Exhibit 10.44

SUBLEASE AGREEMENT

This SUBLEASE AGREEMENT (the “Sublease”) is made and entered into as of the __
day of December, 2011 (the “Effective Date”) by and between CAROLINA POWER &
LIGHT COMPANY, a North Carolina corporation, d/b/a PROGRESS ENERGY CAROLINAS,
INC. (“Sublessor”), and RED HAT, INC., a Delaware corporation (“Sublessee”)
(Sublessor and Sublessee will hereinafter be collectively referred to as the
“Parties”).

WITNESSETH:

WHEREAS, JPMorgan Trust Company, National Association (“JPM”), as Owner Trustee
of the CA Raleigh Owner Trust, as landlord, and Sublessor, as tenant, entered
into that certain Lease Agreement dated April 10, 2003 (the “Master Lease”),
which Master Lease is attached hereto as Exhibit “A”; and

WHEREAS, in connection with the Master Lease, Master Landlord, as owner,
Sublessor, as landlord, and the City of Raleigh, North Carolina (“City”), as
tenant, entered into that certain Parking Deck Lease Agreement dated April 10,
2003 (the “Parking Lease”), governing, among other things, the sublease by
Sublessor of the Parking Deck to the City, the City’s management of, and
Sublessor’s, City’s and Master Landlord’s rights and obligations with respect
to, the Parking Deck, which Parking Lease is attached hereto as Exhibit “B”; and

WHEREAS, Pacific Life Insurance Company (“Lender”) holds a deed of trust
encumbering the interest of Master Landlord in the Premises, as security for a
loan from Lender to Master Landlord (the “Loan”) which was recorded concurrently
with the execution of the Master Lease and Parking Lease; and

WHEREAS, JPM sold its interest in the Premises (as defined herein) to The Bank
of New York Mellon Trust Company, N.A. on or about October 1, 2006 (the “Master
Landlord”); and

WHEREAS, pursuant to the terms of the Master Lease, Sublessor is leasing from
Master Landlord the real property and improvements located thereon more
particularly described in the Master Lease as the Premises, including an
approximately 19-story office building with ground floor retail located at 100
East Davie Street, Raleigh, North Carolina (the “Building”), and an integrated
Parking Deck (the “Parking Deck”), all as more particularly described in the
Master Lease; and

WHEREAS, Sublessor desires to sublease to Sublessee the entire Premises, and to
assign to Sublessee certain rights and obligations of Sublessor, including
certain rights and obligations under the Parking Lease, and Sublessee desires to
sublease the entire Premises from Sublessor, and to assume certain rights and
obligations of Sublessor, including certain rights and obligations under the
Parking Lease, all upon the terms and subject to the conditions hereinafter set
forth.

NOW, THEREFORE, in consideration of the premises, the mutual covenants contained
herein, and other good and valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the parties agree as follows:

 

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A.

DEFINITIONS

The following definitions are incorporated into this Sublease and shall have the
following meanings throughout this Sublease. Capitalized terms used but not
otherwise defined in this Sublease shall have the meanings ascribed to them in
the Master Lease.

“Abatement Measuring Date” means the later of (i) July 1, 2012, or (ii) the date
that floors 8, 9, 12, 13, 14, 16, 17, 18 of the Building, the Building lobby and
the Building facade are delivered by Sublessor to Sublessee in the condition
required by this Sublease.

“Alterations Agreement” shall have the meaning set forth in Section 6.5.

“Applicable Laws” shall have the meaning set forth in the Master Lease.

“Base Rent” shall have the meaning set forth in Section 3.1.

“Building” shall have the meaning set forth in the Recitals.

“City” means the City of Raleigh, North Carolina.

“Claims” means any and all claims, liabilities, losses, damages, costs and
expenses (including reasonable attorneys’ fees), whenever they may be suffered
or incurred by, imposed on or asserted against an Indemnitee of either party, as
applicable.

“Common Elements” shall have the meaning set forth in the Parking Lease, and for
purposes of this Sublease shall be deemed to include elevator cars 8, 9 and 10
located within the Parking Deck (which are currently being maintained by
Sublessor pursuant to, and notwithstanding anything to the contrary contained
in, that certain letter from Sublessor to the City dated October 27, 2004),
unless and to the extent the same are now or hereafter maintained by the City.

“Credit Rating” means, with respect to any entity, the rating then assigned to
such entity’s unsecured, senior long-term debt obligations (not supported by
third party credit enhancements) or if such entity does not have a rating for
its senior unsecured long-term debt, then the rating then assigned to such
entity as an issues rating by S&P, Moody’s or any other rating agency agreed by
the Parties.

“Default Rate” means the rate of interest equal to the lesser of (i) eight
percent per annum or (ii) the maximum rate allowed by Applicable Laws.

“Delay Liquidated Damages” shall have the meaning set forth in Section 1.2.3.

“Delivery Acknowledgment Letter” means a letter from Sublessor, signed by the
Parties, as to each portion of the Premises delivered, in the form attached
hereto as Exhibit “C”.

 

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“Edison Declaration” shall mean that certain Declaration of Covenants,
Conditions, Restrictions, and Reservations by Edison Land LLC recorded in Deed
Book 13276, Page 1051, Wake County records.

“Effective Date” shall mean the date of this Sublease, first above written.

“Expense Commencement Date” means the first day of the thirteenth (13th) full
month following the Abatement Measuring Date, but shall in no event precede the
Final Delivery Date. For example, if the Abatement Measuring Date is July 15,
2012, then the Expense Commencement Date would be August 1, 2013 (so long as the
Final Delivery Date is on or before August 1, 2013).

“Event of Default” shall have the meaning set forth in the Master Lease.

“Force Majeure” means the following events or circumstances: (a) strikes, labor
disputes, work stoppages, lockouts or picketing (legal or illegal); (b) acts of
God, including, without limitation, floods, hurricanes, tornadoes, high winds,
sinkholes, landslides, earthquakes, epidemics, quarantine and pestilence;
(c) fires or other casualties; (d) governmental actions, restrictions or
moratorium; (e) acts of a public enemy, civil commotions, riots, insurrections,
acts of war, blockades, terrorism, effects of nuclear radiation, or national or
international calamities; (f) sabotage; (g) condemnation or other exercise of
the power of eminent domain, or (h) other similar cause beyond the control of
the party claiming Force Majeure.

“Final Delivery Date” means the later of (i) January 1, 2013, and (ii) the date
on which the entire Premises are delivered to Sublessee in the condition
required by this Sublease.

“Final Plans” shall have the meaning set forth in the Alterations Agreement.

“Incorporated Terms” shall have the meaning set forth in Section 17.1.

“lndemnitees” shall mean the affiliates, officers, directors, employees and
agents of Sublessor or Sublessee, as the case may be.

“Initial Abatement Period” means the one-year period between the Abatement
Measuring Date and the Rent Commencement Date, during which Sublessee shall
enjoy a full abatement of Base Rent that would otherwise be due.

“Initial Improvement Allowance” shall have the meaning set forth in
Section 6.8.1.

“Joint and Reciprocal Easement” means that certain Joint and Reciprocal Easement
recorded in Deed Book 9923, Page 2134, Wake County records.

“Landlord Estoppel Certificate” means the Landlord Estoppel Certificate executed
by Master Landlord in connection with the execution of this Sublease.

“Lender” means Pacific Life Insurance Company and its successors and assigns.

“Loan” shall have the meaning set forth in the recitals to this Sublease.

 

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“Master Landlord” means The Bank of New York Mellon Trust Company, N.A., as
Owner Trustee of the CA Raleigh Owner Trust, and its successors and assigns.

“Master Lease” means that certain Lease Agreement dated April 10, 2003, by and
between Master Landlord and Sublessor.

“Notice of Termination” shall have the meaning set forth in Section 2.3.

“Operating Expenses” shall have the meaning set forth in the Master Lease.

“Other Appurtenant Agreements” means (i) that certain Acknowledgement of Unified
Development recorded in Deed Book 9923, Page 2117, as amended in Deed Book
11699, Page 307, Wake County records, (ii) that certain Acknowledgement of
Unified Development recorded in Deed Book 9924, Page 726, as amended in Deed
Book 11699, Page 293, Wake County records, (iii) that certain Declaration of
Easement recorded in Deed Book 9923, Page 2127, Wake County records, and
(iv) that certain Grant of Easements and Agreement Regarding P-2 Residential
Parking Area recorded in Deed Book 11699, Page 319, Wake County records, as
assigned in Deed Book 14382, Page 1446, Wake County records.

“Parapet Sign” shall have the meaning set forth in Section 23.1.

“Parking Deck” shall have the meaning set forth in the Master Lease.

“Parking Lease” means that certain Parking Facility Lease Agreement dated
April 10, 2003, by and among Master Landlord, Sublessor and the City, as amended
by First Amendment to Parking Facility Lease Agreement dated November 21, 2005,
by and among Master Landlord, Sublessor, and the City.

“Parties” or “Party” means Sublessor and Sublessee, or either of them if used in
the singular.

“PESC” means Progress Energy Service Company, LLC and its successors and
assigns.

“Preliminary Plans” shall have the meaning set forth in the Alterations
Agreement.

“Premises” shall have the meaning set forth in the Master Lease.

“Rent Commencement Date” means the date that is one year after the Abatement
Measuring Date, but shall in no event precede the Final Delivery Date. For
example, if the Abatement Measuring Date is July 15, 2012, then the Rent
Commencement Date would be July 15, 2013 (so long as the Final Delivery Date is
on or before July 15, 2013).

“Rentable Square Footage” shall have the meaning set forth in Section 3.5.

“Retail Leases” means the lease agreements, license agreements or other use or
occupancy agreements for ground-floor retail tenants in the Building described
on Exhibit “I” attached hereto, as the same may be modified pursuant to the
terms hereof, together with any new such ground-floor retail agreements entered
into between the Effective Date and the Final Delivery Date with Sublessee’s
consent, pursuant to the terms hereof.

 

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“Roof Leases” means the lease agreements, license agreements or other use or
occupancy agreements for roof-top tenants or installations on the Building
described on Exhibit “I” attached hereto, if any, as the same may be modified
pursuant to the terms hereof, together with any new such roof-top agreements
entered into between the Effective Date and the Final Delivery Date with
Sublessee’s consent, pursuant to the terms hereof.

“Second Abatement Period” means calendar year 2027, during which Sublessee shall
enjoy an abatement of three-quarters (3/4) of the Base Rent that would otherwise
be due each month.

“Second Improvement Allowance” shall have the meaning set forth in
Section 6.8.2.

“Shared Space” shall have the meaning set forth in Section 1.2.2.

“SNDA” means the Subordination, Nondisturbance and Attornment Agreement executed
by each of Lender or Master Landlord, as applicable in connection with the
execution of this Sublease.

“Sublease” means this Sublease Agreement.

“Sublease Term” shall have the meaning set forth in Section 2.1.

“Sublessee” means Red Hat, Inc. and its successors and assigns as permitted
pursuant to this Sublease.

“Sublessee Improvements” shall have the meaning set forth in Section 6.4.

“Sublessee Party” or “Sublessee Parties” shall mean Sublessee and/or any agent,
employee, or independent contractor of Sublessee.

“Sublessor” means Carolina Power & Light Company, d/b/a Progress Energy
Carolinas, Inc., and its successors and assigns.

“Sublessor Party” or “Sublessor Parties” shall mean Sublessor and/or any agent,
employee, or independent contractor of Sublessor.

“Sublessor’s Work” shall have the meaning set forth in Section 6.1

“Taxes” shall have the meaning set forth in the Master Lease.

B.

EXHIBITS

Exhibit “A”         Master Lease

Exhibit “B”         Parking Lease

 

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Exhibit “C”         Delivery Acknowledgement Letter

Exhibit “D”         Partial Assignment of Parking Lease

Exhibit “E”         Form of Assignment of Retail Leases and Roof Leases

Exhibit “F”         Inspection Items

Exhibit “G”         [Intentionally Omitted]

Exhibit “H”         Service Agreements

Exhibit “I”          Rent Schedule (Retail Leases and Roof Leases)

Exhibit “J”          Memorandum of Sublease

C.

SPECIFIC TERMS AND CONDITIONS

Sublessor and Sublessee (and PESC, solely where indicated) specifically agree as
follows:

1.         DEMISE; DELIVERY OF PREMISES; ADDITIONAL RIGHTS.

1.1        Demise. Sublessor hereby subleases the Premises to Sublessee, and
Sublessee hereby subleases the Premises from Sublessor, on the terms and
conditions contained herein.

1.2        Delivery of Premises. Subject to the last sentence of this
Section 1.2, Sublessor shall deliver the Premises to Sublessee in stages,
pursuant to the schedule set forth below. The Premises shall be delivered in the
condition required in Section 6.1 below on or before the dates set forth below:

 

Portion of Premises    Delivery Date             

Floors 12 and 13

  

the Effective Date

      

Building lobby, Building facade and Floors 8 and 16

  

January 6, 2012

      

Floors 9 and 18

  

April 1, 2012

      

Floors 14 and 17

  

July 1, 2012

      

Floors 10 and 19

  

October 1, 2012

          

 

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Floors 11 and 15 and all other portions of the Premises not previously delivered
including, without limitation, the telecommunications warehouse, talent
development center and the IT/server room(s).

      

 

    January 1, 2013

Delivery of each portion of the Premises by Sublessor to Sublessee shall be
evidenced by a Delivery Acknowledgement Letter, in the form attached hereto as
Exhibit “C”, and Sublessor’s obligations pursuant to this Section 1.2 and
Section 6 to deliver such portion of the Premises shall not be deemed satisfied
prior to mutual execution and delivery of the Delivery Acknowledgement Letter,
which shall be executed by Sublessee promptly upon receipt from Sublessor
provided the obligations of Sublessor in Section 1.2 and Section 6 have been
satisfied, and any delay by Sublessee in the execution of the Delivery
Acknowledgement Letter where such obligations have been satisfied shall not be
viewed as a delay by Sublessor.

The Parties acknowledge and agree that delivery of the retail and roof portions
of the Premises on the Final Delivery Date shall be subject to the Retail Leases
and Roof Leases, if any, existing as of the Final Delivery Date (and the rights
of the tenants thereunder), and that delivery of the Parking Deck on the Final
Delivery Date (or such earlier date as the Parking Lease is assigned to
Sublessee pursuant to Section 1.3.2 below) shall be subject to the Parking Lease
(and the rights of the City thereunder).

1.2.1     No Liability Until Delivery. Notwithstanding that this Sublease is
effective as of the Effective Date, except as set forth in Section 6.3 below,
Sublessee shall have no rights, duties or obligations with respect to specific
portions of the Premises unless and until such portions of the Premises are
delivered to Sublessee in the condition required by Section 6.1 below. Once so
delivered, Sublessee’s use and occupancy of such delivered portions of the
Premises shall be subject to all terms and conditions of this Sublease, except
that Sublessee shall pay no Base Rent for its use or occupancy of the Premises
until the Rent Commencement Date in accordance with Article 3, and Sublessee
shall pay no Operating Expenses until the Expense Commencement Date in
accordance with Article 4.

1.2.2     Shared Space. Sublessee’s access to the portions of the Premises to be
delivered prior to the Final Delivery Date shall include nonexclusive access for
Sublessee Parties (with Sublessor) to the IT/server room(s), elevators, shipping
or loading docks, mechanical rooms, electrical rooms, roof, lobby and other
common areas (collectively the “Shared Space”) to facilitate the construction of
the Sublessee Improvements and the conduct of Sublessee’s business in the
portions of the Premises delivered by Sublessor. With respect to the Shared
Space, Sublessor and Sublessee agree to reasonably cooperate with one another
with respect to the use thereof, and to use commercially reasonable efforts to
minimize disruption to the other. In the event it becomes necessary, in
Sublessee’s reasonable opinion, to segregate portions of the Shared Space for
Sublessee’s exclusive use, Sublessee shall notify Sublessor of such need,
including plans depicting the proposed caged or segregated areas (“Caged
Areas”), and related details, which plans shall be subject to Sublessor’s
reasonable review and approval in the same manner as described in Section 6.5
below. Sublessee’s use and occupancy of the Shared Space shall be subject to all
applicable terms and conditions of this Sublease.

1.2.3     Delay Liquidated Damages. Time is of the essence to Sublessee, and any
delay in delivery of all or any portion of the Premises would result in
substantial damages that would

 

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be difficult for the Parties to calculate. Therefore, subject to the last
sentence of this Section 1.2.3, Sublessor shall pay as liquidated damages to
Sublessee the amounts set forth in the chart below (hereinafter, the “Delay
Liquidated Damages”) for each delay in delivering the applicable portion of the
Premises to Sublessee in the condition required by Section 6.1 hereof (other
than delay due to Force Majeure (which Force Majeure delay under this
Section 1.2.3 shall in no event exceed one hundred twenty (120) days) or the act
or omission of a Sublessee Party, provided that notice of any such delay and
details regarding the same are delivered to Sublessee promptly upon Sublessor
becoming aware of the same and provided further that the delay allowed Sublessor
shall be limited to the amount of delay actually caused by the event described
above). Such Delay Liquidated Damages shall be payable to Sublessee in cash by
wire transfer of immediately available funds within thirty (30) days after
written demand therefor to Sublessor.

 

Portion of Premises that must be delivered by
applicable date to avoid Delay Liquidated Damages

  

Date that Delay
Liquidated
Damages begin

  

Delay Liquidated
Damages (for failure
to deliver the
applicable portion  of
Premises)

 

Floors 12 and 13

   the Effective Date    $25,000 per day            

The Building lobby, Building facade and

Floors 8 and 16

   January 6, 2012    $5,000 per day            

Floors 9 and 18

   April 1, 2012    $5,000 per day            

Floors 14 and 17

   July 1, 2012    $5,000 per day            

Floors 10 and 19

   October 1, 2012    $5,000 per day             Floors 11 and 15 and all other
portions of the Premises not yet delivered including, without limitation, the
telecommunications warehouse, talent development center and the IT/server room
   January 1, 2013    $25,000 per day

Notwithstanding anything contained herein to the contrary, the provisions of
this Section 1.2.3 shall not apply with respect to the Parking Deck, which shall
be handled in accordance with Section 1.3 below.

1.2.4     Right to Terminate; Other Remedies. Subject to the last sentence of
this Section 1.2.4, in the event that Sublessor fails to deliver the entire
Premises in the condition required by Section 6.1 hereof by January 31, 2013
(regardless of, and without extension for, any delays due to Force Majeure),
Sublessee has the additional right to either (i) obtain specific performance of
Sublessor’s obligations under this Sublease or (ii) terminate this Sublease by
written notice delivered to Sublessor on or prior to May 31, 2013 (provided that
Sublessor has not delivered the entire Premises in the condition herein required
prior to the date of such

 

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written notice). In the event that Sublessee elects to terminate this Sublease,
the Parties shall have no further liability to each other hereunder except
(a) Sublessor shall pay to Sublessee accrued Delay Liquidated Damages (pursuant
to the chart in subsection 1.2.3 above) up to a maximum amount of
$10,000,000.00, and (b) after application of the amount of the Initial
Improvement Allowance that was actually received by Sublessee as a credit to
Sublessor, Sublessor shall reimburse Sublessee by wire transfer of immediately
available funds within thirty (30) days after written demand therefor for any
actual and reasonable costs or expenses incurred by Sublessee in connection with
this Sublease, upon provision by Sublessee of reasonable evidence regarding
same, including, without limitation, any costs or expenses relating to the
construction, installation, or removal of the Sublessee Improvements. The
remedies provided in this subsection 1.2.4 and in subsection 1.2.3 above shall
be the sole and exclusive remedies of Sublessee hereunder with respect to any
loss or damage that Sublessee may incur of any kind due to the delay in delivery
of the Premises by Sublessor to Sublessee as provided in this subsection 1.2.4
and in subsection 1.2.3 above.

Notwithstanding anything contained herein to the contrary, the provisions of
this Section 1.2.4 shall not apply with respect to the Parking Deck, which shall
be handled in accordance with Section 1.3 below.

1.3         Assignment of Parking Lease. In connection with Sublessee’s sublease
of the Premises, subject to other provisions of this Section 1.3, Sublessor
hereby assigns to Sublessee, and Sublessee hereby assumes from Sublessor, for
the duration of the Sublease Term, Sublessor’s rights and certain of its duties
and obligations under the Parking Lease, which assignment and partial assumption
shall be . effective as of the Final Delivery Date. Master Landlord and Lender
have consented to the forgoing pursuant to their respective SNDAs. In order to
further evidence such assignment and partial assumption, the Parties agree to
execute and deliver, simultaneous with this Sublease, a Partial Assignment and
Assumption of Parking Lease substantially in the form attached hereto as Exhibit
“D”. The Parties acknowledge and agree that Sublessee’s sublease of (and rights,
duties and obligations with respect to) the Parking Deck shall be subject to the
terms and conditions of the Parking Lease, including, without limitation, the
rights of the City set forth therein.

1.3.1     Certain Rights, Duties and Obligations Retained. Notwithstanding the
foregoing, Sublessee shall not assume (and Sublessor shall retain) Sublessor’s
rights, duties and obligations under the Parking Lease relating to: (a) time
periods prior to the Final Delivery Date (except as otherwise provided in
subsection 1.3.2); (b) time periods subsequent to the expiration or termination
of the Sublease Term (except as otherwise provided in Section 2.3); and
(c) Sublessor’s repair, maintenance and replacement obligations under the
Parking Lease (except the obligation to maintain, repair and replace the Common
Elements pursuant to Section 10.3 of the Parking Lease). The costs to Sublessee
for use of parking spaces within the Parking Deck, and the manner and timing of
payment shall be as determined between Sublessee and the City, and Sublessor
shall have no liability or responsibility therefor.

1.3.2     Right to Accelerate. Notwithstanding the other provisions of this
Section 1.3, Sublessee shall have the right to accelerate the effective date of
the assignment of the Parking Lease in the event that Sublessee is unable to
secure adequate parking within the Parking Deck directly from the City
sufficient to serve Sublessee’s parking needs prior to the Final Delivery Date.

 

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1.4     Assignment of Retail and Roof Leases. In connection with Sublessee’s
sublease of the Premises, Sublessor and PESC hereby assign to Sublessee, and
Sublessee hereby assumes from Sublessor and PESC, for the duration of the
Sublease Term, Sublessor’s and PESC’s rights, duties and obligations under the
Retail Leases and the Roof Leases, if any, which assignment and assumption shall
be effective as of the Final Delivery Date. In order to further evidence such
assignment and assumption, the Parties and PESC shall execute and deliver
simultaneous with this Sublease an Assignment and Assumption of Retail Leases
and an Assignment and Assumption of Roof Leases (if applicable) substantially in
the form attached hereto as Exhibit “E”. The Parties agree to execute and
deliver such further documents as may be reasonably necessary to put the tenants
under the Retail Leases and Roof Leases, if any, on notice of the foregoing
assignment.

1.4.1     Notwithstanding Section 1.4 above, Sublessee shall not assume (and
Sublessor/PESC shall retain) Sublessor’s and/or PESC’s rights, duties and
obligations under the Retail Leases and Roof Leases relating to: (a) time
periods prior to the Final Delivery Date and (b) time periods subsequent to the
expiration or termination of the Sublease Term.

1.5     Assignment of Rights Under Edison Declaration. In connection with
Sublessee’s sublease of the Subleased Premises, PESC hereby assigns to
Sublessee, and Sublessee hereby assumes from PESC, for the duration of the
Sublease Term, PESC’s rights, duties and obligations under the Edison
Declaration. Notwithstanding the foregoing, Sublessee hereby agrees that PESC
shall have the right to act as one of the Sublessee members of the Design Review
Committee under the Edison Declaration for the duration of the Sublease Term. If
the total number of members of the Design Review Committee under the Edison
Declaration is increased above three (3) (as contemplated and permitted in the
Edison Declaration), thus allowing Sublessee to increase its representation on
the Design Review Committee, PESC shall, in such event, have the right to
reasonably approve any new member that Sublessee seeks to appoint to the Design
Review Committee. The Parties agree to execute and deliver such further
documents as may be reasonably necessary to put the counterparties to the Edison
Declaration on notice of the foregoing assignment. Each Party shall promptly
provide to the other, copies of any notices such Party may receive from the
counterparties to the Edison Declaration.

1.6     Assignment of Rights Under Joint and Reciprocal Easement and Other
Appurtenant Agreements. In connection with Sublessee’s sublease of the Premises,
Sublessor hereby assigns to Sublessee, and Sublessee hereby assumes from
Sublessor, from and after the Final Delivery Date (or such earlier date as the
Parking Lease is assigned to Sublessee pursuant to Section 1.3.2 above), for the
duration of the Sublease Term, Sublessor’s rights, duties and obligations under
(i) the Joint and Reciprocal Easement and (ii) the Other Appurtenant Agreements,
all as more particularly described in Section 29 below. The Parties agree to
execute and deliver such further documents as may be reasonably necessary to put
the counterparties to the Joint and Reciprocal Easement and the Other
Appurtenant Agreements on notice of the foregoing assignment.

2.         TERM; RENEWAL.

2.1        Term. This Sublease shall be for a term (the “Sublease Term”)
commencing on the Effective Date and expiring on August 23, 2035 (the
“Expiration Date”); provided, however, that subject to the nondisturbance
provisions of Section 19 below, the Sublease Term shall expire at least one day
prior to the end of the term of the Master Lease (currently scheduled to expire
on August 24, 2035), and the Premises, and all improvements thereto, and all
rights of Sublessee under the Master

 

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Lease, the Parking Lease, the Edison Declaration the Joint and Reciprocal
Easement, the Other Appurtenant Agreements, and all other rights assigned to
Sublessee hereunder or under any other document executed in connection herewith
shall revert to Sublessor on such date, or any earlier termination date,
including, but not limited to, all assignments of rights and documents made by
Sublessor to Sublessee as provided herein.

2.2         Renewal of Master Lease. Section 2.3 of the Master Lease grants to
Sublessor the right to renew the Master Lease for four (4) successive terms of
five (5) years each (each a “Renewal Term”) upon not less than eighteen
(18) months prior notice. The Parties acknowledge and agree that unless
Sublessee has given Sublessor notice that Sublessee will not be leasing the
Premises during any such Renewal Term, Sublessor shall not extend or renew the
Master Lease or give notice of its intent to extend or renew the Master Lease,
without consent being provided by Sublessee, which consent shall not be required
if there is a then-existing and continuing Event of Default by Sublessee
hereunder and if required, shall not be unreasonably withheld, conditioned or
delayed; provided, however, Sublessor shall have the right to renew the term of
the Master Lease if such right is within sixty (60) days of expiring and
Sublessee has not provided notice to Sublessor of its intentions with respect to
same, in which event this Sublease shall terminate at the end of the current
Sublease Term. In the event that Sublessee consents to the giving of such
notice, Sublessor shall simultaneously with the giving of such notice provide a
copy of the notice to Sublessee.

2.3         Renewal/Purchase of Parking Deck. Section 2.5 of the Master Lease
grants to Sublessor an option to renew the Master Lease with respect to the
Parking Deck for a single term of ninety-nine (99) years (“Parking Deck Renewal
Option”), and an option to purchase the Parking Deck for One Dollar ($1.00)
(“Parking Deck Purchase Option”). The Parties acknowledge and agree that, during
the Sublease Term, Sublessee shall succeed to and enjoy the exclusive right to
exercise the Parking Deck Renewal Option and the Parking Deck Purchase Option
(and be entitled to all rights granted Sublessor in the Master Lease related
thereto). Sublessee shall have the right to elect to exercise the Parking Deck
Renewal Option or the Parking Deck Purchase Option, in which event it shall
provide notice to Master Landlord in the manner required by Section 2.5 of the
Master Lease and, pursuant to its obligations under its SNDA, Master Landlord
shall recognize Sublessee in lieu of Sublessor with respect thereto, subject to,
and in accordance with, the applicable terms and conditions of the Master Lease,
provided, however, Sublessee may not exercise such rights if there is a
then-existing and continuing Event of Default by Sublessee hereunder. If
Sublessee provides such notice, then Sublessee shall be bound by the terms of
Section 2.6 of the Master Lease and, notwithstanding anything to the contrary
contained herein, all of Sublessor’s rights, duties, and obligations under the
Parking Lease shall be assigned to Sublessee, and Sublessee would be and remain
liable on the Parking Lease through the expiration of the Parking Lease
(including, as applicable, for periods beyond the expiration of the Sublease
Term). Master Landlord has consented to the foregoing pursuant to its SNDA. In
addition and notwithstanding the foregoing, to the extent that the Parking Deck
Renewal Option or the Parking Deck Purchase Option is available for exercise and
must be exercised (to avoid the lapse of such right) prior to expiration of the
Sublease Term, Sublessee shall consult and cooperate with Sublessor in the event
Sublessee elects not to exercise either option, including providing notice
thereof to Master Landlord, so that Sublessor may have an opportunity to do so
prior to lapse of same. Notwithstanding anything to the contrary, the foregoing
right(s) shall revert exclusively to Sublessor, Sublessee shall have no further
right to exercise the same, and Master Landlord’s agreement with respect thereto
shall terminate and expire, upon the earlier to occur of (i) August 23, 2035 or
(ii) Master Landlord’s receipt of written notice from Sublessor that the
Sublease has been terminated (a “Notice of Termination”). Sublessor covenants
and agrees not to deliver a Notice of Termination to

 

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Master Landlord prior to: (i) the occurrence of an Event of Default by Sublessee
(including the expiration of any applicable notice and/or cure periods provided
herein) which entitles Sublessor to terminate this Sublease; (ii) Sublessee’s
receipt of written notice of Sublessor’s election to terminate this Sublease;
and (iii) the expiration of a period of ten (10) days following Sublessee’s
receipt of such notice of election to terminate. Should Sublessor improperly
send a Notice of Termination, the same shall constitute an immediate event of
default under this Sublease (without the benefit of any notice or cure periods
otherwise provided for in Section 16.2 below) and Sublessee shall have all
rights and remedies available to it hereunder, at law or in equity, including,
without limitation, injunctive relief.

2.4        Other Provisions Not Applicable. Except as specifically set forth in
this Article 2, the provisions of Article 2 of the Master Lease shall not apply
to Sublessee or to this Sublease and shall not be Incorporated Terms.

3.          BASE RENT; RENTAL ABATEMENT; RIGHT TO RE-MEASURE.

3.1        Base Rent. Commencing on the Rent Commencement Date, but subject to
the Initial Abatement Period and the Second Abatement Period and the Initial
Improvement Allowance and the Second Improvement Allowance, Sublessee shall pay
to Sublessor, at the address specified in this Sublease for the giving of
notices to Sublessor, or at such other place as Sublessor may specify in
writing, without any prior notice or demand, annual rent (“Base Rent”) as
follows:

 

 

Time Period

 

  Annual Base Rent  

Rent Commencement Date – December 31, 2020

 

$12.00 per Rentable Square Foot of the Premises (excluding the Parking Deck)
($382,442.00 per month)

 

 

January 1, 2021 – August 23, 2035

 

$10.00 per Rentable Square Foot of the Premises (excluding the Parking Deck)
($318,701.67 per month)

The Base Rent shall be due and payable in equal monthly installments, in
advance, beginning on the Rent Commencement Date and continuing on the first
(1st) day of each succeeding month thereafter throughout the Term, without
demand, deduction or offset (except as specifically set forth herein); provided,
however, that the monthly installment of Base Rent payable for any partial
calendar month shall be prorated on a daily basis. Should Sublessee fail to pay
any installment of Base Rent, such late payment shall bear interest at the
Default Rate commencing upon the due date therefor until paid in full, and if
any such payment is not made within fifteen (15) days after Sublessee’s receipt
of notice that the same is past due, Sublessee shall in addition pay a late
charge equal to two percent (2%) of the amount of such late payment. Sublessee
may make payments of Base Rent via electronic payment (e.g., ACH or wire
transfer) at no additional cost to Sublessee. Upon request, Sublessor will
provide Sublessee with Sublessor’s current accurate wiring instructions or
similar information to permit electronic payment, and will update such
information by sending notice to Sublessee as provided in Section 31 hereof.

 

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3.2        Initial Abatement Period. Notwithstanding Section 3.1 above,
Sublessee shall not be liable for any Base Rent that would otherwise be due
during the Initial Abatement Period.

3.3        Second Abatement Period. Notwithstanding Section 3.1 above, Sublessee
shall only be liable for one-quarter (1/4) of the Base Rent that would otherwise
be due each month during the Second Abatement Period.

3.4        Additional Credits Against Base Rent. Sublessee shall also be
entitled to credits against Base Rent that would otherwise be due during
calendar years 2013, 2014 and 2015, as part of the Initial Improvement
Allowance, and during calendar years 2028, 2029, 2030 and 2031 as part of the
Second Improvement Allowance, all as more particularly set forth in Section 6.8
below.

3.5        Rentable Square Footage. For purposes of calculating Base Rent
payable hereunder, the “Rentable Square Footage” of the Premises (excluding the
Parking Deck) is 382,442 square feet. For the avoidance of doubt, the square
footage of the Parking Deck shall not be considered in the calculation of
Rentable Square Footage or Base Rent hereunder.

3.6        Other Provisions Not Applicable. Except for the provisions of
Section 3.5 of the Master Lease (regarding payment of Taxes, discussed in
Section 4 below), the other provisions of Article 3 of the Master Lease shall
not apply to Sublessee or to this Sublease and shall not be Incorporated Terms.

4.         OPERATING EXPENSES AND REAL ESTATE TAXES.

4.1        Operating Expenses. Commencing on the Expense Commencement Date and
continuing during the Sublease Term, Sublessee shall pay all Operating Expenses
in the manner described in Section 4.1 of the Master Lease to the extent the
same relate to the Premises (excluding the Parking Deck, which shall be handled
in accordance with the Parking Lease and Section 1.3 above) and to periods from
and after the Expense Commencement Date. On or before the Expense Commencement
Date, Sublessor shall provide to Sublessee a summary of Operating Expenses
incurred by Sublessor for the twelve (12) months preceding the Expense
Commencement Date (in reasonable detail, including payee amounts, names and
contact information). Sublessee shall forward to Sublessor all invoices received
by Sublessee for Operating Expenses attributable to periods prior to the Expense
Commencement Date promptly after receipt thereof, and Sublessor shall either pay
all Operating Expenses attributable in whole or in part to periods prior to the
Expense Commencement Date directly, or reimburse Sublessee for any such
Operating Expenses paid by Sublessee within thirty (30) days of receipt of an
invoice for same, and reasonable evidence as to the Operating Expense incurred,
provided such Operating Expenses are reasonable and customary for buildings
similar to the Building and consistent with prior practices with respect to the
Building. In the event that Sublessor receives any invoice for Operating
Expenses attributable to periods on or after the Expense Commencement Date,
Sublessor shall forward the same promptly to Sublessee.

4.2        Taxes. Commencing on the Expense Commencement Date, and continuing
during the Sublease Term, Sublessee shall be obligated to pay to the appropriate
taxing authorities, prior to delinquency, and subject to Sublessee’s right to
contest taxes or assessments as provided in Section 4.3 below, all Taxes and
Personal Property Taxes, to the extent the same relate to the Premises
(excluding the Parking Deck, which shall be in accordance with the Parking Lease
and Section 1.3 above), the Base Rent payable under this Sublease, this Sublease
or the leasehold estate created hereby, or Sublessee’s trade fixtures,
furnishings, equipment or other personal property located in or used at the

 

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Premises (excluding the Parking Deck), but not otherwise, as more particularly
set forth in Section 3.5 of the Master Lease.

Beginning in the year the Expense Commencement Date occurs, Sublessor shall
forward copies of all tax bills to Sublessee promptly after receipt thereof, and
shall cooperate (and shall use all reasonable efforts to cause Master Landlord
to cooperate) in attempting to have the tax bills for the Premises (excluding
the Parking Deck, if separately assessed) sent directly to Sublessee. Sublessor
shall remain liable for payment of all Taxes and Personal Property Taxes for
periods prior to the Expense Commencement Date, and during such period Sublessor
shall after written request by Sublessee forward copies of all tax bills related
to the Premises (excluding the Parking Deck and evidence of payment of same by
Sublessor) to Sublessee. From and after the Expense Commencement Date, Sublessee
shall furnish Sublessor evidence of the payment by Sublessee prior to
delinquency of all Taxes and Personal Property Taxes related to the Premises
(excluding the Parking Deck, which shall be paid in accordance with the Parking
Lease and Section 1.3 above). Taxes and Personal Property Taxes for the year in
which the Expense Commencement Date occurs shall be pro-rated by the Parties.

4.3        Tax Protests. Section 4.2 of the Master Lease grants to Sublessor an
option to conduct Tax Protests. The Parties acknowledge and agree that Sublessee
shall succeed to and enjoy the exclusive right to conduct Tax Protests for
matters that relate to the Premises (excluding the Parking Deck), the Base Rent
payable under this Sublease, this Sublease or the leasehold estate created
hereby, or Sublessee’s trade fixtures, furnishings, equipment or other personal
property located in or used at the Premises (excluding the Parking Deck) for any
period or portion thereof between the Expense Commencement Date and the end of
the Sublease Term. Should Sublessee elect to conduct such a Tax Protest, it
shall provide notice to Sublessor and Master Landlord in the manner required of
Sublessor by the Master Lease and, pursuant to its obligations under its SNDA,
Master Landlord shall recognize Sublessee in lieu of Sublessor with respect
thereto, subject to, and in accordance with, the applicable terms of the Master
Lease. Master Landlord has consented to the foregoing pursuant to its SNDA.
Should Sublessee elect not to conduct such a Tax Protest within ninety (90) days
after written notice from Sublessor, Sublessor shall have the right to do so in
accordance with the provisions of Section 4.2 of the Master Lease (and Sublessee
shall consult and cooperate with Sublessor in such event, including providing
notice thereof to Master Landlord, so that Sublessor may have an opportunity to
do so). Notwithstanding anything to the contrary, the foregoing right(s) shall
revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s agreement with respect thereto shall
terminate and expire, upon the earlier to occur of (i) August 23, 2035 or
(ii) Master Landlord’s receipt of a Notice of Termination. Sublessor covenants
and agrees not to deliver a Notice of Termination to Master Landlord prior to:
(i) the occurrence of an Event of Default by Sublessee (including the expiration
of any applicable notice and/or cure periods provided herein) which entitles
Sublessor to terminate this Sublease; (ii) Sublessee’s receipt of written notice
of Sublessor’s election to terminate this Sublease; and (iii) the expiration of
a period of ten (10) days following Sublessee’s receipt of such notice of
election to terminate. Should Sublessor improperly send a Notice of Termination,
the same shall constitute an immediate event of default under this Sublease
(without the benefit of any notice or cure periods otherwise provided for in
Section 16.2 below) and Sublessee shall have all rights and remedies available
to it hereunder, at law or in equity, including, without limitation, injunctive
relief.

4.4        Litigation; Zoning; Joint Assessment. As and when portions of the
Premises are delivered to Sublessee in accordance with Section 1.2 and Section 6
hereof, the provisions of Section

 

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4.3 of the Master Lease (regarding Litigation; Zoning and Joint Assessment)
shall be Incorporated Terms as to such portions delivered (excluding the Parking
Deck), as more particularly described in Section 17 below.

5.          PERMITTED USE; EXCLUSIVE USE.

5.1        Permitted Use. Sublessee shall have the right to use the Premises for
the Use permitted and described in Article 5 of the Master Lease.

5.2        Exclusive Use and Occupancy; Operation/Management. Notwithstanding
anything to the contrary contained herein or in the Master Lease, Sublessee
shall have the exclusive right to operate and manage and use and occupy the
Premises as of the date(s) portions thereof are delivered to Sublessee, seven
(7) days per week, twenty four (24) hours per day, subject only to the use and
occupancy rights of tenants under the Retail Leases and the Roof Leases and the
rights of the City pursuant to the Parking Lease.

5.3        Other Terms Incorporated. As and when portions of the Premises are
delivered to Sublessee in accordance with Section 1.2 and Section 6 hereof, the
other provisions of Article 5 of the Master Lease (regarding Use) shall be
Incorporated Terms as to such portions delivered (excluding the Parking Deck),
as more particularly described in Section 17 below.

6.          DELIVERY CONDITION; IMPROVEMENTS; IMPROVEMENT ALLOWANCES.

6.1        Sublessor’s Work. Sublessor shall deliver the Premises to Sublessee
in stages according to Section 1.2 above. The Premises shall be delivered in
their “as is” current condition, except that (i) Sublessor, at its sole cost and
expense, shall cause the Premises (excluding the Parking Deck and portions of
the Premises subject to Retail Leases and Roof Leases, if any, in effect as of
the Final Delivery Date) to be broom clean with all personal property of
Sublessor (including personal property abandoned by former tenants under Retail
Leases or Roof Leases), including, without limitation, all furniture, trade
fixtures, and equipment, as well as all signage and branding (as more
particularly described in Section 23.1 below) removed and any damage resulting
from such removal shall have been repaired by Sublessor, and (ii) Sublessor
shall cause the repairs and/or modifications described on Exhibit “F” attached
hereto to be made (collectively, “Sublessor’s Work”). Prior to the Effective
Date, Sublessee has been allowed full access to the Premises to inspect same,
and Exhibit “F” has been compiled by Sublessee and reasonably approved by
Sublessor. No additional items of repair or modification may be added by
Sublessee to Exhibit “F” after the date hereof; provided, however, Sublessor
shall complete the work described in and subject to Section 6.2 below.
Sublessor’s Work shall be performed in a good and workmanlike manner and in
compliance with all Applicable Laws, and shall be completed prior to the
scheduled date for delivery of the affected portion(s) of the Premises, with
such dates extended due to Force Majeure or any delay due in whole or in part to
the act or omission of a Sublessee Party, as and to the extent specifically
provided in Section 1.2.3 above.

6.2        Inspection and Punchlist. Prior to delivery of a portion of the
Premises in accordance with Section 1.2 and this Section 6, a representative of
Sublessor and a representative of Sublessee together shall inspect such portions
of the Premises being delivered and generate a punchlist of defective or
uncompleted items relating to the completion of Sublessor’s Work. If such items
are material in nature (i.e., Sublessor’s Work is not materially and
substantially complete in accordance with Section 6.1 above such that Sublessee
cannot reasonably commence the Sublessee Improvements), such items shall be
completed or repaired prior to Sublessee’s execution and delivery

 

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of the Delivery Acknowledgement Letter for such portion(s) of the Premises. If
such items are minor in nature, such items shall be noted in the Delivery
Acknowledgement Letter for such portion(s) of the Premises, in which event such
portions of the Premises shall be deemed delivered pursuant to Section 1.2
above, but Sublessor shall, within a reasonable time after such punchlist is
prepared (but in no event more than thirty (30) days), complete such minor
punchlist items, and Delay Liquidated Damages shall not apply in connection with
the completion of such minor punchlist items.

6.3        Access Prior to Delivery. In addition to Sublessee’s rights in
subsection 1.2.2, from and after the Effective Date the Sublessee Parties shall
have reasonable access to the Premises prior to the date on which portion(s) of
the Premises are delivered to Sublessee, for the purpose of planning and
designing the Sublessee Improvements, provided that (i) such access will be
reasonably communicated and coordinated with Sublessor in advance to minimize
disruption; (ii) such access will be subject to the rights of tenants under
Retail Leases and the City under the Parking Lease; (iii) Sublessee shall comply
in all material respects with all applicable terms and conditions of this
Sublease, (iv) Sublessee shall not unreasonably interfere with Sublessor’s
completion of Sublessor’s Work, and (v) Sublessee shall not begin operation of
its business in such portion(s) of the Premises that are not yet delivered as
provided in subsection 6.1 above.

6.4        Sublessee’s Work. Upon delivery of portions of the Premises in
accordance with Section 1.2 and this Section 6, Sublessee shall be fully
responsible for the design and construction of improvements, alterations, or
modifications to or within such delivered portion(s) of the Premises
(collectively, including the lobby, signage, and façade, “Sublessee
Improvements”), including (a) the exclusive right to select and use its own
architects and engineers with respect to planning and designing the Sublessee
Improvements, (b) the exclusive right to select and use its own construction
manager(s) to oversee the Sublessee Improvements, and (c) the exclusive right to
competitively bid construction of the Sublessee Improvements and to select and
approve the general contractor(s) and sub-contractors to perform the same. The
Sublessee Parties shall have complete and unfettered access to the delivered
portion(s) of the Premises (subject, with respect to the Parking Deck, to the
Parking Lease and, with respect to the retail and roof portions of the Premises,
to the Retail Leases and Roof Leases, if any, respectively) as of the date(s)
delivered to Sublessee in accordance with Section 6.1, 24 hours per day, 7 days
per week, including for the construction of the Sublessee Improvements;
provided, however, that Sublessee shall use all commercially reasonable efforts
not to disrupt the business operations of other tenants in the Building,
including Sublessor, and if such Sublessee Improvements are being constructed in
a portion of the Premises adjoining a portion of the Premises not yet delivered
to Sublessee in accordance with Section 1.2 and this Section 6, Sublessee will
inform Sublessor in writing at least five (5) business days prior to the start
of such construction of the timing and schedule for the construction of such
Sublessee Improvements. In addition, the Sublessee Parties will have access to
and the right to use the Shared Space in connection with construction of the
Sublessee Improvements as more particularly described in subsection 1.2.2 above.

6.5        Approval of Plans. The Parties, Master Landlord and Lender have
reached certain agreements regarding the design and construction of the
Sublessee Improvements pursuant to that certain Alterations Approval Agreement
dated of even date herewith (the “Alterations Agreement”).

6.6        Sublessor Cooperation. Sublessor shall use all reasonable efforts to
cooperate with Sublessee Parties in the construction process for the Sublessee
Improvements, and, except as set forth in the SNDAs or the Alterations
Agreement, Sublessee shall not pay any construction management or supervisory
fees of any party other than its own.

 

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6.7        Treatment at End of Sublease. It is specifically acknowledged and
agreed by Sublessor that Sublessee shall have the right, but not the obligation,
to remove the Sublessee Improvements upon expiration or termination of this
Sublease; provided, however, Sublessee shall be required at such time to remove
all exterior signage bearing its name or logo at the Premises. Removal of
Alterations or Additions installed by Sublessee shall be governed by Section 7
below. Should Sublessee elect to remove some or all of the Sublessee
Improvements, Sublessee shall repair any damage caused by such removal. Should
Sublessee elect not to remove some or all of the Sublessee Improvements, the
same shall be surrendered to Sublessor along with the Premises in their as-is,
where-is condition at the time of surrender, broom clean, with all Building
systems in good condition and repair and operating for their intended purpose,
and any damage to the Premises caused by Sublessee or a Sublessee Party shall be
repaired in full at the expense of Sublessee.

6.8        Improvement Allowances.

    6.8.1      Initial Improvement Allowance. In order to offset the cost of the
Sublessee Improvements, Sublessor shall pay to Sublessee an “Initial Improvement
Allowance”, payable in one (1) cash payment and three (3) credits against Base
Rent pursuant to, and in the amounts set forth in, the following schedule:

 

Date

  

Initial Improvement Allowance payment

 

July 1, 2012            

 

  

$3,200,000.00 (cash payment)

 

July 1, 2013            

 

  

$3,200,000.00 (credit against Base Rent that would otherwise be due)

 

July 1, 2014            

 

  

$3,200,000.00 (credit against Base Rent that would otherwise be due)

 

July 1, 2015            

 

  

$3,200,000.00 (credit against Base Rent that would otherwise be due)

 

6.8.1.1    The cash portion of the Initial Improvement Allowance shall be
applied by Sublessee toward costs of construction of Sublessee Improvements, and
Sublessee Improvements constructed using the cash portion of the Initial
Improvement Allowance shall be surrendered to Sublessor along with the Premises
upon expiration or termination of this Sublease, in the condition required by
Section 6.7 above. In the event that Sublessor fails to pay the cash portion of
the Initial Improvement Allowance as set forth above, the amount which Sublessor
has failed to timely pay shall bear interest at the Default Rate until paid.

6.8.1.2    The portions of the Initial Improvements Allowance payable as credits
against Base Rent may be applied by Sublessee towards Base Rent as the same
becomes due and payable hereunder from and after the corresponding payment dates
set forth in subsection 6.8.1 above.

6.8.2    Second Improvement Allowance. To further offset the cost of the
Sublessee Improvements, Sublessor shall pay to Sublessee a “Second Improvement
Allowance” payable in the form of a credit against Base Rent that would
otherwise be due during calendar years 2028, 2029, 2030, and 2031 of the
Sublease Term. The amount of the Second Improvement

 

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Allowance shall be equal to the total amount of Base Rent that would otherwise
be due during calendar years 2028, 2029, 2030, and 2031.

6.9        Sublessee’s Right to Enforce Warranties. Section 6.3 of the Master
Lease grants to Sublessor the right to enforce certain warranties and guaranties
in connection with construction of the Premises. The Parties acknowledge and
agree that from and after the Final Delivery Date, Sublessee shall succeed to
and enjoy the non-exclusive right to enforce such warranties and guaranties as
they relate to the Building and the Common Elements. Sublessee may elect to do
so, in which event it shall provide notice to Sublessor and Master Landlord in
the manner required by the Master Lease and, pursuant to its obligations under
its SNDA, Master Landlord shall recognize Sublessee in lieu of or in addition to
Sublessor with respect thereto, subject to, and in accordance with, the
applicable terms of the Master Lease, provided, however, Sublessee may not
exercise such right if there is a then-existing and continuing Event of Default
by Sublessee hereunder. Master Landlord has consented to the foregoing pursuant
to its SNDA. Notwithstanding anything to the contrary, the foregoing right(s)
shall revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s agreement with respect thereto shall
terminate and expire, upon the earlier to occur of (i) August 23, 2035 or
(ii) Master Landlord’s receipt of a Notice of Termination. Sublessor covenants
and agrees not to deliver a Notice of Termination to Master Landlord prior to:
(i) the occurrence of an Event of Default by Sublessee (including the expiration
of any applicable notice and/or cure periods provided herein) which entitles
Sublessor to terminate this Sublease; (ii) Sublessee’s receipt of written notice
of Sublessor’s election to terminate this Sublease; and (iii) the expiration of
a period of ten (10) days following Sublessee’s receipt of such notice of
election to terminate. Should Sublessor improperly send a Notice of Termination,
the same shall constitute an immediate event of default under this Sublease
(without the benefit of any notice or cure periods otherwise provided for in
Section 16.2 below) and Sublessee shall have all rights and remedies available
to it hereunder, at law or in equity, including, without limitation, injunctive
relief.

6.10      Other Provisions Not Applicable. Except for the provisions of
Section 6.3 of the Master Lease (discussed in Section 6.9 above), the other
provisions of Article 6 of the Master Lease shall not apply to Sublessee or to
this Sublease and shall not be Incorporated Terms.

7.          ALTERATIONS AND ADDITIONS. As and when portions of the Premises are
delivered to Sublessee in accordance with Section 1.2 and Section 6 hereof, the
provisions of Article 7 of the Master Lease (regarding Alterations and
Additions) shall be Incorporated Terms as to such portions delivered (excluding
the Parking Deck during the term of the Parking Lease), as more particularly
described in Section 17 below, and shall apply with respect to any Alterations
or Additions made by Sublessee.

Notwithstanding the foregoing, it is acknowledged and agreed by the Parties
that, except as specifically provided in the Alterations Agreement, the terms of
Article 7 of the Master Lease (including Section 7.3 thereof) shall not apply
with respect to the Sublessee Improvements depicted on the Preliminary Plans or
the Final Plans, which shall be governed solely by Section 6 of this Sublease
and the Alterations Agreement.

8.          COMPLIANCE WITH APPLICABLE LAWS. As and when portions of the
Premises are delivered to Sublessee in accordance with Section 1.2 and Section 6
hereof, the provisions of Article 8 of the Master Lease (regarding Compliance
with Laws) shall be Incorporated Terms as to such portions delivered (excluding
the Parking Deck during the term of the Parking Lease), as more

 

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particularly described in Section 17 below.

9.        NO LIENS BY TENANT. As and when portions of the Premises are delivered
to Sublessee in accordance with Section 1.2 and Section 6 hereof, the provisions
of Article 9 of the Master Lease (regarding Liens) shall be Incorporated Terms
as to such portions delivered (excluding the Parking Deck during the term of the
Parking Lease), as more particularly described in Section 17 below.

10.      REPAIRS AND MAINTENANCE. As and when portions of the Premises are
delivered to Sublessee in accordance with Section 1.2 and Section 6 hereof, the
provisions of Article 10 of the Master Lease (regarding Repairs and Maintenance)
shall be Incorporated Terms as to such portions delivered, as more particularly
described in Section 17 below.

Notwithstanding the foregoing, and as more particularly set forth in
Section 1.3.1 above, Sublessee shall have no repair, maintenance or replacement
obligations with respect to the Parking Deck except the obligation to maintain,
repair and replace the Common Elements pursuant to Section 10.3 of the Parking
Lease, and Sublessor shall retain and perform all other repair, maintenance and
replacement obligations with respect to the Parking Deck pursuant to the Master
Lease and the Parking Lease.

11.      BUILDING SERVICES. As and when portions of the Premises are delivered
to Sublessee in accordance with Section 1.2 and Section 6 hereof, the provisions
of Article 11 of the Master Lease (regarding Building Services) shall be
Incorporated Terms as to such portions delivered (excluding the Parking Deck
during the term of the Parking Lease), as more particularly described in
Section 17 below.

12.      ASSIGNMENT AND SUBLETTING.

12.1    Terms Incorporated. The provisions of Article 12 of the Master Lease
(regarding Assignment and Subletting) are hereby made Incorporated Terms as more
particularly described in Section 17 below.

12.2    No Assignment.

Notwithstanding anything in the Master Lease to the contrary, including, without
limitation, Section 12.5 thereof, Sublessor hereby covenants and agrees with
Sublessee that Sublessor shall not assign any of its interest in the Master
Lease or this Sublease without Sublessee’s prior written consent (which consent
shall not be unreasonably withheld, conditioned or delayed) unless the proposed
assignee’s Credit Rating as of the date of assignment is equal to or greater
than Sublessor’s Credit Rating on the Effective Date of this Sublease (being
BBB+ from S&P and A3 from Moody’s), in which event Sublessee’s consent shall not
be required. In no event shall Sublessor be entitled to assign less than all of
its interest in the Master Lease or this Sublease.

13.      INSURANCE. As and when portions of the Premises are delivered to
Sublessee in accordance with Section 1.2 and Section 6 hereof, the provisions of
Article 13 of the Master Lease (regarding Insurance), including Exhibit H to the
Master Lease, shall be Incorporated Terms as to such portions delivered
(excluding the Parking Deck), as more particularly described in Section 17
below.

 

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With respect to all policies of insurance required to be obtained by Sublessee,
(i) Sublessor, Master Landlord and Lender shall be named as additional insured
or loss payees, as their interests may appear, and (ii) Sublessee shall obtain
such policies, and deliver certificates of such insurance on or before portions
of the Premises are delivered to Sublessee.

Notwithstanding the foregoing, it is acknowledged and agreed by the Parties that
Sublessor shall continue to carry insurance with respect to the Parking Deck as
required by the terms of the Master Lease and the Parking Lease, and Sublessee
shall not be required to carry insurance with respect to the Parking Deck.

14.          LOSS, DAMAGE, DESTRUCTION AND TAKING.

14.1        Terms Incorporated. Except as otherwise set forth in this
Section 14, as and when portions of the Premises are delivered to Sublessee in
accordance with Section 1.2 and Section 6 hereof, the provisions of Article 14
of the Master Lease (regarding Casualty and Condemnation) shall be Incorporated
Terms as to such portions delivered, as more particularly described in
Section 17 below.

14.2        Casualty to Parking Deck. Notwithstanding the foregoing, Sublessee
shall bear no risk of loss with respect to, and shall have no obligation to
restore, repair, replace or rebuild, the Parking Deck, and Sublessor shall
retain all responsibility with respect thereto, pursuant to the Master Lease
and/or the Parking Lease.

14.3        Tenant’s Termination Notice. Section 14.3 of the Master Lease grants
to Sublessor an option to terminate the Master Lease and purchase the Premises
from Master Landlord following an Event of Loss (“Event of Loss Purchase
Option”). The Parties acknowledge and agree that, during the Sublease Term,
Sublessee shall succeed to and enjoy the exclusive right to exercise the Event
of Loss Purchase Option (and be entitled to all rights granted Sublessor in the
Master Lease related thereto). Sublessee shall have the right following an Event
of Loss to elect during the Sublease Term to exercise the Event of Loss Purchase
Option, in which event it shall provide an Offer to Master Landlord in the
manner required by Section 14.3 of the Master Lease and, pursuant to their
obligations under their respective SNDAs, Master Landlord and Lender shall
recognize, accept and attorn to Sublessee in lieu of Sublessor with respect
thereto, subject to, and in accordance with, the applicable terms of the Master
Lease, provided, however, Sublessee may not exercise such right if there is a
then-existing and continuing Event of Default by Sublessee hereunder. Master
Landlord and Lender have consented to the foregoing pursuant to their respective
SNDAs. In addition and notwithstanding the foregoing, to the extent that the
Event of Loss Purchase Option is available for exercise and must be exercised
(to avoid the lapse of such right) prior to expiration of the Sublease Term,
Sublessee shall consult and cooperate with Sublessor in the event Sublessee
elects not to exercise such option, including providing notice thereof to Master
Landlord, so that Sublessor may have an opportunity to do so prior to lapse of
same. Notwithstanding anything to the contrary, the foregoing right(s) shall
revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s and Lender’s agreement with respect
thereto shall terminate and expire, upon the earlier to occur of (i) August 23,
2035 or (ii) Master Landlord’s and Lender’s receipt of a Notice of Termination.
Sublessor covenants and agrees not to deliver a Notice of Termination to Master
Landlord prior to: (i) the occurrence of an Event of Default by Sublessee
(including the expiration of any applicable notice and/or cure periods provided
herein) which entitles Sublessor to terminate this Sublease; (ii) Sublessee’s
receipt of written notice of Sublessor’s election to terminate this Sublease;
and (iii) the

 

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expiration of a period of ten (10) days following Sublessee’s receipt of such
notice of election to terminate. Should Sublessor improperly send a Notice of
Termination, the same shall constitute an immediate event of default under this
Sublease (without the benefit of any notice or cure periods otherwise provided
for in Section 16.2 below) and Sublessee shall have all rights and remedies
available to it hereunder, at law or in equity, including, without limitation,
injunctive relief.

15.        REPRESENTATIONS, WARRANTIES AND COVENANTS.

15.1      Master Lease Provisions Not Applicable. The representations and
warranties of Master Landlord and Sublessor and the other provisions contained
in Article 15 of the Master Lease shall not apply to this Sublease, or be deemed
the representations or warranties of Sublessor or Sublessee hereunder.

15.2      Representations, Warranties and Covenants of Sublessor, and PESC.
Sublessor (and PESC, solely where indicated) hereby represent and warrant to
Sublessee that the following are true and correct as of the Effective Date, and
shall be true and correct (and be deemed to have been restated) as of the Final
Delivery Date, and hereby covenant with Sublessee as follows:

    15.2.1        Sublessor is a corporation duly organized, validly existing
and in good standing in the State of North Carolina, with the corporate power
and authority to conduct its business as now conducted, to own or hold under
lease its property, to lease and sublease the Premises and to enter into and
perform all of its obligations under this Sublease.

    15.2.2        PESC is a limited liability company, validly formed and
existing and in good standing in the State of North Carolina, with the power and
authority to conduct its business as now conducted, to own or hold under lease
its property, and to perform all of its obligations under this Sublease.

    15.2.3        This Sublease has been duly authorized by all necessary
corporate and limited liability company action on the part of Sublessor, and
PESC, and has been duly executed and delivered by Sublessor, and PESC, and the
execution, delivery and performance hereof by Sublessor will convey valid
leasehold title to the Premises to Sublessee and will not, (i) require any
approval of the stockholders, members or managers of Sublessor, or PESC or any
approval or consent of any trustee or holder of any indebtedness or obligation
of Sublessor, or PESC, or of any other third party, (ii) contravene any
Applicable Laws binding on Sublessor, or PESC or (iii) contravene or result in
any breach of or constitute any default (with or without notice and/or the
passage of time) under Sublessor’s, or PESC’s charter or by-laws or operating
agreement or other organizational documents, or any indenture, judgment, order,
decree, mortgage, loan agreement, contract, partnership or joint venture
agreement, lease or other agreement or instrument to which Sublessor, or PESC is
a party or by which Sublessor, or PESC or any of their property is bound, or
result in the creation of any lien upon any of the property of Sublessor, or
PESC. Without limiting the foregoing, all third-party approvals required in
connection with the execution, delivery and performance by Sublessor, and PESC
of this Sublease, have been obtained, given or made, including, without
limitation, obtaining all approvals from Master Landlord, Lender and the City.

    15.2.4        All governmental approvals required in connection with the
execution, delivery and performance by Sublessor, and PESC of this Sublease,
have been obtained, given or made,

 

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including, without limitation, obtaining all approvals from any federal, state,
county and municipal regulatory authorities.

15.2.5        No bankruptcy, reorganization, arrangement or insolvency
proceedings are pending, threatened or contemplated by Sublessor, or PESC, and
neither Sublessor, nor PESC has made a general assignment for the benefit of
creditors.

15.2.6        The copy of the Master Lease attached hereto as Exhibit “A” is a
true, correct, and complete copy of the Master Lease. The Master Lease is
unmodified and in full force and effect and is the only agreement between Master
Landlord and Sublessor relating in any way to the Premises except for the
recorded Memorandum of Lease and the Parking Lease. Sublessor is the current
tenant under the Master Lease, and Master Landlord is the current landlord under
the Master Lease. There are no actions, suits or proceedings pending or
threatened against, by, or affecting Sublessor that could reasonably be expected
to affect title to the Premises or which question the validity or enforceability
of the Master Lease in any court or arbitral forum or before any government
authority, domestic or foreign.

15.2.7        The copy of the Parking Lease attached hereto as Exhibit “B” is a
true, correct, and complete copy of the Parking Lease. The Parking Lease is
unmodified except as provided on Exhibit B, and in full force and effect and is
the only agreement between Master Landlord and Sublessor or the City relating in
any way to the Parking Deck. Master Landlord is the current “Owner” under the
Parking Lease, Sublessor is the current “Landlord” under the Parking Lease, and
the City is the current “Tenant” under the Parking Lease. There are no actions,
suits or proceedings pending or threatened against, by, or affecting Sublessor
that could reasonably be expected to affect title to the Parking Deck or which
question the validity or enforceability of the Parking Lease in any court or
arbitral forum or before any government authority, domestic or foreign.

15.2.8        Except as provided in Section 3.8 of the Master Lease, Sublessor
is the owner of a leasehold interest in the Premises, and had the right power
and interest to enter into the Master Lease, which conveyed a valid leasehold
interest to Sublessor in accordance with the terms of the Master Lease. There
are no restrictions or other impediments either imposed by law (including,
without limitation, applicable zoning and building ordinances) or by any
contract or agreement that would prevent the use or occupancy of the Premises in
the manner contemplated by the Master Lease or this Sublease or, to the
knowledge of Sublessor, the use or occupancy of the Parking Deck in the manner
contemplated by the Parking Lease or this Sublease. No portion of the Premises
or the land beneath the Premises is located within any Special Flood Hazard Area
designated by the Federal Emergency Management Agency, or in any area similarly
designated by any other governmental authority. No portion of the Premises or
the land beneath the Premises is subject to any other classification,
designation, or preliminary determination of any agency of any federal, state or
local government, or pursuant to any federal, state or local law that would
restrict the use, development, occupancy, or operation, including, without
limitation, any designation or classification as an archeological site,
wetlands, historical site, or any classification or designation under the
Endangered Species Act.

 

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15.2.9        There are no liens affecting the Premises (excluding the Parking
Deck) other than the Permitted Liens. With respect to the Parking Deck, there
are no liens affecting Sublessor’s interest in the Parking Deck.

15.2.10       The date through which Annual Base Rent and Operating Expenses
have been paid is December 1, 2011.

15.2.11       There is no default by Sublessor in the payment of Annual Base
Rent, Operating Expenses, the Facility Payment or any other Rent payable to
Master Landlord under the Master Lease, and there is no other existing Event of
Default by either Master Landlord or Sublessor under the Master Lease, and, to
the knowledge of Sublessor, there are no acts or omissions under the Master
Lease that have occurred that would constitute an Event of Default with or
without notice and/or the passage of time. To Sublessor’s knowledge, Sublessor
has no existing defenses against Master Landlord’s enforcement of the Master
Lease.

15.2.12       All obligations of all parties under the Development Agreement and
the Project Management Agreement have been satisfied in full and the Development
Agreement and Project Management Agreement have expired by their terms.

15.2.13       There is no existing Landlord Event of Default (as defined in the
Parking Lease) or Tenant Event of Default (as defined in the Parking Lease)
under the Parking Lease, and, to the knowledge of Sublessor, there are no acts
or omissions under the Parking Lease that have occurred that would constitute a
Landlord Event of Default or Tenant Event of Default with or without notice
and/or the passage of time.

15.2.14       To the knowledge of Sublessor, there are no setoffs, defenses, or
counterclaims existing in favor of Sublessor against enforcement of the
obligations to be performed under the Master Lease.

15.2.15       The Lease Commencement Date is August 24, 2004.

15.2.16       The Rent Commencement Date is June 1, 2005.

15.2.17       The Expiration Date of the Master Lease is August 24, 2035, unless
renewed in accordance with the terms of the Master Lease. Pursuant to
Section 2.3 of the Master Lease, Sublessor may renew the Master Lease for four
(4) successive terms of five (5) years each. Pursuant to Section 2.5 of the
Master Lease, Sublessor may renew the Master Lease with respect to the Parking
Deck for one (1) term of ninety-nine (99) years. Sublessor has not exercised any
renewal or extension rights under the Master Lease or the Parking Lease.
Sublessor has no renewal or extension rights relating to the Premises except as
described in this paragraph.

15.2.18       No one other than Sublessor, Sublessor’s employees and certain
retired executives of Sublessor (all of whom shall vacate as space is delivered
pursuant to Section 1.2 hereof) occupies or has any right to occupy, whether by
assignment, lease, sublease, license or otherwise, any part of the Premises
except for tenants under the Retail Leases and Roof Leases and the City pursuant
to the Parking Lease.

 

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15.2.19        As of the date hereof, the monthly payment of Annual Base Rent
payable under the Master Lease is $623,309.69 per month. Sublessor has not made
any security deposits with Master Landlord under the Master Lease. There is no
Supplemental Rent due under the Master Lease.

15.2.20        Sublessor has not exercised its right to purchase the Parking
Deck pursuant to Section 2.5(b) of the Master Lease or otherwise. Sublessor has
not exercised its Right of First Offer to Purchase with respect to the purchase
the Premises pursuant to Section 36.13 of the Master Lease or otherwise. Master
Landlord has not submitted the names of any potential purchasers of the Premises
to Sublessor pursuant to Section 36.13 of the Master Lease or otherwise.
Sublessor does not have any right to purchase the Premises or any part thereof
except as described in this paragraph 15.2.20.

15.2.21        Sublessor has paid the Facility Payment in full pursuant to
Section 3.3(b) of the Master Lease.

15.2.22        The Base Building Improvements and Interior Improvements have
been Substantially Completed pursuant to the terms of the Master Lease.

15.2.23        The P-2 Residential Parking Area (as defined in the Parking
Lease) has been released from the Parking Lease by the City to Sublessor
pursuant to that certain First Amendment to Parking Facility Lease Agreement
dated November 21, 2005. The P-2 Residential Parking Area has not been released
from the Master Lease. To Sublessor’s knowledge, the Residential Development (as
defined in the Parking Lease) has been completed and there were 61 spaces
constructed in the Residential Development.

15.2.24        To Sublessor’s knowledge, there are no defects, whether latent or
patent, with respect to the Building Structure, Building Systems, Parking Deck
or Common Elements. To Sublessor’s knowledge, the Building Structure and Parking
Deck are structurally sound and watertight, and the Building Systems and Common
Elements (including elevators) are in good working order and repair. To
Sublessor’s knowledge, the Premises does not violate, and the use and occupancy
of the Premises is in compliance with all Applicable Laws, including, without
limitation, the Americans with Disabilities Act of 1990 and zoning and land use
regulations and all insurance underwriting guidelines and any environmental laws
and regulations. The portions of the Premises occupied by Sublessor are not (and
to Sublessor’s knowledge the Parking Deck and retail portions of the Premises
are not) constructed, occupied, used or operated in violation of, and are not
otherwise in violation of, and Sublessor has received no notice of any
violations or potential violation of, any Applicable Laws.

15.2.25        No Casualty or Taking has occurred with respect to the Premises,
and Sublessor has received no notice of any pending, threatened or contemplated
Taking with respect to the Premises.

15.2.26        To Sublessor’s knowledge, (i) no portion of the Premises is used
or has ever been used for the storage, processing, treatment or disposal of
Hazardous Materials; the Improvements do not contain, nor have they ever
contained, Hazardous Materials; no Hazardous Materials have been released,
introduced, spilled, discharged or disposed of, nor has there been a threat of
release, introduction, spill, discharge or disposal of Hazardous Materials,

 

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on, in, or under the Premises; (ii) there are no pending claims, administrative
proceedings, judgments, declarations, or orders, whether actual or threatened,
relating to the presence of Hazardous Materials on, in or under the Premises;
the Premises are in compliance with all federal, state and local laws, codes,
ordinances, rules, regulations, orders and requirements regarding the regulation
of Hazardous Materials; (iv) no Hazardous Materials have been released,
introduced, spilled, discharged or disposed of on, in or under any adjacent
property; and (v) there are no underground storage tanks located on or in the
Premises.

15.2.27        There are no encroachments on the Site and the Improvements are
situated entirely within the boundaries of the Site and within applicable
building lines.

15.2.28        Sublessor has heretofore paid all city, state and county ad
valorem taxes and similar taxes and assessments, all sewer and water charges and
all other governmental charges levied or imposed upon or assessed against the
Premises for which Sublessor is responsible under the Master Lease or the
Parking Lease, and none of the foregoing are currently past due or delinquent.

15.2.29        There are no unpaid brokerage fees or commission payable with
respect to the Master Lease, the Parking Lease, the Retail Leases or the Roof
Leases.

15.2.30        Sublessor has not received any notice that Master Landlord has
made any assignment, pledge, or hypothecation of the Master Lease or the
Premises (except to Lender in connection with the Loan).

15.2.31        Sublessor has not subleased, assigned, pledged, or hypothecated
its interest in the Master Lease or the Premises, but has subleased the Parking
Deck to the City pursuant to the Parking Lease and has subleased retail and roof
portions of the Premises pursuant to the Retail Leases and Roof Leases, if any,
respectively.

15.2.32        All utilities (including, without limitation, water, storm and
sanitary sewer, electricity, gas, and telephone) are available on the Premises
in capacities sufficient to serve and operate the Premises for the Use permitted
by Section 5.1 above. The Premises have access to the streets and roads
adjoining the Premises and such access is not limited or restricted.

15.2.33        There are no management, maintenance, service or other contracts
with respect to the Premises (excluding the management, maintenance, service,
and/or other contracts of the City with respect to the Parking Deck) other than
those listed on Exhibit “H” attached hereto (the “Service Agreements”); and all
of the Service Agreements can be canceled on thirty (30) days notice or less;
the Service Agreements are presently in full force and effect, have not been
modified, supplemented or amended, and, if in writing, are the entire agreement
between Sublessor and the other parties thereto; Sublessor has fully and
completely paid and performed all of its duties, obligations, liabilities and
responsibilities under the Service Agreements arising on or before the date
hereof; and, as of the Final Delivery Date, there will be no management,
maintenance, service or other contracts with respect to the Premises (excluding
the management, maintenance, service, or other contracts that the City enters
into with respect to the Parking Deck) other than those Service Agreements which

 

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Sublessee elects, by written notice to Sublessor (delivered prior to the Final
Delivery Date), to assume.

15.2.34        Between the date hereof and the Final Delivery Date, Sublessor
shall operate the Premises in the ordinary course of business and shall maintain
and repair the Premises (except for such portions of the Premises as have been
delivered to Sublessee, which shall be maintained and repaired by Sublessee in
the manner required hereunder, and such portions of the Parking Deck as are
maintained by the City pursuant to the Parking Lease) in the manner required by
the Master Lease and the Parking Lease so that, on the Final Delivery Date, the
Premises will be in the same condition as it now exists, normal wear and tear,
loss by Casualty and the performance of Sublessor’s Work excepted.

15.2.35        The Retail Leases and Roof Leases scheduled and identified on
Exhibit “I” attached hereto (the “Rent Schedule”) are the only leases or other
agreements for use, occupancy or possession of the Premises presently in force
with respect to all or any portion of the Premises (excluding the Parking Deck,
which is subject to the Parking Lease only), and the Rent Schedule correctly
sets forth: (i) each space rented by number or other appropriate designation;
(ii) the name of each tenant of each such space; (iii) the rent payable for use
of each of the respective spaces; (iv) the status of rent payable; (v) the
amount of any security or other deposit with respect to each such space; and
(vi) any renewal option applicable to any of the Retail Leases or Roof Leases.

15.2.36        The Retail Leases and Roof Leases are all presently in full force
and effect, have not been modified, supplemented or amended except as expressly
set forth on the Rent Schedule, and are the entire agreement between Sublessor,
PESC and the “lessees” or “tenants” thereunder; Sublessor and PESC have fully
and completely performed all of the duties and obligations of the “lessor” or
“landlord” or “intermediate landlord” under the Retail Leases and Roof Leases
arising on or before the date hereof; there are no obligations of the “lessor”
or “landlord” under any of the Retail Leases or Roof Leases to make or to pay
for any improvements, alterations or additions to the premises covered thereby;
there are no defaults by the “lessees” or “tenants” under any of the Retail
Leases or Roof Leases, or any existing conditions that could become defaults
with or without notice and/or the passage of time; there are no rentals which
have been paid under any of the Retail Leases or Roof Leases more than one
(1) month in advance; there are no rent concessions or offsets with respect to
any of the Retail Leases or Roof Leases; there are no options in favor of the
“lessees” or “tenants” under any of the Retail Leases or Roof Leases to purchase
all or any portion of the Premises; there are no options in favor of the
“lessees” or “tenants” to renew, extend or terminate the term of any of the
Retail Leases or Roof Leases, except as expressly set forth on the Rent
Schedule.

15.2.37        Between the Effective Date and the Final Delivery Date, Sublessor
and PESC: (i) shall comply with all obligations of the “lessor” or “landlord” or
“intermediate landlord” under the Retail Leases and the Roof Leases, if any;
(ii) shall continue to carry and maintain in force all existing policies of
insurance required by the Master Lease, the Retail Leases and the Roof Leases;
(iii) shall not make or enter into any lease or other agreement for the use,
occupancy or possession of all or any part of the Premises (including any Retail
Leases and Roof Leases) or modify, amend or terminate any such agreement, or
pursue remedies against any tenant under any Retail Leases or Roof Leases
(specifically including, but not limited to, an eviction proceeding), without
the prior written approval of Sublessee, which

 

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approval may be given or withheld by Sublessee in its sole discretion;
(iv) shall notify Sublessee promptly of any breach or default under any Retail
Leases or Roof Leases of which Sublessor becomes aware, (v) shall cause the
tenants under the Retail Leases and Roof Leases to deliver updated estoppel
certificates for the benefit of Sublessee (in the form previously requested of
such tenants in connection with this Sublease) within thirty (30) days prior to
the Final Delivery Date, and (vi) unless otherwise approved by Sublessee in
connection with the approval of a lease or other agreement described in
subsection (iii) above, shall not enter into any brokerage commission or fee
agreement or arrangement with respect to any such lease or other such agreement
without the prior written approval of Sublessee.

15.2.38        To Sublessor’s knowledge, the Loan Agreement and each of the Loan
Documents are presently in full force and effect and no event (other than
payments due but not yet delinquent) has occurred that, with or without notice
and/or the passage of time would constitute an Event of Default (as defined in
the Loan Agreement). Sublessor has not taken, or failed to take, any action with
respect to the Loan that with or without notice and/or the passage of time would
constitute or cause an Event of Default (as defined in the Loan Agreement).

15.2.39        Sublessor, and PESC will not take or permit any Sublessor Party
to take any action which will cause any of the foregoing representations,
warranties or covenants to be untrue or unperformed in any material respect on
the Final Delivery Date.

15.2.40        All of the documents and material heretofore provided by
Sublessor to Sublessee or its agents is true, correct and complete in all
material respects, and not misleading in any material respects.

15.2.41        Each and every representation and warranty given by Sublessor
under the Master Lease is true, correct, complete, and not misleading in any
material respects, including, without limitation, the representations and
warranties contained in Section 15.1 of the Master Lease.

15.3        Representations and Warranties of Sublessee. Sublessee hereby
represents and warrants to Sublessor that the following are true and correct as
of the Effective Date, and shall be true and correct (and deemed to have been
restated) as of the Final Delivery Date:

15.3.1 Sublessee is a corporation, duly organized, validly existing and in good
standing in the State of Delaware, with the corporate power to conduct its
business as now conducted, to own or hold under lease its property, to sublease
the Premises and to enter into and perform all of its obligations under this
Sublease.

15.3.2 This Sublease has been duly authorized by all necessary corporate action
on the part of Sublessee and has been duly executed and delivered by Sublessee,
and the execution, delivery and performance hereof by Sublessee will not,
(i) require any approval of the stockholders of Sublessee or any approval or
consent of any trustee or holder of any indebtedness or obligation of Sublessee,
or of any other third party, other than such consents and approvals as have been
obtained, (ii) contravene any Applicable Laws binding on Sublessee or
(iii) contravene or result in any breach of or constitute any default with or
without notice and/or passage of time under Sublessee’s charter or by-laws or
other organizational documents, or any indenture, judgment, order, decree,
mortgage, loan agreement, contract,

 

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partnership or joint venture agreement, lease or other agreement or instrument
to which Sublessee is a party or by which Sublessee or any of its property is
bound, or result in the creation of any lien upon any of the property of
Sublessee.

15.3.3 All governmental approvals required in connection with the execution,
delivery and performance by Sublessee of this Sublease, have been obtained,
given or made, including, without limitation, obtaining all approvals from any
federal, state, county and municipal regulatory authorities.

15.3.4 No bankruptcy, reorganization, arrangement or insolvency proceedings are
pending, threatened or contemplated by Sublessee, and Sublessee has not made a
general assignment for the benefit of creditors.

15.3.5 There is not now pending or, to Sublessee’s knowledge, threatened, any
action, suit or proceeding, legal, equitable or otherwise, before any court or
governmental agency or body which might adversely affect Sublessee’s ability to
perform its obligations hereunder.

15.3.6 Except for its agreement with Jones Lang LaSalle, Sublessee has entered
into no other commission agreement with any third party with respect to the
Sublease.

15.3.7 Neither the execution and delivery of this Sublease, nor the provisions
hereof will result (either immediately or after the passage of time and/or the
giving of notice) in breach or default by Sublessee under any agreement to which
Sublessee is a party or by which Sublessee may be bound or which would have an
effect upon Sublessee’s ability to perform fully its obligations under this
Sublease.

15.3.8 The existing lease of Sublessee at Centennial Campus, Raleigh, NC shall
not prohibit or adversely affect the ability of Sublessee to perform its duties
and obligations hereunder.

15.3.9 Sublessee will not take or permit any Sublessee Party to take any action
which will cause any of the foregoing representations or warranties to be untrue
in any material respect on the Final Delivery Date.

16.        DEFAULTS AND REMEDIES.

16.1      Sublessee Default; Sublessor Remedies. The provisions of Article 16 of
the Master Lease (regarding Default) and Article 17 of the Master Lease
(regarding Remedies) are hereby made Incorporated Terms, as more particularly
described in Section 17 below, such that in the event of Sublessee’s breach of
the provisions of this Sublease and following expiration of the notice and cure
periods provided in Section 16.1 of the Master Lease, Sublessor shall have
available to it all remedies available to Master Landlord under Article 17 of
the Master Lease in the event of a like default on the part of the Sublessor as
tenant under the Master Lease; except that: (i) Sublessee’s obligations under
Section 16.1(a) of the Master Lease shall relate only to the non-payment of Base
Rent under this Sublease, and (ii) Sublessor shall not have the remedy provided
in Section 17.1(f) of the Master Lease (and that provision shall not apply to
this Sublease).

 

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16.2      Sublessor Default; Sublessee Remedies. If Sublessor or PESC fails to
perform any of their respective obligations under this Sublease, or if any of
Sublessor’s or PESC’s representations or warranties contained herein shall be or
become untrue in any material respect, and such failure or untruth continues for
more than thirty (30) days after delivery of a notice from Sublessee specifying
the nature thereof, the same shall be deemed a default and Sublessee may at its
option (a) incur, and deduct from Base Rent otherwise payable the expense
necessary to perform any such obligation, or cure any such breach, and/or
(b) pursue any and all rights and remedies available to Sublessee under this
Sublease or at law or in equity, including, specific performance, a suit for
damages and/or the right to seek termination of the Sublease. Notwithstanding
anything to the contrary contained herein, Sublessee’s right to terminate the
Lease pursuant to Section 1.2.4 above shall not be affected in any manner by
this Section 16.2.

17.        PROVISIONS REGARDING THE MASTER LEASE.

17.1      Incorporated Terms. As and to the extent expressly set forth elsewhere
in this Sublease, certain provisions of the Master Lease are hereby incorporated
in and made a part of this Sublease with the same force and effect as though set
forth at length herein (the “Incorporated Terms”). By virtue of such
incorporation, the term “Landlord” as used in the Incorporated Terms, and the
term “Lender” solely to the extent identified as a consent party in Articles 4,
7, 8, 12 and 14 of the Master Lease, shall be deemed, for purposes of this
Sublease, to refer to Sublessor, the term “Tenant” as used in the Incorporated
Terms shall be deemed, for the purposes of this Sublease, to refer to Sublessee,
and the terms “Project”, “Premises” or “Demised Premises” shall be deemed, for
purposes of this Sublease, to refer to the Premises. References in the
Incorporated Terms to “Facility Payment”, “Annual Base Rent”, “Supplemental
Rent” and/or “Rent” shall be deemed, for the purposes of this Sublease, to refer
to Base Rent hereunder. All the rights and obligations conferred and imposed by
the Incorporated Terms upon Sublessor, as tenant under the Master Lease, are
hereby conferred and imposed upon Sublessee and accepted and assumed by
Sublessee with respect to the Premises, except as otherwise expressly set forth
in this Sublease. All the rights and obligations conferred and imposed by the
Incorporated Terms upon Master Landlord, as landlord under the Master Lease, are
hereby conferred and imposed upon Sublessor and accepted and assumed by
Sublessor with respect to the Premises, except as otherwise expressly set forth
in this Sublease. As more particularly set forth elsewhere in this Sublease,
certain terms and conditions of the Master Lease are excluded from and shall not
apply to this Sublease, or have been modified in their application to this
Sublease, the Parties and/or the Premises. To the extent there is a conflict
between the terms of this Sublease and the terms of the Master Lease, the terms
of this Sublease shall control.

17.1.1        Specific Terms Incorporated. Without limiting the foregoing, it is
specifically acknowledged and agreed by the Parties that, except as otherwise
specifically provided in this Sublease, the following shall be deemed
Incorporated Terms of the Master Lease, to which Sublessee shall succeed: any
future development or air rights, purchase rights, rooftop rights, holdover
rights, construction warranties and other rights as may be granted to Sublessor
pursuant to the Master Lease or the Parking Lease or are otherwise controlled by
Sublessor or its affiliates with respect to the Premises.

17.1.2        Specific Terms Excluded. Without limiting the foregoing, it is
specifically acknowledged and agreed by the Parties that, except as otherwise
specifically provided in this Sublease, the following duties and obligations of
Sublessor under the Master Lease shall not be deemed Incorporated Terms, and
shall not apply to this Sublease or be binding on Sublessee:

 

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Sublessor’s duties and obligations under the Master Lease relating to (a) time
periods prior to the Final Delivery Date (except as otherwise provided herein
with respect to portions of the Premises delivered to Sublessee prior to the
Final Delivery Date), (b) time periods subsequent to the expiration of the
Sublease Term (including, without limitation, rights, duties, or obligations
under the Parking Lease relating to periods from or after the expiration of the
Sublease Term (except as provided in Section 2.3 above)), (c) Annual Base Rent,
the Facility Payment, Supplemental Rent, or any other Rent as defined and
provided in the Master Lease, (d) construction of Base Building Improvements,
(e) representations or warranties of Sublessor, (f) indemnification of Master
Landlord, (g) the obligation to deposit any security deposit with Master
Landlord or Lender, or (h) any other duty or obligation personal to Sublessor
(such as the amount of Base Annual Rent payable by Sublessor under the Master
Lease).

17.2        Sublessor’s Obligations. Sublessor shall not be obligated to
perform, and shall not be liable for the performance by Master Landlord of, any
of the obligations of the Master Landlord under the Master Lease, unless
specifically noted as an Incorporated Term under this Sublease. Sublessor shall
enforce, for the benefit of Sublessee, the obligations of Master Landlord to
Sublessor under the Master Lease.

17.3        Sublessor’s Duties. Sublessor shall not exercise any rights under
the Master Lease that would adversely affect Sublessee, including, but not
limited to, termination of the Master Lease, without prior written consent being
provided by Sublessee, which consent shall not be unreasonably withheld,
conditioned or delayed. Sublessor shall maintain the Master Lease in good
standing throughout the Sublease Term and shall enforce its rights against
Master Landlord under the Master Lease in accordance with its obligations under
this Sublease and, to the extent not inconsistent, in a commercially reasonable
manner and shall not default (after the expiration of any applicable grace
and/or cure periods) under the Master Lease.

17.4        Sublessor’s Right to Cure. Notwithstanding any other provision of
this Sublease to the contrary, in the event of a breach of this Sublease by
Sublessee that may cause a default under the Master Lease, Sublessor may, in
addition to all other remedies and rights available to Sublessor at law or in
equity or under this Sublease, at Sublessee’s expense and after written notice
to Sublessee, cure such default or take such other action as may reasonably be
required to prevent such matter from maturing into a default under the Master
Lease. Sublessee shall pay such reasonable expenses so incurred by Sublessor
within thirty (30) days after written demand therefor from Sublessor.

17.5        Sublessee’s Right to Cure. Sublessor shall promptly upon becoming
aware thereof notify Sublessee of any breach by Sublessor of its duties or
obligations under the Master Lease. In the event of a breach of the Master Lease
by Sublessor that may cause a default under the Master Lease, Sublessee may, in
addition to all other remedies and rights available to Sublessee at law or in
equity or under this Sublease, at Sublessor’s expense and after written notice
to Sublessor, cure such default or take such action as may reasonably be
required to prevent such matter from maturing into a default under the Master
Lease. Sublessor shall pay such reasonable expenses so incurred by Sublessee
within thirty (30) days after written demand therefor from Sublessee, and if
Sublessor shall fail to do so, Sublessee may offset from Base Rent due to
Sublessor under this Sublease for such reasonable expenses.

 

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17.6     Master Lease and Alterations Agreement Indemnity.

  17.6.1 Master Lease Indemnity. In addition to the indemnities contained in
Section 18.2, Sublessor hereby assumes liability for, and shall indemnify,
protect, defend (by counsel reasonably satisfactory to Sublessee), save and keep
harmless Sublessee and its Indemnitees from and against any and all Claims
arising out of or relating to any prior, existing, current or future default,
breach, violation, or nonperformance by Sublessor under the Master Lease,
including, without limitation, Claims arising out of or relating to defaults
under any of the Incorporated Terms existing at the time such Incorporated Terms
are incorporated herein, except to the extent such Claims are caused by the
negligence or a willful act or omission of Sublessee or its Indemnitees. The
provisions of this Section 17.6.1 shall survive expiration or termination of
this Sublease and/or the Master Lease.

  17.6.2 Alterations Agreement Indemnity. In addition to the indemnities
contained in Section 18.2, Sublessor hereby assumes liability for, and shall
indemnify, protect, defend (by counsel reasonably satisfactory to Sublessee),
save and keep harmless Sublessee and its Indemnitees from and against any and
all Claims arising out of or relating to any prior, existing, current or future
default, breach, violation, or nonperformance by Sublessor under the Alterations
Agreement, including, without limitation, Claims arising out of or relating to
(i) Sublessor’s failure to perform the Tenant’s Removal Obligations (as defined
in the Alterations Agreement) and (ii) Paragraphs 6 and 8 of the Alterations
Agreement, except to the extent such Claims are caused by the negligence or a
willful act or omission of Sublessee or its Indemnitees. The provisions of this
Section 17.6.2 shall survive expiration or termination of this Sublease and/or
the Master Lease.

17.7     Consent and Approval. During the Sublease Term, if at any time
Sublessee is required to obtain Sublessor consent or approval pursuant to the
Sublease and Master Landlord (and, if applicable, Lender) consent or approval is
also required pursuant to the Master Lease, Sublessee shall first notify
Sublessor of the need for Master Landlord (and, if applicable, Lender) consent
or approval, and Sublessor shall promptly notify Master Landlord (and, if
applicable, Lender) of the same, which notice shall (i) indicate that such
consent or approval is for the benefit of Sublessee and (ii) request and
authorize Master Landlord (and, if applicable, Lender) to deal directly with
Sublessee with respect thereto. Pursuant to their obligations under their
respective SNDAs, Master Landlord and Lender agree to do so, upon such request
by Sublessor, and to communicate their consent or approval (or the withholding
of same) to Sublessor and Sublessee. Master Landlord and Lender have consented
to the foregoing pursuant to their respective SNDAs. Sublessor shall use all
reasonable efforts to obtain for the benefit of Sublessee the consent or
approval of Master Landlord (and, if applicable, Lender) where required as
described above.

17.8     No Amendment or Termination of Master Lease or Other Agreements.
Sublessor agrees not to consent to or effect any modification or amendment or
termination of the Master Lease, the Parking Lease, the Retail Leases , the Roof
Leases, the Edison Declaration, the Joint and Reciprocal Easement or the Other
Appurtenant Agreements without the prior written consent of Sublessee, which
consent, except as otherwise set forth herein, shall not be unreasonably
withheld, conditioned or delayed. Pursuant to its SNDA, Master Landlord has
agreed that Sublessee shall in no event be bound by any modification or
amendment or termination of the Master Lease or the Parking Lease except to the
extent such actions were approved in writing by Sublessee.

 

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18.        INDEMNIFICATION.

18.1     Master Lease Provisions Not Applicable. The indemnities of Master
Landlord and Sublessor, and the other provisions, contained in Article 15 of the
Master Lease shall not apply to this Sublease, or be deemed Incorporated Terms
or the indemnities or agreements of Sublessor or Sublessee hereunder.

18.2     Sublessor Indemnity. In addition to the indemnities contained in
Section 17.6 of this Sublease, Sublessor hereby assumes liability for, and shall
indemnify, protect, defend (by counsel reasonably satisfactory to Sublessee),
save and keep harmless Sublessee and its Indemnitees from and against any and
all Claims arising out of or relating to: (i) any matter or condition existing
at any portion of the Premises at or prior to the date such portion of the
Premises is delivered to Sublessee; (ii) any default, breach, violation, or
nonperformance by Sublessor under this Sublease (including breach of any
representation, warranty or covenant of Sublessor or PESC contained herein); or
(iii) any act or omission of Sublessor or its Indemnitees, including, without
limitation, injury to or death of any person or damage to property arising out
of any work, construction, reconstruction, restoration, maintenance or other
work to be done hereunder by Sublessor or its Indemnitees, including Sublessor’s
Work, except in all cases to the extent such Claims are caused by a negligent or
willful act or omission of Sublessee or its Indemnitees.

18.3     Sublessee Indemnity. Sublessee hereby assumes liability for, and shall
indemnify, protect, defend (by counsel reasonably satisfactory to Sublessor),
save and keep harmless Sublessor and its Indemnitees from and against any and
all Claims arising out of or relating to: (i) any default, breach, violation, or
nonperformance by Sublessee under this Sublease (including breach of any
representation, warranty or covenant of Sublessee contained herein and any
default, breach, violation, or nonperformance by Sublessee hereunder that causes
a default under the Master Lease); or (ii) Sublessee’s or its Indemnitees’ use
or occupancy of the Premises or activities on or about the Premises, including,
without limitation, injury to or death of any person or damage to property
arising out of any work, construction, reconstruction, restoration, maintenance
or other work to be done hereunder by Sublessee or its Indemnitees, including
construction of the Sublessee Improvements, except in all cases to the extent
such Claims are caused solely by the negligent or willful act or omission of
Sublessor or its Indemnitees.

18.4     Indemnification Procedures. The party making a claim under this
Section 18 (or Section 17.6) is referred to as the “Indemnified Party”, and the
party against whom such claims are asserted under this Article 18 (or
Section 17.6) is referred to as the “Indemnifying Party”.

   18.4.1   Third Party Claims. If any Indemnified Party receives notice of any
claim or assertion brought by any person or entity who is not a Party or an
affiliate or representative of a Party which might reasonably be expected to be
the basis of an indemnity claim covered hereby (a “Third Party Claim”) against
such Indemnified Party with respect to which the Indemnified Party is seeking or
may seek indemnification under this Sublease, the Indemnified Party shall give
the Indemnifying Party reasonably prompt written notice thereof, but in any
event not later than thirty (30) calendar days after receipt of such notice of
such Third Party Claim. The failure to give such prompt written notice shall
not, however, relieve the Indemnifying Party of its indemnification obligations,
except and only to the extent that the Indemnifying Party forfeits rights or
defenses by reason of such failure. Such notice by the Indemnified Party shall
describe the Third Party Claim in reasonable detail, shall include copies of all
material written evidence thereof and shall indicate the estimated amount, if
reasonably practicable, of the Claim that has

 

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been or may be sustained by the Indemnified Party. The Indemnifying Party shall
have the right to participate in, or by giving written notice to the Indemnified
Party, to assume the defense of any Third Party Claim at the Indemnifying
Party’s expense and by the Indemnifying Party’s own counsel, and the Indemnified
Party shall cooperate in good faith in such defense. In the event that the
Indemnifying Party assumes the defense of any Third Party Claim, subject to
Section 18.4.2, it shall have the right to take such action as it deems
necessary to avoid, dispute, defend, appeal or make counterclaims pertaining to
any such Third Party Claim in the name and on behalf of the Indemnified Party.
The Indemnified Party shall have the right to participate in the defense of any
Third Party Claim with counsel selected by it subject to the Indemnifying
Party’s right to control the defense thereof. The fees and disbursements of such
counsel shall be at the expense of the Indemnified Party, provided, however, if
in the reasonable opinion of counsel to the Indemnified Party, (A) there are
legal defenses available to an Indemnified Party that are different from or
additional to those available to the Indemnifying Party; or (B) there exists a
conflict of interest between the Indemnifying Party and the Indemnified Party
that cannot be waived, the Indemnifying Party shall be liable for the reasonable
fees and expenses of counsel to the Indemnified Party in each jurisdiction for
which the Indemnified Party determines counsel is required. If the Indemnifying
Party elects not to compromise or defend such Third Party Claim, fails to
promptly notify the Indemnified Party in writing of its election to defend as
provided in this Sublease, or fails to diligently prosecute the defense of such
Third Party Claim, the Indemnified Party may, subject to Section 18.4.2, pay,
compromise, defend such Third Party Claim and seek indemnification for any and
all Claims based upon, arising from or relating to such Third Party Claim. The
Indemnified Party and the Indemnifying Party shall cooperate with each other in
all reasonable respects in connection with the defense of any Third Party Claim,
including making available records relating to such Third Party Claim and
furnishing, without expense (other than reimbursement of actual out-of-pocket
expenses) to the defending party, management employees of the non-defending
party as may be reasonably necessary for the preparation of the defense of such
Third Party Claim.

18.4.2   Settlement of Third Party Claims. Notwithstanding any other provision
of this Sublease, the Indemnifying Party shall not enter into settlement of any
Third Party Claim without the prior written consent of the Indemnified Party,
except as provided in this Section 18.4.2. If a firm offer is made to settle a
Third Party Claim without leading to liability or the creation of a financial or
other obligation on the part of the Indemnified Party and provides, in customary
form, for the unconditional release of each Indemnified Party from all
liabilities and obligations in connection with such Third Party Claim and the
Indemnifying Party desires to accept and agree to such offer, the Indemnifying
Party shall give written notice to that effect to the Indemnified Party. If the
Indemnified Party fails to consent to such firm offer within ten (10) days after
its receipt of such notice, the Indemnified Party may continue to contest or
defend such Third Party Claim and in such event, the maximum liability of the
Indemnifying Party as to such Third Party Claim shall not exceed the amount of
such settlement offer. If the Indemnified Party fails to consent to such firm
offer and also fails to assume defense of such Third Party Claim, the
Indemnifying Party may settle the Third Party Claim upon the terms set forth in
such firm offer to settle such Third Party Claim. If the Indemnified Party has
assumed the defense pursuant to Section 18.4.1, it shall not agree to any
settlement without the written consent of the Indemnifying Party (which consent
shall not be unreasonably withheld, conditioned or delayed).

 

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  18.4.3   Direct Claims. Any action or proceeding by an Indemnified Party on
account of a Claim which does not result from a Third Party Claim (a “Direct
Claim”) shall be asserted by the Indemnified Party giving the Indemnifying Party
reasonably prompt written notice thereof, but in any event not later than thirty
(30) days after the Indemnified Party becomes aware of such Direct Claim. The
failure to give such prompt written notice shall not, however, relieve the
Indemnifying Party of its indemnification obligations, except and only to the
extent that the Indemnifying Party forfeits rights or defenses by reason of such
failure. Such notice by the Indemnified Party shall describe the Direct Claim in
reasonable detail, shall include copies of all material written evidence thereof
and shall indicate the estimated amount, if reasonably practicable, of the Claim
that has been or may be sustained by the Indemnified Party. The Indemnifying
Party shall have thirty (30) calendar days after its receipt of such notice to
respond in writing to such Direct Claim. The Indemnified Party shall allow the
Indemnifying Party and its professional advisors to investigate the matter or
circumstance alleged to give rise to the Direct Claim, and whether and to what
extent any amount is payable in respect of the Direct Claim and the Indemnified
Party shall assist the Indemnifying Party’s investigation by giving such
information and assistance (including access to the Indemnified Party’s premises
and personnel and the right to examine and copy any accounts, documents or
records) as the Indemnifying Party or any of its professional advisors may
reasonably request. If the Indemnifying Party does not so respond within such
thirty (30) day period, the Indemnifying Party shall be deemed to have rejected
such claim, in which case the Indemnified Party shall be free to pursue such
remedies as may be available to the Indemnified Party on the terms and subject
to the provisions of this Agreement.

  18.4.4   Cooperation. Upon a reasonable request by the Indemnifying Party,
each Indemnified Party seeking indemnification hereunder in respect of any
Direct Claim, hereby agrees to consult with the Indemnifying Party and act
reasonably to take actions reasonably requested by the Indemnifying Party in
order to attempt to reduce the amount of Claims in respect of such Direct Claim.
Any costs or expenses associated with taking such actions shall be included as
Claims hereunder.

  18.4.5    Damages. Notwithstanding any provision of this Sublease to the
contrary, no party hereto shall be liable to any other party hereto for
incidental, indirect, consequential, or punitive damages. Notwithstanding
anything to the contrary contained herein, Sublessee’s rights to the Delay
Liquidated Damages shall not be affected in any manner by this Section 18.4.5.

  18.4.6     Survival. The provisions of this Article 18 shall survive
expiration or termination of this Sublease.

19.       SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE.

19.1    Master Lease Provisions Not Applicable. The provisions contained in
Article 19 of the Master Lease (regarding Subordination, Attornment and
Nondisturbance) shall not apply to Sublessee or to this Sublease and shall not
be Incorporated Terms.

19.2     Subordination to Master Lease. Simultaneously herewith, Master
Landlord, Sublessor and Sublessee have entered into an SNDA (which shall survive
and convey with all subsequent changes in ownership and/or subsequent financing
of the Premises, and be recorded by Sublessee in the applicable real estate
records), containing certain agreements of the parties thereto, and Master

 

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Landlord has executed and delivered a Landlord Estoppel Certificate containing
certain representations and warranties of Master Landlord.

19.3        Subordination to Loan. Simultaneously herewith, Lender and Sublessee
have entered into an SNDA (to be recorded by Sublessee in the applicable real
estate records), containing certain agreements of the parties thereto and
certain representations and warranties of Lender.

19.4        Subordination to Future Loans. Sublessee agrees to subordinate this
Sublease to the lien of any future mortgage or deed of trust affecting the
Premises; provided, however, that the holder(s) of such mortgage or deed of
trust shall acknowledge in writing that this Sublease and Sublessee’s interest
in and possession of the Premises shall not be disturbed and shall recognize and
honor Sublessee’s rights hereunder, so long as Sublessee is not in default under
the terms of this Sublease beyond any time permitted to cure such default,
pursuant to an SNDA in substantially the form entered into by Lender as
described in Section 19.3 above.

20.         SURRENDER OF PREMISES. Upon the expiration of the Sublease Term or
earlier termination of this Sublease, Sublessee shall quit and surrender to
Sublessor the Premises (excluding the Parking Deck, to the extent then subject
to the Parking Lease, or any replacement thereto, and any portions of the
Premises then subject to Retail Leases or Roof Leases, if any, or any
replacements thereto) broom clean, but otherwise in its “as-is”, “where-is”
condition, with all Sublessee Improvements and Alterations in place, except for
(a) those improvements or alterations Sublessee has elected to remove pursuant
to Section 6.7 above, and (b) removal by Sublessee, at Sublessee’s sole
discretion, of Sublessee’s personal property from the Premises including under
Section 23.1 below. The provisions of this Section 20 shall survive any
expiration or termination of this Sublease. The provisions of Article 20 of the
Master Lease shall not apply to Sublessee or to this Sublease, and shall not be
Incorporated Terms.

21.         HOLDING OVER. Article 21 of the Master Lease grants to Sublessor
certain rights in connection with holding over in possession of the Premises
following expiration or earlier termination of the Master Lease, including,
without limitation, the right to holdover in the Premises for up to six
(6) months upon eighteen (18) months prior notice to Master Landlord
(collectively, “Holdover Rights”). The Parties acknowledge and agree that
Sublessee shall succeed to and enjoy the exclusive right to exercise the
Holdover Rights. Should Sublessee elect to exercise the Holdover Rights, it
shall provide notice to Master Landlord in the manner required by Article 21 of
the Master Lease and, pursuant to its obligations under its SNDA, Master
Landlord shall recognize Sublessee in lieu of Sublessor with respect thereto,
subject to, and in accordance with, the applicable terms and conditions of the
Master Lease. Master Landlord has consented to the foregoing pursuant to its
SNDA. Notwithstanding anything to the contrary, the foregoing right(s) shall
revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s agreement with respect thereto shall
terminate and expire, upon the earlier to occur of (i) August 23, 2035 or
(ii) Master Landlord’s receipt of a Notice of Termination. Sublessor covenants
and agrees not to deliver a Notice of Termination to Master Landlord prior to:
(i) the occurrence of an Event of Default by Sublessee (including the expiration
of any applicable notice and/or cure periods provided herein) which entitles
Sublessor to terminate this Sublease; (ii) Sublessee’s receipt of written notice
of Sublessor’s election to terminate this Sublease; and (iii) the expiration of
a period of ten (10) days following Sublessee’s receipt of such notice of
election to terminate. Should Sublessor improperly send a Notice of Termination,
the same shall constitute an immediate event of default under this Sublease
(without the benefit of any notice or cure periods otherwise provided for in
Section 16.2

 

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above) and Sublessee shall have all rights and remedies available to it
hereunder, at law or in equity, including, without limitation, injunctive
relief.

22.        INSPECTIONS AND ACCESS. The provisions of Article 22 of the Master
Lease (regarding Inspections and Access), are hereby made Incorporated Terms, as
more particularly described in Section 17 above. It is specifically acknowledged
and agreed by the Parties that Sublessee shall have the right to designate
certain areas of the Premises (excluding the Parking Deck) as Secured Areas in
the manner contemplated by Article 22 of the Master Lease and, pursuant to its
obligations under its SNDA, Master Landlord shall recognize Sublessee in lieu of
Sublessor with respect thereto, subject to, and in accordance with, the
applicable terms and conditions of the Master Lease. Master Landlord has
consented to the foregoing pursuant to its SNDA. Notwithstanding anything to the
contrary, the foregoing right(s) shall revert exclusively to Sublessor,
Sublessee shall have no further right to exercise the same, and Master
Landlord’s agreement with respect thereto shall terminate and expire, upon the
earlier to occur of (i) August 23, 2035 or (ii) Master Landlord’s receipt of a
Notice of Termination. Sublessor covenants and agrees not to deliver a Notice of
Termination to Master Landlord prior to: (i) the occurrence of an Event of
Default by Sublessee (including the expiration of any applicable notice and/or
cure periods provided herein) which entitles Sublessor to terminate this
Sublease; (ii) Sublessee’s receipt of written notice of Sublessor’s election to
terminate this Sublease; and (iii) the expiration of a period of ten (10) days
following Sublessee’s receipt of such notice of election to terminate. Should
Sublessor improperly send a Notice of Termination, the same shall constitute an
immediate event of default under this Sublease (without the benefit of any
notice or cure periods otherwise provided for in Section 16.2 above) and
Sublessee shall have all rights and remedies available to it hereunder, at law
or in equity, including, without limitation, injunctive relief.

23.        NAME OF PROJECT.

23.1     Right to Rename and Rebrand Building. On or before January 7, 2012, as
part of Sublessor’s Work, Sublessor shall, at its sole cost and expense, remove
all branding and signage from the Building and the Parking Deck (other than
(a) signage and branding on or in the Building associated with the retail
tenants in the Building in accordance with their respective rights under Retail
Leases that are then in full force and effect, (b) signage and branding of the
City (or its agent) on or in the Parking Deck in accordance with the City’s
rights under the Parking Lease and (c) interior signage and branding (such as
interior suite signage) relating exclusively to portions of the Premises not yet
delivered to Sublessee); provided, however, that Sublessor shall remove the
parapet sign on the roof of the Building (the “Parapet Sign”) on or before the
earlier of: (i) the date that the proposed merger of Progress Energy (the parent
of Sublessor) into Duke Energy has received final regulatory approval from each
of the Federal Energy Regulatory Commission, the North Carolina Utility
Commission, and the South Carolina Public Service Commission, and (ii) May 31,
2012. Beginning on January 1, 2012 and continuing through the Sublease Term, the
Parties acknowledge and agree that Sublessee shall succeed to and enjoy the
exclusive right to name the Building, in the manner contemplated by Article 23
of the Master Lease for so long as Sublessee continues to sublease and occupy
not less than thirty­five percent (35%) of the Rentable Square Footage in the
Building and, pursuant to their obligations under their respective SNDAs, Master
Landlord and Lender shall recognize Sublessee in lieu of Sublessor with respect
thereto, subject to, and in accordance with, the applicable terms and conditions
of the Master Lease. It is acknowledged and agreed that the first measuring date
for Sublessee’s sublease and occupancy of the Building for purposes of complying
with the 35% requirements in this Section 23.1 and in Section 32 below shall be
six (6) months following the Final Delivery Date. Master Landlord and Lender
have consented to the foregoing pursuant to their respective SNDAs. Sublessee
shall remove all exterior signage bearing its name or logo at the Premises upon
expiration or

 

36

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termination of this Sublease, as more particularly described in Section 6.7
above. Notwithstanding anything to the contrary, the foregoing right(s) shall
revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s and Lender’s agreement with respect
thereto shall terminate and expire, upon the earlier to occur of (i) August 23,
2035 or (ii) Master Landlord’s and Lender’s receipt of a Notice of Termination.
Sublessor covenants and agrees not to deliver a Notice of Termination to Master
Landlord prior to: (i) the occurrence of an Event of Default by Sublessee
(including the expiration of any applicable notice and/or cure periods provided
herein) which entitles Sublessor to terminate this Sublease; (ii) Sublessee’s
receipt of written notice of Sublessor’s election to terminate this Sublease;
and (iii) the expiration of a period of ten (10) days following Sublessee’s
receipt of such notice of election to terminate. Should Sublessor improperly
send a Notice of Termination, the same shall constitute an immediate event of
default under this Sublease (without the benefit of any notice or cure periods
otherwise provided for in Section 16.2 above) and Sublessee shall have all
rights and remedies available to it hereunder, at law or in equity, including,
without limitation, injunctive relief.

23.2        Master Lease Terms Not Applicable. The provisions of Article 23 of
the Master Lease shall not apply to Sublessee or to this Sublease, and shall not
be Incorporated Terms.

24.         MERGER OF ESTATES; SURRENDER OF LEASE. The provisions of Article 24
of the Master Lease (regarding Merger) are hereby made Incorporated Terms, as
more particularly described in Section 17 above.

25.         WAIVER. The provisions of Article 25 of the Master Lease (regarding
Waiver) are hereby made Incorporated Terms, as more particularly described in
Section 17 above.

26.         SALE BY LANDLORD. The provisions of Article 26 of the Master Lease
shall not apply to the Sublessee or to this Sublease and shall not be
Incorporated Terms.

27.         ESTOPPEL CERTIFICATES. The provisions of Article 27 of the Master
Lease (regarding Estoppel Certificates) are hereby made Incorporated Terms, as
more particularly described in Section 17 above.

28.         RIGHT TO PERFORMANCE. The provisions of Article 28 of the Master
Lease (regarding Right to Performance) are hereby made Incorporated Terms, as
more particularly described in Section 17 above.

29.         RIGHTS UNDER JOINT AND RECIPROCAL EASEMENT AND OTHER APPURTENANT
AGREEMENTS. Article 29 of the Master Lease grants to Sublessor rights and
obligations of Master Landlord arising under the Joint and Reciprocal Easement.
From and after the Final Delivery Date (or such earlier date as the Parking
Lease is assigned to Sublessee pursuant to Section 1.3.2 hereof), Sublessee
shall succeed to and enjoy the rights, duties and obligations of Master Landlord
and/or Sublessor under the Joint and Reciprocal Easement, and shall succeed to
and enjoy the rights, duties and obligations of Sublessor under the Other
Appurtenant Agreements, all as more particularly set forth in Section 1.6 above.
Sublessor hereby represents and warrants to Sublessee as of the Effective Date
and as of the Final Delivery Date that the Joint and Reciprocal Easement and the
Other Appurtenant Agreements are in full force and effect and that Sublessor is
not aware of any default thereunder by any party.

30.         SECURITY SERVICES. As and when portions of the Premises are
delivered to

 

37

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Sublessee in accordance with Section 1.2 and Section 6 hereof, the provisions of
Article 30 of the Master Lease (regarding Security Services) shall be
Incorporated Terms as to such portions delivered (excluding the Parking Deck
during the term of the Parking Lease), as more particularly described in
Section 17 above.

31.         NOTICES. Any notice, request or demand permitted or required to be
given by the terms and provisions of this Sublease shall be in writing and shall
be sent by United States certified mail, return receipt requested, or by a
reputable expedited delivery service such as Federal Express using written proof
of delivery, to the following addresses:

 

If to Sublessor:   

Carolina Power & Light dba Progress Energy Carolinas, Inc.

  

Progress Energy Building

  

410 South Wilmington Street

  

PEB LL3

  

Raleigh, North Carolina 27601

  

Attention: Director of Real Estate

With a copy to:

  

Christopher Cox

  

Progress Energy Service Company, LLC

Legal Department

  

Progress Energy Building

  

410 South Wilmington Street

  

Raleigh, North Carolina 27601

With a copy (which

shall not constitute notice

hereunder) to

  

Nelson Mullins Riley & Scarborough LLP

GlenLake One, Suite 200

4140 Parklake Avenue

Raleigh, NC 27612

Attn:     Cathy Rudisill, Esq.

If to Sublessee:

  

prior to the Final Delivery Date:

  

Red Hat, Inc.

1801 Varsity Drive

Raleigh, North Carolina 27606

Attn: Chief Financial Officer,

General Counsel, and Director, Worldwide Facilities

after the Final Delivery Date:

  

Red Hat, Inc.

100 East Davie Street

Raleigh, North Carolina 27607

Attn: Chief Financial Officer,

General Counsel, and Director, Worldwide Facilities

With a copy (which

shall not constitute notice

hereunder) to

  

Kilpatrick Townsend LLP

 

38

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4208 Six Forks Road

Suite 1400

Raleigh, North Carolina 27609

Attn: B. Ford Robertson, Esq.

All such notices shall be deemed given upon receipt or upon refusal of the
addressee to receive same as evidenced on any return receipt. Either Party may,
by notice as aforesaid, designate different addressees or addresses for notices
to it.

The provisions of Article 31 of the Master Lease shall not apply to Sublessee or
this Sublease, and shall not be Incorporated Terms.

32.         SIGNAGE AND BUILDING IDENTITY. As more particularly described in
Section 23 above, beginning on January 7, 2012 and continuing through the
Sublease Term, the Parties acknowledge and agree that Sublessee shall succeed to
and enjoy exclusive Signage Rights, in the manner contemplated by Article 32 of
the Master Lease (subject to the rights of the Retail Tenants under the Retail
Leases and the City under the Parking Lease and subject to delayed removal of
the Parapet Sign as provided in Section 23.1), and, pursuant to their
obligations under their respective SNDAs, Master Landlord and Lender shall
recognize Sublessee in lieu of Sublessor with respect thereto, subject to, and
in accordance with, the applicable terms and conditions of the Master Lease.
Master Landlord and Lender have consented to the foregoing pursuant to their
respective SNDAs. Notwithstanding anything to the contrary, the foregoing
right(s) shall revert exclusively to Sublessor, Sublessee shall have no further
right to exercise the same, and Master Landlord’s and Lender’s agreement with
respect thereto shall terminate and expire, upon the earlier to occur of
(i) August 23, 2035 or (ii) Master Landlord’s and Lender’s receipt of a Notice
of Termination. Sublessor covenants and agrees not to deliver a Notice of
Termination to Master Landlord prior to: (i) the occurrence of an Event of
Default by Sublessee (including the expiration of any applicable notice and/or
cure periods provided herein) which entitles Sublessor to terminate this
Sublease; (ii) Sublessee’s receipt of written notice of Sublessor’s election to
terminate this Sublease; and (iii) the expiration of a period of ten (10) days
following Sublessee’s receipt of such notice of election to terminate. Should
Sublessor improperly send a Notice of Termination, the same shall constitute an
immediate event of default under this Sublease (without the benefit of any
notice or cure periods otherwise provided for in Section 16.2 above) and
Sublessee shall have all rights and remedies available to it hereunder, at law
or in equity, including, without limitation, injunctive relief.

33.         EXCLUSIVE USE. The provisions of Article 33 of the Master Lease
shall not apply to Sublessee or this Sublease, and shall not be Incorporated
Terms.

34.         ROOF RIGHTS. As and when portions of the Premises are delivered to
Sublessee in accordance with Section 1.2 and Section 6 hereof, the provisions of
Article 34 of the Master Lease (regarding Roof Rights) shall be Incorporated
Terms as to such portions delivered (excluding the Parking Deck during the term
of the Parking Lease), as more particularly described in Section 17 above.

35.          SECURITY DEPOSIT; FINANCIAL STATEMENTS.

35.1        Security Deposit. Sublessee shall not provide a security deposit to
Sublessor unless Sublessee’s Credit Rating falls below BB from S&P or Ba2 from
Moody’s or any nationally recognized successor agency (a “Downgrade Event”). It
shall also be a Downgrade Event if

 

39

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Sublessee was rated but then ceases to be rated by S&P and Moody’s. If a
Downgrade Event occurs, and Sublessor requests by written notice to Sublessee,
Sublessee shall provide a security deposit to Sublessor in an amount equal to
three (3) months’ of the then-applicable Base Rent in cash or by an irrevocable,
unconditional letter of credit for the benefit of Sublessor and from a financial
institution reasonably approved by Sublessor, which security deposit shall be
returned to Sublessee within thirty (30) days after the written request of
Sublessee and upon the earlier to occur of (a) the expiration of the Sublease
Term or (b) Sublessee’s Credit Rating is no longer at a level that would be a
Downgrade Event. Sublessor shall not require, and hereby waives, any security
interest in Sublessee’s personal property at the Premises, including, without
limitation, any statutory liens or security interests.

35.2         Financial Statements. If at any time Sublessee shall cease to be a
publicly-traded company, Sublessee shall provide Sublessor a copy of Sublessee’s
most recent audited financial statements within thirty (30) days (or within ten
(10) business days if Sublessee is then in default under this Sublease beyond
any applicable cure period) after written request by Sublessor therefor but no
more often than one (1) time per calendar year.

36.           MISCELLANEOUS. Except as provided below, the provisions of Article
36 of the Master Lease (regarding Miscellaneous Items) are hereby made
Incorporated Terms, as more particularly described in Section 17 above.

36.1         Recording. Regarding Section 36.7 of the Master Lease, the Parties
and PESC agree to sign and deliver simultaneously herewith a Memorandum of
Sublease in the form attached hereto as Exhibit “J”, to be recorded by Sublessee
in the Wake County real estate records.

36.2         Brokers. Regarding Section 36.9 of the Master Lease, Sublessor
hereby represents and warrants that it has not dealt with, and has no liability
or obligations to, any real estate broker or agent in connection with this
Sublease. Sublessee hereby represents and warrants that, other than Jones Lang
LaSalle (whose commission shall be payable by Sublessee pursuant to separate
agreement between Jones Lang LaSalle and Sublessee), it has not dealt with and
has no liability or obligations to, any real estate broker or agent in
connection with this Sublease.

36.3         Confidentiality. The provisions of Section 36.10 of the Master
Lease (regarding Advertising and Marketing of the Project) shall not apply to
Sublessee or to this Sublease and shall not be Incorporated Terms. The Parties
will coordinate any public release of information in connection with this
Sublease, or any term or provision of this Sublease, and no such public
disclosure or release may be made without the prior written consent of Sublessor
and Sublessee except to the extent required by Applicable Laws or applicable
rules and regulations of a national stock exchange.

36.4         No Setoff; Limited Liability. The provisions of Section 36.12 of
the Master Lease shall not apply to Sublessee or to this Sublease and shall not
be Incorporated Terms. The Parties acknowledge and agree that the Base Rent and
any other amounts payable hereunder by Sublessee or Sublessor shall be paid
without notice, demand, counterclaim, setoff, recoupment, deduction or defense
and without abatement, suspension, deferment, diminution or reduction, except as
otherwise provided herein. It is expressly understood and agreed that there is
and shall be absolutely no personal liability on the part of either Party or any
partner, shareholder, member or beneficiary of any Party or its successors or
permitted assigns with respect to the provisions of this Sublease.

 

40

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36.5         Right of First Offer to Purchase. Regarding Section 36.13 of the
Master Lease, granting to Sublessor a Right of First Offer to Purchase, the
Parties acknowledge and agree that during the Sublease Term, Sublessee shall
succeed to and enjoy the exclusive right to exercise the Right of First Offer to
Purchase, and, pursuant to its obligations under its SNDA, Master Landlord shall
recognize Sublessee in lieu of Sublessor with respect thereto, subject to, and
in accordance with, the applicable terms and conditions of the Master Lease.
Master Landlord has consented to the foregoing pursuant to its SNDA.
Notwithstanding the foregoing, to the extent that the Right of First Offer to
Purchase is available for exercise and must be exercised (to avoid the lapse of
such right) prior to expiration of the Sublease Term, Sublessee will consult and
cooperate with Sublessor in the event Sublessee elects not to exercise the Right
of First Offer to Purchase, including providing notice thereof to Master
Landlord, so that Sublessor may have an opportunity to do so prior to lapse of
same. Notwithstanding anything to the contrary, the foregoing right(s) shall
revert exclusively to Sublessor, Sublessee shall have no further right to
exercise the same, and Master Landlord’s agreement with respect thereto shall
terminate and expire, upon the earlier to occur of (i) August 23, 2035 or
(ii) Master Landlord’s receipt of a Notice of Termination. Sublessor covenants
and agrees not to deliver a Notice of Termination to Master Landlord prior to:
(i) the occurrence of an Event of Default by Sublessee (including the expiration
of any applicable notice and/or cure periods provided herein) which entitles
Sublessor to terminate this Sublease; (ii) Sublessee’s receipt of written notice
of Sublessor’s election to terminate this Sublease; and (iii) the expiration of
a period of ten (10) days following Sublessee’s receipt of such notice of
election to terminate. Should Sublessor improperly send a Notice of Termination,
the same shall constitute an immediate event of default under this Sublease
(without the benefit of any notice or cure periods otherwise provided for in
Section 16.2 above) and Sublessee shall have all rights and remedies available
to it hereunder, at law or in equity, including, without limitation, injunctive
relief.

36.6         Other. The provisions of Section 36.19 (regarding
Recharacterization as Capital Lease), Section 36.20 (regarding Sales) and
Section 36.21 of the Master Lease (regarding Payment of Loan) shall not apply to
Sublessee or this Sublease and shall not be Incorporated Terms.

36.7         Attorney’s Fees. If, during the Sublease Term, Sublessor or
Sublessee institutes any action or proceeding against the other relating to the
provisions of this Sublease or any default hereunder, the unsuccessful party in
such action or proceeding agrees to reimburse the successful party for the
reasonable expenses of such action or proceeding, including reasonable
attorneys’ fees and disbursements incurred by the successful party, regardless
of whether the action or proceeding is prosecuted to judgment. The term
“attorneys’ fees” wherever used in this Sublease, shall mean only the reasonable
charges for services actually performed and rendered, of independent, outside
legal counsel who are not the employees of the party in question.

36.8.         Time. Time is of the essence of the provisions of this Sublease.

36.9         Force Majeure. The duties and obligations of each party hereto
(except for any monetary obligation shall be subject to Force Majeure.
Notwithstanding the provisions of this Section 36.9, this Section shall not act
to increase the limited period of Force Majeure delay permitted in
Section 1.2.3, and shall not apply at all with respect to Section 1.2.4.

[Signatures Begin on Following Page]

 

41

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

IN WITNESS WHEREOF, the Parties have executed and delivered this Sublease as of
the date first set forth above.

 

SUBLESSOR:

CAROLINA POWER & LIGHT

COMPANY, a North Carolina corporation,

d/b/a PROGRESS ENERGY CAROLINAS,

INC.

By:   /s/ Mark F. Mulhern

Name:   Mark F. Mulhern

Title:  

Chief Financial Officer and

Senior Vice President

 

SUBLESSEE:

RED HAT, INC., a Delaware corporation By:   /s/ Charles E. Peters, Jr. Name:
Charles E. Peters, Jr. Title: EVP & Chief Financial Officer

 

Signature Page to Sublease (1 of 2)

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

Consent and Acknowledgement Rider

PESC hereby executes this Sublease in order to acknowledge and agree that the
agreements of PESC set forth in the following sections of this Sublease are and
shall be the legally binding agreements of PESC, enforceable by Sublessee in
accordance with their respective terms: Sections 1.4, 1.5, 15.2.2, 15.2.3,
15.2.4, 15.2.5, 15.2.35, 15.2.36, 15.2.37, 15.2.39, 16.2 and 36.1.

 

PESC:

PROGRESS ENERGY SERVICE COMPANY, LLC By:   /s/ Mark F. Mulhern

Name:   Mark F. Mulhern

Title:   Senior Vice President

 

Signature Page to Sublease (2 of 2)

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

EXHIBIT “A”

MASTER LEASE

[See Attached.]

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

 

 

  

LOGO [g301497301497_47.jpg]

LEASE AGREEMENT

 

LANDLORD:

    

JPMorgan Trust Company, National Association,

 

as Owner Trustee

 

TENANT:

     Progress Energy Carolinas, Inc.

PROPERTY:

     Corporate Headquarters Building     

 

DATE: April 10, 2003

 

 

 

 

 

 

 

 

 

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

TABLE OF CONTENTS

 

LEASE AGREEMENT

     1   

A. DEFINITIONS

     1   

B. SPECIFIC TERMS AND CONDITIONS

     1   

ARTICLE 1. – PREMISES

     16   

1.1         Lease of Project

     16   

ARTICLE 2. – TERM

     16   

2.1         Effective Date

     16   

2.2         Term of Lease

     16   

2.3         Options to Extend

     16   

2.4         Lease Provisions Applicable

     17   

2.5         Options to Renew Lease of Parking Deck and Purchase Parking Deck

     17   

2.6         Use of Parking Deck

     19   

ARTICLE 3. — RENT

     20   

3.1         Payment of Rent

     20   

3.2         Free Rent Period

     21   

3.3         Rent Commencement Date

     21   

3.4         Supplemental Rent

     22   

3.5         Taxes; Rent Taxes

     22   

3.6         Definition of Rent

     23   

3.7         Late Charge

     23   

3.8         Treatment for Tax and Accounting Purposes

     23   

3.9         True Lease

     24   

3.10       Allocated Rent

     24   

3.11       Tenant’s Waivers

     24   

ARTICLE 4. — OPERATING EXPENSES

     25   

4.1         Tenant’s Responsibility for Operating Expenses

     25   

4.2         Tax Protests

     25   

4.3         Litigation; Zoning; Joint Assessment

     26   

 

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ARTICLE 5. — USE

     26   

5.1         Permitted Use

     26   

5.2         Restriction on Use

     26   

5.3         Restaurant Sublease Guidelines

     27   

ARTICLE 6. — CONSTRUCTION; ACCEPTANCE AS IS

     27   

6.1         Construction of Improvements

     27   

6.2         Waivers

     27   

6.3         Tenant’s Right to Enforce Warranties

     28   

ARTICLE 7. — ALTERATIONS AND ADDITIONS

     29   

7.1         Tenant’s Rights to Make Alterations

     29   

7.2         Installation of Alterations

     30   

7.3         Interior Improvements - Treatment at End of Lease

     31   

7.4         Lobby Alterations

     31   

ARTICLE 8. — COMPLIANCE WITH APPLICABLE LAWS (INCLUDING ENVIRONMENTAL LAWS)

     32   

8.1         Compliance

     32   

8.2         Notices

     33   

ARTICLE 9. — NO LIENS BY TENANT

     33   

9.1         No Liens

     33   

ARTICLE 10. — REPAIRS TO PROJECT, INCLUDING THE PARKING DECK

     34   

10.1       Scope of Tenant’s Obligations

     34   

10.2       Landlord’s Right of Entry to Make Repairs

     35   

10.3       Building Structure and Building Systems

     35   

ARTICLE 11. — BUILDING SERVICES

     36   

11.1       Standard Building Services

     36   

11.2       Additional Services

     36   

11.3       Tenant’s Right to Elect Service Provider

     36   

ARTICLE 12. — ASSIGNMENT AND SUBLETTING

     36   

12.1       Right to Sublease and Assign

     36   

12.2       Affiliates

     39   

 

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12.3       Merger, Consolidation or Acquisition

     39   

12.4       Additional Requirements Applicable to Sublease and Assignment

     40   

12.5       Landlord’s Right to Assign

     40   

12.6       Occupancy; License By Others

     40   

12.7       Requirements and Conditions

     41   

12.8       Event Revenues for Common Areas

     41   

ARTICLE 13. — INSURANCE

     41   

13.1       Tenant’s Insurance

     41   

ARTICLE 14. — LOSS, DAMAGE, DESTRUCTION AND TAKING

     43   

14.1       Risk of Loss on Tenant

     43   

14.2       No Notice of Termination

     43   

14.3       Tenant’s Termination Notice

     45   

14.4       Reaffirmation of Lease

     47   

ARTICLE 15. — LANDLORD AND TENANT REPRESENTATIONS AND COVENANTS

     48   

15.1       Representations and Warranties of Tenant

     48   

15.2       Representation and Warranties of Landlord

     49   

ARTICLE 16. — DEFAULTS

     49   

16.1       Default by Tenant

     49   

ARTICLE 17. — LANDLORD’S REMEDIES AND RIGHTS

     50   

17.1       Remedies

     50   

17.2       Remedies Not Exclusive

     53   

17.3       Enforceability

     53   

ARTICLE 18. — INDEMNITIES AND ATTORNEYS’ FEES

     53   

18.1       Attorney Fees

     53   

18.2       General Indemnification

     53   

ARTICLE 19. — SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE

     56   

19.1       Obligations of Tenant

     56   

19.2       Landlord’s Right to Assign

     56   

19.3       Tenant’s Consent to Assignment for Indebtedness

     56   

19.4       Attornment by Tenant

     58   

 

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19.5       Non-Disturbance

     58   

ARTICLE 20. — SURRENDER OF PREMISES

     58   

ARTICLE 21. — HOLDING OVER

     59   

21.1       Holdover Provision

     59   

21.2       Tenant’s Right to Hold Over With Notice

     59   

ARTICLE 22. — INSPECTIONS AND ACCESS

     59   

22.1       Entry by Landlord

     59   

22.2       Secured Areas

     60   

ARTICLE 23. — NAME OF PROJECT

     60   

ARTICLE 24. — MERGER OF ESTATES; SURRENDER OF LEASE

     60   

ARTICLE 25. — WAIVER

     61   

ARTICLE 26. — SALE BY LANDLORD

     61   

ARTICLE 27. — ESTOPPEL CERTIFICATES

     61   

ARTICLE 28. — RIGHT TO PERFORMANCE

     62   

ARTICLE 29. — RIGHTS UNDER THE JOINT AND RECIPROCAL EASEMENT

     62   

ARTICLE 30. — SECURITY SERVICES

     62   

30.1       Tenant’s Obligation to Furnish Security Services

     62   

30.2       Tenant’s Right to Install Security System

     62   

ARTICLE 31. — NOTICES

     62   

ARTICLE 32. — SIGNAGE AND BUILDING IDENTITY

     62   

ARTICLE 33. — EXCLUSIVE USE

     64   

ARTICLE 34. — ROOF RIGHTS

     64   

ARTICLE 35. — SECURITY DEPOSIT

     65   

ARTICLE 36. — MISCELLANEOUS

     65   

36.1       Authorization to Sign Lease

     65   

36.2       Entire Agreement

     65   

36.3       Severability

     65   

36.4       Gender and Headings

     65   

36.5       Exhibits

     66   

36.6       Quiet Enjoyment

     66   

 

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36.7       No Recordation

     66   

36.8       Cumulative Remedies

     66   

36.9       Brokers

     66   

36.10           Advertising and Marketing of Project

     67   

36.11           Consent/Duty to Act Reasonably

     67   

36.12           Net Lease, No Setoff, Etc.

     67   

36.13           Right of First Offer to Purchase

     69   

36.14           Survivability

     71   

36.15           Covenants and Agreements

     72   

36.16           Interest on Past Due Obligations

     72   

36.17           When Payment Is Due

     72   

36.18           Time is of the Essence

     72   

36.19           Recharacterization as Capital Lease

     72   

36.20           Sales

     72   

 

v

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LEASE AGREEMENT

This LEASE AGREEMENT (“Lease”), dated as of April 10, 2003, with an effective
date as set forth in Section 2.1 hereto, is made and entered into by and between
JPMorgan Trust Company, National Association, not in its individual capacity,
but solely as Owner Trustee of the CA Raleigh Owner Trust under a Trust
Agreement dated as of April 1, 2003 (“Landlord”) and Progress Energy Carolinas,
Inc. (“Tenant”).

A.

DEFINITIONS

The following definitions are incorporated into the Lease attached hereto and
said provisions shall have the following meanings throughout the Lease:

 

ACM:   

Asbestos-containing materials.

ADA:   

Americans with Disabilities Act of 1990, 42 U.S.C. 12101 et seq., as amended.

Additional Services:   

As defined in Section 11.2.

Affiliate:   

With respect to Landlord, Tenant or Lender, as the case may be, a Person or
Persons directly or indirectly, through one or more intermediaries, controlling,
controlled by or under common control with Landlord, Tenant or Lender. The term
“control” as used in the immediately preceding sentence, means, with respect to
a Person that is an entity, the right to exercise, directly or indirectly, more
than fifty percent (50%) of the voting rights attributable to the shares or
other voting interests of the controlled entity or the possession, directly or
indirectly, of the power otherwise to direct or cause the direction of the
management or policies of the controlled entity.

Allocated Rent:   

As defined in Section 3.10.

Alterations:   

Any and all alterations, additions, and/or improvements to any portion of the
Premises made by or for Tenant following the Lease Commencement Date and which
are not either (i) Interior Improvements, or (ii) maintenance or repairs of
existing fixtures or improvements.

Annual Base Rent:   

As defined in Section 3.1.

 

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Applicable Laws:   

All existing and future applicable laws (including common laws), rules,
regulations, statutes, treaties, codes, ordinances, permits, certificates,
orders and licenses of and interpretations by, any Governmental Authorities, and
applicable judgments, decrees, injunctions, writs, orders or like action of any
court, arbitrator or other administrative, judicial or quasi­judicial tribunal
or agency of competent jurisdiction (including those pertaining to health,
safety or the environment and those pertaining to the construction, use or
occupancy of the Project), and any reciprocal easement agreement, covenant,
other agreement or deed restriction or easement of record affecting the
Building, Premises, Project or Site.

Appraisal Procedure:   

The Fair Market Rental Value shall be the average of two appraisals of the
monthly rental value of the property to be leased in the Building taking into
consideration the credit worthiness of the Tenant. Each of the Tenant and the
Landlord shall select an appraiser. Each appraiser must be an independent party
that is an approved member of MAI or a similar real estate appraisal
organization of national recognition, doing business in North Carolina and
having experience in the appraisal of office buildings. The parties shall
endeavor to cause the Fair Market Rental Value to be determined within 90 days
from the Extension Notice. Each party shall bear the expense of the appraiser
selected by it. If the two appraisals differ by more than 5%, then the parties
will mutually select a third appraiser. An average of the two appraisals (or
three appraisals if a third appraiser is selected) will be the Fair Market
Rental Value. The cost of the third appraisal will be split equally between
Tenant and Landlord.

Approved Environmental Consultant:   

Any environmental consultant to Tenant of national standing and reasonably
approved by Landlord and Lender.

Approved Project Budget:   

The detailed estimate of Project costs attached as Exhibit “A” to the
Development Agreement.

Architect:   

As set forth in Exhibit “B.”

Base Building Improvements:   

All elements of the Improvements other than the Interior Improvements, as set
forth in the Base

 

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Building Plans.

Base Building Plans:   

Collectively, those certain drawings, elevations, plans and specifications
describing the Project as set forth in Exhibit “B.”

Basic Term:   

The period commencing on the Lease Commencement Date and ending on the
Expiration Date, unless earlier terminated as specifically provided in the
Lease.

Broker(s):   

None.

Building:   

A mixed use structure containing (a) approximately 365,000 square feet of office
space, (b) approximately 21,000 square feet of Retail Space, and (c) the Parking
Deck located on the Site and more particularly described in the Base Building
Plans.

Building Structure:   

As set forth in Section 10.3.

Building Systems:   

As set forth in Section 10.3.

Business Day:   

Any day other than a Saturday, Sunday or other day on which banks are authorized
to be closed in Newport Beach, California, New York, New York, or Raleigh, North
Carolina.

Calendar Year:   

The period from January 1 to December 31.

Casualty:   

As defined in Section 14.2(b).

Certificate of Compliance   

The certificate of compliance issued by the City for the Base Building
Improvements, including the Parking Deck, upon substantial completion.

City:   

The City of Raleigh, North Carolina, a municipal corporation.

Closing Date   

As defined in Section 14.3(c).

Common Areas:   

All driveways and roadways now or hereafter located within the Project, walkways
now or hereafter located within the Project, all utility lines, pipes, wires,
cables and other utility facilities now or hereafter located within and serving
the Project or otherwise exclusively serving the Project, any

 

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retention or detention facilities now or hereafter serving the Project, any
storm and sanitary sewers, culverts, drains, headwalls, manholes and related
equipment now or hereafter located within the Project, all grounds and
landscaping within the Project, all covered walkways, tunnels, or other means of
access to the Project, together with all hallways, lobbies, bathrooms,
corridors, elevators, entrances and exits, stairways and other similar areas
within the Project.

Communications Equipment:   

As defined in Article 34.

Contract Rate:   

1.0% per annum in excess of the prime or base rate of interest announced from
time to time by Wachovia Bank

Contractor:   

Brasfield & Gorrie, LLC

Cost to Repair   

As defined in Section 14.2(b).

Critical Areas:   

Those portions of Premises, to be designated from time to time in writing by
Tenant, which are utilized by Tenant for time sensitive or twenty-four (24) hour
processes or operations and for which provision of repairs requires priority
treatment or advance scheduling as expressly provided in Section 10.2 of this
Lease.

Current Term:   

The Term of the Lease including any Renewal Terms which have been exercised by
the Tenant.

Deed of Trust:   

As defined in the Loan Agreement.

Default Sale Closing Date:   

As defined in Section 17.1(f).

Default Sale Option Date:   

As defined in Section 17.1(f).

Default Sale Purchase Price:   

As defined in Section 17.1(f).

Development Agreement   

The Agreement for Development dated as of April 10, 2003 between Landlord,
Progress Energy Service Company, LLC and Carter & Associates, L.L.C.

Disbursing Account:   

As defined in the Project Management Agreement.

 

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Effective Date:   

As defined in Section 1.1.

Environmental Laws:   

All federal, state or local laws, ordinances, rules, orders, statutes, decrees,
judgments, injunctions, codes, regulations and common law (a) relating to the
environment, human health or natural resources; (b) regulating, controlling or
imposing liability or standards of conduct concerning Hazardous Materials; (c)
relating to the remediation of real property, including investigation, response,
clean-up, remediation, prevention, mitigation or removal of Hazardous Materials;
or (d) requiring notification or disclosure of releases of Hazardous Materials
or any other environmental conditions on or migrating from the Property, as any
of the foregoing may have been or may be amended, supplemented or supplanted
from time to time, including the Resource Conservation and Recovery Act of 1976
(“RCRA”), 42 U.S.C. §§ 6901 et seq., as amended by the Hazardous and Solid Waste
Amendments of 1984, the Comprehensive Environmental Response, Compensation and
Liability Act, as amended by the Superfund Amendments and Reauthorization Act of
1986, 42 U.S.C. §§ 9601 et seq. (“CERCLA”), the Hazardous Materials
Transportation Act of 1975, 49 U.S.C. §§ 1801-1812, the Toxic Substances Control
Act, 15 U.S.C. §§ 2601-2671, the Clean Air Act, 42 U.S.C. §§ 7041 et seq., the
Federal Insecticide, Fungicide and Rodenticide Act, 7 U.S.C. §§ 136 et seq., the
North Carolina Oil Pollution and Hazardous Substances Control Act, and the North
Carolina Inactive Hazardous Sites Act, as any of the foregoing may have been or
may be amended, supplemented or supplanted from time to time.

Estoppel Certificate:   

As defined in Article 27.

Event of Default:   

As defined in Article 16.

Event of Loss:   

As set forth in Section 14.3(a).

Excluded Borrower Costs and Expenses:   

Any costs and expenses are incurred or expended by Lender pursuant to any of the
Loan Documents, as a result solely of the following: (a) an action by Landlord
prohibited by any of the Loan Documents, or (b) an omission or failure by
Landlord to take an action or fulfill an obligation required under any of

 

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the Loan Documents other than any of the following actions or obligations: (i)
the payment of money (except for the failure to pay the costs and expenses
incurred by Lender covered by clauses (a) and (b)(ii) of this paragraph) or (ii)
any other action or obligation required to be taken or fulfilled that Tenant can
reasonably take or fulfill on behalf of Landlord or in Landlord’s stead, or
(iii) prior to the Rent Commencement Date, any other action required to be taken
by Landlord , or any action that Lender is permitted to take, in each case under
any of the Loan Documents, in order to preserve or protect the assets of
Landlord that are collateral for the Loan or to enforce the Landlord’s rights
under any agreements that are collateral for the Loan.

Expiration Date:   

31 Years after the Lease Commencement Date provided, however, that this Lease is
subject to earlier termination or extension as expressly provided herein.

Extension Notice:   

As defined in Section 2.2(a).

Facility Payment:   

An amount equal to the payment due to Tenant from the City, which amount equals
the product of (a) the number of parking spaces in the Parking Deck multiplied
by (b) $13,200.

Fair Market Rental Value:   

The fair market monthly rental value that would be obtained in an arm’s-length
transaction between an informed and willing lessee and an informed and willing
lessor, in either case under no compulsion to lease, and neither of which is
related to Landlord or Tenant, for the lease of the Premises on the terms set
forth, or referred to, in Section 2.3 of the Lease.

Federal Bankruptcy Code:   

The Bankruptcy Reform Act of 1978 as amended and as may be further amended.

Free Rent Period:   

As defined in Section 3.2.

Governmental Authority:   

Any United States federal, state, county, local, municipal or other governmental
or regulatory authority, subdivision, agency, board, body, commission,
instrumentality, court or quasi governmental authority (or private entity in
lieu thereof), including without limitation any federal,

 

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state, local or municipal taxing authority or similar agency.

Hazardous Materials:   

Any and all toxic or hazardous substances, chemicals, materials or pollutants
which are regulated, governed, restricted or prohibited by any federal, state or
local law, decision, statute, rule or ordinance currently in existence or
hereafter enacted or rendered.

Holdover Election Notice:   

As defined in Section 21.2.

HVAC Unit:   

As defined in Article 34.

Improvements:   

The Building, the Parking Deck and all other buildings, structures,
infrastructure, site improvements, landscaping and other onsite or offsite
improvements of any kind or nature whatsoever relating to the Project now
existing or hereafter constructed on the Site.

Indemnitee:   

The Landlord, all direct or indirect beneficial owners of the Landlord, the
Lender, CA Partners, LLC, and their respective Affiliates and the respective
officers, directors, owners agents, successors and assigns of all of the
foregoing.

Insolvent   

With respect to the Tenant (i) the fair value of the property of the Tenant is
less than the amount of the Tenant’s liabilities (including disputed, contingent
and unliquidated liabilities) as such value is established and of liabilities
evaluated for purposes of Section 101(32) of the Bankruptcy Code and, in the
alternative, for purposes of the North Carolina Uniform Fraudulent Transfer Act;
(ii) the present fair saleable value of the property of the Tenant is less than
the amount that will be required to pay the liabilities of the Tenant on its
debts as they become absolute and matured; (iii) the Tenant is not able to
realize upon its property and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business; (iv) the Tenant is not engaged in business or a transaction,
and is not about to engage in business or a transaction, for which the Tenant’s
property would constitute unreasonably small capital; or (v) the Tenant does not
intend to and does not believe that it will incur debts or liabilities beyond

 

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the Tenant’s ability to pay as such debts and liabilities mature.

Interior Improvements:   

All elements of the Improvements other than the Base Building Improvements, as
set forth in the Interior Improvements Plans.

Interior Improvements Allowance:   

The line item of the Approved Project Budget constituting an allowance for the
Interior Improvements, subject to any limitations in the Loan Agreement on Loan
proceeds that can be drawn by Landlord after the Lease Commencement Date.

Interior Improvements Plans:   

As set forth in Exhibit “B.”

Investment Grade:   

The senior unsecured obligations of such Person shall have a Rating of BBB- or
higher by Standard & Poor’s, or Baa3 or higher by Moody’s

Joint and Reciprocal Easement:   

The Joint and Reciprocal Easement Agreement dated April 10, 2003, between the
City and the Tenant.

Landlord:   

JPMorgan Trust Company, National Association, not in its individual capacity,
but solely as Owner Trustee of the CA Raleigh Owner Trust under the Trust
Agreement dated as of April 1, 2003

Landlord’s Address for Notices:   

JPMorgan Trust Company, National Association

560 Mission Street, 13th Floor

San Francisco, CA 94105

Attention: Corporate Trust Department

 

With a copy to:

 

CA Raleigh, LLC

30101 Agoura Court, Suite 234

Agoura Hills, California 91301

Landlord’s Equipment:   

All machinery, apparatus, equipment, fittings, appliances and fixtures of every
kind and nature now or hereafter located on the Site and purchased with the
proceeds of the Loan, and all plumbing, gas, electrical, ventilating, heating,
air conditioning, lighting and other mechanical and utility systems and all
other building systems and fixtures attached to or

 

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comprising a part of the Improvements.

Lease Commencement Date   

As defined in Section 2.2.

Lease Operative Documents:   

This Lease, the Parking Deck Lease and the Joint and Reciprocal Easement.

Lease Year:   

Lease Year shall refer to the Year beginning on the Lease Commencement Date and
to each Year thereafter beginning on the anniversary of the Lease Commencement
Date.

Lien:   

Any lien, mortgage, pledge, charge, security interest or encumbrance of any
kind, or any other type of preferential arrangement that has the practical
effect of creating a security interest on the Premises or any portion thereof or
interest therein, including, without limitation, any thereof arising under any
conditional sale agreement, capital lease or other title retention agreement.

Lender:   

Pacific Life Insurance Company or any subsequent holder of the Mortgage.

Loan:   

The loan obtained by Landlord from Lender with respect to the Project.

Loan Agreement:   

The Loan Agreement dated as of April 10, 2003 between Landlord and Lender

Loan Documents:   

As defined in the Loan Agreement.

Make-Whole Premium:   

As defined in the Loan Documents.

Minor Alterations:   

As defined in Section 7.2(a).

Moody’s:   

Moody’s Investors Service, Inc. and its successors.

Mortgage:   

As defined in the Loan Documents.

Net Casualty Award   

As defined in Section 14.2(b).

Net Taking Award   

As defined in Section 14.2(b).

Offer   

As defined in Section 14.3(a).

Operating Expenses:   

As set forth in Section 4.1.

 

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Operative Documents:   

The Lease Operative Documents, the Loan Documents, the Development Agreement and
all other documents or agreements attached to or referred to in any of the
preceding documents.

Option to Extend:   

As set forth in Section 2.2.

Outside Completion Date:   

September 15, 2005.

Parking Deck:   

The parking structure to be located on the Site as part of the Base Building
Improvements, as described in the Base Building Plans.

Parking Deck Lease:   

That certain Parking Deck Lease Agreement among Progress Energy Carolinas, Inc.,
as sublessor, the City of Raleigh, North Carolina, as sublessee, and Landlord,
dated as of April 10, 2003.

Permitted Liens:   

(a) the respective rights and interests of the Tenant, the Landlord and the
Lender under the Operative Documents, (b) Liens for Taxes either not yet due or
being contested in accordance with Section 4.2, (c) materialmen’s, mechanics’,
workers’, repairmen’s, employees or other like Liens for amounts either not yet
due or being contested in accordance with Section 4.2; provided, however, that
if an Event of Default has occurred and is continuing, or if Tenant’s Rating
falls below Investment Grade during such contest, such lien must either be
bonded to Landlord’s satisfaction or removed, (d) Liens arising out of judgments
or awards with respect to which at the time an appeal or proceeding for review
is being prosecuted in good faith and, if an Event of Default has occurred and
is continuing, or if Tenant’s Rating falls below Investment Grade during the
appeal or proceeding for review, which have been bonded to Landlord’s
satisfaction, (e) easements, rights of way, reservations, servitudes covenants,
conditions, restrictions and rights of others against the Premises which do not
have a material adverse effect on the Premises, its value or its uses, (f)
easements, rights of way, reservations, servitudes, covenants, conditions,
restrictions and rights of others against the Premises existing on the Effective
Date of this Lease, including those which are listed in the title policies
issued to the Lender and the Landlord (as applicable) pursuant to the Loan

 

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Agreement, and (g) subleases expressly permitted by this Lease.

Permits:   

As to the Premises all licenses, authorizations, certificates, variances,
concessions, grants, registrations, consents, permits and other approvals issued
by a Governmental Authority now or hereafter pertaining to the ownership,
management, occupancy, use or operation of such Premises, including certificates
of occupancy.

Person:   

A natural person, a partnership, a corporation, a limited liability company, a
trust, and any other form of business or legal association or entity.

Personal Property Taxes:   

As defined in Section 3.5.

Premises and Project (such terms being

interchangeable for purposes of this

Lease):

  

The Site, together with the Base Building Improvements, the Interior
Improvements, all other Improvements, Landlord’s Equipment and the Common Areas.

Project Management Agreement:   

The Project Management Agreement dated as of April 10, 2003 between Landlord and
Progress Energy Service Company, LLC.

Property Manager:   

The Person designated by Tenant from time to time to manage the Project.

Punch List Items:   

Any items of the Base Building Improvements that are incomplete but, in the
aggregate, do not materially interfere with the lawful use or enjoyment of the
Base Building Improvements for their intended purposes.

Purchase Price:   

As defined in Section 14.3(c)(vi).

Rating:   

A rating by Standard & Poor’s and/or Moody’s of the senior unsecured obligations
of the Tenant (or if the senior unsecured obligations of the Tenant shall not be
rated, a confidential debt rating of the Tenant).

Release:   

The release or threatened release of any Hazardous Material into or upon or
under any land or water or air, or otherwise into the environment, including,
without limitation, by means of burial, disposal, discharge, emission,
injection, spillage, leakage, seepage, leaching, dumping, pumping, pouring,

 

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escaping, emptying, placement and the like.

Remedial Action:   

The investigation, response, clean-up, remediation, prevention, mitigation or
removal of contamination, environmental degradation or damage caused by, related
to or arising from the existence, generation, use, handling, treatment, storage,
transportation, disposal, discharge, Release (including a continuous Release),
or emission of Hazardous Materials, including, without limitation,
investigations, response, removal, monitoring and remedial actions under CERCLA;
corrective action under the Resource Conservation and Recovery Act of 1976, as
amended, the investigation, removal or closure of any underground storage tanks,
and any related soil or groundwater investigation, remediation or other action,
and investigation, clean-up or other actions required under or necessary to
comply with any Environmental Laws.

Renewal Term:   

As defined in Section 2.3.

Rent:   

As defined in Article 3.6.

Rent Commencement Date:   

As defined in Article 3.3.

Rent Constant:   

Shall be 10.256402%.

Rentable Area of the Building:   

The rentable area of the Building, which is approximately 365,000 rentable
square feet of office space and approximately 21,000 rentable square feet of
retail space. A floor-by-floor schedule of the approximate rentable area of the
Building is attached hereto as Exhibit “F.”

Replacement Part:   

As defined in Section 10.1

Restoration Contracts   

As defined in Section 14.2(b).

Retail Space:   

The areas within the Premises allocated by Tenant exclusively to retail
operations.

Right of First Offer to Purchase:   

As defined in Section 36.13.

Secured Areas:   

As defined in Section 22.2.

Services:   

Those services required by this Lease to be provided

 

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by Tenant as further described in Section 11.1.

Signage Rights:   

As set forth in Article 32.

Site:   

That certain property described on Exhibit “A” attached hereto and incorporated
herein by reference and all easements, air rights, and other rights and
interests appurtenant thereto. Landlord and Tenant have agreed to substitute,
and hereby incorporate by reference, a revised Exhibit “A” to recognize minor
changes required in the property dimensions (boundary line adjustments) due to
completion and approval of construction and engineering documents.

Standard & Poor’s:   

Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc., and its successors.

Stipulated Loss Value:   

As set forth in Section 14.3(c).

Sublease:   

As set forth in Section 12.1(a).

“Substantial Completion” or

“Substantially Complete”

  

As to the Base Building Improvements, either (a) the Architect of Record has
certified that substantial completion of the Base Building Improvements as
evidenced by the issuance of a certificate of substantial completion by the
Architect, or (b) issuance of a Certificate of Compliance. The certification of
the Architect of Record shall be conclusive and binding on Tenant. If a
condemnation occurs prior to the Lease Commencement Date, “Substantial
Completion” means the Base Building Improvements less the condemned portion
thereof, with such changes to the Base Building Improvements as the Developer
determines, under the Development Agreement, are reasonably necessary to take
into account the loss of a portion of the Land and/or Improvements because of
the condemnation.

Supplemental Rent:   

Collectively: (i) the Make-Whole Premium; (ii) any and all amounts, fees,
expenses, liabilities, obligations, late charges, Operating Expenses, Taxes and
impositions other than the Facility Payment and Annual Base Rent which Tenant
assumes or agrees in writing or is otherwise obligated to pay under this Lease
to the Landlord or the Lender or otherwise,

 

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including Stipulated Loss Value payments; and (iii) any and all amounts payable
by Landlord under the Loan Documents, including but not limited to late charges,
default interest, and attorney's fees and costs, excluding, however, all
Excluded Borrower Costs and Expenses.

Taking:   

As defined in Section 14.2(b).

Tax Protest:   

As defined in Section 4.2.

Taxes:   

As defined in Section 3.5.

TCMP:   

As defined in the “Note” (as that term is defined in the Loan Agreement).

Tenant:   

Progress Energy Carolinas, Inc., its successors or assigns.

Tenant's Address for Notices:   

Progress Energy Carolinas, Inc.

410 S. Wilmington Street

Raleigh, North Carolina 27602

Attn: Vice President of Real Estate

            with a copy to:

     

Progress Energy Carolinas, Inc.

410 S. Wilmington Street

17th Floor

Raleigh, North Carolina 27602

Attn: Legal Department

Tenant’s Designated Representative:   

Thomas W. Trocheck

Tenant’s Property:   

Tenant’s trade fixtures, furnishings, equipment or other personal property
located in or used at the Premises.

Tenant’s Termination Notice   

As defined in Section 14.3(a).

Term:   

As defined in Section 2.2.

Termination Date   

As defined in Section 17.1(a).

Total Cost:   

The sum of (i) the proceeds of the Loan actually drawn under the Loan Agreement
through the calendar day immediately preceding the Rent Commencement Date,
including, without limitation,

 

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all interest accrued to but excluding the Rent Commencement Date, and including
any interest accruing thereon, whether or not drawn under the Loan Agreement,
during any period of delay in the construction of the Project, regardless of the
cause of any such delay, and any default interest and late fees and charges,
plus (ii) all other costs and expenses incurred by Lender or otherwise
chargeable to Landlord in connection with the making and administration of the
Loan or the enforcement of any rights Lender may have under the Loan Documents
or the protection of Lender’s security in any collateral for the Loan, in each
case to but excluding the Rent Commencement Date, provided that Tenant shall not
be responsible for any Excluded Borrower Costs and Expenses, plus (iii) the
$3,000,000 deposited into the Deficiency Account pursuant to Section 3.2(y) of
the Loan Agreement (the “Initial Deficiency Deposit Amount”) and any other
amounts deposited by Landlord from time to time in the Deficiency Account, plus
(iv) Interest at the Contract Rate (as defined in the Note) on the Initial
Deficiency Deposit Amount and on any other amounts deposited by Landlord from
time to time in the Deficiency Account, in each case accruing from the date of
such deposit through and including the Lease Commencement Date, less (v) the sum
of (A) $750,000, (B) any amounts applied by Lender in the reduction of the
amounts referred to in clauses (i) or (ii) above actually received by Lender
from insurance proceeds, liquidated damages, the Facility Payment or other
sources to but excluding the Rent Commencement Date and (C) all Loan proceeds
actually disbursed by Lender to Landlord in accordance with a request expressly
made by Landlord therefor pursuant to the Loan Agreement and that are expressly
designated by Lender to be applied by Landlord as a return of any or all of the
following: (x) the Initial Deficiency Deposit Amount, (y) any other amounts
deposited by Landlord in the Deficiency Account, and (z) interest as described
in clause (iv) above with respect thereto.

Use:   

As defined in Section 5.1.

Year:   

Any period of 365/366 consecutive days.

 

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B.

SPECIFIC TERMS AND CONDITIONS

Landlord and Tenant specifically agree as follows:

ARTICLE 1. – PREMISES

1.1         Lease of Project. Upon the terms and conditions of this Lease,
Landlord leases to Tenant, and Tenant leases from Landlord, the entire Premises.

ARTICLE 2. – TERM

2.1         Effective Date. The Lease is effective as of April 10, 2003 (the
“Effective Date”).

2.2         Term of Lease. The term of this Lease (together with all extensions
thereto, the “Term”) shall commence on the date the Base Building Improvements
are Substantially Complete (the “Lease Commencement Date”) and shall continue to
the Expiration Date, unless extended pursuant to Section 2.3 hereof, or unless
sooner terminated as hereinafter provided. Landlord and Tenant will execute a
Memorandum of Acceptance, in the form attached hereto as Exhibit “C,” once the
conditions set forth therein have been met. To the extent there shall be any
discrepancy between anything contained in this Lease and anything contained in
the Memorandum of Acceptance, the Memorandum of Acceptance shall control and
operate as an amendment of this Lease with respect to such discrepancy.

2.3         Options to Extend. So long as no Event of Default shall have
occurred and be continuing as of the exercise of the Renewal Term option
specified herein the Landlord hereby grants to the Tenant an option to renew
this Lease in whole or in part (if in part, in full floor increments) for four
successive terms of five years each (each a “Renewal Term”), the first Renewal
Term to commence at the expiration of the Basic Term and each other Renewal Term
to commence at the expiration of the preceding Renewal Term; provided that in
the event any portion of the Premises is subject to subleases at the
commencement of the Renewal Term, the Tenant shall be required to renew the
entire floor for each space subleased. The Tenant shall have no right to extend
the Lease except as provided in this Section 2.3 and Section 2.5. Annual Base
Rent during each Renewal Term shall be payable to the Landlord by the Tenant as
described in Section 3.1. The amount of Annual Base Rent for each Renewal Term,
shall equal the annual Fair Market Rental Value of the Premises (or the portion
thereof) determined as of the commencement of each Renewal Term during such
period. If the Landlord and the Tenant cannot agree on such Fair Market Rental
Value by 120 days prior to the commencement of such Renewal Term, such Fair
Market Rental Value shall be determined by the Appraisal Procedure. Any option
to extend shall be subject to the following additional terms and conditions:

(a)         Tenant shall deliver to Landlord, no less than eighteen (18) months
prior to the expiration of the Current Term, written notice (each, an “Extension
Notice”) of its intention to exercise the applicable Renewal Term. If Tenant
decides to renew the Current Term as to less than all of the Premises then being
leased, then Tenant must indicate in the Extension Notice that Tenant exercises
its renewal option with respect to less than all of the Premises then being
leased

 

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and shall specify in such Extension Notice the particular floors of the Project
as to which Tenant is not exercising its option to renew, which election shall
be within the parameters set forth in subparagraphs (b) and (c) below, but shall
otherwise be determined by Tenant in its sole discretion.

(b)         The portion of the Premises which Tenant elects to exclude from the
Premises during any applicable Renewal Term shall be vacated and surrendered by
Tenant prior to the commencement of the applicable Renewal Term as provided in
Article 20 hereof, subject, however, to the holdover provisions of Article 21
hereof.

(c)         If Tenant shall exercise the option to extend the Term for a
subsequent Renewal Term with respect to less than all of the Premises then being
leased, Tenant’s right to exercise the option to extend the Term or Renewal
Term, as the case may be, for any succeeding Renewal Term shall not apply to any
portion of the Premises surrendered during any previous Renewal Term.

2.4         Lease Provisions Applicable. In the event that Tenant provides the
Extension Notice, Landlord and Tenant agree to negotiate in good faith a new
lease which will include, without limitation the following provisions:

(a)         Tenant shall no longer be obligated to perform repairs or
maintenance on any portion of the Project and such obligation shall, thereafter,
become the obligation of the Landlord.

(b)         Tenant shall no longer be obligated to pay Operating Expenses
directly to third parties, and Landlord shall, instead, pay such costs directly
to the parties entitled to payment thereof, and Tenant shall reimburse Landlord
for Tenant’s pro rata share of Operating Expenses on a monthly basis following
receipt of an invoice for the same.

(c)         Tenant shall no longer pay Taxes directly to third parties, and
Landlord shall, instead, pay such Taxes directly to the taxing authorities, and
Tenant shall reimburse Landlord for Tenant’s pro rata share of Taxes on a
monthly basis following receipt of any invoice for the same.

(d)         Tenant’s insurance obligation shall apply only with respect to
Tenant’s Property and liability insurance required hereunder, such that Tenant
shall no longer carry hazard or casualty insurance with respect to the Project
or Premises and, instead, Landlord shall carry such insurance as is required
hereunder, and Tenant shall reimburse Landlord for its pro rata share thereof
upon receipt any invoice therefor.

(e)         Tenant’s indemnity obligations shall be revised such that they only
apply with respect to losses arising on that portion of the Premises to be
leased by Tenant or the actions or omissions of Tenant.

(f)         Repairs following any Casualty or Taking shall be made by Landlord
instead of Tenant.

2.5         Options to Renew Lease of Parking Deck and Purchase Parking Deck.

 

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(a) Landlord hereby grants Tenant an option to renew this Lease with respect to
the Parking Deck, exercisable at any time after the Loan has been paid in full,
provided that no Event of Default has occurred and is continuing. The option
shall be for a single term of ninety-nine (99) years, such renewal term to
commence at the expiration of the Basic Term. The entire rent for such renewal
term for the Parking Deck shall be One Dollar ($1.00), payable upon exercise of
such option. Such option to renew shall be exercisable by Tenant by delivering
written notice of its intention to exercise such option to Landlord during the
Basic Term, and shall be exercisable regardless of whether Tenant has exercised
all or any portion of the option set forth in Section 2.3 hereof. During any
such renewal term with respect to the Parking Deck:

(i)         The terms set forth in this Lease shall continue to be fully
applicable to the Parking Deck, it being the intention of the parties that this
Lease will continue to be a fully triple-net lease under which the Landlord will
bear no cost, expense or risk of loss with respect to the Parking Deck;

(ii)         All costs, expenses and obligations of every kind and nature
whatsoever relating to the Parking Deck and the appurtenances thereto payable by
Tenant pursuant to the terms and conditions of this Lease and the use and
occupancy thereof that may arise or become due and payable prior to or with
respect to the renewal term (whether or not the same shall become payable during
the Term or thereafter) shall be paid by Tenant;

(iii)         Tenant assumes the sole responsibility for the condition, use,
operation, maintenance, underletting and management of the Parking Deck during
the entire renewal term and the Landlord shall have no responsibility in respect
thereof and shall have no liability for damage to the Parking Deck or the
property of Tenant or any subtenant of Tenant on any account for any reason
whatsoever, other than by reasons of Landlord’s gross negligence;

(iv)         In the event any Taxes imposed on the Project are not separately
assessed with respect to the Parking Deck, Tenant shall be responsible for
twenty percent (20%) of such Taxes, being the approximate percentage that the
estimated cost of the Parking Deck constitutes of the total estimated cost of
the Project; and

(v)         All mechanical systems and building elements that are common to the
Parking Deck and the office and retail components of the Project shall be
identified as “common elements” on the Base Building Plans and shall be
maintained by Landlord. Such maintenance shall be performed in a manner so as to
minimize, to the extent reasonably practicable, any interruption and
interference in the operation of the Parking Deck. Landlord shall use its best
efforts to allocate the cost of such maintenance on an equitable basis and shall
submit invoices to Tenant for Tenant’s proposed share of such maintenance costs,
which Tenant shall pay, as Supplemental Rent, within thirty (30) days of
receipt. In the event Tenant disagrees with Landlord’s allocation of any expense
for the maintenance of the common elements as set forth in an invoice from
Landlord, Tenant shall so notify Landlord within thirty (30) days of receipt of
such invoice and the parties shall thereafter appoint a third-party referee
approved by both parties to determine an equitable allocation of the expenses
addressed in such invoice, and such referee’s determination shall be deemed to
be conclusive, and Tenant shall pay such invoice, as adjusted by the referee’s
determination, within ten (10) days of notice of the referee’s determination. In
the event the parties cannot agree on a third-party referee, each party shall

 

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appoint a referee to make an independent determination of an equitable
allocation the expenses in question. If the result of the two independent
determinations is that the higher allocation of Tenant’s share of the expenses
in question is within ten percent (10%) of the lower allocation of Tenant’s
share of such expenses, the parties agree that the Tenant’s share of such
expenses shall be conclusively deemed to be the average of the two independent
determinations. If the two independent determinations are not within ten percent
(10%) of each other, the two independent referees shall jointly appoint a third
referee, the determination of which shall be conclusively deemed to be Tenant’s
share of the expenses in question.

(b)         Subject only to the provisions of Sections 2.5(c) and 2.6 below,
Landlord hereby grants Tenant the option to purchase the Parking Deck for One
Dollar ($1.00), such option to be exercisable at any time (i) during the Basic
Term subsequent to the date on which the Loan has been paid in full, provided
that no Event of Default has occurred and is continuing, and (ii) if the renewal
option set forth in Section 2.5(a) above is exercised, at any time during the
renewal term described in such Section. Such option shall be exercised by Tenant
by delivering written notice of its intention to exercise such option to
Landlord during the Basic Term. Within thirty (30) days of the receipt of such
notice, Landlord shall deliver to Tenant a fully executed quitclaim deed
conveying its entire right, title and interest in and to the Parking Deck to
Tenant. The Parking Deck shall be sold “AS IS” in its then present condition,
subject to (a) the state of the title thereto existing as of the closing date
(other than defects in, or exceptions to, title, if any, created by Landlord,
but including liens created by the Loan Documents), (b) any state of facts which
an accurate survey or physical inspection might show, (c) all Applicable Laws,
(d) any violations of Applicable Laws which may exist as of the closing date,
(e) the presence of any Hazardous Materials at or under the Parking Deck or at
or under any property in the vicinity of the Site, or (f) any other conditions
or state of facts that may affect the Parking Deck, including without limitation
those described in clauses (a) through (s) of Section 36.12.

(c)         Landlord shall cooperate fully with Tenant to change the legal form
of ownership of the Premises so as to allow the Parking Deck legally to be
conveyed to Tenant separate from the other portions of the Premises, whether by
condominium conversion or otherwise, provided only that any such change shall be
at no cost or expense to Landlord and shall not adversely affect Landlord in any
way. Tenant shall not exercise the purchase option set forth in Section 2.5(b)
above unless the Parking Deck can legally be conveyed to Tenant separate from
the other portions of the premises.

 

  2.6

    Use of Parking Deck.

(a)         All of the parking spaces required to be made available for the
exclusive use of Tenant and other tenants of the Project pursuant to Section 8.4
of the Parking Deck Lease shall be made available to tenants of the Project by
Tenant (and any successor in interest to Tenant) at all times during the term of
the Parking Deck Lease on the terms set forth in the Parking Deck Lease
regardless of whether Tenant is then leasing all or any portion of the Project.
Subsequent to the expiration of the Parking Deck Lease, Tenant shall make
available at least six hundred (600) parking spaces in the Parking Deck for the
exclusive use of tenants of the Project during normal business hours at standard
rates for so long as Tenant or any successor in interest to Tenant owns or
leases the Parking Deck. In the event Tenant is leasing some but less than all
of the Premises (other than the Parking Deck) at any time, a portion of the
parking rights set forth in

 

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this Section 2.6 shall be allocated to Tenant based on the percentage of the
rentable square feet in the Project then occupied by Tenant. The rights of
Landlord under this Section 2.6 shall be incorporated into appropriate recorded
documents so as to assure the enforceability of Landlord’s rights hereunder
against Tenant, the City, any creditor of Tenant or the City, and any person
claiming any interest in the Parking Deck from or through any of them.

(b)         Tenant agrees to release and relinquish its leasehold interest in
the P-2 Residential Parking Area portion of the Premises upon sixty (60) days
written notification from Landlord that it intends to convey the P-2 Residential
Parking Area to Progress Place, LLC under the Parking Deck Lease.

2.7         No Right to Terminate; No Abatement of Rent. Notwithstanding
anything to the contrary contained in this Lease, no Casualty or Taking prior to
Substantial Completion shall give rise to any right of Tenant to terminate this
Lease or to reduce or abate any Rent or affect any obligation of Tenant under
this Lease, and Tenant waives to the fullest extent permitted by Applicable Law
any right under Applicable Law that is inconsistent with the foregoing.

ARTICLE 3. — RENT

3.1         Payment of Rent. Commencing one month after the Rent Commencement
Date, Tenant agrees to pay to Landlord, as rent for the Premises, annual base
rent (“Annual Base Rent”) during the Basic Term in an amount equal to the Total
Cost multiplied by the Rent Constant as set forth in a Notice from Landlord to
Tenant delivered not less than seven (7) days prior to the Rent Commencement
Date. The determination of the Total Cost and Annual Base Rent set forth in such
notice shall be binding on Tenant absent manifest error and shall be the amounts
set forth in the Memorandum of Acceptance. The Annual Base Rent during any
Renewal Term shall be determined as specified in Section 2.3. Such Annual Base
Rent for the Basic Term shall be paid monthly beginning one month after the Rent
Commencement Date and on or before the first Business Day of each calendar month
thereafter for a period of 180 months. The monthly payment shall be determined
by dividing the Annual Base Rent by twelve (12). The Annual Base Rent shall
terminate at the end of 180 payments and thereafter there shall be no payments
of Annual Base Rent for the balance of the Basic Term. Monthly installments of
Annual Base Rent payable during Renewal Term(s) shall be paid monthly in advance
on the first Business Day of each calendar month during the applicable Renewal
Term(s).

If Substantial Completion of the Base Building Improvements occurs on or after
the Outside Completion Date, the parties acknowledge that the Contractor or
insurers may be obligated to make certain liquidated damage payments, which
shall be deposited into the Deficiency Account under the Loan Agreement and
applied towards costs of the Project in accordance thereunder. Any such payments
received by Landlord or Lender shall not reduce or otherwise affect, Tenant’s
obligation to make payments of Annual Base Rent or any other amounts payable by
Tenant hereunder.

Tenant shall pay to Landlord (or as otherwise directed in writing by Landlord as
to place and manner of payment) the Annual Base Rent and the Facility Payment in
the amounts, at the times and in the manner set forth below:

 

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(a)         Tenant shall pay the Annual Base Rent to Landlord in the manner and
at the times set forth at the outset of this Section 3.1.

(b)         Anything contained herein to the contrary notwithstanding, Tenant
shall pay the Facility Payment as provided in Section 3.3(b) and the Annual Base
Rent installments in any event no later than the first calendar day of each
month.

(c)         All payments of the Facility Payment and Annual Base Rent shall be
paid without notice, deduction, set-off or counterclaim.

(d)         Landlord shall have the right, at its option, to direct Tenant in
writing to pay any amounts due hereunder directly to the trustee under the Loan
Documents or to the Lender and upon such a request in writing from Landlord,
Tenant hereby agrees to pay any amounts thereafter coming due hereunder to such
trustee or mortgagee designated by Landlord.

3.2         Free Rent Period. The “Free Rent Period” shall begin on the Lease
Commencement Date and end on the first to occur of (a) the day that is two
hundred seventy (270) days after the Lease Commencement Date, or (b) the Outside
Completion Date. If the Lease Commencement Date occurs on or after the Outside
Completion Date, there shall be no Free Rent Period. The Free Rent Period (if
any) applies only to monthly installments of Annual Base Rent, and not to any
other Rent or amounts payable by Tenant hereunder.

3.3          Rent Commencement Date.

(a)         Payment of Annual Base Rent with respect to the Premises shall begin
one month after the Rent Commencement Date. “Rent Commencement Date” means
(i) the first day of the first calendar month after the end of the Free Rent
Period, or (ii) if there is no Free Rent Period, the Lease Commencement Date.

(b)         Payment of the Facility Payment shall be made by Tenant to Landlord
immediately after payment is received by Tenant from the City under the terms of
the Parking Deck Lease, but in any event, not later than the Lease Commencement
Date. Notwithstanding the preceding sentence, if the Lease Commencement Date has
not occurred prior to March 15, 2005, then Tenant shall make on such date a
portion of the Facility Payment equal to 89.9% of the total capitalized project
costs with respect to the Parking Deck, as determined in accordance with GAAP,
and shall pay the remainder of the Facility Payment on the Lease Commencement
Date. In the event that the Facility Payment is received by Tenant from the City
prior to March 15, 2005, and Substantial Completion has not occurred prior to
March 15, 2005, the Tenant shall not be required to remit the Facility Payment
to the Landlord to the extent that the aggregate amount so received exceeds
89.9% of the total Parking Deck project costs (excluding costs related to the
Premises) capitalized by the Landlord in accordance with GAAP as of the date of
the Facility Payment. The Tenant at its sole cost and expense shall use its
commercially reasonable efforts to collect the Facility Payment from the City
pursuant to the terms of the Parking Deck Lease; provided, however, the Tenant
shall not be liable to the Landlord for the failure of the City to make the
Facility Payment, so long as the Tenant makes the Facility Payment as required
herein. Notwithstanding anything else contained herein, provided the Facility
Payment is made by Tenant, this Lease may not be terminated by Landlord for such

 

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default by the City in making the Facility Payment. The total rent for the
Parking Deck shall be equal to the Facility Payment less any payment made by the
Tenant to the City in accordance with Section 4.5 of the Parking Deck Lease. Any
payment made by the Tenant to the City in accordance with Section 4.5 of the
Parking Deck Lease shall be treated as prepaid rent for the Premises, without
any reduction in Base Rent, Supplemental Rent or any other amount payable under
this Lease. Other than the obligations of Tenant set forth in this
Section 3.3(b) and the Annual Base Rent, Supplemental Rent and other amounts
payable by Tenant hereunder with respect to the Premises, there shall be no
additional Rent due from Tenant for the leasing of the Parking Deck pursuant to
this Lease.

3.4         Supplemental Rent. Tenant shall pay to Landlord, or the Lender
within 10 days of Landlord’s written request or as otherwise required by
Landlord within the time periods set forth in the Loan Documents (and following
demand therefore to the extent notice or demand to Tenant is required by the
applicable provisions of the Loan Documents), any and all Supplemental Rent as
the same shall become due and payable. In the event of Tenant’s failure to pay
when due and payable any Supplemental Rent, Landlord shall have all rights,
powers and remedies provided for herein in the case of nonpayment of Rent.

3.5         Taxes; Rent Taxes. In addition to all other amounts payable by
Tenant hereunder, Tenant shall pay to the appropriate taxing authority(ies),
prior to delinquency, and subject to Tenant’s right to contest taxes or
assessments, as set forth in Section 4.2 hereof, all actual taxes, assessments,
levies, fees, charges, water and sewer charges, special assessments or
assessments of special purpose taxing districts, and all other governmental
charges general and special, ordinary and extraordinary, foreseen or unforeseen,
whether the same became due and payable before, on or after the Lease
Commencement Date (collectively “Taxes”) which are at a time prior to or during
the Term levied or assessed on, imposed upon or attributable to (i) the Premises
or any portion thereof or interest therein, (ii) any Annual Base Rent, Facility
Payment, Supplemental Rent or other sum payable hereunder, (iii) this Lease, the
leasehold estate created hereby, (iv) the acquisition, occupancy, leasing,
subleasing, licensing, use, possession or operation of the Premises or any
portion thereof or interest therein (including without limitation, any taxes on
revenues, rents, income, awards, proceeds, capital gains, profits, excess
profits, gross receipts, sales, use, excise and other taxes, duties or imports
whether similar or not in nature, assessed, levied or imposed against Tenant any
subtenant or any licensee, Landlord or the Leased Premises by any governmental
authority) or (v) the operation of the Premises, including but not limited to
Taxes against the Premises or assessments levied or assessed against the
Premises, and all personal property taxes, charges, rates, duties and license
fees (collectively, “Personal Property Taxes”) assessed against or levied upon
Tenant’s Property but excluding any net income, franchise, capital stock,
succession, transfer, gift, estate or inheritance taxes imposed on Landlord by
the State of North Carolina or the United States or by their respective
agencies, branches or departments, and, during any Renewal Term if Tenant leases
less than the entire Premises, excluding any taxes assessed directly against or
by reason of any users of the Premises and/or any portion thereof (other than
Tenant or anyone holding any portion of the Premises through or under Tenant)
and further excluding taxes assessed against Landlord’s personal property (if
any) at the Project other than such personal property used in the operation or
maintenance of the Project. Any Tax or Personal Property Tax due prior to the
Lease Commencement Date shall be paid from Total Project Costs. In the event
that such Taxes are imposed or assessed against Landlord or the Premises,
Landlord shall furnish Tenant with all

 

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applicable tax bills, public charges and other assessments or impositions and
Tenant shall forthwith pay the same either directly to the taxing authority or,
at Landlord’s option, to Landlord. In addition, notwithstanding any other
provision of this Lease, in the event there is imposed at any time a tax, levy
or fee upon and/or measured or based, in whole or in part, by the rental payable
by Tenant under this Lease, whether by way of a sales or use tax or otherwise,
Tenant shall be responsible for the payment of such tax (and such tax shall be
included within the definition of “Taxes” hereunder) and shall pay the same on
or prior to the due date thereof; provided, however, that the foregoing shall
not include any inheritance, estate, succession, transfer, gift or income tax
imposed on or payable by Landlord. Tenant shall prepare and file all tax reports
required by governmental authorities which relate to the Taxes, and Tenant shall
deliver to Landlord copies of specified receipts for payment of all Taxes within
ten (10) days after payment thereof.

3.6         Definition of Rent. The term “Rent” includes any and all payments of
the Facility Payment, Annual Base Rent, Operating Expenses, Taxes, Supplemental
Rent and any fees, charges, costs, expenses, insurance obligations, late
charges, and all other payments, disbursements or reimbursements which are
payable by or are the responsibility of Tenant under this Lease (collectively
“Rent”). All payments owed by Tenant to Landlord under the Lease shall be paid,
by such payment method (including wire transfer) as may be directed by Landlord
to Tenant from time, to Landlord or to such party as Landlord otherwise directs
in accordance with Section 3.1(d) in immediately available lawful money of the
United States of America at the address specified for Landlord in the
definitions section of this Lease as may be changed from time to time pursuant
to Article 31. All Rent shall be paid without deduction, setoff or counterclaim.

3.7         Late Charge. Tenant acknowledges that the late payment by Tenant of
Rent under this Lease will cause the Landlord to incur damages, including
administrative costs, loss of use of the overdue funds and other costs, the
exact amount of which would be impractical and extremely difficult to fix.
Tenant agrees that if the Landlord does not receive a Rent payment by the date
such payment is due, then the Tenant shall pay, in addition to any other sums
due, an amount equal to (i) the late payment fee, default interest and other
amounts, fees, charges and liquidated damages due under the Loan Documents, or
(ii) after the Loan has been paid in full, interest at the Contract Rate, from
the date payment of such amount was due until Landlord receives the overdue
payment. Acceptance of the late charges by Landlord shall not cure or waive a
default, nor prevent Landlord from exercising, before or after such acceptance,
any of the rights and remedies for a default provided by this Lease or at law.
Payment of the late charge is not an alternative means of performance of
Tenant’s obligation at the times specified in this Lease. Tenant will be liable
for the late charge regardless of whether Tenant’s failure to pay when due
constitutes a default under the Lease.

3.8         Treatment for Tax and Accounting Purposes.

(a)         Parking Deck. Notwithstanding anything to the contrary in this
Lease, Landlord and Tenant intend that under the terms of this Lease and the
Parking Deck Lease, the City shall be the owner of the Parking Deck for federal,
state and local tax purposes and for financial accounting purposes. Accordingly,
Landlord and Tenant agree that: (i) they shall report the transaction on their
respective federal, state and local tax returns and internal books and records

 

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and audited financial statements in a manner consistent with the treatment of
the City as owner of the Parking Deck, (ii) they shall treat the City as the
owner of the Parking Deck for all federal, state and local tax purposes and
financial accounting purposes, (iii) they shall not take any position on any tax
return, financial record or statement or any other document, or in connection
with any audit, contest or other administrative or legal proceeding, the is
inconsistent with such reporting or treatment, (iv) the Facility Payment shall
be treated as reimbursement to Landlord for the cost of constructing the Parking
Deck for the benefit of the City and shall not be treated as rent for tax or
accounting purposes, and (v) Landlord shall not claim any depreciation or other
deductions with respect to ownership of the Parking Deck.

(b)         Premises Other Than Parking Deck. Except as set forth in
Section 3.8(a) above, it is the intent of Landlord and Tenant and the parties
agree that this Lease is a true lease and that this Lease does not represent a
financing agreement with respect to the Premises.

3.9         True Lease. It is the intent of Landlord and Tenant and the parties
agreed that the Lease is a true lease and that the Lease does not represent a
financing agreement. Each party shall reflect the transaction represented hereby
in all applicable books, records and reports (including income tax filings) in a
manner consistent with the “true lease” treatment rather than “financing”
treatment by treating the Landlord as the owner of the Premises for all federal,
state and local tax purposes and financial accounting purposes.

3.10        Allocated Rent. For the purpose of allocating the payments of Annual
Base Rent for federal income tax related purposes pursuant to Section 467 of the
Internal Revenue Code of 1986 and the rules and regulations thereunder, the
Landlord and the Tenant hereby agree that the Annual Base Rent payments shall be
allocated as follows (such amount for any portion of the Term is hereinafter
referred to as the “Allocated Rent”): (i) The average monthly rent under the
Lease shall be determined by aggregating the Annual Base Rent due under the
Lease and dividing the total by three hundred seventy-two (372), the number of
months in the Basic Term. Pursuant to Section 467 of the Code and the rules and
regulations thereunder, 85% of such average shall be allocated to each month
during the first one-half (1/2) of the Basic Term and 115% of such average shall
be allocated to each month during the second one-half (1/2) of the Basic Term.
The rent so allocated to each month during the Basic Term shall be uniformly
apportioned to each day during such month based on the actual number of days in
such month. The Tenant shall be treated as becoming liable for rent allocated to
any period on account of the use of the Premises during such period. Full effect
shall be given to such allocations for federal income tax and all other
purposes. Interest taken into account in accordance with Section 467 of the
Internal Revenue Code of 1986 and regulations thereunder shall be computed at a
rate equal to 110% of the applicable federal rate in effect at the Lease
Commencement Date, compounded monthly.

3.11        Tenant’s Waivers. Tenant waives all rights which may now or
hereafter be conferred by law (i) to quit, terminate or surrender this Lease or
the Premises, and (ii) to any setoff, recoupment, abatement, suspension,
deferment, diminution, deduction, reduction or defense of or to Annual Base
Rent, the Facility Payment, Supplemental Rent or any other sums payable under
this Lease, except as otherwise expressly provided herein.

 

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ARTICLE 4. — OPERATING EXPENSES

4.1        Tenant’s Responsibility for Operating Expenses. Commencing on the
Lease Commencement Date, Tenant shall pay all costs, expenses and disbursements
of owning, maintaining, repairing, replacing or operating the Premises (the
“Operating Expenses”), including, but not limited to, utilities, insurance,
maintenance, repairs and replacements required by Tenant to be performed
hereunder or otherwise necessary to the operation and preservation of the
Project. Anything contained in the foregoing sentence to the contrary
notwithstanding, “Operating Expenses” shall not include the following:
(i) Taxes; (ii) Personal Property Taxes; (iii) depreciation on the Project or
any part thereof and on any equipment or other property contained therein or
thereon; (iv) Excluded Borrower Costs and Expenses and (v) amounts reimbursed to
Landlord by third parties such as insurers. Tenant shall pay all Operating
Expenses directly to the party entitled to payment of the same prior to the same
becoming delinquent;

4.2        Tax Protests. Subject to Section 3.5 of this Lease, Tenant shall pay
all Taxes and Personal Property Taxes when due and payable and prior to the time
any penalty or interest may be charged in respect of the nonpayment thereof, and
shall obtain receipted tax bills for such payments. Tenant, may, however,
petition for reduction of the assessed valuation of the Project and/or the
Project or Site, claim a refund of Taxes or Personal Property Taxes, otherwise
challenge the validity, amount or applicability of any Tax or Personal Property
Tax, assessment or other similar governmental charge (“Tax Protest”), in
accordance with this Section 4.2. After prior written notice to Landlord and
Lender, and provided no Event of Default has occurred and is continuing, Tenant
may conduct a Tax Protest so long as the contest is in good faith, at Tenant’s
sole cost and expense, and by appropriate proceedings which, as a condition to
Tenant’s right to contest under this Section 4.2, shall operate during the
pendency thereof to prevent (A) the collection, of or other realization upon the
Taxes so contested, (B) the sale, forfeiture, or loss of any of the Premises,
any interest therein or any Rent to satisfy the same or to pay any damages
fines, or penalties related to the Taxes so contested, (C) any interference with
the use or occupancy of the Premises, (D) any interference with the payment of
any Rent, or any other sum payable hereunder, and (E) the cancellation of any
fire or other insurance policy. If at the time of commencement of or at any time
during any such contest either (i) Tenant’s Rating shall not be Investment Grade
or (ii) there shall have occurred and be continuing an Event of Default, Tenant
shall provide to Landlord and Lender a bond of a surety acceptable to Landlord
and Lender in an amount satisfactory to Landlord and Lender. While any such
proceedings are pending, neither Landlord nor Lender shall have the right to
pay, remove or cause to be discharged the Tax, Personal Property Tax or Lien
thereby being contested unless an Event of Default has occurred and is
continuing. Tenant agrees that each such contest shall be promptly and
diligently prosecuted to a final conclusion, except that Tenant shall, so long
as the conditions of this Section 4.2 are at all times complied with, have the
right to attempt to settle or compromise such contest through negotiations.
Tenant shall pay indemnify, defend and save Landlord and Lender harmless against
any and all damages, liabilities, costs, expenses, losses, judgments, decrees
and costs (including all reasonable attorneys’ fees and expenses) in connection
with or arising from any such contest and shall, promptly after the final
determination of such contest, fully pay and discharge the amounts which shall
be levied, assessed, charged or imposed or be determined to be payable therein
or in connection therewith, together with all penalties, fines, interest, costs
and expenses thereof or in connection therewith, and perform all acts the
performance of which shall be ordered or decreed as a result thereof. No such
contest

 

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shall subject Landlord or Lender to the risk of any material civil liabilitiy or
any criminal liability, penalty or sanction. The foregoing indemnity is in
addition to, and not in substitution or limitation of the other indemnities
provided in this Lease, and shall survive the expiration or termination of this
Lease. Landlord and Tenant shall each cooperate in such filings as reasonably
requested by Tenant. Tenant shall pay all costs incurred in connection with such
filings. If Tenant is successful in reducing taxes and/or assessed value through
such Tax Protest, and if during a Renewal Term Tenant’s Premises at the
conclusion of such Tax Protest are less than one hundred percent (100%) of the
Premises, then Landlord shall reimburse Tenant for its reasonable costs to the
extent same do not exceed the tax refund or reduction achieved. Any Tax Protest
initiated by Landlord or Tenant shall be conducted in accordance with all
applicable governmental requirements and in such a manner as to prevent any
Liens from attaching to the Premises, the Project or the Site. Any refund of any
Tax or Personal Property Tax received by Landlord pursuant to any Tax Protest
(after any reimbursement of Landlord’s costs incurred in connection therewith)
shall be paid over to Tenant unless Tenant is in default hereunder.

4.3        Litigation; Zoning; Joint Assessment. Tenant shall provide written
notice to Landlord and the Lender within three Business Days following receipt
of any notice of any litigation or governmental proceedings pending or
threatened against Tenant or the Project of which Tenant has actual knowledge,
which in Tenant’s determination, could reasonably be expected to materially
adversely affect the Project. Tenant shall not initiate any zoning
reclassification for the Project, or any portion thereof, or seek any variance
under any existing zoning ordinances or use or permit the use of any portion of
the Project in any manner that could result in such use becoming a
non-conforming use under any zoning ordinance or any other Applicable Law.
Tenant shall not initiate any proceeding to cause the Project to be jointly
assessed with any other property or with any personal property of Tenant, or
take any other action or initiate any proceeding which might cause the personal
property of the Tenant to be taxed in a manner whereby such taxes or levies
could be assessed against the Project.

ARTICLE 5. — USE

5.1        Permitted Use. Tenant or its assignees or sublessees may use the
Premises, in accordance with Section 5.2 hereof, as an office building, with a
maximum of three floors (or the equivalent in rentable square feet) of retail
space and related parking, and for no other use or purpose whatsoever (the
“Use”), and shall maintain the Premises in first-class condition.

5.2        Restriction on Use. Tenant shall not do or permit to be done in or
about the Premises nor bring, keep or permit to be brought or kept therein,
anything which is prohibited by any standard form fire insurance policy or which
will in any way increase the existing rate of or otherwise adversely affect, any
fire or other insurance upon the Premises or any portion thereof. Tenant, at its
sole cost and expense, shall comply with all Applicable Laws affecting the
Premises, and with the requirements of any board of fire underwriters or other
similar body now or hereafter instituted, and shall also comply with any order
of the fire marshal or similar governmental body or certificate of occupancy
issued pursuant to any Applicable Laws which affect Premises or the use or
occupancy thereof, including, but not limited to, any requirements of structural
changes or capital expenditures, whether or not related to or affected by
Tenant’s acts, occupancy or use of the Premises, and whether foreseeable or
unforeseeable.

 

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5.3        Restaurant Sublease Guidelines. Tenant agrees that any Sublease
entered into by Tenant for the purposes of permitting a restaurant to operate
within the Premises shall specifically include requirements that the subtenant
(i) carry appropriate levels of insurance, including host and liquor liability
(if applicable) and naming Landlord and Property Manager as additional insureds;
(ii) provide for regular janitorial service, pest control, and daily trash
removal; (iii) require regular HVAC and grease trap maintenance; and
(iv) require fire extinguishers to be maintained in the kitchen areas and
regularly serviced in accordance with Applicable Laws.

ARTICLE 6. — CONSTRUCTION; ACCEPTANCE AS IS

6.1        Construction of Improvements.

(a)        Landlord, at its sole cost and expense, will pay for the construction
on the Site of the Base Building Improvements, as indicated on the Base Building
Plans listed on Exhibit “B” attached hereto, and will provide the Tenant with
the Interior Improvements Allowance (subject to any limitations in the Loan
Agreement on Loan proceeds that can be drawn by Landlord after the Lease
Commencement Date) to be applied by Tenant toward the cost of the Interior
Improvements.

(b)        Landlord will not interfere with access to and availability of all
areas of the Project by Tenant and its subtenants, employees, contractors,
agents, licensees and invitees, twenty-four (24) hours per day, seven (7) days
per week, every day of the year, except as otherwise permitted by this Lease.

(c)        During the construction of the Improvements, the Landlord, by and
through its agent the Property Manager, will approve each Draw Request as
defined in and in the form provided in Exhibit C to the Loan Agreement. The
Tenant shall also execute in connection with each Draw a Certificate in the form
of Exhibit “G”.

6.2        Waivers. Without in any way waiving its rights under the Development
Agreement and for purposes of this Lease only, Tenant shall be unconditionally
required to accept the Premises on the Lease Commencement Date. On the Lease
Commencement Date, the Premises shall be demised and let by Landlord and shall
be accepted by Tenant “AS IS” in its then present condition, subject to (a) the
rights of any parties in possession thereof (other than rights, if any, granted
by Landlord), (b) the state of the title thereto existing as of the Lease
Commencement Date (other than defects in, or exceptions to, title, if any,
created by Landlord, but including Liens created by the Loan Documents and any
other Permitted Liens), (c) any state of facts which an accurate survey or
physical inspection might show, (d) all Applicable Laws, (e) any violations of
Applicable Laws which may exist as of the Lease Commencement Date, (f) the
presence of any Hazardous Materials at or under the Premises or at or under any
property in the vicinity of the Site, or (g) any other conditions or state of
facts that may affect the Project, including without limitation those described
in clauses (a) through (s) of Section 36.12. NONE OF LANDLORD, LENDER, OR ANY
AFFILIATE OR REPRESENTATIVE THEREOF HAS MADE OR SHALL BE DEEMED TO HAVE MADE ANY
REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE DEEMED TO HAVE ANY
LIABILITY WHATSOEVER AS TO THE PREMISES, INCLUDING BUT NOT LIMITED

 

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TO, ANY WARRANTY OR REPRESENTATION, EXPRESS OF IMPLIED, AS TO THE VALUE,
HABITABILITY, COMPLIANCE WITH ANY PLANS AND SPECIFICATIONS, CONDITION, DESIGN,
OPERATION, LOCATION, USE, DURABILITY, MERCHANTABILITY, CONDITION OF TITLE, OR
FITNESS FOR USE OF THE PREMISES (OR ANY PART THEREOF) FOR ANY PARTICULAR
PURPOSE, OR AS TO THE STATE OF LANDLORD’S TITLE TO THE PREMISES OR ANY OTHER
REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO THE
PREMISES (OR ANY PART THEREOF) AND NONE OF LANDLORD, LENDER, ANY AFFILIATE
THEREOF OR ANY DESIGNEE THEREOF SHALL BE LIABLE FOR ANY LATENT, HIDDEN, OR
PATENT DEFECT THEREIN OR FOR THE FAILURE OF THE .PROJECT TO BE CONSTRUCTED IN
ACCORDANCE WITH ANY PLANS AND SPECIFICATIONS THEREFOR, FOR THE COMPLIANCE OF THE
PLANS AND SPECIFICATIONS FOR THE PROJECT WITH APPLICABLE LAWS OR FOR THE FAILURE
OF THE PROJECT, OR ANY PART THEREOF, TO OTHERWISE COMPLY WITH ANY APPLICABLE
LAWS, OR FOR ANY ACTUAL, EXCEPTIONAL OR CONSEQUENTIAL DAMAGES ARISING THEREFROM
(INCLUDING STRICT LIABILITY IN TORT), IT BEING AGREED THAT ALL RISKS INCIDENT TO
ALL OF THESE MATTERS ARE TO BE BORNE SOLELY BY TENANT. It is agreed that,
pursuant to the terms of the Project Management Agreement, Tenant or an
Affiliate of Tenant has approved the design and will oversee and be responsible
for the construction of the Project, will inspect the Project to its complete
satisfaction, will rely solely on the results of its own inspections and accepts
all risks incident to the matters discussed in the preceding sentence. The
provisions of this Section 6.2 have been negotiated, and the foregoing
provisions are intended to be a complete exclusion and negation of any
representations or warranties by Landlord, any Affiliate thereof or the Lender
or any Affiliate thereof, express or implied, with respect to the Premises, the
condition thereof and title thereto, that may arise pursuant to any law now or
hereafter in effect, or otherwise and specifically negating any warranties under
the Uniform Commercial Code.

6.3        Tenant’s Right to Enforce Warranties.

(a)        As of the Lease Commencement Date, provided that no Event of Default
shall have occurred and be continuing, and subject to Section 6.3(b) below,
Landlord hereby assigns and sets over (without recourse) to, and Tenant hereby
accepts the assignment and assumes the obligations thereunder from and after the
Lease Commencement Date of all of Landlord’s right, title and interest, and
estate in, to and under the Development Agreement and any and all warranties
(other than warranties of title to the Premises), guaranties and other claims
against dealers, manufacturers, vendors, suppliers, contractors and
subcontractors relating to the construction, use and maintenance of the Premises
or any portion thereof now existing or hereafter acquired; provided, however,
that Landlord shall have no obligations under, or liabilities with respect to,
any such warranties, guaranties and claims or, after the effective date of such
assignment, the Development Agreement. Landlord represents that, except as
otherwise provided in the Loan Documents, it has not and shall not make any
further assignments of the warranties, guarantees, rights, claims and Permits
that have been assigned to Tenant pursuant to this Section 6.3. To the extent
the Development Agreement or any such warranties, guaranties or claims are not
assignable, Landlord agrees reasonably to cooperate with Tenant at Tenant’s
request and solely at Tenant’s expense in pursuing a claim under such items for
Tenant’s benefit.

 

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(b)        Unless an Event of Default shall have occurred and be continuing,
Landlord authorizes Tenant (directly or through agents) at Tenant’s expense to
assert during the Term, all of Landlord’s rights (if any) under the Development
Agreement or any applicable warranty, guaranty and any other claim that Tenant
or Landlord may have against any dealer, vendor, supplier, manufacturer,
contractor or subcontractor. If an Event of Default shall have occurred and be
continuing, Landlord shall have the right but not the obligation to pursue any
or all of such rights at Tenant’s expense, in which case, absent Landlord’s
gross negligence or willful misconduct, Landlord shall have no liability to
Tenant regardless of the outcome thereof. Any amount recovered by Landlord
during an Event of Default shall be applied (after deducting expenses incurred
by Landlord in connection with such recovery) to Tenant’s obligations hereunder.
Tenant shall indemnify and hold Landlord harmless from any claims, expenses,
liabilities, costs, loses or damages arising out of or relating to Tenant’s
enforcement of any such warranty, guaranty or indemnity or, after the effective
date of such assignment, the Development Agreement.

(c)        Unless an Event of Default shall have occurred and be continuing,
Landlord agrees, at Tenant’s expense, to cooperate with Tenant and take all
other action necessary as specifically and reasonably requested by Tenant to
enable Tenant to enforce all of Tenant’s rights (if any) under this Section 6.3,
such rights of enforcement to be exclusive to Tenant, and Landlord will not,
during the Term (except during the continuance of an Event of Default), amend,
modify or waive, or take any action under, any applicable warranty, guaranty or
any other claim, that Tenant may have under this Section 6.3 without Tenant’s
prior written consent, which shall not be unreasonably withheld. Tenant agrees
at its expense to diligently assert all of its rights under such warranties,
guaranties and any other claims that the Tenant may have against such vendor,
manufacturer, supplier, contractor or subcontractor with respect to the Project
or any portion thereof.

ARTICLE 7. — ALTERATIONS AND ADDITIONS

7.1       Tenant’s Rights to Make Alterations. Tenant, at its sole cost and
expense, upon fifteen (15) days’ notice to Landlord, shall have the right to
make Alterations, provided that Tenant shall obtain Landlord’s prior written
consent to same, unless consent is expressly waived below and, to the extent
that any secured party’s consent is required under the Loan Documents, Tenant
shall also obtain the prior written consent of same (hereafter “Lender’s
Consent”). Except as provided in Section 7.3 below, Tenant shall not have any
obligation to remove any such Alterations. Notwithstanding anything to the
contrary set forth herein, Tenant shall not be required to obtain Landlord’s or
Lender’s consent with respect to any Alterations performed within the Premises
by Tenant provided that such Alterations: (a) are not reasonably anticipated to
materially increase the rate of fire or other insurance on the Project or
subject such insurance to being voided or suspended; (b) are not in violation of
Applicable Laws; (c) do not affect or involve the Building Structure or Building
Systems of the Project (which adverse effect shall not be used as a basis for
Landlord to withhold consent if Tenant agrees to pay any additional cost of
upgrading or modifying the Project to mitigate such adverse effect) or entail
any penetration of the roof; (d) do not materially reduce the overall quality of
the Interior Improvements; (e) are not Alterations to the exterior of the
Project, other than alterations to or installations on the roof, which is
addressed in Article 34 hereof, and the construction of internal staircases
between two adjoining floors; (f) do not materially reduce the square footage of
the Project; and (g) do not

 

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materially reduce the number of parking spaces in the Parking Deck; provided
that the reduction in parking spaces upon the release of the P-2 Residential
Parking Area of the Parking Deck pursuant to Section 2.6(b) hereof and Article
XVI of the Parking Deck Lease shall not be deemed to be a material reduction in
the number of parking spaces for purposes of this clause (g). Upon completion of
any Alterations made by Tenant to the Premises (including any such Alterations
involving the moving, removal or construction of walls), Tenant shall provide
Landlord as built plans or drawings with respect to such material Alterations,
irrespective of whether Landlord’s consent to such Alterations was required
hereunder. Any consent required from Landlord pursuant to this Section 7.1 shall
not be unreasonably withheld, and shall further be deemed given if Landlord
fails to respond in writing (with specific reasons for any withholding of
consent) to a written request for such consent within fifteen (15) Business Days
after Landlord’s receipt of such request together with Tenant’s plans with
respect to such Alterations. All such Alterations shall be made in conformity
with the requirements of Section 7.2 below and, if applicable, removed in
accordance with the requirements of Section 7.3 below. Once the Alterations have
been completed, such Alterations shall thereafter also be included in the
designation of “Interior Improvements” or “Base Building Improvements” under the
applicable provisions of this Lease.

7.2        Installation of Alterations. Any Alterations installed by Tenant
shall be done in strict compliance with all of the following:

(a)        Prior to the beginning of Alterations, unless the Alterations at
issue will cost less than $500,000 (“Minor Alterations”), are non-structural and
do not involve penetration of the roof, Tenant shall furnish to Landlord
(i) certificates of insurance from a company or companies reasonably acceptable
to Landlord, covering Tenant’s contractors, for combined single limit bodily
injury and property damage insurance covering comprehensive general liability
and automobile liability, in an amount not less than Two Million Dollars
($2,000,000.00) per occurrence and endorsed to show Landlord, Lender and any
agents of Landlord reasonably designated by Landlord in writing, as additional
insureds, and for workers’ compensation as required by North Carolina law
(provided, however, nothing in this Section 7.2(a) shall release Tenant of its
other insurance obligations hereunder); and (ii) detailed plans and
specifications for such work to the extent reasonably required, which shall be
subject to Landlord’s review and reasonable approval; and

(b)        All such work shall be done in a first-class, workmanlike manner and,
unless they are Minor Alterations, by a general contractor reasonably
satisfactory to Landlord, and in conformity with a valid building permit and/or
all other permits or licenses when and where required, and any work not
acceptable to any governmental authority or agency having or exercising
jurisdiction over such work, or not done in a first-class, workmanlike manner,
shall be promptly replaced and corrected at Tenant’s expense. Landlord’s
approval or consent and/or Lender’s Consent to any such work shall not impose
any liability upon Landlord or Lender. No work shall proceed until and unless
Landlord has received at least five (5) days’ written notice that such work is
to commence and a reasonable description of the work, and, if Tenant’s Rating
shall not be Investment Grade at the time of commencement of the Alteration or
at any time during the Alteration, together with such bonds as Landlord or
Lender may reasonably require.

 

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7.3        Interior Improvements - Treatment at End of Lease. All Alterations
and any of the Interior Improvements which are permanent in character and
permanently attached to the Building Structure or Building Systems, made either
by Landlord or Tenant, shall be Landlord’s property, and shall be surrendered to
Landlord in good condition, reasonable wear and tear and, with respect to a
termination after the Loan has been paid in full, upon expiration of the Term or
termination of the Lease, without compensation to Tenant; provided however, that
upon expiration of the Term or termination of the Lease (other than a
termination because of Tenant’s default) all of Tenant’s Property may be removed
by Tenant, at its election, prior to the expiration of the Term including,
without limitation any security system installed pursuant to Section 30.2 hereof
and the Communication Equipment. Notwithstanding the above and foregoing, Tenant
expressly reserves the right upon expiration of the Term or termination of the
Lease (other than a termination because of Tenant’s default) to remove all
reusable communications lines and communications equipment, including but not
limited to cabling, roof antennas and dishes, monitoring or security equipment,
conveyor systems and shelving, and mechanical and electrical equipment above
standard improvements installed by Tenant (but in the course of performing such
removals, Tenant shall not leave the Project in a condition which is not
operationally functional) and all public art installed by Tenant or at Tenant’s
cost (but only to the extent such public art may be removed without violating
any Applicable Laws); provided, however, that Tenant shall repair all damage
caused by any removal permitted by this Section 7.3 prior to the expiration of
the Term, and provided further, that any of Tenant’s Property not so removed
shall, at the option of Landlord, if not removed by Tenant within thirty
(30) Business Days after receipt of written notice from Landlord requesting such
removal, automatically and without further consideration become the property of
Landlord upon the later of the expiration or termination of the Lease and the
expiration of such 30-Business Day period. Thereafter, Landlord may retain or
dispose of in any manner (at Tenant’s expense) the Tenant’s Property not so
removed. All costs and expenses incurred by Landlord in removing and disposing
of any such Tenant’s Property shall be promptly reimbursed to Landlord by
Tenant. This obligation of Tenant shall survive the expiration or termination of
this Lease.

The above and foregoing notwithstanding, if Tenant Alterations are of such a
nature that Landlord’s consent and/or Lender’s Consent is required prior to
installation of same, and if, at the time that Landlord’s consent and/or
Lender’s Consent is given, it is conditioned upon Tenant’s agreement to remove
the Alterations consented to at the termination of this Lease, then Tenant shall
remove such Alterations at its expense and repair any damage caused to the
Project by their removal and shall restore floor openings caused by the
installation of such Alterations.

7.4        Lobby Alterations.

(a)        For so long as Tenant shall lease and possess one hundred percent
(100%) of the Premises, Tenant shall have the right to make non-structural,
decorative Alterations to the lobby, provided that (i) if the Alterations are
intended to be permanent in nature and Tenant does not intend to remove such
Alterations at the end of the Current Term of this Lease (repairing any damage
caused thereby and restoring the lobby to a condition equivalent to standard
condition), Tenant shall obtain Landlord’s prior written approval of such
Alterations, which approval shall not be unreasonably delayed, withheld or
conditioned (the provisions of Section 7.1 hereof apply as to the procedure and
time period for Landlord’s review and approval of the same); (ii) at least four
(4) full years shall remain in the Current Term following the completion of such
Alterations;

 

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(iii) such Alterations do not adversely affect the Building Structure or
Building Systems; and (iv) such Alterations do not materially reduce the overall
quality of the finish and improvements in the Building lobby.

(b)        For so long as Tenant shall lease and possess at least fifty percent
(50%) but less than one hundred percent (100%) of the rentable area of the
Premises, Tenant shall have the right to make non-structural, decorative
Alterations to the lobby only with Landlord’s prior written approval of such
Alterations, which approval shall not be unreasonably delayed, withheld or
conditioned (the provisions of Section 7.1 hereof apply as to the procedure and
time period for Landlord’s review and approval of the same), but it shall not be
deemed unreasonable for Landlord to condition its consent upon Tenant’s
agreement to remove such lobby Alterations upon the termination of this Lease
and to restore the lobby to a condition equivalent to standard condition.

ARTICLE 8. — COMPLIANCE WITH APPLICABLE LAWS (INCLUDING

ENVIRONMENTAL LAWS)

8.1        Compliance. Tenant, at Tenant’s sole cost and expense, shall comply,
and shall cause its subtenants and other users of the Project to comply, in all
material respects at all times with all Applicable Laws, including Environmental
Laws. Such required compliance shall include Tenant’s making at its sole cost
and expense any structural changes and other capital improvements and
expenditures required by any Applicable Law including those that require
unforeseen or extraordinary changes or additions to the Premises. Landlord shall
have the right (but not the obligation) to confirm that any such structural
change or other capital improvement is required by Applicable Law, before the
commencement of the construction thereof. Such compliance includes, without
limitation, Tenant’s obligation, at its sole cost and expense, to take Remedial
Action when required by Applicable Laws (in accordance with Applicable Laws, and
this Lease) whether such requirement is now or hereafter existing, currently
known or unknown to Tenant and/or Landlord, as and when such requirements are
known to Tenant. In the event that Tenant is required or elects to enter into
any plan relating to a Remedial Action in connection with the Project with
respect to any Environmental Laws, Tenant shall on a quarterly basis (or more
frequently if reasonably requested by Landlord) apprise Landlord and the Lender
in writing of the status of such remediation plan and provide copies of all
correspondence, plans, proposals, contracts and other documents relating to such
plan or proposed plan. After prior written notice to Landlord and Lender, Tenant
may in good faith contest the applicability or alleged liability under any
Environmental Law to the Project, provided (i) compliance with such Law will be
satisfied as of the Expiration Date or earlier termination of the Lease, and if
not completed by the Expiration Date, Tenant will continue to remain liable to
comply with such Law; (ii) such contest shall be by appropriate legal
proceedings conducted in good faith and with due diligence, (iii) such contest
will operate to suspend the enforcement of such Law against the Landlord or the
Project; (iv) such contest will not result in the possibility of the Project or
any Rent being sold, attached, forfeited or otherwise lost if such contest is
adversely decided; (v) such contest will not adversely affect the Lender’s Lien
on any Property, or Tenant’s right to the Project, (vi) such contest will not
materially and adversely interfere with the possession, use or occupancy or sale
of the Project, (vii) such contest will not subject Landlord or the Lender to
the risk of any civil, criminal liability, penalty or sanction, (viii) Tenant
shall not permit the Project to become subject to a Lien created by such contest
that is prior to the Lien securing the Loan,

 

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(ix) no Event of Default is existing and (x) if Tenant’s Rating is not
Investment Grade, at the time of commencement of or at any time during any such
contest, Tenant shall provide to Landlord and Lender a bond of a surety
acceptable to Landlord and Lender in an amount satisfactory to Landlord and
Lender. Tenant shall keep Landlord regularly apprised of the status of such
contest. In all events Tenant must pay any cost, fine, penalty, assessment or
other charge due in order to remove any Lien, encumbrance or judgment against
the Project after the contest is either adversely decided or terminated
voluntarily by Tenant. Tenant agrees that each such contest shall be promptly
and diligently prosecuted to a final conclusion or settlement. Tenant shall pay
indemnify, defend (with counsel reasonably satisfactory to Landlord and Lender)
and save Landlord and Lender harmless against any and all damages, liabilities,
costs, expenses, losses, judgments, decrees and costs (including all reasonable
attorneys’ fees and expenses) in connection with or arising from any such
contest and shall, promptly after the final determination of such contest, fully
pay and discharge the amounts which shall be levied, assessed, charged or
imposed or be determined to be payable therein or in connection therewith,
together with all penalties, fines, interest, costs and expenses thereof or in
connection therewith, and perform all acts the performance of which shall be
ordered or decreed as a result thereof. The foregoing indemnity is in addition
to, and not in substitution or limitation of the other indemnities provided in
this Lease, and shall survive the expiration or termination of this Lease.

8.2        Notices. Tenant shall notify Landlord and Lender promptly if
(i) Tenant becomes aware of the presence or Release of any Hazardous Material
at, on, under, within, emanating from, or migrating to, the Project or related
to the Project in any quantity or manner which could reasonably be expected to
violate in any respect any Environmental Law or give rise to any liability or
obligation to take Remedial Action or other obligations under any Environmental
Law, or (ii) Tenant receives any written notice, claim, demand, request for
information, or other communication from a Governmental Authority or a third
party regarding the presence or Release of any Hazardous Material at, on, under,
within, emanating from, or migrating to, the Project or related to the Project
in any quantity or manner which could reasonably be expected to violate in any
respect any Environmental Law or give rise to any liability or obligation to
take Remedial Action or other obligations under any Environmental Law. In
connection with any actions undertaken pursuant to this Lease, Tenant shall at
all times comply with all applicable Environmental Laws and with all other
Applicable Laws and shall use an Approved Environmental Consultant to perform
any Remedial Action.

In the event Tenant is obligated or desires to undertake any Remedial Action on,
under or about the Project, Tenant shall undertake and complete such Remedial
Action to the extent required, under and in full compliance with all Applicable
Laws and shall submit to Landlord and the Lender written confirmation from the
applicable governmental agency that no further Remedial Action is required to be
taken (“Final Governmental Approval”).

ARTICLE 9. — NO LIENS BY TENANT

9.1        No Liens. Tenant at its sole cost and expense shall at all times keep
the Premises free from and discharge any Liens on or with respect to any and all
of the Premises, title thereto or interest therein, to this Lease or the
leasehold interest created hereby, or to the Rent, title thereto or any interest
therein, or the rental payable with respect to the Premises (other than
Permitted Liens). Tenant agrees to indemnify, defend (by counsel reasonably
satisfactory to

 

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Landlord) and hold Landlord harmless from and against any and all loss, costs,
damages, liabilities and expenses, including reasonable attorney’s fees, arising
from or relating to claims for any Liens (except Permitted Liens), including but
not limited to mechanics’, materialmen’s or other Liens in connection with any
Alterations, repairs, or any work performed, materials furnished or obligations
incurred by or for Tenant or anyone holding or occupying any part of the
Premises through or under Tenant. Landlord reserves the right to enter the
Premises for the purpose of posting such notices of non-responsibility as may be
permitted by law, or desired by Landlord.

ARTICLE 10. — REPAIRS TO PROJECT, INCLUDING THE PARKING DECK

10.1        Scope of Tenant’s Obligations. Commencing on the Lease Commencement
Date, Tenant, at its sole cost and expense, shall at all times: (a) maintain and
operate the Premises in a first-class manner, keep the Building Structure,
Building Systems, all Improvements, and all elements of the Premises and Common
Areas in first-class condition and repair, maintain a safe and healthful
environment in the Premises, and operate, maintain, and provide Services and
security to the Premises at a first-class level of service which is consistent
with or superior to services provided in other first-class buildings in Raleigh,
North Carolina; (b) maintain the Premises in accordance with all Applicable
Laws; and (c) make all necessary or appropriate repairs and replacements of the
Premises or any portion or element thereof which may be required to keep the
Premises in the condition required by the preceding clause (a), whether interior
or exterior, structural or nonstructural, ordinary or extraordinary, foreseen or
unforeseen. The Tenant waives any right that it may now have or hereafter
acquire to require the Landlord to (i) maintain, repair, replace, alter, remove,
or rebuild all or any part of the Project or (ii) make repairs (whether or not
at the expense of the Landlord) pursuant to any Applicable Laws, including
Environmental Laws or otherwise. The Tenant shall at its own cost and expense,
comply with, and shall perform all obligations of the Landlord under any
restrictive covenant, deed or easement of record, or the Parking Deck Lease to
the extent relating to the Project, including the Parking Deck. The Tenant, at
its own cost and expense, shall promptly replace or cause to be replaced all
parts of the Premises which may from time to time fail to function properly or
become worn out, lost, stolen, destroyed, seized, confiscated, damaged beyond
repair or permanently rendered unfit for any reason whatsoever, provided,
however, that the Tenant shall not be obligated to replace any part if (a) such
part has become redundant and its replacement is not necessary for the proper
functioning of the Project as a whole, in each case assuming the Premises is
then being operated and maintained in accordance with this Article 10. In
addition, the Tenant may, at its own cost and expense, remove in the ordinary
course of maintenance, service, repair, overhaul or testing, any such parts,
whether or not functioning properly, worn out, lost, stolen, destroyed, seized,
confiscated, damaged beyond repair or permanently rendered unfit for use,
provided that the Tenant will at its own cost and expense, replace such parts as
promptly as practicable. All replacement parts (“Replacement Parts”) shall be
new and free and clear of all liens, and shall be in as good operating condition
as, and shall have a value, useful life and utility at least equal to, the parts
replaced, assuming such replaced parts were in the condition and repair required
to be maintained by the terms hereof. Immediately upon any Replacement Part
becoming incorporated or installed in or attached to any of the Project as above
provided, without further act, (i) legal title to such Replacement Part shall
thereupon vest in Landlord and shall become subject to this Lease, (ii) such
Replacement Part shall be deemed part of the Project for all purposes hereof to
the same extent as the parts

 

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originally incorporated or installed in or attached to the Project, and
(iii) title to the replaced part shall vest in the Tenant free and clear of all
rights of the Landlord, and shall no longer be deemed part of the Project.
Tenant shall have the sole and exclusive obligation to cause all defects in the
Project to be repaired and corrected at its sole cost and expense promptly upon
discovery by or notice to Tenant of the same and Tenant may seek recovery from
the builder or other third parties responsible, however, Landlord shall have no
responsibility for any such defects.

10.2        Landlord’s Right of Entry to Make Repairs. Landlord, or its agents,
shall have the right (but not the obligation) to enter the Premises at all
reasonable times for the purpose of making any alterations, additions,
improvements or repairs which Tenant is required to perform under this Lease and
which Tenant fails to make within a reasonable amount of time following receipt
by Tenant of written notice from Landlord requesting that Tenant fulfill its
repair obligation (except in the case of emergency, when such repairs can be
made immediately upon telephonic notice to Tenant), and charge Tenant for the
actual cost of such repairs, plus interest thereon at the Contract Rate if
Tenant fails to pay the invoice within thirty (30) days after Tenant’s receipt
thereof. Tenant further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action, unless caused by the gross negligence or
willful misconduct of Landlord, its agents, contractors or employees. Except in
the case of emergency, Landlord shall give reasonable notice to Tenant of
Landlord’s intent to enter the Premises and effect repairs and, if any such
entry and/or repairs will or might result in interruption of Services to or use
of Critical Areas, then Tenant shall have the right to reasonably approve the
timing of any such interruption. Furthermore, if any such repairs will or might
result in interruption of electricity or water to any portion of Tenant’s
Premises, then Tenant shall have the absolute right to approve the timing of any
such interruption; provided, however, that in a bona fide emergency situation,
no prior notice shall be required to effect such portion of the repairs as is
reasonably necessary to protect the occupants and to prevent further damage from
occurring. Absent such an emergency, Landlord shall conduct and schedule such
entry and its activities within the Premises in a manner which will attempt in
good faith to minimize to the extent practicable any interruption or
interference with Tenant’s business operations within the Premises. Landlord
shall have no obligation to make repairs, and shall have no liability to Tenant
for interruption in Tenant’s business or otherwise if Landlord shall not make
any repairs. Tenant expressly waives the right to make repairs at the expense of
Landlord pursuant to any law at any time in effect.

10.3        Building Structure and Building Systems. Tenant at all times and at
its sole cost and expense will maintain, repair and when necessary replace the
structural portions of the Project, and including the foundation, floor slabs,
ceilings of Common Areas, roof, curtain wall, exterior glass and mullions,
columns, beams, shafts (including elevator shafts), fire stairwells, escalators,
elevator cabs, plazas, washrooms, mechanical, electrical and telephone closets,
and all Common Areas and public areas (collectively, “Building Structure”) and
the Project mechanical, electrical, life safety, security, plumbing, sprinkler,
and HVAC systems (“Building Systems”) so as to keep the Building Structure and
the Building Systems at all times in first-class condition and repair and Tenant
at all times shall operate the Project as a first-class office building.
Notwithstanding anything in this Lease to the contrary, Landlord shall have the
right (but not the obligation) to make any repair or replacement to the Building
Structure and/or the Building Systems to the extent required because of Tenant’s
failure to make repairs within a reasonable amount of time following receipt by
Tenant of written notice from Landlord requesting that Tenant fulfill its repair
obligation (except in the case of emergency, when such

 

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repairs can be made immediately upon telephonic notice to Tenant), and charge
Tenant for the actual cost of such repairs, plus interest thereon at the
Contract Rate if Tenant fails to pay the invoice within thirty (30) days of
Tenant’s receipt thereof.

ARTICLE 11. — BUILDING SERVICES

11.1        Standard Building Services. During the Term of this Lease, Tenant at
its sole cost and expense shall furnish the Premises with the standard building
services, including, but not limited to, HVAC, electricity, power, gas, oil,
water, telephone, sanitary sewer services and all other utilities (collectively,
the “Services”) which are commonly offered by owners of first-class buildings in
the Raleigh, North Carolina commercial real estate market.

11.2        Additional Services. Tenant agrees to pay on or before the date due
all costs incurred by Tenant from time to time in providing all Services
supplied to or used by the Premises. If Tenant needs services in addition to the
Services and same may not be provided by utilization of the existing Building
Systems (“Additional Services”), Tenant, at Tenant’s sole cost and expense and
conditioned upon the prior written consent of Landlord, which consent shall not
be unreasonably withheld or delayed (the provisions of Section 7.1 hereof apply
as to the procedure and time period for Landlord’s review and approval of the
same), may install such additional equipment it needs to obtain such Additional
Services, and Landlord shall allow Tenant the right to install such equipment in
portions of the Premises that are reasonably necessary for such installation and
use, subject, however, to the terms of Article 7 hereof.

11.3        Tenant’s Right to Elect Service Provider. To the extent more than
one provider of any given utility or Service or Additional Service is available,
and to the extent permitted by Applicable Law, Tenant shall have the absolute
right, from time to time during the Term of this Lease, to select the
provider(s) of utilities, Services and Additional Services to the Premises.
Additionally, provided the technology and physical systems then exist for more
than one utility provider to service the Building, Tenant shall have the right
to select the provider(s) of utilities to Tenant’s Premises during any Renewal
Terms hereof and, so long as Tenant is leasing at least thirty-five (35%) of the
Rentable Area of the Building to approve any contracts for provision of utility
services to the Project that are longer than one (1) year in duration.

ARTICLE 12. — ASSIGNMENT AND SUBLETTING

12.1        Right to Sublease and Assign.

(a)           Right to Assign. So long as no Event of Default has occurred and
is continuing, Tenant may, at Tenant’s sole cost and expense, following written
notice to Landlord and satisfaction of all conditions to and restrictions on
assignment contained herein and in the Loan Documents, including Section 1.8 of
the Mortgage, assign Tenant’s entire interest in this Lease for a period that
does not extend beyond the Lease Term, to any Person. Any assignee shall assume
in writing any obligations of Tenant arising from and after the effective date
of the assignment, provided, however, that no such assignment shall become
effective until (i) a fully executed copy of an assignment and assumption
agreement, in form and substance reasonably acceptable to Landlord, Lender and
Tenant, as assignor (in such capacity, “Assignor”) shall have been delivered to
Landlord and the Lender and (ii) Assignor and such assignee shall have

 

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executed such instruments and other documents (in the case of Assignor,
including but not limited to an unconditional guarantee of all of the assignee’s
obligations under this Lease satisfactory to Lender and Landlord in form and
content) and provided such further assurances as the Lender shall reasonably
request to ensure that such assignment is subject to the Loan Documents (to the
extent such documents affect this Lease) and this Lease and is enforceable and
to ensure the continuing primary liability of Assignor. Notwithstanding any such
assignment, Assignor shall not be released from its primary liability hereunder
and shall continue to be obligated for all obligations of “Tenant” in this
Lease, which obligations shall continue in full effect as obligations of a
principal and not of a guarantor or surety (except as provided in any guaranty
executed by Assignor at Lender’s or Landlord’s request) as though no assignment
had been made, such liability of Assignor to continue notwithstanding any
subsequent modifications or amendments of this Lease as may be agreed upon by
Landlord and an assignee, provided, however that (other than with respect to any
modifications required by Applicable Law or on account of bankruptcy or
insolvency) if any modification or amendment is made without the consent of
Assignor, such modification or amendment shall be ineffective as against
Assignor to the extent, and only to the extent, that the same increases the rent
or other charges payable by Assignor or materially increases the other
obligations of Assignor, it being expressly agreed that (even if such
modification or amendment increases the likelihood of a default by the assignee
under this Lease), Assignor shall remain liable to the full extent of this Lease
as if such modification or amendment had not been made. Subsequent to any
assignment (a) Landlord will send to Assignor, at the same time sent to the
assignee, a duplicate copy of each notice of default sent by Landlord to the
assignee and (b) Landlord will accept from Assignor the cure of any default by
Assignor or the assignee under this Lease within the same cure period (if any)
provided for Tenant to cure hereunder. Assignor’s liability hereunder shall
continue notwithstanding the rejection of this Lease by an assignee of this
Lease pursuant to Section 365 of the Bankruptcy Code, any other provision of the
Bankruptcy Code, or any similar law relating to bankruptcy, insolvency,
reorganization or the rights of creditors, which arises subsequent to such
assignment. In the event Assignor assigns this Lease and it shall thereafter be
rejected in a bankruptcy or similar proceeding, a new lease identical to this
Lease shall be reinstituted as between Landlord and Assignor without further act
of either party, provided Landlord shall not be obligated to deliver to Assignor
possession of the Premises free of any tenancy created or caused by Assignor or
any entity holding by or through Assignor. Assignor shall provide written notice
to Landlord and the Lender of any proposed assignment of this Lease at least
thirty (30) days prior to the effective date thereof and an executed copy of the
approved agreement of assignment and assumption within thirty (30) days after
the execution thereof. To the extent an assignee of this Lease fails to perform
on behalf of Assignor the obligations of Tenant hereunder, and Assignor performs
such obligations, then Assignor shall be subrogated to the rights of Landlord as
against such assignee in respect of such performance.

(b)           Right to Assign; Profits of Sublease. Except as expressly provided
below, Tenant shall have the right to sublet all or any portion of the Premises
without Landlord’s consent. Except as otherwise provided herein, Tenant shall
have the absolute right to retain all rents, excess rents, and profits received
by Tenant by reason of subletting. Such right of Tenant shall extend throughout
the Term of this Lease and any Renewals Terms or extensions thereof exercised by
Tenant. Any assignment or subletting of all or any part of the Premises (each, a
“Sublease”) by Tenant shall not relieve Tenant from primary liability hereunder
and the

 

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obligations of Tenant hereunder shall continue in full force and effect as
obligations of a principal and not as a surety or guarantor.

(c)        Approval of Landlord to Sublease Beyond Term. Except for the Parking
Deck Lease, Tenant may not sublease all or any part of the Premises for a term
which will extend beyond the Current Term without first obtaining the prior
written consent of Landlord as to the extension of such Sublease beyond the
Current Term, which consent shall not be unreasonably withheld or delayed by
Landlord. (For the avoidance of doubt, Landlord’s consent shall not be required
in connection with a subleasing which provides a sublease term coterminous with
the Current Term and options to extend such sublease term for periods not in
excess of any Renewal Term, so long as such extensions for periods not in excess
of any Renewal Term are expressly conditioned upon Tenant having first exercised
its rights to invoke a Renewal Term(s) under this Lease which correspond in
duration with such extension.) In connection with the request for Landlord’s
approval, Tenant shall provide Landlord with a specific written report
describing the term of the proposed Sublease. Landlord shall have ten
(10) Business Days following the receipt of such report to object to the
proposed Sublease, by providing Tenant with specific written notice detailing
the Landlord’s objections to the proposed Sublease and/or the proposed
Sublease’s noncompliance with this paragraph. If Landlord fails to provide such
written notice within the above-described period, Landlord will be deemed to
have approved said Sublease, provided that the specific written report delivered
to Landlord makes specific reference to the “ten (10) Business Days deemed
approved” provision set forth in this Section. Upon approval or deemed approval
of any such Sublease, Landlord shall promptly execute a nondisturbance and
attornment agreement in favor of such subtenant. Landlord agrees to cooperate in
good faith to provide such approvals as may be necessary for Tenant to negotiate
and enter into any Sublease(s) permitted under this Lease, all in accordance
with such standards as Landlord shall reasonably require, and Landlord agrees to
respond promptly to such requests at whatever stage in the subleasing process
that Tenant may make such requests.

If Landlord provides Tenant with timely written notice that Landlord withholds
its consent of a proposed Sublease for reasons permitted above, then Tenant may
either (A) elect not to proceed with the Sublease; (B) proceed with the Sublease
for a term which does not exceed the Current Term; or (C) proceed with the
Sublease for a term which is co-terminous with the Current Term, including
rights during any Renewal Terms which Tenant may have the right to exercise, but
with such Renewal Terms on the subtenant’s part being contingent upon the actual
exercise of the underlying lease Renewal Terms by Tenant.

(d)        Deemed Renewal as to Certain Sublet Premises. Notwithstanding the
limitations set forth in Section 2.3 hereof, in the event Landlord approves or
is deemed to have approved a Sublease pursuant to subsection (c) above, Tenant
shall be deemed to have elected to exercise its renewal option(s) to extend the
Current Term throughout the entire initial term of the Sublease, as to the full
floor(s) of all non-Retail Space occupied in whole or in part by such subtenant,
if the sublet portion of the Premises are not Retail Space, for the minimum
number of Renewal Terms and any extensions thereof that would prevent Tenant’s
Lease from expiring sooner than such Sublease. Landlord agrees that it shall not
impose upon Tenant any charge or fee for its review and approval or disapproval
of any proposed Sublease by Tenant. Notwithstanding anything contained in this
Section 12.1, the Landlord acknowledges that the term of the Parking Deck Lease
is forty (40) years which is nine (9) years beyond the Basic Term. The Landlord

 

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agrees that the Basic Term is not or will not be extended pursuant to the terms
of this Section 12.1(d) with respect to the Parking Deck Lease, and Landlord
will assume all obligations under the Parking Deck Lease in accordance with the
terms thereof.

(e)        Landlord’s Attornment to Certain Subtenants. In the event of the
expiration or earlier termination of this Lease following the entering into one
or more Subleases by Tenant, and provided a non-disturbance and attornment
agreement shall have been delivered as provided above, Landlord, or any
successor-in-interest thereto, shall be obligated to recognize and honor any
Subleases entered into between Tenant and any subtenant which comply with the
foregoing provisions of this paragraph, except that any Lender shall be
obligated only to the extent such Lender has executed a Subordination,
Non-disturbance and Attornment agreement in favor of such subtenant(s) in
accordance with the terms of the Loan Documents Such attornment shall provide
that the rent payable to Landlord by the Subtenant will not be any less than the
rent (including reimbursement for operating costs) required to be paid by Tenant
to Landlord.

12.2        Affiliates. Tenant may, from time to time and at any time, without
the need for the prior consent of Landlord, but with prior written notice to
Landlord, sublet all or any part of the Premises to an Affiliate of Tenant, so
long as such transaction is not entered into as a subterfuge to avoid the
restrictions relating to assignments and sublettings set forth in this Lease. No
assignment or subletting permitted under this Section 12.2 shall relieve Tenant
of any of Tenant’s obligations under this Lease, and Tenant shall remain fully
and primarily liable as a principal and not as a surety or guarantor (except
pursuant to any guaranty executed by Tenant at Lender’s or Landlord’s request)
for the faithful performance of all covenants, terms and conditions hereof on
the Tenant’s part to be performed. Tenant shall have the absolute right to
retain all rents, excess rents and profits received by Tenant by reason of such
assignment or subletting.

12.3        Merger, Consolidation or Acquisition. Tenant will not merge,
consolidate, sell or otherwise transfer any substantial portion of its assets
without Landlord’s prior written consent in each instance unless each of the
following conditions are met in full: (i) the surviving entity shall be a
corporation, partnership or other entity owned by or owning, directly or
indirectly, Carolina Power & Light Company (currently doing business as Progress
Energy Carolinas, Inc.) or Progress Energy, Inc. (or any of their successors)
and organized and validly existing under the laws of the United States, (ii) the
surviving, resulting or acquiring entity shall have assumed in writing the past,
current and future obligations and liabilities of Tenant relating to this Lease
(which may be by a blanket written assumption of liabilities or by operation of
law), (iii) at the time of such merger, consolidation, sale or transfer, no
Event of Default, shall have occurred and be continuing, and (iv) immediately
after giving effect to such consolidation, merger, sale or transfer, no Event of
Default shall have occurred and be continuing; provided, that nothing set forth
in this paragraph shall prevent Tenant from exercising any option to purchase
expressly granted to Tenant pursuant to this Lease.

The transfer of any voting capital stock of Tenant or the voting capital stock
of any corporate entity which directly or indirectly controls Tenant or any
interest in a non-corporate entity which directly or indirectly controls Tenant,
which transfer results in a change in the direct or indirect voting control of
Tenant (whether such transfer occurs at one time or in steps so that, in the
aggregate, such a transfer shall have occurred) shall be deemed a voluntary
assignment of

 

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this Lease and subject to the provisions of this Article 12; provided, further,
that Tenant shall not be in default under this Lease, and no consent of Landlord
shall be required, with respect to an offering of Tenant’s voting stock to the
public pursuant to a registered securities offering or the transfer of Tenant’s
voting stock on a national securities exchange or through the NASDAQ national
market system.

12.4     Additional Requirements Applicable to Sublease and Assignment.

(a)       Insurance Requirements. Each Sublease or assignment shall contain
covenants of the subtenant or assignee to provide insurance and waivers of
subrogation consistent with those required of Tenant hereunder, and the
permitted uses shall be limited to the uses permitted hereunder.

(b)       Restaurant Subtenant or Assignee. The terms and provisions of any
Sublease to a restaurant or food service facility shall fully comply with
Section 5.3 of this Lease.

(c)       Secondary and Subordinate. Except as otherwise expressly provided
herein, each sublease will be subject, secondary and subordinate to this Lease
and to Tenant’s possessory interest in the Premises under this Lease, and in no
event will any sublease be construed as a direct lease or other obligation
between Landlord and any sublessee except as provided in Section 12.l(c).

(d)       Rent Rolls. At any time that Tenant’s Rating is not Investment Grade,
or if an Event of Default has occurred and is continuing, Tenant shall deliver
to Landlord and Lender upon request, but no more often than quarterly, a rent
roll certified by an officer of Tenant of all subtenants of the Premises,
specifying the date of the sublease and all amendments, name of subtenant, size
of space, term of sublease, rent, options and such other information as
reasonably requested by Landlord or Lender. Tenant will deliver copies of any or
all subleases and amendments to Landlord and Lender upon request.

(e)       Landlord’s Rights. Landlord shall be named a third party beneficiary
of all subtenants’ obligations under any subleases. Each sublease, shall contain
a provision pursuant to which Landlord may elect, in its sole discretion, to
cause the subtenant under such sublease to attorn to Landlord following
termination of this Lease before the end of the Basic Term or any Renewal Term.

12.5     Landlord’s Right to Assign. Landlord shall have the right to sell,
encumber, convey, transfer, and/or assign any of its interest, rights and
obligations under the Lease or in the Premises, subject to the further
provisions of Section 36.13.

12.6     Occupancy; License By Others. Tenant may allow any person or company
which is a client of Tenant or which is providing services to Tenant or one of
Tenant’s clients to occupy certain portions of the Premises without Landlord’s
consent and without such occupancy being deemed an assignment or Sublease as
long as such relationship was not created as a subterfuge to avoid the
obligations set forth in this Article 12. Any such occupancy shall not survive
the expiration or termination of the Lease. Tenant agrees to require appropriate
certificates of insurance from all such occupants related to their personal
property located in the Premises and commercial general liability policies
covering their subpremises.

 

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12.7     Requirements and Conditions. Each subtenant, assignee, and occupant
shall fully observe all covenants of this Lease, including without limitation,
the provisions of Article 5 of this Lease, and no consent by Landlord to an
assignment or Sublease shall be deemed in any manner to be a consent to a use
not permitted under Article 5 or a consent to any further assignment or
subletting. Except for subleases surviving the Term of this Lease as set forth
in Section 12.1(d) above and then only with respect to the portion of the
Sublease term which extends beyond the Term of this Lease, no assignment or
subletting by Tenant shall relieve Tenant of any of Tenant’s obligations under
this Lease, and Tenant shall remain fully and primarily liable (as a principal
and not merely as a surety, except pursuant to any guaranty executed by Tenant
at Lender’s or Landlord’s request) for the faithful performance of all
covenants, terms and conditions hereof on the Tenant’s part to be performed,
including without limitation the payment of Rent as and when due hereunder.

12.8     Event Revenues for Common Areas. For so long as Tenant shall lease all
of the rentable area of the Project, Tenant shall have the sole and exclusive
right to designate event space within the Common Areas, to approve all events
proposed for the Common Areas, and to collect all revenues from same.

ARTICLE 13. — INSURANCE

13.1     Tenant’s Insurance. Tenant shall have the insurance obligations set
forth herein and in Exhibit H hereto at all times from and after the Lease
Commencement Date and throughout the Term. In the event that any of such
provisions of Exhibit H are inconsistent with the provisions of this Article
XIII, then such provisions of Exhibit H shall control.

(a)       Liability Insurance. Tenant shall obtain and keep in full force a
policy of commercial general liability insurance for personal injury, death and
property damage (including but not limited to automobile, personal injury, broad
form contractual liability, Tenant’s contractors protective and broad form
property damage) under which Landlord and Lender are shown as additional
insureds and under which the insurer waives subrogation as to Landlord’s and
Tenant’s agents and the Property Manager. The minimum limits of liability shall
be a combined single limit with respect to each occurrence of not less than
$25,000,000. The policy shall, if such is available on a commercially reasonable
basis, contain a cross liability endorsement and shall be primary coverage for
Tenant and Landlord for any liability arising out of Landlord’s and its agents
use, occupancy or maintenance of the Premises and the Building and all areas
appurtenant thereto, and Tenant’s use, occupancy or maintenance of the Premises
and all areas appurtenant thereto. Such insurance shall provide that it is
primary insurance and not “excess over” or contributory. The policy shall
contain a severability of interest clause. Tenant shall have the right to
determine appropriate deductibles, in its sole discretion, so long as Tenant (or
its permitted successors and assigns) shall retain the insurance obligations
under this Lease and shall maintain an Investment Grade Rating.

(b)       Tenant’s Property Insurance. Tenant at its cost shall maintain on all
of Tenant’s Property, in, on, or about the Premises, an “all risk” property
policy covering not less than one hundred percent (100%) of the full replacement
cost valuation, under which Tenant is named as the insured but subject to such
deductibles as Tenant shall deem appropriate. The proceeds from any such policy
shall be used by Tenant for the replacement of such Tenant’s Property.

 

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(c)     Tenant’s Obligation to Insure Premises. During the Term of the Lease,
Tenant shall obtain and maintain in effect at all times fire and hazard “all
risk” insurance covering one hundred percent (100%) of the full replacement cost
valuation of the Premises in the event of fire, lightning, windstorm, vandalism,
malicious mischief and any other risks specified on Exhibit “L” and all other
risks normally covered by “all risk” policies carried by landlords of
first-class buildings in the Raleigh, North Carolina market area. Tenant shall
have the right to determine the appropriate deductible, in its sole discretion
(but in no event more than $3,000,000), so long as (a) Tenant or Progress
Energy, Inc. (or their successors) shall agree to provide the insurance
coverages and obligations required under this Lease in the amount of any
deductibles, not to exceed $3,000,000 for any policy of insurance, as a result
of either being a Tenant or a surety of the Tenant’s insurance obligations under
this Lease and (b) Tenant Rating is Investment Grade. In the event the
requirements set forth in the preceding sentence are not satisfied, such
policies shall not have any deductible in excess of $500,000. Any policy of
insurance required pursuant to this subsection (c) shall provide that all
insurance proceeds in respect of any loss or occurrence shall be adjusted with
the Landlord and the Tenant, provided that no Event of Default has occurred and
is continuing; otherwise, such proceeds shall be adjusted solely with the
Landlord, and shall be payable in accordance with Section 14.1 hereof.

(d)     Insurance Criteria. All the insurance required to be maintained by
Tenant under this Lease shall:

 (i)     Be issued by insurance companies with a financial rating of at least
A-/X for any property insurance and A-/X for any liability insurance as rated in
the most recent edition of Best’s Insurance Reports;

 (ii)     Be issued as a primary policy;

 (iii)     Require thirty (30) days’ written notice from the insurance company
to Landlord and to Landlord’s lender before cancellation or any material change
in the coverage, scope or amount of any policy; and.

 (iv)     Landlord and Lender shall be named as additional insured or loss
payees, as their interests may appear, for each insurance policy required to be
maintained by Tenant, with all proceeds under any policy to be paid in
accordance with the provisions of this Lease.

Notwithstanding the foregoing, all of the insurance requirements set forth
herein on the part of Tenant to be observed shall be deemed satisfied if the
risk to be insured is covered by a blanket insurance policy insuring all or most
of Tenant’s facilities, and provided that the coverage attributable to the
Premises and the other properties required to be insured by Tenant under such
blanket insurance policy equals or exceeds the applicable requirements set forth
in this Lease and the coverage for the Premises is not subject to reduction
because of any loss or event relating to any other facility or property.

(e)    Evidence of Coverage. Tenant shall furnish Landlord with a certificate of
insurance, prior to the date that Tenant or any of its contractors or agents
first enters upon any portion of the Premises in order to commence the Interior
Improvements, but in no event later than the Lease Commencement Date, and on
renewal of the policy a certificate of insurance

 

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listing the insurance coverages required hereunder or under the Loan Documents
and naming Landlord, and any other parties required to be insured under the
terms of this Lease, specifically including the Lender, as additional insured
and shall deliver such certificate of insurance to Landlord, not less than
thirty (30) days before the expiration of the term of the policy.

(f)     Certificates of Insurance. Certificates of such insurance shall be
delivered to Landlord and Lender, and any additional insureds upon execution of
this Lease and any renewals or extensions of said policies or certificates of
insurance shall be delivered to Landlord and Lender at least thirty (30) days
prior to the expiration or termination of such policies. Upon request of
Landlord or Lender, Tenant shall provide copies (certified as true and correct
by Tenant’s risk manager) of those portions of any policy requested covering all
aspects of how a claim can or may be made under such policy, within thirty
(30) days of request. In the alternative, Tenant may provide a certificate from
its insurance broker setting forth all of the foregoing, in form and substance
reasonably satisfactory to Landlord and Lender

ARTICLE 14. — LOSS, DAMAGE, DESTRUCTION AND TAKING

14.1   Risk of Loss on Tenant.

(a)     After the Lease Commencement Date, Tenant hereby assumes all risk of
loss, damage, theft, taking, destruction, confiscation, requisitions or
commandeering, partial or complete, of or to the Project, however caused or
occasioned, and whether or not insured, such risk to be borne by Tenant with
respect to the entire Project, including the Premises and the Parking Deck. No
occurrence specified in the preceding sentence shall impair, in whole or in
part, any obligation of Tenant under this Lease to pay Rent, including the
Facility Payment, Annual Base Rent, Operating Expenses, Supplemental Rent, Taxes
or Personal Property Taxes or any other amounts pursuant to Article 3 hereof as
they become due, or to perform any of its other obligations hereunder as and
when required except as herein expressly provided.

(b)     Tenant shall give Landlord and Lender prompt written notice of any
Casualty or Taking, describing in reasonable detail the circumstances of such
Taking or Casualty and the damage to or loss of the Project.

14.2   No Notice of Termination.

(a)     The provisions of this Section 14.2 shall not apply if Tenant delivers a
Tenant’s Termination Notice and this Lease is actually terminated pursuant to
Section 14.3 hereof.

(b)     In the absence of the occurrence of an Event of Default by Tenant that
is continuing beyond any applicable cure periods:

 (i)     Tenant shall be entitled to receive (and Landlord hereby irrevocably
assigns to Tenant all of Landlord’s right, title and interest in, and agrees to
turn over to Tenant), subject to Tenant’s obligation to restore, any award,
compensation, insurance proceeds or other payment to which Tenant may become
entitled by reason of its leasehold interest in the Premises, Tenant’s Property,
moving expenses, good will, and any separate award made to Tenant as
reimbursement for defeasance payments, make whole premiums or other
extraordinary costs incurred by Tenant hereunder, (i) if the Project, including
the Premises and the Parking Deck, or

 

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any portion thereof, is damaged or destroyed by fire or other casualty or cause
in an amount in excess of any applicable deductibles (a “Casualty”), or (ii) by
reason of any taking by condemnation or by sale or conveyance in lieu of
condemnation, of the Project, including the Premises and the Parking Deck, or
any portion thereof (a “Taking”); provided however that if any such amounts are
or would be received at a time when either an Event of Default shall have
occurred and be continuing or Tenant’s Rating is not Investment Grade, then all
such amounts shall be paid to Lender to be disbursed in accordance with the
terms of the Mortgage.

(ii)     Tenant shall be entitled to receive, subject to Tenant’s obligation to
restore, all other amounts paid or payable for any Casualty or Taking of all or
any portion of the Premises, less any amounts paid or payable for Landlord’s
Equipment (if any) (the amounts received for any Casualty, less such amounts as
are payable for Landlord’s Equipment, are referred to as the “Net Casualty
Award” and the amounts received for any Taking, less such costs and expenses,
are referred to as the “Net Taking Award”). No award for any partial or entire
Taking shall be apportioned and Landlord assigns to Tenant any Net Taking Award
together with all rights of Landlord to such award including, without
limitation, any award or compensation for the value of all or any part of the
leasehold estate.

(iii)     The Net Casualty Award or the Net Taking Award and any and all other
awards received with respect to the Casualty or Taking shall be applied in
accordance with the provisions of this Lease for the actual cost of repair,
restoration, rebuilding or replacement by Tenant of the Improvements damaged by
such Casualty or Taking (collectively, “Cost To Repair”) If the Net Casualty
Award or the Net Taking Award and any and all other awards received with respect
to the Casualty or Taking are not sufficient to complete the repair,
restoration, rebuilding or replacement of the Project or any portion of the
Project damaged by such Casualty or Taking, the Tenant shall be liable to pay
the shortfall.

(iv)     Upon any Taking or Casualty, and regardless of the extent to which such
Taking or Casualty is insured, Tenant shall, at its sole cost and expense,
within one hundred twenty (120) days of the occurrence of such Casualty or
Taking, enter into a contract with an architect and/or engineer (the
“Restoration Contracts”) to restore, repair, replace and/or rebuild the Project
as provided in this Section 14.2. Each Restoration Contract shall include a
schedule for completion for all restoration, repair, replacement and/or
rebuilding therein provided for. Tenant shall cause the contractors under such
Restoration Contracts to proceed with diligence and promptness, and in all cases
within time periods set forth in the Restoration Contracts, to carry out any
demolition and to restore, repair, replace and/or rebuild the Project, as nearly
as practicable, to a configuration, condition and fair market value as existed
immediately prior to such Taking or Casualty Upon completion of the restoration,
repair, replacement and/or rebuilding of the Project (including any upgrades or
redesign as Tenant shall require (subject to Landlord’s reasonable approval and
to Lender’s approval if required by the Loan Documents) to bring the Project up
to current standards of Tenant and to reflect any changes in use as may be
permitted by this Lease and reasonably deemed necessary to Tenant’s efficient
occupancy of the Premises), Tenant shall be entitled to retain such portion of
the Net Casualty Award or Net Taking Award, if any, which was not used by Tenant
in the restoration, repair, replacement and/or rebuilding of the Project;
provided that if at the time of receipt thereof an Event of Default shall have
occurred and be continuing or Tenant’s Rating is not Investment Grade, such
amounts shall be paid to Lender to be applied in accordance with the terms of
the Mortgage. Each repair

 

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or restoration pursuant to this Section 14.2(b) shall be undertaken and
completed in a good and workmanlike manner and in compliance in all material
respects with all Applicable Laws then in effect with respect to the Project and
the Restoration Contracts, and in compliance with the provisions of Article 7
hereof.

 (v)     During the Term hereof, Tenant may, at its cost and expense, in its own
name or in the name and on behalf of Landlord and Lender, appear in any
proceeding or other action relative to a Casualty or Taking to negotiate, accept
and prosecute any claim for any award, compensation, insurance proceeds or other
payment on account of such Casualty or Taking and to cause any such award,
compensation, insurance proceeds or other payment to be paid to Tenant in
accordance with the provisions of this Section 14.2. Tenant shall use its
commercially reasonable efforts to achieve the maximum award or other recovery
obtainable under the circumstances. Any negotiated awards, settlements or
recoveries shall be subject to Landlord’s and Lender’s prior approval, which
approvals shall not be unreasonably withheld, conditioned or delayed. Landlord
and Lender may appear in any such proceeding or other action, in a manner
consistent with the foregoing, and the reasonable costs and expenses of any such
appearance shall be borne by Tenant.

(c)     If an Event of Default by Tenant has occurred and is continuing beyond
applicable cure periods or Tenant’s Rating drops below Investment Grade:

 (i)     Landlord and Lender shall have the right (but not the obligation) to
appear, at Tenant’s expense, in any proceeding or other action relative to a
Casualty or Taking, and to negotiate, accept and prosecute in their sole
discretion any claim for any award, compensation, insurance proceeds or other
payment on account of such Casualty or Taking without the approval of Tenant.
Tenant shall be deemed to have assigned to Landlord and Lender any award,
compensation, insurance proceeds or other payments to which Tenant would
otherwise be entitled hereunder.

 (ii)     The Net Casualty Award or the Net Taking Award and any and all other
awards received with respect to the Casualty or Taking then or thereafter made
shall be paid to the Lender, if the Loan has not been paid in full and the
Mortgage discharged as of the date such awards are received, or the Landlord and
Lender may, but shall not be obligated to apply such award in accordance with
the provisions of this Lease for the actual cost of repair, restoration,
rebuilding or replacement of the portion of the Project damaged by such Casualty
or Taking. If the Net Casualty Award or the Net Taking Award and any and all
other awards received with respect to the Casualty or Taking are not sufficient
to complete the repair, restoration, rebuilding or replacement of the portion of
the Project damaged by such Casualty or Taking, the Tenant shall be liable to
pay the shortfall.

(d)     Notwithstanding the provisions of Sections 14.2(a)-(c) or any other
provisions of this Lease, the provisions of the Mortgage and the other Loan
Documents with respect to the payment and disbursal of any insurance proceeds,
Net Casualty Award and Net Taking Award shall govern the receipt and
disbursement thereof.

14.3    Tenant’s Termination Notice.

 

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(a)    If an Event of Loss occurs, Tenant may elect to give Landlord and Lender
a written notice (“Tenant’s Termination Notice”) within ninety (90) days of the
occurrence of such Event of Loss (but in no event thereafter) setting forth
Tenant’s intention to terminate the Lease and Tenant’s irrevocable and
unconditional offer (“Offer”) to buy the Project from Landlord for the Purchase
Price as defined in Section 14.3(c)(vi). Any Tenant’s Termination Notice that
fails to explicitly set forth such Offer shall be deemed to include such Offer.
An “Event of Loss” shall be deemed to occur if (i) with respect to a Casualty,
the Project is totally or partially damaged or destroyed from such Casualty and
the cost to restore the same exceeds $35,000,000; or (ii) with respect to a
Taking, at least 30% of the Rentable Area of the Building is taken or is
rendered permanently inaccessible for its intended purposes or (iii) with
respect to a Casualty or Taking, the Project cannot be restored or repaired as
required by the provisions of this Lease within two (2) years from the
occurrence of the Casualty or Taking or in any event prior to the end of the
Basic Term or any then exercised Renewal Term. If Tenant does not deliver a
Tenant’s Termination Notice as described above, this Lease shall not terminate
by reason of the Event of Loss, the provisions of this Section 14.3 shall not
apply, and the other provisions of this Article 14 shall govern. Except as
expressly provided in this Section 14.3, Tenant shall have no right to terminate
this Lease upon a Casualty or Taking, and no right to abatement or reduction of
Rent or any other modification or reduction of its obligations (regardless of
loss of all or any portion of the Premises through Taking or Casualty) and
Tenant waives the provisions of any present or future Applicable Law to the
contrary.

(b)     If Landlord elects to reject Tenant’s Offer, Landlord shall give notice
thereof to Tenant within thirty (30) days after receipt of Tenant’s Termination
Notice. No election to reject by the Landlord at a time when any amounts or
obligations remain outstanding under the Loan Documents shall be effective
unless accompanied by the written consent of the Lender. If Landlord fails to so
reject an Offer or purports to reject an Offer without Lender’s consent such
Offer shall be deemed accepted. If an Offer is rejected by Landlord with
Lender’s written consent, the Lease shall terminate on the Closing Date (as
defined below) as if that date were the natural expiration date of this Lease,
and the entire Net Casualty Award or Net Taking Award and any and all other
awards received with respect to the Event of Loss then or thereafter made shall
be paid to Landlord. Notwithstanding anything to the contrary herein, If the
Loan has not been paid in full and the Mortgage discharged at the time Landlord
elects to reject an Offer, such rejection shall be effective only if it is
consented to in writing by the Lender.

(c)     If Landlord accepts or is deemed to accept Tenant’s Offer:

(i)     The Purchase Price shall be paid as hereinafter provided and Tenant
shall be entitled to and shall receive the Net Casualty Award or the Net Taking
Award and any and all other awards with respect to the Event of Loss then or
thereafter made and Landlord shall assign without recourse (or in case of any
award previously made, deliver to Tenant on the Closing Date) all such awards as
may be made with respect to the Event of Loss.

(ii)     The purchase and sale of the Project shall close on the Closing Date at
12:00 noon local time at the local office of Landlord’s counsel (as set forth in
the notice provision of this Lease unless Tenant notifies Landlord to the
contrary), or at such other time and place as the parties hereto may agree.

 

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  (iii)     The Term shall be extended to and including the Closing Date and
shall end on the Closing Date as if that date were the natural expiration date
of this Lease.

  (iv)     Tenant shall pay the Purchase Price (without deduction, setoff or
counterclaim) by transferring immediately available funds in the amount of such
Purchase Price to such account or accounts in such bank or banks as Landlord
shall designate, upon delivery of a special warranty deed conveying the Project
(or the remainder thereof, if any) and all other required documents including an
assignment, without recourse, of the Net Casualty Award or the Net Taking Award
and all other awards with respect to the Event of Loss.

  (v)     The “Closing Date” shall be the first Business Day of any calendar
month that occurs at least thirty (30) days and no more than within sixty-one
(61) days after the date Tenant’s Termination Notice is given.

  (vi)     The “Purchase Price” shall be equal to the sum of (i) the Stipulated
Loss Value as of the Closing Date, plus (ii) all other amounts which may be due
and owing to Landlord or Lender as of the Closing Date by reason of any Event of
Default by Tenant, plus (iii) all Rent payable by Tenant with respect to the
period through and including the Closing Date, plus (iv) all costs of closing.
During the Basic Term, “Stipulated Loss Value” shall mean, as of the first
Business Day of any calendar month, the amount so designated set forth opposite
such month in Exhibit I to this Lease, plus the Make-Whole Premium and any other
amounts due Lender under the Loan Documents

  (vii)     The Premises shall be sold “AS IS” in its then present condition,
subject to (a) the state of the title thereto existing as of the Closing Date
(other than defects in, or exceptions to, title, if any, created by Landlord,
but including liens created by the Loan Documents and any Permitted Liens),
(b) any state of facts which an accurate survey or physical inspection might
show, (c) all Applicable Laws, (d) any violations of Applicable Laws which may
exist as of the Closing Date, (e) the presence of any Hazardous Materials at or
under the Premises or at or under any property in the vicinity of the Site, or
(f) any other conditions or state of facts that may affect the Project,
including without limitation those described in clauses (a) through (s) of
Section 36.12.

14.4     Reaffirmation of Lease. Upon the occurrence of any Casualty to or
Taking of all or any portion of the Project and provided that either Tenant does
not have the right hereunder to terminate this Lease as a result of such
Casualty or Taking or Tenant does have the right hereunder to terminate this
Lease but has elected not to (or has failed to) terminate this Lease as provided
and within the time frame granted herein, either Landlord or Tenant shall
thereafter, within ten (10) days after receipt by such party of a written
request therefor from the other party, provide such other party with a written
reaffirmation of this Lease, including an acknowledgment that Tenant does not
have the right to terminate this Lease as a result of such Casualty or Taking or
that Tenant had the right to terminate this Lease but has elected not to (or has
failed to) terminate this Lease as herein provided.

 

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ARTICLE 15. — LANDLORD AND TENANT REPRESENTATIONS AND COVENANTS

15.1     Representations and Warranties of Tenant. Tenant represents and
warrants to Landlord that the following are true and correct as of the Effective
Date:

(a)       Due Organization. Carolina Power & Light Company d/b/a Progress Energy
Carolinas, Inc. is a corporation duly organized, validly existing and in good
standing in the State of North Carolina. Tenant has the corporate power and
authority to conduct its business as now conducted, to own or hold under lease
its property, to lease the Premises and to enter into and perform its
obligations under the Lease Operative Documents to which it is or is to become a
party.

(b)       Due Authorization; No Conflict. Each of the Lease Operative Documents
to which Tenant is a party has been duly authorized by all necessary corporate
action on the part of Tenant and has been duly executed and delivered by Tenant,
and the execution, delivery and performance thereof by Tenant will not,
(i) require any approval of the stockholders of Tenant or any approval or
consent of any trustee or holder of any indebtedness or obligation of Tenant, or
of any other third party, other than such consents and approvals as have been
obtained, (ii) contravene any Applicable Law binding on Tenant or
(iii) contravene or result in any breach of or constitute any default under
Tenant’s charter or by-laws or other organizational documents, or any indenture,
judgment, order, decree, mortgage, loan agreement, contract, partnership or
joint venture agreement, lease or other agreement or instrument to which Tenant
is a party or by which Tenant is bound, or result in the creation of any Lien
(other than pursuant to the Lease Operative Documents) upon any of the property
of Tenant.

(c)       Governmental Approvals. All governmental approvals required in
connection with the execution, delivery and performance by Tenant of the Lease
Operative Documents to which it is a party, have been or will have been
obtained, given or made, including, without limitation, obtaining all approvals
from any federal or state regulatory authorities.

(d)       Investment Company. Tenant is not an “investment company” or a company
“controlled” by an “investment company” within the meaning of the Investment
Company Act of 1940, as amended.

(e)       Securities Act. Tenant has not offered any interest in the Site, the
Project or the Lease, or any similar securities of Tenant to, or solicited any
offer to acquire any of the same from, any Person, in violation of Section 5 of
the Securities Act of 1933, nor has it authorized any Person to take any such
action, and Tenant has not taken any action that would subject any interest in
the Site, the Project, the Loan, or the Lease to the registration requirements
of Section 5 of the Securities Act of 1933. Nothing herein is intended to imply
or shall be construed to suggest that the interests in Landlord constitute
securities.

(f)       Bankruptcy. No bankruptcy, reorganization, arrangement or insolvency
proceedings are pending, threatened or contemplated by Tenant, and Tenant has
not made a general assignment for the benefit of creditors.

(g)       Tax Filings. All tax returns and reports of Tenant required by law to
be filed with respect to the Site have been duly filed, and all taxes, interests
and penalties assessed by any

 

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Governmental Authority upon the Site or Tenant (with respect to the Site), which
are due and payable, have been paid, except to the extent being contested in
good faith by the Tenant.

(h)        Solvency. Taking into account the transfers to occur on the Effective
Date, Tenant shall be solvent and shall not be rendered Insolvent as a result of
this transaction.

(i)         Debts and Liabilities. The Tenant is able to realize upon its
property and pay its debts and other liabilities (including contingent and
unliquidated liabilities) as they mature in the normal course of business; the
Tenant does not intend to, and does not believe that it will incur debts or
liabilities beyond the Tenant’s ability to pay as such debts and liabilities
become due; and Tenant is not engaged in business or a transaction, and is not
about to engage in business or a transaction, for which the Tenant’s remaining
assets are unreasonably small in relation to such business or transaction.

(j)         ERISA. The Tenant is not an “employee benefit plan” as defined in
Section 3(3) of ERISA or a “plan” as defined in Section 4975(e)(i) of the Code.
No part of the funds to be used by Tenant in satisfaction of its obligations
under any of the Lease Operative Documents are the assets of any such “employee
benefit plan” (or its related trust).

15.2      Representation and Warranties of Landlord:

(a)        Due Organization. Landlord is a national banking association duly
organized, validly existing and in good standing. Landlord has the trust power
to conduct its business as now conducted, to own or hold under lease its
property as Trustee under the Trust Agreement, to lease the Project and to enter
into and perform its obligations under the Lease Operative Documents to which it
is or is to become a party in its capacity as such Trustee.

(b)        Due Authorization; No Conflict. Each of the Lease Operative Documents
to which Landlord is a party has been duly authorized by all necessary trust
action on the part of Landlord and has been duly executed and delivered by
Landlord, and the execution, delivery and performance thereof by Landlord will
not (i) contravene any Applicable Law binding on Landlord, or (ii) contravene or
result in any breach of or constitute any default under Landlord’s trust
agreement or other organizational documents, or any indenture, judgment, order,
mortgage, loan agreement, contract, partnership or joint venture agreement,
lease or other agreement or instrument to which Landlord is a party or by which
Landlord is bound, or result in the creation of any Lien (other than pursuant to
the Lease Operative Documents) upon any of the property of Landlord.

ARTICLE 16. — DEFAULTS

16.1      Default by Tenant. Each of the following shall be an “Event of
Default” by Tenant and a material breach of the Lease, entitling Landlord to
exercise all remedies which may be available to Landlord hereunder, in equity or
at law, including, without limitation, those remedies set forth in Section 17.1
hereof:

(a)        Tenant shall fail to pay the Facility Payment as and when required
under Section 3.3(b) hereof or any monthly installment of Annual Base Rent or
Supplemental Rent on or before

 

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the time set forth in Section 3.1, and any such failure continues uncured for a
period of fifteen (15) days.

(b)        Tenant shall fail to make any other payment owed by Tenant under this
Lease within ten (10) days after written notice from Landlord notifying Tenant
of its failure to pay.

(c)        Tenant or any surety of this Lease shall make a general assignment
for the benefit of creditors, or shall admit in writing its inability to pay its
debts as they become due, or shall file a petition in bankruptcy, or shall be
adjudicated as bankrupt or insolvent, or shall file a petition in any proceeding
seeking any reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under any present or future statute, law or
regulation, or shall file an answer admitting or fail timely to contest the
material allegations of a petition filed against it in any such proceeding.

(d)        A proceeding is commenced against Tenant seeking any reorganization,
arrangement, composition, readjustment, liquidation, dissolution or similar
relief under any present or future statute, law or regulation, and such
proceeding shall not have been withdrawn or dismissed within sixty (60) days
after the commencement thereof.

(e)        A receiver or trustee shall be appointed for the Premises or for all
or substantially all of the assets of Tenant, and such receivership or
trusteeship shall not be withdrawn or dismissed within sixty (60) days following
such appointment.

(f)        Tenant shall fail to observe, keep or perform any of the terms,
covenants, agreements or conditions under the Lease that Tenant is obligated to
observe or perform, other than those described in subparagraphs (a) and (b) of
this Section 16.1, for a period of thirty (30) days after notice to Tenant of
said failure; provided however, that if the nature of Tenant’s default is such
that more than thirty (30) days are reasonably required for its cure, then
Tenant shall not be deemed to be in default under the Lease if Tenant shall
commence the cure of such default so specified within said thirty (30) day
period and shall diligently prosecute the same to completion.

ARTICLE 17. — LANDLORD’S REMEDIES AND RIGHTS

17.1      Remedies. Upon the occurrence and during the continuance of any Event
of Default, Landlord shall have the option to pursue any one or more of the
following remedies without any further notice or demand whatsoever:

(a)        the Landlord may, by written notice to the Tenant, and subject to the
Lender’s consent if required by the Loan Documents, terminate this Lease as of
the date specified in such notice (“Termination Date”), in which event Tenant
shall immediately surrender the Premises to Landlord and if Tenant fails to do
so, Landlord may, without prejudice to any other remedy which it may have for
possession or arrearages in Rent, enter upon and take possession of the Premises
and expel or remove Tenant and any other Person who may be occupying said
Premises or any part thereof, by legal force, if necessary, without being liable
for prosecution or any claim of damages therefor, Tenant hereby agreeing to pay
to Landlord on demand the amount of all loss and damage which Landlord may
suffer by reason of Tenant’s breach or default and/or Landlord’s termination,
whether through inability to relet the Premises on

 

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satisfactory terms or otherwise, including reasonable attorney’s fees and court
costs. As liquidated and agreed damages for the period beyond the Termination
Date (it being agreed that it would be impracticable or extremely difficult to
fix the actual damages), Tenant shall pay Landlord, on demand, an amount equal
to the excess, if any, of (i) the aggregate of all Annual Base Rent,
Supplemental Rent and all other Rent and charges which would be payable under
this Lease, in each case from the Termination Date for what is or would have
been, in the absence of such termination, the then unexpired Lease Term,
discounted at a per annum rate equal to the TCMP, over (ii) the amount of such
rental loss as Tenant proves could be reasonably avoided, discounted at a per
annum rate equal to the TCMP. In no event will Landlord be obligated to pay any
amount to Tenant or otherwise account to Tenant if the amount specified in
clause (ii) of the preceding sentence exceeds the amount specified in clause
(i) of the preceding sentence. Notwithstanding anything to the contrary herein ,
(i) no reletting, reentry or taking of possession of the Premises by the
Landlord will be construed as an election on the Landlord’s part to terminate
this Lease unless a written notice of such intention is given to the Tenant,
(ii) notwithstanding any reletting, reentry or taking of possession, the
Landlord may at any time thereafter elect to terminate this Lease for a
continuing Event of Default, and (iii) no act or thing done by the Landlord or
any of its agents, representatives or employees and no agreement accepting a
surrender of the Premises shall be valid unless the same be made in writing and
executed by the Landlord;

(b)        the Landlord may terminate Tenant’s right of possession (but not this
Lease) and enter upon and take possession of the Premises and expel or remove
Tenant and any other Person who may be occupying said Premises or any part
thereof, by entry (including the use of legal force, if necessary),
dispossessory suit or otherwise, without thereby releasing Tenant from any
liability hereunder, without terminating this Lease, and without being liable
for prosecution or any claim of damages therefor and, if Landlord so elects,
make such commercially reasonable alterations, redecorations and repairs as, in
Landlord’s judgment, may be necessary to relet the Premises, and Landlord may
relet the Premises or any portion thereof in Landlord’s or Tenant’s name, but
for the account of Tenant, for such term or terms (which may be for a term less
than or extending beyond the Term) and at such rental or rentals and upon such
other terms as Landlord reasonably may deem advisable, with or without
advertisement, and by private negotiations, and receive the rent therefor,
Tenant hereby agreeing to pay to Landlord at any time and from time to time,
upon Landlord’s demand, the deficiency, if any, between all Rent reserved
hereunder for the period covered by Landlord’s demand and rentals actually
received by Landlord from reletting for the period covered by Landlord’s demand
(or, if Landlord has not relet for such period, the amount of such rental loss
Tenant proves could be reasonably avoided). Tenant shall be liable for
Landlord’s reasonable expenses in redecorating and restoring the Premises and
all reasonable costs incident to such re-letting or attempts to relet, including
broker’s commissions and lease assumptions, and in no event shall Tenant be
entitled to any rentals received by Landlord for any period in excess of the
amounts due by Tenant hereunder for such period. The provisions of this
Section 17.1(b) shall operate as a notice to quit and shall be deemed to satisfy
any other requirement or provisions of Applicable Laws which may require the
Landlord to provide a notice to quit or of the Landlord’s intention to re-enter
the Premises and any such requirements or provisions are hereby waived by the
Tenant;

(c)        Landlord may enter upon the Premises without being liable for
prosecution or any claim of damages therefor, and do whatever Tenant is
obligated to do under the terms of this

 

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Lease other than pay Rent on an accelerated basis; and Tenant agrees to
reimburse Landlord on demand for any expenses including, without limitation,
reasonable attorneys’ fees which Landlord may incur in thus effecting compliance
with Tenant’s obligations under this Lease (including interest at the Contract
Rate computed from the date incurred by Landlord), and Tenant further agrees
that Landlord shall not be liable for any damages resulting to Tenant from such
action, unless caused by the gross negligence or willful misconduct of Landlord,
its agents, contractors or employees. Any performance by Landlord of Tenant’s
obligations shall not waive or cure such default.

(d)        the Landlord may exercise any other right or remedy that may be
available to it under this Lease, Applicable Laws or in equity, or proceed by
appropriate court action (legal or equitable) to enforce the terms hereof or to
recover damages for the breach hereof. Separate suits may be brought to collect
any such damages for any period of this Lease, and such suits shall not in any
manner prejudice the Landlord’s right to collect any such damages for any
subsequent period of this Lease, or the Landlord may defer any such suit until
after the expiration of the Term or the then-current Renewal Term, in which
event such suit shall be deemed not to have accrued until the expiration of the
Term, or the then-current Renewal Term.

(e)        the Landlord may retain and apply against the Landlord’s damages, all
sums which the Landlord would, absent such Event of Default, be required to pay
to, or turn over to, the Tenant pursuant to the terms of the Lease.

(f)        At any time after the occurrence of an Event of Default, whether or
not Landlord shall have collected any damages pursuant to this Section 17.1,
Landlord (subject to the provisions of the last sentence of this
Section 17.1(f)) shall have the right to sell to Tenant, and Tenant shall be
obligated to purchase from Landlord, all of Landlord’s interest in the Premises
for a purchase price (“Default Sale Purchase Price”) equal to the sum of (i) the
outstanding principal balance of the Loan and all accrued interest thereon,
together with the Make-Whole Premium and all other amounts payable to Lender as
of the Default Sale Closing Date (defined below), plus (ii) all other amounts
which may be due and owing to Landlord or Lender as of the Default Sale Default
Sale Closing Date by reason of any Event of Default by Tenant, plus (iii) all
Rent payable by Tenant with respect to the period through and including the
Default Sale Closing Date, plus (iv) all costs of closing. Landlord may exercise
its right under this Section 17.1(f) by giving Tenant written notice thereof (a
“Default Sale Option Notice”). The purchase and sale of the Project shall close
on the date (“Default Sale Closing Date”) specified by Landlord in the Default
Sale Option Notice (which Default Sale Closing Date may be extended from time to
time by Landlord in its sole discretion) at 12:00 noon local time at the local
office of Landlord’s counsel (as set forth in the notice provision of this Lease
unless Landlord notifies Tenant to the contrary), or at such other time and
place as Landlord may specify in writing. The Term shall be extended to and
including the Default Sale Closing Date and shall end on the Default Sale
Closing Date. Tenant shall pay the Purchase Price (without deduction, set-off or
counterclaim) by transferring immediately available funds in the amount of such
Default Sale Purchase Price to such account or accounts in such bank or banks as
Landlord shall designate, upon delivery of a special warranty deed conveying the
Project to Tenant. The Premises shall be sold “AS IS” in its then present
condition, subject to (a) the rights of any parties in possession thereof (other
than rights, if any, granted by Landlord), (b) the state of the title thereto
existing as of the Default Sale Closing Date (other than defects in, or
exceptions to, title, if any, created by

 

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Landlord but including liens created by the Loan Documents and any other
Permitted Liens), (c) any state of facts which an accurate survey or physical
inspection might show, (d) all Applicable Laws, (e) any violations of Applicable
Laws which may exist as of the Default Sale Closing Date, (f) the presence of
any Hazardous Materials at or under the Premises or at or under any property in
the vicinity of the Site, or (g) any other conditions or state of facts that may
affect the Project, including without limitation those described in clauses
(a) through (s) of Section 36.12. Without limiting any of Landlord’s other
rights and remedies hereunder, Landlord will be entitled to specific performance
to enforce its rights under this Section 17.1(f). Notwithstanding anything to
the contrary herein, the rights of Landlord under this Section 17.1(f) may only
be exercised after the Project has been transferred to Lender or an Affiliate of
Lender through foreclosure under the Loan Documents or by deed in lieu of
foreclosure.

17.2      Remedies Not Exclusive. The rights and remedies of Landlord set forth
herein are not exclusive, and Landlord may exercise any other right or remedy
available to it under this Lease, at law or in equity, including, without
limitation, injunctive relief of all varieties, except as otherwise expressly
set forth herein. Forbearance by Landlord to enforce one or more of the remedies
herein provided upon an Event of Default shall not be deemed or construed to
constitute a waiver of such default or an election of remedies.

17.3      Enforceability. The provisions of this Article 17 shall be enforceable
to the maximum extent not prohibited by applicable law, and the unenforceability
of any portion thereof shall not thereby render unenforceable any other portion.
To the extent any provision of applicable law requires some action by Landlord
to evidence or effect the termination of this Lease or to evidence the
termination of Tenant’s right of occupancy, Tenant and Landlord hereby agree
that only unequivocal written notice of such termination, delivered in
accordance with Article 31 herein, shall be sufficient to evidence and effect
the termination therein provided for.

ARTICLE 18. — INDEMNITIES AND ATTORNEYS’ FEES

18.1      Attorney Fees. If either Landlord or Tenant commences or engages in
any action or litigation or arbitration against the other party arising out of
or in connection with this Lease, the Premises or the Project, including but not
limited to, any action for recovery of any payment owed by either party under
the Lease, or to recover possession of the Premises, or for damages for breach
of the Lease, the prevailing party shall be entitled to have and recover from
the losing party reasonable attorneys’ fees and other costs incurred in
connection with the action and in preparation for said action.

18.2      General Indemnification.

(a)        Tenant hereby assumes liability for, and indemnifies, and agrees to
protect, defend (by counsel reasonably satisfactory to the Indemnitee), save and
keep harmless each Indemnitee, from and against any and all claims, liabilities,
losses, damages, costs and expenses (including reasonable attorney’s fees),
whenever they may be suffered or incurred by, imposed on or asserted against any
Indemnitee, arising out of or relating to any of the following after the Lease
Commencement Date: (i) the acquisition, ownership, construction, operation,
maintenance, use, possession, lease, sublease, condition, maintenance, repair,
replacement,

 

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alteration or reconstruction of the Project whether before or after the
Effective Date of this Lease (including, without limitation, latent and other
defects, whether or not discoverable by any Indemnitee or by Tenant and any
claim arising under the strict liability theory in tort), (ii) injury to or
death of any person, or damage to or loss of property, on or about the Project
or any adjoining sidewalks, streets or ways, or connected with the use,
condition or occupancy thereof; (iii) any act or omission of Tenant or its
agents, employees, contractors, assignee, subtenants, licensees, or invitees,
(iv) any representation or warranty made by Tenant in any of the Lease Operative
Documents shall be materially false as of the date made, (v) the non-compliance
of the Project with Applicable Laws (including Environmental Laws), (vi) any
Remedial Action, assessment, containment, monitoring, treatment and/or removal
of any and all Hazardous Materials from all or any portion of the Project or any
surrounding areas over which Tenant has responsibility or to which Hazardous
Materials may migrate from the Project, the cost of any actions taken in
response to a Release or threat of release of any Hazardous Materials on, in,
under, relating to or affecting any portion of the Project or any surrounding
areas over which Tenant has responsibility or to which Hazardous Materials may
migrate from the Project to prevent or minimize such Release or threat of
release so that it does not migrate or otherwise cause or threaten danger to
present or future public health, safety, welfare or the environment, and costs
incurred to comply with Environmental Laws in connection with all or any portion
of the Project or any surrounding areas over which Tenant has responsibility or
to which Hazardous Materials may migrate from the Project, (vii) an Event of
Default or any breach or violation of this Lease by Tenant or anyone by, through
or under Tenant, (viii) any litigation, suit, cause of action, writ, decree,
injunction, order, judgment, proceeding or claim now or hereafter asserted
against the Project, Landlord (by virtue of its ownership of or leasing the
Project), or Tenant with respect to the Project or this Lease and (ix) all Taxes
for which Tenant is responsible under Section 4.2. Tenant acknowledges that the
foregoing includes any costs incurred by Landlord or the Lender in performing
any inspections of the Project if such inspection reveals a violation by Tenant
of this Lease. Tenant shall not be required to indemnify any Indemnitee under
this Section 18.2 for any claim to the extent resulting from (A) the willful
misconduct or gross negligence such Indemnitee, and (B) any amounts payable
under the Loan Documents unless such amounts are payable by Tenant under this
Lease as Supplemental Rent or any other Lease Operative Documents. Tenant shall
be entitled to credit against any payments due under this Section 18.2 any
insurance recoveries or other reimbursements if, as, when and to the extent
actually received by the Indemnitee to be indemnified in respect of the related
claim under or from insurance paid for, directly, by Tenant or assigned to
Landlord by Tenant, to the extent such insurance recoveries exceed such
Indemnitee’s costs and expenses incurred in recouping such insurance recovery.

(b)        In case any claim shall be made or brought against any Indemnitee,
such Indemnitee shall give prompt notice thereof to Tenant; provided that
failure to so notify Tenant shall not reduce Tenant’s obligations to indemnify
any Indemnitee hereunder unless and only to the extent such failure results in
additional liability on Tenant’s part. Such Indemnitee shall be entitled, acting
through counsel selected by Tenant (and reasonably satisfactory to such
Indemnitee), to participate in, and, to the extent that such Indemnitee desires
to assume and control, in consultation with Tenant, the negotiation, litigation
and/or settlement of any such claim (subject to the provisions of the last
sentence of subparagraph (c) of this Section 18.2). Such Indemnitee may (but
shall not be obligated to) participate in a reasonable manner at its own expense
and with its own counsel in any proceeding conducted by Tenant in accordance
with the

 

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foregoing. Notwithstanding anything to the contrary herein, if such Indemnitee
shall determine (in its reasonable discretion) that a conflict of interest
exists between Tenant and such Indemnitee, or that by using counsel selected by
Tenant Indemnitee would incur a material risk of impairing, eliminating or being
deemed to have waived any privilege it otherwise would have with respect to any
communication, information or document, or that Tenant’s defense is inadequate
or inappropriate to protect the interests of such Indemnitee, such Indemnitee
may assume the defense of its own interest using its own counsel, at Tenant’s
expense. The preceding sentence shall apply to all indemnification obligations
of Tenant under this Lease.

(c)        Each Indemnitee shall at Tenant’s expense supply Tenant with such
information and documents reasonably requested by Tenant in connection with any
claim for which Tenant may be required to indemnify any Indemnitee under this
Section 18.2. Unless an Event of Default is continuing, no Indemnitee shall
enter into any settlement or other compromise with respect to any claim for
which indemnification is required under this Section 18.2 without the prior
written consent of Tenant, which shall not be unreasonably withheld. Tenant
shall have the authority to settle or compromise any claim against an Indemnitee
hereunder; provided that no admission of wrongdoing, shall be required of such
Indemnitee, and such settlement or compromise does not involve any finding of
criminality or impose any injunctive or other equitable relief affecting any
Indemnitee or the Project, and such Indemnitee shall be released of all
liability in connection with any such claim.

(d)        Upon payment in full of any claim by Tenant pursuant to this
Section 18.2 to or on behalf of an Indemnitee, Tenant, without any further
action, shall be subrogated to any and all claims that such Indemnitee may have
relating thereto (other than claims in respect of insurance policies maintained
by such Indemnitee at its own expense), and such Indemnitee shall execute such
instruments of assignment and conveyance, evidence of claims and payment and
such other documents, instruments and agreements as may be necessary to preserve
any such claims and otherwise reasonably cooperate (at Tenant’s expense) with
Tenant to enable Tenant to pursue such claims.

(e)        Prior to paying any amount otherwise payable to an Indemnitee
pursuant to this Section 18.2, Tenant shall be entitled to receive from such
Indemnitee (i) a written statement describing the amount so payable, and
(ii) such additional information as Tenant may reasonably request and which is
reasonably available to such Indemnitee to properly substantiate the requested
payment.

(f)        Subject to the penultimate sentence of Section 18.2(a) above,
Tenant’s liability hereunder shall in no way be limited or impaired by any act,
including, without limitation, (i) any amendment or modification to any of the
Lease Operative Documents, (ii) any waiver of any Event of Default, default, or
extension of time or any failure to enforce any remedies or rights of either
Landlord or Lender under the Lease Operative Documents, (iii) any sale or
transfer of all or any portion of the Project, or (iv) any assignment of the
Lease or the Loan Documents.

(g)        All indemnities provided for in this Lease are cumulative; all such
indemnities shall survive without limitation the expiration or termination of
this Lease for a period of five years even if liability does not accrue or any
claim with respect thereto is not made until after the effective date of such
expiration or termination; all such indemnities shall continue to run in

 

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favor of and be enforceable by each person or entity that shall be a Landlord,
Lender or other secured lender from time to time, and their respective partners,
shareholders, members, officers, directors, etc., notwithstanding the assignment
of this Lease by such Landlord and the release of such Landlord hereunder, or
the assignment or release of any mortgage or deed of trust or the payment of any
debt owed to a Lender or other secured lender. Tenant’s indemnity obligations
shall not be limited by insurance maintained or required to be maintained by
Tenant hereunder.

(h)        The indemnities and obligations of Tenant to defend contained in this
Article 18 and elsewhere in this Lease (including, without limitation, Sections
4.2, 6.3(b), 8.1 and 8.2) shall extend with regard to all actions against the
Indemnitees, and to all liabilities, losses, damages, costs, expenses (including
reasonable attorney’s fees), causes of action, suits, claims, demands or
judgments, arising in whole or in part from the negligence of the Indemnitees.
It is the express intent of the parties that the indemnities and obligations of
Tenant to defend are extended by Tenant to indemnify, defend and protect the
Indemnitees even if such indemnities and obligations to protect and defend arise
from, relate to, or result from or are caused in whole or in part by, the sole
or concurrent negligence of any Indemnitee or Indemnitees. Notwithstanding the
foregoing, this Section 18.2(h) shall not be construed to expand the coverage or
time periods of any indemnity provided for in this Lease.

ARTICLE 19. — SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE

19.1      Obligations of Tenant. Subject to the provisions of Section 19.4
hereof, the Lease and the rights granted to Tenant by the Lease shall be subject
and subordinate to all deeds of trust or mortgages affecting or encumbering all
or any part of the Project; provided however, that if Landlord elects at any
time to have Tenant’s interest in the Lease be or become superior, senior or
prior to any such instrument, then upon receipt by Tenant of written notice of
such election, Tenant shall promptly execute all necessary and reasonable
subordination instruments or other documents confirming the subordination of
such mortgage or deed of trust.

19.2      Landlord’s Right to Assign. Landlord’s interest in the Lease may be
assigned to any mortgagee or trust deed beneficiary as additional security.
Nothing in this Lease shall empower Tenant to do any act without Landlord’s
prior consent which can, shall or may encumber the title of the Landlord of all
or any part of the Project. Nothing in this Lease shall prohibit Tenant from
encumbering Tenant’s leasehold estate in and to the Premises; provided however,
that any transfer upon or in lieu of foreclosure of such encumbrance shall be
subject to the conditions to and restrictions on assignment in Article 12
hereof, and any failure to comply with such conditions or restrictions will
constitute an Event of Default hereunder.

19.3      Tenant’s Consent to Assignment for Indebtedness. Tenant acknowledges
that in order to secure Landlord’s obligations under the loan in favor of the
Lender as reflected in the Loan Documents relating to the Mortgage, Landlord has
agreed to the assignment (to the extent provided therein) to the Lender, of
Landlord’s right, title and interest to this Lease. While the Loan Documents or
any replacements, renewals, extensions or modifications thereof are in effect,
Tenant hereby:

(a)        consents to such assignment in this Lease;

 

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(b)    agrees:

(i)        to deliver to the Lender all notices and other communications which
Tenant is required to deliver to the Landlord pursuant to this Lease
concurrently with delivery to Landlord;

(ii)        that all matters requiring the consent, approval, waiver and the
like of the Landlord pursuant to this Lease shall require such consent,
approval, waiver or the like of both Landlord and Lender, and no such consent,
approval, waiver and the like delivered by Landlord shall be of any force or
effect unless also delivered by Lender;

(iii)        to deliver to the Lender, concurrently with Tenant’s delivery to
Landlord, duplicate originals of all notices and other communications delivered
to Landlord pursuant to this Lease, in accordance with this Lease, of (A) the
occurrence of any Event of Default, (B) the making of any election, (C) the
exercise of any right expressly granted to Tenant in this Lease to terminate all
or any portion of this Lease, and (D) the exercise of any option;

(iv)        that it shall not, except as expressly provided in this Lease, seek
to recover from the Lender any moneys paid to the Landlord or the Lender by
virtue of the assignment of lease and the foregoing provisions; provided,
however, that neither the assignment of lease nor the foregoing provisions shall
limit Tenant’s right to recover (A) any duplicate payment made to the Lender,
whether due to computational or administrative error or otherwise, if the Lender
has received such payment, and (B) any amounts that have been paid to or are
actually held by the Lender that are expressly required to be refunded to,
repaid, or otherwise released to or for the benefit of Tenant under this Lease;

(v)         that Tenant shall not pay any Rent more than thirty (30) days prior
to such payment’s scheduled due date except as provided in this Lease;

(vi)        that Tenant shall not enter into any agreement subordinating or
(except as expressly permitted by the terms of this Lease as in effect on the
date hereof) surrendering, canceling, or terminating this Lease without the
prior written consent of the Lender, and any such attempted subordination,
surrender, cancellation or termination without such consent shall be void;

(vii)        that Tenant shall not enter into any amendment or modification of
this Lease without the prior written consent of the Lender;

(viii)       that if this Lease shall be amended, it shall continue to
constitute collateral under the Mortgage without the necessity of any further
act by Landlord, Tenant or the Lender; and

(ix)          that except as expressly provided in this Lease, Tenant shall not
take any action to terminate, rescind or avoid this Lease, notwithstanding, the
bankruptcy, insolvency, reorganization, composition, readjustment, liquidation,
dissolution or other proceeding affecting Landlord or any assignee of Landlord
and notwithstanding any action with respect to the Lease which may be taken by
an assignee, Lender or receiver of Landlord or of any such assignee or by any
court in any such proceedings.

 

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19.4      Attornment by Tenant. In the event of any foreclosure of any or all
mortgages or deeds of trust encumbering the Project or the Site by trustee’s
sale, voluntary agreement, deed in lieu of foreclosure, or by the commencement
of any judicial action seeking foreclosure, Tenant, at the request of the then
landlord under this Lease, shall attorn to and recognize the beneficiary or
purchaser at the foreclosure sale, as Tenant’s landlord under this Lease. Tenant
further agrees that the beneficiary or purchaser at the foreclosure sale shall
not be (i) bound by any payment of Rent for more than one (1) month in advance,
except prepayments in the nature of security for the performance by Tenant of
its obligations under this Lease (and then only if such prepayments have been
deposited with and are under the control of such beneficiary or purchaser);
(ii) bound by any amendment or modification of this Lease made without the
express written consent of Landlord’s lender of record (i.e., the holder of
record of such mortgage or deed of trust) at the time such amendment or
modification is made; (iii) liable for any act or omission of any prior landlord
(including Landlord) except to the extent such act or omission continues after
such time as such beneficiary or purchaser acquires the Project; (iv) subject to
any offsets or defenses which Tenant might have against any prior landlord
(including Landlord), except to the extent the circumstances giving rise to such
offsets or defenses continues to exist or not exist, as the case may be, after
such time as such beneficiary or purchaser acquires the Project; or (v) subject
to any obligation to cure any default by a prior Landlord except for defaults of
a continuing nature. Tenant agrees to execute and deliver at any time upon
request of such beneficiary, purchaser, or their successors, any instrument to
further evidence such attornment. Tenant hereby waives its right, if any, to
elect to terminate this Lease or to surrender possession of the Premises in the
event of any such termination of mortgage or deed of trust foreclosure.

19.5      Non-Disturbance. Tenant’s rights (if any) under this Lease following a
foreclosure of the Mortgage or deed in lieu of such foreclosure are covered in
the Specific Assignment, Subordination, Nondisturbance and Attornment agreement
by and among Landlord, Tenant and Lender dated April 10, 2003. Notwithstanding
any of the provisions of this Article 19 to the contrary, unless an Event of
Default has occurred and is continuing, Tenant’s right to occupy the Premises
under this Lease shall not terminate because of a foreclosure of any other deed
of trust or mortgage (other than the Mortgage), which right shall continue,
subject to the conditions of this Lease, and this Lease shall remain in effect,
until an Event of Default occurs, or until Tenant’s rights are modified because
of an applicable eminent domain proceeding pursuant to Article 14, or because of
the occurrence of applicable damage and destruction pursuant to Article 14. To
the extent of any inconsistency the terms and conditions of the Loan Documents
shall control over this Section 19.5. Tenant’s obligation under this Article 19
hereof to subordinate this Lease to any other holder of any mortgage or deed of
trust other than Lender is expressly conditioned upon Tenant receiving from such
holder a non-disturbance agreement in commercially reasonable form, and Landlord
covenants to use good faith efforts to obtain the same on behalf of Tenant from
such holder.

ARTICLE 20. — SURRENDER OF PREMISES

Upon the expiration of the Term or earlier termination of this Lease, Tenant
shall quit and surrender to Landlord the Premises, broom clean and with the Base
Building Improvements in substantially the same condition as at the completion
thereof and with the Interior Improvements in substantially in the same
condition as at the completion thereof, except for (a) those Alterations which
Tenant is required to remove and/or restore in accordance with Article 7

 

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hereof, (b) reasonable wear and tear, (c) removal by Tenant, at Tenant’s sole
discretion, of Tenant’s Property from the Premises (subject to Tenant’s
obligation to repair any damage caused by such removal) and (d) portions of the
Property subject to a Taking or Casualty (except to the extent required to be
restored under this Lease). The covenants and conditions of this Article 20
shall survive any expiration or termination of this Lease.

ARTICLE 21. — HOLDING OVER

21.1      Holdover Provision. Tenant shall surrender, subject to the provisions
of Article 20 and Section 21.2 below, possession of the Premises immediately
upon the expiration of the Term or earlier termination of this Lease. If Tenant
shall continue to occupy or possess the Premises after such expiration or
termination without the consent of Landlord, then unless Landlord and Tenant
have otherwise agreed in writing, Tenant shall be a tenant from month-to-month.
All the terms, provisions and conditions of this Lease shall apply to this
month-to-month tenancy, including but not limited to the obligation to pay
monthly installments during the holdover period of rent equal to one-twelfth of
the Annual Base Rent for the first year of the Basic Term or the immediately
preceding Renewal Term, as the case may be. This month-to-month tenancy may be
terminated by Landlord or Tenant upon thirty (30) days’ prior notice to the
non-terminating party. In the event that Tenant fails to surrender the Premises
immediately upon the expiration of the Term or earlier termination of the Lease,
then, subject to the provisions of Section 21.2 below, Tenant shall indemnify
and hold Landlord harmless against all damages, loss or liability resulting from
or arising out of Tenant’s failure to surrender the Premises, including, but not
limited to, any amounts required to be paid to any tenant or prospective tenant
who was to have occupied the Premises after said termination or expiration and
any related reasonable attorneys’ fees and brokerage commissions.

21.2      Tenant’s Right to Hold Over With Notice. Notwithstanding anything to
the contrary set forth above, provided that Tenant shall give eighteen months
(18) months prior written notice to Landlord of its election to do so, Tenant
shall have the right, upon the expiration of the original Term of this Lease or
any extension thereof, to hold over in the Premises for a fixed period
specifically designated in Tenant’s notice, but not to exceed six (6) months,
upon the same terms and conditions that were applicable to the Premises during
the Term, including but not limited to the obligation to pay monthly
installments during the holdover period of rent equal to one-twelfth of the
Annual Base Rent for the first year of the Basic Term or the immediately
preceding Renewal Term, as the case may be, by giving written notice of such
election (the “Holdover Election Notice”).

ARTICLE 22. — INSPECTIONS AND ACCESS

22.1      Entry by Landlord. Upon reasonable prior notice (which shall not be
required in case of emergency or upon the requirement of any applicable
governmental authority (e.g., surprise inspection) in any of which events no
such notice shall be required), Landlord, or its agents, may enter the Premises
at all reasonable hours for any reasonable purpose when accompanied by an
authorized representative of Tenant. Any such entry shall be accomplished as
expeditiously as reasonably possible and in a manner so as to cause as little
interference to Tenant as reasonably possible.

 

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22.2      Secured Areas. Notwithstanding anything to the contrary set forth
above, Tenant may designate certain areas of the Premises as “Secured Areas”
should Tenant require such areas for the purpose of securing certain valuable
property or confidential information. Landlord may not enter such Secured Areas
except in the case of emergency or in the event of a Landlord inspection, in
which case Landlord shall provide Tenant with ten (10) days’ prior written
notice of the specific date and time of such Landlord inspection.

ARTICLE 23. — NAME OF PROJECT

For so long as Tenant continues to lease and possess not less than thirty-five
percent (35%) of the Rentable Area in the Building, Tenant shall have the sole
and exclusive right, from time to time, to name the Building. Landlord reserves
the right, subject to the provisions of Article 33, at any time to change the
street address of the Building to comply with applicable governmental
regulations. Upon the expiration or termination of this Lease, if Tenant so
requests, Landlord shall have the obligation, at Tenant’s expense, to remove
from the Building and/or the Project any name which refers to Tenant or by which
Tenant is known. The preceding sentence shall not be deemed or construed to
relieve Tenant of any obligation to remove Tenant’s Property upon the expiration
or termination of this Lease, including Tenant’s Property comprised of any name
or sign which refers to Tenant or by which Tenant is known.

In the event that Tenant’s right to name the Building has expired due to
contraction of the Tenant’s Premises in any Renewal Term below thirty-five
percent (35%) of the Rentable Area in the Building, and provided that Tenant’s
Premises includes at least twenty percent (20%) of the Rentable Area of the
Building, the following restrictions shall apply to any name or identity of the
Building and/or the Project selected by Landlord: (i) the Building shall not be
named, designated or commonly referred to by the name of, or by reference to any
utility companies other than Tenant; and (ii) No Person engaged in a use
described in Article 33 hereof as being violative of Tenant’s Exclusive Use
rights, other than Tenant, shall be permitted to locate any signage or
advertising of any type on any portion of the Building that can be viewed from
the exterior of the Building or from the external Common Areas.

ARTICLE 24. — MERGER OF ESTATES; SURRENDER OF LEASE

No voluntary or other surrender of the Lease by Tenant, no acquisition by
Landlord of Tenant’s estate in the Lease, no acquisition by Tenant of Landlord’s
estate in the Lease or the Project, and no ownership by any one Person of both
the Landlord’s estate under the Lease and the Tenant’s estate under the Lease
shall result in the merger of this Lease or the respective estates of the
Landlord and Tenant created hereunder. No such merger shall occur unless and
until all persons, corporations, firms and other entities (including any
mortgagee) having any interest in (x) this Lease or the leasehold estate created
by this Lease, and (y) the fee estate in or ownership of the Premises sought to
be merged shall join in a written instrument expressly effecting such merger and
shall duly record the same. Any termination or surrender of the Lease by Tenant
or a mutual cancellation of the Lease shall, at the option of Landlord,
terminate all or any existing subleases or subtenancies, or may, at the option
of Landlord, operate as an assignment to it of Tenant’s interest in any or all
such subleases or subtenancies; provided, however, that any sublease consented
to by Landlord or deemed consented to by Landlord or otherwise permitted under
Article 12 hereof and for which Landlord has provided a

 

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subordination, non-disturbance and attornment agreement shall survive and be
automatically assigned to Landlord as the prime Landlord thereunder.

ARTICLE 25. — WAIVER

The waiver by Landlord or Tenant of any term, covenant, agreement or condition
contained in this Lease shall not (i) be effective unless in writing and signed
by the party against whom enforcement is sought, or (ii) be deemed to be a
waiver of any subsequent breach of the same or of any other term, covenant,
agreement, condition or provision of this Lease, nor shall any custom or
practice which may develop between the parties in the administration of the
Lease be construed to waive or lessen the right of Landlord or Tenant to insist
upon the performance by the other in strict accordance with all of the terms,
covenants, agreements, conditions, and provisions of the Lease. The subsequent
acceptance by Landlord of any payment owed by Tenant to Landlord under the
Lease, or the payment of Rent by Tenant, shall not be deemed to be a waiver of
any preceding breach by Tenant of any term, covenant, agreement, condition or
provision of the Lease, other than the failure of Tenant to make the specific
payment so accepted by Landlord, regardless of Landlord’s or Tenant’s knowledge
of such preceding breach at the time of the making or acceptance of such
payment.

ARTICLE 26. — SALE BY LANDLORD

In the event Landlord shall sell, assign, convey or transfer all of its interest
in the Project and/or the Site, Tenant agrees to attorn to such transferee,
assignee or new Landlord, subject however to the provisions of Section 19.4
hereof, and upon consummation of such sale, conveyance or transfer, Landlord
shall automatically be freed and relieved from all liability and obligations
accruing or to be performed from and after the date of such sale, transfer, or
conveyance.

ARTICLE 27. — ESTOPPEL CERTIFICATES

Each party shall, at any time and from time to time upon request of the other
party or Lender within fifteen (15) days following notice of such request from
the requesting party, execute, acknowledge and deliver to the requesting party a
certificate (the “Estoppel Certificate”) in writing in the form of the attached
Exhibit “K”. For purposes of this Article 27, an Estoppel Certificate shall not
be deemed to be commercially reasonable if it amends or modifies any of the
provisions of this Lease. If the certifying party fails to deliver the Estoppel
Certificate within such fifteen (15) day period, the requesting party shall so
notify the certifying party and, if the certifying party does not deliver the
Estoppel Certificate within five (5) Business Days thereafter, the certifying
party’s failure to do so shall be an Event of Default under this Lease and, in
addition, be deemed to establish conclusively that this Lease is in full force
and effect and has not been modified except as may be represented by the
requesting party, but shall not be deemed to have cured any default under this
Lease by the party failing to provide the Estoppel Certificate.

 

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ARTICLE 28. — RIGHT TO PERFORMANCE

Except as otherwise provided in this Lease, all covenants and agreements to be
performed by Landlord or Tenant under the Lease shall be performed by such party
at such party’s sole cost and expense.

ARTICLE 29. — RIGHTS UNDER THE JOINT AND RECIPROCAL EASEMENT

During the Term, all of the rights and obligations of the Landlord under the
Joint and Reciprocal Easement are hereby assigned to Tenant and the Tenant
hereby assumes such obligations and agrees to comply with the provisions thereof
at Tenant’s sole cost and expense.

ARTICLE 30. — SECURITY SERVICES

30.1     Tenant’s Obligation to Furnish Security Services. Tenant shall provide,
at Tenant’s sole cost and expense, twenty-four (24) hours per day, seven
(7) days per week, every day of the year, on-site Building security equipment,
personnel, procedures and systems which are not less than security services
provided at other first-class buildings in the Raleigh, North Carolina market
area and which are in full conformance with Tenant’s standards and requirements
as the same may be altered from time to time.

30.2     Tenant’s Right to Install Security System. Tenant may, at Tenant’s cost
(which may include use of funds provided under the Loan Documents for such
purposes), establish or install any automated and/or nonautomated security
system or security personnel in, on or about the Premises in lieu of or in
addition to Landlord’s Base Building Improvements security equipment.

ARTICLE 31. — NOTICES

All notices, requests, consents, approvals, payments in connection with this
Lease, or communications that either party desires or is required or permitted
to give or make to the other party under this Lease shall only be deemed to have
been given, made and delivered, when made or given in writing and personally
served, or deposited in the United States mail, certified or registered mail,
return receipt requested, postage prepaid, or sent by reputable overnight
courier (e.g. Federal Express) and addressed to the parties as follows: If to
Tenant, at Tenant’s Address for Notices set forth in Section A of this Lease, or
to such other place as Tenant may from time to time designate in a notice to
Landlord given in the manner set forth in this Article 31; if to Landlord, at
Landlord’s Address for Notices set forth in Section A of this Lease, or to such
other places as Landlord may from time to time designate in a notice to Tenant
given in the manner set forth in this Article 31. Tenant agrees to send copies
of all notices required or permitted to be given to Landlord to any holder or
beneficiary under a mortgage or deed of trust that notifies Tenant in writing of
its interest and the address to which notices are to be sent.

ARTICLE 32. — SIGNAGE AND BUILDING IDENTITY

In addition to Building/Project identity signage which is included in the Base
Building Improvements budget, Tenant, at Tenant’s sole cost and expense (but
Tenant may use a portion of the Interior Improvements Allowance for the same),
and subject to Tenant obtaining all

 

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applicable governmental approvals regarding same, shall be entitled to install
appropriate signage, including Tenant’s or any subtenant’s or occupant’s
corporate name and logo, on and in the Building, including (a) exterior signage
and (b) signage on or adjacent to the entrance doors to Tenant’s Premises, and
(c) on the directory board located in the main entrance to the Building or
anywhere else Tenant deems appropriate (collectively, the “Signage Rights”).

During any Renewal Term and subject to the provisions of Article 23 hereof, if
Tenant is then leasing less than one hundred percent (100%) of the Rentable Area
of the Building, exterior signage shall be subject to Landlord’s prior written
approval, which approval shall not be unreasonably withheld or delayed. The
standard for Landlord to withhold approval shall be limited to (1) signage which
interferes with or downgrades the first-class nature of the Building, and
(2) provision of fair, pro rata external signage for ground floor retail
tenants. In no event shall Landlord ever have the right to deny Tenant the use
of its national or regional logos or selected colors in such signage. In the
event that Tenant is then leasing less than one hundred percent (100%) of the
Rentable Area of the Building, Landlord may elect to allow other tenants of the
Building to place graphics upon exterior monument signs within the external
Common Areas of the Building. In the event Tenant is then leasing less than
thirty-five percent (35%) of the Rentable Area of the Building, Landlord may
elect to cause Tenant to remove any exterior signage from the external Common
Areas of the Building or Landlord may elect to allow Tenant and other tenants of
the Building to place their signs and graphics on exterior signage approved by
Landlord as provided above, in which case Landlord shall have the right to
determine the position and relative size of such signs and graphics on such
exterior signage, and Landlord agrees that no other tenant occupying less
Rentable Area of the Building than Tenant shall be entitled to signs and
graphics on such exterior signage which will be larger or placed in a more
prominent position than the signs and graphics of Tenant. If Tenant is at any
time leasing less than thirty-five percent (35%) of the Rentable Area of the
Building, Landlord may elect to cause Tenant to remove its exterior signage from
the exterior of such Building, and in the event any tenant of such Building
shall lease more Rentable Area of such Building than the Rentable Area in such
Building leased by Tenant, Landlord may grant such other tenant the right to
place signage on the exterior of such Building.

Landlord shall, if so requested by Tenant, execute any applications reasonably
required to assist Tenant in obtaining the proper governmental approvals and
permits for the requested signage. Any such signage installed by Tenant need not
be consistent or compatible with the Building’s design, signage and graphics
program, except as provided in the preceding paragraph.

At any time when Tenant is leasing at least thirty-five percent (35%). of the
Rentable Area of the Building, Landlord shall not permit any other tenant of
such Building or the Project to install external signage which references the
words “energy” or “power” or “utility” or contains any other reference to a
business utilizing its premises as a power company or for the business of
manufacturing, selling or trading energy or energy-related products or
activities, or any other trade name of a tenant or occupant whose use is in
conflict with the Exclusive Use granted to Tenant in Article 33 hereof.

 

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ARTICLE 33. — EXCLUSIVE USE

If, pursuant to any right of Tenant to reduce the size of the Tenant’s Premises
during any Renewal Terms, the Tenant’s Premises shall be at least thirty-five
percent (35%) of the Rentable Area of the Building, Landlord shall not use,
lease or permit any area within the Building or the Project to be used by anyone
other than Tenant for the business of manufacturing, selling or trading energy
or energy-related products or activities related to any of the foregoing (the
“Exclusive Use”).

ARTICLE 34. — ROOF RIGHTS

Except as hereinafter provided, during the Term of the Lease (as it may be
extended), Tenant shall have the sole and exclusive right at no additional cost
to install and maintain, on the roof of the Building and elsewhere on the
Project, satellite dishes, television or communications antennas or facilities,
related receiving or transmitting equipment, related cable connections and any
and all other related equipment (collectively, “Communications Equipment”)
required in connection with Tenant’s communications and data transmission
network. Tenant may license, assign or sublet without Landlord’s consent the
right to use any of such Communications Equipment or roof space, whether or not
in conjunction with any sublease or assignment regarding the Premises. Tenant
shall have the right to use “risers” in the Building over and above those
provided in the Base Building Improvements (and to install additional risers if
necessary) as long as there is no adverse affect on the Building Structure or
Building Systems. In addition to the foregoing, Tenant shall, at its option,
have the right to use additional space on the roof of the Building for Tenant’s
additional HVAC equipment and any and all related equipment to accommodate
Tenant’s excess HVAC requirements (collectively, “HVAC Unit”). All such
Communications Equipment and HVAC Units shall be screened from view of
pedestrians. Furthermore, the exact location, construction method and
installation of any such Communications Equipment or HVAC Unit shall be mutually
and reasonably acceptable to Landlord and Tenant and Tenant shall have secured,
at Tenant’s sole cost and expense, the approval of all governmental authorities
and all permits required by governmental authorities having jurisdiction over
such approvals and permits for the Communications Equipment and the HVAC Unit,
and shall provide copies of such approvals and permits to Landlord prior to
commencing any work with respect to such Communications Equipment and the HVAC
Unit. Landlord shall have the right to place reasonable conditions upon the
method of installation as reasonably necessary to preserve Landlord’s roof
warranty. Tenant shall be permitted to alter its Communications Equipment in
connection with technological upgrades from time to time. Tenant shall pay for
any and all costs and expenses in connection with the installation, maintenance,
use and removal of the Communications Equipment and the HVAC Unit, including
without limitation any and all costs related to ensuring that Landlord’s roof
warranties related to the Building or any portion thereof are not terminated,
negated in any way by any of such installations or by Tenant’s applicable repair
and maintenance of such facilities, but in no event shall Tenant be obligated to
pay Landlord any rental or license fees for any area(s) on which the
Communications Equipment and the HVAC Unit shall be located. The contractor
selected by Tenant to install and to maintain and repair any such Communications
Equipment and HVAC Units shall be reputable and licensed in the jurisdiction
where the Building is located. Furthermore, Tenant shall, at its sole and
absolute discretion when it deems it as necessary or

 

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appropriate to do so, repair and maintain the Communications Equipment and the
HVAC Unit. No portion of the roof space shall be included in or designated as
rentable area.

Upon termination or expiration of this Lease, Tenant shall remove the
Communications Equipment installed by it pursuant to this Article 34, at
Tenant’s expense, and shall repair and restore any damage to the Building and
Project caused by such removal to a condition comparable to that existing prior
to such installation, normal wear and tear excepted.

ARTICLE 35. — SECURITY DEPOSIT

Tenant, in recognition of its financial standing and reputation, shall not be
obligated to provide a security deposit.

ARTICLE 36. — MISCELLANEOUS

36.1     Authorization to Sign Lease. If Tenant or Landlord is a corporation,
each individual executing the Lease on behalf of such party represents and
warrants that he/she is duly authorized to execute and deliver the Lease on
behalf of such party. If such party is a partnership or trust, each individual
executing the Lease on behalf of such party represents and warrants that he/she
is duly authorized to execute and deliver the Lease on behalf of such party in
accordance with the terms of such entity’s partnership agreement or trust
agreement, respectively. If such party is a limited liability company, each
individual executing the Lease on behalf of such party represents and warrants
that he/she is duly authorized to execute and deliver the Lease on behalf of
such party in accordance with the terms of such entity’s operating agreement.

36.2     Entire Agreement. It is understood and acknowledged that there are no
oral agreements between the parties hereto affecting this Lease, and this Lease
supersedes and cancels any and all previous negotiations, arrangements,
brochures, agreements and understandings, if any, between the parties hereto or
displayed by Landlord to Tenant with respect to the subject matter thereof, and
none thereof shall be used to interpret or construe this Lease. This Lease, and
the exhibits and schedules attached hereto, contain all of the terms, covenants,
conditions, warranties and agreements of the parties relating in any manner to
the rental, use and occupancy of the Premises and shall be considered to be the
only agreements between the parties hereto and their representatives and agents.
None of the terms, covenants, conditions or provisions of this Lease can be
modified, deleted or added to except in writing signed by the parties hereto and
with Lender’s prior written consent. All negotiations and oral agreements
acceptable to both parties have been merged into and are included herein. There
are no other representations or warranties between the parties, and all reliance
with respect to representations is based totally upon the representations and
agreements contained in this Lease.

36.3     Severability. The illegality, invalidity or unenforceability of any
term, condition, or provision of the Lease shall in no way impair or invalidate
any other term, provision or condition of the Lease, and all such other terms,
provisions and conditions shall remain in full force and effect.

36.4     Gender and Headings. The words “Landlord” and “Tenant” as used herein
shall include the plural as well as the singular and, when appropriate, shall
refer to action taken by or on behalf of Landlord or Tenant by their respective
employees, agents, or authorized

 

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representatives. Words in masculine gender include the feminine and neuter. If
there be more than one Tenant, the obligations hereunder imposed upon Tenant
shall be joint and several. The section and article headings of the Lease are
not a part of the Lease and shall have no effect upon the construction or
interpretation of any part hereof. Subject to the provisions of Articles 12 and
26, and except as otherwise provided to the contrary in this Lease, the terms,
conditions and agreements of this Lease shall apply to and bind the heirs,
successors, legal representatives and permitted assigns of the parties hereto.
The Lease shall be governed by and construed pursuant to the laws of the State
of North Carolina.

36.5     Exhibits. The Exhibits attached to this Lease, are hereby incorporated
by this reference and made a part of this Lease.

36.6     Quiet Enjoyment. Landlord covenants and agrees that so long as Tenant
makes all of Tenant’s payments as and when due under this Lease, and upon fully
performing, observing and keeping the covenants, agreements and conditions of
this Lease on its part to be kept, Landlord or anyone claiming through Landlord
shall do no act nor authorize any act to disturb the peaceful and quiet
enjoyment of the Premises by Tenant during the Term of this Lease, subject to
the terms and provisions of this Lease.

36.7     No Recordation. Landlord and Tenant agree that in no event and under no
circumstances shall the Lease be recorded by Landlord or Tenant, but at Tenant’s
or Landlord’s election, a Memorandum of Lease may be recorded, and Tenant shall
also have the right to grant to its subtenants or assignees the right to record
a Memorandum referencing such sublease or assignment. The granting to any
subtenants or assignees of the right to record a Memorandum referencing such
sublease or assignment shall not be deemed an acceptance or approval of such
sublease or assignment by Landlord except to the extent otherwise provided in
Article 12 hereof with respect to Subleases not requiring Landlord’s approval.
Upon the request of Landlord following the expiration or termination of this
Lease, Tenant shall promptly execute and deliver to Landlord an appropriate
release and/or cancellation instrument acknowledging the expiration or
termination of the Lease and releasing any and all right, title and interest of
Tenant in and to the Premises under this Lease. Also, upon the request of
Landlord following the exercise of an option to extend the Term with respect to
less than all of the Premises as provided in Section 2.3 of this Lease, Tenant
shall promptly execute and deliver to Landlord an appropriate release instrument
acknowledging the exercise of the option to extend the Term with respect to less
than all of the Premises and releasing any and all right, title and interest of
Tenant in and to the portion of the Premises which are no longer subject to the
terms of this Lease as a result of the exercise of the option to extend the Term
with respect to less than all of the Premises as provided in Section 2.3 of this
Lease. The release and/or cancellation instruments contemplated herein shall be
executed in proper form for recordation in the real estate records of Wake
County, North Carolina.

36.8     Cumulative Remedies. No remedy or election provided, allowed or given
to Landlord by any provision of this Lease shall be deemed exclusive unless so
indicated, but shall, whenever possible, be cumulative with all other remedies
under this Lease, in law or equity.

36.9     Brokers. Each party represents and warrants that it has not dealt with
any real estate broker or agent in connection with this Lease. Each party shall
indemnify the other and

 

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hold it harmless from any cost, expense, or liability (including costs of suit
and reasonable attorneys’ fees) for any compensation, commission or fees claimed
by any real estate broker or agent, in connection with this Lease or its
negotiation by reason of any act or statement of the indemnifying party.

36.10     Advertising and Marketing of Project. Tenant shall have the right to
cause promotional materials and press releases prepared, at Tenant’s cost, and
to distribute the same, advertising, promoting or marketing the Project. If
Landlord desires to market, advertise or promote the Project or Landlord’s role
therein, Landlord may do so at Landlord’s cost, provided that Tenant shall have
the right to approve or reject the content of any such advertising, marketing or
promotion during any time that Tenant retains naming rights pursuant to Article
23 hereof, provided no Event of Default has occurred and is continuing.

36.11     Consent/Duty to Act Reasonably. Except for any references to the terms
“sole” or “absolute”, any time the consent of Landlord or Tenant is required,
such consent shall not be unreasonably withheld, conditioned or delayed.
Whenever this Lease grants Landlord or Tenant the right to take action, exercise
discretion, establish rules and regulations or make allocations or other
determinations (other than decisions to exercise expansion, contraction,
cancellation, termination or renewal options), unless another standard is
expressly set forth in this Lease limiting any such rights (or unless Landlord
is bound by another standard in the Loan Documents in consenting to the exercise
of such rights), Landlord and Tenant shall act reasonably and in good faith and
take no action which might result in the frustration of the reasonable
expectations of a sophisticated tenant or landlord concerning the benefits to be
enjoyed under this Lease in consenting to or withholding consent to the exercise
of such rights.

36.12     Net Lease, No Setoff, Etc. It is the intention and agreement of the
parties hereto that the obligations of Tenant hereunder shall be separate and
independent covenants and agreements, and that the Facility Payment, Annual Base
Rent, Supplemental Rent and all other sums payable by Tenant hereunder shall
continue to be payable in all events, and that the obligations of Tenant
hereunder shall continue unaffected for any reason, unless the requirement to
pay or perform the same shall have been terminated pursuant to an express
provision of this Lease. This Lease is an absolutely net lease and it is agreed
and intended that the Facility Payment, Annual Base Rent, Supplemental Rent and
any other amounts payable hereunder by Tenant shall be paid without notice,
demand, counterclaim, setoff, recoupment, deduction or defense and without
abatement, suspension, deferment, diminution or reduction and that Tenant’s
obligation to pay all such amounts, throughout the Term and all applicable
Renewal Terms is absolute and unconditional and free from any charges,
assessments, impositions, expenses or deductions of any and every kind or
nature. Under no circumstances shall Landlord be obligated to repay Tenant,
refund to Tenant, or return to Tenant, any Facility Payment, Annual Base Rent,
Supplemental Rent, or any other Rent or any portion thereof. All costs, expenses
and obligations of every kind and nature whatsoever relating to the Premises and
the appurtenances thereto or otherwise payable by Tenant pursuant to the terms
and conditions of this Lease and the use and occupancy thereof that may arise or
become due and payable prior to or with respect to the Term (whether or not the
same shall become payable during the Term or thereafter) shall be paid by
Tenant. Tenant assumes the sole responsibility for the condition, use,
operation, maintenance, repair, replacement, underletting and management of the
Premises and the Landlord shall have no responsibility in respect thereof and
shall have no liability for damage

 

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to the Premises of Tenant or any subtenant of Tenant on any account for any
reason whatsoever, other than by reason of such Landlord’s gross negligence. It
is the purpose and intention of the parties to this Lease that the Facility
Payment, Annual Base Rent, Supplemental Rent and all other Rent due hereunder
shall be absolutely net to the Landlord and that this Lease shall yield, net to
the Landlord, the Facility Payment, Annual Base Rent, Supplemental Rent and all
other payments hereunder required to be made by Tenant as provided in this
Lease.

Tenant acknowledges that it accepts full risk of its being unable to occupy the
Premises, by virtue of Event of Loss, early termination or Event of Default, or
by any other reason, despite having paid the Facility Payment, Annual Base Rent,
Supplemental Rent and any other amount payable hereunder with respect to such
period.

This Lease shall not terminate and Tenant shall not have any rights to terminate
this Lease, during the Basic Term and any Renewal Terms (except as otherwise
expressly provided in this Lease). Without limiting the generality of the
foregoing, except as elsewhere expressly provided in this Lease, this Lease
shall not terminate and Tenant shall not take any action to terminate, rescind
or void this Lease and the obligations and liabilities of Tenant hereunder shall
in no way be released, discharged or otherwise affected for any reason,
including without limitation: (a) any latent or other defect in the condition,
merchantability, design, quality or fitness for use of the Premises or any part
thereof, or the failure of the Premises to comply with all Applicable Laws,
including any inability to occupy or use the Premises by reason of such
noncompliance; (b) any damage to, removal, abandonment, salvage, loss,
condemnation (except as set forth in this Lease), theft, scrapping or
destruction of or any requisition or taking of the Premises or any part thereof,
or any environmental conditions on the Premises or any property in the vicinity
of the Premises; (c) any restriction, deprivation, prevention, prohibition, or
curtailment of or interference with any use of, access to or occupancy of the
Premises or any part thereof including eviction; (d) any defect in title to or
rights to the Premises or any Lien on such title or rights to the Premises or
any inadequacy or failure of the description of the Premises to demise and let
to Tenant the Premises intended to be leased hereunder; (e) any change, waiver,
extension, indulgence or other action or omission or breach in respect of any
obligation or liability of or by any Person; (f) any bankruptcy, insolvency,
reorganization, composition, adjustment, dissolution, liquidation or other like
proceedings relating to Tenant, Landlord or any other Person, or any action
taken with respect to this Lease by any trustee or receiver of Tenant or any
other Person, or by any court, in any such proceeding; (g) any right or claim
that Tenant has or might have against any Person, including without limitation
Landlord, the Lender, or any vendor, manufacturer, contractor of or for the
Premises; (h) any action, omission, breach or failure on the part of Landlord or
any other Person to perform or comply with any of the terms of this Lease, any
other Operative Document or of any other agreement; (i) any invalidity,
unenforceability, rejection or disaffirmance of this Lease, any of the Operative
Documents, or any provision hereof or thereof, by operation of law or otherwise
against or by Tenant or Landlord or any provision hereof; (j) the impossibility
or illegality of performance by Tenant or Landlord, or both; (k) any action by
any court, administrative agency or other Governmental Authority; (1) any
interference, interruption or cessation or delay in the use, possession or quiet
enjoyment of the Premises; (m) the exercise of any remedy, including
foreclosure, under the Mortgage, (n) any action with respect to this Lease
(including the disaffirmance or rejection hereof) which may be taken by Landlord
or Tenant under the Federal Bankruptcy Code or by any trustee, receiver or
liquidator of Landlord or Tenant or by any court under the Federal

 

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Bankruptcy Code or otherwise, (o) the prohibition or restriction of Tenant’s use
of the Premises under any Applicable Laws or otherwise, (p) the eviction of
Tenant from possession of the Premises by paramount title or otherwise, (q) any
breach or default by Landlord hereunder or under any other agreement between
Landlord and Tenant, (provided, that this provision shall not prohibit the
Tenant from exercising any remedy it may have at law or in equity to collect
damages or obtain specific performance; provided, further that damages to which
Tenant may be entitled may in no event whatsoever be set off against or deducted
from Rent), (r) any sale or other disposition of the Premises; or (s) any other
occurrence whatsoever, whether similar or dissimilar to the foregoing, whether
foreseeable or unforeseeable, and whether or not Tenant shall have notice or
knowledge of any of the foregoing, any present or future law to the contrary
notwithstanding. Except as specifically set forth in this Lease, this Lease
shall be noncancellable by Tenant for any reason whatsoever and, except as
expressly provided in this Lease, Tenant, to the extent now or hereafter
permitted by Applicable Laws, waives all rights now or hereafter conferred by
statute or otherwise to quit, terminate or surrender this Lease or to any
diminution, abatement or reduction of Rent payable hereunder. Except as
otherwise expressly provided in Section 14.2(b)(iv) this Lease, under no
circumstances or conditions shall Landlord be expected or required to make any
payment of any kind hereunder or have any obligations with respect to the use,
possession, control, maintenance, alteration, rebuilding, replacing, repair,
restoration or operation of all or any part of the Premises, so long as the
Premises or any part thereof is subject to this Lease, and Tenant expressly
waives the right to perform any such action at the expense of Landlord whether
hereunder or pursuant to any law. Tenant waives all rights which are not
expressly stated herein but which may now or hereafter otherwise be conferred by
law (i) to quit, terminate or surrender this Lease or any of the Premises;
(ii) to have any setoff, counterclaim, recoupment, abatement, suspension,
deferment, diminution, deduction, reduction or defense of or to the Facility
Payment, Annual Base Rent, Supplemental Rent, or any other sums payable under
this Lease, except as otherwise expressly provided herein; and (iii) to have any
statutory Lien or offset right against Landlord or its Premises.

Notwithstanding anything to the contrary in this Lease, it is specifically
understood and agreed that there is and shall be absolutely no personal
liability on the part of Landlord or any partner, shareholder, member or
beneficiary of Landlord or its successors or permitted assigns with respect to
any of the terms, covenants and conditions of this Lease, and any liability on
the part of Landlord or its successors or assigns is and shall be limited to
solely to its interest in the Premises and in any Net Taking Award or Net
Casualty Award. Upon Landlord’s sale or transfer of the Project to a transferee
that is not an Affiliate of Landlord, provided such transferee has assumed all
of Landlord’s prospective obligations under this Lease, Landlord shall have no
further liability of any kind whatsoever under this Lease for any liability
accruing subsequent to such transfer, and Tenant shall look solely to such
transferee for any recourse to the extent any recourse against the Landlord is
provided for herein

36.13     Right of First Offer to Purchase The terms, covenants and agreements
contained in this Section 36.13 shall be applicable only if (i) no Event of
Default under this Lease has occurred and is continuing, (ii) upon any exercise
of the Right of First Offer to Purchase by Tenant hereunder, Tenant shall either
repay the Loan in full and all other amounts owing under the Loan Documents or
assume the Loan and all obligations under the Loan Documents pursuant to an
agreement in form and substance satisfactory to Lender, (iii) any sale or
transfer pursuant to the terms of this Section 36.13 does not occur prior to the
first day of the seventh calendar

 

69

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month of the eighth Permanent Loan Year (as defined in the Note) following the
Permanent Loan Commencement Date (as defined in the Note referred to in the Loan
Agreement). This Section 36.13 shall not apply to any transfer pursuant to
foreclosure or deed in lieu of foreclosure under the Mortgage, or to any Taking
or transfer in lieu of a Taking. The terms, covenants and agreements contained
in this Section 36.13 shall be applicable during the Renewal Terms only if
Tenant’s Premises shall include more than fifty percent (50%) of the Rentable
Area of the Building.

(a)     Landlord shall have the right from time to time to submit to Tenant one
or more names of prospective purchasers or transferees of an interest in the
Project or any portion thereof and to request Tenant to approve or reject the
identity of such proposed purchaser or transferee. Tenant agrees to respond to
Landlord within twenty (20) Business Days after receipt of such request from
Landlord, and Tenant agrees that its approval shall not be unreasonably
withheld. In the event Tenant fails to so respond within such twenty
(20) Business Day period, Tenant shall be deemed to have approved the identity
of such prospective purchaser and/or transferee. The rejection or disapproval by
Tenant of the identity of such prospective purchaser and/or transferee shall not
disqualify such purchaser and/or transferee from acquiring an interest in the
Project, but such rejection or disapproval shall renew and/or trigger Tenant’s
right to acquire the Project (or the applicable portion thereof) as provided in
subsection (c) below. Any approval (or deemed approval) by Tenant of any
particular prospective purchaser or transferee shall be effective only for a
period of twelve (12) months after such approval or deemed approval by Tenant.

(b)     If at any time Landlord desires to sell or transfer Landlord’s interest
in the Project or any portion thereof, Landlord shall notify Tenant in writing
of the terms of such sale or transfer which would be acceptable to Landlord,
including whether the purchase price must be paid in full at closing and, if
not, the terms relating to the payment of the deferred portion of the purchase
price (including interest rate, maturity date and method of securing such
deferred portion of the purchase price), and Tenant shall have the right to
purchase such interest for the purchase price and other terms stated in
Landlord’s notice (“Right of First Offer to Purchase”). Tenant shall exercise
such right, if at all, within thirty (30) Business Days after receipt of the
aforesaid notice from Landlord. Should Tenant fail to exercise this right,
Landlord shall, upon the expiration of such thirty (30) day period and subject
to the right of Tenant to reject the purchaser or transferee and purchase the
Project (or the applicable portion thereof) as provided in subsection (a) above
and subsection (c) below, be thereafter free for a period of twelve (12) months
to consummate a sale or transfer of Landlord’s interest in the Project (or
applicable portion thereof), subject to this Lease, to any party or for any
purchase price and upon any terms, so long as (i) such purchase price shall be
equal to or more than the purchase price set forth in Landlord’s notice,
(ii) such purchase price is paid in full at closing if Landlord’s notice
specified that the purchase price must be paid in full at closing, and (iii) if
Landlord’s notice specified that the payment of the purchase price may be
deferred, the terms for such deferred payment of the purchase price are no less
favorable to Landlord than those set forth in Landlord’s notice. To the extent
this Section 36.13 is applicable, Landlord shall not consummate a sale or
transfer of Landlord’s interest in the Project or any portion thereof which does
not comply with the conditions set forth in this subsection (b). If any sale or
transfer is not consummated by Landlord within such twelve (12) month period
after following the procedure set forth in this subsection (b), the Right of
First Offer to Purchase granted to Tenant herein shall

 

70

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remain in effect. If Landlord shall sell or transfer such interest in the
Project (or applicable portion thereof) after a failure by Tenant to exercise
its rights hereunder, such new owner and landlord shall be automatically subject
to the terms of this Right of First Offer to Purchase set forth in this
Section 36.13 for any subsequent sale of the Project.

(c)     Prior to such sale or transfer, if the identity of the prospective
purchaser or transferee has not previously been approved or deemed approved by
Tenant, Landlord shall notify Tenant of the identity of the purchaser or
transferee, the amount of the consideration and the other terms of the sale or
transfer. Unless Tenant has previously rejected or disapproved the identity of
the prospective purchaser or transferee pursuant to subsection (a) above, Tenant
shall have ten (10) Business Days after Tenant’s receipt of the notice given by
Landlord under this subsection (c) to either approve or reject the identity of
such proposed purchaser or transferee. Whether Tenant approves or rejects the
proposed purchaser or transferee, if the terms of the sale do not comply with
the conditions of subsection (b) above, Tenant shall have the right to purchase
the Project (or the applicable portion thereof) for the consideration and other
terms stated in the Landlord’s notice. Tenant must exercise such right to
purchase the Project (or the applicable portion thereof) under this subparagraph
(c), if at all, within sixty (60) days after receipt of the notice from Landlord
given pursuant to this subsection (c). If Tenant approves the identity of the
prospective purchaser or transferee, and if the terms of the sale comply with
the conditions of subsection (b) above, Tenant shall have no right to acquire
the Project (or the applicable portion thereof). If Tenant rejects the identity
of the proposed purchaser or transferee, and if the terms of the sale comply
with the conditions of subsection (b) above, Tenant shall have the right to
purchase the Project (or the applicable portion thereof) for the consideration
and other terms set forth in the notice given by Landlord to Tenant under this
subsection (c). Tenant shall exercise such right under the preceding sentence,
if at all, by giving Landlord written notice of such exercise within sixty
(60) days after receipt of the notice from Landlord given pursuant to this
subsection (c). If Tenant shall fail to exercise such right, Landlord shall,
upon the expiration of such sixty (60) day period, be thereafter free to
consummate such sale or transfer to such party.

Notwithstanding anything to the contrary in this Section 36.13, neither the
beneficiaries of the CA Raleigh Owner Trust, nor any person who has any interest
in any beneficiary in the CA Raleigh Owner Trust shall be subject to any of the
provisions of this Section 36.13, and Tenant acknowledges that such interests
may be freely transferred without any notice to or consent of the Tenant;
provided, however, no beneficial interest in the CA Raleigh Owner Trust may be
sold or conveyed nor may JPMorgan Trust Company, National Association, as owner
trustee, sell or convey any part of the Project to any Person or entity that is
a competitor of Tenant or its Affiliates, without first obtaining the written
consent of Tenant, such consent to be given or withheld in Tenant’s sole
discretion; provided further, however, that the provisions of this sentence
shall not apply to any foreclosure under the Mortgage or deed in lieu of such
foreclosure.

36.14     Survivability. The parties agree that the appropriate provisions of
this Lease will be deemed to survive and continue to remain in effect to the
extent necessary to allow Landlord and/or Tenant to enforce rights accruing
prior to, and attributable to the period of time, prior to the expiration or
termination of this Lease; provided, however, that all indemnification
obligations of Tenant shall survive for a period of five (5) years after
termination of this Lease.

 

71

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36.15     Covenants and Agreements. The failure of Landlord or Tenant to insist
in any instance on the strict keeping, observance or performance of any covenant
or agreement contained in the Lease, or the exercise of any election contained
in the Lease, shall not be construed as a waiver or relinquishment for the
future of such covenant or agreement, but the same shall continue and remain in
full force and effect.

36.16     Interest on Past Due Obligations. Except with respect to the late
payment of Rent (which shall be governed by the provisions of Section 3.7),
whenever one party is obligated pursuant to this Lease to make a payment to the
other party, if such payment is not paid when due, then the party who does not
make such payment when due shall pay interest at the Contract Rate to the party
on the unpaid amount from the date such amount was due until the date such
amount is paid.

36.17     When Payment Is Due. Except with respect to payment of the Facility
Payment, Annual Base Rent, late fees or penalties accruing due to a late payment
of the Facility Payment or Annual Base Rent, whenever in this Lease a payment is
required to be made by one party to the other, but a specific date for payment
is not set forth or a specific number of days within which payment is to be made
is not set forth, or the words “immediately”, “promptly” and/or “on demand”, or
the equivalent, are used to specify when such payment is due, then such payment
shall be due thirty (30) days after the party which is entitled to such payment
sends written notice to the other party demanding payment.

36.18     Time is of the Essence. The time for the performance of all of the
covenants, conditions and agreements of this Lease is of the essence of this
Lease.

36.19     Recharacterization as Capital Lease. Except as provided in
Section 3.8(a) with respect to the Parking Deck Lease, Landlord and Tenant
intend for this Lease to qualify as an operating lease for GAAP accounting
purposes under all applicable financial accounting standard bulletins. If at any
time Tenant determines that an event has occurred which could result in
reclassification of this Lease as a capital lease under GAAP, or Tenant’s
independent auditors advise Tenant of such a risk of recharacterization,
Landlord shall agree, subject only to the approval of the secured parties and/or
their designee which have retained approval rights pursuant to the Loan
Documents, to such amendments as are reasonably requested by Tenant in order to
avoid a recharacterization of this Lease as a capital lease, provided that
Landlord’s costs and obligations hereunder shall not increase thereby, and
Tenant’s obligations hereunder shall not decrease thereby.

36.20     Sales. Landlord shall not voluntarily sell or transfer the Project to
any Person prior to the first day of the seventh calendar month of the eighth
Permanent Loan Year (as defined in the Note) following the Permanent Loan
Commencement Date (as defined in the Note); provided that this Section shall not
prohibit a sale to the Tenant if the Tenant agrees in writing, in form and
substance satisfactory to Lender, to assume the Loan and all obligations under
the Loan Documents; provided, however, that this Section 36.20 shall not apply
to any transfer by foreclosure of the Mortgage, any deed in lieu of foreclosure,
any Taking or Casualty, or any transfer to an Affiliate of Landlord.

 

72

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36.21     Meaning of Payment of Loan. For all purposes of this Lease, all
references to the Loan being “paid in full” (or similar phrases) means that the
entire principal balance plus all accrued interest, Make-Whole Premium and other
amounts payable to Lender under the Loan Documents have actually been paid in
full, but excluding any Excluded Borrower Costs and Expenses. A foreclosure of
the Mortgage or deed in lieu of foreclosure shall not be deemed for purposes of
this Lease to reduce the amount of the Loan or any other amounts owing to Lender
under the Loan Documents or to be a payment on account of any such amount,
regardless of the amount bid at the foreclosure sale or the agreed-upon
consideration for the deed in lieu of foreclosure, it being the intent of
Landlord and Tenant that the Loan shall be deemed paid in full only after all
payments of Base Rent, and all Supplemental Rent attributable to amounts owing
to Lender under any of the Loan Documents, including, without limitation, any
Make-Whole Premium, has been paid, or the payment in full in cash or immediately
available funds of the greater of the amounts owing under this Lease or the
amount of the Loan, all accrued interest thereon and all other amounts owing
under the Loan Documents upon the permitted termination of this Lease by Tenant.

[SIGNATURES APPEAR ON FOLLOWING PAGE]

 

73

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IN WITNESS WHEREOF, the parties have executed the Lease as of the last date set
forth below, acknowledged that each party has carefully read each and every
provision of the Lease, that each party has freely entered into the Lease of its
own free will and volition, and that the terms, conditions and provisions of the
Lease are commercially reasonable as of the date of execution.

 

“LANDLORD” JPMORGAN TRUST COMPANY, NATIONAL ASSOCIATION, a national banking
corporation, not in its individual capacity, but solely as Trustee of CA Raleigh
Owner Trust under a Trust Agreement dated as of April 1, 2003. By:    /s/ Mitch
Gardner

Name:   Mitch Gardner Title:   Vice President Date of Execution: April 10, 2003

 

“TENANT” PROGRESS ENERGY CAROLINAS, INC. By:    /s/ Robert G. Cutlip

Name:   Robert G. Cutlip Title:   Vice President Date of Execution: April 10,
2003

 

74

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

Exhibits

 

“A”

 

-

 

Legal Description

“B”

 

-

 

Plans and Specifications

“C”

 

-

 

Memorandum of Acceptance

“D”

 

-

 

Construction Schedule for Base Building Improvements

“E”

 

-

 

Project Management Agreement

“F”

 

-

 

Rentable Area

“G”

 

-

 

Certificate Pursuant to Section 6.1(c)

“H”

 

-

 

Insurance

“I”

 

-

 

Stipulated Loss Value

“J”

 

-

 

[Omitted]

“K”

 

-

 

Estoppel Certificate

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

Exhibit “A”

LEGAL DESCRIPTION

Progress Energy Downtown Development—Office Property

Lying and being in Raleigh Township, Wake County, North Carolina and more
particularly described as follows:

BEGINNING at NCGS Monument “PERNEW”, NC Grid Coordinates (NAD: 83) of N:
225264.996 Meters and E: 642617.839 Meters; thence South 19°42’47” West
1815.4296 feet to an existing P.K. nail in the Western right-of-way of S. Blount
Street, and the Southern right-of­ way of E. Davie Street; Thence with the
Western right-of-way of S. Blount Street, S 02°13’57” W 210.00 feet to a P.K
Set; Thence with The City of Raleigh property as recorded in Deed Book 8253 Page
299, Deed Book 8231 Page 1759, and Deed Book 8214, Page 2408, North 87°46’03”
West 164.08 feet to a Survey Nail Set the POINT AND PLACE OF BEGINNING.

Thence from the POINT OF .BEGINNING, with The City of Raleigh property line as
recorded in Deed Book 8253 Page 299, Deed Book 8231 Page 1759, and Deed Book
8214, Page 2408, the next three calls, North 87°46’03” West 45.92 feet to a 1/2”
Iron Pipe Found; Thence North 02°13’57” East 15.00 feet to a Nail; Thence North
87°46’03” West, 210.00 feet to a Nail in the Eastern right-of-way line of S.
Wilmington Street; Thence with said right-of-way, North 02°13’57” East 195.00
feet to a Point in the Southern right-of-way line of E. Davie Street; Thence
with said E. Davie Street right-of-way line, South 87°46’03” East 384.00 feet to
a Lead Plug and Tack, Set; Thence a new line, running parallel to S. Blount
Street, South 02°13’57” West 188.93 feet to a Survey Nail Set; Thence a new line
North 87°46’03 West 128.08 feet to a Survey Nail Set; Thence a new line, South
02°13’57” West 21.07 feet to a Survey Nail Set in the Northern property line of
The City of Raleigh, the POINT AND PLACE OF BEGINNING.

CONTAINING: 74,791 square feet or 1.71697 acres of land, more or less.

TOGETHER WITH: A Temporary Construction Easement, said easement being described
as follows; from said POINT OF BEGINNING, with The City of Raleigh property line
as recorded in Deed Book 8253 Page 299, Deed Book 8231 Page 1759, and Deed Book
8214, Page 2408, North 87°46’03” West 164.08 feet to a point in the new
residential/ office line as described above, the new point of beginning; thence
continuing with said property line North 87°46’03”West 20.00 feet to a point;
Thence running parallel to S. Blount Street North 02°13’57” East 41.07 feet to a
point; Thence South 87°46’03” East 128.08 feet to a point; Thence North
02°13’57” East 168.93 feet, to the South right-of-way of E. Davie Street; Thence
with the right-of-way of E. Davie Street South 87°46’03” East 20.00 feet to a
point; thence running with the line dividing the office space from the
residential area, for the next three calls, a new line South 02°13’57” East
188.93 feet to a point; thence North 87°46’03” West 128.08 feet to a point;
Thence South 02°13’57” West 21.07 feet to the new point of beginning: containing
6,761 square feet or 0.15521 acres of land, more or less.

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

Exhibit “B”

PLANS AND SPECIFICATIONS

 

PROJECT INFORMATION:

02/12/03

  

A0.0

  

TITLE SHEET

02/12/03

  

A0.l

  

GLOSSARY, SYMBOL KEY & SHEET INDEX

02/12/03

  

A0.2

  

BUILDING CODE SUMMARY

02/12/03

  

A0.3

  

PARKING DECK OPEN AREA CALCULATIONS

LIFE SAFETY:

02/12/03

  

LS-1_0

  

EXISTING DECK EGRESS DIAGRAM

02/12/03

  

LS-1_1

  

GROUND LEVEL EGRESS DIAGRAM

02/12/03

  

LS-1_2

  

PARKING LEVEL-2 EGRESS DIAGRAM

02/12/03

  

LS-1_3

  

PARKING LEVELS P3-P7 EGRESS DIAGRAM

02/12/03

  

LS-1_4

  

OFFICE LEVELS 01-02 EGRESS DIAGRAM

02/12/03

  

LS-1_5

  

OFFICE LEVEL 03 EGRESS DIAGRAM

02/12/03

  

LS-1_6

  

OFFICE LEVELS 04-012 EGRESS DIAGRAM

CIVIL:

02/12/03

  

C-1

  

LEGEND

02/12/03

  

C-2

  

PARKING AND FLOOR CHARTS

02/12/03

  

C-3

  

EXISTING CONDITIONS

02/12/03

  

C-4

  

INTERIM GRADING & EROSION CONTROL

02/12/03

  

C-5

  

TRAFFIC CONTROL

02/12/03

  

C-6

  

FINAL GRADING

02/12/03

  

C-7

  

UTILITY PLAN

02/12/03

  

C-8

  

UTILITY PLAN & PROFILE

02/12/03

  

C-9

  

UTILITY PLAN & PROFILE

02/12/03

  

C-10

  

SEWER DETAILS

02/12/03

  

C-11

  

WATER DETAILS

02/12/03

  

C-12

  

MISC. DETAILS

02/12/03

  

C-13

  

MISC. DETAILS

LANDSCAPE:

  

02/12/03

  

L-401

  

LANDSCAPE PLAN

02/12/03

  

L-501

  

DETAILS

DEMOLITION:

  

02/12/03

  

APD1. 0

  

OVERALL EXISTING PARKING DECK PLAN/DEMO PLAN P-2

02/12/03

  

APD1. 1

  

EXISTING PARKING DECK – ENLARGED FLOOR PLANS

02/12/03

  

APD1.2

  

EXISTING PARKING DECK – ENLARGED FLOOR PLANS

02/12/03

  

APD1.3

  

EXISTING PARKING DECK – TEMPORARY STAIR PLANS

02/12/03

  

APD1.4

  

PARTIAL INTERIOR ELEVATIONS

ARCHITECTURAL:

02/12/03

  

A1.1

  

SITE/ROOF PLAN

02/12/03

  

A1.2

  

SITE PLAN

03/27/03

  

A1.3

  

HARDSCAPE PLAN

03/27/03

  

A1.4

  

HARDSCAPE PLAN

03/27/03

  

A1.5

  

HARDSCAPE PLAN

02/12/03

  

A2.1

  

GROUND LEVEL

02/12/03

  

A2.2

  

PARKING LEVEL P2

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

02/12/03

  

A2.2A

  

PARKING LEVELS P2 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.3

  

PARKING LEVEL P3

02/12/03

  

A2.3A

  

PARKING LEVELS P3 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.4

  

PARKING LEVEL P4

02/12/03

  

A2.4A

  

PARKING LEVELS P4 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.5

  

PARKING LEVEL P5

02/12/03

  

A2.5A

  

PARKING LEVELS P5 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.6

  

PARKING LEVEL P6

02/12/03

  

A2.6A

  

PARKING LEVELS P6 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.7

  

PARKING LEVEL P7

02/12/03

  

A2.7A

  

PARKING LEVELS P7 CABLE RAIL & CURB LAYOUT

02/12/03

  

A2.8

  

LARGE OFFICE LEVEL 1

02/12/03

  

A2.9

  

TRADING FLOOR OFFICE LEVEL 2

02/12/03

  

A2.10

  

PARTIAL OFFICE LEVEL 3

02/12/03

  

A2.11

  

TYPICAL OFFICE LFOOR LEVELS 4-10/TRADING FLOOR ROOF

02/12/03

  

A2.12

  

OFFICE FLOOR LEVELS 11-12

02/12/03

  

A2.13

  

ROOF PLAN

02/12/03

  

A3.1

  

ENLARGED CORE PLANS

02/12/03

  

A3.2

  

ENLARGED CORE PLANS

02/12/03

  

A3.3

  

ENLARGED CORE PLANS

02/12/03

  

A3.4

  

ENLARGED CORE PLANS

02/12/03

  

A3.5

  

ENLARGED CORE PLANS

02/12/03

  

A3.6

  

ENLARGED CORE PLANS

02/12/03

  

A3.7

  

ENLARGED CORE PLANS

02/12/03

  

A3.8

  

ENLARGED CORE PLANS

02/12/03

  

A3.9

  

ENLARGED CORE PLANS

02/12/03

  

A3.10

  

ENLARGED CORE PLANS

03/27/03

  

A3.11

  

ENLARGED CORE PLANS

02/12/03

  

A4.1

  

NORTH ELEVATION

02/12/03

  

A4.2

  

EAST ELEVATION

02/12/03

  

A4.3

  

SOUTH ELEVATION

02/12/03

  

A4.4

  

WEST ELEVATION

02/12/03

  

A5.1

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.2

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.3

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.4

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.5

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.6

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.7

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.8

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.9

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.10

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.11

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.12

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.13

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.14

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.15

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.16

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.17

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.18

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.19

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.20

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.21

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

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

02/12/03

  

A5.22

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.23

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.24

  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

02/12/03

  

A5.25

  

ROOF SCREEN SECTIONS AND ELEVATIONS

03/27/03

  

A5.26

  

PARTIAL EXTERIOR WALL SECTIONS AND ELEVATIONS

02/12/03

  

A6.1

  

PLAN DETAILS

02/12/03

  

A6.2

  

PLAN DETAILS

02/12/03

  

A6.3

  

PLAN DETAILS

02/12/03

  

A6.4

  

PLAN DETAILS

02/12/03

  

A6.5

  

PLAN DETAILS

02/12/03

  

A6.6

  

PLAN DETAILS

02/12/03

  

A6.7

  

PLAN DETAILS

02/12/03

  

A6.8

  

PLAN DETAILS

02/12/03

  

A6.9

  

PLAN DETAILS

02/12/03

  

A6.10

  

PLAN DETAILS

02/12/03

  

A6.11

  

PLAN DETAILS

02/12/03

  

A6.12

  

PLAN DETAILS

03/27/03

  

A6.13

  

PLAN DETAILS

02/12/03

  

A6.14

  

SECTION DETAILS

02/12/03

  

A6.15

  

SECTION DETAILS

02/12/03

  

A6.16

  

SECTION DETAILS

02/12/03

  

A6.17

  

SECTION DETAILS

02/12/03

  

A6.18

  

SECTION DETAILS

02/12/03

  

A6.19

  

SECTION DETAILS

02/12/03

  

A6.20

  

SECTION DETAILS

02/12/03

  

A6.21

  

SECTION DETAILS

02/12/03

  

A6.22

  

SECTION DETAILS

02/12/03

  

A6.23

  

SECTION DETAILS

02/12/03

  

A6.24

  

SECTION DETAILS

02/12/03

  

A6.25

  

SECTION DETAILS

02/12/03

  

A6.26

  

SECTION DETAILS

02/12/03

  

A6.27

  

CUSTOM LIGHT FIXTURES

02/12/03

  

A6.28

  

METAL BAS RELIEF PANELS

02/12/03

  

A6.29

  

PARTIAL NORTH ELEVATION DETAILS

02/12/03

  

A6.30

  

PARITAL WEST ELEVATION DETAILS

02/12/03

  

A6.31

  

PARTIAL WEST ELEVATION DETAILS

02/12/03

  

A6.32

  

ROOF SCREEN DETAILS

03/27/03

  

A6.33

  

ROOF SCREEN DETAILS

03/27/03

  

A6.34

  

SECTION DETAILS

03/27/03

  

A6.35

  

SECTION DETAILS

03/27/03

  

A6.36

  

SECTION DETAILS

02/12/03

  

A7.1

  

STAIR SP-1 SECTIONS

02/12/03

  

A7.2

  

STAIR SP-2 SECTIONS

02/12/03

  

A7.3

  

STAIR SP-3 PLANS & SECTIONS

02/12/03

  

A7.4

  

STAIR SP-4 PLANS & SECTIONS

02/12/03

  

A7.11

  

STAIR SP-1 PLANS

02/12/03

  

A7.12

  

STAIR SP-2 PLANS

02/12/03

  

A7.20

  

STAIR DETAILS

02/12/03

  

A8.1

  

ELEVATOR DIAGRAM

03/27/03

  

A8.2

  

TOWER ELEVATOR PLAN, ELEVATIONS, AND RCP

03/27/03

  

A8.3

  

MAIN LOBBY PARKING SHUTTLE PLAN, ELEV’S, AND RCP

03/27/03

  

A8.4

  

PARKING SHUTTLE AT DAVIE PLAN, ELEV’S, AND RCP

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

02/12/03

  

A9.1

  

ROOM FINISH SCHEDULE

02/12/03

  

A9.2

  

DOOR SCHEDULE & DETAILS

02/12/03

  

A9.3

  

PARTITION SCHEDULE

02/12/03

  

A9.4

  

PARTITION SCHEDULE

02/12/03

  

A9.5

  

UL PARTITION DESCRIPTIONS

02/12/03

  

A9.6

  

UL PARTITION DESCRIPTIONS

03/27/03

  

A10.1

  

GROUND FLOOR LOBBY FLOOR PLAN

03/27/03

  

A10.2

  

GROUND FLOOR LOBBY PAVING PLAN

03/27/03

  

A10.3

  

GROUND FLOOR LOBBY RELECTED CEILING PLAN

03/27/03

  

A10.4

  

LOBBY ELEVATIONS

03/27/03

  

A10.5

  

LOBBY ELEVATIONS

02/12/03

  

A10.6

  

GROUND FLOOR RESTROOM PLANS AND ELEVATIONS

02/12/03

  

A10.7

  

OFFICE LEVEL 1 RESTROOM PLANS AND ELEVATIONS

02/12/03

  

A10.8

  

OFFICE LEVEL 2 RESTROOM PLANS AND ELEVATIONS

02/12/03

  

A10.9

  

TYPICAL RESTROOM PLANS AND ELEVATIONS

03/27/03

  

A10.10

  

LOBBY DETAILS

03/27/03

  

A10.11

  

LOBBY DETAILS

03/27/03

  

A10.12

  

WALL SECTIONS

03/27/03

  

A10.13

  

WALL SECTIONS

03/27/03

  

A10.14

  

WALL SECTIONS

03/27/03

  

A10.15

  

SECTION DETAILS

03/27/03

  

A10.16

  

SECTION DETAILS

03/27/03

  

A10.17

  

SECTION DETAILS

02/12/03

  

A11.1

  

GROUND FLOOR RCP

02/12/03

  

A11.2

  

PARKING LEVEL P2 RCP

02/12/03

  

A11.3

  

PARKING LEVEL P3 RCP

02/12/03

  

A11.4

  

PARKING LEVEL P4 RCP

02/12/03

  

A11.5

  

PARKING LEVEL P5 RCP

02/12/03

  

A11.6

  

PARKING LEVEL P6 RCP

02/12/03

  

A11.7

  

PARKING LEVEL P7 RCP

02/12/03

  

A11.8

  

LARGE OFFICE FLOOR PLAN 1 RCP

02/12/03

  

A11.9

  

TRADING FLOOR OFFICE LEVEL 2 RCP

02/12/03

  

A11.10

  

PARTIAL FLOOR OFFICE LEVEL 3 RCP

02/12/03

  

A11.11

  

TYPICAL OFFICE FLOOR LEVELS 4-10 RCP

02/12/03

  

A11.12

  

OFFICE FLOOR LEVELS 11-12 RCP

STRUCTURAL:

02/12/03

  

S0.1

  

GENERAL NOTES

02/12/03

  

S0.2

  

COMPONENTS AND GRADING DESIGN WIND PRESSURES

02/12/03

  

S.1.1

  

FOUNDATION PLAN

02/12/03

  

S1.lA

  

SLAB-ON-GRADE PLAN

02/12/03

  

S1.2

  

PARKING DECK LEVEL P2 FRAMING PLAN

02/12/03

  

S1.2T

  

PARKING DECK LEVEL P2 TOPPING PLAN

02/12/03

  

S1.3

  

PARKING DECK LEVEL P3 FRAMING PLAN

02/12/03

  

S1.3T

  

PARKING DECK LEVEL P3 TOPPING PLAN

02/12/03

  

S1.4

  

PARKING DECK TYPICAL LEVEL FRAMING PLAN

02/12/03

  

S1.5

  

PARKING LEVEL P7 FRAMING PLAN

02/12/03

  

S1.6

  

OFFICE FLOOR LEVEL 1 FRAMING PLAN

02/12/03

  

S1.7

  

TRADING FLOOR / OFFICE FLOOR LEVEL 2 FRAMING PLAN

02/12/03

  

S1.8

  

MEZZANINE / OFFICE FLOOR LEVEL 3 FRAMING PLAN

02/12/03

  

S1.9

  

LOW ROOF / OFFICE FLOOR LEVEL 4 FRAMING PLAN

02/12/03

  

S1.l0

  

OFFICE FLOOR LEVELS 5 TO 12 FRAMING PLANS

02/12/03

  

S1.11

  

ROOF / PENTHOUSE SCREENWALL FRAMING PLANS

02/12/03

  

S2.1

  

TYPICAL SECTIONS AND DETAILS

02/12/03

  

S3.1

  

FOUNDATION SECTIONS AND DETAILS

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

02/12/03

  

S3.2

  

FOUNDATION DECTIONS AND DETAILS

02/12/03

  

S3.3

  

TRANSFORMER VAULT PLANS, SECTIONS, AND DETAILS

02/12/03

  

S4.1

  

COLUMN SCHEDULE AND DETAILS

02/12/03

  

S4.2

  

COLUMN SCHEDULE

02/12/03

  

S4.3

  

FOUNDATION SCHEDULE

02/12/03

  

S5.1

  

OFFICE BEAM SCHEDULES, SLAB DIAGRAMS & DETAILS

02/12/03

  

S5.2

  

OFFICE BEAM SCHEDULES AND DETAILS

02/12/03

  

S5.3

  

PARKING BEAM SCHEDULES

02/12/03

  

S5.4

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.5

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.6

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.7

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.8

  

TYPICAL PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.9

  

TYPICAL PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.10

  

TYPICAL PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.11

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.12

  

PARKING DECK BEAM DIAGRAMS

02/12/03

  

S5.13

  

OFFICE LEVEL BEAM DIAGRAMS

02/12/03

  

S5.14

  

OFFICE LEVEL BEAM DIAGRAMS

02/12/03

  

S5.15

  

OFFICE LEVEL BEAM DIAGRAMS

02/12/03

  

S5.16

  

OFFICE LEVEL BEAM DIAGRAMS

02/12/03

  

S5.17

  

TYPICAL OFFICE LEVEL BEAM DIAGRAMS

02/12/03

  

S5.18

  

ROOF BEAM DIAGRAMS

02/12/03

  

S6.1

  

PARKING DECK SLAB DIAGRAMS

02/12/03

  

S6.2

  

PARKING DECK SLAB DIAGRAMS

02/12/03

  

S7.1

  

SECTIONS AND DETAILS

02/12/03

  

S7.2

  

SECTIONS AND DETAILS

02/12/03

  

S7.3

  

SECTIONS AND DETAILS

02/12/03

  

S7.4

  

FRAME ELEVATIONS, SECTIONS AND DETAILS

02/12/03

  

S7.5

  

SECTIONS AND DETAILS

02/12/03

  

S7.6

  

SECTIONS AND DETAILS

02/12/03

  

S7.7

  

SECTIONS AND DETAILS

02/12/03

  

S7.8

  

SECTIONS AND DETAILS

02/12/03

  

S7.9

  

SECTIONS AND DETAILS

03/27/03

  

S7.10

  

SECTIONS AND DETAILS

MECHANICAL:

02/12/03

  

M0.1

  

LEGENDS, NOTES & CODES COMPLIANCE

02/12/03

  

M1.1A

  

LOBBY LEVEL FLOOR PLAN – PART A – MECHANICAL

02/12/03

  

M1.1B

  

LOBBY LEVEL FLOOR PLAN – PART B – MECHANICAL

02/12/03

  

M1.2A

  

UPPER LOBBY FLOOR PLAN – PART A – MECHANICAL

02/12/03

  

M1.2B

  

PARKING LEVEL 2 – PART B – MECHANICAL

02/12/03

  

M1.3A

  

PARKING LEVEL 3 – PART A – MECHANICAL

02/12/03

  

M1.3B

  

PARKING LEVEL 3 – PART B – MECHANICAL

02/12/03

  

M1.4A

  

PARKING LEVEL 4 – 5 PART A – MECHANICAL

02/12/03

  

M1.4B

  

PARKING LEVEL 4 – 5 PART B – MECHANICAL

02/12/03

  

M1.5A

  

PARKING LEVEL 6 PART A – MECHANICAL

02/12/03

  

M1.5B

  

PARKING LEVEL 6 PART B – MECHANICAL

02/12/03

  

M1.6A

  

PARKING LEVEL 7 PART A – MECHANICAL

02/12/03

  

M1.6B

  

PARKING LEVEL 7 PART B – MECHANICAL

02/12/03

  

M1.7A

  

OFFICE LEVEL 1 FLOOR PLAN – PART A – MECHANICAL

02/12/03

  

M1.7B

  

OFFICE LEVEL 1 FLOOR PLAN – PART B – MECHANICAL

02/12/03

  

M1.8A

  

OFFICE LEVEL 2 FLOOR PLAN – PART A – MECHANICAL

02/12/03

  

M1.8B

  

OFFICE LEVEL 2 FLOOR PLAN – PART B – MECHANICAL

02/12/03

  

M1.9A

  

OFFICE LEVEL 3 FLOOR PLAN – PART A – MECHANICAL

02/12/03

  

M1.9B

  

OFFICE LEVEL 3 FLOOR PLAN – PART B – MECHANICAL

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

02/12/03

  

M1.10

  

TYPICAL FLOORS (5TH – 10TH) MECHANICAL

02/12/03

  

M1.11

  

ELEVENTH FLOOR PLAN – MECHANICAL

02/12/03

  

M1.12

  

FLOOR PLAN – MECHANICAL

02/12/03

  

M1.13

  

ROOF LEVEL PLAN – MECHANICAL

02/12/03

  

M2.1

  

CENTRAL PLAN MECHANICAL

02/12/03

  

M2.2

  

FIRST OFFICE FLOOR CORE PLAN – MECHANICAL

02/12/03

  

M2.3

  

SECOND OFFICE FLOOR CORE PLAN – MECHANICAL

02/12/03

  

M2.4

  

THIRD OFFICE FLOOR CORE PLAN – MECHANICAL

02/12/03

  

M2.5

  

TYPICAL OFFICE FLOOR CORE PLAN – MECHANICAL

03/27/03

  

M2.6

  

 1/4” SCALE ROOF PLAN – MECHANICAL

02/12/03

  

M3.1

  

DETAILS & DIAGRAMS – MECHANICAL

02/12/03

  

M3.2

  

DETAILS & DIAGRAMS – MECHANICAL

02/12/03

  

M4.1

  

RISERS – MECHANICAL

02/12/03

  

M4.2

  

RISERS – MECHANICAL

02/12/03

  

M5.1

  

SCHEDULES – MECHANICAL

02/12/03

  

M5.2

  

SCHEDULES – MECHANICAL

02/12/03

  

M5.3

  

SCHEDULES – MECHANICAL

02/12/03

  

M5.4

  

SCHEDULES – MECHANICAL

ELECTRICAL:

  

02/12/03

  

E0.1

  

SITE PLAN – ELECTRICAL

02/12/03

  

E1.1A

  

LOBBY LEVEL FLOOR PLAN – PART A – ELECTRICAL

02/12/03

  

E1.1B

  

LOBBY LEVEL FLOOR PLAN – PART B – ELECTRICAL

02/12/03

  

E1.1C

  

LOBBY LEVEL FLOOR PLAN – PART C-ELECTRICAL

02/12/03

  

E1.2A

  

PARKING LEVEL 2 – PART – A – ELECTRICAL

02/12/03

  

E1.2B

  

PARKING LEVEL 2 – PART– B – ELECTRICAL

02/12/03

  

E1.3A

  

PARKING LEVEL 3 FLOOR PLAN – PART A – ELECTRICAL

02/12/03

  

E1.3B

  

PARKING LEVEL 3 FLOOR PLAN – PART B – ELECTRICAL

02/12/03

  

E1.4A

  

PARKING LEVELS 3 – 6 PART – A – ELECTRICAL

02/12/03

  

E1.4B

  

PARKING LEVELS 3 – 6 PART – B – ELECTRICAL

02/12/03

  

E1.5A

  

PARKING LEVEL 6 FLOOR PLAN – PART A – ELECTRICAL

02/12/03

  

E1.5B

  

PARKING LEVEL 6 FLOOR PLAN – PART B – ELECTRICAL

02/12/03

  

E1.6A

  

PARKING LEVEL 7 – PART A – ELECTRICAL

02/12/03

  

E1.6B

  

PARKING LEVEL 7 – PART B – ELECTRICAL

02/12/03

  

E1.7A

  

OFFICE LEVEL 1 – PART A

02/12/03

  

E1.7B

  

OFFICE LEVEL 1 – PART B

02/12/03

  

E1.8A

  

OFFICE LEVEL 2 – PART A

02/12/03

  

E1.8B

  

OFFICE LEVEL 2 – PART B

02/12/03

  

E1.9A

  

OFFICE LEVEL 3 – PART A

02/12/03

  

E1.9B

  

OFFICE LEVEL 3 – PART B

02/12/03

  

E1.10

  

TYPICAL (4-10) OFFICE FLOOR PLAN – ELECTRICAL

02/12/03

  

E1.11

  

OFFICE LEVEL 11 – FLOOR PLAN – ELECTRICAL

02/12/03

  

E1.12

  

OFFICE LEVEL 12 – FLOOR PLAN – ELECTRICAL

02/12/03

  

E1.13

  

ROOF PLAN – ELECTRICAL

02/12/03

  

E2.1A

  

LOBBY LEVEL FLOOR PLAN – PART A – LIGHTING

02/12/03

  

E2.1B

  

LOBBY LEVEL FLOOR PLAN – PART B – LIGHTING

02/12/03

  

E2.2A

  

OFFICE LEVEL 1 – FLOOR PLAN – PART A – LIGHTING

02/12/03

  

E2.2B

  

OFFICE LEVEL 1 – FLOOR PLAN – PART B – LIGHTING

02/12/03

  

E2.3

  

CORE LIGHTING PLANS – OFFICE LEVELS 2 & 3

02/12/03

  

E2.4

  

CORE LIGHTING PLANS – OFFICE LEVELS 4 – 12

02/12/03

  

E4.1

  

POWER RISER DIAGRAM

02/12/03

  

E4.2

  

ONE LINE DIAGRAM

02/12/03

  

E4.3

  

TELECOM RISER DIAGRAM

02/12/03

  

E5.1

  

LIGHTING FIXTURE SCHEDULE

02/12/03

  

E5.2

  

PANELBOARD SCHEDULE

02/12/03

  

E5.3A

  

PANELBOARD SCHEDULE

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

02/12/03

  

E5.3B

  

PANELBOARD SCHEDULE

02/12/03

  

E5.4

  

LOBBY LEVEL & P2-P5 MECH EQUIP SCHEDULES

02/12/03

  

E5.5

  

OFFICE–1 & P6–P7 MECH EQUIP SCHEDULES

02/12/03

  

E5.6

  

OFFICE–2 & 3 MECH EQUIP SCHEDULES

02/12/03

  

E6.1

  

ELECTICAL LEGEND & DETAILS

PLUMBING:

02/12/03

  

P1.1A

  

LOBBY LEVEL FLOOR PLAN – PART A – PLUMBING

02/12/03

  

P1.1B

  

LOBBY LEVEL FLOOR PLAN – PART B – PLUMBING

02/12/03

  

P1.2A

  

PARKING LEVEL 2 PLAN – PART A – PLUMBING

02/12/03

  

P1.2B

  

PARKING LEVEL 2 PLAN – PART B – PLUMBING

02/12/03

  

P1.3A

  

TYPICAL PARKING LEVEL PLAN – PART A – PLUMBING

02/12/03

  

P1.3B

  

TYPICAL PARKING LEVEL PLAN – PART B – PLUMBING

02/12/03

  

P1.4A

  

PARKING LEVEL 7 PLAN – PART A – PLUMBING

02/12/03

  

P1.4B

  

PARKING LEVEL 7 PLAN – PART B – PLUMBING

02/12/03

  

P1.5A

  

FIRST OFFICE LEVEL PLAN – PART A – PLUMBING

02/12/03

  

P1.5B

  

FIRST OFFICE LEVEL PLAN – PART B – PLUMBING

02/12/03

  

P1.6A

  

SECOND OFFICE LEVEL PLAN – PART A – PLUMBING

02/12/03

  

P1.6B

  

SECOND OFFICE LEVEL PLAN – PART B – PLUMBING

02/12/03

  

P1.7A

  

THIRD OFFICE LEVEL PLAN – PART A – PLUMBING

02/12/03

  

P1.7B

  

THIRD OFFICE LEVEL PLAN – PART B – PLUMBING

02/12/03

  

P1.8

  

OFFICE LEVEL 4 THRU 6 FLOOR PLAN – PLUMBING

02/12/03

  

P1.9

  

NOT USED

02/12/03

  

P1.l0

  

OFFICE LEVEL 12 FLOOR PLAN – PLUMBING

02/12/03

  

P1.11

  

ROOF AND PENTHOUSE PLAN – PLUMBING

02/12/03

  

P2.01

  

ENLARGED TOILET PLANS – PLUMBING

02/12/03

  

P2.02

  

ENLARGED TOILET PLANS – PLUMBING

02/12/03

  

P2.3

  

ENLARGED TOILET PLANS – PLUMBING

02/12/03

  

P3.1

  

WATER RISER DIAGRAMS – PLUMBING

02/12/03

  

P3.2

  

WATER RISER DIAGRAMS – PLUMBING

02/12/03

  

P3.3

  

STORM WATER RISERS – PLUMBING

02/12/03

  

P4.1

  

SCHEDULES AND DETAILS – PLUMBING

02/12/03

  

P4.2

  

SCHEDULES AND DETAILS – FIRE PROTECTION

02/12/03

  

P4.3

  

UL DETAILS & DIAGRAMS – PLUMBING

FIRE PROTECTION:

02/12/03

  

FP-1.1

  

SITE PLAN/PROJECT NOTES

02/12/03

  

FP-1.2

  

STANDPIPE PLAN

02/12/03

  

FP-1.3

  

GROUND FLOOR WEST – STANDPIPE

02/12/03

  

FP-1.4

  

GROUND FLOOR EAST – STANPIPE

02/12/03

  

FP-1.5

  

PARKING LEVEL 2 WEST – STANDPIPE

02/12/03

  

FP-1.6

  

PARKING LEVEL 2 EAST – STANDPIPE

02/12/03

  

FP-1.7

  

PARKING LEVEL 3 – 7 WEST – STANDPIPE

02/12/03

  

FP-1.8

  

PARKING LEVELS 3 – 7 EAST – STANDPIPE

02/12/03

  

FP-1.9

  

1ST FLOOR SANDPIPE

02/12/03

  

FP-1.10

  

2ND FLOOR STANDPIPE

02/12/03

  

FP-1.11

  

3RD FLOOR STANDPIPE

02/12/03

  

FP-1.12

  

4TH – 12TH STANDPIPE

02/12/03

  

FP-1.13

  

ROOF STANDPIPE

02/12/03

  

FP-1.14

  

STANDPIPE SCHEMATIC

02/12/03

  

FP-1.15

  

FIRE PUMP PLAN

02/12/03

  

FP-1.16

  

FIRE PUMP SECTIONS AND DETAILS

02/12/03

  

FP-1.17

  

STANDPIPE RISER SCHEMATIC

02/12/03

  

FP-1.18

  

STANDPIPE SECTIONS & DETAILS

02/12/03

  

FP-1.19

  

STANDPIPE SECTIONS & DETAILS

02/12/03

  

FP-1.20

  

STANDPIPE SECTIONS & DETAILS

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

02/12/03

  

FP-2.1

  

GROUND FLOOR NW– SPRINKLER

02/12/03

  

FP-2.2

  

GROUND FLOOR NE – SPRINKLER

02/12/03

  

FP-2.3

  

GROUND FLOOR SW – SPRINKLER

02/12/03

  

FP-2.4

  

GROUND FLOOR SE – SPRINKLER

02/12/03

  

FP-2.5

  

OFFICE LEVEL 1 – SPRINKLER

02/12/03

  

FP-2.6

  

OFFICE LEVEL 2 – SPRINKELR

02/12/03

  

FP-2.7

  

OFFICE LEVEL 3 – SPRINKLER

02/12/03

  

FP-2.8

  

OFFICE LEVEL 4 THROUGH 11 – SPRINKLER

02/12/03

  

FP-2.9

  

OFFICE LEVEL 12 – SPRINKLER

02/12/03

  

FP-2.10

  

ROOF LEVEL – ELEVATOR MACHINE ROOM – SPRINKLER

02/12/03

  

FP-3.1

  

GROUND FLOOR NW – REFLECTED CEILING PLAN

02/12/03

  

FP-3.2

  

GROUND FLOOR NE – REFLECTED CEILING PLAN

02/12/03

  

FP-3.3

  

GROUND FLOOR SW – REFLECTED CEILING PLAN

02/12/03

  

FP-3.4

  

GROUND FLOOR SE – REFLECTED CEILING PLAN

02/12/03

  

FP-3.5

  

OFFICE LEVEL 1 – REFLECTED CEILING PLAN

02/12/03

  

FP-3.6

  

OFFICE LEVEL 2 – REFLECTED CEILING PLAN

02/12/03

  

FP-3.7

  

OFFICE LEVEL 3 – REFLECTED CEILING PLAN

02/12/03

  

FP-3.8

  

OFFICE LEVEL 4 – 11 – REFLECTED CEILING PLAN

02/12/03

  

FP-3.9

  

OFFICE LEVEL 12 – REFLECTED CEILING PLAN

02/12/03

  

FP-3.10

  

ROOF LEVEL – ELEVATOR MACHINE ROOM – RCP

02/12/03

  

FP-4.1

  

FULL HEIGHT BUILDING SECTION

02/12/03

  

FP-4.2

  

FIRE PROTECTION DETAILS

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Exhibit “C”

MEMORANDUM OF ACCEPTANCE

This Memorandum of Acceptance is an amendment to the Lease Agreement, having an
effective date of                         , between JPMorgan Trust Company,
National Association, as Owner Trustee, as Landlord, and Progress Energy
Carolinas, Inc., as Tenant. Landlord and Tenant acknowledge and agree that:

1.         The Premises (as defined in the Lease) are tenantable and accepted by
Tenant as suitable for the purpose for which they were let.

2.         The Rent Commencement Date is agreed to be
                                    .

3.         The expiration date of the Term of the Lease is agreed to be
                                    . Tenant shall have the option to extend the
Lease for up to four (4) consecutive, additional five (5) year Renewal Terms (as
defined in the Lease).

4.         The Total Project Costs are agreed to be $
                                    .

5.         The Annual Base Rent shall be shown on Exhibit C-1.

6.         All other terms and conditions of the Lease are ratified and
acknowledged to be unchanged.

Executed and delivered                                     .

Tenant:

PROGRESS ENERGY CAROLINAS, INC. By:     Name:     Title:    

Landlord:

JPMORGAN TRUST COMPANY, NATIONAL ASSOCIATION, as

Owner Trustee

By:     Name:     Title:    

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Exhibit “D”

CONSTRUCTION SCHEDULE FOR BASE BUILDING IMPROVEMENTS

 

Milestone Activity

 

  

Required Date

 

Construction Documents released

 

   March 27, 2003

Closing Date

 

   April 11, 2003

Notice to Proceed issued to Brasfield & Gorrie for Base Building Improvements

 

   April 12, 2003

Substantial Completion Date of the Base Building Improvements

 

   August 24, 2004

Substantial Completion Date for the Parking Deck

 

   August 24, 2004

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Exhibit “E”

PROJECT MANAGEMENT AGREEMENT

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PROJECT MANAGEMENT AGREEMENT

This PROJECT MANAGEMENT AGREEMENT (“Agreement”) is made and entered into as of
this 10 day of April 2003, between PROGRESS ENERGY SERVICE COMPANY, LLC
(“Manager”) and JPMORGAN TRUST COMPANY, NATIONAL ASSOClATlON., not in its
individual capacity, but solely as Owner Trustee of the Owner Trust under Trust
Agreement dated as of April 1, 2003 (“Owner”).

RECITALS

 

A. Owner and Manager, as agent for Owner, have entered into a Development
Agreement dated as of April 10, 2003 (“Development Agreement”) with Carter &
Associates, L.L.C. (“Carter”), pursuant to which Carter agrees to provide, among
other services, development services through completion of construction for an
administrative office building, parking deck, and retail component in Raleigh,
North Carolina (the “Project”).

 

B. Owner desires to engage the services of Manager as its agent to facilitate
the design and construction of the Base Building Improvements (as defined
herein). Manager desires to provide such services and to have the rights set
forth herein with respect to supervision and control of the design and
construction of the Base Building Improvements.

 

C. Owner has entered into an Agreement of Purchase and Sale with Progress Energy
Carolinas, Inc. (“Progress Energy”) dated as of April 10, 2003, to purchase the
land on which the Project is to be constructed and all of Manager’s right, title
and interest in the plans, permits and other rights related to the development
of the Project (the “Purchase Agreement”).

 

D. Carter has entered into a Construction Agreement dated as of April 10, 2003
with Brasfield & Gorrie, LLC (the “Construction Agreement”), pursuant to which
Carter has engaged the services of Brasfield & Gorrie to construct the entire
Project other than certain interior improvements (the “Base Building
Improvements”).

 

E. Owner has entered into a Lease dated as of April 10, 2003 (the “Lease”) with
Progress Energy, pursuant to which Progress Energy will lease the Project from
Owner for an initial term of thirty-one (3l) years, commencing upon Substantial
Completion of the Base Building Improvements.

 

F. Owner has entered into a Building Loan Agreement dated as of April 10, 2003
(the “Loan Agreement”) with Pacific Life Insurance Company (“Lender”), pursuant
to which Lender has agreed to provide certain funding for the Project (the
“Loan”).

TERMS AND CONDITIONS

NOW, THEREFORE, in consideration of the mutual covenants and promises
hereinafter set forth and other good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties mutually covenant and
agree as follows:

 

A-1

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1.

Definitions

1.1.       When used in this Agreement, capitalized terms shall have the
meanings set forth in the Lease or, if not defined therein, in the Development
Agreement unless otherwise defined in this Agreement.

1.2.       The following terms shall have the following meanings when
capitalized in this Agreement:

“Tenant Improvement Line Item” shall have the meaning set forth in Section 2.3.

“Total Cost” shall have the meaning set forth in the Lease.

 

2. Scope of Services. Manager shall facilitate the completion of the Project in
a timely and cost efficient manner without material deviation from the Approved
Project Budget or the Approved Project Schedule and in compliance with the
requirements of the Loan Agreement by performing the following services:

2.1.       Manager shall perform all services necessary to manage, as agent for
Owner, the design, development and completion of construction of the Project as
set forth in the Development Agreement. For so long as the Development Agreement
is in effect, Manager shall accomplish such matters by (a) administering the
Development Agreement as agent of Owner, and (b) performing Owner’s duties and
exercising Owner’s rights under the Development Agreement. In this regard,
Manager shall attend all Project meetings, establish and monitor schedules and
budgets (making and approving such changes as Manager deems appropriate from
time to time), approve change orders and amendments, approve all changes to the
Approved Project Budget and the Approved Project Schedule, approve, all payment
requests and otherwise receive all notices and make all decisions that Owner is
entitled to make under the Development Agreement, subject only to the limitation
in Section 2.2 below and the provisions of the Loan Agreement.

2.2.       Manager shall perform, as agent for Owner, all acts necessary or
appropriate under the Loan Agreement, including the preparation and submission
of all draw requests. For so long as the Loan Agreement is in effect, Manager
shall accomplish such matters by performing, as agent for Owner, Owner’s duties
and exercising Owner’s rights under the Loan Agreement. Notwithstanding any
other provision of this Agreement, Manager shall not take, consent to or approve
any action to increase the Approved Project Budget or extend the Approved
Project Schedule that is not in accordance with the Loan Agreement. Within the
Approved Project Budget and within the Approved Project Schedule, Manager shall
have full authority (subject to the limitations in the Loan Agreement and
Section 2.3 below) to make decisions regarding expenditures to be made in
connection with the Project and to approve disbursements in accordance with the
terms of this Agreement and the Loan Agreement.

2.3.       The Approved Project Budget includes three Line Items relating to
tenant improvements (“Headquarters TI’s (Within C&A)”, “Headquarters TI’s
(Outside C&A)”,

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and “Retail TI’s and Leasing Commissions”) (collectively the “Tenant Improvement
Line Item.” No portion of the Tenant Improvement Line Item shall be disbursed
prior to Substantial Completion of the Base Building Improvements, except
(i) that up to $1,000,000.00 of the Tenant Improvement Line Item may be
disbursed prior to such time in accordance with Section 3.2(l) of the Loan
Agreement and (ii) up to $2,000,000.00 of the Tenant Improvement Line Item may
be disbursed in the 90 days prior to such time in accordance with Section 3.4(i)
of the Loan Agreement.

2.4.       The Approved Project Budget includes a Telecom Fund Line Item. Up to
$2,900,000.00 of the Telecom Fund Line Item may be approved for disbursement
during the Base Building Improvements in accordance with Section 32.(m) of the
Loan Agreement.

2.5.       Except as set forth in this Section 2.5, in no event shall Manager be
obligated to pay any costs associated with the Project. Manager agrees to assume
liability for, and to indemnify and hold harmless Owner and the employees,
officers, directors, members and successors and assigns of Owner (individually
each an “Owner Indemnitee” and collectively the “Owner Indemnitees”) from and
against any and all liabilities, obligations, losses, damages, taxes, claims,
actions, suits, costs, expenses and disbursements (including reasonable legal
fees and expenses) of any kind and nature whatsoever which may be imposed on,
incurred by or asserted at any time against any Owner Indemnitee in any way
relating to or arising out of any act or omission by Manager and any agent or
employee of Manager constituting a failure (a) to act within the scope of
authority set forth in Sections 2.1 or 2.2 hereof or any other provision of this
Agreement, (b) to fully and completely fulfill Manager’s fiduciary obligation as
Owner’s agent hereunder, or (c) to act at all times in Owner’s best interests
consistent with the relationship of trust and confidence established under this
Agreement.

2.6.       Manager shall act as Owner’s agent hereunder, solely as Owner’s agent
and not personally, and shall be vested with full control over Carter and all
other professionals, contractors and subcontractors relative to the Project.
Manager accepts the relationship of trust and confidence established between it
and Owner and the fiduciary obligations owed to Owner hereunder. In the
performance of this Agreement, Manager and Owner each will be acting in an
individual capacity and not as employees, partners, joint venturers, agents or
associates of one another, except as provided in this Subsection 2.5. The
employees, agents, contractors and subcontractors of one party shall not be
deemed or construed to be the employees, agents, contractors and subcontractors
of the other party for any purpose whatsoever, and each is and shall at all
times be an independent contractor. Except as otherwise expressly provided
herein, no party will assume any liability for any injury (including death) to
any persons, or any damage to any property, arising out of the acts or omissions
of the agents, employees, contractors or subcontractors of any other party

2.7.       Manager shall appoint two employees as the persons to act for Manager
under this Agreement, and either of them shall have the complete authority to
transmit instructions, receive information, interpret and define Manager’s
policies and decisions with respect to this Agreement. Either of the two
representatives, or both of them, are authorized and

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

empowered to execute in the name of and on behalf of Manager for any and all
contracts, documents and other instruments in connection with the construction
and development of the Project.

 

3. Owner Obligations. Owner shall (a) lease the Project to Progress Energy in
accordance with the terms of the Lease, (b) reimburse Progress Energy in
accordance with the terms of the Purchase Agreement for those expenses
previously incurred by Progress Energy in connection with the Project, and
(c) perform its obligation under the Lease and Loan Agreement. If Owner fails to
perform its obligations, neither Manager nor Progress Energy shall be liable for
any costs resulting therefrom. In order to evidence Manager’s authority, Owner
shall, Upon request from Manager, execute and deliver to Manager, or such other
party as Manager may designate, a letter of authorization evidencing the
authority of Manger set forth herein.

 

4. Advances and Expense Reimbursement. In its sole and absolute discretion,
Manager may from time to time elect to advance funds, or to otherwise pay or
incur costs or expenses on behalf of Owner, provided, however, that such costs
or expenses are properly included as part of the costs of the Project. Manager
shall not be obligated to make any such advances or to pay or incur any such
costs or expenses. However, if Manager does make any such advances or pay any
such costs or expenses, Manager shall be entitled to be reimbursed for such
advances or payments as are available within the Approved Project Budget.

 

5. Nature of Relationship

5.1.       No Financial Responsibility. Manager is not acting as a guarantor or
surety of any of the financial obligations of Owner or the Project.

5.2.       Standard of Care/No Guarantees. Manager does not warrant or guarantee
estimates and schedules relating to the Project. Manager’ only obligation with
respect to establishing such estimates and schedules, and with respect to
performing other services hereunder, is to use the same standard of care as
agents providing similar services in the Raleigh metropolitan area.

5.3.       No Professional Services Provided. Manager shall not be required to
provide and shall not provide professional services constituting the practice of
architecture, engineering, contracting, accounting or law.

5.4.       Appointment of Manager. Owner hereby engages Manager, as a disclosed
agent for Owner, to be the Manager for the Project and Manager hereby accepts
such engagement as agent. Manager shall at all times be an independent
contractor. In

performing its obligations under this Agreement, Manager shall: act as Owner’s
general representative with respect to all matters related to the development of
the Project, including contracting, solely as Owner’s agent and not personally,
consistent with applicable laws.

5.5.       No Assumed Duties or Obligations. Owner acknowledges and agrees,
however, that notwithstanding anything contained in this Agreement to the
contrary, (a) Manager

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

shall not be deemed to have assumed any of the duties, obligations or
liabilities or guaranteed or warranted the materials or work of any engineer,
architect or contractor or other party (or any subcontractor thereof) performing
work or services in connection with the development or construction of the
Project, and (b) under no circumstance shall Manager be required to expend its
own funds with respect to the cost of constructing or otherwise developing the
Project.

5.6.       No Restriction on Other Activities. Owner hereby acknowledges that
Manager is engaged in the development, ownership, leasing and management of
commercial properties other than the Project, and Owner hereby agrees that
Manager shall in no way be restricted from or have any liability to account to
Owner with respect to such activities, notwithstanding that such activities may
compete with or be enhanced by Manager’s activities under this Agreement or
Owner’s ownership of the Project.

5.7.       Authority of Manager. Owner hereby acknowledges and agrees that
subject to and in accordance with the terms of this Agreement, Manager is
Owner’s duly authorized agent and representative for all purposes of the Project
and this Agreement, the Development Agreement, other Project documents and such
other documents as Owner may approve for Manager and Manager may agree to enter
into. ln order to evidence. Manager’s authority, Owner shall, upon request from
Manager, execute and deliver to Manager, or such other party as Manager may
designate, a letter of authorization evidencing the authority of Manager set
forth herein.

 

6. Term and Termination

6.1.       Term of Agreement. Unless earlier terminated as hereinafter provided,
the term of this Agreement shall be from the date first above written
(“Effective Date”) through the Lease Commencement Date set forth in the Lease.

6.2.       Termination of Lease. If the Lease shall terminate on a date that is
prior to the Lease Commencement Date, then this Agreement shall terminate on
such date as well.

6.3.       Termination on Default. Upon the occurrence of a material default
under this Agreement by one party, the other party may, at its option and in
addition to any other remedies which it may have, terminate this Agreement by
giving the defaulting party thirty (30) days written notice of the default.
Unless the default is cured within the thirty-day period, this Agreement will be
deemed terminated without further action by either party, except that all claims
or defenses by either party against the other party for material breach or other
default in performance of this Agreement that arose prior to the effective date
of termination shall survive the termination of this Agreement.

 

7. Miscellaneous

7.1.       Notices. Any notice or report required or permitted under this
Agreement shall be in writing and shall validly given when hand-delivered or
sent by courier or express service guaranteeing overnight delivery or by
facsimile, with the original being sent promptly as otherwise provided above to
the following addresses or such different addresses as the parties may designate
by notice given in accordance with this Section:

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If to Manager:

               Progress Energy Service Company, LLC                410 S.
Wilmington Street                Raleigh, NC 27601                Attention:
Robert Cutlip                Facsimile: 919-546-3202

With a copy to:

               Hunton & Williams                421 Fayetteville Street Mall   
            One Hanover Square, Suite 1400                Raleigh, NC 27601   
            Attention: David R. Fricke                Facsimile: 919-899-3160

If to Owner:

               JPMorgan Trust Company, National Association.                560
Mission Street, 13th Floor                San Francisco, CA 94105   
            Attention: Hank Helley                Facsimile: 415-315-7585

With copies to:

               CA Partners, LLC                30101 Agoura Court, Suite 234   
            Agoura Hills, CA 9l30l                Attention: Neal Smaler   
            Facsimile: 818-706-3966

and to:

               Kaye Scholer LLP                1999 Avenue of the Stars   
            17th Floor                Los Angeles, CA 90067   
            Attention: B.J. Yankowitz                Facsimile: 310-229-1975

A notice given by any means described herein shall be deemed delivered on the
day after such notice is sent.

7.2.     Assignment. The rights of the parties under this Agreement are personal
to the parties and may not be assigned without the prior written consent of the
other party. This Agreement shall be binding upon and enforceable against, and
shall inure to the benefit of, the parties hereto and their respective legal
representatives, successors and permitted assigns.

7.3.     Applicable Law. This Agreement shall be governed by, construed under
and interpreted and enforced in accordance with the laws of the State of North
Carolina, without regard to its conflicts of laws provisions.

7.4.     Entire Agreement. This Agreement contains the entire agreement of the
parties with respect to the engagement of Manager by Owner relative to the
development of the

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Project, and all representations, warranties, inducements, promises or
agreements, oral or otherwise, between the parties not embodied in this
Agreement shall be of no force or effect.

7.5.     Headings. The use of headings, captions and numbers in this Agreement
is solely for the convenience of identifying and indexing the various provisions
in this Agreement and shall in no event be considered otherwise in construing or
interpreting any provision in this Agreement.

7.6.     Exhibits. Each and every exhibit referred to or otherwise mentioned in
this Agreement is attached to this Agreement and is and shall be construed to be
made a part of this Agreement by such reference or other mention at each point
at which such reference or other mention occurs, in the same manner and with the
same effect as if each exhibit were set forth in full and at length every time
it is referred to or otherwise mentioned.

7.7.     Pronouns. Wherever appropriate in this Agreement, personal pronouns
shall be deemed to include the other genders and the singular to include the
plural.

7.8.     Severability. If any term, covenant, condition or provision of this
Agreement, or the application thereof to any person or circumstance, shall ever
be held to be invalid or unenforceable, then in each such event the remainder of
this Agreement or the application of such term, covenant, condition or provision
to any other person or any other circumstance (other than those as to which it
shall be invalid or unenforceable) shall not be thereby affected, and each term,
covenant, condition and provision hereof shall remain valid and enforceable to
the fullest extent permitted by law.

7.9.     Non-Waiver. Failure by either party to complain of any action,
non-action or default of the other party shall not constitute a waiver of any
aggrieved party’s rights hereunder. Waiver by either party of any right arising
from any default of the other party shall not constitute a waiver of any other
right arising from a subsequent default of the same obligation or for any other
default, past, present or future.

7.10.     Rights Cumulative. All rights, remedies, powers and privileges
conferred under this Agreement on the parties shall be cumulative of and in
addition to, but not restrictive of or in lieu of, those conferred by law or
equity.

7.11.     Time of Essence; Prompt Responses. Time is of the essence of this
Agreement. Anywhere a day certain is stated for payment or for performance of
any obligation, the day certain so stated enters into and becomes a part of the
consideration for this Agreement. The parties recognize and agree that the time
limits and time periods provided herein are of the essence of this Agreement.
The parties mutually agree to exercise their mutual and separate good faith,
reasonable efforts to consider and respond promptly and as expeditiously as is
reasonably possible notwithstanding any time period provided in this Agreement.

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7.12.     Modifications. This Agreement shall not be modified or amended in any
respect except by a written agreement executed by both parties in the same
manner as this Agreement is executed.

7.13.     Counterparts. This Agreement may be executed in several counterparts,
each of which shall be deemed an original, and all of such counterparts together
shall constitute one and the same instrument.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, this Agreement is entered into as of the day and the year
first written above.

 

PROGRESS ENERGY SERVICE

COMPANY, LLC, a North Carolina limited

liability company (“Manager”)

   

JPMORGAN TRUST COMPANY,

NATIONAL ASSOIATlON,

a National Banking corporation, not in its

individual capacity, but solely as Trustee of

the Owner Trust under Trust Agreement

dated as of April 1, 2003 (“Owner”)

By:          By:      Name:           Name:       Title:         Title:    

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Exhibit “F”

RENTABLE AREA

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Progress Energy      Page 1    Project No. 201094      7/1/2003    Preliminary
Area Calculations    April 7, 2003   

 

FLR TO
FLR    .LEVEL      CONSTR
....AREA     

.GROSS. INT
AREA

A..

  

VERT
PENET

B.

  

BOMA

RENT
C=(A-B)

   EFF.
C/A    FLOOR
COMMON
D   

BLDG
COMMON

E

   USABLE
SGL TNT
F=C-(D+E)    FACTOR
(SINGLE)
G=C/F    CORR
ELEV.LOB
I    USABLE
MULTI
J=(F-I)    FACTOR
(MULTI).
K=C/J   

LEASABLE

(SINGLE)

L=FACTOR

   LEASABLE
(MULTI)
M=FACTOR 14.68      1         34,358       34,626    1,007    33,619    97.1%   
4975         28,744    117.0%    1125    27,599    121.8%    33,619    33,619
14.68      2         35,118       34,898    1,043    33,855    97.0%    2502   
     31,253    108.3%    1222    30,031    112.7%    33,855    33,855 13.00     
3         23,494       22,835    1,015    21,820    95.6%    2213         19,607
   111.3%    1222    18,385    118.7%    21,820    21,820 13.00      4        
28,532       28,317    1,015    27,302    96.4%    2213         25,089    108.8%
   1222    23,867    114.4%    27,302    27,302 13.00      5         28,532   
   28,317    1,015    27,302    96.4%    2213         25,089    108.8%    1222
   23,867    114.4%    27,302    27,302 13.00      6         28,532       28,317
   1,015    27,302    96.4%    2213         25,089    108.8%    1222    23,867
   114.4%    27,302    27,302 13.00      7         28,532       28,317    1,015
   27,302    96.4%    2213         25,089    108.8%    1222    23,867    114.4%
   27,302    27,302 13.00      8         28,532       28,317    1,015    27,302
   96.4%    2213         25,089    108.8%    1222    23,867    114.4%    27,302
   27,302 13.00      9         28,532       28,317    1,015    27,302    96.4%
   2213         25,089    108.8%    1222    23,867    114.4%    27,302    27,302
13.00      10         28,532       28,317    1,015    27,302    96.4%    2213   
     25,089    108.8%    1232    23,867    114.4%    27,302    27,302 13.00     
11         28,428       28,205    1,015    27,190    96.4%    2213        
24,977    108.9%    1232    23,755    114.6%    27,190    27,190 13.00      12
        28,428       28,205    1,015    27,190    96.4%    2213         24,977
   108.9%    1,222    23,755    114.5%    27,190    27,190

Sub-Total

  

     349,550       346,988    12,200    334,788    96.5%    29,607    0   
305,181    109.7%    14,587    290,594    115.2%    334,788    334,788
Ground Components                          Breakdown                           
                                                 Allocation    Retail    Parking
   Office
GS    Office RSF                                                

Leasable Retail I

     8,915         8,826       R    8,826                                      
                

Leasable Retail II

     1,176         1,161       R    1,161                                      
                

Leasable Retail III

     2,827         2,789       R    2,789                                      
                

Leasable Retail IV

     1,382         1,359       R    1,359                                      
                

Leasable Retail V

     3,042         3,011       R    3,011                                      
                

Leasable Retail VI

     1,591         1,576       R    1,576                                      
                

Lobby

     4,161         3,377       O              3,377    3,377                    
                   

Arcade

     1,716         1,716       O              1,716                            
                

Lobby Elevators

     605         605       O              605    0                              
         

Service Elevator

     116         116       O              118    0                              
         

Restrooms (Men/Wom)

     238         238       O              238    238                            
           

Housekeeping

     188         188       O              188    188                            
           

UPS & Gen. Room

     832         832       O              832    832                            
           

Fire Control

     214         214       O              214    214                            
           

Facilities

     608         608       O              608    608                            
           

Lobby Supply Duct

     12         12                      12    12                              
         

Main Parking Electrical

     56         56       P         56                                           
      

Emergency Parking E

     44         44       P         44                                           
      

Main Electrical

     578         578       O              578    578                            
           

Emergency Electrical

     225         225       O              225    225                            
           

Telephone

     497         497       O              497    497                            
           

Chillers

     1,832         1,832       O              1,832    1,832                    
                   

Retail Electrical

     248         248       R    248                                             
         

Tenant Corridor

     1,172         1,172       R    1,172                                      
                

Egress Corridor 1

     102         102       O              102    102                            
           

Egress Corridor 2

     280         280       O              280    280                            
           

Egress Corridor 3

     1,257         1,257       P         1,257                                 
                

Telecomm. Storage

     9,594         9,594       O              9,594    9,594                    
                   

Telecomm. Mech.

     167         167                      167    167                            
           

LDC I

     7,485         7,485       O              7,485    7,485                    
                   

Future Retail VII/Res

     6,555         6,555       O              6,555    6,555                    
                   

Stair Shafts (Deck)

     232         232       P         232                                        
         

Public Lobby (Deck)

     216         216       P         216                                        
         

Elevators (Deck)

     102         102       P         102                                        
         

Deck Entry Ramp

     6,797         6,797       P         6,797                                 
                

Loading Dock

     10,954         10,954       O              10,954                         
                   

Service Drive

     20,410         20,410       O              20,410                         
                   

Tenant Generator

     1,414         1,414       O              1,414    1,414                    
                   

Building Generator

     504         504                      504    504                            
           

Pump Room

     406         406       O              406    406                            
           

Ground Total

     98,750         97,755            20,142    8,704    68,909    35,108     
                                  

Ground + office Total

     448,300         444,743                      415,897    369,896          
                             

 

The following is the general criteria for the previously listed area
calculations

  

for Progress Energy Mixed Use Building.

  

1.

 

Construction area is the area enclosed by the extreme exterior face of the
building skin.

  

2.

 

Gross interior area is the floor area enclosed by the building perimeter curtain
wall measured to the inside face of the glass.

  

3.

 

Vertical penetrations include elevator shafts, stairs, mechanical duct
enclosures, and is measured to the outside of their enclosing partitions.

  

4.

 

Net rentable area is derived arithmatically by subtracting vertical penetrations
from the gross interior area.

  

5.

 

Building Common Area - These are the areas which are designed to benefit all
building tenants without being used exclusively by any one tenant.

Included without limitation are the main building lobby, mail room all building
mechanical and electrical rooms, fire command center, building service areas,
etc., and their enclosing walls. This area will be prorated on a consistent
ratio to each floor.

            

6.

 

Floor Common Area (Single-tenant floors) - These are the areas within the core
that are not ‘usable’, less all penetrations, and include toilets, mechanical
rooms, electrical rooms, telephone closets, janitor’s closet, service elevator
vestibule, etc;

Including there enclosing walls.

            

7.

 

Useable Area - The space actually available for the discretionary use of the
tenant(s).

    

A. Single Tenant Floor - The gross interior area less entire core and its
enclosing walls, except the elevator lobby and any crossover corridors.

    

B. Multi-tenant Floor - The gross interior area less entire core, and its
enclosing walls, and the 5’0” clear minimum corridor, measured to the tenant
side of the wall, needed to gain access to stairs, toilets, service elevator,
and any common service areas.

   8.  

Leasable - The usable area multiplied by the appropriate building factor.

  

 

Vertical Penetrations:

    

Stair “A” & encl

    

Exhaust “A”:

    

Toilet Exhaust:

    

Elevator Shaft “A”

    

Elevator Shaft “B”

    

Supply Shaft

    

Stair “B” & Encl.

    

Exhaust “B”

    

Total

   0  

Floor Common:

    

Gross MEP, toilets, etc:

    

less shafts

    

Min “Z” Corridor & Elev. Lobby

    

Elevator Lobby:

    

Corridor Min.:

    

Total

   0

 

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

Exhibit “G”

Certificate Pursuant to Section 6.1(c)

TENANT’S CERTIFICATE

 

JPMorgan Trust Company, National

 

Pacific Life Insurance Company

Association

 

700 Newport Center Drive

560 Mission Street, 13th Floor

 

Newport Beach, California 92660

San Francisco, CA 94105

 

Attention: Real Estate Division

Attention: Corporate Trust Department

   

RE:     Application for Progress Payment

Pursuant to that certain Lease, dated April 10, 2003 (the “Lease”) between
Progress Energy Carolinas, Inc. (“Tenant”) and JPMorgan Trust Company, National
Association, not in its individual capacity, but solely as Landlord Trustee of
the CA Raleigh Landlord Trust under a Trust Agreement dated as of April 1, 2003
(“Landlord”), Landlord is requesting a progress payment in the amount of
$                    , as indicated on the Borrower’s Certificate to which this
Tenant’s Certificate is attached. All capitalized terms used herein and not
otherwise defined shall have the meaning ascribed to them in the Loan Agreement.

Certification and Agreement

1.         Tenant hereby (i) acknowledges and agrees that the amounts of the
loan funds requested in the Draw Request to which this Tenant’s Certificate is
attached (including, without limitation, any loan funds disbursed in connection
with any Change Orders referred to in such Draw Request or for any Line Items
for which there have been reallocations from or to other Line Items within the
Budget) will, when disbursed by Lender pursuant to the Loan Agreement, become
part of the Total Cost, as defined in the Lease, and (ii) certifies, represents
and warrants that, as of the date of such Draw Request, nothing has come to the
attention of Tenant’s Representative which would prevent Tenant from accepting
the Premises as of the Lease Commencement Date, as required by Section 6.2 of
the Lease, and (iii) Tenant’s Representative has been and is the person most
knowledgeable at Tenant about the Premises and the construction activities being
conducted thereon or in connection therewith. Tenant further acknowledges and
agrees that Lender is disbursing loan funds pursuant to the Draw Request in
reliance on this Tenant’s Certificate and would not do so in the absence
thereof.

2.         Tenant, or authorized signer, certifies that the statements made in
this Tenant’s Certificate are true and has duly caused this Tenant’s Certificate
to be signed on its behalf by the undersigned, thereunto duly authorized.

 

DATE:         “Tenant”         By:      

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

Exhibit “H”

Insurance Policies.

Tenant shall comply with the following insurance requirements:

(a) Insurance Policies During the Term. During the Term, Tenant, at its sole
cost and expense, shall procure and maintain the insurance required pursuant to
this Lease, including, without limitation, Article 13 hereof (“Tenant’s
Insurance”), provided that all such insurance shall comply with the provisions
of this Lease, including this Exhibit H. All policies of Tenant’s Insurance that
are liability insurance policies shall name Lender as an additional insured and
all policies of Tenant’s Insurance that are property insurance policies shall
name Lender loss payee and shall contain such endorsements as Lender may
require. None of the policies required in this Exhibit H shall contain a
deductible, self-insured retention, retrospective premium or any other
provision, which requires the payment of a sum in excess of Three Million
Dollars ($3,000,000.00) so long as Tenant is Investment Grade, and Five Hundred
Thousand Dollars $500,000.00) if and so as Tenant is less than Investment Grade.
The property insurance coverage required under this Lease, including this
Exhibit H may be effected under a blanket policy or policies covering the
Premises and other property of Tenant, provided that Tenant shall provide
Landlord and Lender either with a written officer’s certificate setting forth
the premises address of each building covered by such blanket policy (provided
that Lender and Tenant shall agree in writing to keep any such information
confidential), and any sublimit in such blanket policy applicable to the
Premises, or with a written officer’s certificate that the blanket property
insurance coverage limits affording coverage for the Premises are sufficient to
cover the combined replacement costs of any properties on the blanket policy
that are located within a two (2) mile radius of the Premises and that in any
case the blanket policy will provide the same protection as would a separate
policy insuring only the Premises and otherwise comply with all other respects
with the requirements of this Lease, including this Exhibit H.

(b) Form of Policy. All insurance required under this Exhibit H shall be fully
paid for and be nonassessable, and the policies therefore shall contain such
other provisions, endorsements and expiration dates, as Lender shall from time
to time reasonably request, and shall be in such form, content and amounts, and
be issued by such insurance companies having an A.M. Best rating of “A-X” or
better and doing business in North Carolina (“State”), all as are satisfactory
to Lender, or as otherwise provided and required by law. Without limiting the
foregoing, each such policy shall contain a waiver of subrogation to all claims
against Landlord, Tenant or Lender, and shall provide that the policy shall not
be canceled, amended or materially altered (including by reduction in the scope
or limits of coverage) without at least thirty (30) days prior written notice to
Lender. All policies of insurance required by this Exhibit H shall contain an
endorsement or agreement of the insurer that any loss payable to Lender in
accordance with the terms thereof shall not be adversely affected by any act or
negligence of Landlord or Tenant, which might otherwise result in the forfeiture
of such insurance. Further, no such policy shall contain an exclusion for suits
or other proceedings as between or among insured’s covered thereunder. All
insurance required pursuant to this Exhibit H (other than liability insurance)
shall contain a noncontributory standard mortgagee clause in favor of Lender.

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

(c) Duplicate Originals or Certificates. Tenant shall deposit with Lender
duplicate original policies or other evidence of insurance satisfactory to
Lender evidencing the insurance required under this Exhibit H and any additional
insurance which shall be taken out on the Premises by Tenant, together with a
certificate signed by each insurance company issuing same to the effect that the
policies so delivered are true and accurate duplicates of the originals thereof.
In addition, Tenant will deliver to Lender: (i) receipts evidencing payment of
all premiums thereon; and, (ii) duplicate original renewal policies, a binder
thereof or a property insurance certificate, with evidence reasonably
satisfactory to Lender of payment of all premiums thereon prior to the time that
any such payment would become delinquent. In lieu of the duplicate original
policies provided herein to be delivered to Lender or other evidence of
insurance as provided above, Grantor may deliver an underlyer of any blanket
policy together with signed certificates from the issuing insurance company
certifying that such underlyer truly and accurately reflects the insurance in
place, and that such insurance is in full force and effect. In addition, such
underlyer shall contain sufficient information to allow Lender to determine
whether such policy complies with the requirements of this Exhibit H. Tenant
acknowledges that its failure to provide a certificate or certificates of
insurance evidencing all of the insurance requirements set forth in the Lease
including this Exhibit H have been met shall not constitute a waiver by Lender
of any of the requirements of Lender relating to insurance.

(d) No Separate Insurance. Tenant shall not carry separate or additional
insurance concurrent in form or contributing in the event of loss with that
required under this Exhibit H unless endorsed in favor of Lender in accordance
with the requirements of this Exhibit H and otherwise approved by Lender in all
respects.

(e) Transfer of Title. In connection with any foreclosure of the Deed of Trust
or other transfer of title or assignment of the Premises by Lender or Trustee
(as defined in the Deed of Trust) pursuant to their rights under the Deed of
Trust, Tenant hereby authorizes Lender (if Lender shall so elect), without the
consent of Tenant, to assign any and all insurance policies to the purchaser
(which may be Lender) at the sale, and take such further or other action as
Lender may deem necessary or advisable to cause the interests of said purchaser
to be protected under any such insurance policies.

(f) Replacement Cost. For purposes of this Section, the term “full insurable
value” shall mean the actual cost of replacing the property in question, without
allowance for depreciation, as determined from time to time by Lender.

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

Exhibit “I”

STIPULATED LOSS VALUE

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

Exhibit I

Stipulated Loss Value Schedule

The Stipulated Loss Value Schedule shall be determined by Owner on the Rent
Commencement Date as the sum of:

  A.

An amount equal to the initial loan balance for the Pacific Life Permanent Loan
on the Rent Commencement Date, and thereafter on the first day of each
succeeding month as the Permanent Loan is amortized in accordance with the terms
of the Note and Building Loan Agreement; plus

  B.

An initial amount of $8,000,000 on the Rent Commencement Date and thereafter as
accreted at 6% per annum, compounded monthly; plus

  C.

The Make-Whole Premium as required in the Note.

  D.

During the last 10 years of the Basic Lease Term the Stipulated Loss Amount
shall not exceed $35,000,000

The Schedule below is an exemplar based upon an assumed initial Permanent Loan
in the amount of $73,000,000 and an annual rate of 6.20% on the financing. The
only variations in computing the final and actual Stipulated Loss Schedule are
to replace:

(i)   the initial loan amount assumed to be $73,000,000 with the actual loan
amount for the Permanent Loan; and

(ii)  the assumed monthly payment of $623,931 with the actual monthly payment

Exemplar of Stipulated Loss Value Schedule: Actual will vary based upon Actual
Permanent Loan Amount and the Actual Annual Rate on Financing

 

1. Assumed annual rate on financing:

     6.20%   

10 Year Treasury Rate

     3.95%   

Spread to Determine Rate

     2.25%   

2. Assumed Initial Amount of Permanent Loan

   $ 73,000,000   

3. Annual Payments

   $ 7,487,173   

 4. The Stipulated Loss Value as shown below does not include the Lender’s
Make-Whole Premium.

NOTE: THE TABLE BELOW IS ONLY FOR EXAMPLE PURPOSES

 

Exemplar of  Pacific Life Loan Amortization Schedule (not actual)          
Owner Coverage         Stipulated Loss

First Day

of Month

     Beginning
Balance     

Interest

on Prior
Balance at
6.20%

     Monthly
Payment     Ending
Balance           Beginning
Balance   

Accretion at

6%

   Ending
Balance        

Value At Beginning

of Month (Not
Including Make-Whole

Premium, If Any)

          1         73,000,000         377,167         (623,931 )     
72,753,236          $          8,000,000    $        40,000   
$        8,040,000       $            81,000,000           2         72,753,236
        375,892         (623,931 )      72,505,196          $          8,040,000
   $        40,200    $        8,080,200       $            80,793,236  
        3         72,505,196         374,610         (623,931 )      72,255,875
         $          8,080,200    $        40,401    $        8,120,601      
$            80,585,396           4         72,255,875         373,322        
(623,931 )      72,005,266          $          8,120,601    $        40,603   
$        8,161,204       $            80,376,476           5         72,005,266
        372,027         (623,931 )      71,753,362          $          8,161,204
   $        40,806    $        8,202,010       $            80,166,470  
        6         71,753,362         370,726         (623,931 )      71,500,157
         $          8,202,010    $        41,010    $        8,243,020      
$            79,955,372           7         71,500,157         369,417        
(623,931 )      71,245,643          $          8,243,020    $        41,215   
$        8,284,235       $            79,743,177           8         71,245,643
        368,102         (623,931 )      70,989,815          $          8,284,235
   $        41,421    $        8,325,656       $            79,529,878  
        9         70,989,815         366,781         (623,931 )      70,732,664
         $          8,325,656    $        41,628    $        8,367,285      
$            79,315,471           10         70,732,664         365,452        
(623,931 )      70,474,185          $          8,367,285    $        41,836   
$        8,409,121       $            79,099,949           11         70,474,185
        364,117         (623,931 )      70,214,371          $          8,409,121
   $        42,046    $        8,451,167       $            78,883,306  
        12         70,214,371         362,774         (623,931 )      69,953,214
         $          8,451,167    $        42,256    $        8,493,422      
$            78,665,537           13         69,953,214         361,425        
(623,931 )      69,690,708          $          8,493,422    $        42,467   
$        8,535,890       $            78,446,636           14         69,690,708
        360,069         (623,931 )      69,426,845          $          8,535,890
   $        42,679    $        8,578,569       $            78,226,597  
        15         69,426,845         358,705         (623,931 )      69,161,619
         $          8,578,569    $        42,893    $        8,621,462      
$            78,005,414           16         69,161,619         357,335        
(623,931 )      68,895,023          $          8,621,462    $        43,107   
$        8,664,569       $            77,783,081           17         68,895,023
        355,958         (623,931 )      68,627,050          $          8,664,569
   $        43,323    $        8,707,892       $            77,559,593  
        18         68,627,050         354,573         (623,931 )      68,357,692
         $          8,707,892    $        43,539    $        8,751,432      
$            77,334,942           19         68,357,692         353,181        
(623,931 )      68,086,942          $          8,751,432    $        43,757   
$        8,795,189       $            77,109,123           20         68,086,942
        351,783         (623,931 )      67,814,794          $          8,795,189
   $        43,976    $        8,839,165       $            76,882,131  
        21         67,814,794         350,376         (623,931 )      67,541,239
         $          8,839,165    $        44,196    $        8,883,360      
$            76,653,958           22         67,541,239         348,963        
(623,931 )      67,266,271          $          8,883,360    $        44,417   
$        8,927,777       $            76,424,599           23         67,266,271
        347,542         (623,931 )      66,989,882          $          8,927,777
   $        44,639    $        8,972,416       $            76,194,048  
        24         66,989,882         346,114         (623,931 )      66,712,065
         $          8,972,416    $        44,862    $        9,017,278      
$            75,962,298           25         66,712,065         344,679        
(623,931 )      66,432,813          $          9,017,278    $        45,086   
$        9,062,365       $            75,729,344

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

   

26

   66,432,813    343,236    (623,931)    66,152,118             $     9,062,365
      $     45,312       $     9,107,676            $             75,495,178   
   

27

   66,152,118    341,786    (623,931)    65,869,973             $ 9,107,676   
   $ 45,538       $ 9,153,215            $ 75,259,795       

28

   65,869,973    340,328    (623,931)    65,586,370             $ 9,153,215   
   $ 45,766       $ 9,198,981            $ 75,023,188       

29

   65,586,370    338,863    (623,931)    65,301,302             $ 9,198,981   
   $ 45,995       $ 9,244,976            $ 74,785,351       

30

   65,301,302    337,390    (623,931)    65,014,761             $ 9,244,976   
   $ 46,225       $ 9,291,201            $ 74,546,278       

31

   65,014,761    335,910    (623,931)    64,726,739             $ 9,291,201   
   $ 46,456       $ 9,337,657            $ 74,305,962       

32

   64,726,739    334,421    (623,931)    64,437,230             $ 9,337,657   
   $ 46,688       $ 9,384,345            $ 74,064,396       

33

   64,437,230    332,926    (623,931)    64,146,224             $ 9,384,345   
   $ 46,922       $ 9,431,267            $ 73,821,575       

34

   64,146,224    331,422    (623,931)    63,853,715             $ 9,431,267   
   $ 47,156       $ 9,478,423            $ 73,577,491       

35

   63,853,715    329,911    (623,931)    63,559,695             $ 9,478,423   
   $ 47,392       $ 9,525,815            $ 73,332,138       

36

   63,559,695    328,392    (623,931)    63,264,156             $ 9,525,815   
   $ 47,629       $ 9,573,444            $ 73,085,510       

37

   63,264,156    326,865    (623,931)    62,967,090             $ 9,573,444   
   $ 47,867       $ 9,621,311            $ 72,837,600       

38

   62,967,090    325,330    (623,931)    62,668,488             $ 9,621,311   
   $ 48,107       $ 9,669,418            $ 72,588,401       

39

   62,668,488    323,787    (623,931)    62,368,345             $ 9,669,418   
   $ 48,347       $ 9,717,765            $ 72,337,906       

40

   62,368,345    322,236    (623,931)    62,066,650             $ 9,717,765   
   $ 48,589       $ 9,766,354            $ 72,086,110       

41

   62,066,650    320,678    (623,931)    61,763,396             $ 9,766,354   
   $ 48,832       $ 9,815,186            $ 71,833,004       

42

   61,763,396    319,111    (623,931)    61,458,576             $ 9,815,186   
   $ 49,076       $ 9,864,262            $ 71,578,582       

43

   61,458,576    317,536    (623,931)    61,152,181             $ 9,864,262   
   $ 49,321       $ 9,913,583            $ 71,322,838       

44

   61,152,181    315,953    (623,931)    60,844,203             $ 9,913,583   
   $ 49,568       $ 9,963,151            $ 71,065,764       

45

   60,844,203    314,362    (623,931)    60,534,633             $ 9,963,151   
   $ 49,816       $ 10,012,967            $ 70,807,354       

46

   60,534,633    312,762    (623,931)    60,223,465             $ 10,012,967   
   $ 50,065       $ 10,063,031            $ 70,547,600       

47

   60,223,465    311,155    (623,931)    59,910,688             $ 10,063,031   
   $ 50,315       $ 10,113,347            $ 70,286,496       

48

   59,910,688    309,539    (623,931)    59,596,296             $ 10,113,347   
   $ 50,567       $ 10,163,913            $ 70,024,035       

49

   59,596,296    307,914    (623,931)    59,280,279             $ 10,163,913   
   $ 50,820       $ 10,214,733            $ 69,760,209       

50

   59,280,279    306,281    (623,931)    58,962,629             $ 10,214,733   
   $ 51,074       $ 10,265,807            $ 69,495,011       

51

   58,962,629    304,640    (623,931)    58,643,338             $ 10,265,807   
   $ 51,329       $ 10,317,136            $ 69,228,435       

52

   58,643,338    302,991    (623,931)    58,322,398             $ 10,317,136   
   $ 51,586       $ 10,368,721            $ 68,960,474       

53

   58,322,398    301,332    (623,931)    57,999,799             $ 10,368,721   
   $ 51,844       $ 10,420,565            $ 68,691,119       

54

   57,999,799    299,666    (623,931)    57,675,533             $ 10,420,565   
   $ 52,103       $ 10,472,668            $ 68,420,364       

55

   57,675,533    297,990    (623,931)    57,349,592             $ 10,472,668   
   $ 52,363       $ 10,525,031            $ 68,148,201       

56

   57,349,592    296,306    (623,931)    57,021,968             $ 10,525,031   
   $ 52,625       $ 10,577,656            $ 67,874,623       

57

   57,021,968    294,613    (623,931)    56,692,650             $ 10,577,656   
   $ 52,888       $ 10,630,544            $ 67,599,624       

58

   56,692,650    292,912    (623,931)    56,361,631             $ 10,630,544   
   $ 53,153       $ 10,683,697            $ 67,323,194       

59

   56,361,631    291,202    (623,931)    56,028,902             $ 10,683,697   
   $ 53,418       $ 10,737,116            $ 67,045,328       

60

   56,028,902    289,483    (623,931)    55,694,453             $ 10,737,116   
   $ 53,686       $ 10,790,801            $ 66,766,017       

61

   55,694,453    287,755    (623,931)    55,358,277             $ 10,790,801   
   $ 53,954       $ 10,844,755            $ 66,485,254       

62

   55,358,277    286,018    (623,931)    55,020,363             $ 10,844,755   
   $ 54,224       $ 10,898,979            $ 66,203,032       

63

   55,020,363    284,272    (623,931)    54,680,704             $ 10,898,979   
   $ 54,495       $ 10,953,474            $ 65,919,342       

64

   54,680,704    282,517    (623,931)    54,339,290             $ 10,953,474   
   $ 54,767       $ 11,008,241            $ 65,634,178       

65

   54,339,290    280,753    (623,931)    53,996,112             $ 11,008,241   
   $ 55,041       $ 11,063,282            $ 65,347,531       

66

   53,996,112    278,980    (623,931)    53,651,161             $ 11,063,282   
   $ 55,316       $ 11,118,599            $ 65,059,394       

67

   53,651,161    277,198    (623,931)    53,304,427             $ 11,118,599   
   $ 55,593       $ 11,174,192            $ 64,769,759       

68

   53,304,427    275,406    (623,931)    52,955,902             $ 11,174,192   
   $ 55,871       $ 11,230,063            $ 64,478,619       

69

   52,955,902    273,605    (623,931)    52,605,577             $ 11,230,063   
   $ 56,150       $ 11,286,213            $ 64,185,965       

70

   52,605,577    271,795    (623,931)    52,253,441             $ 11,286,213   
   $ 56,431       $ 11,342,644            $ 63,891,790       

71

   52,253,441    269,976    (623,931)    51,899,486             $ 11,342,644   
   $ 56,713       $ 11,399,357            $ 63,596,085       

72

   51,899,486    268,147    (623,931)    51,543,702             $ 11,399,357   
   $ 56,997       $ 11,456,354            $ 63,298,843       

73

   51,543,702    266,309    (623,931)    51,186,080             $ 11,456,354   
   $ 57,282       $ 11,513,636            $ 63,000,056       

74

   51,186,080    264,461    (623,931)    50,826,611             $ 11,513,636   
   $ 57,568       $ 11,571,204            $ 62,699,716       

75

   50,826,611    262,604    (623,931)    50,465,284             $ 11,571,204   
   $ 57,856       $ 11,629,060            $ 62,397,815       

76

   50,465,284    260,737    (623,931)    50,102,090             $ 11,629,060   
   $ 58,145       $ 11,687,206            $ 62,094,344       

77

   50,102,090    258,861    (623,931)    49,737,019             $ 11,687,206   
   $ 58,436       $ 11,745,642            $ 61,789,295       

78

   49,737,019    256,975    (623,931)    49,370,063             $ 11,745,642   
   $ 58,728       $ 11,804,370            $ 61,482,661       

79

   49,370,063    255,079    (623,931)    49,001,210             $ 11,804,370   
   $ 59,022       $ 11,863,392            $ 61,174,433       

80

   49,001,210    253,173    (623,931)    48,630,452             $ 11,863,392   
   $ 59,317       $ 11,922,709            $ 60,864,602       

81

   48,630,452    251,257    (623,931)    48,257,779             $ 11,922,709   
   $ 59,614       $ 11,982,322            $ 60,553,161       

82

   48,257,779    249,332    (623,931)    47,883,179             $ 11,982,322   
   $ 59,912       $ 12,042,234            $ 60,240,101       

83

   47,883,179    247,396    (623,931)    47,506,645             $ 12,042,234   
   $ 60,211       $ 12,102,445            $ 59,925,413       

84

   47,506,645    245,451    (623,931)    47,128,164             $ 12,102,445   
   $ 60,512       $ 12,162,957            $ 59,609,089       

85

   47,128,164    243,496    (623,931)    46,747,729             $ 12,162,957   
   $ 60,815       $ 12,223,772            $ 59,291,122       

86

   46,747,729    241,530    (623,931)    46,365,328             $ 12,223,772   
   $ 61,119       $ 12,284,891            $ 58,971,501       

87

   46,365,328    239,554    (623,931)    45,980,951             $ 12,284,891   
   $ 61,424       $ 12,346,315            $ 58,650,218       

88

   45,980,951    237,568    (623,931)    45,594,588             $ 12,346,315   
   $ 61,732       $ 12,408,047            $ 58,327,266       

89

   45,594,588    235,572    (623,931)    45,206,229             $ 12,408,047   
   $ 62,040       $ 12,470,087            $ 58,002,635       

90

   45,206,229    233,566    (623,931)    44,815,863             $ 12,470,087   
   $ 62,350       $ 12,532,437            $ 57,676,316       

91

   44,815,863    231,549    (623,931)    44,423,481             $ 12,532,437   
   $ 62,662       $ 12,595,100            $ 57,348,301   

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

   

92

   44,423,481    229,521    (623,931)    44,029,071             $     12,595,100
      $     62,975       $     12,658,075            $             57,018,580   
   

93

   44,029,071    227,484    (623,931)    43,632,623             $ 12,658,075   
   $ 63,290       $ 12,721,365            $ 56,687,146       

94

   43,632,623    225,435    (623,931)    43,234,127             $ 12,721,365   
   $ 63,607       $ 12,784,972            $ 56,353,989       

95

   43,234,127    223,376    (623,931)    42,833,573             $ 12,784,972   
   $ 63,925       $ 12,848,897            $ 56,019,100       

96

   42,833,573    221,307    (623,931)    42,430,948             $ 12,848,897   
   $ 64,244       $ 12,913,142            $ 55,682,470       

97

   42,430,948    219,227    (623,931)    42,026,244             $ 12,913,142   
   $ 64,566       $ 12,977,707            $ 55,344,090       

98

   42,026,244    217,136    (623,931)    41,619,448             $ 12,977,707   
   $ 64,889       $ 13,042,596            $ 55,003,951       

99

   41,619,448    215,034    (623,931)    41,210,551             $ 13,042,596   
   $ 65,213       $ 13,107,809            $ 54,662,044       

100

   41,210,551    212,921    (623,931)    40,799,541             $ 13,107,809   
   $ 65,539       $ 13,173,348            $ 54,318,360       

101

   40,799,541    210,798    (623,931)    40,386,408             $ 13,173,348   
   $ 65,867       $ 13,239,215            $ 53,972,889       

102

   40,386,408    208,663    (623,931)    39,971,140             $ 13,239,215   
   $ 66,196       $ 13,305,411            $ 53,625,622       

103

   39,971,140    206,518    (623,931)    39,553,726             $ 13,305,411   
   $ 66,527       $ 13,371,938            $ 53,276,550       

104

   39,553,726    204,361    (623,931)    39,134,156             $ 13,371,938   
   $ 66,860       $ 13,438,797            $ 52,925,664       

105

   39,134,156    202,193    (623,931)    38,712,418             $ 13,438,797   
   $ 67,194       $ 13,505,991            $ 52,572,953       

106

   38,712,418    200,014    (623,931)    38,288,501             $ 13,505,991   
   $ 67,530       $ 13,573,521            $ 52,218,409       

107

   38,288,501    197,824    (623,931)    37,862,394             $ 13,573,521   
   $ 67,868       $ 13,641,389            $ 51,862,022       

108

   37,862,394    195,622    (623,931)    37,434,085             $ 13,641,389   
   $ 68,207       $ 13,709,596            $ 51,503,783       

109

   37,434,085    193,409    (623,931)    37,003,563             $ 13,709,596   
   $ 68,548       $ 13,778,144            $ 51,143,681       

110

   37,003,563    191,185    (623,931)    36,570,817             $ 13,778,144   
   $ 68,891       $ 13,847,035            $ 50,781,707       

111

   36,570,817    188,949    (623,931)    36,135,835             $ 13,847,035   
   $ 69,235       $ 13,916,270            $ 50,417,852       

112

   36,135,835    186,702    (623,931)    35,698,606             $ 13,916,270   
   $ 69,581       $ 13,985,851            $ 50,052,105       

113

   35,698,606    184,443    (623,931)    35,259,118             $ 13,985,851   
   $ 69,929       $ 14,055,780            $ 49,684,457       

114

   35,259,118    182,172    (623,931)    34,817,359             $ 14,055,780   
   $ 70,279       $ 14,126,059            $ 49,314,898       

115

   34,817,359    179,890    (623,931)    34,373,317             $ 14,126,059   
   $ 70,630       $ 14,196,690            $ 48,943,418       

116

   34,373,317    177,595    (623,931)    33,926,982             $ 14,196,690   
   $ 70,983       $ 14,267,673            $ 48,570,007       

117

   33,926,982    175,289    (623,931)    33,478,340             $ 14,267,673   
   $ 71,338       $ 14,339,011            $ 48,194,655       

118

   33,478,340    172,971    (623,931)    33,027,380             $ 14,339,011   
   $ 71,695       $ 14,410,707            $ 47,817,351       

119

   33,027,380    170,641    (623,931)    32,574,091             $ 14,410,707   
   $ 72,054       $ 14,482,760            $ 47,438,087       

120

   32,574,091    168,299    (623,931)    32,118,459             $ 14,482,760   
   $ 72,414       $ 14,555,174            $ 47,056,851       

121

   32,118,459    165,945    (623,931)    31,660,473             $ 14,555,174   
   $ 72,776       $ 14,627,950            $ 46,673,633       

122

   31,660,473    163,579    (623,931)    31,200,121             $ 14,627,950   
   $ 73,140       $ 14,701,089            $ 46,288,423       

123

   31,200,121    161,201    (623,931)    30,737,391             $ 14,701,089   
   $ 73,505       $ 14,774,595            $ 45,901,211       

124

   30,737,391    158,810    (623,931)    30,272,269             $ 14,774,595   
   $ 73,873       $ 14,848,468            $ 45,511,986       

125

   30,272,269    156,407    (623,931)    29,804,745             $ 14,848,468   
   $ 74,242       $ 14,922,710            $ 45,120,737       

126

   29,804,745    153,991    (623,931)    29,334,805             $ 14,922,710   
   $ 74,614       $ 14,997,324            $ 44,727,455       

127

   29,334,805    151,563    (623,931)    28,862,437             $ 14,997,324   
   $ 74,987       $ 15,072,310            $ 44,332,129       

128

   28,862,437    149,123    (623,931)    28,387,629             $ 15,072,310   
   $ 75,362       $ 15,147,672            $ 43,934,748       

129

   28,387,629    146,669    (623,931)    27,910,367             $ 15,147,672   
   $ 75,738       $ 15,223,410            $ 43,535,301       

130

   27,910,367    144,204    (623,931)    27,430,639             $ 15,223,410   
   $ 76,117       $ 15,299,527            $ 43,133,777       

131

   27,430,639    141,725    (623,931)    26,948,433             $ 15,299,527   
   $ 76,498       $ 15,376,025            $ 42,730,167       

132

   26,948,433    139,234    (623,931)    26,463,736             $ 15,376,025   
   $ 76,880       $ 15,452,905            $ 42,324,458       

133

   26,463,736    136,729    (623,931)    25,976,534             $ 15,452,905   
   $ 77,265       $ 15,530,170            $ 41,916,641       

134

   25,976,534    134,212    (623,931)    25,486,815             $ 15,530,170   
   $ 77,651       $ 15,607,821            $ 41,506,704       

135

   25,486,815    131,682    (623,931)    24,994,566             $ 15,607,821   
   $ 78,039       $ 15,685,860            $ 41,094,635       

136

   24,994,566    129,139    (623,931)    24,499,773             $ 15,685,860   
   $ 78,429       $ 15,764,289            $ 40,680,425       

137

   24,499,773    126,582    (623,931)    24,002,424             $ 15,764,289   
   $ 78,821       $ 15,843,110            $ 40,264,062       

138

   24,002,424    124,013    (623,931)    23,502,506             $ 15,843,110   
   $ 79,216       $ 15,922,326            $ 39,845,535       

139

   23,502,506    121,430    (623,931)    23,000,004             $ 15,922,326   
   $ 79,612       $ 16,001,938            $ 39,424,832       

140

   23,000,004    118,833    (623,931)    22,494,906             $ 16,001,938   
   $ 80,010       $ 16,081,947            $ 39,001,942       

141

   22,494,906    116,224    (623,931)    21,987,199             $ 16,081,947   
   $ 80,410       $ 16,162,357            $ 38,576,854       

142

   21,987,199    113,601    (623,931)    21,476,868             $ 16,162,357   
   $ 80,812       $ 16,243,169            $ 38,149,556       

143

   21,476,868    110,964    (623,931)    20,963,901             $ 16,243,169   
   $ 81,216       $ 16,324,385            $ 37,720,037       

144

   20,963,901    108,313    (623,931)    20,448,283             $ 16,324,385   
   $ 81,622       $ 16,406,007            $ 37,288,286       

145

   20,448,283    105,649    (623,931)    19,930,002             $ 16,406,007   
   $ 82,030       $ 16,488,037            $ 36,854,290       

146

   19,930,002    102,972    (623,931)    19,409,042             $ 16,488,037   
   $ 82,440       $ 16,570,477            $ 36,418,038       

147

   19,409,042    100,280    (623,931)    18,885,391             $ 16,570,477   
   $ 82,852       $ 16,653,329            $ 35,979,519       

148

   18,885,391    97,575    (623,931)    18,359,035             $ 16,653,329   
   $ 83,267       $ 16,736,596            $ 35,538,720       

149

   18,359,035    94,855    (623,931)    17,829,959             $ 16,736,596   
   $ 83,683       $ 16,820,279            $ 35,095,630       

150

   17,829,959    92,121    (623,931)    17,298,149             $ 16,820,279   
   $ 84,101       $ 16,904,380            $ 34,650,237       

151

   17,298,149    89,374    (623,931)    16,763,592             $ 16,904,380   
   $ 84,522       $ 16,988,902            $ 34,202,529       

152

   16,763,592    86,612    (623,931)    16,226,272             $ 16,988,902   
   $ 84,945       $ 17,073,847            $ 33,752,494       

153

   16,226,272    83,836    (623,931)    15,686,177             $ 17,073,847   
   $ 85,369       $ 17,159,216            $ 33,300,119       

154

   15,686,177    81,045    (623,931)    15,143,291             $ 17,159,216   
   $ 85,796       $ 17,245,012            $ 32,845,393       

155

   15,143,291    78,240    (623,931)    14,597,600             $ 17,245,012   
   $ 86,225       $ 17,331,237            $ 32,388,303       

156

   14,597,600    75,421    (623,931)    14,049,090             $ 17,331,237   
   $ 86,656       $ 17,417,893            $ 31,928,837       

157

   14,049,090    72,587    (623,931)    13,497,746             $ 17,417,893   
   $ 87,089       $ 17,504,983            $ 31,466,983   

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

   

158

   13,497,746    69,738    (623,931)    12,943,553             $     17,504,983
      $     87,525       $     17,592,507            $             31,002,729   
   

159

   12,943,553    66,875    (623,931)    12,386,497             $ 17,592,507   
   $ 87,963       $ 17,680,470            $ 30,536,061       

160

   12,386,497    63,997    (623,931)    11,826,563             $ 17,680,470   
   $ 88,402       $ 17,768,872            $ 30,066,967       

161

   11,826,563    61,104    (623,931)    11,263,736             $ 17,768,872   
   $ 88,844       $ 17,857,717            $ 29,595,435       

162

   11,263,736    58,196    (623,931)    10,698,001             $ 17,857,717   
   $ 89,289       $ 17,947,005            $ 29,121,452       

163

   10,698,001    55,273    (623,931)    10,129,343             $ 17,947,005   
   $ 89,735       $ 18,036,740            $ 28,645,006       

164

   10,129,343    52,335    (623,931)    9,557,746             $ 18,036,740      
$ 90,184       $ 18,126,924            $ 28,166,083       

165

   9,557,746    49,382    (623,931)    8,983,197             $ 18,126,924      
$ 90,635       $ 18,217,559            $ 27,684,670       

166

   8,983,197    46,413    (623,931)    8,405,679             $ 18,217,559      
$ 91,088       $ 18,308,646            $ 27,200,756       

167

   8,405,679    43,429    (623,931)    7,825,177             $ 18,308,646      
$ 91,543       $ 18,400,190            $ 26,714,325       

168

   7,825,177    40,430    (623,931)    7,241,676             $ 18,400,190      
$ 92,001       $ 18,492,191            $ 26,225,367       

169

   7,241,676    37,415    (623,931)    6,655,160             $ 18,492,191      
$ 92,461       $ 18,584,652            $ 25,733,867       

170

   6,655,160    34,385    (623,931)    6,065,614             $ 18,584,652      
$ 92,923       $ 18,677,575            $ 25,239,812       

171

   6,065,614    31,339    (623,931)    5,473,022             $ 18,677,575      
$ 93,388       $ 18,770,963            $ 24,743,189       

172

   5,473,022    28,277    (623,931)    4,877,368             $ 18,770,963      
$ 93,855       $ 18,864,818            $ 24,243,985       

173

   4,877,368    25,200    (623,931)    4,278,637             $ 18,864,818      
$ 94,324       $ 18,959,142            $ 23,742,186       

174

   4,278,637    22,106    (623,931)    3,676,812             $ 18,959,142      
$ 94,796       $ 19,053,937            $ 23,237,779       

175

   3,676,812    18,997    (623,931)    3,071,878             $ 19,053,937      
$ 95,270       $ 19,149,207            $ 22,730,749       

176

   3,071,878    15,871    (623,931)    2,463,818             $ 19,149,207      
$ 95,746       $ 19,244,953            $ 22,221,085       

177

   2,463,818    12,730    (623,931)    1,852,617             $ 19,244,953      
$ 96,225       $ 19,341,178            $ 21,708,771       

178

   1,852,617    9,512    (623,931)    1,238,257             $ 19,341,178       $
96,706       $ 19,437,884            $ 21,193,795       

179

   1,238,257    6,398    (623,931)    620,724             $ 19,437,884       $
97,189       $ 19,535,073            $ 20,676,141       

180

   620,724    3,207    (623,931)    0             $ 19,535,073       $ 97,675   
   $ 19,632,748            $ 20,155,797       

181

   0    0    0    0             $ 19,632,748       $ 98,164       $ 19,730,912
           $ 19,632,748       

182

   0    0    0    0             $ 19,730,912       $ 98,655       $ 19,829,567
           $ 19,730,912       

183

   0    0    0    0             $ 19,829,567       $ 99,148       $ 19,928,715
           $ 19,829,567       

184

   0    0    0    0             $ 19,928,715       $ 99,644       $ 20,028,358
           $ 19,928,715       

185

   0    0    0    0             $ 20,028,358       $ 100,142       $ 20,128,500
           $ 20,028,358       

186

   0    0    0    0             $ 20,128,500       $ 100,642       $ 20,229,142
           $ 20,128,500       

187

   0    0    0    0             $ 20,229,142       $ 101,146       $ 20,330,288
           $ 20,229,142       

188

   0    0    0    0             $ 20,330,288       $ 101,651       $ 20,431,940
           $ 20,330,288       

189

   0    0    0    0             $ 20,431,940       $ 102,160       $ 20,534,099
           $ 20,431,940       

190

   0    0    0    0             $ 20,534,099       $ 102,670       $ 20,636,770
           $ 20,534,099       

191

   0    0    0    0             $ 20,636,770       $ 103,184       $ 20,739,954
           $ 20,636,770       

192

   0    0    0    0             $ 20,739,954       $ 103,700       $ 20,843,653
           $ 20,739,954       

193

   0    0    0    0             $ 20,843,653       $ 104,218       $ 20,947,872
           $ 20,843,653       

194

   0    0    0    0             $ 20,947,872       $ 104,739       $ 21,052,611
           $ 20,947,872       

195

   0    0    0    0             $ 21,052,611       $ 105,263       $ 21,157,874
           $ 21,052,611       

196

   0    0    0    0             $ 21,157,874       $ 105,789       $ 21,263,664
           $ 21,157,874       

197

   0    0    0    0             $ 21,263,664       $ 106,318       $ 21,369,982
           $ 21,263,664       

198

   0    0    0    0             $ 21,369,982       $ 106,850       $ 21,476,832
           $ 21,369,982       

199

   0    0    0    0             $ 21,476,832       $ 107,384       $ 21,584,216
           $ 21,476,832       

200

   0    0    0    0             $ 21,584,216       $ 107,921       $ 21,692,137
           $ 21,584,216       

201

   0    0    0    0             $ 21,692,137       $ 108,461       $ 21,800,598
           $ 21,692,137       

202

   0    0    0    0             $ 21,800,598       $ 109,003       $ 21,909,601
           $ 21,800,598       

203

   0    0    0    0             $ 21,909,601       $ 109,548       $ 22,019,149
           $ 21,909,601       

204

   0    0    0    0             $ 22,019,149       $ 110,096       $ 22,129,244
           $ 22,019,149       

205

   0    0    0    0             $ 22,129,244       $ 110,646       $ 22,239,891
           $ 22,129,244       

206

   0    0    0    0             $ 22,239,891       $ 111,199       $ 22,351,090
           $ 22,239,891       

207

   0    0    0    0             $ 22,351,090       $ 111,755       $ 22,462,846
           $ 22,351,090       

208

   0    0    0    0             $ 22,462,846       $ 112,314       $ 22,575,160
           $ 22,462,846       

209

   0    0    0    0             $ 22,575,160       $ 112,876       $ 22,688,036
           $ 22,575,160       

210

   0    0    0    0             $ 22,688,036       $ 113,440       $ 22,801,476
           $ 22,688,036       

211

   0    0    0    0             $ 22,801,476       $ 114,007       $ 22,915,483
           $ 22,801,476       

212

   0    0    0    0             $ 22,915,483       $ 114,577       $ 23,030,061
           $ 22,915,483       

213

   0    0    0    0             $ 23,030,061       $ 115,150       $ 23,145,211
           $ 23,030,061       

214

   0    0    0    0             $ 23,145,211       $ 115,726       $ 23,260,937
           $ 23,145,211       

215

   0    0    0    0             $ 23,260,937       $ 116,305       $ 23,377,242
           $ 23.260,937       

216

   0    0    0    0             $ 23,377,242       $ 116,886       $ 23,494,128
           $ 23,377,242       

217

   0    0    0    0             $ 23,494,128       $ 117,471       $ 23,611,598
           $ 23,494,128       

218

   0    0    0    0             $ 23,611,598       $ 118,058       $ 23,729,656
           $ 23,611,598       

219

   0    0    0    0             $ 23,729,656       $ 118,648       $ 23,848,305
           $ 23,729,656       

220

   0    0    0    0             $ 23,848,305       $ 119,242       $ 23,967,546
           $ 23,848,305       

221

   0    0    0    0             $ 23,967,546       $ 119,838       $ 24,087,384
           $ 23,967,546       

222

   0    0    0    0             $ 24,087,384       $ 120,437       $ 24,207,821
           $ 24,087,384       

223

   0    0    0    0             $ 24,207,821       $ 121,039       $ 24,328,860
           $ 24,207,821   

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

   

224

   0    0    0    0             $     24,328,860       $     121,644       $
    24,450,504            $             24,328,860       

225

   0    0    0    0             $ 24,450,504       $ 122,253       $ 24,572,757
           $ 24,450,504       

226

   0    0    0    0             $ 24,572,757       $ 122,864       $ 24,695,621
           $ 24,572,757       

227

   0    0    0    0             $ 24,695,621       $ 123,478       $ 24,819,099
           $ 24,695,621       

228

   0    0    0    0             $ 24,819,099       $ 124,095       $ 24,943,194
           $ 24,819,099       

229

   0    0    0    0             $ 24,943,194       $ 124,716       $ 25,067,910
           $ 24,943,194       

230

   0    0    0    0             $ 25,067,910       $ 125,340       $ 25,193,250
           $ 25,067,910       

231

   0    0    0    0             $ 25,193,250       $ 125,966       $ 25,319,216
           $ 25,193,250       

232

   0    0    0    0             $ 25,319,216       $ 126,596       $ 25,445,812
           $ 25,319,216       

233

   0    0    0    0             $ 25,445,812       $ 127,229       $ 25,573,041
           $ 25,445,812       

234

   0    0    0    0             $ 25,573,041       $ 127,865       $ 25,700,906
           $ 25,573,041       

235

   0    0    0    0             $ 25,700,906       $ 128,505       $ 25,829,411
           $ 25,700,906       

236

   0    0    0    0             $ 25,829,411       $ 129,147       $ 25,958,558
           $ 25,829,411       

237

   0    0    0    0             $ 25,958,558       $ 129,793       $ 26,088,351
           $ 25,958,558       

238

   0    0    0    0             $ 26,088,351       $ 130,442       $ 26,218,792
           $ 26,088,351       

239

   0    0    0    0             $ 26,218,792       $ 131,094       $ 26,349,886
           $ 26,218,792       

240

   0    0    0    0             $ 26,349,886       $ 131,749       $ 26,481,636
           $ 26,349,886       

241

   0    0    0    0             $ 26,481,636       $ 132,408       $ 26,614,044
           $ 26,481,636       

242

   0    0    0    0             $ 26,614,044       $ 133,070       $ 26,747,114
           $ 26,614,044       

243

   0    0    0    0             $ 26,747,114       $ 133,736       $ 26,880,850
           $ 26,747,114       

244

   0    0    0    0             $ 26,880,850       $ 134,404       $ 27,015,254
           $ 26,880,850       

245

   0    0    0    0             $ 27,015,254       $ 135,076       $ 27,150,330
           $ 27,015,254       

246

   0    0    0    0             $ 27,150,330       $ 135,752       $ 27,286,082
           $ 27,150,330       

247

   0    0    0    0             $ 27,286,082       $ 136,430       $ 27,422,512
           $ 27,286,082       

248

   0    0    0    0             $ 27,422,512       $ 137,113       $ 27,559,625
           $ 27,422,512       

249

   0    0    0    0             $ 27,559,625       $ 137,798       $ 27,697,423
           $ 27,559,625       

250

   0    0    0    0             $ 27,697,423       $ 138,487       $ 27,835,910
           $ 27,697,423       

251

   0    0    0    0             $ 27,835,910       $ 139,180       $ 27,975,090
           $ 27,835,910       

252

   0    0    0    0             $ 27,975,090       $ 139,875       $ 28,114,965
           $ 27,975,090       

253

   0    0    0    0             $ 28,114,965       $ 140,575       $ 28,255,540
           $ 28,114,965       

254

   0    0    0    0             $ 28,255,540       $ 141,278       $ 28,396,818
           $ 28,255,540       

255

   0    0    0    0             $ 28,396,818       $ 141,984       $ 28,538,802
           $ 28,396,818       

256

   0    0    0    0             $ 28,538,802       $ 142,694       $ 28,681,496
           $ 28,538,802       

257

   0    0    0    0             $ 28,681,496       $ 143,407       $ 28,824,903
           $ 28,681,496       

258

   0    0    0    0             $ 28,824,903       $ 144,125       $ 28,969,028
           $ 28,824,903       

259

   0    0    0    0             $ 28,969,028       $ 144,845       $ 29,113,873
           $ 28,969,028       

260

   0    0    0    0             $ 29,113,873       $ 145,569       $ 29,259,442
           $ 29,113,873       

261

   0    0    0    0             $ 29,259,442       $ 146,297       $ 29,405,739
           $ 29,259,442       

262

   0    0    0    0             $ 29,405,739       $ 147,029       $ 29,552,768
           $ 29,405,739       

263

   0    0    0    0             $ 29,552,768       $ 147,764       $ 29,700,532
           $ 29,552,768       

264

   0    0    0    0             $ 29,700,532       $ 148,503       $ 29,849,035
           $ 29,700,532       

265

   0    0    0    0             $ 29,849,035       $ 149,245       $ 29,998,280
           $ 29,849,035       

266

   0    0    0    0             $ 29,998,280       $ 149,991       $ 30,148,271
           $ 29,998,280       

267

   0    0    0    0             $ 30,148,271       $ 150,741       $ 30,299,013
           $ 30,148,271       

268

   0    0    0    0             $ 30,299,013       $ 151,495       $ 30,450,508
           $ 30,299,013       

269

   0    0    0    0             $ 30,450,508       $ 152,253       $ 30,602,760
           $ 30,450,508       

270

   0    0    0    0             $ 30,602,760       $ 153,014       $ 30,755,774
           $ 30,602,760       

271

   0    0    0    0             $ 30,755,774       $ 153,779       $ 30,909,553
           $ 30,755,774       

272

   0    0    0    0             $ 30,909,553       $ 154,548       $ 31,064,101
           $ 30,909,553       

273

   0    0    0    0             $ 31,064,101       $ 155,321       $ 31,219,421
           $ 31,064,101       

274

   0    0    0    0             $ 31,219,421       $ 156,097       $ 31,375,518
           $ 31,219,421       

275

   0    0    0    0             $ 31,375,518       $ 156,878       $ 31,532,396
           $ 31,375,518       

276

   0    0    0    0             $ 31,532,396       $ 157,662       $ 31,690,058
           $ 31,532,396       

277

   0    0    0    0             $ 31,690,058       $ 158,450       $ 31,848,508
           $ 31,690,058       

278

   0    0    0    0             $ 31,848,508       $ 159,243       $ 32,007,751
           $ 31,848,508       

279

   0    0    0    0             $ 32,007,751       $ 160,039       $ 32,167,789
           $ 32,007,751       

280

   0    0    0    0             $ 32,167,789       $ 160,839       $ 32,328,628
           $ 32,167,789       

281

   0    0    0    0             $ 32,328,628       $ 161,643       $ 32,490,272
           $ 32,328,628       

282

   0    0    0    0             $ 32,490,272       $ 162,451       $ 32,652,723
           $ 32,490,272       

283

   0    0    0    0             $ 32,652,723       $ 163,264       $ 32,815,986
           $ 32,652,723       

284

   0    0    0    0             $ 32,815,986       $ 164,080       $ 32,980,066
           $ 32,815,986       

285

   0    0    0    0             $ 32,980,066       $ 164,900       $ 33,144,967
           $ 32,980,066       

286

   0    0    0    0             $ 33,144,967       $ 165,725       $ 33,310,692
           $ 33,144,967       

287

   0    0    0    0             $ 33,310,692       $ 166,553       $ 33,477,245
           $ 33,310,692       

288

   0    0    0    0             $ 33,477,245       $ 167,386       $ 33,644,631
           $ 33,477,245       

289

   0    0    0    0             $ 33,644,631       $ 168,223       $ 33,812,854
           $ 33,644,631   

 

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

   

290

   0    0    0    0             $     33,812,854       $     169,064       $
    33,981,919            $             33,812,854       

291

   0    0    0    0             $ 33,981,919       $ 169,910       $ 34,151,828
           $ 33,981,919       

292

   0    0    0    0             $ 34,151,828       $ 170,759       $ 34,322,587
           $ 34,151,828       

293

   0    0    0    0             $ 34,322,587       $ 171,613       $ 34,494,200
           $ 34,322,587       

294

   0    0    0    0             $ 34,494,200       $ 172,471       $ 34,666,671
           $ 34,494,200       

295

   0    0    0    0             $ 34,666,671       $ 173,333       $ 34,840,005
           $ 34,666,671       

296

   0    0    0    0             $ 34,840,005       $ 174,200       $ 35,014,205
           $ 34,840,005       

297

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

298

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

299

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

300

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

301

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

302

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

303

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

304

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

305

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

306

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

307

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

308

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

309

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

310

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

311

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

312

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

313

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

314

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

315

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

316

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

317

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

318

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

319

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

320

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

321

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

322

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

323

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

324

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

325

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

326

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

327

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

328

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

329

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

330

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

331

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

332

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

333

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

334

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

335

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

336

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

337

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

338

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

339

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

340

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

341

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

342

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

343

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

344

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

345

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

346

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

347

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

348

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

349

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

350

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

351

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

352

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

353

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

354

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

355

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000   

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

   

356

   0    0    0    0             $     35,000,000       $           -           $
    35,000,000            $             35,000,000       

357

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

358

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

359

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

360

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

361

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

362

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

363

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

364

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

365

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

366

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

367

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

368

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

369

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

370

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

371

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000       

372

   0    0    0    0             $ 35,000,000       $ -           $ 35,000,000   
        $ 35,000,000   

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

Exhibit “J”

[Omitted]

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

Exhibit “K

FORM OF ESTOPPEL AGREEMENT

                , the              of [Tenant][Landlord] hereby certifies that
as of              (the “Certification Date”), the following is true and
correct:

(a)        the Lease dated as of April     , 2003 is unmodified and in force and
effect [(or if there have been modifications, that the Lease is in force and
effect as modified, and identifying the modification agreements];

(b)        the date to which Annual Base Rent has been paid is             
    ,             ;

(c)        there is no default by Tenant in the payment of Annual Base Rent or
any other Rent payable to Landlord hereunder, and there is no other existing
default by either party with respect to which a notice of default or notice of
termination (by Landlord) has been served, [and, if there is any such default,
specifying the nature and extent thereof], and, to the actual knowledge of the
property or asset manager of Tenant having responsibility for the Lease and
Premises, and the officer to which he or she reports, there are no acts under
the Lease that have occurred that would constitute an Event of Default with
notice, and the passage of time;

(d)        to the knowledge of the signer, there are no setoffs, defenses or
counterclaims against enforcement of the obligations to be performed hereunder
existing in favor of the party executing such certificate.

(e)        the term of the Lease and the payment of rent commenced on
            , 2001, and is scheduled to expire on             , unless renewed
or terminated in accordance with the terms of the Lease. Pursuant to the Lease,
Tenant is entitled to renew the Lease for four (4) terms of five (5) years each.

[(f)    Tenant is not the subject of any filing for bankruptcy or reorganization
under any applicable law.]1

 

[LESSOR/TENANT]

________________________

 

 

1 

Only if Lessee is delivering estoppel certificate.

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

EXHIBIT “B”

PARKING LEASE

[See Attached.]

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

PARKING FACILITY LEASE AGREEMENT

Among

J.P. MORGAN TRUST COMPANY, N.A., as Owner,

PROGRESS ENERGY CAROLINAS, INC., As Landlord,

And

THE CITY OF RALEIGH, NORTH CAROLINA, As Tenant

DATED AS OF April 10, 2003

This instrument has been pre-audited in the

Manner required by the Local Government

Budget and Fiscal Control Act.

/s/ [ILLEGIBLE]

Finance Officer

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

TABLE OF CONTENTS

 

     Page No.  

RECITALS

     1   

ARTICLE I - Definitions

     1        1.1  

Definitions

     1   

ARTICLE II - Lease of Premises and Term

     4        2.1  

Lease of Premises

     4        2.2  

Term

     4        2.3  

Surrender Upon Termination

     4        2.4  

Termination of Master Lease Prior to Commencement Date

     5   

ARTICLE Ill - Rent

     5        3.1  

Facility Payment

     5        3.2  

Base Rent

     5        3.3  

Additional Rent

     5        3.4  

Tax Treatment

     5   

ARTICLE IV - Construction of the Parking Facility

     6        4.1  

Plans and Specifications

     6        4.2  

Quality of Work and Warranty

     7        4.3  

Commencement Date

     7        4.4  

Escrow for Punchlist Items

     8        4.5  

Post-Construction Audit

     8        4.6  

Alterations or Additions

     9        4.7  

Waivers

     9        4.8  

Construction Liens

     10   

ARTICLE V - Payment of Taxes, Assessments, Etc.

     10        5.1  

Payment of Taxes and Impositions

     10        5.2  

No Income Taxes

     11        5.3  

Tenant’s Right to Contest

     11        5.4  

Payment of Taxes by Landlord or Owner

     12   

ARTICLE VI - Insurance

     12        6.1  

Casualty Insurance

     12        6.2  

Liability Insurance; Other Insurance

     12        6.3  

Carriers; Types of Policies

     13        6.4  

Blanket Policies

     13        6.5  

Additional Insureds; Loss Payee

     13        6.6  

Non-Cancelable

     14        6.7  

Unearned Premiums

     14   

ARTICLE VII - Utilities

     14   

ARTICLE VIII - Use of Premises

     14        8.1  

Permitted Use

     14        8.2  

Operation of Parking Facility

     15        8.3  

Revenue From Premises

     15   

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

    8.4  

Parking for Landlord’s Exclusive Use

     15        8.5  

Use of the Project by Owner and Landlord

     16   

ARTICLE IX - Compliance with Laws

     16        9.1  

Compliance with Laws

     16        9.2  

Compliance with Insurance Policies

     17        9.3  

Hazardous Materials

     17   

ARTICLE X - Maintenance and Repair of Premises

     18        10.1  

Tenant’s Repair Obligations

     18        10.2  

Landlord’s Repair Obligations

     18        10.3  

Maintenance of Common Elements and Systems

     19   

ARTICLE XI - Damage or Destruction

     20        11.1  

Deposit of Net Proceeds

     20   

ARTICLE XII - Condemnation

     21        12.1  

Taking

     21        12.2  

Total Taking

     21        12.3  

Continuation of Lease After Partial Taking

     22        12.4  

Temporary Takings

     22   

ARTICLE XIII - Right to Mortgage

     22        13.1  

Leasehold Mortgages

     22        13.2  

No Mortgagee Obligations

     24        13.3.  

Release of Tenant Mortgagee

     24        13.4  

Mortgage of Landlord’s lnterest

     24   

ARTICLE XIV - Representations

     25        14.1  

Representations by Landlord

     25        14.2  

Representations by Tenant

     25   

ARTICLE XV - Indemnifications

     26        15.1  

Tenant Indemnity

     26        15.2  

Landlord lndemnity

     27   

ARTICLE XVI - Residential Development and Release of P-2 Residential Parking
Area

     28        16.1  

Residential Development

     28        16.2  

Release of P-2 Residential Parking Area from Lease

     28        16.3  

Amendment to Lease

     28        16.4  

Conveyance of Easement Rights to Residential Development

     29        16.5  

Release Contemplated by Mortgages

     29        16.6  

Guarantee by Landlord

     29        16.7  

Parking for Residential Development Second Phase

     29        16.8  

Restriction on Residential Development Second Phase

     29        16.9  

Sharing of Profits from Residential Development

     30   

ARTICLE XVII - Entry on Premises by Landlord

     30        17.1  

Entry by Landlord

     30   

ARTICLE XVIII - Parties’ Right to Perform Covenants

     31        18.1  

Landlord’s Right to Cure

     31        18.2  

Tenant’s Right to Cure

     31        18.3.  

Interest on Costs to Cure

     31        18.4  

No Setoff

     32   

 

ii

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

ARTICLE XIX - Defaults

     33        19.1  

Events of Default

     33        19.2  

Termination of Lease: Other Remedies

     33        19.3  

Events of Landlord Default

     34        19.4  

Late Charge

     34        19.5  

No Waiver

     35        19.6  

Cumulative Remedies

     35   

ARTICLE XX - Estoppels

     35        20.1  

Tenant Estoppel

     35        20.2  

Landlord Estoppel

     36   

ARTICLE XXI - Limited Arbitration

     36   

ARTICLE XXII - Miscellaneous Provisions

     36        22.1  

Notices

     36        22.2  

Severability

     37        22.3  

Successors and Assigns

     37        22.4  

Applicable Law

     37        22.5  

Counterparts

     37        22.6  

Nondiscrimination

     37        22.7  

Entire Agreement

     37        22.8  

Short Form

     37        22.9  

Interpretation

     37        22.10  

Brokerage Commissions

     38        22.11  

Assignment

     38        22.12  

Amendments to Master Lease

     38    Exhibit A  

Property Description

   Exhibit B  

Description of the Premises Parking Area

   Exhibit C  

Description of P-2 Residential Parking Area

   Exhibit D  

Description of Plans and Specifications

  

 

iii

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

PARKING FACILITY LEASE AGREEMENT

THIS PARKING FACILITY LEASE AGREEMENT is entered into as of this 10th day of
April, 2003, by and among J.P. MORGAN TRUST COMPANY, N.A., a national banking
association, not in its individual capacity but solely as Owner Trustee of CA
Raleigh Owner Trust, under Trust Agreement dated April 1, 2003 (“Owner”)
PROGRESS ENERGY CAROLINAS, INC., a North Carolina corporation (“Landlord”), and
the CITY OF RALEIGH, NORTH CAROLINA, a political subdivision of the State of
North Carolina (“Tenant”).

RECITALS:

A.     Owner is the owner of that certain parcel of land located in the City of
Raleigh, Wake County, North Carolina, more particularly described on Exhibit A,
attached hereto and incorporated herein by reference (the “Property”).

B.     Owner and Landlord have entered into a Lease Agreement dated as of
April 10, 2003 (the “Master Lease”) pursuant to which Owner shall lease the
Property to Landlord upon the terms and conditions stated therein.

C.     Landlord intends to construct on the Property a multi-level parking deck
and related facilities and improvements more particularly described in Exhibit B
(the “Parking Facility”). The Parking Facility is to be part of a mixed-use
development on the Property consisting of approximately 400,000 square feet of
office development, 20,000 square feet of retail development, and a two-phased
residential development consisting of 75-90 residential housing units
(collectively, the “Project”).

D.     Tenant desires to acquire a long-term leasehold interest in the Parking
Facility and desires to finance its acquisition of such leasehold interest under
an installment contract financing arrangement to be entered into by the Tenant
under the provisions of Section 160A-20 of the North Carolina General Statutes,
as amended.

NOW, THEREFORE, for and in consideration of the mutual covenants hereinafter set
forth, the parties hereto do hereby agree as follows:

ARTICLE I

Definitions

1.1     Definitions. The following words and terms as used in this Lease shall
have the following meanings unless the context otherwise requires:

“Additional Rent” shall mean all other sums of money that shall become due from
and payable by Tenant hereunder other than Base Rent as more particularly
described in Section 3.3 of this Lease.

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

“Base Rent” shall have the meaning set forth in Section 3.2 of this Lease.

“Code” shall mean the Internal Revenue Code of 1986, as amended from time to
time.

“Commencement Date” shall have the meaning set forth in Section 4.3 of this
Lease.

“Common Elements” shall have the meaning set forth in Section 10.3 of this
Lease.

“Convention Center Parking Facility” means the existing parking facility with
approximately 870 parking spaces located at the corner of Wilmington and
Cabarrus Streets and which is owned and operated by Tenant.

“Facility Payment” shall mean the payment due from Tenant to Landlord on the
Commencement Date in an amount equal to the product of (A) the number of parking
spaces in the Parking Facility multiplied by (B) $13,200.

“Force Majeure” shall mean strikes, lock-outs, riots or other labor troubles,
unavailability of materials, a national emergency, any rule, order or regulation
of governmental authorities, tornados, floods, hurricanes or other natural
disasters, or other similar causes not within a party’s control.

“Guarantee” shall mean the corporate guarantee of Landlord as more particularly
described in Section 16.6 of this Lease.

“Impositions” shall have the meaning set forth in Section 5.1 of this Lease.

“Joint and Reciprocal Easement Agreement” shall mean the Joint and Reciprocal
Easement Agreement by and between the Landlord and Tenant pursuant to which the
parties have conveyed various easement rights to each other, recorded or to be
recorded in the Office of the Wake County Register of Deeds.

“Lease” shall mean this Parking Facility Lease Agreement and any and all
amendments or supplements hereto.

“Master Lease” shall mean the Lease Agreement between Owner and Landlord dated
as of April 10, 2003.

“Net Proceeds” shall mean the gross proceeds from any insurance recovery or
condemnation or eminent domain award remaining after payment of all expenses
(including attorneys fees) incurred in the collection of such proceeds.

 

2

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

“Owner Mortgagee” means any mortgagee of Owner’s interest in the Premises.

“P-2 Residential Parking Area” shall mean the area on the second level of the
Parking Facility more particularly shown on Exhibit C attached hereto and
incorporated herein, consisting of 61 parking spaces and related driveways and
access ways.

“Parking Facility Equipment” shall mean all machinery, apparatus, fixtures and
systems of every kind and nature attached to or used in connection with the
operation or maintenance of the Parking Facility to be installed by Landlord and
specifically referenced in the Plans and Specifications, including any
electrical, communication, heating, mechanical, sanitary, sprinkler, utility,
power, plumbing, cleaning, fire prevention, ventilating, air cooling, elevator
systems, equipment, and replacements thereof included in such Plans and
Specifications; all personal property not specifically referenced in the Plans
and Specifications shall not be treated as Parking Facility Equipment for
purposes of this Lease.

“Parking Facility” shall mean the six-level parking facility to be constructed
on the Property, consisting of approximately 1,055 parking spaces, together with
all ramps, driveways, stairways, and passageways constructed in connection
therewith, as more particularly described in Exhibit B.

“Plans and Specifications” shall have the meaning set forth in Section 4.1 of
this Lease.

“Premises” shall mean, collectively, the Parking Facility, the Parking Facility
Equipment, and all easement and rights appurtenant thereto, including those
easements created under the Joint and Reciprocal Easement Agreement for the
benefit of the owner of the Property. As used herein, the term “Premises” shall
not include the fee interest of Owner in the Property.

“Project” shall mean the mixed-use development to be constructed on the Property
as more particularly described in Recital B hereof.

“Property” shall mean the real property more particularly described on Exhibit A
attached hereto and incorporated herein.

“Punchlist” shall have the meaning set forth in Section 4.4 of this Lease.

“Punchlist Escrow” shall have the meaning set forth in Section 4.4 of this
Lease.

“Residential Development” shall have the meaning set forth in Section 16.1
hereof.

 

3

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

“Residential Development First Phase” shall have the meaning set forth in
Section 16.1 hereof.

“Residential Development Second Phase” shall have the meaning set forth in
Section 16.1 hereof.

“Tax-Exempt Obligations” shall mean any financing of the Tenant’s obligation to
pay the Facility Payment under this Lease and any separate financing to finance
Tenant’s cost of the Convention Center Parking Facility in the form of
obligations, the interest upon which is not includable in the gross income of
the owners thereof for purposes of federal income taxation under the Code.

“Tenant Mortgagee” shall mean the holder of any mortgage or deed of trust
encumbering the Tenant’s leasehold interest in the Premises.

ARTICLE II

Lease of Premises and Term

2.1     Lease of Premises. Landlord hereby leases the Premises to Tenant, and
the Tenant hereby leases the same from the Landlord for the term of the Master
Lease. Upon the termination or expiration of the Master Lease, Owner shall lease
the Premises to Tenant and Tenant shall lease the same from Owner, upon the
terms and conditions of this Lease, and all references to Landlord herein during
such period shall be deemed to apply to Owner. Landlord covenants with Tenant
that the leasehold interest conveyed in this Lease is marketable and free and
clear of all defects and encumbrances arising during the period Landlord was
seized of the property, and that Landlord will warrant and defend title thereto
against the lawful claims of all persons claiming by, through, or under Landlord
subject only to easements, liens, or other encumbrances of record, if any.

2.2     Term. The term of this Lease shall commence on the Commencement Date
and, unless sooner terminated in accordance with the provisions hereof, shall
expire on the fortieth (40th) anniversary of the Commencement Date.

2.3     Surrender Upon Termination. Upon the termination of this Lease, Tenant
will promptly quit and surrender the Premises in good order, condition, and
repair, ordinary wear and tear and damage by condemnation and casualty excepted
and in broom clean condition unless previously demolished or removed by Tenant
or Landlord under the terms of this Lease. Tenant may remove from the Parking
Facility any trade fixtures, equipment, and moveable furniture placed at the
Parking Facility by Tenant, whether or not such trade fixtures or equipment are
fastened to the Parking Facility; provided, however, that Tenant will not remove
any trade fixtures or equipment without Landlord’s written consent if such
fixtures or equipment are used in the operation of the Premises or if the
removal of such fixtures or equipment will result in impairing the

 

4

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

structural strength of the Parking Facility or any part thereof. Tenant will
fully repair any damage occasioned by the removal of any trade fixtures,
equipment, furniture, alterations, additions, and improvements. All trade
fixtures, equipment, furniture, alterations, additions, and improvements not so
removed will be deemed conclusively to have been abandoned and may be
appropriated, sold, stored, destroyed, or otherwise disposed of by Landlord
without notice to Tenant or any other person and without obligation to account
for them; and, except as hereinafter provided, Tenant will pay Landlord for all
reasonable expenses incurred in connection with such property, including but not
limited to the cost of repairing any damage to the Premises caused by the
removal of such property. To the extent any such alterations, additions,
improvements or equipment have been constructed or installed with the express
written consent of Landlord, Tenant shall not be responsible for the cost of
removal of the same. Tenant’s obligation to observe and perform this covenant
will survive the expiration or other termination of this Lease.

2.4     Termination of Master Lease Prior to Commencement Date. In the event the
Master Lease is terminated prior to the Commencement Date hereunder, this Lease
shall be deemed to have terminated, and the parties shall have no further
rights, obligations or liabilities hereunder.

ARTICLE Ill

Rent

3.1     Facility Payment. On the Commencement Date, Tenant shall pay to
Landlord, without notice, deduction, offset or demand, in lawful money of the
United States of America, at the offices of the Landlord or at such other place
as Landlord may designate in writing, the Facility Payment.

3.2     Base Rent. In addition to the Facility Payment, Tenant shall pay,
without offset, demand or written notice, in lawful money of the United States
of America, at the offices of the Landlord or at such other place as Landlord
may designate in writing, One Dollar ($1.00) per year, payable in advance on the
Commencement Date and on each anniversary of the Commencement Date thereafter
during the term of this Lease.

3.3    Additional Rent. Except as hereinafter otherwise provided, Tenant shall
also pay without notice, except as may be required hereunder, and without
abatement, deduction or offset, as Additional Rent, all sums, costs, expenses
and other payments which Tenant in any other provisions of this Lease assumes or
agrees to pay, and, in the event of any nonpayment thereof, Landlord shall have
(in addition to all other rights and remedies) all the rights and remedies
provided for herein or by law in the case of nonpayment of Base Rent.

3.4     Tax Treatment. Notwithstanding anything to the contrary in this Lease,
Owner, Landlord and Tenant intend that this Lease shall constitute and be
treated as a purchase by Tenant and a sale by Owner and Landlord of the Premises
for federal, State and local tax purposes and for financial accounting purposes.
Accordingly,

 

5

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

Owner, Landlord, and Tenant agree that, unless compelled to take a contrary
position by an explicit and adverse final determination of the Internal Revenue
Service that is not subject to further appeal, they shall (i) report on their
respective federal, State and local tax returns and internal books and records
and audited financial statements the transaction contemplated by this Lease as a
purchase by Tenant and a sale by Owner and Landlord of the Premises for an
amount equal to the Facility Payment, (ii) treat Tenant as the owner of the
Premises for all federal, State and local tax purposes and financial accounting
purposes, (iii) not take any position on any tax return, financial record or
statement or any other document, or in connection with any audit, contest or
other administrative or legal proceeding, that is inconsistent with such
reporting or treatment, and (iv) Landlord and Owner shall not claim any
depreciation or other deductions with respect to ownership of the Parking
Facility. In the event Owner or Landlord are compelled to take a contrary
position as a result of a determination of the Internal Revenue Service, notice
of such determination shall be given to Tenant, and Tenant shall the right to
contest such determination by the Internal Revenue Service. Owner or Landlord,
as the case may be, shall cooperate with Tenant in contesting such determination
through participation, at Tenant’s expense, in any administrative or judicial
appeal from the determination as shall be requested by Tenant.

ARTICLE IV

Construction of the Parking Facility

4.1     Plans and Specifications. Landlord shall, at its sole cost, risk and
expense, construct and complete, or cause to be constructed and completed, the
Parking Facility, and shall install or cause to be installed the Parking
Facility Equipment and other improvements to the Property which may be necessary
for the use and enjoyment of the Parking Facility which are generally outlined
in Exhibit D attached hereto and incorporated herein. The Landlord has provided
to the Tenant the latest version of the Plans and Specifications for the Parking
Facility and the Parking Facility Equipment. As the architectural drawings and
other designs for the Project are developed, the Plans and Specifications shall
be updated and revised to reflect the greater detail available from the newer
drawing and designs. Landlord agrees to provide Tenant with copies of the Plans
and Specifications, and any modifications thereto, in electronic format to the
extent readily available. Such amendments shall be made as the Landlord and
Tenant mutually agree. The Plans and Specifications shall be subject to the
review of Tenant and shall comply with applicable design criteria set forth in
ordinances and policies adopted by the City of Raleigh, North Carolina. Tenant
shall have the right to inspect and review the progress of construction and
review and approve any change orders affecting the design, operation,
maintenance or cost of the Parking Facility and the Parking Facility Equipment;
provided, any proposed change order that is not approved or objected to with
specificity within seven (7) business days of receipt shall be deemed approved
by Tenant. The issuance of permits by the City of Raleigh acting in its
governmental capacity shall not constitute approval of the Plans and
Specifications or of change orders by Tenant. Notwithstanding anything herein to
the contrary, the review and approval of a change order by the Tenant shall not

 

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increase the amount of the Facility Payment unless such change order represents
an upgrade or betterment in the Parking Facility which is requested by the City;
provided, however, if a change order is required to address a design error or
design deficiency, it shall in no event increase the amount of the Facility
Payment. To facilitate the review and approval, each Landlord and Tenant shall
appoint one or more construction representatives to meet at least weekly until
the Commencement Date. Landlord’s initial construction representative(s) shall
be Frank Smith, and Tenant’s initial construction representative shall be
Tenant’s Construction Project Administrator or his designee.

4.2     Quality of Work and Warranty. Landlord shall cause the Parking Facility
and the Parking Facility Equipment, to be constructed in a good and workmanlike
manner, in accordance with the Plans and Specifications and in substantial
conformance with all applicable laws and ordinances, and the latest editions of
applicable building codes, standards, or institute specifications. Landlord
shall cause the contractor, or contractors, for the Parking Facility and Parking
Facility Equipment to guarantee the materials and workmanship against defects
due to faulty materials, workmanship or negligence for a minimum period of
twelve (12) months following the Commencement Date. Where items of equipment or
material carry a manufacturer’s or other warranty for a period exceeding twelve
(12) months, then such warranty shall additionally apply for such equipment or
material.

In addition, Landlord shall cause Tenant to be a named obligee under all
warranties from parties providing labor, materials, or equipment with respect to
the installation and construction of, and repairs to, the Parking Facility and
Parking Facility Equipment.

All warranties shall remain in effect until a warranty punchlist has been
completed. Tenant shall have the right to review the punch list and to include
additional items in the warranty punchlist.

Landlord shall arrange for Tenant to receive, at least two weeks prior to the
Commencement Date, copies of all operating and maintenance manuals or special
training benefits in connection with all Parking Facility Equipment installed by
Landlord, to receive licenses to use any proprietary software required to
operate the same and to receive access to any passwords or codes necessary for
maintenance of the Parking Facility Equipment or to access any equipment systems
installed.

4.3     Commencement Date. The Commencement Date shall be the first date on
which each of the following conditions have been satisfied: (i) the City of
Raleigh, North Carolina has issued a temporary certificate of occupancy for the
Parking Facility, and (ii) the City of Raleigh, North Carolina has issued a
certificate of completion of the shell building of the office component of the
Project. At least sixty days before the date that Landlord expects the events
described in (i) and (ii) to occur, Landlord shall notify the Tenant in writing
of the expected Commencement Date so that the Tenant can arrange to have
financing arrangements in place in order to pay the Facility Payment on

 

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the Commencement Date. In the event that the Tenant has issued obligations to
pay the Facility Payment on or before the date identified to the Tenant as the
expected Commencement Date and the events described in (i) and (ii) above have
not occurred within ten (10) business days after that date, and such delay is
attributable to Landlord and is not attributable to Force Majeure, Landlord will
indemnify Tenant for any investment losses Tenant incurs on account of the delay
(measured as the difference between the interest paid or accrued on the
obligations issued by the Tenant during the period from the date ten
(10) business days after the date identified to the Tenant as the expected
Commencement Date and the date that is the actual Commencement Date and the
investment earnings received or accrued for the benefit of the Tenant for that
period). In addition, Landlord shall endeavor to cause 100 spaces in the Parking
Facility to be leased under monthly parking leases at standard rates; provided,
however, such monthly parking leases shall not be a condition to Tenant’s
obligation to pay the Facility Payment. Tenant shall apprise Landlord of the
date upon which it issues its obligations to finance the Facility Payment.

4.4     Escrow for Punchlist Items. Upon the payment of the Facility Payment,
the parties shall compile a list of punchlist items to be completed (the
“Punchlist”), and Landlord shall cause to be deposited with an escrow agent
mutually designated by Landlord and Tenant the sum of $675,000 (the “Punchlist
Escrow”). Amounts in the escrow account shall secure the performance by Landlord
of punch list items required in order for the Parking Facility to be in
compliance with the Plans and Specifications hereinafter mentioned. In the event
the Punchlist is not completed within six (6) months after the Commencement
Date, Tenant may complete the Punchlist items that are outstanding and submit
invoices for the completion of such items to be paid from the escrow. Any
amounts remaining in the Punchlist Escrow after the parties have mutually agreed
that the Punchlist has been completed shall be released to Landlord.

4.5     Post-Construction Audit. Landlord and Tenant acknowledge that the
determination of the Facility Payment is based on negotiations that have
occurred between Landlord and Tenant with respect to the cost of the Parking
Facility. Within sixty (60) days after the Commencement Date, Landlord shall
provide to Tenant a full accounting of the cost of the Parking Facility and the
Parking Facility Equipment. Tenant shall be entitled to request an independent
audit of such accounting. In the event Tenant determines that the aggregate cost
of the development and construction of the Parking Facility is less than the
aggregate cost determined by Landlord, and the two determinations are within ten
percent (10%) of the lower determination, the parties agree that the aggregate
cost of the development and construction of the Parking Facility shall be
conclusively deemed to be the average of the two determinations. In the event
Tenant determines that the aggregate cost of the development and construction of
the Parking Facility is less than the aggregate cost determined by Landlord, and
the difference between the two determinations is greater than ten percent
(10%) of the lower determination, the parties agree to appoint an independent
architect, construction manager or other acknowledged expert (the cost of which
shall be shared equally by the parties), whose determination shall be deemed to
be conclusive for purposes of this Section 4.4. In the event such
post-construction audit determines that

 

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the aggregate cost of the development and construction of the Parking Facility
is less than $13,200 per space, the Landlord shall pay to Tenant, in cash,
within ten (10) days of such determination, the amount by which the Facility
Payment exceeds such aggregate cost.

4.6     Alterations or Additions. Tenant may not make any modifications,
alterations, or additions to the Premises without Landlord’s prior written
consent, which shall not be unreasonably withheld. All modifications shall
(i) be completed promptly and in a good and workmanlike manner; (ii) conform to
all applicable governmental laws and requirements; and (iii) be paid for in full
by Tenant, and Tenant shall not permit any mechanics or other liens associated
with such alterations to be filed against the Premises to remain a lien of
record against Tenant’s interest in the Premises for more than 30 days after
Tenant receives notice of said liens(s).

4.7     Waivers. Tenant acknowledges that the Premises are subleased to the
Tenant by Landlord and that Landlord has irrevocably and unconditionally
transferred and assigned its right to the Facility Payment to the Owner. Tenant
acknowledges that Owner will not be active in the construction of the Premises
and pursuant to the terms of a Project Management Agreement, Landlord or an
affiliate of Landlord, has designed and will oversee the construction of the
Premises and will inspect the Premises. Accordingly, the Tenant shall be
unconditionally required to accept the Premises on the Commencement Date. NONE
OF OWNER, OWNER MORTGAGEE, OR ANY AFFILIATE THEREOF HAS MADE OR SHALL BE DEEMED
TO HAVE MADE ANY REPRESENTATION OR WARRANTY, EXPRESS OR IMPLIED, OR SHALL BE
DEEMED TO HAVE ANY LIABILITY WHATSOEVER AS TO THE VALUE, HABITABILITY,
COMPLIANCE WITH ANY PLANS AND SPECIFICATIONS, CONDITION, DESIGN, OPERATION,
LOCATION, USE, DURABILITY, MERCHANTABILITY, CONDITION OF TITLE, OR FITNESS FOR
USE OF THE PREMISES (OR ANY PART THEREOF) FOR ANY PARTICULAR PURPOSE, OR ANY
OTHER REPRESENTATION OR WARRANTY WHATSOEVER, EXPRESS OR IMPLIED, WITH RESPECT TO
THE PREMISES (OR ANY PART THEREOF) AND NONE OF OWNER, OWNER MORTGAGEE, ANY
AFFILIATE THEREOF OR ANY DESIGNEE THEREOF SHALL BE LIABLE FOR ANY LATENT,
HIDDEN, OR PATENT DEFECT THEREIN OR FOR THE FAILURE OF THE PREMISES TO BE
CONSTRUCTED IN ACCORDANCE WITH ANY PLANS AND SPECIFICATIONS THEREFOR, FOR THE
COMPLIANCE OF THE PLANS AND SPECIFICATIONS FOR THE PREMISES WITH APPLICABLE LAWS
OR FOR THE FAILURE OF THE PREMISES, OR ANY PART THEREOF, TO OTHERWISE COMPLY
WITH ANY APPLICABLE LAWS. The provisions of this Article IV have been
negotiated, and the foregoing provisions are intended to be a complete exclusion
and negation of any representations or warranties by Owner, any affiliate
thereof or the Owner Mortgagee, express or implied, with respect to the
Premises, that may arise pursuant to any law now or hereafter in effect, or
otherwise and specifically negating any warranties under the Uniform Commercial
Code.

 

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4.8     Construction Liens. The Landlord will not permit any mechanic’s or other
lien to be established or remain against the Premises for labor or materials
furnished in connection with construction and installation of the Parking
Facility and the Parking Facility Equipment; provided, however, that if any such
lien is established, the Landlord may in good faith contest any lien filed or
established against the Premises, and in such event may permit the items so
contested to remain undischarged and unsatisfied during the period of such
contest and any appeal therefrom and shall provide the Tenant with full security
against any loss or forfeiture which might arise from the nonpayment of any such
item, in form satisfactory to the Tenant.

ARTICLE V

Payment of Taxes, Assessments, Etc.

5.1     Payment of Taxes and Impositions. Tenant shall pay or cause to be paid,
before any fine, penalty, interest or cost may be added thereto for the
nonpayment thereof, all taxes, assessments, water and sewer rents, rates and
charges, levies, license and permit fees and other governmental charges, general
and special, ordinary and extraordinary, foreseen and unforeseen, of any kind
and nature whatsoever which at any time during the term of this Lease may be
assessed, levied, confirmed, imposed upon, or grow or become due and payable out
of or in respect of, or become a lien on, the Parking Facility or the Parking
Facility Equipment, or any part thereof or any appurtenance thereto (all such
taxes, assessments, water and sewer rents, rates and charges, levies, license
and permit fees and other governmental charges being hereinafter referred to as
“Impositions”, and any of the same being hereinafter referred to as an
“Imposition”) (and shall deliver to Landlord within thirty (30) days after the
date when ad valorem taxes would become delinquent, official receipts of the
appropriate taxing authority, or other evidence reasonably satisfactory to
Landlord evidencing payment of such ad valorem taxes and, within thirty
(30) days after written request of Landlord, evidence of Tenant’s payment of all
other Impositions thereof); provided, however, that

(a)     If, by law, any Imposition may at the option of the taxpayer be paid in
installments, Tenant may pay the same in equal installments over a period of not
more than ten years. Tenant shall pay only such installments as shall become due
during the Term of this Lease; and

(b)     All Impositions for the fiscal or tax years in which the Term of this
Lease shall begin and end shall be prorated between Landlord and Tenant.

(c)     Nothing contained herein shall constitute an admission or other action
by the Tenant confirming that the Parking Facility or the Parking Facility
Equipment are subject to any taxes that the Parking Facility or the Parking
Facility Equipment are not so subject on account of the Parking Facility or the
Parking Facility Equipment being property belonging to a political subdivision
of the State of North Carolina.

 

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Tenant, Owner and Landlord hereby agree that any separate valuation by the Wake
County tax assessor of the Parking Facility or the Parking Facility Equipment
from the rest of the Project shall be the value of the Parking Facility or the
Parking Facility Equipment in allocating ad valorem taxes among Tenant and Owner
or any other entity responsible for payment of property taxes. In the event that
an Imposition upon the Premises is not separately assessed from the rest of the
Project, the Tenant shall be responsible for payment of that portion of such
Imposition equal to the percentage that the Facility Payment is to the total
cost of the Parking Facility and the office and retail components of the
Project.

5.2     No Income Taxes. Nothing herein contained shall require Tenant to pay
municipal, state or federal income taxes assessed against Landlord, municipal,
state or federal capital levy, gift, estate, succession, inheritance or transfer
taxes of Landlord, or corporation excess profits or franchise taxes imposed upon
any corporate owner of the fee of the Premises, or any income, profits, or
revenue tax, assessment or charge imposed upon rent as such, payable by Tenant
under this Lease.

5.3     Tenant’s Right to Contest. Tenant shall be privileged to seek an
exemption or reduction in the valuation of the Parking Facility or the Parking
Facility Equipment for tax purposes and to contest in good faith by appropriate
proceedings, at Tenant’s expense, the amount or validity in whole or in part of
any Imposition; and may defer payment thereof, provided that Tenant shall
deposit with Landlord or the appropriate governmental authority, as provided by
applicable law, a sum which shall be at least equal to the amount of the item so
contested, and also, from time to time, on demand of Landlord, .such additional
sum as may be reasonably required to cover interest or penalties accrued or to
accrue on any such item or items. Landlord may, upon ten (10) days prior written
notice to Tenant, pay such contested item or items out of any sums so deposited
in the event that (a) Tenant has caused an undue delay in the prosecution of
such proceedings, or (b) Landlord has received written notice of a taxing
authority’s intent to initiate foreclosure proceedings with respect to the
Premises. When any such contested items shall have been paid or canceled, any
sums so deposited to cover them and not applied by Landlord as aforesaid shall
be repaid to Tenant.

Landlord shall have a right to seek a reduction in the valuation of the Premises
assessed for tax purposes and to prosecute any action or proceeding theretofore
commenced by Tenant, if such assessed valuation or valuations shall in whole or
in part relate and pertain to any period of time subsequent to the expiration or
termination of this Lease. To the extent to which any tax refund payable is a
result of any proceeding in the nature of certiorari which Landlord or Tenant
may institute, or payable by reason of compromise or settlement of any such
proceeding, may be based upon a payment made by anyone other than Landlord,
Tenant shall be authorized to collect the same, subject, however, to Tenant’s
obligation to reimburse Landlord forthwith for any expense incurred by Landlord
in connection therewith.

 

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5.4     Payment of Taxes by Landlord or Owner. To the extent the Tenant is not
responsible for such taxes, assessment or other charges pursuant to Section 5.1,
Landlord or Owner shall pay or cause to be paid all taxes, assessments or other
charges of any type or nature levied, assessed or charged against any portion of
the Project that could constitute a lien upon the Premises.

ARTICLE VI - Insurance

6.1     Casualty Insurance. Tenant, at its sole cost and expense, shall keep the
Parking Facility and the Parking Facility Equipment insured, during the term of
this Lease, against loss or damage by fire, and extended coverage customary for
premises similarly situated in the City of Raleigh, with replacement cost
endorsement, in amounts sufficient to prevent Landlord or Tenant from being or
becoming a co-insurer within the terms of the policy or policies and in no event
less than one hundred percent (100%) of the replacement value of the
improvements on the Parking Facility or the Parking Facility Equipment. Such
replacement value shall be determined from time to time, but not more frequently
than once in any thirty-six (36) consecutive calendar months, at the request of
Landlord, by an architect or contractor who shall be mutually and reasonably
acceptable to Landlord and Tenant. No omission on the part of Landlord to
request any such determination shall relieve Tenant of its obligation hereunder.
Tenant’s property and casualty insurance required under this Section 6.1 shall
include “demolition and increased cost of construction” endorsement which, in
the event of casualty, would cover increased cost of reconstruction due to
changes in the law.

6.2     Liability Insurance; Other Insurance.

 

  (a)

Tenant, at its sole cost and expense, shall maintain:

 

  (i)

for the mutual benefit of Landlord and Tenant, commercial general liability
insurance against claims for bodily injury, death or property damage, occurring
upon, in or about the Parking Facility or the Parking Facility Equipment, or the
elevators or any escalators, and on, in or about the adjoining sidewalks and
passageways (including, without limitation, personal injury, death or property
damage resulting directly or indirectly from any change, alteration, improvement
or repair thereof) for at least $1,000,000 for any one accident and/or $500,000
for damage to property and in such greater or lesser limits as may be determined
pursuant to the provisions hereof. In addition, Tenant shall carry an umbrella
liability policy in an aggregate amount of at least Five Million and No/100
Dollars ($5,000,000.00). Tenant will periodically review its liability coverage
and make such

 

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adjustments as are prudent in light of any changed circumstances;

 

  (ii)

automobile liability insurance; and

 

  (iii)

such other insurance and in such amounts as may be reasonably required by
Landlord by written request made no more frequently than every third (3rd) year
for the ensuing three (3) year period, against other insurable hazards which at
the time are customarily insured against in the case of premises similarly
situated in the City of Raleigh.

6.3     Carriers; Types of Policies Except to the extent coverage is provided by
a self-insurance program administered by the Tenant, all insurance provided for
in this Article shall be effected under valid and enforceable policies, issued
by insurers with a Best’s rating of at least [A-7] and who are licensed or
approved to do business in the State of North Carolina. Upon the Commencement
Date, and thereafter not less than thirty (30) days prior to the expiration
dates of the expiring policies theretofore furnished pursuant to this Article,
copies of the policies (or, in the case of commercial general liability
insurance, certificates of the insurers) bearing notations evidencing the
payment of premiums or accompanied by other evidence satisfactory to Landlord of
such payment, shall be delivered by Tenant to Landlord and, upon request, Owner,
Owner’s Mortgagee and any mortgagee of Landlord.

6.4     Blanket Policies. Nothing in this Article VI shall prevent Tenant from
taking out insurance of the kind and in the amounts provided for under this
Article under a blanket insurance policy or policies covering other properties
as well as the Parking Facility or the Parking Facility Equipment, provided,
however, that any such policy or policies of blanket insurance (i) shall specify
therein, or Tenant shall furnish Landlord with a written statement from the
insurers under such policy or policies specifying, the amount of the total
insurance allocated to the Parking Facility or the Parking Facility Equipment,
which amounts shall not be less than the amounts required by Sections 6.1 and
6.2 hereof, and (ii) such amounts so specified shall be sufficient to prevent
any one of the insureds from becoming a co-insurer within the terms of the
applicable policy or policies, and provided further, however, that any such
policy or policies of blanket insurance shall, as to the Parking Facility or the
Parking Facility Equipment, otherwise comply as to endorsements and coverage
with the provisions of this Article.

6.5     Additional Insureds; Loss Payee. All policies of insurance provided for
in Sections 6.1 and 6.2 hereof shall name Landlord (as lessee of Owner), Owner,
the Owner’s mortgagee and Tenant as additional insureds as their respective
interests may appear, and also insure the interest of any leasehold mortgagee of
Landlord, when requested, as the interest of any such mortgagee may appear, by
standard mortgagee clause. Any policy may also name any leasehold mortgagee of
Tenant as an additional insured. In case of damage to any building or other
improvements located on the Parking Facility or the Parking Facility Equipment
during the Term of this Lease, which

 

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damage is to be repaired or restored, the loss shall be adjusted by Landlord and
Tenant and the proceeds applied as provided in Section 11.1.

6.6     Non-Cancelable. Each such policy or certificate therefor issued by the
insurer shall, to the extent obtainable, contain an agreement by the insurer
that such policy shall not be canceled without at least ten (10) days prior
written notice to Landlord and to any mortgagee named therein.

6.7     Unearned Premiums. Upon the expiration of this Lease, the unearned
premiums upon any such transferable insurance policies shall be apportioned if
Tenant shall not then be in default in the performance of any of Tenant’s
agreements, terms, covenants and conditions in this Lease provided. At the
commencement of the term all transferable policies shall be transferred by
Landlord to Tenant who shall pay Landlord the unearned premiums thereon.

ARTICLE VII

Utilities

Landlord shall provide utility service connections for the Parking Facility or
the Parking Facility Equipment as required in the Plans and Specifications and
shall pay the initial connection charges for such utilities, including any
hook-up charges, connection fees and the like, associated with providing the
utility service connections. During the term of this Lease, Tenant shall pay all
operating utility charges, including those for gas, water, sewage and
electricity used on the Parking Facility or the Parking Facility Equipment.
Landlord shall provide for the installment of separate meters for all utilities
for the Parking Facility and Parking Facility Equipment from the other users of
the Project. Tenant’s payment obligation for utilities shall commence on the
Commencement Date.

ARTICLE VIII

Use of Premises

8.1     Permitted Use. Tenant may use or allow the Premises to be used for any
lawful purpose, but not otherwise. To the extent practicable, Tenant shall
conduct its activities at the Premises so that such activities do not
unreasonably interfere with the activities of other tenants at the Project in
the areas of the Project they lease from Landlord or otherwise deny such tenants
peaceful enjoyment of their leased areas. Tenant shall prevent the accumulation
of any unclean, unhealthy, unsightly or unkempt condition of the Premises.
Tenant will not conduct any activities at the Premises that will have a material
detrimental impact on the Project. Tenant shall not conduct any activity at the
Premises that would constitute a nuisance to any other tenants at the Project.
Nothing contained herein shall be construed to (i) prevent Tenant from operating
the Premises as a public parking deck facility as provided in Section 8.2 or
(ii) require Tenant to operate the Premises as a public parking deck facility if
Tenant has other uses for the Premises consistent with the provisions of this
paragraph. Landlord

 

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shall obtain similar covenants from other tenants leasing other areas of the
Project from Landlord.

8.2     Operation of Parking Facility. In the event Tenant elects to operate the
Parking Facility as a public parking deck during the term of this Lease, Tenant
shall change such rates for the spaces located in its parking facilities,
including the Convention Center Parking Facility and the Parking Facility, as
Tenant shall determine from time to time in its sole discretion, provided,
however, that Tenant shall charge the same rates to Landlord and Landlord’s
tenants and subtenants and their invitees as are charged to other members of the
general public for comparable use of the Convention Center Parking Facility and
the Parking Facility. Nothing contained herein shall prevent Tenant from
establishing different rates for usage on an hourly basis, weekly basis or
monthly basis, or from utilizing different rates for different times of the day,
as Tenant determines in connection with its operation of its parking facilities,
so long as Tenant does not discriminate against Landlord and their invitees in
charging such rates. Tenant covenants and agrees, that, so long as the Parking
Facility is operated as a parking deck, it shall operate the Parking Facility in
a first-class manner consistent the operation and maintenance of other parking
facilities located in downtown Raleigh, North Carolina.

Tenant may, in its sole discretion, retain the services of a management company
to manage the operation of the Premises on behalf of the Tenant. If the Tenant
does retain such services, the Tenant shall nevertheless be responsible for the
performance by Tenant of its obligations hereunder in accordance with the terms
hereof.

8.3     Revenue From Premises. All revenue derived from the operation of the
Premises during the term of this Lease shall be Tenant’s exclusive property.

8.4     Parking for Landlord’s Exclusive Use. Tenant will make available at
least six hundred (600) parking spaces for the exclusive use of Landlord and
other tenants of the Project during normal business hours at standard rates.
Such parking spaces will be made available in one or more of the Convention
Center Parking Facility, the Parking Facility, Tenant’s parking facility
commonly known as the Moore Square Parking Deck, and any other Tenant-owned
structured parking facilities within four blocks of the Project. Notwithstanding
the foregoing, the amount of parking spaces that will be reserved for the
exclusive use of Landlord shall in no event exceed ten percent (10%) of the
spaces in the Convention Center Parking Facility and the Parking Facility and of
the respective facilities which are subject to limitation on private uses under
the terms of applicable financings, and that this ten percent (10%) amount shall
be reduced as necessary to assure that the aggregate private use of such
facilities, determined in the manner provided by the Code, does not exceed ten
percent (10%) of such facilities subject to such limitations.

Subject to the provisions set forth in the preceding paragraph, in providing the
600 reserved parking spaces Tenant is required to provide pursuant to the
preceding paragraph, Tenant shall allocate ten percent (10%) of the parking
spaces in the

 

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Convention Center Parking Facility and the Parking Facility as the first parking
spaces made available to meet the requirement, unless the amount of parking
spaces the City can responsibly reserve from the Convention Center Parking
Facility and the Parking Facility and remain in compliance with the restrictions
of the Code described in this Section is less than 10%, in which event Tenant
shall reserve the maximum amount of parking spaces Tenant can responsibly
provide and remain in compliance with the restrictions of the Code. Tenant shall
not reserve parking spaces in the Convention Center Parking Facility and the
Parking Facility for any party other than Tenant that would result in a
reduction in the amount of spaces Tenant may reserve for Landlord pursuant to
this Section. In carrying out the undertaking described in the preceding two
sentences, Tenant shall be entitled to rely conclusively on the advice of
counsel selected by Tenant as to the amount of spaces in the Convention Center
Parking Facility and the Parking Facility that Tenant may reserve for Landlord.

In the event that Landlord does enter into agreements with Tenant to lease and
pay for all the spaces available for the exclusive use of Landlord pursuant to
this Section, Tenant may lease the spaces not taken by Landlord to members of
the general public. As is consistent with all parking decks controlled by
Tenant, parking shall be permitted after normal business hours on a
space-available basis.

Any use of the area reserved for Landlord pursuant to this Section shall be
consistent with any rules, regulations, procedures and restrictions Tenant may
impose for the operation of the Premises.

8.5     Use of the Project by Owner and Landlord. Owner and Landlord may use or
allow the office and retail components of the Project to be used for any lawful
purpose, but not otherwise. To the extent practicable, Owner and Landlord shall
conduct their activities at the Project so that such activities do not
unreasonably interfere with Tenant’s activities with respect to the Parking
Facility or otherwise deny Tenant the peaceful enjoyment of the Parking
Facility. Owner and Landlord shall prevent the accumulation of any unclean,
unhealthy, unsightly or unkempt condition of the Project. Owner and Landlord
will not conduct any activities at the Project that will have a material
detrimental impact on the Parking Facility. Owner and Landlord shall not conduct
any activity at the Project that would constitute a nuisance to any other
tenants at the Project.

ARTICLE IX

Compliance with Laws

9.1     Compliance with Laws. Throughout the term of this Lease, Tenant, on
behalf of itself and Landlord, at its sole cost and expense, shall promptly
comply with all present and future laws, ordinances, orders, rules, regulations
and requirements of all federal, state and municipal governments, departments,
commissions, boards and officers, whether applicable to Landlord or Tenant, and
all orders, rules, standards, and regulations of the National Board of Fire
Underwriters or any other body or bodies

 

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exercising similar functions, foreseen or unforeseen, which may be applicable to
the Premises and the sidewalks, alleyways, passageways, curbs and vaults
adjoining the same or to the use or manner of use of the Premises or the owners,
tenants or occupants thereof, whether or not such law, ordinance, order, rule,
regulation or requirement shall affect the interior or exterior of the Premises,
necessitate structural changes or improvements or interfere with the use and
enjoyment of the Premises, and whether or not such compliance is required by
reason of any condition, event or circumstance existing prior to or after the
commencement of the term of this Lease.

9.2     Compliance with Insurance Policies. Tenant shall likewise observe and
comply with the requirements of all policies of public liability, fire and all
other policies of insurance required to be supplied by Tenant at any time in
force with respect to the Premises, whether or not such observance or compliance
is required by reason of any condition, event or circumstance existing prior to
or after the commencement of the term of this Lease, and Tenant shall, in the
event of any violation or any attempted violation of the provisions of this
Section by any subtenant, take steps, immediately upon knowledge of such
violation or attempted violation, to remedy or prevent the same as the case may
be. In any case Tenant shall be privileged to substitute policies of other
properly rated insurance companies, as described in Article VI.

9.3     Hazardous Materials.

(a)    Tenant shall at all times during the term of this Lease, permit the use
and/or presence of Hazardous Materials (as defined hereinafter) on the Parking
Facility or the Parking Facility Equipment only to the extent reasonably
necessary for the use of the Parking Facility or the Parking Facility Equipment
and only in accordance with applicable laws, rules and regulations, and neither
Tenant nor any of it employees, agents, invitees, licensees, contractors, or
permitted assigns or permitted sub-tenants shall use, generate, manufacture,
refine, treat, process, produce, store, deposit, handle, transport, release, or
dispose of Hazardous Materials in, on or about the Parking Facility or the
Parking Facility Equipment or the ground water thereof, in violation of any
federal, state or municipal law, decision, statute, rule, ordinance or
regulation currently in existence or hereafter enacted or rendered or in any
event in any manner that interferes with the use and operation of the Project.
Tenant shall give Landlord prompt written notice of any claim received by Tenant
from any person, entity, or governmental agency that a release or disposal of
Hazardous Materials has occurred on the Parking Facility or the Parking Facility
Equipment or the ground water thereof. As used in this Section, “Hazardous
Materials” shall mean and be defined as any and all toxic or hazardous
substances, chemicals, materials or pollutants which are regulated, governed,
restricted or prohibited by any federal, state or local law, decision, statute,
rule, or ordinance currently in existence or hereafter enacted or rendered.

(b)    To the extent permitted by law, Tenant hereby agrees to indemnify and
hold harmless Landlord, its employees and agents, and Landlord’s

 

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mortgagee, its employees and agents and each of them, their successors and
assigns (collectively, the “lndemnitees”), from and against any and all loss,
cost, damage, claim, penalty, fine, suit, liability or expense, including cost
of investigation, cleanup costs, reasonable attorney’s fees, reasonable
consultant’s or expert’s fees and expenses of every kind and nature incurred or
suffered by Landlord or any such lndemnitees, directly or indirectly, as a
result of or on account of: (i) any failure by Tenant to comply with the
obligations of this Section or (ii) the presence of Hazardous Materials on the
Parking Facility or the Parking Facility Equipment, but shall not include
Hazardous Materials introduced to the Parking Facility or the Parking Facility
Equipment after Landlord regains possession of the Parking Facility or the
Parking Facility Equipment. Tenant’s obligations under this Section, including
Tenant’s indemnification obligation, shall survive the expiration or earlier
termination of the Lease, but shall not limit Tenant’s right to seek damages
against any third party for losses incurred by Tenant as a result of the
presence of Hazardous Materials on, under, or about the Premises at any time.

ARTICLE X

Maintenance and Repair of Premises

10.1     Tenant’s Repair Obligations. During the term of this Lease, the Tenant
shall, subject to Landlord’s obligations hereunder, at its sole cost and
expense:

(a)     Be responsible for the maintenance, repair and replacement to the
sidewalks, driveways, service areas, curbs, and parking areas within the Parking
Facility;

(b)     Be responsible for maintenance, repair and replacement of the interior
of the Parking Facility and the Parking Facility Equipment;

(c)     Be responsible for the removal of snow and ice and for janitorial
services, replacement of light bulbs, florescent tubes and ballasts in the
Parking Facility;

(d)     Make all repairs caused by its negligence, unless covered by any
insurance policy maintained by Landlord; and

(e)     Be responsible for all maintenance, repairs and replacements which are
not expressly Landlord’s responsibility hereunder.

10.2     Landlord’s Repair Obligations. During the term of this Lease, Landlord
shall, at its sole cost and expense perform all necessary maintenance, repairs
and replacements, none of which cost shall be charged to Tenant:

 

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    (a)     To the exterior and to the structure of the Premises, which
obligation shall expressly include but not be limited to exterior walls
(including caulking), and foundations;

    (b)     Required because of damage or destruction by fire or other peril
covered by all risk insurance policies or by reason of war or acts of God
applicable to the Premises or to the Parking Facility; and

    (c)     Required because of faulty construction of the Parking Facility or
improper installation of Parking Facility Equipment or Landlord’s negligence.

10.3     Maintenance of Common Elements and Systems. The parties acknowledge
that certain mechanical systems and building elements shall be common to both
the Premises and to the office and retail components of the Project
(collectively, “Common Elements”). Items currently acknowledged as Common
Elements are (i) street level access and perimeter landscape and hardscape;
(ii) portions of the main lobby used for parking patron street access;
(iii) columns; (iv) exit corridors; (v) exterior façade from street level to the
street level identified as “P7” on the Plans and Specifications; (vi) exterior
lighting; (vii) common chases for utilities; (viii) storm sewer drain lines;
(ix) fire alarm devices; and (x) fire risers through the Parking Facility.
Additional items may be hereafter identified as Common Elements by agreement of
Landlord and Tenant. The Common Elements shall be maintained by Landlord and
such maintenance shall be performed in a manner so as to minimize, to the extent
reasonably practicable, any interruption and interference in the operation of
the Parking Facility and the Project. Landlord shall use its best efforts to
allocate the cost of such maintenance on an equitable basis and shall submit
invoices to Tenant for Tenant’s proposed share of such maintenance costs, which
Tenant shall pay, as Additional Rent, within thirty (30) days of receipt. In the
event Tenant disagrees with Landlord’s allocation of any expense for the
maintenance of the Common Elements as set forth in an invoice from Landlord,
Tenant shall so notify Landlord within thirty (30) days of receipt of such
invoice and the parties shall thereafter appoint a third-party referee approved
by both parties to determine an equitable allocation of the expenses addressed
in such invoice, and such referee’s determination shall be deemed to be
conclusive, and Tenant shall pay such invoice, as adjusted by the referee’s
determination, within ten (10) days of notice of the referee’s determination. In
the event the parties cannot agree on a third-party referee, each party shall
appoint a referee to make an independent determination of an equitable
allocation the expenses in question. If the result of the two independent
determinations is that the higher allocation of Tenant’s share of the expenses
in question is within ten percent (10%) of the lower allocation of Tenant’s
share of such expenses, the parties agree that the Tenant’s share of such
expenses shall be conclusively deemed to be the average of the two independent
determinations. If the two independent determinations are not within ten percent
(10%) of each other, the two independent referees shall jointly appoint a third
referee, the determination of which shall be conclusively deemed to be Tenant’s
share of the expenses in question.

 

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ARTICLE XI

Damage or Destruction

11.1     Deposit of Net Proceeds. In the event all or any material portion of
the Parking Facility is damaged or destroyed by fire or other casualty, the
Landlord and Tenant shall deposit all Net Proceeds payable as to such casualty
with an escrow agent (the “Escrow Agent”) mutually acceptable to Landlord and
Tenant. Landlord shall, within ninety (90) days after the date such damage or
destruction occurs, proceed in accordance with the following provisions and
shall give notice of its intended course of action to Tenant, and the Escrow
Agent shall disburse such Net Proceeds in accordance with such notice.

    (a)     Repair and Restoration. In the event less than twenty-five percent
(25%) of the Parking Facility is destroyed, then Landlord shall proceed to
repair, reconstruct and restore the Premises to substantially the same condition
as had existed prior to the event causing such damage or destruction, with such
alterations and additions as the Landlord may determine to be necessary or
desirable and as will not impair the capacity or character of the Parking
Facility for the purposes for which it had been used prior to such damage or
destruction or is intended to be used. In the event such repairs and restoration
require a permanent alteration in the design or use of the Parking Facility,
Tenant shall have a period of not more than thirty (30) days in which to review,
approve and accept the cost of such repair and replacement before the Landlord
shall proceed with such repairs. So long as no event of default has occurred and
is continuing under this Lease, the Escrow Agent, upon receipt of a request made
by the Landlord, shall apply so much as may be necessary of such Net Proceeds to
payment of the cost of such repair, reconstruction and restoration, either on
completion thereof or as the work progresses. Any such request may provide for
Net Proceeds to be paid directly to third-party vendors or to be paid to the
Landlord for reimbursement of costs incurred in such repair, replacement or
restoration. If such Net Proceeds are not sufficient to pay in full the cost of
such repair, replacement and restoration, any deficiency shall be paid by
Tenant.

    (b)     In the event more than twenty-five percent (25%) of the Parking
Facility is destroyed and Landlord determines not to restore or repair the
Parking Facility, the Net Proceeds, to the extent available, shall be applied as
follows:

    (i)     First, to the costs of demolition and removal of debris and to
restoration of the Property, subject to the structural requirements of any
remaining components of the Project;

    (ii)     Second, to the payment of any outstanding amount owed to any Tenant
Mortgagee; and

 

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(iii)     Third, the balance to be allocated between Landlord and Tenant in
proportion to the value that each of the Landlord’s reversionary interest and
Tenant’s leasehold interest in the Premises has to the value of the Premises
immediately prior to the date such damage or destruction occurs. Any
determination of the Landlord’s reversionary interest in the Premises and the
Tenant’s leasehold interest in the Premises for purposes of this subsection
(iii) shall take into account the fact that the Tenant has leased the Premises
for the expected useful life of the Parking Facility.

ARTICLE XII

Condemnation

12.1    Taking. In the event that the Premises, or any part thereof, shall be
taken in condemnation proceedings or by exercise of any right of eminent domain
or by agreement between Landlord, Tenant and those authorized to exercise such
right (any such matters being hereinafter referred to as a “taking”), Landlord,
Tenant and any person or entity having an interest in the award or awards shall
have the right to participate in any such condemnation proceedings or agreement
for the purpose of protecting their interests hereunder. Each party so
participating shall pay its own expenses and fees incurred therein.

12.2    Total Taking. If at any time during the term of this Lease there shall
be a taking of the whole or substantially all of the Premises, this Lease shall
terminate and expire on the date of such taking and the Base Rent and the
Additional Rent owing hereunder shall be apportioned and paid to the date of
such taking. For the purposes of this Article “substantially all of the
Premises” shall be deemed to have been taken if, in the reasonable judgment of
either Landlord or Tenant, the untaken part of the Premises shall be
insufficient for the economic and feasible operation thereof by Tenant, such as,
for example, if in the reasonable judgment of either Landlord or Tenant, the
taking reduces available parking below acceptable levels taking into account the
uses contemplated by either Landlord or Tenant. In such event, the Net Proceeds,
to the extent available, shall be allocable as follows:

  (a)     First, the value of the Property considered as vacant and unimproved
land shall be paid to Owner or to Owner’s mortgagee, if any;

  (b)     Second, to the payment of any outstanding amount owed to any Tenant
Mortgagee; and

 

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(c)     Third, the balance to be allocated between Landlord and Tenant in
proportion to the value that each of the Landlord’s reversionary interest and
Tenant’s leasehold interest in the Premises has to the value of the Premises
immediately prior to the date such taking occurs. Any determination of the
Landlord’s reversionary interest in the Premises and the Tenant’s leasehold
interest in the Premises for purposes of this subsection (c) shall take into
account the fact that the Tenant has leased the Premises for the expected useful
life of the Parking Facility.

12.3.   Continuation of Lease After Partial Taking. In the event of a partial
taking of less than materially all of the Parking Facility such that the Parking
Facility can continue to operate on an economically viable basis, this Lease
shall continue without modification and the Net Proceeds shall be allocated as
follows:

(a)     First, to any restoration or modification of the Premises required to
make the Premises a complete architectural unit as nearly as reasonably possible
to their condition prior to the taking;

(b)     Second, the balance shall be shared by Landlord and Tenant in the same
proportion as described in Section 12.2(c) above.

12.4.   Temporary Takings. In the event of a taking of all or a part of the
Premises for temporary use, this Lease shall continue without change, including
without abatement of rent, as between Landlord and Tenant, and Tenant shall be
entitled to the award made for such use; provided that:

 

  (a)

such award shall be apportioned between Landlord and Tenant so as to allocate to
Landlord that portion of the award applicable following the date of the
expiration of the term of this Lease; and

 

  (b)

Tenant shall be entitled to file and prosecute any claim against the condemnor
for damages and to recover the same, for any negligent use, waste or injury to
the Premises throughout the balance of the Term of this Lease. The amount of
damages so recovered shall be paid directly to Tenant.

ARTICLE XIII

Right to Mortgage

13.1   Leasehold Mortgages. Notwithstanding anything to the contrary contained
in this Lease, Tenant shall have the right, at any time and from time to time,
to mortgage its leasehold interest in the Premises on such terms, conditions and
maturity as Tenant shall determine, and to enter into any and all extensions,
modifications, amendments, replacements, and refinancings of any such leasehold
mortgage as Tenant may desire; provided, however, the terms of any such
leasehold mortgage shall expressly disclaim

 

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any interest against Landlord’s interest in the Premises and shall absolve
Landlord of any liability with respect to the financing secured by such
leasehold mortgage. In addition, in the event the original principal balance of
the obligation secured by any one or more mortgages encumbering the Tenant’s
leasehold interest exceeds the amount of the Facility Payment, plus amounts
incurred to pay financing costs and to fund reserves in connection with Tenant’s
arrangements to finance the Facility Payment, the terms of such mortgages shall
provide that, in the event of a default under the terms thereof, the Parking
Facility shall be released from the liens of such mortgages upon payment to the
holders thereof of an amount equal to the fair market value of the Parking
Facility at the time of such default.

If Tenant, or Tenant’s successors or assigns shall mortgage said leasehold
interest, then as long as any such leasehold mortgage shall remain unsatisfied
of record, the following provisions shall apply, notwithstanding anything to the
contrary contained in this Lease, and any pertinent provisions of this Lease
shall be deemed to be amended and modified to the extent necessary so as to
provide as follows:

 

  (a)

Landlord’s rights to cancel, surrender, accept a surrender, or modify this Lease
shall be subject to the rights of a Tenant Mortgagee under this Article XIII.

 

  (b)

Landlord, upon serving upon Tenant any notice of default pursuant to the
provisions of Article XX hereof, or any other notice under the provisions of or
with respect to this Lease, shall also serve a copy of such notice on any Tenant
Mortgagee; provided, however, that Landlord’s obligation to give or provide such
Tenant Mortgagee with any notice shall be contingent upon such Tenant Mortgagee
providing written notice to Landlord of its existence and setting forth the
address to which all such notices are to be delivered.

 

  (c)

Any Tenant Mortgagee, in case Tenant shall be in default hereunder, shall,
within the period and otherwise as herein provided, have the right to remedy
such default, or cause the same to be remedied, and Landlord shall accept such,
performance by or at the instance of such holder as if the same had been made by
Tenant.

 

  (d)

A Tenant Mortgagee, in the event Tenant shall be in default hereunder, shall
have the right, within the period and otherwise as herein provided, to remedy or
cause to be remedied such default, and Landlord shall accept such performance by
or at the instigation of such leasehold mortgage holder as if the same had been
performed by Tenant. No default by Tenant in performing work required to be
performed, acts to be done, or conditions to be remedied, shall be deemed to
exist, if steps, in good faith, have been properly commenced by Tenant or by
said leasehold mortgage holder, or by any other party, person, or entity to
rectify the same and prosecuted to completion within 180 days.

 

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  (e)

Anything herein contained to the contrary notwithstanding, during such time as
the leasehold mortgage remains unsatisfied of record and unpaid, if an event or
events shall occur which shall entitle Landlord to terminate this Lease, and if
before the expiration of sixty (60) days after the date of service of notice of
termination under this Lease, a Tenant Mortgagee shall have paid to Landlord all
rent and other payments which are then in default, and shall have complied or
shall be engaged in the work of complying with all the other requirements of
this Lease, if any, which work shall be completed in not more than 180 days,
then in default, and shall continue to pay rent due hereunder, then Landlord
shall not be entitled to terminate this Lease and any notice of termination
theretofore given shall be void and of no effect, provided, however, that
nothing herein contained shall in any way affect, diminish, or impair Landlord’s
right to terminate this Lease (if such default is not cured within said sixty
(60) day period or in the process of being cured with reasonable due diligence)
or to enforce any other remedy in the event of the nonpayment of any such rent
thereafter payable by Tenant or in case of any other such default in the
performance of any of the obligations of Tenant hereunder in accordance with
this Lease.

 

  (f)

Landlord and Tenant shall not enter into any agreement modifying, canceling or
surrendering this Lease without the prior written consent of any Tenant
Mortgagee.

13.2     No Mortgagee Obligations. Notwithstanding anything to the contrary set
forth in this Lease, in no event shall any Tenant Mortgagee be obligated to
(i) construct any improvements on the Premises, (ii) cure any default with
respect to or satisfy or discharge any lien or encumbrance against Tenant’s
interest in this Lease or the Premises.

13.3.     Release of Tenant Mortgagee. If any Tenant Mortgagee shall acquire
title to Tenant’s interest in this Lease, by foreclosure of a mortgage thereon
or by assignment in lieu of foreclosure or by an assignment from a nominee or
wholly owned subsidiary corporation of such mortgagee, or under a new lease,
such Tenant Mortgagee may assign such lease and shall thereupon be released from
all liability for the performance or observance of the covenants and conditions
in such lease contained on Tenant’s part to be performed and observed from and
after the date of such assignment, provided that the assignee from such Tenant
Mortgagee shall have (i) assumed the Tenant’s obligations under this Lease, and
(ii) engaged an experienced management firm reasonably satisfactory to Landlord
to manage the Premises.

13.4     Mortgage of Owner’s Interest. Owner shall have the unrestricted right
to mortgage its interest in the Premises. Any such mortgage shall be superior to
the Master Lease and to this Lease and any Tenant Mortgagee’s interest in the
Premises, and Landlord, Tenant and Tenant Mortgagee and the holder of any
mortgage or deed of

 

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trust placed on the Premises by Owner shall have executed a Subordination,
Non-Disturbance and Attornment Agreement subordinating the Tenant’s and Tenant
Mortgagee’s interest in this Lease and the Premises to the lien of such mortgage
or deed of trust and providing that upon any foreclosure sale pursuant to power
of sale, in lieu of foreclosure or other acquisition of Owner’s interest in this
Lease or the Premises by such holder, its successors or assigns, that the Master
Lease, and Tenant’s and Tenant Mortgagee’s rights in this Lease or in the
Premises shall not be disturbed or impaired and any such holder shall not have
any greater rights than Owner hereunder, or the right to cancel this Lease, or
to cancel any new lease made to a Tenant Mortgagee, unless there is a default on
the part of the Tenant, uncured by either the Tenant or any Tenant Mortgagee
within any applicable cure period, or notice and cure period herein provided,
which, under the terms of this Lease, or such lease, would enable the Landlord,
or its successors, to cancel this Lease. Such Subordination, Non-Disturbance and
Attornment Agreement shall provide that Owner’s Mortgagee’s liability (i) shall
be limited to its interest in the Property, (ii) shall not apply to any acts or
occurrences prior to any acquisition of Owner’s interest in this Lease or the
Premises; and (iii) shall be limited with respect to any obligations to restore
or repair the Premises to available proceeds of insurance.

ARTICLE XIV

Representations

14.1     Representations by Landlord. Landlord makes the following
representations:

(a)     The Landlord is duly incorporated, validly existing and in good standing
under the laws of the State of North Carolina; and

(b)     The Landlord has full power and authority to enter into this Lease and
to perform the transactions contemplated thereby and to carry out its
obligations thereunder and by proper corporate action has duly authorized,
executed and delivered this Lease.

14.2     Representations by Tenant. Tenant makes the following representations:

(a)     Tenant is a political subdivision of the State of North Carolina, duly
created and validly existing under the laws of the State of North Carolina;

(b)     The lease of the Premises to Tenant pursuant to this Lease will provide
needed parking facilities for Tenant and serve functions which are essential to
the proper, efficient and economic operation of Tenant;

(c)     Tenant has full power and authority to enter into this Lease and to
perform the transactions contemplated hereby and to carry out its obligations
hereunder and by proper action has duly authorized, executed and delivered this
Lease;

 

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(d)     Tenant is not in default in the payment of the principal of or interest
on any of its indebtedness for borrowed money and is not in default under any
instrument under or subject to which any indebtedness for borrowed money has
been incurred, and no event has occurred and is continuing that with the lapse
of time or the giving of notice, or both, would constitute or result in an event
of default thereunder;

(e)     Tenant is not in default under or in violation of, and the execution,
delivery and compliance by Tenant with the terms and conditions of this Lease
will not conflict with or constitute or result in a default under or violation
of, (i) any existing law, rule or regulation applicable to Tenant, or (ii) any
indenture, mortgage, deed of trust, lien, lease, contract, note, order,
judgment, decree or other agreement, instrument or restriction of any kind to
which Tenant or any of its assets is subject, and no event has occurred and is
continuing that with the lapse of time or the giving of notice, or both, would
constitute or result in such a default or violation; and

(f)     No further approval, consent or withholding of objection on the part of
any regulatory body or any official, Federal, state or local, is required in
connection with the execution or delivery of or compliance by Tenant with the
terms and conditions of this Lease.

ARTICLE XV

Indemnifications

15.1     Tenant Indemnity. To the extent permitted by law, Tenant shall
indemnify and save harmless Landlord (and each of Landlord’s partners,
shareholders or corporate general partners, officers, directors, agents and
employees) against and from all liabilities, obligations, damages, penalties,
claims, costs, charges and expenses, including reasonable attorneys’ fees, which
may be imposed upon or incurred by or asserted against Landlord by reason of any
of the following occurrences during the term of this Lease:

 

  (a)

any use, non-use, possession, occupation, condition, operation, maintenance or
management of the Premises by Tenant or its agents or its invitees;

 

  (b)

any negligence on the part of Tenant or any of its agents, contractors,
servants, employees, subtenants, licensees or invitees in connection with the
operation of the Premises;

 

  (c)

any failure to comply with all applicable laws governing the use and occupancy
of the Parking Facility, including, without limitation, laws and regulations
with regard to Hazardous Materials;

 

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  (d)

any accident, injury or damage to any person or property occurring in, on or
about the Parking Facility or any part thereof, or any alley, sidewalk, curb,
vault, passageway or space adjacent thereto; or

 

  (e)

any failure on the part of Tenant to perform or comply with any of the
covenants, agreements, terms, provisions, conditions or limitations contained in
this Lease on its part to be performed or complied with.

 

  (f)

In case any action or proceeding is brought against Landlord by reason of any
such claim, Tenant upon written notice from Landlord shall at Tenant’s expense
resist or defend such action or proceeding by counsel selected by Landlord in
writing and approved by Tenant, which approval Tenant agrees not unreasonably to
withhold. If Tenant has supplied Landlord with insurance policies covering any
of the aforementioned risks, no claim shall be made against Tenant unless and
until the insurer shall fail or refuse to defend and/or pay all or any part
thereof.

 

  (g)

Notwithstanding the foregoing, the indemnification described in this
Section 15.1 shall not apply to any liability, obligation, damage, penalty,
claim, cost, charge or expense created, in whole or in part, by the willful or
negligent acts or omissions of Landlord, its agents or employees or in
connection with any action by Tenant against Landlord for failure to comply with
the provisions of this Lease.

15.2.     Landlord Indemnity.

(a)     Landlord shall indemnify and save harmless Tenant (and each of Tenant’s
elected officials, officers, agents and employees) against and from all
liabilities, obligations, damages, penalties, claims, costs, charges and
expenses, including reasonable attorneys’ fees, which may be imposed upon or
incurred by or asserted against Landlord by reason of any of the following
occurrences during the term of this Lease:

 

  (i)

any work or thing done in, on or about the Premises or any part thereof by
Landlord or any agent, contractor or employee of Landlord;

 

  (ii)

any negligence on the part of Landlord or any of its agents, contractors,
servants, employees, subtenants, licensees or invitees;

 

  (iii)

any failure on the part of Landlord to perform or comply with any of the
covenants, agreements, terms, provisions, conditions or limitations contained in
this Lease on its part to be performed or complied with.

 

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  (iv)

In case any action or proceeding is brought against Tenant by reason of any such
claim, Landlord upon written notice from Tenant shall at Landlord’s expense
resist or defend such action or proceeding by counsel approved by Tenant in
writing, which approval Tenant agrees not unreasonably to withhold. If Landlord
has supplied Tenant with insurance policies covering any of the aforementioned
risks, no claim shall be made against Landlord unless and until the insurer
shall fail or refuse to defend and/or pay all or any part thereof.

(b)     Notwithstanding the foregoing, the indemnification described in this
Section 15. 2 shall not apply to any liability, obligation, damage, penalty,
claim, cost, charge or expense created, in whole or in part, by the willful or
negligent acts or omissions of Tenant, its agents or employees or in connection
with any action by Landlord against Tenant for failure to comply with the
provisions of this Lease.

ARTICLE XVI

Residential Development and

Release of P-2 Residential Parking Area

16.1     Residential Development. The parties acknowledge that Landlord proposes
to include a residential development of approximately 78 housing units in the
Project (the “Residential Development”), to be constructed in phases, the first
phase to comprise approximately 35 to 45 residential housing units (the
“Residential Development First Phase”), and a second phase of approximately 40
housing units (the “Residential Development Second Phase”) to commence upon the
pre-sale of 75% of the units in the Residential Development First Phase,
provided that market conditions permit financing to be secured for the
Residential Development Second Phase on commercially reasonable terms. The
parties further acknowledge that the construction of the Residential Development
is a material inducement to the Tenant’s execution and performance of this
Lease.

16.2     Release of P-2 Residential Parking Area from Lease. Tenant agrees to
release and relinquish its leasehold interest in the P-2 Residential Parking
Area portion of the Premises upon sixty (60) days written notification from
Landlord requesting such release and certifying the issuance of a final
certificate of occupancy for the shell building for the Residential Development
First Phase. In consideration for such release, Landlord shall pay, or shall
cause to be paid, to Tenant at the time of such release the amount of $549,000,
representing the sum of $9,000 for each of the sixty-one (61) parking spaces
included in the P-2 Residential Parking Area.

16.3     Amendment to Lease. The release of the P-2 Residential Parking Area
shall be evidenced by an appropriate amendment to this Lease and by an amendment
to any recorded memorandum of this Lease.

 

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16.4     Conveyance of Easement Rights to Residential Development. Tenant
further agrees to join in the conveyance of any easement rights over and across
the Premises reasonably necessary for the use and enjoyment of the P-2
Residential Parking Area by the occupants of the residential housing units for
whom the P-2 Residential Parking Area shall be reserved, provided such easement
rights do not unreasonably interfere with Tenant’s use and enjoyment of the
Premises.

16.5     Release Contemplated by Mortgages. Tenant covenants and agrees that any
mortgage or deed of trust encumbering its leasehold interest in the Premises
shall include provisions to release the P-2 Residential Parking Area in
accordance with the terms of this Lease.

16.6     Guarantee by Landlord. In consideration for Tenant’s payment of the
Facility Payment with respect to the P-2 Residential Parking Area and for
Tenant’s agreement to thereafter release the P-2 Residential Parking Area from
the Premises, Landlord agrees to deliver to Tenant upon the Commencement Date of
this Lease a corporate guarantee in the face amount of One Million Dollars
($1,000,000) (the “Guarantee”), representing the portion of the Facility Payment
allocable to the P-2 Residential Parking Area. The City may demand payment under
the Guarantee in the event the Residential Development First Phase is not
completed, such completion to be evidenced by issuance of a certificate of
completion by the City of Raleigh, within three (3) years after receipt of the
building permit for the construction of the office and retail portions of the
Project. In the event the Residential Development First Phase is completed
within such three (3) year period, the Guarantee shall cease to be of any force
or effect, and Landlord shall have no further obligation to Tenant with respect
to the construction of the residential portion of the Project.

16.7     Parking for Residential Development Second Phase. Upon completion of
the parking for the Residential Development Second Phase, Tenant agrees to pay
to Landlord, the sum of $4,200 for each space constructed for the Residential
Development Second Phase; provided, however, the aggregate number of spaces for
both phases of the Residential Development shall not exceed 150 without Tenant’s
written consent. In addition, Tenant covenants and agrees to take such
reasonable steps as are necessary such that the Residential Development can
operate as a separately owned condominium development, including, but not
limited to, execution of “zero lot line” agreements, construction easements, and
the conveyance of easement rights for ingress, egress, air rights, and
utilities.

16.8     Restriction on Residential Development Second Phase. Owner and Landlord
agree to subject the property currently designated for the Second Residential
Phase on Block A-24 as noted on Exhibit B to a restrictive covenant running with
the land restricting the development of such property to residential, office and
retail uses (and related parking requirements) unless otherwise consented to in
writing by Tenant. A similar restrictive covenant will apply to any portion of
the Residential Development First Phase that may remain unfinished at the end of
the three-year period beginning on

 

29

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the date hereof. All such covenants shall have a term of ten (10) years from the
date hereof.

16.9     Sharing of Profits from Residential Development. As additional
consideration for Tenant’s execution and performance of this Lease, Landlord
agrees that Tenant shall share in the profits from the sale of residential units
within the Residential Development as follows. Within three months of the sale
of all of the units in the Residential Development, Landlord shall determine the
“net profit” and “total costs” of the Residential Development. For purposes
hereof, “net profit” means gross proceeds from the sale of residential units
less total costs, and “total costs” means all hard and soft costs of designing,
developing, constructing and marketing the Residential Development, as well as a
ten percent (10%) preferred return on all equity invested in the Residential
Development. Following such determination, Landlord shall cause Tenant to be
paid the following amounts:

(i)     5% of net profits to the extent that net profits exclusive of the City’s
participation are less than 15% of total costs;

(ii)     10% of net profits to the extent net profits are more than 15% of total
costs and less than 16% of total costs;

(iii)     14% of net profits to the extent net profits are more than 16% of
total costs and less than 17% of total costs;

(iv)     18% of net profits to the extent net profits are more than 17% of total
costs and less than 18% of total costs;

(v)     23% of net profits to the extent net profits are more than 18% of total
costs and less than 19% of total costs;

(vi)     28% of net profits to the extent net profits are more than 19% of total
costs and less than 20% of total costs; and

(vii)     33% of net profits to the extent net profits are more than 20% of
total costs.

ARTICLE XVII

Entry on Premises by Landlord

17.1     Entry by Landlord. Tenant shall permit Landlord and its authorized
representatives to enter the Premises at all reasonable times, after reasonable
advance written notice to Tenant, for the purpose of inspecting the Premises,
except in the event of an actual emergency, in which case no notice shall be
required. Notwithstanding the foregoing, Landlord’s right to inspect the
Premises shall not unreasonably interfere with the rights of any of subtenants
and their rightful licensees, invitees and guests and any

 

30

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such entry shall be subject to the terms of any agreements, including subleases,
between Tenant and any occupant of all or any portion of the Premises.

ARTICLE XVIII

Parties’ Right to Perform Covenants

18.1     Landlord’s Right to Cure. If Tenant shall at any time fail to pay any
Imposition in accordance with the provisions of Article V hereof, or to take
out, pay for, maintain or deliver any of the insurance policies or certificates
therefor as provided for in Article VI hereof, or shall fail to make any other
payment or perform any other act on its part to be made or performed, then
Landlord, after thirty (30) days written notice to Tenant (or without notice in
case of an actual emergency) and without waiving or releasing Tenant from any
obligation of Tenant contained in this Lease or from any default by Tenant and
without waiving Landlord’s right to take such action as may be permissible under
this Lease as a result of such default, may (but shall be under no obligation
to):

 

  (a)

pay any Imposition payable by Tenant pursuant to the provisions of Article V
hereof, or

 

  (b)

take out, pay for and maintain any of the insurance policies provided for in
Article VI hereof, or

 

  (c)

make any other payment or perform any other act on Tenant’s part to be made or
performed as in this Lease provided, and may enter upon the Premises for any
such purpose, and take all such action thereon, as may be necessary therefor.

18.2     Tenant’s Right to Cure. If Landlord shall at any time fail to perform
its maintenance obligations under Article X of hereof, and such failure
continues for thirty (30) days after written notice of such failure from Tenant
to Landlord (or without notice in case of an actual emergency) and without
waiving or releasing Landlord from any obligation of Landlord contained in this
Lease or from any default by Landlord, may (but shall be under no obligation to)
perform such obligations and to be reimbursed by Landlord for all such expenses
incurred in connection with such performance of Landlord’s obligations.

18.3.     Interest on Costs to Cure. All sums so paid by Landlord or Tenant and
all costs and expenses incurred by Landlord or Tenant, including reasonable
attorneys’ fees, in connection with the performance of any such act, together
with interest thereon at the annual rate equal to the Wall Street Journal Prime
Rate (or a commercially equivalent rate if such a prime rate is no longer
published by the Wall Street Journal) plus two percent (2%) beginning on the
date following such payment or incurrence of such cost and expense. Any amounts
owed by Tenant under this Article XIX shall constitute Additional Rent payable
by Tenant under this Lease and shall be paid by Tenant to Landlord on demand.

 

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18.4        No Setoff. It is the intention of the parties hereto that the
obligations of Tenant hereunder to make the Facility Payment (which has been
irrevocably transferred and assigned by Landlord to the Owner) to the Owner
shall be a separate and independent covenant and agreement in accordance with
the terms hereof. It is agreed and intended that Facility Payment by Tenant in
accordance with the terms hereof shall be paid without notice, demand,
counterclaim, setoff, deduction or defense and without abatement, suspension,
deferment, diminution or reduction and that Tenant’s obligation to pay the
Facility Payment is absolute and unconditional and free from any charges,
assessments, impositions, expenses or deductions of any and every kind or
nature. Under no circumstances shall the Owner or Owner Mortgagee be obligated
to repay Tenant, refund to Tenant, or return to Tenant, the Facility Payment.
Tenant shall not take any action to terminate, rescind or void this Lease and
the obligations and liabilities of Tenant hereunder shall in no way be released,
discharged or otherwise affected for any reason, including without limitation:
(a) any defect in the condition, merchantability, design, quality or fitness for
use of the Premises or any part thereof; (b) the failure of the Premises to
comply with all applicable laws, including any inability to occupy or use the
Premises by reason of such noncompliance; (c) any right or claim that Tenant has
or might have against any person, including without limitation Landlord, the
Owner, any Owner Mortgagee, or any vendor, manufacturer, contractor of or for
the Premises; (d) any action, omission, breach or failure on the part of
Landlord or any other person to perform or comply with any of the terms of this
Lease, or of any other agreement; (e) any action by any court, administrative
agency or other governmental authority; (f) any interference, interruption or
cessation or delay in the use, possession or quiet enjoyment of the Premises;
(g) any action with respect to this Lease (including the disaffirmance or
rejection hereof) which may be taken by Landlord under the Federal Bankruptcy
Code or by any trustee, receiver or liquidator of Landlord or by any court under
the Federal Bankruptcy Code or otherwise, (h) the prohibition or restriction of
Tenant’s use of the Premises under any applicable laws or otherwise, (i) any
breach or default by Landlord hereunder or under any other agreement between
Landlord and Tenant, (j) any sale or other disposition of the Premises; or
(k) any other occurrence whatsoever, whether similar or dissimilar to the
foregoing, whether foreseeable or unforeseeable, and whether or not Tenant shall
have notice or knowledge of any of the foregoing, any recent or future law
notwithstanding. This Lease shall be noncancellable by Tenant for any reason
whatsoever and, except as expressly provided in this Lease, Tenant, to the
extent now or hereafter permitted by applicable laws, waives all rights now or
hereafter conferred by statute or otherwise to quit, terminate or surrender this
Lease or to any diminution, abatement or reduction of the Facility Payment
payable hereunder. Unless the Owner has assumed the role of Landlord pursuant to
Section 2.1, under no circumstances or conditions shall Owner or Owner Mortgagee
be expected or required to make any payment of any kind hereunder or have any
obligations with respect to the use, possession, control, maintenance,
alteration, rebuilding, replacing, repair, restoration or operation of all or
any part of the Premises, so long as the Premises or any part thereof is subject
to this Lease, and Tenant expressly waives the right to perform any such action
at the expense of Owner or Owner Mortgagee whether hereunder or pursuant to any
law. Tenant waives all rights

 

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which are not expressly stated herein but which may now or hereafter otherwise
be conferred by law (i) to quit, terminate or surrender this Lease or any of the
Premises; (ii) to have any setoff, counterclaim, recoupment, abatement,
suspension, deferment, diminution, deduction, reduction or defense of or to the
Facility Payment; and (iii) to have any statutory lien or offset right against
Owner or Owner Mortgagee.

ARTICLE XIX

Defaults

19.1    Events of Default. If any one or more of the following events shall
happen and shall remain uncured after the expiration of the specified notice and
cure periods applicable to such events, such event shall be a “Tenant Event of
Default”:

 

  (a)

if default shall be made in the due and punctual payment of the Facility
Payment,

 

  (b)

if default shall be made in the due and punctual payment of any Base Rent
payable under this Lease or any part thereof, or in the due and punctual payment
of the Impositions in accordance with the provisions of Article V, or with
respect to the premiums payable in connection with the insurance policies
required in accordance with the provisions of Article VI, when and as the same
shall become due and payable, and such default shall continue for a period of
fifteen (15) days after written notice from Landlord to Tenant specifying the
items in default; or

 

  (c)

if default shall be made by Tenant in the performance or compliance with any of
the agreements, terms, covenants or conditions in this Lease other than those
referred to in the foregoing paragraph (a) of this Section for a period of
ninety (90) days after written notice from Landlord to Tenant specifying the
items in default; or

 

  (d)

if Tenant shall file a voluntary petition in bankruptcy or have entered against
it an order for relief in response to any involuntary petition in bankruptcy or
shall be adjudicated a bankrupt or insolvent, or shall file any petition or
answer seeking any reorganization, arrangement, composition, readjustment,
liquidation, dissolution or similar relief under the present or any future
federal bankruptcy act or any other present or future federal, state or other
bankruptcy or insolvency statute or law, or shall seek or consent to or
acquiesce in the appointment of any bankruptcy or insolvency trustee, receiver
or liquidator of Tenant or of all or any substantial part of its properties or
of the Premises, and if such condition shall continue for a period of thirty
(30) days after the occurrence thereof.

19.2    Termination of Lease: Other Remedies. Upon the occurrence of a Tenant
Event of Default specified in Section 19.1(a), Landlord, at any time thereafter
may give

.

 

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written notice to Tenant specifying such event of default or events of default
and stating that this Lease and the term hereby demised shall expire and
terminate on the date specified in such notice, which shall be at least thirty
(30) days after the giving of such notice, and upon the date specified in such
notice this Lease and the term hereby demised and all rights of Tenant under
this Lease, shall expire and terminate, and Tenant shall remain liable as
hereinafter provided. Alternatively, Landlord may enter and take control of the
Premises without terminating this Lease, and may pursue any other remedy
available at law or in equity. Tenant agrees that if it breaches its obligations
under Section 19.1(a), Landlord shall be entitled to maintain an action for
specific performance of Tenant’s duties and obligations hereunder.

Upon the occurrence of any event of default specified in Section 19.1(b),(c) or
(d), Landlord may take such action in law or equity as shall be deemed necessary
to enforce the rights of Landlord under this Lease.

19.3    Events of Landlord Default. If any one or more of the following events
shall happen and shall remain uncured after the expiration of the specified
notice and cure periods applicable to such events, such event shall be a
“Landlord Event of Default”:

(a)        if default shall be made by Landlord in the performance or compliance
with any of the agreements, terms, covenants or conditions in this Lease for a
period of ninety (90) days after written notice from Tenant to Landlord
specifying the items in default; or

(b)        if Landlord shall file a voluntary petition in bankruptcy or have
entered against it an order for relief in response to any involuntary petition
in bankruptcy or shall be adjudicated a bankrupt or insolvent, or shall file any
petition or answer seeking any reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the present or
any future federal bankruptcy act or any other present or future federal, state
or other bankruptcy or insolvency statute or law, or shall seek or consent to or
acquiesce in the appointment of any bankruptcy or insolvency trustee, receiver
or liquidator of Landlord or of all or any substantial part of its properties
and if such condition shall continue for a period of thirty (30) days after the
occurrence thereof;

Upon the occurrence of any Landlord Event of Default, Tenant may take such
action in law or equity as shall be deemed necessary to enforce the rights of
Tenant under this Lease.

19.4    Late Charge. Tenant acknowledges that the late payment by Tenant of the
Facility Payment under this Lease will cause the Owner to incur damages,
including administrative costs, loss of use of the overdue funds and other
costs, the exact amount of which would be impractical and extremely difficult to
fix. Tenant agrees that if the Owner does not receive the Facility Payment by
the date such payment is due, then the Tenant shall pay, in addition to any
other sums due, an amount equal to the late

 

34

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payment fee and other penalties due under the loan documents between Owner and
Owner Mortgagee. Acceptance of the late charges by Owner shall not cure or waive
a default, nor prevent Owner or Landlord from exercising, before or after such
acceptance, any of the rights and remedies for a default provided by this Lease
or at law. Payment of the late charge is not an alternative means of performance
of Tenant’s obligation at the times specified in this Lease. Tenant will be
liable for the late charge regardless of whether Tenant’s failure to pay when
due constitutes an Event of Default under the Lease.

19.5    No Waiver. No failure by any party hereunder to insist upon the strict
performance of any agreement, term, covenant or condition hereof or to exercise
any right or remedy consequent upon a breach thereof, and no acceptance of full
or partial rent during the continuance of any such breach, shall constitute a
waiver of any such breach or of such agreement, term, covenant or condition. No
agreement, term, covenant or condition hereof to be performed or complied with
by any party hereunder, and no breach thereof, shall be waived, altered or
modified except by a written instrument executed by the non-defaulting party. No
waiver of any breach shall affect or alter this Lease, but each and every
agreement, term, covenant and condition hereof shall continue in full force and
effect with respect to any other then existing or subsequent breach thereof.

19.6    Cumulative Remedies. Each right and remedy provided for in this Lease
shall be cumulative and shall be in addition to every other right or remedy
provided for in this Lease or now or hereafter existing at law or in equity or
by statute or otherwise, and the exercise or beginning of the exercise by
Landlord or Tenant of any one or more of the rights or remedies provided for in
this Lease or now or hereafter existing at law or in equity or by statute or
otherwise shall not preclude the simultaneous or later exercise by the party in
question of any or all other rights or remedies provided for in this Lease or
now or hereafter existing at law or in equity or by statute or otherwise.

ARTICLE XX

Estoppels

20.1    Tenant Estoppel. Tenant shall, without charge, at any time and from time
to time, within twenty (20) days after request by Landlord or Owner, certify by
written instrument, duly executed, acknowledged and delivered, to Landlord or
Owner, or any other person, firm or corporation specified by Landlord or Owner:

 

  (a)

that this Lease is unmodified and in full force and effect, or, if there have
been any modifications, that the same is in full force and effect as modified
and stating the modifications;

 

  (b)

whether or not there are then existing any set-offs or defenses against the
enforcement of any of the agreements, terms, covenants or conditions

 

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hereof and any modifications hereof upon the part of Tenant to be performed or
complied with, and, if so, specifying the same;

 

  (c)

the dates, if any, to which the Base Rent and any Additional Rent and other
charges hereunder have been paid in advance; and

 

  (d)

the date of expiration of the term of this Lease.

20.2    Landlord Estoppel. Landlord shall, without charge, at any time and from
time to time, within twenty (20) days after request by Tenant or leasehold
mortgagee certify by written instrument, duly executed, acknowledged and
delivered, to the effect that this Lease is unmodified and in full force and
effect (or if there shall have been modifications that the same is in full force
and effect as modified and stating the modifications) and the dates to which the
Base Rent and other charges have been paid, the date of expiration of the term
of this Lease, the Base Rent then payable under this Lease, and stating whether
or not, to the best knowledge of the officer executing such certificate on
behalf of Landlord, Tenant is in default in performance of any covenant,
agreement or condition contained in this Lease and, if so, specifying each such
default of which the person executing such certificate may have knowledge.

ARTICLE XXI

Disputes

Landlord and Tenant agree that any dispute between the parties shall be resolved
by the courts of the State of North Carolina and not by arbitration.

ARTICLE XXII

Miscellaneous Provisions

22.1    Notices. Unless otherwise provided herein, all demands, notices,
approvals, consents, requests, opinions and other communications hereunder shall
be in writing and shall be deemed to have been given when delivered in person or
mailed by first class registered or certified mail, postage prepaid, addressed
as follows:

 

  (a)

If to Landlord:

Progress Energy Carolinas, Inc.

PO Box 1551

Raleigh, NC 27602-1551

Attention: Vice President, Real Estate

 

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  (b)

If to Tenant:

City of Raleigh

P.O. Box 590

Raleigh, North Carolina 27602

Attention: City Manager

22.2    Severability. The provisions of this Agreement are intended to be
severable. If any provision of this Agreement shall be held invalid by any court
of competent jurisdiction, such holding shall not invalidate any other provision
hereof.

22.3    Successors and Assigns. Except as provided in Section 22.11, this
Agreement shall be binding upon, inure to the benefit of and be enforceable by
the parties and their respective successors and assigns.

22.4    Applicable Law. This Agreement shall be governed by the laws of the
State of North Carolina.

22.5    Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, together shall constitute but
one and the same Agreement.

22.6    Nondiscrimination. Neither the Landlord nor its officers or employees
will discriminate in any manner on the basis of age, handicap, sex, race, color,
creed, sexual orientation or national origin with respect to the subject matter
of this Agreement, no matter how remote. The Landlord hereto further agrees in
all respects to conform with the provisions and intent of the City of Raleigh,
North Carolina Ordinance No. 1969-889 as amended. This provision being
incorporated for the benefit of the City and its residents may be enforced as
set out in said ordinance, enforcement of this provision shall be by action for
specific performance, injunctive relief, and other remedy as by law provided.
This provision shall be binding on the successors and assigns of the Landlord
with reference to the subject matter of this Agreement.

22.7    Entire Agreement. This Agreement expresses the entire understanding and
all agreements between the parties with respect to the matters covered hereby
and may not be modified except by a writing signed by the parties.

22.8    Short Form. Upon request by either party, the parties shall execute and
record a memorandum or short form of this Lease and all amendments or renewals
hereof setting forth such provisions hereof as either party may wish to
incorporate.

22.9    Interpretation. Pronouns, where used herein, of whatever gender, shall
include natural persons, corporations, and associations of every kind and
character, and the singular shall include the plural and vice versa where and as
often as may be appropriate. Article and section headings under this Lease are
for convenience of reference and shall not affect the construction or
interpretation of this Lease. Whenever

 

37

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the terms “hereof,” “hereby,” “herein,” or words of similar import are used in
this Lease, they shall be construed as referring to this Lease in its entirety
rather than to a particular section or provision, unless the context
specifically indicates to the contrary. Any reference to a particular “Article”
or “Section” shall be construed as referring to the indicated Article or Section
of this Lease. Statements herein in respect to compliance with applicable law or
text of similar import shall be construed to require compliance with applicable
law as now or hereafter in effect.

22.10    Brokerage Commissions. Tenant warrants and represents to Landlord that
it has had no dealings with any real estate broker or agent in connection with
this Lease, and, to the extent permitted by law, Tenant covenants to pay, hold
harmless, and indemnify Landlord from and against any and all costs, expenses,
liabilities (including reasonable attorneys’ fees), causes of action, claims or
suits in connection with any compensation, commission, fee, or charges claimed
by any real estate broker or agent with respect to this Lease or the negotiation
thereof, arising out of any act of Tenant. Landlord warrants and represents to
Tenant that it has had no dealings with any real estate broker or agent in
connection with this Lease, and Landlord covenants to pay any compensation,
commission, fee, or charges due any real estate broker or agent with respect to
this Lease or the negotiation thereof and arising out of any act of Landlord.

22.11    Assignment. This Lease may not be assigned by Landlord or Tenant, and
Tenant may not sublease its interest in this Lease, without the prior written
consent of the other party, which consent shall not be unreasonably withheld;
provided, however, it is expressly consented to and agreed that Landlord may
assign its rights in and to the Facility Payment to Owner, and that Owner may
assign its rights under this Lease to Owner’s Mortgagee or any other party
without the necessity of any further consent or approval from Tenant.
Notwithstanding anything herein to the contrary, Tenant’s consent shall not be
required in connection with an assignment of Landlord’s interest in this Lease
occurring as a result of a merger, acquisition or other form of corporate
combination in which Landlord is not the surviving entity.

22.12    Amendments to Master Lease. The Landlord and the Owner shall not enter
into any amendments to the Master Lease that either (i) modify the term of the
Master Lease or (ii) cause a voluntary termination of the Master Lease without
the prior written consent of the Tenant, which consent shall not be unreasonably
withheld. Notwithstanding anything herein to the contrary, Tenant’s consent
shall not be required in connection with a voluntary termination of the Master
Lease occurring as a result of a merger, acquisition or other form of corporate
combination in which Landlord is not the surviving entity. At Tenant’s request
to Landlord, representatives of Tenant shall have the right to inspect and
review, at the offices of, or at other premises designated by, Landlord, all
provisions of the Master Lease relating to the Parking Facility, its
construction, repair, maintenance, and use.

 

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

 

OWNER:

 

JPMORGAN TRUST COMPANY,

NATIONAL ASSOCIATION, a national banking

association, not in its individual capacity, but

solely as Trustee of CA Raleigh Owner Trust

under a Trust Agreement dated as of

April 10, 2003

By:

 

/s/ Mitch Garange

 

Title:

 

Mitch Garange

   

Vice President

 

LANDLORD:

 

PROGRESS ENERGY CAROLINAS, INC.

 

By:

     

Title:

     

TENANT:

 

THE CITY OF RALEIGH, NORTH CAROLINA

By:

       

Charles Meeker, Mayor

 

 

ATTEST:                      Gail Smith, City Clerk  

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

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

 

OWNER:  

J.P. MORGAN TRUST COMPANY, N.A., a

national banking association, not in its

individual capacity, but solely as Trustee of CA

Raleigh Owner Trust under a Trust Agreement

dated as of                  , 2003

By:       Title:      

LANDLORD:

 

PROGRESS ENERGY CAROLINAS, INC.

 

By:

 

[SIGNATURE ILLEGIBLE]

 

Title:

     

TENANT:

 

THE CITY OF RALEIGH, NORTH CAROLINA

By:

 

/s/ Charles Meeker

   

Charles Meeker, Mayor

 

 

ATTEST:  

/s/ Gail Smith

    Gail Smith, City Clerk  

 

    

PROVISIONS FOR THE PAYMENT OF THE MONEYS TO FALL DUE UNDER THIS AGREEMENT HAS
BEEN MADE BY AN APPROPRIATION DULY MADE, OR BY BONDS OR NOTES DULY AUTHORIZED,
AS REQUIRED BY THE LOCAL GOVERNMENT ACT.

        /s/ Michelle Brooks   

2/24/03

       

CITY ACCOUNTANT

  

DATE

      CODE  

No Current

  

$        -0-

       

Year Expenditure

     

 

39

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EXHIBITS

 

     

Exhibit A

  

Property Description

     

Exhibit B

  

Description of the Premises Parking Area

     

Exhibit C

  

Description of P-2 Residential Parking Area

     

Exhibit D

  

Description of Plans and Specifications

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

Exhibit A

Property Description

Lying and being in Raleigh Township, Wake County, North Carolina and more
particularly described as follows:

BEGINNING at NCGS Monument “PERNEW”, NC Grid Coordinates (NAD: 83) of N:
225264.996 Meters and E: 642617.839 Meters; thence South 17°55’15” West 2016.89
feet to an existing P.K. nail in the Western right-of-way of S. Blount Street,
Thence with The City of Raleigh property as recorded in Deed Book 8253 Page 299,
Deed Book 8231 Page 1759, and Deed Book 8214, Page 2408, North 87°46’03” West
164.08 feet to a point the POINT AND PLACE OF BEGINNING.

Thence from the POINT OF BEGINNING, with The City of Raleigh property line as
recorded in Deed Book 8253 Page 299, Deed Book 8231 Page 1759, and Deed Book
8214, Page 2408, the next three calls, North 87046’03” West 45.92 feet to a 3/4”
Iron Pipe Found; Thence North 02°13’57” East 15.00 feet to a Nail; Thence North
87°46’03” West, 210.00 feet to a Nail in the Eastern right-of-way line of S.
Wilmington Street; Thence with said right-of-way, North 02°13’57” East 195.00
feet to a Point in the Southern right-of-way line of E. Davie Street; Thence
with said E. Davie Street right-of-way line, South 87°46’03” East 384.00 feet to
a point; Thence a new line, running parallel to S. Blount Street, South
02°13’57” West 188.93 feet to a new point; Thence a new line North 87°46’03 West
128.08 feet to a new point; Thence a new line, South 02°13’57” West 21.07 feet
to a point in the Northern property line of The City of Raleigh, the POINT AND
PLACE OF BEGINNING.

CONTAINING: 74,791 square feet or 1.71697 acres of land, more or less.

 

41

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Exhibit B

Description of the Premises Parking Area

 

 

 

 

 

 

 

 

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Exhibit C

Description of P-2 Residential Parking Area

Lying and being in Raleigh Township, Wake County, North Carolina and more
particularly described as follows:

BEGINNING at NCGS Monument “PERNEW”, NC Grid Coordinates (NAD: 83) of N:
225264.996 Meters and E: 642617.839 Meters; thence South 17°55’15” West 2016.89
feet to an existing P.K. nail in the Western right-of-way of S. Blount Street;
thence North 87°46’03” West 36.00 feet to a point; thence North 02°13’57” East
21.07 feet to the POINT OF BEGINNING.

Thence from the POINT OF BEGINNING, North 87° 46’ 03” West a distance of 141.86
feet to a point; thence North 2° 13’ 57” East a distance of 105.92 feet to a
point; thence South 87° 46’ 03” East a distance of 14.75 feet to a point; thence
North 2°13’ 57” East a distance of 22.14 feet to a point; thence North 87° 46’
03” West a distance of 15.08 feet to a point; thence North 2° 13’ 57”East a
distance of 54.20 feet to a point; thence South 87° 46’ 03” East a distance of
110.94 feet to a point; thence South 2° 13’ 57” West a distance of 20.14 feet to
a point; thence South 87° 46’ 03” East a distance of 31.26 feet to a point;
thence South 2° 13’ 57” West a distance of 162.11 feet to the POINT AND PLACE OF
BEGINNING.

The area described above is restricted to the proposed Building/Parking Deck
level P2, the second level of the proposed structure and which is located
vertically between the MSL elevation of 334.25 +/- and MSL elevation 345.25+/-.

CONTAINING: 24,917 square feet or 0.5720 acres, more or less.

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Exhibit D

Description of Plans and Specifications

PROGRESS ENERGY MIXED-USE DEVELOPMENT

DRAWING LIST- 11/21/02

 

 

PROJECT INFORMATION:

 

A0.0     TITLE SHEET    

A0.1  

GLOSSARY, SYMBOL KEY & SHEET INDEX

A0.2  

BUILDING CODE SUMMARY

A0.3  

PARKING DECK OPEN AREA CALCULATIONS

LIFE SAFETY:

LS-1-0  

EXISTING DECK EGRESS DIAGRAM

LS-1-1  

GROUND LEVEL EGRESS DIAGRAM

LS-1-2  

PARKING LEVEL – 2 EGRESS DIAGRAM

LS-1-3  

PARKING LEVELS P3-P7 EGRESS DIAGRAM

LS-1-4  

OFFICE LEVELS 01-02 EGRESS DIAGRAM

LS-1-5  

OFFICE LEVEL 03 EGRESS DIAGRAM

LS-1-6  

OFFICE LEVELS 04-012 EGRESS DIAGRAM

CIVIL:

C-1  

LEGEND

C-2  

PARKING AND FLOOR CHARTS

C-3  

EXISTING CONDITIONS

C-4  

INTERIM GRADING & EROSION CONTROL

C-5  

TRAFFIC CONTROL

C-6  

FINAL GRADING

C-7  

UTILITY PLAN

C-8  

UTILITY PLAN & PROFILE

C-9  

UTILITY PLAN & PROFILE

C-10  

SEWER DETAILS

C-11  

WATER DETAILS

C-12  

MISC. DETAILS

C-13  

MISC. DETAILS

LANDSCAPE:

L-401  

LANDSCAPE PLAN

L-501  

DETAILS

 

44

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DEMOLITION:

APD1.0  

OVERALL EXISTING PARKING DECK FLOOR PLAN/DEMO PLAN P-2

APD1.1  

EXISTING PARKING DECK – ENLARGED FLOOR PLANS

APD1.2  

EXISTING PARKING DECK – ENLARGED FLOOR PLANS

APD1.3  

EXISTING PARKING DECK – TEMPORARY STAIR PLANS

APD1.4  

PARTIAL INTERIOR ELEVATIONS

 

45

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ARCHITECTURAL:

A1.1  

SITE/ROOF PLAN

A1.2  

SITE PLAN

A2.1  

GROUND LEVEL

A2.2  

PARKING LEVEL P2

A2.2A  

PARKING LEVELS P2 CABLE RAIL & CURB LAYOUT

A2.3  

PARKING LEVEL P3

A2.3A  

PARKING LEVELS P3 CABLE RAIL & CURB LAYOUT

 

A2.4 PARKING LEVEL 4

A2.4A  

PARKING LEVELS P4 CABLE RAIL & CURB LAYOUT

A2.5  

PARKING LEVEL 5

A2.5A  

PARKING LEVELS P5 CABLE RAIL & CURB LAYOUT

A2.6  

PARKING LEVEL 6

A2.6A  

PARKING LEVELS P6 CABLE RAIL & CURB LAYOUT

A2.7  

PARKING LEVEL 7

A2.7A  

PARKING LEVELS P7 CABLE RAIL & CURB LAYOUT

A2.8  

LARGE OFFICE LEVEL 1

A2.9  

TRADING FLOOR OFFICE LEVEL 2

A2.10  

PARTIAL OFFICE LEVEL 3

A2.11  

TYPICAL OFFICE FLOOR LEVELS 4-10/TRADING FLOOR ROOF

A2.12  

OFFICE FLOOR LEVELS 11-12

A2.13  

ROOF PLAN

A3.1  

ENLARED CORE PLANS

A3.2  

ENLARED CORE PLANS

A3.3  

ENLARED CORE PLANS

A3.4  

ENLARED CORE PLANS

A3.5  

ENLARED CORE PLANS

A3.6  

ENLARED CORE PLANS

A3.7  

ENLARED CORE PLANS

A3.8  

ENLARED CORE PLANS

A3.9  

ENLARED CORE PLANS

A4.1  

NORTH ELEVATION

A4.2  

EAST ELEVATION

A4.3  

SOUTH ELEVATION

A4.4  

WEST ELEVATION

A5.1  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.2  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.3  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.4  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.5  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.6  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.7  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

 

46

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A5.8  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.9  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.10  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.11  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.12  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.13  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.14  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.15  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.16  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.17  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.18  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.19  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.20  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.21  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.22  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.23  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.24  

PARTIAL EXTERIOR WALL SECTIONS, PLAN AND ELEVATIONS

A5.25  

ROOF SCREEN SECTIONS AND ELEVATIONS

A6.1  

PLAN DETAILS

A6.2  

PLAN DETAILS

A6.3  

PLAN DETAILS

A6.4  

PLAN DETAILS

A6.5  

PLAN DETAILS

A6.6  

PLAN DETAILS

A6.7  

PLAN DETAILS

A6.8  

PLAN DETAILS

A6.9  

PLAN DETAILS

A6.10  

PLAN DETAILS

A6.11  

PLAN DETAILS

A6.12  

PLAN DETAILS

A6.13  

NOT USED

A6.14  

SECTION DETAILS

A6.15  

SECTION DETAILS'

A6.16  

SECTION DETAILS

A6.17  

SECTION DETAILS

A6.18  

SECTION DETAILS

A6.19  

SECTION DETAILS

A6.20  

SECTION DETAILS

A6.21  

SECTION DETAILS

A6.22  

SECTION DETAILS

A6.23  

SECTION DETAILS

A6.24  

SECTION DETAILS

A6.25  

SECTION DETAILS

A6.26  

SECTION DETAILS

A6.27  

CUSTOM LIGHT FIXTURES

 

47

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A6.28  

METAL BAS RELIEF PANELS

A6.29  

PARTIAL NORTH ELEVATION DETAILS

A6.30  

PARTIAL WEST ELEVATION DETAILS

A6.31  

PARITAL WEST ELEVATION DETAILS

A6.32  

ROOF SCREEN DETAILS

A7.1  

STAIR SP-1 SECTIONS

A7.2  

STAIR SP-2 SECTIONS

A7.3  

STAIR SP-3 PLANS & SECTIONS

A7.4  

STAIR SP-4 PLANS & SECTIONS

A7.11  

STAIR AP-1 PLANS

A7.12  

STAIR AP-2 PLANS

A7.20  

STAIR DETAILS

A8.1  

ELEVATOR DIAGRAM

A9.1  

ROOM FINISH SCHEDULE

A9.2  

DOOR SCHEDULE & DETAILS

A9.3  

PARTITION SCHEDULE

A9.4  

PARTITION SCHEDULE

A9.5  

UL PARTITION DESCRIPTIONS

A9.6  

UL PARTITION DESCRIPTIONS

A10.5  

GROUND FLOOR RESTROOM PLANS AND ELEVATIONS

A10.6  

OFFICE LEVEL 1 RESTROOM PLANS AND ELEVATIONS

A10.7  

OFFICE LEVEL 2 RESTROOM PLANS AND ELEVATIONS

A10.8  

TYPICAL RESTROOM PLANS AND ELEVATIONS

A11.1  

GROUND FLOOR RCP

A11.2.  

PARKING LEVEL P2 RCP

A11.3  

PARKING LEVEL P3 RCP

A11.4  

PARKING LEVEL P4 RCP

A11.5  

PARKING LEVEL P5 RCP

A11.6  

PARKING LEVEL P6 RCP

A11.7  

PARKING LEVEL P7 RCP

A11.8  

LARGE OFFICE FLOOR PLAN 1 RCP

A11.9  

TRADING FLOOR OFFICE LEVEL 2 RCP

A11.10  

PARTIAL FLOOR OFFICE LEVEL 3 RCP

A11.11  

TYPICAL OFFICE FLOOR LEVELS 4-10 RCP

A11.12  

OFFICE FLOOR LEVELS 11-12 RCP

 

48

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STRUCTURAL:

S0.1  

GENERAL NOTES

S0.2  

COMPONENTS AND GRADING DESIGN WIND PRESSURES

S1.1  

FOUNDATION PLAN

S1.1A  

SLAB-ON-GRADE PLAN

S1.2  

PARKING DECK LEVEL P2 FRAMING PLAN

S1.2T  

PARKING DECK LEVEL P2 TOPPING PLAN

S1.3  

PARKING DECK LEVEL P3 FRAMING PLAN

S1.3T  

PARKING DECK LEVEL P3 TOPPING PLAN

S1.4  

PARKING DECK TYPICAL LEVEL FRAMING PLAN

S1.5  

PARKING DECK LEVEL P7 FRAMING PLAN

S1.6  

OFFICE FLOOR LEVEL 1 FRAMING PLAN

S1.7  

TRADING FLOOR I OFFICE FLOOR LEVEL 2 FRAMING PLAN

S1.8  

MEZZANINE I OFFICE FLOOR LEVEL 3 FRAMING PLAN

S1.9  

LOW ROOF I OFFICE FLOOR LEVEL 4 FRAMING PLAN

S1.10  

OFFICE FLOOR LEVELS 5 TO 12 FRAMING PLANS

S1.11  

ROOF I PENTHOUSE SCREENWALL FRAMING PLANS

S2.1  

TYPICAL SECTIONS AND DETAILS

S3.1  

FOUNDATION SECTIONS AND DETAILS

S3.2  

FOUNDATION SECTIONS AND DETAILS

S3.3  

TRANSFORMER VAULT PLANS, SECTIONS, AND DETAILS

S4.1  

COLUMN SCHEDULE AND DETAILS

S4.2  

COLUMN SCHEDULE

S4.3  

FOUNDATION SCHEDULE

S5.1  

OFFICE BEAM SCHEDULES, SLAB DIAGRAMS & DETAILS

S5.2  

OFFICE BEAM SCHEDULE AND DETAILS

S5.3  

PARKING BEAM SCHEDULES

S5.4  

PARKING DECK BEAM DIAGRAMS

S5.5  

PARKING DECK BEAM DIAGRAMS

S5.6  

PARKING DECK BEAM DIAGRAMS

S5.7  

PARKING DECK BEAM DIAGRAMS

S5.8  

TYPICAL PARKING DECK BEAM DIAGRAMS

S5.9  

TYPICAL PARKING DECK BEAM DIAGRAMS

S5.10  

TYPICAL PARKING DECK BEAM DIAGRAMS

S5.11  

PARKING DECK BEAM DIAGRAMS

S5.12  

PARKING DECK BEAM DIAGRAMS

S5.13  

OFFICE LEVEL BEAM DIAGRAMS

S5.14  

OFFICE LEVEL BEAM DIAGRAMS

S5.15  

OFFICE LEVEL BEAM DIAGRAMS

S5.16  

OFFICE LEVEL BEAM DIAGRAMS

S5.17  

TYPICAL OFFICE LEVEL BEAM DIAGRAMS

S5.18  

ROOF BEAM DIAGRAMS

S6.1  

PARKING DECK SLAB DIAGRAMS

S6.2  

PARKING DECK SLAB DIAGRAMS

S7.1  

SECTIONS AND DETAILS

 

49

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S7.2  

SECTIONS AND DETAILS

S7.3  

SECTIONS AND DETAILS

S7.4  

FRAME ELEVATIONS, SECTIONS AND DETAILS

S7.5  

SECTIONS AND DETAILS

S7.6  

SECTIONS AND DETAILS

S7.7  

SECTIONS AND DETAILS

S7.8  

SECTIONS AND DETAILS

S7.9  

SECTIONS AND DETAILS

MECHANICAL:

M0.1  

LEGENDS, NOTES & CODE COMPLIANCE

M1.1A  

LOBBY LEVEL FLOOR PLAN – PART A – MECHANICAL

M1.1B  

LOBBY LEVEL FLOOR PLAN – PART B – MECHANICAL

M1.2A  

UPPER LOBBY FLOOR PLAN – PART A – MECHANICAL

M1.2B  

PARKING LEVEL 2 – PART B – MECHANICAL

M1.3A  

PARKING LEVEL 3 – PART A – MECHANICAL

A1.3B  

PARKING LEVEL 3 – PART B – MECHANICAL

M1.4A  

PARKING LEVEL 4 – 5 – PART A – MECHANICAL

M1.4B  

PARKING LEVEL 4 – 5 – PART B – MECHANICAL

M1.5A  

PARKING LEVEL 6 – PART A – MECHANICAL

M1.5B  

PARKING LEVEL 6 – PART B – MECHANICAL

M1.6A  

PARKING LEVEL 7 – PART A – MECHANICAL

M1.6B  

PARKING LEVEL 7–PART B– MECHANICAL

M1.7A  

OFFICE LEVEL 1 FLOOR PLAN – PART A – MECHANICAL

M1.7B  

OFFICE LEVEL 1 FLOOR PLAN – PART B – MECHANICAL

M1.8A  

OFFICE LEVEL 2 FLOOR PLAN – PART A – MECHANICAL

M1.8B  

OFFICE LEVEL 2 FLOOR PLAN – PART B – MECHANICAL

M1.9A  

OFFICE LEVEL 3 FLOOR PLAN – PART A – MECHANICAL

M1.9B  

OFFICE LEVEL 3 FLOOR PLAN – PART B – MECHANICAL

M1.10  

TYPICAL FLOORS (5TH– 10TH) MECHANICAL

M1.11  

ELEVENTH FLOOR PLAN – MECHANICAL

M1.12  

FLOOR PLAN – MECHANICAL

M1.13  

ROOF LEVEL PLAN – MECHANICAL

M2.1  

CENTRAL PLANT MECHANICAL

M2.2  

FIRST OFFICE FLOOR CORE PLAN – MECHANCIAL

M2.3  

SECOND OFFICE FLOOR CORE PLAN – MECHANICAL

M2.4  

THIRD OFFICE FLOOR CORE PLAN – MECHANICAL

M2.5  

TYPICAL OFFICE FLOOR CORE PLAN – MECHANICAL

M3.1  

DETAILS & DIAGRAMS – MECHANICAL

M3.2  

DETAILS & DIAGRAMS – MECHANICAL

M4.1  

RISERS – MECHANICAL

M4.2  

RISERS – MECHANICAL

M5.1  

SCHEDULES – MECHANICAL

M5.2  

SCHEDULES – MECHANICAL

M5.3  

SCHEDULES – MECHANICAL

M5.4  

SCHEDULES – MECHANICAL

 

50

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ELECTRICAL:

E0.1   

SITE PLAN – ELECTRICAL

E1.1A   

LOBBY LEVEL FLOOR PLAN – PART A– ELECTRICAL

E1.1B   

LOBBY LEVEL FLOOR PLAN – PART B– ELECTRICAL

E1.1C   

LOBBY LEVEL FLOOR PLAN – PART C– ELECTRICAL

E1.2A   

PARKING LEVEL 2 – PART A – ELECTRICAL

E1.2B   

PARKING LEVEL 2 – PART B – ELECTRICAL

E1.3A   

PARKING LEVEL 3 FLOOR PLAN – PART A – ELECTRICAL

E1.3B   

PARKING LEVEL 3 FLOOR PLAN – PART B– ELECTRICAL

E1.4A   

PARKING LEVELS 3-6 –PART A – ELECTRICAL

E1.4B   

PARKING LEVELS 3-6– PART B – ELECTRICAL

E1.5A   

PARKING LEVEL 6 FLOOR PLAN – PART A – ELECTRICAL

E1.5B   

PARKING LEVEL 6 FLOOR PLAN – PART B – ELECTRICAL

E1.6A   

PARKING LEVEL 7 – PART A – ELECTRICAL

E1.6B   

PARKING LEVEL 7 – PART B – ELECTRICAL

E1.7A   

OFFICE LEVEL 1 – PART A

E1.7B   

OFFICE LEVEL 1 – PART B

E1.8A   

OFFICE LEVEL 2 – PART A

E1.8B   

OFFICE LEVEL 2 – PART B

E1.9A   

OFFICE LEVEL 3 – PART A

E1.9B   

OFFICE LEVEL 3 – PART B

E1.10   

TYPICAL (4 – 10) OFFICE FLOOR PLAN – ELECTRICAL

E1.11   

OFFICE LEVEL 11 – FLOOR PLAN – ELECTRICAL

E1.12   

OFFICE LEVEL 12 – FLOOR PLAN – ELECTRICAL

E1.13   

ROOF PLAN – ELECTRICAL

E2.1A   

LOBBY LEVEL FLOOR PLAN – PART A – LIGHTING

E2.1B   

LOBBY LEVEL FLOOR PLAN – PART B – LIGHTING

E2.2A   

OFFICE LEVEL 1 – FLOOR PLAN – PART A – LIGHTING

E2.2B   

OFFICE LEVEL 1 – FLOOR PLAN – PART B – LIGHTING

E2.3   

CORE LIGHTING PLAN – OFFICE LEVELS 2 & 3

E2.4   

CORE LIGHTING PLAN – OFFICE LEVELS 4 – 12

E4.1   

POWER RISER DIAGRAM

E4.2   

ONE LINE DIAGRAM

E4.3   

TELECOM RISER DIAGRAM

E5.1   

LIGHTING FIXTURE SCHEDULE

E5.2   

PANELBOARD SCHEDULE

E5.3A   

PANELBOARD SCHEDULE

E5.3B   

PANELBOARD SCHEDULE

E5.4   

LOBBY LEVEL & P2 – P5 MECH EQUIP SCHEDULES

E5.5   

OFFICE – 1 & P6 – P7 MECH EQUIP SCHEDULES

E5.6   

OFFICE – 2 & 3 MECH EQUIP SCHEDULES

E6.1   

ELECTRICAL LEGEND & DETAILS

 

51

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PLUMBING:

P1.1A

 

LOBBY LEVEL FLOOR PLAN – PART A – PLUMBING

P1.1B

 

LOBBY LEVEL FLOOR PLAN – PART B – PLUMBING

P1.2A

 

PARKING LEVEL 2 PLAN – PART A – PLUMBING

P1.2B

 

PARKING LEVEL 2 PLAN – PART B – PLUMBING

P1.3A

 

TYPICAL PARKING LEVEL PLAN – PART A – PLUMBING

P1.3B

 

TYPICAL PARKING LEVEL PLAN – PART B – PLUMBING

P1.4A

 

PARKING LEVEL 7 PLAN – PART A – PLUMBING

P1.4B

 

PARKING LEVEL 7 PLAN – PART B – PLUMBING

P1.5A

 

FIRST OFFICE LEVEL PLAN – PART A – PLUMBING

P1.5B

 

FIRST OFFICE LEVEL PLAN – PART B – PLUMBING

P1.6A

 

SECOND FLOOR PLAN – PART A – PLUMBING

P1.6B

 

SECOND FLOOR PLAN – PART B – PLUMBING

P1.7A

 

THIRD FLOOR PLAN – PART A – PLUMBING

P1.7B

 

THIRD FLOOR PLAN – PART B – PLUMBING

P1.8

 

OFFICE LEVEL 4 THRU 6 FLOOR PLAN – PLUMBING

P1.9

 

OFFICE LEVEL 7 THRU 11 FLOOR PLAN – PLUMBING

P1.10

 

OFFICE LEVEL 12 FLOOR PLAN – PLUMBING

P1.11

 

ROOF AND PENTHOUSE PLAN – PLUMBING

P2.01

 

ENLARGED TOILET PLANS – PLUMBING

P2.02

 

ENLARGED TOILET PLANS – PLUMBING

P2.3

 

ENLARGED TOILET PLANS – PLUMBING

P3.1

 

WASTE RISER DIAGRAMS – PLUMBING

P3.2

 

WASTE RISER DIAGRAMS – PLUMBING

P3.3

 

STORM WATER RISERS – PLUMBING

P4.1

 

SCHEDULES AND DETAILS – PLUMBING

P4.2

 

SCHEDULES AND DETAILS – FIRE PROTECTION

P4.3

 

UL DETAILS & DIAGAMS – PLUMBING

FIRE PROTECTION:

FP-1.1

 

SITE PLAN/PROJECT NOTES

FP-1.2

 

STANDPIPE PLAN

FP-1.3

 

GROUND FLOOR WEST – STANDPIPE

FP-1.4

 

GROUND FLOOR EAST– STANDPIPE

FP-1.5

 

PARKING LEVEL 2 WEST – STANDPIPE

FP-1.6

 

PARKING LEVEL 2 EAST – STANDPIPE

FP-1.7

 

PARKING LEVEL 3-7 WEST – STANDPIPE

FP-1.8

 

PARKING LEVEL 3-7 EAST – STANDPIPE

FP-1.9

 

1ST FLOOR STANDPIPE

FP-1.10

 

2ND FLOOR STANDPIPE

FP-1.11

 

3RD FLOOR STANDPIPE

FP-1.12

 

4TH – 12TH STANDPIPE

FP-1.13

 

ROOF STANDPIPE

FP-1.14

 

STANDPIPE SCHEMATIC

 

52

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FP-1.15

  

FIRE PUMP PLAN

FP-1.16

  

FIRE PUMP SECTIONS AND DETAILS

FP-1.17

  

STANDPIPE RISER SCHEMATIC

FP-1.18

  

STANDPIPE SECTIONS & DETAILS

FP-1.19

  

STANDPIPE SECTIONS & DETAILS

FP-1.20

  

STANDPIPE SECTIONS & DETAILS

FP-2.1

  

GROUND FLOOR NW– SPRINKLER

FP-2.2

  

GROUND FLOOR NE – SPRINKLER

FP-2.3

  

GROUND FLOOR SW– SPRINKLER

FP-2.4

  

GROUND FLOOR SE – SPRINKLER

FP-2.5

  

OFFICE LEVEL 1 – SPRINKLER

FP-2.6

  

OFFICE LEVEL 2 – SPRINKLER

FP-2.7

  

OFFICE LEVEL 3 – SPRINKLER

FP-2.8

  

OFFICE LEVEL 4 THROUGH 11 – SPRINKLER

FP-2.9

  

OFFICE LEVEL 12 – SPRINKLER

FP-2.10

  

ROOF LEVEL – ELEVATOR MACHINE ROOM – SPRINKLER

FP-3.1

  

GROUND FLOOR NW – REFLECTED CEILING PLAN

FP-3.2

  

GROUND FLOOR NE – REFLECTED CEILING PLAN

FP-3.3

  

GROUND FLOOR SW– REFLECTED CEILING PLAN

FP-3.4

  

GROUND FLOOR SE – REFLECTED CEILING PLAN

FP-3.5

  

OFFICE LEVEL 1 – REFLECTED CEILING PLAN

FP-3.6

  

OFFICE LEVEL 2 – REFLECTED CEILING PLAN

FP-3.7

  

OFFICE LEVEL 3 – REFLECTED CEILING PLAN

FP-3.8

  

OFFICE LEVEL 4 – 11 – REFLECTED CEILING PLAN

FP-3.9

  

OFFICE LEVEL 12 – REFLECTED CEILING PLAN

FP-3.10

  

ROOF LEVEL – ELEVATOR MACHINE ROOM – RCP

FP-4.1

  

FULL HEIGHT BUILDING SECTION

FP-4.2

  

FIRE PROTECTION DETAILS

 

53

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FIRST AMENDMENT TO PARKING FACILITY LEASE AGREEMENT

THIS FIRST AMENDMENT TO PARKING FACILITY LEASE AGREEMENT is entered into as of
this 21st day of November, 2005, by and among J.P.MORGAN TRUST COMPANY, N.A., a
national banking association, not in its individual capacity but solely as Owner
Trustee of CA Raleigh Owner Trust, under a Trust Agreement dated April 1, 2003
(“Owner”), PROGRESS ENERGY CAROLINAS, INC., a North Carolina corporation
(“Landlord”), the CITY OF RALEIGH, NORTH CAROLINA, a political subdivision of
the State of North Carolina (“Tenant”), and is consented to by PACIFIC LIFE
INSURANCE COMPANY, a California corporation (“Lender”).

RECITALS:

A.     The parties entered into a Parking Facility Lease Agreement dated as of
April 10, 2003 (the “Lease”).

B.     The parties desire to amend the Lease as provided herein.

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

1.     Amendments to Lease. The Lease is hereby amended as follows:

a.     Recital C to the Lease is amended to read as follows:

C.     Landlord intends to construct on the Property a multi-level parking deck
and related facilities and improvements more particularly described in Exhibit C
(the “Parking Facility”). The Parking Facility is to be part of a mixed-use
development on the Property consisting of approximately 400,000 square feet of
office development, 20,000 square feet of retail development, and a residential
development consisting of approximately 66 residential housing units
(collectively, the “Project”).

b.     The definitions of “Residential Development First Phase” and “Residential
Development Second Phase” in Section 1.1 of the Lease are deleted in their
entirety.

c.     The third paragraph of Section 8.4 of the Lease is amended to add the
following sentence:

All agreements with respect to the spaces available for the exclusive use of
Landlord and other tenants of the Project pursuant to this Section shall be

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

deemed to be on a month-to-month basis, and renewed for successive monthly
periods unless Landlord notifies Tenant to the contrary in writing.

d.         Section 16.1 of the Lease is amended to read as follows:

16.1     Residential Development. The parties acknowledge that Landlord proposes
to include a residential development of approximately 66 housing units in the
Project (the “Residential Development”). The parties further acknowledge that
the construction of the Residential Development is a material inducement to the
Tenant’s execution and performance of this Lease .

e.         Section 16.2 of the Lease is amended to read as follows:

16.2     Release of P-2 Residential Parking Area from Lease. Tenant agrees to
release and relinquish its leasehold interest in the P-2 Residential Parking
Area portion of the Premises upon sixty (60) days written notification from
Landlord requesting such release and certifying the issuance of a final
certificate of occupancy for the shell building for the Residential Development.
In consideration for such release, Landlord shall pay, or shall cause to be
paid, to Tenant at the time of such release the amount of $549,000, representing
the sum of $9,000 for each of the sixty-one (61) parking spaces included in the
P-2 Residential Parking Area.

f.         The second and third sentences of Section 16.6 of the Lease are
amended to read as follows:

The City may demand payment under the Guarantee in the event the Residential
Development is not completed on or before December 31, 2006, such completion to
be evidenced by issuance of a certificate of completion by the City of Raleigh.
In the event the Residential Development is completed on or before December 31,
2006, the Guarantee shall cease to be of any force or effect,and Landlord shall
have no further obligation to Tenant with respect to the construction of the
residential portion of the Project.

g.         Section 16.7 of the Lease is amended to read as follows:

16.7     Parking for Residential Development. Upon completion of the parking for
the Residential Development, Tenant agrees to pay to Landlord, the sum of $4,200
for each space constructed for the Residential Development; provided, however,
the total number of spaces for the Residential Development shall not exceed 150
without Tenant’s written consent. In addition, Tenant covenants and agrees to
take such

 

2

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

reasonable steps as are necessary such that the Residential Development can
operate as a separately owned condominium development, including, but not
limited to, execution of “zero lot line” agreements, construction easements, and
the conveyance of easement rights for ingress, egress, air rights, and
utilities.

h.         Section 16.8 of the Lease is deleted in its entirety.

2.        Lender Consent Lender, as beneficiary under that certain deed of trust
dated as of April 10, 2003, and recorded on April 11, 2003, in Book 10043, Page
2168, Wake County Registry, joins in this instrument for the sole purpose of
consenting to amendment to the Lease as provided herein.

3.         No Further Amendment. Except as expressly provided herein, the Lease
has not been modified or amended and remains in full force and effect.

[The remainder of this page is intentionally blank]

 

3

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

IN WITNESS WHEREOF, the parties have executed this First Amendment to Parking
Facility Lease Agreement as of the day and year first above written.

 

OWNER:  

J.P. MORGAN TRUST COMPANY, N.A., a

national banking association, not in its

individual capacity, but solely as Trustee of CA Raleigh Owner Trust under a
Trust Agreement

dated as of April 1, 2003

By:  

/s/ Carol Logan

  Title:   Vice President  

 

LANDLORD:  

PROGRESS ENERGY CAROLINAS, INC.

By:  

/s/ Rodney E. Gaddy

  Title:   Vice President–Corporate Services  

 

TENANT:   THE CITY OF RALEIGH, NORTH CAROLINA By:  

/s/ Charles Meeker

   

Charles Meeker, Mayor

 

 

ATTEST:  

/s/ Gail Smith

    Gail Smith, City Clerk  

 

LOGO [g301497301497_235.jpg]

 

Consented to by:

   

 

LENDER:

   

 

PACIFIC LIFE INSURANCE COMPANY

 

  By:   /s/ C. S. Dillion     Title:   Vice President             /s/ John
Waldeck       John Waldeck       Assistant Secretary                    

 

4

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

EXHIBIT “C”

DELIVERY ACKNOWLEDGEMENT LETTER

                                    , 201    

BY OVERNIGHT OR HAND DELIVERY

Red Hat, Inc.

1801 Varsity Drive

Raleigh, North Carolina 27606

Attn: Chief Financial Officer,

General Counsel, and Director, Worldwide Facilities

This Delivery Acknowledgement Letter is being provided pursuant to Section 1.2
of that certain Sublease Agreement dated November         , 2011 (the
“Sublease”), by and between Carolina Power & Light Company, a North Carolina
corporation dba Progress Energy Carolinas, Inc. (“Sublessor”) and Red Hat, Inc.,
a Delaware corporation (“Sublessee”). Capitalized terms used but not otherwise
defined herein shall have the meanings ascribed thereto in the Sublease.
Sublessor and Sublessee desire to acknowledge the following:

1.     [Floor         ], [the lobby], [the Building façade] was delivered by
Sublessor to Sublessee on                     , 201    , in accordance with
Section 1.2 and Section 6.1 of the Sublease.

2.     There [are/are no] punchlist items to complete pursuant to Section 6.2 of
the Sublease. [The punchlist items consist of the following and shall be
completed by Sublessor on or before                      [insert date that is
thirty (30) days after the date set forth in paragraph 1 above]:

a. .]

3.     [All conditions under the Sublease for the Abatement Measuring Date/Final
Delivery Date have been met, and the Abatement Measuring Date/Final Delivery
Date is                         .]

4.     Time is of the essence of your execution of this Delivery Acknowledgement
Letter with a signed copy to be sent to Chris.Cox@pgnmail.com and
Robin.Hilburn@pgnmail.com and the original overnighted to Chris Cox at Progress
Energy, 410 S. Wilmington Street, Raleigh, NC 27601.

 

Sincerely, CAROLINA POWER & LIGHT COMPANY, a North Carolina corporation dba
PROGRESS ENERGY CAROLINAS, INC. By:     Name:      

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

Title:       Date of Mailing:    

 

Acknowledged and Agreed:

RED HAT, INC., a Delaware corporation

By:       Name:       Title:       Date of Execution:      

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

EXHIBIT “D”

PARTIAL ASSIGNMENT AND ASSUMPTION OF PARKING LEASE

This Partial Assignment and Assumption of Parking Lease (this “Agreement”),
entered into as of this                      day of December, 2011, is by and
between Carolina Power & Light Company, a North Carolina corporation dba
Progress Energy Carolinas, Inc. (“Sublessor”) and Red Hat, Inc., a Delaware
corporation (“Sublessee”).

WHEREAS, Sublessor and Sublessee have entered into a certain Sublease Agreement
of even date herewith (the “Sublease Agreement”), pursuant to which, among other
things, Sublessor has agreed to assign its rights in, and Sublessee has agreed
to assume certain of Sublessor’s duties and obligations under, that certain
Parking Facility Lease Agreement dated April 10, 2003, by and among JP Morgan
Trust Company, N.A., predecessor in interest to The Bank of New York Mellon
Trust Company, N.A., as “Owner”, Sublessor as “Landlord” and the City of Raleigh
(the “City”) as “Tenant” and amended by that certain First Amendment to Parking
Facility Lease Agreement dated November 21, 2005, and that certain letter from
Sublessor to the City dated October 27, 2004 (as amended, the “Parking Lease”).

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.

Definitions. All capitalized terms used in this Agreement but not otherwise
defined herein shall have the meanings ascribed thereto in the Sublease
Agreement.

 

2.

Assignment. Sublessor hereby assigns, grants, conveys, and transfers to
Sublessee, for the duration of the Sublease Term, Sublessor’s rights under the
Parking Lease, which assignment shall be effective as of the Final Delivery
Date. Without limiting the generality of the foregoing, Sublessor specifically
assigns, grants, conveys, and transfers to Sublessee all air rights and/or
development rights inuring to Sublessee under the Parking Lease or otherwise
associated with the Parking Deck.

 

3.

Assumption. Sublessee hereby assumes from Sublessor, for the duration of the
Sublease Term, certain of Sublessor’s duties and obligations under the Parking
Lease, which partial assumption shall be effective as of the Final Delivery
Date. Notwithstanding the foregoing, Sublessee shall not assume (and Sublessor
shall retain) Sublessor’s rights, duties and obligations under the Parking Lease
relating to: (a) time periods prior to the Final Delivery Date (except as
otherwise provided in Section 5 below); (b) time periods subsequent to the
expiration or termination of the Sublease Term (except as otherwise provided in
Section 6 below); and (c) Sublessor’s repair, maintenance, and replacement
obligations under the Parking Lease (except the obligation to maintain, repair
and replace

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

 

the Common Elements pursuant to Section 10.3 of the Parking Lease (which shall
include elevator cars 8, 9 and 10 located within the Parking Deck (which are
currently being maintained by Sublessor pursuant to that certain letter from
Sublessor to the City dated October 27, 2004), unless and to the extent the same
are now or hereafter maintained by the City)). The costs to Sublessee for use of
parking spaces within the Parking Deck, and the manner and timing of payment
shall be as determined between Sublessee and the City, and Sublessor shall have
no liability or responsibility therefor.

 

4.

No Liability Until Assumption. Notwithstanding that this Agreement is effective
as of the date set forth above, except as set forth in Section 5 below,
Sublessee shall have no rights, duties or obligations with respect to the
Parking Lease until the Final Delivery Date.

 

5.

Acceleration of Assignment. Notwithstanding the provisions of Section 2 above,
Sublessee shall have the right to accelerate the effective date of the
assignment of rights under Section 2 above in the event that Sublessee is unable
to secure adequate parking within the Parking Deck directly from the City
sufficient to serve Sublessee’s parking needs prior to the Final Delivery Date.
Such acceleration shall be exercised by Sublessee by written notice to
Sublessor, with a copy provided to Master Landlord and the City. If Sublessee
exercises the acceleration provided in this Section 5, then this Agreement shall
remain in full force and effect; provided, however, that this Agreement shall be
modified to provide that the effectiveness of the assignment under Section 2
above shall be the date of such notice as opposed to the Final Delivery Date.

 

6.

Contingent Full Assignment and Assumption. If Sublessee exercises the Parking
Deck Renewal Option or the Parking Deck Purchase Option (each as set forth in
Section 2.3 of the Sublease Agreement), all of Sublessor’s rights, duties, and
obligations under the Parking Lease shall be assigned to and assumed by
Sublessee, which would be and remain liable on the Parking Lease through the
expiration of the Parking Lease (including, as applicable, for periods beyond
the expiration of the Sublease Term). Such full assignment and assumption shall
(a) be automatic and no additional amendment to this Agreement shall be
required, provided that Sublessor and Sublessee agree to provide notice thereof
promptly to Master Landlord and the City and (b) be effective (the “Contingent
Full Assignment and Assumption Effective Date”) as of the effective date of the
Parking Deck Renewal Option or Parking Deck Purchase Option, as applicable.
Notwithstanding the foregoing, Sublessee shall not assume (and Sublessor shall
retain) Sublessor’s rights, duties and obligations under the Parking Lease
relating to time periods prior to the Contingent Full Assignment and Assumption
Effective Date (except as otherwise provided in Section 2 and Section 3 above).

 

7.

Mutual Indemnification. In addition to the indemnities contained in the
Sublease, Sublessor assumes liability for, and shall indemnify, protect, defend
(by counsel reasonably satisfactory to Sublessee), save and keep harmless the
Sublessee Indemnitees from and against any and all Claims arising out of or
relating to any right, duty or

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

 

obligation assigned pursuant this Agreement and relating to the period of time
(i) prior to the assignment to Sublessee or (ii) following termination of this
Agreement, except in all cases to the extent that such Claims are caused by a
negligent or willful act or omission of a Sublessee Indemnitee. Sublessee hereby
assumes liability for, and shall indemnify, protect, defend (by counsel
reasonably satisfactory to Sublessor), save and keep harmless Sublessor and the
Sublessor Indemnities from and against any and all Claims arising out of or
relating to any right, duty or obligation assumed pursuant this Agreement and
relating to the period of time on or after the assumption by Sublessee and prior
to the termination of this Agreement, except in all cases to the extent that
such Claims are caused solely by the negligent or willful act or omission of a
Sublessor Indemnitee. The provisions of this Section 7 shall survive the
termination or expiration of this Agreement.

 

8.

Notice of and Consent to Assignment. By the execution of this Agreement, the
City hereby consents to the terms hereof, and agrees to recognize, accept and
attorn to Sublessee in lieu of Sublessor with respect to the rights, duties and
obligations assigned to and assumed by Sublessee pursuant hereto (but not
otherwise).

 

9.

Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of North Carolina without giving effect to
any choice or conflict of law provision or rule (whether of the State of North
Carolina or any other jurisdiction) that would cause the application of laws of
any jurisdiction other than those of the State of North Carolina.

 

10.

Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall be deemed to be one
and the same agreement. A signed copy of this Agreement delivered by facsimile,
email or other means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this Agreement.

 

11.

Further Assurances. Each of the parties hereto shall execute and deliver, at the
reasonable request of the other party hereto, such additional documents,
instruments, conveyances and assurances and take such further actions as such
other party may reasonably request to carry out the provisions hereof and give
effect to the transactions contemplated by this Agreement.

 

12.

City Estoppel. Contemporaneously with the execution of this Agreement, the City
has executed that certain Tenant Estoppel Certificate and Consent to Assignment
(Parking Facility Lease Agreement) in favor of Sublessee (the “Initial
Estoppel”). In the event that Sublessee requests, the City shall execute an
additional estoppel certificate in substantially the form and substance of the
Initial Estoppel Certificate prior to or contemporaneously with the effective
date of the assignment of rights under Section 2 above. The request of Sublessee
in the preceding sentence shall be in writing and shall allow the City at least
ten (10) business days to execute and return such estoppel.

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

13.

Termination. Except as provided in Section 6 above, this Agreement shall
terminate, and all rights, duties and obligations of “Landlord” under the
Parking Lease shall revert to Sublessor upon the expiration or earlier
termination of the Sublease Agreement.

[SIGNATURE PAGE FOLLOWS]

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

IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written (in the case of the City, solely for the purposes
specifically set forth herein as to such party).

 

SUBLESSOR:

Carolina Power & Light

Company, a North Carolina

corporation dba Progress Energy Carolinas, Inc.

By    

Name:   Title:   Date:  

 

SUBLESSEE: Red Hat, Inc., a Delaware corporation By    

Name:   Title:   Date:  

 

CITY:

The City of Raleigh, a North

Carolina municipal corporation

By    

Name:   Title:   Date:  

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

EXHIBIT “E”

ASSIGNMENT AND ASSUMPTION OF RETAIL LEASES

This Assignment and Assumption of Retail Leases and Roof Leases (this
“Agreement”), entered into as of this                      day of December,
2011, is by and among Carolina Power & Light Company, a North Carolina
corporation dba Progress Energy Carolinas, Inc. (“Sublessor”), Progress Energy
Service Company, LLC, a North Carolina limited liability company (“PESC”) and
Red Hat, Inc., a Delaware corporation (“Sublessee”).

WHEREAS, Sublessor and Sublessee have entered into a certain Sublease Agreement
of even date herewith (the “Sublease Agreement”), pursuant to which, among other
things, Sublessor and PESC have agreed to assign Sublessor’s and PESC’s
respective rights in, and Sublessee has agreed to assume Sublessor’s and PESC’s
respective duties and obligations under, those certain retail and roof leases
set forth in the Rent Schedule (the “Rent Schedule”) on Exhibit “A”, attached
hereto and incorporated herein by reference, hereinafter called the “Retail
Leases” with respect to that certain real property located at 100 East Davie
Street, Raleigh, North Carolina, as more particularly described in the Sublease.
Sublessor is the “Intermediate Landlord” and PESC is the “Landlord” under the
Retail Leases.

NOW, THEREFORE, in consideration of the mutual covenants, terms and conditions
set forth herein, and for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:

 

1.

Definitions. All capitalized terms used in this Agreement but not otherwise
defined herein shall have the meanings ascribed thereto in the Sublease
Agreement.

 

2.

Assignment. Sublessor hereby assigns, grants, conveys, and transfers to
Sublessee, for the duration of the Sublease Term, Sublessor’s rights under the
Retail Leases, which assignment shall be effective as of the Final Delivery
Date. PESC hereby assigns, grants, conveys, and transfers to Sublessee, for the
duration of the Sublease Term, PESC’s rights under the Retail Leases, which
assignment shall be effective as of the Final Delivery Date.

 

3.

Assumption. Sublessee hereby assumes from Sublessor, for the duration of the
Sublease Term, Sublessor’s duties and obligations under the Retail Leases, which
assumption shall be effective as of the Final Delivery Date. Sublessee hereby
assumes from PESC, for the duration of the Sublease Term, PESC’s duties and
obligations under the Retail Lease, which assumption shall be effective as of
the Final Delivery Date.

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

Notwithstanding the foregoing, Sublessee shall not assume (and Sublessor and
PESC, as applicable, shall retain) Sublessor’s and PESC’s rights, duties and
obligations under the Retail Leases relating to: (a) time periods prior to the
Final Delivery Date and (b) time periods subsequent to the expiration or
termination of the Sublease Term.

 

4.

Mutual Indemnification. In addition to the indemnities contained in the
Sublease, Sublessor and PESC hereby jointly and severally assume liability for,
and shall indemnify, protect, defend (by counsel reasonably satisfactory to
Sublessee), save and keep harmless the Sublessee Indemnitees from and against
any and all Claims arising out of or relating to any right, duty or obligation
assigned pursuant this Agreement and relating to the period of time (i) prior to
the Final Delivery Date or (ii) following termination of this Agreement, except
in all cases to the extent that such Claims are caused by a negligent or willful
act or omission of a Sublessee Indemnitee. Sublessee hereby assumes liability
for, and shall indemnify, protect, defend (by counsel reasonably satisfactory to
Sublessor), save and keep harmless Sublessor and the Sublessor Indemnities from
and against any and all Claims arising out of or relating to any right, duty or
obligation assumed pursuant this Agreement and relating to the period of time on
or after the Final Delivery Date and prior to the termination of this Agreement,
except in all cases to the extent that such Claims are caused solely by the
negligent or willful act or omission of a Sublessor Indemnitee. The provisions
of this Section 4 shall survive the termination or expiration of this Agreement.

 

5.

Governing Law. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of North Carolina without giving effect to
any choice or conflict of law provision or rule (whether of the State of North
Carolina or any other jurisdiction) that would cause the application of laws of
any jurisdiction other than those of the State of North Carolina.

 

6.

Counterparts. This Agreement may be executed in counterparts, each of which
shall be deemed an original, but all of which together shall be deemed to be one
and the same agreement. A signed copy of this Agreement delivered by facsimile,
email or other means of electronic transmission shall be deemed to have the same
legal effect as delivery of an original signed copy of this Agreement.

 

7.

Further Assurances. Sublessor and PESC shall execute and deliver, at the
reasonable request of the Sublessee and Sublessee shall execute and deliver, at
the reasonable request of Sublessor or PESC, such additional documents,
instruments, conveyances and assurances and take such further actions as such
other party may reasonably request to carry out the provisions hereof and give
effect to the transactions contemplated by this Agreement.

 

8.

Termination. This Agreement shall terminate, and all rights, duties and
obligations of “Intermediate Landlord” under the Retail Leases shall revert to
Sublessor and all rights,

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

duties and obligations of “Landlord” under the Retail Leases shall revert to
PESC upon the expiration or earlier termination of the Sublease Agreement.

 

SUBLESSOR:   CAROLINA POWER & LIGHT, COMPANY, a North Carolina corporation dba
Progress Energy Carolinas, Inc. By:       Name:       Title:      

 

PESC:  

PROGRESS ENERGY SERVICE COMPANY, LLC,

a North Carolina limited liability company

  By:       Name:       Title:      

 

SUBLESSEE:   RED HAT, INC., a Delaware corporation By:       Name:       Title:
     

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

EXHIBIT “A” to Assignment and Assumption of Retail Leases

RENT SCHEDULE

Retail Leases

 

1.

WST Coast, LLC dba buku pursuant to that certain Lease Agreement dated January
2006 (entered into by Reel Sea Productions, LLC), as amended by that certain
First Amendment to Lease Agreement dated April 19, 2007, and amended by that
certain Second Amendment to Lease Agreement dated February 12, 2008, and amended
and assigned by that certain Third Amendment to Lease Agreement dated July 1,
2010;

 

2.

WakeMed Property Services pursuant to that certain Lease Agreement dated 2010;

 

3.

GMW Carolina, Inc. pursuant to that certain Lease Agreement dated July 29, 2010;
and

4.     Pranzo Group, LLC pursuant to that certain Lease Agreement dated November
2004 (entered into by Joy Coffee, Inc. dba LaJoy Coffee and Tea House), as
amended by that certain First Amendment to Lease dated February 1, 2006, and
assigned by that certain Assignment and Assumption Agreement dated February 1,
2006.

Roof Leases

None.

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

EXHIBIT “F”

INSPECTION ITEMS

The following shall be performed in accordance with and in the locations shown
on that certain report by Collins Structural Consulting, PLLC dated September 9,
2011, and titled Final Report: Two Progress Plaza Structural Review. Such work
shall be based upon recommendations, which can be in narrative form outlining
surface preparation materials, materials, etc., of a licensed structural
engineer, who will perform a visual inspection of the work following completion:

Two Progress Plaza Building Level 8 (page 4) – repair concrete around exposed
rebar.

Two Progress Plaza Building Level 17 (Looking up at underside of level 18)(page
4) - repair concrete around exposed rebar.

Two Progress Plaza Building Level 18 (Looking up at underside of 19)(page 5) -
repair concrete around exposed rebar.

Reference AMEC Facade and Roofing Survey dated September 14, 2012.

On the main and trading floor roofs, the areas where ponding occurs must be
re-surfaced in accordance with the amec and manufacturers recommendations.

On both roofs, the walk treads and pads that are incorrectly installed must be
reinstalled in accordance with the manufacturer’s recommendations.

Any repairs to the upper roof caused by storage of maintenance equipment must be
repaired in accordance with the manufacturer’s recommendations.

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

EXHIBIT “G”

[Intentionally Omitted]

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

EXHIBIT “H”

SERVICE AGREEMENTS

 

 

CONFIDENTIAL-

PRIVILEGED INFORMATION OF PROGRESS ENERGY

 

 

Service Providers -Two Progress Plaza    Service Provided   

 

Contracted  

Support to  

Other PGN  

Facilities  

   Contact Names    Telephone # Besam Entrance Solutions    Revolving Door
Repair    *   

David Core/Lori

Rudisill

   704-357-9924 Bonitz Flooring Group    Carpet Cleaning    *    Elaine Cooper
   919-361-1521 Brady    Chiller PM’s    *    David McDaniel    919-781-0458
Capitol Maintenance Co    Landscaping    *    Raymond Stanley    919-639-7639
Carolina Grease Traps    Grease Trap cleaning         Preston Williams   
919-201-5474 Chemsearch    Chemicals for cooling tower and bio generators for
grease traps    *    Doug Campbell    919-271-7506 City of Raleigh    Water    *
   NA    919-890-3245 Colin Fairweather and Sons    Painting    *    Pat Martin
   919-828-9220 Covington Detroit Diesel – Allison    Generator    *    Steve
Mills    336-292-9240 Crawford Sprinkler Co of Raleigh    Sprinkler    *   
Sprite Corbett    919-828-9346 Environmental Service Systems, LLC    Janitorial
   *    Edgar Ruth    704-527-4099 Gateway Services, Inc.    Locksmith    *   
Dennis Verzaal    919-233-1139 Intelligent Access Systems    Card Access    *   
Tim Bullock    919-773-9400x101 J. Flanagan Furniture Repair    Furniture Repair
   *    Jack Flanagan    919-554-9154 Peak Fall Protection / McClancy Access
Systems    Roof Tie-down Inspections    *    Nambiri Bastos    919-303-8900
Peoplecube    Conference Room Scheduling    *    Angela Bennett    407-297-1830
Petroleum Equipment Solutions    UST Inspections    *    Billy Pierce   
919-303-7374 Pinnacle    Fire Protection/Ecaro 25    *    Obie Hooker   
919-367-0240 Power BackUPS & Solutions    UPS    *    Mitch Wandzell   
336-228-0464 Precision Walls    Construction    *    Tim Nutt    919-832-0380
Progress Energy    Utility    *    NA    NA Pye Barker Fire & Safety    Fire
Extinguishers    *    Dan Brown    919-779-4010 Rapid Response Electric, Inc   
Electrical    *    Willie Wall    919-669-8200 Red Star oil Co    Fuel for
Generators    *    Ray Brackett    919-772-1944 Schindler Elevator Company   
Elevators    *    Craig Andersch    919-954-9454x22 Scottie’s Building Services
   Window Cleaning    *    Tom McGrath    800-524-4643 Service Roofing and Sheet
Metal Co of Raleigh    Roofing    *    Matt Basnett    919-873-0370 Siemens   
HVAC and BAS    *    Will Tattersall    919-469-5095 Smith Exterminating Co, Inc
   Exterminator    *    Connie Pearce    919-851-0220 Waste Industries    Waste
   *    Dave Wilson    919-662-7100 Zee Medical Service    First Aid Kits    *
   Brad Brown    336-668-7714

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

EXHIBIT “I”

RENT SCHEDULE

Retail Leases

1.       WST Coast, LLC dba buku pursuant to that certain Lease Agreement dated
January 2006 (entered into by Reel Sea Productions, LLC), as amended by that
certain First Amendment to Lease Agreement dated April 19, 2007, and amended by
that certain Second Amendment to Lease Agreement dated February 12, 2008, and
amended and assigned by that certain Third Amendment to Lease Agreement dated
July 1, 2010;

2.       WakeMed Property Services pursuant to that certain Lease Agreement
dated 2010;

3.       GMW Carolina, Inc. pursuant to that certain Lease Agreement dated
July 29, 2010; and

4.       Pranzo Group, LLC pursuant to that certain Lease Agreement dated
November 2004 (entered into by Joy Coffee, Inc. dba LaJoy Coffee and Tea House),
as amended by that certain First Amendment to Lease dated February 1, 2006, and
assigned by that certain Assignment and Assumption Agreement dated February 1,
2006.

Roof Leases

None.

 

[See detailed Rent Schedule attached]

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

EXHIBIT “I” (continued)

TPP Rent Roll

Retail Leases

 

LEASE ID

  

TENANT NAME

     Rent Amt.       Rent Status        Security Deposit         Renewal Options
   Default

110

  

BUKU

   $ 12,217,18      

Current

     0      

See below

  

None

130

  

Pranzo Group

     1,146.49      

Current

     0      

See below

  

None

170

  

GMW Carolina Inc.

     1,933.33      

Current

     1,933.33      

See below

  

None

150

  

WakeMed Property Services

     4,839.33      

Current

     4,839.33      

See below

  

None

Renewal Comments

BUKU:

Provided there is no default or event of default hereunder by Tenant at any
time, Tenant shall have the option to renew the term of the lease for two (2)
renewal terms (individually, a “Renewal Term” and collectively, the “Renewal
Terms”) which shall each be of five (5) lease years in duration. The date of the
commencement of each Renewal Term shall be the day after the expiration of the
then current term of the Lease (unless sooner terminated as provided herein).

Pranzo Group:

Provided there is no default or event of default by Tenant under the lease,
Tenant shall have the option to extend the term of the Lease for one additional
period of three (3) years provided that Tenant shall give Landlord written
notice of its desire to exercise the aforesaid option at least one hundred
eighty (180) days prior to the end of the then current term failing which the
right of Tenant to extend the term shall be null and void.

GMW Carolina Inc.:

Provided there is no default or event of default hereunder by Tenant at any
time, Tenant shall have the option to renew the term of the Lease for three
(3) renewal terms (individually, a “Renewal Term” and collectively, the “Renewal
Terms”) which shall each be of five (5) Lease Years in duration. The date of the
commencement of each Renewal Term shall be the day after the expiration of the
then current term of the Lease (unless sooner terminated as provided herein).
The first Lease Year hereunder is the period of time from the date hereof until
December 31, 2011 and each consecutive period of twelve months thereafter is an
addition Lease Year.

WakeMed Property Services:

Provided there is no default or event of default hereunder by Tenant at any time
hereunder. Tenant shall have the option to renew the term of the Lease for one
(1) renewal term of three (3) lease years in duration (the “Renewal Term”). The
date of the commencement of the Renewal Term shall be the day after the
expriation of the then current term of the Lease (unless sooner terminated asp
provided herein). A lease year shall be each consecutive period of twelve months
herein.

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

EXHIBIT “J”

MEMORANDUM OF SUBLEASE

MEMORANDUM OF SUBLEASE AND OF PARTIAL ASSIGNMENT OF

PARKING LEASE AND CERTAIN OTHER AGREEMENTS

PREPARED AND RETURN TO:

Kilpatrick Townsend & Stockton LLP (BFR)

4208 Six Forks Road, Suite 1400

Raleigh, NC 27609

STATE OF NORTH CAROLINA

COUNTY OF WAKE

This Memorandum of Sublease and of Partial Assignment of Parking Lease and
Certain Other Agreements (this “Memorandum”) is entered into this
                     day of December, 2011, by and among CAROLINA POWER & LIGHT
COMPANY, a North Carolina corporation dba Progress Energy Carolinas, Inc.
(“Sublessor”), PROGRESS ENERGY SERVICE COMPANY, LLC, a North Carolina limited
liability company (“PESC”), and RED HAT, INC., a Delaware corporation
(“Sublessee”) in connection with that certain Sublease Agreement of even date
herewith (as amended from time to time, the “Sublease”), pursuant to which,
among other things, (i) Sublessor has demised to Sublessee those certain
Premises described below and more particularly described in the Sublease subject
to the rights of the City of Raleigh under the Parking Lease and the rights of
the tenants under any Roof Leases and any Retail Leases, (ii) Sublessor has
assigned its rights to Sublessee and Sublessee has assumed certain of
Sublessor’s duties and obligations under that certain Parking Facility Lease
Agreement dated April 10, 2003 by and among The Bank of New York Mellon Trust
Company, N.A., successor to JP Morgan Trust Company, as Owner Trustee of the CA
Raleigh Owner Trust (“Master Landlord”), as “Owner”, Sublessor as “Landlord”,
and the City of Raleigh as “Tenant” (the “Parking Lease”)

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

for the duration of the Sublease Term, (iii) Sublessor has assigned its rights
to Sublessee and Sublessee has assumed Sublessor’s duties and obligations under
that certain Joint and Reciprocal Easement recorded in Deed Book 9923, Page
2134, Wake County Register of Deeds (the “Joint and Reciprocal Easement”) for
the duration of the Sublease Term, (iv) Sublessor has assigned its rights to
Sublessee and Sublessee has assumed Sublessor’s duties and obligations under
that certain Acknowledgement of Unified Development recorded in Deed Book 9923,
Page 2117, as amended in Deed Book 11699, Page 307, Wake County Register of
Deeds, that certain Acknowledgement of Unified Development recorded in Deed Book
9924, Page 726, as amended in Deed Book 11699, Page 293, Wake County Register of
Deeds, that certain Declaration of Easement recorded in Deed Book 9923, Page
2127, Wake County Register of Deeds, and that certain Grant of Easements and
Agreement Regarding P-2 Residential Parking Area recorded in Deed Book 11699,
Page 319, Wake County Register of Deeds (collectively, the “Other Appurtenant
Agreements”) for the duration of the Sublease Term, and (v) PESC has assigned
its rights to Sublessee and Sublessee has assumed Sublessor’s duties and
obligations under that certain Declaration of Covenants, Conditions,
Restrictions, and Reservations by Edison Land LLC recorded in Deed Book 13276,
Page 1051, Wake County Register of Deeds (the “Edison Declaration”) for the
duration of the Sublease Term. Master Landlord leased the Premises to Sublessor
pursuant to that certain Lease Agreement by and between Master Landlord and
Sublessor dated April 10, 2003 (as amended from time to time, the “Master
Lease”), as evidenced by that certain Memorandum of Lease recorded at Book
10043, Page 2219 of the Wake County Register of Deeds (the “Memorandum of Master
Lease”). The Bank of New York Mellon Trust Company, N.A. (successor to The Bank
of New York Trust Company, N.A.), succeeded to JP Morgan Trust Company under the
Master Lease pursuant to Agreement of Resignation and Assumption dated
October 1, 2006, a copy of which is attached hereto as Exhibit B.

The purpose of this Memorandum is to give record notice of (i) the Sublease and
of the rights, duties and obligations created thereby—including, without
limitation, the material terms summarized below—all of which are hereby
confirmed and all terms of which are incorporated into this Memorandum of
Sublease by reference, (ii) the assignment of the Parking Lease, as more
particularly described below and in the Sublease, (iii) the assignment of the
Joint and Reciprocal Easement and the Other Appurtenant Agreements as more
particularly described below and in the Sublease and (iv) the assignment of the
Edison Declaration, as more particularly described below and in the Sublease,
and subject to the additional terms and conditions provided therein. In the
event of any discrepancy between the Sublease and this Memorandum, the terms of
the Sublease shall control and take precedence. Capitalized terms used but not
otherwise defined herein shall have the meanings ascribed thereto in the
Sublease.

Certain provisions of the Sublease are set forth below:

 

   1.           

Premises:

  

The real property located at 100 East Davie Street, Raleigh, North Carolina,
which is more particularly described on Exhibit A attached hereto and made a
part hereof, together with certain improvements thereon, including the Building
and the Parking

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

      

Deck, all as more particularly described in the Sublease.

 

2.        

 

Sublease Term:

  

The Sublease Term shall commence on the date hereof and expire on August 23,
2035; provided, however, that subject to the provisions of those certain
Subordination, Nondisturbance and Attornment Agreements executed by each of
Lender and Master Landlord, as applicable, in connection with the Sublease,
recorded of even date herewith in the Wake County records (each an “SNDA”), the
Sublease Term shall expire at least one day prior to the end of the term of the
Master Lease (currently scheduled to expire on August 24, 2035), and the
Premises, and all improvements thereto, and all rights of Sublessee under the
Master Lease, the Parking Lease, the Edison Declaration, the Joint and
Reciprocal Easement, the Other Appurtenant Agreements, and all other rights
assigned to Sublessee under the Sublease or under any other document executed in
connection with the Sublease shall revert to Sublessor on such date, or any
earlier termination date, including, but not limited to, all assignments of
rights and documents made by Sublessor to Sublessee as provided in the Sublease.
For clarification, and notwithstanding anything to the contrary contained in the
Memorandum of Master Lease, the Expiration Date of the Master Lease is August
24, 2035, subject to renewal rights as more particularly set forth below.

 

3.        

 

Renewal Rights

  

The Master Lease grants to Sublessor the right to renew the Master Lease for
four (4) successive Renewal Terms of five (5) years each upon not less than
eighteen (18) months prior notice. The Parties acknowledge and agree that unless
Sublessee has given Sublessor notice that Sublessee will not be leasing the
Premises during any such Renewal Term, Sublessor shall not extend or renew the
Master Lease or give notice of its intent to extend or renew the Master Lease,
without consent being provided by Sublessee, which consent shall not be required
if there is a then-existing and continuing Event of Default by Sublessee under
the Sublease and, if required, shall not be unreasonably withheld, conditioned
or delayed; provided,

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

       

however, Sublessor shall have the right to renew the term of the Master Lease if
such right is within sixty (60) days of expiring and Sublessee has not provided
notice to Sublessor of its intentions with respect to same, in which event the
Sublease shall terminate at the end of the current Sublease Term.

 

4.        

  

Right of First Refusal:

  

The Master Lease grants to Sublessor a Right of First Offer to Purchase the
Premises. The Parties acknowledge and agree that during the Sublease Term,
Sublessee shall succeed to and enjoy the exclusive right to exercise the Right
of First Offer to Purchase, and, pursuant to its obligations under its SNDA,
Master Landlord shall recognize Sublessee in lieu of Sublessor with respect
thereto, subject to, and in accordance with, the applicable terms and conditions
of the Sublease. Master Landlord has consented to the foregoing pursuant to its
SNDA. Notwithstanding the foregoing, to the extent that the Right of First Offer
to Purchase is available for exercise and must be exercised (to avoid the lapse
of such right) prior to expiration of the Sublease Term, Sublessee will consult
and cooperate with Sublessor in the event Sublessee elects not to exercise the
Right of First Offer to Purchase, including providing notice thereof to Master
Landlord, so that Sublessor may have an opportunity to do so prior to lapse of
same.

 

5.

   Renewal/Purchase of Parking Deck:   

The Master Lease grants to Sublessor a Parking Deck Renewal Option to renew the
Master Lease with respect to the Parking Deck for a single term of ninety-nine
(99) years, and a Parking Deck Purchase Option to purchase the Parking Deck for
One Dollar ($1.00). The Parties acknowledge and agree that, during the Sublease
Term, Sublessee shall succeed to and enjoy the exclusive right to exercise the
Parking Deck Renewal Option and the Parking Deck Purchase Option (and be
entitled to all rights granted Sublessor in the Master Lease related thereto).
Sublessee shall have the right to elect to exercise the Parking Deck Renewal
Option or the Parking Deck Purchase Option, in which event it shall provide
notice to Master Landlord in

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

        

the manner required by Section 2.5 of the Master Lease and, pursuant to its
obligations under its SNDA, Master Landlord shall recognize Sublessee in lieu of
Sublessor with respect thereto, subject to, and in accordance with, the
applicable terms and conditions of the Master Lease, provided, however,
Sublessee may not exercise such rights if there is a then-existing and
continuing Event of Default by Sublessee under the Sublease. If Sublessee
provides such notice, then Sublessee shall be bound by the terms of Section 2.6
of the Master Lease and, notwithstanding anything to the contrary contained in
the Sublease, all of Sublessor's rights, duties, and obligations under the
Parking Lease shall be assigned to Sublessee, and Sublessee would be and remain
liable on the Parking Lease through the expiration of the Parking Lease
(including, as applicable, for periods beyond the expiration of the Sublease
Term). Master Landlord has consented to the foregoing pursuant to its SNDA. In
addition and notwithstanding the foregoing, to the extent that the Parking Deck
Renewal Option or the Parking Deck Purchase Option is available for exercise and
must be exercised (to avoid the lapse of such right) prior to expiration of the
Sublease Term, Sublessee shall consult and cooperate with Sublessor in the event
Sublessee elects not to exercise either option, including providing notice
thereof to Master Landlord, so that Sublessor may have an opportunity to do so
prior to lapse of same.

  

6.        

  

Parking Lease:

  

In connection with Sublessee's sublease of the Premises, subject to other
provisions of the Sublease, Sublessor has assigned to Sublessee, and Sublessee
has assumed from Sublessor, for the duration of the Sublease Term, Sublessor's
rights and certain of its duties and obligations under the Parking Lease, which
assignment and partial assumption shall be effective as of the Final Delivery
Date. Master Landlord has consented to the foregoing pursuant to its SNDA. The
Parties acknowledge and agree that Sublessee's sublease of (and rights, duties
and obligations with respect to) the Parking Deck shall be subject to the terms
and

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

        

conditions of the Parking Lease, including, without limitation, the rights of
the City set forth therein.

        

Notwithstanding the foregoing, Sublessee has not assumed (and Sublessor has
retained) Sublessor's rights, duties and obligations under the Parking Lease
relating to: (a) time periods prior to the Final Delivery Date (except as
otherwise provided in the Sublease); (b) time periods subsequent to the
expiration or termination of the Sublease Term (except as otherwise provided in
the Sublease); and (c) Sublessor's repair, maintenance and replacement
obligations under the Parking Lease (except the obligation to maintain, repair
and replace the Common Elements pursuant to Section 10.3 of the Parking Lease).
The costs to Sublessee for use of parking spaces within the Parking Deck, and
the manner and timing of payment shall be as determined between Sublessee and
the City, and Sublessor shall have no liability or responsibility therefor.

        

Notwithstanding the other provisions of the Sublease, Sublessee shall have the
right to accelerate the effective date of the assignment of the Parking Lease in
the event that Sublessee is unable to secure adequate parking within the Parking
Deck directly from the City sufficient to serve Sublessee's parking needs prior
to the Final Delivery Date.

  

7.        

  

Joint and Reciprocal

Easement and Other

        

Appurtenant Agreements

  

In connection with Sublessee's sublease of the Premises, Sublessor has assigned
to Sublessee, and Sublessee has assumed from Sublessor, from and after the Final
Delivery Date (or such earlier date as the Parking Lease is assigned to
Sublessee pursuant to the Sublease), for the duration of the Sublease Term,
Sublessor's rights, duties and obligations under (i) the Joint and Reciprocal
Easement and (ii) the Other Appurtenant Agreements, all as more particularly
described in the Sublease.

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

  

8.        

  

Edison Declaration:

  

In connection with Sublessee's sublease of the Subleased Premises, PESC has
assigned to Sublessee, and Sublessee has assumed from PESC, for the duration of
the Sublease Term, PESC's rights, duties and obligations under the Edison
Declaration. Notwithstanding the foregoing, Sublessee agrees that PESC shall
have the right to act as one of the Sublessee members of the Design Review
Committee under the Edison Declaration for the duration of the Sublease Term. If
the total number of members of the Design Review Committee under the Edison
Declaration is increased above three (3) (as contemplated and permitted in the
Edison Declaration), thus allowing Sublessee to increase its representation on
the Design Review Committee, PESC shall, in such event, have the right to
reasonably approve any new member that Sublessee seeks to appoint to the Design
Review Committee. The Parties agree to execute and deliver such further
documents as may be reasonably necessary to put the counterparties to the Edison
Declaration on notice of the foregoing assignment.

This Memorandum may be executed in any number of counterparts, each of which
shall constitute an original and all of which, when taken together, shall
constitute one instrument.

[Signature pages attached hereto.]

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

IN WITNESS WHEREOF, the parties have executed this Memorandum as of the date
first above written.

 

SUBLESSOR:  

CAROLINA POWER & LIGHT COMPANY

d/b/a PROGRESS ENERGY CAROLINAS, INC.

  By:                                                                    
                    Name:                                          
                                          Title:                          
                                                               

STATE OF                                                              

COUNTY OF                                                          

I certify that the following person(s) personally appeared before me this day,
and

            ¨

   I have personal knowledge of the identity of the principal(s)

            ¨

  

I have seen satisfactory evidence of the principal’s identity, by a current
state or federal identification with the principal’s photograph in the form of a
                                         
                                                        

            ¨

   A credible witness has sworn to the identity of the principal(s);

each acknowledging to me that he or she voluntarily signed the foregoing
document for the purpose stated therein and in the capacity indicated:
                                        
                                                             

[insert name of person signing]

Date:                                                              

    

 

      

                                                                       
  , Notary Public

       (print name)     (official seal)   My commission expires:     

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

PESC:     PROGRESS ENERGY SERVICES COMPANY, LLC   By:                          
                                                              Name:
                                         
                                          Title:                          
                                                               

STATE OF                                                              

COUNTY OF                                                          

I certify that the following person(s) personally appeared before me this day,
and

            ¨

   I have personal knowledge of the identity of the principal(s)

            ¨

  

I have seen satisfactory evidence of the principal’s identity, by a current
state or federal identification with the principal’s photograph in the form of a
                                         
                                                        

            ¨

   A credible witness has sworn to the identity of the principal(s);

each acknowledging to me that he or she voluntarily signed the foregoing
document for the purpose stated therein and in the capacity indicated:
                                         
                                                            

[insert name of person signing]

Date:                                                              

     

 

       

                                                                  ,

  Notary Public         (print name)     (official seal)    My commission
expires:     

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

SUBLESSEE: RED HAT, INC.   By:                          
                                                                         
Name:                                                                   
                             Title:                         
                                                                    

STATE OF                                                              

COUNTY OF                                                          

I certify that the following person(s) personally appeared before me this day,
and

            ¨

   I have personal knowledge of the identity of the principal(s)

            ¨

  

I have seen satisfactory evidence of the principal’s identity, by a current
state or federal identification with the principal’s photograph in the form of a
                                         
                                                        

            ¨

   A credible witness has sworn to the identity of the principal(s);

each acknowledging to me that he or she voluntarily signed the foregoing
document for the purpose stated therein and in the capacity indicated:
                                         
                                                            

[insert name of person signing]

Date:                                                              

    

 

                                                                             ,  

  Notary Public

       (print name)     (official seal)   

My commission expires:

 

 

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

EXHIBIT A

LEGAL DESCRIPTION

Progress Energy Downtown Development

Office Property

Lying and being in Raleigh Township, Wake County, North Carolina and more
particularly described as follows:

BEGINNING at NCGS Monument “PERNEW”, NC Grid Coordinates (NAD:83) of N:
225264.996 Meters and E: 642617.839 Meters; thence South 19°42’47” West
1815.4296 feet to an existing P.K. nail in the Western right-of-way of S. Blount
Street, and the Southern right-of-way of E. Davie Street; Thence with the
Western right-of-way of S. Blount Street, S 02°13’57” W 210.00 feet to a P.K
Set; Thence with The City of Raleigh property as recorded in Deed Book 8253 Page
299, Deed Book 8231 Page 1759, and Deed Book 8214, Page 2408, North 87°46’03”
West 164.08 feet to a Survey Nail Set the POINT AND PLACE OF BEGINNING.

Thence from the POINT OF BEGINNING, with The City of Raleigh property line as
recorded in Deed Book 8253 Page 299, Deed Book 8231 Page 1759, and Deed Book
8214, Page 2408, the next three calls, North 87°46’03” West 45.92 feet to a 1/2”
Iron Pipe Found; Thence North 02°13’57” East 15.00 feet to a Nail; Thence North
87°46’03” West, 210.00 feet to a Nail in the Eastern right-of-way line of S.
Wilmington Street; Thence with said right-of-way, North 02°13’57” East 195.00
feet to a Point in the Southern right-of-way line of E. Davie Street; Thence
with said E. Davie Street right-of-way line, South 87°46’03” East 384.00 feet to
a Lead Plug and Tack, Set; Thence a new line, running parallel to S. Blount
Street, South 02°13’57” West 188.93 feet to a Survey Nail Set; Thence a new line
North 87°46’03 West 128.08 feet to a Survey Nail Set; Thence a new line, South
02°13’57” West 21.07 feet to a Survey Nail Set in the Northern property line of
The City of Raleigh, the POINT AND PLACE OF BEGINNING.

CONTAINING: 74,791 square feet or 1.71697 acres of land, more or less.

TOGETHER WITH: A Temporary Construction Easement, said easement being described
as follows; from said POINT OF BEGINNING, with The City of Raleigh property line
as recorded in Deed Book 8253 Page 299, Deed Book 8231 Page 1759, and Deed Book
8214, Page 2408, North 87°46’03” West 164.08 feet to a point in the new
residential/ office line as described above, the new point of beginning; thence
continuing with said property line North 87°46’03’West 20.00 feet to a point;
Thence running parallel to S. Blount Street North 02°13’57” East 41.07 feet to a
point; Thence South 87°46’03” East 128.08 feet to a point; Thence North
02°13’57” East 168.93 feet, to the South right-of-way of E. Davie Street; Thence
with the right-of-way of E. Davie Street South 87°46’03” East 20.00 feet to a
point; thence running with the line dividing the office space from the
residential area, for the next three calls, a new line South 02°13’57” East
188.93 feet to a point; thence North 87°46’03” West 128.08 feet to a point;
Thence South 02°13’57” West 21.07 feet to the new point of beginning: containing
6,761 square feet or 0.15521 acres of land, more or less.

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

EXHIBIT B

AGREEMENT OF RESIGNATION AND ASSUMPTION, dated as of October 1, 2006 by and
among JPMORGAN CHASE BANK, NATIONAL ASSOCIATION (the “Resigning Trustee”) and
THE BANK OF NEW YORK TRUST COMPANY, N.A. (the “Successor Trustee”).

RECITALS:

WHEREAS, pursuant to the Purchase and Assumption Agreement dated as of April 7,
2006 (the “Purchase Agreement”) by and between The Bank of New York Company,
Inc. (“BNY”) and JPMorgan Chase & Co. (“JPM”) caused Resigning Trustee to
transfer to Successor Trustee its rights, duties and obligations as trustee
under various Agreements listed on Schedule A attached thereto (the
“Agreements”);

WHEREAS, Resigning Trustee and Successor Trustee desire to enter into this
Agreement of Resignation and Assumption to evidence the resignation by Resigning
Trustee and the assumption by Successor Trustee, as applicable to the
Agreements;

NOW, THEREFORE, Resigning Trustee and Successor Trustee, for and in
consideration of the premises and of other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, hereby consent and
agree as follows:

1.        Resignation. Resigning Trustee hereby assigns, transfers, delivers and
confirms to Successor Trustee all right, title and interest of Resigning Trustee
in and to each of the Agreements and all the rights, powers and trusts of the
Resigning Trustee, as trustee or otherwise, under each of the Agreements.

2.        Assumption. Successor Trustee hereby assumes all right, title and
interest of Resigning Trustee, as applicable, in and to the trust under each of
the Agreements, and all rights, powers and trusts of Resigning Trustee, as
trustee or otherwise, under each of the Agreements.

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

3.        Effective Date. This Agreement and resignation, and assumption
effected hereby shall be effective as of the opening of business on October 1,
2006.

4.        Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of New York

5.        Counterparts. This Agreement may be executed in any number of
counterparts each of which shall be an original, but such counterparts shall
together constitute but one and the same instrument.

6.         Purchase Agreement. This Agreement is made in connection with and is
subject to the terms and conditions of the Purchase Agreement and the Assignment
and Assumption Agreement executed and delivered in connection therewith.

IN WITNESS WHEREOF, the parties hereto have caused this Agreement of Resignation
and Assumption to be duly executed and acknowledged and their respective seals
to be affixed hereunto and duly attested all as of the day and year first above
written.

 

RESIGNING TRUSTEE: JPMORGAN CHASE BANK, NATIONAL ASSOCIATION By:    /s/ Francis
J. Grippo   Name:   Francis J. Grippo   Title:   Vice President SUCCESSOR
TRUSTEE THE BANK OF NEW YORK TRUST COMPANY, N.A. By:    /s/ Lila R. Garlin  
Name:   Lila R. Garlin   Title:   Vice President

 

- 2 -

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STATE OF NEW YORK          )

                                                    )    ss.:

COUNTY OF NEW YORK      )

On the 20th day of December in the year 2007 before me, the undersigned,
personally appeared Francis J. Grippo, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

/s/ [ILLEGIBLE]

Notary Public

LINDA D’ALESSANDRO

NOTARY PUBLIC-STATE OF NEW YORK

No. 01DA6115119

Qualified In Suffolk County

My Commission Expires August 30, 2008

STATE OF NEW YORK          )

                                                    )    ss.:

COUNTY OF NEW YORK      )

On the              day of November in the year 2007 before me, the undersigned,
personally appeared                                         , personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her capacity, and that by his/her signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

 

 

Notary Public

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

STATE OF NEW YORK          )

                                                    )    ss.:

COUNTY OF NEW YORK      )

On the              day of November in the year 2007 before me, the undersigned,
personally appeared                                         , personally known
to me or proved to me on the basis of satisfactory evidence to be the individual
whose name is subscribed to the within instrument and acknowledged to me that
he/she executed the same in his/her capacity, and that by his/her signature on
the instrument, the individual, or the person upon behalf of which the
individual acted, executed the instrument.

 

 

Notary Public

STATE OF TEXAS                   )

                                                    )    ss.:

COUNTY OF NORRIS             )

On the 11th day of January in the year 2008 before me, the undersigned,
personally appeared Lila R. Garlin, personally known to me or proved to me on
the basis of satisfactory evidence to be the individual whose name is subscribed
to the within instrument and acknowledged to me that he/she executed the same in
his/her capacity, and that by his/her signature on the instrument, the
individual, or the person upon behalf of which the individual acted, executed
the instrument.

 

/s/ Cecilia A. Garcia

Notary Public

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