Document:

EX-10.6

 Exhibit 10.6

Embrace Change Acquisition Corp. 

        , 2022 

ARC Group Limited 
 Re: Administrative
Support Agreement 
 Ladies and Gentlemen: 

This letter agreement by and between Embrace Change Acquisition Corp. (the “Company”) and ARC Group Limited (“ARC”), dated
as of the date hereof, will confirm our agreement that, commencing on the date the securities of the Company are first listed on The Nasdaq Global Market (the “Listing Date”), pursuant to a Registration Statement on Form S-1 and prospectus filed with the U.S. Securities and Exchange Commission (the “Registration Statement”) and continuing until the earlier of the consummation by the Company of an initial business
combination or the Company’s liquidation (in each case as described in the Registration Statement) (such earlier date hereinafter referred to as the “Termination Date”): 

(i) ARC shall make available, or cause to be made available, to the Company, or any successor certain utilities and secretarial and
administrative support as may be reasonably required by the Company. In exchange therefor, the Company shall pay ARC the sum of $10,000 per month on the Listing Date and continuing monthly thereafter until the Termination Date; and 

(ii) ARC hereby irrevocably waives any and all right, title, interest, causes of action and claims of any kind as a result of, or arising out
of, this letter agreement (each, a “Claim”) in or to, and any and all right to seek payment of any amounts due to it out of, the trust account established for the benefit of the public stockholders of the Company and into which
substantially all of the proceeds of the Company’s initial public offering will be deposited (the “Trust Account”) as a result of, or arising out of, this letter agreement, and hereby irrevocably waives any Claim it may have in the
future, which Claim would reduce, encumber or otherwise adversely affect the Trust Account or any monies or other assets in the Trust Account, and further agrees not to seek recourse, reimbursement, payment or satisfaction of any Claim against the
Trust Account or any monies or other assets in the Trust Account for any reason whatsoever. 
 This letter agreement constitutes the entire
agreement and understanding of the parties hereto in respect of its subject matter and supersedes all prior understandings, agreements, or representations by or among the parties hereto, written or oral, to the extent they relate in any way to the
subject matter hereof or the transactions contemplated hereby. 
 This letter agreement may not be amended, modified or waived as to any
particular provision, except by a written instrument executed by the parties hereto. 
 No party hereto may assign either this letter
agreement or any of its rights, interests, or obligations hereunder without the prior written approval of the other party. Any purported assignment in violation of this paragraph shall be void and ineffectual and shall not operate to transfer or
assign any interest or title to the purported assignee. 
 This letter agreement constitutes the entire relationship of the parties hereto,
and any litigation between the parties (whether grounded in contract, tort, statute, law or equity) shall be governed by, construed in accordance with, and interpreted pursuant to the laws of the State of New York, without giving effect to its
choice of law principles. 
 [Signature Page Follows] 

 
			
	 Very truly yours,

	
	 EMBRACE CHANGE ACQUISITION CORP.

		
	By:	 	                
	 Name:
	 	 Yoann Delwarde

	 Title:
	 	 Chief Executive Officer

 AGREED TO AND ACCEPTED BY: 

ARC Group Limited 

			
		
	By:	 	                    
	 Name:
	 	 Abraham Cinta

	 Title:
	 	 Chief Executive Officer

 [Signature Page to Administrative Support Agreement]reguslease_139142144xend

Renewal Agreement: THIS AGREEMENT HAS BEEN UPDATED PLEASE CLICK THE LINK BELOW TO VIEW THE MOST RECENT VERSION. > View Agreement Copy right © 2021, IWG Group Companies. All rights reserv ed. Reproduction in whole or in part in any  f orm or medium without express written permission of  IWG Group Companies is prohibited. Agreement Date : 9 November 2021 Confirmation No : R-2020266 Business Centre Details London - London Bridge Client Details Company Name VERONA PHARMA PLC Phone +44 20 3223 4200 Email paula.siu@veronapharma.com Service Provision : Start Date 1 March 2022 End Date 28 February 2023 This w ebsite is secure. Your personal details are protected at all times. Print Agreement   Office Payment Details (exc.VAT and exc. services) Office Number Number of people Price per Office 142 2 £ 2,255.00 144 6 £ 6,837.00 139 4 £ 2,759.00 All agreements end on the last calendar day of the month. Terms and Conditions We are IW Group Services (UK) Limited, please click the link below  for terms and conditions. By signing our service Agreement, you agree to authorize Colliers International Rating UK LLP, as managing representative of IW Group Services (UK) Limited, to act on your behalf in connection w ith all business rates matters relating to IW Group Services (UK) Ltd managed property. This includes the payment of business rates and application of reliefs (including Small Business Rate Relief). Any business rates overpayments should be refunded to the payee ‘IW Group Services (UK) Ltd’ w ith all business rates correspondence sent C/O Rate Account Management, Colliers International, 50 George Street, London, W1U 7GA. Dow nload the terms and conditions Dow nload the house rulesreguslease_145a151xendin

04/01/2022, 11:10 Regus https://serviceagreement.regus.com/ServiceAgreement.aspx?id=4717c5f6853dd453481216da462cc186&user=regus&term=12&mostRecentVersi... 1/1 Renewal Agreement: Agreement Date : 7 December 2021 Confirmation No : R-2030978 Business Centre Details London - London Bridge Client Details Company Name VERONA PHARMA PLC Phone +44 20 3223 4200 Email paula.siu@veronapharma.com Service Provision : Start Date 1 March 2022 End Date 28 February 2023   Office Payment Details (exc.VAT and exc. services) Office Number Number of people Price per Office 145A 6 £ 12,405.00 151 1 £ 3,652.00 All agreements end on the last calendar day of the month. An Activation fee of £ 35.00 per occupant will be payable.  Terms and Conditions We are IW Group Services (UK) Limited, please click the link below for terms and conditions.  By signing our service Agreement, you agree to authorize Colliers International Rating UK LLP, as managing representative of IW Group Services (UK) Limited, to act on your behalf in connection with all business rates matters relating to IW Group Services (UK) Ltd managed property. This includes the payment of business rates and application of reliefs (including Small Business Rate Relief). Any business rates overpayments should be refunded to the payee ‘IW Group Services (UK) Ltd’ with all business rates correspondence sent C/O Rate Account Management, Colliers International, 50 George Street, London, W1U 7GA. Download the house rulesveronapharmaincbriercree

           BRIER CREEK OFFICE PARK    WAKE COUNTY, NORTH CAROLINA        LEASE BETWEEN    BRIER CREEK OFFICE #4, LLC  Landlord,    AND    VERONA PHARMA INC.,  Tenant      DATED _______________, 2020      

 

  1       TABLE OF CONTENTS    Page  1. Principal Terms ........................................................................................................................ 1  2. Premises ................................................................................................................................... 5  3. Term ........................................................................................................................................ 5  4. Rent ......................................................................................................................................... 5  5. Operating Expense Payments .................................................................................................... 6  6. Use ........................................................................................................................................... 8  7. Assignment, Mortgaging and Subletting .................................................................................. 10  8. Repairs ................................................................................................................................... 11  9. Access .................................................................................................................................... 11  10. Common Facilities/Landlord’s Maintenance ........................................................................ 12  11. Utilities and Services........................................................................................................... 13  12. Alterations .......................................................................................................................... 14  13. Insurance ............................................................................................................................ 16  14. Non-Liability and Indemnification....................................................................................... 17  15. Casualty Damage ................................................................................................................ 18  16. Eminent Domain ................................................................................................................ 18  17. Events of Default ................................................................................................................ 19  18. Landlord’s Remedies .......................................................................................................... 20  19. Landlord’s Defaults ............................................................................................................ 21  20. Subordination and Attornment ............................................................................................ 21  21. Surrender ............................................................................................................................ 21  22. Holding Over ...................................................................................................................... 21  23. Quiet Enjoyment ................................................................................................................. 22  

 

         24. Security Deposit ................................................................................................................. 22  25. Rules and Regulations ......................................................................................................... 22  26. Guaranty ............................................................................................................................ 23  27. Miscellaneous ..................................................................................................................... 23    28. Electronic Signature...........................................................................................................26  29. Exhibits .............................................................................................................................. 26     Exhibit A - Description of Premises ......................................................................................... A-1   Exhibit B - Rules and Regulations ............................................................................................ B-1   Exhibit C – Intentionally Deleted .............................................................................................. C-1   Exhibit D - Operating Expenses ................................................................................................ D-1   Exhibit E - Basic Rent ................................................................................................................ E-1   Exhibit F – Guaranty .................................................................................................................. F-1   Exhibit G - Other Terms ............................................................................................................ G-1   Exhibit H - Description of the Land .......................................................................................... H-1   Exhibit I – Temporary Premises ................................................................................................. I-1     

 

  1         LEASE AGREEMENT     THIS LEASE AGREEMENT is made and entered into as of this _____ day of _________,  2020, by and between BRIER CREEK OFFICE #4, LLC, a North Carolina limited liability  company (“Landlord”), and VERONA PHARMA INC., a Delaware corporation (“Tenant”).    W I T N E S S E T H :     1. Principal Terms.  The following terms shall have the meanings set forth below for all  purposes in this Lease:     (a) Additional Rent means all sums of money whatsoever, other than Basic Rent, due and  payable by Tenant to Landlord under this Lease.     (b) Base Factor means the actual annual Operating Expenses for the Building during the  year in which the Commencement Date occurs, grossed up to 95% occupancy, and which is included  in Basic Rent.     (c) Basic Rent means that amount set forth on Exhibit E attached hereto.     (d) Building means the building improvements commonly known as “8045 Arco  Corporate Drive, Raleigh, NC 27617” located or to be located upon the Land. The Building contains   approximately 127,522 Rentable Square Feet.      (e) Building Standard means the materials and work which Landlord, in its sole  discretion, purchases or obtains, from time to time and at any time, from its suppliers or contractors for  general use in finishing premises in the Building for individual tenants.     (f) Business Days means all days other than Saturdays, Sundays and days proclaimed as  legal holidays by the State of North Carolina, the City of Raleigh or the Federal Government, provided  that upon such holidays, professional businesses, such as law firms or accounting firms, are not  generally open for business.     (g) Business Hours means the hours from 8 a.m. to 6 p.m., on Business Days, and from  8:00 a.m. to 1:00 p.m. on Saturdays by request, exclusive of (i) New Year’s Day, (ii) Memorial Day,  (iii) Independence Day, (iv) Labor Day, (v) Thanksgiving Day, and (vi) Christmas Day.     (h) Commencement Date means May 1, 2020, provided that Landlord has delivered the  Premises to Tenant “Ready for Occupancy,” meaning that Landlord has completed the Preparation  Work defined in Paragraph 2 and received a certificate of occupancy or its equivalent from the  governing municipality.  In the event the Premises are not Ready for Occupancy on May 1, 2020, the  Commencement Date and Rent Commencement Date and all other dates that may be affected by their  change shall be revised to conform to Landlord’s delivery of Premises to Tenant in accordance with  this Lease.    

 

  2     (i) Development means that certain commercial development known as “Brier Creek  Office Park,” which Development includes the Land.     (j) Expiration Date means April 30, 2024.     (k) Hazardous Substance means any substance which is toxic, ignitable, reactive, or  corrosive and which is regulated by any local government, the state of North Carolina, or the United  States Government, and includes any and all materials or substances which are defined as “hazardous  waste,” “extremely hazardous waste,” or a “hazardous substance” pursuant to state, federal, or local  governmental law, including but not limited to asbestos, polychlorobiphenyls (“PCB’s”) and  petroleum.     (l) Insurance Requirements means all requirements of any insurance policy covering or  applicable to all or any part of the Land, the Building or the Premises or the use thereof, all  requirements of the issuer of any such policy and all orders, rules, regulations, recommendations and  other requirements of the local board of fire underwriters or any other body exercising the same or  similar functions and having jurisdiction or cognizance of all or any part of the Land, the Building or  the Premises.     (m) Land means that certain parcel of land within the Development which is described on  Exhibit H attached hereto and incorporated herein by reference.     (n) Landlord means Brier Creek Office #4, LLC.     (o) Landlord’s Notice Address means c/o American Asset Corporation, 5950 Fairview  Road, Suite 800, Charlotte, North Carolina 28210, or such other address as Landlord shall give in  accordance with Paragraph 27(k).     (p) [Intentionally Deleted].     (q) [Intentionally Deleted].     (r) Legal Requirements means all laws, statutes and ordinances (including building codes  and zoning regulations and ordinances) and the orders, rules, regulations, directives and requirements  of all federal, state, county and city departments, bureaus, boards, agencies, offices, commissions and  other subdivisions thereof, or of any official thereof, or of any other governmental, public or  quasi-public authority, whether now or hereafter in force, which may be applicable to the Land, the  Building or the Premises, or any part thereof, and all requirements, obligations and conditions of all  instruments of record affecting the Land and the Building.     (s) Operating Expenses means all expenses relating to the Building and Public Areas, and  all expenses and costs (but not specific costs which are allocated or separately billed to and paid by  specific tenants) of every kind and nature which Landlord shall pay or become obligated to pay because  of or in connection with owning, operating, managing, painting, repairing, insuring, cleaning,  maintaining, decorating, securing, and replacing components or systems in the Building and Public  Areas, computed on an accrual basis and in accordance with generally accepted accounting principles  

 

  3    consistently applied, including, but not limited to, all Taxes and the items enumerated in Exhibit D  annexed hereto; provided, however, notwithstanding anything herein to the contrary or in Exhibit D,  the following shall be excluded from Operating Expenses: (i) depreciation or amortization (except as  otherwise provided above), (ii) debt service or interest (paid or accrued) or financing charges associated  with the Building, (iii) leasing commissions, brokerage fees, or special tenant inducements, (iv) costs  incurred by Landlord for tenant improvements, including tenant improvement allowances, (v) the cost  of capital improvements to the Building, the common areas serving the Building, or other property  within the Development, other than those that result in a reduction to Operating Expenses, in which  event such capital costs shall be amortized in equal monthly installments over the useful life of the  capital improvement in question in accordance with generally accepted accounting principles; (vi) costs  of correcting building code violations which violations were in existence on the Commencement Date,  (vii) repairs and replacements for which and to the extent that Landlord has been reimbursed by  insurance and/or paid pursuant to warranties, (viii) advertising, marketing and promotional expenses,  (ix) intentionally deleted; (x) reserves for anticipated future expenses, (xi) accounting services rendered  for the benefit of Landlord; (xii) any costs or expenses incurred by Landlord in bringing the Premises  or Building, or any portion thereof, into compliance with any applicable federal, state or local statutes,  codes, ordinances or rules; (xiii) costs related to remediation or clean-up of hazardous materials; (xiv)  legal and other expenses incurred in the negotiation or enforcement of leases; (xv) costs to be  reimbursed by other tenants of the Building, whether or not actually paid; and (xvi) penalties, fines,  costs, damages, and legal fees incurred by Landlord due to the violation by Landlord.     (t) Partnership Tenant means a partnership of two (2) or more persons or entities,  individually, or as joint ventures or as co-partners of a partnership.     (u) Premises means approximately 6,543 rentable square feet, designated as Suite 130, in  the Building, said Premises being more particularly depicted on Exhibit A attached.     (v) Public Areas means the sidewalks, driveways, public entrances, passageways, doors,  doorways, corridors, elevators, stairs, toilets, parking areas, parking decks, entrance drives and other  public portions of the Building and the Land.     (w) [Intentionally Deleted].     (x) Rent means Basic Rent and Additional Rent.     (y) Rent Commencement Date means June 1, 2020, subject to adjustment pursuant to  Paragraph 1(h) above.     (z) Rentable Square Feet of the Premises means 6,543 rentable square feet, subject to the  terms of Paragraph 2 hereof.     (aa) Rules and Regulations means those attached to this Lease as Exhibit B and such  reasonable changes therein as Landlord hereafter may make and communicate in writing to Tenant.     (bb) Security Deposit means the sum of $31,079.26 to be held and used in accordance with  Paragraph 24 hereof.  

 

  4       (cc) Taxes means all taxes, assessments, and governmental charges, whether or not directly  paid by Landlord, whether federal, state, county, or municipal and whether assessed by taxing district  or authorities presently taxing the Building and the Land or by others subsequently created or  otherwise, and any other taxes and assessments attributable to the Land and the Building or its  operation, excluding, however, federal and state taxes on income, death taxes, franchise taxes, and any  taxes imposed or measured on or by the income of Landlord from the operation of the Building or  imposed on Landlord’s profit in connection with any change of ownership of the Building; provided,  however, that if at any time during the Term the present method of taxation or assessment shall be so  changed that the whole or any part of the taxes, assessments, levies, impositions, or charges so levied,  assessed, or imposed on real estate and the improvements thereof shall be discontinued and as a  substitute therefor, or in lieu of or in addition thereto, taxes, assessments, levies, impositions, or charges  shall be levied, assessed and/or imposed wholly or partially as a capital levy or otherwise on the rents  received from the Building, such substitute or additional taxes, assessments, levies, impositions, or  charges, to the extent so levied, assessed, or imposed, shall be deemed to be included within Taxes.     (dd) Tenant means Verona Pharma Inc.      (ee) Tenant’s Notice Address means 3 More London Riverside, London, SE1 2RE,  United Kingdom, with a copy to the Premises.      Tenant’s Billing Email Notification: accounts@veronapharma.com, Attention: Chief  Financial Officer.  Email billing notification shall be deemed proper notice for all terms of this Lease.     (ff) Tenant’s Operating Payment means an amount equal to Tenant’s Proportionate  Share of the amount by which Operating Expenses for a calendar year exceeds the Base Factor.     (gg) [Intentionally Deleted].     (hh) Tenant’s Proportionate Share means, as of the date hereof, 5.1%, calculated as a  fraction, the numerator of which is the number of Rentable Square Feet of the Premises and the  denominator of which is the Rentable Square Feet of the Building; provided, however, such percentage  may be adjusted in the event the Building is re-measured following interior upfits.  Notwithstanding  the foregoing, Tenant’s Proportionate Share shall not be increased by more than 20% following  any such remeasurement.     (ii) [Intentionally Deleted].     (jj) Term means that certain term of this Lease, commencing and expiring as set forth in  Paragraph 3(a) hereof, subject to Tenant’s renewal rights as set forth on Exhibit G.     (kk) Unavoidable Delays means any delays caused by other tenants, war, civil commotion,  riot, acts of God, strikes or other labor disputes, governmental restrictions, regulations or actions, fire or  other casualty, shortage or unavailability of labor or materials obtainable on reasonable terms, adverse  weather conditions or unusual inclement weather or any other factors beyond the reasonable control of  

 

  5    Landlord or Tenant, whether similar or not to any of those listed above; provided, however, that  payment of Rent hereunder shall not be excused or delayed due to Unavoidable Delays.     (ll) Guaranty shall mean that certain Guaranty Agreement to be executed by VERONA  PHARMA PLC, in the form attached hereto as Exhibit F.    (mm) Temporary Premises means approximately 2,039 rentable square feet, designated as  Suite 370, in the Building, said Temporary Premises being more particularly depicted on Exhibit I  attached.  Tenant shall be permitted to occupy the Temporary Premises on a rent-free basis effective on  the date of full execution of this Lease Agreement until the time that the Premises are ready for  occupancy by Tenant; provided, however, that Tenant hereby agrees that all provisions of this Lease,  with the exception of Tenant’s obligation to pay Rent, shall apply to Tenant’s occupancy of the  Temporary Premises.       2. Premises  Landlord hereby leases to Tenant and Tenant hereby leases from Landlord the Premises,  together with the right to the use of and benefit from, in common with others, the Public Areas.  During  the Term, Tenant shall have the non-exclusive right to use, at no additional cost to Tenant, its pro rata  share of parking afforded to the Building.  Landlord shall have the right during the Term to reserve  parking spaces on the Land for the exclusive use of other tenants in the Building, provided the  reservation of such spaces does not interfere with Tenant’s parking rights as set forth herein.       Prior to the Commencement Date and Tenant’s occupancy, Landlord, at Landlord’s sole cost  and expense, shall prepare the Premises as shown on the plan in Exhibit A (the “Preparation Work”).   Tenant, at Tenant’s sole cost and expense, shall be responsible for providing its own reception desk and  shall be responsible for any low voltage cabling that Tenant deems necessary to provide.      3. Term   The Term of this Lease shall commence on the Commencement Date, and shall end on the  Expiration Date, unless the Term shall sooner terminate pursuant to any of the terms of this Lease or  pursuant to law or shall be extended pursuant to the renewal terms set forth on Exhibit G.  Upon prior  notice to Landlord and delivery of a certificate of insurance evidencing that the Premises is  covered by the required insurance set forth in this Lease, if the Premises is vacant, Tenant and its  agents may, at Tenant’s option, enter the Premises one week prior to Commencement Date in order  to install Tenant’s furniture, fixtures, cabling, wiring and equipment in the Premises, and in order  to perform such other upfit work as Tenant may desire in  accordance with the terms and  conditions of this Lease. In the event of such entry by Tenant prior to the Commencement Date  referenced above, and with respect to Tenant’s occupancy of the Temporary Premises, all terms  and conditions of this Lease shall apply, although Tenant shall have no obligation to pay Basic  Rent for the Premises until the Rent Commencement Date.     4. Rent   (a) Tenant shall pay to Landlord without notice or demand or set-off, in lawful money of  the United States of America at the office of Landlord or at such other place as Landlord may  designate, Rent as follows:    

 

  6      (i) Basic Rent, which shall be payable in advance in monthly installments  beginning on the Rent Commencement Date and continuing on the first day of each calendar month  thereafter during the Term; and      (ii) Additional Rent, which shall be payable within the time limitations elsewhere  provided in this Lease, or if no such time limit is elsewhere provided, within fifteen (15) Business Days  after receipt of notice from Landlord as to the amount due and payable, beginning on the  Commencement Date.     The Basic Rent together with Additional Rent shall constitute the “contract rent”, as such  term is used in N.C.G.S. § 42-34(b).     (b) Notwithstanding and not to the exclusion of any other remedies for Tenant’s default, if  any installment of Basic Rent or Additional Rent payable under Paragraph 5(c) remains unpaid for a  period of five (5) Business Days after such installment shall have become due, Tenant shall pay interest  thereon at the rate of 1% per month, from the date on which such installment or payment is due to the  date of payment thereof.  Such interest shall be deemed Additional Rent.  If the Rent Commencement  Date shall occur on a day other than the first day of a calendar month, the monthly installment of Basic  Rent and any monthly installment of Additional Rent payable under Paragraph 5(c) for the unexpired  portion of the month in which the Rent Commencement Date occurs shall be prorated on the basis of  the actual number of calendar days in such month.       5. Operating Expense Payments   (a) Subject to Paragraph 5(e), if Operating Expenses payable in any calendar year falling  wholly or partially within the Term shall be in such amount as shall constitute an increase above the  Base Factor, Tenant shall pay as Additional Rent for such calendar year Tenant’s Operating Payment.     (b) Notwithstanding any other provision contained herein to the contrary, if the Building is  not fully occupied during any calendar year or if the entire Building is not provided with complete  building standard services during any calendar year, then for purposes of the computation of Tenant’s  Operating Payment, each component of Operating Expenses, including, but not limited to, electrical  power, management fees (not to exceed 4% of gross rents for the Building), taxes and insurance,  janitorial expenses, on-site labor and maintenance contracts, may be computed for such year as though  95% of the entire Building had been fully occupied and provided with complete building standard  services during such year.     (c) Landlord may, with respect to any calendar year subsequent to the year in which the  Commencement Date occurs, furnish to Tenant an estimate of Tenant’s Operating Payment for such  year, and upon receipt of such estimate, Tenant will thereafter pay to Landlord on the first (1st) day of  each month during such year an amount equal to one-twelfth of such estimate.  Landlord may revise  such estimate from time to time, not more than twice per calendar year.  Until such estimate has been  furnished to Tenant relative to any calendar year, Tenant shall pay to Landlord, on the first day of each  month during such year, an amount equal to one-twelfth of the Tenant’s Operating Payment for the  previous calendar year.  On or before April 30 of each calendar year, Landlord shall furnish Tenant  with a reconciliation statement, with reasonable supporting documentation (i.e., a worksheet that lists  all relevant Operating Expenses), setting forth the Tenant’s Operating Payment for such prior calendar  

 

  7    year and the amounts paid to date by Tenant on account thereof (the “Annual Statement). Any  additional amount payable as Tenant’s Operating Payment as set forth on such statement shall be  payable within thirty (30) days after Tenant’s receipt of such statement, and the amount of any  overpayment by Tenant shall be applied to the next month’s installment of Tenant’s Operating  Payment then due, with the residual, if any, refunded by Landlord to Tenant within thirty (30) days  after delivery of such statement.  The Annual Statement shall be final and binding upon Tenant unless  Tenant, within sixty (60) days after Tenant’s receipt thereof, shall contest any item therein by giving  written notice to Landlord specifying each item contested and the reason therefor.  If, during such 60- day period, Tenant reasonably and in good faith questions or contests the accuracy of the Annual  Statement, Landlord and Tenant shall work in good faith to resolve Tenant’s questions. Landlord will  provide Tenant with access to Landlord’s book and records relating to the operation of the Building and  such information as Landlord reasonably determines to be responsive to Tenant’s questions for  inspection and audit.  Such audit shall be conducted at Tenant’s sole expense by a certified public  accountant approved by Landlord, which approval shall not be unreasonably withheld or delayed.  If  such audit reveals that Landlord has overcharged Tenant, the amount overcharged shall be paid to  Tenant within thirty (30) days after the audit is concluded.  If such audit reveals that Landlord has  undercharged Tenant, the amount of undercharge shall be paid by Tenant to Landlord within thirty (30)  days after the audit is conducted.  In addition, if the Operating Expenses included in the Annual  Statement exceed the actual Operating Expenses which should have been charged to Tenant by more  than five percent (5%), the cost of the audit shall be paid by Landlord. Tenant may not withhold any  payment due as set forth in this Lease pending completion of the audit.     (d) Any Additional Rent payable by Tenant pursuant to this Paragraph 5 shall be  collectible by Landlord in the same manner as Basic Rent.     (e) If the Commencement Date or the Expiration Date shall occur on a date other than  January 1 or December 31, respectively, Tenant’s Operating Payment for the calendar year in which  the Commencement Date or Expiration Date shall occur, as the case may be, shall be prorated based  upon the actual number of days in the particular calendar year.  In no event shall Basic Rent ever be  reduced by operation of this Paragraph 5.  The rights and obligations of Landlord and Tenant under the  provisions of this Paragraph 5 with respect to any Additional Rent shall survive the Expiration Date or  any sooner termination of the Term.    (f) Landlord has advised Tenant that presently Duke Energy Progress (the “Electric  Service Provider”) is the utility company selected by Landlord to provide electricity service for the  Building.  Notwithstanding the foregoing, if permitted by applicable law, Landlord shall have the right  at any time and from time to time during the Term to either contract for service from a different  company or companies providing electricity service (each such company being hereinafter referred to  as an “Alternative Service Provider”) or continue to contract for service from the Electric Service  Provider; provided, however, before contracting with an Alternative Service Provider, Landlord shall  use good faith efforts to ensure that such provider’s rate are customary and in line with rates for the  Raleigh/Durham market area.  Tenant shall cooperate with Landlord, the Electric Service Provider, and  any Alternative Service Provider at all times and, as reasonably necessary, shall allow Landlord,  Electric Service Provider, and any Alternative Service Provider reasonable access to the Building’s  electric lines, feeders, risers, wiring, and any other machinery within the Premises. Landlord shall in no  way be liable or responsible for any loss, damage, or expense that Tenant may sustain or incur by  

 

  8    reason of any change, failure, interference, disruption, or defect in the supply or character of the electric  energy furnished to the Premises, or if the quantity or character of the electric energy supplied by the  Electric Service Provider or any Alternative Service Provider is no longer available or suitable for  Tenant’s requirements, and no such change, failure, defect, unavailability, or unsuitability shall  constitute an actual or constructive eviction, in whole or in part, or entitle Tenant to any abatement or  diminution of rent, or relieve Tenant from any of its obligations under the Lease.  Notwithstanding the  foregoing, in the event electricity service required to be provided by Landlord is not provided for  a period of three (3) consecutive Business Days or more due to Landlord’s negligence or willful  act, then the Basic Rent and all other Rent and charges hereunder shall abate until the services  are fully restored.       (g) Tenant will be responsible for ad valorem taxes on its personal property and on the  value of the leasehold improvements in the Premises, to the extent the same exceed Building Standard.   If the taxing authorities do not separately assess Tenant’s leasehold improvements, Landlord may  make reasonable allocation of the ad valorem taxes allocated to the Building to give effect to this  subparagraph (g).    (h)  Notwithstanding anything in this Lease to the contrary, for each calendar year after the  Controllable Base Year, Tenant’s Controllable Operating Payment shall not exceed the Controllable  OE Cap.  The “Controllable Base Year” shall mean the total, actual Controllable OE for the calendar  year of 2020.  The “Controllable OE Cap” shall mean: (i) with respect to the calendar year 2021, the  amount obtained by multiplying the amount of Controllable OE for 2020 Year by 1.05; and (ii) relative  to each calendar year subsequent thereto, the amount obtained by multiplying the higher of the  Controllable OE Cap for the previous calendar year or the actual Tenant’s Operating Payment for the  previous calendar year by 1.05.  “Controllable OE” shall be those Operating Expenses reasonably  determined by Landlord to be within its control with respect to price, more specifically defined as all  Operating Expenses other than Taxes, insurance, utilities, removal of ice and snow from the sidewalks  on or adjacent to the Land, repairs and costs of complying with governmental regulations.  “Tenant’s  Controllable Operating Payment” shall mean Tenant’s Proportionate Share of the Controllable OE.     6. Use   (a) Tenant covenants that throughout the Term it will use the Premises for general, clerical,  administrative, and executive offices consistent with a first class office building in the area in which the  Building is located and for no other purpose.     (b) Landlord represents and warrants that, to the best of Landlord’s knowledge, the  Premises and the Building are in compliance with all Legal Requirements as of the date hereof,  including, without limitation, the ADA and all applicable environmental regulations, and shall be in  compliance with such Legal Requirements as of the Commencement Date.  Tenant, at its sole cost and  expense, shall comply with all Legal Requirements and all Insurance Requirements relating to or  affecting Tenant’s use of the Premises. Without limiting the generality of the foregoing, in the event the  Premises must be modified or any other action relating to the Premises must be undertaken in the future  to comply with the Americans With Disabilities Act or any similar federal, state or local statute, law, or  ordinance due solely to Tenant’s unique use of or activity in the Premises, the responsibility for such  modification or action (including the payment of all costs incurred in connection therewith) shall  belong to Tenant.  If the Public Areas must be modified or any other action relating to the Public Areas  

 

  9    must be undertaken in the future to comply with the Americans With Disabilities Act or any similar  federal, state or local statute, law, or ordinance and if such modification or action is required because of  (i) any special or unique use or activity in the Premises or (ii) the performance of any alterations within  the Premises, the responsibility for such modification or action (including the payment of all costs  incurred in connection therewith) shall belong to Tenant.  Except as provided in the immediately  preceding sentence, in the event the Public Areas must be modified or any other action relating to the  Public Areas must be undertaken in the future to comply with the Americans With Disabilities Act or  any similar federal, state or local statute, law, or ordinance, the responsibility for such modification or  action (including the payment of all costs incurred in connection therewith, subject to the terms and  provisions of this Lease relating to the pass-through of Operating Expenses) shall belong to Landlord.     (c) If anything is done, omitted to be done, or suffered to be done by Tenant, or kept or  suffered by Tenant to be kept in, upon or about the Premises that shall cause the rate of fire or other  insurance on the Premises or the Building procured by Landlord to be increased, Tenant shall be  provided written notice by Landlord of such rate increase (as well as the schedule referred to herein)  and shall either (i) immediately discontinue those activities which account for the increased rates, or (ii)  continue such activities and pay the entire amount of such increase promptly upon Landlord’s demand  therefor as Additional Rent.  In determining whether increased premiums are a result of something  done, omitted or suffered to be done or kept or suffered to be kept in, upon or about the Premises solely  by Tenant, a schedule issued by the organization computing the insurance rate for the Building showing  the various components of such rate shall be conclusive evidence of the several items and charges  which make up such rate.     (d) Tenant shall not place a load upon any floor that exceeds the floor load per square foot  that such floor was designed to carry or violates any Legal Requirement.  All mechanical equipment  and other applicable property of Tenant in the Premises shall be placed and maintained by Tenant, at  Tenant’s sole expense, in such manner as shall be sufficient, in Landlord’s reasonable judgment, to  prevent vibration, noise, annoyance or inconvenience to Landlord and the other tenants.     (e) Tenant shall not cause or permit any Hazardous Substance to be used, stored, generated  or disposed of on or in the Premises, the Building, or the Land in violation of any applicable law by  Tenant or Tenant’s agents, employees, contractors or invitees.  If Hazardous Substances are used,  stored, generated or disposed of by Tenant on or in the Premises, the Building or the Land, or if the  Premises, the Building, or the Land become contaminated in any manner due to Tenant’s use or  occupancy of the Premises, Tenant shall indemnify and hold harmless Landlord from any and all  claims, damages, fines, judgments, penalties, costs, liabilities or losses (including, without limitation, a  decrease in value of the Building or the Land, damages due to loss or restriction of rentable or usable  space, or any damages due to adverse impact on marketing of the Building, and any and all sums paid  for settlement of claims, reasonable attorneys’ fees, consultant and expert fees) arising during or after  the Term and arising as a result of such contamination by Tenant.  This indemnification includes,  without limitation, any and all costs incurred due to any investigation of the site or any cleanup,  removal or restoration mandated by a federal, state or local agency or political subdivision, and shall  expressly survive expiration or termination of this Lease.  Without limitation of the foregoing, if Tenant  causes or permits the presence of any Hazardous Substance on the Premises, the Building or the Land  in violation of any applicable law, and same results in contamination, Tenant shall promptly, at its sole  expense, take any and all necessary actions to return the Premises to the condition existing prior to the  

 

  10    presence of any such Hazardous Substance on the Premises, the Building or the Land. Tenant shall first  obtain Landlord’s approval, however, for any such remedial action.  Notwithstanding anything to the  contrary contained in this subparagraph (e), Tenant shall not be responsible for, and the indemnification  and hold harmless obligation set forth in this paragraph shall not apply to (i) contamination in the  Premises which existed prior to the Commencement Date, (ii) the presence of Hazardous Materials in  the Premises which migrated from outside of the Premises, or (iii) contamination caused by Landlord  or any of Landlord’s employees, agents, or contractors.     7. Assignment, Mortgaging and Subletting  (a) Except as otherwise set forth in this Paragraph 7, Tenant shall not (i) wholly or partially  assign or otherwise transfer this Lease or any rights herein granted, (ii) sublet all or part of the Premises  or allow the same to be used or occupied by others or in violation of Paragraph 6 hereof, or (iii)  mortgage, pledge, or encumber this Lease or all or any part of the Premises in any manner by reason of  any act or omission on the part of Tenant, without the prior written consent of Landlord in each  instance, which consent shall not be unreasonably withheld, conditioned, or delayed.  If Tenant or any  assignee of Tenant is a corporation or partnership, the terms “assign” and “assignment” shall, for  purposes of this Lease, be deemed to include the aggregate transfer of effective control of the  applicable entity and/or a majority of the stock or partnership interest, as the case may be, of Tenant or  such assignee of Tenant.  Tenant shall reimburse Landlord for its actual legal fees (not to exceed  $1,000.00), if any, and an administrative fee of $1,000.00 in connection with any request by Tenant for  Landlord’s consent to an assignment. Notwithstanding anything to the contrary contained in the  Lease, Tenant shall be permitted to assign its interest in the Lease or to sublet all or any portion  of the Premises, without advance notice to or consent from Landlord (i) to any entity which  controls, is controlled by, or under common control with Tenant; (ii) to any successor entity who  acquires all or substantially all of Tenant’s assets or interest in its then-existing operations; and  (iii) in connection with a merger or consolidation (each a “Permitted Transfer”).       (b) If this Lease is assigned, whether or not in violation of the terms of this Lease, Landlord  may collect rent from the assignee.  If the Premises or any part thereof be sublet or be used or occupied  by any person other than Tenant, whether or not in violation of this Lease, Landlord may, after default  by Tenant and expiration of Tenant’s time to cure such default, if any, collect rent from the subtenant or  occupant. In either event, Landlord may apply the net amount collected to the Rent herein reserved.   The consent by Landlord to an assignment, transfer, encumbering or subletting pursuant to any  provision of this Lease shall not in any way be considered to relieve Tenant from obtaining the express  prior consent of Landlord to any other or further assignment, transfer, encumbering or subletting.   Neither any assignment of this Lease nor any subletting, occupancy or use of the Premises or any part  thereof by any person other than Tenant, nor any collection of rent by Landlord from any person other  than Tenant, nor any application of any Rent as provided in this Paragraph 7 shall, under any  circumstances be deemed a waiver of any of the provisions of Paragraph 7(a) hereof, or relieve, impair,  release, or discharge Tenant of its obligations fully to perform the terms of this Lease on Tenant’s part  to be performed, and Tenant shall remain fully and primarily liable therefor.     (c) Tenant shall use good faith efforts to deliver to Landlord a duplicate original instrument  of assignment and assumption in form and substance reasonably satisfactory to Landlord, within ten  (10) days after the execution thereof, duly executed by Tenant and by the assignee, pursuant to which  such assignee shall assume performance of all terms of this Lease on Tenant’s part to be performed.  

 

  11       (d) In the event of any assignment, sale or other transfer of Tenant’s interest in this  Lease or subletting of the Premises (in whole or in part), whether consented to by Landlord or  not, Tenant shall pay to Landlord fifty percent (50%) of any rent consideration or money  received by Tenant or payable to Tenant in connection with such assignment or subletting that is  in excess of rental payable by Tenant hereunder (computed on a per rentable square foot basis),  after netting out actual transaction expenses incurred by Tenant in connection with such transfer  (including, without limitation, legal fees, brokerage commissions, tenant improvement  allowances, etc.).     8. Repairs  Provided Tenant has received written notice from Landlord of the need for repair, replacement,  or alteration and reasonable time to effectuate same, Tenant shall pay to Landlord, promptly upon  demand, all reasonable costs and expenses incurred by Landlord in connection with all repairs,  replacements and alterations to the Premises and the Building, whether such repairs, replacements, and  alterations are interior or exterior, structural, or otherwise, ordinary or extraordinary, the need for which  arises out of (i) the installation, use, operation, or existence of Tenant’s alterations (other than the  Preparation Work) or personal property, or the moving of the same in or out of the Building or the  Premises by Tenant or any of its subtenants, or any of such parties’ employees, agents, contractors,  licensees or invitees or (ii) the acts, omissions or negligence of Tenant or any of its subtenants, or any  of such parties’ employees, agents, contractors, licensees or invitees, or the misuse of the Premises by  any of such parties.  Tenant, at its sole cost and expense, shall promptly replace scratched, damaged or  broken doors and glass in and about the Premises and shall be responsible for all repairs and  maintenance of wall, window and floor coverings in the Premises, normal wear and tear and damage  caused by casualty or by any act of Landlord or its agents excluded.     9. Access   Except in the event of an emergency that poses imminent threat of harm to persons or property,  Landlord or its representatives or designees may enter the Premises upon at least twenty-four (24)  hours’ prior notice to Tenant, accompanied by a representative of Tenant, at all reasonable times,  whether or not during Business Hours, to inspect the Premises, to enforce any provisions of this Lease,  to make or cause to be made such repairs as Landlord may deem necessary or desirable, to cure any  uncured defaults of Tenant pursuant to the rights granted Landlord under this Lease, to repair any utility  lines or systems servicing other parts of the Building, to rectify any condition in the Premises adversely  affecting other occupants of the Building, or, upon prior reasonable notice to Tenant, to exhibit the  Premises to others during the last nine (9) months of the Term (as same may be extended from time to  time).  If Tenant, its agents or employees shall not elect to be present or shall not permit an entry into  the Premises at any time when such entry shall be permissible, or in the case of an emergency,  Landlord may use a master key (or master code, card or switch if Tenant’s security system is other than  conventional locks and keys), or, solely in the event of an emergency, forcibly enter the Premises.     In the event Tenant is located on the top floor of the Building, Tenant acknowledges that Landlord,  Landlord’s employees or agents, may need to access the roof of the Building through the Premises  from time to time.  Landlord agrees to use commercially reasonably efforts to minimize any  interruption to Tenant for roof access and to perform any maintenance during normal business hours,  

 

  12    however, Tenant shall provide Landlord with three (3) access devices to access the Premises if  necessary for roof maintenance or repair after business hours.     Landlord has installed an access system (the “Access System”) regulating access to and from the  Building. Landlord shall provide Tenant with access devices for each of Tenant’s full-time employees  and up to ten (10) visitor access devices. Tenant shall notify Landlord of any access device  reassignment, deletions or additions if such device permits access to any Public Areas on the Land or  common facilities within the Development, including the fitness center or training room. Tenant shall  be liable for any employee’s use of such common facility due to access device reassignment without  prior written notice to Landlord. All access devices shall be returned to Landlord immediately upon the  expiration or earlier termination of the Term. In the event Tenant installs a card access system for the  Premises, such system must be compatible with the Building Access System, and Tenant shall program  the Premises access system to permit Landlord’s regular maintenance, security and janitorial  contractors.     10. Common Facilities/Landlord’s Maintenance   (a) Landlord shall have the right at any time, without the same constituting an eviction and  without incurring liability to Tenant therefor, to change the arrangement and/or location of the Public  Areas, provided such changes do not materially interfere with or adversely impact Tenant’s access to  the Building or Premises, Tenant’s use of the Premises, or Tenant’s use of the parking area within the  Public Areas. The Public Areas shall at all times be maintained by Landlord in good condition  comparable to other similar buildings in the market area and be subject to the exclusive control and  management of Landlord.     (b) Except for the obligations of Tenant as set forth herein, Landlord shall repair, replace,  manage, insure and maintain the Building as follows, which shall in all cases be commensurate with  comparable office buildings in the Raleigh/Durham market area:      (i) Landlord shall purchase all Building Standard supplies and materials used, and  labor charges incurred, in performing its duties hereunder related to the operation, maintenance,  decoration, repairing, and cleaning of the Building.      (ii) Landlord shall purchase insurance coverage for the Building in accordance  with Paragraph 13(f) of this Lease.      (iii) Landlord shall perform all repairs, replacements and general maintenance to the  Building, structural or non-structural, including without limitation the roof and mechanical, electrical  and heating, ventilating and air-conditioning equipment and/or systems, in a manner consistent with  other comparable office buildings in the market area (provided, however, Tenant shall be responsible  for the maintenance, repair and replacement, such that the Premises remains at all times in good and  tenantable condition, of the non-structural portions of the Premises, any Alterations constructed by  Tenant, plumbing, heating, ventilating, air-conditioning and other systems and equipment which serve  the Premises exclusively, and any non-Building Standard materials within the Premises).    

 

  13      (iv) Landlord shall provide for the removal of trash, rubbish, garbage, and other  refuse from the Building, as well as removal of ice and snow from the sidewalks on or adjacent to the  Land.      (v) Landlord shall provide janitorial service, including service to areas of the  Building leased to tenants, as more particularly set forth in Paragraph 11 below.    The cost of performance of such obligations of Landlord shall be paid from the Operating Expenses  collected from Tenant and the other tenants of the Building.     11. Utilities and Services   (a) Except as otherwise provided herein, Landlord shall maintain and operate the heating,  ventilating and air-conditioning systems and shall furnish heat and air-conditioning to the Premises  during Business Hours at temperatures usual and customary for similar office space in the  Raleigh/Durham market area, except to the extent reduced service is required by any governmental  body.     (b) If Tenant requests heating, ventilating, or air-conditioning services during other than  Business Hours, Landlord shall make the same available to Tenant in accordance with such request,  provided that Tenant shall pay to Landlord, as Additional Rent, Landlord’s charges therefor, such  charge is currently $35.00 per hour of additional service, and constitutes the additional electricity cost  incurred plus a reasonable allowance for equipment wear and tear and overhead.     (c) Notwithstanding the foregoing provisions of this Paragraph 11, Landlord shall not be  responsible if the normal operation of the Building heating, ventilating and air-conditioning system  shall fail to provide conditioned air at reasonable temperatures, pressures or degrees of humidity or in  reasonable volumes or velocities in any portion of the Premises (i) which shall have an electrical load in  excess of 3.5 watts per square foot of usable area of the Premises for all purposes (including lighting  and power), or which shall have a human occupancy factor in excess of one person per 100 square feet  of usable area of the Premises (i.e., the average electrical load and human occupancy factors for which  such system is designed), or (ii) because of any rearrangement of partitioning or other improvements,  alterations, changes, additions or use of the Premises by Tenant.  Tenant shall cooperate fully with  Landlord at all times and abide by all regulations and requirements which Landlord may reasonably  prescribe for the proper functioning and protection of the heating, ventilating, and air-conditioning  system.     (d) Landlord shall provide elevator service during Business Hours with and without card  access and shall have at least one passenger elevator subject to call at all other times with card access.     (e) Landlord shall provide such janitorial services to the Premises consistent with those  services currently being provided to the Building, a schedule for which shall be furnished to Tenant  upon request.     (f) Landlord shall furnish water to each floor on which the Premises are located for normal  drinking, lavatory, and cleaning purposes.    

 

  14     (g) Landlord shall furnish electrical energy reasonably required, subject to the provisions  herein, in connection with the use and occupancy of the Premises for the operation of such lighting,  electrical appliances and equipment as Landlord may permit to be installed in the Premises.     (h) Tenant covenants that at no time shall the use of electrical energy in the Premises  exceed 3.5 watts per square foot of usable area (consisting of 3.0 watts per square foot for lighting and  0.5 watts per square foot for power (i.e., electric outlets)).  Tenant shall not, without the prior consent of  Landlord, (i) make or perform, or permit the making or performing of, any alteration to wiring  installations or other electrical facilities in or serving the Premises or any additions to the electrical  fixtures; or (ii) install and/or use business machines, office equipment, or other appliances in the  Premises which utilize electrical energy other than small business machines normally used in executive  and administrative offices.  Should Landlord grant such consent, all additional risers or other equipment  required therefor, including, without limitation, air-conditioning equipment, shall be provided by  Landlord and the cost thereof shall be paid by Tenant within fifteen (15) Business Days after being  billed therefor.  Landlord may grant such consent subject to such terms and conditions as are necessary  in the opinion of the Landlord to ensure that Landlord will be reimbursed by Tenant for Landlord’s  installation of any relevant alterations, wiring, fixtures, appliances, or equipment, as well as Landlord’s  provision of any additional electrical service.       (i) Landlord reserves the right to stop, interrupt or reduce the level of services required of  Landlord under this Lease, whenever and for so long as may be necessary, by reason of accidents,  emergencies, introduction of foreign substances, laws, regulations, controls, or guidelines, strikes,  maintenance, repairs or changes which Landlord is required by this Lease or by law to make or in good  faith deems necessary, or by reason of difficulty in securing proper supplies of fuel, water, electricity,  or labor, or by reason of any other cause beyond Landlord’s reasonable control.  In each instance,  Landlord shall exercise reasonable diligence to eliminate the cause of stoppage and to effect restoration  of service and shall give Tenant reasonable notice, when practicable, of the commencement and  anticipated duration of such stoppage, interruption or reduction in service.  Tenant shall not be entitled  to any diminution or abatement of Rent or other compensation by reason of any such stoppage,  interruption or reduction unless resulting from Landlord’s wrongful acts or gross negligence.   Notwithstanding the foregoing, in the event Tenant’s ability to conduct its business operations in the  Premises is materially impacted by a Landlord-initiated service interruption and Landlord has failed to  commence repair within three (3) days of such interruption, Tenant shall be entitled to undertake  necessary repairs, the cost of which Landlord shall pay to Tenant upon demand.     12. Alterations   (a) Tenant shall make no improvements, alterations, changes, or additions to the Premises  (“Alterations”) without the prior written consent of Landlord, which consent shall not be unreasonably  withheld, conditioned, or delayed; provided, however, that Tenant may paint or repaint the Premises,  relocate movable partitions within the Premises for purposes of reconfiguring individual work areas in  the Premises, and perform other non-structural and/or cosmetic or decorative modifications to the  Premises without Landlord’s prior consent.  Tenant shall reimburse Landlord for all reasonable  expenses incurred by Landlord in connection with approving and inspecting said Alterations, including  Landlord’s reasonable legal fees actually incurred, if any, and an administrative fee of $500.00.      

 

  15     (b) All Alterations and fixtures (excluding Tenant’s trade fixtures, if any) are the property  of Landlord and shall be surrendered with the Premises, unless Landlord requires Tenant prior to the  expiration or termination of this Lease to remove same upon such surrender.  Notwithstanding the  foregoing, Landlord shall notify Tenant at the time of approving Alterations if said Alterations will  need to be removed at the expiration or termination of the Lease.     (c) Tenant shall cause no damage to the Premises and the Building from removal of  Tenant’s personal property from the Building.  Any such damage or injury to the Premises and the  Building shall be promptly repaired by Tenant at its sole cost and expense.  Any personal property of  Tenant not removed by Tenant prior to the Expiration Date or within five (5) days of sooner  termination of this Lease shall, at Landlord’s option, either become the property of Landlord or shall be  disposed of or stored by Landlord at Tenant’s risk and expense.     (d) No approval of plans or specifications by Landlord or consent by Landlord allowing  Tenant to make Alterations to the Premises shall in any way be deemed to be an agreement by  Landlord that the contemplated work complies with any Legal Requirements or Insurance  Requirements, or the certificate of occupancy for the Building, or deemed to be a waiver by Landlord  of any of the provisions of this Lease.  Tenant shall construct all approved Alterations in a good and  workmanlike manner, free of all defects and in compliance with all Legal Requirements and Insurance  Requirements.  Tenant is not acting as an agent for Landlord and neither Landlord, Landlord’s agents,  nor the holder of any mortgage on the Land and Building shall be liable for any labor or materials  furnished or to be furnished to Tenant upon credit, and no mechanic’s or materialman’s or other liens  for such labor or materials shall attach to or affect any estate or interest of Landlord or any other such  party in and to the Premises, the Land and the Building.  Tenant shall not permit any mechanic’s or  materialmen’s lien to attach, be placed or filed against the Premises, the Building or the Land arising  out of such work prosecuted under this Paragraph 12; and if such a lien is filed, Tenant shall satisfy,  bond off, or otherwise cause such lien to be cancelled or discharged within thirty (30) days of Tenant’s  receipt of notice of such filing.  Tenant agrees that any damage to the Premises caused by Tenant’s  Alterations shall be repaired at Tenant’s sole cost and expense.  No later than thirty (30) days  after completion of any Alterations in the Premises by Tenant (including, but not limited to, the  addition of equipment, cables or any material that must be inspected), Tenant shall provide to  Landlord (i) an affidavit from the general contractor performing the work that same has been  substantially completed in accordance with the approved plans and specifications and that all  mechanics and materialmen in connection therewith have been paid in full; (ii) a waiver of lien  with respect to such construction work executed by the general contractor and each  subcontractor, except as to any contractor for which Tenant has obtained a bond to pay any  claims by such persons; and (iii) a certificate of occupancy from the applicable governmental  authorities evidencing completion of such work in accordance all applicable laws, codes and  ordinances.  In the event a certificate of occupancy cannot be obtained for the Premises due to  any action or inaction by Tenant, Tenant shall be in default hereunder and must immediately  comply with any and all requirements to obtain a certificate of occupancy.  Notwithstanding  anything to the contrary contained in this Paragraph 12, the parties acknowledge and agree that  the Preparation Work defined in Paragraph 2 is to be completed solely by Landlord and shall not  be considered a Tenant Alteration under any provision of this Lease.    

 

  16     13. Insurance   (a) Tenant shall, during the Term and during any period (if any) of rent abatement or  period of occupancy prior to the Commencement Date, at its sole cost and expense, obtain, maintain  and keep in full force and effect, with Landlord and the holder of any mortgage or deed of trust (if  Tenant has been notified of the name of such holder) on the Land and Building named as additional  insureds therein or as their respective interests may appear, as appropriate, the following insurance:      (i) hazard insurance, on a Special Form Cause of Loss, upon property of every  description and kind owned by Tenant or anyone claiming through or under Tenant and located in the  Building, or for which Tenant is legally liable, or which was installed by or on behalf of Tenant or  anyone claiming through or under Tenant, including, without limitation, Tenant’s personal property  and all other improvements, alterations, changes and additions (other than the Preparation Work), in an  amount not less than the full insurable value thereof;      (ii) commercial general liability insurance (occurrence coverage), to include  personal injury, bodily injury, broad form property damage, operations hazard, contractual liability and  products and completed operations liability in combined single limits not less than $2,000,000  inclusive; with Landlord named as additional insured.      (iii) worker’s compensation in no less than statutory limits and employer’s liability  insurance in limits acceptable to Landlord; and      (iv) Any other form or forms of insurance as Landlord may reasonably require.     (b) All policies shall be taken out with insurers reasonably acceptable to Landlord and in  form reasonably satisfactory from time to time to Landlord.  Tenant shall cause insurance required in  subsections (i) and (ii) above to be provided by an insurer or agent admitted in North Carolina. Tenant  agrees that certificates of insurance will be delivered to Landlord as soon as practicable after the  placing of the required insurance.  All policies shall contain an undertaking by the insurers to notify  Landlord in writing not less than 30 days prior to any material change or reduction in coverage or  cancellation or termination thereof.     (c) In the event of damage to or destruction of the Premises and the termination of this  Lease by Landlord pursuant to Paragraph 15 hereof, Tenant shall pay to Landlord all of its insurance  proceeds relating to any improvements, alterations, changes and additions made by Tenant to the  Premises, except for any such proceeds paid on (i) items installed by Tenant and which Landlord has  agreed may be removed from the Premises upon the expiration of the Term, and (ii) any personal  property of Tenant.     (d) Landlord shall not carry insurance of any kind on any Alterations made by Tenant to  the Premises, or on any of Tenant’s personal property, and Landlord shall not be obligated to repair any  damage thereto or replace the same.     (e) Any policy or policies of hazard, extended coverage, or similar casualty insurance  which either party obtains in connection with the Premises or Building shall include a clause or  endorsement denying the insurer any rights of subrogation against the other party to the extent rights  

 

  17    have been waived by the insured prior to the occurrence of injury or loss.  Tenant and Landlord waive  any rights of recovery against the other for injury or loss due to hazards covered by the hazard  insurance that either party is required to maintain hereunder or otherwise elects to maintain, but only to  the extent of the injury or loss covered thereby.     (f) Landlord shall carry (i) hazard insurance covering at least full replacement cost of the  Building (exclusive of foundations and footings) and (ii) commercial general liability insurance  (occurrence coverage) with limits of not less than $10,000,000.00 at all times.     14. Non-Liability and Indemnification   (a) Unless caused by Landlord’s gross negligence or intentional misconduct, or that of  Landlord’s employees, agents or contractors, Tenant shall indemnify and hold harmless Landlord and  its agents from and against any and all claims for damage to the person or property of anyone or any  entity arising from Tenant’s negligent use of the Premises, or from any negligence or intentional  misconduct of Tenant in or about the Premises or elsewhere, and shall further indemnify and hold  harmless Landlord from and against any and all claims, costs, and expenses arising from any breach or  default in the performance of any obligation on Tenant’s part to be performed under the terms of this  Lease, or arising from any other negligent act or omission of Tenant or any of Tenant’s agents,  contractors, employees, or invitees, and from and against all costs, reasonable attorney’s fees, expenses  and liabilities incurred by Landlord as the result of any such use, breach, default, misconduct or  negligence, and in dealing reasonably therewith, including, but not limited to, the defense or pursuit of  any claim or any action or proceeding involved therein; and in case any action or proceeding be  brought against Landlord by reason of any such matter, Tenant upon notice from Landlord shall defend  the same at Tenant’s expense by counsel reasonably satisfactory to Landlord and Landlord shall  cooperate with Tenant in such defense.  Landlord need not have first paid any such claim in order to be  so indemnified.  This indemnity shall expressly survive expiration or termination of this Lease.  Tenant,  as a material part of the consideration to Landlord, hereby assumes all risk of damage to property of  Tenant or injury to person, in, upon, or about the Premises arising from any cause, except for the  negligence or intentional misconduct of Landlord, its agents, employees and contractors, and Tenant  hereby waives all claims in respect thereof against Landlord.     (b) Unless caused by Tenant’s gross negligence or intentional misconduct, or that of  Tenant’s agents, employees, or contractors, Landlord shall indemnify and hold harmless Tenant and its  agents from and against any and all claims for damage to the person or property of anyone or any entity  arising from Landlord’s negligent operation of the Building, or from any negligence or intentional  misconduct of Landlord in or about the Building, and shall further indemnify and hold harmless Tenant  from and against any and all claims, costs, and expenses arising from any breach or default in the  performance of any obligation on Landlord’s part to be performed under the terms of this Lease, or  arising from any other negligent act or omission of Landlord or any of Landlord’s agents, contractors or  employees, and from and against all costs, reasonable attorney’s fees, expenses and liabilities incurred  by Tenant as the result of any such use, breach, default, misconduct, or negligence, and in dealing  reasonably therewith, including, but not limited to, the defense or pursuit of any claim or any action or  proceeding involved therein; and in case any action or proceeding be brought against Tenant by reason  of any such matter, Landlord upon notice from Tenant shall defend the same at Landlord’s expense by  counsel reasonably satisfactory to Tenant and Tenant shall cooperate with Landlord in such defense.   

 

  18    Tenant need not have first paid any such claim in order to be so indemnified.  This indemnity shall  expressly survive expiration or termination of this Lease.     15. Casualty Damage.    (a) Tenant shall give immediate notice (by telephone, confirmed in writing) to Landlord of  any damage caused to the Premises by fire or other casualty, and if neither party elects to terminate this  Lease as provided in Paragraph 15(b), Landlord shall proceed with reasonable diligence and at its sole  cost and expense to repair and restore the Premises (other than any Alterations to the Premises  performed by Tenant and any personal property of Tenant) to substantially the same condition as  immediately prior to said damage or destruction.     (b) If (i) the Building or the Premises shall be destroyed or substantially damaged by a  casualty not covered by Landlord’s insurance; or (ii) 25% or more of the Premises is damaged or  rendered untenantable by a casualty covered by Landlord’s insurance; or (iii) the Premises are not  affected but 25% of the Building or such portion of the Public Areas as shall render the Premises or the  Building untenantable is damaged or rendered untenantable, then in any such event Landlord may elect  either to terminate this Lease or to proceed to rebuild and repair the Premises (subject to the limitations  set forth in Paragraph 15(a) above) or that portion of the Building so damaged.  Landlord shall give  written notice to Tenant of such election within 90 days after the occurrence of such casualty.  If 25%  or more of the Premises is damaged or rendered untenantable by a casualty during the last twelve (12)  months of the Term, Tenant may also elect to terminate this Lease upon sixty (60) days’ written notice  to Landlord.  If such notice of termination shall be given, this Lease shall terminate as of the date  provided in such notice of termination (if the Term shall have commenced) with the same effect as if  that date were the Expiration Date.  If neither party elects to terminate this Lease, and Landlord  commences repair and reconstruction as set forth herein, then in the event the repair and restoration of  the Premises and/or Tenant’s access thereto is not substantially complete within one hundred eighty  days of the casualty event, Tenant shall have the right to terminate this Lease upon written notice to  Landlord.     (c) If the Premises are damaged and the Lease is not terminated pursuant to Paragraph  15(b), the Basic Rent and the Additional Rent payable pursuant to Paragraph 4 hereof shall be abated in  proportion to the degree in which Tenant’s ability to use the Premises is impaired during the period of  any damage, repair or restoration provided for in this Paragraph 15 (i.e., until such time as Landlord has  satisfied its restoration obligations under this Paragraph 15).  Except for such abatement, Tenant shall  not be entitled to any compensation or damage for loss in the use of the whole or any part of the  Premises and/or any inconvenience or annoyance occasioned by damage, destruction, repair or  restoration.     16. Eminent Domain   (a) Subject to the rights of Landlord to relocate Tenant pursuant to Paragraph 27(n), if the  whole or any portion of the Premises shall be acquired or condemned by eminent domain for any  public or quasi-public use or purpose, this Lease shall terminate as of the date of the vesting or  acquisition of title in the condemning authority with the same effect as if said date were the Expiration  Date.  In addition, if the whole or any portion of the Building other than the Premises shall be acquired  or condemned by eminent domain for any public or quasi-public use or purpose, this Lease shall, at the  

 

  19    option of Landlord, terminate as of the date of the vesting or acquisition of title in such condemning  authority with the same effect as if such date were the Expiration Date.     (b) The proceeds of any condemnation award shall be the property of Landlord, whether  such award is compensation for damages to Landlord’s or Tenant’s interest in the Premises, and Tenant  hereby assigns all of its interest in any such award to Landlord; provided, however, that Landlord shall  have no interest in any award made to Tenant for loss of business, relocation expenses, or for the taking  of Tenant’s personal property if a separate award for such items is made to Tenant.     17. Events of Default  The occurrence of any one or more of the following events shall constitute a material default of  this Lease by Tenant:     (a) The failure by Tenant to make any payment on or before five (5) days following the  due date of (i) Basic Rent or (ii) Additional Rent payable in monthly installments pursuant to Paragraph  5(c) hereof, provided, however, that Landlord will give Tenant notice and an opportunity to cure any  failure to pay Rent within five (5) days of any such notice not more than twice in any 12-month period.       (b) The failure by Tenant to make any payment of Additional Rent (other than pursuant to  Paragraph 5(c) hereof) or any other payment required to be made by Tenant hereunder other than that  described in Paragraph 17(a), as and when due, where such failure shall continue for a period of ten  (10) days after written notice thereof from Landlord to Tenant.  If Landlord serves Tenant with a Notice  to Pay Additional Rent or Quit, such Notice to Pay Additional Rent or Quit shall also constitute the  notice required by this Paragraph 17(b).     (c) The failure of Tenant to execute the documents contemplated in Paragraphs 20(b) or  27(e) hereof, and such failure shall continue for a period of ten (10) days after written notice thereof  from Landlord to Tenant.     (d) The failure by Tenant to observe or perform any of the covenants, conditions or  provisions of this Lease to be observed or performed by Tenant other than those referenced above,  where such failure shall continue for a period of thirty (30) days after written notice thereof from  Landlord to Tenant; provided, however, that if the nature of Tenant’s noncompliance is such that more  than thirty (30) days are reasonably required for its cure, then Tenant shall not be deemed to be in  default if Tenant commenced such cure within said thirty (30) day period and thereafter diligently  pursues such cure to completion.  To the extent permitted by law, such thirty (30) day notice shall  constitute the sole and exclusive notice required to be given to Tenant under applicable statutes.     (e) (i)  The making by Tenant of any general arrangement or general assignment for the  benefit of creditors; (ii) Tenant becoming a “debtor” as defined in 11 U.S.C. §101 or any successor  statute thereto (unless, in the case of a petition filed against Tenant, the same is dismissed within sixty  (60) days); (iii) the appointment of a trustee or receiver to take possession of substantially all of  Tenant’s assets located at the Premises or of Tenant’s interest in this Lease; or (iv) the attachment,  execution, or other judicial seizure of substantially all of Tenant’s assets located at the Premises or of  Tenant’s interest in this Lease, where such seizure is not discharged within sixty (60) days.      

 

  20     (f) The discovery by Landlord that any financial statement given to Landlord by Tenant,  by Tenant’s successor in interest, or by any guarantor of Tenant’s obligations hereunder was materially  false when presented to Landlord.     18. Landlord’s Remedies  In the event of any material default or breach of this Lease by Tenant, Landlord may at any  time thereafter, without further notice or demand and without limiting Landlord in the exercise of any  right or remedy which Landlord may have by reason of such default:     (a) Terminate this Lease or terminate Tenant’s right to possession of the Premises, and  force Tenant to immediately surrender the Premises to Landlord according to North Carolina law.   Tenant agrees to pay to Landlord on demand the costs which Landlord may suffer by reason of such  termination including, but not limited to, the cost of recovering possession of the Premises. If Landlord  terminates this Lease or Tenant’s right to possess the Premises hereunder, Tenant shall be liable to  Landlord for monthly Basic Rent, and any other indebtedness of Tenant under the Lease accrued to the  date the Lease or Tenant’s right to possession ends and thereafter scheduled during the remainder of the  Term, reduced only by any sums Landlord receives by reletting the Premises during the scheduled  term, provided, however, if Landlord relets the Premises during the remainder of the scheduled term at  a rental in excess of that provided under this Lease, Tenant shall not be entitled to any such excess  rental; and/or     (b) Pursuant to North Carolina Law,  enter upon and take possession of the Premises and  expel or remove Tenant and any other person who may be present, by reasonable force if necessary (to  the extent allowed by law), without terminating the Lease or being liable for prosecution or any claim  for damages, and, if Landlord so elects, relet the Premises on such terms as Landlord may determine  and receive from Tenant any difference between the aggregate rentals to be collected under such  replacement lease during the remainder of the Term and the aggregate rentals payable under this Lease  for the remainder of the Term (discounted using a customary and reasonable present value formula).   Tenant agrees to pay to Landlord on demand any such deficiency that may arise by reason of such  reletting and any and all costs (including, without limitation, any reasonable costs of upfitting the  Premises for any replacement tenant and any applicable brokerage commissions) expended by  Landlord in connection with such reletting; and/or     (c) Pursuant to North Carolina law, enter the Premises at any time to cure any default  without thereby incurring any liability to Tenant or anyone claiming through or under Tenant.  Any  expenses incurred by Landlord in connection with any such performance or involved in collecting or  endeavoring to collect rent or enforcing or endeavoring to enforce any rights against Tenant under or in  connection with this Lease or pursuant to law shall be paid by Tenant as Additional Rent on demand;  and/or      (d) Pursue any other remedies now or hereafter available to Landlord under applicable  laws or judicial decisions and/or under this Lease.      The remedies provided under this Paragraph 18 are non-exclusive and may be combined with  other remedies hereunder available to Landlord for Tenant’s material default or breach hereunder.  Landlord shall use good faith efforts to mitigate its damages after a Tenant default.   

 

  21       19. Landlord’s Defaults  Landlord shall not be in default under this Lease unless Landlord fails to perform obligations  required of Landlord within thirty (30) days after written notice by Tenant to Landlord and to the  holder of any first mortgage or deed of trust covering the Premises whose name and address shall have  theretofore been furnished to Tenant in writing, specifying wherein Landlord has failed to perform such  obligation; provided, however, that if the nature of Landlord’s obligation is such that more than thirty  (30) days are required for performance, then Landlord shall not be in default if Landlord commences  performance within such 30-day period and thereafter diligently pursues the same to completion.  If  Landlord fails to commence cure of any claimed Landlord default as provided above, Tenant may  commence and prosecute such cure to completion and shall be entitled to recover the reasonable costs  of such cure from Landlord upon demand by Tenant.       20. Subordination and Attornment   (a) This Lease shall be automatically subordinate to any ground lease, mortgage, deed of  trust, or any other hypothecation or security now or hereafter placed upon the Premises and to any and  all advances made on the security thereof and to all renewals, modifications, consolidations,  replacements and extensions thereof.  Notwithstanding the foregoing, if any mortgagee, trustee or  ground lessor shall elect to have this Lease prior to the lien of such mortgage, deed of trust, or ground  lease, and shall give written notice thereof to Tenant, this Lease shall be deemed prior to such  mortgage, deed of trust, or ground lease, whether this Lease is dated prior or subsequent to the date of  said mortgage, deed of trust, or ground lease or the date of recording thereof.     (b) Tenant agrees, upon the request of Landlord, to execute any reasonable documents  required to effectuate an attornment or a subordination, or to make this Lease prior to the lien of any  mortgage, deed of trust, or ground lease, as the case may be, provided such mortgagee, deed of trust  beneficiary or ground lessor agrees, in writing, not to disturb Tenant in its use and enjoyment of the  Premises for the remainder of the Term, including any renewal options, as long as Tenant is not default  of this Lease beyond any applicable notice and cure period. Tenant’s failure to execute such documents  within twenty (20) days after written demand shall constitute a material default by Tenant.       21. Surrender  On the Expiration Date or upon the sooner termination of this Lease or upon re-entry by  Landlord upon the Premises in accordance with Paragraph 18, Tenant shall surrender, vacate, and  deliver to Landlord the Premises, including all improvements, additions, alterations, and replacements  thereon, “broom clean” and in good order, condition and repair except for ordinary wear, tear, and  damage by fire or other casualty or the acts of Landlord, its agents or employees, with all Tenant- installed low voltage wiring removed; provided, however, that Tenant shall have five (5) days to  remove its personal property and trade fixtures from the Premises following a termination of this Lease  prior to the Expiration Date.  If the Premises are not surrendered upon the expiration or termination of  this Lease as provided herein, Tenant hereby indemnifies Landlord against liability resulting from delay  by Tenant in so surrendering the Premises, including any claims made by any succeeding tenant or  prospective tenant founded upon such delay.  Tenant’s obligations under this Paragraph 21 shall  survive the termination of this Lease.     22. Holding Over  

 

  22    If Tenant shall hold over the Premises after the expiration or earlier termination of the Term,  then Tenant waives all notice to quit and agrees to pay Landlord for the period that Tenant is in  possession after the Expiration Date or earlier termination date, monthly rent which is one hundred and  fifty percent (150%) of the Rent applicable to the last full month of the Term.  Tenant expressly agrees  to hold Landlord harmless from all loss and damages, direct and consequential, which Landlord may  suffer in defense of claims by any parties against Landlord arising out of the holding over by Tenant,  including, without limitation, reasonable attorneys’ fees which may be incurred by Landlord in defense  of such claims.  Acceptance of Rent by Landlord subsequent to the Expiration Date or earlier  termination of this Lease shall not constitute consent to any holding over.  Landlord shall have the right  to apply all payments received after the Expiration Date or earlier termination of this Lease toward  payment for use and occupancy of the Premises subsequent to the Expiration Date or earlier  termination of this Lease and toward any other sums owed by Tenant to Landlord.  In the event of any  holdover by Tenant, Landlord, at its option, may forthwith re-enter and take possession of the Premises  without process or by any legal process in force.     23. Quiet Enjoyment  Tenant, if and so long as it pays the Rent and performs and observes the other terms and  covenants as provided in this Lease, shall have the peaceable and quiet possession of the Premises  during the Term free of the claims of Landlord or anyone claiming by, through or under Landlord,  subject to the terms of this Lease and any ground lease, mortgage or deed of trust as set forth in  Paragraph 20 hereof.  This covenant shall be construed as a covenant running with the land and shall  not be construed as a personal covenant or obligation of Landlord.     24. Security Deposit  Tenant shall deposit with Landlord simultaneously with the execution of this Lease, the amount  stipulated in Paragraph 1 as a security deposit.  Provided Tenant is not in default in the payment of any  Rent or any other charges due Landlord and further provided the Premises are left in the condition  described in Paragraph 21 upon the Expiration Date or earlier termination of this Lease, the Security  Deposit (which shall not bear interest to Tenant) shall be returned to Tenant within thirty (30) days after  the Expiration Date or earlier termination of this Lease.  If the Tenant is in default under this Lease or  the Premises are not left in good condition, reasonable wear and tear excepted, then the Security  Deposit shall be applied to the extent available on account of sums due Landlord or to the cost of  repairing damages to the Premises.  If all or any part of the Security Deposit is applied to an obligation  of the Tenant hereunder while Tenant is in possession of the Premises, Tenant shall immediately upon  request of Landlord, restore the Security Deposit to its original amount.  Tenant shall not have the right  to call upon Landlord to apply any or all of the Security Deposit to cure any default or fulfill any  obligation of Tenant, but such use shall be solely in the discretion of Landlord.  Upon any conveyance  by Landlord of its fee simple interest in the Building, the Security Deposit may be delivered by  Landlord to Landlord’s grantee or transferee, and upon such delivery, Landlord shall thereupon be  released of any and all liability with respect to the Security Deposit, its application and return, and the  Tenant agrees to look solely to such grantee or transferee.     25. Rules and Regulations  Tenant and its employees, agents, invitees and licensees shall faithfully observe and strictly comply  with, and shall not permit violation of, the Rules and Regulations attached hereto as Exhibit B and  incorporated herein by reference.  In case of any conflict or inconsistency between the provisions of  

 

  23    this Lease and any Rules and Regulations, the provisions of this Lease shall control.  Landlord shall  have no duty or obligation to enforce any Rule or Regulation, or any term, covenant or condition of any  other lease, against any other tenant, and Landlord’s failure or refusal to enforce any Rule or  Regulation or any term, covenant or condition of any other lease against any other tenant shall not  result in any liability of Landlord to Tenant.  Landlord will make reasonable efforts to uniformly apply  the rules and regulations consistently to all comparably sized tenants.     26. Guaranty  Contemporaneously with the execution of this Lease by Tenant, Verona Pharma PLC, an  English corporation, has executed a guaranty agreement in the form attached hereto as Exhibit F, as an  inducement for Landlord to execute this lease, guaranteeing the payment and performance of all  obligations of Tenant hereunder.     27. Miscellaneous   (a) No agreement to accept a surrender of this Lease or possession of the Premises shall be  valid unless in writing signed by Landlord.  The delivery of keys or possession to Landlord or any  agent or employee of Landlord shall not operate as a termination of this Lease or a surrender of the  Premises.     (b) No provision of this Lease shall be deemed to have been waived by Landlord or Tenant  unless such waiver be in writing signed by the party making such waiver.  The failure of Landlord or  Tenant to seek redress for violation of, or to insist upon the strict performance of, any covenant or  condition of this Lease, shall not be deemed a waiver thereof or prevent a subsequent act, which would  have originally constituted a violation, from having all the force and effect of an original violation.     (c) The receipt by Landlord of Rent with knowledge of the breach of any covenant,  warranty, or obligation by Tenant contained in this Lease shall not be deemed a waiver of such breach.   No payment by Tenant or receipt by Landlord of a lesser amount than the Basic Rent herein stipulated  shall be deemed to be other than on account of the earliest Basic Rent reserved hereby which is due and  owing at the time such payment is received by Landlord.  No payment by Tenant or receipt by  Landlord of a lesser amount than the Additional Rent herein stipulated shall be deemed to be other than  on account of the earliest Additional Rent reserved hereby which is due and owing at the time such  payment is received by Landlord.  No endorsement or statement on any check or any letter  accompanying any check or payment of any such Rent shall be deemed an accord and satisfaction, and  Landlord may accept such check or payment without prejudice to Landlord’s right to remedies  provided in this Lease.  If Tenant is in arrears in payment of Rent, Tenant waives Tenant’s right, if any,  to designate the items against which any payments made by Tenant are to be credited, irrespective of  and notwithstanding any designation or requests by Tenant as to the items against which any such  payments shall be credited.     (d) This Lease and all attachments and exhibits hereto contain the entire agreement  between the parties, and no agreement, representation or inducement shall be effective to change,  modify or terminate this Lease in whole or in part unless such agreement, representation or inducement  is in writing and signed by both parties hereto.    

 

  24     (e) Tenant at any time or from time to time at the request of Landlord or at the  request of the holder of any ground lease, mortgage or deed of trust referred to in Paragraph 20  hereof, shall execute, acknowledge and deliver to the party so requesting, a certificate by Tenant,  certifying (i) that this Lease has not been modified, changed, altered or amended in any respect  and is in full force and effect (or, if there have been modifications, stating the modifications and  that the Lease is in full force and effect as modified); (ii) that this Lease is the only Lease  between Landlord and Tenant affecting the Premises (or specifying any other leases); (iii) that  Tenant has accepted the Premises (or a part thereof), is in occupancy of the Premises (or a part  thereof) and is paying all Rent hereunder, for which it is then liable on a current basis; (iv) that  there are then existing no credits, offsets or defenses against the enforcement of any provisions  of this Lease (or, if any of same exist, specifying the same); (v) the dates, if any, to which the  Rent or other charges due hereunder have been paid in advance and that there has been no  prepayment of Rent other than as provided for in this Lease; (vi) that there are no known existing  defaults by Landlord or Tenant under this Lease (or, if any such default exists, specifying such  default); (vii) whether or not Tenant has exercised any renewal options or other options which  may be provided in this Lease; (viii) that there are no actions, whether voluntary or otherwise,  pending against Tenant under the bankruptcy laws of the United States or any insolvency laws of  any state thereof; and (ix) such further information with respect to the Lease or the Premises as  Landlord, or such lessor, mortgagee or deed of trust beneficiary, may request.  Any such  certificate may be relied upon by any prospective purchaser of the Land and Building or of the  interest of Landlord in any part thereof, by any mortgagee or prospective mortgagee thereof, by  any deed of trust beneficiary or any prospective deed of trust beneficiary thereof, by any lessor  or prospective lessor thereof, by any lessee or prospective lessee thereof, or by any prospective  assignee of any mortgage or deed of trust thereof.  The failure of Tenant to execute, acknowledge  and deliver to Landlord a statement in accordance with the provisions of this Paragraph 27(e)  within ten (10) days after request therefor shall shall be an event of default under this Lease.   Within ten (10) days of a request by Tenant, Landlord shall provide a similar certificate that may  be relied upon by a prospective lender, investor, or purchaser of Tenant.      (f) If any provision of this Lease should be held to be invalid or unenforceable, such  invalid and unenforceable provisions shall be stricken and the validity and enforceability of the  remaining provisions of this Lease shall not be affected thereby.     (g) The terms, provisions and covenants contained in this Lease shall apply to, inure to the  benefit of, and be binding upon the parties hereto and their respective heirs, personal representatives,  successors and permitted assigns.     (h) In the event of any default or breach by Landlord with respect to any of the terms,  covenants and conditions of this Lease to be observed and performed by Landlord, Tenant shall look  solely to the estate and property of Landlord in the Land and Building for the collection of any sum of  money on a judgment, or for the payment or expenditure of any money under any decree of specific  performance, injunctive relief or other equitable relief (or other judicial process) requiring performance  by Landlord of any obligation under this Lease.  No other property or assets of the Landlord,  Landlord’s agents, partners, principals (disclosed or undisclosed) or affiliates shall be subject to levy,  execution or other enforcement procedure for the satisfaction of Tenant’s remedies.    

 

  25     (i) The term “Landlord” shall mean only the owner at the time in question of the present  Landlord’s interest in the Building, and in the event of a sale or transfer of the Building (by operation of  law or otherwise) the transferor shall be and hereby is automatically and entirely released and  discharged, from and after the date of such sale or transfer, of all liability in respect of the performance  of any of the terms of this Lease arising from and after the date of such transfer or sale on the part of  Landlord thereafter to be performed, provided that such buyer or transferee shall have expressly  assumed the obligations of Landlord under the Lease in writing.     (j) Landlord, upon a request by Tenant, shall execute a memorandum of this Lease  containing the names of the parties, a description of the Premises, the Term (including any renewal  options), and such additional information as necessary to provide adequate record notice of the  existence of the Lease.  Tenant shall pay all recording fees in connection with recording any such  memorandum.       (k) Except as otherwise expressly set forth herein all notices, requests, demands,  approvals or consents required hereunder or by law shall be in writing and shall be given by  personal delivery, by overnight courier service, or by mailing the same, certified or registered  mail, return receipt requested, postage prepaid, addressed, if to Landlord, to Landlord’s Notice  Address, and if to Tenant, to Tenant’s Notice Address.  Such notices, requests, demands,  approvals or consents shall be deemed given upon such personal delivery; if sent by overnight  courier service, one (1) business day after deposit with such service; and if mailed, two (2)  business days after mailing.  The persons designated for the receipt of such, and the addresses to  which such may be given or made by either party, may be changed or supplemented by notice  given by such party to the other and notwithstanding the preceding sentence, such notice (and  therefore such new notice address) shall be effective ten (10) days after mailing or delivery.     (l) Tenant warrants that it has not employed nor had any dealings or discussions with any  broker or agent in connection with the negotiation or execution of, relative to the Premises or Building,  an agreement to lease, a letter of intent to lease, or this Lease other than American Asset Corporation  and Tri Properties, LLC.  American Asset Corporation shall pay a commission to Tri Properties, LLC,  in accordance with a separate agreement.  Tenant agrees to indemnify Landlord and hold it harmless  from and against any and all liability for commissions or other compensation or charges and all costs  and expenses incurred in defense of the claim if this warranty is breached.  In the event of a suit on any  such claim, Landlord shall notify and implead Tenant, or Tenant may intervene.  This warranty shall  survive termination or expiration of this Lease.     (m) If Tenant is a Partnership Tenant or if Tenant’s interest in this Lease shall be  assigned (in accordance with the provisions of Paragraph 7 hereof) to a Partnership Tenant, the  following provisions shall apply to such Partnership Tenant: (i) the liability of each of the parties  comprising Partnership Tenant shall be joint and several, (ii) each of the parties comprising  Partnership Tenant hereby consents in advance to and agrees to be bound by, any modifications,  termination, discharge, or surrender of this Lease which may hereafter be made and by any  notices, demands, requests, or other communications which may hereafter be given, by  Partnership Tenant or by any of the parties comprising Partnership Tenant, (iii) any bills,  statements, notices, demands, requests, or other communications given or rendered to  Partnership Tenant or to any of the parties comprising Partnership Tenant shall be deemed given  

 

  26    or rendered to Partnership Tenant or to any of the parties comprising Partnership Tenant and  shall be binding upon Partnership Tenant and all such parties, (iv) if Partnership Tenant shall  admit new partners, all such new partners shall, by their admission to Partnership Tenant, be  deemed to have assumed performance of all of the terms, covenants, and conditions of this Lease  on Tenant’s part to be observed and performed, and (v) Partnership Tenant shall give prompt  notice to Landlord of the admission of any such new partners.     Similarly, if Tenant is comprised of two (2) or more individuals or if Tenant’s interest in  this Lease shall be assigned (in accordance with the provisions of Paragraph 7 hereof) to two (2) or  more individuals, the following provisions shall apply:  (i) the liability of each of the individuals  comprising Tenant shall be joint and several, (ii) each of the individuals comprising Tenant hereby  consents in advance to and agrees to be bound by any modifications, termination, discharge, or  surrender of this Lease which may hereafter be made, and by any notices, demands, requests, or  other communications which may hereafter be given, by Tenant or by any of the individuals  comprising Tenant, and (iii) any bills, statements, notices, demands, requests, or other  communications given or rendered to Tenant or to any of the individuals comprising Tenant shall  be deemed given or rendered to Tenant or to any of the individuals comprising Tenant, and shall be  binding upon Tenant and all such individuals.     (n) Landlord may, at its option, at any time during the Term (but not more than one  time), elect upon not less than ninety (90) days notice to Tenant to substitute for the Premises other  office space in the Building designated by Landlord, provided that the substituted premises  contains at least the same rentable area as the Premises and has a configuration and linear window  area substantially similar to that of the Premises.  Tenant agrees to surrender the Premises and  occupy the substituted premises promptly (and, in any event, not later than fifteen (15) days) after  Landlord has substantially completed the work to be performed by Landlord in the substituted  premises pursuant to this Lease.  Landlord shall use reasonable efforts to minimize disruption or  inconvenience to Tenant during any relocation.  Tenant shall pay the same Rent with respect to the  substituted premises that was payable with respect to the Premises, without regard to the rentable  area of the substituted premises.  In any such event, this Lease (i) shall no longer apply to the  Premises, except with respect to obligations which accrued on or prior to such surrender date; and  (ii) shall apply to the substituted premises as if the substituted premises had been the space  originally demised under this Lease.  Landlord shall have no liability to Tenant in the event of such  substitution except that Landlord shall reimburse Tenant for (A) any reasonable moving expenses  (if Landlord’s election is made subsequent to the Commencement Date), (B) the cost of reinstalling  Tenant’s access system in the substituted premises, (C) any reasonable costs incurred for architects  or engineers in connection with the Premises to the extent the work performed by such architects  and engineers cannot be applied to the substituted premises, and (D) any other reasonable,  documented expenses Tenant incurs in connection with the relocation (e.g., reprinting of  stationery, business cards, etc.). In the event of such substitution, Landlord and Tenant, at the  request of either party, will execute an amendment to this Lease confirming such substitution and  amending such other provisions of this Lease as are necessary to effect such substitution.     (o) This Lease shall be deemed to be made under and shall be construed in  accordance with and governed by the internal laws of the State of North Carolina, without regard  to principles of conflicts of laws.  

 

  27       (p) Tenant expressly acknowledges that neither Landlord nor Landlord’s agents has made  or is making any warranties, representations, promises, or statements, except to the extent that the same  are expressly set forth in this Lease, that Tenant, in executing and delivering this Lease, is not relying  upon any such warranties, representations, promises, or statements, and that no rights, easements, or  licenses are or shall be acquired by Tenant by implication or otherwise unless expressly set forth in this  Lease.     (q) Tenant hereby waives any claim against Landlord which it may have based upon any  assertion that Landlord has unreasonably withheld or unreasonably delayed any consent provided for in  this Lease, and Tenant agrees that its sole remedy shall be an action or proceeding to enforce any such  provision or for specific performance, injunction, or declaratory judgment.  In the event of such a  determination, the requested consent shall be deemed to have been granted.  The sole remedy for  Landlord’s unreasonably withholding or delaying of consent shall be as provided in this Paragraph  27(q).     (r) During the Term, should a real estate investment trust become Landlord hereunder, all  provisions of this Lease shall remain in full force and effect except as modified by this Paragraph 27(r).   If Landlord in good faith determines that its status as a real estate investment trust under the provisions  of the Internal Revenue Code of 1986, as heretofore or hereafter amended, will be jeopardized because  of any provision of this Lease, Landlord may request reasonable amendments to this Lease and Tenant  will not unreasonably withhold, delay or defer its consent thereto, provided that such amendments do  not (a) increase the monetary obligations of Tenant pursuant to this Lease or (b) in any other manner  adversely affect Tenant’s interest in the Premises.     (s) Whenever a period of time is herein prescribed for the taking of any action by either  party, the party required to take such action shall not be liable or responsible for, and there shall be  excluded from the computation of such period of time, any delays due to any Unavoidable Delay,  except with respect to payment of monetary obligations.       (t) If, following the execution of this Lease, Tenant requests that Landlord execute  any document or instrument that is other than (i) a document or instrument the form of which is  attached hereto as an exhibit, or (ii) a document that solely sets forth facts or circumstances that  are then existing and reasonably ascertainable by the requested party with respect to the lease,  then Tenant shall be responsible for paying the out-of-pocket costs and expenses, including  without limitation, the attorney’s fees (not to exceed $750.00), incurred by Landlord in  connection with the review (and, if applicable, the negotiations) related to such document(s) or  instrument(s), regardless of whether such document(s) or instrument(s) is (are) ever executed by  Landlord.  All such costs and expenses incurred by Landlord in connection with its review and  negotiation of any such document(s) or instrument(s) shall be deemed to be additional rental due  hereunder and shall be payable by Tenant promptly upon demand.    (u) Landlord and Tenant have agreed to additional terms of this Lease, which are more  fully set forth on Exhibit G attached hereto and made a part hereof.  In the event of a conflict between  the provisions of this Lease and the provisions of Exhibit G, the provisions of Exhibit G shall control.    

 

  28    (v) Landlord shall provide lobby and suite entry door signage at Landlord’s sole cost and  expense.    (w) In the event of a dispute between the parties predicated upon this Lease, the prevailing  party shall be entitled to recover its reasonable attorneys’ fees and costs.  For purposes of this Lease,  “reasonable attorneys’ fees” shall be deemed to be those fees actually charged based upon time actually  spent at rates customary and reasonable in the Raleigh/Durham, NC market area for those types of  services, without regard to any statutory presumption.    28. Electronic Signature.  This Agreement may be executed and delivered by  facsimile transmission, an electronic transmission in Portable Document Format (PDF), or by  other electronic transmission and each signature delivered in any such manner shall be deemed to  be an original signature.  The signature pages taken from separate individually executed  counterparts of this Agreement may be combined to form one or more fully executed  counterparts.  All executed counterparts of this Agreement shall be deemed to be originals, but  all such counterparts taken together or collectively, as the case may be, shall constitute one and  the same agreement.     29. Exhibits.  Except as noted on the Table of Contents of this Lease, the following exhibits  are attached hereto and are made a part of this Lease as if fully set out herein:  (a) description of the  Premises as set forth in Exhibit A, “Description of Premises”; (b) rules and regulations governing  Tenant’s occupancy of the Premises as set forth in Exhibit B, “Rules and Regulations”; (c) intentionally  deleted; (d) enumerated operating expenses as set forth in Exhibit D, “Operating Expenses”;  (e) a  schedule of Basic Rent as set forth in Exhibit E, “Basic Rent”; (f) a guaranty of Tenant’s obligations  under the Lease as set forth in Exhibit F, “Guaranty of Lease”;  (g) other terms as set forth in Exhibit G,  “Other Terms”; and (h) a description of the Land as set forth in Exhibit H,  “Description of the Land”.         [SIGNATURES BEGIN ON FOLLOWING PAGE]  

 

  29     IN WITNESS WHEREOF, the parties hereto have executed this Lease under seal on the day  and year first above written.    LANDLORD:    BRIER CREEK OFFICE #4, LLC,   a North Carolina limited liability company                                                                   By: _____________________________                                                               Name: Paul L. Herndon                                                               Title: Vice President        TENANT:    VERONA PHARMA INC.,  a Delaware corporation       By:    Name:    Title: _____         By:    Name:    Title: _____   

 

         A-1  EXHIBIT A    DESCRIPTION OF PREMISES            Suite 130 – 6,543 rentable square feet      Preparation Work    

 

         B-1  EXHIBIT B    RULES AND REGULATIONS     1. The Public Areas shall not be obstructed or encumbered by any tenant or used for any  purpose other than ingress and egress to and from the Premises, and no tenant shall permit any of its  employees, agents, licensees or invitees to congregate or loiter in any of the Public Areas.  Tenant shall  not invite to, or permit to visit, the Premises persons in such numbers or under such conditions as may  interfere with the use and enjoyment by others of the Public Areas. Fire exits and stairways are for  emergency use only, and they shall not be used for any other purposes by any tenant, or the employees,  agents, licensees or invitees of any tenant.  Landlord reserves the right to control and operate, and to  restrict and regulate the use of, the Public Areas and the public facilities, as well as other facilities  furnished for the common use of the tenants, in such manner as it deems best for the benefit of the  tenants generally, including the right to allocate certain elevators for delivery service, and the right to  designate which Building entrances shall be used by persons making deliveries in the Building.  No  doormat of any kind whatsoever shall be placed or left in any public hall or outside any entry door of  the Premises.     2. No awnings or other projections shall be attached to the outside walls of the Building.   No curtains, blinds, shades or screens shall be attached to or hung in, or used in connection with, any  window or door of the Premises, without the consent of Landlord.  Such curtains, blinds, shades or  screens must be of a quality, type, design and color, and attached in the manner, approved by Landlord.   In order that the Building can and will maintain a uniform appearance to those persons outside of the  Building, each tenant occupying the perimeter areas of the Building shall (a) use only building standard  lighting in areas where lighting is visible from the outside of the Building and (b) use only building  standard blinds in window areas which are visible from the outside of the Building.     3. No sign, insignia, advertisement, lettering, notice or other object shall be exhibited,  inscribed, painted or affixed by Tenant on any part of the outside or inside of the Premises or the Building  (including, without limitation, any patios or balconies that are part of, or that are connected to, the  Building) or on doors, corridor walls, the Building directory or in the elevator cabs without the prior  approval of Landlord as to size, color, style, content and location, and Tenant shall obtain all necessary  approvals and permits from governmental or quasi-governmental authorities in connection with such  signs.  Tenant shall submit sign drawings to Landlord for approval prior to fabrication and installation.   The following submission requirements, in duplicate, constitute the minimum data required: (i) layout,  size, location and color of test; (ii) layout of additional symbols or logo; (iii) installation details; and (iv)  lighting details, if applicable. Such signs shall, at the expense of Tenant, be inscribed, painted or affixed  by signmakers approved by Landlord.  In the event of the violation of the foregoing by any tenant,  Landlord may remove such signs without any liability, and may charge the expense incurred in such  removal to the tenant or tenants violating this rule.  Only the Tenant named in the Lease shall be entitled  to appear on the directory tablet.  Additional names may be added in Landlord’s sole discretion under  such terms and conditions as Landlord may approve.     4. No object (including, without limitation, furniture, signs, insignia, lettering, flags, and  banners) shall be placed, stored  or exhibited outside of the Premises or the Building (including,  without limitation, any patios or balconies that are part of, or that are connected to, the Building) by  

 

         B-2  Tenant, without the prior written consent of Landlord, which may be granted, withheld or conditioned  in Landlord’s sole and absolute discretion.       5. Neither the sashes, sash doors, skylights or windows that reflect or admit light and air  into the halls, passageways or other public places in the Building nor the heating, ventilating and air  conditioning vents and doors shall be covered or obstructed by any tenant, nor shall any bottles, parcels  or other articles be placed on the window sills on the peripheral heating enclosures.  Whenever the  heating, ventilating or air conditioning systems are in operation, Tenant agrees to draw the shades,  blinds or other window coverings, as reasonably required because of the position of the sun.  Tenant  shall have no right to remove or change shades, blinds, or other window-coverings within the Premises  without Landlord’s consent.     6. No showcases or other articles shall be placed by Tenant in front of or affixed to any  part of the exterior of the Building, nor placed in the Public Areas.     7. No acids, vapors, or other harmful materials shall be discharged, or permitted to be  discharged, into the waste lines, vents, or flues of the Building.  The water and wash closets and other  plumbing fixtures shall not be used for any purposes other than those for which they were designed and  constructed, and no sweepings, rubbish, rags, acids, or other foreign substances shall be thrown or  deposited therein. Nothing shall be swept or thrown into the Public Areas or other areas of the  Building, or into or upon any heating or ventilating vents or registers or plumbing apparatus in the  Building, or upon adjoining buildings or land or the street. The cost of repairing any damage resulting  from any misuse of such fixtures, vents, registers, and apparatus and the cost of repairing any damage  to the Building, or to any facilities of the Building, or to any adjoining building or property, caused by  Tenant, or the employees, agents, licensees or invitees of Tenant, shall be paid by Tenant.  Any  cuspidors or similar containers or receptacles shall be emptied, cared for and cleaned by and at the  expense of such tenant.     8. Tenant shall not mark, paint, drill into, or in any way deface, any part of the Premises  or the Building.  No boring, cutting, or stringing of wires shall be permitted, except with the prior  written consent of, and as directed by, Landlord.  No telephone, telegraph, or other wires or instruments  shall be introduced into the Building by Tenant except in a manner approved by Landlord.  Tenant shall  not lay linoleum, or other similar floor covering, so that the same shall come in direct contact with the  floor of the Premises, and, if linoleum or other similar floor covering is desired to be used, an  interlining of builder’s deadening felt shall be first affixed to the floor, by a paste or other material,  soluble in water, the use of cement or other similar adhesive material being expressly prohibited.     9. No bicycles, vehicles, animals (except service animals), fish or birds of any kind shall  be brought into, or kept in or about, the Premises. In the event a service animal is brought into the  Development, Tenant shall be liable for any injury caused by such service animal.     10. No noise, including, but not limited to, music, the playing of musical instruments,  recordings, radio or television, which, in the judgment of Landlord, might disturb other tenants in the  Building, shall be made or permitted by Tenant.  Nothing shall be done or permitted by any tenant  which would impair or interfere with the use or enjoyment by any other tenant of any other space in the  Building.  

 

         B-3     11. Nothing shall be done or permitted in the Premises, and nothing shall be brought into,  or kept in or about the Premises, which would impair or interfere with any of the Building equipment or  the services of the Building or the proper and economic heating, cleaning or other services of the  Building or the Premises, nor shall there be installed by Tenant any ventilating, air-conditioning,  electrical, or other equipment of any kind which, in the judgment of Landlord, might cause any such  impairment or interference.  Neither Tenant, nor the employees, agents, licensees, or invitees of Tenant,  shall at any time bring or keep upon the Premises any inflammable, combustible, or explosive fluid,  chemical, or substance not generally used in similar office buildings.     12. No additional locks or bolts of any kind shall be placed upon any of the doors or  windows by any tenant, nor shall any changes be made in locks or the mechanism thereof.  Duplicate  keys for the Premises and toilet rooms shall be procured only from Landlord, and Landlord may make  a reasonable charge therefor.  Each tenant shall, upon the expiration or sooner termination of the Lease  of which these Rules and Regulations are a part, turn over to Landlord all keys to stores, offices and  toilet rooms, either furnished to, or otherwise procured by, Tenant, and in the event of the loss of any  keys furnished by Landlord, Tenant shall pay to Landlord the cost of replacement locks.   Notwithstanding the foregoing, Tenant may, with Landlord’s prior written consent, install a security  system on the Premises which uses master codes or cards instead of keys provided that Tenant shall  provide Landlord with the master code or card for such system.     13. All removals, or the carrying in or out of, any safes, freight, furniture, packages, boxes,  crates, or any other object or matter of any description shall take place only during such hours and in  such elevators as Landlord may from time to time determine, which may involve overtime work for  Landlord’s employees.  Tenant shall reimburse Landlord for extra costs incurred by Landlord including  but not limited to the cost of such overtime work.  Landlord reserves the right to inspect all objects and  matter to be brought into the Building and to exclude from the Building all objects and matter which  violate any of these Rules and Regulations or the Lease of which these Rules and Regulations are a  part.  Landlord may require any person leaving the Building with any package or other object or matter  to submit a pass, listing such package or object or matter, from the tenant from whose premises the  package or object or matter is being removed, but the establishment and enforcement of such  requirement shall not impose any responsibility on Landlord for the protection of any tenant against the  removal of property from the premises of such tenant.  Landlord shall in no way be liable to Tenant for  damages or loss arising from the admission, exclusion or ejection of any person to or from the Premises  or the Building under the provisions of this Rule 13 or of Rule 16 hereof.     14. Tenant shall not use or occupy, or permit any portion of the Premises to be used or  occupied, as an office for a public stenographer or public typist, or for the possession, storage,  manufacture, or sale of narcotics or other illegal substances or as a barber, beauty, or manicure shop,  telephone or telegraph agency, telephone or secretarial service, messenger service, travel or tourist  agency, retail, wholesale or discount shop for sale of merchandise, retail service shop, labor union,  classroom, or for a public finance (personal loan) business, or as a hiring or employment agency, or as  a stock brokerage board room.  Tenant shall not engage or pay any employee on the Premises, except  those actually working for Tenant on the Premises, nor advertise for laborers giving an address at the  Building.  Tenant shall not use the Premises or any part thereof, or permit the Premises or any part  thereof to be used as a restaurant, shop, booth or other stand, or for the conduct of any business or  

 

         B-4  occupation which predominantly involves direct patronage of the general public, or for manufacturing,  or for the sale at retail or auction of merchandise, goods, or property of any kind.     15. Landlord shall have the right to prohibit any advertising or identifying sign by Tenant  which, in the judgment of Landlord, tends to impair the appearance or reputation of the Building or the  desirability of the Building, and upon written notice from Landlord, Tenant shall refrain from and  discontinue such advertising or identifying sign.     16. Landlord reserves the right to exclude from the Building at all times other than  Business Hours all persons without authorization from Tenant for admission to the Building.  Each  Tenant shall be responsible for all persons for whom it authorizes admission to the Building and shall  be liable to the Landlord for all acts of such person or persons.  Landlord shall in no case be liable for  damages for any error with regard to the admission to or exclusion from the Building of any person.  Landlord reserves the right to exclude or expel from the Building any person who, in the judgment of  Landlord, is intoxicated or under the influence of liquor or drugs, or who shall in any manner do any  act in violation of any of the rules and regulations of the Building. In the event of invasion, riot, public  excitement or other commotion, Landlord may prevent all access to the Building during the  continuance of the same by closing the doors or otherwise, for the safety of tenants and the protection  of property in the Building.     17. Tenant, before closing and leaving the Premises at any time, shall see that all lights,  typewriters, copying machines and other electrical equipment are turned off.  All entrance doors in the  Premises shall be kept locked by Tenant when the Premises are not in use.  Entrance doors shall not be  left open at any time.     18. Tenant shall, at its expense, provide light, power and water for the employees of  Landlord, and the agents, contractors and employees of Landlord, while performing janitorial service or  other cleaning in the Premises and while making repairs or alterations in the Premises.     19. The Premises shall not be used for lodging or sleeping or for any immoral or illegal  purpose.     20. Unless otherwise expressly provided in the Lease, Tenant shall not use, occupy or  permit any portion of the Premises to be used or occupied for the manufacture or sale of liquor.     21. The requirements of Tenant will be attended to only upon application at the office of  the Building.  Employees of Landlord shall not perform any work or do anything outside of their  regular duties, unless under special instructions from Landlord.     22. Canvassing, soliciting, and peddling in the Building are prohibited, and Tenant shall  cooperate to prevent the same.     23. The employees, agents, licensees and invitees of Tenant shall not loiter around the  Public Areas or the front, roof, or any part of the Building used in common by other occupants of the  Building.    

 

         B-5   24. There shall not be used in any space, or in the Public Areas, either by Tenant or by  others, in the moving or delivery or receipt of safes, freight, furniture, packages, boxes, crates, paper,  office material or any other matter or thing, any hand trucks except those equipped with rubber tires,  side guards and such other safeguards as Landlord shall require.     25. Tenant shall not cause or permit any odor of cooking or other processes, or any unusual  or objectionable odors, to emanate from the Premises which would annoy other tenants or create a  public or private nuisance.  No cooking shall be done in the Premises except as is expressly permitted  in the Lease of which these Rules and Regulations are a part.     26. All paneling, doors, trim or other wood products not considered furniture shall be of  fire-retardant materials. Before installation of any such materials, certification of the materials’  fire-retardant characteristics shall be submitted to and approved by Landlord, and all such materials  shall be installed in a manner approved by Landlord.     27. Whenever Tenant shall submit to Landlord any plan, agreement, or other document for  the consent or approval of Landlord, Tenant shall pay to Landlord, on demand, a processing fee in the  amount of the reasonable fees for the review thereof, including the services of any outside architect,  engineer or attorney employed by Landlord to review such plan, agreement, or document.     28. All employees of the Tenant will park in their assigned or designated areas, as may be  determined by Landlord from time to time.  Tenant will insure that its employees are prohibited from  utilizing the visitor parking areas.       29. Landlord will direct electricians as to where and how telephone and telegraph wires are  to be introduced.  No boring or cutting for wires or stringing of wires will be allowed without written  consent of Landlord.  The location of telephones, call boxes and other office equipment affixed to the  Premises shall be subject to the approval of Landlord.  All such work shall be effected pursuant to  permits issued by all applicable governmental authorities having jurisdiction.     30. All Public Areas shall be under the sole and absolute control of Landlord, with  Landlord having the exclusive right to regulate and control these areas.  Tenant agrees to conform to  the rules and regulations that may be established by Landlord for these areas from time to time.     31. Smoking is prohibited in all common areas including, without limitation, all restrooms,  hallways, stairwells, elevators, lobbies, etc.       32. All Tenant move-ins and move-outs will be limited to Monday through Friday: 5:30  p.m. until 6:00 a.m., or anytime on Saturday or Sunday.  Tenant must notify Landlord of moving  arrangements in advance.     33. Landlord reserves the right to rescind, alter, waive, or add, as to one or more or all  tenants, any rule or regulation at any time prescribed for the Building when, in the judgment of  Landlord, Landlord deems it necessary or desirable for the reputation, safety, character, security, care,  appearance, or interests of the Building, or the preservation of good order therein, or the operation or  maintenance of the Building, or the equipment thereof, or the comfort of tenants or others in the  

 

         B-6  Building.  No rescission, alteration, waiver, or addition of any rule or regulation in respect of one tenant  shall operate as a rescission, alteration, or waiver in respect of any other tenant.  

 

         C-1  EXHIBIT C    INTENTIONALLY DELETED  

 

         D-1  EXHIBIT D    OPERATING EXPENSES     (i) all supplies and materials used, and labor charges incurred, in the operation,  maintenance, decoration, repairing, and cleaning of the Building and the Public Areas;     (ii) cost of all equipment purchased or rented which is utilized in the performance of  Landlord’s obligations hereunder, other than in connection with the upfitting of the Premises, and the  cost of maintenance and operation of any such equipment;     (iii) cost of all management, maintenance, and service agreements for the Building and the  Public Areas and the equipment therein and thereon, including, without limitation, alarm service,  security service, window cleaning, and elevator maintenance, janitorial service, and landscaping and  signage maintenance;     (iv) accounting costs, including the cost of audits by certified public accountants, and legal  and engineering fees and expenses incurred in connection with the operation and management of the  Land and the Building, other than incurred in connection with the upfitting of any tenant spaces;     (v) wages, salaries, and related expenses of all on-site agents or employees engaged in the  operation, maintenance, security and management of the Building and the Public Areas;     (vi) cost of all insurance coverage for the Building and the Public Areas, including, but not  limited to, the cost of casualty, rental abatement, and liability insurance applicable to the Building and  the Public Areas and Landlord’s personal property used in connection therewith;     (vii) cost of repairs, replacements and general maintenance to the Building and the Public  Areas, structural or non-structural, including without limitation the roof and mechanical, electrical and  heating, ventilating and air-conditioning equipment and/or systems of the Building (excluding repairs  and general maintenance paid by proceeds of insurance or by tenants or other third parties, and  alterations attributable solely to tenants), such cost to be included in Operating Expenses for the  calendar year in which such cost is incurred by Landlord;     (viii) any and all maintenance or redecoration (including repainting) of the Building and the  Public Areas, and exterior and interior landscaping;     (ix) cost of removal of trash, rubbish, garbage, and other refuse from the Building and the  Public Areas, as well as removal of ice and snow from the sidewalks on or adjacent to the Land;     (x) all supplies, tools, equipment and materials used in the operation and maintenance of  the Building and the Public Areas;     (xi) all charges for gas, water, sewerage service, and other utilities furnished to the Building  and the Public Areas, to the extent not separately metered for a particular tenant premises;    

 

         D-2   (xi) all electricity furnished to the Building and the Public Areas, including, without  limitation, electricity furnished to individual tenants of the Building (to the extent same is not metered  to a particular tenant premises), and to the machinery and equipment, including, without limitation, any  heating, ventilation, and air-conditioning equipment, used in the operation and maintenance of the  Building and the Public Areas;     (xiii) janitorial service, including service to areas of the Building leased to tenants;     (xiv) every other expense which would be considered an expense of maintaining, operating,  insuring, managing, or repairing the Building and the Public Areas, capital expenditures excluded  except as specifically permitted pursuant to paragraph 1(s) of the Lease.      (xii) management fees (not to exceed 4% of gross rents from the Building) payable to any  managing agent of the Building and the Public Areas;     (xiii) the Building’s proportionate share of the costs of leasing, operating and maintaining the  leasing and management office and the fitness center within the Development;     (xiv) the Building’s proportionate share of any and all assessments and other charges payable  by Landlord relative to the Development under the terms of any applicable restrictive covenants,  agreements or similar documents, specifically including the Building’s share of the costs of the fitness  center run by the association for the benefit of the Development; and     (xvviii) the Building’s proportionate share of the costs of maintenance, repair, replacement and  operation of any common area improvements (including, without limitation, parking areas, parking  decks, roadways, driveways, landscaped areas, utility facilities, signage and other similar or related  improvements) serving the Building as well as other property within the Development, capital  expenditures excluded except as specifically permitted pursuant to paragraph 1(s) of the Lease.      

 

         E-1  EXHIBIT E    BASIC RENT       Lease Year Monthly Rent    04/01/2020 – 04/30/2020 $0.00    05/01/2020 – 04/30/2021 $15,539.63    05/01/2021 – 04/30/2022 $16,008.54    05/01/2022 – 04/30/2023 $16,488.36    05/01/2023 – 04/30/2024 $16,984.54      

 

         F-1  EXHIBIT F    GUARANTY OF LEASE       IN CONSIDERATION OF, and as an inducement for Landlord to grant, execute and deliver  that certain Lease Agreement (the “Lease”) dated _______________, 2020, between Brier Creek  Office #4, LLC, a North Carolina limited liability company, as the Landlord (the “Landlord”), and  Verona Pharma Inc., a Delaware corporation, as Tenant (the “Tenant”), covering certain Premises  in the Building (as such terms are defined in the Lease), and in further consideration of the sum of  One Dollar ($1.00), and other good and valuable consideration paid by the Landlord to the  undersigned, the undersigned (the “Guarantor”) hereby guarantees to the Landlord, its successors  and assigns, the full and prompt payment of rent, including, but not limited to, the Basic Rent,  Additional Rent and any and all other sums and charges payable by the Tenant, its successors and  assigns under said Lease; and the full performance and observance of all the covenants, terms,  conditions and agreements therein provided to be performed and observed by the Tenant, its  successors and assigns.  The Guarantor hereby covenants and agrees to and with the Landlord, its  successors and assigns, that the Guarantor will forthwith pay to the Landlord all damages that may  arise in consequence of any default by the Tenant, its successors and assigns under the Lease,  including, without limitation, all court costs and reasonable attorneys’ fees actually incurred by the  Landlord and caused by any such default or by the enforcement of this Guaranty.       THIS GUARANTY IS AN ABSOLUTE AND UNCONDITIONAL GUARANTY OF  PAYMENT AND OF PERFORMANCE.  It shall be enforceable against the Guarantor, its  successors and assigns, without the necessity for any suit or proceedings by Landlord of any kind or  nature whatsoever against the Tenant, its successors and assigns, and without the necessity of any  notice of non-payment, non-performance or non-observance, or of any notice of acceptance of this  Guaranty, or of any other notice or demand to which the Guarantor might otherwise be entitled, all  of which the Guarantor hereby expressly waives. Without limiting the generality of the foregoing,  the Guarantor expressly waives the benefits of North Carolina General Statutes Sections 26-7  through 26-9 inclusive, as such provisions may be amended from time to time.  The Guarantor  hereby expressly agrees that the validity of this Guaranty and the obligations of the Guarantor  hereunder shall not in any way be terminated or diminished, affected or impaired by reason of the  assertion or the failure to assert by the Landlord against the Tenant, or the Tenant’s successor and  assigns, of any of the rights or remedies reserved to the Landlord pursuant to the provisions of the  Lease, by reason of the termination of the Lease so long as the Tenant continues to be liable, or by  reason of the invalidity of the Lease or its unenforceability against the Tenant for any reason.     THE GUARANTY SHALL BE a continuing Guaranty, and the liability of the Guarantor  hereunder shall in no way be affected, modified or diminished by reason of any assignment,  sublease, renewal, amendment,  modification or extension of the Lease, by reason of any  modification or waiver of or change in any of the terms, covenants, conditions or provisions of the  Lease, by reason of any extension of time that may be granted by the Landlord to the Tenant, its  successors or assigns, or by reason of any dealings, transactions, matters or things occurring  between the Landlord and Tenant, its successors or assigns, whether or not notice thereof is given to  the Guarantor.  

 

         F-2     In the event the Tenant shall become insolvent, shall be adjudicated bankrupt, or shall file a  petition for reorganization, arrangement or similar relief under any present or future provision of the  United States Bankruptcy Code, or if such a petition filed by creditors of the Tenant shall be  approved by a court, or if the Tenant shall seek a judicial readjustment of the rights of its creditors  under any present or future federal or state law, or if a receiver of all or part of its property and  assets is appointed by any state or federal court, and in any such proceeding the Lease is terminated  or rejected or the obligations of the Tenant thereunder shall be modified, the Guarantor shall  immediately pay to the Landlord:  (a) an amount equal to all fixed, contingent and additional rent  accrued to the date of such termination, rejection or modification, plus (b) an amount equal to the  then cash value of the Basic Rent and Additional Rent which would have been payable under the  Lease for the unexpired portion of the term less the then cash rental value of the Premises for such  unexpired portion of the term, together with interest on the amounts designated in clauses (a) and  (b) above at the rate of ten percent (10%) per annum from the date of such termination, rejection or  modification to the date of payment.  The Guarantor’s obligation to make payment shall not be  modified, changed, released or limited in any manner whatsoever by any impairment, modification,  change, release or limitation of the liability of the Tenant or its estate in bankruptcy resulting from  the operation of any present or future provision of the United States Bankruptcy Code or other  statute, or from the decision of any court.     ALL OF THE LANDLORD’S rights and remedies under this Guaranty are intended to be  distinct, separate and cumulative, and no such right or remedy therein or herein mentioned is  intended to be in exclusion of or a waiver of any of the others.  This Guaranty shall be binding on  Guarantor’s heirs, successors and assigns and shall inure to the benefit of Landlord, its successors  and assigns.    [REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]  

 

         F-3   IN WITNESS WHEREOF, the Guarantor has signed this Guaranty Agreement, under seal,  as of ________________, 20___.      GUARANTOR:    VERONA PHARMA PLC      By:     [SEAL]  Name:       Title: ____________________    Address:                      STATE OF         COUNTY OF         I, __________________________, a Notary Public for said County and State, do hereby  certify that _________________________________ personally came before me this day and  acknowledged that he or she executed the foregoing document for the purpose stated therein and  in the capacity indicated: [Name]___________________, [Title]_____________________ of  Verona Pharma PLC.    Date:  _________________, 2020   _____________________________, Notary Public      My commission expires:  ______________________      _______________________________  [NOTARIAL SEAL]                

 

         F-4  By:     [SEAL]  Name:       Title: ____________________    Address:                      STATE OF         COUNTY OF         I, __________________________, a Notary Public for said County and State, do hereby  certify that _________________________________ personally came before me this day and  acknowledged that he or she executed the foregoing document for the purpose stated therein and  in the capacity indicated: [Name]___________________, [Title]_____________________ of  Verona Pharma PLC.    Date:  _________________, 2020   _____________________________, Notary Public      My commission expires:  ______________________      _______________________________  [NOTARIAL SEAL]  

 

         G-1  EXHIBIT G    OTHER TERMS    1. RENEWAL OPTION. So long as VERONA PHARMA INC, a Delaware corporation, or an  assignee or sublessee pursuant to a Permitted Transfer, actually occupies the Premises and is not in  default under this Lease beyond any applicable cure or notice period, Tenant is hereby granted the option  to renew the term of the Lease as to the entire Premises for one period (“Renewal Term”) of three (3)  years, to commence at the expiration of the initial Term.  Tenant shall exercise its option to renew by  delivering written notice to Landlord no later than nine (9) months prior to the expiration of the initial  Term, time being of the essence. If notification of the exercise of this option is not timely given and  received, all options granted hereunder shall automatically expire. Any such renewal of this Lease shall  be upon the same terms and conditions of this Lease, except there shall be no further renewal option and  the annual Basic Rent during the Renewal Term shall be at the then prevailing market rental rates for  comparable office buildings in Raleigh, North Carolina.  Upon Tenant’s exercise of its renewal right as  provided herein, mutual agreement as to market rent and execution of applicable documentation thereof,  the “Expiration Date” of the Lease shall mean the date upon which the Renewal Term expires.   The “market rate” means the rental rate which Landlord and a third party tenant would agree  upon the renewal option, as of the commencement date of such Renewal Term, taking into consideration  the uses permitted under the Lease, the quality, size, design and location of the Premises, and the rental  for the renewal of leases for comparable space located in the vicinity.    Within thirty (30) days of Tenant’s election to renew pursuant to its option hereunder, Landlord  and Tenant shall execute and deliver an amendment to this Lease confirming the same. If said amendment  is not signed and delivered by Tenant to Landlord within thirty (30) days of Tenant’s election to renew,  Tenant’s election shall be deemed null and void and all options granted hereunder shall expire.   Tenant acknowledges this Renewal Option is personal to the entity named in this Lease and shall  automatically expire and be null and void in the event this Lease is assigned or all or a portion of the  Premises is sublet, except in the event of a Permitted Transfer as defined in Paragraph 7 of the Lease.          

 

                       EXHIBIT H    DESCRIPTION OF THE LAND    Lying and being located in the City of Raleigh, Wake County, North Carolina and being  more particularly described as follows:     Being all of Lot 8 containing 9.52 acres as shown on "Brier Creek Corporate Center –  Parcel J Subdivision Ph.1, Open Space Ph. 2-4 & Tree Conservation Area Ph. 1-4 Plat"  recorded in the Wake County Registry in Book of Maps 2006, Pages 1636-1645.                                                                    

 

                       EXHIBIT I    DESCRIPTION OF TEMPORARY PREMISES

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