Document:

Exhibit 10.1

 

	
  

  	
  OFFICE LEASE 

  

 

	
  

  	
  TABLE OF
  CONTENTS 1. BASIC DEFINITIONS AND PROVISIONS 1 a. Premises 1 b. Term 1 c.
  Permitted Use: 1 d. Base Rent: 1 e. Rent Payment Address 1 f. Security
  Deposit 1 g. Business Hours 1 h. Electrical Service 1 i. After Hours HVAC
  Rate 1 j. Parking 2 k. Notice Addresses 2 I. Broker. 2 2. LEASED PREMISES 2
  a. Premises 2 b. Rentable Square Foot Determination 2 c. Common Areas 2 3.
  TERM 2 a. Commencement and Expiration Dates 2 b. Adjustments to Commencement
  Date 3 c. Delivery of Possession 3 d. Adjustment of Expiration Date 3 e.
  Right to Occupy. 3 f. Commencement Agreement 3 4. USE 3 a. Permitted Use 3 b.
  Prohibited Uses 3 c. Tenant shall not use the Premises: 3 d. A dditional
  Prohibited Uses 4 5. RENT 4 a. Payment Obligations 4 b. Base Rent 5 c.
  Additional Rent 5 6. SECURITY DEPOSIT 5 a. Amount of Deposit 5 b. Application
  of Deposit 5 c. Refund of Deposit 5 7. SERVICES BY LANDLORD 6 a. Base
  Services 6 b. Landlord’s Maintenance 6 c. No Abatement 6 d. Tenant’s
  Obligation to Report Defects 6 e. Limitation on Landlord’s Liability 7 8.
  TENANT'S ACCEPTANCE AND MAINTENANCE OF PREMISES. a. Acceptance of Premises 7
  b. Move-In Obligations 7 c. Tenant's Maintenance 7 d. Alterations to Premises
  7 e. Restoration of Premises 9 f. Landlord’s Performance of Tenant’s
  Obligations 9 g. Construction Liens 9 h. Tenant's Equipment 10 9. PROPERTY OF
  TENANT 10 a. Property Taxes 10 b. Removal. 10 10. SIGNS 11 

  

 

	
  

  	
  11. ACCESS TO
  PREMISES 11 a. Tenant’s Access 11 b. Landlord’s Access 11 c. Emergency Access
  11 12. TENANT’S COMPLIANCE 11 a. Laws 11 b. Rules and Regulations 11 13. ADA
  COMPLIANCE 11 a. Tenant’s Compliance 11 b. Landlord's Compliance 11 c. ADA
  Notices 12 14. INSURANCE REQUIREMENTS 12 a. Tenant's Liability Insurance 12
  b. Tenant’s Property Insurance 12 c. Certificates of Insurance 12 d.
  Insurance Policy Requirements 12 e. Landlord's Property Insurance 13 f.
  Mutual Waiver of Subrogation 13 15. INDEMNITY 13 a. Indemnity 13 b. Defense
  Obligation 13 16. QUIET ENJOYMENT 13 17 SUBORDINATION; ATTORNMENT; NON-DISTURBANCE;
  AND ESTOPPEL CERTIFICATE 13 a. Subordination and Attornment 13 b.
  Non-Disturbance 14 c. Estoppel Certificates 14 18 ASSIGNMENT - SUBLEASE 14 a.
  Landlord Consent 14 b. Definition of Assignment 14 c. Permitted
  Assignments/Subleases 15 d. Notice to Landlord 15 e. Prohibited
  Assignments/Subleases 15 f. Limitation 15 g. Tenant Not Released 15 h. Excess
  Rents 15 i. Request for Consent 15 j. Unauthorized Assignment or Sublease 16
  19 DAMAGES TO PREMISES 16 a. Landlord’s Restoration Obligations 16 b.
  Termination of Lease by Landlord 16 c. Termination of Lease by Tenant 16 d.
  Tenant’s Restoration Obligations 16 e. Rent Abatement 17 f. Waiver of Claims
  17 20. EMINENT DOMAIN 17 a. Effect on Lease 17 b. Right to Condemnation Award
  17 21 ENVIRONMENTAL COMPLIANCE 17 a. Environmental Laws 17 b. Tenant's
  Responsibility 17 c. Tenant's Liability 17 d. Limitation on Tenant’s
  Liability 18 e. Inspections by Landlord 18 f. Property 18 g. Tenant's
  Liability After Termination of Lease 18 22. DEFAULT 18 

  

 

	
  

  	
  a. Tenant's
  Default 18 b. Landlord’s Remedies 18 c. Landlord's Expenses; Attorneys Fees
  20 d. Remedies Cumulative 20 e. No Accord and Satisfaction 20 f. No
  Reinstatement 20 g. Summary Ejectment 20 23. MULTIPLE DEFAULTS 20 a. Loss of
  Option Rights 20 b. Increased Security Deposit 20 c. Effect on Notice Rights
  and Cure Periods 21 24 BANKRUPTCY 21 a. Trustee’s Rights 21 b. Adequate
  Assurance 21 c. Assumption of Lease Obligations 21 25. NOTICES 21 a.
  Addresses 21 b. Form; Delivery; Receipt 21 c. Address Changes 21 d. Notice by
  Legal Counsel 21 26. HOLDING OVER 22 27. RIGHT TO RELOCATE 22 28 BROKER'S
  COMMISSIONS 22 a. Broker. 22 b. Landlord’s Obligation 22 c. Indemnity 22 29
  MISCELLANEOUS 22 a. No Agency 22 b. Force Majeure 22 c. Building Standard
  Improvements 22 d. Limitation on Damages 22 e. Landlord's Liability. 22 f.
  Interest 22 g. Legal Costs 23 h. Sale of Premises or Building 23 i. Time of
  the Essence 23 j. Transfer of Security Deposit 23 k. Tender of Premises 23 I.
  Tenant’s Financial Statements 23 m. Recordation 23 n. Partial In validity 23
  o. Binding Effect 23 p. Entire Agreement 23 q. Good Standing 23 r.
  Terminology 23 s. Headings 23 t. Choice of Law 23 u. Effective Date 23 30.
  ANTI-TERRORISM 24 31 MOISTURE INTRUSION 24 32 ADDENDA AND EXHIBITS 25 a.
  Lease Addendum Number One - “Work Letter” 25 b. Lease Addendum Number Two -
  “Additional Rent - Operating Expense Pass Throughs” 25 c. Lease Addendum
  Number Three - “Option to Renew Lease Term” 25 d. Lease Addendum Number Four
  - “Expansion Rights” 25 e. Exhibit A - Premises 25 f. Exhibit B - Rules and
  Regulations 25 g. Exhibit C - Commencement Agreement 25 

  

 

	
  

  	
  iv 

  

 

	
  

  	
  OFFICE LEASE
  28th day of November, 2011, THIS LEASE ("Lease"), made this 28th
  day of November 2011, by and between JAMES CAMPBELL COMPANY LLC
  ("Landlord”) and TRANZYME, INC., (“Tenant"), provides as follows:
  1. BASIC DEFINITIONS AND PROVISIONS. The following basic definitions and
  provisions apply to this Lease: a. Premises. b. Term. Rentable Square Feet
  Suite Building Street Address Number of Months Commencement Date Premises
  Access Date Expiration Date 8,126 Portion of Suite 300 as depicted on Exhibit
  A Central Park West 5001 South Miami Boulevard, Durham NC 27703 38 December
  1, 2011 Seven (7) days prior to Commencement Date January 31, 2015 c.
  Permitted Use: general office d. Base Rent: MONTHS Annual Base Rent Rate Per
  Rentable Square) Monthly Base Rent 01-02 $0 $0 03-12 $19.00 $12,866 17 13-24
  $19.48 $13,191.21 25-36 $19.97 $13,523.02 37-38 $20.47 $13,861.60 e. Rent
  Payment Address. James Campbell Company do Grubb & Ellis|Thomas Linderman
  Graham, 1511 Sunday Drive, Suite 200, Raleigh, NC f. Security Deposit.
  $25,742.00 g. Business Hours. 7:00 A.M. to 6:00 P.M. Monday through Friday
  and 8:00 A. M. to 1:00 P.M. Saturday (excluding National and State Holidays).
  h. Electrical Service. No more than 5 watts per usable square foot i. After
  Hours HVAC Rate. Currently $35.00 per hour, per zone, with a minimum of 1 

  

 

	
  

  	
  j. Parking. two
  (2) hours per occurrence. 4.8 spaces per 1,000 rentable square feet. k.
  Notice Addresses. LANDLORD: James Campbell Company 425 California Street,
  Suite 1000 San Francisco, California 94104 Attn: Executive Vice President,
  Real Estate Investment Management with a copy to: James Campbell Company do
  Grubb & Ellis|Thomas Linderman Graham 1511 Sunday Drive Suite 200
  Raleigh, NC TENANT: After Commencement Date: 5001 South Miami Boulevard
  Durham NC 27703 Attn: Richard Eisenstadt Prior to Commencement Date: 4819
  Emperor Blvd, Suite 400 Durham, NC 27703 Attn: Richard Eisenstadt I. Broker.
  Grubb & Ellis|Thomas Linderman Graham representing Landlord UGL Services
  representing Tenant 2. LEASED PREMISES a. Premises. Landlord leases to Tenant
  and Tenant leases from Landlord the Premises identified in Section 1a and as
  more particularly shown on Exhibit A, attached hereto. b. Rentable Square
  Foot Determination. The parties acknowledge that all square foot measurements
  are approximate and agree that the square footage figures in Section 1a shall
  be conclusive for all purposes with respect to this Lease irrespective of the
  actual size of the Premises. Landlord hereby represents and warrants that the
  square foot measurements have been approximated in good faith. c. Common
  Areas. Tenant shall have non-exclusive use of the common areas of the
  Building that are intended by Landlord to be available for use by Building
  occupants. The common areas generally include space that is not included in
  portions of the building set aside for leasing to tenants or reserved for
  Landlord’s exclusive use, including entrances, hallways, lobbies, elevators,
  restrooms, walkways, parking lots, driveways, landscaped areas, sidewalks and
  plazas (“Common Areas"). Landlord has the exclusive right to (i)
  designate the Common Areas, (ii) change the designation of any Common Area
  and otherwise modify the Common Areas, and (iii) permit special use of the
  Common Areas, including temporary exclusive use for special occasions,
  provided that the foregoing do not unreasonably interfere with the Tenant’s
  ability to conduct business. Tenant shall not interfere with the rights of
  others to use the Common Areas. All use of the Common Areas shall be subject
  to any rules and regulations promulgated by Landlord. 3. TERM a. Commencement
  and Expiration Dates. The Lease Term commences on the Commencement Date and
  expires on the Expiration Date, as set forth in Section 1b. Prior to the
  Commencement Date, Landlord shall steam clean the carpet throughout the
  Premises, touch up all paint and replace any broken ceiling tiles. 2 

  

 

	
  

  	
  b. Adjustments
  to Commencement Date. The Commencement Date shall be adjusted as follows: i.
  If Tenant requests possession of the Premises prior to the Commencement Date
  for the purposes of conducting business, and Landlord consents, the
  Commencement Date shall be the date of possession. All rent and other
  obligations under this Lease shall begin on the date of possession, but the
  Expiration Date shall remain the same. The parties hereby acknowledge and
  agree that Tenant may access the premises seven days prior to the
  Commencement Date on the Premises Access Date for the purposes of setting up
  operations, including cabling the Premises and the Commencement Date will not
  be adjusted. ii. If Landlord, for any reason, cannot deliver possession of
  the Premises to Tenant on the Commencement Date, then the Commencement Date,
  Expiration Date, and all other dates that may be affected by their change,
  shall be revised to conform to the date of Landlord's delivery of possession
  of the Premises to Tenant. For clarity, all rent and other obligations under
  this Lease shall begin on the earlier of (i) the Commencement Date and (ii)
  the date Tenant takes possession of the Premises for the purpose of
  conducting business. Any such delay shall not relieve Tenant of its
  obligations under this Lease, and neither Landlord nor Landlord's agents
  shall be liable to Tenant for any loss or damage resulting from the delay in
  delivery of possession. c. Delivery of Possession. Unless otherwise specified
  in the Workletter attached as Lease Addendum Number One, “delivery of
  possession" of the Premises shall mean the earlier of: (i) the date
  Landlord has the Premises ready for occupancy by Tenant as evidenced by a
  permanent or temporary Certificate of Occupancy issued by proper governmental
  authority, but not earlier than December 1, 2011, (ii) the date Landlord
  could have had the Premises ready had there been no Tenant-Caused Delays, but
  not earlier than December 1, 2011, or (iii) the date the Tenant takes full or
  partial possession of the Premises for the purposes of conducting business.
  d. Adjustment of Expiration Date. If the Expiration Date does not occur on
  the last day of a calendar month, then Landlord, at its option, may extend
  the Term by the number of days necessary to cause the Expiration Date to
  occur on the last day of the last calendar month of the Term. Tenant shall
  pay Base Rent and Additional Rent for such additional days at the same rate
  payable for the portion of the last calendar month immediately preceding such
  extension. e. Right to Occupy. Tenant shall not occupy the Premises until
  Tenant has complied with all of the following requirements to the extent
  applicable under the terms of this Lease: (i) delivery of all certificates of
  insurance, (ii) payment of Security Deposit, (iii) execution and delivery of
  any required Guaranty of Lease, and (iv) if Tenant is an entity, receipt of a
  good standing certificate from the State where it was organized and a
  certificate of authority to do business in the State in which the Premises
  are located (if different). Tenant’s failure to comply with these (or any
  other conditions precedent to occupancy under the terms of this Lease) shall
  not delay the Commencement Date. f. Commencement Agreement. The Commencement
  Date, Term, and Expiration Date may be set forth in a Commencement Agreement
  similar to Exhibit C, attached hereto, to be prepared by Landlord and
  executed by the parties. 4. USE a. Permitted Use. The
  Premises may be used only for general office purposes in connection with
  Tenant’s Permitted Use as defined in Section 1c and in accordance with the
  use permitted under applicable zoning regulations. Tenant shall keep all
  doors leading from the Premises to the rest of the Building closed when not
  in use. b. Prohibited Uses. Tenant shall not use the Premises: i. In violation
  of the following restrictive covenants which apply to the Premises:
  Declaration of Covenants, Conditions, Restrictions and Easements recorded in
  Book 2359 at Page 170, and First Amendment to said Declaration recorded in
  Book 2619 at Page 183, both with the Registrar of Deeds for Durham County,
  NC; 3 

  

 

	
  

  	
  ii. In any
  manner that constitutes a nuisance or trespass, or for any unlawful purpose;
  iii. In any manner which increases any insurance premiums, or makes such
  insurance unavailable to Landlord on the Building; provided that, in the
  event of an increase in Landlord's insurance premiums which results from
  Tenant's use of the Premises, Landlord shall provide Tenant with written
  notice of such increase and 20 days to correct the action which caused such
  increase. If Tenant fails to cure such action, Landlord may elect to permit
  the use and charge Tenant for the increase in premiums, and Tenant’s failure
  to pay Landlord, on demand, the amount of such increase shall be an event of
  default; iv. In any manner that creates unusual demands for electricity,
  heating or air conditioning as reasonably determined by Landlord; v. For any
  purpose except the Permitted Use, unless consented to by Landlord in writing;
  vi. For any purpose which will materially obstruct or interfere with the
  ability of other tenants of the Building to conduct business, or injure or
  annoy them, or for any improper, immoral, or objectionable purpose. c.
  Prohibited Equipment in Premises. Tenant shall not install any equipment in
  the Premises that places unusual demands on the electrical, heating or air
  conditioning systems (“High Demand Equipment") without Landlord’s prior
  written consent, which consent will not be unreasonably withheld, conditioned
  or delayed. Any determination regarding whether equipment should be
  classified as High Demand Equipment shall be consistent with standards
  regarding such equipment in comparable Class A office buildings owned by
  Landlord in the Raleigh-Durham market. No such consent will be given if
  Landlord determines, in its reasonable opinion, that such equipment may not
  be safely used in the Premises or that electrical service is not adequate to
  support the equipment. Landlord’s consent may be conditioned, without
  limitation, upon separate metering of the High Demand Equipment and Tenant’s
  payment of all engineering, equipment, installation, maintenance, removal and
  restoration costs and utility charges associated with the High Demand
  Equipment and the separate meter. If High Demand Equipment used in the
  Premises by Tenant affect the temperature otherwise maintained by the heating
  and air conditioning system, Landlord shall have the right to install
  supplemental air conditioning units in the Premises with the cost of
  engineering, installation, operation and maintenance of the units to be paid
  by Tenant. All costs and expenses relating to High Demand Equipment and
  Landlord's administrative costs (such as reading meters and calculating
  invoices, not to exceed 4% of such costs and expenses) shall be Additional
  Rent, payable by Tenant upon demand. d. Additional Prohibited Uses. In
  addition to and not in limitation of the other restrictions on use of the
  Premises set forth in this Section, Tenant hereby agrees that the following
  uses of the Premises shall not be considered to be "office use" and
  shall not be permitted: (1) any use of the Premises by an organization or
  person enjoying sovereign or diplomatic immunity; (2) any use of the Premises
  by or for any medical, mental health or dental practice; (3) any use of the
  Premises by or for an employment agency or bureau; (4) any use of the
  Premises for classroom purposes (other than internal training purposes); (5)
  any use of the Premises by or for any user which distributes governmental or
  other payments, benefits or information to persons that personally appear at
  the Premises; (6) any other use of the Premises or any portion of the
  Property by any user that will attract a volume, frequency or type of visitor
  or employee to the Premises or any portion of the Property or the Building
  which is not consistent with the standards of a high quality, first-class,
  office building in Durham North Carolina or that will in any way impose an
  excessive demand or use on the facilities or services of the Premises or the
  Building. 5. RENT a. Payment Obligations. Tenant shall
  pay Base Rent and Additional Rent (collectively, “Rent”) on or before the
  first day of each calendar month during the Term, as follows: i. Rent
  payments shall be sent to the Rent Payment Address set forth in Section 1e. ii.
  Rent shall be paid without previous demand or notice and without set off or
  deduction. Tenant's obligation to pay Rent under this Lease is completely
  separate and independent from any of Landlord's obligations under this Lease.
  4 

  

 

	
  

  	
  iii. If the
  Term commences on a day other than the first day of a calendar month, then
  Rent for such month shall be (i) prorated for the period between the
  Commencement Date and the last day of the month in which the Commencement
  Date falls, and (ii) due and payable on the Commencement Date. iv. For each
  Rent payment Landlord receives after the fifth (5th) day of the month,
  Landlord shall be entitled to all default remedies provided under the terms
  of this Lease, and a late charge in the amount of five percent (5%) of all Rent
  due for such month; provided, however, that no more than once in any twelve
  (12)- month period, Landlord agrees to waive its right to collect such late
  charge on such payment of Rent if such payment is made no later than the
  fifth (5th) day after Landlord delivers to Tenant written notice of such late
  payment. v. If Landlord presents Tenant's check to any bank and Tenant has
  insufficient funds to pay for such check, then Landlord shall be entitled to
  all default remedies provided under the terms of this Lease and the maximum
  lawful bad check fee or five percent (5%) of the amount of such check,
  whichever amount is less. b. Base Rent. Tenant shall pay Base Rent as set
  forth in Section 1d. c. Additional Rent. In addition to Base Rent, Tenant
  shall pay as part of Rent all sums and charges due and payable by Tenant
  under this Lease (“Additional Rent”), including, but not limited to, the
  following: i. Tenant's Expense Increase Share as set forth in Lease Addendum
  Number Two, which shall not include any construction management fees with
  respect to work performed by Landlord for any particular tenant of the
  Building (however, construction management fees may be included in Tenant’s
  Expense Increase Share for work of the type performed by Landlord pursuant to
  its obligations contained in this Lease, e.g., casualty repairs, etc. at a
  maximum rate of: 5% of project costs up to $100,000.00 and 3% of project
  costs over $100,000.00. ii. Any sales or use tax imposed on rents collected
  by Landlord or any tax on rents in lieu of ad valorem taxes on the Building,
  even though laws imposing such taxes attempt to require Landlord to pay the
  same; provided, however, if any such sales or use tax are imposed on Landlord
  and Landlord is prohibited by applicable law from collecting the amount of
  such tax from Tenant as Additional Rent, then Landlord, upon sixty (60) days
  prior notice to Tenant, may terminate this Lease. Landlord has advised Tenant
  that currently there is no such sales or use tax, and in any event the
  parties intend that Tenant is not responsible for Landlord’s income tax. 6.
  SECURITY DEPOSIT. a. Amount of Deposit. Tenant shall deposit with Landlord a
  Security Deposit in the amount set forth in Section 1f, which sum Landlord
  shall retain as security for the performance by Tenant of each of its
  obligations hereunder. The Security Deposit shall not be maintained in a
  separate account and shall not bear interest. b. Application of Deposit. If
  Tenant at any time fails to perform any of its obligations under this Lease,
  including its Rent or other payment obligations, its restoration obligations,
  or its insurance and indemnity obligations, then Landlord may, at its option,
  apply the Security Deposit (or any portion) to cure Tenant's default or to
  pay for damages caused by Tenant’s default. If the Lease has been terminated,
  then Landlord may apply the Security Deposit (or any portion) against the
  damages incurred as a consequence of Tenant’s breach. The application of the
  Security Deposit shall not limit Landlord's remedies for default under the
  terms of this Lease. If Landlord depletes the Security Deposit, in whole or
  in part, prior to the Expiration Date or any termination of this Lease, then
  Tenant shall restore the amount so used by Landlord within five (5) business
  days following written request from the Landlord. c. Refund of Deposit.
  Unless Landlord uses the Security Deposit to cure a default of Tenant, to pay
  damages for Tenant’s breach of the Lease, or to restore the Premises to the
  condition to which Tenant is required to leave the Premises upon the
  expiration or any termination of the Lease, reasonable wear and tear and loss
  by casualty or condemnation excepted, then Landlord shall, within thirty (30)
  days after the Expiration Date or any termination of this Lease, refund to
  Tenant any funds remaining in the Security Deposit. Tenant may not 5 

  

 

	
  

  	
  credit the
  Security Deposit against any month's Rent. Landlord’s obligation to return
  the Security Deposit shall survive termination of the Lease. 7. SERVICES BY
  LANDLORD a. Base Services. Provided that Tenant is not then in default beyond
  any applicable cure period, Landlord shall cause to be furnished to the
  Building, or as applicable, the Premises, in common with other tenants the
  following services: i. Water (if available from city mains) for drinking,
  lavatory and toilet purposes. ii. Electricity (if available from the utility
  supplier) for the building standard fluorescent lighting and for the
  operation of general office machines, such as electric typewriters,
  computers, servers and market computing equipment, dictating equipment,
  adding machines and calculators, and general service office copy machines
  iii. Operatorless elevator service. iv. Building standard fluorescent
  lighting composed of 2' x 4' fixtures; Tenant shall service, replace and
  maintain at its own expense any incandescent fixtures, table lamps, or
  lighting other than the building standard fluorescent light, and any dimmers
  or lighting controls other than controls for the building standard
  fluorescent lighting. v. Heating and air conditioning for the reasonably
  comfortable use and occupancy of the Premises during Business Hours as set
  forth in Section 1 h; provided that, heating and cooling conforming to any
  governmental regulation prescribing limitations thereon shall be deemed to
  comply with this service. vi. After Business Hours, weekend and holiday
  heating and air conditioning at the After Hours HVAC rate set forth in
  Section 1 i, with such charges subject to commercially reasonable annual
  increases as determined by Landlord. vii. Janitorial services five (5) days a
  week (excluding National and State holidays) after Business Hours. viii. A
  reasonable pro-rata share of the unreserved parking spaces of the Building,
  not to exceed the Parking specified in Section 1 j, for use by Tenant's
  employees and visitors in common with the other tenants and their employees
  and visitors. ix. Snow and ice removal. x. Landscaping services. xi.
  Maintenance of the common areas. xii. Removal of trash from the Building. b.
  Landlord’s Maintenance. Landlord shall make all repairs and replacements to
  the Building (including Building fixtures and equipment), Common Areas and
  Building Standard Improvements in the Premises, except for repairs and
  replacements that Tenant must make under Section 8. Landlord’s maintenance
  shall include the roof, roof membrane, foundation, exterior walls, interior
  structural walls, all structural components, and all Building systems, such
  as mechanical, electrical, HVAC, and plumbing. Repairs or replacements shall
  be made within a reasonable time (depending on the nature of the repair or
  replacement needed) after receiving notice from Tenant or Landlord having
  actual knowledge of the need for a repair or replacement. c. No Abatement.
  There shall be no abatement or reduction of Rent by reason of any of the
  foregoing services not being continuously provided to Tenant. Landlord shall
  have the right to shut down the Building systems (including electricity and
  HVAC systems) for required maintenance and safety inspections, and in cases
  of emergency. Notwithstanding the foregoing, in the event of any interruption
  of service required to be provided by Landlord that renders the Premises
  untenantable for a minimum of five (5) consecutive business days and results
  solely from Landlord's negligence or willful misconduct, Rent shall abate
  equitably based on the diminution in use of the Premises resulting from such
  interruption for every business day in which such interruption continues
  beyond said five (5) consecutive business day period. d. Tenant’s Obligation
  to Report Defects. Except in the case of latent defects or defects 6 

  

 

	
  

  	
  about which
  Landlord knows or should have known prior to the Commencement Date, Tenant
  shall report to Landlord immediately any defective condition in or about the
  Premises known to Tenant and if such defect is not so reported and such
  failure to promptly report results in other damage, Tenant shall be liable
  for same. e. Limitation on Landlord's Liability. Except as set forth in
  Section 7(c), Landlord shall not be liable to Tenant for any damage caused to
  Tenant and its property due to the Building or any part or appurtenance
  thereof being improperly constructed or being or becoming out of repair, or
  arising from the leaking of gas, water, sewer or steam pipes, or from
  problems with electrical service. It is understood and agreed that Landlord
  shall not be liable for failure to furnish, or for delay or suspension in
  furnishing or providing, any of the utilities or services required to be
  furnished or provided by Landlord caused by breakdown, maintenance, repairs,
  strikes, scarcity of labor and/or materials, acts of God or from any other
  cause or reason whatsoever. If the Building equipment should cease to
  function properly, Landlord shall use due diligence to repair the same
  promptly. 8. TENANT’S ACCEPTANCE AND MAINTENANCE OF PREMISES a. Acceptance of
  Premises. Subject to the terms of the attached Workletter, if any, Tenant’s
  occupancy of the Premises is Tenant's representation to Landlord that (i) Tenant
  has examined and inspected the Premises, (ii) finds the Premises to be as
  represented by Landlord and satisfactory for Tenant's intended use, and (iii)
  constitutes Tenant's acceptance of the Premises "as is". Landlord
  makes no representation or warranty as to the condition of the Premises
  except as may be specifically set forth in the Workletter or elsewhere within
  this Lease. Tenant acknowledges that Landlord has no obligation to improve or
  renovate the Premises or contribute to the cost thereof except as expressly
  set forth in the Work Letter. Notwithstanding the foregoing, Landlord shall
  be responsible for the following: (i) causing the Common Areas to be in
  compliance with all laws, including, but not limited to, Building Codes, Fire
  Codes and the Americans with Disabilities Act; and (ii) causing as of the
  Commencement Date all electrical systems, including HVAC systems to be in
  good repair and condition. b. Move-ln Obligations. Tenant shall schedule its
  move-in with the Landlord’s Property Manager. Unless otherwise approved by
  Landlord’s Property Manager, and such approval shall not be unreasonably
  withheld, conditioned, or delayed, move-in shall not take place during
  Business Hours. During Tenant's move-in, a representative of Tenant must be
  on-site with Tenant's moving company to insure proper treatment of the
  Building and the Premises. Elevators, entrances, hallways and other Common
  Areas must remain in use for the general public during business hours. Any
  specialized use of elevators or other Common Areas must be coordinated with
  Landlord's Property Manager. Tenant must properly dispose of all packing
  material and refuse in accordance with the Rules and Regulations. Any damage
  or destruction to the Building or the Premises due to moving will be the sole
  responsibility of Tenant. c. Tenant's Maintenance. Tenant shall: (i) keep the
  Premises and fixtures in good order; (ii) make repairs and replacements to
  the Premises or Building needed because of Tenant's misuse or negligence;
  (iii) repair and replace Non-Standard Improvements, including any special
  equipment or decorative treatments, installed by or at Tenant’s request that
  serve the Premises (unless the Lease is ended because of casualty loss or
  condemnation); and (iv) not commit waste. d. Alterations to Premises. i.
  Tenant shall not make or permit anyone to make any alterations, additions,
  substitutions, installations, changes or improvements, structural or
  otherwise, in or to the Premises (including without limitation, any Tenant
  Work) or the rest of the Property ("Alterations") without the prior
  written consent of Landlord, such consent shall not be unreasonably withheld,
  conditioned, or delayed, except that the consent of Landlord shall not be
  required for any Alteration to the Premises which is purely cosmetic or
  decorative and is not visible from the exterior of the Premises. As a
  condition to granting its consent, Landlord may require Tenant to pay
  Landlord a reasonable fee to reimburse Landlord for overhead and
  administrative costs and expenses incurred in connection with the supervision
  by Landlord of Tenant's Alterations. Landlord’s administrative/supervision
  costs shall be as follows: 5% of the cost of Tenant’s alterations up to
  $100,000.00 and 3% of the cost of Tenant’s alterations over $100,000.00. All
  Alterations permitted by Landlord must conform to all rules, regulations and
  requirements of any governmental or public authority having jurisdiction over
  the Premises and/or the Property, must conform harmoniously with the
  Building's design and interior decoration and must not require any changes to
  or modifications of any 7 

  

 

	
  

  	
  of the
  Building's structural components or mechanical, electrical, HVAC (hereinafter
  defined), plumbing or other systems. As a condition precedent to such written
  consent of Landlord, Tenant agrees to obtain and deliver to Landlord written
  and unconditional waivers of mechanics' liens upon the Land and Building for
  all work, labor and services to be performed, and materials to be furnished,
  by Tenant's contractors and suppliers in connection with such work. Upon
  verbal request, Tenant will allow Landlord or its designated agent to inspect
  the work from time to time during the period of construction of all
  Alterations. Landlord may stop work on any Alterations if Landlord or its
  designated agent reasonably determines that the work is not being done (i) in
  a good and workmanlike manner, (ii) in compliance with all applicable laws,
  regulations and other requirements of governmental authorities, (iii)
  materially according to the plans and specifications provided to and approved
  by Landlord, (iv) using new materials and installations, at least equal in
  quality to the original Building materials and installations, free from any
  defects or deficiencies, and (v) in a way that reasonably avoids interfering
  with, or disturbing the quiet enjoyment of the other tenants. In such event,
  Tenant will promptly correct the problem(s) which gave rise to the work
  stoppage. If Tenant fails to correct such problem(s) within a time period Landlord
  determines to be reasonable, but in no case less than five (5) business days,
  then Landlord may, at its sole option, correct the problem(s), complete the
  Alterations, and Tenant will be liable for the costs of such action as
  Additional Rent. Upon completion of any Alterations, Tenant will deliver to
  Landlord complete as-built mylar drawings or CAD drawings of the Alterations.
  In addition, Tenant will furnish “as built” plans and specifications for all
  Alterations within a reasonable period of time after completion of the
  Alterations, and pay to Landlord or its designated agent a reasonable fee for
  updating the master reproducible Building blueprint to show the Alterations.
  It is understood and agreed by Landlord and Tenant that any Alterations shall
  be conducted on behalf of Tenant and not on behalf of Landlord. Tenant shall
  and does hereby indemnify, hold harmless and defend Landlord from and against
  any and all loss, damage, cost or expense (including, without limitation,
  attorneys' fees and all court costs) incurred by Landlord which may or might
  arise by reason of the making of or removal of any Alterations. If any
  Alteration is made without the prior written consent of Landlord, Landlord
  may correct or remove the same, and Tenant shall be liable for any and all
  loss, damage, cost or expense (including, without limitation, attorneys’ fees
  and all court costs) incurred by Landlord in the performance of this work.
  All Alterations (including flooring, wall-to-wall carpet and wall covering)
  shall, at Landlord’s election, immediately become the property of Landlord
  and shall remain upon and be surrendered with the Premises as a part thereof
  at the end of the Term; provided, however, that if Tenant is not in default
  in the performance of any of its obligations under this Lease beyond any
  applicable cure period, Tenant shall have the right to remove, prior to the
  expiration or termination of the Term, all movable furniture, furnishings or
  equipment not affixed to or in the Premises at the expense of Tenant. Except
  with regard to any Alteration approved pursuant to Section 8(d)(i) of which
  at the time of approval Landlord notified Tenant that the same would not be
  required to be removed, if and to the extent Landlord does not elect that any
  of the Alterations (including without limitation, any vaults, safes, file
  systems, raised floors or interior staircases between floors) remain upon and
  be surrendered with the Premises at the expiration or termination of the
  Term, Tenant shall, at its sole cost and expense, remove the same, restore
  the affected area to the condition existing prior to the construction or
  installation of any such Alteration and repair any damage caused by such
  removal, and if Tenant fails to remove any such Alteration, to restore and
  repair the affected area or repair any damage caused by any such removal as
  provided above, Landlord may undertake such removal, restoration and repair
  at Tenant's expense and Tenant shall reimburse Landlord for the cost thereof,
  together with any and all damages (including, without limitation, attorneys'
  fees and all court costs) which Landlord may sustain by reason of such
  default by Tenant. If Landlord consents to Alterations by Tenant, Landlord
  shall have the right to approve the plans and specifications for any Alterations
  and the contractors and subcontractors which Tenant proposes to use in
  connection with the Alterations, such approval not to be unreasonably
  withheld, conditioned or delayed. Tenant, 

  

 

	
  

  	
  or its
  contractors and subcontractors, as Landlord may direct, shall provide such
  insurance, bonding and/or indemnifications of Landlord as Landlord may
  reasonably require and shall comply with any and all rules and regulations
  applicable to Alterations as may be promulgated by Landlord from time to
  time. Prior to undertaking any Alterations, Tenant shall furnish to Landlord
  duplicate original policies or certificates thereof of worker's compensation
  insurance (covering all persons to be employed by Tenant and Tenant's
  contractors and subcontractors in connection with such Alterations),
  builder's all-risk insurance, and comprehensive commercial general liability
  insurance (including property damage coverage) in such form, with such
  companies, for such periods and in such amounts as Landlord may reasonably
  require, naming Landlord, its management agent and any mortgagee as
  additional insureds. v. All work described in this Section shall be performed
  only by contractors and subcontractors approved in writing by Landlord, such
  approval shall not be unreasonably withheld, conditioned, or delayed by
  Landlord. Tenant shall cause all contractors and subcontractors to procure
  and maintain insurance coverage against such risks, in such amounts, and with
  such companies as Landlord may reasonably require, but in no event less than:
  (i) Commercial General Liability insurance on an occurrence basis in amounts
  not less than $2,000,000 ($1,000,000 of which may be in excess umbrella
  coverage) naming Landlord and Landlord’s property management company as
  additional insureds; (ii) workers’ compensation insurance in amounts required
  by statute; and (iii) Business Automobile Liability insurance on an
  occurrence basis in amounts not less than $1,000,000. Tenant shall provide
  Landlord with insurance certificates for such contractors and subcontractors
  prior to commencement of any work. Tenant shall provide Landlord with the
  identities, mailing addresses and telephone numbers of all persons performing
  work or supplying materials prior to beginning such construction and Landlord
  may post on and about the Premises notices of non-responsibility pursuant to
  applicable Laws. All such work shall be performed in accordance with all Laws
  and in a good and workmanlike manner so as not to damage the Building
  (including the Premises, the Building's Structure and the Building's
  Systems). All such work which may affect the Building’s Structure or the
  Building's Systems, at Landlord’s election, must be performed by Landlord’s
  usual contractor for such work or a contractor approved by Landlord. All work
  affecting the roof of the Building must be performed by Landlord’s roofing
  contractor or a contractor approved by Landlord and no such work will be
  permitted if it would void or reduce the warranty on the roof. e. Restoration
  of Premises. At the expiration or earlier termination of this Lease, Tenant
  shall (i) deliver each and every part of the Premises in good repair and
  condition, ordinary wear and tear and damage by insured casualty excepted,
  and (ii) restore the Premises at Tenant's sole expense to the same condition
  as existed at the Commencement Date (excepting approved Alterations to the
  extent not required to be removed in accordance with this Lease), ordinary
  wear and tear and damage by insured casualty excepted. If Tenant has required
  or installed Non-Standard Improvements, such improvements shall be removed as
  part of Tenant's restoration obligation. Landlord, however, may elect to
  require Tenant to leave any Non- Standard Improvements in the Premises unless
  at the time of such Non-Standard Improvements were installed, Landlord agreed
  in writing that Tenant could remove such improvements. Tenant shall repair
  any damage caused by the removal of any Non-Standard Improvements.
  “Non-Standard Improvements” means such items as (i) High Demand Equipment and
  separate meters, (ii) all wiring and cabling from the point of origin to the
  termination point, (iii) raised floors for computer or communications
  systems, (iv) telephone equipment, security systems, and UPS systems, (iv)
  equipment racks, (v) alterations installed by or at the request of Tenant
  after the Commencement Date, and (vi) any other improvements that are not
  part of the Building Standard Improvements. f. Landlord's Performance of
  Tenant’s Obligations. If Tenant does not perform its maintenance or restoration
  obligations in a timely manner, commencing the same within five (5) business
  days after receipt of written notice from Landlord specifying the work
  needed, and thereafter diligently and continuously pursuing the work until
  completion, then Landlord shall have the right, but not the obligation, to
  perform such work. In addition, Landlord shall have the right but not the
  obligation to perform such work at the request of Tenant. Any amounts
  expended by Landlord on such maintenance or restoration shall be Additional
  Rent to be paid by Tenant to Landlord within thirty (30) days after demand.
  g. Construction Liens. Tenant shall have no power to do any act or make any
  contract 9 

  

 

	
  

  	
  that may create
  or be the foundation of any lien, mortgage or other encumbrance upon the
  reversionary or other estate of Landlord, or any interest of Landlord in the
  Premises. NO CONSTRUCTION LIENS OR OTHER LIENS FOR ANY LABOR, SERVICES OR
  MATERIALS FURNISHED TO THE PREMISES SHALL ATTACH TO OR AFFECT THE INTEREST OF
  LANDLORD IN AND TO THE PREMISES OR THE BUILDING. Tenant shall keep the
  Premises and the Building free from any liens arising out of any work
  performed, materials furnished, or obligations incurred by or on behalf of
  Tenant. Should any lien or claim of lien be filed against the Premises or the
  Building by reason of any act or omission of Tenant or any of Tenant's
  agents, employees, contractors or representatives, then Tenant shall cause
  the same to be canceled and discharged of record by bond or otherwise within
  ten (10) days after the filing thereof. Should Tenant fail to discharge the
  lien within ten (10) days, then Landlord may discharge the lien. The amount
  paid by Landlord to discharge the lien (whether directly or by bond), plus
  all administrative and legal costs incurred by Landlord, shall be Additional
  Rent payable on demand. The remedies provided herein shall be in addition to
  all other remedies available to Landlord under this Lease or otherwise. h.
  Tenant's Equipment. Tenant will not install or operate in the Premises any
  electrically operated equipment or other machinery, other than standard desk
  top office equipment ordinarily found in first-class office buildings in
  Durham North Carolina, without first obtaining the prior written consent of
  Landlord, such consent shall not be unreasonably withheld, conditioned, or
  delayed. Landlord shall have the right to charge Tenant for the cost of its
  electricity consumption beyond Business Hours or in excess of the electrical
  capacity set forth in Section 1. i (exclusive of Building standard HVAC and
  lights) and for the cost of any additional wiring or other improvements to
  the Building as may be occasioned by or required solely as a result of any
  such excess use by Tenant. Tenant shall not use or consume water other than
  for drinking, lavatory and toilet purposes, or in unusual quantities (of
  which fact Landlord shall reasonably judge), without first obtaining the
  prior written consent of Landlord, such consent shall not be unreasonably
  withheld, conditioned, or delayed. Tenant shall not install any other
  equipment of any kind or nature whatsoever (including, without limitation,
  electric space heaters and supplementary air-conditioning units) which will
  or may necessitate any changes, replacements or additions to, or in the use
  of, the water system, heating system, plumbing system, air- conditioning
  system, or electrical system of the Demised Premises or the rest of the
  Building. Landlord may condition its consent to the installation or use of
  any equipment or machinery or to the consumption of excess utilities upon the
  payment by Tenant of Additional Rent in compensation for any excess
  consumption of utilities and for the cost of additional wiring, piping or
  other improvements to the Building as may be occasioned by the operation of
  said equipment or machinery or by said excess use of utilities. In the event
  of any excessive consumption of any utilities (including without limitation
  any consumption beyond Building Hours), Landlord shall be entitled to require
  that Tenant install in the Premises (at Tenant's cost and in a location
  approved by Landlord) meters or submeters to measure Tenant’s utility
  consumption for the Premises or for any specific equipment causing excess
  consumption, as Landlord shall require; in which case, Tenant shall maintain
  in good order and repair (and replace, if necessary) such meters or
  submeters. If separate meters are installed for measuring Tenant's use of any
  utilities, then charges for such utilities shall be paid directly by Tenant
  to the appropriate utility company. If submeters are installed for measuring
  Tenant's consumption of any utilities, Tenant shall pay the costs of the same
  to Landlord as Additional Rent, within fifteen (15) days of its receipt of a
  bill therefor based on such submeter readings. Business machines and
  mechanical equipment belonging to Tenant which cause noise or vibration that
  may be transmitted to the structure of the Building or to any space therein
  to such a degree as to be objectionable to Landlord or to any tenant in the
  Building shall be installed and maintained by Tenant, at Tenant's expense, on
  vibration eliminators or other devices sufficient to eliminate such noise and
  vibration, which fact Landlord shall reasonably judge. Whenever machines or
  equipment generating excessive heat are used in the Premises, Landlord
  reserves the right to require Tenant to install supplementary air
  conditioning units in the Premises and any cost associated therewith shall be
  paid by Tenant, including any cost of installation, operation and maintenance
  thereof. 9. PROPERTY OF TENANT a. Property Taxes.
  Tenant shall pay when due all taxes levied or assessed upon Tenant's
  equipment, fixtures, furniture, leasehold improvements and personal property
  located in the Premises. b. Removal. Provided Tenant is not in default beyond
  any applicable cure period, Tenant may remove all fixtures and equipment
  which it has placed in the Premises; provided, however, Tenant must repair
  all damages caused by such removal. If Tenant does not remove its property
  from the Premises within five days after the expiration or earlier
  termination (for whatever cause) of this Lease, such property shall be deemed
  abandoned by Tenant, and 10 

  

 

	
  

  	
  Landlord may
  dispose of the same in whatever manner Landlord may elect without any
  liability to Tenant. 10 SIGNS. No sign, advertisement or notice shall be
  inscribed, painted, affixed or displayed by Tenant on any part of the outside
  or the inside of the Building or within the Premises if the same is visible
  from outside of the Premises, and if any such sign, advertisement or notice
  is nevertheless exhibited by Tenant, Landlord may remove the same and Tenant
  shall be liable for any and all expenses (including, without limitation,
  attorneys' fees and all court costs) incurred by Landlord in such connection.
  Door and directory signage shall be provided and installed by the Landlord in
  accordance with building standards at Landlord's sole expense.- 11. ACCESS TO
  PREMISES. a. Tenant's Access. Tenant, its agents, employees, invitees, and
  guests, shall have access to the Premises and reasonable ingress and egress
  to common and public areas of the Building twenty-four hours a day, seven
  days a week; provided, however, Landlord by reasonable regulation may control
  such access for the comfort, convenience, safety and protection of all
  tenants in the Building, or as needed for making repairs and alterations.
  Tenant shall be responsible for providing access to the Premises to its
  agents, employees, invitees and guests after business hours and on weekends
  and holidays, but in no event shall Tenant’s use of and access to the
  Premises during non-business hours compromise the security of the Building.
  b. Landlord’s Access. Landlord shall have the right, at all reasonable times
  and upon reasonable oral notice, either itself or through its authorized
  agents, to enter the Premises (i) to make repairs, alterations or changes as
  Landlord deems necessary, (ii) to inspect the Premises, mechanical systems
  and electrical devices, and (iii) to show the Premises to prospective
  mortgagees and purchasers. Within one hundred eighty (180) days prior to the
  Expiration Date, Landlord shall have the right, either itself or through its
  authorized agents, to enter the Premises at all reasonable times to show
  prospective tenants. c. Emergency Access. Landlord shall have the right to
  enter the Premises at any time without notice in the event of an emergency.
  12. TENANT’S COMPLIANCE a. Laws. Except as otherwise expressly provided in
  Lease Addendum Number One, Tenant, at Tenant's sole expense, shall comply
  with, and make any and all alterations to and within the Premises in the
  manner allowed under Section 9 hereof as may be necessary to effect
  compliance with, any and all present and future laws, ordinances,
  regulations, and orders of any governmental, quasi-governmental, public or
  other authority having jurisdiction over the Property (or any part thereof),
  including without limitation The Americans with Disabilities Act
  (collectively, the "Applicable Laws"). In addition, if Landlord
  makes any alteration in or to any part of the Property in order to comply
  with any requirement of any of the Applicable Laws and such requirement is a
  result of Tenant's particular business or use of the Premises, then Tenant
  shall reimburse Landlord upon demand for the cost thereof. b. Rules and
  Regulations. Tenant shall comply with the Rules and Regulations attached as
  Exhibit B. The Rules and Regulations may be modified from time to time by
  Landlord, effective as of the date delivered to Tenant or posted on the
  Premises, provided such rules are uniformly applicable to all tenants in the
  Building. Any conflict between this Lease and the Rules and Regulations shall
  be governed by the terms of this Lease. 13. ADA COMPLIANCE. a. Tenant's
  Compliance. Tenant, at Tenant’s sole expense, shall comply with all
  Applicable Laws which shall impose any duty upon Landlord or Tenant with
  respect to the use or occupation of the Premises or alteration of the
  Premises to accommodate persons with special needs, including using all
  reasonable efforts to comply with The Americans With Disabilities Act (the
  "ADA”). b. Landlord's Compliance. Landlord, at Landlord’s sole expense,
  shall use all reasonable efforts to meet the requirements of the ADA as it
  applies to the Common Areas and restrooms of the Building; but Landlord shall
  have no responsibility for ADA compliance with respect to the Premises.
  Landlord shall not be required to make changes to the Common Areas or
  restrooms of the Building to comply with ADA standards adopted after
  construction of the Building unless specifically required to do so by law,
  and Tenant shall reimburse Landlord for 11 

  

 

	
  

  	
  the cost of ADA
  compliance necessitated by Tenant's particular use of the Premises including,
  without limitation, any alterations to the Premises. c. ADA Notices. If
  Tenant receives any notices alleging a violation of ADA relating to any
  portion of the Building or Premises (including any governmental or regulatory
  actions or investigations regarding non-compliance with ADA), then Tenant
  shall notify Landlord in writing within ten (10) days of such notice and
  provide Landlord with copies of any such notice. 14. INSURANCE REQUIREMENTS
  a. Tenant’s Liability Insurance. Effective as of the earlier of: (1) the date
  Tenant enters or occupies the Premises; or (2) the Commencement Date, and
  continuing throughout the Term, Tenant shall maintain the following insurance
  policies: (A) commercial general liability insurance in amounts of $2,000,000
  per occurrence, which shall apply on a per location basis, or, following the
  expiration of the initial Term, such other amounts as Landlord may from time
  to time reasonably require (and, if the use and occupancy of the Premises
  include any activity or matter that is or may be excluded from coverage under
  a commercial general liability policy [e.g., the sale, service or consumption
  of alcoholic beverages], Tenant shall obtain such endorsements to the
  commercial general liability policy or otherwise obtain insurance to insure
  all liability arising from such activity or matter in such amounts as
  Landlord may reasonably require), insuring Tenant, Landlord and Landlord's
  property management company against all liability for injury to or death of a
  person or persons or damage to property arising from the use and occupancy of
  the Premises and (without implying any consent by Landlord to the
  installation thereof) the installation, operation, maintenance, repair or
  removal of Tenant’s equipment; (B) All Risk Property insurance covering the
  full value of all Alterations and improvements and betterments in the
  Premises, naming Landlord and Landlord's mortgagees designated by Landlord as
  additional loss payees as their interests may appear; (C) All Risk Property
  insurance covering the full value of all furniture, trade fixtures and
  personal property (including property of Tenant or others) in the Premises or
  otherwise placed in the Building or Common Areas by or on behalf of Tenant it
  being understood that no lack or inadequacy of insurance by Tenant shall in
  any event make Landlord subject to any claim by virtue of any theft of or
  loss or damage to any uninsured or inadequately insured property; (D)
  contractual liability insurance sufficient to cover Tenant’s indemnity
  obligations hereunder (but only if such contractual liability insurance is
  not already included in Tenant’s commercial general liability insurance
  policy); (E) worker's compensation insurance in amounts not less than
  statutorily required; (F) in the event Tenant performs any alterations or repairs
  in, on, or to the Premises, Builder’s Risk Insurance on an All Risk basis
  (including collapse) on a completed value (non-reporting) form, or by
  endorsement including such coverage pursuant to Section 8.d hereinabove, for
  full replacement value covering all work incorporated in the Building and all
  materials and equipment in or about the Premises; and (G) such increased
  limits of coverages, as Landlord, or any mortgagee or lessor of Landlord, may
  reasonably require from time to time. Tenant's insurance shall provide
  primary coverage to Landlord and shall not require contribution by any
  insurance maintained by Landlord, when any policy issued to Landlord provides
  duplicate or similar coverage, and in such circumstance Landlord’s policy
  will be excess over Tenant’s policy. Tenant will obtain Automobile Liability
  insurance in the event that the Tenant possesses vehicles owned by Tenant,
  which insurance shall have limits no less than $2,000,000 combined single
  limit for property damage and bodily injury. b Tenant’s Property Insurance.
  Tenant shall also carry the equivalent of ISO Special Form Property Insurance
  on Tenant’s Property for full replacement value and with coinsurance waived.
  For purposes of this provision, “Tenant’s Property" shall mean Tenant’s
  personal property and fixtures, and any Non-Standard Improvements to the
  Premises. Tenant shall neither have, nor make, any claim against Landlord for
  any loss or damage to the Tenant’s Property, regardless of the cause of the
  loss or damage. c. Certificates of Insurance. Prior to taking possession of
  the Premises, and annually thereafter, Tenant shall deliver to Landlord
  certificates or other evidence of insurance satisfactory to Landlord All such
  policies shall be non assessable and shall contain language to the extent
  obtainable that: (i) any loss shall be payable notwithstanding any act or
  negligence of Landlord or Tenant that might otherwise result in forfeiture of
  the insurance, (ii) that the policies are primary and non contributing with
  any insurance that Landlord may carry, and (iii) that the policies cannot be
  canceled, non-renewed, or coverage reduced except after thirty (30) days'
  prior notice to Landlord. If Tenant fails to provide Landlord with such
  certificates or other evidence of insurance coverage, Landlord may obtain
  such coverage and the cost of such coverage shall be Additional Rent payable
  by Tenant upon demand. d Insurance Policy Requirements. Tenant’s insurance
  policies required by this Lease shall: (i) be issued by insurance companies
  licensed to do business in the state in which the 12 

  

 

	
  

  	
  Premises are
  located with a general policyholder's ratings of at least A- and a financial
  rating of at least VII in the most current Best's Insurance Reports available
  on the Commencement Date, or if the Best's ratings are changed or
  discontinued, the parties shall agree to a comparable method of rating
  insurance companies; (ii) name Landlord as an additional insured as its
  interest may appear [other landlords or tenants may be added as additional
  insureds in a blanket policy]; (iii) provide that the insurance not be
  canceled, non-renewed or coverage materially reduced unless thirty (30) days
  advance notice is given to Landlord; (iv) be primary policies; (v) provide
  that any loss shall be payable notwithstanding any gross negligence of
  Landlord or Tenant which might result in a forfeiture thereunder of such
  insurance or the amount of proceeds payable; (vi) have no deductible
  exceeding TEN THOUSAND DOLLARS ($10,000), unless approved in writing by
  Landlord; and (vii) be maintained during the entire Term and any extension
  terms. e. Landlord's Insurance. Landlord shall keep the Building, including
  the improvements (but excluding Tenant’s Property), insured against damage
  and destruction by perils insured by the equivalent of ISO Special Form
  Property Insurance in the amount of the full replacement value of the
  Building Landlord shall also maintain General Liability insurance in amounts
  that Landlord reasonably deems appropriate. f. Mutual Waiver of Subrogation.
  Anything in this Lease to the contrary notwithstanding, Landlord hereby
  releases and waives unto Tenant (including all partners, stockholders,
  officers, directors, employees and agents thereof), its successors and
  assigns, and Tenant hereby releases and waives unto Landlord (including all
  partners, stockholders, officers, directors, employees and agents thereof),
  its successors and assigns, all rights to claim damages for any injury, loss,
  cost or damage to persons or to the Premises or any other casualty, as long
  as the amount of such injury, loss, cost or damage has been paid either to
  Landlord, Tenant, or any other person, firm or corporation, under the terms
  of any Property, General Liability, or other policy of insurance, to the
  extent such releases or waivers are permitted under applicable law. As
  respects all policies of insurance carried or maintained pursuant to this
  Lease and to the extent permitted under such policies, Tenant and Landlord
  each waive the insurance carriers' rights of subrogation. 15. INDEMNITY.
  Subject to the insurance requirements, releases and mutual waivers of
  subrogation set forth in this Lease, Tenant agrees as follows: a. Indemnity.
  Tenant shall indemnify and hold Landlord harmless from and against any and
  all third party claims, damages, losses, liabilities, lawsuits, costs and
  expenses (including attorneys’ fees at all tribunal levels) arising out of or
  related to (i) any activity, work, or other thing done, permitted or suffered
  by Tenant in or about the Premises or the Building, (ii) any breach or
  default by Tenant in the performance of any of its obligations under this
  Lease, or (iii) any act or neglect of Tenant, or any officer, agent,
  employee, contractor, servant, invitee or guest of Tenant. The foregoing
  indemnity shall not, however, excuse Landlord from liability to third parties
  resulting from the negligence of Landlord its agents and employees.
  Notwithstanding anything to the contrary in this paragraph, at Landlord’s
  election, Tenant shall provide and pay for the cost of Landlord's defense in
  connection with any and all claims arising within or in any way connected
  with the Premises until such time as it is adjudicated that such claim(s)
  resulted from the negligence of Landlord, its agents or employees. In the
  event of such adjudication, Landlord shall have a percentage responsibility
  with respect to any judgments against Tenant resulting from such claims as
  well as costs incurred by Tenant in its defense of Landlord in connection
  with same. Landlord's percentage of responsibility shall be equal to the
  percentage of its comparative negligence as determined in a final court
  judgment. b. Defense Obligation. If any such action is brought against
  Landlord, then Tenant, upon notice from Landlord, shall defend the same through
  counsel selected by Landlord's insurer, or other counsel acceptable to
  Landlord. The provisions of this Section shall survive the termination of
  this Lease. 16. QUIET ENJOYMENT Tenant shall have quiet enjoyment and
  possession of the Premises provided Tenant is not in default beyond any
  applicable cure period. No action of Landlord or other tenants working in
  other space in the Building, or in repairing or restoring the Premises, shall
  be deemed a breach of this covenant, nor shall such action give to Tenant any
  right to modify this Lease either as to term, rent payables or other
  obligations to be performed. 17. SUBORDINATION; ATTORNMENT;
  NON-DISTURBANCE; AND ESTOPPEL CERTIFICATE. a. Subordination and
  Attornment. Tenant agrees to execute within ten (10) days after request to do
  so from Landlord or its mortgagee an agreement: 13 

  

 

	
  

  	
  i. Making this
  Lease superior or subordinate (as required by Landlord) to the interests of
  the mortgagee; ii. Agreeing to attorn to the mortgagee; iii. Giving the
  mortgagee notice of, and a reasonable opportunity (which shall in no event be
  less than thirty (30) days after notice thereof is delivered to mortgagee) to
  cure any Landlord default and agreeing to accept such cure if effected by the
  mortgagee; iv. Permitting the mortgagee (or other purchaser at any
  foreclosure sale), and its successors and assigns, on acquiring Landlord's
  interest in the Premises and the Lease, to become substitute Landlord
  hereunder, with liability only for such Landlord obligations as accrue after
  Landlord's interest is so acquired; v. Agreeing to attorn to any successor
  Landlord; and vi. Containing such other agreements and covenants on Tenant’s
  part as Landlord’s mortgagee may reasonably request. b. Non-Disturbance. It
  shall be a condition of such subordination that Tenant receive from the
  holder of each such encumbrance a typical commercial lender's standard form
  of non- disturbance agreement whereby the holder covenants and agrees that
  provided Tenant is not in default of this Lease beyond the applicable cure
  period, subject to the terms of such non- disturbance agreement, Tenant’s
  right of possession of the Leased Premises will not be terminated or
  disturbed by the foreclosure of such encumbrance (or transfer in lieu of
  foreclosure) or by any subsequent transfers of the Property. c. Estoppel
  Certificates. Tenant agrees to execute within ten (10) business days after
  request, and as often as requested, estoppel certificates confirming any
  factual matter requested by Landlord which is true and is within Tenant's
  knowledge regarding this Lease, and the Premises, including but not limited
  to: (i) the date of occupancy, (ii) Expiration Date, (iii) the amount of Rent
  due and date to which Rent is paid, (iii) whether Tenant has any defense or
  offsets to the enforcement of this Lease or the Rent payable, (iv) any
  default or breach by Landlord, and (v) whether this Lease, together with any
  modifications or amendments, is in full force and effect. Tenant shall attach
  to such estoppel certificate copies of any modifications or amendments to the
  Lease. 18. ASSIGNMENT - SUBLEASE. a. Landlord Consent. Tenant may not assign
  or encumber this Lease or its interest in the Premises arising under this
  Lease, and may not sublet all or any part of the Premises without first obtaining
  the written consent of Landlord (each such action is referred to as a
  "Transfer”). Landlord shall not unreasonably withhold, condition, or
  delay its consent to any assignment or subletting of the Premises, provided
  that the proposed transferee in Landlord's reasonable opinion: (1) is
  creditworthy; (2) has a good reputation in the business community; (3) will
  use the Premises for the Permitted Use (thus, excluding without limitation,
  uses for credit processing and telemarketing) and will not use the Premises
  in any manner that would conflict with any exclusive use agreement or other
  similar agreement entered into by Landlord with any other tenant of the
  Project; (4) will not use the Premises, Project in a manner that would
  materially increase the pedestrian or vehicular traffic to the Premises,
  Project; (5) is not a governmental entity, or subdivision or agency thereof;
  and (6) is not another occupant of the Project;; otherwise, Landlord may
  withhold its consent in its sole discretion. Landlord will not consent to an
  assignment or sublease that might will result in a use that conflicts with
  the rights of any existing tenant. One consent shall not be the basis for any
  further consent. b. Definition of Assignment. For the purpose of this Section
  18, the word "assignment" shall be defined and deemed to include
  the following: (i) if Tenant is a partnership, the withdrawal or change,
  whether voluntary, involuntary or by operation of law, of partners owning
  thirty percent (30%) or more of the partnership, or the dissolution of the
  partnership; (ii) if Tenant consists of more than one person, an assignment,
  whether voluntary, involuntary, or by operation of law, by one person to one
  of the other persons that is a Tenant; (iii) if Tenant is a corporation, any
  dissolution or reorganization of Tenant, or the sale or other transfer of a
  controlling percentage (hereafter defined) of capital stock of Tenant other
  than to an affiliate or subsidiary or the sale of fifty one percent (51%) in
  value of the assets of Tenant; (iv) if Tenant is a limited liability company,
  the change of members whose interest in the company is fifty percent (50%) or
  more. The phrase "controlling percentage" means the ownership of,
  and the right to vote, stock possessing at least fifty one percent (51%) of
  the total combined voting 14 

  

 

	
  

  	
  power of all
  classes of Tenant's capital stock issued, outstanding and entitled to vote
  for the election of directors, or such lesser percentage as is required to
  provide actual control over the affairs of the corporation; except that, if
  the Tenant is a publicly traded company, public trades or sales of the
  Tenant's stock on a national stock exchange shall not be considered an
  assignment hereunder even if the aggregate of the trades of sales exceeds
  fifty percent (50%) of the capital stock of the company. c. Permitted
  Assignments/Subleases. Notwithstanding anything to the contrary contained
  herein provided Tenant gives Landlord fifteen (15) days prior written notice,
  Tenant shall be entitled to assign this Lease or sublet the Premises to an
  entity ("Controlled Tenant") (i) resulting from the merger of the
  originally named Tenant with, or acquisition (including all or substantially
  all of the assets or stock) by or of, another company, provided such Controlled
  Tenant shall have a tangible net worth not less than the tangible net worth
  of Tenant as of the date of this Lease; or (ii) any company that is and
  remains throughout the Lease Term an affiliate of Tenant. As used in the
  immediately preceding sentence, an affiliate is a company that controls
  Tenant, is controlled by Tenant or which is controlled by a company that
  likewise controls Tenant. In connection with any such assignment, Tenant
  shall cause the Controlled Tenant to execute and deliver to Landlord an agreement
  whereby the Controlled Tenant agrees to be bound by all the covenants and
  agreements in this Lease which Tenant has agreed to keep, observe or perform,
  and whereby the Controlled Tenant agrees that the provisions of this
  paragraph shall be binding upon it as if it were the original Tenant
  hereunder. Together with its required notice to Landlord regarding the
  proposed transfer to a Controlled Tenant, Tenant shall provide Landlord with
  supporting documentation confirming to Landlord's reasonable satisfaction
  that the transferee is, in fact, a Controlled Tenant. Notwithstanding the
  foregoing, in no event shall the Tenant be released from liability for the
  obligations under the Lease upon a transfer to a Controlled Tenant. d. Notice
  to Landlord. Landlord must be given prior written notice of every assignment
  or subletting, and failure to do so shall be a default hereunder. e.
  Prohibited Assignments/Subleases. In no event shall this Lease be assignable
  by operation of any law, and Tenant’s rights hereunder may not become, and
  shall not be listed by Tenant as an asset under any bankruptcy, insolvency or
  reorganization proceedings. Acceptance of Rent by Landlord after any non
  permitted assignment or sublease shall not constitute approval thereof by
  Landlord. f. Limitation. Any assignment or sublease for which Landlord's
  consent is required shall not include the right to exercise any options to
  renew the Lease Term, expand the Premises, or similar options, unless
  specifically provided for in the consent. If Landlord consents to a proposed
  Transfer, then the proposed transferee shall deliver to Landlord a written
  agreement whereby it expressly assumes Tenant’s obligations hereunder;
  however, any transferee of less than all of the space in the Premises shall
  be liable only for obligations under this Lease that are properly allocable
  to the space subject to the Transfer for the period of the Transfer. No
  Transfer shall release Tenant from its obligations under this Lease, but
  rather Tenant and its transferee shall be jointly and severally liable
  therefor. Landlord's consent to any Transfer shall not be deemed consent to
  any subsequent Transfers. If an Event of Default occurs while the Premises or
  any part thereof are subject to a Transfer, then Landlord, in addition to its
  other remedies, may collect directly from such transferee all rents becoming
  due to Tenant and apply such rents against Rent. Tenant authorizes its
  transferees to make payments of rent directly to Landlord upon receipt of
  notice from Landlord to do so following the occurrence of an Event of Default
  hereunder. Tenant shall pay for the cost of any demising walls or other
  improvements necessitated by a proposed subletting or assignment. g. Tenant
  Not Released. No assignment or sublease shall release Tenant of any of its
  obligations under this Lease. h. Excess Rents. If Tenant assigns this Lease
  or subleases all or part of the Premises at a rental rate or other
  consideration that exceeds the rentals paid to Landlord, then after Tenant’s
  reasonable costs and expenses are recouped, fifty percent (50%) of any such
  excess shall be paid over to Landlord by Tenant as and when received by
  Tenant. i. Request for Consent. If Tenant requests Landlord’s consent to a
  Transfer, then, at least fifteen (15) days prior to the effective date of the
  proposed Transfer, Tenant shall provide Landlord with a written description
  of all terms and conditions of the proposed Transfer, copies of the proposed
  pertinent documentation, and the following information about the proposed transferee:
  name and address; reasonably satisfactory information about its business and
  business history; its proposed use of the Premises; banking, financial, and
  other credit information; and general references sufficient to enable
  Landlord to determine the proposed 15 

  

 

	
  

  	
  transferee’s
  creditworthiness and character. Concurrently with Tenant's notice of any
  request for consent to a Transfer, Tenant shall pay to Landlord a fee of
  $1,000 to defray Landlord’s expenses in reviewing such request, and Tenant shall
  also reimburse Landlord immediately upon request for its reasonable
  attorneys’ fees incurred in connection with considering any request for
  consent to a Transfer. Landlord may, within fifteen (15) days after
  submission of Tenant’s written request for Landlord's consent to an
  assignment or subletting, terminate this Lease as to the portion of the
  Premises proposed to be sublet or assigned as of the date the proposed
  Transfer is to be effective. If Landlord cancels this Lease as to any portion
  of the Premises, then this Lease shall cease for such portion of the
  Premises, Tenant shall pay to Landlord all Rent accrued through the
  cancellation date relating to the portion of the Premises covered by the
  proposed Transfer, and Rent shall be reduced proportionately based on the
  remaining square footage in the Premises. Thereafter, Landlord may lease such
  portion of the Premises to the prospective transferee (or to any other
  person) without liability to Tenant. For purposes of clarity, this means that
  if Landlord terminates this lease pursuant to this Section 18(i), Tenant
  shall have no further obligations hereunder that would first arise following
  the date of Termination but for such termination (and in any event Tenant
  will continue to be responsible for any previously accrued obligations,
  including obligations for reconciled operating expenses). j. Unauthorized
  Assignment or Sublease. Any unauthorized assignment or sublease shall
  constitute a default under the terms of this Lease. 19. DAMAGES TO PREMISES.
  a. Landlord’s Restoration Obligations. If the Building or Premises are
  damaged by fire or other casualty ("Casualty”), then Landlord shall
  repair and restore the Premises to substantially the same condition of the
  Premises immediately prior to such Casualty, subject to the following terms
  and conditions: i. The casualty must be insured under Landlord's insurance
  policies, and Landlord’s obligation is limited to the extent of the insurance
  proceeds received by Landlord. Landlord’s duty to repair and restore the Premises
  shall not begin until receipt of the insurance proceeds. ii. Landlord’s
  lender(s) must permit the insurance proceeds to be used for such repair and
  restoration. iii. Landlord shall have no obligation to repair and restore
  Tenant’s trade fixtures, decorations, signs, contents, or any Non-Standard
  Improvements to the Premises. b. Termination of Lease by Landlord. Landlord
  shall have the option of terminating the Lease as of the date of the Casualty
  if: (i) the Premises is rendered wholly untenantable; (ii) the Premises is
  damaged in whole or in part as a result of a risk which is not covered by
  Landlord's insurance policies; (iii) Landlord's lender does not permit a
  sufficient amount of the insurance proceeds to be used for restoration
  purposes; (iv) the Premises is damaged in whole or in part during the last
  two years of the Term; or (v) the Building containing the Premises is damaged
  (whether or not the Premises is damaged) to an extent of fifty percent (50%)
  or more of the fair market value thereof. If Landlord elects to terminate
  this Lease, then it shall give notice of the cancellation to Tenant within
  sixty (60) days after the date of the Casualty and Tenant's obligations
  hereunder shall expire effective as of the date of the Casualty. Tenant shall
  vacate and surrender the Premises to Landlord within thirty (30) days after
  receipt of the notice of termination. c. Termination of Lease by Tenant.
  Notwithstanding anything herein to the contrary, in the event Landlord does
  not complete its required restoration of the Leased Premises within two
  hundred twenty-five (225) days after the occurrence of the damage or
  destruction, Tenant shall be entitled to terminate this Lease by giving
  Landlord written notice of intent to terminate within ten (10) days after expiration
  of such two hundred twenty-five (225) day period. However, if at any time
  Landlord believes it will be unable to complete restoration within such two
  hundred twenty-five (225) day period, it shall be entitled to notify Tenant
  in writing of the Landlord’s estimated time frame for completion of
  restoration and if Tenant fails to cancel this Lease by notice of
  cancellation given to Landlord within 10 days following Landlord’s written
  notice, such two hundred twenty-five (225) day period shall automatically be
  extended to the last day of Landlord's estimated time frame. d. Tenant’s
  Restoration Obligations. Unless terminated, the Lease shall remain in full
  force and effect, and Tenant shall promptly repair, restore, or replace
  Tenant's insured trade fixtures, decorations, signs, contents, and any
  Non-Standard Improvements to the Premises. All 16 

  

 

	
  

  	
  repair,
  restoration or replacement shall be at least to the same condition as existed
  prior to the Casualty. The proceeds of all insurance carried by Tenant on its
  property shall be held in trust by Tenant for the purposes of such repair,
  restoration, or replacement. e. Rent Abatement. If Premises is rendered
  wholly untenantable by the Casualty, then the Rent payable by Tenant shall be
  fully abated. If the Premises is only partially damaged, then Tenant shall
  continue the operation of Tenant's business in any part not damaged to the
  extent reasonably practicable from the standpoint of prudent business
  management, and Rent and other charges shall be abated proportionately to the
  portion of the Premises rendered untenantable. The abatement shall be from
  the date of the Casualty until the Premises have been substantially repaired
  and restored, or until Tenant's business operations are restored in the
  entire Premises, whichever shall first occur. However, if the Casualty is
  caused by the negligence or other wrongful conduct of Tenant or of Tenant's
  subtenants, licensees, contractors, or invitees, or their respective agents
  or employees, there shall be no abatement of Rent. f. Waiver of Claims. The
  abatement of the Rent and Tenant's right to terminate as set forth above is
  Tenant’s exclusive remedy against Landlord in the event of a Casualty. Tenant
  hereby waives all claims against Landlord for any compensation or damage for
  loss of use of the whole or any part of the Premises and/or for any
  inconvenience or annoyance occasioned by any Casualty and any resulting
  damage, destruction, repair, or restoration. 20. EMINENT DOMAIN a. Effect on
  Lease. If all of the Premises are taken under the power of eminent domain (or
  by conveyance in lieu thereof), then this Lease shall terminate as of the
  date possession is taken by the condemnor, and Rent shall be adjusted between
  Landlord and Tenant as of such date. If only a portion of the Premises is
  taken and Tenant can continue use of the remainder, then this Lease will not
  terminate, but Rent shall abate in a just and proportionate amount to the
  loss of use occasioned by the taking. b. Right to Condemnation Award.
  Landlord shall be entitled to receive and retain the entire condemnation
  award for the taking of the Building and Premises. Tenant shall have no right
  or claim against Landlord for any part of any award received by Landlord for
  the taking. Tenant shall have no right or claim for any alleged value of the
  unexpired portion of this Lease, or its leasehold estate, or for costs of
  removal, relocation, business interruption expense or any other damages
  arising out of such taking. Tenant, however, shall not be prevented from making
  a claim against the condemning party (but not against Landlord ) for any
  moving expenses, loss of profits, or taking of Tenant’s personal property
  (other than its leasehold estate) to which Tenant may be entitled; provided
  that any such award shall not reduce the amount of the award otherwise
  payable to Landlord for the taking of the Building and Premises. 21.
  ENVIRONMENTAL COMPLIANCE a. Environmental Laws. The term “ Environmental
  Laws” shall mean all now existing or hereafter enacted or issued statutes,
  laws, rules, ordinances, orders, permits and regulations of all state,
  federal, local and other governmental and regulatory authorities, agencies
  and bodies applicable to the Premises, pertaining to environmental matters or
  regulating, prohibiting or otherwise having to do with asbestos and all other
  toxic, radioactive, or hazardous wastes or materials including, but not
  limited to, the Federal Clean Air Act, the Federal Water Pollution Control
  Act, and the Comprehensive Environmental Response, Compensation, and
  Liability Act of 1980, as from time to time amended. b. Tenant's
  Responsibility. Tenant covenants and agrees that it will keep and maintain
  the Premises at all times in compliance with Environmental Laws. Tenant shall
  not (either with or without negligence) cause or permit the escape, disposal
  or release of any biologically active or other hazardous substances, or
  materials on the Property. Tenant shall not allow the storage or use of such
  substances or materials in any manner not sanctioned by law or in compliance
  with the highest standards prevailing in the industry for the storage and use
  of such substances or materials, nor allow to be brought onto the Property
  any such materials or substances except to use in the ordinary course of
  Tenant's business, and then only after notice is given to Landlord of the
  identity of such substances or materials. No such notice shall be required,
  however, for commercially reasonable amounts of ordinary office supplies and
  janitorial supplies. Tenant shall execute affidavits, representations and the
  like, from time to time, at Landlord's request, concerning Tenant's best
  knowledge and belief regarding the presence of hazardous substances or
  materials on the Premises. c. Tenant's Liability. Tenant shall hold Landlord free,
  harmless, and indemnified from 17 

  

 

	
  

  	
  any penalty,
  fine, claim, demand, liability, cost, or charge whatsoever which Landlord
  shall incur, or which Landlord would otherwise incur, by reason of Tenant's
  failure to comply with this Section 21 including, but not limited to: (i) the
  cost of full remediation of any contamination to bring the Property into the
  same condition as prior to the Commencement Date and into full compliance
  with all Environmental Laws; (ii) the reasonable cost of all appropriate tests
  and examinations of the Premises to confirm that the Premises and any other
  contaminated areas have been remediated and brought into compliance with all
  Environmental Laws; and (iii) the reasonable fees and expenses of Landlord’s
  attorneys, engineers, and consultants incurred by Landlord in enforcing and
  confirming compliance with this Section 21. d. Limitation on Tenant's
  Liability. Tenant’s obligations under this Section 21 shall not apply to any
  condition or matter constituting a violation of any Environmental Laws: (i)
  which existed prior to the commencement of Tenant’s use or occupancy of the
  Premises; (ii) which was not caused, in whole or in part, by Tenant or
  Tenant's agents, employees, officers, partners, contractors or invitees; or
  (iii) to the extent such violation is caused by, or results from the acts or
  neglects of Landlord or Landlord's agents, employees, officers, partners,
  contractors, guests, or invitees. e. Inspections by Landlord. Landlord and
  its engineers, technicians, and consultants (collectively the
  "Auditors") may, from time to time as Landlord deems appropriate,
  conduct periodic tests and examinations ("Audits") of the Premises
  to confirm and monitor Tenant's compliance with this Section 21. Such Audits
  shall be conducted in such a manner as to minimize the interference with
  Tenant's Permitted Use; however in all cases, the Audits shall be of such
  nature and scope as shall be reasonably required by then existing technology
  to confirm Tenant's compliance with this Section 21. Tenant shall fully
  cooperate with Landlord and its Auditors in the conduct of such Audits. The
  cost of such Audits shall be paid by Landlord unless an Audit shall disclose
  a material failure of Tenant to comply with this Section 21, in which case,
  the cost of such Audit, and the cost of all subsequent Audits made during the
  Term and within thirty (30) days thereafter (not to exceed two (2) such
  Audits per calendar year), shall be paid for on demand by Tenant. f.
  Property. For the purposes of this Section 21, the term “Property’’ shall
  include the Premises, Building, all Common Areas, the real estate upon which
  the Building is located; all personal property (including that owned by
  Tenant); and the soil, ground water, and surface water of the real estate
  upon which the Building is located. g. Tenant's Liability After Termination
  of Lease. The covenants contained in this Section 21 shall survive the
  expiration or termination of this Lease, and shall continue for so long as
  Landlord and its successors and assigns may be subject to any expense,
  liability, charge, penalty, or obligation against which Tenant has agreed to
  indemnify Landlord under this Section 21. 22. DEFAULT. a. Tenant's Default.
  Tenant shall be in default under this Lease if Tenant: i. Fails to pay when
  due any Base Rent, Additional rent, or any other sum of money which Tenant is
  obligated to pay, as provided in this Lease; ii. Breaches any other
  agreement, covenant or obligation in this Lease and such breach is not
  remedied within fifteen (15) days after Landlord gives Tenant written notice
  specifying the breach, or if such breach cannot, with due diligence, be cured
  within fifteen (15) days, Tenant does not commence curing within fifteen (15)
  days and with reasonable diligence completely cure the breach within a
  reasonable period of time after the notice; iii. Files any petition or action
  for relief under any creditor's law (including bankruptcy, reorganization, or
  similar action), either in state or federal court, or has such a petition or
  action filed against it which is not stayed or vacated within sixty (60) days
  after filing; or iv. Makes any transfer in fraud of creditors as defined in
  Section 548 of the United States Bankruptcy Code (11 U.S.C. 548, as amended
  or replaced), has a receiver appointed for its assets (and the appointment is
  not stayed or vacated within sixty (60) days), or makes an assignment for
  benefit of creditors b. Landlord’s Remedies. In the event of a Tenant
  default, Landlord at its option may do one or more of the following: 18 

  

 

	
  

  	
  i. Terminate
  this Lease and recover all damages caused by Tenant's breach, including
  consequential damages for lost future rent; ii. Repossess the Premises, with
  or without terminating, and relet the Premises at such amount as Landlord
  deems reasonable; iii. Declare the entire remaining Base Rent and Additional
  Rent immediately due and payable, such amount to be discounted to its present
  value at a discount rate equal to the U.S. Treasury Bill or Note rate with
  the closest maturity to the remaining term of the Lease as selected by
  Landlord; iv. Bring action for recovery of all amounts due from Tenant; v.
  Place a subordinate lien on the personal property of Tenant that complies
  with the terms of that certain Consent and Waiver (Owner, Landlord or Mortagee
  of Real Estate) attached hereto as Exhibit D (the “Consent and Waiver”). vi.
  Lock the Premises and deny Tenant access thereto without obtaining any court
  authorization; or vii. Pursue any other remedy available in law or equity.
  Mitigation. Landlord shall use commercially reasonable efforts to mitigate
  any damages resulting from a default of the other party under this Lease.
  Requirements pertaining to such mitigation of damages are as follows: (1)
  Landlord's obligation to mitigate damages after a default by Tenant under
  this Lease that results in Landlord regaining possession of all or part of
  the Premises shall be satisfied in full if Landlord undertakes to lease the
  Premises to another tenant (a "Substitute Tenant") in accordance
  with the following criteria: (a) Landlord shall have no obligation to solicit
  or entertain negotiations with any other prospective tenants for the Premises
  until Landlord obtains full and complete possession of the Premises
  including, without limitation, the final and unappealable legal right to
  re-let the Premises free of any claim of Tenant. (b) Landlord shall not be
  obligated to offer the Premises to any prospective tenant when other premises
  in the Building suitable for that prospective tenant's use are currently
  available, or will be available within the next three months. (c) Landlord
  shall not be obligated to lease the Premises to a Substitute Tenant for a
  rental less than the current fair market rental then prevailing for similar
  office space in comparable Class “A" buildings in the Raleigh Durham
  office market. (d) Landlord shall not be obligated to enter into a new lease
  under terms and conditions that are unacceptable to Landlord under Landlord's
  then current leasing policies for comparable space in the Building. (e) Landlord
  shall not be obligated to enter into a lease with any proposed Substitute
  Tenant that does not have, in Landlord's reasonable opinion, sufficient
  financial resources. (f) Landlord shall not be required to expend any amount
  of money to alter, remodel, or otherwise make the Premises suitable for use
  by a Substitute Tenant unless: i) Tenant pays any such sum to Landlord in
  advance of Landlord's execution of a lease with such Substitute Tenant (which
  payment shall not be in lieu of any damages or other sums to which Landlord
  may be entitled to as a result of Tenant's default under this Lease); or ii)
  Landlord, in Landlord's sole discretion, determines that any such expenditure
  is financially justified in connection with entering into any lease with such
  Substitute Tenant. 19 

  

 

	
  

  	
  (2) Landlord
  shall not be obligated to enter into a lease with any Substitute Tenant whose
  use would: (a) Disrupt the tenant mix or balance of the Building; (b) Violate
  any restriction, covenant, or requirement contained in the lease of another
  tenant of the Building; (c) Adversely affect the reputation of the Building;
  or (d) In Landlord’s reasonable opinion be incompatible with the operation of
  the Building as a first-class office building. c. Landlord’s Expenses;
  Attorneys Fees. All reasonable expenses of Landlord in repairing, restoring,
  or altering the Premises for reletting as general office space, together with
  commercially reasonable leasing fees and all other expenses in seeking and
  obtaining a new Tenant, shall be charged to and be a liability of Tenant.
  Landlord's reasonable attorneys' fees in pursuing any of the foregoing
  remedies, or in collecting any Rent or Additional Rent due by Tenant
  hereunder, shall be paid by Tenant. d. Remedies Cumulative. All rights and
  remedies of Landlord are cumulative, and the exercise of any one shall not be
  an election excluding Landlord at any other time from exercise of a different
  or inconsistent remedy. No exercise by Landlord of any right or remedy
  granted herein shall constitute or effect a termination of this Lease unless
  Landlord shall so elect by notice delivered to Tenant. The failure of
  Landlord to exercise its rights in connection with this Lease or any breach
  or violation of any term, or any subsequent breach of the same or any other
  term, covenant or condition herein contained shall not be a waiver of such
  term, covenant or condition or any subsequent breach of the same or any other
  covenant or condition herein contained. e. No Accord and Satisfaction. No
  acceptance by Landlord of a lesser sum than the Rent, Additional Rent and
  other sums then due shall be deemed to be other than on account of the
  earliest installment of such payments due, nor shall any endorsement or
  statement on any check or any letter accompanying any check or payment be
  deemed as accord and satisfaction, and Landlord may accept such check or
  payment without prejudice to Landlord’s right to recover the balance of such
  installment or pursue any other remedy provided in this Lease. f. No
  Reinstatement. No payment of money by Tenant to Landlord after the expiration
  or termination of this Lease shall reinstate or extend the Term, or make
  ineffective any notice of termination given to Tenant prior to the payment of
  such money. After the service of notice or the commencement of a suit, or
  after final judgment granting Landlord possession of the Premises, Landlord
  may receive and collect any sums due under this Lease, and the payment
  thereof shall not make ineffective any notice or in any manner affect any
  pending suit or any judgment previously obtained. g. Summary Ejectment.
  Tenant agrees that in addition to all other rights and remedies Landlord may
  obtain an order for summary ejectment from any court of competent
  jurisdiction without prejudice to Landlord's rights to otherwise collect
  rents or breach of contract damages from Tenant. 23.
  MULTIPLE DEFAULTS a. Loss of Option Rights. Tenant acknowledges that any
  rights or options of first refusal, or to extend the Term, to expand the size
  of the Premises, to purchase the Premises or the Building, or other similar
  rights or options which have been granted to Tenant under this Lease are
  conditioned upon the prompt and diligent performance of the terms of this
  Lease by Tenant. Accordingly, should Tenant have a monetary default under
  this Lease on two (2) or more occasions during any twelve (12) month period,
  in addition to all other remedies available to Landlord, all such rights and
  options shall automatically, and without further action on the part of any
  party, expire and be of no further force and effect. b. Increased Security
  Deposit. Should Tenant default in the payment of Base Rent, Additional Rent,
  or any other sums payable by Tenant under this Lease on two (2) or more
  occasions during any twelve (12) month period, regardless of whether Landlord
  permits such default to be cured, then, in addition to all other remedies
  otherwise available to Landlord, 20 

  

 

	
  

  	
  Tenant shall,
  within ten (10) days after demand by Landlord, post a Security Deposit in, or
  increase the existing Security Deposit to, a sum equal to three (3) months’
  installments of Base Rent. The Security Deposit shall be governed by the
  terms of this Lease. c. Effect on Notice Rights and Cure Periods. Should
  Tenant default under this Lease on two (2) or more occasions during any
  twelve (12) month period, in addition to all other remedies available to
  Landlord, any notice requirements or cure periods otherwise set forth in this
  Lease with respect to a default by Tenant shall not apply. 24. BANKRUPTCY. a.
  Trustee's Rights. Landlord and Tenant understand that, notwithstanding
  contrary terms in this Lease, a trustee or debtor in possession under the
  United States Bankruptcy Code, as amended, (the "Code") may have
  certain rights to assume or assign this Lease. This Lease shall not be
  construed to give the trustee or debtor in possession any rights greater than
  the minimum rights granted under the Code. b. Adequate Assurance. Landlord
  and Tenant acknowledge that, pursuant to the Code, Landlord is entitled to
  adequate assurances of future performance of the provisions of this Lease.
  The parties agree that the term “adequate assurance” shall include at least
  the following: i. In order to assure Landlord that any proposed assignee will
  have the resources with which to pay all Rent payable pursuant to the
  provisions of this Lease during the bankruptcy, any proposed assignee must
  have, as demonstrated to Landlord's satisfaction, a net worth (as defined in
  accordance with generally accepted accounting principles consistently applied)
  of not less than the net worth of Tenant on the Effective Date (as
  hereinafter defined), increased by seven percent (7%), compounded annually,
  for each year from the Effective Date through the date of the proposed
  assignment. It is understood and agreed that the financial condition and
  resources of Tenant were a material inducement to Landlord in entering into
  this Lease. ii. Any proposed assignee must have been engaged in the conduct
  of business for the five (5) years prior to any such proposed assignment,
  which business does not violate the Use provisions under Section 4 above, and
  such proposed assignee shall continue to engage in the Permitted Use under
  Section 4. It is understood that Landlord’s asset will be substantially
  impaired if the trustee in bankruptcy or any assignee of this Lease makes any
  use of the Premises other than the Permitted Use. c. Assumption of Lease
  Obligations. Any proposed assignee of this Lease must assume and agree to be
  personally bound by the provisions of this Lease. 25. NOTICES. a. Addresses.
  All notices, demands and requests by Landlord or Tenant shall be sent to the
  Notice Addresses set forth in Section 1(1), or to such other address as a
  party may specify by duly given notice. b. Form; Delivery; Receipt. ALL
  NOTICES, DEMANDS AND REQUESTS WHICH MAY BE GIVEN OR WHICH ARE REQUIRED TO BE
  GIVEN BY EITHER PARTY TO THE OTHER MUST BE IN WRITING UNLESS OTHERWISE
  SPECIFIED. Notices, demands or requests shall be deemed to have been properly
  given for all purposes if (i) delivered against a written receipt of
  delivery, (ii) mailed by express, registered or certified mail of the United
  States Postal Service, return receipt requested, postage prepaid, or (iii)
  delivered to a nationally recognized overnight courier service for next business
  day delivery to the receiving party's address as set forth above. Each such
  notice, demand or request shall be deemed to have been received upon the
  earlier of the actual receipt or refusal by the addressee or three (3)
  business days after deposit thereof at any main or branch United States post
  office if sent in accordance with subsection (ii) above, and the next
  business day after deposit thereof with the courier if sent pursuant to
  subsection (iii) above. c. Address Changes. The parties shall notify the
  other of any change in address, which notification must be at least fifteen
  (15) days in advance of it being effective. d. Notice by Legal Counsel.
  Notices may be given on behalf of any party by such party's legal counsel. 21
  

  

 

	
  

  	
  26. HOLDING
  OVER. If Tenant holds over after the Expiration Date or other termination of
  this Lease, such holding over shall not be a renewal of this Lease but shall
  create a tenancy at sufferance. Tenant shall continue to be bound by all of
  the terms and conditions of this Lease, except that during such tenancy at
  sufferance Tenant shall pay to Landlord (i) Base Rent at the rate equal to
  one hundred and fifty percent (150%) of that provided for as of the
  expiration or termination date, and (ii) any and all Operating Expenses, Real
  Estate Taxes and other forms of Additional Rent payable under this Lease. The
  increased Rent during such holding over is intended to compensate Landlord
  partially for losses, damages and expenses, including frustrating and
  delaying Landlord's ability to secure a replacement tenant. If Landlord loses
  a prospective tenant because Tenant fails to vacate the Premises on the
  Expiration Date or any termination of the Lease after notice to do so, then
  Tenant will be liable for such damages as Landlord can legally prove because
  of Tenant's wrongful failure to vacate. 27. RIGHT TO
  RELOCATE (Intentionally Omitted) 28. BROKER’S
  COMMISSIONS a. Broker. Each party represents and warrants to the other
  that it has not dealt with any real estate broker, finder or other person
  with respect to this Lease in any manner, except the Broker identified in
  Section 1(1). b. Landlord's Obligation. Landlord shall pay any commissions or
  fees that are payable to the Broker with respect to this Lease pursuant to
  Landlord’s separate agreement with the Broker. c. Indemnity. Each party shall
  indemnify and hold the other party harmless from any and all damages
  resulting from claims that may be asserted against the other party by any
  other broker, finder or other person (including, without limitation, any
  substitute or replacement broker claiming to have been engaged by
  indemnifying party in the future), claiming to have dealt with the
  indemnifying party in connection with this Lease or any amendment or
  extension hereto, or which may result in Tenant leasing other or enlarged
  space from Landlord. The provisions of this Section shall survive the
  termination of this Lease. 29. MISCELLANEOUS a. No
  Agency. Tenant is not, may not become, and shall never represent itself to be
  an agent of Landlord, and Tenant acknowledges that Landlord's title to the
  Building is paramount, and that it can do nothing to affect or impair
  Landlord's title. b. Force Majeure. The term "force majeure" means:
  fire, flood, extreme weather, labor disputes, strike, lock-out, riot, war,
  act of terrorism, government interference (including regulation,
  appropriation or rationing), unusual delay in governmental permitting,
  unusual delay in deliveries or unavailability of materials, unavoidable
  casualties, Act of God, or other causes beyond the Landlord's reasonable
  control. c. Building Standard Improvements. The term "Building Standard
  Improvements” shall mean the standards for normal construction of general
  office space within the Building as specified by Landlord, including design
  and construction standards, electrical load factors, materials, fixtures and
  finishes. d. Limitation on Damages. Notwithstanding any other provisions in
  this Lease, Landlord shall not be liable to Tenant for any special,
  consequential, incidental or punitive damages. e. Landlord's Liability. The
  liability of Landlord (and its partners, shareholders or members) to Tenant
  (or any person or entity claiming by, through or under Tenant) for any
  default by Landlord under the terms of this Lease or any matter relating to
  or arising out of the occupancy or use of the Premises and/or other areas of
  the Building or Project shall be limited to Tenant’s actual direct, but not
  consequential, damages therefor and shall be recoverable only from the
  interest of Landlord in the Property; and Landlord (and its partners,
  shareholders or members) shall not be personally liable for any deficiency.
  Additionally, to the extent allowed by Law, Tenant hereby waives any
  statutory lien it may have against Landlord or its assets, including without
  limitation, the Building. f. Interest. Should Tenant fail to pay any amount
  due to Landlord within 30 days of the date such amount is due (whether Base
  Rent, Additional Rent, or any other payment obligation), then the amount due
  shall begin accruing interest at the rate of 18% per annum, compounded 22 

  

 

	
  

  	
  monthly, or the
  highest permissible rate under applicable usury law, whichever is less, until
  paid. g. Legal Costs. Should either party prevail in any legal proceedings
  against the other party for breach of any provision in this Lease, then the
  non-prevailing party shall be liable for the costs and expenses of the
  prevailing party, including its reasonable attorneys' fees (at all tribunal
  and appellate levels). h. Sale of Premises or Building. Landlord may sell the
  Premises or the Building without affecting the obligations of Tenant
  hereunder; upon the sale of the Premises or the Building, Landlord shall be
  relieved of all responsibility for the Premises and shall be released from
  any liability thereafter accruing under this Lease. i. Time of the Essence.
  Time is of the essence in the performance of all obligations under the terms
  of this Lease. j. Transfer of Security Deposit. If any Security Deposit or
  prepaid Rent has been paid by Tenant, Landlord may transfer the Security
  Deposit or prepaid Rent to Landlord's successor and upon such transfer,
  Landlord shall be released from any liability for return of the Security
  Deposit or prepaid Rent. k. Tender of Premises. The delivery of a key or other
  such tender of possession of the Premises to Landlord or to an employee of
  Landlord shall not operate as a termination of this Lease or a surrender of
  the Premises unless requested in writing by Landlord. I. Tenant's Financial
  Statements. Upon request of Landlord, Tenant agrees to furnish to Landlord
  copies of Tenant's most recent publicly available financial statements,
  audited if applicable. The financial statements shall be prepared in
  accordance with generally accepted accounting principles, consistently
  applied. . Landlord may deliver the financial statements to any prospective
  or existing mortgagee or purchaser of the Building. Landlord may deliver the
  financial statements to any prospective or existing mortgagee or purchaser of
  the Building, and anyone else but only on a “need to know” basis. m.
  Recordation. Tenant shall not record this Lease or any memorandum of this
  Lease. n. Partial Invalidity. The invalidity of any portion of this Lease
  shall not invalidate the remaining portions of the Lease. o. Binding Effect.
  This Lease shall be binding upon the respective parties hereto, and upon
  their heirs, executors, successors and assigns. p. Entire Agreement. This
  Lease supersedes and cancels all prior negotiations between the parties, and
  no changes shall be effective unless in writing signed by both parties.
  Tenant acknowledges and agrees that it has not relied upon any statements,
  representations, agreements or warranties except those expressed in this
  Lease, and that this Lease contains the entire agreement of the parties
  hereto with respect to the subject matter hereof. q. Good Standing. If
  requested by Landlord, Tenant shall furnish appropriate legal documentation
  evidencing the valid existence in good standing of Tenant, and the authority
  of any person signing this Lease to act for the Tenant. If Tenant signs as a
  corporation, each of the persons executing this Lease on behalf of Tenant
  does hereby covenant and warrant that Tenant is a duly authorized and
  existing corporation, that Tenant has and is qualified to do business in the
  State in which the Premises are located, that the corporation has a full
  right and authority to enter into this Lease and that each of the persons
  signing on behalf of the corporation is authorized to do so. r. Terminology.
  The singular shall include the plural, and the masculine, feminine or neuter
  includes the other. s. Headings. Headings of sections are for convenience
  only and shall not be considered in construing the meaning of the contents of
  such section. t. Choice of Law. This Lease shall be interpreted and enforced
  in accordance with the laws of the State in which the Premises are located.
  u. Effective Date. The submission of this Lease to Tenant for review does not
  constitute a reservation of or option for the Premises, and this Lease shall
  become effective as a contract only upon the execution and delivery by both
  Landlord and Tenant. The date of execution shall be entered on the top of the
  first page of this Lease by Landlord, and shall be the date on which the last
  party signed the Lease, or as otherwise may be specifically agreed by both
  parties. 23 

  

 

	
  

  	
  Such date, once
  inserted, shall be established as the final day of ratification by all
  parties to this Lease, and shall be the date for use throughout this Lease as
  the "Effective Date". 30. ANTI-TERRORISM a.
  Tenant represents and warrants as of the Effective Date and throughout the
  Term of this Lease that to its actual knowledge: (i) Tenant is and will
  continue to be in compliance with the Anti-Terrorism Laws (as defined below);
  (ii) Tenant is not, and will not be, a Prohibited Person (as defined below);
  (iii) Tenant does not and will not knowingly: (A) conduct any business or
  engage in any transaction or dealing with any Prohibited Person, or (B) deal
  in, or otherwise engage in any transaction relating to, any property or
  interests in property blocked pursuant to Executive Order 13224 (as defined
  below); and (iv) Tenant has not entered in this Lease directly or indirectly
  on behalf of, and first party is not otherwise acting, directly or
  indirectly, for or on behalf of any Prohibited Person. Tenant shall promptly
  notify the Landlord if it has reason to believe that any of the foregoing
  representations and warranties are no longer correct. b. For the purposes hereof:
  i. “Anti-Terrorism Laws” means any laws related to terrorism or money
  laundering, including Executive Order 13224 and the USA Patriot Act (as
  defined below), and any regulations promulgated under either of them; ii.
  “Executive Order 13224" means Executive Order Number 13224 on Terrorism
  Financing, effective September 24, 2001; iii. “Person” means any individual,
  corporation, partnership, joint venture, limited liability company,
  association, bank, joint-stock company, trust, unincorporated organization or
  government, or an agency or political subdivision thereof; iv. “Prohibited
  Person” means (A) a Person subject to the provisions of Executive Order
  13224; (B) a Person owned or controlled by, or acting for or on behalf of, an
  entity that is subject to the provisions of Executive Order 13224; (C) a
  Person with whom Tenant or Landlord are prohibited from dealing by any of the
  Anti-Terrorism Laws; (D) a Person that commits, threatens or conspires to
  commit or supports "“terrorism"” as defined in Executive Order
  13224; (E) a Person or entity that is named as a "“specially designated
  national and blocked person"” on the most current list published by the
  U.S. Treasury Department's Office of Foreign Assets Control; or (F) a Person
  who is affiliated with a Person described in clauses (A) through (EF) above;
  and v. “USA Patriot Act” means the Uniting and Strengthening America by
  Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act
  of 2001, H R. 3162, Public Law 107-56, as may be amended from time to time.
  c. Tenant shall defend, indemnify, and hold harmless the Landlord, its
  members, trustees and agents and its and their respective employees,
  officers, directors and members from and against any and all third party
  claims, damages, losses, risks, liabilities, and expenses (including
  reasonable attorneys’ fees and costs) arising from or related to any breach
  of the foregoing representations and warranties. d. Tenant acknowledges and
  agrees that, notwithstanding anything to the contrary in this Lease, Landlord
  may withhold its consent to any transfer of an interest in this Lease if the
  prospective transferee is a Prohibited Person. 31. MOISTURE INTRUSION It is
  generally understood that mold spores are present essentially everywhere and
  that mold can grow in most any moist location. Emphasis is properly placed on
  prevention of moisture and on good housekeeping and ventilation practices.
  Tenant acknowledges the necessity of housekeeping, ventilation, and moisture
  control (especially in kitchens, janitor’s closets, bathrooms, break rooms
  and around outside walls) for mold prevention. Tenant represents that it has
  inspected the Premises and certifies that it has not observed mold, mildew or
  moisture within the Premises. Tenant agrees to immediately notify Landlord if
  it observes mold/mildew and/or moisture conditions (from any source,
  including leaks), and allow Landlord to evaluate and make recommendations
  and/or take appropriate corrective action. Tenant relieves Landlord from any
  liability for any bodily injury or damages to property caused by or
  associated with moisture or the growth of or occurrence of mold or mildew on
  the Premises. In addition, execution of this Lease constitutes 24 

  

 

	
  

  	
  acknowledgement
  by Tenant that control of moisture and mold prevention are integral to its
  Lease obligations. 32 ADDENDA AND EXHIBITS a. Lease Addendum Number One -
  “Work Letter” b. Lease Addendum Number Two - “Additional Rent - Operating
  Expense Pass Throughs” c. Lease Addendum Number Three - “Option to Renew Lease
  Term” d. Lease Addendum Number Four - “Expansion Rights” e. Exhibit A -
  Premises f. Exhibit B - Rules and Regulations g. Exhibit C - Commencement
  Agreement h. Exhibit D - Lender Agreement [REMAINDER OF PAGE LEFT BLANK
  INTENTIONALLY SIGNATURE BLOCKS ON NEXT PAGE] 25 

  

 

	
  

  	
  IN WITNESS
  WHEREOF, Landlord and Tenant have executed this lease in four originals, all
  as of the day and year first above written WITNESSES: Name Printed Name
  Printed LANDLORD: JAMES CAMPBELL COMPANY LLC Dorine Holsey Streeter,
  Executive Vice President, Real Estate Investment Management Dated: s. 11/28/2011 26 WITNESSES: Name Printed BY : s. Douglass C. Morris Douglas C. Morris, Vice President, RegionaLManager Dated: s. 11/28/2011 TENANT: TRANZYME, INC. By: (SEAL) Name: Title: £& Dated: 

  

 

	
  

  	
  LEASE ADDENDUM
  NUMBER ONE WORK LETTER Except as expressly provided in this Lease Addendum
  Number One, Tenant accepts the Premises in its as-is condition and
  acknowledges that Landlord has no obligation to improve or renovate the
  Premises or contribute to the costs thereof. Notwithstanding the foregoing,
  Landlord agrees that it will provide the following work using Building
  standard materials: (i) touch-up paint as needed; and (ii) replacement of any
  broken ceiling tiles. Additionally Landlord will steam clean the carpet
  throughout the Premises. Additionally, Landlord agrees that it will open up
  the area adjacent to the stairwell as shown on Exhibit A in order to allow
  for access to the exist shown on Exhibit A as required by the local
  government fire department having jurisdiction over the Premises and replace
  the exterior door of the storage room as shown in Exhibit A with a building
  standard wall.. 1 

  

 

	
  

  	
  LEASE ADDENDUM
  NUMBER TWO Additional Rent - Operating Expense and Real Estate Pass Throughs
  (a) For each calendar year or any portion thereof occurring during the Term
  ("Operating Expenses Year”), Tenant shall pay to Landlord, as Additional
  Rent, an amount ('Tenant's Expense Increase Share") determined as
  follows: the Real Estate Taxes (as hereinafter defined) and Operating
  Expenses (as hereinafter defined) of the Building for an Operating Expenses
  Year that are in excess of Operating Expenses and Real Estate Taxes for the
  Base Year (defined as calendar year 2012) shall be totaled. That sum shall be
  divided by the rentable square feet of the Building which is stipulated and
  agreed to be 95,766 square feet. The result shall be multiplied by the
  rentable area of the Premises, and that product shall in turn be multiplied
  by a fraction, the numerator of which shall be the number of days of such
  Operating Expenses Year and the denominator of which shall be 365. The
  product so determined shall be the dollar amount of Tenant's Expense Increase
  Share for such Operating Expenses Year. Tenant’s Expense Increase Share of
  Operating Expenses shall not be in excess of the Cap. For purposes of the
  preceding sentence: "Cap" for the calendar year in which the
  Commencement Date occurs shall be actual Operating Expenses for that calendar
  year; "Cap" for the next calendar year shall be One Hundred and
  Four Percent (104%) of controllable Operating Expenses incurred during the
  prior calendar year, and for each succeeding calendar year, the
  "Cap" shall be One Hundred and Four Percent (104%) of the Cap for
  the preceding calendar year; and "controllable Operating Expense"
  means all Operating Expenses other than taxes, insurance, utilities, snow/ice
  removal, security or unforeseen expenses caused by an event of force majeure
  or any reasonable expenses incurred due to changes in governmental code or
  applicable ordinances or laws after the Expansion Term Commencement Date, or
  expenses of a periodic but non-annual nature, such as parking lot sealcoating
  and striping. Any sums which were excluded from Tenant's Proportionate Share
  of Operating Expenses because they exceeded the Cap in any year may be
  carried over to the following years during the term of the Lease, provided,
  however, that in no event shall Tenant’s Proportionate Share of Operating
  Expenses for any year exceed the Cap for that year. (b) "Real Estate
  Taxes" are hereby defined as any and all taxes, fees, charges and
  assessments (including without limitation, any payments to a business
  improvement district or similar entity and any payments "in lieu of
  taxes, such as that portion of any ground rent payments made by Landlord that
  represent the pass-through of real estate taxes from any ground lessor to
  Landlord) allocable to the Building, general and special, ordinary and
  extraordinary, foreseen or unforeseen, assessed, levied, or imposed upon the
  Building and the Land by any governmental, quasi-governmental, public or
  other authority having jurisdiction over the Building and the Land. Except
  for the taxes, fees, charges and assessments described in the next succeeding
  sentence, Real Estate Taxes shall not include any federal or state income
  tax. If at any time during the Term there shall be imposed by any
  governmental, quasi- governmental, public or other authority having
  jurisdiction a gross receipts tax or other tax, fee, charge and/or assessment
  of any kind or nature upon, against or with respect to the Base Rent and/or
  Additional Rent payable hereunder or otherwise received from the Building,
  either in substitution of all or any part of the taxes, fees, charges and
  assessments levied or assessed against the Property, or in addition thereto,
  the entire amount of such gross receipts tax or other tax, fee, charge or
  assessment payable on account of the Base Rent and/or Additional Rent (as
  determined by Landlord) shall be paid promptly by Tenant whether such gross
  receipts tax or other tax, fee, charge or assessment is imposed nominally on
  Landlord or Tenant, such payment to be made either directly to the
  appropriate government, quasi-governmental, public or other authority (if such
  is required by such authority) or indirectly, by payment as Additional Rent
  to Landlord, which shall in turn be required to promptly pay over amounts
  received by it pursuant to the foregoing provisions to such authority. Real
  Estate Taxes also includes Landlord's reasonable costs and expenses in
  evaluating whether to challenge or contest Real Estate Taxes as well as its
  reasonable costs and expenses in connection with the actual challenge or
  contest. (c) "Operating Expenses" are hereby defined as actual costs
  (except as grossed up as provided in Section (f) below) allocable to the
  Building, including, without limitation, the cost of: heating; cooling;
  utilities; insurance; janitorial and cleaning service; lobby host, if any is
  provided by Landlord; security services, if any are provided by Landlord;
  salaries, wages and other personnel costs of engineers, superintendents,
  watchmen and other Building employees, and other employees of Landlord and
  the employees of Landlord's agents and contractors allocable to Building or
  Property-related matters (provided, however, to the extent that employees of
  Landlord or employees of Landlord's agents are not assigned exclusively to
  the Building or the Property, then Operating Expenses shall include only the
  portion of their salaries, 1 

  

 

	
  

  	
  wages and other
  personnel costs that Landlord allocates to the Building or the Property);
  charges under all maintenance, repair and service contracts, including,
  without limitation, for chillers, boilers, controls and/or elevators, security
  systems, exterior window cleaning, landscaping, common areas, public areas,
  lobbies, and Building and Land maintenance; all maintenance and repair
  expenses including, without limitation, the cost of all warranties included
  in contracts for the provision of materials or services to the Building to
  the extent the cost of such warranty is separately stated in such contract;
  the cost of enforcing warranties; the cost of supplies which are deducted
  (and not capitalized) for federal income tax purposes; management fees;
  accounting costs and fees; expenses incurred for attorneys or other third
  parties to appeal real estate tax assessments, including without limitation
  the expenses incurred to review the feasibility thereof; the cost of
  cleaning, repairing, maintaining and operating any Common Facilities; and all
  other costs and expenses incurred by Landlord in connection with the
  operation, servicing, maintenance and repair of the Building and the Land,
  including, without limitation, annual amounts amortizing the following items
  ("Permitted Capital Expenditures"): (i) cost of furniture,
  fixtures, energy-saving and other equipment owned by Landlord and used in
  connection with the Building or the Land (including, without limitation,
  equipment used to maintain other equipment and all tools) and (ii) capital
  expenditures incurred either to reduce Operating Expenses or to comply with
  any law, order or regulation of any governmental, quasi- governmental, public
  or other authority. Operating Expenses shall not include (i) depreciation of
  the Building (except as otherwise provided herein), (ii) payments of
  principal and interest on any mortgages, deeds of trust or other encumbrances
  upon the Building; (iii) the cost of painting, decorating or renovating a
  specific tenant's space (specifically excluding base building improvements
  and systems and the common areas of the Property), unless such items are
  similarly provided to, or benefit generally, other tenants in the Building;
  (iv) the cost of any repair, restoration, replacement or other item, to the
  extent Landlord is actually reimbursed therefor by insurance, warranties or
  condemnation proceeds; (v) leasing commissions, attorneys' fees and
  advertising costs incurred by Landlord to lease space in the Building to
  tenants or prospective tenants of the Building; and (vi) rental payments made
  under any ground lease, except with respect to any portion thereof relating
  to the pass-through of any operating costs or real estate taxes incurred by
  the ground lessor. Operating Expenses shall also include a portion of the
  costs and expenses attributable to the overall complex in which the Building
  is located as reasonably allocated by Landlord to the Building. (d) At any
  time or times prior to or during an Operating Expenses Year, Landlord may
  submit to Tenant a statement of Landlord's estimates of Tenant's Expense
  Increase Share for such Operating Expenses Year. If such estimate is
  submitted prior to an Operating Expenses Year, Tenant shall pay to Landlord
  one-twelfth (1/12) of the amount so estimated on the first day of each month
  in advance, commencing on the first day of the Operating Expenses Year. In
  the event such estimate is submitted during an Operating Expenses Year,
  Tenant shall continue paying the previous Operating Expenses Year's Tenant's
  Expense Increase Share until such estimate is submitted. Within thirty (30)
  days after such statement is submitted to Tenant, Tenant shall (i) make a
  lump sum payment to Landlord equal to one-twelfth (1/12) of the difference
  between Tenant's Expense Increase Share for the current Operating Expenses
  Year and Tenant's Expense Increase Share for the previous Operating Expenses
  Year, multiplied by the number of months in such current Operating Expenses
  Year that will have elapsed prior to the first monthly payment required by
  clause (ii) hereof, and (ii) begin paying to Landlord, as Additional Rent,
  due and payable on the first day each month, an amount equal to one-twelfth
  (1/12) of Tenant’s Expense Increase Share. After the expiration of each Operating
  Expenses Year and the preparation of the annual statement of Real Estate
  Taxes and Operating Expenses for such Operating Expenses Year, Landlord shall
  submit to Tenant a statement showing the determination of Tenant's Expense
  Increase Share. If such statement shows that the total of Tenant's monthly
  payments pursuant to this Section 4(d) exceed Tenant's Expense Increase
  Share, then Landlord will refund such overpayment with the notice; provided,
  however, that no such refund shall be made if Tenant is currently in default
  under any provision of this Lease. This obligation shall survive termination
  of the Lease and any such overpayment may be used to cure any current
  default. If such statement shows that Tenant's Expense Increase Share
  exceeded the aggregate of Tenant's monthly payments pursuant to this Section
  4(d) for the preceding Operating Expenses Year, then Tenant shall, within
  thirty (30) days after receiving the statement, pay such deficiency to
  Landlord. Monthly estimated payments of Tenant's Expense Increase Share for a
  partial Operating Expenses Year shall be made on the same basis as set forth
  above. In the event of any dispute as to any Operating Expenses due under
  this Exhibit, during a period of sixty (60) days following Tenant’s receipt of
  the annual statement of Operating Expenses, Tenant shall be entitled to have
  a certified public accountant review and audit Landlord's books and records
  relating Operating Expenses for the period covered by the annual statement.
  Prior to having access to Landlord’s books and records, Tenant’s accountant
  shall certify in writing to Landlord that (i) it is not being paid on a
  contingent basis and (ii) it shall keep 2 

  

 

	
  

  	
  information
  gained through such audit confidential other than disclosure of same to Tenant.
  All information obtained through Tenant's review and audit shall be held in
  strict confidence and shall not be revealed to anyone except in connection
  with litigation or other formal dispute resolution between Landlord and
  Tenant regarding the disputed amount or as otherwise required by law. The
  obligations in this paragraph shall survive termination of this Lease. (e) If
  Real Estate Taxes paid by Landlord for an Operating Expenses Year, or any
  part thereof, for which Tenant has paid Tenant's Expense Increase Share, are
  refunded to Landlord as a result of a final determination of such Real Estate
  Taxes, then, provided Tenant is not then in default under this Lease, Tenant
  shall be entitled to a refund of Tenant’s Expense Increase Share in an amount
  equal to Tenant's share of such refund (net of expenses incurred to obtain
  the refund). Landlord shall notify Tenant of the amount of any refund due
  Tenant, and shall pay the same over to Tenant within thirty (30) days after
  its receipt of such refund. Landlord shall make reasonable efforts to locate
  Tenant if Real Estate Taxes accruing during the Term are refunded after the
  Term has ended. If Landlord is, despite such effort, unable to locate Tenant,
  then Landlord shall be entitled to retain the refund for its own use. (f) If
  for any period during the Term less than ninety-five percent (95%) of the
  rentable area of the Building is occupied by tenants, then, in calculating
  Operating Expenses for such period, Landlord shall increase those components
  of Operating Expenses that Landlord reasonably determined to vary based on
  occupancy of the Building. In addition, if for any period during the Term any
  part of the Building is leased to a tenant who, in accordance with the terms
  of its lease, provides its own cleaning services and/or any other services
  otherwise included in Operating Expenses, then Operating Expenses for such
  period shall be increased by the additional costs for cleaning and/or such
  other applicable expenses that Landlord reasonably estimates would have been
  incurred by Landlord if Landlord had furnished and paid for cleaning and/or
  such other services for the space occupied by such tenant. 3 

  

 

	
  

  	
  ADDENDUM NUMBER
  THREE OPTION TO RENEW LEASE TERM If Tenant has not
  committed an Event of Default at any time during the Term, and Tenant is
  occupying the entire Premises at the time of such election, Tenant may renew
  this Lease for one (1) additional period of one (1) year, by delivering
  written notice of the exercise thereof to Landlord not earlier than twelve
  (12) months nor later than nine (9) months before the expiration of the Term.
  The Base Rent payable for each month during such extended Term shall be the
  prevailing rental rate (the Prevailing Rental Rate"), at the
  commencement of such extended Term, for renewals of space in a building of
  similar age, quality, size, utility and general location, with the length of
  the extended Term and the credit standing of Tenant to be taken into account.
  Within thirty (30) days after receipt of Tenant’s notice to renew, Landlord
  shall deliver to Tenant written notice of the Prevailing Rental Rate and
  shall advise Tenant of the required adjustment to Base Rent, if any, and the
  other terms and conditions offered. Tenant shall, within ten (10) business
  days after receipt of Landlord's notice, notify Landlord in writing whether
  Tenant accepts or rejects Landlord's determination of the Prevailing Rental
  Rate. If Tenant timely notifies Landlord that Tenant accepts Landlord’s
  determination of the Prevailing Rental Rate, then, on or before the
  commencement date of the extended Term, Landlord and Tenant shall execute an
  amendment to this Lease extending the Term on the same terms provided in this
  Lease, except as follows: (a) Base Rent shall be adjusted to the Prevailing
  Rental Rate; (b) Tenant shall have no further renewal option unless expressly
  granted by Landlord in writing; (c) Landlord shall lease to Tenant the
  Premises in their then-current condition, and Landlord shall not provide to
  Tenant any allowances (e.g., moving allowance, construction allowance, and
  the like) or other tenant inducements; and Notwithstanding anything herein to
  the contrary, if Tenant rejects Landlord's determination of the Prevailing
  Rental Rate, Tenant shall have ten (10) business days to provide its
  interpretation of the Prevailing Rental Rate. The Landlord, in its sole
  discretion, can accept or reject the Tenant’s determination of the Prevailing
  Rental Rate in which case Tenant's rights under this Exhibit shall terminate
  and Tenant shall have no right to renew this Lease. Landlord shall endeavor
  to provide written notice of its acceptance or rejection to Tenant within
  five (5) business days of receipt of Tenant’s determination; provided,
  however, termination of Tenant’s rights under this Addendum will not be
  affected by Landlord’s inadvertent failure to provide such notice. Tenant's
  rights under this Exhibit shall terminate if (1) this Lease or Tenant’s right
  to possession of the Premises is terminated, (2) Tenant assigns any of its
  interest in this Lease or sublets any portion of the Premises, (3) Tenant
  fails to timely exercise its option under this Exhibit, time being of the
  essence with respect to Tenant’s exercise thereof, or (4) Landlord
  determines, in its sole but reasonable discretion, that Tenant’s financial
  condition or creditworthiness has materially deteriorated since the date of
  this Lease. 1 

  

 

	
  

  	
  ADDENDUM NUMBER
  FOUR RIGHT OF FIRST OFFER A. As used in this paragraph, the "Negotiation
  Space" refers to Suite 310 of the Building depicted in Schedule 1
  attached to this Addendum Number Four, if and when it is available for
  leasing and is not then subject to any then existing rights of Building
  occupants. Provided Tenant is not then in default hereunder beyond any
  applicable cure period and as long as Tenant has not defaulted in the payment
  of Rent more than three (3) times during the Lease Term, upon receipt of a
  bona fide offer from a third party tenant for the Negotiation Space or
  contemporaneous with a bona fide offer that Landlord proposes to give to a
  third party (in either case, such bona fide offer is referred to as the
  “Proposal”), Landlord shall give Tenant notice ("Landlord's
  Notice") that the Negotiation Space has a bona fide offer upon it, the
  terms of such offer, and provide Tenant with the option to lease such space
  before the offer is accepted. If Tenant fails to notify Landlord within 3
  business days from the date of Landlord's Notice that Tenant wishes to lease
  the Negotiation Space, Tenant shall have waived any and all rights it may
  have under this paragraph with respect to the Negotiation Space. If Tenant
  notifies Landlord within such 3 business day period that it accepts the
  Proposal, Tenant shall be deemed to have leased such Negotiation Space on the
  same terms and conditions of this Lease, and the Premises shall be deemed to
  include the Negotiation Space, except as follows: (1) any conflict between
  the Proposal and this Lease with regard to Rent, Term length and other
  economic terms in connection with such Negotiation Space shall be resolved in
  favor of the Proposal except as modified by this paragraph; (2) the Lease
  Expiration Date only with respect to the Negotiation Space shall be as
  contemplated by the Proposal notwithstanding the Lease Expiration Date of the
  Premises as originally set forth in the Lease; (3) Tenant's obligation to pay
  Rent with respect to the Negotiation Space shall commence as and when
  contemplated by the Proposal; (4) Tenant's Expense Increase Share shall be
  ratably increased based on the Gross Rentable Area of such Negotiation Space;
  (5) Tenant shall accept the Negotiation Space in its "as-is"
  condition unless otherwise set forth in the Proposal; and (6) if the Proposal
  contemplates that Landlord will improve the Negotiation Space, the rights and
  obligations of Landlord and Tenant with respect to leasehold improvements
  that Tenant shall construct in such Negotiation Space shall be in accordance
  with such work letter agreement as Landlord would prepare in connection with
  the Proposal. B. The parties shall execute an amendment to this Lease that
  evidences the terms and conditions of Tenant's lease of the Negotiation Space
  as provided herein. 1 

  

 

	
  

  	
  STE 330 LEASED
  STE 320 4096 USF 4670 RSF STE 310 2086 USF 2378 RSF STE 350 3009 USF 3430 RSF
  STE 300 7128 USF 8126 RSF SCHEDULE 1 TO ADDENDUM NUMBER FOUR 

  

 

	
  

  	
  Exhibit A
  PREMISES STE CENTRAL PARK WEST-3RD FLOOR(8126 RSF) 11.09.11 

  

 

	
  

  	
  EXHIBIT B RULES
  AND REGULATIONS 1. Access to Building. On Saturdays, Sundays, legal holidays
  and weekdays between the hours of 6:00 P.M. and 8:00 A.M., access to the
  Building and/or to the halls, corridors, elevators or stairways in the
  Building may be restricted and access shall be gained by use of a key or
  electronic card to the outside doors of the Buildings. Landlord may from time
  to time establish security controls for the purpose of regulating access to
  the Building. Tenant shall be responsible for providing access to the
  Premises for its agents, employees, invitees and guests at times access is
  restricted, and shall comply with all such security regulations so
  established. 2. Protecting Premises. The last member of Tenant to leave the
  Premises shall close and securely lock all doors or other means of entry to
  the Premises and shut off all lights and equipment in the Premises. 3. Building
  Directories. The directories for the Building in the form selected by
  Landlord shall be used exclusively for the display of the name and location
  of tenants. Any additional names and/or name change requested by Tenant to be
  displayed in the directories must be approved by Landlord and, if approved,
  will be provided at the sole expense of Tenant. 4. Large Articles. Furniture,
  freight and other large or heavy articles may be brought into the Building
  only at times and in the manner designated by Landlord and always at Tenant's
  sole responsibility. All damage done to the Building, its furnishings,
  fixtures or equipment by moving or maintaining such furniture, freight or
  articles shall be repaired at Tenant’s expense. 5. Signs. Tenant shall not
  paint, display, inscribe, maintain or affix any sign, placard, picture,
  advertisement, name, notice, lettering or direction on any part of the
  outside or inside of the Building, or on any part of the inside of the
  Premises which can be seen from the outside of the Premises, including
  windows and doors, without the written consent of Landlord, and then only
  such name or names or matter and in such color, size, style, character and
  material as shall be first approved by Landlord in writing. Landlord, without
  notice to Tenant, reserves the right to remove, at Tenant's expense, all
  matters other than that provided for above. 6. Compliance with Laws. Tenant
  shall comply with all applicable laws, ordinances, governmental orders or
  regulations and applicable orders or directions from any public office or
  body having jurisdiction, whether now existing or hereinafter enacted with
  respect to the Premises and the use or occupancy thereof. Tenant shall not
  make or permit any use of the Premises which directly or indirectly is forbidden
  by law, ordinance, governmental regulations or order or direction of
  applicable public authority, which may be dangerous to persons or property or
  which may constitute a nuisance to other tenants. 7. (Deleted). 8. Defacing
  Premises and Overloading. Tenant shall not place anything or allow anything
  to be placed in the Premises near the glass of any door, partition, wall or
  window that may be unsightly from outside the Premises. Tenant shall not
  place or permit to be placed any article of any kind on any window ledge or
  on the exterior walls; blinds, shades, awnings or other forms of inside or
  outside window ventilators or similar devices shall not be placed in or about
  the outside windows in the Premises except to the extent that the character,
  shape, color, material and make thereof is approved by Landlord. Tenant shall
  not do any painting or decorating in the Premises or install any floor
  coverings in the Premises or make, paint, cut or drill into, or in any way
  deface any part of the Premises or Building without in each instance
  obtaining the prior written consent of Landlord. Tenant shall not overload
  any floor or part thereof in the Premises, or any facility in the Building or
  any public corridors or elevators therein by bringing in or removing any large
  or heavy articles and Landlord may direct and control the location of safes,
  files, and all other heavy articles and, if considered necessary by Landlord
  may require Tenant at its expense to supply whatever supplementary supports
  necessary to properly distribute the weight. 9. Obstruction of Public Areas.
  Tenant shall not, whether temporarily, accidentally or otherwise, allow
  anything to remain in, place or store anything in, or obstruct in any way,
  any sidewalk, court, hall, passageway, entrance, or shipping area. Tenant
  shall lend its full cooperation to keep such areas free from all obstruction
  and in a clean and sightly condition, and move all supplies, furniture and
  equipment as soon as received directly to the Premises, and shall move all
  such items and waste (other than waste customarily removed by Building
  employees) that are at any time being taken from the Premises directly to the
  areas designated for disposal. All courts, passageways, entrances, exits,
  elevators, escalators, stairways, corridors, halls and roofs are not for the
  use of the general public and Landlord shall in all cases 1 

  

 

	
  

  	
  retain the
  right to control and prevent access thereto by all persons whose presence, in
  the judgment of Landlord, shall be prejudicial to the safety, character,
  reputation and interest of the Building and its tenants; provided, however,
  that nothing herein contained shall be construed to prevent such access to
  persons with whom Tenant deals within the normal course of Tenant's business
  so long as such persons are not engaged in illegal activities. 10. Additional
  Locks. Tenant shall not attach, or permit to be attached, additional locks or
  similar devices to any door or window, change existing locks or the mechanism
  thereof, or make or permit to be made any keys for any door other than those
  provided by Landlord. Upon termination of this Lease or of Tenant's
  possession, Tenant shall immediately surrender all keys to the Premises. 11.
  Communications or Utility Connections. If Tenant desires signal, alarm or other
  utility or similar senvice connections installed or changed, then Tenant
  shall not install or change the same without the approval of Landlord, and
  then only under direction of Landlord and at Tenant's expense. Tenant shall
  not install in the Premises any equipment which requires a greater than
  normal amount of electrical current for the permitted use without the advance
  written consent of Landlord. Tenant shall ascertain from Landlord the maximum
  amount of load or demand for or use of electrical current which can safely be
  permitted in the Premises, taking into account the capacity of the electric
  wiring in the Building and the Premises and the needs of other tenants in the
  Building, and Tenant shall not in any event connect a greater load than that which
  is safe. 12. Office of the Building. Service requirements of Tenant will be
  attended to only upon application to the Building manager. Employees of
  Landlord shall not perform, and Tenant shall not engage them to do any work
  outside of their duties unless specifically authorized by Landlord. 13.
  Restrooms. The restrooms, toilets, urinals, vanities and the other apparatus
  shall not be used for any purpose other than that for which they were
  constructed, and no foreign substance of any kind whatsoever shall be thrown
  therein. The expense of any breakage, stoppage or damage resulting from the
  violation of this rule shall be borne by the Tenant whom, or whose employees
  or invitees, shall have caused it. 14. Intoxication. Landlord reserves the
  right to exclude or expel from the Building any person who, in the judgment
  of Landlord, is intoxicated, or under the influence of liquor or drugs, or
  who in any way violates any of the Rules and Regulations of the Building. 15.
  Nuisances and Certain Other Prohibited Uses. Tenant shall not (a) install or
  operate any internal combustion engine, boiler, machinery, refrigerating,
  heating or air conditioning apparatus in or about the Premises; (b) engage in
  any mechanical business, or in any service in or about the Premises or
  Building, except those ordinarily embraced within the Permitted Use as
  specified in Section 3 of the Lease; (c) use the Premises for housing,
  lodging, or sleeping purposes; (d) prepare or warm food in the Premises or
  permit food to be brought into the Premises for consumption therein (heating
  coffee and individual lunches of employees and clients, customers and agents
  of Tenant excepted) except by express permission of Landlord; (e) place any
  radio or television antennae on the roof or on or in any part of the inside
  or outside of the Building other than the inside of the Premises, or place a
  musical or sound producing instrument or device inside or outside the
  Premises which may be heard outside the Premises; (f) use any power source
  for the operation of any equipment or device other than dry cell batteries or
  electricity; (g) operate any electrical device from which may emanate waves
  that could interfere with or impair radio or television broadcasting or
  reception from or in the Building or elsewhere; (h) bring or permit to be in
  the Building any bicycle, other vehicle, dog (except in the company of a
  blind person), other animal or bird; (i) make or permit any objectionable
  noise or odor to emanate from the Premises; (j) disturb, harass, solicit or
  canvass any occupant of the Building; (k) do anything in or about the
  Premises which is a nuisance or injures the reputation of the Building; (i)
  allow any firearms in the Building or the Premises except as approved by
  Landlord in writing. 16. Solicitation. Tenant shall not canvass other tenants
  in the Building to solicit business or contributions and shall not exhibit,
  sell or offer to sell, use, rent or exchange any products or services in or
  from the Premises unless ordinarily embraced within the Tenant's Permitted
  Use as specified in Section 3 of the Lease. 17. Energy Conservation. Tenant
  shall not waste electricity, water, heat or air conditioning and agrees to
  cooperate fully with Landlord to insure the most effective operation of the
  Building's heating and air conditioning, and shall not allow the adjustment
  (except by Landlord's authorized Building personnel) of any controls. 2 

  

 

	
  

  	
  18. Building
  Security. At all times other than normal business hours the exterior Building
  doors and suite entry door(s) must be kept locked to assist in security.
  Problems in Building and suite security should be directed to the Building
  manager. 19. Parking. Parking is in designated parking areas only. There
  shall be no vehicles in "no parking" zones or at curbs. Handicapped
  spaces are for handicapped persons only and the Police Department will ticket
  unauthorized (unidentified) cars in handicapped spaces. Landlord reserves the
  right to remove vehicles that do not comply with the Lease or these Rules and
  Regulations and Tenant shall indemnify and hold harmless Landlord from its
  reasonable exercise of these rights with respect to the vehicles of Tenant
  and its employees, agents and invitees. 20. Janitorial Service. The
  janitorial staff will remove all trash from trashcans. Any container or boxes
  left in hallways or apparently discarded unless clearly and conspicuously
  labeled DO NOT REMOVE may be removed without liability to Tenant. Any large
  volume of trash resulting from delivery of furniture, equipment, etc., should
  be removed by the delivery company, Tenant, or Landlord at Tenant's expense.
  Janitorial service will be provided after hours five (5) days a week. All
  requests for trash removal other than normal janitorial services should be
  directed to the Building manager. 21. Construction. Tenant shall make no
  structural or interior alterations of the Premises. All structural and
  nonstructural alterations and modifications to the Premises shall be
  coordinated through Landlord as outlined in the Lease. Completed construction
  drawings of the requested changes are to be submitted to Landlord or its
  designated agent for pricing and construction supervision. 22. Visible Areas.
  If any of the Premises is visible from the building lobby or other Common
  Areas of the Building, that portion of the Premises shall be used, furnished,
  decorated and maintained in a manner in keeping with a Class A office
  building. Building standard finishes shall be used for wall and floor
  covering. It shall be unacceptable to use said portion for break rooms, kitchens,
  file rooms, copy rooms, storage, or other non-office or reception uses as
  Landlord may determine at its sole discretion. If, in the sole opinion of
  Landlord or Landlord’s agent, that portion of the Premises visible from the
  lobby or other Common Areas of the Building does not conform with this
  provision or is less than Class “A" in appearance, Landlord shall notify
  Tenant and Tenant shall make any of Landlord's required changes within
  fifteen (15) days of receipt of Landlord's notice. Tenant signage installed
  in or on any portion of the Premises which is visible from the building lobby
  or other Common Areas of the Building are subject to Landlord’s prior written
  approval, which approval may be withheld at Landlord’s sole discretion. 3 

  

 

	
  

  	
  EXHIBIT C COMMENCEMENT
  AGREEMENT This COMMENCEMENT AGREEMENT (the “First Amendment”), made and
  entered into as of this day of , 20 , by and between , a , with its principal
  office at (“Landlord") and , a Corporation, with its principal office
  (“Tenant"); at WITNESSETH: WHEREAS, Tenant and Landlord entered into
  that certain Lease Agreement dated (the “Lease”), for space designated as
  Suite , comprising approximately rentable square feet, in the Building,
  located at County of City of , State of ; and WHEREAS, the parties desire to
  establish the Commencement Date and Expiration Date as set forth below, NOW,
  THEREFORE, in consideration of the mutual and reciprocal promises herein
  contained, Tenant and Landlord hereby agree that said Lease hereinafter
  described be, and the same is hereby modified in the following particulars:
  1. The term of the Lease by and between Landlord and Tenant actually
  commenced on (the “Commencement Date"). The initial term of said Lease
  shall terminate on (the “Expiration Date"). Section 2, entitled
  “Term", and all references to the Commencement Date and Termination Date
  in the Lease are hereby amended. 2. Except as modified and amended by this
  First Amendment, the Lease shall remain in full force and effect. IN WITNESS
  WHEREOF, Landlord and Tenant have caused this Agreement to be duly executed,
  as of the day and year first above written. Tenant: a corporation By: Name:
  Title: Date: Attest: Landlord: .Secretary Corporate Seal: By: Vice President
  Date: Attest: .Secretary #10593440 v2 Corporate Seal: 1 

  

 

	
  

  	
  EXHIBIT D
  CONSENT AND WAIVER (OWNER, LANDLORD OR MORTGAGEE OF REAL ESTATE)
  Gentlemen/Ladies: Oxford Finance Corporation and Compass Horizon Funding
  Company LLC, each together with its successors and assigns, if any, (each a
  “Secured Party” and together, the “Secured Parties") has entered into,
  or is about to enter into, a security agreement, chattel mortgage or similar
  agreement ("Security Agreement”) with Tranzyme, Inc. and Tranzyme Pharma
  Inc. (each a "Debtor" and together, the “Debtors”), pursuant to
  which the Debtors have granted, or will grant, to Secured Parties a security
  interest in or a hypothec on certain Collateral. Some or all of the
  Collateral is, or will be, located at certain premises known as a portion of
  Suite 300 (“Premises”) in the office building commonly known as Central Park
  West located at 5001 South Miami Boulevard, Durham, North Carolina 27703. For
  the purposes of this Waiver, “Collateral” shall mean all personal (moveable)
  property and fixtures of the Debtors, including, but not limited to all of
  the receivables, payments, accounts, contract rights, instruments, documents,
  chattel paper (including tangible and electronic chattel paper), payment
  intangibles, commercial tort claims, health-care-insurance receivables,
  instruments, investment property, supporting obligations and general
  intangibles now owned or hereafter acquired by the Debtors and all goods,
  equipment, general intangibles and property of the Debtors described below
  which is now owned or hereafter acquired by the Debtors, wherever located;
  all deposit accounts (including all signature cards, account agreements and
  other documents relating to deposit accounts) and other obligations or
  indebtedness owed to the Debtors from whatever source arising; letter of
  credit rights; all rights of the Debtors to receive any payment in money or
  kind; all inventory; all equipment; all of the Debtors’ rights as an unpaid
  seller, including stoppage in transit, detinue and reclamation; all
  guarantees, or other agreements or property securing or relating to any of
  the items referred to above, or acquired for the purpose of securing and
  enforcing any of such items, all books of account and documents related
  thereto; all customer lists and other documents containing the names,
  addresses and other information regarding the Debtors’ customers, subscribers
  or those to whom the Debtors provide any services; computer tapes, programs,
  discs and other material, media or documents relating to the recording,
  billing or analyzing of any of the above; all computers, word processors,
  printers, switches, interfaces, source codes, mask works, software, web
  servers, website service contracts, internet connection contract or line
  lease, website hosting service contract, website license agreements, back-up
  copies of website content, contracts with website advertisers, scripts, codes
  or Active-X controls, technology escrow agreements, website content
  development agreements, all rights, of whatever form, in and to domain names,
  instructional material, and connectors and all parts, accessories, additions,
  substitutions, or options together with all property or equipment used in
  connection with any of the above or which are used to operate or cause to
  operate any features, special applications, format controls, options or
  software of any or all of the above-mentioned items; whether now owned or
  existing or hereafter acquired; contractual rights, literary rights, all
  amounts received as an award in or settlement of a suit in damages, proceeds
  of loans, interests in joint ventures or general or limited partnerships, the
  sale by the Debtors of any of the foregoing and all proceeds (cash and
  non-cash) of the foregoing; proceeds of property received wholly or partly in
  trade or exchange for the Collateral and all rents, revenues, issues, profits
  and proceeds in any form, including cash, insurance proceeds, distributions
  on stock, negotiable instruments and other evidences of indebtedness, chattel
  paper, security agreements and other documents arising from the sale, lease,
  license, encumbrance, collection of, or any other temporary or permanent
  disposition of the Collateral or any interest therein. Notwithstanding the
  foregoing, (i) the undersigned reserves its rights (as set forth in the
  Lease) to approve any assignee or transferee of Tranzyme, Inc.'s interest in
  the office lease for the Premises (“Lease”) and (ii) the Collateral shall not
  be deemed to include any intellectual property or rights therein. You
  acknowledge and agree that, in applying the law of any jurisdiction that at
  any time enacts all or substantially all of the uniform provisions of Revised
  Article 9 of the Uniform Commercial Code (1999 Official Text), the foregoing
  collateral description covers substantially all assets of the Debtors
  (excluding their intellectual property and rights therein). By your signature
  below, you hereby agree (and we shall rely on your agreement) that: (i) the
  Collateral is, and shall remain, Collateral regardless of the method by which
  it may be, or become, affixed to the Premises; (ii) your interest in the
  Collateral and any proceeds thereof (including, without limitation, proceeds
  of any insurance therefore) shall be, and remain, subject and subordinate to
  the interests and ranking of Secured Parties; (iii) Secured Parties, and its
  respective employees and agents, shall have the right upon any default by the
  Debtors under the Security Agreement, to enter into the Premises and to
  remove the Collateral from the Premises None of the Collateral will be deemed
  fixtures, and the Secured Parties may enter the Premises to remove the
  Collateral, or any part thereof, at any time and from time to time in the
  exercise of its rights under the Security Agreement, provided, however,
  Secured Parties shall provide reasonable advance notice to Landlord prior to
  entering the Premises in the exercise of their rights hereunder. Each Secured
  Party agrees to reimburse you for any damages actually caused to the Premises
  by such Secured Party, or its employees or agents, during any such removal.
  Landlord waives any right of distraint or execution against the Collateral or
  any claim to the Collateral during the effectiveness of the Security
  Agreement. These agreements shall be binding upon, and shall inure to the
  benefit of, any successors and assigns of the parties hereto. We appreciate
  your co-operation in this matter of mutual interest. OXFORD FINANCE
  CORPORATION By: Name: Title: COMPASS HORIZON FUNDING COMPANY LLC By: Name: Title. AGREED TO AND ACCEPTED BY: 2 

  

 

	
  

  	
  Company: JAMES
  CAMPBELL COMPANY LLC Indicate Interest in the Premises: By: Name: Title:
  Date: Mailing Address: with a copy to: Owner: Mortgagee: Landlord: Realty
  Manager: James Campbell Company 425 California Street, Suite 1000 San
  Francisco, California 94104 Attn: Executive Vice President, Real Estate
  Investment Management James Campbell Company c/o Grubb & ElIis|Thomas
  Linderman Graham 1511 Sunday Drive, Suite 200 Raleigh, North Carolina 27607 3Exhibit 4.1

 

THIS PROMISSORY NOTE HAS NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE “ACT”) OF THE SECURITIES LAWS OF ANY STATE.  NO SALE OR DISPOSITION MAY BE EFFECTED EXCEPT IN COMPLIANCE WITH RULE 144 UNDER THE ACT OR AN EFFECTIVE REGISTRATION STATEMENT RELATED THERETO OR AN APPLICABLE EXEMPTION THEREFROM.

 

PROMISSORY NOTE

 

Date of Issuance: November 25, 2011

 

For value received, Vertical Health Solutions, Inc. d/b/a OnPoint Medical Diagnostics, a Florida corporation (“Company”) hereby promises to pay to the order of [Richard Lindstrom] (the “Purchaser”), the principal sum of the then outstanding aggregate amount of all Advances (as such term is defined below) made to the Company from time to time under this Note (the “Principal Amount”) plus any accrued but unpaid Interest (as defined below).

 

Purchaser agrees to remit the first tranche of $50,000 within 2 business days of the execution of this Note (the “Initial Advance”).  Purchaser agrees to advance subsequent funds to the Company in increments of $10,000 within 5 business days following receipt of a request from the Company indicating such requested amount (each, a “Subsequent Advance”; and together with the Initial Advance, the “Advances”); provided, however, in no event shall the aggregate amount of all Advances exceed $200,000 (the “Maximum Loan Amount”).

 

The Purchaser is hereby authorized to endorse Schedule A to this Note with an appropriate notation evidencing each Advance of principal on this Note; provided that the failure to make any such notation will not limit, expand or otherwise affect the rights of the Purchaser of this Note or the obligations of the Company under this Note.

 

1.                                       Interest; Maturity

 

1.1                                 Simple interest on the unpaid Principal shall accrue at the rate of 12% per annum (“Interest”) and will begin to accrue upon the Date of Issuance. Interest shall be payable in quarterly installments each January 1, April 1, July 1 and October 1 from and after the Date of Issuance of this Note and continuing until the repayment in full of the unpaid Principal and accrued Interest in accordance with the terms and conditions of this Note.  Interest shall be calculated based on a 365-day year and charged for the actual number of days elapsed.

 

1.2                                 This Note shall mature on November 25, 2013  (the “Maturity Date”).

 

2.                                       Warrant

 

2.1                                 In connection with each Advance, the Company shall issue the Purchaser a warrant, substantially in form attached hereto as Exhibit A (each, a “Warrant”), to purchase a number of shares of common stock, par value $0.001 per share, of the Company equal to the quotient of (i) the Advance amount, divided by (ii) $1.00.  Each Warrant shall be exercisable for a period of ten years from the date of issuance of such Warrant and shall have an exercise price of $1.00 per share.

 

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3.                                       Default; Remedies

 

3.1                                 Each of the following shall constitute an event of default (each, an “Event of Default”) under this Note:

 

(a)                                  The Company shall fail to pay (i) when due any principal or interest payment on the due date hereunder or (ii) any other payment required under the terms of this Note on the date due and such payment shall not have been made within five days of the Company’s receipt of the Purchaser’s written notice to the Company of such failure to pay;

 

(b)                                 The Company shall fail to observe or perform any other covenant, obligation, condition or agreement contained this Note and (i) such failure shall continue for 15 days, or (ii) if such failure is not curable within such 15-day period, but is reasonably capable of cure within 30 days, either (A) such failure shall continue for 30 days or (B) the Company shall not have commenced a cure in a manner reasonably satisfactory to Purchaser within the initial 15-day period; or

 

(c)                                  The Company files any petition or action for relief under any bankruptcy, reorganization, insolvency or moratorium law or any other law for the relief of, or relating to, debtors, now or hereafter in effect, or makes any general assignment for the benefit of creditors or takes any corporate action in furtherance of any of the foregoing;

 

(d)                                 An involuntary petition is filed against the Company (unless such petition is dismissed or discharged within thirty (30) days) under any bankruptcy statute now or hereafter in effect, or a custodian, receiver, trustee, assignee for the benefit of creditors (or other similar official) is appointed to take possession, custody or control of any property of the Company; or

 

(e)                                  The Company’s stockholders or board of directors affirmatively vote to liquidate, dissolve, or wind up the Company or the Company otherwise ceases to carry on its ongoing business operations.

 

3.2                                 Upon the occurrence and during the continuance of any Event of Default, all unpaid principal on this Note, accrued and unpaid interest thereon and all other amounts owing hereunder shall, at the option of the Purchaser, and, upon the occurrence of any Event of Default pursuant to Sections 3.1 (c), (d) or (e) of this Note, automatically, be immediately due, payable and collectible by Purchaser pursuant to applicable law.  Purchaser shall have all rights and may exercise all remedies available to it under law, successively or concurrently.

 

4.                                       Prepayment.  Prepayment of the outstanding Principal plus accrued but unpaid Interest may be made anytime without consent.

 

5.                                       Waiver; Payment Of Fees And Expenses.  Company waives presentment and demand for payment, notice of dishonor, protest and notice of protest of this Note, and shall pay all costs of collection when incurred, including, without limitation, reasonable attorneys’ fees, costs and other expenses.  The right to plead any and all statutes of limitations as a defense to any demands hereunder is hereby waived to the full extent permitted by law.  No delay by Purchaser shall constitute a waiver, election or acquiescence by it.

 

6.                                       Cumulative Remedies.  Purchaser’s rights and remedies under this Note shall be cumulative.  Purchaser shall have all other rights and remedies not inconsistent herewith as provided under the UCC, by law or in equity.  No exercise by Purchaser of one right or remedy shall be deemed an election, and no waiver by Purchaser of any Event of Default shall be deemed a continuing waiver of such Event of Default or the waiver of any other Event of Default.

 

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7.                                       Miscellaneous

 

7.1                                 Governing Law.  The terms of this Note shall be construed in accordance with the laws of the State of Minnesota, as applied to contracts entered into by Minnesota residents within the State of Minnesota, and to be performed entirely within the State of Minnesota.

 

7.2                                 Successors and Assigns; Assignment.  The terms and conditions of this Note shall inure to the benefit of and be binding upon the respective successors and assigns of the parties.  Neither party may assign this Note or delegate any of its rights or obligations hereunder without the written consent of the other party.

 

7.3                                 Titles and Subtitles.  The titles and subtitles used in this Note are used for convenience only and are not to be considered in construing or interpreting the Note.

 

7.4                                 Notices.  All notices required or permitted hereunder shall be in writing and shall be given in the manner and to the addresses set forth in the Purchase Agreement.

 

7.5                                 Amendment; Modification; Waiver.  No term of this Note may be amended, modified or waived without the written consent of the Company and the Purchaser.

 

7.6                                 Usury.  In the event any interest is paid on this Note which is deemed to be in excess of the then legal maximum rate, then that portion of the interest payment representing an amount in excess of the then legal maximum rate shall be deemed a payment of principal and applied against the principal of this Note.

 

7.7                                 Counterparts.  This Note may be executed in two or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument.

 

[SIGNATURE PAGE TO FOLLOW]

 

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

 

 

	
 
    	
 
    	
VERTICAL   HEALTH SOLUTIONS, INC. D/B/A ONPOINT MEDICAL DIAGNOSTICS
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
By:   
    	
/s/   William T. Cavanaugh
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Name:   
    	
William   T. Cavanaugh
    
	
 
    	
 
    	
 
    	
 
    
	
 
    	
 
    	
Title:   
    	
President   and Chief Executive Officer
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
AGREED TO AND ACCEPTED:
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
RICHARD LINDSTROM
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
By:   
    	
/s/   Richard Lindstrom
    	
 
    	
 
    
					

 

 

SCHEDULE A

 

TO

 

PROMISSORY NOTE

 

	
Date
    	
 
    	
Advance Amount
    	
 
    	
Aggregate Outstanding
    Principal Balance
    	
 
    	
Name of Person
   Making Entry
    
	
November 25, 2011
    	
 
    	
$
    	
50,000
    	
 
    	
$
    	
50,000
    	
 
    	
Company
    
									

 

 

EXHIBIT A

 

FORM OF WARRANT

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