EXHIBIT 10.31
STATE OF NORTH CAROLINA
COUNTY OF DURHAM
FOURTH AMENDMENT TO LEASE
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THIS FOURTH AMENDMENT TO LEASE (the "Fourth Amendment") is made and entered into
as of the 15th day of December, 2005, by and between CANTERBURY HALL, IC, LLC, a
Delaware limited liability company ("LandIord") [successor-in-interest to Petula
Associates, Ltd., an Iowa corporation ("Petula") and Principal Life Insurance
Company, an Iowa corporation ("Principal") as tenants-in-common (collectively,
"Petula/Principal")] and CLINFORCE, INC., a Delaware corporation ("Tenant")
[successor by name change to Clinical Trials Support Services, Inc., a North
Carolina corporation ("CTSS")].
WITNESSETH:
A. Petula/Principal and CTSS entered into a Lease dated as of November
3, 1999 (as amended, the "Existing Lease") for certain premises known as Suites
240 and 206 consisting of approximately 8,080 rentable square feet of space (the
"Original Premises") in that certain building known as Canterbury Hall (the
"Building") located at 4815 Emperor Blvd., Durham, North Carolina as more
particularly described in the Existing Lease;
B. Pursuant to that certain First Amendment to Lease dated December 20,
1999, between Petula/Principal and CTSS, the Original Premises was expanded to
include approximately 4,664 rentable square feet of space, creating the
"Combined Premises" containing approximately 12,744 rentable square feet as more
particularly described in the First Amendment.
C. Pursuant to that certain Second Amendment to Lease dated October 10,
2003, between Landlord (as successor-in-interest to Petula/Principal) and Tenant
(as successor by name change to CTSS), the Combined Premises was further
expanded to include an additional 8,656 rentable square feet designated as the
First Floor Expansion Space, the Second Floor Expansion Space and the 2004
Expansion Space (collectively, the "Expansion Space"), all as more particularly
described in said Second Amendment. The Combined Premises and Expansion Space
totaling approximately 21,400 rentable square feet are collectively hereinafter
referred to as the "Complete Premises".
D. Pursuant to that certain Third Amendment to Lease dated October 6,
2004, between Landlord and Tenant, the Complete Premises was expanded to include
an additional 2,285 rentable square feet of additional space (the Additional
Second Floor Expansion Space), creating the "Revised Complete Premised" totaling
23,685 rentable square feet, all as more particularly described in said Third
Amendment.
E. Landlord and Tenant desire to further amend the terms of the
Existing Lease: (i) to increase the size of the Revised Complete Premises to
include an additional 10,950 rentable square feet of additional space on the
third floor of the Building as more particularly shown on Exhibit A-6 attached
hereto (the "2006 Expansion Space"), and (ii) to modify certain other terms and
conditions of the Existing Lease. For purposes hereof, the Existing Lease as
amended by this Fourth Amendment is referred to as the "Lease" all capitalized
terms not otherwise defined herein shall have the meanings set forth in the
Existing Lease.
NOW, THEREFORE, for and in consideration of Ten Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged. Landlord and Tenant hereby agree that, effective as of the
date set forth above, the Existing Lease shall be, and hereby is, amended as
follows:
1. Recitals. The recitals shall form a part of this Fourth Amendment.
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2. Term Notwithstanding anything in the Lease to the contrary, the Term
of the Lease with respect to the 2006 Expansion Space shall commence on the 2006
Expansion Space Commencement Date (as hereinafter defined in Section 3), and
shall expire on September 30, 2013, coterminously with the Extension Term
applicable to the Complete Premises.
3.Premises. Effective as of the earlier of: (i) the date Tenant, or any
person occupying any portion of the 2006 Expansion Space with Tenant's
permission, commences business operations from the 2006 Expansion Space, or (ii)
the date of Landlord's delivery of the 2006 Expansion Space to Tenant upfitted
in substantial accordance with the Plans (as hereinafter defined in Section 5)
or the date upon which Landlord would have delivered the 2006 Expansion Space to
Tenant upfitted in substantial accordance with the Plans but for delays
attributable to Tenant or Tenants agents, employees or contractors (the earliest
of said dates being the 2006 Expansion Space Commencement Date) and continuing
through the Extension Term of the Lease, the Revised Complete Premises shall be
expanded to include the 2006 Expansion Space and the Premises under the Lease
shall be redefined to be a total of 34,635 rentable square feet on the first,
second and third floors of the Building all as more particularly described in
Exhibit A-6 attached hereto (the "2006 Revised Premises"). Accordingly, as of
the 2006 Expansion Space Commencement Date, wherever reference is made in the
Lease to the Premises, Revised Premises, Complete Premises, or Revised Complete
Premises it shall be deemed to mean the 2006 Revised Premises, and Exhibits A-2,
A-3, A4, and A-5 to the Lease shall be replaced with Exhibit A-6 attached hereto
in order to evidence the location of the 2006 Revised Premises.
4. Delivery of 2006 Expansion Space. Landlord shall act in good faith
and use diligent efforts to deliver the 2006 Expansion Space to Tenant upfitted
in substantial accordance with the Plans on or before April 1, 2006.
Notwithstanding anything contained herein to the contrary, in no event shall
Landlord's completion of the improvements in the 2006 Expansion Space be
dependent upon, or the 2006 Expansion Space Commencement Date delayed because
of, the installation of any special equipment or improvements to the 2006
Expansion Space to be supplied and installed by Tenant.
Notwithstanding the foregoing, Landlord shall use reasonable efforts to
provide Tenant and tenant's licensed contractors with access to the 2006
Expansion Space two (2) weeks prior to the 2006 Expansion Space Commencement
Date for among other things, Tenants installation of its furniture, fixtures,
cabling and equipment within the 2006 Expansion Space, provided (i) Tenant has
obtained all insurance required under the Lease to be maintained by Tenant, (ii)
Such early access by Tenant and its contractors does not in any way interfere
with Landlord's completion of the 2006 Improvements (as hereinafter defined),
(iii) Tenant's access is coordinated in advance with Landlord's contractor, and
(iv) Tenants occupancy of the 2006 Expansion Space prior to the 2006 Expansion
Space Commencement Date otherwise complies with all other applicable terms and
conditions of the Lease.
5. Tenant Improvements. Tenant agrees that it currently occupies, and
shall continue to occupy, the Revised Complete Premises in its "as is" condition
without any further improvements thereto except as otherwise provided herein.
Landlord shall, subject to the terms herein, supervise the construction and
installation of the initial improvements in the 2006 Expansion Space (the 2006
Improvements") in accordance with Tenants plans and specifications for the
design, construction, and installation of the 2006 Improvements (the "Plans"),
as such plans have been reviewed and approved by Landlord and Tenant, such
approval not to be unreasonably withheld. Landlord shall substantially complete
the 2006 Improvements in accordance with said Plans and in a good and
workmanlike manner, such substantial completion to be certified by Landlords
engineer.
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Landlord shall contribute up to a maximum of Seventeen and No/100
Dollars ($17.00) per rentable square foot of the 2006 Expansion Space (the 2006
Expansion Allowance toward only the following costs: (i) any cost of installing
the 2006 Improvements on an "as completed" basis which is performed in
accordance with the Plans and related to the work to be done for the purpose of
preparing the 2006 Expansion Space for Tenants occupancy and use, (ii) the cost
of preparing the Plans, (iii) design costs for architectural, mechanical,
plumbing and electrical design, (iv) construction documents and permits, and (v)
a construction management fee equal to four percent (4%) of the total cost of
constructing the 2006 Improvements to be paid to Landlord; provided, however, in
no event shall the 2006 Expansion Allowance be used for any costs associated
with Tenant's personal property, equipment, trade fixtures or other items of a
non-permanent nature installed in the 2006 Expansion Space, including without
limitation, telephone and data cable lines. In the event that either prior to
the commencement of the installation of the 2006 Inprovements or at any time
during or following the installation of the 2006 Improvements, the cost of the
2006 Improvements exceeds the 2006 Expansion Allowance or Tenant requests any
change to the aforementioned Plans which has resulted or might result in an
increase in the cost of the installation of such 2006 Improvements so that the
cost exceeds the 2006 Expansion Allowance, then Tenant shall be exclusively
responsible for the payment of such amount and shall promptly deliver the
necessary funds to defray such excess cost to Landlord no later than fifteen
(15) days after Landlord demands same. Notwithstanding the foregoing, any change
order(s) requested by Tenant which will result in an increase in the cost of the
construction and installation of the 2006 Improvements shall be agreed to in
advance by Landlord and Tenant, and Tenant shall be obligated to pay Landlord an
additional construction management fee relative to such change order(s) equal to
four percent (4%) of any increase in the cost of the construction and
installation of the Tenant Improvements. Any savings or unused portion of the
2006 Expansion Allowance after the 2006 Improvements are completed shall be made
available to Tenant for additional permanent improvements to the Revised
Complete Premises.
Tenant acknowledges that Landlord may be supervising the construction
of the 2006 Improvements while Tenant occupies the 2006 Revised Premises and
Landlord agrees that it shall use reasonable efforts to minimize any
interference with Tenants business operations within the 2006 Revised Premises
while constructing such improvements.
6. Additional Al1owance. Notwithstanding anything contained herein to
the contrary, Tenant may elect to obtain from Landlord an additional upfitting
allowance in an amount not to exceed Fifty-Four Thousand Seven Hundred Fifty and
No/00 Dollars ($54,750.00) (the "Additional Upfitting Allowance) [which
represents $5.00 per rentable square foot of the 2006 Expansion Space] for the
2006 Improvements. In consideration of any such Additional Upfitting Allowance
paid by Landlord, the Minimum Rent otherwise payable by Tenant under this Lease
shall be increased by the amount required to fully amortize the actual amount of
any sum Additional Upfitting Allowance, together with interest thereon at the
rate of ten percent (10%) per annum, in equal monthly installments over the
initial Term and monthly installments of Minimum Rental shall be adjusted
accordingly.
7.Rental. Provided no Tenant default has occurred and is continuing
under the Lease Tenant shall have no obligation to pay Minimum Rental or
Additional Rent with respect to the 2006 Expansion Space for the first seven (7)
months following the 2006 Expansion Space Commencement Date. Thereafter, Tenant
shall pay all rent due and payable under the Lease, at the same rate and under
the same conditions as are set forth in the Lease with respect to the Revised
Complete Premises. Accordingly, beginning as of the 2006 Expansion Space
Commencement Date and continuing throughout the Extension Term. Tenant shall pay
Minimum Rental with respect to the 2006 Revised Premises as follows:
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PERIOD RATE MONTHLY RENT ANNUAL RENT
- ------ ---- ------------ -----------
4/1/06*-9/30/06 $14.86 per r.s.f. $29,329.93 $351,959.16
10/1/06-10/31/06 $15.23 per r.s.f. $30,060.21 $360,722.52
11/1/06--9/30/07 $15.23 per r.51. $43,957.59 $527,491.08
10/1/07-9/30/08 $15.61 per r.s.f. $45,054.36 $540,652.32
10/1/08-9/30/09 $16.00 per r.s.f. $46,180.00 $554,160.00
10/1/09-9/30/10 $16.40 per r.s.f. $47,334.50 $568,014.00
10/1/10-9/30/11 $16.81 per r.s.f. $48,517.86 $582,214.32
10/1/11-9/30/12 $17.23, per r.s.f. $49,730.09 $596,761.08
10/1/12-9/30/13 $17.66 per r.s.f. $50,971.18 $611,654.16
*In the event the 2006 Expansion Space Commencement Date is a date
other than April 1, 2006, this rent schedule shall be adjusted and shall be
effective as of the actual 2006 Expansion Space Commencement Date, such that
Tenant's base rent applicable to the 2006 Expansion Space shall be abated until
the seven (7) month anniversary of the 2006 Expansion Space Commencement Date.
Effective as of the 2006 Expansion Space Commencement Date, the
Operating Expense Stop with respect to the 2006 Expansion Space shall be
redefined to be the actual Operating Expenses for the calendar year 2006;
provided, however, the Operating Expense Stop applicable to the Revised Combined
Premises shall not be modified. Commencing as of the 2006 Expansion Space
Commencement Date and continuing throughout the Extension Term. Tenant shall
continue to pay Tenants Proportionate Share of Operating Expenses, including
insurance costs, taxes, and operating expense charges, and any other amount due
and payable under the Lease, in accordance with the terms of the Lease, provided
Tenant's Proportionate Share shall be adjusted to reflect the 2006 Revised
Premises as of the 2006 Expansion Space Commencement Date.
8. Broker. Landlord and Tenant represent and warrant each to the other
that they have not dealt with any broker(s) or any other person claiming any
entitlement to any commission in connection with this transaction except Tri
Properties, Inc. and Corporate Realty Advisors (collectively, the "Broker").
Tenant agrees to indemnify and save Landlord harmless from and against any and
all claims, suits, liabilities, costs, judgments and expenses, including
reasonable attorneys fees, for any leasing commissions or other commissions,
fees, charges or payments due, owing, or made to a broker (except as provided
immediately below) in connection with this Fourth Amendment. Landlord agrees to
indemnify and save Tenant harmless from and against any and all claims, suits,
liabilities, costs, judgments and expenses, including reasonable attorneys' fees
for any leasing commissions or other commissions, fees, charges or payments
resulting from or arising out of its actions in connection with this Fourth
Amendment. Landlord expressly agrees and acknowledges that Landlord is
responsible for the full payment of any leasing commissions due Broker pursuant
to a separate written agreement with Broker.
9. Rooftop Communications. Subject to the conditions set forth herein
and provided no default has occurred and is continuing hereunder, Landlord
hereby grants to Tenant the non-exclusive right to install, maintain and
operate, at Tenant's sole cost and expense, communications equipment (the
"Equipment") on the roof of the Building, all in accordance with the Roof
License Agreement attached hereto as Exhibit B and incorporated herein by
reference (the "Roof License Agreement"). The size, location and method of
installation of the Equipment shall be at Landlord's sole discretion and Tenant
hereby agrees to install the Equipment at Tenant's sole cost and expense, under
the direct supervision of Landlords roofing contractor, and in such a manner as
will not affect Landlord's
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insurance or roof warranty. The use of the Equipment shall be limited solely to
Tenant, and Landlord reserves the right, in its sole discretion to withhold
consent to any proposed subletting or assignment of the rights to use the
Equipment. Tenant shall install all equipment at the sole cost and expense and
risk of Tenant and shall do so in a good workmanlike manner and in compliance
with all federal, state and local building, zoning, electric,
telecommunications, and safety codes and ordinances, standards, regulations,
laws and requirements, including, without limitation, those of the Federal
Communications Commission. Nothing contained herein shall impose any liability
or repair obligations upon Landlord relative to the Equipment. Upon the
expiration or earlier termination of this Lease, Tenant agrees, while under the
direct supervision of Landlords roofing contractor, to remove the Equipment and
return the roof of the Building to the condition in which it existed as of the
Commencement Date. Prior to the installation of the Equipment, Tenant shall
execute the Roof License Agreement.
10. Right of First Refusal. Notwithstanding anything in the Lease to
the contrary, provided no Tenant default has occurred and is continuing
hereunder and provided Tenant has not assigned this Lease nor sublet all or any
portion of the Premises, Tenant shall have a continuing right of first refusal
to Lease the space within the Building immediately adjacent to the 2006 Revised
Premises as more: particularly described on Exhibit A-1 attached hereto (the
"Adjacent Space") at such time as such Adjacent Space becomes available for
lease during the initial Term; provided, however, Tenant shall have no right to
lease any portion of the Adjacent Space which is re-leased to existing tenants
occupying such space. Prior to entering into any new lease for all or any
portion of the Adjacent Space, Landlord shall first offer (by written notice to
Tenant) to lease the relevant portion of the Adjacent Space to Tenant upon the
same terms and conditions as set forth in a bona fide third party offer (the
"Third Party Offer") for the relevant portion of the Adjacent Space being
leased. Tenant shall have a period of five (5) business days following receipt
of said written notice from Landlord to provide Landlord with written notice of
its election to lease the Adjacent Space which is the subject of said Third
Party Offer. In the event Tenant fails to respond to Landlord within said five
(5) business day period, Tenant shall be deemed to have waived its rights with
respect to the leasing of the Adjacent Space. If Tenant elects not to exercise
its right to lease the Adjacent Space and such space subsequently becomes
available for lease, Tenant shall again have a right of first refusal with
respect to such space. In the event Tenant elects to exercise its right of first
refusal with respect to the Adjacent Space, Tenant shall be deemed to lease the
Adjacent Space which is the subject of said Third Party Offer subject to the
terms and conditions as set forth in the Third Party Offer and the parties
hereto shall amend the Lease (or enter into a new lease) to memorialize the
terms of said Lease.
11. Extension Option. Tenant shall continue to have the right to extend
the Extension Term with respect to the 2006 Revised Premises once for a period
of five (5) years pursuant to the terms and conditions of Section 7 of the
Second Amendment to Lease.
12. Ratification. Except as expressly or by necessary implication
amended or modified hereby, the terms of the Existing Lease are hereby ratified,
confirmed and continued in full force and effect.
[Remainder of Page Left Blank Intentionally]
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IN WITNESS WHEREOF, Each of the parties hereto has duly executed this
Fourth Amendment as of the day and year first above written.
LANDLORD:
CANTERBURY HALL IC, LLC,
a Delaware limited liability company
By: PRINCIPAL REAL ESTATE INVESTORS, LLC,
a Delaware Limited liability company, its
authorized agent
By: Michael S. Benson
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Investment Director, Asset Management
By: Joseph E Pierce
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Investment Director, Asset Management
Date: December 15, 2005
TENANT:
CLINFORCE, INC.
a Delaware corporation
By: Tony Sims
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President
Date: November 15, 2005
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