Document:

Exhibit 10(d)

 

QUIXOTE
CORPORATION

2001 NON-EMPLOYEE DIRECTORS STOCK OPTION PLAN

As Amended June 26, 2009

 

1.             PURPOSE. The purposes of this plan (the “Plan”)
are to encourage non-employee Directors of Quixote Corporation, a Delaware
corporation (the “Company”), to acquire a long term proprietary interest in the
growth and performance of the Company, to generate an increased incentive to
contribute to the Company’s future success and prosperity (thus enhancing the
value of the Company for the benefit of its stockholders), and to enhance the
ability of the Company to attract and retain qualified Directors upon whom the
sustained progress, growth, and profitability of the Company depend.

 

2.             DEFINITIONS. As used in this Plan, terms defined
immediately after their use shall have the respective meanings provided by such
definitions and the terms set forth below shall have the following meanings
(such meanings to be equally applicable to both the singular and plural forms
of the terms defined):

 

(a) “Award”
means options granted under the Plan.

 

(b) “Board”
means the Board of Directors of the Company.

 

(c) “Effective
Date” means the date upon which this Plan is approved by the stockholders of
the Company.

 

(d) “Director”
means an individual who is a member of the Board and who is not an employee of
the Company or any of its subsidiaries.

 

(e) “Fair
Market Value” of the Stock of the Company means, as of any applicable date, (i) if
the Stock is listed on The New York Stock Exchange, the closing sale price of
the Stock on the immediately preceding date as reported on The New York Stock
Exchange Composite Tape, or if no such reported sale of the Stock shall have
occurred on such date, on the next preceding date on which there was such a
reported sale, or (ii) if the Stock is traded on the Nasdaq National
Market, the average of the highest reported bid and the lowest reported asked
price per share of the Stock on the immediately preceding date on the Nasdaq
National Market.  If the Stock ceases to
be listed on The New York Stock Exchange or traded on the Nasdaq National
Market, the Board shall designate an alternative method of determining the Fair
Market Value of the Stock.

 

(f) “Grant
Date” means the date on which an Award shall be duly granted.

 

(g) “Grantee”
means an individual who has been granted an Award.

 

(h) “Immediate
Family” has the meaning specified in Section 8.

 

 

(i) “Including”
or “includes” means “including, without limitation,” or “includes, without
limitation.”

 

(j) “Option
Price” means the per share purchase price of Stock subject to an option.

 

(k) “Permissible
Transferee” has the meaning specified in Section 8.

 

(l) “Plan”
has the meaning specified in the introductory paragraph.

 

(m) “SEC”
means the Securities and Exchange Commission.

 

(n) “Stock”
means the Company’s common stock, authorized by the Company’s Certificate of
Incorporation.

 

3.             SCOPE OF THE PLAN.

 

(a) Subject to the provisions
of Section 11, from and after the Effective Date,one hundred and
thirty-five thousand (135,000) shares of Stock, shall remain available and
reserved for delivery on account of the exercise of Awards.  Such shares may be treasury shares, newly
issued shares, or shares purchased on the open market (including private
purchases) in accordance with applicable securities laws, or any combination of
the foregoing, as may be determined from time to time by the Board.

 

(b) To
the extent an Award shall expire or terminate for any reason without having
been exercised in whole by the Grantee, the shares of Stock associated with
such Award shall become available for other Awards.

 

4.                    
PARTICIPATION
IN THE PLAN. On
the first Friday after the Effective Date and on the first Friday following the
Company’s annual meeting of stockholders each year thereafter, each Director
elected, re-elected or continuing as a Director shall automatically receive an
Award of an option to acquire five thousand (5,000) shares of Stock.

 

5.             OPTION TERMS.

 

(a) Option
Price. The Option Price per share of Stock
for each option granted under this Plan shall be equal to the Fair Market Value
of the Stock on its Grant Date.

 

(b) Time
for Exercising Options. The options
shall not become exercisable until six (6) months after the Grant Date.
Unless terminated earlier as set forth in Section 6, any option granted
must be exercised within not more than seven (7) years from the date on
which granted (“Option Period”).

 

(c) Exercise
of Options. Each option shall be exercised
by delivery to the Company of written notice of intent to purchase a specific
number of shares of Stock subject to the option. 

 

2

 

The Option Price of any
shares of Stock as to which an option shall be exercised shall be paid in full
at the time of the exercise. Payment may, at the election of the Grantee, be
made in any one or any combination of the following:

 

(i) cash;
or

 

(ii) Stock held by the Grantee for at least 6
months prior to exercise of the option, valued at its Fair Market Value on the
date of exercise; or

 

(iii) by
delivery of a properly executed exercise notice to the Company, together with a
copy of irrevocable instructions to a broker or lending institution, accepted
in writing, authorizing them to sell the Stock (or a sufficient portion
thereof) acquired upon exercise of an option, and assigning the delivery to the
Company of an amount of the sale proceeds to pay for all the Stock acquired
through such exercise and the minimum statutory tax withholding obligations
resulting from such exercise, all in such form and with such security as the
Company may require.

 

In the
event the Grantee elects to make payments as provided in (ii) above,
delivery may be accomplished by means of an attestation by the Grantee, at the
time of exercise, as to the Grantee’s ownership of the number of shares of
stock required to cover the total required-option-price of the option being
exercised and the Company may deliver the net amount of shares covered by the
option exercise after deducting the number of shares required to cover the
total option price.

 

6.                                      TERMINATION OF DIRECTORSHIP.

 

(a)           Cessation of Service.  Upon the
cessation of the Grantee’s service as a Director for a reason other than death,
the options immediately exercisable at the date of cessation of service shall
be exercisable by the Grantee until the close of business on the day before the
same day of the third month after the Grantee’s cessation of service; provided
that if the Grantee shall have served as a Director for a period of six (6) years
or longer, his/her outstanding options shall continue to be exercisable until
the close of business on the last business day of the 24th month following the
such cessation of service.  If the
Grantee dies within such 24-month period, then the Grantee’s options may be
exercised within the 12 month period after his or her death by the person
specified in Section 6(b), below. 
Notwithstanding the foregoing, however, in no event may an option be
exercised after the expiration of the Option Period.  All options not exercisable at the date of
cessation of service shall expire on that date.

 

(b)           Death.  Upon the
cessation of the Grantee’s service as a Director by reason of death, all
unvested options shall become exercisable immediately and may be exercised,
together with those options which were exercisable on the date of death, not
later than the close of business on the last business day of the 12th month
following the date of the Grantee’s death, but in no event after the expiration
of the Option Period, by (i) his/her personal representative, executor, administrator,
or by the person to whom the option is transferred by will or the applicable
laws of descent and distribution, (ii) the Grantee’s beneficiary
designated in 

 

3

 

accordance with Section 8
of the Plan, or (iii) the then-acting trustee of a trust described in Section 8
of the Plan to which the option has been transferred in accordance with that
section.

 

7.   CHANGE IN CONTROL.

 

(a)           Notwithstanding any other provision of this Plan to
the contrary, if, while any Awards remain outstanding under this Plan, a “Change
in Control” (as defined below) should occur, then all options that are
outstanding at the time of such Change in Control shall become immediately
vested and exercisable in full.

 

(b)           A Change in Control means a change in control of the
Company of a nature that would be required to be reported in response to item 6(e) of
Schedule 14A of Regulation14A promulgated under the 1934 Act; provided that,
without limitation, such change in control shall be deemed to have occurred if
the conditions set forth in any one of the following paragraphs shall have been
satisfied:

 

(i)            any person (as defined in Section 3(a)(9) of
the 1934 Act, as such term is modified in Sections 13(d) and 14(d) of
the 1934 Act), other than (1) any employee plan established by the Company
or any Subsidiary, (2) the Company or Subsidiary, (3) an underwriter
temporarily holding securities pursuant to an offering of such securities, or (4) a
corporation owned, directly or indirectly, by stockholders of the Company in
substantially the same proportions as their ownership of the Company), alone or
with its Affiliates, is or becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the 1934 Act), directly or indirectly, of Stock of the
Company representing 30% or more of either the then outstanding shares of Stock
or the combined voting power of the Company’s then outstanding voting
securities;

 

(ii)           a majority of the members of the Board shall cease to
be Continuing Members.  For this purpose,
“Continuing Member” means a member of the Board who either (i) was a
member of the Board on the Effective Date hereof and has been such continuously
thereafter or (ii) became a member of such Board after the Effective Date
and whose election or nomination for election was approved by a vote of at
least two-thirds of the Continuing Members then members of the Company’s Board
(other than a nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the members of the Board, as such terms are used in Rule 14a-11
of Regulation 14A under the 1934 Act);

 

(iii)          the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation, other than (1) a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either
by remaining outstanding or by being converted into voting securities of the
surviving entity or any parent thereof), in combination with the ownership of
any trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any Affiliate or Subsidiary, at least 50% of the
combined voting power of the voting securities of the Company or 

 

4

 

such surviving entity or
any parent thereof outstanding immediately after such merger or consolidation,
or (2) a merger or consolidation effected to implement a recapitalization
of the Company (or similar transaction) in which no person (determined pursuant
to clause (i) above) is or becomes the beneficial owner, directly or
indirectly, of securities of the Company (not including in the securities beneficially
owned by such person any securities acquired directly from the Company, its
Subsidiaries or its Affiliates) representing 15% or more of either the then
outstanding shares of Stock or the combined voting power of the Company’s then
outstanding voting securities; or

 

(iv)          the stockholders of the Company
approve a plan of complete liquidation of the Company or an agreement for the
sale or disposition by the Company of all or of the Company’s assets or earning
power aggregating more than 50% of the assets or the earning power of the
Company and its Subsidiaries, taken as a whole.

 

Notwithstanding
the foregoing, no Change in Control shall be deemed to have occurred if there
is consummated any transaction or series of integrated transactions immediately
following which the record holders of Stock immediately prior to such
transaction or series of transactions continue to have substantially the same
proportionate ownership in an entity which owns substantially all of the assets
of the Company immediately prior to such transaction or series of transactions.

 

8.             TRANSFERABILITY RESTRICTIONS. Each Award granted hereunder shall not
be assignable or transferable other than by will or the laws of descent and
distribution; provided, however, that a Grantee may (a) designate
in writing a beneficiary to exercise his/her Award after the Grantee’s death, (b) transfer
an Award to a revocable, inter vivos trust as to which the Grantee is both the
settlor and trustee and (c) transfer an Award for no consideration to any
of the following permissible transferees (each a “Permissible Transferee”): (w) any
member of the Immediate Family of the Grantee to whom such Award was granted, (x) any
trust solely for the benefit of the Grantee and members of the Grantee’s
Immediate Family, (y) any partnership or limited liability company whose
only partners or members are the Grantee and members of the Grantee’s Immediate
Family, or (z) any other transferee approved by the Board in advance of
the transfer; and further provided that: (i) the transfer of any Award
shall not be effective on a date earlier than the date on which the Award is
first exercisable as set forth in this Plan; (ii) any Permitted Transferee
to whom an Award is transferred by a Grantee shall not be entitled to transfer
the Award, other than to the Grantee or by will or the laws of descent and
distribution; and (iii) the Permitted Transferee shall remain subject to
all of the terms and conditions applicable to such Award prior to such
transfer. For purposes of this Section 8, “Immediate Family” means, with
respect to a particular Grantee, such Grantee’s spouse, children, stepchildren,
grandchildren, parents, stepparents, grandparents, siblings, mother-in-law,
father-in-law, son-in-law, daughter-in-law, brother-in-law, and sister-in-law,
and shall include relationships arising from legal adoption.

 

9.             SECURITIES LAW MATTERS. Each Director electing to purchase
shares pursuant to an option shall be required, as a condition to such
purchase, to represent to the Company that the Director has access by reason of
such Director’s service with the Company to 

 

5

 

sufficient information
concerning the Company to enable the Director to evaluate the merits and risks
of the prospective investment and has such knowledge and experience in
financial and business matters so that the Director is capable of evaluating
such investment, and that the Director is acquiring the shares solely for such
Director’s account and will not sell the securities without registration under
the Securities Act of 1933 (which the Company is under no obligation to
provide) or exemption therefrom. Share certificates shall bear such legend as
the Company may deem necessary.

 

10.          RIGHTS AS A STOCKHOLDER. A Grantee shall not, by reason of any Award, have any
right as a stockholder of the Company with respect to the shares of Stock which
may be issuable upon exercise until such shares have been issued to him or her.

 

11.          ADJUSTMENTS FOR CHANGES IN CAPITALIZATION. If prior to actual delivery of
certificates for the present Stock of the Company pursuant to any option
outstanding hereunder, the said Stock shall be increased through stock
dividends or stock splits, or decreased by reverse stock splits or otherwise
reclassified, or the Company shall be reorganized, consolidated or merged with
one or more corporations, or if all or substantially all of the assets of the
Company shall be sold or exchanged, the Director, at the time he or she shall
be entitled to the delivery of a certificate pursuant to such option, shall
receive in place of the certificate or certificates for the present Stock of
the Company the same number and kind of shares or the same amount of other
property, cash or securities as the Director would have been entitled to
receive upon such increase, decrease, reclassification, reorganization,
consolidation, merger, sale or exchange, if the Director had been immediately
prior to such event the holder of the number of shares of the present Stock of
the Company (not previously delivered to the Director hereunder) which such
Director would otherwise have been entitled to receive pursuant hereto but for
such increase, decrease, reclassification, reorganization, consolidation,
merger, sale or exchange.

 

12.          EFFECTIVE DATE, TERMINATION AND AMENDMENT; ADMINISTRATION.

 

(a)           This Plan shall became effective on the Effective
Date. This Plan shall terminate on, and no grants of options shall be made
after, the close of business (5 P.M.
Chicago, Illinois) on November 1, 2011, unless terminated at an earlier
date by action of the Board, except that any options then outstanding shall
remain in effect until they have been exercised, forfeited or expired.

 

(b)           The Board may amend, suspend, or terminate the Plan.

 

(c)           This Plan shall be administered by the Board.  The Board may delegate to any person or group
of persons who may further so delegate the Board’s powers and obligations
hereunder as they relate to day-to-day administration of the exercise
process.  This Plan may be terminated or
amended by the Board of Directors as it deems advisable, provided however,
unless approved by the Company’s stockholders, no adjustments or reduction of
the Option Price of any outstanding options shall be made directly or by
cancellation of outstanding options and a subsequent re-granting of options at
a lower price to the same individual.  No
amendment may

 

6

 

revoke or alter in any
manner unfavorable to the Grantees any options then outstanding.  Nor may the Board amend this Plan without
stockholder approval where the absence of such approval would cause the Plan to
fail to comply with Rule 16(b)(3) under the Securities Exchange Act
of 1934 or any other requirement of applicable law or regulation.

 

13.          NO TRUST OR FUND CREATED. Neither this Plan nor any Award shall create or be
construed to create a trust or separate fund of any kind or a fiduciary
relationship between the Company and a Grantee or any other person.

 

14.          CONTROLLING LAW. The law of the State of Illinois, except its law with respect to
choice of law and except as to matters relating to corporate law (in which case
the corporate law of the State of Delaware shall control), shall be controlling
in all matters relating to this Plan.

 

15.          SEVERABILITY. If all or any part of this Plan is declared by any court or
governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not serve to invalidate any portion of this Plan not declared
to be unlawful or invalid. Any Section or part of a Section so
declared to be unlawful or invalid shall, if possible, be construed in a manner
in which will give effect to the terms of such Section or part of a Section to
the fullest extent possible while remaining lawful and valid.

 

16.          TITLES AND HEADINGS. The titles and headings of the Sections in this Plan
are for convenience of reference only, and in the event of any conflict, the
text of the Plan, rather than such titles or headings, shall control.

 

	
   

  	
  Approved by the
  Stockholders of Quixote Corporation as of November 14, 2001.

  
	
   

  	
   

  
	
   

  	
  Approved by the
  Board of Directors of Quixote Corporation as of August 17, 2004

  
	
   

  	
   

  
	
   

  	
  Approved by the
  Stockholders of Quixote Corporation as of November 18, 2004

  
	
   

  	
   

  
	
   

  	
  Amended by the Board of Directors of Quixote Corporation
  on June 26, 2009

  

 

7Exhibit 10(e)

 

A & G/SLATER ROAD, INC.

 

OFFICE LEASE

 

	
   

  	
   

  	
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FD.LEASES.HIGHWAY INFORMATION SYSTEMS.200
SLATER RD.

 

1

 

TABLE
OF CONTENTS

 

	
  Section 1:

  	
   

  	
  Basic Definitions and Provisions

  
	
   

  	
  a.

  	
  Premises

  
	
   

  	
  b.

  	
  Term

  
	
   

  	
  c.

  	
  Permitted Use

  
	
   

  	
  d.

  	
  Occupancy Limitation

  
	
   

  	
  e.

  	
  Base Rent

  
	
   

  	
  f.

  	
  Rent Payment Address

  
	
   

  	
  g.

  	
  Security Deposit

  
	
   

  	
  h.

  	
  Business Hours

  
	
   

  	
  i.

  	
  Electrical Service

  
	
   

  	
  j.

  	
  After Hours HVAC Rate

  
	
   

  	
  k.

  	
  Parking

  
	
   

  	
  l.

  	
  Notice Addresses

  
	
   

  	
  m.

  	
  Brokers

  
	
  Section 2.

  	
   

  	
  Leased Premises

  
	
   

  	
  a.

  	
  Premises

  
	
   

  	
  b.

  	
  Rentable Square Foot Determination

  
	
   

  	
  c.

  	
  Common Areas

  
	
  Section 3:

  	
   

  	
  Term

  
	
   

  	
  a.

  	
  Commencement and Expiration Dates

  
	
   

  	
  b.

  	
  Adjustments to Commencement Date

  
	
   

  	
  c.

  	
  Termination by Tenant for Failure to Deliver Possession

  
	
   

  	
  d.

  	
  Delivery of Possession

  
	
   

  	
  e.

  	
  Adjustment of Expiration Date

  
	
   

  	
  f.

  	
  Right to Occupy

  
	
   

  	
  g.

  	
  Commencement Agreement

  
	
  Section 4:

  	
   

  	
  Use

  
	
   

  	
  a.

  	
  Permitted Use

  
	
   

  	
  b.

  	
  Prohibited Uses

  
	
   

  	
  c.

  	
  Prohibited Equipment in Premises

  
	
  Section 5:

  	
   

  	
  Rent

  
	
   

  	
  a.

  	
  Payment Obligations

  
	
   

  	
  b.

  	
  Base Rent

  
	
   

  	
  c.

  	
  Additional Rent

  
	
  Section 6:

  	
   

  	
  Security Deposit

  
	
   

  	
  a.

  	
  Amount of Deposit

  
	
   

  	
  b.

  	
  Application of Deposit

  
	
   

  	
  c.

  	
  Refund of Deposit

  
	
  Section 7:

  	
   

  	
  Services by Landlord

  
	
   

  	
  a.

  	
  Base Services

  
	
   

  	
  b.

  	
  Landlord’s Maintenance

  
	
   

  	
  c.

  	
  No Abatement

  
	
   

  	
  d.

  	
  Tenant’s Obligation to Report Defects

  
	
   

  	
  e.

  	
  Limitation on Landlord’s Liability

  
	
  Section 8:

  	
   

  	
  Tenant’s Acceptance and Maintenance of Premises

  
	
   

  	
  a.

  	
  Acceptance of Premises

  
	
   

  	
  b.

  	
  Move-in Obligations

  
	
   

  	
  c.

  	
  Tenant’s Maintenance

  
	
   

  	
  d.

  	
  Alterations to Premises

  
	
   

  	
  e.

  	
  Restoration of Premises

  

 

	
   

  	
   

  	
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1

 

	
   

  	
  f.

  	
  Landlord’s Performance of Tenant’s Obligations

  
	
   

  	
  g.

  	
  Construction Liens

  
	
   

  	
  h.

  	
  Communications Compliance

  
	
   

  	
  i.

  	
  Mold

  
	
  Section 9:

  	
   

  	
  Property of Tenant

  
	
   

  	
  a.

  	
  Property Taxes

  
	
   

  	
  b.

  	
  Removal

  
	
  Section 10:

  	
   

  	
  Signs

  
	
  Section 11:

  	
   

  	
  Access to Premises

  
	
   

  	
  a.

  	
  Tenant’s Access

  
	
   

  	
  b.

  	
  Landlord’s Access

  
	
   

  	
  c.

  	
  Emergency Access

  
	
  Section 12:

  	
   

  	
  Tenant’s Compliance

  
	
   

  	
  a.

  	
  Laws

  
	
   

  	
  b.

  	
  Rules and Regulations

  
	
  Section 13:

  	
   

  	
  ADA Compliance

  
	
   

  	
  a.

  	
  Tenant’s Compliance

  
	
   

  	
  b.

  	
  Landlord’s Compliance

  
	
   

  	
  c.

  	
  ADA Notices

  
	
  Section 14:

  	
   

  	
  Insurance Requirements

  
	
   

  	
  a.

  	
  Tenant’s Liability Insurance

  
	
   

  	
  b.

  	
  Tenant’s Property Insurance

  
	
   

  	
  c.

  	
  Certificates of Insurance

  
	
   

  	
  d.

  	
  Insurance Policy Requirements

  
	
   

  	
  e.

  	
  Landlord’s Property Insurance

  
	
   

  	
  f.

  	
  Mutual Waiver of Subrogation

  
	
  Section 15:

  	
   

  	
  Indemnity

  
	
   

  	
  a.

  	
  Indemnity

  
	
   

  	
  b.

  	
  Defense Obligation

  
	
  Section 16:

  	
   

  	
  Quiet Enjoyment

  
	
  Section 17:

  	
   

  	
  Subordination; Attornment; Non-Disturbance; and Estoppel
  Certificate

  
	
   

  	
  a.

  	
  Subordination and Attornment

  
	
   

  	
  b.

  	
  Non-Disturbance

  
	
   

  	
  c.

  	
  Estoppel Certificates

  
	
  Section 18:

  	
   

  	
  Assignment — Sublease

  
	
   

  	
  a.

  	
  Landlord Consent

  
	
   

  	
  b.

  	
  Definition of Assignment

  
	
   

  	
  c.

  	
  Permitted Assignments/Subleases

  
	
   

  	
  d.

  	
  Notice to Landlord

  
	
   

  	
  e.

  	
  Prohibited Assignments/Sublease

  
	
   

  	
  f.

  	
  Limitation on Rights of Assignee/Sublessee

  
	
   

  	
  g.

  	
  Tenant Not Released

  
	
   

  	
  h.

  	
  Landlord’s Right to Collect Sublease Rents Upon Tenant
  Default

  
	
   

  	
  i.

  	
  Excess Rents

  
	
   

  	
  j.

  	
  Landlord’s Fees

  
	
   

  	
  k.

  	
  Unauthorized Assignment or Sublease

  
	
  Section 19:

  	
   

  	
  Damages to Premises

  
	
   

  	
  a.

  	
  Landlord’s Restoration Obligations

  
	
   

  	
  b.

  	
  Termination of Lease by Landlord

  
	
   

  	
  c.

  	
  Termination of Lease by Tenant

  
	
   

  	
  d.

  	
  Tenant’s Restoration Obligations

  
	
   

  	
  e.

  	
  Rent Abatement

  
	
   

  	
  f.

  	
  Waiver of Claims

  
	
  Section 20:

  	
   

  	
  Eminent Domain

  

 

	
   

  	
   

  	
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2

 

	
   

  	
  a.

  	
  Effect on Lease

  
	
   

  	
  b.

  	
  Right to Condemnation Award

  
	
  Section 21:

  	
   

  	
  Environmental Compliance

  
	
   

  	
  a.

  	
  Environmental Laws

  
	
   

  	
  b.

  	
  Tenant’s Responsibility

  
	
   

  	
  c.

  	
  Tenant’s Liability

  
	
   

  	
  d.

  	
  Limitation on Tenant’s Liability

  
	
   

  	
  e.

  	
  Inspections by Landlord

  
	
   

  	
  f.

  	
  Landlord’s Liability

  
	
   

  	
  g.

  	
  Property

  
	
   

  	
  h.

  	
  Tenant’s Liability after Termination of Lease

  
	
  Section 22:

  	
   

  	
  Default

  
	
   

  	
  a.

  	
  Tenant’s Default

  
	
   

  	
  b.

  	
  Landlord’s Remedies

  
	
   

  	
  c.

  	
  Attorneys Fees

  
	
   

  	
  d.

  	
  No Accord and Satisfaction

  
	
   

  	
  e.

  	
  No Reinstatement

  
	
   

  	
  f.

  	
  Summary Ejectment

  
	
  Section 23:

  	
   

  	
  Multiple Defaults

  
	
   

  	
  a.

  	
  Loss of Option Rights

  
	
   

  	
  b.

  	
  Increased Security Deposit

  
	
   

  	
  c.

  	
  Effect on Notice Rights and Cure Periods

  
	
  Section 24:

  	
   

  	
  Bankruptcy

  
	
   

  	
  a.

  	
  Trustee’s Rights

  
	
   

  	
  b.

  	
  Adequate Assurance

  
	
   

  	
  c.

  	
  Assumption of Lease Obligations

  
	
  Section 25:

  	
   

  	
  Notices

  
	
   

  	
  a.

  	
  Addresses

  
	
   

  	
  b.

  	
  Form; Delivery; Receipt

  
	
   

  	
  c.

  	
  Address Changes

  
	
   

  	
  d.

  	
  Notice by Legal Counsel

  
	
  Section 26:

  	
   

  	
  Holding Over

  
	
  Section 27:

  	
   

  	
  Right to Relocate

  
	
   

  	
  a.

  	
  Substitute Premises

  
	
   

  	
  b.

  	
  Notice

  
	
   

  	
  c.

  	
  Upfit of Substitute Premises

  
	
   

  	
  d.

  	
  Relocation Costs

  
	
   

  	
  e.

  	
  Lease Terms

  
	
   

  	
  f.

  	
  Limitation on Landlord’s Liability

  
	
  Section 28:

  	
   

  	
  Right of First Offer

  
	
  Section 29:

  	
   

  	
  Right to Renew

  
	
  Section 30:

  	
   

  	
  Termination Option

  
	
  Section 31:

  	
   

  	
  Broker Commissions

  
	
   

  	
  a.

  	
  Brokers

  
	
   

  	
  b.

  	
  Landlord’s Obligation

  
	
   

  	
  c.

  	
  Indemnity

  
	
  Section 32:

  	
   

  	
  Miscellaneous

  
	
   

  	
  a.

  	
  No Agency

  
	
   

  	
  b.

  	
  Force Majeure

  
	
   

  	
  c.

  	
  Building Standard Improvements

  
	
   

  	
  d.

  	
  Limitation on Damages

  
	
   

  	
  e.

  	
  Satisfaction of Judgments Against Landlord

  
	
   

  	
  f.

  	
  Interest

  
	
   

  	
  g.

  	
  Legal Costs

  

 

	
   

  	
   

  	
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  INITIALS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LL

  

 

3

 

	
   

  	
  h.

  	
  Sale of Premises or Building

  
	
   

  	
  i.

  	
  Time of the Essence

  
	
   

  	
  j.

  	
  Transfer of Security Deposit

  
	
   

  	
  k.

  	
  Tender of Premises

  
	
   

  	
  l.

  	
  Tenant’s Financial Statements

  
	
   

  	
  m.

  	
  Recordation

  
	
   

  	
  n.

  	
  Severability

  
	
   

  	
  o.

  	
  Binding Effect

  
	
   

  	
  p.

  	
  Entire Agreement

  
	
   

  	
  q.

  	
  Good Standing

  
	
   

  	
  r.

  	
  Terminology

  
	
   

  	
  s.

  	
  Headings

  
	
   

  	
  t.

  	
  Choice of Law

  
	
   

  	
  u.

  	
  Effective Date

  
	
   

  	
  v.

  	
  Landlord’s Lien

  
	
   

  	
  w.

  	
  Joint and Several

  
	
   

  	
  x.

  	
  No Construction Against Preparer

  
	
  Section 33:

  	
   

  	
  Special Conditions

  
	
  Section 34:

  	
   

  	
  Addenda and Exhibits

  
	
   

  	
  a.

  	
  Lease Addendum Number One — Landlord’s Work

  
	
   

  	
  b.

  	
  Lease Addendum Number Two — Operating Expense Pass
  Throughs

  
	
   

  	
  c.

  	
  Exhibit A — Premises

  
	
   

  	
  d.

  	
  Exhibit B — Rules and Regulations

  
	
   

  	
  e.

  	
  Exhibit C — Commencement Agreement

  
	
   

  	
  f.

  	
  Exhibit D — Insurance Certificate

  
	
   

  	
  g.

  	
  Exhibit E — Liens and Encumbrances

  
	
   

  	
  h.

  	
  Exhibit F
  — Temporary Space and Additional Landlord’s Work

  
	
   

  	
  i.

  	
  Exhibit G
  — Parapet Sign

  

 

	
   

  	
   

  	
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4

 

State of North Carolina:

County of Wake:

 

OFFICE LEASE

 

THIS LEASE (“Lease”), made this 31st
day of July, 2009, by and between A & G/Slater Road, Inc., a
North Carolina corporation (“Landlord”) and Quixote Transportation Technologies, Inc.,
a Delaware corporation (“Tenant”), provides as follows:

 

1.                              BASIC DEFINITIONS AND PROVISIONS. The following basic
definitions and provisions apply to this Lease:

 

	
  a.

  	
  Premises.

  	
   

  	
   

  
	
   

  	
   

  	
  Rentable
  Square Feet:

  	
  10,000

  
	
   

  	
   

  	
  Usable
  Square Feet:

  	
  9,091

  
	
   

  	
   

  	
  Core
  Area Factor (R/U ratio)

  	
  1.10

  
	
   

  	
   

  	
  Suite:

  	
  200

  
	
   

  	
   

  	
  Building:

  	
  Slater
  Road Office Building

  
	
   

  	
   

  	
  Street
  Address:

  	
  2880
  Slater Road

  
	
   

  	
   

  	
  City/County:

  	
  Morrisville/Wake

  
	
   

  	
   

  	
  State/Zip
  Code:

  	
  North
  Carolina/ 27560

  
	
   

  	
   

  	
   

  	
   

  
	
  b.

  	
  Term.

  	
  Number
  of Months:

  	
  67

  
	
   

  	
   

  	
  Commencement
  Date:

  	
  December 1,
  2009

  
	
   

  	
   

  	
  Expiration
  Date:

  	
  June 30,
  2015, as the same may be shortened or extended as herein provided

  
	
   

  	
   

  	
   

  	
   

  
	
  c.

  	
  Permitted Use.

  	
  General
  office, including an electronic equipment laboratory not to exceed 400 square
  feet and located as shown on the attached Exhibit “F” and containing
  work benches, one to two soldering stations, computers, special electrical
  and radio testing frequency equipment for the sole purpose of building
  circuit board prototypes, in conjunction with Tenant’s business of
  transportation management and any other lawful office use consented to by
  Landlord, such consent not to be unreasonably withheld, delayed or
  conditioned

  
	
   

  	
   

  	
   

  
	
  d.

  	
  Occupancy Limitation.

  	
  No
  more than four persons per one thousand (1,000) rentable square feet.

  
					

 

e.                                      Base
Rent. The minimum base rent for the Term is $760,241.92, payable in monthly
installments on the 1st day of each month in accordance with the
following Base Rent Schedule:

 

	
  TERM

  	
   

  	
  RATE

  	
   

  	
  MONTHLY

  RENT

  	
   

  	
  CUMULATIVE RENT

  	
   

  
	
  12/1/09-2/28/10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rent Abated

  	
   

  	
   

  
	
  3/1/10-11/30/10

  	
   

  	
  $

  	
  14.50

  	
   

  	
  $

  	
  12,083.34

  	
   

  	
   

  	
  $108,750.06

  	
   

  	
   

  
	
  12/1/10-12/31/10

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rent Abated

  	
   

  	
   

  
	
  1/1/11-11/30/11

  	
   

  	
  $

  	
  14.50

  	
   

  	
  $

  	
  12,083.34

  	
   

  	
   

  	
  $132,916.74

  	
   

  	
   

  
	
  12/1/11-12/31/11

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rent Abated

  	
   

  	
   

  
	
  1/1/12-11/30/12

  	
   

  	
  $

  	
  14.94

  	
   

  	
  $

  	
  12,450.00

  	
   

  	
   

  	
  $136,950.00

  	
   

  	
   

  
	
  12/1/12-12/31/12

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rent Abated

  	
   

  	
   

  
	
  1/1/13-11/30/13

  	
   

  	
  $

  	
  15.39

  	
   

  	
  $

  	
  12,825.00

  	
   

  	
   

  	
  $141,075.00

  	
   

  	
   

  
	
  12/1/13-12/31/13

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
  Rent Abated

  	
   

  	
   

  
	
  1/1/14-11/30/14

  	
   

  	
  $

  	
  15.85

  	
   

  	
  $

  	
  13,208.34

  	
   

  	
   

  	
  $145,291.74

  	
   

  	
   

  
	
  12/1/14-6/30/15

  	
   

  	
  $

  	
  16.33

  	
   

  	
  $

  	
  13,608.34

  	
   

  	
   

  	
  $95,258.38

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
  BASE RENT:   $760,241.92

  	
   

  	
   

  

 

 

	
   

  	
   

  	
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1

 

If Tenant is in default of this Lease after any applicable notice and
cure period, then in addition to all other rights and remedies of Landlord
contained herein, all abated rent shall immediately become due and payable in
full by Tenant to Landlord, including without limitation abated rent for any
period both before and after the date of such default.  If, during the period that Base Rent is to be
abated as provided in this Section 1e, Base Rent is abated, in whole or in
part, pursuant to any other provisions of this Lease, then such period of time
shall be extended to the extent that such Base Rent are otherwise so abated.

 

	
  f.

  	
  Rent Payment Address.

  	
  A & G/Slater Road, Inc.

  
	
   

  	
   

  	
   

  	
  c/o
  Atlantic Investment Management, LLC

  
	
   

  	
   

  	
   

  	
  4104
  Atlantic Avenue, Suite 140

  
	
   

  	
   

  	
   

  	
  Raleigh,
  North Carolina 27604

  
	
   

  	
   

  	
   

  	
  Attn:
  Rental Business Manager

  
	
   

  	
   

  	
   

  	
  Facsimile
  #: 919/876-2448

  
	
   

  	
   

  	
   

  	
   

  
	
  g.

  	
  Security Deposit.

  	
  $12,083.34

  
	
   

  	
   

  	
   

  	
   

  
	
  h.

  	
  Business Hours.

  	
  8:00 A.M.
  to 6:00 P.M. Monday through Friday (excluding National and State
  Holidays).

  
	
   

  	
   

  	
   

  	
   

  
	
  i.

  	
  Electrical Service.

  	
  Electrical
  circuits for convenience outlets as exist in the Premises on the Commencement
  Date.

  
	
   

  	
   

  	
   

  	
   

  
	
  j.

  	
  After Hours HVAC Rate.

  	
  $18.00
  per hour, per zone, with a minimum of two (2) hours per occurrence.

  
	
   

  	
   

  	
   

  
	
  k.

  	
  Parking.

  	
  Not
  less than four unreserved spaces per 1000 rentable square feet of the
  Premises.  In addition, Landlord will
  provide four reserved parking spaces for Tenant’s sole use at a mutually
  agreeable location.  Landlord will not
  bear any additional responsibility or liability due to Tenant’s sole use of
  the spaces.

  
	
   

  	
   

  	
   

  
	
  l.

  	
  Notice Addresses.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  LANDLORD:

  	
  A & G/Slater Road, Inc.

  
	
   

  	
   

  	
   

  	
  c/o
  Atlantic Investment Management, LLC

  
	
   

  	
   

  	
   

  	
  4104
  Atlantic Avenue, Suite 140

  
	
   

  	
   

  	
   

  	
  Raleigh,
  North Carolina 27604

  
	
   

  	
   

  	
   

  	
  Attn:
  Rental Business Manager

  
	
   

  	
   

  	
   

  	
  Facsimile
  #: 919/876-2448

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  	
  Prior
  to Commencement Date:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Quixote
  Transportation Technologies, Inc.

  
	
   

  	
   

  	
   

  	
  4021
  Stirrup Creek Drive

  
	
   

  	
   

  	
   

  	
  Suite 100

  
	
   

  	
   

  	
   

  	
  Durham,
  North Carolina 27703

  
	
   

  	
   

  	
  Attn:  Mike Corbett

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  From
  and after Commencement Date:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Quixote
  Transportation Technologies, Inc.

  
	
   

  	
   

  	
  2880
  Slater Road, Suite 200

  
	
   

  	
   

  	
  Morrisville,
  NC 27560

  
	
   

  	
   

  	
  Attn:  Mike Corbett

  
	
   

  	
   

  	
   

  
	
  m.

  	
  Brokers.

  	
  Ryan
  Lawrence

  
	
   

  	
   

  	
  Jones Lang LaSalle — Carolinas, LLC

  
	
   

  	
   

  	
  Fred
  Dickens

  
	
   

  	
   

  	
  Coldwell
  Banker Trademark Commercial

  
					

 

	
   

  	
   

  	
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  INITIALS

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
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2

 

2.                                LEASED PREMISES.

 

a.                                      Premises. Subject to the
terms and conditions of this Lease, 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.  The foregoing
notwithstanding, so long as this Lease remains in full force and effect and
Tenant is not in default hereunder beyond any applicable notice and cure
period, until another bona fide third-party tenant leases the corner suite as
shown on Exhibit A and the space is needed by Landlord in preparation
therefor, and upon at least ten (10) days prior notice to Tenant and the
Landlord constructing the walls to create the two additional offices shown on Exhibit F
as provided below, the Premises shall include the two offices within such space
as set forth in Exhibit F (the “Temporary Offices”) together with ingress
and egress rights thereto.  Tenant shall
not be obligated to pay any Base Rent or Additional Rent for such additional
space, but all other obligations, provisions, covenants, insurance requirements
and indemnities set forth herein shall apply to such Temporary Offices as if
such were part of the Premises, but such Temporary Offices shall not be
included in any memorandum of lease recorded in connection with this
Lease.  Upon the Temporary Offices no
longer being available to Tenant based on Landlord leasing such additional
space, and Landlord needing such space in preparation therefor, and upon at
least ten (10) days prior notice to Tenant, Landlord, at its cost and
expense, shall, prior to Tenant being obligated to vacate the same, construct
the walls to create the two additional offices shown on Exhibit F.

 

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, provided that, anything to the contrary contained in
this Lease notwithstanding, if Landlord adds to the rentable square footage of
the Building at any time, then Tenant’s Proportionate Share shall be
proportionately reduced, using the same method of calculating rentable square
footage as was used to determine the rentable square footage of the Building
and Premises initially.

 

c.                                       Common
Areas. Tenant shall have non-exclusive access to the common areas of the
Building. 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 areas and plazas (“Common Areas”). Landlord has
the exclusive right, to be exercised reasonably, 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. 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 attached hereto as Exhibit B
or any additional reasonable rules and regulations of which Tenant has reasonable
advance notice and which are not contrary to the express terms of this Lease
and uniformly applicable to all tenants in the Building.

 

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.

 

b. Adjustments to Commencement Date.
The Commencement Date shall be adjusted as follows:

 

i.                                If Tenant
requests possession of the Premises or a portion thereof prior to the
Commencement Date, and Landlord consents, which consent shall not be
unreasonably withheld, delayed or conditioned, the Commencement Date shall be
the date of possession.  All Rent and
other obligations under this Lease shall begin on the date of possession
(proportionately, if only a portion of the Premises is occupied by Tenant), but
the Expiration Date shall remain the same; provided that if Tenant is only
occupying a portion of the Premises as of the date that otherwise would be the
Commencement Date but for the earlier partial possession, then full Rent and
other obligations under this Lease shall commence on the date that otherwise
would have been the Commencement Date but for the earlier partial possession.

 

	
   

  	
   

  	
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3

 

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 (including without limitation the
dates set forth in Section 1(e) above), shall be revised to conform
to the date of Landlord’s delivery of possession of the Premises to Tenant and
delayed by the same number of days that the Commencement Date is delayed. 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.  Termination by Tenant for Failure to Deliver Possession. In
the event Landlord is unable to deliver possession of the Premises within
ninety (90) days after the original Commencement Date set forth in the first
sentence of this Section 3 (excluding any delays resulting from force majeure (not to exceed thirty (30)
additional days) or caused by Tenant “Excused Delays”), then Tenant may
terminate this Lease by giving notice to Landlord within one hundred twenty
(120) days of the original Commencement Date (excluding any delays resulting
from force majeure (not to exceed
thirty (30) additional days) and Excused Delays); provided that if Landlord
tenders possession of the Premises to Tenant prior to Tenant exercising such
termination right, such termination right shall be deemed waived and of no
further force or effect.

 

d.  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 with all of
the work in the Workletter substantially completed and in broom clean condition
and otherwise in the same condition as of the date hereof, ordinary wear and
tear excepted, free of other occupants, or (ii) the date Landlord could
have had the Premises ready had there been no Excused Delays.

 

e.  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 provided
that Landlord notifies Tenant of such election within thirty (30) days after
the Commencement Date.  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.

 

f. 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 of Tenant’s conditions precedent to occupancy under the terms of
this Lease) shall not delay the Commencement Date.

 

g.  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, including
an electronic equipment laboratory not to exceed 400 square feet and located as
shown on the attached Exhibit “F” and containing work benches, one to two
soldering stations, computers, special electrical and radio testing frequency
equipment for the sole purpose of building circuit board prototypes, in conjunction
with Tenant’s business of transportation management, and otherwise in
connection with Tenant’s Permitted Use as defined in Section 1c and in
accordance with the Occupancy Limitation as set forth in Section 1d.

 

	
   

  	
   

  	
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4

 

b.                                     Prohibited
Uses. Tenant shall not use the Premises:

 

i.                                In violation of
any restrictive covenants which apply to the Premises as identified on Exhibit E
attached hereto and made a part hereof, and future restrictions upon reasonable
advance notice to Tenant provided the same do not unreasonably interfere with
the use and enjoyment of the Premises and Common Areas by Tenant for its
Permitted Use (“Restrictive Covenants”).

 

ii.                             In any manner
that constitutes a nuisance or trespass;

 

iii.                          In any manner
other than normal office usage 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 other than normal office usage, Landlord may elect to
permit the use and charge Tenant for the increase in premiums, and Tenant’s
failure to pay Landlord, within five (5) business days after 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,
unless consented to by Landlord, which consent shall not be unreasonably
withheld, delayed or conditioned; or

 

v.                            For any purpose
except the Permitted Use, unless consented to by Landlord in writing.

 

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 shall not be unreasonably withheld, delayed or
conditioned.  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, provided reasonable advance notice is given to Tenant and Tenant fails
to cure the same within such time period prior to Landlord’s incurring any such
expenses. All costs and expenses relating to High Demand Equipment and Landlord’s
administrative costs (such as reading meters and calculating invoices) shall be
Additional Rent, payable by Tenant within five (5) business days after
demand.  If Tenant installs a
supplemental HVAC unit in its Premises, the supplemental HVAC unit will be
considered High Demand Equipment, be separately metered with metered charges
being paid by Tenant, and both the meter and unit shall be maintained by
Tenant.

 

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 1f.

 

ii.                           Rent shall be
paid without previous demand or notice and without set off or deduction except
to the extent otherwise herein provided. Tenant’s obligation to pay Rent under
this Lease is completely separate and independent from any of Landlord’s
obligations under this Lease except to the extent otherwise provided herein.

 

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

 

	
   

  	
   

  	
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Commencement Date falls, and (ii) due and payable on the
Commencement Date.  A similar proration
shall be made if the Term expires or is terminated prior to the end of a
calendar month.

 

iv.                       If Rent is not
received within five (5) days after the due date (not including any
accelerated Rent due to a default by Tenant hereunder), Landlord shall be
entitled to an overdue payment charge in the amount of five percent (5%) of the
Rent due.  In addition, if Rent is not
received within fifteen (15) days after the due date (not including any
accelerated Rent due to a default by Tenant hereunder), Landlord shall be
entitled to an overdue payment charge in the amount of an additional fifteen
percent (15%) of the Rent due.

 

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 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 1e.

 

c.                                      Additional
Rent.  In addition to Base Rent, Tenant shall pay as
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
Proportionate Share of the increase in Landlord’s Operating Expenses over the
Base Year as set forth in Lease Addendum Number Two;

 

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; and

 

iii.                       Any
construction supervision fees in connection with the construction of Tenant
Improvements or alterations to the Premises as provided in Section 8(d) provided
that no such fees will be charged for any work being performed by Landlord
under the Workletter.

 

6.                             SECURITY DEPOSIT.

 

a.                                      Amount
of Deposit. Tenant shall deposit with Landlord a Security
Deposit in the amount set forth in Section 1g, which sum Landlord shall
retain as security for the performance by Tenant of each of its obligations
hereunder.  The Security Deposit 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, and
such failure continue uncured beyond any applicable cure periods 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 immediately the amount so used by
Landlord.  Landlord shall promptly
provide an itemized statement to Tenant for any use of the Security Deposit.

 

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, all as permitted
by this Lease, 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 credit the Security Deposit against any
month’s Rent.

 

	
   

  	
   

  	
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7.                             SERVICES BY LANDLORD.

 

a.                                      Base
Services. Provided that Tenant is not then in default,
Landlord shall cause to be furnished to the Building, or as applicable, the
Premises, in common with other tenants the following services:

 

i.                             Water for drinking,
lavatory and toilet purposes.

 

ii.                          Electricity for
the building standard fluorescent lighting and for the operation of general
office machines, such as electric typewriters, desk top computers, dictating
equipment, adding machines and calculators, and general service non-production
type office copy machines; provided that Landlord shall have no obligation to
provide more than the amount of power for convenience outlets and the number of
electrical circuits as set forth in Section 1i.

 

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 1h (sometimes herein
referred to as “business hours”).

 

vi.                       After Business
Hours, weekend and holiday heating and air conditioning at the After Hours HVAC
rate set forth in Section 1j, 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, equal to the Parking
specified in Section 1k, for use by Tenant’s employees and visitors in
common with the other tenants and their employees and visitors. In addition,
Tenant shall have four (4) reserved parking spaces of the Building as
provided in Section 1k; provided that Tenant hereby waives and releases
Landlord from any liability arising in connection with the use of such reserved
parking spaces by Tenant, its employees, officers, principals, agents,
contractors or invitees, except for liability arising from the gross negligence
or willful misconduct of Landlord; provided further that Tenant hereby
indemnifies Landlord for any loss, cost, claim, suit or expense (including
reasonable attorneys’ fees) relating to the use of the reserved parking spaces
by Tenant, its employees, officers, principals, agents, contractors or
invitees, except for liability arising from the gross negligence or willful
misconduct of Landlord.

 

Notwithstanding the foregoing, Landlord shall not be liable to Tenant
for any disruption in utilities unless such disruption is caused by Landlord’s
or its agents, employees and contractor’s gross negligence or willful
misconduct.  In the event of such an
interruption (and except as set forth in the immediately preceding sentence),
Landlord’s sole obligation shall be to exercise commercially reasonable efforts
to cause the utility to once again be provided by the applicable utility
provider.

 

b.                                      Landlord’s
Maintenance. Landlord shall maintain and shall make all repairs
and replacements reasonably necessary 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.
The foregoing notwithstanding, Landlord’s maintenance, repair and replacement
obligations shall, without limitation, include the roof, 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.  Landlord shall maintain, repair and operate
the Building and Common Areas in a manner as similar properties in the area are
maintained, repaired and operated.

 

	
   

  	
   

  	
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7

 

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.  The foregoing notwithstanding, (a) if
any such service is not continuously provided as a result of the negligence or
intentional misconduct of Landlord or its agents, employees or contractors such
that the Premises are untenantable in whole or in part for more than five (5) consecutive
business days, then Tenant shall notify Landlord in writing that Tenant intends
to abate rent, and (b) if such utilities or services have not been
restored within five (5) days of Landlord’s receipt of Tenant’s notice,
without regard to Section 22(g) below, then Rent shall abate
proportionately on a per diem basis for each day during which the Premises are
so untenantable and, if such discontinuance is material and continues beyond
seventy five (75) days, without regard to the provisions of Section 22(g) below,
Tenant shall be entitled to terminate this Lease at any time thereafter upon
notice to Landlord. Landlord agrees to cooperate reasonably with Tenant to
restore any such discontinued service as soon as reasonably practicable.  Landlord shall have the right to shut down
the Building systems (including electricity and HVAC systems) to the extent
reasonably necessary for required maintenance and safety inspections, and in
cases of emergency; however, Landlord shall not allow such shut downs to occur
during Business Hours except in the case of an emergency or extraordinary
circumstances and for any shut down Landlord shall make reasonable efforts to
minimize the impact on Tenant’s use and enjoyment of the Premises and Common
Areas.

 

d.                                     Tenant’s
Obligation to Report Defects. Tenant shall report to
Landlord promptly 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. 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, unless such damage is a result of Landlord’s
failure to repair in a timely manner or take reasonable steps to have such
items repaired in a timely manner, after Landlord has written notice of such
defects or necessary repairs from Tenant, or otherwise due to the gross
negligence or intentional misconduct of Landlord or its agents, employees or
contractors.

 

8.                             TENANT’S ACCEPTANCE AND MAINTENANCE OF PREMISES.

 

a.                                      Acceptance
of Premises. Except as may be specifically set forth in this
Lease and 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 the
remainder of this Lease.

 

b.                                     Move-In
Obligations. Tenant shall schedule its move-in with Atlantic
Investment Management, LLC, or any other property manager of which Landlord
gives Tenant at least five (5) business days advance notice (the Landlord’s
“Property Manager”). Unless otherwise approved by Landlord’s Property Manager,
such approval not to be unreasonably withheld, delayed or conditioned, 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 reasonably 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 by Tenant will be the sole
responsibility of Tenant.

 

c.                                      Tenant’s
Maintenance. Tenant shall: (i) keep the Premises and
fixtures in the same order as when delivered to Tenant or after any work which
Tenant is not obligated to remove (subject to Tenant’s right to remove the
same) is completed, ordinary wear, loss or damage by fire or other casualty,
damage or loss from a taking or sale in lieu thereof, damage resulting from the
negligence or willful acts of Landlord or its employees, contractors or agents
and any other maintenance, repairs and replacements for which Landlord is
responsible or Tenant is excused under this Lease excepted; (ii) make
repairs and replacements to the 

 

	
   

  	
   

  	
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Premises or Building needed because of Tenant’s or any officer, agent,
employee, contractor, servant, invitee or guest 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.  Except to the extent otherwise provided in
this Lease, Tenant shall also be solely responsible for maintaining the
following items, if installed in the Premises: (i) ice machines; (ii) sump
pumps; (iii) refrigerators; (iv) dishwashers; (v) garbage
disposals; (vi) coffee machines and microwaves; (v) sinks and
faucets; (vi) water filter and purification systems; (vii) all
kitchen drain lines; (viii) executive restrooms; (ix) Simplex (or key
pad) locks; (x) security access systems or alarm systems; (xi) Tenant
specific hot water heaters; and (xii) showers and spas.  Tenant shall maintain these items in good
working order except to the extent otherwise provided in this Lease.

 

d.                                     Alterations
to Premises. Tenant shall make no structural or interior
alterations to the Premises unless consented to by Landlord, which consent
shall not be unreasonably withheld, delayed or conditioned; provided that
Landlord shall be entitled to approve or disapprove in its sole and absolute
discretion any proposed alterations to the structure of the Premises or
Building, the exterior of the Premises or the mechanical, electrical or
plumbing systems of the Premises or Building. If Tenant requests such
alterations, then Tenant shall provide Landlord’s Property Manager with a
complete set of construction drawings. If Landlord consents to the alterations,
then the Property Manager shall determine the actual cost of the work to be done
(to include a construction supervision fee to be paid to Landlord in the amount
of 10% of the cost of the construction). Tenant may then either agree to pay
Landlord to have the work done or withdraw its request for alterations.  All such alterations are subject to the prior
written approval of Landlord, which approval shall not be unreasonably
withheld, delayed or conditioned; provided that Landlord shall be entitled to
approve or disapprove in its sole and absolute discretion any proposed
alterations to the structure of the Premises or Building, the exterior of the
Premises or the mechanical, electrical or plumbing systems of the Premises or
Building. Notwithstanding the foregoing, Landlord’s consent shall not be
required for alterations to painting and carpeting or other interior,
non-structural alterations that do not exceed $25,000 in value, so long as the
alterations do not affect the Building systems or decrease the value of the
Premises, Tenant uses contractors reasonably approved by Landlord, Tenant
provides Landlord with “as built” or working drawings for any material
modifications and Tenant notifies Landlord prior to making such alterations.

 

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 the
condition it is required to maintain the same pursuant to Section 8(c) above,
and (ii) restore the Premises at Tenant’s sole expense to such condition.
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 provided that Tenant is given at least thirty (30)
days prior written notice thereof prior to the expiration of the Lease or, if
the Lease, is terminated, as soon as reasonably possible, 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
its removal of any Non-Standard Improvements. “Non-Standard Improvements” means
such items installed by or for Tenant (not including any work performed by
Landlord under the Workletter) such 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, (v) equipment
racks, (vi) alterations installed by or at the request of Tenant after the
Commencement Date, and (vii) 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) days after receipt of 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. 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 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 

 

	
   

  	
   

  	
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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 Tenant receives notice
of the filing thereof.  Should Tenant
fail to discharge the lien within such ten (10) day period, 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.                                     Communications
Compliance. Tenant acknowledges and agrees that any and all
telephone and telecommunication services desired by Tenant shall be ordered and
utilized at the sole expense of Tenant. 
Unless Landlord requests otherwise or consents in writing, which  consent shall not be unreasonably withheld, delayed
or conditioned, all of Tenant’s telecommunications equipment shall be located
and remain solely in the Premises. 
Landlord shall not have any responsibility for the maintenance of Tenant’s
telecommunications equipment, including wiring; nor for any wiring or other
infrastructure to which Tenant’s telecommunications equipment may be connected
except to the extent arising from Landlord’s or its agents’, employees’, or
contractors’ negligence or intentional misconduct.  Tenant agrees that, to the extent any
telecommunications service is interrupted, curtailed or discontinued, Landlord
shall have no obligation or liability with respect thereto except to the extent
arising from Landlord’s or its agents’, employees’, or contractors’ negligence
or intentional misconduct.  Landlord
shall have the right, upon reasonable prior oral or written notice to Tenant,
to interrupt or turn off telecommunications facilities to the extent reasonably
necessary in the event of emergency or as necessary in connection with repairs
to the Building or installation of telecommunications equipment for other
tenants of the Building, provided that Landlord shall make reasonable efforts
to minimize the impact on Tenant’s use and enjoyment of the Premises and Common
Areas.  In the event that Tenant wishes
at any time to utilize the services of a telephone or telecommunications
provider whose equipment is not then servicing the Building, the provider shall
not be permitted to install its lines or other equipment within the Building
without first securing the prior written approval of Landlord, which approval
shall not be unreasonably withheld, delayed or conditioned.  Landlord’s approval may be conditioned in
such a manner to as to reasonably protect Landlord’s financial interests, the
interest of the Building, and the other tenants therein.  The refusal of Landlord to grant its approval
to any prospective telecommunications provider shall not be deemed a default or
breach by Landlord of its obligation under this Lease if reasonable.  The provision of this paragraph may be
enforced solely by Tenant and Landlord, are not for the benefit of any other
party, and specifically but without limitation, no telephone or
telecommunications provider shall be deemed a third party beneficiary of this Lease.  Tenant shall not utilize any wireless
communications equipment (other than usual and customary cellular telephones
and wireless modems), including antennae and satellite receiver dishes, within
the Premises or the Building, without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, delayed or conditioned.  Landlord’s consent may be conditioned in such
a manner so as to reasonably protect Landlord’s financial interests, the
interests of the Building, and the other tenants therein.  At Landlord’s option, Tenant may be required
to remove any and all telecommunications equipment (including wireless
equipment) installed in the Premises or elsewhere in or on the Building by or
on behalf of Tenant, including wiring, or other facilities for
telecommunications transmittal at the expiration or termination of the Lease
and at Tenant’s sole cost, provided that Tenant is given at least thirty (30)
days prior written notice thereof prior to the expiration of the Lease or, if
the Lease, is terminated, as soon as reasonably possible.

 

i.                                         Mold.  Tenant shall be responsible for taking
appropriate and timely measures to prevent the growth of mold and mildew within
the Premises that result from its use or occupancy of the Premises, including
but not limited to (1) preventing moisture accumulation in the Premises by
Tenant’s personal equipment, including on windows, walls and other surfaces; (2) promptly
reporting any malfunction of the heating or air conditioning system in the
Premises of which Tenant becomes aware; (3) not obstructing the heating
and air conditioning system from performing as designed; (4) promptly
reporting any water intrusion or accumulation or other moisture accumulation in
or about the Premises of which Tenant becomes aware; and (5) promptly
reporting any visible mold in the Premises. 
Except for matters arising from the negligence or willful acts of
Landlord, and its employees, agents, contractor, invitees or licensees, Tenant
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and all losses, liabilities, including strict liability, obligations,
damages, injuries, costs, expenses, including reasonable attorneys’ fees, costs
of settlement or judgments and claims of any kind whatsoever paid, incurred or
suffered by, or asserted against Landlord by any person, entity, or
governmental agency for, with respect to, or as a direct or indirect result of
the presence of mold or mildew in the Premises or any adjacent portions of the
Building as a result of the acts or omissions of Tenant.

 

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 and subject to the terms and provisions of Section 8(e),
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 upon the expiration or
earlier termination (for whatever cause) of this Lease, such property shall be
deemed abandoned by Tenant, and Landlord may dispose of the same in whatever
manner Landlord may elect without any liability to Tenant.

 

10.                       SIGNS.

 

Tenant may not erect, install or display any sign or advertising
material upon the exterior of the Building or Premises (including any exterior
doors, walls or windows) without the prior written consent of Landlord, which
consent shall not be unreasonably withheld, delayed or conditioned; provided
that, Landlord shall be deemed to be reasonable in disapproving any signage
that is larger than, more numerous than, of a differing style from or in a
location the differs from signage ordinarily and customarily provided to
comparably sized tenants of comparable office buildings.  The foregoing notwithstanding, the exterior
building parapet signage may be similar to that shown on Exhibit G
attached hereto and made a part hereof. 
Door, one monument panel of the same size as a single current panel on
the Building’s monument sign, and directory signage shall be provided and
installed by the Landlord in accordance with building standards at Landlord’s
expense, unless otherwise provided in the Workletter attached as Lease Addendum
Number One.  In the event that Tenant
elects to utilize any exterior building parapet signage, Landlord will contribute
three thousand dollars ($3,000.00) towards Tenant’s building parapet signage
cost promptly after request by Tenant. 
Any exterior signage shall be subject to building standards, Town
ordinances, and codes.  Prior to the
Commencement Date, Landlord shall install one monument panel of the same size a
single current panel on the Building’s monument sign and door and directory
signage as set forth above at Landlord’s sole cost, in locations and designs
reasonably acceptable to the parties.

 

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, provided that Landlord shall exercise reasonable efforts to
not unreasonably interfere with Tenant’s use and enjoyment of the Premises and
the Common Areas, to the extent reasonably possible, (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 upon reasonable
oral notice to show prospective tenants.

 

	
   

  	
   

  	
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11

 

c.                                      Emergency
Access. Landlord shall have the right to enter the Premises at any time
without notice in the event of an emergency that does not allow for any advance
notice provided that Landlord shall give Tenant notice thereof promptly
thereafter.

 

12.                       TENANT’S COMPLIANCE.

 

a.                                      Laws. Tenant shall
comply with all applicable laws, ordinances and regulations affecting Tenant’s
use and occupancy of the Premises or affecting alterations to the Premises made
by Tenant, whether now existing or hereafter enacted.

 

b.                                     Rules and
Regulations. Tenant shall comply with the Rules and
Regulations attached as Exhibit B.  The Rules and Regulations may be
reasonably modified from time to time by Landlord, effective ten (10) days
after the date delivered to Tenant, 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. After the Commencement Date, Tenant, at Tenant’s
sole expense, shall comply with all laws, rules, orders, ordinances,
directions, regulations and requirements of federal, state, county and
municipal authorities now in force, which shall impose any duty upon Landlord
or Tenant with respect to the use or occupation of the Premises by Tenant or
alteration of the Premises made by Tenant to accommodate persons with special
needs, including using all reasonable efforts to comply with The Americans With
Disabilities Act (the “ADA”) with respect thereto.  Landlord represents that the Premises and the
Common Areas are in compliance with the ADA as of the Commencement Date as such
relate to ordinary and customary office use for comparable buildings.

 

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 except to the
extent otherwise herein provided. 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.

 

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. Throughout the Term, Tenant, at its sole cost and
expense, shall keep or cause to be kept for the mutual benefit of Landlord,
Landlord’s Property Manager, and Tenant, Commercial General Liability Insurance
(current ISO Form or its equivalent) with a combined single limit of at
least ONE MILLION DOLLARS each Occurrence and at least TWO MILLION DOLLARS
($2,000,000) General Aggregate-per policy year, which policy shall insure
against liability of Tenant, arising out of and in connection with Tenant’s use
of the Premises, and which shall include contractual liability coverage.  Not more frequently than once every three (3) years,
Landlord may require the limits to be increased if in its reasonable judgment
(or that of its mortgagee) the coverage is insufficient.

 

b.                                     Tenant’s
Property Insurance. Tenant shall also carry the equivalent of ISO
Special Form Property Insurance on Tenant’s Property at the Premises for
full replacement value and with coinsurance waived.  For purposes of this provision, “Tenant’s
Property” shall mean Tenant’s personal property and fixtures at the Premises,
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, to the extent provided in Section 14(g) below.

 

c.                                      Certificates
of Insurance. Prior to occupying the Premises, and prior to any
cancellation thereof during the Term, Tenant shall deliver to Landlord
certificates similar to that provided in Exhibit D attached to this Lease
and incorporated here for reference or other 

 

	
   

  	
   

  	
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12

 

evidence of insurance reasonably satisfactory to Landlord.  All such policies shall be non-assessable to
Landlord and shall contain language to the extent obtainable that: (i) names
Lessor as an additional insured by means of an endorsement at least as broad as
the ISOs “Additional Insured-Managers or Lessors of Premises” Endorsement, (ii) that
the policies are primary and non-contributing with any insurance that Landlord
may carry, and (iii) that the insurer shall endeavor to provide thirty
(30) days notice to Landlord prior to policy being cancelled or
non-renewed.  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 Premises are located with, unless otherwise reasonably
agreed to by Landlord, a general policyholder’s ratings of at least A- and a
financial rating of at least VI 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 on the
liability policies as its interest may appear [provided that other landlords or
tenants may be added as additional insureds in a blanket policy]; (iii) provide
that the insurer shall endeavor to provide thirty (30) days notice to Landlord
prior to policy being cancelled or non-renewed; (iv) be primary policies; (v) name
Lessor as an additional insured to the liability insurance by means of an
endorsement at least as broad as the ISOs “Additional Insured-Managers or
Lessors of Premises” Endorsement; (vi) have no have no deductible or
self-insurance retention exceeding ONE HUNDRED THOUSAND DOLLARS ($100,000),
unless approved in writing by Landlord; and (vii) be maintained during the
entire Term and any extension terms.

 

e.                                      Landlord’s
Property 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, with
commercially reasonable deductibles.

 

f.                                        Landlord’s
Liability Insurance.  Throughout
the Term, Landlord, at its sole cost and expense, shall keep or cause to be kept
Commercial General Liability Insurance (current ISO Form or its
equivalent) with a combined single limit, each Occurrence and General
Aggregate-per policy year of at least TWO MILLION DOLLARS ($2,000,000) (or such
greater amount as is required by the Restrictive Covenants), which policy shall
insure against liability of Landlord arising out of and in connection with the
use of the Building and Common Areas on an occurrence basis.  Upon written request, Landlord shall provide
Tenant with appropriate evidence of such insurance coverage and the coverage
provided in Section 14(e) above, which shall be in the form of a
standard ISO insurance certificate and, for such property insurance, showing
rights of subrogation waived against Tenant.

 

g.                                     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 is payable
either to Landlord, Tenant, or any other person, firm or corporation, under the
terms of any Property, General Liability, or other policy of insurance carried
by either Landlord or Tenant (or would have been paid had such insurance as
required by this Lease been in place). 
All policies of property insurance carried or maintained pursuant to
this Lease shall contain or be endorsed to contain a provision whereby the
insurer waives all rights of subrogation against either Tenant or Landlord, as
the case may be.  If any provision
relating to a waiver of subrogation as set forth in this Section 14(f) shall
contravene any present or future law with respect to exculpatory agreements,
the liability of the party affected shall be deemed not released, but shall be
secondary to the other’s insurer.

 

15.                       INDEMNITY.  Subject to the
insurance requirements, releases and mutual waivers of subrogation set forth in
this Lease, Tenant and Landlord agree as follows:

 

a.                                       Indemnity.
Tenant shall indemnify and hold Landlord harmless from and against any
and all 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 

 

	
   

  	
   

  	
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13

 

thing done, permitted or suffered by Tenant in or about the Premises or
the Building other than claims, damages, losses, liabilities, lawsuits, costs
and expenses (including attorneys’ fees at all tribunal levels) arising out of
or related to Tenant’s violation of an unrecorded agreement of which Tenant has
no actual knowledge between the Landlord (and/or its predecessors in title) and
any third party or by which Landlord is otherwise bound, (ii) any breach
or default by Tenant in the performance of any of its obligations under this
Lease which continues uncured beyond any applicable cure period, or (iii) any
misconduct or neglect of Tenant, or any officer, agent, employee, contractor,
servant, invitee or guest of Tenant in or about the Premises, the Common Areas
or the Building.

 

Landlord shall indemnify and hold harmless Tenant from and against any
and all claims, damages, losses, liabilities, lawsuits, costs and expenses
(including attorneys’ fees at all tribunal levels) arising out of or related to
any misconduct or neglect of Landlord, or any officer, agent, employee or
contractor of Landlord in or about the Premises, the Common Areas or the
Building.

 

b.                                     Defense
Obligation. If any such action is brought against either
indemnified party, then the other party, upon notice from the indemnified
party, shall defend the same through counsel selected by the indemnified party’s
insurer, or other counsel acceptable to the indemnified party.  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 promptly and fully complies with all
of its obligations under this Lease within any applicable cure periods.
Provided that the same does not unreasonably interfere with Tenant’s use and
enjoyment of the Premises and the Common Areas, no action of Landlord or other
tenants working in other space in the Building, or in repairing or restoring
the Premises not in breach of this Lease by Landlord, 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.  Landlord represents and
warrants to Tenant that (a) it is a duly organized and existing North
Carolina corporation; (b) to its actual knowledge it is seized of the
Premises in fee, subject to the liens and encumbrances set out on Exhibit “E,”
(c) it has entered into this agreement by the authority of its Board of
Directors, and (d) there are no pending or, to the best of Landlord’s
knowledge, threatened condemnation proceedings or other litigation or
proceedings against or affecting any part of the Building or Common Areas that
could have an adverse effect on Tenant’s use and enjoyment of the Premises and
Common Areas.

 

17.                       SUBORDINATION; ATTORNMENT; NON-DISTURBANCE; AND ESTOPPEL CERTIFICATE.

 

a.                                      Subordination
and Attornment. Tenant agrees that this Lease and all rights of
Tenant hereunder are and shall be subject and subordinate to any ground or
underlying lease which may hereafter be in effect regarding the Building and
the real property on which it is situate or any component thereof (“ground
lease”), to any deed of trust or mortgage hereafter encumbering the Premises or
the Building and the real property on which it is situate or any component
thereof (“mortgage”), to all advances made or hereafter to be made upon the
security of such ground or underlying lease or deed of trust or mortgage, to
all amendments, modifications, renewals, consolidations, extensions, and
restatements of such ground or underlying lease or deed of trust or mortgage,
and to any replacements and substitutions for such deed of trust or mortgage;
provided that such lender or ground lessor shall not disturb Tenant’s
possession so long as Tenant is not in default of this Lease beyond any
applicable notice and cure period.  The
terms of this provision shall be self-operative and no further instrument of
subordination shall be required. 
However, Tenant agrees to execute within ten (10) days after
request to do so from Landlord or its mortgagee an agreement:

 

i.                             Making this
Lease superior or subordinate 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;

 

	
   

  	
   

  	
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14

 

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. Upon written
request by Tenant, Landlord shall exercise reasonable efforts to obtain a
commercially reasonable non-disturbance agreement from any holder of such a
mortgage or ground lease. Tenant’s obligation to execute a subordination and
attornment agreement as set forth above is conditioned upon the mortgagee’s or
ground lessor’s agreement not to disturb Tenant’s possession and quiet
enjoyment of the Premises under this Lease so long as Tenant is in compliance
with the terms of the Lease within any applicable cure periods.

 

c.                                      Estoppel
Certificates. Tenant agrees to execute within ten (10) days
after request, and as often as requested, estoppel certificates confirming any
factual matter reasonably 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, (iv) whether Tenant has
any defense or offsets to the enforcement of this Lease or the Rent payable, (v) any
default or breach by Landlord, and (vi) 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.

 

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

 

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, which consent shall not be unreasonably withheld, delayed or
conditioned; provided that Landlord may withhold consent to any relevant
proposed assignment or sublease on any of the following grounds: (i) in
Landlord’s sole but good faith judgment the proposed assignee or sublessee
shall not have a good reputation in the area, shall not be financially capable
of fulfilling its obligation under this Lease, and/or shall not have experience
in successfully operating a business of the type and size which such proposed
assignee or sublessee proposes to conduct in the Demised Premises; or (ii) the
assignment or sublease is to another current tenant, subtenant or other
occupant of the Building or any property owned by Landlord or any entity under
common control with Landlord and located within one (1) mile of the
Building, or to any party with whom Landlord or any entity under common control
with Landlord or their agents or brokers have discussed the leasing of space in
the Building or any property owned by Landlord or any entity under common
control with Landlord and located within one (1) mile of the Building
during the six (6) months prior to Tenant’s proposed assignment or sublet;
provided that Landlord or any entity under common control with Landlord then
has suitable and available space within one or more of such buildings for such
prospective assignee/sublessee.

 

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 fifty percent (50%) 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

 

	
   

  	
   

  	
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15

 

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 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 the foregoing, Tenant may
assign this Lease or sublease part or all of the Premises without Landlord’s
consent to: (i) any corporation, limited liability company, or partnership
that controls, is controlled by, or is under common control with, Tenant at the
Commencement Date; or (ii) any corporation or limited liability company
resulting from the merger or consolidation with Tenant or to any entity that
acquires all or substantially all of Tenant’s assets as a going concern of the
business that is being conducted on the Premises; provided however, the
assignor if surviving remains liable under the Lease and the assignee or
sublessee is a bona fide entity and assumes the obligations of Tenant, is as
creditworthy as the Tenant at the time, and continues the same Permitted Use as
provided under Section 4.

 

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
on Rights of Assignee/Sublessee. Any 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.

 

g.                                     Tenant
Not Released. No assignment or sublease shall release Tenant of
any of its obligations under this Lease.

 

h.                                     Landlord’s
Right to Collect Sublease Rents upon Tenant Default. If the
Premises (or any portion) is sublet and Tenant defaults under its obligations
to Landlord, then Landlord is authorized, at its option, to collect all
sublease rents directly from the sublessee. Tenant hereby assigns the right to
collect the sublease rents to Landlord in the event of Tenant default.  The collection of sublease rents by Landlord
shall not relieve Tenant of its obligations under this Lease, nor shall it create
a contractual relationship between sublessee and Landlord or give sublessee any
greater estate or right to the Premises than contained in its Sublease.  If requested and commercially reasonable,
Landlord shall enter into a reasonable non-disturbance and attornment agreement
with any approved or permitted sublessee. 
To the extent requested by Tenant in written notice to Landlord,
Landlord shall provide any assignee of this Lease or any such sublessee with
written notice of any default by Tenant under this Lease, and the same
opportunity to cure such default as provided to Tenant, if applicable, in Section 22
below, and Landlord shall accept performance by any such assignees or
subtenants as if such performance were rendered by Tenant. To the extent
requested by Tenant in written notice to Landlord, Landlord shall provide
Tenant with written notice of any default by any assignee, and the same
opportunity to cure such default as provided in Section 22 below, if
applicable, and Landlord shall accept performance by Tenant.  Tenant, upon curing such default, shall be
entitled, at its option, at any time thereafter to regain possession of the
Premises upon assignee agreeing in writing with Landlord that Tenant can so
regain possession of the Premises.  Any
provision by which Landlord waives any rights or agrees to indemnify, hold
harmless and/or defend Tenant shall also apply in favor of any permitted
assignee of Tenant hereunder.  Tenant
shall cause any sublessee to enter into an agreement with Landlord whereby Landlord
and such sublessee grant indemnities and waivers to one another substantially
similar to those set forth in this Lease between Tenant and Landlord.

 

	
   

  	
   

  	
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16

 

i.                                         Excess
Rents. If Tenant assigns this Lease or subleases all or part of the Premises
for which Landlord’s consent is required at a rental rate that exceeds the
rentals paid to Landlord, then fifty percent (50%) of any such excess shall be
paid over to Landlord by Tenant within ten (10) days after receipt net of
all costs incurred by Tenant with respect to such assignment or sublease,
including, without limitation, brokerage and attorneys’ fees and costs and any
buildout expenses.

 

j.                                         Landlord’s
Fees. Tenant shall pay Landlord an administration fee of $1,000.00 per
assignment or sublease transaction for which consent is required.  If Landlord assists Tenant in finding an
assignee or subtenant at Tenant’s request, Landlord shall be paid a reasonable
fee for such assistance.

 

k.                                      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, Common Areas or Premises
are damaged by fire or other casualty (“Casualty”), then Landlord shall repair
and restore the Premises, Common Areas and any other portion of the Building
that adversely affects Tenant’s use and enjoyment of the Premises and Common
Areas 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, plus
any deductibles.  Landlord’s duty to
repair and restore the Premises shall not begin until receipt of the insurance
proceeds, provided that Landlord shall make reasonable efforts to obtain the
same as soon as reasonably possible.

 

ii.                             Landlord’s
lender(s) must permit the insurance proceeds to be used for such repair
and restoration, provided that Landlord shall make reasonable efforts to obtain
such permission.

 

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 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 or the policies
that Landlord is required to carry hereunder; (iii) Landlord’s lender does
not permit a sufficient amount of the insurance proceeds to be used for
restoration purposes, despite such reasonable efforts; (iv) the Premises
is damaged in whole or in material part during the last lease year 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. 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. Tenant shall have the option of terminating the
Lease if:  (i) such restoration
cannot reasonably be substantially completed or Landlord has failed to
substantially restore the damaged Building, Common Areas or Premises within one
hundred eighty (180) days after such Casualty (“Restoration Period”); (ii) the
Restoration Period has not been delayed by force
majeure (provided that force majeure
shall not extend such period for more than sixty (60) days); and (iii) Tenant
gives Landlord notice of the termination within thirty (30) days after the end
of the Restoration Period (as may be so extended by any force majeure delays); provided that the
Premises has not been so restored prior to the date that Tenant provides such
notice. If Landlord is delayed by force
majeure, then Landlord must provide Tenant with notice of the delays
within fifteen (15) days of the force
majeure event stating the reason for the delays and a good faith
estimate of the length of the delays.

 

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 trade fixtures, decorations, signs, contents, and any Non-Standard
Improvements to the Premises. All repair, 

 

	
   

  	
   

  	
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17

 

restoration or replacement shall be at least to substantially the same condition
as existed prior to the Casualty.

 

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 may continue the operation of
Tenant’s business in any part not damaged to the extent reasonably practicable
from the standpoint of prudent business management (“tenantable”), and Rent and
other charges shall be abated proportionately to the portion of the Premises
rendered untenantable (whether or not Tenant continues to operate in the
tenantable portions). The abatement shall be from the date of the Casualty
until the Premises have been substantially repaired and restored, and a
reasonable period of time thereafter not to exceed thirty (30) days to allow
Tenant to restore, replace and move in its alterations, additions,
improvements, fixtures, trade fixtures, equipment, furniture and personal
property and prepare for reopening, 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 except to the extent
that Landlord actually receives or is entitled to receive reimbursement for
such from rent loss insurance.

 

f.                                         Waiver
of Claims. The abatement of the Rent set forth above is Tenant’s
exclusive remedy against Landlord in the event of a Casualty except to the
extent of the gross negligence or intentional misconduct of Landlord or its
agents, employees or contractors. 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
except to the extent of the gross negligence or intentional misconduct of
Landlord or its agents, employees or contractors.

 

20.                                EMINENT DOMAIN.

 

a.                                      Effect
on Lease. If all of the Premises, Common Areas or the
Building are taken under the power of eminent domain (or by conveyance in lieu
thereof) (a “taking”), 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, Common Area or the Building is so taken or
conveyed and Tenant can continue use of the remainder without materially
impairing its business operations or use of the Premises, 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.  If
only a portion of the Premises, Common Areas or the Building  is taken and Tenant cannot continue use of
the remainder without materially impairing its business operations or use of
the Premises, then Tenant may terminate this Lease upon fifteen (15) days
written notice to Landlord.  If the Lease
is not terminated pursuant to this Section 20(a), Landlord shall restore
that portion of the Premises and the Building and Common Area that remains to a
whole architectural and economic unit with reasonable promptness and all due
diligence to the extent of condemnation proceeds actually received or
receivable by Landlord as opposed to being applied to Landlord’s mortgage loan
by its lender.  Rent shall abate on an
equitable basis for the period such restoration makes the Premises or a portion
thereof untenantable or has a material adverse impact on Tenant’s business at
the Premises for the Permitted Use, and a reasonable period of time thereafter
not to exceed thirty (30) days to allow Tenant to restore, replace and move in
its alterations, additions, improvements, fixtures, trade fixtures, equipment,
furniture and personal property and prepare for reopening.

 

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 except as hereinafter
provided. 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 or fixtures or any
alterations made to the Premises at Tenant’s expense but not to the extent that
such tenant improvements were reimbursed through any tenant improvement
allowance (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.

 

	
   

  	
   

  	
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18

 

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
resulting from its use or occupancy of or alterations to the Property. Tenant
shall not (either with or without negligence) cause or permit the escape,
disposal (except for hazardous materials that are ordinarily and customarily
used by similar businesses and are used and stored in compliance with all
applicable laws and industry standards and further provided that Tenant
notifies Landlord in writing of all such hazardous materials prior to such
being brought to the Premises other than commercially reasonable amounts of
ordinary office and janitorial supplies) 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 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, promptly after
Landlord’s reasonable 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 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, to the
extent arising from such failure: (i) the cost of full remediation of any
contamination to bring the Property into the same condition as existed prior to
such failure 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 reasonably necessary
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.

 

	
   

  	
   

  	
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19

 

f.                                         Landlord’s
Liability. Landlord represents and warrants that, to Landlord’s
actual knowledge, there are no hazardous materials on the Premises as of the
Commencement Date in violation of any Environmental Laws (“Hazardous Materials”).
Landlord shall indemnify and hold Tenant harmless from any liability resulting
from Landlord’s violation of this representation and warranty.  Landlord agrees to disclose
to Tenant in writing the existence, extent and nature of any Hazardous Material
ascertained on, in or about the Property, upon Landlord’s knowledge of the
same.  Landlord agrees to comply with all
Environmental Laws in or affecting the Property during the term of this Lease
to the extent required by the applicable governmental authority.  In addition, Landlord agrees that during the
term of this Lease it will not bring upon, store, dispose of or install in or
upon the Premises any Hazardous Materials in violation of any Environmental
Laws.  Landlord shall indemnify, defend
and hold Tenant harmless from and against any liability, cost, damage or
expense incurred or sustained by Tenant (including, without limitation,
reasonable attorneys’ fees and expenses, court costs and costs incurred in the
investigation, settlement and defense of claims) as a result of or in
connection with any violation of the preceding prohibition.  The indemnity contained in this Section 21(f) shall
survive the termination or expiration of this Lease.

 

g.                                      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.

 

h.                                      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 (a “default”) under this
Lease if:

 

i.                                Tenant 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 and continues to fail to
pay such sums for ten (10) days after notice from Landlord to Tenant
thereof; provided that Tenant shall not be entitled to more than two (2) such
notice and cure periods during any twelve (12) month period;

 

ii.                             Tenant breaches
any other agreement, covenant or obligation in this Lease and such breach is
not remedied within thirty (30) days after Landlord gives Tenant notice
specifying the breach, or if such breach cannot, with due diligence, be cured
within thirty (30) days, Tenant does not commence curing within thirty (30)
days and with reasonable diligence completely cure the breach within sixty (60)
days after the notice of default; provided further that Tenant shall not be
entitled to more than one (1) such notice and cure period for the same
default within any twelve (12) month period;

 

iii.                          Tenant or any
guarantor of this Lease 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;

 

iv.                         Tenant or any
guarantor of this Lease 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 thirty (30) days), or makes a general assignment for benefit of
creditors;

 

v.                            Tenant shall
fail to cease any conduct prohibited by this Lease within three (3) days
after receipt of written notice from Landlord requesting cessation thereof, or
Tenant shall fail to cease any conduct or eliminate any condition which poses a
danger to person or property within twelve (12) hours of receipt of written
notice from Landlord requesting cessation of such conduct or elimination of
such conditions;

 

	
   

  	
   

  	
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20

 

vi.                         Tenant shall do
or permit to be done anything which creates a lien upon the Premises or the
Building and the real property on which it is situate or any component thereof
and such lien is not removed or discharged of record by bond or otherwise
within fifteen (15) days after Tenant receives notice thereof; or

 

vii.                      Tenant shall
fail to return a properly executed subordination, non-disturbance and
attornment agreement or an estoppel certificate in accordance with the terms
and provisions of this Lease and within the time period provided for such
return following Landlord’s request for same as provided in this Lease, and
Tenant fails to provide such instrument within ten (10) days after Tenant
has notice that Tenant has failed to provide such instrument within the time
periods set forth herein (such notice by Landlord not to be delivered prior to
the time such instrument was due from Tenant).

 

b.                                      Landlord’s
Remedies. In the event of a Tenant default, Landlord at its
option may do one or more of the following:

 

(i)                                     terminate this
Lease, in which event Tenant shall immediately surrender the Premises to
Landlord and if Tenant fails to do so, Landlord may, without further notice and
without prejudice to any other remedy Landlord may have for possession or
arrearages in Base Rent and/or Additional Rent, enter upon and take possession
of the Premises and expel or remove Tenant and any other person who may be
occupying said Premises or any part thereof, and its and their effects, without
being liable for prosecution or any claim of damages therefor; Tenant hereby
agreeing to pay to Landlord within ten (10) days after demand the amount
of all loss and damage which Landlord may suffer by reason of such termination,
whether through inability to relet the Premises on satisfactory terms or
otherwise;

 

(ii)                                  terminate
Tenant’s right of possession, without terminating this Lease, and enter upon
and take possession of the Premises as Tenant’s agent and expel or remove
Tenant and any other person who may be occupying said Premises or any part
thereof, and its and their effects, by entry, dispossessory suit or otherwise,
without thereby releasing Tenant from any liability hereunder, without
terminating this Lease, and without being liable for prosecution or any claim
of damages therefor and, if Landlord so elects, make such alterations,
redecorations and repairs as, in Landlord’s judgment, may be necessary to relet
the Premises, and Landlord may, but shall be under no obligation to do so,
relet the Premises or any portion thereof in Landlord’s name, but for the
account of Tenant, for such term or terms (which may be for a term extending
beyond the Lease Term) and at such rental or rentals and upon such other terms
as Landlord may deem advisable, with or without advertisement, and by private
negotiations, and receive the rent therefor, Tenant hereby agreeing to pay to
Landlord the deficiency, if any, between all Base Rent and Additional Rent
reserved hereunder and the total rental applicable to the Lease Term hereof
obtained by Landlord upon re-letting, and Tenant shall be liable for Landlord’s
damages and expenses in redecorating and restoring the Premises and all costs
incident to such re-letting, including broker’s commissions, tenant
improvements, attorneys’ fees and lease assumptions.  In no event shall Tenant be entitled to any
rentals received by Landlord in excess of the amounts due by Tenant hereunder.
Any such demand, reentry and taking of possession of the Premises by Landlord
shall not of itself constitute an acceptance by Landlord of a surrender of the
Lease or of the Premises by Tenant and shall not of itself constitute a
termination of this Lease by Landlord. 
Landlord’s failure to relet the Premises or to make such alterations,
redecorations and repairs as set forth in this paragraph shall not release or
affect Tenant’s liability for Base Rent and Additional Rent or for damages; or

 

(iii)                               enter upon the
Premises, and do whatever Tenant is obligated to do under the terms of this
Lease; and Tenant agrees to reimburse Landlord on demand for any expenses
including, without limitation, reasonable attorneys’ fees which Landlord may
incur in thus effecting compliance with Tenant’s obligations under this Lease
and Tenant further agrees that Landlord shall not be liable for any damages
resulting to Tenant from such action.

 

If this Lease is terminated
by Landlord as a result of the occurrence of a Tenant default, Landlord may
declare to be due and payable immediately, the present value (calculated with a
discount factor of eight percent [8%] per annum) of the difference between (x) the

 

	
   

  	
   

  	
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21

 

entire amount of Base Rent
and Additional Rent and other charges and assessments which in Landlord’s
reasonable determination would become due and payable during the remainder of
the Lease Term determined as though this Lease had not been terminated
(including, but not limited to, increases in Base Rent pursuant to the terms of
this Lease), and (y) the then fair market rental value of the Premises for
the remainder of the Lease Term.  Upon
the acceleration of such amounts, Tenant agrees to pay the same at once,
together with all Base Rent and Additional Rent and other charges and
assessments then due, it being agreed that such payment shall not constitute a
penalty or forfeiture but shall constitute liquidated damages for Tenant’s
failure to comply with the terms of this Lease (Landlord and Tenant agreeing
that Landlord’s actual damages in such event are impossible to ascertain and
that the amount set forth above is a reasonable estimate thereof).

 

Pursuit of any of the
foregoing remedies shall not preclude pursuit of any other remedy herein
provided or any other remedy provided by law or at equity, nor shall pursuit of
any remedy herein provided constitute an election of remedies thereby excluding
the later election of an alternate remedy, or a forfeiture or waiver of any Base
Rent and/or Additional Rent or other charges and assessments payable by Tenant
and due to Landlord hereunder or of any damages accruing to Landlord by reason
of violation of any of the terms, covenants, warranties and provisions herein
contained.  No reentry or taking
possession of the Premises by Landlord or any other action taken by or on
behalf of Landlord shall be construed to be an acceptance of a surrender of
this Lease or an election by Landlord to terminate this Lease unless written
notice of such intention is given to Tenant. 
Forbearance by Landlord to enforce one or more of the remedies herein
provided upon an event of default shall not be deemed or construed to
constitute a waiver of such default.  In
determining the amount of loss or damage Landlord may suffer by reason of
termination of this Lease or the deficiency arising by reason of any reletting
of the Premises by Landlord, allowance shall be made for the expense of
repossession.  Tenant agrees to pay to
Landlord all costs and expenses incurred by Landlord in the enforcement of this
Lease.

 

Upon the occurrence of a
Tenant default, Tenant shall pay to Landlord all costs incurred by Landlord
(including court costs and reasonable attorneys’ fees and expenses) in (i) obtaining
possession of the Premises, (ii) removing and storing Tenant’s or any
other occupant’s property, (iii) repairing, restoring, renovating,
altering, remodeling, or otherwise putting the Premises into condition
acceptable to a new tenant, (iv) if Tenant is dispossessed of, or vacates
or abandons, the Premises and this Lease is not terminated, reletting all or
any part of the Premises (including, but not limited to, brokerage commissions,
cost of tenant finish work, advertising and promotional expenses, and other
costs incidental to such reletting), (v) performing Tenant’s obligations
which Tenant failed to perform, and (vi) enforcing its rights and remedies
arising out of a Tenant default. 
Landlord’s rights and remedies under this paragraph shall be in addition
to the rights and remedies of Landlord set forth in this Section 22(b) or
elsewhere in this Lease, and/or which may otherwise be available to Landlord at
law or in equity.

 

Landlord shall have a duty
to use commercially reasonable good faith efforts to mitigate damages in the
event of a Tenant default; provided that Landlord shall not be required to (i) release
the Premises (or any portion thereof) on terms less favorable to Landlord than
other comparable available space in the Building or any building located within
one (1) mile of the Building and owned by Landlord or an entity that is
controlled by, controlling or under common control with Landlord; or (ii) release
the Premises (or any portion thereof) if there is other available space in the
Building that is suitable for such prospective tenant.

 

c.                                       Attorneys
Fees. Landlord’s reasonable attorneys’ fees in pursuing any of the foregoing
remedies after a default, or in collecting any Rent or Additional Rent due by
Tenant hereunder that is not paid within any cure period, shall be paid by
Tenant.

 

d.                                     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.

 

	
   

  	
   

  	
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22

 

e.                                      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.

 

f.                                        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.

 

g.                                     Landlord
Defaults. If Landlord shall fail to perform any of the
covenants or conditions herein contained on the part of Landlord to be
performed, and such default shall continue uncured beyond thirty (30) days
after notice from Tenant thereof, or such longer period of time as is
reasonably necessary to cure the same (not to exceed a total of sixty (60) days
after the giving of such notice), provided that Landlord is at all times after
such notice diligently pursuing a cure, Tenant shall have the following rights,
including but not limited to the following:

 

(i)                                     the right, but
not the obligation, to perform such obligation and Landlord shall pay to Tenant
the reasonable costs incurred by Tenant in curing such default, including
reasonable attorneys’ fees and expenses, within thirty (30) days after receipt
of a paid invoice from Tenant;

 

(ii)                                  the right of
specific performance and injunctive relief (Tenant not being required to prove
special damages, it being hereby stipulated that legal remedies would be
inadequate); and

 

(iii)                               all other
rights and remedies available hereunder or at law or in equity or otherwise.

 

All
of the rights and remedies of Tenant shall survive the termination or
expiration of this Lease or the Term and shall be cumulative.

 

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 default under this
Lease, 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, 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 

 

	
   

  	
   

  	
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23

 

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, 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 from
and after the date of such assumption.

 

25.                        NOTICES.

 

a.                                      Addresses. All notices,
demands and requests by Landlord or Tenant shall be sent to the Notice
Addresses set forth in Section 1l, 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 or (iv) delivered via
telecopier or facsimile transmission to the facsimile number listed above, with
an original counterpart of such communication sent concurrently as specified in
subsection (ii) or (iii) above and with written confirmation of
receipt of transmission provided.  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.  As used in this Lease, a “business day” shall
be any day other than a Saturday, Sunday or National or State of North Carolina
holiday.

 

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.

 

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 fifty percent
(150%) of that provided for as of the 

 

	
   

  	
   

  	
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24

 

expiration or termination date, and (ii) any and all Operating
Expenses 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 Tenant holds over for more than ten (10) days and 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 prove because of Tenant’s
wrongful failure to vacate.

 

27.                                OMITTED.

 

28.                                 RIGHT OF
FIRST OFFER.  Provided Tenant
is not in default of this Lease, if Landlord decides to market for lease or
otherwise lease any available space in the Building, Landlord shall first offer
to lease such space to Tenant, and Landlord shall set forth, in writing, the
price at which it would lease the space to Tenant and the term for which it
would lease the space (collectively, the “First Offer Terms”).  The offer shall be irrevocable for a period
of ten (10) days after Tenant receives the offer.  Upon expiration of the ten (10) day
period, if Tenant has not accepted the offer, Tenant shall be deemed to have
waived its right to lease such space on the First Offer Terms, and Landlord
shall have the right to lease such space to any third party, provided that the
rental rate to a third party is not less than ninety-five percent (95%) of the
rental rate in the First Offer Terms set forth in writing to Tenant (taking
into account any free rent periods and/or tenant improvement allowances) and
the lease of such space to any third party is otherwise for the same lease
term.  Should Landlord receive an offer
and decide to accept an offer that is less than ninety-five percent (95%) of
the rental rate set forth in the First Offer Terms offered to Tenant (taking
into account any free rent periods and/or tenant improvement allowances) or
otherwise not for the same lease term, Landlord shall notify Tenant with a copy
of the third party offer, and Tenant shall have the right to lease such space
on the same terms as the third party’s offer by giving Landlord written notice
of exercise of such right within ten (10) days of receipt of notice of the
third party’s offer.  After expiration of
the ten (10) day period, if Tenant shall not have accepted the offer,
Tenant shall be deemed to have waived its right to lease such space on the
terms of the third party’s offer, and Landlord shall have the right to lease
the space to the third party, subject to the above provisions.  For purposes of this Section 28, it is
understood and agreed that any offer need not be in the form of a fully
negotiated lease but may rather be in the form of a letter of intent which
addresses at a minimum, rental rate and the term of the lease.  If Tenant exercises its option to lease, then
the subject space and First Offer Terms shall be promptly added to this Lease
by an amendment and, to the extent the First Offer Terms are not complete, then
the remainder of the terms shall be as provided in this Lease.

 

29.                                 RIGHT TO
RENEW.  Tenant may, if not in
default, exercise its right to renew this Lease for one (1) three (3) year
renewal (“renewal term”) with at least six (6) months written notice prior
to the expiration of the initial Lease Term. 
Lease will renew at the then fair market value (“Market Rent”).  In the event that Landlord and Tenant cannot
agree as to the Market Rent for the renewal term within one (1) month
after Tenant’s exercise of the option to renew, then the option to renew shall
become null and void and the term of the Lease shall expire on the original
Expiration Date, unless Tenant delivers to Landlord a written objection to
Landlord’s determination of the Market Rent within five (5) business days
after such one (1) month period, in which event, within five (5) business
days thereafter the parties shall select a highly qualified and reputable real
estate broker or appraiser with at least ten years of experience in the
relevant leasing market (the “Arbiter”) to determine the fair market value for
the renewal term. If Landlord and Tenant are unable to agree on the Arbiter
within such five (5) business day period, the resident manager of the
largest commercial real estate brokerage house in the Raleigh-Durham
metropolitan area will select the Arbiter from a major brokerage house other
than his or her own. The term “largest” means the brokerage house with the
largest dollar sales volume in the preceding calendar year. The Arbiter shall
be furnished copies of the final Landlord’s offer of the Market Rent presented
to Tenant and the final Tenant’s offer of the Market Rent presented to
Landlord, both as given prior to the Arbiter’s appointment. The Arbiter, after
conducting such investigation as he or she deems appropriate, shall, within
fifteen (15) days after being selected, determine the Market Rent during the
Renewal Term, not to be less than the Tenant’s offer or the rent for the last
lease year nor more than the Landlord’s offer. So long as the Arbiter’s
determination of Market Rent is not less than the Tenant’s offer or the rent
for the last lease year nor more than the Landlord’s offer, the decision of the
Arbiter shall be final and non-appealable. The parties shall each pay one-half
of the Arbiter’s fees.

 

	
   

  	
   

  	
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25

 

“Market Rent” shall mean the
annual rental rate then being charged by similar projects in the Raleigh-Durham
metropolitan area for improved space (not including the improvements made by
Tenant) comparable to the Premises for leases commencing on or about the time
of the applicable renewal period, taking into consideration use and location
within the Building, the location, quality, age and reputation of the Building,
the definition of rentable area or net rentable area, as the case may be, with
respect to which such rental rates are computed, comparative leasehold
improvement, rental concessions and abatements, lease assumptions or
take-overs, moving expenses, the term of the lease under consideration and the
extent of services provided thereunder, applicable distinctions between “gross”
leases and “net” leases, base year figures for escalation purposes, other
adjustments (including, by way of example, indexes) to base rental, and any
other relevant term or condition in making such evaluation.

 

30.                                 OPTION TO TERMINATE.  Provided Tenant is not in default, Tenant has
a one-time right to terminate the Lease as of November 30, 2012 (“Early
Termination Date”), conditioned upon Tenant giving Landlord written notice no
less than five (5) months prior to the Early Termination Date and with the
payment of all unamortized (a) third party out of pocket construction
costs for Landlord’s work set forth in the Workletter, (b) moving
allowance paid by Landlord pursuant to the Workletter and (c) brokerage
commission payable to the Brokers identified in Section 1m with respect to
this Lease, plus four (4) month’s of Base Rent at the then prevailing
rental rate (and if Tenant exercises such option to terminate during a period
of rental abatement, the rental rate for the first full month after such rental
abatement period shall be used to calculate the amount to be paid by Tenant);
provided that in order for the exercise of the option to terminate to be valid,
Tenant must pay such amounts to Landlord at the time that it exercises this
option to terminate.  If Tenant fails to
timely give notice, Tenant will be deemed to have waived its right to terminate
under this Paragraph.  For purposes of
determining the amounts in clause (a) through (c) above of this Section 30
shall be amortized on a straight-line basis for the Term of the Lease, not
including the renewal term.  Upon written
request from Tenant and once all of the costs included in said clauses (a) through
(c) are determinable, Landlord shall, promptly provide Tenant with the total
of such costs in reasonable detail, including any back up documentation
reasonably requested by Tenant to verify the same.

 

31.  BROKER’S COMMISSIONS.

 

a.                                      Brokers. 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 Brokers identified in Section 1m.

 

b.                                     Landlord’s
Obligation. Landlord shall pay any commissions or fees that are
payable to Coldwell Banker Trademark Commercial with respect to this Lease
pursuant to Landlord’s separate agreement with Coldwell Banker Trademark
Commercial, which broker shall pay the brokerage commission due to Jones Lang
LaSalle — Carolinas, LLC pursuant to a separate agreement.

 

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.

 

32.                                 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:  to the extent
beyond Landlord’s reasonable control, fire, flood, extreme weather, labor
disputes, strike or lock-out, riot, 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.  Anything to the
contrary contained in this Lease notwithstanding, force majeure shall not apply to any monetary obligations
except in regard to the method of delivery provided that such delivery is
promptly thereafter made.

 

	
   

  	
   

  	
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26

 

c.                                       Building
Standard Improvements. The term “Building Standard Improvements”
and “building standard” shall mean the standards for normal construction of
general office space within the Building as reasonably specified by Landlord,
including design and construction standards, electrical load factors,
materials, fixtures and finishes, and shall include Landlord’s work set forth
in the Workletter.

 

d.                                      Limitation
on Damages. Notwithstanding any other provisions in this Lease,
neither party shall be liable to the other for any special, consequential,
incidental or punitive damages, provided that Tenant shall be liable to
Landlord for consequential damages to the extent Tenant breaches the provisions
of the last sentence of Section 26.

 

e.                                       Satisfaction
of Judgments Against Landlord. If Landlord, or its
employees, officers, directors, stockholders or partners are ordered to pay
Tenant a money judgment because of Landlord’s default under this Lease, said
money judgment may only be enforced against and satisfied out of: (i) Landlord’s
interest in the Building in which the Premises are located including the rental
income and proceeds from sale; (ii) the rents, income and proceeds of the
Building, and (iii) any insurance or condemnation proceeds received
because of damage or condemnation to, or of, said Building that are available
for use by Landlord.  No other assets of
Landlord or said other parties exculpated by the preceding sentence shall be
liable for, or subject to, any such money judgment.

 

f.                                         Interest. Should either
party fail to pay any amount due to the other by 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 the prime rate as
quoted from time to time in the Wall Street
Journal plus four percent (4%), per annum, compounded yearly, 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
for breach of any provision in this Lease, then the breaching party shall be
liable for the costs and expenses of the non-breaching party, including its
reasonable attorneys’ fees (at all tribunal 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 under the Lease accruing after such sale and
shall be released from any liability thereafter accruing under this Lease for
those matters arising from and after the date of sale so long as the buyer
agrees to assume all obligations of Landlord under this Lease accruing from
that point forward.

 

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 shall 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.

 

l.                                          Tenant’s
Financial Statements. Upon request of Landlord, but no more often
than twice a year, Tenant agrees to furnish to Landlord copies of Tenant’s most
recent annual, quarterly and monthly financial statements, audited if
available. The financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied. The financial
statements shall include a balance sheet and a statement of profit and loss.
Landlord may deliver the financial statements to any prospective or existing
mortgagee or purchaser of the Building.

 

m.                                    Recordation. This Lease may
not be recorded without Landlord’s prior written consent.  The parties agree to execute and allow Tenant
to record a memorandum of lease in form reasonably acceptable to the parties;
provided that the memorandum shall not contain any reference to the rental
amounts or rent abatements set forth herein; provided further that upon 

 

	
   

  	
   

  	
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27

 

the expiration or earlier termination of this Lease, Tenant shall
execute a memorandum of termination of lease to be recorded.

 

n.                                      Severability. If any clause
or provision of this Lease is illegal, invalid or unenforceable under present
or future laws, the remainder of this Lease shall not be affected thereby, and
in lieu of each clause or provision of this Lease which is illegal, invalid or
unenforceable, there shall be added as a part of this Lease a clause or
provision as nearly identical to the said clause or provision as may be legal,
valid and enforceable.

 

o.                                      Binding
Effect. This Lease shall be binding upon and inure to the benefit of 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 with respect to the subject matter hereof, 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, Tenant does hereby covenant and warrant that Tenant is a duly
authorized and existing corporation, that Tenant shall by the Commencement Date
be 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.  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”.

 

v.                                      Omitted.

 

w.                                    Joint
and Several.  If Tenant
comprises more than one person, corporation, partnership or other entity, the
liability hereunder of all such persons, corporations, partnerships or other
entities shall be joint and several.

 

x.                                        No
Construction Against Preparer.  No provision of this Lease shall be construed
against or interpreted to the disadvantage of any party by any court or other
governmental or judicial authority by reason of such party’s having or being
deemed to have prepared or imposed such provision.

 

y.                                      Reasonableness. Anything to
the contrary contained in this Lease notwithstanding, where either party is
authorized to and does expend costs and expenses on behalf of the other, the
same shall be in reasonable amounts.

 

z.                                        Patriot
Act.  Each of Landlord and Tenant,
each as to itself, hereby represents its compliance with all applicable
anti-money laundering laws, including, without limitation the USA Patriot Act,
and the laws administered by the United States Treasury Department’s Office of
Foreign Assets Control, including without limitation, Executive Order 13224 (“Executive
Order”).  Each of Landlord and Tenant
further represents (i) that it is not, and it is not owned or controlled
directly or indirectly by any person or entity, on the SDN List published by
the United States 

 

	
   

  	
   

  	
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28

 

Treasury Departments’ Office of Foreign Assets Control, and (ii) that
it is not a person otherwise identified by government or legal authority as a
person with whom a U.S. Person is prohibited from transacting business.  As of the date hereof, a list of such designations
and the text of the Executive Order are published under the internet website
address www.ustreas.gov/offices/enforcement/ofac.

 

33.                                SPECIAL CONDITIONS.  The
following special conditions, if any, shall apply, and where in conflict with
earlier provisions in this Lease shall control:

 

“None”

 

34.                                ADDENDA AND EXHIBITS.  If any addenda
are noted below, such addenda are incorporated herein and made a part of this
Lease.

 

a.                                      Lease Addendum Number One – Workletter

b.                                     Lease Addendum Number Two – Operating Expense Pass Throughs

c.                                      Exhibit A – Premises

d.                                     Exhibit B – Rules and Regulations

e.                                      Exhibit C – Commencement Agreement

f.                                       Exhibit D – Insurance Certificate

g.                                     Exhibit E - Liens and Encumbrances

h.                                    Exhibit F - Temporary Space and Additional Landlord’s Work

i.                                        Exhibit G - Parapet Sign

 

[REMAINDER OF PAGE LEFT BLANK INTENTIONALLY

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29

 

IN WITNESS WHEREOF, Landlord and Tenant have executed this lease in
four originals, all as of the day and year first above written.

 

 

TENANT:

 

 

QUIXOTE TRANSPORTATION TECHNOLOGIES, INC.,

a Delaware corporation

 

	
  By:

  	
  /s/ Joan R. Riley

  	
   

  
	
  Name:

  	
  Joan R. Riley

  	
   

  
	
  Title:

  	
  Vice President

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
   

  

 

Attest:

 

 

	
  Joan R. Riley

  	
   

  
	
                    Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Affix Corporate Seal:

  	
   

  

 

	
   

  	
   

  	
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30

 

LANDLORD:

 

A & G/Slater Road, Inc.

a North Carolina corporation

 

	
  By:

  	
  /s/ Stephen M. Weiandt

  	
   

  
	
  Name:

  	
  Stephen M. Weiandt

  	
   

  
	
  Title:

  	
  Rental Business Manager

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  July 31, 2009

  	
   

  

 

 

	
  Attest:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
                   Secretary

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
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31

 

Corporate
Resolution

 

The undersigned hereby
represent that the following is a complete and exact copy of Resolutions
adopted by Tenant’s Board of Directors on July 14, 2009:

 

WHEREAS,  Quixote Transportation Technologies, Inc.
(the “Corporation”) wants to lease space from A & G/Slater Road, Inc.;
and

 

WHEREAS, duly authorized
personnel of the Corporation have negotiated the terms and conditions of the
lease of space, as set forth in a written lease; and

 

WHEREAS, the Corporation’s
board of directors has considered the lease of space and reviewed the written
lease and believe that it is in the best interest of the Corporation to enter
the lease for space; and

 

NOW THEREFORE, BE IT
RESOLVED, that the Board of Directors hereby approves the written lease in the
form presented to the Board of Directors on the date that these resolutions are
adopted and hereby authorizes, the Chairman of the Board or the President or
any Vice President and the Secretary or any Assistant Secretary to sign and
delivery the lease in substantially the same form as presented; and

 

BE IT FURTHER RESOLVED that
the officers of Corporation are hereby authorized and empowered to take any
additional action as may be necessary or appropriate to carry out the intent of
these resolutions.

 

 

	
  This the 15th day of July,
  2009.

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Joan R. Riley

  
	
   

  	
                                               Secretary

  

 

	
   

  	
   

  	
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32

 

LEASE ADDENDUM NUMBER ONE

 

Landlord agrees to make the
following Building Standard Improvements at its own cost and expense:

 

1)              Have the carpet
professionally cleaned.  In the event
areas of the carpet need to be repaired or replaced, Landlord will repair or
patch at its cost.

2)              Repaint the Premises in the
areas to be mutually reasonably agreed upon by Landlord and Tenant.

3)              Install VCT flooring in the
lab area as shown on Exhibit F.

4)              If needed employ a plumber
to install a drain line to allow runoff of condensation from Tenant’s
supplemental HVAC unit in the server room at the Premises; provided that the
Tenant uses the prior server room shown on the attached Exhibit F as its
server room.

5)              Spruce up the landscaping
back to the level when the Building was fully occupied and had more regular
scheduled visits from the landscapers; provided that Landlord shall have until
forty-five (45) days after Tenant opens for business to complete such and shall
not be obligated to spend more than $4.000.00 in the aggregate prior to such
date sprucing up the landscaping.

6)              Provided Tenant is then not
in default of the Lease beyond any applicable notice and cure period, Landlord
will provide Tenant a moving allowance of up to twenty thousand dollars
($20,000.00) (“moving allowance”). 
Landlord will pay the allowance directly to Tenant within thirty (30)
days after Tenant opens for business, provides Landlord with a paid invoice
from its mover and commences paying rent and the amount shall equal the actual
costs incurred by Tenant with Tenant’s mover, not to exceed $20,000.00.  In the event of a default by Tenant, in
addition to all other rights and remedies of Landlord herein, Tenant shall pay
to Landlord the unamortized portion of such moving allowance paid by Landlord
based on a straight line amortization over the Lease Term.

7)              A wall will be constructed
in the office indicated in Exhibit F, dividing the office into two
offices.

 

	
   

  	
   

  	
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1

 

LEASE ADDENDUM NUMBER TWO [BASE YEAR calendar
year]

 

ADDITIONAL RENT - OPERATING EXPENSE PASS THROUGHS. For the
calendar year commencing on 2011  and
for each calendar year thereafter, Tenant shall pay to Landlord, as Additional
Rent, Tenant’s Proportionate Share of any increase in Operating Expenses (as
hereinafter defined) incurred by Landlord’s operation or maintenance of the
Building above the Operating Expenses Landlord incurred during the Base Year
(as hereinafter defined).

 

For purposes of calculating Tenant’s Proportionate Share of real and
personal property taxes included in Operating Expenses, Landlord shall use the
Base Year or the year in which the Building and improvements are completed and
are fully assessed, whichever shall be later. 
Tenant’s Proportionate Share shall be calculated by dividing the
approximately 10,000 rentable square feet of the Premises by the approximately
29,311 net rentable square feet of the Building, which equals 34%.  If during any calendar year the occupancy of
the rentable area of the Building is less than 95% full, then Operating
Expenses (as hereinafter defined) that are affected by occupancy will be
adjusted for such calendar year at a rate of 95% occupancy.

 

For the calendar year commencing on January 1, 2011 and for each
calendar year thereafter during the Term, Landlord shall reasonably estimate
the amount the Operating Expenses shall increase for such calendar year above
the Operating Expenses incurred during the Base Year.  Landlord shall send to Tenant a written
statement of the amount of Tenant’s Proportionate Share of any estimated
increase in Operating Expenses and Tenant shall pay to Landlord, on the first
day of each month during such calendar year, one-twelfth (1/12th) of Tenant’s Proportionate
Share of such increase in Operating Expenses, provided that the first payment
shall not be due until at least five (5) business days after such notice
from Landlord to Tenant.  Within one
hundred and eighty (180) days after the end of each calendar year or as soon as
possible thereafter, Landlord shall send a copy of the Annual Statement to
Tenant.  Pursuant to the Annual
Statement, Tenant shall pay to Landlord Additional Rent as owed or Landlord
shall deduct the same from Tenant’s Rent payments next due until satisfied if
Landlord owes Tenant a credit (with any balance at the end of the Term being
paid to Tenant within thirty (30) days after the end of the Term). After the
Expiration Date, Landlord shall send Tenant the final Annual Statement for the
Term, and Tenant shall pay to Landlord Additional Rent as owed or if Landlord
owes Tenant a credit, then Landlord shall pay Tenant a refund promptly. If
there is a decrease in Operating Expenses in any subsequent year below
Operating Expenses for the Base Year then no additional rent shall be due on
account of Operating Expenses, but Tenant shall not be entitled to any credit,
refund or other payment that would reduce the amount of other additional rent
or Base Rent owed. If this Lease commences or expires or terminates on a day
other than December 31, then Additional Rent shall be prorated on a
365-day calendar year (or 366 if a leap year). All payments or adjustments for
Additional Rent shall be made within thirty (30) days after the applicable
Statement is sent to Tenant.

 

The term “Base Year” shall mean the twelve month period beginning on
the January 1, 2010 and ending on December 31, 2010.

 

The term “Operating Expenses” shall mean all direct costs incurred by
Landlord in the provision of services to tenants and in the operation, repair
and maintenance of the Building and Common Areas as determined by generally
accepted accounting principles, including, but not limited to ad valorem real
and personal property taxes, amortization of capital improvements that reduce
Operating Expenses (reasonably amortized over their useful life and not to
exceed the amount of such reduction in any calendar year of part thereof during
the Term), hazard and liability insurance premiums, utilities, heat, air
conditioning, janitorial service, labor, materials, supplies, equipment and
tools, permits, licenses, inspection fees, management fees (not to exceed a
commercially reasonable fee), and common area expenses; provided, however, the
term “Operating Expenses” shall not include any capital expenditures except as
provided above, depreciation on the Building or equipment therein, interest,
executive salaries, real estate brokers’ commissions or other costs incurred in
leasing or in procuring or attempting to procure or retain tenants, or other
expenses that do not relate to the operation of the Building. The annual
statement of Operating Expenses shall be accounted for and reported in
accordance with generally accepted accounting principles and otherwise in
reasonable detail (the “Annual Statement”).

 

Landlord shall cap Controllable Operating Expenses at a five percent
(5%) maximum increase each year on a cumulative basis.  “Controllable Operating Expenses” as used
herein shall mean all Operating Expenses except ad valorem real and personal
property taxes,

 

 

insurance premiums, utilities, inspection fees for inspections required
by governing bodies having jurisdiction over the building and property, and
snow and ice removal.  Landlord shall
make reasonable efforts to minimize Operating Expenses including appealing
taxes when reasonable.  Notwithstanding
the year for which any such taxes are levied, in the case of taxes which may be
paid in installments, the minimum installment, plus any interest payable
thereon, so payable during a calendar year shall be included in taxes for that
year. If there shall be any refund of any Operating Expenses at any time during
or after the Term for any Operating Expenses incurred during the Term, Tenant
shall be entitled to it pro rata share of the refund, after Landlord deducts
from the refund Landlord’s reasonable pro rata costs and expenses in obtaining
the same, and Landlord shall promptly pay Tenant the same.

 

Tenant and its designees
shall have the right to inspect, at reasonable times and in a reasonable
manner, during the ninety (90) day period following the delivery of Landlord’s
Annual Statement, such of Landlord’s books of account and records as pertain to
and contain information concerning such costs and expenses in order to verify
the amounts thereof, which books and records Landlord agrees to keep or cause
to be kept in accordance with reasonable accounting principles (which can be on
a cash basis as opposed to an accrual basis) for a long enough period of time
after each calendar year to allow for the review provided for in this
paragraph. Tenant’s failure to exercise its rights hereunder within said ninety
(90) day period shall be deemed a waiver of its right to inspect or contest the
method, accuracy or amount of the applicable Annual Statement. In the event of
any undisputed error, Landlord shall make a correcting payment in full to Tenant
within thirty (30) days after the determination of the amount of such error. In
the event of any errors on the part of Landlord which Landlord agrees (or it is
determined as provided below) were errors in excess of five percent (5%) of
Tenant’s actual operating expense liability for any calendar year, Landlord
will also reimburse Tenant for all reasonable costs of an audit reasonably
incurred by Tenant within the above thirty (30) day period. If within the
period aforesaid, Tenant provides Landlord with its notice disputing the
correctness of the statement, and if such dispute shall have not been settled
by agreement, Tenant shall be entitled to pursue all rights and remedies at
law.  Any payment made pursuant to this
Lease Addendum Number Two shall be made without prejudice to any right of the
Tenant to dispute any items as billed pursuant to the provisions hereof.

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