exv10w18






Exhibit 10.18




09/27/06




OFFICE LEASE




     THIS OFFICE LEASE is executed this 29th day of September, 2006 by and
between DUKE REALTY LIMITED PARTNERSHIP, an Indiana Limited partnership doing business in North
Carolina as Duke Realty of Indiana Limited Partnership (“Landlord”), and KROY BUILDING PRODUCTS,
INC., a Delaware corporation (“Tenant”).



ARTICLE 1 — LEASE OF PREMISES




     Section 1.01. Basic Lease Provisions and Definitions.



     (a) Leased Premises (shown outlined in Exhibit A hereto): Suite 250 of the building
(the “Building”) located at 6501 Weston Parkway, Cary, North Carolina 27513, within Weston Parkway
(the “Park”).



     (b) Rentable Area: approximately 7,224 rentable square feet. The Rentable Area includes the
square footage within the Leased Premises plus a pro rata portion of the square footage of the
common areas within the Building, as reasonably determined by Landlord.



     (c) Tenant’s Proportionate Share: 7.69%.



     (d) Minimum Annual Rent:




	 	 	 	 	 
	12/15/2006 — 06/30/2007
	 	$	0.00	*
	07/01/2007 — 12/31/2007
	 	$	65,016.00	**
	01/01/2008 — 12/31/2008
	 	$	133,282.80	 
	01/01/2009 — 12/31/2009
	 	$	136,614.87	 
	01/01/2010 — 12/31/2010
	 	$	140,030.24	 
	01/01/2011 — 12/31/2011
	 	$	143,531.00	 
	01/01/2012 — 12/31/2012
	 	$	147,119.27	 
	01/01/2013 — 12/31/2014
	 	$	150,797.25	 








			
	*	 	Represents six and 1/2 months
	 
	**	 	represents six months






     (e) Monthly Rental Installments:




	 	 	 	 	 
	Months 1 — 6

	 	$	0.00	 
	Months 7 — 12

	 	$	10,836.00	 
	Months
13 — 24

	 	$	11,106.90	 
	Months 25 — 36

	 	$	11,384.57	 
	Months 37 — 48

	 	$	11,669.19	 
	Months 49 — 60

	 	$	11,960.92	 
	Months 61 — 72

	 	$	12,259.94	 
	Months 73 — 84

	 	$	12,566.44	 






     (f) Base
Year: 2007.



     (g) Commencement Date: December 15, 2006.



     (h) Lease Term: Seven (7) years.



     (i) Security Deposit: $10,836.00.



     (j) Broker(s): GVA Advantis representing Tenant.



     (k) Permitted Use: General office purposes.



     (1) Address for notices and payments are as follows:



	 	 	 
	Landlord:

	 	Duke Realty Limited Partnership
	 

	 	c/o Duke Realty Corporation
	 

	 	Attn.: Raleigh Market — Vice President, Property Management
	 

	 	1800 Perimeter Park Drive, Suite 200
	 

	 	Morrisville, North Carolina 27560
	 
	 	 
	With a copy to:

	 	 Duke Realty Limited Partnership
	 

	 	c/o Duke Realty Corporation






 









 






	 	 	 
	 

	 	Attn: Elizabeth C. Belden, Vice President/Corporate Counsel
	 

	 	3950 Shackleford Road, Suite 300
	 

	 	Duluth, Georgia 30096-8268
	 
	 	 
	With
Payments to:

	 	Duke Realty Limited Partnership
	 

	 	75 Remittance Drive, Suite 3205
	 

	 	Chicago, IL 60675-3205
	 
	 	 







	 	 	 
	Tenant (prior to occupancy):

	 	Mr. Matt Fangman
	 

	 	Vice President of Finance
	 

	 	Kroy Building Products, Inc.
	 

	 	1857 Evans Road
	 

	 	Cary, NC 27513
	 
	 	 
	Tenant (following occupancy):

	 	6501 Weston Parkway, Suite 250
	 

	 	Cary, North Carolina 27513






     (m) Guarantors): None.



EXHIBITS




	 	 	 
	Exhibit A

	 	— Leased Premises
	Exhibit B

	 	— Tenant Improvements
	Exhibit B-l

	 	— Scope of Work
	Exhibit C

	 	— Letter of Understanding
	Exhibit D

	 	— Rules and Regulations
	Exhibit E

	 	— Refusal Space






     Section 1.02. Lease of Premises. Landlord hereby leases to Tenant and Tenant
hereby leases from Landlord the Leased Premises, under the terms and conditions herein, together
with a non-exclusive right, in common with others, to use the following (collectively, the “Common
Areas”): the areas of the Building and the underlying land and improvements thereto that are
designed for use in common by all tenants of the Building and their respective employees, agents,
customers, invitees and others.



ARTICLE 2 — TERM AND POSSESSION




     Section 2.01. Term. The Commencement Date and Lease Term shall be as set forth
in Sections 1.01(g) and 1.01(h) above.



     Section 2.02. Construction of Tenant Improvements. Landlord shall construct
and install all leasehold improvements to the Leased Premises (collectively, the “Tenant
Improvements”) in accordance with Exhibit B attached hereto and made a part hereof.



     Section 2.03. Surrender of the Premises. Upon the expiration or earlier
termination of this Lease, Tenant shall, at its sole cost and expense, immediately (a) surrender
the Leased Premises to Landlord in broom-clean condition and in good order, condition and repair,
(b) remove from the Leased Premises (i) Tenant’s Property (as defined in Section 8.01
below), (ii) all data and communications wiring and cabling (including above ceiling, below raised
floors and behind walls) that is placed on the Leased Premises by Tenant during the term of this
Lease or placed on the Leased Premises on Tenant’s behalf by Landlord in preparing the Leased
Premises for possession by Tenant at the commencement of this Lease (and not including any other
preexisting wiring and/or cabling), and (iii) any alterations required to be removed pursuant to
Section 7.03 below, and (c) repair any damage caused by any such removal and restore the
Leased Premises to the condition existing upon the Commencement Date, reasonable wear and tear
excepted. All of Tenant’s Property that is not removed within ten (10) days following Landlord’s
written demand therefore shall be conclusively deemed to have been abandoned and Landlord shall be
entitled to dispose of such property at Tenant’s cost without incurring any liability to Tenant.
This Section 2.03 shall survive the expiration or any earlier termination of this Lease.



     Section 2.04. Holding Over. If Tenant retains possession of the Leased
Premises after the expiration or earlier termination of this Lease, Tenant shall be a tenant at
sufferance at one hundred fifty percent (150%) of the Monthly Rental Installments and Annual Rental
Adjustment (as hereinafter defined) for the Leased Premises in effect upon the date of such
expiration or earlier termination, and otherwise upon the terms, covenants and conditions herein
specified, so far as applicable. Acceptance by Landlord of rent after such expiration or earlier
termination shall not result in a renewal of this Lease, nor shall such acceptance create a
month-to-month tenancy. In the event a month-to-month tenancy is created by operation of law,
either party shall have the right to terminate such month-to-month tenancy








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upon thirty (30) days’ prior written notice to the other, whether or not said notice is given on
the rent paying date. This Section 2.04 shall in no way constitute a consent by Landlord to
any holding over by Tenant upon the expiration or earlier termination of this Lease, nor limit
Landlord’s remedies in such event.



ARTICLE
3 — RENT




     Section 3.01. Base Rent. Tenant shall pay to Landlord the Minimum Annual Rent
in the Monthly Rental Installments in advance, without demand, deduction or offset, on the
Commencement Date and on or before the first day of each and every calendar month thereafter during
the Lease Term. The Monthly Rental Installments for partial calendar months shall be prorated.
Tenant shall be responsible for delivering the Monthly Rental Installments to the payment address
set forth in Section1.01(1) above in accordance with this Section 3.01.



     Section 3.02. Annual Rental Adjustment Definitions.



     (a) “Annual Rental Adjustment” shall mean the amount of Tenant’s Proportionate Share
of Operating Expenses for a particular calendar year.



     (b) “Operating Expenses” shall mean the amount of all of Landlord’s costs and expenses
paid or incurred in operating, repairing, replacing and maintaining the Building and the Common
Areas in good condition and repair for a particular calendar year (including all additional costs
and expenses that Landlord reasonably determines that it would have paid or incurred during such
year if the Building had been fully occupied), including by way of illustration and not limitation,
the following: all Real Estate Taxes (as hereinafter defined), insurance premiums and deductibles;
water, sewer, electrical and other utility charges other than the separately billed electrical and
other charges paid by Tenant as provided in this Lease (or other tenants in the Building); service
and other charges incurred in the repair, replacement, operation and maintenance of the elevators
and the heating, ventilation and air-conditioning system; costs associated with providing fitness
facilities, if any; cleaning and other janitorial services; tools and supplies; repair costs;
landscape maintenance costs; security patrols; license, permit and inspection fees; management fees
not to exceed four percent (4%) of gross receipts from the Building; administrative fees; supplies,
costs, wages and related employee benefits payable for the management, maintenance and operation of
the Building; maintenance, repair and replacement of the driveways, parking and sidewalk areas
(including snow and ice removal), landscaped areas, and lighting; and maintenance and repair costs,
dues, fees and assessments incurred under any covenants or charged by any owners association. The
cost of any Operating Expenses that are capital in nature shall be amortized over the useful life
of the improvement (as reasonably determined by Landlord), and only the amortized portion shall be
included in Operating Expenses.



     Operating Expenses shall not include the following (whether incurred in the current year
or amortized):




	 	1.	 	Leasing commissions.
	 
	 	2.	 	The cost of tenant finish improvements provided solely for the benefit of other
tenants or proposed tenants in the Building.
	 
	 	3.	 	Costs of correcting building code violations which violations were in existence
on the Commencement Date.
	 
	 	4.	 	Depreciation on the Building.
	 
	 	5.	 	The cost of services separately charged to and paid by another tenant in the Building.
	 
	 	6.	 	Interest payments and financing costs associated with Building financing.
	 
	 	7.	 	Legal fees associated with the preparation, interpretation and/or enforcement of leases.
	 
	 	8.	 	Repairs and replacements for which and to the extent that Landlord has been
reimbursed by insurance and/or paid pursuant to warranties.
	 
	 	9.	 	Advertising and promotional expenses.
	 
	 	10.	 	Costs representing amounts paid to an affiliate of Landlord for services or
materials which are in excess of the amounts which would have been paid in the absence
of such relationship.





     (c) “Tenant’s Proportionate Share of Operating Expenses” shall mean an amount equal to
the remainder of (i) the product of Tenant’s Proportionate Share times the Operating Expenses for a
particular year less (ii) Tenant’s Proportionate Share times the Operating Expenses for the Base
Year. The parties hereto acknowledge that there will be no Additional Rent payment attributable to
an Annual Rental Adjustment prior to calendar year 2008.



     (d) “Real Estate Taxes” shall mean any form of real estate tax or assessment or
service payments in lieu thereof, and any license fee, commercial rental tax, improvement bond or
other similar charge or tax (other than inheritance, personal income or estate taxes) imposed upon
the Building or








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Common Areas, or against Landlord’s business of leasing the Building, by any authority having
the power to so charge or tax, together with costs and expenses of contesting the validity or
amount of the Real Estate Taxes.




     Section 3.03. Payment of Additional Rent.



     (a) Any amount required to be paid by Tenant hereunder (in addition to Minimum Annual
Rent) and any charges or expenses incurred by Landlord on behalf of Tenant under the terms
of this Lease shall be considered “Additional Rent” payable in the same manner and upon the
same terms and conditions as the Minimum Annual Rent reserved hereunder, except as set forth
herein to the contrary. Any failure on the part of Tenant to pay such Additional Rent when
and as the same shall become due shall entitle Landlord to the remedies available to it for
non-payment of Minimum Annual Rent.



     (b) In addition to the Minimum Annual Rent specified in this Lease, commencing with calendar
year 2008, Tenant shall pay to Landlord as Additional Rent for the Leased Premises, in each
remaining calendar year or partial calendar year during the Lease Term (beginning with calendar
year 2008), an amount equal to the Annual Rental Adjustment for such calendar year. Landlord shall
estimate the Annual Rental Adjustment annually, and written notice thereof shall be given to Tenant
prior to the beginning of each calendar year. Tenant shall pay to Landlord each month, at the same
time the Monthly Rental Installment is due, an amount equal to one-twelfth (1/12) of the estimated
Annual Rental Adjustment. Tenant shall be responsible for delivering the Additional Rent to the
payment address set forth in Section 1.01(1) above in accordance with this Section
3.03. If Operating Expenses increase during a calendar year, Landlord may increase the
estimated Annual Rental Adjustment during such year by giving Tenant 30 days advance written notice
to that effect, and thereafter Tenant shall pay to Landlord, in each of the remaining months of
such year, an amount equal to the amount of such increase in the estimated Annual Rental Adjustment
divided by the number of months remaining in such year. Within a reasonable time after the end of
each calendar year, Landlord shall prepare and deliver to Tenant a statement showing the actual
Annual Rental Adjustment. Within thirty (30) days after receipt of the aforementioned statement,
Tenant shall pay to Landlord, or Landlord shall credit against the next rent payment or payments
due from Tenant, as the case may be, the difference between the actual Annual Rental Adjustment for
the preceding calendar year and the estimated amount paid by Tenant during such year. This
Section 3.03 shall survive the expiration or any earlier termination of this Lease.



     Section 3.04. Late Charges. Tenant acknowledges that Landlord shall incur
certain additional unanticipated administrative and legal costs and expenses if Tenant fails to pay
timely any payment required hereunder. Therefore, in addition to the other remedies available to
Landlord hereunder, if any payment required to be paid by Tenant to Landlord hereunder shall become
overdue , such unpaid amount shall bear interest from the due date thereof to the date of payment
at the prime rate of interest, as reported in the Wall Street Journal (the “Prime Rate”) plus six
percent (6%) per annum.



     Section 3.05. Maximum Increase in Operating Expenses. Notwithstanding anything in
this Lease to the contrary, Tenant will be responsible for Tenant’s Proportionate Share of
Real Estate Taxes, insurance premiums, utilities, janitorial services, snow removal,
landscaping, management fees, and charges assessed against the Building pursuant to any
covenants or owner’s association (“Uncontrollable Expenses”), without regard to the level of
increase in any or all of the above in any year or other period of time. Tenant’s obligation
to pay all other Building Operating Expenses that are not Uncontrollable Expenses (herein
“Controllable Expenses”) shall be limited to a six percent (6%) per annum increase over the
amount of the Controllable Expenses for the immediately preceding calendar year, beginning
with the actual Controllable Expenses for the year ending December 31, 2007.



     Section 3.06. Right to Audit. Tenant will be entitled from time to time to
audit and verify the operations of the Building and the related books and records of Landlord to
assure that the Operating Expenses from time to time reported by Landlord are in keeping with the
provisions of this Article. As to any calendar year, any undertaking by Tenant must be initiated
within sixty (60) days of receipt by Tenant of the statement; and absent fraud, intentional
misconduct or gross negligence on Landlord’s part, the Operating Expenses as timely reported by
Landlord for the calendar year will be deemed controlling upon the expiration of Tenant’s audit and
verification rights for such calendar year. In the event of any errors, the appropriate party will
make a correcting payment in full to the other party within thirty (30) days after the
determination and communication to all parties of the amount of such error. Notwithstanding the
foregoing, Tenant shall be prohibited from using any third party audit firm that is paid on a
contingent fee basis. In the event of any errors on the part of Landlord in excess of five percent
(5% ) of Operating Expenses for any calendar year, Landlord will also reimburse Tenant for all
reasonable costs of an audit incurred by Tenant.




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ARTICLE 4 — SECURITY DEPOSIT




     Upon execution and delivery of this Lease by Tenant, Tenant shall deposit the Security Deposit
with Landlord as security for the performance by Tenant of all of Tenant’s obligations contained in
this Lease. In the event of a default by Tenant, Landlord may apply all or any part of the Security
Deposit to cure all or any part of such default; provided, however, that any such application by
Landlord shall not be or be deemed to be an election of remedies by Landlord or considered or
deemed to be liquidated damages. Tenant agrees promptly, upon demand, to deposit such additional
sum with Landlord as may be required to maintain the full amount of the Security Deposit. All sums
held by Landlord pursuant to this Article 4 shall be without interest and may be commingled
by Landlord. At the end of the Lease Term, provided that there is then no uncured default or any
repairs required to be made by Tenant pursuant to Section 2.03 above or Section
7.03 below, Landlord shall return the Security Deposit to Tenant.



ARTICLE 5 — OCCUPANCY AND USE




     Section 5.01. Use. Tenant shall use the Leased Premises for the Permitted Use
and for no other purpose without the prior written consent of Landlord.



     Section 5.02. Covenants of Tenant Regarding Use.



     (a) Tenant shall (i) use and maintain the Leased Premises and conduct its business thereon in
a safe, careful, reputable and lawful manner, (ii) comply with all covenants that encumber the
Building and all laws, rules, regulations, orders, ordinances, directions and requirements of any
governmental authority or agency, now in force or which may hereafter be in force, including,
without limitation, those which shall impose upon Landlord or Tenant any duty with respect to or
triggered by a change in the use or occupation of, or any improvement or alteration to, the Leased
Premises, and (iii) comply with and obey all reasonable directions, rules and regulations of
Landlord, including the Building Rules and Regulations attached hereto as Exhibit D and
made a part hereof, as may be modified from time to time by Landlord on reasonable notice to
Tenant.



     (b) Tenant shall not do or permit anything to be done in or about the Leased Premises that
will in any way cause a nuisance, obstruct or interfere with the rights of other tenants or
occupants of the Building or injure or annoy them. Landlord shall not be responsible to Tenant for
the non-performance by any other tenant or occupant of the Building of any of Landlord’s
directions, rules and regulations, but agrees that any enforcement thereof shall be done uniformly.
Tenant shall not use the Leased Premises, nor allow the Leased Premises to be used, for any purpose
or in any manner that would (i) invalidate any policy of insurance now or hereafter carried by
Landlord on the Building, or (ii) increase the rate of premiums payable on any such insurance
policy unless Tenant reimburses Landlord for any increase in premium charged.



     Section 5.03. Landlord’s Rights Regarding Use. Without limiting any of
Landlord’s rights specified elsewhere in this Lease (a) Landlord shall have the right at any time,
without notice to Tenant, to control, change or otherwise alter the Common Areas in such manner as
it deems necessary or proper so long as such control, change or alteration does not unreasonably
interfere with the use or occupancy by Tenant of the Lease Premises or the Building or Tenant’s
ability to conduct it business therein, and (b) Landlord, its agents, employees and contractors and
any mortgagee of the Building shall have the right to enter any part of the Leased Premises at
reasonable times upon reasonable notice (except in the event of an emergency where no notice shall
be required) for the purposes of (i) examining or inspecting the same (including, without
limitation, testing to confirm Tenant’s compliance with this Lease), (ii) showing the same to
prospective purchasers, mortgagees or tenants during the last nine (9) months of the Lease term and
any time Tenant is in Default hereunder, and (iii) making such repairs, alterations or improvements
to the Leased Premises or the Building as Landlord may deem necessary or desirable. Tenant shall be
entitled to provide an escort at Tenant’s sole discretion. Landlord shall incur no liability to
Tenant for such entry, nor shall such entry constitute an eviction of Tenant or a termination of
this Lease, or entitle Tenant to any abatement of rent therefore; provided such entry or alteration
of the Common Areas does not unreasonably interfere with the use or occupancy by Tenant of the
Leased Premises or the Building or Tenant’s ability to conduct its business therein.



ARTICLE 6 — UTILITIES AND OTHER BUILDING SERVICES




     Section 6.01. Services to be Provided. Provided Tenant is not in default,
Landlord shall furnish to Tenant, except as noted below, the following utilities and other services
to the extent reasonably necessary for Tenant’s use of the Leased Premises for the Permitted Use,
or as may be required by law or directed by governmental authority:



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     (a) Heating, ventilation and air-conditioning between the hours of 8:00 a.m. and 6:00 p.m.
Monday through Friday and 9:00 a.m. to 1:00 p.m. on Saturday of each week except on legal
holidays;



     (b) Electrical current not to exceed four (4) watts per square foot;



     (c) Water in the Common Areas for lavatory and drinking purposes;



     (d) Automatic elevator service;



     (e) Cleaning and janitorial service in the Leased Premises and Common Areas on Monday
through Friday of each week except legal holidays; provided, however, Tenant shall be
responsible for carpet cleaning other than routine vacuuming;



     (f) Washing of windows at intervals reasonably established by Landlord;



     (g) Replacement of all lamps, bulbs, starters and ballasts in Building standard lighting as
required from time to time as a result of normal usage; and



     (h) Maintenance of the Common Areas, including the removal of rubbish, ice and snow.



     Section 6.02. Additional Services.



     (a) If Tenant requests utilities or building services in addition to those identified above,
or if Tenant uses any of the above utilities or services in frequency, scope, quality or quantity
substantially greater than that which Landlord determines is normally required by other tenants in
the Building, then Landlord shall use reasonable efforts to attempt to furnish Tenant with such
additional utilities or services. In the event Landlord is able to and does furnish such additional
utilities or services, the costs thereof (which shall be deemed to mean the cost that Tenant would
have incurred had Tenant contracted directly with the utility company or service provider) shall be
borne by Tenant, who shall reimburse Landlord monthly for the same as Additional Rent. Landlord
shall also have the right to submeter or separately meter the Leased Premises at Tenant’s sole
cost, and Tenant shall pay such utilities based on the submeter or separate meter.



     (b) If any lights, density of staff, machines or equipment used by Tenant in the Leased
Premises materially affect the temperature otherwise maintained by the Building’s air-conditioning
system or generate substantially more heat in the Leased Premises than that which would normally be
generated by other tenants in the Building or by tenants in comparable office buildings, then
Landlord shall give Tenant written notice of said condition. If Tenant has not cured such condition
within thirty (30) days of its receipt of Landlord’s notice, or an extended time period that
Landlord has agreed upon, then Landlord shall have the right to install any machinery or equipment
that Landlord considers reasonably necessary in order to restore the temperature balance between
the Leased Premises and the rest of the Building, including, without limitation, equipment that
modifies the Building’s air-conditioning system. All costs expended by Landlord to install any such
machinery and equipment and any additional costs of operation and maintenance in connection
therewith shall be borne by Tenant, who shall reimburse Landlord for the same as provided in this
Section 6.02.



     Section 6.03. Interruption of Services. Tenant acknowledges and agrees that
any one or more of the utilities or other services identified in Sections 6.01 or
6.02 or otherwise hereunder may be interrupted by reason of accident, emergency or other
causes beyond Landlord’s control, or may be discontinued or diminished temporarily by Landlord or
other persons until certain repairs, alterations or improvements can be made. Landlord shall not be
liable in damages or otherwise for any failure or interruption of any utility or service and no
such failure or interruption shall entitle Tenant to terminate this Lease or withhold sums due
hereunder except as otherwise set forth herein. In the event Landlord is responsible for an
interruption in the supply of utilities as provided herein, and such interruption adversely affects
Tenant’s ability to conduct its business in the Leased Premises for more than three (3) consecutive
business days, Tenant shall be entitled to an abatement of base rental for each day after the third
(3rd) business day during which the interruption continues as its sole remedy for such
interruption.



ARTICLE
7 — REPAIRS, MAINTENANCE AND ALTERATIONS




     Section 7.01. Repair and Maintenance of Building. Landlord shall make all
necessary repairs and replacements to the roof, exterior walls, exterior doors, windows, corridors
and other Common Areas, and Landlord shall keep the Building in a clean and neat condition and use
reasonable efforts to keep all equipment used in common with other tenants in good condition and
repair. The cost of such repairs, replacements and maintenance shall be included in Operating
Expenses to the extent provided in



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Section 3.02; provided however, to the extent any such repairs, replacements or maintenance
are required because of the negligence, misuse or default of Tenant, its employees, agents,
contractors, customers or invitees, Landlord shall make such repairs at Tenant’s sole expense.




     Section 7.02. Repair and Maintenance of Leased Premises. Landlord shall keep
and maintain the Leased Premises in good condition and repair. The cost of such repairs and
maintenance to the Leased Premises shall be included in Operating Expenses; provided however, to
the extent any repairs or maintenance are required in the Leased Premises because of the
negligence, misuse or default of Tenant, its employees, agents, contractors, customers or invitees
or are made at the specific request of Tenant, Landlord shall make such repairs or perform such
maintenance at Tenant’s sole expense. Notwithstanding the above, Tenant shall be solely responsible
for any repair or replacement with respect to Tenant’s Property (as defined in Section 8.01
below) located in the Leased Premises. Nothing in this Article 7 shall obligate Landlord or
Tenant to repair normal wear and tear to any paint, wall covering or carpet in the Leased Premises.



     Section 7.03. Alterations.



     (a) Tenant shall not permit alterations in or to the Leased Premises unless and until Landlord
has approved the plans therefore in writing. As a condition of such approval, Landlord may require
Tenant to remove the alterations and restore the Leased Premises upon termination of this Lease;
otherwise, all such alterations shall at Landlord’s option become a part of the realty and the
property of Landlord, and shall not be removed by Tenant. Tenant shall ensure that all alterations
shall be made in accordance with all applicable laws, regulations and building codes, in a good and
workmanlike manner and of quality equal to or better than the original construction of the
Building. No person shall be entitled to any lien derived through or under Tenant for any labor or
material furnished to the Leased Premises, and nothing in this Lease shall be construed to
constitute Landlord’s consent to the creation of any lien. If any lien is filed against the Leased
Premises for work claimed to have been done for or material claimed to have been furnished to
Tenant, Tenant shall cause such lien to be discharged of record within thirty (30) days after
filing. Tenant shall indemnify Landlord from all costs, losses, expenses and attorneys’ fees in
connection with any construction or alteration and any related lien. Tenant agrees that at
Landlord’s option, Duke Construction Limited Partnership or a subsidiary or affiliate of Landlord,
who shall receive a fee as Landlord’s construction manager or general contractor, shall perform all
work on any alterations to the Leased Premises.



     (b) Notwithstanding anything to the contrary in this Lease or in the Rules and Regulations
attached hereto, Tenant shall have the right to make alterations to the Leased Premises without
obtaining Landlord’s prior written consent provided that (i) such alterations do not exceed Five
Thousand and No/100 Dollars ($5,000.00) in cost in any one instance; (ii) such alterations are
non-structural in nature and do not affect the Building systems; (iii) no permit is required for
such alteration; and (iv) Tenant provides Landlord with prior written notice of its intention to
make such alterations stating in reasonable detail the nature, extent and estimated cost of such
alterations together with the plans and specifications for the same no less than ten (10) days
before the date on which Tenant anticipates commencing construction of the same.



ARTICLE 8 — INDEMNITY AND INSURANCE




     Section 8.01. Release. All of Tenant’s trade fixtures, merchandise, inventory
and all other personal property in or about the Leased Premises, the Building or the Common Areas,
which is deemed to include the trade fixtures, merchandise, inventory and personal property of
others located in or about the Leased Premises or Common Areas at the invitation, direction or
acquiescence (express or implied) of Tenant (all of which property shall be referred to herein,
collectively, as “Tenant’s Property”), shall be and remain at Tenant’s sole risk. Landlord shall
not be liable to Tenant or to any other person for, and Tenant hereby releases Landlord from (a)
any and all liability for theft or damage to Tenant’s Property, and (b) any and all liability for
any injury to Tenant or its employees, agents, contractors, guests and invitees in or about the
Leased Premises, the Building or the Common Areas, except to the extent of personal injury (but not
property loss or damage) caused directly by the negligence or willful misconduct of Landlord, its
agents, employees or contractors. Nothing contained in this Section 8.01 shall limit (or be
deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict
between the provisions of Section 8.06 below and this Section 8.01, the provisions
of Section 8.06 shall prevail. This Section 8.01 shall survive the expiration or
earlier termination of this Lease.



     Section 8.02. Indemnification by Tenant. Tenant shall protect, defend,
indemnify and hold Landlord, its agents, employees and contractors harmless from and against any
and all claims, damages, demands, penalties, costs, liabilities, losses, and expenses (including
reasonable attorneys’ fees and expenses at the trial and appellate levels) to the extent (a)
arising out of or relating to any act, omission,



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negligence, or willful misconduct of Tenant or Tenant’s agents, employees, contractors, customers
or invitees in or about the Leased Premises, the Building or the Common Areas, (b) arising out of
or relating to any of Tenant’s Property, or (c) arising out of any other act or occurrence within
the Leased Premises, in all such cases except to the extent of personal injury (but not property
loss or damage) caused directly by the negligence or willful misconduct of Landlord, its agents,
employees or contractors. Nothing contained in this Section 8.02 shall limit (or be deemed
to limit) the waivers contained in Section 8.06 below. In the event of any conflict between
the provisions of Section 8.06 below and this Section 8.02, the provisions of
Section 8.06 shall prevail. This Section 8.02 shall survive the expiration or
earlier termination of this Lease.




     Section 8.03.
Indemnification by Landlord. Landlord shall protect, defend,
indemnify and hold Tenant, its agents, employees and contractors harmless from and against any and
all claims, damages, demands, penalties, costs, liabilities, losses and expenses (including
reasonable attorneys’ fees and expenses at the trial and appellate levels) to the extent arising
out of or relating to any act, omission, negligence or willful misconduct of Landlord or Landlord’s
agents, employees or contractors. Nothing contained in this Section 8.03 shall limit (or be
deemed to limit) the waivers contained in Section 8.06 below. In the event of any conflict
between the provisions of Section 8.06 below and this Section 8.03, the provisions
of Section 8.06 shall prevail. This Section 8.03 shall survive the expiration or
earlier termination of this Lease.



     Section 8.04. Tenant’s Insurance.



     (a) During the Lease Term (and any period of early entry or occupancy or holding over by
Tenant, if applicable), Tenant shall maintain the following types of insurance, in the
amounts specified
below:



          (i) Liability Insurance. Commercial General Liability Insurance (which
insurance shall not exclude blanket, contractual liability, broad form property damage, personal
injury, or fire damage coverage) covering the Leased Premises and Tenant’s use thereof against
claims for bodily injury or death and property damage, which insurance shall provide coverage on an
occurrence basis with a per occurrence limit of not less than $3,000,000, and with general
aggregate limits of not less than $10,000,000 for each policy year, which limits may be satisfied
by any combination of primary and excess or umbrella per occurrence policies.




          (ii) Property Insurance. Special Form Insurance (which insurance shall not
exclude flood or earthquake) in the amount of the full replacement cost of Tenant’s Property and
betterments (including alterations or additions performed by Tenant pursuant hereto, but excluding
those improvements, if any, made pursuant to Section 2.02 above), which insurance shall
include an agreed amount endorsement waiving coinsurance limitations.




          (iii) Worker’s Compensation Insurance. Worker’s Compensation insurance in
amounts required by applicable law.




          (iv) Business Interruption Insurance. Business Interruption Insurance with limits
not less than an amount equal to one (1) year rent hereunder.




     (b) All insurance required by Tenant hereunder shall (i) be issued by one or more insurance
companies reasonably acceptable to Landlord, licensed to do business in the State in which the
Leased
Premises is located and having an AM Best’s rating of A IX or better, and (ii) provide that
said insurance
shall not be materially changed, canceled or permitted to lapse on less than thirty (30) days’
prior written
notice to Landlord. In addition, Tenant’s insurance shall protect Tenant and Landlord as their
interests
may appear, naming Landlord, Landlord’s managing agent, and any mortgagee requested by
Landlord, as
additional insureds under its commercial general liability policies. On or before the
Commencement
Date (or the date of any earlier entry or occupancy by Tenant), and thereafter, within thirty
(30) days
prior to the expiration of each such policy, Tenant shall furnish Landlord with certificates
of insurance in
the form of ACORD 25 or ACORD 25-S (or other evidence of insurance reasonably acceptable to
Landlord), evidencing all required coverages including primary and non-contributory coverage
offered to
the appropriate additional insureds. If Tenant fails to carry such insurance and furnish
Landlord with
such certificates of insurance, Landlord may obtain such insurance on Tenant’s behalf and
Tenant shall
reimburse Landlord upon demand for the cost thereof as Additional Rent. Landlord reserves the
right
from time to time to require Tenant to obtain higher minimum amounts or different types of
insurance if
it becomes customary for other landlords of similar buildings in the area to require similar
sized tenants
in similar industries to carry insurance of such higher minimum amounts or such different
types.



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     Section 8.05. Landlord’s Insurance. During the Lease Term, Landlord shall
maintain the following types of insurance, in the amounts specified below (the cost of which
shall be included in Operating Expenses):



     (a) Liability Insurance. Commercial General Liability Insurance (which insurance shall
not exclude blanket, contractual liability, broad form property damage, personal injury, or fire
damage coverage) covering the Common Areas against claims for bodily injury or death and property
damage, which insurance shall provide coverage on an occurrence basis with a per occurrence limit
of not less than $3,000,000, and with general aggregate limits of not less than $10,000,000 for
each policy year, which limits may be satisfied by any combination of primary and excess or
umbrella per occurrence policies.



     (b) Property Insurance. Special Form Insurance (which insurance shall not exclude
flood or earthquake) in the amount of the full replacement cost of the Building, including, without
limitation, any improvements, if any, made pursuant to Section 2.02 above, but excluding
Tenant’s Property and any other items required to be insured by Tenant pursuant to Section
8.04 above.



     Section 8.06. Waiver of Subrogation. Notwithstanding anything contained in
this Lease to the contrary, Landlord and Tenant hereby waive any rights each may have against the
other on account of any loss of or damage to their respective property, the Leased Premises, its
contents, or other portions of the Building or Common Areas arising from any risk which is required
to be insured against by Sections 8.04(a)(ii) and 8.05(b) above. The special form
coverage insurance policies maintained by Landlord and Tenant as provided in this Lease shall
include an endorsement containing an express waiver of any rights of subrogation by the insurance
company against Landlord and Tenant, as applicable.



ARTICLE
9 — CASUALTY




     In the event of total or partial destruction of the Building or the Leased Premises by fire or
other casualty, Landlord agrees promptly to restore and repair same; provided, however, Landlord’s
obligation hereunder with respect to the Leased Premises shall be limited to the reconstruction of
such of the leasehold improvements as were originally required to be made by Landlord pursuant to
Section 2.02 above, if any. Rent shall proportionately abate during the time that the
Leased Premises or part thereof are unusable because of any such damage. Notwithstanding the
foregoing, if the Leased Premises are (a) so destroyed that they cannot be repaired or rebuilt
within two hundred ten (210) days from the casualty date; or (b) destroyed by a casualty that is
not covered by the insurance required hereunder or, if covered, such insurance proceeds are not
released by any mortgagee entitled thereto or are insufficient to rebuild the Building and the
Leased Premises; then, in case of a clause (a) casualty, either Landlord or Tenant may, or, in the
case of a clause (b) casualty, then Landlord may, upon thirty (30) days’ written notice to the
other party, terminate this Lease with respect to matters thereafter accruing. Tenant waives any
right under applicable laws inconsistent with the terms of this paragraph.



ARTICLE 10 — EMINENT DOMAIN




     If all or any substantial part of the Building or Common Areas shall be acquired by the
exercise of eminent domain, Landlord may terminate this Lease by giving written notice to Tenant on
or before the date possession thereof is so taken. If all or any part of the Leased Premises shall
be acquired by the exercise of eminent domain so that the Leased Premises shall become impractical
for Tenant to use for the Permitted Use, Tenant may terminate this Lease by giving written notice
to Landlord as of the date possession thereof is so taken. All damages awarded shall belong to
Landlord; provided, however, that Tenant may claim dislocation damages if such amount is not
subtracted from Landlord’s award.



ARTICLE 11 — ASSIGNMENT AND SUBLEASE




     Section 11.01. Assignment and Sublease.



     (a) Tenant shall not assign this Lease or sublet the Leased Premises in whole or in part
without Landlord’s prior written consent which consent shall not be unreasonably withheld,
conditioned or delayed. In the event of any permitted assignment or subletting, Tenant shall remain
primarily liable hereunder, and any extension, expansion, rights of first offer, rights of first
refusal or other options granted to Tenant under this Lease shall be rendered void and of no
further force or effect. The acceptance of rent from any other person shall not be deemed to be a
waiver of any of the provisions of this Lease or to be a consent to the assignment of this Lease or
the subletting of the Leased Premises. Any assignment or sublease consented to by Landlord shall
not relieve Tenant (or its assignee) from obtaining Landlord’s consent to any subsequent assignment
or sublease.



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     (b) By way of example and not limitation, Landlord shall be deemed to have reasonably withheld
consent to a proposed assignment or sublease if in Landlord’s opinion (i) the Leased Premises are
or may be adversely affected; (ii) the business reputation of the proposed assignee or subtenant is
reasonably unacceptable; (iii) the financial worth of the proposed assignee or subtenant is
insufficient to meet the obligations hereunder, or (iv) the prospective assignee or subtenant is a
current tenant at the Park and is a bona-fide third-party prospective tenant to the Landlord.
Landlord further expressly reserves the right to refuse to give its consent to any subletting if
the proposed rent is publicly advertised to be less than the then current rent for similar premises
in the Building. If Landlord refuses to give its consent to any proposed assignment or subletting,
Landlord may, at its option, within thirty (30) days after receiving a request to consent,
terminate this Lease by giving Tenant thirty (30) days prior written notice of such termination,
whereupon each party shall be released from all further obligations and liability hereunder, except
those which expressly survive the termination of this Lease. Notwithstanding the foregoing, in
the event Landlord elects to terminate this Lease pursuant to the immediately preceding sentence,
Tenant shall have the right to withdraw its assignment or sublet request within ten (10) days after
receipt of Landlord’s termination notice, whereupon Landlord’s termination shall be ineffective and
this Lease shall continue in full force and effect.



     (c) If Tenant shall make any assignment or sublease, with Landlord’s consent, for a rental in
excess of the rent payable under this Lease, Tenant shall pay to Landlord fifty percent (50%) of
any such excess rental upon receipt after all reasonable costs associated with the assignment or
sublease transaction, including but not limited to attorney’s fees, brokerage fees, construction
costs, architectural and engineering costs. Tenant agrees to pay Landlord $500.00 upon demand by
Landlord for reasonable accounting and attorneys’ fees incurred in conjunction with the processing
and documentation of any requested assignment, subletting or any other hypothecation of this Lease
or Tenant’s interest in and to the Leased Premises as consideration for Landlord’s consent.



     Section 11.02. Permitted Transfer. Notwithstanding anything to the contrary
contained in Section 11.01 above, Tenant shall have the right, without Landlord’s consent,
but upon ten (10) days prior notice to Landlord, to (a) sublet all or part of the Leased Premises
to any related corporation or other entity which controls Tenant, is controlled by Tenant or is
under common control with Tenant; (b) assign all or any part of this Lease to any related
corporation or other entity which controls Tenant, is controlled by Tenant, or is under common
control with Tenant, or to a successor entity into which or with which Tenant is merged or
consolidated or which acquires substantially all of Tenant’s assets or property; or (c) effectuate
any public offering of Tenant’s stock on the New York Stock Exchange or in the NASDAQ over the
counter market, provided that in the event of a transfer pursuant to clause (b), the tangible net
worth after any such transaction is not less than the tangible net worth of Tenant as of the date
hereof and provided further that such successor entity assumes all of the obligations and
liabilities of Tenant (any such entity hereinafter referred to as a “Permitted Transferee”). For
the purpose of this Article 11.02 “control” shall mean ownership of not less than fifty
percent (50%) of all voting stock or legal and equitable interest in such corporation or entity,
and (ii) “tangible net worth” shall mean the excess of the value of tangible assets (i.e. assets
excluding those which are intangible such as goodwill, patents and trademarks) over liabilities.
Any such transfer shall not relieve Tenant of its obligations under this Lease. Nothing in this
paragraph is intended to nor shall permit Tenant to transfer its interest under this Lease as part
of a fraud or subterfuge to intentionally avoid its obligations under this Lease (for example,
transferring its interest to a shell corporation that subsequently files a bankruptcy), and any
such transfer shall constitute a Default hereunder. Any change in control of Tenant resulting from
a merger, consolidation, or a transfer of partnership or membership interests, a stock transfer, or
any sale of substantially all of the assets of Tenant that do not meet the requirements of this
Section 11.02 shall be deemed an assignment or transfer that requires Landlord’s prior
written consent pursuant to Section 11.01 above.



ARTICLE 12 — TRANSFERS BY LANDLORD




     Section 12.01. Sale of the Building. Landlord shall have the right to sell the
Building at any time during the Lease Term, subject only to the rights of Tenant hereunder; and
such sale shall operate to release Landlord from liability hereunder after the date of such
conveyance.



     Section 12.02. Estoppel Certificate. Within ten (10) business days following
receipt of a written request from Landlord, Tenant shall execute and deliver to Landlord, without
cost to Landlord, an estoppel certificate in such form as Landlord may reasonably request
certifying (a) that this Lease is in full force and effect and unmodified or stating the nature of
any modification, (b) the date to which rent has been paid, (c) that there are not, to Tenant’s
knowledge, any uncured defaults or specifying such defaults if any are claimed, and (d) any other
matters or state of facts reasonably required respecting the Lease. Such estoppel may be relied
upon by Landlord and by any purchaser or mortgagee of the Building.




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     Section 12.03. Subordination. Landlord shall have the right to
subordinate this Lease to any mortgage, deed to secure debt, deed of trust or other instrument in
the nature thereof, and any amendments or modifications thereto (collectively, a “Mortgage”)
presently existing or hereafter encumbering the Building by so declaring in such Mortgage. Within
ten (10) business days following receipt of a written request from Landlord, Tenant shall execute
and deliver to Landlord, without cost, any instrument that Landlord deems reasonably necessary or
desirable to confirm the subordination of this Lease. Notwithstanding the foregoing, if the holder
of the Mortgage shall take title to the Leased Premises through foreclosure or deed in lieu of
foreclosure, Tenant shall be allowed to continue in possession of the Leased Premises as provided
for in this Lease so long as Tenant is not in Default.



ARTICLE 13 — DEFAULT AND REMEDY




     Section 13.01. Default. The occurrence of any of the following shall be a
“Default”:



     (a) Tenant fails to pay any Monthly Rental Installments or Additional Rent within five (5)
business days after the same is due.



     (b) Tenant fails to perform or observe any other term, condition, covenant or obligation
required under this Lease for a period of thirty (30) days after written notice thereof from
Landlord; provided, however, that if the nature of Tenant’s default is such that more than thirty
(30) days are reasonably required to cure, then such default shall be deemed to have been cured if
Tenant commences such performance within said thirty (30) day period and thereafter diligently
completes the required action within a reasonable time.



     (c) Tenant shall vacate or abandon the Leased Premises, or fail to occupy the Leased
Premises or any substantial portion thereof for a period of thirty (30) days.



     (d) Tenant shall assign or sublet all or a portion of the Leased Premises in contravention of
the provisions of Article 11 of this Lease.



     (e) All or substantially all of Tenant’s assets in the Leased Premises or Tenant’s interest in
this Lease are attached or levied under execution (and Tenant does not discharge the same within
sixty (60) days thereafter); a petition in bankruptcy, insolvency or for reorganization or
arrangement is filed by or against Tenant (and Tenant fails to secure a stay or discharge thereof
within sixty (60) days thereafter); Tenant is insolvent and unable to pay its debts as they become
due; Tenant makes a general assignment for the benefit of creditors; Tenant takes the benefit of
any insolvency action or law; the appointment of a receiver or trustee in bankruptcy for Tenant or
its assets if such receivership has not been vacated or set aside within thirty (30) days
thereafter; or, dissolution or other termination of Tenant’s corporate charter if Tenant is a
corporation.



     (f) In addition to the defaults described in (a) through (e) above, the parties agree that if
Tenant receives written notice of a violation of the performance of any (but not necessarily the
same) term or condition of this Lease three (3) or more times during any twelve (12) month period,
regardless of whether such violations are ultimately cured, then such conduct shall, at Landlord’s
option, represent a separate Default.



     Section 13.02. Remedies. Upon the occurrence of any Default, Landlord shall
have the following rights and remedies, in addition to those stated elsewhere in this Lease and
those allowed by law or in equity, any one or more of which may be exercised without further notice
to Tenant:



     (a) Landlord may re-enter the Leased Premises and cure any Default of Tenant, and Tenant shall
reimburse Landlord as Additional Rent for any reasonable costs and expenses which Landlord thereby
incurs; and Landlord shall not be liable to Tenant for any loss or damage which Tenant may sustain
by reason of Landlord’s action.



     (b) Without terminating this Lease, Landlord may terminate Tenant’s right to possession of the
Leased Premises, and thereafter, neither Tenant nor any person claiming under or through Tenant
shall be entitled to possession of the Leased Premises, and Tenant shall immediately surrender the
Leased Premises to Landlord, and Landlord may re-enter the Leased Premises and dispossess Tenant
and any other occupants of the Leased Premises by any lawful means and may remove their effects,
without prejudice to any other remedy that Landlord may have. Upon termination of possession,
Landlord may (i) re-let all or any part thereof for a term different from that which would
otherwise have constituted the balance of the Lease Term and for rent and on terms and conditions
different from those contained herein, whereupon Tenant shall be immediately obligated to pay to
Landlord an amount equal to the present value (discounted at the Prime Rate) of the difference
between the rent provided for herein and that provided for in any lease covering a subsequent
re-letting of the Leased Premises, for the period



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which would otherwise have constituted the balance of the Lease Term (the “Accelerated Rent
Difference”), or (ii) without re-letting, declare the present value (discounted at the Prime Rate)
of all rent which would have been due under this Lease for the balance of the Lease Term to be
immediately due and payable as liquidated damages (the “Accelerated Rent”). Upon termination of
possession, Tenant shall be obligated to pay to Landlord (A) the Accelerated Rent Difference or the
Accelerated Rent, whichever is applicable, (B) all loss or damage that Landlord may sustain by
reason of Tenant’s Default (“Default Damages”), which shall include, without limitation, expenses
of preparing the Leased Premises for re-letting, demolition, repairs, tenant finish improvements,
brokers’ commissions and attorneys’ fees, and (C) all unpaid Minimum Annual Rent and Additional
Rent that accrued prior to the date of termination of possession, plus any interest and late fees
due hereunder (the “Prior Obligations”).




     (c) Landlord may terminate this Lease and declare the Accelerated Rent to be immediately due
and payable, whereupon Tenant shall be obligated to pay to Landlord (i) the Accelerated Rent, (ii)
all of Landlord’s Default Damages, and (iii) all Prior Obligations. It is expressly agreed and
understood that all of Tenant’s liabilities and obligations set forth in this subsection (c) shall
survive termination.



     (d) Landlord and Tenant acknowledge and agree that the payment of the Accelerated Rent
Difference or the Accelerated Rent as set above shall not be deemed a penalty, but merely shall
constitute payment of liquidated damages, it being understood that actual damages to Landlord are
extremely difficult, if not impossible, to ascertain. Neither the filing of a dispossessory
proceeding nor an eviction of personalty in the Leased Premises shall be deemed to terminate the
Lease.



     (e) Landlord may sue for injunctive relief or to recover damages for any loss resulting from
the Default.



     Section 13.03. Landlord’s Default and Tenant’s Remedies. Landlord shall be in
default if it fails to perform any term, condition, covenant or obligation required under this
Lease for a period of thirty (30) days after written notice thereof from Tenant to Landlord;
provided, however, that if the term, condition, covenant or obligation to be performed by Landlord
is such that it cannot reasonably be performed within thirty (30) days, such default shall be
deemed to have been cured if Landlord commences such performance within said thirty-day period and
thereafter diligently undertakes to complete the same. Upon the occurrence of any such default,
Tenant may sue for injunctive relief or to recover damages for any loss directly resulting from the
breach, but Tenant shall not be entitled to terminate this Lease or withhold, offset or abate any
sums due hereunder.



     Section 13.04. Limitation of Landlord’s Liability. If Landlord shall fail to
perform any term, condition, covenant or obligation required to be performed by it under this Lease
and if Tenant shall, as a consequence thereof, recover a money judgment against Landlord, Tenant
agrees that it shall look solely to Landlord’s right, title and interest in and to the Building for
the collection of such judgment; and Tenant further agrees that no other assets of Landlord shall
be subject to levy, execution or other process for the satisfaction of Tenant’s judgment.



     Section 13.05. Nonwaiver of Defaults. Neither party’s failure or delay in
exercising any of its rights or remedies or other provisions of this Lease shall constitute a
waiver thereof or affect its right thereafter to exercise or enforce such right or remedy or other
provision. No waiver of any default shall be deemed to be a waiver of any other default. Landlord’s
receipt of less than the full rent due shall not be construed to be other than a payment on account
of rent then due, nor shall any statement on Tenant’s check or any letter accompanying Tenant’s
check be deemed an accord and satisfaction. No act or omission by Landlord or its employees or
agents during the Lease Term shall be deemed an acceptance of a surrender of the Leased Premises,
and no agreement to accept such a surrender shall be valid unless in writing and signed by
Landlord.



     Section 13.06. Attorneys’ Fees. If either party defaults in the performance or
observance of any of the terms, conditions, covenants or obligations contained in this Lease and
the non-defaulting party obtains a judgment against the defaulting party, then the defaulting party
agrees to reimburse the non-defaulting party for reasonable attorneys’ fees incurred in connection
therewith. In addition, if a monetary Default shall occur and Landlord engages outside counsel to
exercise its remedies hereunder, and then Tenant cures such monetary Default, Tenant shall pay to
Landlord, on demand, all expenses incurred by Landlord as a result thereof, including reasonable
attorneys’ fees, court costs and expenses actually incurred.



ARTICLE 14 — LANDLORD’S RIGHT TO RELOCATE TENANT




     Landlord shall have the right upon at least thirty (30) days’ prior written notice to
Tenant, and in the event Landlord has an existing tenant who needs to expand or a prospective
tenant who is interested in leasing square footage equivalent to a full floor of the Building, to
relocate Tenant and to substitute for








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the Leased Premises other space in the Building. Landlord shall improve such substituted space, at
its expense, with improvements at least equal in quantity and quality to those in the Leased
Premises. Landlord shall reimburse Tenant for all reasonable expenses incurred in connection with,
and caused by, such relocation. In no event shall Landlord be liable to Tenant for any
consequential damages as a result of any such relocation, including, but not limited to, loss of
business income or opportunity.




ARTICLE 15 — TENANT’S RESPONSIBILITY REGARDING

ENVIRONMENTAL LAWS AND HAZARDOUS SUBSTANCES




     Section 15.01. Environmental Definitions.



     (a) “Environmental Laws” shall mean all present or future federal, state and municipal laws,
ordinances, rules and regulations applicable to the environmental and ecological condition of the
Leased Premises, and the rules and regulations of the Federal Environmental Protection Agency and
any other federal, state or municipal agency or governmental board or entity having jurisdiction
over the Leased Premises.



     (b) “Hazardous Substances” shall mean those substances included within the definitions of
“hazardous substances,” “hazardous materials,” “toxic substances” “solid waste” or “infectious
waste” under Environmental Laws and petroleum products.



     Section 15.02. Restrictions on Tenant. Tenant shall not cause or permit the
use, generation, release, manufacture, refining, production, processing, storage or disposal of any
Hazardous Substances on, under or about the Leased Premises, or the transportation to or from the
Leased Premises of any Hazardous Substances, except as necessary and appropriate for its Permitted
Use in which case the use, storage or disposal of such Hazardous Substances shall be performed in
compliance with the Environmental Laws and the highest standards prevailing in the industry.



     Section 15.03. Notices, Affidavits. Etc. Tenant shall immediately (a) notify
Landlord of (i) any violation by Tenant, its employees, agents, representatives, customers,
invitees or contractors of any Environmental Laws on, under or about the Leased Premises, or (ii)
the presence or suspected presence of any Hazardous Substances on, under or about the Leased
Premises, and (b) deliver to Landlord any notice received by Tenant relating to (a)(i) and (a)(ii)
above from any source. Tenant shall execute affidavits, representations and the like within five
(5) days of Landlord’s request therefore concerning Tenant’s best knowledge and belief regarding
the presence of any Hazardous Substances on, under or about the Leased Premises.



     Section 15.04. Tenant’s Indemnification. Tenant shall indemnify
Landlord and Landlord’s managing agent from any and all claims, losses, liabilities, costs,
expenses and damages, including attorneys’ fees, costs of testing and remediation costs,
incurred by Landlord in connection with any breach by Tenant of its obligations under this
Article 15. The covenants and obligations under this Article 15 shall
survive the expiration or earlier termination of this Lease.



     Section 15.05. Existing Conditions. Notwithstanding anything contained in this
Article 15 to the contrary, Tenant shall not have any liability to Landlord under this
Article 15 resulting from any conditions existing, or events occurring, or any Hazardous
Substances existing or generated, at, in, on, under or in connection with the Leased Premises prior
to the Commencement Date of this Lease (or any earlier occupancy of the Leased Premises by Tenant)
except to the extent Tenant exacerbates the same.



     Section 15.06. Landlord’s Representations Regarding Existing Conditions.
Landlord represents and warrants that on the Commencement Date of the term hereof, the Leased
Premises shall either be in compliance with all governmental codes, ordinances, rules and
regulations (including but not limited to all environmental laws) or, if required at such time,
shall be brought into such compliance.



     Section 15.07. Landlord’s Indemnification. Landlord shall hold harmless and
indemnify Tenant for, from and against any clean-up costs, remedial costs, preventative costs,
and/or any governmental fees, costs, expenses, charges or the like arising from any presence of any
hazardous or toxic substances (as those terms are defined in any state or federal statute or
regulation) on, in or under the Leased Premises which were present on the Leased Premises prior to
the commencement of the term of the Lease or which were released by Landlord at the property
containing the Leased Premises. Nothing in this paragraph shall be interpreted as imposing any
liability on Landlord for any other costs or expenses incurred by Tenant including any lost sales
or profits of Tenant resulting from any such presence.



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ARTICLE 16 — MISCELLANEOUS




     Section 16.01. Benefit of Landlord and Tenant. This Lease shall inure to the
benefit of and be binding upon Landlord and Tenant and their respective successors and assigns.



     Section 16.02. Governing Law. This Lease shall be governed in accordance with
the laws of the State where the Building is located.



     Section 16.03. Force Majeure. Landlord and Tenant (except with respect to the
payment of any monetary obligation) shall be excused for the period of any delay in the performance
of any obligation hereunder when such delay is occasioned by causes beyond its control, including
but not limited to work stoppages, boycotts, slowdowns or strikes; shortages of materials,
equipment, labor or energy; unusual weather conditions; or acts or omissions of governmental or
political bodies.



     Section 16.04. Examination of Lease. Submission of this instrument by Landlord
to Tenant for examination or signature does not constitute an offer by Landlord to lease the Leased
Premises. This Lease shall become effective, if at all, only upon the execution by and delivery to
both Landlord and Tenant. Execution and delivery of this Lease by Tenant to Landlord constitutes an
offer to lease the Leased Premises on the terms contained herein. The offer by Tenant will be
irrevocable until 6:00 p.m. EST, fifteen (15) days after the date Landlord receives the Lease
executed by Tenant.



     Section 16.05. Indemnification for Leasing Commissions. The parties hereby
represent and warrant that the only real estate brokers involved in the negotiation and execution
of this Lease are the Brokers and that no other party is entitled, as a result of the actions of
the respective party, to a commission or other fee resulting from the execution of this Lease. Each
party shall indemnify the other from any and all liability for the breach of this representation
and warranty on its part and shall pay any compensation to any other broker or person who may be
entitled thereto. Landlord shall pay any commissions due Brokers based on this Lease pursuant to
separate agreements between Landlord and Brokers.



     Section 16.06. Notices. Any notice required or permitted to be given under
this Lease or by law shall be deemed to have been given if it is written and delivered in person or
by overnight courier or mailed by certified mail, postage prepaid, to the party who is to receive
such notice at the address specified in Section 1.01(1). If sent by overnight courier, the
notice shall be deemed to have been given one (1) day after sending. If mailed, the notice shall be
deemed to have been given on the date that is three (3) business days following mailing. Either
party may change its address by giving written notice thereof to the other party.



     Section 16.07. Partial Invalidity; Complete Agreement. If any provision of
this Lease shall be held to be invalid, void or unenforceable, the remaining provisions shall
remain in full force and effect. This Lease represents the entire agreement between Landlord and
Tenant covering everything agreed upon or understood in this transaction. There are no oral
promises, conditions, representations, understandings, interpretations or terms of any kind as
conditions or inducements to the execution hereof or in effect between the parties. No change or
addition shall be made to this Lease except by a written agreement executed by Landlord and Tenant.



     Section 16.08. Financial Statements. During the Lease Term and any extensions
thereof, Tenant shall provide to Landlord upon written request thereof on an annual basis, a copy
of Tenant’s most recent financial statements prepared as of the end of Tenant’s fiscal year. Such
financial statements shall be signed by Tenant or an officer of Tenant, if applicable, who shall
attest to the truth and accuracy of the information set forth in such statements. All financial
statements provided by Tenant to Landlord hereunder shall be prepared in conformity with generally
accepted accounting principles, consistently applied.



     Section 16.09. Representations and Warranties.



     (a) Tenant hereby represents and warrants that (i) Tenant is duly organized, validly existing
and in good standing (if applicable) in accordance with the laws of the State under which it was
organized; (ii) Tenant is authorized to do business in the State where the Building is located; and
(iii) the individual(s) executing and delivering this Lease on behalf of Tenant has been properly
authorized to do so, and such execution and delivery shall bind Tenant to its terms.



     (b) Landlord hereby represents and warrants that (i) Landlord is duly organized, validly
existing and in good standing (if applicable) in accordance with the laws of the State under which
it was organized; (ii) Landlord is authorized to do business in the State where the Building is
located; and (iii)



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the individual(s) executing and delivering this Lease on behalf of Landlord has been properly
authorized to do so, and such execution and delivery shall bind Landlord to its terms.




     Section 16.10. Signage. Landlord, at its cost and expense, shall provide
Tenant with Building standard signage on the main Building directory and at the entrance to the
Leased Premises. Any changes requested by Tenant to the initial directory or suite signage shall be
made at Tenant’s sole cost and expense and shall be subject to Landlord’s approval. Landlord may
install such other signs, advertisements, notices or tenant identification information on the
Building directory, tenant access doors or other areas of the Building, as it shall deem necessary
or proper. Tenant shall not place any exterior signs on the Leased Premises or interior signs
visible from the exterior of the Leased Premises without the prior written consent of Landlord.
Notwithstanding any other provision of this Lease to the contrary, Landlord may immediately remove
any sign(s) placed by Tenant in violation of this Section 16.10.



     Section 16.11. Parking. Tenant shall be entitled to the non-exclusive use of
the parking spaces designated for the Building by Landlord. Tenant agrees not to overburden the
parking facilities and agrees to cooperate with Landlord and other tenants in the use of the
parking facilities. Landlord reserves the right in its absolute discretion to determine whether
parking facilities are becoming crowded and, in such event, to allocate parking spaces between
Tenant and other tenants, but in such event, Tenant will be allocated 29 parking spaces for its
use. There will be no assigned parking unless Landlord, in its sole discretion, deems such assigned
parking advisable. No vehicle may be repaired or serviced in the parking area and any vehicle
brought into the parking area by Tenant, or any of Tenant’s employees, contractors or invitees, and
deemed abandoned by Landlord will be towed and all costs thereof shall be borne by the Tenant. All
driveways, ingress and egress, and all parking spaces are for the joint use of all tenants. There
shall be no parking permitted on any of the streets or roadways located within the Park. In
addition, Tenant agrees that its employees will not park in the spaces designated visitor parking.



     Section 16.12. Consent. Where the consent of a party is required, such
consent will not be unreasonably withheld, conditioned or delayed.



     Section 16.13. Time. Time is of the essence of each term and provision of
this Lease.



     Section 16.14. Patriot Act. Each of Landlord and Tenant, each as to itself,
hereby represents its compliance with all applicable anti-money laundering laws, including, without
limitation, the USA Patriot Act, and the laws administered by the United State Treasury
Department’s Office of Foreign Assets Control, including, without limitation, Executive Order 13224
(“Executive Order”). Each of Landlord and Tenant further represents (i) that it is not, owned or
controlled directly or indirectly by any person or entity, on the SDN List published by the United
States Treasury Department’s Office of Foreign Assets Control and (ii) that it is not a person
otherwise identified by government or legal authority as a person with whom a U.S. Person is
prohibited from transacting business. As of the date hereof, a list of such designations and the
text for the Executive Order are published under the internet website address
 www.ustreas.gov/offices/enforcement/ofac.



ARTICLE 17  — SPECIAL PROVISIONS




     Section 17.01.  Options to Extend.



     (a) Grant and Exercise of Option. Provided that (i) no default has occurred and
is then continuing pursuant to Article 13, (ii) the creditworthiness of Tenant is then reasonably
acceptable to Landlord and (iii) Tenant originally named herein (or a Permitted Transferee under
Section 11.02 hereof) remains in possession of and has been continuously operating in the entire
Leased Premises throughout the term immediately preceding the Extension Term (as defined below),
Tenant shall have the option to extend the Lease Term for two (2) additional periods of five (5)
years each (the “Extension Terms”). Each Extension Term shall be upon the same terms and conditions
contained in the Lease except (x) this provision giving two (2) extension options shall be amended
to reflect the remaining options to extend, if any, and (y) any improvement allowances or other
concessions applicable to the Leased Premises under the Lease shall not apply to the Extension
Term, and (z) the Minimum Annual Rent shall be adjusted as set forth below (the “Rent Adjustment”).
Tenant shall exercise each option by delivering to Landlord, no later than nine (9) months prior to
the expiration of the preceding term, written notice of Tenant’s desire to extend the Lease Term.
Tenant’s failure to timely exercise such option shall be deemed a waiver of such option and any
succeeding option. Landlord shall notify Tenant of the amount of the Rent Adjustment no later than
six (6) months prior to the commencement of the Extension Term. Tenant shall be deemed to have
accepted the Rent Adjustment if it fails to deliver to Landlord a written objection thereto within
ten (10) business days after receipt thereof. If Tenant properly exercises its option to extend,
Landlord and Tenant shall execute an amendment to the Lease (or, at Landlord’s option, a new lease
on the form then in use for the Building) reflecting the terms and conditions of the Extension Term
within thirty (30) days after Tenant’s acceptance (or deemed acceptance) of the Rent Adjustment.



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     (b) Rent Adjustment. The Minimum Annual Rent for the applicable Extension Term
shall be an amount equal to the Minimum Annual Rent then being quoted by Landlord to prospective
renewal tenants of the Building for space of comparable size and quality and with similar or
equivalent improvements as are found in the Building, and if none, then in similar buildings in the
Park; provided, however, that in no event shall the Minimum Annual Rent during any Extension Term
be less than the highest Minimum Annual Rent payable during the immediately preceding term. The
Monthly Rental Installments shall be an amount equal to one-twelfth (1/12) of the Minimum Annual
Rent for the Extension Term and shall be paid at the same time and in the same manner as provided
in the Lease.



     Section 17.02. Right of First Refusal.



     (a) Provided that (i) no default has occurred and is then continuing pursuant to Article 13,
(ii) the creditworthiness of Tenant is then reasonably acceptable to Landlord, and (iii) Tenant
originally named herein (or a Permitted Transferee under Section 11.02 hereof) remains in
possession of and has been continuously operating in the entire Leased Premises throughout the
Lease Term, and subject to any rights of other tenants to the Refusal Space (as defined herein) and
Landlord’s right to renew or extend the lease term of any other tenant with respect to the portion
of the Refusal Space now or hereafter leased by such other tenant, Tenant shall have an on-going
right of first refusal (“Refusal Option”) to lease additional space in the Building located
contiguous to the Leased Premises as shown crosshatched on the attached Exhibit E (“Refusal
Space”). Prior to entering into any lease that includes all or any portion of the Refusal Space,
Landlord shall notify Tenant in writing (“Landlord’s Notice”) of Landlord’s receipt of an
arms-length offer to lease such space that Landlord is willing to accept from a bona fide third
party offeror (“Bona Fide Offer”) and setting forth the material terms of the Bona Fide Offer and
such other terms as are herein provided. If the Bona Fide Offer includes space in the Building in
addition to the Refusal Space, then the Refusal Space shall be deemed to include, and this Refusal
Option shall be deemed to apply to, all of the space included in the Bona Fide Offer. Tenant shall
have ten (10) business days after Tenant receives Landlord’s Notice in which to notify Landlord in
writing of its election to lease the Refusal Space upon the terms set forth in Landlord’s Notice.
If Tenant declines to exercise this Refusal Option or fails to give such written notice within the
time period required, Tenant shall be deemed to have waived this Refusal Option, and thereafter,
except as provided in subsection (c) below, this Refusal Option shall be void and of no further
force or effect, and Landlord shall be free to lease the Refusal Space to the bona fide offeror or
any third party.



     (b) The term for the Refusal Space shall be the greater of (i) the term set forth in the Bona
Fide Offer or (ii) the then remaining period of the Lease Term; provided, however, that if the term
set forth in the Bona Fide Offer is greater than the then remaining period of the Lease Term, the
Lease Term for the then existing Leased Premises (“Existing Premises”) shall be extended to be
coterminous with the term for the Refusal Space. The Refusal Space shall be offered to Tenant at
the rental rate and upon such other terms and conditions as are set forth in the Bona Fide Offer
and herein, but in no event shall such rental rate be less than the then current rental rate under
this Lease. If the Lease Term for the Existing Premises is extended as provided above, the Minimum
Annual Rent for such extension term shall be an amount equal to the Minimum Annual Rent then being
quoted by Landlord to prospective renewal tenants of the Building for space of comparable size and
quality and with similar or equivalent improvements as are found in the Building, and if none, then
in similar buildings in the Park; provided, however, that in no event shall the Minimum Annual Rent
during such extension term be less than the highest Minimum Annual Rent payable during the
immediately preceding term.



     (c) If Tenant shall exercise the Refusal Option, the parties shall enter into an amendment to
this Lease adding the Refusal Space to the Leased Premises upon the terms and conditions set forth
herein and making such other modifications to this Lease as are appropriate under the
circumstances. If Tenant shall fail to enter into such amendment within ten (10) days following
Tenant’s exercise of the Refusal Option, then Landlord may terminate this Refusal Option, by
notifying Tenant in writing, in which event this Refusal Option shall become void and of no further
force or effect, and Landlord shall thereafter be free to lease the Refusal Space to the bona fide
offeror or any third party.



(SIGNATURES CONTAINED ON FOLLOWING PAGE)




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



	 	 	 	 	 
	 	LANDLORD:



DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership doing business in North Carolina as Duke Realty of Indiana Limited Partnership

 	 
	 	By:  	Duke Realty Corporation,
 	 
	 	 	its General Partner 	 
	 
	 	 	 
	 	By:  	                                                           /s/ H. Andrew Kelton
 	 
	 	 	H. Andrew Kelton 	 
	 	 	Senior Vice President

Raleigh Operations 	 
	 
	 	TENANT:



KROY BUILDING PRODUCTS, INC., a Delaware corporation

 	 
	 	By:  	/s/ MATTHEW FANGMAN
 	 
	 	 	Name:  	MATTHEW FANGMAN 	 
	 	 	Title:  	VP FINANCE 	 
	 
	 	 	 
	 	Attest:  	/s/ John Stephenson
 	 
	 	 	Name:  	John Stephenson 	 
	 	 	Title:  	President 	 
	 
	 
	 	 	(CORPORATE SEAL)	 
	 




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