EXHIBIT 10.1
 
STATE OF NORTH CAROLINA

ORANGE COUNTY
LEASE MODIFICATION AGREEMENT NO. 1

THIS LEASE MODIFICATION AGREEMENT NO. 1 (this “Agreement”)  is made and entered
into as of this 16th day of  February, 2009 (the “Execution Date”), by and
between The Exchange at Meadowmont LLC, a North Carolina limited liability
company  (“Landlord”), and Pozen, Inc., an Delaware corporation, authorized to
conduct business in the State of North Carolina (“Tenant”).

WITNESSETH:

WHEREAS, Landlord and Tenant entered into that certain Lease Agreement dated
November 21, 2001 (the “Lease”), pursuant to which Tenant agreed to lease from
Landlord approximately 17,009 square feet of space (the “Leased Premises”)
contained in Suite 400 in the building known as Exchange West and located at
1414 Raleigh Road, Chapel Hill, North Carolina  27517 (the “Building”).  (The
Lease is incorporated herein by reference in its entirety.  Any capitalized term
used and not otherwise defined herein shall have the meaning ascribed to it in
the Lease.); and

WHEREAS, the current Expiration Date of the Lease is February 28, 2010; and

WHEREAS, Exhibit G of the Lease (Renewal Options) sets forth two (2) options to
renew the Term of the Lease for a period of either three (3) or five (5) years,
at Tenant’s discretion, on the terms and conditions set forth therein; and

WHEREAS, the Lease provides for a separating Base Operating Expense Factor and
Real Estate Tax Stop and the parties wish to combine the factors and include the
Tax Stop (and tax related expenses) with the Operating Expense Factor and in the
Operating Expenses; and

WHEREAS, Exhibit H of the Lease (First Offer Rights) sets forth two (2) separate
options for Tenant to lease additional space in the Building; and

WHEREAS Landlord and Tenant desire to renew the Term of the Lease for five (5)
years and seven (7) months and make certain other modifications to the Lease,
upon the terms and conditions contained herein.

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

 
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1.           Renewal of Term/Basic Lease Provisions.  Effective as of the
Execution Date, the Lease is hereby renewed for a period of five (5) years and
seven (7) months, so that the revised Expiration Date of the Lease shall be
September 30, 2015.  The time period from March 1, 2010, through September 30,
2015, is hereby deemed to be the “Renewal Term”.  Therefore, effective as of the
commencement of the Renewal Term (i.e., March 1, 2010) or the Execution Date, as
applicable, Section 2.01 of the Lease is hereby amended as follows:

A.  
Effective as of the Execution Date, Subsection 2.01(d) of the Lease (Base Rent)
is hereby amended as follows:

(i)  
Monthly Base Rent during the Renewal Term will be changed to equal Twenty-six
Dollars and Seventy-three Cents ($26.73) per square foot contained in the Leased
Premises, per annum;

(ii)  
Monthly Base Rent is hereby abated for months one (1) through six (6) of the
Renewal Term and month 37 of the Renewal Term; and

(iii)  
Monthly Base Rent shall be escalated by two percent (2.0%) increases each March
1st throughout the Renewal Term.  Therefore, effective as of the Execution Date,
the Lease is hereby amended by modifying the Base Rent chart currently set forth
in Subsection 2.01(d) of the Lease to the following:

Date(s)
Price Per Square Foot, per annum (rounded)
Square Feet
Annual (or for time period noted) Base Rent
Monthly Base Rent
3/1/08 through 2/28/09
$23.71
17,009
$403,207.44
$33,600.62
3/1/09 through 2/28/10
$24.21
17,009
$411,859.32
$34,321.61
3/1/10 through 8/31/10
$0.00
($26.73/SF Base
Rent abated)
17,009
$0.00
($26.73/SF Base
Rent abated for 6 months)
$0.00
($26.73/SF Base
Rent abated)
9/1/10 through 2/28/11
$26.73
17,009
$227,325.30
(for 6 months)
$37,887.55
3/1/11 through 2/29/12
$27.26
17,009
$463,743.60
$38,645.30
3/1/12 through 2/28/13
$27.81
17,009
$473,018.52
$39,418.21
3/1/13 through 3/31/13
$0.00
($27.81/SF Base
Rent abated)
17,009
$0.00
($27.81/SF Base
Rent abated 1 month)
$0.00
($27.81/SF Base
Rent abated)
4/1/13 through 2/28/14
$28.37
17,009
$442,272.27
(for 11 months)
$40,206.57
3/1/14 through 2/28/15
$28.93
17,009
$492,128.40
$41,010.70
3/1/15 through 9/30/15
$29.51
17,009
$292,816.37
(for 7 months)
$41,830.91

Tenant shall also continue to be responsible for Additional Rent payments during
the Renewal Term pursuant to Article 4 of the Lease; and

 
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B.
(i)
Effective as of the Execution Date, Subsection 2.01(e) of the Lease  is hereby
amended by changing the Base Operating Expense Factor from  “$4.75” to that of
“$6.75” and deleting the reference to the “Base Real Estate Tax Stop”;   and

(ii)           Effective as of the commencement of the Renewal Term, Subsection
2.01(e) of the Lease is hereby amended by changing the Base Operating Expense
Factor from  “$6.75” to that of “$8.75”; and

 
C.
Effective as of the Execution Date, Subsection 2.01(g) of the Lease (Term) is
hereby amended to reflect the addition of the Renewal Term to the Term of the
Lease by (i) changing the number “8” next to the word “Year(s)” to the number
“13”, and (ii) changing the number “0” next to the word “Month(s)” to the number
“7”; and

 
D.
Effective as of the Execution Date, Subsection 2.01(h) of the Lease (Expiration
Date) is hereby amended to reflect the Renewal Term by changing the current
Expiration Date of “February 28, 2010”, to that of “September 30, 2015”.

2.           Operating Expense Adjustment.  Landlord and Tenant specifically
acknowledge and agree that, effective as of the Execution Date, the Base
Operating Expense Factor shall include the Base Real Estate Tax
Stop.  Therefore, all references in the Lease to the “Operating Expense and Real
Estate Tax Adjustment”, including those in Sections 4.03 and 4.04, shall change
to the “Operating Expense Adjustment”.  As a result of the change the definition
for Operating Expenses shall include real estate taxes that were formerly
provided for in the separate Real Estate Tax adjustment.

4.           Security for the Lease.  Effective as of the commencement of the
Renewal Term, Section 4.06 (Security for the Lease) is hereby amended by
reducing the Letter of Credit during the Renewal Term to equal $42,000.00, and
the chart set forth in Section 4.06 of the Lease is amended accordingly.

5.           Refurbishment Fee.  Landlord and Tenant specifically acknowledge
and agree that, effective prior to the commencement of the Renewal Term, but not
earlier than December 1, 2009, Landlord shall provide Tenant with an allowance
in the amount of $51,027.00 to refurbish the Leased Premises pursuant to the
terms of the Lease, and the Lease is hereby amended accordingly.

6.           Renewal Option.  Effective as of the Execution Date, Exhibit G of
the Lease is hereby amended by deleting the first Renewal Option set forth in
section “A” therein so that the Tenant shall have one (1) remaining option to
renew the Term of the Lease, as set forth in Section “B” of Exhibit G to the
Lease, except that Tenant’s notice to Landlord to exercise the Second Renewal
Option shall be reduced to seven (7) months.

7.           First Offer Rights.  In regards to the First Offer Rights provided
in Exhibit H of the Lease, Landlord and Tenant specifically acknowledge and
agree that:
(i)  
the time frame for Tenant to exercise the Second First Offer Right has expired
so the Second First Offer Right is no longer of any force or effect,

(ii)  
the remaining First Offer Right shall be amended as follows:

 
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a.  
paragraph A of the First Offer Right is hereby amended to provide that Tenant
has the right to exercise the First Offer Right anytime during the Term, as it
may be extended, and not just during the initial Term;

b.  
paragraph A of the First Offer Right is hereby amended to reflect that the
defined term the “Space” shall also include the 11,601 square feet of space
contained in Suite 300 of the Building, as shown on Exhibit H-1 attached hereto;
and

c.  
paragraph A1 of the First Offer Right shall be modified by deleting the language
currently therein and inserting the following in lieu thereof:

Prior to Landlord leasing the Space to any third party, Landlord shall provide
Tenant with notice of the availability of the Space (“Landlord’s Written
Offer”).  Tenant hereby acknowledges that Landlord’s Written Offer may, among
other terms, contain a requirement for Tenant’s prompt occupancy of the
Space.  The terms for the lease of the Space shall be as provided for in this
Exhibit.

 and the Lease is hereby amended accordingly.  Notwithstanding the foregoing,
Landlord and Tenant specifically acknowledge and agree that the First Offer
Right with respect to the Space on the third floor of the Building is subject to
any and all prior existing rights of third parties (i.e., Affiliated Engineers,
East, P.C. and Higgins, Frankstone, Graves & Morris, P.A.) and Landlord's hereby
reserved right to continue to lease (by lease amendment, new lease agreement or
other written agreement) the Space contained on the third floor of the Building
to the tenant, assignee or subtenant occupying the Space contained on the third
floor of the Building, whether or not pursuant to a written option to renew or
extend a lease.

8.           Brokerage/Indemnification.  Landlord and Tenant each represent to
the other that they, respectively, have had no dealings with any real estate
broker or agent in connection with the negotiation of this Agreement except for
Capital Associates Management, LLC, Landlord’s broker, and Jones Lang LaSalle
Americas, Inc. Tenant’s broker, and that they, respectively, know of no other
real estate broker or agent who is entitled to a commission or finder’s fee in
connection with this Agreement.  Each party shall indemnify, protect, defend and
hold harmless the other party against all claims, demands, losses, liabilities,
lawsuits, judgments, and costs and expenses (including, but not limited to,
reasonable attorneys’ fees) for any leasing commission, finder’s fee or
equivalent compensation alleged to be owed on account of dealings with any other
than the above-stated real estate brokers by the party from whom indemnification
is sought.  Landlord shall pay the commissions or fees due with respect to the
Renewal Term to the above-stated Landlord’s broker.  Landlord’s broker shall
then pay Tenant’s broker.

9.           Affirmation of Lease Terms.  Except as hereinabove modified, the
original terms and conditions of the Lease shall remain in full force and
effect.

 
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10.           Binding Agreement.  Upon execution by Tenant, this Agreement shall
be binding upon Tenant, its legal representatives and successors, and, to the
extent assignment may be approved by Landlord hereunder, Tenant’s assigns.  Upon
execution by Landlord, this Agreement shall be binding upon Landlord, its legal
representatives, successors and assigns.  This Agreement shall inure to the
benefit of Landlord and Tenant, and their representatives, successors and
permitted assigns.

11.           Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which taken
together shall constitute one and the same instrument.

IN WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
caused this Agreement to be executed by their respective duly authorized
representatives this the day and year first above written.

LANDLORD:
 
The Exchange at Meadowmont LLC, a North Carolina limited liability company
 
By:
Capital Associates Management, LLC, a North Carolina limited liability company,
Manager
   
By:
 /s/ Huge D. Little, Manager
 
   
Hugh D. Little, Manager

TENANT:
 
Pozen Inc., a Delaware corporation
   By:  /s/ William L. Hodges
 
   Name:  William L. Hodges
 
   Title:  Chief Financial Officer
 

 
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