination of all
locks for safes, safe cabinets and vault doors, if any, to remain in the
Premises.

3.4 Graphics and Signage. Landlord shall provide and install Tenant’s name and
suite numerals of the Premises inside the Building in a location reasonably
determined by Landlord. All graphics of Tenant visible in or from public
corridors or the exterior of the Premises shall be subject to Landlord’s prior
written approval (to be granted or withheld in Landlord’s sole discretion);
provided, however, Tenant may not display any signs or graphics visible from the
exterior of the Building. Landlord, at Landlord’s expense, will also identify
Tenant in the directory located in the main lobby of the Building and on any
other appropriate directory which may be part of the Project. The space to be
made available to Tenant in such directories shall be provided in the same
proportion that the Rentable Area of the Premises bears to the Rentable Area of
the Building.

3.5 Repairs by Landlord. Landlord shall keep and maintain the Building, the
Common Areas and the Premises (to the extent of Landlord’s obligations herein
with respect to the Premises) according to the standards of Comparable Space.
Except to the extent caused by Tenant or Tenant’s Invitees, Landlord shall make
all repairs necessary to maintain the Building, the Common Areas, the plumbing,
HVAC and electrical systems installed or furnished to the Premises by Landlord
as part of Landlord’s Work (excluding any special electrical equipment or other
fixtures installed or furnished by Landlord at Tenant’s request and not as part
of Landlord’s Work unless the maintenance and repair was necessitated by the
misrepresentation, negligence or misconduct of Landlord or caused by the
negligence of Landlord, its agents, employees, or contractors, in which case
such maintenance or repairs shall be made at Landlord’s sole cost and expense if
not otherwise reimbursed to Tenant by insurance carried by Landlord or Tenant),
windows, flooring installed or furnished by Landlord, and all other structural
elements of the Premises installed or furnished by Landlord. Tenant shall
promptly notify Landlord of any condition which requires repair. Landlord shall
undertake such repairs with due diligence within a reasonable time after written
notice from Tenant that such repair is needed subject to reasonable delays for
adjustment of insurance claims, Force Majeure or other matters beyond Landlord’s
control. In no event shall Landlord be obligated to repair any nonstructural
system damage or any damage to systems not provided in base Building plans
unless such damage is caused by the negligence of Landlord or its employees,
agents, or contractors in such capacity. Tenant shall not be required to make
structural repairs or repairs or replacements to the mechanical systems of the
Building (including but not limited, to HVAC, electrical and plumbing), but such
repairs shall be made by Landlord at Landlord’s cost, unless the repairs were
necessitated by Tenant’s negligence or misconduct, in which case such repairs
shall be at Tenant’s sole cost and expense, if such costs are not otherwise
reimbursed to Landlord by the proceeds of insurance carried by either Landlord
or Tenant. Any special leasehold improvements shall, at Tenant’s written request
and at Landlord’s option, be maintained by Landlord at Tenant’s expense in an
amount equal to Landlord’s actual cost plus

 

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an additional charge of ten percent (10%) of such cost. Notwithstanding the
provisions of this Section to the contrary, Landlord shall, at Landlord’s sole
cost and expense, repair: any defects in the construction of the (i) base
Building work or any Tenant’s Work installed by Landlord, or Landlord’s
contractor, which are discovered by Tenant and communicated in writing by Tenant
to Landlord, and (ii) the base Building work and Tenant’s Work installed by
Landlord or Landlord’s contractor necessitated by the failure of Landlord or
Landlord’s contractor to comply with the Building plans and Tenant’s Plans for
such work and all codes, legal requirements and other applicable laws in effect
at the time of construction of the base Building work and Tenant’s Work. If,
within a reasonable time after discovery, Tenant notifies Landlord of such
defects, Landlord shall thereafter, with reasonable diligence subject to
reasonable delays for adjustment of insurance claims, Force Majeure or other
matters beyond Landlord’s control, proceed to repair such defects to a
reasonably satisfactory condition consistent with comparable buildings.

3.6 Additional Repair Obligations. In addition to the obligations set forth in
Section 3.5, but subject to Tenant’s repair obligations and Tenant’s other
covenants and obligations under this Lease, Landlord shall repair and maintain
(or cause to be repaired and maintained) the Project consistent with projects
containing Comparable Space. Landlord shall exercise commercially reasonable
efforts to schedule all maintenance and repairs so as not to unreasonably
interfere with Tenant’s use of, access to and enjoyment of the Premises and
Parking Area.

3.7 Peaceful Enjoyment. Landlord warrants and represents to Tenant that Tenant
shall and may peacefully have, hold and enjoy the Premises, subject to the other
terms hereof. The parties hereto agree that said letting and hiring is upon and
subject to the terms, covenants and conditions herein set forth, and each party
covenants, as a material part of the consideration for this Lease, to keep and
perform each and all of the terms, covenants and conditions required to be kept
and performed by it, and that this Lease is made upon the condition of such
performance.

3.8 Parking.

3.8.1 General Parking. A total of four (4) unreserved spaces per one thousand
(1,000) square feet of Rentable Area in the Premises shall be available in the
Parking Area effective on the Commencement Date and continuing throughout the
Term, for the use of Tenant’s officers, managers, agents, invitees and employees
twenty-four (24) hours per day, seven (7) days per week. Tenant’s officers,
managers, agents, invitees and employees may use all or any portion of the
allotted spaces as hereinabove described effective on the Commencement Date.

3.9 Landlord’s Additional Representations and Warranties. In addition to
Landlord’s other representations and warranties set forth in this Lease,
Landlord hereby represents, warrants and covenants to Tenant as follows:

(a) Landlord has full and lawful authority to enter into this Lease.

(b) On the date of delivery of possession of the Premises to Tenant and
throughout the Term of this Lease, the Building (excluding Tenant’s Work in the
Premises) will be in substantial compliance with all applicable federal, state
and local laws, ordinances, orders, rules, regulations and other requirements of
Governmental Authorities relating to the use, condition and occupancy and the
Building and all applicable rules, orders, regulations and requirements of any
board of fire underwriters or insurance service office or any similar body
having jurisdiction over the Building; provided, however, in the event the
Building does not comply in some immaterial respects with the Americans with
Disabilities Act of 1990, as amended, or other applicable laws, such
non-compliance shall not be deemed a default by Landlord hereunder so long as
such non-compliance does not materially impair Tenant’s use and occupancy of the
Premises or endanger the health or safety of Tenant’s employees or invitees.

(c) Landlord shall maintain, repair, operate, manage and lease the Building at a
standard consistent with the maintenance, repair, operation, management and
leasing of Comparable Space.

 

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3.10 Tenant’s Financial Statements. Upon request of Landlord, Tenant agrees to
furnish to Landlord copies of Tenant’s most recent annual and quarterly
financial statements, audited if available or otherwise certified as to accuracy
by the chief financial officer of the Tenant. The financial statements shall be
prepared in accordance with generally accepted accounting principles,
consistently applied. The financial statements shall include a balance sheet and
a statement of profit and loss, and the annual financial statement shall also
include a statement of changes in financial position and appropriate explanatory
notes. Landlord may deliver the financial statements to any prospective or
existing mortgagee or purchaser of the Building. Notwithstanding the foregoing,
as long as Tenant continues to file such statements in a timely manner with the
United States Securities and Exchange Commission and such statements continue to
be available on the Internet, Tenant need not provide statements directly to
Landlord.

 

IV. TENANT’S OCCUPANCY OF PREMISES

4.1 Care and Surrender of the Premises.

4.1.1 Damage; Load Capacity. Neither Tenant nor Tenant’s Invitees shall commit
any waste or damage, or allow any waste or damage, on any portion of the
Premises or the Project. Tenant shall not place upon or load any floor of the
Building with a load exceeding its design capacity. Landlord certifies that the
floors of the Premises are each designed generally to bear one hundred
(100) pounds live load and ten (10) pounds for partitions, per square foot of
floor space, and that the location and quantity of fire proof file cabinets
shown on Exhibit A shall not exceed such load. Tenant shall take into account
such load-bearing capacities when locating all safes, additional cooling systems
and heavy installations which Tenant wishes to place in the Premises. At any
time during the Term, Landlord, in its sole and absolute discretion, may employ
a structural engineer, at Tenant’s sole cost and expense, to analyze Tenant’s
compliance with the above-stated load capacity limits.

4.1.2 Condition of Premises at End of Term. At the end of the Term, by lapse of
time or otherwise, Tenant shall deliver the Premises to Landlord in its base
building condition, broom clean and in good order, except for the following: the
Tenant Improvements; those alterations, additions and improvements thereto which
Landlord hereafter accepts; normal wear and tear; insured casualty losses;
conditions existing due to the negligent or willful acts of Landlord and its
agents, and acts of God. Notwithstanding anything to the contrary herein, Tenant
shall remove any and all data, telephone or other cabling installed in
connection with Tenant’s occupancy of the Premises at the end of the Term. If
Tenant does not so deliver the Premises, Landlord may restore the Premises to
such condition following Tenant’s surrender of possession, and Tenant shall pay
the reasonable cost thereof. Unless Landlord directs Tenant to remove such
installations, alterations, additions or improvements (in which event Tenant
shall so remove them and shall restore the Premises to its base building
condition, excepting Landlord’s Work), all installations, alterations, additions
and improvements, including partitions which may have been installed by either
Landlord or Tenant, shall remain upon the Premises and shall become Landlord’s
property, all without compensation, allowance or credit. Tenant shall reimburse
Landlord for any damage to any portion of the Building or the Premises caused by
the removal of any Alterations, additions or improvements made to the Premises.
Tenant’s movable office equipment, furniture, furnishings and artwork which can
be removed without damage to the Building shall remain Tenant’s property, and
Tenant shall have the right prior to the end of the Term to remove the same.
Tenant’s goods, effects, personal property, business and trade fixtures,
machinery and equipment not removed at the end of the Term (or within one
(1) week after entry of a final unappealable order awarding possession of the
Premises to Landlord by a court of competent jurisdiction, and provided that
during such time Landlord has not hindered or impeded Tenant’s efforts to remove
such property from the Premises by reason of Tenant’s default) shall be
considered abandoned, and Landlord may appropriate such items for itself, sell
such items or otherwise dispose of the same in such commercially reasonable
manner as Landlord deems expedient after ten (10) days’ prior written notice to
Tenant without any liability to Tenant.

4.1.3 Prohibited Equipment in Premises. Tenant shall not use or install any
equipment in the Premises that runs continuously (for example, equipment in a
computer server room and/or a supplemental HVAC unit) or places unusual demands
on the electrical, heating or air conditioning systems (“High Demand Equipment”)
without Landlord’s prior written consent. No such consent will be given if
Landlord determines, in its discretion, that such High Demand Equipment may not
be safely used in the Premises or that electrical service is not adequate to
support the High Demand Equipment. Landlord’s consent may be conditioned,
without limitation, upon separate metering of the High Demand Equipment and
Tenant’s payment of all engineering, equipment, installation,

 

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maintenance, removal and restoration costs and utility charges associated with
the High Demand Equipment and the separate meter, as well as administrative
costs as provided below. If High Demand Equipment used in the Premises by Tenant
affects the temperature otherwise maintained by the heating and air conditioning
system, Landlord shall have the right to install supplemental air conditioning
units in the Premises and/or require Tenant to use any existing supplemental
units serving the Premises. If supplemental units are required by Landlord
pursuant to the foregoing sentence, or if Tenant requests the installation
and/or use of any supplemental units, then the cost of engineering,
installation, operation and maintenance of the units shall be paid by Tenant.
All costs and expenses relating to High Demand Equipment and Landlord’s
administrative costs (such as reading meters and calculating invoices) shall be
payable by Tenant within ten (10) days after receipt of Landlord’s invoice for
such costs.

4.2 Legal Use and Violation of Insurance Coverage. Tenant shall comply with all
applicable laws, ordinances, orders, rules and regulations of any Governmental
Authority relating to the construction, use, condition or occupancy of the
Premises. Landlord shall comply with all applicable laws, ordinances, rules and
regulations of any Governmental Authority relating to the construction,
ownership, leasing and management of the Building; provided, however, Tenant
agrees that the scope of Landlord’s compliance with laws, ordinances, orders,
rules and regulations of any Governmental Authority applicable to construction
of the Building is limited to those in effect when approvals, permits and
licenses for construction of the Building were obtained or issued or to the
extent needed to not materially impair Tenant’s use and occupancy of the
Premises or the health or safety of Tenant’s employees or invitees. Tenant shall
not occupy or use, or permit any portion of the Premises to be occupied or used,
for any business or purpose which is unlawful, disreputable or deemed to be
extra-hazardous on account of fire. Tenant shall not permit anything to be done
in the Premises which would increase the rate of fire insurance coverage on the
Building.

Subject to the mutual waiver of subrogation set forth herein, Tenant agrees to
indemnify and hold Landlord harmless from and against any and all claims,
judgments, fines, penalties, losses, damages, liabilities and reasonable
attorney’s and consultant’s fees and other costs and expenses, including but not
limited to damages for bodily injury, death and property damage, which are
caused by, arise out of, occasioned by or in any way attributable to any of the
following, except to the extent caused by Landlord’s breach of this Lease or
applicable law or the willful misconduct or negligence of Landlord, its agents,
employees and contractors: (a) the use or occupancy of the Premises by Tenant or
its subtenants and assignees, or their agents, employees, contractors,
licensees, customers and express invitees, (b) the use or occupancy of any other
portion of the Project by Tenant or Tenant’s Invitees, (c) the breach of this
Lease or applicable law by Tenant or its subtenants and assignees, or their
employees, agents, contractors or subcontractors or (d) the willful misconduct
or negligence of Tenant, its agents, employees and contractors.

Subject to the mutual waiver of subrogation set forth herein, Landlord agrees to
indemnify and hold Tenant harmless from and against any and all claims,
judgments, fines, penalties, losses, damages, liabilities and reasonable
attorney’s and consultant’s fees and other costs and expenses, including but not
limited to damages for bodily injury, death and property damage, which are
caused by, arise out of, occasioned by or in any way attributable any of the
following, except to the extent caused by Tenant’s breach of this Lease or
applicable law or other willful misconduct or negligence of Tenant, its agents,
employees and contractors (a) the breach of this Lease or applicable law by
Landlord, its assignees or their employees, agents, contractors or
subcontractors or (b) the willful misconduct or negligence of Landlord, its
agents, employees and contractors.

4.3 Hazardous Materials.

4.3.1 No Storage. For the purposes of this Section, “Premises” shall include the
Premises and all space over which Tenant has the right to exclusive use and
control. Except for general office and cleaning supplies typically used in the
ordinary course of Tenant’s business, without Landlord’s prior written consent,
neither Tenant nor Tenant’s Invitees shall knowingly use, release, generate,
store or dispose of on, under or about the Project or transport to or from the
same any Hazardous Materials or permit or allow any third party to do so. For
purposes of this Lease, (i) “Hazardous Materials” means polychlorinated
biphenyls, petroleum and any fraction thereof, radioactive materials, urea
formaldehyde, asbestos, and any waste, pollutant, contaminant, chemical
compound, substance or material defined or regulated as “hazardous”, “extremely
hazardous” or “toxic” under any Environmental Laws or by any federal, state, or
local governmental agency or authority, and (ii) “Environmental Laws” means any
applicable current or future federal, state, or local law, regulation,
ordinance, order, guidance

 

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document, policy document, or ruling applicable to health or environmental
conditions on, under or about the Building, including, without limitation, the
Comprehensive Environmental Response, Compensation and Liability Act, the
Hazardous Materials Transportation Act, the Resource Conservation and Recovery
Act, the Toxic Substances Control Act, the Water Pollution Control Act, the
Clean Air Act, the Federal Insecticide, Fungicide and Rodenticide Act, and
analogous state and local laws.

4.3.2 Compliance; Citation. All of Landlord’s and Tenant’s activities on the
Project shall comply with Environmental Laws. As soon as practical after receipt
of same, Landlord or Tenant shall furnish the other party with a copy of any and
all citations, orders, notices, reports, subpoenas or requests from any federal,
state or local Governmental Authority concerning or having an impact on the
environmental condition of the Premises and a copy of any and all information,
documents or reports submitted to any Governmental Authority by or on behalf of
Landlord or Tenant regarding the environmental condition of the Premises.
Landlord or Tenant shall provide the other party with written notice of any
environmental condition affecting the Premises which must be reported to any
Governmental Authority no later than five (5) business days after occurrence of
the event which triggers the reporting obligation.

4.3.3 Landlord’s Warranties and Indemnification. Landlord shall have no
liability to Tenant or any other party for, and Tenant shall indemnify, defend
with counsel acceptable to Landlord, and hold Landlord harmless from any and all
claims, damages, fines, penalties, losses, judgments, costs and liabilities
arising out of or related to Hazardous Materials which were transported to or
used, stored, released or disposed of on, under or about the Project by Tenant,
its officers, managers, employees, agents, contractors or licensees, in
connection with work being performed by or for Tenant (except to the extent such
work is performed by Landlord, its contractors, agents or employees) regardless
of whether Landlord consented to, approved of, participated in or had notice and
approved of the activities giving rise to such liabilities. Based only upon
warranties of third parties made to Landlord and the results of environmental
audits or assessments prepared for Landlord, Landlord warrants and represents to
Tenant that to the best of Landlord’s actual knowledge without independent
investigation, the Building and the Premises contain no Hazardous Materials
except for contained petroleum products and office and cleaning supplies.
Landlord warrants and represents to Tenant that to the best knowledge of
Landlord any Hazardous Materials used or to be used in the construction of the
Building or the Premises have only or will only be used in such quantities and
in such manner as may be permitted by Environmental Laws. Except to the extent
reported in written reports delivered to Landlord and available for Tenant’s
inspection upon request, Landlord represents and warrants to Tenant that
Landlord has no knowledge of and has no reason to believe that there has been a
release, generation or storage of Hazardous Materials on, under or beneath the
Project as of the date of this Lease. Landlord shall indemnify and hold Tenant
harmless against any and all actual and direct losses, costs, expenses
(including reasonable attorneys’ fees), liabilities, claims, fines, penalties,
judgments and damages arising out of, and Landlord shall advise Tenant in
writing within five (5) business days of Landlord’s actual knowledge of, the
following: (i) all notices of violations or alleged violations of Environmental
Laws relating to activities occurring prior to the Commencement Date which are
received by Landlord in writing from any Governmental Authority and which relate
to the Premises or Project or affect the health, safety or welfare of the
tenants of the Building and their employees; and (ii) the release of any
Hazardous Materials in, on, under or about the Premises or any part of the
Project by Landlord or Landlord’s agents. Any interruption of Tenant’s occupancy
or use and enjoyment of the Premises or any condition which constitutes a danger
to the health, safety and welfare of Tenant’s officers, managers, employees,
agents or contractors, each of which results from environmental contamination
which is not attributable to Tenant or its contractors, agents or employees,
shall constitute an interruption of services under Section 10 of Exhibit E.
Notwithstanding anything to the contrary in this Lease, if any environmental
contamination which is not attributable to Tenant or its contractors, agents or
employees interrupts Tenant’s occupancy or use and enjoyment of the Premises or
constitutes a danger to the health, safety and welfare of Tenant’s officers,
managers, employees, agents and contractors (such contamination, an
“Environmental Condition”) occurs or exists for more than ten (10) consecutive
business days, Landlord shall abate Tenant’s Rent effective from and after the
date which is ten (10) consecutive business days after the date the
Environmental Condition began, until Tenant shall once again have unimpaired
occupancy or use and enjoyment of the Premises or the Environmental Condition is
removed.

Notwithstanding anything in this Lease to the contrary, if Landlord is not in
compliance with any applicable Environmental Laws or any representation or
warranty contained herein, such noncompliance shall not be deemed to be an event
of default hereunder or a breach of this Lease so long as such noncompliance
does not have a materially adverse affect on Tenant’s use of the Premises or on
the health or safety of Tenant’s employees or invitees.

 

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4.4 Nuisance. Tenant shall conduct its business and shall use its best efforts
to control its officers, managers, agents, employees, invitees and visitors in
such manner as not to create any nuisance, or interfere with any other tenant of
the Building or with Landlord in its operation of the Project.

4.5 Rules of the Building. Tenant and its officers, managers, employees, agents,
visitors, contractors, assigns and licensees shall comply with the Rules and
Regulations of the Project attached as Exhibit D, as the same may be reasonably
amended from time to time. No change in the Rules and Regulations shall be made
that would materially and adversely affect Tenant’s ability to use the Premises
as originally intended. Tenant shall be required to comply with only those
regulations that do not conflict with the terms and conditions of this Lease.
The terms of the Lease shall control any conflict with the terms of the Rules
and Regulations.

4.6 Repairs by Tenant. At Tenant’s own cost and expense, Tenant shall repair or
replace any damage or injury done to the Premises, the Project or any part
thereof caused by Tenant or its contractors, subcontractors, officers, managers,
agents, employees, invitees or visitors (other than Landlord or its contractors,
subcontractors, agents, or employees) to the extent such damage or injury is not
covered by insurance. If Tenant has not undertaken such repairs or otherwise
diligently pursued all actions preparatory to such repairs within thirty
(30) days after notice from Landlord of Tenant’s obligation to do so or if
Tenant is not diligently pursuing completion of any repair undertaken within the
thirty (30) day period, Landlord may, at its option, make such repairs or
replacements, and Tenant shall pay to Landlord the cost thereof, plus an
additional charge of fifteen percent (15%) to Landlord on demand.

4.7 Alterations, Additions, Improvements.

4.7.1 Right to Make Alterations. After Tenant Improvements have been made in the
Premises, Tenant shall have the right from time to time to make changes,
additions, material repairs, improvements or other alterations (collectively,
“Alterations”) in or to the Premises upon the prior written approval of
Landlord, which approval shall not be unreasonably withheld, conditioned or
delayed. Notwithstanding anything to the contrary herein, in the event Landlord
approves such Alterations, and in such approval letter does not require the
removal of such Alterations upon Tenant’s vacating the Premises, Tenant shall
not be required to remove the approved Alterations and restore the Premises to
the condition existing prior to the installation of the Alterations upon
Tenant’s vacating the Premises. Furthermore, notwithstanding anything contained
herein to the contrary, all alterations and improvements to the Premises,
including without limitation the Tenant Improvements, whether undertaken by
Tenant or Landlord using Landlord’s contractor shall be subject to a fee in an
amount equal to ten percent (10%) of the total cost of planning and constructing
any such alterations and improvements payable by Tenant to Landlord as a profit
and overhead fee upon Landlord’s demand for same. In the event Tenant wishes to
use a contractor other than Landlord’s contractor and Landlord reasonably
approves such contractor, however, Tenant shall not be required to pay such fee
in connection with work performed by such contractor.

4.7.2 Agreements; Permits. Tenant shall enter into an agreement for the
performance of such Alterations with such contractors and subcontractors
selected by Tenant and reasonably approved by Landlord; provided, however,
Landlord’s approval of such contractors or subcontractors shall only be required
to the extent the Alterations require Landlord’s approval. Tenant’s contractors
shall obtain, on behalf of Tenant and at Tenant’s sole cost and expense, all
necessary governmental permits and approvals for the commencement and completion
of such Alterations.

4.7.3 Review by Landlord; Completion. If any Alterations require Landlord’s
approval, Tenant shall pay to Landlord the reasonable, actual cost of Landlord’s
independent engineers (but not Landlord’s “in-house” personnel). Such payment
shall be made within thirty (30) days after Tenant’s receipt of invoices from
Landlord, or at Landlord’s option, prior to the commencement of the Alterations.
All Alterations shall be performed: (i) in accordance with the approved plans,
specifications and working drawings; (ii) lien-free and in a good and
workmanlike manner; (iii) in compliance with all laws, ordinances, rules and
regulations of all Governmental Authorities; and (iv) in such a manner so as not
to materially interfere with the use or occupancy of the Building by any other
tenant in the Building or its employees or invitees, nor impose any material
additional expenses upon, nor delay Landlord in, the maintenance and operation
of the Building, nor endanger the health or safety of any party in the Building.

 

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4.7.4 Compliance With Laws. All work and materials installed in the Premises by
Tenant or at Tenant’s request shall comply with all Rules and Regulations of the
Project, all insurance requirements, and all laws, ordinances, rules and
regulations of all Governmental Authorities. Tenant agrees to hold Landlord
forever harmless from any and all claims and liabilities of every kind and
description, including without limitation Landlord’s attorneys’ fees, which may
arise out of or be connected in any way with Alterations, to the extent such
claims and liabilities are not covered by insurance.

4.7.5 Insurance Requirements. In the event Tenant employs any contractor to do
any work in the Premises, Tenant shall provide Landlord with certificates naming
Landlord and such other parties as Landlord may designate as additional insured
under policies of builder’s risk and general liability insurance in amounts and
with insurers reasonably satisfactory to Landlord. Tenant shall also provide
evidence of satisfactory worker’s compensation coverage in accordance with
statutory requirements.

4.7.6 Lien Waivers; Liens. Upon completion of such Alterations, Tenant shall
arrange to have its contractor deliver to Landlord a lien waiver sufficient to
assure Landlord that no statutory lien could be filed against the Building or
the Project relating to such Alterations. Notwithstanding the foregoing, if any
statutory lien shall be filed against the Premises or the Project purporting to
be for labor or materials furnished or to be furnished at the request of Tenant,
then Tenant shall at its expense cause such lien to be discharged by payment, by
posting of a cash or surety bond reasonably satisfactory to Landlord or by other
assurances reasonably satisfactory to Landlord, within thirty (30) days after
the filing thereof. If Tenant shall fail to take such action within such thirty
(30) day period, upon written notice to Tenant, Landlord may cause such lien to
be discharged by payment, bond or otherwise, after reasonable investigation as
to its validity or adverse effect on marketable title to the Building or the
Project. Tenant shall indemnify and hold harmless Landlord against any and all
claims, costs, damages, liabilities and expenses (including attorneys’ fees)
incurred by Landlord by reason of any such lien or its discharge, and all such
sums properly paid by Landlord as permitted in this Section shall be deemed to
be Rent due and payable upon demand. No part of this Lease shall be deemed or
construed in any way as constituting the consent of or request by Landlord to
any contractor, subcontractor, laborer or materialman for the performance of any
labor or the furnishing of any materials to the Premises or the Project, or any
part thereof, or the imposition of any lien against the estates of Landlord or
Tenant.

4.8 Entry for Repairs and Inspection. Landlord shall have the right to enter the
Premises at any time without notice in the event of an emergency. Furthermore,
Landlord or Landlord’s agents or representatives shall have the right to enter
into and upon any part of the Premises at all reasonable hours with prior notice
(oral or written) to Tenant to inspect same, make repairs, alterations or
additions thereto in accordance with the terms of this Lease or to exhibit the
Premises to (a) prospective tenants during the last twelve (12) months of the
Term or (b) upon reasonable advance notice, to prospective purchasers or to
others, or for other reasonable purposes. Except as otherwise expressly provided
in this Lease, Tenant shall not be entitled to any abatement or reduction of
Rent or any other sums due under this Lease by reason of such access afforded to
Landlord. If representatives of Tenant shall not be present to open and permit
entry into the Premises at any time when such entry by Landlord is necessary or
permitted hereunder, Landlord, its employees, contractors and agents may enter
by means of a master key or key card (or forcibly in the event of an emergency)
without such entry constituting an eviction of Tenant or termination of this
Lease. In the exercise of any rights of entry to the Premises permitted to
Landlord under this Section, Landlord shall use reasonable efforts to minimize
any disturbance of Tenant’s use, enjoyment and possession of the Premises.

4.9 Assignment or Sublease.

4.9.1 Rights of Assignment and Sublease. Except with respect to an assignment to
a Tenant Affiliate as hereinafter provided, which shall not require Landlord’s
consent, and except with the prior notice of at least thirty (30) days and the
written consent of Landlord, which consent Landlord shall not unreasonably or
arbitrarily withhold, condition or delay, Tenant shall not voluntarily
(i) assign or in any manner transfer this Lease or any estate or interest
therein, (ii) permit any assignment of this Lease or any estate or interest
therein by operation of law or otherwise, (iii) sublet the Premises or any part
thereof, (iv) grant any license, concession or other right of

 

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occupancy of any portion of the Premises other than for services which are
incidental to office work (e.g., copying, vending machines, etc.), or (v) permit
the use of the Premises by any parties other than Tenant, its managers, agents,
employees, officers, licensees or invitees. If Tenant is a corporation, then any
transfer of the Lease from Tenant by merger, consolidation or dissolution or any
change in ownership or power to vote a majority of the voting stock in Tenant
outstanding on the date of this Lease shall not constitute an assignment for
purposes of this Section. If Tenant is a general or limited partnership, the
transfer of any partnership interest, or a change in the constitution of the
partnership by death, withdrawal or retirement of a partner, or interests
constituting a majority or the reallocation of partnership interests, in each
case provided that the partnership remains in existence, shall not constitute an
assignment for the purposes of this Section. Tenant shall not mortgage, pledge
or otherwise encumber its interest in this Lease or in the Premises. Consent by
Landlord to one or more assignments or sublettings shall not be a waiver of
Landlord’s rights as to any subsequent assignments and sublettings. Assignment
of this Lease or subletting of all or any part of the Premises to a Tenant
Affiliate will require that at least thirty (30) days notice be given to
Landlord, but consent or approval of Landlord shall not be required so long as
Tenant continues to remain liable under this Lease for the performance of all
terms and obligations of this Lease, including, but not limited to, payment of
all Rent and other sums due under this Lease. A “Tenant Affiliate” shall mean
any entity owned or controlled by Tenant constituting at a minimum a majority of
the ownership interests in such entity and “owned or controlled by” shall mean
ownership of more than a fifty percent (50%) interest in such entity.

4.9.2 Matters Affecting Transfer. Any approved transfer shall be expressly
subject to the terms and conditions of this Lease. In the event of an assignment
or subletting, Tenant and any guarantors under this Lease shall remain fully
responsible and liable for the payment of Rent and for compliance with all of
Tenant’s other obligations under this Lease and any guaranty delivered under
this Lease shall remain in effect. If an event of default occurs following any
approved transfer, Landlord, in addition to any other available remedies, may
collect directly from Tenant’s assignee or sublessee all rents becoming due to
Tenant and apply such amount against any sums due to Landlord by Tenant. Tenant
authorizes and directs any assignee or sublessee to pay rent directly to
Landlord upon receipt of notice from Landlord of Tenant’s default. No direct
collection by Landlord from any assignee or sublessee shall constitute a
novation or a release of Tenant or any guarantor from the further performance of
its remaining obligations under this Lease, nor shall receipt by Landlord of
Rent from any assignee, sublessee or occupant of the Premises be a waiver of the
covenant in this Lease prohibiting assignment and subletting.

4.9.3 Consent to Assignment or Sublease. If Tenant requests Landlord’s consent
to an assignment of this Lease or subletting of all or a part of the Premises,
Tenant shall submit to Landlord, in writing, (i) the name of the proposed
assignee or sublessee, (ii) current financial statements, if any, available to
Tenant disclosing the financial condition of the proposed assignee or subtenant,
(iii) the nature of the business of the proposed assignee or sublessee, and its
proposed use of the Premises (any assignment or subletting being subject to
restrictions on use contained in this Lease, and a violation of such
restrictions by the proposed assignee or sublessee shall constitute absolute
grounds for Landlord’s denial of the requested assignment or subletting, such
grounds not being the exclusive grounds for denial under clause (iii)), and
(iv) the proposed commencement date of the assignment or subletting, together
with a copy of the proposed assignment or sublease. Within fifteen (15) business
days after its receipt of such notice, Landlord shall either approve or
disapprove such proposed assignment or sublease in writing. Landlord reserves
the right to withhold consent to any proposed assignment or sublease to any
third party other than a Tenant Affiliate if the creditworthiness of such third
party is not comparable to Tenant’s creditworthiness at the time this Lease was
executed.

4.9.4 Additional Limitations Relative to Assignment and Subletting.
Notwithstanding anything in this Lease to the contrary, Tenant further agrees
that any assignment or sublet shall be subject to the following additional
limitations: (i) In no event may Tenant assign this Lease or sublet all or any
portion of the Premises to an existing tenant of the Building or the Project or
its subtenant or assignee; (ii) In no event shall the proposed subtenant or
assignee be a person or entity with whom Landlord or its agent is negotiating
and to or from whom Landlord, or its agent, has given or received any written or
oral proposal within the past six (6) months regarding a lease of space in the
Building or the Project; (iii) Tenant shall not publicly advertise the rate for
which Tenant is willing to sublet the space; and all public advertisements of
the assignment of the Lease or sublet of the Premises, or any portion thereof,
shall be subject to prior approval in writing by Landlord, such approval not to
be unreasonably withheld or delayed; and (iv) Tenant shall not use a likeness of
the Building or the Premises in any advertisement unless any such likeness has
been approved by Landlord. Said public advertisements shall include, but not be
limited to, the placement or display of any signs or lettering on the exterior
of the Premises, or on the glass or any window or door of the Premises, or in
the interior of the Premises if it is visible from the exterior.

 

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4.9.5 Effect of Assignment or Sublease. If Landlord consents to any subletting
by Tenant and subsequently any rents received by Tenant under such sublease are
in excess of the Rent payable by Tenant under this Lease, or any additional
consideration is paid to Tenant by the assignee under the assignment, then
Landlord shall be entitled to retain such excess and such additional
consideration.

4.9.6 Assumption by Assignee. Each permitted assignee shall assume, and be
deemed to have assumed, this Lease and be and remain liable jointly and
severally with Tenant for all payments and for the due performance of all its
terms, covenants and conditions. No approved assignment shall be binding upon
Landlord unless Landlord shall receive an instrument in recordable form
containing a covenant of assumption by the assignee, but the failure or refusal
of an assignee to execute the same shall not release it from its liability as
set forth herein. Tenant shall pay Landlord’s reasonable counsel fees in
connection with any proposed assignment or subletting. In the event that the
proposed assignee or sublessee is an existing tenant of the Building or the
Project, Landlord, at its option and its sole discretion, shall have the right
to cancel this Lease and lease the Premises or any portion of the Premises to be
assigned or sublet to the proposed assignee or sublessee under the terms of its
existing lease with Landlord.

4.10 Subordination to Mortgage. This Lease is subject and subordinate to any and
all mortgages or deeds of trust currently existing on the property of which the
Premises is a part, and this clause shall be self-operative without any further
instrument necessary to effect such subordination. If requested by Landlord,
Tenant shall promptly execute and deliver to Landlord any such agreements in a
commercially reasonable form as Landlord may reasonably request evidencing the
subordination of this Lease to such mortgages or deeds of trust; provided that
Landlord shall obtain for the benefit of Tenant a non-disturbance agreement in a
commercially reasonable form from any such mortgagee, trustee or beneficiary
currently having an interest in all or any portion of the Premises expressly
stating that upon succession of ownership by a lender (a) this Lease shall
continue in full force and effect as a direct lease between such lender and
Tenant, and (b) such lender shall not disturb Tenant’s right of quiet possession
of the Premise under the terms of the Lease so long as Tenant is not in default
beyond any applicable grace period of any term, covenant or condition of this
Lease. This Lease shall be subject and subordinate to any mortgage or deed of
trust which may hereafter encumber the property of which the Premises is a part.
Any subordination agreement provided by the lender of Landlord shall confirm,
among other things, and Tenant hereby confirms and agrees to the following,
that: (i) the disposition of the proceeds of the insurance of the Landlord shall
be governed and controlled by the lender of the Landlord and the loan documents
of such lender, (ii) the lender of the Landlord shall be entitled to receive
concurrent written notice of any default (and a cure period of thirty days in
which to effect a cure on behalf of the Landlord which cure period shall be in
addition to any cure period provided to the Landlord which cure will be accepted
by Tenant) or event of default by Landlord hereunder as provided by Tenant to
Landlord provided that Tenant is provided with written notice of the name and
address of the lender of Landlord, (iii) a successor landlord is not liable for
any default of a prior landlord, (iv) a successor landlord is not subject to
offsets or other defenses against a prior landlord except for those matters of
which Tenant has provided prior written notice to the successor landlord and an
opportunity for the successor landlord to cure, and (v) a successor landlord is
not liable for the return of any security deposit posted by Tenant unless such
security deposit is delivered to successor landlord by the prior landlord.
Tenant’s obligations under this Lease shall continue in full force and effect
notwithstanding any such default proceedings under a mortgage or deed of trust
and Tenant shall attorn to the mortgagee, trustee or beneficiary of such
mortgage or deed of trust, and their successors or assigns, and to the
transferee under any foreclosure or default proceedings. Tenant will, upon
request by Landlord, execute and deliver to Landlord or to any other person
designated by Landlord, any instrument or instruments in a commercially
reasonable form required to give effect to the provisions of this paragraph.

4.11 Estoppel Certificate. Tenant shall, at any time and from time to time,
within ten business (10) days following written request from Landlord, execute,
acknowledge and deliver a written statement certifying if true that this Lease
is in full force and effect and unmodified (or, if modified, stating the nature
of such modification), certifying the date to which Rent has been paid,
certifying whether or not, to Tenant’s best knowledge, there are any uncured
defaults by Landlord or specifying such defaults if any are claimed, and
certifying such other matters as Landlord may reasonably request. Any such
statement may be relied upon by a prospective purchaser or mortgagee of all or
any part of the Building. Tenant’s failure to deliver such statement within said
ten (10) day period shall constitute Tenant’s certification that this Lease is
in full force and effect and unmodified, and that there are no uncured defaults
by Landlord.

 

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V. INSURANCE

5.1 Casualty Insurance. During the Term, Landlord shall insure the Building
against loss or damage by fire, or other insurable hazards and contingencies
through all risk insurance (which sometimes may be referenced in the insurance
industry as special cause of loss insurance), including fire and extended
coverage, in amounts, coverages and with deductibles as are commercially
reasonable and as are in effect for comparable buildings. Landlord shall not be
obligated to insure any furniture, equipment, machinery, goods or supplies which
Tenant may bring or obtain upon the Premises or any leasehold improvements which
Landlord requires Tenant to remove at the end of the Term. If the premiums for
any casualty insurance exceed the standard rates because Tenant’s operations
result in increased premiums, then Tenant shall upon receipt of appropriate
invoices reimburse Landlord for such excess. Tenant shall maintain at its
expense, in an amount equal to full replacement cost, fire and extended coverage
insurance on all leasehold improvements and on all of its personal property,
including removable trade fixtures, located in the Premises plus such additional
insurance as may be required to meet Tenant’s obligations under Section 5.2.2.

5.2 Liability Insurance.

5.2.1 Landlord’s Obligation. During the Term, Landlord shall obtain and keep in
force comprehensive general liability insurance in amounts, coverages and with
deductibles as are commercially reasonable and as are in effect for comparable
buildings.

5.2.2 Tenant’s Obligation. During the Term, Tenant shall procure, and shall
maintain, at Tenant’s sole cost and expense, (i) general public liability
insurance, including contractual liability coverage for the indemnity
obligations of Tenant set forth herein, against claims for personal and bodily
injury, death or property damage occurring upon, in or about the Premises with
carriers and in amounts reasonably satisfactory to Landlord, but not less than
Three Million and No/100 Dollars ($3,000,000.00) per occurrence and Five Million
Dollars ($5,000,000.00) in the aggregate for bodily injury and property damage,
which limits may be satisfied using an umbrella liability insurance policy that
provides coverage in excess of the general liability policy, (ii) business
income and extra expense coverage in such amounts as will reimburse Tenant for
direct or indirect loss or earnings attributable to any loss caused by fire or
other casualty or cause including, but not limited to, vandalism, theft and
water damage of any type, and (iii) casualty insurance in an amount that Tenant
deems sufficient to insure its personal property in the Premises. Landlord makes
no representation that Tenant’s coverage requirements hereunder are adequate to
protect Tenant’s undertakings under this Lease. If Tenant believes that such
coverage amounts are insufficient, Tenant shall procure such additional
insurance that Tenant deems adequate at Tenant’s sole cost and expense.

5.3 Other Insurance. Landlord shall obtain (i) worker’s compensation and
employers’ liability insurance as required by law; and (ii) additional rental
income insurance as an endorsement to Landlord’s all risk policy. Landlord may,
at its option, obtain insurance against losses due to theft or burglary as
reasonably determined by Landlord.

5.4 Insurance Standards; Waiver of Subrogation.

5.4.1 All of Tenant’s insurance policies and renewals thereof as are required in
this Section 5 shall name Landlord as an additional insured and shall be written
as primary policies not contributory with and not in excess of coverage which
Landlord may carry. All of Tenant’s insurance policies shall provide (i) that no
material change or cancellation of said policies shall be made without thirty
(30) days’ prior written notice to Landlord, and (ii) that the insurance company
issuing the same shall have waived any right of subrogation against Landlord.
All policies of insurance which are secured by Landlord and Tenant as required
by this Lease shall include appropriate deductible amounts so that insurance
premiums therefor are commercially reasonable. Before Tenant’s initial entry
into the Premises and thereafter at least thirty (30) days prior to the
expiration dates of said policy or policies, both Landlord and Tenant shall
provide each to the other copies of policies or certificates of insurance
evidencing all coverages required of Landlord or Tenant or either of them by
this Lease. All the insurance required under this Lease shall be primary and
non-contributory, issued by companies which are rated at least A/VIII in Best’s
Insurance Reports and authorized to do business in North Carolina.

 

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5.4.2 Neither Landlord nor Tenant shall be liable to the other or to any
insurance company (by way of subrogation or otherwise) insuring the other party
for any loss or damage to the Premises, the Building or other tangible property
of Landlord or Tenant, or any resulting loss of income, or losses under worker’s
compensation laws and benefits, even though such loss or damage might have been
occasioned by the negligence of such party, its agents, employees, invitees or
contractors, if and to the extent that any such loss or damage has been paid by
insurance benefiting the party suffering such loss or damage or would have been
paid if the injured party had carried the insurance required of it pursuant to
this Lease.

5.5 Indemnity for Insurance Coverage. Because the Landlord is required to
maintain casualty insurance pursuant to this Lease, and because of the existence
of waivers of subrogation set forth in this Lease, Landlord shall indemnify,
defend and hold Tenant harmless from and against any claims resulting or arising
from any damage to any property outside of the Premises to the extent such
claims are covered by such insurance, or would have been covered by such
insurance had Landlord obtained the same as required by this Lease, even if
resulting from the negligent acts or omissions of Tenant or Tenant’s agents,
contractors, employees, subtenants, invitees or licensees together with
reasonable attorney’s fees incurred in connection therewith. Similarly, because
Tenant must carry casualty insurance pursuant to the Lease to cover its personal
property within the Premises, Tenant shall indemnify, defend and hold Landlord
harmless from and against any claims to the extent such indemnified claims are
covered by such insurance, or would have been covered by such insurance had
Tenant obtained the same as required under this Lease, even if resulting from
the negligent acts or omissions of Landlord or Landlord’s agents, contractors,
employees, assignees, invitees or licensees together with reasonable attorney’s
fees incurred in connection therewith.

5.6 No Release. Tenant’s and Landlord’s indemnification obligations in this
Section shall survive the expiration or earlier termination of this Lease.
Tenant’s and Landlord’s covenants, agreements and indemnity obligations in this
Lease are not intended to and shall not relieve any insurance carrier of its
obligations under policies required to be carried by Landlord or Tenant,
respectively, pursuant to the provisions of this Lease.

5.7 Casualty Damage. If the Premises shall be damaged by fire or other casualty,
Tenant shall give prompt written notice to Landlord. If the Building or any part
thereof or access thereto shall be so damaged or destroyed by fire or other
casualty that substantial alteration or reconstruction of the Building and
access thereto shall, in the good faith and reasonable determination of the
Landlord’s architect, be required with such repair taking longer than one
hundred eighty (180) days (whether or not the Premises shall have been damaged
by such casualty), or in the event any Mortgagee should require that the
insurance proceeds be applied to the payment of the mortgage debt, or in the
event of any material uninsured loss to the Building, or in the event of any
substantial damage to the Building within the final two (2) Lease Years of the
Initial Term or an exercised Renewal Term, Landlord may, at its option,
terminate the Lease by notifying Tenant in writing within thirty (30) days after
the date of such damage. In case the Premises shall be so damaged by fire or
other casualty that substantial alteration or reconstruction of the Building
shall, in the mutual good faith and reasonable determination of the Landlord’s
architect, be required, Tenant shall have the right to terminate this Lease upon
thirty (30) days prior written notice to Landlord if Landlord (i) has not
completed, (ii) cannot complete or (iii) in the opinion of the Landlord’s
architect, cannot reasonably be expected to complete substantially the making of
any required repairs and restorations within one hundred eighty (180) days from
the date of such damage or destruction. In addition, if any such damage or
destruction shall occur during the last two (2) Lease Years of the Initial Term
or an exercised Renewal Term, Tenant, at its option, may terminate this Lease by
giving prior written notice to Landlord within thirty (30) days after the events
specified in clauses (i), (ii), or (iii) above occur or become determinable.
Rent shall abate and be prorated as of the date such damage occurs and during
any period of repair and restoration to the extent the Premises or any material
part thereof are rendered unusable or access thereto is denied Tenant. Subject
to the provisions of any deed of trust encumbering the Building, if Landlord or
Tenant does not thus elect to terminate this Lease, Landlord shall commence and
diligently proceed to restore and repair (to the extent of the insurance
proceeds received by Landlord) the Building or the Project and the Premises to
substantially the same condition in which it was immediately prior to the
happening of the casualty except that Landlord’s obligation to restore shall not
exceed the scope of Landlord’s Work, adjusted for inflation, in originally
constructing the Building or the Project, as applicable. When the Landlord’s
Work with respect to such reconstruction or restoration has been completed,
Landlord and Tenant shall

 

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complete the restoration of the Premises, including the reconstruction of all
leasehold improvements and the restoration of Tenant’s furniture and equipment.
Landlord shall not be liable for any inconvenience or annoyance to Tenant or
injury to the business of Tenant resulting in any way from such damage or
repair, except that Landlord shall allow Tenant a fair diminution of Rent during
the time and to the extent the Premises or any material portion thereof are
unfit for occupancy or access to the Premises is materially affected.
Notwithstanding anything contained herein to the contrary, if the casualty
results from the fault or gross negligence of Tenant or any of Tenant’s agents,
employees or invitees, (i) Rent shall not be diminished during the repair of
such damage, (ii) Tenant shall be liable to Landlord for the cost of the repair
and restoration of the Building to the extent such cost and expense is not
covered by insurance proceeds, and (iii) Tenant shall have no right to terminate
this Lease.

5.8 Additional Rights Regarding Restoration. If neither Tenant nor Landlord has
elected or has the right to terminate this Lease pursuant to Section 5.7 above,
and if Landlord shall not have substantially repaired or restored the Building
and Premises and access thereto (to the extent such items are required to be
repaired pursuant to Section 5.7) within the later of: (i) the applicable time
periods set forth in Section 5.7 after such damage or destruction (which time
periods shall be extended by the amount of any construction delays caused by
Force Majeure and/or Tenant Delays); or (ii) thirty (30) days after the time
period that the parties mutually estimate would be required to substantially
complete such repairs pursuant to Section 5.7 above (which time periods shall be
extended by the amount of any construction delays caused by Force Majeure and/or
Tenant Delays), then Tenant shall again have the right to terminate this Lease
by delivering written notice thereof to Landlord within thirty (30) days
thereafter, which termination shall be effective as of the date Landlord
receives such notice. However, such termination notice shall have no force or
effect if Landlord performs such substantial repairs at any time within thirty
(30) days after Landlord’s receipt of Tenant’s termination notice. For purposes
of this section, the Premises shall be deemed “substantially” repaired or
restored if the only items remaining to be repaired or restored are minor
“punchlist” items, which can be fully completed without material interference
with Tenant’s permitted use hereunder, which Landlord shall promptly repair
thereafter. Unless Tenant or Landlord elects to terminate this Lease pursuant to
this Section 5.8, this Lease shall continue in full force and effect, except for
the abatement of Rent to the extent provided in Section 5.7 in this Lease.

5.9 Application of Insurance Proceeds. If this Lease is terminated by reason of
damage or destruction, each party shall be entitled to retain the insurance
proceeds awarded to such party by that party’s insurer. Subject to the
provisions of any deed of trust encumbering the Building, if this Lease is not
terminated by reason of any such damage or destruction, then all insurance
proceeds payable by reason of damage or destruction to the Premises, Tenant’s
Work or Alterations or to the Project or access thereto shall be disbursed to
the party making such repairs in a manner reasonably satisfactory to Landlord,
Tenant and any mortgagee or beneficiary under any mortgage or deed of trust
encumbering the Project, the Building, or Premises for use in reconstruction of
the Project, Building or Premises, or access thereto. Upon completion of the
repairs or reconstruction of such Building, any remaining insurance proceeds
shall be paid to the parties whose policies provided such proceeds.

 

VI. CONDEMNATION

6.1 Effect of Condemnation. If the whole or substantially the whole (being more
than 25%) of the Premises or access thereto should be taken for any public or
quasi-public use, under any statute or by right of eminent domain or otherwise
or should title to the Building or access thereto be taken or be sold by private
purchase in lieu of condemnation, then this Lease shall terminate as of (i) the
date when physical possession of the Premises is taken or access thereto is
substantially impaired by the condemning authority; or (ii) the date that the
Premises, or access thereto is adversely affected by the taking and Tenant’s use
or enjoyment of the Premises is substantially impaired. If less than
substantially all of the Building or less than 25% of the Premises is thus taken
or sold, or in the event of a temporary taking of less than one hundred eighty
(180) days, Landlord (whether or not the Premises are affected thereby) may not
terminate this Lease but Tenant’s Rent shall be abated during the period of such
partial taking and Landlord shall proceed with due diligence to make all
necessary repairs and alterations to the extent of the proceeds received. If
this Lease is not so terminated upon any such taking or sale, Rent shall be
reduced by an equitable amount considering the degree to which the Premises is
affected. Subject to the provisions of any deed of trust affecting the Building,
Landlord shall restore the Building and the Premises to the extent feasible in
light of the portion condemned, and except to the extent Landlord is required to
insure Tenant’s improvements to the Premises, such work shall not exceed the
scope of Landlord’s Work, adjusted for inflation, in originally constructing the
Building and the Premises.

 

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6.2 Proceedings in Condemnation. Landlord and Tenant shall use commercially
practicable efforts to have the court in any proceeding in connection with any
taking pursuant to Section 6.1 allocate any award in the manner specified in
this Section 6.2. Tenant shall have the right to participate in any such
proceeding and to request that the court allocate any award in the manner
specified in this Section 6.2. Landlord shall be entitled to receive the entire
amount of any compensation awarded or paid upon any taking described in or
governed by Section 6.1, except that Tenant shall be entitled to the following
portions of such compensation or award: (i) all costs of relocating Tenant’s
business (severance damages) and (ii) the value of Tenant’s trade fixtures taken
and the portion of tenant improvements paid for by Tenant; provided, however, in
no event shall Tenant be entitled to any compensation for the loss of its
leasehold estate.

6.3 Notice of Execution. Immediately upon service of process or other notice
upon either party in connection with any appropriation, taking or temporary
taking relating to the Project, the Building, the Premises, or access thereto,
such party shall give written notice thereof to the other. Each party agrees to
execute and deliver to the other all instruments that may be required to
effectuate the provisions of this Section. Each party reserves the right to
appear in any proceedings in connection with any taking or temporary taking.

 

VII. TENANT’S DEFAULT

7.1 Default by Tenant. Any of the following events shall constitute an event of
default by Tenant under this Lease:

7.1.1 Payments Due. A failure by Tenant to pay any Rent within five (5) days
after the due date therefore (provided that Tenant shall be entitled to written
notice and a five (5) day cure period once during each Lease Year) or pay any
other payment due hereunder within thirty (30) days after the due date therefor
or Tenant’s submission of a check for which Tenant has insufficient funds on
account. Tenant’s payment of less than the full amount due shall be applied to
the earliest installment of Rent due. No endorsement or statement on any check
or letter shall be deemed an accord and satisfaction. Landlord may accept any
such payment without prejudicing its right to recover any outstanding balance or
pursue any other remedy.

7.1.2 Bankruptcy. Tenant shall file on its own behalf a petition for relief (or
such petition for relief shall be filed against Tenant and remain undischarged
for a period of sixty (60) days after the date of such filing) under any section
or chapter of the Federal Bankruptcy Code, as amended, or under any similar law
or statute of the United States or any state; or Tenant shall be adjudged
bankrupt or insolvent; or an order shall be entered by any Governmental
Authority for the dissolution or liquidation of Tenant.

7.1.3 Appointment of Receiver. The appointment of a receiver, liquidator or
trustee for the Premises or for all or substantially all of the assets of Tenant
which remains undischarged for a period of ninety (90) days after the date
thereof.

7.1.4 Other Defaults. A failure by Tenant to comply with or to observe and
perform any provisions of this Lease or any other agreement between Landlord and
Tenant (including any work letter for construction of Tenant Improvements) or to
fulfill any covenants of this Lease other than any failure addressed in
Subsections 7.1.1 or 7.1.2 above where such failure continues for thirty
(30) days after written notice to Tenant from Landlord specifying the nature of
said default, all the foregoing referenced provisions and covenants being deemed
material. In case of a default that cannot be reasonably completely cured or
remedied within said period, Tenant shall be in default if Tenant does not
commence a cure within such period, or, having commenced, if Tenant fails to
diligently proceed to remedy or cure such default and promptly complete such
remedy.

7.2 Multiple Defaults.

7.2.1 Loss of Option Rights. Tenant acknowledges that any rights or options of
first refusal, or to extend the Term, to expand the size of the Premises, or
other similar rights or options which have been granted to Tenant under
Section 7.1.1 of this Lease are conditioned upon the prompt and diligent
performance of the terms of this Lease by Tenant. Accordingly, should Tenant
default under this Lease on two or more occasions during any 12-month period, in
addition to all other remedies available to Landlord, all such rights and
options shall automatically, and without further action on the part of any
party, expire and be of no further force and effect.

 

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7.2.2 Increased Security Deposit. Should Tenant default in the payment of Rent,
or any other sums payable by Tenant under this Lease on two (2) or more
occasions during any 12-month period, regardless of whether Landlord permits
such default to be cured, then, in addition to all other remedies otherwise
available to Landlord, Tenant, within ten (10) days after demand by Landlord,
shall post a security deposit in, or increase the existing security deposit by,
a sum equal to three (3) months’ installments of Base Rent at the rate in effect
at the time of Landlord’s demand not to exceed the equivalent of four
(4) months’ installments of Base Rent. The security deposit shall be governed by
the terms of this Lease.

7.3 Landlord’s Remedies. Upon the occurrence of any event of default and the
lapse of any grace or cure periods without cure thereof, Landlord shall have the
option to pursue any one or more of the following remedies upon notice to
Tenant:

7.3.1 Termination. Terminate this Lease or terminate Tenant’s right to
possession pursuant to judicial action, and in either event, accelerate all
obligations of Tenant owed to Landlord under the Lease 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.
Immediately upon any termination Landlord shall be entitled to recover from
Tenant (i) all outstanding and unpaid Rent as of the date of such termination,
(ii) the unamortized cost of the Tenant Improvements, (iii) the amount of any
Rent that was abated pursuant to Section 2.3, and (iv) all future Rent due,
which future Rent shall be discounted to present value using a discount rate
equal to the U.S. Treasury Bill or Note rate with the closest maturity to the
remaining term of the Lease as selected by Landlord.

7.3.2 Possession. 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. Proceeds of reletting the Premises shall be applied to
pay (i) first, all costs of Landlord incurred in connection with such reletting
(including without limitation, all costs and expenses of taking possession of
the Premises, securing new tenants, including expenses for redecoration,
alterations or other upfit costs), (ii) second, any indebtedness of Tenant other
than Rent, (iii) third, all then-outstanding Rent due hereunder, and
(iv) fourth, any future obligations of Tenant, including without limitation,
Rent. Tenant agrees to pay to Landlord on demand any deficiency that may arise
by reason of such reletting.

7.3.3 Entry. Pursuant to judicial process, enter upon the Premises, by
reasonable force if necessary (to the extent allowed by law), without being
liable for prosecution or any claim for damages, and do whatever Tenant is
obligated to do under the terms of this Lease. Tenant agrees to reimburse
Landlord on demand for any expenses which Landlord may incur in effecting
compliance with Tenant’s obligations.

7.4 Bankruptcy. In the event of a bankruptcy filing by or against the Tenant as
described in Section 7.1.2, the following provisions shall apply:

7.4.1 Trustee’s Rights. Landlord and Tenant understand that, notwithstanding
contrary terms in this Lease, a trustee or debtor in possession under the United
States Bankruptcy Code, as amended (the “Code”), may have certain rights to
assume or assign this Lease. This Lease shall not be construed to give the
trustee or debtor in possession any rights greater than the minimum rights
granted under the Code.

7.4.2 Adequate Assurance. Landlord and Tenant acknowledge that, pursuant to the
Code, Landlord is entitled to adequate assurances of future performance of the
provisions of this Lease. The parties agree that the term “adequate assurance”
shall include at least the following:

(a) In order to assure Landlord that any proposed assignee will have the
resources with which to pay all Rent payable pursuant to the provisions of this
Lease, any proposed assignee must have, as demonstrated to Landlord’s
satisfaction, a net worth (as defined in accordance with generally accepted
accounting principles consistently applied) of not less than the net worth of
Tenant on the date on

 

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which this Lease was fully executed (the “Effective Date”), increased by seven
percent (7%), compounded annually, for each year from the Effective Date through
the date of the proposed assignment. It is understood and agreed that the
financial condition and resources of Tenant were a material inducement to
Landlord in entering into this Lease.

(b) Any proposed assignee must have been engaged in the conduct of business for
five (5) years prior to any such proposed assignment, which business does not
violate the use provisions set forth in Section 2.2, and such proposed assignee
shall continue to engage in such use of the Premises. It is understood that
Landlord’s asset will be substantially impaired if the trustee in bankruptcy or
any assignee of this Lease makes any use of the Premises other than that allowed
in Section 2.2.

7.4.3 Assumption of Lease Obligations. Any proposed assignee of this Lease
pursuant to the provisions of the Code must assume and agree to be bound by the
provisions of this Lease, as evidenced by a written assumption in form and
substance acceptable to the Landlord.

7.5 Remedies Cumulative. Pursuit of any one or more of the remedies provided in
this Lease shall not preclude pursuit of any other remedies provided hereunder
or by law, which shall be cumulative, nor shall pursuit of any remedy constitute
a forfeiture or waiver of any Rent due or of any damages accruing to Landlord by
reason of the breach. Actions to collect amounts due Landlord may be brought
from time to time, on one or more occasions without the necessity of Landlord’s
waiting until the expiration of the Term.

7.6 Cure Rights. Landlord may cure, at any time, without notice except as
otherwise herein provided, any default by Tenant under this Lease. Whenever
Landlord so elects, all unrecovered costs and expenses incurred by Landlord in
curing a default, including, without limitation, reasonable attorneys’ fees,
together with interest on the amount of costs and expenses so incurred at the
Contract Rate, such costs and expenses shall be paid by Tenant to Landlord on
demand, and shall be recoverable as Rent.

7.7 Rights Upon Possession. Upon the occurrence of an uncured event of default
by Tenant and exercise of Landlord’s remedies hereunder, Landlord may make such
alterations, repairs, replacements and/or decorations in the Premises as
Landlord, in its commercially reasonable judgment, considers advisable and
necessary for reletting the Premises. Such undertakings shall not operate or be
construed to release Tenant from its liability. Landlord shall in no event be
liable in any way whatsoever for failure to relet the Premises, or in the event
that the Premises are relet, for failure to collect the rent under such
reletting. The failure of Landlord to relet the Premises or any part or parts
thereof shall not release or affect Tenant’s liability for damages. In no event
shall Tenant be entitled to any excess rent obtained by reletting. In
determining the amount of loss or damage which Landlord may suffer by reason of
termination of this Lease or the deficiency arising by reason of any reletting
of the Premises, Landlord shall be entitled to recover, in addition to any other
damages elsewhere provided in this Lease, at law or in equity, such unrecovered
reasonable expenses as Landlord may incur in connection with reletting of the
Premises (including, without limitation, court costs, attorneys’ fees and
disbursements, brokerage expenses and expenses for putting and keeping the
Premises in good order or for preparing the same for reletting as herein
provided).

7.8 Prevailing Party; Venue. If either party places in the hands of an attorney
the enforcement of this Lease, or any part thereof, or the collection of any
Rent due or to become due hereunder, or recovery of the possession of the
Premises, or files suit upon the same, the non-prevailing (or defaulting) party
shall pay the other party’s reasonable attorneys’ fees and court costs. The
parties agree that any litigation concerning this Lease may be brought before
the Superior Court of North Carolina and that Mecklenburg County, North Carolina
shall be the proper venue for any such action.

7.9 Landlord Default. In the event of any default by Landlord under this Lease,
Tenant will give Landlord written notice specifying such default with
particularity, and Landlord shall thereupon have thirty (30) days (or such
longer period as may be required in the exercise of due diligence) in which to
cure any such default. Unless and until Landlord fails to so cure any default
after such notice, Tenant shall not have any remedy or cause of action by reason
thereof. All obligations of Landlord hereunder will be construed as covenants,
not conditions. Notwithstanding any other provisions of this Lease to the
contrary, Tenant shall look solely to Landlord’s equity in the Building, and not
to any other or separate business or non-business assets of Landlord, or any
partner,

 

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shareholder, officers or representative of Landlord, for the satisfaction of any
claim brought by Tenant against Landlord, and if Landlord shall fail to perform
any covenant, term or condition of this Lease upon Landlord’s part to be
performed, and as a consequence of such default, Tenant shall recover a monetary
judgment against Landlord, such judgment shall be satisfied only: (i) out of the
proceeds of sale received upon levy against Landlord’s equity in the Building,
and/or (ii) to the extent not encumbered by a secured creditor, out of the rents
or other incomes receivable by Landlord from the Building. With respect to any
provisions of this Lease which provides that Landlord shall not unreasonably
withhold or delay any consent or approval, Tenant shall not have, and Tenant
hereby waives, any claim for money damages; nor shall Tenant claim any money
damages by way of setoff, counterclaim or defense, based upon any allegation of
unreasonableness by Landlord. Tenant’s sole remedy shall be an action or
proceeding to enforce any such provisions, or for specific performance,
injunction or declaratory judgment.

 

VIII. MISCELLANEOUS PROVISIONS

8.1 Force Majeure. Whenever a period of time is prescribed for the taking of any
action by Landlord or by Tenant, neither Landlord nor Tenant shall be liable or
responsible for, and there shall be excluded from the computation of such period
of time, any delays due to strikes, fire, earthquakes, floods, acts of God,
governmental regulations, shortages of labor or materials, war, governmental
laws, regulations or restrictions, lack of governmental agency or municipal
responsiveness or any other cause whatsoever beyond the control of Landlord or
Tenant, as applicable (all of which are sometimes referenced collectively in
this Agreement as “Force Majeure”) excluding however the financial condition of,
or the unavailability or cost of funds to, either party or payment of rent or
any other charge hereunder. This Section 8.1 shall not apply with respect to
interruption of services pursuant to Section 10 of Exhibit E.

8.2 Sale of the Building. Landlord shall have the right to transfer and assign,
in whole or in part, all its rights and obligations hereunder, and in the
Project, the Building and leasehold improvements, and upon the transferee’s
express assumption of Landlord’s obligations hereunder, Landlord shall be
relieved of all responsibility for the Premises, the Building and/or the
Project, as applicable, and no further liability or obligations shall accrue
against Landlord relative to rights and obligations accruing after the transfer.
No Sale or other transfer of the Building shall affect the obligations of Tenant
hereunder. Any and all covenants of Landlord contained in this Lease shall be
binding upon Landlord and its successors only with respect to breaches occurring
during its and their respective ownerships of Landlord’s interest hereunder. The
successor landlord shall be liable for any claims existing as of the date of
such sale.

8.3 Name of Building. As of the Commencement Date, the name of the Building is
“Toringdon VI”. Landlord shall have the right and privilege at its cost to
change the name of the Building. Subject to the sign provisions set out
elsewhere in this Lease, Landlord shall have exclusive control over all signs,
graphics or other wall ornamentation or displays in the entrance lobby to the
Building and in all Common Areas. Costs for changes in the name of the Building
or the Project shall be paid by Landlord.

8.4 Notices. All notices required under this Lease shall be in writing unless
expressly permitted otherwise. Any notice by either party to the other shall be
deemed to be duly given if either personally delivered with written receipt to
the respective addresses set forth below for each party or sent by first-class
mail, postage prepaid, return receipt requested, or by a nationally recognized
overnight courier service addressed as set forth below:

 

If to Tenant (for any notice delivered prior to the Commencement Date):   

Chelsea Therapeutics, Inc.

13950 Ballantyne Corporate Place, Suite 325

Charlotte, North Carolina 28277

Attn: Nick Riehl

      If to Tenant (for any notice delivered after the Commencement Date):   

Chelsea Therapeutics, Inc.

3530 Toringdon Way, Suite             

Charlotte, North Carolina 28277

Attn: Nick Riehl

     

 

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If to Landlord:   

Lichtin/Toringdon Land, LLC

3110 Edwards Mill Road, Suite 200

Raleigh, North Carolina 27612

Attn: Karen Lichtin

With a copy to:   

Womble Carlyle Sandridge & Rice, PLLC

150 Fayetteville Street, Suite 2100

Raleigh, North Carolina 27601

Attn: William C. Matthews, Jr.

Either party which desires to change the address as set forth above shall do so
by notice to the other party which complies with the requirements of this
Section 8.4.

8.5 No Waiver. Neither Landlord’s nor Tenant’s failure to enforce or delay in
exercising any of the provisions, rights or remedies in this Lease shall be a
waiver, nor in any way affect the validity of this Lease or any part hereof, or
their respective rights thereafter to enforce each and every such provision,
right or remedy. No waiver of any breach of this Lease shall be held to be a
waiver of any other or subsequent breach. The receipt by Landlord of Rent, or
any other payment by or to Tenant at a time when the Rent or the payment of any
other sum due hereunder is in default shall not be construed as a waiver of such
default. The receipt by Landlord of a lesser amount than the Rent, or by
Landlord or Tenant of any other sum due, shall not be construed to be other than
a payment on account which may be applied in such manner as such party deems
appropriate. Either Landlord or Tenant may accept any such payment without
prejudice to its right to recover the balance due or to pursue any other
remedies. No act or thing done by Landlord or its agents or employees during the
Term, including acceptance of keys or card keys, shall be deemed an acceptance
of a surrender of the Premises, and no agreement to accept such a surrender
shall be valid unless signed by Landlord.

8.6 Commissions. Each party warrants to the other that it has not engaged or
contracted any person, firm or entity to serve or act as a broker, agent or
finder for the purpose of leasing the Premises or in regard to this Lease.
Landlord and Tenant hereby indemnify and hold each other harmless against any
loss, claim, expense or liability with respect to any commissions or brokerage
fees claimed on account of the execution and/or renewal of this Lease due to any
action of the indemnifying party.

8.7 Rights of Light, View or Air. This Lease does not grant any rights to light,
view or air over adjacent property, and any diminution or shutting off of light,
view or air by any structure that may be erected adjacent to the Building shall
not affect this Lease or impose any obligation or liability upon Landlord.

8.8 Severability. If any term or provision of this Lease, or the application
thereof to any person or circumstances shall to any extent be invalid or
unenforceable, the remainder of this Lease, or the application of such
provisions to persons or circumstances other than those as to which it is
invalid or enforceable, shall not be affected thereby, and each provision of
this Lease shall be valid and shall be enforceable to the extent permitted by
law.

8.9 Recordation. Landlord and Tenant agree not to record this Lease. At Tenant’s
sole cost and expense, the parties shall prepare, execute and record a
memorandum hereof which shall include a summary of the following terms of this
Lease: The names and addresses of the parties; the Term and all extended Term
periods, if any; rights of first offer and options, if any; a description of the
Premises; and such easements as may be required by this Lease.

8.10 Binding Effect. This Lease, including all exhibits attached hereto, shall
be binding upon and shall inure to the benefit of Landlord, its successors and
assigns, and Tenant, its successors, and to the extent assignment and subletting
may be approved by Landlord hereunder, Tenant’s assigns and sublessees. Each
individual executing this Lease on behalf of the respective parties represents
and warrants that he is duly authorized to execute and deliver this Lease on
behalf of said party in accordance with the duly adopted resolution of the Board
of Directors of said corporation or in accordance with the pertinent partnership
agreements and that this Lease is binding upon said party in accordance with its
terms.

 

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8.11 Entire Agreement. The following lettered exhibits are attached hereto and
incorporated herein and made a part of this Lease for all purposes:

 

Exhibit A -    Floor Plan of the Premises Exhibit A-1 -    Building Standard
Materials and Finishes Exhibit B -    Landlord’s Work Exhibit B-1 -   
Construction Documents Exhibit B-2 -    The Schedule Exhibit B-3 -   
Agreed-Upon Above-Standard Items Provided at Landlord’s Cost Exhibit B-4 -   
Agreed-Upon Above-Standard Items Provided at Tenant’s Cost Exhibit C -   
Cleaning Specifications Exhibit D -    Rules and Regulations Exhibit E -   
Services to be Provided by Landlord Exhibit F -    Form of Escrow Agreement

This Lease and the attached exhibits set forth all the covenants, promises,
agreements, conditions and understandings between Landlord and Tenant concerning
the Premises. Tenant agrees that Landlord and its agents made no representations
or promises with respect to the Premises, the Building, the Project or property
of which the same are part except as herein expressly set forth. Tenant shall
make no claim on account of any representations, whether made by any renting
agent, broker, officer or other representative of Landlord or which may be
contained in a circular, prospectus or advertisement related to the Project or
otherwise, unless the same is specifically set forth in this Lease.

8.12 Amendments. Except as expressly provided herein, no subsequent alteration,
amendment, change or addition to this Lease shall be binding upon Landlord or
Tenant unless reduced to writing and signed by both parties.

8.13 Counterparts. This Lease may be executed in counterparts. Each fully
executed counterpart shall be an original and it shall not be necessary in
making proof of this Lease to produce or account for more than one such
counterpart.

8.14 Governing Law. This Lease is declared to be a North Carolina contract, and
all of the terms hereof shall be governed by, construed and enforced according
to the laws and judicial decisions of the State of North Carolina.

8.15 Security Deposit. Tenant has this day deposited with Landlord the sum of
$76,163.40 (the “Security Deposit”) as security for the performance by Tenant of
all the terms, covenants and conditions of this Lease upon Tenant’s part to be
performed, which sum shall be returned to Tenant after the expiration of the
Term hereof or as otherwise provided herein, provided Tenant has fully performed
all obligations to be performed by it hereunder. Landlord shall have the right
to apply any part of the Security Deposit to cure any default of Tenant and if
Landlord does so, Tenant shall upon demand deposit with Landlord the amount so
applied so that Landlord shall

 

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have the full deposit on hand at all times during the Term of this Lease.
Landlord shall establish a separate escrow account with a third party to hold
the Security Deposit, and shall, upon transfer or sale of the Building, transfer
the portion of the Security Deposit then held by Landlord to the successor
landlord, including any lender that succeeds to Landlord’s interest in the
Building. The terms of the escrow account shall be governed by a separate escrow
agreement in the form attached hereto and incorporated herein by reference as
Exhibit F. Upon receipt from Tenant of reasonable evidence of additional
financing or of cash received as a result of the licensing of Tenant’s products
or any combination thereof in an amount not less than $25,000,000.00, Landlord
shall return to Tenant one-half of the Security Deposit then held by Landlord
hereunder. Furthermore, Landlord shall refund the entire amount of the security
deposit then held by Landlord in the event there has been no monetary default by
Tenant hereunder during the first four (4) Lease Years. The security deposit
posted hereunder is not an advance payment of Rent or a measure or limit of
Landlord’s damages upon a Tenant default. In the event of a sale of the Building
or a lease of the Building, subject to this Lease, Landlord shall transfer the
security to the vendee or lessee, and upon such transfer Landlord shall
thereupon be released from all liability for the return of such security and
Tenant shall look solely to the new Landlord for the return of said security,
and this provision shall apply to every transfer or assignment made of the
security to a new lessor. The security deposited under this Lease shall not be
assigned or encumbered by Tenant without the written consent of Landlord and any
such assignment or encumbrance made without Landlord’s consent shall be void.

8.16 Equipment Access. Tenant shall be provided with reasonable access to the
equipment rooms, telephone rooms and other areas on the floors of the Premises
in which Tenant’s equipment may be placed. Tenant agrees that Tenant shall not
be given access to the roof of the Building.

8.17 Limits on Certain Liabilities. Notwithstanding any other provision of this
Lease, neither Landlord nor Tenant nor any partner (including those holding a
partnership interest in Landlord or Tenant), director, officer, agent or
employee of Landlord or Tenant shall be liable for any indemnified claims caused
by or arising from the actions or omissions of other tenants in or about the
Building or Project, or caused by any public work. Tenant specifically agrees to
look solely to Landlord’s equity in the Building for the recovery of any
judgment against Landlord and shall not be entitled to deduct the amount of any
such judgment from Rent. Landlord, or if Landlord is a partnership, its
partners, whether general or limited, or if Landlord is a corporation, its
directors, officers or shareholders, or if Landlord is a limited liability
company, its members or managers, shall never be personally liable for any such
judgment. The terms and provisions of this Section shall survive the expiration
or earlier termination of this Lease. Notwithstanding any other provisions in
this Lease, neither Landlord nor Tenant shall be liable to the other for any
special, consequential, incidental or punitive damages.

8.18 Intentionally deleted.

8.19 Survival. The provisions of this Lease shall survive the expiration or
termination of this Lease.

8.20 Drafting. Landlord and Tenant acknowledge that this Lease was negotiated at
arms length and that no presumptions in favor of or against the drafter shall
apply to the interpretation of this Lease.

8.21 Smoking Prohibited. Smoking is prohibited in all areas within the Building
and in all areas surrounding the Building other than the loading dock.
Notwithstanding the foregoing, however, Landlord, in its sole discretion, shall
have the right to change the location of areas in which smoking is permitted.
Tenant shall ensure that Tenant’s Invitees are made aware of such prohibition
and require that all employees and other Tenant’s Invitees comply with the
foregoing prohibition.

8.22 Patriot Act Compliance.

8.22.1 Tenant Representation. Tenant hereby represents and warrants to Landlord
that to the best of Tenant’s knowledge, neither Tenant nor its respective
constituents or affiliates are in violation of any laws relating to terrorism or
money laundering, including the Executive Order (as hereinafter defined) and/or
the Uniting and Strengthening America by Providing Appropriate Tools Required to
Intercept and Obstruct Terrorism Act of 2001 (Public Law 107-56, the “Patriot
Act”).

 

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8.22.2 Not a Prohibited Person. Tenant hereby represents and warrants to
Landlord that to the best of Tenant’s knowledge, neither Tenant nor any of its
respective constituents or affiliates is a “Prohibited Person”, which is defined
as follows:

(a) A person or entity that is listed in the Annex to, or is otherwise subject
to the provisions of, the Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001, and relating to Blocking Property and Prohibiting
Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism
(the “Executive Order”);

(b) A person or entity owned or controlled by, or acting for or on behalf of,
any person or entity that is listed in the Annex to, or is otherwise subject to
the provisions of, the Executive Order;

(c) A person or entity with whom Landlord is prohibited from dealing or
otherwise engaging in any transaction by any terrorism or money laundering law,
including the Executive Order and the Patriot Act;

(d) A person or entity who commits, threatens or conspires to commit or supports
“terrorism” as defined in the Executive Order;

(e) A person or entity that is named as a “specially designated national and
blocked person” on the most current list published by the U.S. Treasury
Department Office of Foreign Assets Control at its official website,
http://www.treas.gov/ofac/tllsdn.pdf, or at any replacement website or other
replacement official publication of such list; and

(f) A person or entity who is affiliated with a person or entity listed above.

8.22.3 No Transactions. Tenant hereby represents and warrants to Landlord that
neither Tenant nor any of its affiliates or constituents is or will knowingly
(i) conduct any business or engage in any transaction or dealing with any
Prohibited Person, including making or receiving any contribution of funds,
goods or services to or for the benefit of any Prohibited Person; (ii) deal in,
or otherwise engage in any transaction relating to, any property or interests in
property blocked pursuant to the Executive Order; or (iii) engage in or conspire
to engage in any transaction that evades or avoids, or has the purpose of
evading or avoiding, or attempts to violate, any of the prohibitions set forth
in the Executive Order or the Patriot Act.

8.22.4 Certification. Tenant covenants and agrees to deliver to Landlord any
certification or other evidence required from time to time by Landlord in its
reasonable discretion, confirming Tenant’s compliance with this Section.

8.23 Time is of the Essence. Time is of the essence in the performance of all
obligations under the terms of this Lease.

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

8.25 Consent/Discretion. Except as otherwise provided herein, a party’s
consent/approval shall not be unreasonably withheld, conditioned or delayed.
Whenever a party is authorized to use its discretion in deciding to take or
taking action under the Lease, such exercise shall be subject to a standard of
commercial reasonableness.

[Remainder of Page Intentionally Left Blank]

 

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IN TESTIMONY WHEREOF, the parties, by authority duly given, have executed this
Lease as of the date set forth on the first page of this Lease.

 

LANDLORD:

LICHTIN/TORINGDON LAND, LLC,

a North Carolina limited liability company

By:  

/s/ Harold S. Lichtin

Name:   Harold S. Lichtin Its:   Manager TENANT: CHELSEA THERAPEUTICS, INC., a
Delaware corporation By:  

/s/ J. Nick Riehle

Name:   J. Nick Riehle Its:   Vice President and Chief Financial Officer

 

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SCHEDULE OF EXHIBITS

 

Exhibit A-    Floor Plan of the Premises Exhibit A-1 -    Building Standard
Materials and Finishes Exhibit B -    Landlord’s Work Exhibit B-1 -   
Construction Documents Exhibit B-2 -    The Schedule Exhibit B-3 -   
Agreed-Upon Above-Standard Items Provided at Landlord’s Cost Exhibit B-4 -   
Agreed-Upon Above-Standard Items Provided at Tenant’s Cost Exhibit C -   
Cleaning Specifications Exhibit D -    Rules and Regulations Exhibit E -   
Services to be Provided by Landlord Exhibit F -    Form of Escrow Agreement

 

1

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EXHIBIT A

FLOOR PLAN OF THE PREMISES

Landlord shall supply prior to the Commencement Date.

 

A-1

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

LOGO [g47809img-001.jpg]

EXHIBIT A-1

BUILDING STANDARD MATERIALS AND FINISHES

BASE BUILDING

STRUCTURE

 

  •  

The building foundation will consist of shallow spread footings at the columns,
seismic brace frames required in accordance with code and the site
classification and slab on grade.

 

  •  

The building elevated floors will be composite slabs supported by a steel beam
and column frame wall. The roof will consist of metal deck with concrete pads at
the mechanical units for sound and vibration isolation.

 

  •  

The roof system will be a fully adhered TPO (Thermoplastic polyolefin) membrane
roof. The membrane will be white, which reduces the heat gain through the roof.

EXTERIOR WALLS

 

  •  

Exterior walls will be metal studs with exterior gypsum sheathing clad in a
combination of brick veneer, architectural precast concrete accents and aluminum
window wall system with 1-inch low-e coated insulated glazing. The building
envelope will meet or exceed all current energy codes and standards.

BUILDING COMMON

 

  •  

Walls in all vertical shafts and “back of house” areas, mechanical & electrical
rooms etc., will be extended above the finished ceiling and filled with sound
attenuation batts. The outer faces of the building core will be finished and
sanded smooth ready for tenant finish.

 

  •  

“Back of house” areas will have painted walls, vinyl base and painted concrete
floors.

 

  •  

The walls in the public/egress corridors will extend tight to the structure
above. The walls will have a single color Zolotone/Polymix finish and the floors
will have upgraded base building carpet and carpet base.

 

  •  

Combination gypsum board/acoustical ceiling tile will be provided only in base
building egress corridors and service elevator vestibules. All other back of
house areas will have exposed painted structure with suspended fluorescent light
fixtures.

MECHANICAL

 

  •  

Self Contained Units on each floor with water cooled compressors connected by a
condensed water loop to a cooling tower located on the roof.

 

  •  

Medium pressure loop connected to cooling on VAV boxes at the interior and fan
powered units with re-heat at the perimeter of each floor.

 

  •  

Return air plenum.

 

  •  

Bathrooms use a ducted exhaust.

 

  •  

DDC controls for the system.

 

  •  

Separate package roof top unit for the elevator machine room.

 

A-1-1

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FIRE /LIFE-SAFETY

 

  •  

The entire building will be protected by a Light Hazard fire sprinkler system.

 

  •  

Dry standpipes will be located in both fire stairs per code.

 

  •  

Life Safety devices will be monitored by an addressable fire alarm panel.

 

  •  

The core area fire sprinkler protection system will be complete with concealed
sprinkler heads in the main lobby and public areas.

 

  •  

Battery powered emergency lighting will be provided for all public areas and
corridors.

CONVEYING SYSTEMS

 

  •  

Passengers and Freight Elevators will be Electric Traction type with a capacity
of 3500 pounds, minimum and travel at a rate of 150 feet per minute, minimum.
All elevators will stop at each floor.

 

  •  

A single passenger elevator will have traveling cable that will permit future
addition of security after hours access for the elevator.

 

  •  

Interior walls of passenger elevator cabs will be finished with a stone base and
wood paneling, with a thin-set stone tile matching the lobby on the floor. The
ceiling will be a mirror finish stainless steel panels with down lights.

MAIN LOBBY – ENTRY LEVEL

 

  •  

16” – 18” cut natural stone thin set tiles (butt joint), arranged in an
architectural pattern with natural stone tile base. Natural stones include
marble, granite and limestone.

 

  •  

Fully recessed and illuminated tenant directory.

 

  •  

Wall paint will be a two color Zolotone/Polymix finish.

 

  •  

Combination of direct, compact fluorescent, MR-16 and indirect lighting with
cold cathode (neon), in lobby ceiling. Ceiling will be entirely hard gypsum
board with representative architectural detailing to compliment the overall
lobby design.

 

  •  

Fully recessed sprinkler heads.

 

  •  

Pedimat walk-off mats at all entries.

ELEVATOR LOBBIES – TYPICAL TENANT FLOORS

 

  •  

Ceiling will be hard gypsum board with complementary architectural detailing and
compact fluorescent and MR-16 down lights.

 

  •  

Single color Zolotone/Polymix finish on the walls, upgraded base building carpet
and carpet base.

BATHROOMS

 

  •  

6” – 12” porcelain or ceramic thin set tile.

 

  •  

Single color Zolotone/Polymix finish.

 

  •  

Stain grade chevron louver doors with transom to individual stalls stained to
match building standard on door finish.

 

  •  

Solid surfacing counters with integral sink bowls.

 

  •  

9’ – 0” high ceilings with 2’ x 2’ acoustical tile, Armstrong Cortega, with
white grid. Hard gypsum board soffits above lavatories, counters, urinals,
toilet stalls and room transitions within the bathroom. Lighting will be a
combination of compact fluorescent downlights in the acoustical ceiling and
gypsum board ceilings as well as MR-16 fixtures and wall sconces over the
lavatories and counters.

 

  •  

Fully recessed sprinkler heads.

 

A-1-2

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TENANT STANDARDS

INTERIOR WALL PARTITIONS

 

  •  

Partitions will be 5/8” gypsum wallboard over 25-gauge metal studs at 16” on
center.

 

  •  

Typical non-rated partitions will be constructed to extend 12” above the hung
ceiling and taped, compounded and sanded to finished condition to receive paint
or vinyl wall coverings.

DEMISING PARTITIONS

 

  •  

Demising partitions separated tenants will be 5/8” gypsum wallboard over
25-gauge metal studs 16” on center with R-11 fiberglass sound attenuation batts.

 

  •  

Demising partitions will be constructed to extend to the metal decking/floor
slab and taped, compounded and sanded to finished condition to receive paint or
vinyl wall coverings.

WALL FINISHES

 

  •  

Tenant will have choice of colors of latex paint. Two coats of flat finish latex
for all exposed walls inside the demised premises. Upgrade for other alternate
finish available.

SOUND ATTENUATION

 

  •  

Sound attenuation batts will be provided in the walls around Break Room and One
(1) Conference Room of choice.

BLINDS

 

  •  

Brushed aluminum Hunter Douglas 1” blinds in all exterior windows.

HVAC

 

  •  

One (1) VAV box installed for approximately every 900 square feet.

FIRE/LIFE – SAFETY

 

  •  

Wet pipe sprinkler system per the approval of all required local governing
authorities. Maximum sprinkler head spacing of one (1) per 144 square feet.
Quick response white semi-recessed pendent heads are located in the center of
the acoustical tile.

PLUMBING

 

  •  

Water line provided in break room for refrigerator.

 

  •  

Sink provided.

SECURITY SYSTEM

 

  •  

Infrastructure provided and one (1) keypad.

 

  •  

Monitoring will be tenant responsibility.

FINISHED FLOORING

 

  •  

COMMON CORRIDORS – Premium Commercial Carpet with Carpet Base.

 

  •  

TENANT – Commercial grade $18—$20 installed/square yard carpet. Allowance
including installation, to be glued directly to the floor slab, with carpet
base. VCT (vinyl composition tile) with rubber cover base is standard in break
rooms and telephone/server rooms.

 

A-1-3

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DOORS AND FRAMES

 

 

•

 

All doors will be factory stained and sealed 1  3/4” solid core rotary cut Birch
Veneer doors measuring 3’ wide by 8’8” tall. Stain color shall be mahogany.

 

  •  

All doorframes will be welded 16-gauge steel with two (2) coats of semi-gloss
paint finish.

 

  •  

All hardware will be Schlage AL Series, Style Neptune/polished chrome. All
hardware sets will conform to NC accessibility requirements. Locksets standard
on front entry doors, rear doors, telephone/server door, and one (1) additional
room of choice.

FINISHED CEILINGS

 

  •  

9’ – 0” high ceilings with white metal grid and tile construction with grid
system centered in partitioned areas.

 

  •  

2’ x 2’ acoustical ceiling tile (white) will be Armstrong Cortega or similar.

 

  •  

Tenant entry off elevator lobby or corridor will have hard gypsum board ceiling
detail.

MILLWORK

 

 

•

 

Custom millwork in Break Rooms – approximately 7  1/2 LF of single shelf upper
cabinets, with built-in microwave shelf, and approximately 7  1/2 LF of lower
cabinets with single basin sink. Solid laminate for all cabinets and patterned
laminate for counter tops. White laminate adjustable shelves. Brushed aluminum
hardware.

ELECTRICAL

 

  •  

Duplex Outlets and Light Switches: two (2) duplex outlets per office Standard
ivory with matching plastic covers centered 16” AFF height unless otherwise
noted. Height of 44” AFF at countertops.

 

  •  

Two (2) dedicated circuits for a break room, one (1) dedicated circuit for a
telephone/server room.

 

  •  

Dedicated circuits provided for copy machines, printers, etc. (maximum of four).

 

  •  

2’ x 4’, 18 cell parabolic fluorescent fixtures with electronic ballast, 3-T8
lamps, 277 volts. One (1) per 100 usable square feet.

 

  •  

Outlets around sinks will be on a GFI circuit as required per code.

 

  •  

Any special electrical fit-up such as additional dedicated circuits, equipment
wiring, added exit lights, kitchens, low voltage wiring, special circuitry,
electrical floor cores, etc. to be priced per tenant plans at time of fit-up.

VOICE/DATA

 

  •  

Empty junction box with conduit/pull cord—(1) per office.

 

A-1-4

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EXHIBIT B

LANDLORD’S WORK

At the sole cost and expense of Landlord and without application of any Tenant
allowances, Landlord shall provide the following:

 

1.    Men’s and women’s restrooms; 2.    Drinking fountains at core, accessible
to the handicapped; 3.    Electric/telephone closets; 4.    Building stairways;
5.    Elevators and elevator lobby; 6.    Sheet rocked core walls and interior
columns taped and spackled, ready for finish; 7.    Concrete slab floors; 8.   
Mechanical equipment room(s): 9.    Fire protection alarm and communication
systems installed according to NFPA 101; 10.    Any handicap facilities for the
Project required by law; and 11.    Grid system tiles and ceiling tiles stacked
on the floor; and 12.    Concrete suitable for application of floor covering.

In the event of any dispute as to whether any specific item of work in and about
the Premises constitutes Landlord’s Work or work to be performed at Tenant’s
cost and expense, Tenant agrees that the certificate of the Landlord’s
architect, who shall employ objective and professional standards, shall be
conclusive.

 

B-1

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

EXHIBIT B-1

CONSTRUCTION DOCUMENTS

(to be delivered in accordance with

the Schedule attached as Exhibit B-2)

 

B-1-1

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

EXHIBIT B-2

THE SCHEDULE

 

B-2-1

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

EXHIBIT B-3

AGREED-UPON ABOVE-STANDARD ITEMS PROVIDED AT LANDLORD’S COST

None

 

B-3-1

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

EXHIBIT B-4

AGREED-UPON ABOVE-STANDARD ITEMS PROVIDED AT TENANT’S COST

 

Glass Doors

   $ 700.00

Floor cores in conference rooms (2)

   $ 1,300.00

Wall washer lights for signage in vestibule

   $ 480.00

Carpet border in CEO and conference room

   $ 3,000.00

Wallcovering in reception and conference room

   $ 2,000.00

6’ of upper and lower millwork in file room

   $ 1,750.00

Sound insulation in CEO office

   $ 300.00

Bring sheetrock walls completely to the deck in main boardroom & CEO office.

   $ 2,050.00

Plumbing and Electrical rough-in for dishwasher

   $ 500.00

Card readers (2) and keypad (1)

   $ 6,025.00

Subtotal

   $ 18,105.00

General Contractor 10% fee

   $ 1,810.50

Grand Total:

   $ 19,915.50

Landlord Contribution as detailed in Section 3.1:

   $ 10,000.00

Net Contribution Due From Chelsea Therapeautics based upon these pricing
estimates, which should be unerstood,may vary based upon final engineering and
construction documents:

   $ 9,915.50

 

B-4-1

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EXHIBIT C

CLEANING SPECIFICATIONS

 

TASKS

   Daily    Weekly    Monthly    Quarterly    Yearly

Nightly Services (General)

              

Police and remove all litter from entrance areas.

   X            

Empty and damp wipe ashtrays, empty trash cans.

   X            

Clean and sanitize drinking fountains, follow with stainless steel cleaner.

   X            

Spot clean all windows and partition glass, including lobby doors.

   X            

Dust mop and spot clean all tiled areas.

   X            

Vacuum all carpeted areas.

   X            

Nightly Services – Restrooms

              

Remove trash and clean receptacles.

   X            

Clean and sanitize lavatories, commodes and urinals.

   X            

Clean out corners and edges.

   X            

Clean mirrors.

   X            

Spot clean walls and partitions.

   X            

Replenish supplies.

   X            

Mop and disinfect floor.

   X            

Nightly Services – Elevators

              

Clean lenses and replace burned out bulbs. (Re-bill bulbs)

   X            

Spot clean elevator walls.

   X            

Use paste wax or appropriate treatment on finished metal.

   X            

Clean edges, corners and tracks.

   X            

Vacuum carpets.

   X            

Nightly Services – Street Level

              

Sweep all granite and/or marble public areas.

   X            

Clean all glass entrance ways and side panels. Empty all ash urns.

   X            

Spot clean granite and/or marble walls.

   X            

Dust all horizontal ledges.

   X            

TASKS

   Daily    Weekly    Monthly    Quarterly    Yearly

Weekly Services – General

              

Dust all horizontal surfaces, desks, chairs, files, telephones, picture frames,
baseboards.

      X         

Damp wash and wipe dry all plastic or Formica desktops.

      X         

Weekly Services – Stairways

              

Sweep from top to bottom.

      X         

Dust handrails and ledges.

      X         

Dust lights between floors.

      X         

Weekly Services – Granite/Marble Floors

              

Spray Buff all public areas.

      X         

Monthly Services – Tile Floors

              

Clean and wax all traffic lanes and other “high wear” areas.

         X      

Quarterly Services

              

Clean blinds

            X   

Annual Services – General

              

Vacuum drapes, cornices and wall hangings.

               X

 

C-1

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

Clean all vertical surfaces not attended to during nightly, weekly, quarterly or
semi-annually.

               X

Damp wash diffusers, grills and other such items.

               X

Wash down all restroom walls and partitions.

               X

Dust all storage areas and shelves and contents.

              

Services as Needed Due to Ordinary Wear and Tear

              

Clean carpeted areas.

              

Shampoo public areas outside Tenant space. Damp mop all tile floors.

              

Machine buff all tile floors.

              

Strip and re-coat all tile floors.

              

Spot clean carpeted areas.

              

Daily Services – Building Exterior

              

Inspect Building perimeter for trash.

              

Remove trash from tree wells and planters.

              

TASKS

   Daily    Weekly    Monthly    Quarterly    Yearly

Hose down sidewalks as needed.

              

Services – Day Crew

              

Maintain and replenish supplies in all restrooms.

   Daily            

Vacuum all passenger elevators once each day.

   Daily            

Clean all ash urns twice each day.

   Daily            

Clean all glass entrance doors in main lobby.

   As
Needed            

Dust mop and/or damp mop all granite and/or marble floors in main lobby once
each day.

   Daily            

Clean all windows on Building perimeter at street level as needed.

   As
Needed            

 

C-2

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

EXHIBIT D

RULES AND REGULATIONS

Sidewalks, doorways, vestibules, halls, stairways and similar areas shall not be
obstructed nor shall refuse, furniture, boxes or other items be placed therein
by Tenant or its officers, agents, servants or employees, or used for any
purpose other than ingress or egress to and from the Premises, or for going from
one part of the Building to another part of the Building. Canvassing, soliciting
and peddling in the Building are prohibited.

Plumbing, fixtures and appliances shall be used only for the purposes for which
constructed, and no unsuitable material shall be placed therein.

No signs, directories, posters, advertisements, or notices shall be painted or
affixed on or to any of the windows or doors, or in corridors or other parts of
the Building, except in such color, size, and style, and in such places, as
shall be first approved in writing by Landlord in its discretion. Building
standard suite identification signs will be prepared by Landlord in accordance
with the terms of the Lease.

Tenant shall not do, or permit anything to be done in or about the Building, or
bring or keep anything therein, that will in any way increase the rate of fire
or other insurance on the Building, or on property kept therein or otherwise
increase the possibility of fire or other casualty.

Landlord shall have the right to prescribe the weight and position of heavy
equipment or objects which may overstress any portion of the floors of the
Premises. All damage done to the Building by the improper placing of such heavy
items will be repaired at the sole expense of Tenant.

Tenant shall notify the building manager when safes or other heavy equipment are
to be taken in or out of the Building, and such moving shall only be done after
written permission is obtained from Landlord on such conditions as Landlord
shall require.

Corridor doors, when not in use, shall be kept closed. Stairwell doors shall
remain closed at all times. Tenant shall lock all office doors leading to
corridors and turn out all lights at the close of the working day.

All deliveries must be made via the appropriate entryway during Normal Business
Hours. Landlord’s written approval must be obtained for any delivery after
Normal Business Hours.

Tenant shall cooperate with Landlord’s employees in keeping the Premises neat
and clean.

Tenant shall not cause or permit any improper noises in the Building, or allow
any unpleasant odors to emanate from the Premises, or otherwise interfere with,
injure or annoy in any way other tenants, or persons having business with them.

No animals (other than seeing eye dogs) shall be brought into or kept in or
about the Building.

No machinery of any kind, other than that which is subject to normal business
practices, such as typewriters, calculators, vending machines, kitchen
appliances and business computers, shall be operated on the Premises without the
prior written consent of Landlord, nor shall Tenant use or keep in the Building
any inflammable or explosive fluid or substance, or any illuminating materials.
No space heaters or fans shall be operated in the Building.

No bicycles, motorcycles or similar vehicles will be allowed in the Building.

No nails, hooks or screws shall be driven into or inserted in any perimeter wall
of the Building except as approved by the building manager.

Landlord has the right to evacuate the Building in the event of an emergency or
catastrophe.

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

Except for normal office vending machine services, and routine business lunch
meetings, business receptions or events in the Premises, no food and/or
beverages shall be distributed from the Premises without prior written approval
of the Building manager.

No additional locks shall be placed upon any doors without the prior written
consent of Landlord. All necessary keys shall be furnished by Landlord, and the
same shall be surrendered upon termination of the Lease. Tenant shall then give
Landlord or its agent an explanation of the combination of all locks on the
doors or vaults. No duplicates of such keys shall be made by Tenant or its
employees. Additional keys shall be obtained only from Landlord, at a reasonable
fee.

Tenant shall not locate furnishings or cabinets adjacent to mechanical,
electrical, or window access panels or over air conditioning outlets so as to
prevent operating personnel from servicing such units as routine or emergency
access may require. Cost of moving such furnishings for Landlord’s access shall
be paid by Tenant upon demand from Landlord. Only personnel designated by
Landlord may work on the lighting and air conditioning equipment of the
Building.

Tenant shall comply with reasonable parking rules and regulations as may be
posted and distributed from time to time.

No portion of the Building shall be used as an overnight sleeping accommodation.

Prior written approval, which shall be at Landlord’s sole discretion, must be
obtained for installation of window shades, blinds, drapes, or any other window
treatment whatsoever. Landlord shall control all internal lighting that may be
visible from the exterior of the Building and shall have the right to change any
unapproved lighting, without notice to Tenant, at Tenant’s expense.

Tenant shall not tamper with or attempt to adjust temperature control settings
in the Premises. Upon request of Tenant, Landlord shall make any necessary
adjustments in thermostat settings.

Smoking is not permitted in any portion of the Building or on any patios or
balconies associated with the Building and will only be permitted in certain
areas so designated by Landlord in its sole and absolute discretion.

No firearms, weapons or any explosive devices shall be permitted in or around
the Building at any time.

Tenant shall not place or store (or permit the placement or storage of) any
improvements, personal property or any other objects on any balconies or patios
of the Building without the prior written consent of Landlord.

Tenant shall provide Landlord with notice of any deliveries to the Building
which will require any floor covering within the Building and any such
deliveries shall be subject to Landlord’s prior approval.

 

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

EXHIBIT E

SERVICES TO BE PROVIDED BY LANDLORD

[To be modified by Landlord as the Building plans are finalized]

1. Utilities. Hot and cold water to the restrooms on each floor in the Premises;
cold water (with cold water risers provided by Landlord to the designated
portions of the core of each floor of the Premises) twenty-four (24) hours a
day, seven (7) days a week; and central heat, ventilation and air conditioning
(“HVAC”) in season during Normal Business Hours. During Normal Business Hours,
Landlord shall provide to the Premises, at the rates established by Landlord
from time to time, central HVAC in season at such temperatures and in such
amounts as are reasonably considered by Landlord to be standard for Comparable
Space or as may be permitted, controlled or regulated by applicable laws,
ordinances, rules and regulations; provided that Landlord agrees to cause the
HVAC system which services the Premises to be designed, installed and maintained
in a manner which shall maximize its efficiency and shall, during Normal
Business Hours, maintain the temperature of the Premises within the following
range of temperatures, subject to unusual heat loads caused by Tenant’s
extraordinary use of the Premises or alteration of the Premises made contrary to
the provisions of this Lease:

 

Summer:   93 De. F. DB-74 De. F.W.B   - OUTSIDE   75 De. F. DB-50% RH   - INSIDE
Winter:   22 De. F. DB   - OUTSIDE   72 De. F. DB-50% RH.   - INSIDE

Shell HVAC internal heat loads shall be based upon two (2) watts per rentable
square foot of area in the Premises (“RSF”) for lighting, two (2) watts per RSF
for power and one (1) person per one hundred and fifty (150) RSF. In addition to
Tenant’s electrical consumption for HVAC and lighting, Tenant’s overall use of
electricity shall not, without Landlord’s prior written consent, exceed in times
and duration of consumption an overall load of eight (8) kilowatt hours per RSF
per Lease Year, processed load. Any electrical use in excess of eight
(8) kilowatt hours per RSF per Lease Year shall be billed to Tenant at
Landlord’s rate established from time to time.

Landlord shall make HVAC available to the Premises outside of Normal Business
Hours in accordance with the provisions of this Lease and at a cost equal to
$35.00 per hour (as reasonably adjusted from time to time by Landlord) per zone,
with a minimum of two (2) hours per occurrence. Service during weekdays and
weekends at other than Normal Business Hours for the Building and on Saturday
afternoons, Sundays and Holidays shall be furnished only upon request of Tenant.
Tenant may request such HVAC service for one or more floors constituting the
Premises. At Tenant’s cost, Tenant may tap condenser water supply lines for
supplemental HVAC services to Tenant’s word processing and computer room units.

2. Janitorial services. Janitorial service (as set forth in Exhibit C) on the
evening before each weekday except for Holidays. Such service shall be
consistent with the janitorial services provided to tenants in Comparable Space.
If Tenant requests special or additional attention other than routine janitorial
service, Tenant shall pay the extra cost thereof.

3. Electrical Facilities. Electrical facilities to provide electrical capacity
up to four (4) watts for each RSF, determined on a connected load in accordance
with the National Electric Code 1993 (“Standard Building Capacity”). For the
purposes of computing Tenant’s access to electrical capacity, Tenant shall
continuously have the right to demand, and simultaneously use, twenty-four
(24) hours per day, every day of the year, electrical facilities which provide
electrical power of four (4) watts per RSF, all costs of providing electrical
capacity to the Premises in excess of four (4) watts per RSF to be borne by
Tenant. Tenant’s usage initially will be determined by a survey by Landlord of
Tenant’s final construction documents. Tenant shall notify Landlord in writing
of any equipment in the Premises that has a rated electrical load greater than
500 watts and/or that requires a service voltage other than 120 volts, and
Landlord’s written approval (which shall not be unreasonably or arbitrarily
withheld, conditioned or delayed) shall be required with respect to the
installation of any such high electrical consumption equipment in the Premises.
In the event Tenant consumes electricity in excess of Standard Building

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

Capacity, Landlord may impose such reasonable conditions on such usage as
Landlord elects (including, without limitation, the requirement that Tenant bear
the cost of such excess capacity and/or that submeters be installed at Tenant’s
expense). If the installation of any electrical equipment in Tenant’s Premises
requires air conditioning or other equipment which Landlord’s contractor
reasonably estimates will exceed an electrical capacity of four (4) watts per
RSF in the Premises, then the additional capacity required for such air
conditioning/equipment will be the obligation of Tenant. Tenant shall install
and pay for all costs of meters and submeters to measure or accommodate Tenant’s
use of electricity or Tenant’s design loads and capacities that exceed four
(4) watts per RSF. Landlord shall provide and pay for all costs of wiring,
risers, transformer and electrical panels to accommodate Tenant’s connected
loads and capacities up to four (4) watts per RSF, including, without
limitation, the installation and maintenance thereof. Notwithstanding the
foregoing, Landlord may refuse to install and withhold consent for Tenant’s
installation of any wiring, risers, transformers, electrical panels, or air
conditioning in connection with providing electricity in excess of four
(4) watts per RSF if, in Landlord’s sole judgment, the same are not necessary or
would cause damage or injury to the Building or the Premises or cause or create
a dangerous or hazardous condition or entail excessive or unreasonable
alterations or repairs to the Building or the Premises, or would materially
interfere with or create or constitute a disturbance to other tenants or
occupants of the Building. In no event shall Landlord incur any liability for
Landlord’s refusal to install any such electrical facility or equipment in
excess of electrical facilities or equipment to provide four (4) watts per RSF.

4. Electrical Supplies. All lamps, bulbs, starters and ballasts for all light
fixtures in Common Areas and initial lamps, bulbs, starters and ballasts for
Building standard light fixtures in the Premises and replacement bulbs for
Building standard fixtures or Tenant’s light fixtures in the Premises that can
accommodate Building standard bulbs (including, without limitation, those
Building standard 2’ x 4’ fluorescent light fixtures which are supplied by
Tenant in addition to those supplied by Landlord).

5. [Intentionally Deleted]

6. Common Areas Maintenance. Routine maintenance, painting and electric lighting
service for all Common Areas in the manner and to the extent necessary to be
consistent with the operation of Comparable Space.

7. Elevator Service. Elevator service to be provided (except during periods of
routine service and repairs if such service and repairs cannot be scheduled
outside Normal Business Hours, power failures, and emergencies).

8. Communications. Landlord shall, at its expense, install telephone cables in
the central core of the Building providing service to each floor of the
Building. Tenant shall be solely responsible for arranging and paying for
telephone service to the Premises.

9. Mail Room Services. Mail room services during Normal Business Hours by
accommodation of the United States Postal Services at an area designated by
Landlord in the Building.

10. Interruption of Services. Landlord reserves the right to interrupt any
services when, in Landlord’s reasonable judgment, such interruption is necessary
by reason of accident or emergency or for repairs, alterations, replacements or
improvements. Except in the case of an emergency, Landlord will notify Tenant in
advance, if possible, of any interruption and its estimated duration. Landlord
will undertake repairs with reasonable diligence to restore such service as
promptly as reasonably possible and will conduct ordinary repairs in a manner
and at times, including outside Normal Business Hours, so as not unduly to
interfere with or impair Tenant’s use and enjoyment of the Premises.

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

EXHIBIT F

FORM OF ESCROW AGREEMENT

ESCROW AGREEMENT

THIS ESCROW AGREEMENT (“AGREEMENT”) dated as of                     , 2008, by
and among Chelsea Therapeutics, Inc., a Delaware corporation (“Tenant”),
Lichtin/Toringdon Land, LLC, a North Carolina limited liability company
(“Buyer”), and The Title Company of North Carolina, a North Carolina corporation
(“Escrow Agent”).

RECITALS:

WHEREAS, Landlord and Tenant previously entered into that certain Lease
Agreement dated as of March     , 2008 (the “Lease”), pursuant to which Landlord
leases to Tenant approximately 9,956 rentable square feet of space in the
building known as Toringdon VI, located at 3530 Toringdon Way, Charlotte, North
Carolina 28277, as more particularly described in the Lease (the “Premises”);

WHEREAS, pursuant to the terms of the Lease, Tenant is required to deposit with
Landlord a security deposit in the sum of $ 76,136.40 (as the same may be
reduced or increased in accordance with the terms of the Lease, the “Escrowed
Funds”) as security for the performance by Tenant of all the terms, covenants
and conditions of the Lease on Tenant’s part to be performed;

WHEREAS, Tenant has requested and Landlord has agreed to place the Escrowed
Funds in an escrow account (the “Escrow Account”) with a third-party escrow
agent;

WHEREAS, the parties hereto wish to provide for the terms and conditions under
which Escrow Agent shall hold the Escrowed Funds.

NOW, THEREFORE, for valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, the parties agree as follows:

1. Capitalized terms used but not defined herein shall have those meanings
ascribed to them in the Lease.

2. Deposit with Escrow Agent. Upon full execution of the Lease, Tenant shall
deposit with Escrow Agent the sum of $76,136.40 for deposit into the Escrow
Account.

3. Investment of Deposit. Provided that Escrow Agent is provided with Tenant’s
taxpayer identification number, the Escrow Agent shall established an
interest-bearing escrow account with a federally insured bank or savings and
loan association, doing business and having an office in the State of North
Carolina, in the name of Escrow Agent with the designation “as escrow agent”
(the “Escrow Account”). Upon written instruction from Tenant, the Escrow Agent
shall invest the Escrow Funds in such other manner as Landlord and Tenant shall
jointly direct, but Escrow Agent shall not be liable for the safety or security
of any such alternative investment of the Escrow Funds or the rate of return
thereon.

4. Disbursement.

a. Landlord shall be entitled to draw upon the Escrowed Funds to cure any
default of Tenant under the Lease. In the event of a default by Tenant, beyond
any applicable cure period, Landlord shall, in writing, (i) notify the Escrow
Agent of the default, which notice shall include any notice from Landlord to
Tenant regarding such default as required by the terms of the Lease (ii) confirm
that the default has not been cured within the applicable cure period recited in
the Lease and (iii) notify the Escrow Agent of the amount required from the
Escrowed Funds to cure the default (such notice, the “Draw Notice”). Upon
receipt of such Draw Notice, Escrow Agent shall disburse the amount required to
cure the default as set forth in the Draw Notice to Landlord. Escrow

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Agent acknowledges that upon Landlord’s drawing upon the Escrowed Funds as
provided herein, the Lease requires Tenant to deposit additional funds with the
Escrow Agent equal to the amount disbursed pursuant to the Draw Notice. Any
additional funds deposited with Escrow Agent in accordance with the Lease shall
be governed by the terms hereof.

b. Escrow Agent further acknowledges that under the terms of the Lease, if
Tenant meets certain conditions set forth in the Lease, Tenant shall be entitled
to a return of one-half of the Escrowed Funds then held by Escrow Agent. If
Tenant meets such conditions, Landlord shall provide notice to Escrow Agent (the
“Reimbursement Notice”), and Escrow Agent shall disburse the amount set forth in
the Reimbursement Notice to Tenant.

c. In addition, in the event there has been no monetary default by Tenant during
the first four (4) years of the Lease, Tenant is entitled under the terms of the
Lease to a return of the entire Escrowed Funds. Landlord shall notify Escrow
Agent that Tenant is entitled to a return of the Escrowed Funds, and Escrow
Agent shall disburse all remaining Escrowed Funds to Tenant. If, at any time
during the first four (4) lease years, Tenant has defaulted on its monetary
obligations under the Lease, Escrow Agent shall continue to hold the Escrowed
Funds until the end of the term, as set forth in the Lease.

d. If the parties hereto shall be in disagreement about the interpretation of
this Agreement, or about their rights and obligations hereunder, or the
propriety of any action contemplated by the Escrow Agent hereunder, any party
hereto may, at its discretion, file an action in a court of competent
jurisdiction to resolve such disagreement. Specifically, Escrow Agent, at its
option, may institute an interpleader action in and deliver the Escrow Funds and
any interest earned thereon to a court of competent jurisdiction, whereupon
Escrow Agent shall thereafter be relieved of any and all liability under the
terms and provisions of this Agreement. Escrow Agent shall be indemnified,
jointly and severally, by the parties for all costs, including attorney’s fees,
in connection with such action, and shall be fully protected in suspending all
or a part of its activities under this Agreement until a final judgment, order
or decree in the action is received.

e. This Agreement shall be terminated and the liability of Escrow Agent shall
cease upon the complete distribution of the Escrow Funds and any interest earned
thereon, or by joint written notice of termination by the parties to Escrow
Agent.

5. Miscellaneous.

a. Escrow Agent may act in reliance upon any writing or instrument or signature
which it, in good faith, believes to be genuine, may assume the validity and
accuracy of any statement or assertion contained in such a writing or instrument
and may assume that any person purporting to give any writing, notice, advice or
instruction in connection with the provisions hereof has been duly authorized so
to do.

b. Escrow Agent’s duties hereunder shall be limited to the safekeeping of the
Escrow Funds and interest earned thereon and the disposition of the same in
accordance with the terms hereof.

c. Escrow Agent undertakes to perform only such duties as are expressly set
forth herein and no implied duties or obligations shall be read into this
Agreement against the Escrow Agent.

d. Landlord and Tenant, jointly and severally, hereby agree to indemnify Escrow
Agent and hold it harmless from any and all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or any other expense, fees or
charges of any character or nature, which it may incur or with which it may be
threatened by reason of its acting as Escrow Agent under this Agreement, and in
connection therewith, to indemnify the Escrow Agent against any and all
expenses, including attorney’s fees and the cost of defending any action, suit
or proceeding or resisting any claim.

e. If the parties hereto shall be in disagreement about the interpretation of
this Agreement, or about their rights and obligations hereunder, or the
propriety of any action contemplated by the Escrow Agent hereunder, any party
hereto may, at its discretion, file an action in a court of competent
jurisdiction to resolve such disagreement. Specifically, Escrow Agent, at its
option, may institute an interpleader action in and deliver the

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Escrow Funds and any interest earned thereon to a court of competent
jurisdiction, whereupon Escrow Agent shall thereafter be relieved of any and all
liability under the terms and provisions of this Agreement. Escrow Agent shall
be indemnified, jointly and severally, by Landlord and Tenant for all costs,
including attorney’s fees, in connection with any such action, and shall be
fully protected in suspending all or a part of its activities under this
Agreement until a final judgment, order or decree in the action is received.

f. Escrow Agent shall not be liable for any mistakes of fact, or errors of
judgment, or for any acts or omission of any kind unless caused by the willful
misconduct or gross negligence of Escrow Agent.

g. Escrow Agent may resign upon fifteen (15) days written notice to the parties
to this Agreement. If a successor escrow agent is not appointed by joint written
action of Landlord and Tenant within a fifteen (15) day period following such
resignation, the Escrow Agent may institute an interpleader action and deliver
the Escrow Funds and any interest earned thereon with a court of competent
jurisdiction, whereupon Escrow Agent shall thereafter be relieved of any and all
liability under the terms and provisions of this Agreement. The costs of such
action shall be paid by Landlord and Tenant, jointly and severally.

h. All notices and communications hereunder shall be in writing and shall be
deemed to be duly given if sent as indicated in the Contract.

i. This Agreement shall inure to the benefit of and shall be binding upon the
parties hereto and their respective successors and assigns.

j. This Agreement shall be construed, enforced and interpreted under the laws of
the State of North Carolina, without regard to principles of conflict of laws.

k. This Agreement shall terminate and the Escrow Agent shall be discharged of
all responsibility hereunder at such time as the Escrow Agent shall have
completed its duties hereunder.

l. Time shall be of the essence for all purposes in construing and applying this
Agreement.

m. As used herein, the plural shall include the singular, the singular the
plural, and the use of any gender shall be applicable to all genders.

n. Escrow Agent shall be paid a fee of $300.00 in connection with the Escrow
Account. Such fee shall be shared equally by Landlord and Tenant, and shall be
paid upon deposit of the Escrowed Funds with Escrow Account.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
day and year first above written.

 

TENANT: CHELSEA THERAPEUTICS, INC., a Delaware corporation By:  

 

Name:  

 

Its:  

 

Tenant’s Tax Identification Number:                              LANDLORD:

LICHTIN/TORINGDON LAND, LLC,

a North Carolina limited liability company

By:  

 

Name:   Harold S. Lichtin Its:   Manager ESCROW AGENT:

THE TITLE COMPANY OF NORTH CAROLINA,

a North Carolina corporation

By:  

 

Name:  

 

Its: