Exhibit 10.17
L E A S E A G R E E M E N T
NORTH CAROLINA
COUNTY OF WAKE
THIS LEASE AGREEMENT dated the 7th day of November, 2003, and entered into
between REGENCY PARK CORPORATION, a North Carolina corporation having its
principal place of business in Cary, North Carolina (the "Landlord"), and Level
8 Systems, Inc. a New York corporation having its principal place of business in
Cary, North Carolina (the "Tenant").
W I T N E S S E T H:
DEFINITIONS:
The following definitions shall be deemed to control herein.
ADDITIONAL RENT: Any adjustments to Annual Rental and other sums due
Landlord from Tenant.
BASE OPERATING EXPENSES: Means Operating Expenses for the Operating Year
ending November 30, 2001, which amount shall be as certified by Landlord's
auditors.
BASE REAL ESTATE TAXES: Means the lesser of:
a. the real estate taxes levied or imposed for the tax year ending
December 31, 2003, which amount shall be as certified by Landlord's auditors; or
b. such lesser amount as may be fixed, settled, and compromised, consented
to, or determined as a result of contestation or otherwise.
BUILDING: 8000 Regency Parkway located in Cary, North Carolina.
LEASE: This Lease Agreement with all Exhibits and Riders attached thereto.
LEASE YEAR: As used herein (i) shall mean each and every 12-month period
during the term of this Lease, or (ii) (in the event of Lease expiration or
termination) shall mean the period between the last 12-month period and said
expiration or termination. The first such 12-month period shall commence on the
1st day of October, 2003, and end on the 30th day of September, 2004.
OPERATING EXPENSES: The Landlord's cost of operating the Building and
Property as more particularly described in Exhibit E attached hereto and made a
part hereof by this reference.
OPERATING YEAR: Means a year commencing on December 1, and terminating on
November 30, provided that Landlord shall be permitted at any time and from time
to time to change the commencement and termination dates of any operating year
of the Landlord.
PREMISES: The space as outlined on the floor plan which is attached hereto
as Exhibit A and made a part hereof by this reference. The Premises constitutes
two thousand nine hundred fifty-six (2,956) rentable square feet located on the
5th floor of the Building and is designated as Suite 342.
PROPERTY: The land upon which the Building is located, which land is more
particularly described in Exhibit B attached hereto and made a part hereof by
this reference.
RENTABLE AREA: One hundred forty-four thousand eight hundred seventy-six
(144,876) square feet located within the Building.
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Exhibit 10.17
REAL ESTATE TAXES: Includes (i) personal property taxes (attributable to
the year in which assessed) imposed upon the furniture, fixtures, machinery,
equipment, apparatus, systems, and appurtenances used in connection with the
Building and the Property for the operating thereof; and (ii) real estate taxes,
assessments, sewer rents, rates and charges, taxes based upon the receipt of
rent and any other federal, state, or local governmental charge, general,
special, ordinary, or extraordinary (but not including income or franchise taxes
or any other taxes imposed upon or measured by Landlord's income or profits,
unless the same shall be imposed in lieu of real estate taxes) or any other tax
which may now or hereafter be levied or assessed against the Property, the
Building, any other improvements hereinafter constructed on the Property, or the
rents derived from the Property, the Building and such other improvements. (In
the case of special taxes or assessments which may be payable in installment,
only the amount of each installment paid during a calendar year shall be
included in the taxes for that year.)
REAL ESTATE TAX YEAR: Means each successive 12-month period following and
corresponding to the period in respect of which the base real estate taxes are
established irrespective of the period or periods which may from time to time in
the future be established by competent authority for the purposes of levying or
imposing real estate taxes.
PREMISES
Landlord, for and in consideration of the rents, covenants, agreements,
and stipulations herein contained, to be paid, kept and performed by the Tenant,
has leased and by these presents leases unto the Tenant, and Tenant hereby
agrees to lease upon the terms and conditions herein contained, the Premises
located in the Building situate upon the Property.
FINISHING OF PREMISES
The Premises shall be finished by the Landlord at its expense in
accordance with the provisions of Exhibit C which is attached to and forms a
part of this Lease.
All other improvements to the Premises shall be made at the Tenant's
expense and must be performed in accordance with accurate working drawings and
specifications that are to be submitted to and approved by the Landlord in
writing prior to the commencement of such work.
1.0 TERM
The term of this Lease shall be for a period of three (3) years commencing
on the 1st day of October, 2003, (hereinafter referred to as the "Commencement
Date"), and ending on the 31st day of December, 2006, inclusive. If, however,
for any reason Landlord is unable to deliver possession of the Premises to
Tenant upon the Commencement Date, Landlord shall not be liable for any damage
caused thereby, nor shall this Lease become void or voidable but, rather, the
term specified herein shall commence upon the date of delivery of possession of
the Premises to Tenant and shall terminate three (3) years subsequent to the
Commencement Date. Tenant shall not be liable for any rent hereunder until such
time as Landlord shall have delivered possession of the Premises to Tenant and
substantially completed the work described in Exhibit C unless the delay is
caused by Tenant. If, however, Landlord is unable to deliver possession of the
Premises to Tenant within six (6) months after the Commencement Date for any
reason other than the fault or neglect of Tenant, then this Lease may be
terminated by either party without liability to the other upon fifteen (15) days
prior written notice to the other party. Should the lease term commence upon any
date other than the Commencement Date hereinabove specified, Landlord and Tenant
shall execute and acknowledge a written statement setting forth the actual date
of commencement of the lease term, which statement may be recorded by either
party and a copy of which shall be attached as Exhibit D to this Lease.
2.0 ANNUAL RENTAL AND ADJUSTMENTS THEREOF
2.01 ANNUAL RENTAL: Tenant agrees to pay Landlord, at Regency Park
Corporation , P.O. Box 501034, St. Louis, MO 63150-1034, or at such other place
as Landlord may designate in writing, without demand, deduction, credit or
setoff and in lawful money of the United States of America:
Rental of zero Dollars ($0.00) per year ("Annual Rent"), payable in equal
monthly installments of zero Dollars ($0.00), in advance, on or before the first
day of each calendar month during the term; October 1, 2003 up to and including
December 31, 2003, provided, however, that if the term of this Lease commences
on a date other than the first day of a calendar month, rent shall be prorated
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Exhibit 10.17
for the fractional month at the beginning of the term and paid on the date the
term commences; and in that event, rent for the fractional month at the end of
the term shall also be prorated.
Rental of fifty-four thousand six hundred twelve and 00/100 Dollars
($54,612.00) per year ("Annual Rent"), payable in equal monthly installments of
four thousand five hundred fifty-one and 00/100 Dollars ($4,551.00), in advance,
on or before the first day of each calendar month during the term; January 1,
2004 up to and including December 31, 2005.
Rental of fifty six thousand one hundred sixty-four and 00/100 Dollars
($56,164.00) per year ("Annual Rent"), payable in equal monthly installments of
four thousand eighty and 33/100 Dollars ($4,680.33), in advance, on or before
the first day of each calendar month during the term; January 1, 2006 up to and
including December 31, 2006
The Tenant is also obligated to pay to the Landlord Additional Rent and
certain other sums as provided for herein.
2.02 ADDITIONAL RENT: Any adjustment to Annual Rent and other sums due
Landlord from Tenant shall be referred to collectively as "Additional Rent."
2.02.01 OPERATING EXPENSES: Prior to commencement of each Operating Year
or as soon thereafter as is reasonably possible, Landlord will furnish to Tenant
as estimate of the Operating Expenses for such Operating Year and if the same
shall be in excess of the Base Operating Expenses, the installments of rent
payable hereunder in respect of each month of such Operating Year shall be
increased by way of Additional Rent by an amount equal to one-twelfth (1/12) of
two percent (2%) of such excess and Tenant shall make payment thereof to
Landlord accordingly ("Tenant's Estimated Share").
After the end of each Operating Year, the Landlord shall furnish to Tenant
a statement of Landlord's actual Operating Expenses for such Operating Year and
Tenant shall pay to Landlord an amount equal to two percent (2%) of the excess
of such Operating Expenses over the Base Operating Expenses ("Tenant's Actual
Share"). If Tenant's Actual Share is greater than the amount paid by Tenant to
Landlord as Tenant's Estimated Share, then Tenant shall pay this difference to
Landlord within fourteen (14) days after delivery of such statement. If Tenant's
Actual Share is less than the amount paid by Tenant to Landlord as Tenant's
Estimated Share, then Landlord shall refund the excess to Tenant within fourteen
(14) days after delivery of such statement.
Nothing contained in this Article shall be construed at any time so as to
reduce the monthly installments of rent payable hereunder below the amount
stipulated in Article 2.01.
If this Lease shall terminate other than on the expiry of an Operating
Year in any Operating Year, then in computing the amount payable by Tenant under
this Article for the period from the commencement of the Operating Year in which
the Lease terminates until the date of termination, the Base Operating Expenses
shall be deducted from the Operating Expenses for such Operating Year and Tenant
shall pay one-three hundred sixty-fifth (1/365) of two percent (2%) for each day
of such Operating Year during which this Lease shall have been in full force and
effect.
The obligations of the parties hereto to adjust sums owed pursuant to this
Article shall survive the expiration of the term of this Lease
Failure of Landlord to furnish a statement of actual Operating Expenses or
to give notice of an adjustment to Annual Rent under this Article in a timely
manner shall not prejudice or act as a waiver of Landlord's right to furnish
such statement or give such notice at a subsequent time or to collect any
adjustments to the Base Rent for any preceding period.
2.02.02 REAL ESTATE TAXES: If at any time or from time to time during the
term of this Lease, the Real Estate Taxes for or attributable to any Real Estate
Tax Year shall be in excess of the Base Real Estate Taxes, and/or if any new tax
or increase of the effective rate of present taxes shall become effective after
the date hereof but before the normal tax escalation provision shall take
effect, the rent payable hereunder in respect of such year shall be increased by
an amount equal to two percent (2%) of such excess and/or such new tax or
increase (the "Tenant's Tax Share"). Tenant shall pay to Landlord, not later
than the sixty (60) days prior to the tax due date, or such other date as may be
specified in writing to Tenant by Landlord, the Tenant's Tax Share for such
year. Where at any time such amount has become payable to Landlord hereunder, in
addition to such amount, subsequent monthly installments of rent shall be
increased by an amount equal to one-twelfth (1/12) of the Tenant's Tax Share,
and such monthly amounts when paid to Landlord shall be available (without
interest) as a credit against subsequent obligations of Tenant to Landlord under
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Exhibit 10.17
this Article. Landlord shall furnish to Tenant upon the specific written request
of Tenant copies of all notices of valuation and assessment and all tax bills
received by Landlord.
Tenant shall pay to Landlord as Additional Rent two percent (2%) of any
expenses incurred by Landlord in obtaining or attempting to obtain a reduction
of any Real Estate Taxes. Real Estate Taxes which are being contested by
Landlord shall nevertheless be included for purposes of the computation of the
liability of Tenant under this Article; provided, however, that in the event
that Tenant shall have paid any amount of increased rent pursuant to this
Article and Landlord shall thereafter receive a refund of any portion of the
Real Estate Taxes on which such payment shall have been based, Landlord shall
pay to Tenant the appropriate portion of such refund after deduction of the
aforementioned expenses.
Landlord shall have no obligation to contest, object to or to litigate the
levying or imposition of any Real Estate Taxes and may settle, compromise,
consent to, waive or otherwise determine in its discretion any Real Estate Taxes
without notice to, consent or approval of Tenant.
Nothing contained in this Article shall be construed at any time so as to
reduce the monthly installments of rent payable hereunder below the amount
stipulated in Article 2.01.
If the termination date of the Lease shall not coincide with the end of a
Real Estate Tax Year, then in computing the amount payable under this Article
for the period between the commencement of the applicable Real Estate Tax Year
in question and the termination date of this Lease, the Base Real Estate Taxes
shall be deducted from the Real Estate Taxes for the applicable Real Estate Tax
Year and, if such Real Estate Taxes exceed the Base Real Estate Taxes, the
Tenant shall pay one-three hundred sixty-fifth (1/365) of two percent (2%) for
each day of such Real Estate Tax Year during which the Lease shall have been in
full force and effect.
Tenant's obligation to pay under this Article for the final period of the
Lease shall survive the expiration of the term of this Lease.
Failure of Landlord to furnish a statement of actual Tax Expenses or to
give notice of an adjustment to Annual Rent under this Article in a timely
manner shall not prejudice or act as a waiver of Landlord's right to furnish
such statement or give such notice as a subsequent time or to collect any
adjustments to the Annual Rent for any preceding period.
2.02.03 INTEREST FOR LATE PAYMENT: Any payment provided for herein to be
made by the Tenant and not received by Landlord on the due date specified in
this Lease shall accrue interest from the due date at the rate of two percent
(2%) above the published prime rate of First Union National Bank of North
Carolina in effect from time to time (the "Prime Rate").
For purposes of computing interest hereunder, changes in the Prime Rate
shall be effective on the date of each change.
2.03 SECURITY DEPOSIT: Landlord acknowledges that it has received from
Tenant the sum of nine thousand fourteen thousand and 33/100 Dollars
($9,114.37), equal to one (1) monthly installment of Annual Rent (herein called
"Security Deposit"), which amount shall be security for the full and faithful
performance and observance by Tenant of the covenants, terms and conditions of
this Lease, including, without limitation, the payment of Annual Rent and
Additional Rent, on the part of Tenant to be kept and performed. No interest
shall be payable on the Security Deposit. Tenant acknowledges that the Security
Deposit is not an advance payment of rent or a measure of Landlord's damages in
the case of default by Tenant. Upon the occurrence of an Event of Default under
the Lease, Landlord may use, apply or retain the whole or any part of the
Security Deposit so deposited to the extent required for the payment of any
Annual Rent and Additional Rent or any other sum as to which Tenant is in
default or for the payment of any other damage, injury, expense or liability
resulting from any Event of Default. Following any such application of the
Security Deposit, Tenant shall pay to Landlord on demand the amount necessary to
restore the Security Deposit to its original amount. In the event that Tenant
shall fully and faithfully comply with all of the terms, provisions, covenants
and conditions of this Lease, the Security Deposit shall be returned to Tenant
within thirty (30) days after the termination of this Lease subject to the
retention of an amount estimated by Landlord to be sufficient to satisfy
Tenant's Additional Rent obligations hereunder. In the event of a sale of the
Building or a lease of the Building, subject to this Lease, Landlord shall be
released from all liability for the return of the Security Deposit and Tenant
shall look to the new landlord for the return of the Security Deposit. This
provision shall apply to every transfer or assignment made of the Security
Deposit to a new landlord. The Security Deposit shall not be assigned or
encumbered by Tenant without the written consent of Landlord, and such
assignment or encumbrance without Landlord's consent shall be void.
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Exhibit 10.17
3.0 USE
The Premises shall be used and occupied only for general office use and
shall not be used or occupied for any other purpose without the prior written
consent of Landlord. Tenant shall not display any signs on the Property without
prior written consent of Landlord. Tenant shall not conduct, or allow to be
conducted, on the Premises any business, or permit any act, (i) which
constitutes a nuisance, (ii) which is contrary to or in violation of the laws,
statutes, or ordinances of the United States, or the State or City in which the
Premises are located, or (iii) which is dangerous to persons or property or
which may invalidate (or increase the premium for) any policy of insurance
carried on the Building or the Premises. Tenant will comply with all police,
fire, sanitary and all other laws and regulations imposed by any governmental or
municipal authority or body or by Landlord's fire insurance underwriters. Any
violation of this provision by the Tenant shall be an Event of Default entitling
Landlord to exercise any rights or remedies contained herein or provided by law.
4.0 SERVICES OF LANDLORD
The Landlord shall provide, at the Landlord's expense except as otherwise
provided, the following services:
a. Janitorial service in and about the Premises, Saturdays, Sundays and
holidays excepted.
b. Heat and air-conditioning, daily from 8:00 a.m. to 6:00 p.m., and 8:00
a.m. to 1:00 p.m. on Saturdays (if not a holiday), Sundays and holidays
excepted, sufficient to maintain comfortable temperature on the basis of one
person per 100 square feet of space reasonably subdivided. This paragraph shall
conform to any government regulations preserving limitations thereon and such
conformity shall be deemed to satisfy this Landlord obligation.
Whenever heat generating machines or equipment which affect the
temperature otherwise maintained by the air-conditioning system are used in the
Premises, Landlord reserves the right, at its option, either to require Tenant
to discontinue the use of such heat generating machines or equipment or to
install supplementary air-conditioning equipment in the Premises. The cost of
such installation shall be paid by Tenant to Landlord promptly on being billed
therefor, and the cost of operation and maintenance of said supplementary
equipment shall be paid by Tenant to Landlord promptly on the monthly rent
payment dates at such rates as may be agreed on, but in no event at a rate less
than Landlord's actual cost therefor of labor, materials and utilities.
c. Water for drinking, lavatory and toilet purposes.
d. Passenger elevator service at all times. Any or all elevator service
may be automatic.
e. Window washing of all exterior windows, both inside and out, weather
permitting.
f. Provision, installation and replacement of ballasts and tubes for
lighting purposes.
g. Removal of ice and snow from walks, drives and parking facilities.
h. Electricity typically provided in general office space, specifically
excluding any extraordinary requirements of the Tenant.
If Tenant shall require electric current in excess of that usually
furnished or supplied for use of the Premises as general office space, Tenant
shall first procure the consent of Landlord, (which Landlord may refuse in its
sole discretion), to the use thereof. Landlord may cause an electric check meter
to be installed in the Premises. Landlord shall also have the right to cause a
reputable independent electrical engineering or consulting firm to survey and
determine the value of the electric service furnished for such excess electric
current. The cost of any such survey or meters and of installation, maintenance
and repair thereof shall be paid for by Tenant. Tenant agrees to pay to
Landlord, promptly upon demand therefor, for all such electric current consumed
as shown by said meters or by said survey at the rates charged for such services
by the city, or the local public utility, as the case may be, furnishing the
same, plus any additional expense incurred in monitoring the electric current so
consumed.
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Exhibit 10.17
Tenant covenants and agrees that at all times its use of electric current
shall never exceed Tenant's proportionate share of the capacity of existing
feeders to the Building or the risers of wiring installation. Any riser or
risers or wiring to meet Tenant's excess electrical requirements, upon written
request of Tenant, will be installed by Landlord, at the sole cost and expense
of Tenant if, in Landlord's sole judgment, the same are necessary and will not
cause permanent damage or injury to Building or Premises or cause or create a
dangerous or hazardous condition or entail excessive or unreasonable alteration,
repairs or expense or interfere with or disturb other tenants or occupants.
Should Tenant require any additional work or service, including but not
limited to the additional work or service described above, including service
furnished outside the stipulated hours, Landlord may, on terms to be agreed,
upon reasonable advance notice by Tenant, furnish such additional service.
Tenant agrees to pay the Landlord such charges as may be agreed on, but in no
event at a charge less than Landlord's actual cost plus overhead for the
additional services provided, it being agreed that the cost to the Landlord of
such additional services shall be excluded from Operating Expenses.
Landlord does not warrant that any of the services referred to above, or
any other services which Landlord may supply, will be free from interruption.
Tenant acknowledges that any one or more of such services may be suspended by
reason of accident or of repairs, alterations or improvements necessary to be
made, or by strikes or lockouts, or by reason of operation of law, or causes
beyond the reasonable control of Landlord. Any such interruption or
discontinuance of service shall not constitute an eviction or disturbance of
Tenant's use and possession of the Premises, or any part thereof, or render
Landlord liable to Tenant for damages by abatement of rent or otherwise, or
relieve Tenant from performance of Tenant's obligations under this Lease.
5.0 TENANT'S ACCEPTANCE AND MAINTENANCE OF PREMISES
Tenant, on occupancy of the Premises, represents to the Landlord that it
has examined and inspected the same, finds them to be as represented by the
Landlord and satisfactory for Tenant's intended use, and such occupancy
evidences Tenant's acceptance "AS IS." Landlord makes no representation or
warranty as to the condition of said Premises. Tenant shall maintain (and so
deliver at the end of the Lease) each and every part of the Premises in good
repair and condition, and shall make, at Tenant's sole cost and expense, such
replacements, restorations, renewals or repairs, in quality equivalent or better
than the original work, as may be required to so maintain the same, ordinary
wear and tear only excepted. Tenant, however, shall make no structural or
interior alterations, additions or improvements to the Premises without
Landlord's prior written consent, and any work performed by Tenant shall be done
in good and workmanlike manner, and so as not to disturb or inconvenience other
tenants in the Building. Tenant shall not at any time permit any work to be
performed on the Premises except by duly licensed contractors or artisans, each
of whom must carry general public liability insurance in form and content
satisfactory to the Landlord, certificates of which shall be furnished Landlord.
At no time may Tenant do any work that results in a claim of lien against
Landlord. All alterations, additions or improvements (including, but not limited
to, floor covering, wall covering, wall and ceiling lighting fixtures, carpet,
drapes and drapery hardware) made or installed by Tenant or by Landlord for
Tenant's benefit to the Premises, shall become the property of Landlord upon the
termination or earlier expiration of this Lease. Landlord reserves the right to
require Tenant, at Tenant's expense, (i) to remove any improvements or additions
made to the Premises by Tenant, or by Landlord for Tenant's benefit, upon the
expiration or earlier termination of this Lease; and (ii) to repair all injury
done by or in connection with installation or removal of said improvements or
additions. Tenant further agrees to do so prior to the expiration date of this
Lease, or within thirty (30) days after notice from Landlord, whichever shall be
later, provided that Landlord gives such notice no later than thirty (30) days
prior to the expiration date of this Lease.
If the sprinkler system as installed in the Building or any of its
appliances shall be damaged or injured or not in proper working order by reason
of any act or omission of the Tenant, Tenant's agents, servants, employees,
licensees or visitors, the Tenant shall forthwith restore the same to good
working conditions at its own expense. If the Board of Fire Underwriters of Fire
Insurance Exchange or any bureau, department or official of the state, county or
city government, require or recommend that any changes, modifications,
alterations or additional sprinkler heads or other equipment be made or supplied
by reason of the Tenant's business, or the location of partitions, trade
fixtures, or other contents of the Premises, or if any such changes,
modifications, alterations, additional sprinkler heads or other equipment become
necessary to prevent the imposition of a penalty or charge against the full
allowance for a sprinkler system in the fire insurance rate as fixed by said
Exchange, or by any fire insurance company, Tenant shall, at the Tenant's
expense, promptly make and supply such changes, modifications, alterations,
additional sprinkler heads or other equipment.
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Exhibit 10.17
Tenant shall not overload the floors, nor shall Tenant install any heavy
business machines or any safes or heavy equipment of any kind without prior
written consent of Landlord, which if granted, may be conditioned upon moving by
skilled licensed handlers, and installation and maintenance at Tenant's expense
of special reinforcings and settings adequate to carry the additional weight and
to absorb and prevent noise and vibration.
6.0 REPAIRS BY LANDLORD
Landlord shall have no duty to Tenant to make any repairs or improvements
to the Premises except such repairs as may be deemed necessary by Landlord for
normal maintenance operations of the Building's plumbing, heating and
air-conditioning and electrical systems, Building parking lots and grounds, and
such structural repairs necessary for safety and tenantability and then only if
not brought about by any act or neglect of Tenant, its agents, employees or
visitors. Tenant agrees to report immediately in writing to Landlord any
defective condition in or about the Premises known to Tenant, and a failure to
so report shall make Tenant liable to Landlord for any expense or damage to
Landlord resulting from such defective condition. Landlord shall have the right
of full access to the Premises (including entry by use of master key) to make
repairs without reduction or abatement of rent.
7.0 INSURANCE AND INSURANCE RATES
Landlord shall carry fire, casualty and liability insurance insuring its
interest in the Building and the Premises. Tenant shall carry fire, casualty and
liability insurance insuring its interest, if any, in improvements to or in the
Premises and its interest in its office furniture, equipment, supplies and other
property. Tenant hereby waives any claim or right of action which it may have
against Landlord for loss or damage covered by such insurance, and Tenant
covenants and agrees that it will obtain a waiver from the carrier of such
insurance releasing such carrier's subrogation rights as against Landlord.
Tenant shall maintain a comprehensive liability policy covering loss to person
or property (a) in the amount of One Million and No/100 Dollars ($1,000,000)
bodily injury per person, and One Hundred Thousand and No/100 Dollars ($100,000)
property damage, or (b) in the amount of Three Million and No/100 Dollars
($3,000,000) single limit for bodily injury and property damage. Such policies
shall name Landlord as an insured. Tenant shall furnish Landlord a certificate
of insurance indicating (a) current coverage during the term of this Lease, and
(b) a provision requiring a thirty (30) day prior notice to the Landlord of
cancellation.
Tenant shall not do or cause to be done or permit on the Premises or in
the Building anything deemed extrahazardous on account of fire, and Tenant shall
not use the Premises or the Building in any manner which will cause an increase
in the premium rate for any insurance in effect on the Building or a part
thereof. If, because of anything done by Tenant, the premium rate for any kind
of insurance in effect on the Building or any part thereof shall be raised,
Tenant shall pay Landlord the amount of any such increase in premium in
accordance with the provisions of this Lease. If Landlord shall demand that
Tenant remedy the condition which caused any such increase in an insurance
premium rate, Tenant shall remedy such condition within five (5) days after
receipt of such demand.
8.0 FIRE OR OTHER CASUALTY
In the event that before or during the term of this Lease, the Premises
shall be damaged by fire or other casualty which in the opinion of Landlord does
not render the Premises or a part thereof untenantable Landlord will, at its
option (subject to the other provisions of this Section 8.0), repair the same
with reasonable dispatch upon receipt of written notice of the damage from
Tenant, and there shall be no abatement of the rent.
In the event that before or during the term of this Lease the Premises or
the Building shall be damaged by fire or other casualty which in the opinion of
the Landlord renders the Building, the Premises or any part of the Building or
Premises untenantable, Landlord within twenty (20) days of notice of such fire
or casualty or of receipt of written notice from Tenant of such damage
(whichever shall last occur) shall have the right to and shall either (i) serve
written notice upon Tenant of Landlord's intent to repair said damage or (ii) if
in Landlord's opinion said damage renders so much of either of the Premises or
of the Building untenantable that repair would not be advisable, serve written
notice upon Tenant that this Lease is terminated. If Landlord shall elect to
terminate this Lease aforesaid, such termination shall be effective immediately
upon service of such notice by Landlord upon Tenant if the term shall not have
commenced or on the date specified in such notice if during the term. In the
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Exhibit 10.17
event of such termination the rent shall be apportioned and paid up to the time
of such fire or other casualty if the Premises are rendered wholly untenantable
as aforesaid by such fire or other casualty or up to the specified date of
termination if the Premises are not rendered wholly untenantable by such fire or
other casualty. Any obligation of Tenant to Landlord for any sum of money due
under any provisions of this Lease shall survive any such termination of this
Lease by Landlord. If, on the other hand, Landlord shall elect to repair such
damage, such repairs shall be commenced within forty-five (45) days of notice to
Tenant of such election and the Landlord shall diligently proceed with such
restoration, however, Landlord's obligation to repair or rebuild shall be
limited to the availability of insurance proceeds. During the period of repair
the total amount of the rent provided for in Article 2.0 of this Lease shall be
reduced to an amount which in Landlord's opinion bears the same ratio to the
rent provided for in said Article 2.0 as the portion of the Premises then
available for use bears to the entire Premises. Upon completion of such repair,
the rent shall thereafter be paid as if no fire or other casualty had occurred.
Notwithstanding the foregoing, in the event that before or during the term
of this Lease the Premises or the Building shall be damaged by fire or other
casualty which shall have been occasioned by the act of Tenant or of its
servants, agents, visitors, invitees or licensees, (i) there shall be no
apportionment or abatement of the rent and, (ii) Landlord shall have the right
but shall have no obligation to repair the Premises or the Building, and (iii)
Tenant shall reimburse and compensate Landlord within five (5) days of rendition
of any statements to Tenant by Landlord for any expenditures made by Landlord in
making any such repairs. Any such actions shall be without prejudice to any
other rights and remedies of Landlord and without prejudice to any rights of
subrogation of any insurer of Landlord.
The other provisions of this Article 8.0 notwithstanding, Landlord shall
have no obligation to replace or repair any property in the Building or on the
Premises belonging to Tenant or to anyone claiming through or under Tenant, nor
shall Landlord have any obligation hereunder to replace or repair any property
on the Premises which Landlord may require Tenant to remove from the Premises.
9.0 WAIVER OF CERTAIN CLAIMS
The Tenant, to the extent permitted by law, waives all claims it may have
against the Landlord, and against the Landlord's agents and employees for damage
to person or property sustained by the Tenant or by any occupant of the Premises
or by any other person, resulting from any part of the Property or any equipment
or appurtenances becoming out of repair, or resulting from any accident in or
about the Property or resulting directly or indirectly from any act or neglect
of any tenant or occupant of any part of the Property or of any other person,
unless such damage is a result of the negligence or contributory negligence of
Landlord, or Landlord's agents or employees. If any damage results from any act
or neglect of the Tenant, the Landlord may, at the Landlord's option, repair
such damage and the Tenant shall thereupon pay to the Landlord the total cost of
such repair. All personal property belonging to the Tenant or any occupant of
the Premises that is in or on any part of the Property shall be there at the
risk of the Tenant or of such other person only, and the Landlord, its agents
and employees shall not be liable for any damage thereto or for the theft or
misappropriation thereof unless such damage, theft or misappropriation is a
result of the negligence or contributory negligence of Landlord or Landlord's
agents or employees. The Tenant agrees to hold the Landlord harmless and to
indemnify the Landlord against claims and liability for injuries to all persons
and for damage to or loss of property occurring in or about the Property, due to
any act of negligence or default under this Lease by the Tenant, its agents or
employees.
To the extent that the Tenant carries hazard insurance on any of its
property in the Premises and to the extent that the Landlord carries hazard
insurance on the Property, each policy of insurance shall contain (if obtainable
from the insurer selected by the Tenant or the Landlord, as the case may be,
without additional expense) a provision waiving subrogation against the other
party to this Lease. If such provision can be obtained only at additional
expense, the obligation to obtain such provision shall be effective only if the
other party, on notice shall pay the amount of such additional expense. Each of
the parties hereto releases the other with respect to any liability which the
other may have for any damage by fire or other casualty with respect to which
the party against whom such release is claimed shall be insured under a policy
or policies of insurance containing such provision waiving subrogation.
10.0 PARKING
Landlord shall have the right to change the area, level, location and
arrangement of and number of parking areas, as well as the number of parking
spaces, and to restrict parking areas with a view toward improving the
convenience and use thereof by the Tenant, its customers and employees. The
E-48
Exhibit 10.17
Landlord presently provides a total of five hundred seventy-five (575) parking
spaces for this Building. Based on the Tenant's proportionate share of space in
the Building of two percent (2%) (the same proportionate share as found in
Article 2.02.01 OPERATING EXPENSES and Article 2.02.02 REAL ESTATE TAXES), the
Tenant is entitled to two percent (2%) of the parking spaces, which percentage
shall increase in direct proportion to any additional space leased by the
Tenant.
Subject to the other provisions of this Lease, Tenant shall have free
non-exclusive use of parking facilities, driveways and islands for Tenant,
Tenant's employees, Tenant's business invitees and Tenant's agents. Such areas
for non-exclusive parking spaces shall serve all tenants, their employees,
business invitees and agents. (Tenant shall, upon written notice from Landlord,
within five (5) days, furnish Landlord, or its authorized agent, the state motor
vehicle license number assigned to each of its motor vehicles to be parked on
the Property and the motor vehicle of all of its employees to be employed on the
Premises). Tenant shall not at any time park any truck or delivery vehicles in
any parking areas or driveways, except as specifically designated by Landlord
from time to time, and shall confine all truck parking, loading and unloading to
times and locations specifically designated by Landlord from time to time.
Tenant shall require all trucks servicing Tenant to be promptly loaded or
unloaded and removed from the Property. Tenant covenants and agrees to enforce
the provisions of this Lease against Tenant's employees and business invitees.
Landlord shall have the right, but not the obligation: (a) to police said
parking facilities, (b) to provide parking attendants, (c) to change the area,
level, location and arrangement of parking areas, (d) to cause unauthorized
motor vehicles to be towed away at the sole risk and expense of the owner of
such motor vehicles, (e) to provide for such exclusive use as Landlord may
determine from time to time, for the exclusive use of the handicapped, and/or
for the exclusive use of visitors, (f) to use any portion of the parking
facilities from time to time and/or to deny access to the same temporarily to
repair, maintain or restore such facilities or to construct improvements under,
over, along, across and upon the same for the benefit of the Property and to
grant easements therein to public and quasi-public authorities, and (g) to adopt
and modify from time to time rules and regulations for parking and ingress,
egress, speed, no parking, no standing, and for times and places for move in,
move out and deliveries.
11.0 RIGHT OF ENTRY
Landlord shall have the right to enter and to grant licenses to enter the
Premises at any time and for such lengths of time as Landlord shall deem
reasonable without reduction or abatement of rent (a) to inspect the Premises,
(b) to exhibit the Premises to prospective tenants or purchasers of the
Building, (c) to make alterations or repairs to the Premises or the Building and
to temporarily store materials, tools and equipment for such alterations or
repairs for any purpose which Landlord shall deem necessary for the operation
and maintenance of the Building and the general welfare and comfort of its
tenants.
Landlord shall have the right to enter and to grant licenses to enter the
Premises at any time and for such lengths of time as Landlord shall deem
reasonable without reduction or abatement of rent for the purposes (a) of
removing from the Premises any placards, signs, fixtures, alterations or
additions not permitted by this agreement or by the Rules and Regulations, (b)
of abating any condition which constitutes a violation of any covenant or
condition of this Lease or of the Rules and Regulations, and (c) of an
emergency. No such entry by Landlord shall in any manner affect Tenant's
obligations and covenants under this Lease, and no such entry shall of itself
render Landlord liable for any loss of or damage to the property of Tenant.
12.0 QUIET ENJOYMENT; SUBORDINATION AND ATTORNMENT
If Tenant promptly and punctually complies with each of its obligations
hereunder, it shall peacefully have and enjoy the possession of the Premises
during the term hereof. No action of Landlord in other space in the Building, or
in repairing or restoring the leased space, however, shall be deemed a breach of
this covenant, or give Tenant any right to modify this Lease either as to term,
rent payable, or other obligations to perform.
This Lease is and shall continue to be subject and subordinate to any
mortgages or deeds of trust which may now or hereafter cover or affect the land
on which the Building is constructed or the Building, and to all renewals,
modifications, consolidations, replacements and extensions of any such mortgages
or deeds of trust. This clause shall be self-operative and no further instrument
of subordination shall be required. At any time and from time to time, however,
Tenant shall execute within five (5) days after receipt any certificate in
confirmation of such subordination that Landlord may request.
E-49
Exhibit 10.17
If any such mortgage or deed of trust is terminated or foreclosed, this
Lease (at the option of the purchaser at such foreclosure sale) shall not
terminate, nor be terminable by Tenant by reason of such foreclosure, and Tenant
shall, if requested, attorn to the purchaser at such foreclosure sale.
13.0 DEFAULT
13.01 Any one of the following events shall constitute an "Event of
Default:"
1. if Tenant shall fail to pay any monthly installment of Annual Rent, any
Additional Rent or any other sum payable by the Tenant when such sum is due in
accordance with the terms of this Lease; or
2. if Tenant shall fail to keep or perform or abide by any other term,
condition, covenant or agreement of this Lease (whether or not specified herein
as an Event of Default) or of the Rules and Regulations now in effect or
hereafter adopted and such default shall continue for a period of ten (10) days
after notice to Tenant of such default; or
3. if (a) Tenant (or, if Tenant is a partnership, if any partner in
Tenant) shall file a petition in bankruptcy or consent to any other action
seeking any such judicial decree or shall make any assignment for the benefit of
its creditors or shall admit in writing its inability to pay its debts generally
as they become due or if (b) any court of competent jurisdiction shall enter a
decree or order approving a petition filed against it or appointing any trustee
or receiver for Tenant or if any person shall file a petition for involuntary
bankruptcy against Tenant and such appointment or petition shall not be stayed
or vacated within sixty (60) days or entry thereof; or
4. if Tenant's interest in this lease or the Premises shall be subjected
to any attachment, levy or sale pursuant to any order or decree entered against
Tenant in any legal proceeding and such order or decree shall not be vacated
within fifteen (15) days of entry thereof; or
5. the Premises are deserted, vacated, or not used regularly or
consistently as would normally be expected for similar premises put to the same
or similar purposes, even though the Tenant continues to pay all rental and
charges provided for herein.
13.02 If there is an "Event of Default," Landlord, without declaring a
termination of the Lease (which right is, however, unconditionally and
absolutely reserved) may at its sole election exercise any one or more or all of
the following remedies, in addition to any other remedies Landlord may have
under this Lease or at law or in equity:
1. Landlord may re-enter the Premises and correct or repair any condition
which shall constitute a failure on Tenant's part to keep or perform any
covenant of this Lease or the Rules and Regulations, and Tenant shall reimburse
Landlord any expenditure made to make such correction or repair.
2. Landlord may, without terminating this Lease, demand that Tenant vacate
the Premises and remove all property belonging to Tenant, and Landlord shall
have the right to re-enter and take possession of the Premises without such
entry and possession relieving the Tenant, in whole or in part, from the
Tenant's obligation to pay the rent due hereunder for the full term of the
Lease. Any and all property which may be removed from the Premises by Landlord
pursuant to this section or at law, to which Tenant is or may be entitled, may
be handled, removed or stored by landlord at risk, cost and expense of Tenant,
and Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. Tenant shall pay to Landlord upon demand any and all
expenses incurred in such removal and all storage charges against such
properties so long as the same shall be in Landlord's possession or under
Landlord's control. Tenant agrees that to the fullest extent permitted by law
any such property of Tenant not retaken from storage by Tenant within thirty
(30) days after the end of the term, however terminated, may be disposed of by
Landlord in any manner whatsoever, including without limitation, the sale,
scrapping of and/or destruction thereof without any further obligation to
Tenant, and Tenant shall pay to Landlord promptly on demand reasonable expenses
of such disposal.
3. Landlord may at any time, without terminating this Lease, re-enter the
Premises and remove therefrom Tenant and all property belonging to or placed on
the Premises by Tenant.
E-50
Exhibit 10.17
4. Landlord without terminating this Lease may re-let the Premises at any
rental as the Landlord in its sole discretion deems advisable and Tenant shall
pay all costs of such re-letting, including but not limited to, any necessary
alterations, repairs, and the difference, if any, between the rent collected by
any subsequent tenant and the rental provided under this Lease.
5. The Landlord may elect to terminate this Lease. In such event, Tenant
shall remain liable to Landlord for damages, due and payable monthly on the day
rent would have been payable hereunder, and in the amount equal to the rent and
any other amounts which would have been owing by Tenant for the balance of the
term of the lease, had this Lease not been terminated, less the net proceeds, if
any, of any re-letting of the Premises by Landlord, after deducting all of the
Landlord's costs associated with the termination of the Lease (including but not
limited to legal expenses and attorneys' fees), and the cost to repair or alter
the Premises incurred in connection or in any way related to the termination of
this Lease, eviction of Tenant and such re-letting.
6. Landlord may recover from Tenant all costs associated with the
termination of this Lease or other remedial measures herein provided or provided
by law, including but not limited to, legal expenses and attorneys' fees, the
cost to repair or alter the Premises, and all loss of rents the Landlord may
incur by reason of such termination.
7. Landlord may declare the entire amount of rent calculated on current
rent being paid by Tenant and Additional Rent which in Landlord's reasonable
determination would become due and payable during the remainder of the term of
the Lease, discounted to present value by using a reasonable discount rate
selected by Landlord, to be due and payable immediately. Upon acceleration of
such amounts, Tenant agrees to pay the same at once, together with all rent and
other amounts theretofore due, at Landlord's address as provided herein. Such
payment shall not constitute a penalty or forfeiture but shall constitute
liquidated damages for Tenant's failure to comply with the terms and provisions
of this Lease (Landlord and Tenant agreeing that Landlord's actual damages in
such an event are impossible to ascertain and that the amount set forth above is
a reasonable estimate thereof).
13.03 In the event of any re-entry of the Premises by Landlord pursuant to
any of the provisions of this Lease, Tenant hereby waives all claims for damages
which may be caused by such re-entry by Landlord, and Tenant shall save Landlord
harmless from any loss, cost (including legal expenses and reasonable attorneys'
fees) or damages suffered by Landlord by reason of such re-entry. No such
re-entry shall be considered or construed to be a forcible entry.
13.04 No course of dealing between Landlord and Tenant or any delay on the
part of Landlord in exercising any rights it may have under this Lease shall
operate as a waiver of any of the rights of Landlord hereunder, nor shall any
waiver of a prior default operate as a waiver of any subsequent default or
defaults. No express waiver shall affect any condition, covenant, rule or
regulation other than the one specified in such waiver and that one only for the
time and in the manner specifically stated.
13.05 The exercise by Landlord of any one or more of the remedies provided
in this Lease shall not prevent the subsequent exercise by Landlord of any one
or more of the other remedies herein provided or provided by law. All remedies
provided for in this Lease are cumulative and may, at the election of Landlord,
be exercised alternatively, successively or in any other manner and are in
addition to any other rights provided by law.
13.06 Landlord, to the fullest extent permitted by law, shall have a lien
on and the Tenant hereby grants Landlord a security interest in all of the
equipment, wares, chattels, fixtures, furniture and other property of Tenant
which may be in or upon the Premises, the Building or the Property. Tenant
hereby specifically, to the fullest extent permitted by law, waives any and all
exemptions allowed by law, and such lien and security interest may be enforced
upon the nonpayment of any installment of rent, Additional Rent or other moneys
due and payable hereunder by the taking and selling of such property subject to
at least fifteen (15) days advance written notice, or such lien may be enforced
in any lawful manner at the option of Landlord.
13.07 Tenant shall pay upon demand all Landlord's costs, charges and
expenses, including the fees of counsel, agents and others retained by Landlord,
incurred in enforcing its obligations hereunder or incurred by Landlord in any
litigation, negotiation or transaction which Tenant causes Landlord, without
Landlord's fault to become involved or concerned.
14.0 NO ESTATE IN LAND
E-51
Exhibit 10.17
This Lease shall create only the relationship of landlord and tenant
between Landlord and Tenant.
15.0 INVALIDITY OF PARTICULAR PROVISIONS
If any clause or provision of this Lease is or becomes illegal, invalid,
or unenforceable because of present or future laws or any rule or regulation of
any governmental body or entity, effective during its term, the intention of the
parties hereto is that the remaining parts of this Lease shall not be affected
thereby unless such invalidity is, in the sole determination of Landlord,
essential to the rights of both parties, in which event Landlord has the right
to terminate this Lease on written notice to Tenant.
16.0 SUBSTITUTE PREMISES
The Landlord shall have the right at any time during the term hereof, upon
giving Tenant not less than sixty (60) days prior written notice, to provide and
furnish Tenant with space elsewhere in the Building of approximately the same
size as the Premises and remove and place Tenant in such space, with Landlord to
pay all reasonable costs and expenses incurred as a result of such removal of
Tenant. Should Tenant refuse to permit Landlord to move Tenant to such new space
at the end of said sixty (60) day period, Landlord shall have the right to
cancel and terminate this Lease effective ninety (90) days from the date of
original notification by Landlord. If Landlord moves Tenant to such new space,
this Lease and each and all of its terms, covenants and conditions shall remain
in full force and effect, subject however, to the adjustment of rent to account
for any difference in square footage, with such adjustment to be made on a per
square foot basis.
17.0 TENANT'S PERSONAL PROPERTY TAXES
Tenant shall pay prior to the delinquency all taxes assessed against or
levied upon its occupancy of the Premises, or upon the fixtures, furnishings,
equipment and all other personal property of Tenant located in the Premises.
Tenant shall cause said fixtures, furnishings, equipment and other personal
property to be assessed and billed separately from the property of Landlord. In
the event any or all of Tenant's fixtures, furnishings, equipment and other
personal property, shall be assessed and taxed as the property of Landlord,
Tenant shall pay to Landlord its share of such taxes within ten (10) days after
delivery to Tenant by Landlord of a statement in writing setting forth the
amount of such taxes applicable to Tenant's fixtures, furnishings, equipment or
personal property.
18.0 NOTICES AND CONSENTS
All notices, demands, requests, consents or approvals which may or are
required to be given by either party to the other shall be in writing and shall
be deemed given when sent by United States Certified or Registered Mail, Return
Receipt Requested, postage prepaid, (a) if for the Tenant, addressed to the
Tenant at the Building, or at such other place as the Tenant my from time to
time designate by written notice to the Landlord, or (b) if the Landlord,
addressed to the office of the Landlord at 2000 Regency Parkway, Suite 110,
Cary, North Carolina 27511, with a copy to Landlord's attorney addressed to
Womble Carlyle Sandridge & Rice, P.L.L.C., Attention: Mr. Bill Matthews, P. O.
Box 831, Raleigh, North Carolina 27602, or at such other place as the Landlord
may from time to time designate by written notice to the Tenant. All consent and
approvals provided for herein must be in writing to be valid. If the term
"Tenant" as used in this Lease refers to more than one person, any notice,
consent, approval, requests, bill, demand or statement, given as aforesaid to
any one of such persons shall be deemed to have been duly given to Tenant.
Except as specifically provided in this Lease, Tenant hereby expressly
waives the service of intention to terminate this Lease or to re-enter the
Premises and waives the service of any demand for payment of rent or for
possession and waives the services of any other notice or demand prescribed by
any statute or other law.
19.0 CONDEMNATION
E-52
Exhibit 10.17
19.01 If the whole or more than twenty-five percent (25%) of the Building
shall be taken by condemnation, this Lease shall terminate on the date
possession of the Building is required to be surrendered to the condemnor, and
rent payable hereunder shall be prorated through such date.
19.02 If less than twenty-five percent (25%) of the Building shall be
taken by condemnation, this Lease shall, at the option of the Landlord,
terminate only as to the part of the Premises so taken, but shall continue in
full force as to the part of the Premises not taken. In the event of such
partial taking and the continuance of this Lease for the part not so taken, then
Landlord shall, at its cost and expense, forthwith repair and restore the
Building to as nearly as possible their condition immediately prior to such
taking. Notwithstanding the above, Landlord's obligation to restore shall be
limited to the availability of any condemnation awards. From the date of the
surrender of possession to the condemnor to the date of the completion of the
repairs and restoration of the portion of the Building not so taken, there shall
be no abatement of the rent, except for the portion of the Premises, if any,
that shall not be usable for Tenant's business.
19.03 After the repairs and restoration have been completed following the
partial taking, the rent for the unexpired term shall not be reduced unless the
particular taking includes a part of the Premises and, in such event, the rent
for the unexpired term shall be reduced by that portion which the area so taken
shall bear to the entire area of the Premises immediately prior to such taking.
19.04 Tenant agrees that if the Premises or any part thereof shall be
taken by condemnation, Tenant shall have no claim against the Landlord and shall
not have any claim or right to any portion of the amount that may be awarded as
damages or paid as a result of such condemnation.
20.0 ASSIGNMENT-SUBLEASE
Tenant shall not, without the prior written consent of Landlord, assign,
hypothecate, encumber or otherwise transfer this Lease or any interest
hereunder, or sublet the Premises or any part thereof, or permit the use of the
Premises by any party other than Tenant.
If Tenant desires to sublease the Premises or any part thereof, Tenant
shall submit to Landlord a written request for the consent of Landlord to such
subletting, which request shall be accompanied by the name and address of the
proposed subtenant, a description identifying the space to be sublet, a copy of
the fully executed sublease conditioned only upon approval of Landlord, the
nature and character of the business of the proposed subtenant, and its proposed
use of the Premises, current financial information on the proposed subtenant and
such other information as Landlord may request.
Consent to any assignment or sublease shall not be unreasonably withheld.
The Tenant acknowledges that Landlord is entitled to withhold its consent in the
event the nature and character of the business of the proposed tenant, its
proposed use of the Premises or the financial condition of the proposed tenant
is objectionable or unsatisfactory to Landlord. Any Landlord consent to an
assignment or sublease shall not nullify this provision, and all later
assignments or subleases shall be made likewise only after the prior written
consent of Landlord is obtained in each instance. Unless otherwise expressly
agreed to by Landlord in writing, no sublease or assignment by Tenant shall
relieve Tenant of any liability hereunder. Tenant acknowledges and agrees that
Landlord may condition its consent to any proposed assignment or sublease upon
the agreement of Tenant to pay to Landlord the excess, if any, of the rentals
and other charges to be paid by Tenant's assignee or sublessee under the terms
and provisions of such proposed assignment or sublease over the Annual Rent and
Additional Rent and other charges to be paid by Tenant to Landlord hereunder.
The occupancy of the Premises by any successor firm of the Tenant or by any firm
into which or with which the Tenant may become merged or consolidated shall be
deemed an assignment of this Lease requiring the prior written consent of
Landlord. Notwithstanding the giving by Landlord of its consent to any
assignment or sublease with respect to the Premises, no such assignee or
sublessee may exercise any expansion option, right of first refusal option, or
renewal option under this Lease except in accordance with a separate written
agreement entered into directly between such assignee of sublessee and Landlord.
In no event shall Tenant (1) advertise or publicize in any way the
availability of all or part of the Premises without the prior written consent of
the Landlord, or (2) advertise or publicize the Premises for subletting whether
through a broker, agent, representative or otherwise at a rental rate less than
that for which space in the Building is being offered for rent by Landlord.
Tenant agrees to pay to Landlord, on demand, all reasonable costs (including
attorneys' fees) incurred by Landlord in connection with any request by Tenant
for Landlord's consent to any assignment or subletting.
E-53
Exhibit 10.17
Landlord may assign this Lease to any construction or permanent mortgagee
("Mortgagee") of the Property as additional security for the payment of any loan
thereby secured. If the Tenant shall have received notice from Landlord or
Mortgagee of any such assignment, Tenant shall thereafter give written notice of
any breach or failure of performance by Landlord under this Lease to Mortgagee
and allow Mortgagee a reasonable period of time to remedy the same. Any breach
or failure of performance by Landlord hereunder shall not constitute a default
as between Landlord and Tenant until such notice shall have been given.
Landlord, or its successors and assigns, may assign this Lease to a
subsequent purchaser of the Property without the consent or approval of this
Tenant, assignee or sublessee.
21.0 HOLDING OVER
In the event Tenant remains in possession of the Premises subsequent to
the expiration or other termination of this Lease and without regard to
Landlord's acquiescence or consent, Tenant shall pay as liquidated damages a
monthly rent double the monthly rent payable immediately prior to such
expiration or termination of the Lease for the duration of such period. No such
payment (or the acceptance thereof) shall in any way constitute a waiver of the
right of the Landlord to dispossess the Tenant and recover possession or
exercise any other remedy herein provided. If such holding over is with the
Landlord's consent, the Tenant shall be a tenant on a month-to-month basis which
tenancy shall be terminated absolutely and without remedy upon thirty (30) days
written notice of such intent by either party. There shall be no renewal of this
Lease by operation of law.
22.0 RULES AND REGULATIONS
The Rules and Regulations in regard to the Building attached hereto as
Exhibit F and all rules and regulations which Landlord may hereafter from time
to time adopt and promulgate for the government and management of said Building
(provided all such rules and regulations are applicable to all tenants) are
hereby made a part of this Lease and shall during the said Term be in all things
observed and performed by the Tenant and by the Tenant's clerks, employees,
servants and agents. Tenant does hereby accept and agree to abide by and uphold
the Rules and Regulations as shown in Exhibit F. Insofar as the attached
standard Rules and Regulations conflict with any of the terms and provisions of
this Lease Agreement, the terms and provisions of the Lease shall control.
23.0 TIME IS OF THE ESSENCE
Time is of the essence of this Agreement.
24.0 ESTOPPEL CERTIFICATES
Within five (5) days after request therefor by Landlord or any mortgagee
of the Property or any prospective purchaser of the Premises, Tenant agrees to
execute and deliver, in recordable form, at any time or from time to time, an
estoppel certificate addressed to any mortgagee or proposed mortgagee or
purchaser, of the Building, or addressed to the Landlord, certifying (if such be
the case) that this Lease is unmodified and in full force and effect (and if
there have been any modifications that the same is in full force and effect as
modified and stating said modifications); stating that there are no defenses,
defaults, or offsets against the enforcement of this Lease or stating those
claimed by Tenant; stating that rent has commenced to accrue, and that Tenant
has accepted and is occupying the Premises; stating the date to which rentals
and other charges are paid; and as to mortgagees or prospective mortgagees,
agreeing that in the event the mortgagee becomes owner of the Premises or
exercises an assignment of rents granted mortgagee by the Landlord, the Tenant
will accept and attorn to the mortgagee or to a party designated by said
mortgagee as its direct tenant, and that the mortgagee will not be bound by or
responsible for any rents paid in advance to Landlord or offsets against Tenant
or any prior defaults of the Tenant and that thereafter all notices required or
permitted under the Lease be given to Landlord shall thereafter be given to said
mortgagee. Such certificates shall also include such other information as may be
reasonably required by any mortgagee.
E-54
Exhibit 10.17
25.0 EVENTS BEYOND CONTROL OF LANDLORD AND TENANT
Landlord and/or Tenant shall be excused for the period of any delay and
shall not be deemed in default with respect to the performance of any of the
terms, covenants, and conditions of this Lease when prevented from so doing by a
cause or causes beyond the Landlord and/or Tenant's control, which shall
include, without limitation, all labor disputes, governmental regulations or
controls, fire or other casualty, inability to obtain any material or services,
acts of God, or any other cause, except the obligation of the Tenant under this
Lease to make prompt payment to Landlord of the rental payments and all other
charges due hereunder.
26.0 SIGNS
Tenant may not erect, install or display any sign or advertising material
upon the Premises and Building, the walls thereof, of in any window therein,
without prior written consent of Landlord. Landlord shall furnish, install and
maintain a building directory at a convenient location in the lobby listing the
name of Tenant and the room number of Tenant's entrance office and shall furnish
and install any approved sign for Tenant, the cost of which shall be charged to
the Tenant.
The Tenant shall not use the name "REGENCY PARK" or its logo unless the
Landlord should grant its prior written consent thereto.
27.0 BROKERAGE
Tenant represents and warrants that it has dealt with no broker, agent or
other person in connection with this transaction and that no broker, agent or
other person brought about this transaction, other than REGENCY PARK
CORPORATION. Tenant agrees to indemnify and hold Landlord harmless from and
against any claims by any other broker, agent or other person claiming a
commission or other form of compensation by virtue of having dealt with Tenant
with regard to this leasing transaction. The provisions of this section shall
survive the termination of this Lease.
28.0 RECORDATION OF LEASE
The Tenant will not record this Lease. Upon the request of either party
hereto, the other party will join in the execution of a Memorandum of Lease for
the purposes of recordation in the Office of the Register of Deeds, Wake County,
North Carolina. The Memorandum will be approved as to form by the Landlord and
will describe only the parties, the Premises, the term and any options to renew
the term.
29.0 GOVERNMENTAL COMPLIANCE
Tenant covenants and agrees to make use of the Premises in accordance with
all municipal, county, state and federal laws, rules and regulations, including,
but not limited to environmental laws, rules and regulations, and all
permitting, licensing and other governmental approvals now or hereafter
implemented. Tenant further covenants and agrees neither to cause nor permit any
hazardous or toxic waste or materials (as defined by state and federal laws,
rules and regulations) to be stored at or upon the Premises, the Building and
Property nor to cause nor permit any such material or waste to be disposed of at
the Premises or under or within the Building and Property. Tenant will hold
Landlord harmless for all costs, expenses, fines, charges (including attorneys'
and engineers' fees and charges) incurred by Landlord as a direct or indirect
expense caused by the breach of this Article by Tenant, its employees, agents
and invitees, and further covenants and agrees to, at all times, include
specific coverage to such effect as a part of Tenant's public liability
insurance coverage.
30.0 HAZARDOUS MATERIALS
Tenant shall not (either with or without negligence) cause or permit the
escape, disposal or release of any biologically or chemically active or other
hazardous substances or materials. Tenant shall not allow the storage or use of
such substances or materials in any manner not sanctioned by law or by the
E-55
highest standards prevailing in the industry for the storage and use of such
substances or materials, nor allow to be brought onto the Property any such
materials or substances except to use in the ordinary course of Tenant's
business, and then only after written notice is given to Landlord of the
identity of such substances or materials. Without limitation, hazardous
substances and materials shall include those described in the Comprehensive
Environmental Response Compensation and Liability Act of 1980, as amended, 42
U.S.C. Section 9601 et seq., any applicable state or local laws and the
regulations adopted under these acts. If any lender or governmental agency shall
ever require testing to ascertain whether or not there has been any release of
hazardous materials, then the reasonable costs thereof shall be reimbursed by
Tenant to Landlord upon demand as additional charges if such requirement applies
to the Premises. In addition, Tenant shall execute affidavits, representations
and the like from time to time at Landlord's request concerning Tenant's best
knowledge and belief regarding the presence of hazardous substances or materials
on the Premises. In all events, Tenant shall indemnify Landlord in the manner
elsewhere provided in this Lease from any release of hazardous materials on the
Premises occurring while Tenant is in possession, or elsewhere if caused by
Tenant or persons acting under Tenant. The within covenants shall survive the
expiration or earlier termination of the Lease term.
31.0 COMMON AREAS
Tenant shall have the right, together with other tenants and occupants and
invitees, to the non-exclusive use of the sidewalks, driveways, stairways,
halls, lobbies, elevators and passages in the Building and on the Property for
reasonable ingress to and egress from the Premises and for no other purpose
subject to the other provisions of this Lease, including, without limitation,
the Rules and Regulations set forth in Exhibit F.
32.0 POSSESSION
On the expiration or other termination of the term of this Lease, Tenant
shall quit and surrender to Landlord the Premises, broom clean, in good order
and condition, ordinary wear and tear excepted, and Tenant shall remove all of
its property except as provided in Article 5. Tenant's obligation to observe and
perform this covenant shall survive the expiration and other termination of the
term of this Lease.
33.0 MISCELLANEOUS
a. The words "Landlord" and "Tenant" wherever used in the Lease shall be
construed to mean plural where necessary, and the necessary grammatical changes
required to make the provisions hereof apply either to corporations or
individuals, either men or women, shall in all cases be assumed as though in
each case fully expressed.
b. Each provision hereof shall extend to and shall bind and inure to the
benefit of Landlord and Tenant and their respective heirs, legal
representatives, assessors and assigns.
c. Submission of this instrument for examination does not constitute a
reservation of or option for the Premises. The instrument does not become
effective as a Lease or otherwise until executed and delivered by both Landlord
and Tenant.
d. The headings of sections are for convenience only and do not limit or
construe the contents of the sections.
e. Should any mortgagee require a modification or modifications of this
Lease, which modification or modifications will not bring about any increased
cost or expense to Tenant or in any way substantially change the rights and
obligations of Tenant hereunder, then in such event, Tenant agrees to execute
such an amendment.
f. The laws of the State of North Carolina shall govern the validity,
performance and enforcement of this Lease.
g. This Lease contains the entire agreement of the parties in regard to
the Premises. There are no oral agreements existing between them, and there
shall be no oral changes. Neither Landlord nor any agent of Landlord has made
any representations, warranties or promises with respect to the Premises, the
Building or the Property, or the use of any amenities or facilities except as
expressly set forth herein. Any agreement hereafter made shall be ineffective to
change, waive, modify, discharge or terminate the Lease in whole or in part
E-56
Exhibit 10.17
unless such agreement is in writing and signed by the party against whom
enforcement of the change, waiver, modification, discharge or termination is
sought.
h. The shareholders, directors and officers of Landlord (collectively the
"Parties") shall not be liable for the performance of Landlord's obligations
under this Lease. Tenant shall look solely to Landlord to enforce Landlord's
obligations hereunder and shall not seek any damages against the rest of the
parties. A liability of Landlord for Landlord's obligations of this Lease shall
not exceed and shall be limited to a value of Landlord's interest in the
Property, and Tenant shall not look to the property or assets of any of the
Parties in seeking either to enforce Landlord's obligations under the Lease or
to satisfy a judgment for Landlord's failure to perform as such obligation.
Exhibits A, B, C, D, E, F and G consisting of eleven (11) pages are
attached hereto and become part of this Lease.
IN WITNESS WHEREOF, Landlord and Tenant have respectively signed and
sealed this Lease in duplicate as the day and year first above written.
REGENCY PARK CORPORATION
Landlord
(CORPORATE SEAL) By:
----------------------------------
Vice President/Treasurer
ATTEST:
- --------------------------
Assistant Secretary
LEVEL 8 SYSTEMS, INC.
Tenant
(CORPORATE SEAL) By:
----------------------------------
Title:
-------------------------------
ATTEST:
- --------------------------
E-57
Exhibit 10.17
EXHIBIT C
---------
TENANT FIT-UP - SCHEDULE 1
Landlord shall provide at Landlord's sole cost the following tenant finish work:
Clean Premises of all debris, shampoo all carpets, and provide new signage on
the entry door to the suite.
EXHIBIT C
---------
SCHEDULE 2
SATELLITE ANTENNA
Landlord and Tenant agree to the following:
Tenant will provide Landlord with a specification for its Satellite Antenna.
Once specifics including, but not limited to size, circumference, weight and
installation specifications are reviewed by Landlord, and Landlord's Engineers
and Architects, Landlord and the Town of Cary will either approve or request
additional information for further review. There will be no charge for this
service.
Tenant shall have the right, subject to Landlord's and the Town of Cary's
consent (Landlord's consent not unreasonably withheld, conditioned or delayed)
to have the Landlord install a satellite antenna on the roof of the Building in
a location, size, color and weight satisfactory to Landlord, the Town of Cary
and Tenant. Tenant shall not be charged any rent for space taken by the antenna.
Prior to installation, Tenant shall submit to Landlord elevations and
specifications for the rooftop unit. If approved, Landlord shall install the
antenna at Tenant's sole expense and Tenant shall be responsible for any damage
caused by its installation and/or removal or temporary removal. The Tenant shall
be responsible for all the costs for the removal or temporary removal of
satellite antenna or rooftop unit. At the expiration of the Lease, such
Satellite Antenna shall be removed by the Landlord at the Tenant's expense.
Any cost to remove the rooftop unit during the term of the Lease caused by the
need of Landlord to repair the roof shall be borne solely by Tenant.
Contracts for the installation and the removal of the Satellite Antenna shall be
held by the Landlord with (a) contractor(s) jointly approved by the Landlord and
the Tenant.
E-58
Exhibit 10.17
EXHIBIT D
---------
COMMENCEMENT DATE VERIFICATION
NORTH CAROLINA
WAKE COUNTY
THIS COMMENCEMENT DATE VERIFICATION, dated this _____ day of
________________, 2003, and entered into between REGENCY PARK CORPORATION, a
North Carolina corporation, as Landlord, and ____________________________, a
_____________ corporation, the Tenant.
W I T N E S S E T H:
WHEREAS, the parties hereto entered into that certain Lease Agreement
dated the ____ day of _________________, 2003; and
WHEREAS, the parties hereto are desirous of establishing the Commencement
Date of the Lease term provided for in said Lease Agreement.
NOW, THEREFORE, the parties hereto do hereby mutually agree that the
Commencement Date of the hereinabove referred to Lease is the ____ day of
______________, 2003.
IN TESTIMONY WHEREOF, the parties hereto have caused this instrument to be
executed the date first hereinabove set out.
REGENCY PARK CORPORATION
Landlord
(CORPORATE SEAL)
By:
----------------------------------
Vice President/Treasurer
ATTEST:
- --------------------------
Assistant Secretary
LEVEL 8 SYSTEMS, INC.
Tenant
(CORPORATE SEAL)
By:
----------------------------------
Title:
-------------------------------
ATTEST:
- --------------------------
Secretary
- -----------
E-59
Exhibit 10.17
EXHIBIT E
---------
OPERATING EXPENSES
"Operating Expenses" shall mean those items of cost and expenses paid or
incurred by, or on behalf of, Landlord for ownership security, maintenance,
repair, management or operation of the Building, adjacent sidewalks, the land
upon which the Building is located, and the personal property of Landlord used
in the operation of the Building as determined in accordance with generally
accepted principles of sound management consistently applied, which are properly
chargeable to the operation of the Building, including but not limited to:
1.Landscaping and grounds maintenance costs and expenses, including those
attributable to the care and upkeep of the common areas of Regency Park required
of Property Owners;
2.Costs and expenses of redecorating, painting, and carpeting the common areas
of the Building and Property; provided, however, that, except as specified in
Item 6 hereof, the cost of structural changes to the Building which should be
capitalized in accordance with sound accounting principles shall not be
allocated or charged to the Premises without Tenant's approval;
3.Costs of all repairs, alterations, additions, changes, replacements, and other
items required by any law or governmental regulation imposed after the date of
this Lease, regardless of whether such costs, when incurred, are classified as
capital expenditures;
4.Costs of wages and salaries of all persons engaged in the operation,
maintenance, repair, and security of the Building and the Property, and
so-called fringe benefits, including social security taxes, unemployment
insurance taxes, costs for providing coverage for disability benefits, cost of
any pensions, hospitalization, welfare or retirement plans, or any other similar
or like expense incurred under the provisions of any collective bargaining
agreement, costs of uniforms, and all other costs or expenses that the Landlord
pays to or on behalf of employees engaged in the operation, maintenance, repair,
and security of the Building and the Property;
5.Legal and accounting expenses, including, but not limited to, such expenses as
relate to seeking or obtaining reductions in and/or refunds of real estate tax
taxes;
6.Amortization, with interest, of capital expenditures for capital improvements
made by Landlord after completion of the Building where such capital
improvements are for the purpose of, or result in, reducing Operating Expenses;
provided, however, that payments by Landlord of interest and principal on any
mortgage or similar instrument secured by the Property or the Building shall not
be included in Operating Expenses;
7.Landlord's insurance costs and expenses for all types of insurance carried by
Landlord with respect to the Building and Property;
8.Such other expenses paid by Landlord, from time to time, in connection with
the operation and maintenance of the Building and the Property as would be
expected to be paid by a reasonable and prudent operator and manager of a
building and site comparable to the Building and the Property;
9.All costs of special services rendered to particular tenants of the Building,
which are paid by such tenants, shall not be included in Operating Expenses; and
10. The operating costs for the Regency Park Fitness Center. This Fitness Center
is for the benefit of all tenants of the Landlord and the operating costs shall
be proportionately shared by tenants of the Landlord.
EXHIBIT F
---------
RULES AND REGULATIONS
1. The sidewalks and entry passages shall not be obstructed by Tenants, or
used by them for any purpose other than those of ingress and egress. The floors
and skylights and windows that reflect or admit light into any place in said
E-60
Building shall not be covered or obstructed by Tenants. The water closets and
other water apparatus shall not be used for any other purpose than those for
which they were constructed and no sweepings, rubbish, or other obstructing
substances shall be thrown therein. Any damage resulting to them or to
associated systems, from misuse, shall be borne by Tenants who, or whose clerks,
agents, or servants shall cause it.
2. No Tenant shall do or permit to be done in said Premises, or bring or
keep anything therein, which shall in any way increase the rate of fire
insurance on said Building, or on property kept therein, or obstruct or
interfere with the rights of other tenants or in any way injure or annoy them,
or conflict with the laws relating to fires, or with the regulations of the Fire
Department, or any part thereof, or conflict with any of the rules and
ordinances of the Board of Health. Tenants, their clerks and servants shall
maintain order in the Building, shall not make or permit any improper noise in
the Building or interfere in any way with other Tenants or those having business
with them. Nothing shall be thrown by Tenants, their clerks or servants out of
the windows or doors, or down the passages or skylights of the Building. No
rooms shall be occupied or used as sleeping or lodging apartments at any time.
No part of the Building shall be used or in any way appropriated for gambling,
immoral or other unlawful practices, and no intoxicating liquor or liquors shall
be sold in said Building.
3. Tenants shall not employ any persons other than the janitors of the
Landlord (who will be provided with pass keys into the offices) for the purpose
of cleaning or taking charge of said Premises. It is understood and agreed that
the Landlord shall not be responsible to any Tenant for any loss of property
from rental premises, however occurring, or for any damage done to the furniture
or other effects of any Tenant by the janitor or any of its employees.
4. No animals, birds, bicycles or other vehicles, or other obstructions,
other than those which are necessitated by an employee or invitee disability,
shall be allowed in the offices, halls, corridors, elevators or elsewhere in the
Building.
5. No painting shall be done, nor shall any alterations be made, to any
part of the Building by putting up or changing any partitions, doors or windows,
nor shall there be any nailing, boring or screwing into the woodwork or
plastering, nor shall any connection be made to the electric wires or gas or
electric fixtures, without the consent in writing on each occasion of the
Landlord or its agent, which consent shall be not be reasonably withheld. Tenant
must replace and/or repair any alternations to conditions of the Premises prior
to such alternations, including but not limited to, the hanging of pictures and
coathangers. All glass, locks and trimmings in or upon the doors and windows of
the Building shall be kept whole and, when any part thereof shall be broken, the
same shall be immediately replaced or repaired and put in order under the
direction and to the satisfaction of Landlord, or its agents, and shall be left
whole and in good repair. Tenants shall not injure, overload or deface the
Building and Premises, woodwork or walls of the Premises and Building, nor carry
on upon the Premises or in the Building any noisome, noxious, noisy, or
offensive business.
6. Not more than two keys for each Premises will be furnished without
charge. No additional locks or latches shall be put upon any door without the
written consent of Landlord. Tenants, at termination of their lease of the
Premises, shall return to Landlord all keys to doors and entry to Building.
7. Landlord in all cases retains the power to prescribe the weight and
position of iron safes or other heavy articles. Tenants must make arrangements
with the Superintendent of the Building when the elevator is required for the
purpose of the carrying of any kind of freight.
8. Tenants shall not (without the Landlord's written consent) put up or
operate any steam engine, boiler, machinery or stove upon the Premises, or carry
on any mechanical business thereon, or do any cooking thereon, or use or allow
to be used in the demised Premises oil, burning fluids, camphene, gasoline or
kerosene for heating, warming, or lighting. No article deemed extra hazardous on
account of fire and no explosives shall be brought into said Premises. No
offensive gases or liquids will be permitted.
9. If Tenants desire blinds or window covering of any kind over the
windows, other than what may be provided by Landlord, they must be of such
shape, color, and materials as may be prescribed by Landlord, and shall be
erected with Landlord's consent and at the expense of said Tenants. No awnings
shall be placed on said Building.
10. If Tenants require wiring for a business machine, or a bell or buzz
system, such wiring shall be done by the Electrician of the Building only, and
no outside wiring men shall be allowed to do work of this kind unless by the
written permission of Landlord or its representatives. If telegraphic or
telephonic service is desired, the wiring for same shall be done as directed by
the Electrician of the Building or by some other employee of Landlord who may be
instructed by the Superintendent of the Building to supervise same, and no
E-61
Exhibit 10.17
boring or cutting for wiring shall be done unless approved by Landlord or its
representatives as stated. The electric current shall not be used for power or
heating unless written permission to do so shall first have been obtained from
Landlord, or its representatives in writing and at an agreed cost to Tenants.
11. Landlord reserves all vending rights. Request for such service will be
made to Landlord.
12. Landlord shall have the right to make such other and further
reasonable rules and regulations as in its judgment may from time to time be
needful for the safety, care, and cleanliness of the Premises, and for the
preservation of good order therein and the same shall be kept and observed by
the Tenants, their agents, clerks, servants or employees.
13. Anyone wishing to smoke must do so either on their own Premises or
outside the Building. We will provide an ash urn at a designated area of the
Building and would ask that special care be taken by those who wish to smoke in
keeping these areas clean.
14. The Tenant agrees to the foregoing Rules and Regulations which are
hereby made a part of this Lease, and each of them, and agrees that for such
persistent infraction of them, or any of them, as may in the opinion of the
Landlord be calculated to annoy or disturb the quiet enjoyment of any other
Tenant, or interfere with the proper operation of the Building, the Landlord may
declare a forfeiture and cancellation of the accompanying Lease and may demand
possession of the demised Premises upon one week's notice.
15. The Landlord reserves the right to close the Building after regular
working hours and on legal holidays subject, however, to Tenant's right of
admittance, under such reasonable regulations as Landlord may prescribe from
time to time, which may include by way of example, but not of limitation, that
persons entering or leaving the Building identify themselves by registration or
otherwise and that such persons establish the right to enter or leave the
Building.
EXHIBIT G
---------
FURNITURE AND FIXTURE INVENTORY
E-62