HomeMy WebLinkAboutAgenda - 02-20-2007-5jORANGE.000NTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: February 20, 2007
Action Agenda
Item No.J?- j
SUBJECT: Gateway Building Unit 200 and Unit 300 T
DEPARTMENT: Purchasing PUBIC HEARING: (Y/N) No
ATTACHMENT(S): INFORMATION CONTACT:
Pam Jones, 919-245-2652
Lease with Option to Purchase Geof Gledhill, 919-732-2196
Condominium Declaration (Under
Separate Cover)
PURPOSE: To approve (1) a lease with option to purchase for approximately 22,846 square
feet of space in Unit 200 and Unit 300 of the Gateway Center Condominium, Hillsborough; and
(2) to approve the Condominium Declaration for the Gateway Center Condominium.
BACKGROUND: In November 2006 the Board approved the downtown Hillsborough county
"campus" project, which includes an office building and library building, to be owned by the.
County. The "campus" also includes condominium units (Unit 200 and Unit 300) comprising the
second and third floors of the Gateway Center Condominium. The County will lease Unit 200
and Unit 300 for one year plus one day beginning on the "commencement date." The
commencement date is defined in the lease as the date as of which all of the following occur: (1)
the building is substantially complete, (2) the Premises Upfit is substantially complete (to be
completed by the Lessor per Premises Upfit plans and specifications approved by the County
and the Lessor, (3) the Plat and Plans of the Gateway Center Condominium and the
Condominium Declaration have been recorded in the office of the Orange County Register of
Deeds, (4) the Lessor has obtained the issuance of a Certificate of Occupancy for Condominium
Unit 200 and Condominium Unit 300, and (5) the Lessor has delivered possession of
Condominium Unit 200 and Condominium Unit 300 to the County. A copy of the lease with
option to purchase is attached.
Other substantive terms of the lease with option to purchase are as follows:
• Current construction schedules indicate completion should be around November 2007.
• Monthly lease payments equal $47,120 ($565,224 annual); the County is responsible
during the lease term for all utilities and the repair and maintenance of the leased
condominium units.
• Lessor is responsible for providing 45 parking spaces during that portion of the lease
period that precedes completion of the parking deck. During construction some of the
parking spaces may be provided off-site at a conveniently located parking area.
• Upon completion of the parking deck (April 2008 estimated), 89 spaces will be provided
on site, in the parking deck or otherwise on the premises. The County will be assessed
an estimated $65 per parking deck space per year for parking deck maintenance.
• The County will provide upfit plans to the Lessor's architect. An upfit allowance of
$800,000 is allowed. The County will be responsible for upfit costs in excess of the upfit
allowance. The Lessor will perform the upfit according to the upfit plans.
• The Lessor will be responsible for all exterior maintenance of the building and common
areas.
The County will have an option to purchase Condominium Unit 200 and Condominium
Unit 300 at the end of the lease term for the sum of $5,490,449 which option must be
exercised, if at all, 90 days before the end of the lease term.
Board action on February 6, 2007 endorsed the Manager's recommendation that the Register of
Deeds, Land Records, Tax Assessor and the Revenue office occupy the Gateway Building.
The Board is also being asked to approve the form of the Declaration of Condominium of
Gateway Center (the Declaration). The building will consist of three condominiums. Unit 100
(the ground floor) is expected to be owned by Hillsborough Community, LLC, a non profit
corporation doing business as Weaver Street Market. The County will lease Unit 200 and Unit
300 and will have the option of buying those units at the end of the year and one day lease term.
The Declaration, including its Plans and Specifications, creates the condominium legal structure
and allocates among the condominium unit owners the various components of the Gateway
Center property. It creates "common elements" and an Association responsible for those of the
common elements that will not expressly be allocated to particular Units. For example, some of
the parking at the building, some of the walkways around the building and the building structure
itself are common elements. The Association will consist of and be managed by the
condominium Unit owners.
The Condominium will not legally come into existence until the Gateway Center is complete.
And, it is possible that some changes will have to be made to the Condominium Declaration
between now and then. Ultimately though, the County will have to be satisfied with the form and
the substance of the Condominium Declaration at the time it is required to exercise its option to
purchase Unit 200 and Unit 300 of the Gateway Center Condominium.
FINANCIAL IMPACT: Monthly lease payments of $47,120 will be included in the County's
annual operating budget for fiscal year 2007-2008 ($376,960 to cover the eight-month period
from November 2007 through June 2008) and fiscal year 2008-09 ($188,480 to cover the four-
month period from July through October 2008. In addition, utility costs for the facility, which are
unknown at this time, will be included in each of the two fiscal years' budgets. It is not
anticipated that a reserve for repairs and maintenance will be needed during the lease term
because the building and the upfit will be new due to the fact that necessary repairs should be
covered by warranties during this period. The County's September 2006 Debt Issuance Plans
include $5,490,449 to purchase Condo Units 200 and 300 should the Board decide to exercise
its option to purchase them.
RECOMMENDATION(S): The Manager recommends that the Board approve: (1) the lease
and option to purchase agreement for Unit 200 and Unit 300 of the Gateway Center
Condominium;(2) authorize the Board chair, the Clerk to the Board, the County Manager, the
County Finance Director, the County Director of Purchasing and Central Services and the
County Attorney to act on the County's behalf and execute and deliver the lease to Telesis
Construction Management, LLC in form substantially similar to the copy of the document
attached to this abstract; and (3) approve the Condominium Declaration in form substantially
similar to the copy of the Declaration attached to this abstract.
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LEASE AGREEMENT
THIS LEASE AGREEMENT ("Lease") is made and entered into effective as.of the Effective Date
(as hereinafter defined) by and between the undersigned Lessor and Lessee.
THAT:
WHEREAS, Lessor is the owner of fee simple title to the Property and, as of the Commencement
Date (as hereinafter defined), shall be the owner of fee simple title to the Premises; and
WHEREAS, Lessee desires to lease the Premises from Lessor, and Lessee desires to Lease the
Premises to Lessee, pursuant to the terms, conditions and covenants set forth below.
NOW, THEREFORE, in consideration of the terms, conditions and covenants set forth below and
other good and valuable consideration, the receipt and sufficiency of which are hereby, acknowledged, Lessor
and Lessee agree, covenant and bind themselves as follows:
ARTICLE I - DEFINMONS
Section 1.01 Definitions. When and as used in this Lease, the following terms shall have the
meanings ascribed to them:
(a) Additional Rent. "Additional Rent" shall mean any and all late fees and other fees, costs,
charges, expenses and assessments, exclusive of Annual Rent, chargeable to Lessee as provided in this Lease.
(b) Annual Rent. "Annual Rent" shall mean the amount of rent which Lessee shall pay to
Lessor for the term of this Lease. Annual Rent shall not include Additional Rent.
(c) Building. "Building" shall mean the Gateway Center Building a three (3) floor commercial
use building which shall be constructed by Lessor upon the Property in accordance with the Building Plans
and Specifications.
(d) Building Plans and Specifications. "Building Plans and Specifications" shall mean the site
plan, elevations, floor plans and other renderings relative to the Gateway Center Building. substantially in the
form attached as EXHIBIT B as same may be amended, modified and/or supplemented from time to time.
(e) Commencement Date. "Commencement Date" shall mean the date as of which (i) the
Building is substantially complete, (ii) the Premises Upfit is substantially complete, (iii) the Plat and Plans
and the Condominium Declaration have been recorded in the office of the Register of Deeds of Orange
County, North Carolina, (iii) Lessor has obtained the issuance of a Certificate of Occupancy for the Premises,
and (iv) Lessor has delivered possession of the Premises to Lessee.
(f) Common Area. "Common Area" shall mean the grounds, parking areas, driveways,
sidewalks, entrances, lobbies, hallways, stairwells and elevators located in the Building or otherwise upon the
Property, exclusive of any Limited Common Elements allocated by the Plat and Plans and/or the
Condominium Declaration for the exclusive use of the ground floor condominium unit (Unit 100).
(g) Condominium. "Condominium" shall mean the Gateway Center Building Condominium., a
commercial use condominium which shall consist of the Building, the Units and the other Common Elements
as provided in the Plat and Plans and in the Condominium Declaration.'
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(h) Condominium Declaration. "Condominium Declaration" shall mean a Declaration of
Condominium of Gateway Center Building Condominium substantially in the form attached as EXIIIBIT D
which shall be recorded by Lessor in the office of the Register of Deeds of Orange County, North Carolina
upon substantial completion of the Building.
(i) Effective Date. "Effective Date" shall mean the date as of which this Lease is fully executed
by both Lessee and Lessor.
(j) Lessee. "Lessee" shall mean Orange County, North Carolina, a body politic and corporate
and a political subdivision of the State of North Carolina.
(k) Lessor. "Lessor" shall mean Telesis Construction Management, LLC, a North Carolina
limited liability company, its successors and assigns.
(1) Premises. "Premises" shall mean all of the condominium unit which shall be located on the
second floor of the Building consisting of approximately 11,423 square feet (Unit 200) and all of the
condominium unit which shall be located on the third floor of the Building consisting of approximately
11,423 square feet (Unit 300), as shown on the Building Plans and Specifications and the Premises Upfit
Plans and Specifications and as identified and described in the Condominium Declaration.
(m) Premises Unfit. "Premises Upfit" shall mean any and all upfit, finishing and improvement
of the Premises as provided in the Premises Upfit Plans and Specifications.
(n) Premises Unfit Allowance. "Premises Upfit Allowance" shall mean a sum not to exceed
Eight Hundred Thousand Dollars and No/100 Dollars ($800,000.00) which shall be paid or contributed by
Lessor to the cost of completing the Premises Upfit.
(o) Premises Unfit Plans and Specifications. "Premises Upfii Plans and Specifications" shall.
mean the plans and specifications for the upfit, finishing and/or other improvement of the Premises attached
as EXHIBIT C as same may be amended, modified and/or supplemented from time to time.
(p) Pro "Property" shall mean all of that certain. tract or parcel of land located in
Hillsborough, Orange County, North Carolina, and more particularly described on the attached EXHHBIT A.
(q) Regulations. "Regulations" shall mean any regulations regarding the use and/or operation of
the Condominium or any part thereof, including without limitation, the Building, the Units and the Common
Elements, as may be adopted by Lessor or the Association from time to time in accordance with the
provisions of the Condominium Declaration.
(r) Rent. "Rent" shall mean Annual Rent and Additional Rent.
Section 1.02 Rules of Construction.
(a) Gender. When and as used in this Lease, words of the masculine gender shall be deemed
and construed to include co-relative words of the feminine and neuter genders, words of the feminine
gender shall be deemed and construed to include co-relative words of the masculine and neuter genders,
and words of the neuter gender shall be deemed to include co-relative words of the masculine and
feminine genders.
(b) Person. When and as used in this Lease, unless the context shall otherwise require, the
word "person" shall include the plural as well as the singular, and shall mean any natural person,
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corporation, limited liability company, partnership, association, unincorporated organization, joint
venture, joint-stock company, business or other trust, estate, government, governmental subdivision or
agency or other legal or commercial entity.
(c) Captions. The captions and headings in this Lease are for convenience only and in no
way define, limit or describe the scope or intent of any article, section, paragraph or other provision of
this Declaration:
(d) Reference. All references in this Lease to articles, sections or paragraphs are references
to articles, sections or paragraphs of this Declaration unless some other reference is expressly established.
(e) Condominium Declaration. Each defined term in the Condominium Declaration shall
have the same meaning in this Lease as is ascribed to it in the Condominium Declaration unless otherwise
expressly defined in this Lease.
ARTICLE H - LEASEHOLD
Section 2.01 Conveyance.
(a) Premises. Lessor hereby conveys, leases and demises- to Lessee, and Lessee hereby accepts
from Lessor, a leasehold interest in the Premises subject to all of the terms, conditions and covenants
contained in this Lease and in the Regulations.
(b) Common Area. During the term of this Lease and subject to all of the terms, conditions and
covenants contained in this Lease and in the Regulations, Lessee and its employees, guests, customers,
licensees and invitces while doing business with Lessee shall have the non-exclusive right and privilege of
using the Common Area, together with Lessor, other tenants and owners of any Unit and their respective
employees, guests, customers, licensees and invitees.
(c) Possession. Lessor shall deliver possession of the Premises to Lessee on the
Commencement Date.
Section 2.02 Term. Subject to the termination rights set forth in this Section and elsewhere in this
Lease, the term of this Lease shall commence on the Commencement Date and end at 11:59:59 p.m. (local
time) on the day after the one (1) year anniversary of the Commencement Date. In the event Lessor shall
permit Lessee to take possession of the Premises prior to the Commencement Date, all of the terms,
conditions and covenants contained in this Lease shall apply effective as of the date of such possession.
Lessor shall confirm the Commencement Date and the date of termination of this Lease to Lessee, in writing,
prior to the Commencement Date. Notwithstanding the foregoing, in the event Lessor shall be unable to
acquire any and all permits and approvals necessary to construct the Building substantially in accordance
with the- Building Plans and Specification or to upfit the Premises substantially in accordance with the
Premises Upfit Plans and Specifications so as to enable Lessee to use and occupy the Premises for the
permitted uses set forth in Section 2.05, either party shall be entitled to terminate this Lease upon delivery of
written notice of termination to the other parry.
Section 2.03 Holding Over. If Lessee shall hold over after the expiration or termination of the term
of this Lease, (a) such holding over shall not be deemed to be an extension or renewal of the term of this
Lease but shall be deemed to create a tenancy-at-sufferance; (b) Lessee shall be deemed to have agreed to be
bound by all of the terms, conditions and covenants contained in this Lease during such tenancy-at-
sufferance; and (c) during such tenancy-at-sufferance, Lessee shall pay to Lessor Annual Rent in an amount
equal to one hu-*ndred ten percent (110°1x) of the Annual Rent in effect on the date of expiration or termination
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of the term of this Lease together with such Additional Rent and other fees, costs, charges, expenses and
assessments, if any, as are required to be paid by Lessee pursuant to the terms of this Lease.
Section 2.04 Lessor's Reserved Right of Entry. Lessor reserves the right to enter the Premises,
without abatement of Rent, upon not less than twenty-four (24) hours prior notice to Lessee, to view the state
or condition of the Premises or to make such alterations or repairs therein as may be necessary for the safety
and preservation of the Premises, or for any other reasonable purpose. Lessor shall not be required to give the
notice to Lessee required by this paragraph in the event of a bona fide emergency.
Section 2.05 Restrictive Covenants.
(a) Permitted Uses. Lessee shall use the Premises for general office and services (to the extent
authorized to be performed by North Carolina local governments) purposes only and for no other purpose
without the prior written consent of Lessor.
(b) Prohibited Activities. At no time during the term of this Lease shall Lessee use or permit to
be used any part of the Premises or the Common Area (i) for any purpose prohibited by state, county,
municipal or federal law, ordinance or regulation, (ii) in any manner inconsistent with the terms, covenants
and conditions contained in this Lease, the Condominium Declaration or the Regulations, or (iii) in any
manner which shall increase the fire insurance premiums for the Building (or make such insurance
unavailable to Lessor).
(e) Simage. Lessee shall place no sign or signboard on the exterior of the Premises or
elsewhere in, on or upon the Building or the Property without the prior written consent of Lessor, which
consent shall not be unreasonably withheld. In no event shall Lessor approve any exterior signage that is
inconsistent with the Plans and Specifications and/or the Condominium Declaration or that has not been
approved by the Town of Hillsborough or any other governmental or regulatory authority if such approval is
required. The cost of any sign or signboard, including installation, shall be paid by Lessee.
(d) Inducement. The aforementioned covenants are inducements for Lessor to enter into this
Lease, are of the essence, and shall be liberally construed in Lessor's favor.
Section 2.06 Lessor's Warranties.
(a) Warranties of Title. Lessor warrants that it has or will have, as of the Commencement
Date), fee simple title to the Premises.
(b) Quiet Enjoyment. Subject to all of the terms, conditions and covenants contained in this
Lease and Lessee's compliance therewith, Lessee shall enjoy the quiet and useful benefit of the Premises
during the term of this Lease free from interruption by Lessor or any person or entity claiming through
Lessor.
(c) Authori t . Lessor has the power and authority to execute this Lease and, subject to the
terms, conditions and covenants contained in this Lease, to convey to Lessee the quiet enjoyment and use of
the Premises warranted in paragraph 2.06(b).
(d) Zoning, The Premises are, or as of the Commencement Date will be, properly zoned under
the applicable municipal zoning ordinance for uses which include the use(s) specified in paragraph 2.05(a).
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Section 2.07 Subletting, Assignment Prohibited.
(a) Subletting. Lessee shall not sublease the Premises, or any part thereof, to any third party or
parties without Lessor's prior written approval, which approval shall not be unreasonably withheld or
delayed. Any sublease approved by Lessor shall be subject to all of the terms, conditions and covenants set
forth in this Lease and in the Regulations, and any such sublease, to be effective, must so provide.
Furthermore, any such sublease, to be effective, must irrevocably appoint Lessee as sublessee's sole and
exclusive agent for the purposes of receiving any'notices from Lessor or entering into any agreement or
transaction with Lessor concerning the Premises. Lessee shall remain primarily liable for the performance of
this Lease notwithstanding any sublease.
(b) Assignment. Lessee shall not assign or attempt to assign this Lease. Any attempt by Lessee
to assign this Lease shall be voidable at Lessor's option.
ARTICZE III - UNDERTAKINGS
Section 3.01 Undertaldngs Of Lessor.
(a) Completion of Building and Premises Up fit. Lessor shall make a reasonable effort to
substantially complete the Building in accordance with the Building Plans and Specifications and all
applicable municipal approvals and to substantially complete the Premises Upfit in accordance with the
Premises Upfit Plans and Specifications and all applicable municipal approvals not later than November 30,
2007No amendment and/or modification of or to the Building Plans and Specifications which shall materially
alter or change the size or layout of the Premises or the means of access to the Premises shall be made by
Lessor at any time subsequent to the Effective Date without Lessee's prior written consent. No material
amendment and/or modification of or to the Premises Upfit Plans and Specifications shall be made by Lessor
at any time subsequent to the Effective Date without Lessee's prior written consent. Lessor shall perform and
complete, or shall contract for the performance and completion of all such construction, up-fit and finishing
by such contractor(s) and/or subcontractor(s) as Lessor shall select in its sole discretion. The construction of
the Building in accordance with the Building Plans and Specifications shall be performed and completed at
Lessor's sole cost and expense. Subject to the provisions of paragraph 3.02(c), the upfit, improvement and
finishing of the Premises in accordance with the Premises Upfit Plans and Specifications shall be performed
and completed at Lessor's sole cost and expense.
(b) Parkin . During the term of this Lease prior to the date of Lessor's-opening of a parking
deck for public use on property now owned or hereafter acquired by Lessor adjacent to the Property, Lessor
shall make available to Lessee, for use by Lessee and its employees, customers, guests, invitees and licensees,
at no cost to Lessee, a total of forty-five (45) parking spaces in such location(s) as shall be agreed upon by
Lessor and Lessee, in writing, prior to the Commencement Date. During the term of this Lease on and
subsequent to the date of Lessor's opening of a parking deck for public use on property now owned or
hereafter acquired by Lessor adjacent to the Property, Lessor shall make available to Lessee, for use by
Lessee and its employees, customers, guests, invitees and licensees, a total of eighty-nine (89) parking spaces
in such location(s) as shall be agreed upon by Lessor and Lessee in writing. There shall be no charge to
Lessee during the term of this Lease for parking spaces made available to Lessee outside the parking deck.
Lessee shall pay to Lessor the sum of One Dollar ($1.00) plus a pro-rated share of annual maintenance cost
pass-throughs (Annual maintenance cost pass-throughs shall include the costs of. daily cleaning, periodic
sweeping, light bulb replacement and re-striping as needed. Annual maintenance cost pass-throughs shall not
include other parking deck operating expenses or parking deck capital expenses, both of which shall be the
responsibility of Lessor) applicable solely to sucb.parking deck, for parking spaces made available-to Lessee
in the parking deck during the term of this Lease. Such amount(s) shall be paid by Lessee to Lessor as
Additional Rent.
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(c) ' Repair and Maintenance. During the term of this Lease, all Common Elements, including,
without limitation, the structural portions of the.roof, foundation and exterior walls of the Building, and all
electrical, plumbing, water, sewer and other utilities to the respective meters (exclusive of any HVAC unit
servicing the Premises and electrical, water, sewer and other utilities running to the Premises from the service
side of the respective meters), shall be maintained by Lessor or the Association as provided in the
Condominium Declaration; provided, however, (i) that Lessor shall be responsible for the payment of any
and all Common Expenses, special assessments and other. assessment, cost, charge or fee charged or levied
by the Association to either Unit comprising the Premises, and (ii) that Lessee shall be responsible for the
payment of the cost of any repairs required solely as the consequence of any negligent act or omission by, or
willful misconduct of, Lessee or any employee, guest, agent, customer, contractor, licensee, ,invitee or
sublessee of Lessee. The cost of any such repair arising from any such negligent act or omission shall be paid
by Lessee to Lessor as Additional Rent. Lessor shall be responsible for normal wear and tear associated with
Lessee's ordinary and reasonable use of the Premises for the conduct of its business.. Nothing contained in
this .paragraph or elsewhere in this Lease shall preclude or prevent Lessor from making the repairs or
performing the maintenance required of Lessee in paragraph 3.02(h) should Lessee fail to do so after written
demand; provided, however, that the cost of any such repairs and/or maintenance shall be paid by Lessee as
Additional Rent.
(d) No Liability or Abatement of Rent. Provided that Lessor shall have acted reasonably and in
good faith, there shall be no abatement or reduction of Rent by reason of any utility services or other
described in this Section not being performed by Lessor or continuously provided to Lessee. Lessor shall
have no obligation or liability to Lessee as a consequence of delays beyond Lessor's reasonable control with
respect to the delivery or availability of any of the foregoing services.
Section 3.02 Undertaldngs Of Lessee.
(a) Annual Rent. Lessee shall pay Annual Rent to Lessor in the amount of Five Hundred Sixty-
Five Thousand Two Hundred Twenty Four and No/100 Dollars ($565,224.00). Annual Rent shall be paid by
Lessee in twelve (12) consecutive equal monthly installments in the amount of Forty-Seven Thousand One
Hundred Twenty and No/100 Dollars ($47,120.00) each. Monthly installments of annual rent shall be due
and payable on the Commencement Date and on the same day of each successive month thereafter until the
Annual Rent has been paid in full.
Lessee's failure to pay to Lessor any monthly installment of Annual Rent within ten (10) days after
Lessor's delivery of written notice to Lessee that such installment is delinquent shall constitute an event of
default which shall entitle Lessor, without fiuther notice to Lessee, to pursue any and all remedies specified in
this Lease, at law or in equity. Lessee's obligation to pay monthly installments of Annual Rent shall not be
subject to abatement, set-off or deduction except to the extent expressly provided in this Lease.
(b) Security Deposit. No security deposit shall be required from Lessee.
(c) Premises Upfit Costs and Premises Upfit Allowance. Notwithstanding any provision
contained in this Lease to the contrary, Lessee shall be solely responsible for the payment of, and shall pay
when and as due, any and all costs and expenses of the Premises Upfit and any other upfit, finishing and/or
improvement of the Premises, including, without limitation, the installation of equipment and trade fixtures,
to the extent such costs and expenses shall exceed the Premises Upfit Allowance. In the event Lessor shall
expend any funds in excess of the Premises Allowance to pay any cost and/or expense of the Premises Upfit
or any other upfit, finishing and/or improvement of the Premises (the "Upfit Overage"), Lessee shall
reimburse Lessor, as Additional Rent, the full amount of such Upfit Overage in twelve (12) consecutive equal
monthly installments (the amount of each installment being equal to one-twelfth (1/12a) of the Upfit
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Overage). Monthly installments of the Upfit Overage, if any, shall be due and payable on the
Commencement Date and on the same day of each successive month thereafter until the Upfit Overage has
been paid in full.
(d) Additional Rent. Unless otherwise expressly provided in this Lease, any and all Additional
Rent required to be paid by Lessee pursuant to the terms of this Lease shall be paid to Lessor not later than
fifteen (15) days after Lessor's delivery of a statement or invoice therefore to Lessee. Lessee's failure to make
timely payment of Additional Rent to Lessor when and as provided in this Lease shall constitute an event of
default which shall entitle Lessor, without further notice to Lessee, to pursue any and all remedies specified in
this Lease, at law or in equity. Lessee's obligation to pay Additional Rent shall not be subject to abatement,
set-off or deduction except to the extent expressly provided in this Lease. Lessee's independent covenant and
obligation to pay Additional Rent shall survive any expiration or termination of this Lease.
(e) Late Payment Charge. AttgMe sY Fees. In the event Lessee shall fail to pay to Lessor any Rent
or other fee, charge or assessment required to be paid by Lessee pursuant to the terms of this Lease within
fifteen (15) days after the date on which such payment is due, Lessor may, at its option, assess Lessee, and
Lessee shall pay to Lessor, a late payment charge in an amount not to exceed four percent (4%) of the amount
of the delinquent Rent or other charge or assessment. Lessee's failure to pay to Lessor any late payment
charge within fifteen (15) days after Lessor's delivery of written demand for payment to Lessee shall
constitute an event of default which shall entitle Lessor, without further notice to Lessee, to pursue any and
all remedies specified in this Lease, at law or in equity. Lessor's assessment of a late payment charge
pursuant to this paragraph shall not constitute liquidated damages and shall be in addition to, and not to the
exclusion of, any other remedy available to Less (under this Lease, at law or in equity.
In the event any collection action or proceeding is instituted by Lessor in accordance with the terms
of this paragraph to collect any delinquent payment of Rent or other fee, charge or assessment required to be
paid by Lessee pursuant to the terms of this Lease, including any late payment charge, Lessee shall be
obligated for the payment of, and shall pay to Lessor, to the extent allowed by law, all costs of collection,
including reasonable attorneys' fees in an amount not to exceed fifteen percent (15%) of the delinquent Rent
and/or other fee, charge or. assessment, including any'late payment charge, if such collection is effectuated by
an attorney. The parties agree that Lessee's covenants to pay Rent and other fees, charges and assessments
pursuant to the terms of this Lease, including late payment charges, constitute evidence of indebtedness for
purposes of this provision.
(f) Tender. All payments required by this Article to be made to Lessor shall be delivered to
Lessor at the address designated in Section 6.03, or at such other place as Lessor may hereafter designate in
writing. Payment shall be made in a reasonable manner and form satisfactory to Lessor.
(g) Utilities. At all times during the term of this Lease, Lessee shall assume sole responsibility
for and shall pay to each appropriate public or private utility or service provider, promptly and without delay,
all electric, natural gas, water, sewer, telephone, cable internet and other utility fees, costs and charges,
including installation, connection, hook-up and service fees and charges, incurred in connection with Lessee's
use of the Premises. Electric' natural gas, water and sewer service to the Premises shall be separately
metered. Lessee shall also assume sole responsibility for the replacement of any expired light bulbs or
fluorescent lights within the Premises at its sole cost and expense.
(h) Repairs and Maintenance. At all times during the term of this Lease, Lessee shall maintain
and repair the Premises, including, without limitation, the HVAC, electrical, gas and plumbing lines, systems,
equipment and fixtures servicing the Premises and the interior walls, ceilings, flooring, windows, plate glass,
exterior doors and hardware (except for damages caused by defective construction or negligence of Lessor),
and shall keep the Premises in an orderly and sanitary condition, at its sole cost and expense. Lessee shall
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also be responsible for all damages and required repairs to the Premises, the Building and/or the Common
Area resulting solely from the negligence or willful actions of Lessee, its employees, guests, customers,
licenses and/or invitees. Upon the expiration or termination of the term of this Lease, Lessee shall deliver
and return the Premises to Lessor, subject to the provisions of Section 4.01 and further subject to Lessee's
exercise of its Option to Purchase pursuant to Section 6.14, in as good a condition as when the Premises were
first received, ordinary wear and tear excepted.
(i) Acceptance of Premises. Lessee's taking of possession of the Premises shall constitute a
conclusive presumption that Lessee has inspected the Premises, that Lessee has found the Premises to be in
good condition, that Lessee accepts the Premises "as-is", and that Lessor has made no representation or
warranty to Lessee regarding the condition of the Premises.
(j) Observance of Laws. At all times during the term of this Lease, Lessee shall duly obey and
comply with all municipal, county, state and federal laws, statutes, ordinances, rules, regulations and codes
relating to the upfitting, use and occupancy of the Premises and the conduct of Lessee's business thereon.
Lessee shall not store, place or keep upon the Premises, nor shall Lessee release or discharge on, in or upon
the Premises or the Property or into any municipal drain or sewer, any Hazardous Substance in violation of
any municipal, county, state or federal law, statute, regulation, ordinance, rule, regulation or code. As used
herein, the term "Hazardous Substance" shall mean and include any and all petroleum, petroleum byproducts
(including, without limitation, crude oil, diesel fuel, fuel oil, gasoline, lubrication oil, oil refuse, oil mixed
with other waste, oil sludge and all other hydrocarbons, regardless of specific gravity), natural or synthetic
gas products, asbestos, PCB, biologic waste, contaminant or refuse or any other substance, .material, waste,
pollutant or contaminant deemed hazardous by any law, statute, ordinance, rule regulation or code. Lessee
shall, to the extent permitted by law, hold Lessor harmless from, and shall, to the extent permitted by law,
indemnify Lessor for, any and all damages suffered by Lessor as a consequence of Lessee's failure to comply
with this paragraph.
ARTICLE IV - ALLOCATED RIGHTS AND OBLIGATIONS
Section 4.01 Alterations and improvements.
(a) Alterations and Improvements. Subsequent to the Commencement Date, Lessee may make
alterations and/or improvements to the Premises only with the prior written consent of Lessor. Any and all
such alterations and/or improvements shall be made in a good and workmanlike manner and shall not
unreasonably disturb or inconvenience the tenants or owners of any other Unit in the Building. Lessor shall
famish Lessee with its consent or notice of its refusal to consent to Lessee's proposed alterations and/or
improvements within ten (10) days after receipt of Lessee's written request for same, or, in the absence of
Lessor's timely written consent or notice, Lessee may proceed without Lessor's consent (which shall be
considered the same as and shall constitute Lessor's consent). Lessor's consent shall not be unreasonably
refused. Lessor may, however, refuse consent if, in Lessor's reasoned opinion, the proposed alterations and/or
improvements cannot be completed in accordance with the requirements of this paragraph, are inconsistent
with the permitted use(s) of the Premises, affect the structural integrity of the Premises or the Building,
materially threaten the health, safety and welfare of die general public, do not comply with any municipal,
county, state or federal safety code (fire, electrical, plumbing, building, etc.), ordinance or regulation, or do
not comply with any restriction set forth in this Lease, the Condominium Declaration or the Regulations. In
the event Lessee proceeds with any such alteration and/or improvement without Lessor's consent, Lessee
shall, at Lessor's election, restore the Premises to the condition in which the Premises existed immediately
prior to such alteration and/or improvement. Any and all alterations and/or improvements made by Lessee
pursuant to this paragraph shall inure to the benefit of and become the property of Lessor without any
obligation on Lessor's part to pay any consideration therefor.
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(b) Contractor and Materialmen's Liens and Claims. Any upfit, finishing, alteration and/or
improvement of the Premises other than the Premises Upfit shall be made, if at all, at Lessee's sole risk and
expense. Lessee shall not permit .any contractor's lien or materialmen's lien to attach to the Premises, the
Building or the Property. Lessee shall, to the extent permitted by law, indemnify and hold Lessor harmless
from any and all damages incurred by reason of any claim or lien filed or asserted against the Premises the
Building and/or the Property by any unpaid contractor or materialrnan, and shall reimburse and pay to Lessor,
as Additional Rent, any and all amounts paid by Lessor to discharge any such claim or lien; provided,
however, that Lessee shall have the right to contest in good faith by legal proceedings or otherwise any lien
asserted against the Premises, the Building and/or the Property by any contractor or materiahnan without cost
to Lessor. In the event Lessee decides to contest any such claim or lien, Lessee shall post with Lessor a good
and sufficient surety bond in an amount not less than one hundred percent (100%) of the amount of the claim
or lien contested. The release of such funds shall be conditional upon Lessee satisfying the claim or lien as
well as all interest and costs thereon, including reasonable attorneys' fees.
Section 4.02 Fixtures and Equipment. Upon the expiration or termination of this. Lease, other
than a termination arising upon any event of default by Lessee, Lessee may remove from the Premises all
furniture, trade fixtures and equipment installed by it. Lessor shall, however, have and retain ownership and
possession of any and all furniture, fixtures and equipment, if any, installed by Lessor as part of the Lessor
Upfit. Lessee shall repair any and all damage to the Premises that may be caused by the installation or
removal of such trade fixtures and equipment. Lessee shall surrender the Premises, subject to the provisions
of Section 4.01, broom clean and in as good order and condition as the. same were in on the Commencement
Date, ordinary wear and tear and damage by fire or other casualty beyond the control of the Lessee excepted.
All partitions or other additions or improvements to the Premises shall, however, be and remain the property
of Lessor.
. Section 4.03 Lessee's Assumption of Risk and Indemnity. Lessee hereby assumes any and all
risk of injury and damage to persons or property that may occur by reason of any act or negligence of Lessee
or any officer, agent, employee, contractor, servant, invitee, guest or sublessee of Lessee. Lessee shall, to the
extent permitted by law and to the extent covered by policies of insurance maintained by Lessee from time to
time, indemnify and hold Lessor harmless from and against any and all claims, losses, costs, expenses,
liabilities and damages suffered by Lessor, including, without limitation, reasonable attorneys' fees to the
extent permitted by law, in any manner arising out of, or resulting from, (a) Lessee's use of the Premises, the
Common Area, the Building and/or the Property, or any part thereof, (b) any activity, work or other thing
done, permitted or suffered by Lessee in or about the Premises, the Common Area, the Building and/or the
Property, or any part thereof, (c) any breach or default by Lessee in the performance of any monetary or other
obligation of Lessee pursuant to the terms of this Lease, and/or (d) any act, omission, negligence or willful
misconduct of Lessee or any officer, agent, employee, contractor, servant, invitee, guest or sublessee of
Lessee. In the event any action or proceeding shall be brought against Lessor as a consequence of any of the
foregoing, Lessee shall, to the extent permitted by law and to the extent covered by policies of insurance
maintained by Lessee from time to time, upon written notice and demand from Lessor, defend the same
through counsel selected by Lessee's insurer or other counsel acceptable to Lessor. The provisions of this
paragraph shall survive any expiration or termination of this Lease.
Section 4.04 Insurance Requirements.
Prior to taking possession of the Premises and thereafter, Lessee shall deliver to Lessor, not less than
ten (10) business days prior to the renewal date thereof, a copy of each original policy of insurance in effect
and maintained by Lessee which provides coverage with respect to the Premises and Lessee's personal
property located on the Premises. Each such policy shall contain language, to the extent obtainable, that the
policy is primary and non-contributing with any insurance that Lessor may carry, and (c) that the policy
cannot be cancelled or changed except upon thirty (30) days prior written notice to Lessor.
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Notwithstanding any provision in this Lease to the contrary, and to the extent permitted by law,
Lessor hereby waives and releases unto Lessee and its successors and assigns, and Lessee hereby waives and
releases unto Lessor and its successors and assigns, any and all rights to claim or assert any claim for
damages resulting from any injury, loss, cost or damage suffered by any person or to the Premises which is
occasioned by fire, explosion, accident, occurrence or condition in, on or about the Premises or any other
casualty; provided, however, that the full amount of such injury, loss, cost or damage has been paid to Lessor,
Lessee or any other person, firm or corporation, under, the terms of any fire, extended coverage, public
liability or other policy of insurance. All policies of insurance carried or maintained pursuant to this Lease
shall contain or be endorsed to contain a provision whereby the insurer waives all rights of subrogation
against either Lessor or Lessee, as applicable.
Section 4.05 Casualty Loss. In the event the Premises are wholly destroyed and/or rendered
untenantable .by fire or other casualty not the result of any wrongful or negligent act or omission of Lessee,
either party may, by written notice delivered to the other party not later than thirty (30) days after the date of
such casualty, terminate this Lease. In the event of any termination of this Lease pursuant to this Section, the
monthly installment of Annual Rent paid for the month in which the casualty occurred shall be prorated as of
the date the casualty occurred and any portion of the prorated monthly installment of Annual Rent paid by
Lessee and applicable to that portion of the month following the casualty shall be refunded to Lessee.
In the event the Premises are damaged by fire or other casualty, but not wholly destroyed and/or
rendered untenantable, but Lessee is nevertheless reasonably required to discontinue its business and/or
operations in the Premises for any period prior to the completion of repairs and restoration, payment of.
monthly installments of Annual Rent shall abate during such period. In the event Lessee is able to continue
its business and/or operations in the Premises during the period of repair and restoration, Rent shall be
adjusted and prorated, if at all, in the same proportion that the total unusable area of the Premises, if any,
bears to the total area of the Premises. Lessor shall not, in any event, be liable for any loss, injury or
damages, consequential or otherwise, suffered by Lessee. In the event the damage to the Premises is such
that Lessor concludes that repair and restoration of the Premises cannot be completed within one hundred
fifty (150) days after the date of the casualty, Lessor shall so notify Lessee, in writing, not later than sixty (60)
days after such fire or other casualty, and either party may thereafter terminate this Lease by written notice
delivered to the other party not later than thirty (30) days after the date on which Lessor delivers written
notice to Lessee that repair and restoration cannot be completed within one hundred fifty (150) days. If the
Premises are damaged by cause due to any fault or neglect of Lessee, its agents, employees, invitees, or
licensees, Lessor may repair such damage without prejudice to any subrogation rights of Lessor's insurer, and
there shall be no apportionment or abatement of any Rent.
Section 4.06 Condemnation. In the event the Premises shall be taken for public use by any city,
state, county, federal or other public authority, or by any corporation or entity having the power of eminent
domain, this Lease shall terminate on the date on which possession of the Premises is taken for public use, or,
at the option of Lessee, on the date on which the Premises shall become unsuitable for Lessee's business by
reason of such taking; provided, however, that if only a part of the Premises are so taken, any termination of
this Lease shall be at Lessee's option only. In the event a partial taking of the Premises occurs and Lessee
elects not to terminate this Lease, all Rent and other costs and expenses due hereunder shall be reduced
proportionally. Such reductions shall be effective as of the date possession is taken for public use. Lessor
shall have the sole and exclusive right to participate in any award for a public or private taking; provided,
however, that Lessee shall be permitted to apply for a condemnation award based on the value of any trade
fixtures which are the property of Lessee and which are taken for public purposes, as well as for any
relocation assistance that may be available.
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Section 4.07 Subordination and Attornment. Lessee agrees that this Lease (including the terms
of Section 6.14 hereof) and the rights of Lessee hereunder and all of Lessee's rights in and to the Premises,
Building, Common Area and the Property shall be and are subject and subordinate to any mortgage or
security instrument heretofore or hereafter executed by Lessor encumbering the Premises, the Building, the
Common Area and/or-the Property, including, but not limited to, deeds of trust in favor of Branch Banking
and Trust Company ("BB&T"), and all modifications, extensions or amendments of such mortgage, deed of
trust or security instrument . To further evidence this subordination, Lessee shall, upon request, execute any
such document or instrument as may reasonably be required from. time to time by Lessor's mortgagee
(including BB&T) to make this Lease subordinate to any mortgage, deed of trust or security instrument.
Lessee further agrees to attom to Lessor's mortgagee (including BB&T) provided that such mortgagee shall
agree not to disturb Lessee's possession of the Premises during the term of this Lease so long as Lessee is not
in default under the terms, conditions and covenants set forth in this Lease. Lessor consents to Lessee's
execution of any subordination, attornment and non-disturbance agreement that may reasonably be requested
by Lessor's mortgagee (including BB&T). Lessee further agrees to execute and deliver to Lessor or Lessor's
mortgagee, not later than ten (10) days after receipt of a written request therefore, and as often as requested,
an estoppel certificate setting forth such information concerning this Lease as may reasonably be requested.
if, in connection with financing currently existing or obtained by Lessor with respect to the Premises,
the Building, the Common Area and/or the Property, Lessor's mortgagee or other lender (including BB&T)
shall request that Lessee consent to reasonable modifications of this Lease as a condition to such financing,
Lessee will not unreasonably withhold, delay or defer its consent provided that such modifications do not
increase Lessee's monetary obligations hereunder, extend or reduce the term of this Lease alter or attempt to
alter in any way Lessee's governmental immunity or limitations on its contracting powers as a County, a
body politic and corporate and a political subdivision of the State of North Carolina, or adversely affect to
any material extent the leasehold interest granted to Lessee herein or any other material term of this Lease.
Lessee consents to any assignment of this Lease by Lessor to Lessor's mortgagee (including BB&T)
heretofore or hereafter made in connection with any such financing.
Lessee agrees to give written notice to Lessor's mortgagee or other lender (including BB&T) of
any notice of default given by Lessee to Lessor at the same time Lessee gives such notice to Lessor.
Lessee agrees that prior to the exercise by Lessee of any remedy for a default by Lessor under this Lease,
including remedies provided by Section 5.02 hereof, the Lessee will provide written notice to Lessor's
mortgagee or other lender (including BB&T) of intent to exercise such remedy and will provide Lessor's
mortgagee or other lender (including BB&T) a reasonable period of time (but not less than 30 days) to
cure such default by Lessor.
ARTICLE V - DEFAULT TERN11NATION OTHER REMEDIES AND ABANDONMENT
Section 5.01 Default. Lessee's failure to abide by or perform any of the terms, covenants and
conditions contained in this Lease, shall constitute an event of default by Lessee. Lessor's failure to abide by
or perform any of the terms, covenants and conditions contained in this Lease shall constitute an event of
default by Lessor.
Section 5.02 Termination And Other Remedies. Upon the occurrence of any event of default by
Lessee, Lessor shall have the right to re-enter and take possession of the Premises and, at its option, to
terminate this Lease. At Lessor's option, Lessor inay, to the extent permitted by law, avail itself of the
following additional or alternative remedies: (a) all dispossessory and eviction rights granted by law, (b) all
rights to repossess and seize collateral granted under the Uniform Commercial Code, (c) all rights of claim
and delivery, (d) all rights of offset, (e) all rights given by law for damages, (f) all rights conferred by law or
equity for injunction relief, and (g) all other rights conferred by this Lease or which exist at law or in equity.
Lessee's covenants to pay Rent shall not abate upon the termination of this Lease by reason of default by
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Lessee. Lessee's obligation to pay Rent shall survive and continue notwithstanding termination by reason of
any event of default by Lessee and Lessor may recover any and all such Rent from Lessee. Except as
otherwise provided in paragraphs 3.02(a), (c), (d) and (e), before any event.of default shall become effective
so as to give Lessor the rights enumerated in (a), (b) or (c) hereinabove, as well as the right of termination,
Lessor shall give Lessee thirty (30) days prior written notice of default (which notice shall state the event of
default with specificity) so as to give the Lessee an opportunity to cure. Notwithstanding any provision
contained in this section or elsewhere in this Lease to the contrary, in the event Lessor shall re-take
possession of the Premises and/or terminate this Lease prior to the expiration of the term hereof as a
consequence of any uncured default by Lessee under this Lease, Lessor shall make a good faith effort to re-let
the Premises in mitigation of its damages as provided by law.
Upon the occurrence of any material event of default by Lessor, if such event of default is not cured
by Lessor within thirty (30) days after the date of Lessee's delivery to Lessor of written notice of default and
demand for cure (which notice shall describe the nature of the event default with specificity), Lessee shall
thereafter have the right to terminate this Lease without further liability to Lessor in addition to any other
right afforded Lessee by law.
Section 5.03 Abandonment. In the event Lessee shall not have paid any installment of Monthly
Rent, any Annual Operating Expense Adjustment or any Additional Rent within thirty (30) days after its due
date, and Lessee or its agents shall not have been present on the Premises and conducting business during that
period of time, it shall be conclusively presumed (and Lessee so agrees) that Lessee has abandoned the
Premises, whether or not Lessee has left behind any properly belonging to it. In such event, Lessor may take
possession of the Premises and its contents without process of law and without liability to Lessee for
damages, trespass, unlawful entry or the like. Lessor may, at its option, declare this Lease terminated. The
rights conferred upon Lessor hereunder shall be in addition to and not exclusive of all other rights and
remedies provided in this Lease and by law.
ARTICLE VI - MISCELLANEOUS
Section 6.01 Brokers' Commissions. The parties acknowledge and agree that there is no
commission, fee or other payment due any real estate salesperson, broker, firm or other person as a
consequence of the execution of this Lease by the parties hereto.
Section 6.02 Parties. The terms, conditions and covenants contained in this Lease shall bind and
inure to the benefit of each of the parties and their respective heirs, successors, assigns, executors,
administrators and other legal representatives.
Section 6.03 Notice. All notices and statements required or permitted by this Lease to be given to
the parties or to either of them shall be deemed sufficiently given and delivered when made in writing and
personally delivered to the parties or delivered by next day courier service (i.e. FedEx, UPS, etc.), or
delivered by the United States Postal Service via certified mail, return receipt requested, postage prepaid and
addressed to the appropriate party(ies) at the following address(es):
If to Lessor: Telesis Construction Management, LLC
1000 Corporate Drive, Suite 109
Hillsborough, NC 27278
Attention: George A. Horton, III
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If to Lessee: Orange County, North Carolina
P.O. Box 8181
Hillsborough, NC 27278
Attention: Pam Jones, Director of Purchasing and Central Services
Any such notice or statement delivered by personal delivery shall be deemed delivered and received
as of the date of personal delivery. Any notice or statement delivered by next day courier service or United
States certified mail as provided above shall be deemed delivered when delivered to the next day courier
service or deposited in the United States mail, and the delivery confirmation or return receipt therefrom, as
applicable, shall be deemed prima facie evidence that such notice or statement was received on the date stated
on such delivery confirmation or return receipt.
Section 6.04 Waiver. No term, condition or covenant contained in this Lease shall be deemed
waived by any act, omission or forbearance, or any series of same, by either Lessor or Lessee. The only
waivers that shall be effective under this Lease shall be those which are in writing and signed by the party to
be charged. No prior notice of non-waiver need be given by a party who has previously forborne from
exercising a right hereunder:
Section 6.05 Amendment Modification And Release. This Lease shall not be amended or
modified, nor shall any right created or conferred hereunder be released, except by a writing signed by the
party to be charged.
Section 6.06 No Joint Venture. Nothing in this Lease shall constitute or be construed to constitute
a joint venture between Lessor and Lessee.
Section 6.07 No Third Party Beneficiaries. Neither party intends to confer any rights under this
Lease upon any third party. The benefits and burdens of this Lease shall accrue to and bind only the parties
hereto and standing to enforce this Lease shall rest exclusively in such parties.
Section 6.08 Survival. Notwithstanding the natural expiration of the term of this Lease or its earlier
termination as provided herein, the rights, duties and obligations conferred and imposed under Sections 3.02,
4.01, 4.02, 4.03, 4.04, 4.05, 4.06, 4.07, 6.01, 6.04 and 6.14, and under ARTICLE V, shall survive and
continue to bind the parties until every pre-expiration or pre-termination obligation, promise or claim arising
out of the breach thereof is fully paid, performed settled or otherwise disposed of.
Section 6.09 Complete And Exclusive Agreement. Lessor and Lessee agree and understand that
all prior negotiations, representations, understandings and agreements are merged into and do not survive the
execution of this Lease. The parties expressly agree that this written Lease, including exhibits, is the sole,
complete and exclusive statement of the terms of the parties' agreement, and that no other negotiations,
representations, understandings, or agreements exist, except as may appear herein. Furthermore, the parties
agree that this written Lease, being the sole, complete and exclusive statement of the terms of the parties'
agreement, is exclusive of any course of performance, course of dealing or usage of trade.
Section 6.10 Governing Law. The legal effect and consequence of this Lease shall be determined
in accordance with the laws of the State of North Carolina.
Section 6.11 Exhibits. Each exhibit attached or appended to this Lease is fully incorporated herein.
Section 6.12 Severability. Should any provision of this Lease be declared unconstitutional or void
or unenforceable, such provision shall be severed from this Lease and the surviving terms; conditions and
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obligations shall continue in full force and effect; provided, however, that if the severed portion is a material
term, this Lease shall terminate.
. Section 6.13 Construction Status Conferences. Unless otherwise agreed by Lessee and Lessor in
writing, commencing in February, 2007 and continuing thereafter until the Commencement Date,
representatives of Lessor and Lessee shall meet at a place and time mutually agreeable to the parties on a
frequency of not less than once per month for 'the .purposes of (i) reviewing and discussing the status of
construction and completion of the Building and the upfit and finishing of the Premises in accordance with
the Building Plans and Specifications and the Premises Upfit Plans• and. Specifications, (ii) approving, to the
extent necessary, any amendments, modifications, supplements and/or other changes to the Building Plans
and Specifications and/or the Premises Upfit Plans and Specifications, and (iii) addressing any other issues
pertaining to the Condominium and/or this Lease that either party may wish to address.
Section 6.14 Option to Purchase. Provided that Lessee shall be in substantial compliance with all
of its duties and obligations under this Lease, and subject to any and all termination rights contained in this
Section or elsewhere in this Lease, Lessor hereby grants and conveys to Lessee an exclusive right and option
to purchase and acquire the condominium units to be located on the second and third floors of the Building as
provided in the Condominium Declaration (Unit 200 and Unit 300) subject to the following terms and
conditions:
(a) The purchase price for Unit 200 and Unit 300 (collectively the "Units") shall be
$5,490,449.00, subject to adjustment as provided below. The purchase price for the Units
shall be paid by Lessee to Lessor, in cash, at Closing (as hereinafter defined).
(b) In the event any amendment, modification, supplement and/or other change in or to the
Building Plans and Specifications and/or the Premises Upfit Plans and Specifications agreed
upon by Lessor and Lessee shall result in any increase or decrease in the purchase price for
the Units, such amendment, modification, supplement and/or other change, specifically
including the amount of any change in the purchase price of the Units, shall be memorialized
in a written document signed by each party and the above-stated purchase price for the Units
shall be deemed amended as provided therein. Provided, however, upfit costs paid for by
Lessee pursuant to Section 3.02(c) shall not be the basis for an increase in the purchase price
of the Units.
(c) At Closing, Lessor shall convey marketable, fee simple title to the Units (including all rights
appurtenant to each of the Units as provided in the Condominium Declaration) by special
warranty deed. Title to the Units shall be conveyed to Lessee free and clear of any and all
liens and encumbrances with the exception of (i) the Plat and Plans, (ii) the Condominium
Declaration, (iii) access and utility easements over and across the Property, including
easements established by the Condominium Declaration, (iv) the provisions of any special
use permit, conditional use permit and/or variance affecting the Property or any part thereof,
(v) Town of Hillsborough and/or Orange County ad valorem taxes and/or assessments
against each of the Units, if any, due for the calendar year in which the Closing occurs and
thereafter, (vi) any Annual Assessment or Special Assessment due and owing to the
Association with respect to each of the Units for the calendar year in which the Closing
occurs and thereafter, and (vii) any other title exception or matter agreed to by Lessee in
writing. Except to the limited extent otherwise expressly provided in this paragraph or in the
special warranty deed; LESSOR SHALL CONVEY EACH OF THE UNITS TO
LESSEE, AT CLOSING, IN "AS-IS" CONDITION WITHOUT WARRANTY OF
ANY KIND OR NATURE, AND ALL SUCH WARRANTIES, INCLUDING,
WITHOUT LB11TATION, ANY WARRANTY OF MERCHANTABILITY OR
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FITNESS FOR A PARTICULAR PURPOSE, ARE HEREBY DISCLAUWED BY
LESSOR. If for any reason Lessor cannot deliver title at Closing as required by this
subsection, Lessee may elect to a) accept the Units with title as is; b) refuse to accept the
Units; or c) allow Lessor additional time to pursue reasonable efforts to correct the problem,
including bringing any necessary quiet title actions or other lawsuits.
(d) At Closing, each party shall be responsible for the payment of any and all costs and/or
.expenses incurred by it with respect to the purchase and sale of the Units, including
attorneys' fees, unless otherwise expressly provided in this Section. Lessor shall be
responsible for the costs of preparing the special warranty deed and any lien waiver or
affidavit that may reasonably be required by Lessee or its attorneys or title insurer, excise tax
on the transfer of the Units to Lessee, Lessor's prorated share of ad valorem taxes and
assessments, if any, payable for the calendar year in which the Closing occurs, and Lessor's
prorated share of Annual Assessments and/or Special Assessments payable to the
Association in the calendar year in which the Closing occurs.
(e) At or before Closing, and as a condition of Lessee's obligation to purchase the Units, Lessor
and Lessee shall have made and entered into a written license agreement pursuant to which
Lessor shall license to Lessee, upon terms and conditions mutually satisfactory to Lessor and
Lessee, the exclusive use of the Allocated Parking Spaces. As used herein "Allocated
Parking Spaces" shall mean the number of parking spaces in Lessor's parking deck (as
described above) which shall be allocated for the exclusive use of the Owners of Unit 200
and Unit 300 and their respective tenants, employees, customers, guests, licensees and
invitees. Allocated Parking Spaces shall be determined by subtracting from two hundred
forty-six (246) the number of parking spaces which shall have been licensed to Lessee or
otherwise made available or reserved for the exclusive use of Lessee within the project
complex (including the Property, the parking deck, the proposed office building tract and the
proposed library tract). Lessor and Lessee acknowledge that it is their intent that a total of
two hundred forty-six (246) parking spaces shall be allocated to Lessee within the project
complex for Lessee's use of Unit 200, Unit 300, the proposed office building and the
proposed library. Only to the extend that such parking spaces cannot be accommodated
within the project complex and outside the parking deck, shall parking spaces be allocated to
Lessee within the parking deck.
(f) Lessee shall exercise its right and option to purchase both of the Units (but not only one (1)
of the Units), if at all, by delivering to Lessor written notice of Lessee's exercise of its option
to purchase the Units not later than ninety (90) days prior to the expiration of the term of this
Lease. In the event Lessee shall deliver to Lessor written notice of Lessee's exercise with
respect to the Units, such delivery shall constitute a binding contract between Lessee and
Lessor to purchase and sell the Units in accordance with the provisions of this Section. In
the event Lessee shall fail to exercise its option to purchase the Units when and as provided
above, Lessee shall be deemed to have waived its right to purchase the Units, Lessor shall
have no further duty or obligation pursuant to this Lease or otherwise to sell the Units to
Lessee, and Lessor shall have the immediate right to list for sale, market and sell or lease
either or both of the Units in its sole discretion.
(g) In the event this Lease is terminated by Lessee as the result of fire or other casualty as
prescribed in Section 4.05 which fire or casualty occurs after Lessee has exercised its option
to purchase as prescribed in this Section, the contract to purchase and sell as prescribed in
this Section is voidable at the election of Lessee and void upon the Lessee's delivery to the
Lessor written notice prior to Closing to that effect.
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In the event the Premises are damaged by fire or other casualty, but not wholly destroyed
and/or rendered untenable which fire or casualty occurs after.Lessee has exercised its option
to purchase as prescribed in this Section, and this Lease is not terminated as prescribed in
Section 4.05, the contract to purchase and sell as prescribed in this Section is voidable at the
election of Lessee or Lessor and void upon the delivery of written notice prior to Closing to
that effect from the one voiding the contract to the other.
(h) Upon and after Lessee's option to purchase becoming a binding contract between Lessee
and Lessor for the purchase and sale of the Units, Lessor's reservation of the right as
contained in Section 4.02 and paragraphs 1 and 2 in Article X of the Condominium
Declaration, the present form of which is attached as Exhibit D hereto, to combine,
recombine, subdivide and/or reconfigure either or both of the Units, and/or either or both of
the Units and any Common Elements, shall be exercised by Lessor, if at all, only with the
prior written consent of Lessee.
(i) In the event Lessee shall exercise its option to purchase the Units as provided above, the
closing of the purchase and sale of the Units, including the recordation of the special
warranty deed and the payment of the purchase price (the "Closing"), shall occur not later
than five (5) business days immediately following the date of expiration of the term of this
Lease.
Section 6.15 Recordation. Upon the request of either party, the other party will in good faith
cooperate in the preparation and execution of a recordable Memorandum of Lease.
IN WITNESS WHEREOF, each party has caused this Lease to be executed by its duly authorized
representative(s) effective as of the day and year first above written.
LESSOR:
By:
By:
Date:
Telesis Construction Management, LLC, a North Carolina
limited liability company
George A. Horton, Ill, Member/Manager
James W. Parker, Jr., Member/Manager
(SIGNATURES CONTINUE ON NEXT PAGE]
(SEAL)
(SEAL)
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(?q
LESSEE:
Orange County, North Carolina, a body politic and
corporate and a political subdivision of the State of North
Carolina
By:
Name:
Title:
Date:
[SIGNATURES CONCLUDE]
129251011M10180runge County Lease (01.31.07 NVDB Draft H8 CL)
(SEAL)
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ao
EYMIT A
THE PROPERTY
Being all of Lot , consisting of acres, more or less, as shown on that certain plat of survey
recorded in Plat Book , Page(s) , Orange County Registry, reference to which plat of
survey is hereby made for a more particular description of such Lot.
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aI
EXHIBIT B
BUILDING PLANS AND SPECIFICATIONS
The following plans and specifications pertaining to the Building are incorporated herein by this reference:
1. Gateway Center Site Plan, Utilities and Erosion Control Plans and Specifications consisting of
Drawing Nos. 1 - 16 prepared by Summit Consulting Engineers last revised November 16, 2006
(Project No. 05-032).
Code Data, Elevations, Floor Plans, Roof Plan and other Building Plans, Cross Sections and
Details for The Gateway Center consisting of Sheet Nos. Al - A13 prepared by John C.
Williams, Architect, last revised December 6, 2006 (Job No. 0600).
3. Foundation, Framing and Other Plans for The Gateway Center consisting of Sheet Nos. S 1 - S6
prepared by Gardner & McDaniel Consulting Engineers dated October, 2006 (Job No, 06073).
4. Plumbing, Sanitary Waste, Vent and Water Supply Plans, Specifications, Calculations and
Details for The Gateway Center consisting of Sheet Nos. P-1 - P-9 prepared by John C.
Williams, Architect, dated November 16, 2006 (Job No. 77-06).
5. Mechanical Specifications, Notes, Schedules, Details and Plans for The Gateway Center
consisting of Sheet Nos. M-1 - M-6 prepared by John C. Williams, Architect, dated November
16, 2006 (Job No. 77-06).
6. Electrical Specifications and Schedules for The Gateway Center consisting of Sheet Nos. E-1 -
E-5 prepared by John C. Williams, Architect, dated November 16, 2006 (Job No. 77-06).
7. Technical Specifications for Gateway Center prepared by Brockwell Associates, Inc., Architect
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49,q5l
EXIIIBff C
PREMISES UPFIT PLANS AND SPECIFICATIONS
To be provided by Lessor and Lessee.
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