Exhibit 10.1
333 CORPORATE PLAZA
1. Basic Lease Provisions & Definitions ("Basic Lease Provisions").
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1.1 Parties. This Lease, dated November 1, 2005, is between 333 Ventures, LLC
("Landlord") and Capital Bank Corporation ("Tenant").
1.2 Premises. As defined in Exhibit A.
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Additionally, Landlord will provide Tenant with 3,314 square feet of vault and
adjoining space in the basement of the Building at a cost of $4.00 per foot to
the Tenant (the "Vault").
1.3 Building. The real property located at 333 Fayetteville Street, Raleigh,
County of Wake, State of North Carolina (the "Building"), including adjacent
parking structures used in connection therewith.
1.4 Use. General office, retail banking, and other financial services, subject
to Paragraph 6.
1.5 Term. The Commencement Date shall be April 01, 2006. The original term under
this Lease shall begin on the Commencement Date and will continue for a period
of one hundred and twenty (120) full months until midnight, March 31, 2016 (the
"Termination Date").
1.6 Base Rent. Tenant base rent shall be based on an initial rental rate of
$18.75 per rentable square foot, resulting in Tenant paying the monthly amounts
in Paragraph 1.8. Rent payment is due and payable in advance on the 1st day of
each month per Paragraph 4.1.
1.7 Base Allowance. The (per square foot) dollar amount that results by dividing
the sum of the annual Operating Expenses (as defined in Paragraph 4.2) for the
Building (144,711 rentable sq. ft.) by the rentable square footage of the leased
building area. The Tenant's Base Year shall be 2006. Throughout the term of this
lease, the Base Year Operating Expenses are included in the Base Rent.
1.8 Base Rent Increase. The Base Rent for the rental space payable under
Paragraph 1.6 shall increase every April 1st at a rate of Three Percent (3%) per
year during the Term of the Lease, resulting in the following rent rates per
rentable square foot per year and Monthly rents:
Period Premises Rate/rsf RSF Monthly rent Total $
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April 1, 2006 thru October 31, 2006: Initial space $18.75 25,907 $40,479.69 283,357.81
Nov. 1, 2006 thru March 31, 2007: 2nd Floor added $18.75 33,449 $52,264.06 261,320.31
April 1, 2007 thru June 30, 2007: -- $19.31 33,449 $53,825.02 161,475.04
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July 1, 2007 thru Dec. 31, 2007: 6th Floor added $19.31 44,404 $71,453.44 428,720.61
Jan. 1, 2008 thru March 31, 2008: 7th Floor added $19.31 55,359 $89,081.85 267,245.57
April 1, 2008 thru March 31, 2009: -- $19.89 55,359 $91,757.54 1,101,090.48
April 1, 2009 thru March 31, 2010: -- $20.49 55,359 $94,525.49 1,134,305.91
April 1, 2010 thru March 31, 2011: -- $21.10 55,359 $97,339.58 1,168,074.90
April 1, 2011 thru March 31, 2012: -- $21.74 55,359 $100,292.06 1,203,504.66
April 1, 2012 thru March 31, 2013: -- $22.39 55,359 $103,290.67 1,239,488.01
April 1, 2013 thru March 31, 2014: -- $23.06 55,359 $106,381.55 1,276,578.54
April 1, 2014 thru March 31, 2015: -- $23.75 55,359 $109,564.69 1,314,776.25
April 1, 2015 thru March 31, 2016: -- $24.46 55,359 $112,840.10 1,354,081.14
April 1, 2006 thru March 31, 2016 Vault area rental $4.585* 3,314 -- 151,946.90
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TOTAL RENTAL PAYMENTS $11,345,966.13
*$4.585 is a 10-year average based on $4.00 initial rate and 3% escalation
In the event Tenant chooses to take occupancy of any portion or all of the 6th
or 7thFloors prior to the Occupancy Date specified above and in Exhibit A, then
the base lease rate of the area occupied shall be $12.75 per rentable square
foot until the Occupancy Date specified above and in Exhibit A is reached, at
which time the lease rate changes to the rate specified above. The Base Rental
Increase in Paragraph 1.8 shall apply to the $12.75 per rentable square footage
rate, based on a beginning Base Rate term rate term effective April 1, 2006.
1.9 Rent Adjustments. Beginning on the Commencement Date, the Tenant shall pay
Landlord the Base Rent as described herein. In the event the first day following
the Commencement Date shall occur on a day other than the first day of a month,
Tenant shall be liable for the pro rata portion of Base Rent for the remainder
of the month in which Base Rent first becomes due. In the event that the
Commencement Date occurs between the 15th day of the month and the end of the
month, then the pro rata rent will be based on the 1st Month rate, the following
month will also be at the 1st Month rate, the next month will be at the 2nd
Month rate, etc.
1.10 Security Deposit. Tenant is not required to provide Landlord a security
deposit.
1.11 Tenant's Share of Operating Expense Increase. Varies as Tenant occupancy
increases under this lease, but will initially be 17.90 % (25,907/144,711) as
defined in Paragraph 4.2. At 33,449 rsf it will be 23.11%, at 44,404 rsf it will
be 30.68 and at 55,359 rsf it will be 38.25.
1.12 Foregone Rent. N/A
1.13 Parking. Landlord shall make available eleven (11) secured, individually
assigned, executive or customer parking spaces in the adjacent Hudson Building
(or beneath the 333 Building, depending upon Tenant preference). The cost, which
varies from $125/space per month beneath the 333 Building to $110/space per
month beneath the Hudson Building, will be passed on to the Tenant without any
markup. Landlord shall use commercially reasonable
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efforts to make available two or three short-term customer parking spaces
beneath the 333 Building. Tenant shall reimburse Landlord for the reasonable
cost of converting existing parking spaces into suitable customer parking, Upon
Tenant request, Landlord shall use commercially reasonable efforts to procure
all other parking spaces needed by Tenant and pass on the actual direct costs,
without mark-up, to the Tenant for payment in the Tenant's monthly lease
invoice. Landlord shall seek spaces in the adjacent Raleigh Convention Center
Deck (adjoining the Progress Energy Corporate Office), which has 2005 rates
varying from $55.00/ space per month on the top, un-covered level to $80/space
per month on the lower covered levels. Tenant understands that the City reserves
the right to move the assigned spaces and to change the rate. The most likely
alternate for space relocation would be the Moore's Square Deck.
1.14 Listing Broker. Landlord acknowledges that Raleigh Commercial Realty, LLC
serves as a listing broker with regard to the building.
1.15 Cooperating Broker. Tenant acknowledges that Thomas Linderman Graham Inc.
is the exclusive cooperating broker (Representative) for the Tenant. A
"cooperating broker" is defined as any broker other than the Listing Broker
entitled to a share of any commission arising under this Lease. A separate
commission Agreement has been negotiated between Thomas Linderman Graham Inc.
and Raleigh Commercial Realty, LLC.
1.16 ERISA Party. Landlord is not an employee benefit plan as that term is
defined in Paragraph 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA"), or a trust formed to hold assets of one or more such plans or an
entity owned by such a plan or trust (each of which is referred to in this Lease
as an "ERISA Party"). Paragraph 48 of this Lease shall apply if Landlord is an
ERISA Party. Paragraph 12.13 of this Lease shall apply if Landlord is an ERISA
Party or if an ERISA Party subsequently becomes Landlord.
1.17 Landlord Alterations, Improvements or Additions. Landlord will be making
alterations improvements or additions to the Premises in conjunction with this
lease. Paragraph 7.5(a) shall apply if Landlord will not be making alterations,
improvements or additions to the Premises in conjunction with this Lease.
Paragraph 7.5(b) shall apply if Landlord will be making alterations improvements
or additions to the Premises in conjunction with this Lease.
1.18 Moving expenses. Tenant is responsible for all moving expenses.
2. Premises, Parking and Common Areas.
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2.1 Premises. The Premises, the Building, the Common Areas, as defined in
Paragraph 2.3, the land upon which the same are located, along with all other
buildings and improvements thereon or thereunder, are herein collectively
referred to as the "Building". Landlord hereby leases the Premises to Tenant and
Tenant leases the Premises from Landlord for the term, at the rental, and upon
all of the conditions set forth herein, including rights to the Common Areas as
herein specified.
2.2 Vehicle Parking. Intentionally Omitted.
2.3 Common Areas -Definition. The term "Common Areas" is defined as all areas
and facilities outside the Premises and within the exterior boundary line of the
Building that are provided and designated by the Landlord from time to time for
the general non-exclusive use of Landlord, Tenant and other lessees of the
Building and their invitees, including, but not limited to, all areas of, common
entrances, lobbies (except certain portions of the main lobby on the
Fayetteville Street level, which is a part of the Tenant Premises), corridors,
stairways and stairwells, public restrooms, elevators (those designated for
office tenant use and does not include the exclusive
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Tenant basement through 3rd floor elevator), access passage ways from the
elevators to the streets, access passageways to the parking, loading and
unloading areas, trash areas, roadways, sidewalks, ramps, driveways, landscaped
areas and decorative walls. As used in this Lease, the term "invitees" means the
employees, visitors, suppliers, shippers and customers of Landlord, Tenant and
other lessees of the Building.
2.4 Common Areas -Rules and Regulations. Tenant agrees to abide by and conform
to the rules and regulations attached hereto as Exhibit B with respect to the
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Building, and to cause its invitees to so abide and conform. Landlord or such
other person(s) as Landlord may appoint shall have the exclusive control and
management of the Common Areas and shall have the right, from time to time, to
modify, amend and enforce said rules and regulations. Provided, however, that
(a) in the event of any conflict between said rules and regulations and the
express terms of this Lease, the Lease terms shall control; (b) such rules and
regulations do not require payment of additional monies; (c) Landlord provides
reasonable advance written notice thereof; and (d) such rules and regulations
are uniformly enforced in a non-discriminatory manner.
2.5 Common Areas -Changes. Provided that such actions do not unreasonably
interfere with the conduct of Tenant's business or Tenant's use and enjoyment of
the Premises, Landlord shall have the right, in Landlord's reasonable
discretion, from time to time:
(a) To make changes to the Building interior and exterior and the Common Areas,
including, without limitation, changes in the location, size, shape, number, and
appearance thereof, including but not limited to the lobbies, windows,
stairways, air shafts, elevators, escalators, restrooms, driveways, entrances,
parking spaces, parking areas, loading and unloading areas, ingress, egress,
direction of traffic, decorative walls, landscaped areas and walkways; provided,
however, Landlord shall at all times provide the parking facilities required by
applicable law;
(b) To close temporarily any of the Common Areas for maintenance purposes so
long as reasonable access to the Premises remains available;
(c) To designate other land and improvements outside the present or future
boundaries of the Building to be a part of the Common Areas, provided that such
other land and improvements have a reasonable and functional relationship to the
Building;
(d) To add additional buildings and improvements to the Common Areas;
(e) To use the Common Areas while engaged in making additional improvements,
repairs or alterations to the Building or any portion thereof;
(f) To do and perform such other acts and make such other changes in, to or with
respect to the Common Areas and the other portions of the Building as Landlord
may, in the exercise of sound business judgment, deem to be appropriate, in a
manner which will not unreasonably interfere with Tenants access.
3. Term.
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3.1 Term. The Term and projected Commencement Date of this Lease shall be as
specified in Paragraph 1.5 of the Basic Lease Provisions.
3.2 Delay in Possession. Notwithstanding said Commencement Date in Paragraph
1.5, if the Premises are not ready for Tenant's business occupancy due to the
unreasonable actions or omissions of Landlord, Landlord's agents, employees,
and/or contractors ("Landlord Delays") and subject to Paragraph 3.2.2, Tenant
shall be entitled to an abatement of Rent for the period of time directly
attributable to Landlord Delays (and the
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Commencement Date and all dates in the rent schedule shall be adjusted
accordingly). Landlord shall also be responsible for all damages incurred (due
to the delay) directly attributable to Landlord Delays.
3.2.1 Possession Tendered; Defined. During the Lease Term, possession of the
Premises shall be deemed tendered to Tenant ("Tender of Possession") when (1)
the improvements to be provided by Landlord or provided by Tenant based on the
Tenant Improvement allowance under this Lease are substantially completed (with
a Certificate of Occupancy issued by the City of Raleigh), (2) the Building
utilities are ready for use in the Premises, and (3) Tenant has reasonable
access to the Premises.
3.2.2 Delays Caused by Tenant. There shall be no abatement of Rent upon
completion items (1), (2) and (3) of Paragraph 3.2.1 to the extent of any delays
proximately attributable to the unreasonable acts or omissions of Tenant,
Tenant's agents, employees and contractors.
3.3 Early Possession. If Tenant occupies the Premises for business purposes
(i.e., the operation of financial services) prior to said Commencement Date,
such occupancy shall be subject to all the provisions of this Lease, such
occupancy shall not change the termination date, and Tenant shall pay Rent for
such occupancy; provided, however, Landlord hereby agrees to allow Tenant early
occupancy of the lobby area without payment of Rent. In such event, Tenant and
Landlord shall execute an amendment to this Lease establishing the date of the
actual taking of possession by Tenant as the Commencement Date. Any work
performed by Tenant or a Tenant contractor for items in preparation of business
occupancy, such as telephone/workstations, or for the Tenant Improvements, if
Tenant Improvements are contracted directly with the Tenant, shall not
constitute taking occupancy for the purposes of this Paragraph.
4. Rent.
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4.1 Base Rent. Subject to adjustment as provided in Paragraph 4.3 and except as
may be otherwise expressly provided in this Lease, Tenant shall pay Landlord the
Base Rent set forth in Paragraph 1.8 of the Basic Lease Provisions, without
offset or deduction. Rent for any period during the term less than one month
shall be prorated based upon the actual number of days of the calendar month
involved. Rent shall be payable in lawful money of the United States to Landlord
at the address stated herein or to such other persons or at such other places as
Landlord may designate in writing.
4.2 Operating Expense Increase. Tenant shall pay to Landlord, during the term of
this Lease, Tenant's Share, as defined in Paragraph 4.2(a), of all estimated
increases (on a per square foot basis) in Operating Expenses, adjusted on an
annual basis, as defined in Paragraph 4.2(b), above the Base Allowance, as
defined in Paragraph 1.7. Payments of Tenant's Share in excess of the Base
Allowance are due and payable monthly on the same date as the Base Rent.
Tenant's Share of the increase may be adjusted by Landlord on an annual basis
should the actual Operating Expenses exceed the then current estimates. Within
ninety (90) days after the expiration of each calendar year, Landlord shall
provide Tenant with a reasonably detailed statement showing the actual increase
or decrease in Operating Expenses over the Base Allowance for the prior year. If
payments made by Tenant pursuant to this Paragraph are less than or exceed the
amounts shown in any statement then Tenant's account will be adjusted to reflect
the amounts due. All deficiencies are payable upon receipt of invoice and all
credits will be applied by Landlord to the next installment of Operating Expense
reimbursement. Concurrently, with the remittance of the prior year statement, or
as soon thereafter as is reasonably possible, Landlord shall advise Tenant of
the then current year's estimate of Operating Expenses as well as the monthly
payment due thereon. Any deficiencies in the monthly billings that may have
accrued from either the commencement date of the Lease or the first day of any
subsequent calendar year shall be due and payable upon receipt by Tenant of an
invoice from Landlord.
(a) "Tenant's Share" is defined as the product derived by multiplying the
percentage set forth in Paragraph 1.11 by the then current year's Operating
Expenses less the square foot Base Allowance multiplied by the total
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rentable square footage of the Building. The percentage set forth in Paragraph
1.11 is calculated by dividing the rentable square footage of the Premises by
the total rentable square footage of the Building. It is understood and agreed
that the square footage figures are approximations that Landlord and Tenant
agree are reasonable and shall not be subject to revision except in connection
with an actual change in the size of the Premises or a change in the space
available for lease in the Building. Notwithstanding any provision of this
Paragraph to the contrary, if the Building is less than ninety-five (95%)
percent leased as of the last day of any calendar quarter, an adjustment may be
made in Tenant's Share for such quarter to reflect at least ninety-five (95%)
percent of the rentable area of the Building as being leased. The formula for
such computation shall be a ratio, the numerator of which is Tenant's rentable
square footage as stated in Paragraph 1.2 of the Basic Lease Provisions and the
denominator of which is the total rentable square footage of the Building less
five percent (5%).
(b) "Operating Expense(s)" is defined to include all costs incurred by Landlord
in the exercise of its reasonable discretion and shall be in accordance with
Generally Accepted Accounting Practices (GAAP) for:
(i) The operation, repair, maintenance, and replacement, in a neat, clean, safe,
good order and condition, of the Building, including but not limited to, the
following:
(aa) The Common Areas, including their surfaces, coverings, decorative items,
carpets, drapes and window coverings, and including parking areas, loading and
unloading areas, trash areas, roadways, sidewalks, walkways, stairways,
parkways, driveways, landscaped areas, striping, bumpers, irrigation systems,
lighting facilities, building exteriors and roofs, fences and gates;
(bb) All heating, air conditioning, plumbing, electrical systems, life safety
equipment, telecommunications equipment, elevators and escalators, lessee
directories, fire detection systems, sprinkler systems and other equipment used
in common by, or for the benefit of, occupants of the Building;
(ii) Trash disposal, janitorial, security services, window cleaning;
(iii) Any other service to be provided by Landlord that is elsewhere in this
Lease stated to be an "Operating Expense";
(iv) Premiums for the liability and property insurance policies (including, but
not limited to, earthquake, flood and boiler and machinery insurance, if
carried} maintained by Landlord;
(v) Real property taxes payable by Landlord under Paragraph 10.1;
(vi) Water, sewer, gas, electricity, and other publicly mandated services to the
Building;
(vii) Wages, salaries, other costs of all on-site and off-site employees engaged
either full or part-time in the operation, management maintenance or access
control of project, and applicable fringe benefits and materials, supplies and
tools, used in maintaining and cleaning the Building;
(viii) Maintaining and auditing accounting records and a management fee (not to
exceed five percent (5%) of rental) attributable to the operation of the
Building;
(ix) Replacing and/or adding any repairs or removals mandated by any
governmental agency, provided such repairs or removals are first required after
the Commencement Date.;
(x) Replacing equipment or improvements that have a useful life for depreciation
purposes of five (5) years or less, as determined in the reasonable judgment of
Landlord's accountant, amortized over such life (including interest on the
un-amortized balance as reasonably determined by Landlord's accountant), and;
(xi) Replacing and/or adding any equipment, device or capital improvement to
reduce operation or maintenance expenses with respect to the Building, amortized
over its useful life as determined in the reasonable judgment
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of Landlord's accountant (including interest on the unamortized balance as
reasonably determined by Landlord's accountant).
(c) [Intentionally Deleted]
(d) Notwithstanding the foregoing, the following shall not be included in the
calculation of Operating Expenses: (i) costs of alterations of tenants'
premises; (ii) costs of capital improvements and costs of curing construction
defects; (iii) depreciation; (iv) interest and principal payments on mortgages,
and other debt costs; (v) any cost or expenditure (or portion thereof) for which
Landlord is reimbursed, whether by insurance proceeds or otherwise; (vi) cost of
any service furnished to any other occupant of the Building which Landlord does
not provide to Tenant hereunder; (vii) leasing commissions, costs,
disbursements, and other expenses incurred for leasing, renovating, or improving
space for tenants; (viii) costs incurred because Landlord or another tenant
violated the terms of any lease; (ix) profit paid to subsidiaries or affiliates
of Landlord for management or other services (other than as provided in
Paragraph 4.2(b)(vii) above) on or to the property or for supplies or other
materials, to the extent that the cost of the services, supplies, or materials
exceed the competitive costs of the services, supplies, or materials were they
not provided by a subsidiary or affiliate; (x) compensation paid to clerks,
attendants, or other persons in commercial concessions operated by Landlord;
(xi) repairs or other work needed because of fire, wind storm, or other casualty
or cause insured against by Landlord or to the extent insurance required under
the Lease would have provided insurance, whichever is the greater coverage;
(xii) costs incurred in operating the parking facilities for the Building,
except to the extent the cost of operating the parking facilities exceeds the
revenue generated from operating the parking facilities (in which case such
unrecouped costs shall be included in Operating Expenses); (xiii) non-recurring
costs incurred to remedy structural defects in original construction materials
or installations; (xiv) expenses paid directly by a tenant for any reason; (xv)
greater than five percent (5%) annual increase in management fees or employees'
salaries or benefits, except where Landlord can reasonably demonstrate through
comparable market salaries or benefits that are greater than 5% increase is
consistent with market conditions, or both; (xvi) costs exceeding market rates
for comparable buildings; and (xvii) other expenses that, under GAAP
consistently applied, would not be considered customary and reasonable
maintenance, repair, management, or operation expenses.
(e) Notwithstanding anything contained herein to the contrary, increases in
"controllable common area costs" (as hereinafter defined) shall not, in the
aggregate, exceed seven percent (7%) annually, except where Landlord can
reasonably demonstrate through comparable market costs, that increases greater
than 7% is consistent with market conditions. "Controllable common area costs"
shall mean the common area costs relating to compensation, cleaning,
maintenance, overhead, contract services, grounds care, repair and other
miscellaneous common area costs for the Building. Controllable common area costs
shall exclude insurance expenses and utility charges.
(f) Upon reasonable prior written request given not later than thirty (30) days
following the date Landlord's bill for Tenant's Share is delivered to Tenant,
Landlord will provide Tenant reasonably detailed documentation to support such
bill or provide Tenant with the opportunity to review such supporting
information. If Tenant does not notify Landlord of any objection to Landlord's
bill within ninety (90) days after the later of delivery of Landlord's bill or
such requested supporting documentation, Tenant shall be deemed to have accepted
Landlord's bill as true and correct and shall be deemed to have waived any right
to dispute the Tenant's Share due pursuant to that bill. Any records reviewed by
Tenant or its designees relating to Operating Expenses shall constitute
confidential information of Landlord and shall not be disclosed to anyone other
than Tenant, its accountants or others engaged in the review. If such review
reveals that Landlord has overcharged Tenant, the amount overcharged shall be
paid to Tenant within thirty (30) days after the review is concluded, together
with interest thereon at the prevailing Prime Interest Rate, from the date the
Tenant's payment is received by the Landlord until the payment of the overcharge
is made to the Tenant. Additionally, in the event such review reveals that
Landlord has overcharged Tenant by three percent (3%) or more, Landlord shall
also pay to Tenant the reasonable costs of such review. Any disputes over the
results of such review shall be settled pursuant to Paragraph 52 of this Lease.
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(g) Operating Expenses shall not include replacement of equipment or
improvements having a useful life in excess of five (5) years as determined in
the reasonable judgment of Landlord's accountant unless they are the type
described in Paragraph 4.2(b) (ix) or (xi), in which case their cost shall be
included as above provided.
4.3 Base Rent Increase.
4.3.1 N/A
4.3.2 Definition of Rent. The capitalized term "Rent", as used in this Lease,
shall mean the Base Rent.
5. Security Deposit.. [Intentionally Deleted]
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6. Use.
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6.1 Use. The Premises shall be used and occupied only for the purpose set forth
in Paragraph 1.4 of the Basic Lease Provisions and for no other purpose, without
Landlord's consent, not to be unreasonably withheld, conditioned, or delayed.
Landlord represents and warrants, to the best of its knowledge, that applicable
laws, codes, ordinances, covenants and restrictions permit the Premises to be
used for the purpose set forth in Paragraph 1.4 of the Basic Lease provisions.
Landlord agrees not to lease any portion of the Building to a thrift, bank,
credit union, or any other similar financial services company or institution
that offers services similar to those offered by the Tenant.
6.2 Compliance with Legal Requirements. Landlord warrants that (to the best of
its knowledge and except for the Tenant Improvements to be constructed by
Tenant), on the Commencement Date, the Building and Premises will comply with
all applicable laws, ordinances, rules, and regulations of governmental
authorities ("Applicable Laws"). During the Term, Landlord shall comply with all
Applicable Laws regarding the Premises and Building, except to the extent Tenant
must comply under Paragraphs 6.1 and 6.2. Except as to pre-existing defects,
violations or conditions, Tenant shall comply with all Applicable Laws: (i)
regarding the physical condition of the Premises, but only to the extent the
Applicable Laws pertain to the particular manner in which Tenant uses the
Premises; (ii) related to its construction of the Tenant Improvements; or (iii)
that do not relate to the physical condition of the Premises but relate to the
lawful use of the Premises and with which only the occupant can comply, such as
laws governing maximum occupancy, workplace smoking, and illegal business
operations, such as gambling.
6.3 Condition of Premises.
(a) Upon delivery of possession to Tenant the Premises shall be clean and the
plumbing, electrical, air conditioning, and heating system in the Premises shall
be in good operating condition. Tenant shall promptly notify Landlord in writing
of any claimed violation of the foregoing warranty, setting forth with
reasonable specificity the nature of the violation. If it is determined that
there has been a violation (not proximately attributable to Tenant's
construction of the Tenant Improvements), Landlord shall promptly after receipt
of such notice from Tenant, at Landlord's sole cost, rectify such violation.
(b) Except as otherwise provided in this Lease, Tenant hereby accepts the
Premises and the Building prior to its construction of the Tenant Improvements
in their "as is" condition as of the date of delivery of possession of the
Premises to Tenant, except for: (i) latent defects not readily apparent through
visual inspection, (ii) the replacement of window film by Landlord on floors 3,
4, 6 and 7 prior to Tenant Occupancy and (iii) possible removal by Landlord, in
its discretion, of any window blinds on the 3rd and 4th floors and further
subject to all
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applicable municipal, county and state laws, ordinances and regulations
governing and regulating the use of the Premises, and any easements, covenants
or restrictions of record, and Tenant accepts this Lease subject thereto and to
all matters disclosed thereby and by any exhibits attached hereto.
Notwithstanding the foregoing, Tenant acknowledges and agrees that Tenant shall
be responsible for legal requirements associated with its construction of the
Tenant Improvements. Tenant acknowledges that it has satisfied itself by its own
independent investigation that the Premises are suitable for its intended use,
and that, except as specifically provided herein, neither Landlord nor any agent
of Landlord has made any representation or warranty as to the present or future
suitability of the Premises, Common Areas, or Building for the conduct of
Tenant's business.
7. Maintenance, Repairs, Alterations and Additions.
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7.1 Maintenance and Repair -Landlord's Obligations. Landlord shall maintain the
Common Areas of the Building and the plumbing, heating, ventilating, air
conditioning, elevator, electrical and other mechanical systems of the Building
in good working order.
7.2 Maintenance and Repair-Tenant's Obligations. During the term of this Lease,
Tenant shall take good care of the Premises and fixtures therein and maintain
them in as good order, condition and repair as received, ordinary and reasonable
wear and tear and insured casualty excepted. During the term of this Lease,
Tenant shall maintain at its own expense any plumbing facilities located within
the Premises serving only the Premises, except the rest rooms located in the
core of the Building, in good order, condition and repair to the reasonable
satisfaction of Landlord. Upon surrender of the Premises to Landlord, Tenant
shall deliver the Premises to Landlord, broom clean, in as good order, condition
and repair as they were upon delivery of possession to Tenant, ordinary and
reasonable wear and tear, approved alterations and insured casualty excepted.
Without limiting the foregoing, Landlord may require, upon advance written
notice, that such repairs and maintenance be performed by Landlord-appointed
contractors/workers (to maintain quality of services), all at Tenant's expense,
provided that such expenses are customary and reasonable for the work performed.
7.3 Alterations and Additions.
(a) Tenant shall not, without Landlord's prior written consent, make any
alterations, improvements or additions in, on or about the Premises or the
Building, which consent shall not be unreasonably withheld, conditioned, or
delayed by the Landlord. At the expiration of the term, Landlord may require the
removal of any or all of said alterations, improvements or additions and the
restoration of the Premises and the Building to their prior condition, at
Tenant's expense. Should Landlord permit Tenant to make any alterations,
improvements or additions, Tenant shall use only contractors expressly approved
by Landlord. Tenant shall cause any mechanics' or materialmen's lien (placed on
the Building by Tenant's contractors) to be discharged within five (5) business
days after receipt of written notice thereof. Such contractors shall carry
liability insurance of a type and in such reasonable amounts as Landlord shall
reasonably require, naming Landlord and Tenant as additional insureds. Before
commencing the work, such contractors shall furnish Landlord with certificates
of insurance evidencing such coverage. Tenant shall also maintain a policy of
Builder's Risk for such work. Should Tenant make any alterations, improvements
or additions without the prior approval of Landlord, or use a contractor not
expressly approved by Landlord, Landlord may, at any time during the term of
this Lease, require that Tenant remove any part or all of such work.
(b) Tenant shall present any alteration, improvement or addition in or about the
Premises or the Building that Tenant desires to make to Landlord in written
form, with proposed detailed plans. If Landlord consents to such alteration,
improvement or addition, the consent shall be deemed conditioned upon Tenant
acquiring a permit to do so from the applicable government agencies, furnishing
a copy thereof to Landlord prior to the commencement of the work, and compliance
by Tenant with all conditions of said permit in a prompt and
13
expeditious manner. Landlord shall take commercially reasonable measures to
cooperate with Tenant in obtaining any such permit.
(c) Tenant shall pay, when due, all claims for labor or materials furnished or
alleged to have been furnished to or for Tenant at or for use in the Premises,
which claims are or may be secured by any mechanic's or materialman's lien
against the Premises, the Building or the Building, or any interest therein.
(d) Tenant shall give Landlord not less than ten (10) days' notice prior to the
commencement of any work in the Premises by Tenant. Landlord shall have the
right to post notices of non-responsibility in or on the Premises or the
Building. If Tenant, in good faith, contests the validity of any lien, claim or
demand regarding the work, then Tenant shall, at its sole expense, defend itself
and Landlord and Landlord's agents against the same and shall pay and satisfy
any adverse judgment that may be rendered thereon before the enforcement thereof
against Landlord or Landlord's agents or the Premises or the Building or the
Building, upon the condition that if Landlord shall require, Tenant shall
furnish to Landlord a surety bond satisfactory to Landlord in an amount equal to
such contested lien claim or demand indemnifying Landlord and Landlord's agents
against liability for the same and holding the Premises, the Building and the
Building free from the effect of such lien or claim.
(e) All alterations, improvements and additions made by Tenant shall be done in
a good, workmanlike manner with good quality materials and, upon installation,
shall become the property of Landlord and remain upon and be surrendered with
the Premises at the expiration of the Lease term, unless Landlord requires
removal pursuant to Paragraph 7.3(a). Any trade fixtures installed and paid for
by Tenant may be removed by Tenant during the term of this Lease and shall be
removed at the expiration of the term. Tenant shall in all events promptly
repair any damage caused by removal of trade fixtures.
(f) Tenant shall provide Landlord with as-built plans and specifications for any
alterations, improvements or additions.
7.4 Utility Additions. Landlord reserves the right to install new or additional
utility facilities throughout the Building for the benefit of Landlord or
Tenant, or any other lessee of the Building, including but not limited to,
plumbing, electrical systems, communication systems, and fire protection and
detection systems, so long as such installations do not unreasonably interfere
with Tenant's use of the Premises.
7.5 Americans with Disabilities Act. Landlord represents that, to the best of
its knowledge, the Building complies with or will comply with the Americans with
Disabilities Act (the" Act"). Tenant shall be responsible for compliance with
the Act in its construction of the Tenant Improvements and the failure to do so
shall, at the option of Landlord, constitute an event of default under this
Lease.
7.6 Tenant Improvements. Landlord shall provide a Tenant Improvements (TI), or
"Up-fits", allowance in accordance to Exhibit C.
8. Insurance - Indemnity. [NOTE: Review with insurance broker or internal
--------------------- ----
personnel.]
8.1 Liability Insurance-Tenant. Tenant shall, at Tenant's expense, obtain and
keep in force during the Term of this Lease a policy of Commercial General
Liability Insurance in an amount of not less than $1,000,000 per occurrence of
bodily injury and property damage combined. Compliance with the above
requirement shall not, however, limit the liability of Tenant hereunder.
8.2 Liability Insurance -Landlord. Landlord shall, at Landlord's expense, obtain
and keep in force during the Term of this Lease a policy of Commercial General
Liability Insurance in an amount of not less than $1,000,000 per occurrence of
bodily injury and property damage combined. Compliance with the above
requirement shall not, however, limit the liability of Landlord hereunder.
14
8.3 Property and Business Interruption Insurance -Tenant. [Intentionally
-------------
Deleted.]
- -------
8.4 Property Insurance -Landlord. Landlord shall obtain and keep in force during
the term of this Lease a policy or policies of insurance covering loss or damage
to the Building improvements, but not Tenant's personal property, fixtures,
equipment or tenant improvements, in an amount no less than full replacement
cost providing protection against all perils included within the classification
of fire, extended coverage, vandalism, malicious mischief, plate glass, and such
other perils as Landlord deems advisable from time to time or may be required by
a lender having a lien on the Office Building. Such insurance may include
earthquake, flood and boiler and machinery insurance. In addition, Landlord may
obtain and keep in force, during the term of this Lease, rental value insurance,
with loss payable to Landlord, which insurance may also cover Operating Expenses
(but such insurance will not be passed to Tenant as an Operating Expense).
Tenant will not be named in any such policies carried by Landlord and shall have
no right to any proceeds therefrom. The policies required by Paragraphs 8.2 and
8.4 shall contain such deductibles as Landlord or the aforesaid lender may
determine. Tenant shall not do or permit to be done anything (other than for the
use specified in Paragraph 1.4 of the Basic Lease provisions) which shall
invalidate the insurance policies carried by Landlord. Tenant shall pay the
increase in the property insurance premium for the Building if the increase is
specified by Landlord's insurance carrier as being caused by the particular
nature of Tenant's occupancy or any act or omission of Tenant.
8.5 Insurance Policies. Tenant shall deliver to Landlord certificates evidencing
the existence and amounts of such insurance within seven (7) days after the
Commencement Date of this Lease. The policies or certificates must include a
copy of the endorsement naming the additional insureds required under Paragraph
8.1. Tenant shall, at least thirty (30) days prior to the expiration of each
policy, furnish Landlord with a copy of the policy or a certificate evidencing
the renewal thereof. If Tenant provides a certificate Landlord may at any time
thereafter require Tenant to provide Landlord with a copy of the policy. The
policies shall be issued by insurers having a rating of A+10 or better in Best's
Key Rating Guide, who are admitted carriers in the State of North Carolina. No
such policy shall be cancelable or subject to reduction of coverage or other
modification except after thirty (30) days prior written notice to Landlord.
Landlord shall deliver to Tenant certificates evidencing the existence and
amounts of such insurance within seven (7) days after the Commencement Date.
8.6 Waiver of Subrogation. Tenant and Landlord each hereby release and relieve
the other and waive their entire right of recovery against the other, for direct
or consequential loss or damage arising out of or incident to the perils covered
by property insurance carried by such party, whether due to the negligence of
Landlord or Tenant or their agents, employees, contractors or invitees. If
necessary, all property insurance policies required under this Lease shall be
endorsed to so provide.
8.7 Indemnity. Each party (an "Indemnifying Party") shall, in an amount
proportionate to such Indemnifying Party's culpability, indemnify, defend and
hold harmless the other party (an "Indemnified Party") and the Indemnified
Party's agents, partners, shareholders, directors, officers, employees, and
lenders, if any, from and against any and all claims for damage to the person or
property of anyone or any entity arising from the Indemnifying Party's use or
operation of the Building, or from the conduct of Indemnifying Party's business
or from any activity, work or things done, permitted or suffered by Indemnifying
Party in or about the Premises or elsewhere and shall further indemnify, defend
and hold harmless Indemnified Party from and against any and all claims, costs
and expenses arising from any breach or default in the performance of any
obligation on the Indemnifying Party's part to be performed under the terms of
this Lease, or arising from any act or omission of Indemnifying Party, or any of
Indemnifying Party's agents, contractors, employees, or invitees, and from and
against all costs, attorneys' fees, expenses and liabilities incurred by
Indemnified Party as the result of any such use, conduct, activity, work, things
done, permitted or suffered, breach, default 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
proceedings be brought against an Indemnified Party by reason of any such
matter, the Indemnifying Party upon notice from Indemnified Party shall defend
the same at the Indemnifying Party's expense by counsel reasonably satisfactory
to Indemnified Party and the Indemnified
15
Party shall cooperate with the Indemnifying Party in such defense. The
Indemnified Party need not have first paid any such claim in order to be so
indemnified. The provisions of this Paragraph 8.7 shall survive the expiration
or termination of this Lease.
8.8 Exemption of Landlord from Liability. Tenant hereby agrees that Landlord
shall not be liable for injury ("Tenant Damages") to Tenant's business or any
loss of income thereof or for loss of or damage to the goods, wares, merchandise
or other property of Tenant, Tenant's employees, invitees, customers, or any
other person in or about the Premises or the Building, nor shall Landlord be
liable for injury to the person of Tenant, Tenant's employees, agents or
contractors, whether such damage or injury is caused by or results from theft,
fire, steam, electricity, gas, water or rain, or from the breakage, leakage,
obstruction or other defects of pipes, sprinklers, wires, appliances, plumbing,
air conditioning or lighting fixtures, or from any other cause, whether said
damage or injury results from conditions arising upon the Premises or upon other
portions of the Building, or from other source or place, or from new
construction or the repair, alteration or improvement of any part of the
Building, or of the equipment, fixtures or appurtenances applicable thereto, and
regardless of whether the cause of such damage or injury or the means of
repairing the same is inaccessible. Landlord shall not be liable for any damages
arising from any act or neglect of any other tenant, occupant or user of the
Building. Notwithstanding the foregoing, the Landlord shall indemnify Tenant for
Tenant Damages resulting from Landlord's gross negligence or intentional
misconduct, but only in an amount proportionate to Landlord's culpability.
[NOTE: Need to confirm insurance will cover even with this liability waiver.]
----
8.9 No Representation of Adequate Coverage. Neither party makes any
representation that the limits or forms of coverage of insurance specified in
this Paragraph 8 are adequate to cover any party's property or obligations under
this Lease.
9. Damage or Destruction.
---------------------
9.1 Definitions.
(a) "Premises Damage" shall mean damage or destruction of the Premises to any
extent.
(b) "Premises Building Partial Damage" shall mean damage or destruction of the
Building to the extent that the cost to repair is less than fifty percent (50%)
of the then Replacement Cost of the Building.
(c) "Premises Building Total Destruction" shall mean damage or destruction of
the Building to the extent that the cost to repair is fifty percent (50%) or
more of the then Replacement Cost of the Building.
(d) "Building Total Destruction" shall mean damage or destruction of the
buildings in the Building to the extent that the cost of repair is fifty percent
(50%) or more of the then Replacement Cost of all of the buildings in the
Building.
(e) "Insured Loss" shall mean damage or destruction caused by an event required
to be covered by the insurance described in Paragraph 8. The fact that an
Insured Loss has a deductible amount shall not make the loss an uninsured loss.
(f) "Replacement Cost" shall mean the amount of money necessary to be spent to
repair or rebuild the damaged area to the condition that existed immediately
prior to the damage occurring, excluding all improvements made by tenants of the
Building.
16
9.2 Premises Damage; Premises Building Partial Damage.
(a) Insured Loss: Subject to the provisions of Paragraphs 9.4 and 9.5, if at any
time during the term of this Lease there is an Insured Loss and that falls into
the classification of either Premises Damage or Premises Building Partial
Damage, and that does not fall into the classification of Premises Building
Total Destruction or Building Total Destruction, then Landlord shall, as soon as
reasonably possible and to the extent the required materials and labor are
readily available through usual commercial channels, at Landlord's expense,
repair such damage (but not Tenant's fixtures, equipment or tenant improvements
originally paid for entirely by Tenant, except that Landlord shall restore the
Tenant Improvements) to its condition existing at the time of the damage, and
this Lease shall continue in full force and effect; provided, however, that
Tenant shall have the right to terminate this Lease (by written notice to
Landlord) if Landlord does not restore the Premises within one hundred eighty
(180) days.
(b) Uninsured Loss: Subject to the provisions of Paragraphs 9.4 and 9.5, if at
any time during the term of this Lease there is damage that is not an Insured
Loss and that falls into the classification of Premises Damage or Premises
Building Partial Damage, and that does not fall into the classification of
Premises Building Total Destruction or Building Total Destruction, unless caused
by a negligent or willful act of Tenant (in which event Tenant shall make the
repairs at Tenant's expense) , which damage prevents Tenant from making
substantial use of the Premises, Landlord may at Landlord's option either (i)
repair such damage as soon as reasonably possible at Landlord's expense, in
which event this Lease shall continue in full force and effect, or (ii) give
written notice to Tenant within thirty (30) days after the date of the
occurrence of such damage of Landlord's intention to cancel and terminate this
Lease as of the date of the occurrence of such damage, in which event this Lease
shall terminate as of the date of the occurrence of such damage; provided,
however, that Tenant shall have the right to terminate this Lease (by written
notice to Landlord) if Landlord does not restore the Premises within one hundred
eighty (180) days.
9.3 Premises Building Total Destruction; Building Total Destruction. Subject to
the provisions of Paragraphs 9.4 and 9.5, if at any time during the term of this
Lease there is damage, whether or not it is an Insured Loss, that falls into I'
the classification of either (i) Premises Building Total Destruction, or (ii)
Building Total Destruction, then Landlord may at Landlord's option either 0)
repair such damage or destruction as soon as reasonably possible at Landlord's
expense (to the extent the required materials are readily available through
usual commercial channels) to its condition existing at the time of the damage,
but not Tenant's fixtures, equipment or tenant improvements, and this Lease
shall continue in full force and effect, or (ii) give written notice to Tenant
within thirty (30) days after the date of occurrence of such damage of
Landlord's intention to cancel and terminate this Lease, in which case this
Lease shall terminate as of the date of the occurrence of such damage; provided,
however, that Tenant shall have the right to terminate this Lease (by written
notice to Landlord) if Landlord does not restore the Premises within one hundred
eighty (180) days.
9.4 Damage Near End of Term.
(a) Subject to Paragraph 9.4(b), if at any time during the last twelve (12)
months of the term of this Lease there is Premises Damage resulting in Tenant's
loss-of-use of more than fifty percent (50%) of the Premises for more than
thirty (30) days, Landlord or Tenant may, at its option, cancel and terminate
this Lease as of the date of occurrence of such damage by giving written notice
to the other party of its election to do so within thirty (30) days after the
date of occurrence of such damage.
(b) In the event that Tenant has an option to extend or renew this Lease that
has not expired, Tenant shall exercise such option, if it is to be exercised at
all, no later than twenty (20) days after the occurrence during the last twelve
(12) months of the term of an Insured Loss that falls into the classification
Premises Damage. If Tenant duly exercises such option during said twenty (20)
day period, the provisions of Paragraph 9.4(a) shall
17
not apply. If Tenant fails to exercise such option during said twenty (20) day
period, then Landlord may at Landlord's option terminate and cancel this Lease
as of the expiration of said twenty (20) day period, notwithstanding any term or
provision in the grant of option to the contrary.
9.5 Abatement of Rent- Tenant's Remedies.
(a) In the event Landlord repairs or restores the Building or Premises pursuant
to the provisions of this Paragraph 9, and any part of the Premises are not
usable (including loss of use due to loss of access or essential services), the
Rent payable hereunder (including Tenant's Share of Operating Expense Increase)
for the period during which such damage, repair or restoration continues shall
be abated, provided (1) the damage was not the result of the negligence or
willful misconduct of Tenant, and (2) such abatement shall only be to the extent
the operation and profitability of Tenant's business as operated from the
Premises is adversely affected. Except for said abatement of Rent, if any,
Tenant shall have no claim against Landlord for any damage suffered by reason of
any such damage, destruction, repair or restoration. Any disputes regarding
eligibility for abatement shall be settled in accordance with Paragraph 52 of
this Lease.
(b) If Landlord shall be obligated to repair or restore the Premises or the
Building under the provisions of this Paragraph 9 and shall not commence such
repair or restoration within ninety (90) days after such occurrence, or if
Landlord shall not complete the restoration and repair within six (6) months
after such occurrence, Tenant may at Tenant's option cancel and terminate this
Lease by giving Landlord written notice of Tenant's election to do so at any
time prior to the commencement or completion, respectively, of such repair or
restoration. In such event this Lease shall terminate as of the date of such
notice.
(c) Tenant agrees to take commercially reasonable measures to cooperate with
Landlord in connection with any such restoration and repair, including but not
limited to the approval or execution of plans and specifications if required.
9.6 Termination -Advance payments. Upon termination of this Lease pursuant to
this Paragraph 9, an equitable adjustment shall be made concerning advance Rent
and any advance payments made by Tenant to Landlord.
10. Real Property Taxes.
-------------------
10.1 Payment of Taxes. Landlord shall pay the real property tax, as defined in
Paragraph 10.3, applicable to the Building subject to reimbursement by Tenant of
Tenant's Share of such taxes in accordance with the provisions of Paragraph 4.2,
except as otherwise provided in Paragraph 10.2.
10.2 Additional Improvements. Tenant shall not be responsible for paying any
increase in real property tax specified in the tax assessor's records and work
sheets as being caused by additional improvements placed upon the Building by
other lessees or by Landlord for the exclusive enjoyment of any other lessee.
Tenant shall, however, pay to Landlord at the time that Operating Expenses are
payable under Paragraph 4.2 the entirety of any increase in real property tax if
assessed solely by reason of additional improvements placed upon the Premises by
Tenant or at Tenant's request (as reasonably documented by Landlord).
10.3 Definition of "Real Property Tax". As used herein, the term "real property
tax" shall include any form of real estate tax or assessment, general, special,
ordinary or extraordinary, and any license fee, commercial rental tax,
improvement bond or bonds, levy or tax (other than inheritance, personal income
or estate taxes) imposed on the Building or any portion thereof by any authority
having the direct or indirect power to tax, including any city, county, state or
federal government, or any school, agricultural, sanitary, fire, street,
18
drainage or other improvement district thereof, as against any legal or
equitable interest of Landlord in the Building or in any portion thereof, as
against Landlord's right to rent or other income therefrom, and as against
Landlord's business of leasing the Building. The term "real property tax" shall
also include any tax, fee, levy, assessment or charge (i) in substitution of,
partially or totally, or as a supplement to any tax, fee, levy, assessment or
charge included within the definition of "real property tax," or (ii) which is
imposed as a result of a change of ownership, as defined by applicable local
statutes for property tax purposes, of the Building or which is added to a tax
or charge included within the definition or real property tax by reason of such
change of ownership, or (iii) which is imposed by reason of this transaction,
any modifications or changes hereto, or any transfers hereof.
10.4 Joint Assessment. If the improvements or property, the taxes for which are
to be paid separately by Tenant under Paragraph 10.2 or 10.5 are not separately
assessed, Tenant's portion of that tax shall be equitably determined and
reasonably documented by Landlord from the respective valuations assigned in the
assessor's work sheets or such other information (which may include the cost of
construction) as may be reasonably available.
10.5 Personal Property Taxes.
(a) Tenant shall pay prior to delinquency all taxes assessed against and levied
upon trade fixtures, furnishings, equipment and all other personal property of
Tenant contained in the Premises or elsewhere.
(b) If any of Tenant's said personal property shall be assessed with Landlord's
real property, Tenant shall pay to Landlord the taxes attributable to Tenant (as
reasonably documented by Landlord) within ten (10) days after receipt of a
written statement setting forth the taxes applicable to Tenant's property.
11. Utilities.
---------
11.1 Services Provided by Landlord. Landlord shall provide heating, ventilation,
air conditioning, and janitorial service during Operating Hours, reasonable
amounts of electricity for normal lighting and office machines, water for
reasonable and normal drinking and lavatory use, replacement of standard light
bulbs and/or standard fluorescent tubes and ballasts for standard overhead
fixtures. Landlord shall provide sufficient ventilation and air conditioning for
office work environment, exclusive of higher heat sources such as server rooms.
Installation of a Liebert system or similar provisions to accommodate higher
heat generation from a server room or similar elevated-heat sources shall be a
responsibility of the Tenant. Standard bulbs for the Building include F40CW or
F40WW in flood or incandescent with standard-threaded bulbs. Standard light
fixtures include 2' x 2' or 2' x 4' florescent or standard-threaded 110-volt
recessed can lights. Any non-standard bulbs required by Tenant shall be
purchased by Tenant and installed by Landlord.
11.2 Services Exclusive to Tenant. Tenant shall pay for all water, gas, heat,
light, power, telephone and other utilities and services specially or
exclusively supplied or metered exclusively to the Premises or to Tenant,
together with any taxes thereon. If any such services are not separately metered
to the Premises, Tenant shall pay a reasonable proportion determined and
reasonably documented by Landlord of all charges jointly metered with other
areas in the Building.
11.3 Hours of Service. Operating hours for the Building are Monday through
Friday, 7:00 am to 6:00 pm (excepting holidays) and Saturday 8:00 am to 1:00 pm
("Operating Hours"); however, access to the building with all utilities
maintained, including heating and air conditioning, will be available to the
Tenant 24 hours per day, 7 days per week. Landlord reserves the right to bill
Tenant at a rate of Twenty-five Dollars ($25.00) per hour for utility
compensation if after-hours usage exceeds 250 hours per year.
19
11.4 Excess Usage by Tenant. Tenant shall not make connection to the utilities
except by or through existing outlets and shall not install or use machinery or
equipment (other than standard office and business equipment) in or about the
Premises that uses excess water, lighting or power, or suffer or permit any act
that causes extra burden upon the utilities or services, including but not
limited to security services, over standard office usage for the Building. Any
disputes regarding excess usage shall be settled in accordance with Paragraph 52
of this Lease.
11.5 Interruptions. There shall be no abatement of Rent and Landlord shall not
be liable in any respect whatsoever for the inadequacy, stoppage, interruption
or discontinuance of any utility or service provided to the Building. Any
inadequacy, stoppage, interruption or discontinuance of any utility or service
due to reasons within the Building or within the Premises, except due to war and
riots, after five (5) consecutive days, shall result in rent being abated by
fifty percent (50%) until service is restored.
12. Assignment and Subletting.
-------------------------
12.1 Landlord's Consent Required. Tenant shall not sell, mortgage, pledge,
hypothecate, encumber or otherwise transfer this Lease or any interest therein
(each of which actions is hereafter referred to as a "transfer"), and shall not
sublet the Premises or any part thereof, without the prior written consent of
Landlord in each instance, which consent shall not be unreasonably withheld,
conditioned, or delayed. Notwithstanding the foregoing, Tenant may (i) assign
this Lease or sublet any portion of the Premises to any company or professional
corporation or association affiliated with, owned by, or under common corporate
control with Tenant (as used herein, "affiliate" and "affiliated" shall mean a
person or entity controlled by Tenant, owned in part by one or more persons
owning more than ten percent (10%) of Tenant or under contract to Tenant for
management services); (ii) sublease a portion of its space to an insurance
securities, commercial leasing, or investment banking company, provided each
sublease does not exceed more than 500 usable square feet; or (iii) assign the
lease to a new owner of the Tenant assets in the event Tenant is acquired,
merged or otherwise has a change in ownership (a "Change of Control") after
Tenant provides notice to the Landlord of such assignment. Tenant shall not
assign the lease under any other circumstances without the prior written consent
of Landlord, which consent shall not be unreasonably withheld, conditioned, or
delayed. Any attempt to do so without such consent shall be voidable at
Landlord's election. Notwithstanding the foregoing, except in the case of Change
of Control, Tenant shall remain liable to Landlord for all Rent, regardless of
any assignment of this Lease.
12.2 Tenant's Application. If Tenant desires at any time to transfer this Lease
(which transfer shall in no event be for less than its entire interest in this
Lease) or to sublet the Premises or any portion thereof, Tenant shall submit to
Landlord at least thirty (30) days prior to the proposed effective date of the
transfer or sublease ("Proposed Effective Date"), in writing:
(a) A notice of intent to transfer or sublease, setting forth the Proposed
Effective Date, which shall be no less than thirty (30) days nor more than one
hundred twenty (120) days after the sending of such notice;
(b) The name of the proposed transferee or subtenant;
(c) The nature of the proposed transferee's or subtenant's business to be
carried on in the Premises;
(d) The terms and provisions of the proposed transfer or sublease; and
(e) Such information as Landlord may reasonably request concerning the proposed
transferee or subtenant, including recent financial statements and bank
references.
20
12.3 Landlord's Option to Terminate. In the event this Lease is assigned and the
ground level of the Premises is subsequently abandoned (as defined in Paragraph
25), Landlord shall have the right, but not the obligation, to terminate this
Lease.
12.4 Approval Procedure. If Landlord approves a transfer or sublease, Tenant
shall, prior to the Proposed Effective Date, submit to Landlord an executed
original of the transfer or sublease agreement for execution by Landlord on the
signature page after the words "the foregoing is hereby consented to". No
purported transfer or sublease shall be deemed effective as against Landlord and
no proposed transferee or subtenant shall take occupancy unless such document is
so executed by Landlord.
12.5 Required Provisions. Any and all transfer or sublease agreements shall:
(a) Contain such terms as are described in Tenant's notice under Paragraph 12.2
or as otherwise agreed by Landlord;
(b) Prohibit further transfers or subleases without Landlord's consent under
this Paragraph 12;
(c) Impose the same obligations and conditions on the transferee or subtenant as
are imposed on Tenant by this Lease (except as to Rent and term or as otherwise
agreed by Landlord);
(d) Be expressly subject and subordinate to each and every provision of this
Lease;
(e) Have a term that expires on or before the expiration of the term of this
Lease;
(e) Have a term that expires on or before the expiration of the term of this
lease; and
(f) Provide that the Tenant and/or transferee or subtenant shall pay Landlord
the amount of any reasonable costs or expenses incurred by Landlord for repairs,
maintenance or otherwise as a result of any change in the nature of occupancy
caused by the transfer or sublease.
(g) Contain Tenant's acknowledgment that Tenant remains liable under this lease
notwithstanding the transfer or sublease.
12.6 Transfer of Sublease Profit. [Intentionally Deleted]
12.7 Fees for Review. Tenant shall pay to Landlord or Landlord's designee,
together with the notice described in Paragraph 12.2, all reimbursement, if
Landlord retains the services of an attorney to review the transaction, Tenant
shall pay to Landlord all reasonable attorneys' fees actually incurred by
Landlord in connection therewith, provided Landlord provides an attorney fee
estimate to Tenant for approval prior to Landlord engaging the attorney. Tenant
shall pay such attorneys' fees to Landlord within thirty (30) days after receipt
of written request.
12.8 No Release of Tenant. No consent by Landlord to any transfer or subletting
by Tenant shall relieve Tenant of any obligation to be performed by Tenant under
this Lease, whether occurring before or after such consent, transfer or
subletting. Landlord's consent to any transfer or subletting shall not relieve
Tenant from the obligation to obtain Landlord's express prior written consent to
any other transfer or subletting. The acceptance by Landlord of payment from any
other person shall not be deemed to be a waiver by Landlord of any provision of
this Lease or to be a consent to any subsequent transfer or sublease, or be a
release of Tenant from any obligation under this Lease.
12.9 Assumption of Obligations. Each transferee of this Lease shall assume all
obligations of Tenant under this Lease and shall be and remain liable jointly
and severally with Tenant for the payment of the Rent and the
21
performance of all the terms, covenants, conditions and agreements herein
contained on Tenant's part to be performed for the term of this Lease. No
transfer shall be binding on Landlord unless the transferee or Tenant delivers
to Landlord a counterpart of the instrument of transfer which contains a
covenant of assumption by the transferee satisfactory in substance and form to
Landlord, consistent with the above requirements. The failure or refusal of the
transferee to execute such instrument of assumption shall not release or
discharge the transferee from its liability to Landlord hereunder. Landlord
shall have no obligation whatsoever to perform any duty to or respond to any
request from any subtenant, it being the obligation of Tenant to administer the
terms of its sublease.
12.10 Deemed Transfers. [Intentionally Deleted]
12.11 Assignment by Operation of Law. [Intentionally Deleted]
12.12 Assignment of Sublease Rents. Tenant immediately and irrevocably assigns
to Landlord, as security for Tenant's obligations under this Lease, all rents
from any subletting of all or any part of the Premises; provided, however, the
total amount paid to Landlord by Tenant (including amounts paid by subleasee, if
paid separately) shall not exceed Tenant's Rent obligation hereunder.
Notwithstanding the foregoing, Tenant shall be permitted to collect all rents
from subletting, unless Tenant: (i) is then in default (beyond any applicable
notice and cure period); and (ii) has received written notice from Landlord that
Landlord will collect such rents directly.
12.13 Prohibition of Assignment to Party in Interest of ERISA Party. If Landlord
is an ERISA Party (see Paragraph 1.16) or an ERISA Party subsequently becomes
Landlord hereunder and Tenant is notified of such event, Tenant shall inquire of
any prospective transferee or subtenant whether it is a "party in interest," as
that term is defined in Section 3 (14) of ERISA, as to Landlord. Tenant shall
not transfer this Lease or sublet any part of the Premises to a person or entity
that Tenant knows or reasonably should know is a "party in interest," as that
term is defined in Section 3(14) of ERISA, as to Landlord.
13. Default- Remedies.
-----------------
13.1 Default. The occurrence of anyone or more of the following events shall
constitute a material default of this Lease by Tenant:
(a) [Intentionally Deleted]
(b) The failure by Tenant to pay Rent or make any other payment required to be
made by Tenant hereunder, as and when due, where such failure shall continue for
a period of five (5) business days after receipt of written notice thereof from
Landlord to Tenant. In the event that Landlord serves Tenant with a notice
regarding such nonpayment pursuant to any applicable summary eviction statute,
such notice shall also constitute the notice required by this Subparagraph.
(c) 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 in Subparagraphs 13.1 (a) and (b) where such failure shall
continue for a period of thirty (30) days after receipt of 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 commences such cure within said thirty (30) days and thereafter
diligently pursues such cure to completion. To the extent permitted by law, such
thirty (30) day notice shall constitute the sole notice required to be given to
Tenant under any applicable summary eviction statute.
22
(d) (i) The making by Tenant of any arrangement or assignment for the benefit of
creditors; (ii) Tenant becoming a "debtor" as defined in the Bankruptcy Code or
any successor statute, (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, where possession
is not restored to Tenant within thirty (30) days; 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 thirty (30) days, all of which are hereby
deemed to be non- curable defaults without the necessity of any notice by
Landlord to Tenant thereof.
(e) The existence of materially false information in any financial statement
given to Landlord by Tenant, or its successor in interest or by any guarantor of
any of Tenant's obligations hereunder, all of which are hereby deemed to be
non-curable defaults without the necessity of any notice by Landlord to Tenant
thereof.
(f) [Intentionally Deleted]
13.2 Remedies. In the event of any material default of this Lease by Tenant,
Landlord may at any time thereafter, with or without separate 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 and Tenant's right to possession of the Premises by any
lawful means, in which case Tenant shall immediately surrender possession of the
Premises to Landlord. In such event, Landlord shall be entitled to recover from
Tenant all damages incurred by Landlord by reason of Tenant's default including,
but not limited to, the cost of recovering possession of the Premises; expenses
of reletting, including necessary renovation and alteration of the Premises,
reasonable attorney's fees, and any real estate commission actually paid; the
worth at the time of award by the court having jurisdiction thereof of the
amount by which the unpaid Rent for the balance of the term after the time of
such award exceeds the amount of Rent loss for the same period that Tenant
proves could be reasonably avoided; that portion of the leasing commission paid
by Landlord pursuant to Paragraph 15, applicable to the un-expired term of the
Lease. No payment by Tenant after termination of this Lease following default by
Tenant shall reinstate the Lease. Neither shall the receipt and retention of any
such payment by Landlord reinstate the Lease.
(b) Without terminating this Lease, re-enter and take possession (in accordance
with legal process) of the Premises or any part thereof and expel Tenant and
those claiming through or under Tenant, and remove the effects of both or
either, and relet the Premises, or any part thereof, in Landlord's or Tenant's
name, but for the account of Tenant. In such event, Tenant shall in no manner be
relieved from liability for payment of Rent covering the balance of the term of
this Lease, and Landlord's retaking shall not be considered an acceptance of the
Premises or a manifestation of an intent to terminate this Lease.
(c) Maintain Tenant's right to possession, in which case this Lease shall
continue in effect whether or not Tenant shall have vacated or abandoned the
Premises. In such event, Landlord shall be entitled to enforce all of Landlord's
rights and remedies under this Lease, including the right to recover the Rent as
it becomes due hereunder.
(d) Pursue any other remedy now or hereafter available to Landlord under the
laws or judicial decisions of the state of North Carolina.
(e) Notwithstanding the foregoing, Landlord acknowledges and agrees that it
shall use commercially reasonable efforts to mitigate its damages in the event
of a Tenant default.
23
13.3 Default by Landlord. Landlord shall not be in default unless Landlord fails
to perform obligations required of Landlord within a reasonable time, but in no
event later than 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 thirty (30) day period and
thereafter diligently pursues the same to completion.
13.4 Late Charges. Tenant hereby acknowledges that late payment by Tenant to
Landlord of Base Rent, Tenant's Share of Operating Expense Increase or other
sums due hereunder will cause Landlord to incur costs not contemplated by this
Lease, the exact amount of which will be extremely difficult to ascertain. Such
costs include, but are not limited to, processing and accounting charges, and
late charges which may be imposed on Landlord by the terms of any mortgage or
trust deed covering the Building. Accordingly, if any installment of Base Rent,
Operating Expense Increase, or any other sum due from Tenant shall not be
received by Landlord or Landlord's designee within ten (10) days after such
amount shall be due, then, without any requirement for notice to Tenant, Tenant
shall pay to Landlord a late charge equal to three percent (3%) of such overdue
amount, but not to exceed the maximum late charge permitted by law in the
jurisdiction where the Building is located. The parties hereby agree that such
late charge represents a fair and reasonable estimate of the costs Landlord will
incur by reason of late payment by Tenant. Acceptance of such late charge by
Landlord shall in no event constitute a waiver of Tenant's default with respect
to such overdue amount, nor prevent Landlord from exercising any of the other
rights and remedies granted hereunder.
13.5 Interest on Past-Due Obligations. Any amount not paid by Tenant to Landlord
when due shall bear interest from the date due at the maximum rate then
allowable by law, except that interest shall not be payable on any late charge
and interest on any amount upon which a late charge is payable shall not
commence to accrue until thirty (30) days after the date due. Payment of
interest shall not excuse or cure any default by Tenant.
14. Condemnation. If the Premises or any portion thereof or the Building are
------------
taken under the power of eminent domain, or sold under the threat of the
exercise of said power (all of which are herein called "condemnation"), this
Lease shall terminate as to the part so taken as of the date the condemning
authority takes title or possession, whichever first occurs; provided that if so
much of the Premises or the Building is taken by such condemnation as would
substantially and adversely affect the operation and profitability of Tenant's
business conducted from the Premises, Tenant shall have the option, to be
exercised only in writing within thirty (30) days after the condemning authority
shall have taken possession, to terminate this Lease as of the date the
condemning authority takes such possession. If Tenant does not terminate this
Lease in accordance with the foregoing, this Lease shall remain in full force
and effect as to the portion of the Premises remaining, except that the Rent and
Tenant's Share of Operating Expense Increase shall be reduced in the proportion
that the floor area of the Premises taken bears to the total floor area of the
Premises. Common Areas taken shall be excluded from the Common Areas usable by
Tenant and no reduction of Rent shall occur with respect thereto or by reason
thereof. Landlord shall have the option to terminate this Lease as of the taking
of possession by the condemning authority, by giving written notice to Tenant of
such election within thirty (30) days after receipt of notice of a taking by
condemnation of any part of the Premises or the Building. Any award for the
taking of all or any part of the Premises or the Building under the power of
eminent domain or any payment made under threat of the exercise of such power
shall be the property of Landlord; provided, however, that Tenant shall be
entitled to any separate award for loss of or damage to Tenant's trade fixtures,
its leasehold interest, removable personal property and un-amortized tenant
improvements that have been paid for by Tenant. For that purpose, the cost of
such improvements shall be amortized over the original term of the Lease
excluding any options. In the event that this Lease is not terminated by reason
of such condemnation, Landlord shall, to the extent of severance damages
received by Landlord in connection with such condemnation, repair any damage to
the
24
Premises caused by such condemnation except to the extent that Tenant has been
reimbursed therefore by the condemning authority. Any disputes regarding this
Paragraph shall be settled pursuant to Paragraph 52 of this Lease.
15. Broker's Fee.
------------
(a) Subject to the execution of this Lease by both parties, Landlord shall pay
to the Listing Broker and the Cooperating Broker, if any, designated in
Paragraphs 1.14 and 1.15 of this Lease jointly, or in such separate shares as
they may mutually designate in writing, a fee as set forth in a separate
agreement between Landlord and the Listing Broker.
(b) Tenant and Landlord each represent and warrant to the other that neither has
had any dealing with any person, firm, broker or finder (other than the
person(s), if any, whose names are set forth in Paragraphs 1.14 and 1.15) in
connection with the negotiation of this Lease or the consummation of the
transaction contemplated hereby, and no other broker or other person, firm or
entity is entitled to any commission or finder's fee in connection with said
transaction and Tenant and Landlord do each hereby indemnify and hold the other
harmless from and against any costs, expenses, attorneys' fees or liability for
compensation or charges which may be claimed by any such unnamed broker, finder
or other similar party by reason of any dealings or actions of the indemnifying
party.
16. Estoppel Certificates.
---------------------
(a) Each party (as "responding party") shall at any time upon not less than ten
(10) business days after receipt of prior written notice from the other party
("requesting party") execute, acknowledge and deliver to the requesting party a
statement (to the extent true and to the responding party's actual knowledge) in
writing (i) certifying that this Lease is unmodified and in full force and
effect (or, if modified, stating the nature of such modification and certifying
that this Lease, as so modified, is in full force and effect) and the date to
which the rent and other charges are paid in advance, if any, and (ii)
acknowledging that there are not, to the responding party's knowledge, any
uncured defaults on the part of the requesting party, or specifying such
defaults if any are claimed. Any such statement may be conclusively relied upon
by any prospective purchaser or encumbrancer of the Building or of the business
of Tenant.
(b) At the requesting party's option, the responding party's failure to respond
within such time shall be conclusive upon such party that (i) this Lease is in
full force and effect, without modification except as may be represented by the
requesting party, (ii) there are no known uncured defaults in the requesting
party's performance, and (iii) if Landlord is the requesting party, not more
than one month's rent has been paid in advance.
(c) [Intentionally Deleted]
17. Landlord's Liability. The term "Landlord" as used herein shall mean only the
--------------------
owner or owners, at the time in question, of the fee title or the leasehold
interest under a ground lease of the Building. In the event of any transfer of
such title or interest, Landlord herein named (and in case of any subsequent
transfers then the grantor) shall be relieved from and after the date of such
transfer of all liability as respects Landlord's obligations thereafter to be
performed, provided: (i) any successor in interest or transferee expressly
assumes the obligations of Landlord hereunder, in writing; and (ii) that any
funds in the hands of Landlord or the then grantor at the time of such transfer,
in which Tenant has an interest, shall be delivered to the grantee. The
obligations contained in this Lease to be performed by Landlord shall be binding
on Landlord's successors and assigns, only as to matters arising during their
respective periods of ownership. The liability of Landlord for the performance
of its duties and obligations under this Lease is limited to Landlord's interest
in the Building
25
(including rental income and insurance/condemnation proceeds) and neither the
Landlord nor its partners, shareholders, officers or other principals shall have
any personal liability under this Lease.
18. Severability. The invalidity of any provision of this Lease as determined by
------------
a court of competent jurisdiction shall in no way affect the validity of any
other provision hereof.
19. Force Majeure. Any obligation of Landlord or Tenant which is delayed or not
-------------
performed due to an act of God, strike, riot, shortage of labor or materials,
war (whether declared or undeclared), laws, governmental regulations or
restrictions or any other governmental action or inaction, or any other cause of
any kind whatsoever which is beyond the responsible party's reasonable control,
shall not constitute a default hereunder and shall be performed within a
reasonable time after the end of the cause for delay or non-performance.
20. Time is of Essence. Time is of the essence with respect to the obligations
------------------
to be performed under this Lease.
21. Additional Rent. All monetary obligations of Tenant to Landlord under the
----------------
terms of this Lease, including but not limited to any expenses payable by Tenant
hereunder, shall be deemed to be rent.
22. Incorporation of Prior Agreement; Amendments. This Lease contains all
-----------------------------------------------
agreements of the parties with respect to any matter mentioned herein. No prior
or contemporaneous agreement or understanding pertaining to any such matter
shall be effective. This Lease may be modified in writing only, signed by the
parties in interest at the time of the modification. Except as otherwise stated
in this Lease, Tenant hereby acknowledges that neither the Listing Broker nor
the Cooperating Broker, if any, designated in Paragraphs 1.14 and 1.15, nor the
Landlord or any employee or agent of any of said persons has made any oral or
written warranties or representations to Tenant relative to the condition or use
by Tenant of the Premises or Building.
23. Notices. Any notice required or permitted to be given hereunder shall be in
-------
writing and may be given by personal delivery or by certified or registered mail
(provided that notice of exercise of any Option, as defined in Paragraph 39,
must in all events be given by certified or registered mail) addressed to a
party at the following address:
If to Landlord: 333 Ventures, LLC
333 Fayetteville Street, Suite 100
Raleigh, NC 27601
Attention: Ms. Jacqueline Barker
Phone: 919-754-8073
Fax: 919-754-8077
with a copy to: Sanford Holshouser, LP
219 Fayetteville Street, Suite 1000
Raleigh, North Carolina 27601
Attention: Samuel W. Whitt, Esq.
Phone: 919-755-1800
Fax: 919-829-0272
26
If to Tenant: Capital Bank Corporation
4901 Glenwood Avenue
Raleigh, NC 27612
Attention: John Anthony and Grant Yarber
Phone: 919-645-3494
Fax: 919-645-3490
with a copy to: Smith, Anderson, Blount, Dorsett,
Mitchell & Jernigan, L.L.P.
2500 Wachovia Capital Center
Raleigh, North Carolina 27601
Attention: Stephen T. Parascandola, Esq.
Phone: 919-821-1220
Fax: 919-821-6800
or such other address for notice purposes as may be later specified by notice to
the other party. Mailed notices shall be deemed given upon actual receipt at the
address required, or upon refusal thereof.
24. Waivers. No waiver by Landlord or Tenant of any provision hereof shall be
-------
deemed a waiver of any other provision or of any subsequent breach by the other
party of the same or any other provision. Landlord's or Tenant's consent to, or
approval of, any act shall not be deemed to render unnecessary the obtaining of
the other party's consent to or approval of any subsequent act by the other
party. The acceptance of rent by Landlord shall not be a waiver of any preceding
breach of this Lease by Tenant, other than Tenant's failure to pay the
particular rent so accepted, regardless of Landlord's knowledge of such
preceding breach at the time of acceptance of such rent. A copy of all notices
required to be given to Landlord hereunder shall be concurrently transmitted to
such other party(ies) as designated in advance by Landlord to Tenant.
25. Vacation or Abandonment of Premises. In the event that Tenant or its
---------------------------------------
assignees shall fail to conduct business on the ground level for a continuous
period of sixty (60) days or more, whether or not Rent is paid, said failure
shall be considered an "Abandonment." Tenant acknowledges and agrees that
occupancy of the ground level is an item of importance to Landlord. Thus, in the
event of an Abandonment, Tenant agrees to use commercially reasonable efforts to
effectuate a sublease/assignment for the ground level space. Landlord and Tenant
will also entertain, in good faith, potential arrangements for a full or partial
termination of the Lease (in the event of an Abandonment).
26. Holding Over. If Tenant remains in possession of all or any part of the
-------------
Premises after the expiration of the term of this Lease, such occupancy shall be
a tenancy from month-to-month upon all of the provisions of this Lease
pertaining to the obligations of Tenant, except that the Base Rent payable shall
be one hundred and fifty percent (150%) of the Base Rent payable immediately
preceding the expiration of the term.
27. Cumulative Remedies. No remedy or election hereunder shall be deemed
--------------------
exclusive but shall, wherever possible, be cumulative with all other remedies at
law or in equity.
28. Covenants and Conditions. Each provision of this Lease to be performed by
-------------------------
Landlord or Tenant shall be deemed both a covenant and a condition.
29. Binding Effect; Choice of Law. Subject to any provisions hereof restricting
------------------------------
assignment or subletting by Tenant and subject to the provisions of Paragraph
17, this Lease shall bind the parties, their personal
27
representatives, successors and assigns. This Lease shall be governed by the
laws of the State where the Building is located and any litigation concerning
this Lease between the parties hereto shall be initiated in the county in which
the Building is located.
30. Subordination.
-------------
30.1 Provided that Landlord provides Tenant with a commercially reasonable
non-disturbance agreement (a specimen form of which is attached hereto as
Exhibit E), this Lease, including but not limited to any Option, as defined in
Paragraph 39, shall, at Landlord's option, be subordinate to any ground lease,
mortgage, trust deed, or any other security interest now or hereafter affecting
the Building and to any and all advances made on the security thereof and to all
renewals, modifications, consolidations, replacements and extensions thereof.
Notwithstanding such subordination, Tenant's right to quiet possession of the
Premises shall not be disturbed if Tenant is not in default and so long as
Tenant shall pay the Rent and observe and perform all of the provisions of this
Lease, unless this Lease is otherwise terminated pursuant to its terms. If any
ground lessor or the holder of any mortgage, trust deed or other security
interest shall elect to have this Lease prior to its ground lease, mortgage,
trust deed or other security interest, and shall give written notice thereof to
Tenant, this Lease shall be deemed prior to such ground lease, mortgage, trust
deed or other security interest, whether this Lease is dated prior or subsequent
to the date of said ground lease, mortgage, trust deed or other security
interest or the date of recording thereof. Upon termination of any ground lease
or foreclosure of any mortgage, deed of trust or other security interest, Tenant
shall attorn to the ground lessor or any purchaser upon foreclosure, provided
that said entity expressly assumes (in writing) the obligations of Landlord
hereunder.
30.2 Tenant agrees to execute any documents (within a reasonable period of time
after receipt of written request therefor) required to effectuate a
subordination or attornment, or to make this Lease prior to any ground lease,
mortgage, trust deed or other security interest, if requested by the ground
lessor or holder of the mortgage, trust deed or other security interest.
31. Attorneys' Fees. If either party brings any lawsuit to enforce or declare
----------------
rights under this Lease, the prevailing party in the action, including any
appeal, shall be entitled to reasonable attorneys' fees paid by the losing party
as fixed by the court in the same or a separate proceeding, whether or not such
action is pursued to decision or judgment. The attorneys' fee award shall not be
computed in accordance with any court fee schedule, but shall be such as to
fully reimburse all attorneys' fees reasonably incurred in good faith.
32. Landlord's Access.
-----------------
32.1 Landlord and Landlord's agents shall have the right to enter the Premises
at reasonable times, upon reasonable advance notice (except in the event of an
emergency) and subject to Tenant's reasonable security measures, for the purpose
of inspecting the same, performing any services required of Landlord, showing
the same to prospective purchasers, lenders, or lessees (during the last nine
(9) months of the Term), taking such measures, erecting such scaffolding or
other necessary structures, making such alterations, repairs, improvements or
additions to the Premises or to the Building as Landlord may reasonably deem
necessary or desirable and the erecting, using and maintaining of utilities,
services, pipes and conduits through the Premises and/or other premises as long
as there is no unreasonable interference with Tenant's use of the Premises.
Landlord may at any time place on or about the Premises, the Building or the
Building "For Sale" signs and Landlord may at any time during the last one
hundred twenty (120) days of the term place on or about the Premises "For Lease"
signs.
32.2 All activities of Landlord pursuant to Paragraph 32 shall be without
abatement of Rent and Landlord shall not have any liability to Tenant for the
same.
28
32.3 Landlord shall have the right to retain keys to the Premises and to unlock
all doors in or upon the Premises other than files, vaults and safes, and in the
case of emergency to enter the Premises by any reasonably appropriate means, and
any such entry shall not be deemed a forcible or unlawful entry or detainer of
the Premises or an eviction.
33. Auctions, Other Sales and Cessation of Business. Tenant shall not conduct,
------------------------------------------------
nor permit to be conducted, either voluntarily or involuntarily, any auction
upon the Premises or the Common Areas without Landlord's prior written consent.
Notwithstanding anything to the contrary in this Lease, Landlord shall not be
obligated to exercise any standard of reasonableness in determining whether to
grant such consent.
34. Signs. Landlord shall provide Tenant with exclusive Building naming rights
-----
and placement of signs naming the Building, based on the terms in Exhibit D.
Tenant shall have certain exclusive rights to post signs upon the Premises,
based on reasonable requests and agreement by both parties. All other signs
placed by Tenant shall require Landlord approval, which approval shall not be
unreasonably withheld, conditioned, or delayed. Landlord shall provide Tenant
with standard door signage for each floor or suite and directory signage on the
lobby Marquee at no cost to Tenant. All other signage, including signage
associated with re-naming the Building, signage on the exterior of the building,
signage in the lobby or any similar non-standard Building Tenant signage shall
be a Tenant expense.
35. Merger. The voluntary or other surrender or mutual cancellation or
------
termination by Landlord of this Lease shall not result in a merger of the
interest of the Landlord and the interest of the Tenant, but shall, at the
option of Landlord, terminate all or any sub-tenancies or may, at the option of
Landlord, operate as an assignment to Landlord of any or all sub-tenancies.
36. Consents. Except for Paragraph 33 (Auctions, Other Sales and Cessation of
--------
Business) and Paragraph 49 (Hazardous Material) as it relates to causing or
permitting any Hazardous Material to be brought upon, kept or used in or about
the Premises, wherever in this Lease the consent of one party is required to an
act of the other party such consent shall not be unreasonably withheld,
conditioned, or delayed.
37. Guarantor. [Intentionally Deleted]
---------
38. Quiet Enjoyment. Upon Tenant paying the rent for the Premises and observing
---------------
and performing all of the covenants, conditions and provisions on Tenant's part
to be observed and performed hereunder, Tenant shall have quiet enjoyment of the
Premises for the entire term subject to all of the provisions of this Lease.
39. Options.
-------
39.1 Options Personal. The term "Option" as used in this Lease refers to any
option to extend, renew or expand and to any right of first refusal or first
offer granted to Tenant, as set forth in this Paragraph 39 and in Exhibit D,
---------
Paragraph 4. Each Option is personal to the original Tenant and may be exercised
- -----------
only by the original Tenant (or an entity for which Tenant did not need
Landlord's consent for sublease/assignment) while occupying the Premises without
the intent of thereafter assigning this Lease or subletting the Premises or any
portion thereof, and may not be, voluntarily or involuntarily, exercised by or
assigned to any other person or entity. Options shall not be assignable separate
and apart from this Lease, and may not be separated from this Lease in any
manner, by reservation or otherwise.
39.2 Option to Renew.
(a) Tenant shall have the right, at its option, to renew this Lease, as the same
may have been amended from time to time, for two renewal terms of five (5) years
each, with the first commencing on the day following the expiration of the
initial lease term and the second commencing on the day following expiration of
the first renewal option term.
29
(b) Tenant shall exercise the renewal option by giving to Landlord written
notice of such election to renew not later than one hundred eighty (180) days
prior to the expiration of the initial lease term.
(c) All the terms, provisions, agreements, covenants and conditions of this
Lease shall continue in full force and effect during the renewal term except
that the Base Rent for the first year of the renewal term shall be the lesser
of: (1) the rental rate in effect at the end of the initial term of this lease
plus 3%; or (2) the Fair Market Rental (as defined in Exhibit D, Paragraph 4).
The rate shall increase at the rate of 3% per year during the term of the
renewal period.
(d) Any termination, cancellation, surrender, sublease or assignment of this
Lease (if Landlord's consent thereto is required under the Lease) during the
Term shall terminate any right of renewal hereunder.
(e) As used herein, "Term" shall include the renewal term of this Lease if this
Lease is renewed pursuant to the provisions of this Paragraph.
39.3 Option to Expand & Right of First Refusal. Subject to the provisions of
this Paragraph 39 and the rights of other tenants, if any other tenant on the
Tenant's floor of the Building does not renew or extend their lease or their
lease is otherwise terminated, Tenant shall have the first right of refusal to
lease said tenant's space upon the same terms and conditions and at the lower
of: (i) the per square foot rate (with substantially similar Tenant Improvement
allowance provisions, prorated to account for the portion of the Term remaining)
as then currently applicable under this Lease; or (ii) the Fair Market Rental as
defined in (Exhibit D, Paragraph 4 hereto). Tenant shall have thirty (30) days
written notice for exercising said option. Notwithstanding the foregoing, Tenant
may only exercise this right if: (i) at least three (3) years remain in the
Term; or (ii) Tenant offers to extend the Term so that at least three (3) years
remain.
39.4 Option for Alternative Premises. In the event Tenant determines that it
requires alternative space to the Premises provided under this Lease, Landlord
shall make reasonable efforts to lease to Tenant alternative premises in the
Building at the same terms and conditions set forth in this Lease, provided,
however, the move to alternative space shall be subject to Landlord's sole
discretion.
39.5 Option for Additional Premises. In the event Tenant determines that it
desires additional square footage in the Building, Landlord shall make
reasonable efforts to lease to Tenant such additional space. In the event
Landlord procures such addition square footage for Tenant, a lease addendum
shall be entered into for a minimum term of thirty-six (36) months, with rent on
the additional space at the lower of: (i) the per square foot rate (with
substantially similar Tenant Improvement allowance provisions, prorated to
account for the portion of the Term remaining) as then currently applicable
under this Lease; or (ii) the Fair Market Rental (as defined in Exhibit D,
Paragraph 4 hereto), and incorporating substantially the same terms and
conditions as provided in this Lease. 39.6 Multiple Options. If Tenant has
multiple options to extend or renew this Lease, a later option cannot be
exercised unless the prior option to extend or renew has been exercised.
39.7 Effect of Default on Options.
(a) Tenant shall have no right to exercise any Option set forth in this
Paragraph 39, notwithstanding any provision in the grant of the Option to the
contrary, (i) if Tenant has committed any non-curable material default, or (ii)
from the date Landlord gives Tenant notice of a curable default until the
default is cured, or (iii) from the day after a monetary obligation to Landlord
is due from Tenant and unpaid (without any necessity of notice thereof to
Tenant) until the obligation is paid; or (iv) if, during the twelve (12) month
period prior to the date Tenant gives Landlord notice of Tenant's exercise of
the option, Landlord has given to Tenant three or more notices of default under
Paragraph 13.1 (b) or (c), whether or not the defaults are cured. The period of
30
time within which an Option may be exercised shall not be extended by reason of
Tenant's inability to exercise an option because of the provisions of this
Paragraph 39.
(b) All rights of Tenant under the provisions of any Option shall terminate and
be of no further force or effect, notwithstanding Tenant's due and timely
exercise of the Option, if after such exercise (i) Tenant fails to pay a
monetary obligation to Landlord within thirty (30) days after receipt of written
notice of such delinquency, (ii) Tenant fails to cure a default when required
after notice given pursuant to Paragraph 13.1 (c), or (iii) Landlord gives
Tenant three (3) or more notices of default (in any consecutive twelve (12)
month period) under Paragraph 13.1 (c), whether or not the defaults are cured,
or (iii) Tenant commits any non-curable material default.
40. Security Measures-Landlord's Reservations.
-----------------------------------------
40.1 Obligation. Tenant assumes all responsibility for the protection of Tenant
and its agents and invitees and the property of Tenant and its agents and
invitees from acts of third parties. Nothing herein contained shall prevent
Landlord, at Landlord's sole option, from providing security protection for the
Building or any part thereof, in which event the cost thereof shall be included
within the definition of Operating Expenses, as set forth in Paragraph 4.2(b).
Notwithstanding the foregoing, Landlord represents that it shall continue at its
own expense to contract for a comparable level of Security in the Building.
40.2 Landlord shall have the following rights:
(a) [Intentionally Deleted]
(b) To provide and install Building standard (beyond "Building standard" is at
Tenant's cost and expense) graphics on the door of the Premises and such
portions of the Common Areas as Landlord shall reasonably deem appropriate;
(c) To grant to any lessee of the Building the exclusive right to conduct any
business as long as such exclusive right does not conflict with any rights
expressly given herein including the provisions of Paragraph 6.1.
(d) [Intentionally Deleted]
40.3 Tenant shall not:
(a) [Intentionally Deleted]
(b) Suffer or permit anyone, except in emergency, to go upon the roof of the
Building.
40.3 Representation of the Building. Landlord grants Tenant, as part of naming
rights, the right to use representation (photographic or otherwise) of the
Building in connection with Tenant's business, provided such usage does not
negatively impact Building image or public perception. Landlord shall have the
reasonable right, by written notice to Tenant, to object to Tenant's
representation of the Building. In the event of such dispute, the chief
executive officer and managing member, respectively, of Tenant and Landlord
shall work in good faith to resolve any differences in the representation of the
Building.
31
41. Easements.
---------
41.1 Landlord reserves the right, from time to time, to grant easements and
rights, make dedications and record maps affecting the Building as Landlord may
deem necessary or desirable, so long as such easements, rights, dedications, and
maps do not unreasonably interfere with the use of the Premises by Tenant.
Tenant shall sign any of the after-mentioned documents within a reasonable
period of time following receipt of written request of Landlord.
41.2 The obstruction of Tenant's view, air, or light by any structure erected in
the vicinity of the Building, whether by Landlord or third parties, shall in no
way affect this Lease or impose any liability upon Landlord.
42. Performance. If at any time a dispute shall arise as to any amount or sum of
-----------
money to be paid by one party to the other under the provisions hereof, the
party against whom the obligation to pay the money is asserted shall have the
right to make payment "under protest" and such payment shall not be regarded as
a voluntary payment, and there shall survive the right on the part of said party
to institute suit for recovery of such sum. If it shall be adjudged that there
was no legal obligation on the part of said party to pay such sum or any part
thereof, said party shall be entitled to recover such sum or so much thereof as
it was not legally required to pay under the provisions of this Lease.
43. Authority. If Landlord or Tenant is a corporation, trust, limited liability
---------
company or general or limited partnership, said entity, and each individual
executing this Lease on behalf of such entity represent and warrant that such
individual is duly authorized to execute and deliver this Lease on behalf of
said entity.
44. Conflict. [Intentionally Deleted]
--------
45. No Offer. Preparation of this Lease by Landlord or Landlord's agent and
--------
submission of same by Landlord or Tenant shall not be deemed an offer to lease.
This Lease shall become binding upon Landlord and Tenant only when fully
executed by both parties. Notwithstanding any other provision contained in this
Lease to the contrary, this Lease is subject to Tenant obtaining approval at
this site from all applicable regulatory authorities, including the North
Carolina Banking Commission and the FDIC. Tenant agrees to diligently and
continuously pursue obtaining such approvals. If approval by all such regulatory
authorities is not obtained on or before the Commencement Date, Tenant shall
have the option within the next succeeding ten (10) days by written notice to
Landlord to cancel this Lease. At such time as the required regulatory approvals
are obtained, Tenant shall give Landlord prompt written notice thereof.
46. Lender Modification. Tenant agrees to make technical modifications to this
-------------------
Lease if reasonably required by an institutional lender in connection with
normal financing/refinancing of the Building.
47. Multiple Parties. If more than one person or entity is named as either
-----------------
Landlord or Tenant herein, except as otherwise expressly provided herein, the
obligations of the Landlord or Tenant herein shall be the joint and several
responsibility of all persons or entities named herein as such Landlord or
Tenant, respectively.
48. ERISA Representation. [Intentionally Deleted]
--------------------
49. Hazardous Material. Except for standard quantities of office supplies
-------------------
reasonably incident to the use listed in Paragraph 1.4 of the Basic Lease
Provisions, Tenant shall not cause or permit any Hazardous Material (as
hereinafter defined) to be brought upon, kept or used in or about the Premises
by Tenant, its agents, employees, contractors or invitees, without the prior
written consent of Landlord, which consent may be granted or withheld in
Landlord's sole discretion. For the purpose of this Lease, "Hazardous Material"
shall include oil, flammable explosives, asbestos, urea formaldehyde,
radioactive materials or waste, or other hazardous, toxic, contaminated or
polluting materials, substances or wastes, including, without limitation, any
"hazardous
32
substances," "hazardous wastes," "hazardous materials" or "toxic substances" as
such terms are defined in the Resource Conservation and Recovery Act and the
Comprehensive Environmental Response, Compensation and Liability Act, and in any
other law, ordinance, rule, regulation or order promulgated by the federal or
state government, or any other governmental entity having jurisdiction over the
Building or the parties to this Lease. If Tenant breaches the obligations set
forth in this Paragraph 49, or if the presence of Hazardous Material in the
Premises or at the Building caused or permitted by Tenant (whether or not
Landlord has given its consent to the presence of such Hazardous Material in the
Premises) proximately results in contamination of the Premises or any other part
of the Building, or if contamination of the Building by Hazardous Material
otherwise occurs for which Tenant is legally liable, then Tenant shall
indemnify, defend and hold Landlord harmless from any and all claims, judgments,
damages, penalties, fines, costs, liabilities or losses, including, without
limitation, diminution in value of the Building, damages for the loss or
restriction on use of rentable or useable space or floor area in or of any
amenity of the Building, damages proximately arising from any adverse impact on
leasing space in the Building, sums paid in settlement of claims, and reasonable
any attorneys' fees, consultant fees and expert fees which arise during or after
the term of this Lease as a result of such contamination. This indemnification
of Landlord by Tenant shall survive expiration or termination of this Lease and
includes, without limitation, costs incurred in connection with any
investigation of site conditions or any cleanup, remedial, removal or
restoration work required by any federal, state or local governmental agency or
political subdivision because of Hazardous Material present in, on or under the
Premises. Without limiting the foregoing, if it can be objectively demonstrated
that the presence of any Hazardous Material caused or permitted by Tenant or its
agents, employees, contractors or invitees, results in any contamination of the
Building, Tenant shall promptly take remediation and/or assessment actions
required by applicable law and agencies having jurisdiction; provided that
Landlord's approval of such actions shall first be obtained, which approval
shall not be unreasonably withheld, conditioned, or delayed. Tenant shall
promptly notify Landlord of any such known contamination.
50. Attachments. Attached hereto are the following Exhibits which constitute a
-----------
part of this Lease.
EXHIBIT A: Premises.
EXHIBIT B: Rules and Regulations.
EXHIBIT C: Tenant Improvements.
EXHIBIT D: Additional Provisions (as modified)
EXHIBIT E: SNDA Specimen Form
51. Miscellaneous. This Agreement and the Exhibit(s) hereto constitute the
-------------
entire agreement between the parties regarding the subject matter hereof. The
parties shall not be bound by or liable for any prior or contemporaneous
statement, writing, representation, promise, inducement or understanding,
written or oral, not set forth in this Agreement and any attachments hereto.
This Agreement may be executed in counterparts. This Agreement (including any
attachment hereto) may not be amended or modified except by a written instrument
signed by duly authorized officers or representatives of the parties hereto. Any
attempt to modify the Agreement by an oral understanding is void and shall have
no effect. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their successors and permitted assigns only. Each party's
respective obligations under this Agreement which are not, by the express terms
of this Agreement, fully to be performed during the term of this Agreement shall
survive the termination of this Agreement for any reason. At the request of
either party, the parties shall promptly execute and record, at the cost of the
requesting party, a short form memorandum describing the Premises and stating
this Lease's Term, its Commencement and Termination Dates, and other information
that the parties agree to include.
33
52. Dispute Resolution. The parties shall make good faith efforts to resolve any
------------------
disputes concerning Lease matters. Following such good faith efforts, all
disputes, claims, and causes one party makes against the other, at law or
otherwise, including third party or "pass-through" claims for indemnification
and/or contribution, shall be initiated, determined, and resolved by arbitration
in Wake County, North Carolina, in accordance with the Commercial Arbitration
Rules of the American Arbitration Association, and judgment upon the award
rendered by the Arbitrator(s) may be entered in any court having jurisdiction
thereof.
[Signature Page Follows]
34
LANDLORD AND TENANT HAVE CAREFULLY READ AND REVIEWED THIS LEASE AND EACH
PROVISION IN IT AND BY EXECUTING IT, SHOW THEIR INFORMED AND VOLUNTARY CONSENT.
THE PARTIES AGREE THAT, AT THE TIME THIS LEASE IS EXECUTED, ITS TERMS ARE
COMMERCIALLY REASONABLE AND EFFECTUATE THE INTENT AND PURPOSE OF LANDLORD AND
TENANT WITH RESPECT TO THE PREMISES.
This Lease has been prepared for submission to your attorney for approval; no
representation or recommendation is made as to the legal sufficiency, legal
effect, or tax consequences of this Lease or the transaction relating thereto;
the parties shall rely solely upon the advice of their own legal counsel as to
the legal and tax consequences of this issue.
LANDLORD TENANT
333 Ventures, LLC Capital Bank Corporation
A North Carolina Limited Liability Company A North Carolina Corporation
By: /s/Donald F. Carter By: /s/B. Grant Yarber
------------------- ------------------
Its: Member Its: President & CEO
------ ---------------
WITNESS / ATTEST: /s/Jacqueline Barber WITNESS / ATTEST: /s/Jacqueline Barber
-------------------- ---------------------
On: On:
-------------------------------------- -----------------------------------
Address Address
----------------------------------- --------------------------------
- ------------------------------------------ ---------------------------------------
35
EXHIBIT A
PREMISES
Premises location, rentable square footage and occupancy dates are as
follows:
Location Rentable SF Occupancy Date
-------- ----------- --------------
1st floor Office area 1,597 April 1, 2006
1st floor lobby 2,400 April 1, 2006
3rd Floor 10,955 April 1, 2006
4th Floor 10,955 April 1, 2006
------
Subtotal 25,907
2nd Floor Office 7,542 November 1, 2006
6th Floor 10,955 July 1, 2007
7th Floor 10,955 January 1, 2008
------
Total 55,359
36
EXHIBIT B
RULES AND REGULATIONS FOR STANDARD OFFICE LEASE
GENERAL RULES
1. Tenant shall not suffer or permit the obstruction of any Common Areas,
including driveways, walkways and stairways.
2. Landlord reserves the right to refuse access to any persons Landlord in good
faith judges to be a threat to the safety, reputation, or property of the
Building and its occupants.
3. Tenant shall not make or permit any noise or odors that unreasonably
interfere with other lessees or persons having business within the Building.
4. Tenant shall not keep animals or birds within the Building, and shall not
bring bicycles, motorcycles or other vehicles into areas not designated as
authorized for same.
5. Tenant shall not make, suffer or permit litter except in appropriate
receptacles for that purpose.
6. Tenant shall not alter any lock or install new or additional locks or bolts,
without Landlord's consent, not to be unreasonably withheld, conditioned, or
delayed.
7. Tenant shall be responsible for the inappropriate use of any toilet rooms,
plumbing or other utilities. No foreign substances of any kind are to be
inserted therein.
8. Tenant shall not deface the walls, partitions or other surfaces of the
premises or Building.
9. Tenant shall not suffer or permit any thing in or around the Premises or
Building that causes excessive vibration or floor loading in any part of the
Building.
10. Furniture, significant freight and equipment shall be moved into or out of
the building only with the Landlord's knowledge and consent, without Landlord's
consent, not to be unreasonably withheld, conditioned, or delayed, and subject
to such reasonable limitations, techniques and timing, as may be designated by
Landlord. Tenant shall be responsible for any damage to the Building arising
from any such activity.
11. Tenant shall not employ any service or contractor for services or work to be
performed in the Building, except as approved by Landlord.
12. Landlord reserves the right to close and lock the Building on Saturdays,
Sundays and legal holidays, and on other days between the hours of 6:00 P.M. and
7:00 A.M. of the following day. If Tenant uses the Premises during
37
such periods, Tenant shall be responsible for securely locking its suite door.
Tenant shall have access to Building 24 hours per day, seven days a week.
13. Tenant shall return all keys at the termination of its tenancy and shall be
responsible for the cost of replacing any keys that are lost.
14. No window coverings, shades or awnings shall be installed or used by Tenant,
without Landlord's consent, not to be unreasonably withheld, conditioned, or
delayed.
15. Neither Tenant nor any employee or invitee of Tenant shall go upon the roof
of the Building.
16. Tenant shall not suffer or permit smoking or carrying of lighted cigar or
cigarettes in areas reasonably designated by Landlord or by applicable
governmental agencies as non-smoking areas.
17. Tenant shall not use any method of heating or air conditioning without
Landlord's consent, not to be unreasonably withheld, conditioned, or delayed.
18. The Premises shall not be used for lodging or manufacturing. Cooking shall
be by microwave oven only.
19. Tenant shall comply with all safety, fire protection and evacuation
regulations established by Landlord or any applicable governmental agency.
20. Landlord reserves the right to waive anyone of these rules or regulations,
and/or as to any particular lessee, and any such waiver shall not constitute a
waiver of any other rule or regulation or any subsequent application thereof to
such Tenant.
21. Tenant assumes all risks from theft or vandalism and agrees to keep its
Premises locked as may be required.
22. Landlord reserves the right to make such other reasonable rules and
regulations as it may from time to time deem necessary for the appropriate
operation and safety of the Building and its occupants. Tenant agrees to abide
by such rules and regulations as well as these rules and regulations, subject to
the limitations on such rules and regulations as provided in the Lease.
38
EXHIBIT C
TENANT IMPROVEMENTS
1. Landlord shall provide a Tenant Improvement ("TI") allowance of $32.50 per
rentable square foot to be used at the discretion of the Tenant. The allowance
does not include the basement/vault square footage.
2. Tenant may reallocate or transfer the TI allowance, as desired, to the
various leased areas of the Premises.
3. Payment of the TI allowance by Landlord shall be on a monthly basis (upon
receipt of invoices from Tenant reasonably documenting its expenditures) and
shall correspond to or match the immediately upcoming new space occupancy by the
Tenant. TI Payment for up-fits, excluding the 6th and 7th floors, shall be
available to the Tenant as expenditures occur after the full execution of the
Lease. TI allowance for the 6th and 7th Floors shall be provided only as design
and construction of these floors begin.
4. Any un-used TI allowance shall be applied as credit to future Premises
up-fits or returned to Tenant upon written request (but no earlier than thirty
(30) days following the Commencement Date).
5. Tenant accepts Premises in accordance with the Lease provisions and any
improvements to the Premises (or activities incidental thereto) shall be
eligible for reimbursement from the TI allowance, including, but not limited to:
design drawings, architectural services, engineering services, permitting,
document copying, bidding, demolition, waste removal, new construction,
additions/removal or modifications to the electrical, HVAC, fire protection,
sewer and water, and communications, elevator lock-out and security
installations, window treatment and shading (except window film replacement as
stated in Paragraph 6.3(b), which shall be provided separately by Landlord),
modifications to common area(s) or other Premises required by Tenant Up-fit,
mark-up of Construction cost if Tenant requests Landlord to provide construction
Project management. Landlord shall cooperate (at no cost to Tenant) with all
reasonable Tenant requests to execute permit applications and similar
ministerial acts.
6. Tenant shall choose its' own design and construction team. Tenant shall
designate the construction Project Manager and Landlord will designate a single
Point of Contact to interact with the Project Manager. Tenant's Project Manager
duties shall include endeavoring to keep the project on schedule and taking
commercially reasonable precautions to protect the Building from damages or
abuse during construction. All work activities that may materially hinder,
damage or otherwise impact the Building or its day-to-day operations shall be
initiated and completed based on the reasonable concurrence and agreement by the
Project Manager and Point of Contact person. As a minimum, Project Manager and
Point of Contact person shall meet twice a week on-site during construction to
monitor activities.
7. The General Contractor shall have a full-time on-site Project manager.
8. Tenant shall endeavor to provide initial space occupancy (for business
purposes) on or about April 1, 2006, including: completion of construction
drawings, submittal to the City of Raleigh for permit review and selection of
the General Contractor by approximately December 15, 2005; completion of up-fit
demolition, receipt of the construction permit and start-up of the installation
up-fits by approximately February 1, 2006, and; completion of up-fits on or
39
about April 1, 2006. Tenant agrees to take all commercially reasonable efforts
to meet this schedule, and agrees to designate the Occupancy Date (for business
purposes) as April 1, 2006, subject to extension only as expressly provided in
the Lease.
9. Tenant Improvements shall be designed and constructed in a manner that
maintains substantial consistency in appearance and finishes in areas
interfacing or exposed to common areas. The design and construction of such
areas shall be reviewed and approved by the Landlord, with Landlord not
unreasonably withholding, delaying, or conditioning approval. This excludes
up-fit of fully occupied floors by Tenant. Tenant shall provide HVAC,
electrical, fire protection, safety and plumbing design and construction
consistent with building standards, and shall allow Landlord a reasonable
opportunity to review and inspect these items during design and construction.
40
EXHIBIT D
ADDITIONAL PROVISIONS
1. Naming Rights: The lease rate and amount of square footage in the lease
provides exclusive Tenant naming rights for the building. Naming rights will be
granted upon lease signing. All costs associated with implementing the building
name change, including the installation of signage, will be a Tenant cost. The
new building name will be agreed upon by both Tenant and Landlord. Tenant may
place appropriate signage (building name and/or Tenant logo) on the north and
south faces of the building near the top and at the building entrances on
Fayetteville and Davie Streets, with size and configuration contingent upon City
of Raleigh approval. Tenant has tentatively selected the new building name as
"Capital Bank Plaza", which is acceptable to the Landlord. Tenant may assign the
naming rights to a successor company, subject to Landlord's written consent,
which shall not be unreasonably withheld, conditioned or delayed.
2. Vaults/ATM/Safe: Landlord shall lease the basement vault and the contiguous
open space (a total of 3,314 rentable square feet) to the Tenant, which will
enable Tenant to establish security while using the vault. Tenant shall provide
all costs and expenditures to up-fit the vault and open space (including any
additional security measures, ventilation, electronics, and reactivation of the
vault doors), service and maintain the vault and adjoining space. Two additional
vaults are located in Tenant Premises (one on the 2nd floor and one on the 3rd
floor); it shall be the Tenant's responsibility to service and maintain those
vaults as well as the installation of any electronics or ventilation that may be
required. Tenant, at Tenant's sole cost, will have the right to install an ATM
kiosk and safe at a location reasonably acceptable to Landlord.
3. Dedicated Private Elevator: Landlord shall provide Tenant with exclusive use
of a private elevator that operates between the basement vault area, the lobby
level, the 2nd floor and the 3rd floor. Tenant shall be responsible for
operating, servicing and maintaining the private elevator. Landlord, upon
request, shall provide Tenant with the ability to "lock-out" this elevator for
certain floors or "lock-out" the building's common elevators for requested
floors, with the costs of "lock-out" installation included in the Tenant
Improvement Allowance.
41
4. Fair Market Rental: "Fair Market Rental" shall mean ninety-five percent (95%)
of the fair market Base Rent, taking into account the cash value of free rent
and leasehold improvements, which non-equity tenants are then receiving in
connection with a lease for comparable space within a three (3) mile radius of
the Building. Promptly following receipt by Landlord of Tenant's notice to
exercise its expansion option, Landlord shall notify Tenant of the amount that,
in Landlord's reasonable opinion, represents the Fair Market Rental. Within
fifteen (15) days of such notice, (a) if Tenant agrees, Tenant shall notify
Landlord that Tenant so agrees that the Base Rent therein provided constitutes
the Fair Market Rental, or (b) if Tenant disagrees with the Fair Market Rental,
Tenant shall specify what Base Rent, in Tenant's opinion, constitutes the Fair
Market Rental ("Tenant's Base Rent Notice"), or (c) if Tenant does not respond,
Tenant shall be deemed to agree with Landlord's determination of Fair Market
Rental. In the event Tenant agrees, then the Base Rent set forth in Landlord's
said notice shall be deemed the lesser of the current lease rate or the Fair
Market Rental. In the event Tenant disagrees as provided in clause (b) above,
the following procedure shall be used in determining the Fair Market Rental: The
parties shall use due diligence to attempt to agree upon the Fair Market Rental
within seven (7) business days following the foregoing fifteen (15) day period,
but, if they do not so agree, then at the request of either party to the other
(the "Initial Request"), the parties shall jointly choose an impartial real
estate broker (who shall have had at least ten (10) years experience as a broker
in commercial office leasing within a three (3) mile radius of the Building,
whose decision shall be final and binding. If the parties do not agree upon such
a third party broker and notify in writing the other thereof within seven (7)
business days of the Initial Request, then within six (6) additional business
days each party shall choose a real estate broker (having the foregoing
credentials) and notify in writing the other thereof, and the joint decision of
such real estate brokers regarding fair market rental shall be final and binding
(or, failing such notice, or if such choice is made, failing notice to the other
within such six (6) additional business day period, the decision of one such
real estate broker timely chosen and noticed shall be final and binding). If the
two (2) real estate brokers timely chosen and noticed do not agree within seven
(7) business days of the end of the six (6) business day period mentioned above
during which they were chosen, then they shall choose a third such real estate
broker (having the foregoing credentials) within five (5) business days, and the
decision of such third real estate broker regarding fair market rental shall be
final and binding.
5. Capital Bank Financing: Tenant shall provide the Landlord with the following
Building re-financing and Line-of-credit (subject to separate written agreement
between Landlord and Tenant).
a) Re-Finance Current Building Loan.
--------------------------------
Amount: $7,910,000
Terms: A fixed interest rate of 6.75% for a period of 10 years
and no origination fee, with interest only for the first
5 years and P&I during the next five years based on a 25
year amortization. The loan shall have a balloon payment
at the end of 10 years.
b) Line-of-Credit for TI
---------------------
Amount: The line-of-credit shall cover the original Capital Bank
TI ($1,799,167) plus other near-term TI expenditures by
Capital Bank due to expansion and other new tenants
($1,000,000), for a total line-of-credit amount of
$2,800,000.
Terms: Interest only, at Prime minus 1/2 percent, with no
origination fee.
*NOTE: Landlord shall have the right to satisfy and replace one or both loans
with permanent financing at any point in the future, in Landlord's sole
discretion and without penalty.
6. Security: Landlord provides a security guard during normal business hours,
and the building has lock-out and security swipe card entry after hours.
Additional security required by Tenant will be a responsibility and cost to
Tenant.
42
7. Communications: The building is wired for Broad Band Internet Service, which
is provided by Windchannel Communications, a tenant in the building.
8. Building Management: RDC Property Management, an affiliate of Raleigh
Development Company, manages the building. RDC Property Management has its
primary office at 333 Corporate Plaza, Suite 100, Raleigh, North Carolina 27601,
and shall have said office open during normal business hours and be reasonably
accessible to Tenant.
43
EXHIBIT E
SNDA SPECIMEN FORM
SUBORDINATION, ATTORNMENT AND
NON-DISTURBANCE AGREEMENT
THIS SUBORDINATION, ATTORNMENT AND NON-DISTURBANCE AGREEMENT ("Agreement"),
entered into as of ______________________, by ______________________ ("Tenant"),
and ___________________________ ("Bank").
I. Tenant is the lessee under certain leases described on Attachment 1 (the
leases and all modifications, amendments, extensions, renewals, replacements and
substitutions thereto or therefor, the "Leases"), which Leases cover all or a
portion of the real property described on Attachment 1 (the "Property").
II. Bank has extended or has committed to extend credit ("Loan") to
____________________________, which Loan is or will be secured by the lien of a
mortgage, deed to secure debt, security deed, trust deed or deed of trust
encumbering the Property (the "Mortgage").
III. The Mortgage is dated ________________________ and recorded in Book _____
at Page _____, of the Office of the Register of Deeds, or other similar
recording office, in the State and County indicated above.
IV. Bank requires that Tenant enter into this Agreement.
NOW, THEREFORE, in consideration of One Dollar in hand paid by each party to the
other, the covenants contained herein and other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties agree
as follows:
1. Subordination of Leases. The Leases and all terms thereof, including,
-----------------------
without limitation, any options to purchase, rights of first refusal and any
similar rights, are and shall be subject and subordinate to the Mortgage, and to
all amendments, modifications, extensions, renewals, replacements and
substitutions thereof or therefor, to the full extent of the principal,
interest, fees, charges, costs and expenses (to include attorneys' fees, fees of
legal assistants and fees of other professionals as provided therein) and all
other amounts now or hereafter secured thereby.
2. Joinder in Foreclosure. In the event Bank elects to foreclose or cause
----------------------
the foreclosure of the Mortgage, Bank will not join, nor will any other person
on behalf of Bank join Tenant in summary or foreclosure proceedings as long as
(1) Tenant has not amended, modified, replaced or substituted the Leases without
Bank's prior written consent and (2) Tenant is not in default under the Leases.
3. Succession to Interest of Landlord; Nondisturbance. In the event that
---------------------------------------------------
Bank shall succeed to the interest of the lessor or landlord under the Leases,
or any other person shall succeed to the interest of the lessor or landlord
under the Leases either directly or through Bank on account of or by virtue of a
foreclosure under the Mortgage, or a deed-in-lieu of foreclosure, and there
exists no default by Tenant under the Leases (beyond any applicable cure period)
and Tenant has not amended, modified, replaced or substituted the Leases without
Bank's prior written consent, Bank or such other person who succeeds to the
interest of the lessor or landlord directly or through Bank on account of a
foreclosure or a deed-in-lieu of foreclosure, agrees not to disturb or otherwise
interfere with Tenant's possession of the portion of the Property leased by
Tenant pursuant to the Leases for the unexpired term of the Leases, provided
that Bank and such other successor person as aforesaid, (1) shall be liable only
for the duties and obligations of the "landlord" under the Leases accruing after
the taking of possession as aforesaid and for the period that each is severally
the "landlord" under the Leases and (2) shall not be:
(a) liable for any act or omission of any other lessor or landlord,
or any other person under the Leases;
44
(b) subject to any offsets or defenses which Tenant might have
against any lessor or landlord, or any other person under the Leases;
(c) bound by any rent or additional rent which Tenant might have
paid for more than thirty (30) days in advance to any lessor or landlord,
or other person, unless the same was paid to Bank or such other successor
person to Bank as aforesaid;
(d) bound by any amendment, modification, replacement or
substitution of the Leases made without Bank's prior written consent; or
(e) liable for any security deposit Tenant might have paid any
lessor or landlord, or other person, except to the extent Bank has
actually received said security deposit.
4. Attornment by Tenant. Upon Bank succeeding to the interest of the
---------------------
lessor or landlord under the Leases, or any other person succeeding to the
interest of the lessor or landlord under the Leases either directly or through
Bank on account of or by virtue of a foreclosure under the Mortgage, or a
deed-in-lieu of foreclosure, Tenant covenants and agrees (1) to attorn to Bank
or any other person succeeding to the interest of "landlord" under the Leases
either directly or through Bank on account of or by virtue of a foreclosure
under the Mortgage, or a deed-in-lieu of foreclosure, (2) to recognize Bank or
such other successor as Tenant's "landlord" under the Leases, and (3) to be
bound by and perform all of the obligations and conditions imposed upon Tenant
by the Leases, provided that Bank or other successor person assumes all
obligations of Landlord thereunder. If requested by Bank or any subsequent owner
of the Property as aforesaid, Tenant shall execute a new lease for a term equal
to the remaining term of the Leases and otherwise containing the same provisions
and covenants of the Leases.
5. Tenant's Representation and Warranty. Tenant represents and warrants to
------------------------------------
Bank that there has been no assignment of Tenant's rights and interests under
the Leases to any person and no sublease or other agreement covering the leased
premises has been entered into by Tenant.
6. Tenant's Additional Covenants and Agreements.
--------------------------------------------
(a) Insertion of Mortgage Information. Tenant agrees that the
------------------------------------
recording information for the Mortgage may be written on this Agreement at
the time this Agreement is recorded or at such other time as may be
appropriate, and such insertion shall not negate, or adversely or
negatively effect the validity and enforceability of this Agreement.
(b) No Amendment or Modification. Tenant agrees that it will not
------------------------------
amend, modify, replace or substitute the Leases, or any part thereof,
without Bank's prior written consent.
(c) No Alterations or Improvements. Tenant agrees that it will not
-------------------------------
make to that portion of the Property leased by it under the Leases any
alterations, improvements or changes that would cause the value of the
Property to diminish or the utility or current usefulness of the Property
to be diminished, without the prior written consent of Bank.
(d) Payment of Rents to Bank. Tenant, recognizing and acknowledging
------------------------
that the lessor or landlord under the Leases has assigned or will assign
to Bank the rents and profits from the Property, and Tenant agrees that it
will pay to Bank, on written demand, all rental payments or other sums
required to be paid by Tenant under the Leases.
(e) Notice and Right to Cure Defaults. Prior to terminating the
----------------------------------
Leases due to a default by the lessor or landlord thereunder, Tenant
agrees to notify Bank of such default and give Bank the opportunity to
cure such default within thirty (30) days of Bank's receipt of such notice
(or, if such default cannot reasonably be cured within such thirty (30)
day period, Bank shall have such longer time as may be necessary (not ot
exceed sixty (60) days) to cure the default; provided that Bank commences
the cure within such period and diligently pursues the cure thereafter).
7. Limitation of Liability. Notwithstanding anything to the contrary
-------------------------
contained herein, the shareholders, directors, officers, employees, agents and
other representatives of Bank shall not have any personal liability to Tenant
and the liability of Bank to Tenant, in any event, shall not exceed and shall be
limited to Bank's interest in that portion (including rental income, insurance
and condemnation proceeds) of the Property that is subject to the Leases. If
Bank becomes the "landlord" under the Leases, after it conveys its interest
under the Leases and no longer is the "landlord" thereunder, Bank shall not be
liable for any unperformed covenant, duty or obligation of "landlord" thereafter
accruing.
45
8. Miscellaneous.
-------------
(a) Incorporation of Exhibits. The Mortgage and all exhibits, schedules,
-------------------------
addenda and other attachments to this Agreement are by this reference
incorporated herein and made a part hereof as if fully set forth in the body of
this Agreement.
(b) No Oral Change. This Agreement can be amended or modified only in a
--------------
writing duly executed by the parties hereto.
(c) Notices. All notices, certificates and other communications hereunder
-------
shall be deemed given when mailed by registered or certified mail, postage
prepaid, return receipt requested, addressed to the addresses set forth above.
Bank and Tenant may, by written notice given hereunder, designate a different
address where communications should be sent.
(d) Number and Gender. Whenever the context may require, any pronouns used
-----------------
herein shall include the corresponding masculine, feminine or neuter forms, and
the singular form of nouns and pronouns shall include the plural and vice versa.
Words importing persons include firms, companies, associations, general
partnerships, limited partnerships, limited liability partnerships, limited
liability limited partnerships, limited liability companies, trusts, business
trusts, corporations and legal entities, including public and quasi-public
bodies, as well as individuals.
(e) Successors and Assigns. This Agreement shall be binding upon and inure
----------------------
to the benefit of the respective heirs, personal representatives, successors or
assigns of the parties hereto.
(f) Term of Agreement. The terms and provisions of this Agreement shall
-----------------
terminate upon the cancellation of record of the Mortgage, unless the same is
earlier terminated by a termination agreement executed and delivered to Tenant
by Bank.
(i)
(Signatures Begin on the Next Page)
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The undersigned have executed this Agreement as of the day and year first above
stated.
--------------------------
By:
-------------------------------------
_____________, President
ATTEST:
- ------------------------------
______________, Secretary
STATE OF NORTH CAROLINA
COUNTY OF
---------------------
I, __________________________________, a Notary Public of the County and State
aforesaid, certify that ____________________ personally came before me this day
and acknowledged that he is ____________________ of ________________________, a
_______________________________________, and that by authority given and as the
act of said company, the foregoing instrument was signed in its name by him.
Witness my hand and official stamp or seal, this the day of , 2004.
Notary Public
My Commission Expires:
-----------------------------------------------
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ATTACHMENT 1
(Subordination, Attornment and Non-disturbance Agreement)
(a) Description of Leases (include all amendments, modifications,
extensions, renewals, replacements and substitutions; and include any recorded
memorandum of lease or recording information for lease if lease recorded):
----------------------------------------------
Lease Agreement dated __________ by and between ________________________, as
lessor, and Tenant, as lessee.
5. Description of Property (describe below or attach description and reference
attachment below):
(Description of Leased Premises)
48