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HomeMy WebLinkAboutAgenda - 03-07-2019 8-k - Lease of Office Space for Orange County Departments and Approval of Budget Amendment #6-D 1 ORD-2019-009 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 7, 2019 Action Agenda Item No. 8-k SUBJECT: Lease of Office Space for Orange County Departments and Approval of Budget Amendment #6-D DEPARTMENT: Asset Management Services ATTACHMENT(S): INFORMATION CONTACT: 1) Major Business Forms Lease Travis Myren, 919-245-2308 Agreement Alan Dorman, 919-245-2627 2) Sinclair Building Lease Agreement Angel Barnes, 919-245-2628 PURPOSE: To: 1.) Approve one year leases for office space within Major Business Forms (1510 Highway 86 North) and the Sinclair Building (105 West Corbin Street — suite 103); 2.) Authorize the Chair to execute the leases following review and approval by the County Attorney; and 3.) Approve Budget Amendment #6-D reallocating $150,000 from Capital Reserve funds to the General Fund (Asset Management Services) to cover the costs of office space leases during remediation work at the Link Building in Hillsborough. BACKGROUND: The John M. Link Government Services Center in Hillsborough has experienced water intrusions as a result of roof and fagade failures. Due to these intrusions, the County conducted a thorough inspection and testing of the facility at the direction of an industrial hygienist. The inspection revealed mold within the cavity of the exterior walls. The remediation plan calls for the repair of the fagade along with additional roof repair to stop any further water intrusion followed by a remediation of the Link Building. The air quality within the building remains within acceptable parameters based on weekly testing, so the remediation can be phased, performing the repair and remediation in 4 separate sections, or quadrants. The remediation of each quadrant will start with the repair of the fagade and then proceed to remediate the interior of the same quadrant immediately following the repair. This process is expected to take around 90 days per quadrant. Staff is developing bid specifications for the repair and remediation, which will go out to bid by mid-March. The repair and remediation will be brought to the Board for consideration following the solicitation process. 2 Performing the remediation in quadrants will allow most the departments housed within the Link Center to stay in the same building during the remediation process, shifting departments internally as each space is remediated. However, one department must be relocated from the Link Building for the duration of the remediation in order to create flex space into which other departments can move while their respective spaces are being remediated. The Human Resources Department will be moved to the Asset Management Services space in West Campus Office Building to provide a centrally located, stable office location through the course of the repair and remediation. Asset Management Services will move to leased space at Major Business Forms located at 1510 Highway 86 North in Hillsborough. That location provides office space (5,000 square feet), pre-existing offices, a conference room, parking, and an attached warehouse (15,000 square feet). The lease cost would be $100,000 for the first year with the option to extend the lease for one term of 90 days. While the Human Resources' space within the Link Center would be large enough for most departments, additional lease space would be necessary for the County Attorney and the Human Rights and Relations Department. After reviewing several spaces within the immediate vicinity of Hillsborough, Suite 103 of the Sinclair Building located at 105 West Corbin Street was determined to be the best fit. The 1,895 square foot office space is within one mile of downtown Hillsborough, has pre-existing offices and conference rooms, and adequate parking. The cost of the lease for the first year is $30,000, with an option to renew. Once Asset Management Services, Human Resources, the County Attorney, and Human Rights and Relations have been relocated to temporary office space, the Public Defender's Office would move into the vacant Human Resources space within Link Center to allow the first stage of repair and remediation to begin. FINANCIAL IMPACT: Lease cost for the two spaces will be $130,000 for the first year. Additional costs for the moves and associated expenses are estimated at $20,000. Funds for the leases and move expenses will come from reallocating $150,000 in Capital Reserve funds to the General Fund (Asset Management Services) to cover the costs mentioned above. SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goals are applicable to this item. • GOAL: CREATE A SAFE COMMUNITY The reduction of risks from vehicle/traffic accidents, childhood and senior injuries, gang activity, substance abuse and domestic violence. • GOAL: ENABLE FULL CIVIC PARTICIPATION Ensure that Orange County residents are able to engage government through voting and volunteering by eliminating disparities in participation and barriers to participation. Leasing of office space for will allow for the remediation and repair of the Link building, which will create a safe working environment for staff. RECOMMENDATION(S): The Manager recommends that the Board: 1.) Approve one year leases for office space within Major Business Forms (1510 Highway 86 North) and the Sinclair Building (105 West Corbin Street — suite 103); 3 2.) Authorize the Chair to execute the leases following review and approval by the County Attorney; and 3.) Approve Budget Amendment #6-D reallocating $150,000 from Capital Reserve funds to the General Fund (Asset Management Services) within the General Fund to cover the costs of office space leases during remediation work at the Link Center in Hillsborough. 4 REALTDAW CommerehalNNlance 113 COMMERCIAL LEASE AGREEMENT (Multi-Tenant Facility) REALTORO North Carolina Association of REALTORS9 (Note: This form is not intended to be used as a Sublease and SHOULD NOT be used in Sublease circumstances) THIS COMMERCIAL LEASE AGREEMENT, including any and all addenda attached hereto ("Lease"), is by and between Hillsborough Business Systems,Inc. a(n)NC C Corporation ("Landlord"), (individual or State of formation and type of entity) whose address is P.O.Box 652,Hillsborough,NC 27278 -_ and Orange County a(n) ("Tenant"), (individual or State of formation and type of entity) whose address is P.O.Box 8181,Hillsborough,NC 27278 ❑If this box is checked,the obligations of Tenant under this Lease are secured by the guaranty of (name(s)of guarantor(s))attached hereto and incorporated herein by reference. (Note:Any guaranty should be prepared by an attorney at law.) For and in consideration of the mutual promises set forth herein and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged,the parties hereto agree as follows: PREMISESIPROPERTY (Note:In this paragraph,Premises is the actual space being leased and Property is the broader site/location of the Premises.) 1. (a) Landlord leases unto Tenant, and Tenant hereby leases and takes upon the terms and conditions which hereinafter appear, those certain premises depicted on Exhibit A attached hereto and incorporated herein by reference (hereinafter called the 'Premises'),which is a part of a building or buildings located at the Property(defined below). The address of the Premises is: (Address):1510 Highway 86 North,Hillsborough,NC 27278 (b) The Premises is located at the following described property("Property"): (Address):19,764SFknownas Building 1-A Plat Reference: Lot(s) Block or Section as shown on Plat Book or Slide 39 at Page(s)33 , Orange County,consisting of 21 acres. ❑If this box is checked, Property shall mean that property described on Exhibit B attached hereto and incorporated herewith by reference. (For information purposes:(i)the tax parcel number of the Property is:9865-68-5784 ;and,(ii)some or all of the Property is described in Deed Book 233 Page No.554 ,Orange County.) All facilities furnished at the Property and designated for the general use,in common,of occupants of the Property and their invitees, agents or employees,including Tenant hereunder,including but not limited to parking areas, streets, driveways, sidewalks, canopies, roadways, loading platforms, shelters, ramps, landscaped areas, exterior water faucets, irrigation systems, exterior lighting fixtures, signs and other facilities whether of a similar or dissimilar nature ("Common Areas") shall at all times be subject to the exclusive control and management of Landlord, and Landlord shall have the right from time to time to change the area, level, location and arrangement of the Common Areas and to restrict parking by tenants and their employees to employee parking areas, to make Rules Page 1 of 13 STANDARD FORM 593-T North Carolina Association of REALTORS®,Inc. Revised 7/2018 � � 07/2018 REACTOR® Tenant Initials Landlord Initials 5 and Regulations (as herein defined) and do such things from time to time as in Landlord's reasonable discretion may be necessary regarding the Common Areas. Tenant shall also have a non-exclusive right, in common with other tenants at the Property, to the use of the Common Areas at the Property,subject to the terms hereof TERM 2. The term of this Lease shall commence on 03/15/2019 ("Lease Commencement Date"),and shall end at 11:59 p.m. (based upon the time at the locale of the Premises) on 03/31/2020 , unless sooner terminated as herein provided. The first Lease Year Anniversary shall be the date twelve (12) calendar months after the first day of the first full month immediately following the Lease Commencement Date and successive Lease Year Anniversaries shall be the date twelve (12) calendar months from the previous Lease Year Anniversary. ® If this box is checked,Tenant shall have the option of renewing this Lease,upon written notice given to Landlord at least 90 days prior to the end of the then expiring term of this Lease,for one additional term(s)of 90 days year*each. ❑Option to Lease- If this box is checked,Tenant,upon the payment of the sum of$ (which sum is not rental or security deposit hereunder,but is consideration for this Option to Lease and is non-refundable under any circumstances)shall have a period of. days prior to the Lease Commencement Date("Option Period")in which to inspect the Premises and make inquiry regarding such sign regulations, zoning regulations, utility availability, private restrictions or permits or other regulatory requirements as Tenant may deem appropriate to satisfy itself as to the use of the Premises for Tenant's intended purposes. Tenant shall conduct all such on-site inspections, examinations, inquiries and other review of the Premises in a good and workmanlike manner,shall repair any damage to the Premises caused by Tenant's entry and on-site inspections and shall conduct same in a manner that does not unreasonably interfere with Landlord's or any tenant's use and enjoyment of the Property. In that respect, Tenant shall make reasonable efforts to undertake on-site inspections outside of the hours any tenant's business is open to the public and shall give prior notice to the tenant at the Premises of any entry onto the Premises for the purpose of conducting inspections. Upon Landlord's request,Tenant shall provide to Landlord evidence of general liability insurance. Tenant shall also have a right to review and inspect all contracts or other agreements affecting or related directly to the Premises and shall be entitled to review such books and records of Landlord that relate directly to the operation and maintenance of the Premises,provided,however,that Tenant shall not disclose any information regarding the Property(or any tenant therein)unless required by law and the same shall be regarded as confidential,to any person, except to its attorneys, accountants, lenders and other professional advisors, in which case Tenant shall obtain their agreement to maintain such confidentiality. Tenant assumes all responsibility for the acts of itself, its agents or representatives in exercising its rights under this Option to Lease and agrees to indemnify and hold Seller harmless from any damages resulting therefrom. This indemnification obligation of Tenant shall survive the termination of this Option to Lease or this Lease. Tenant shall, at Tenant's expense, promptly repair any damage to the Premises or Property caused by Tenant's entry and on-site inspections. IF TENANT CHOOSES NOT TO LEASE THE PREMISES, FOR ANY REASON OR NO REASON, AND PROVIDES WRITTEN NOTICE TO LANDLORD THEREOF PRIOR TO THE EXPIRATION OF THE OPTION PERIOD, THEN THIS LEASE SHALL TERMINATE AND NEITHER PARTY SHALL HAVE ANY FURTHER OBLIGATIONS HEREUNDER AND LANDLORD SHALL RETURN TO TENANT ANY RENTAL OR SECURITY DEPOSIT PAID TO LANDLORD HEREUNDER. Tenant shall be deemed to have exercised its Option to Lease and to be bound under the terms of this Lease if(i) Tenant shall occupy the Premises prior to the expiration of the Option Period, whereupon the date of occupancy shall be deemed the Lease Commencement Date,or(ii)Tenant shall not provide written notice to Landlord of its termination of this Lease prior to the expiration of the Option Period. RENTAL 3. Beginning on 03/15/2019 ("Rent c_:ommencement Date"), Tenant agrees to pay Landlord(or its Agent as directed by Landlord), without notice, demand, deduction or set off, an annual rental of$70,354.00 payable in equal monthly installments of$5,862.83 , in advance on the first day of each calendar month during the term hereof. Upon execution of this Lease, Tenant shall pay to Landlord the first monthly installment of rent due hereunder. Rental for any period during the term hereof which is less than one month shall be the pro-rated portion of the monthly installment of rental due,based upon a 30 day month. ❑ If this box is checked,the annual rental payable hereunder(and accordingly the monthly installments)shall be adjusted every Lease Year Anniversary by %over the amount then payable hereunder. In the event renewal of this Lease is provided for in paragraph 2 hereof and effectively exercised by Tenant,the rental adjustments provided herein shall apply to the term of the Lease so renewed,or Page 2 of 13 STANDARD FORM 593-T Revised 7/2018 Tenant Initials Landlord Initials ®712018 6 ❑ If this box is checked,the annual rental payable hereunder(and accordingly the monthly installments)shall be adjusted every Lease Year Anniversary by the greater of.(i) percent(_ %o)over the amount then payable hereunder, or,(ii)the percentage increase(but not any decrease)in the numerical index of the"Consumer Price Index for All Urban Consumers" (1982-84= 100)published by the Bureau of Labor Statistics of the United States Department of Labor("CPI')for the immediately preceding twelve(12)month period over the amount then payable hereunder. ❑ If this box is checked,the annual rental payable hereunder(and accordingly the monthly installments)shall be adjusted every Lease Year Anniversary by $ over the amount then payable hereunder. In the event renewal of this Lease is provided for in paragraph 2 hereof and effectively exercised by Tenant,the rental adjustments provided herein shall apply to the term of the Lease so renewed, ❑ If this box is checked,Tenant shall pay all rental to Landlord's Agent at the following address: LATE CHARGES 4. If Landlord fails to receive full rental payment within Five days after it becomes due, Tenant shall pay Landlord, as additional rental, a late charge equal to percent S.0 (%) of the overdue amount or $300.00 whichever is greater,plus any actual bank fees incurred for dishonored payments. The parties agree that such a late charge represents a fair and reasonable estimate of the cost Landlord will incur by reason of such late payment. SECURITY DEPOSIT 5. Upon the execution of this Lease, Tenant shall deposit with Landlord the sum of$8,333.33 as a security deposit which shall be held by Landlord as security for the full and faithful performance by Tenant of each and every term,covenant and condition of this Lease. The security deposit does not represent payment of and Tenant shall not presume application of same as payment of the last monthly installment of rental due under this Lease. Landlord shall have no obligation to segregate or otherwise account for the security deposit except as provided in this paragraph 5. If any of the rental or other charges or sums payable by Tenant shall be over-due and unpaid or should payments be made by Landlord on behalf of Tenant, or should Tenant fail to perform any of the terms of this Lease, then Landlord may, at its option, appropriate and apply the security deposit, or so much thereof as may be necessary, to compensate toward the payment of the rents, charges or other sums due from Tenant, or towards any loss, damage or expense sustained by Landlord resulting from such default on the part of the Tenant; and in such event Tenant upon demand shall restore the security deposit to the amount set forth above in this paragraph 5. In the event Tenant furnishes Landlord with proof that all utility bills and other bills of Tenant related to the Premises have been paid through the date of Lease termination,and performs all of Tenant's other obligations under this Lease,the security deposit shall be returned to Tenant within sixty(60)days after the date of the expiration or sooner termination of the term of this Lease and the surrender of the Premises by Tenant in compliance with the provisions of this Lease. ❑ If this box is checked,Agent shall hold the security deposit in trust and shall be entitled to the interest,if any,thereon. UTILITY BILLS/SERVICE CONTRACTS 6. Landlord and Tenant agree that utility bills and service contracts("Service Obligations")for the Premises shall be paid by the party indicated below as to each Service Obligation. Where a Service Obligation is allocated to Tenant,Tenant shall not be responsible for such service as to any Common Area and such responsibility shall be limited to the Premises(Tenant space). In each instance, the party undertaking responsibility for payment of a Service Obligation covenants that they will pay the applicable bills prior to delinquency. The responsibility to pay for a Service Obligation shall include all metering,hook-up fees or other miscellaneous charges associated with establishing, installing and maintaining such utility or contact in said party's name. Within thirty(30)days of the Lease Commencement Date, Tenant shall provide Landlord with a copy of any requested Tenant Service Obligation information. Page 3 of 13 STANDARD FORM 593-T Revised 7/2018 Tenant Initials Landlord Initials ®7/2018 7 Service Oblityation Landlord Tenant Not Applicable Sewer/Septic Water ❑ ® # Electric ® ❑ Gas ❑ ® ❑ Telephone ❑ ® ❑ HVAC maintenance/service contract • Elevator(including hone line Security System ❑ ® ❑ Fiber Optic ❑ Janitor/Cleaning ❑ ® [] Trash/Dum ster ❑ ® ❑ Landscaping/Maintenance El 0 Sprinkler System(including hone line ❑ ❑ Pest Control ❑ ® ❑ *Included in TICAM ❑ ❑ ❑ 11 ❑ ❑ ❑ ❑ ❑ ❑ ❑ Landlord shall not be liable for injury to Tenant's business or loss of income therefrom or for damage that may be sustained by the person,merchandise or personal property of Tenant, its employees, agents, invitees or contractors or any other person in or about the Premises, caused by or resulting from fire, steam, electricity, gas, water or rain, which may leak or flow from or into any part of the Premises, or from the breakage, leakage, obstruction or other defects of any utility installations, air conditioning system or other components of the Premises or the Property, except to the extent that such damage or loss is caused by Landlord's gross negligence or willful misconduct. Landlord represents and warrants that the heating, ventilation and air conditioning system(s) and utility installations existing as of the Lease Commencement Date shall be in good order and repair. Subject to the provisions of this paragraph b, Landlord shall not be liable in damages or otherwise for any discontinuance, failure or interruption of service to the Premises of utilities or the heating,ventilation and air conditioning system(s)and Tenant shall have no right to terminate this Lease or withhold rental because of the same. RULES AND REGULATIONS 7. ❑ If this box is checked, the rules and regulations attached hereto ("Rules and Regulations") are made a part of this Lease. Tenant agrees to comply with all Rules and Regulations of Landlord in connection with the Premises and the Property which are in erect at the time of the execution of the Lease or which may be from time to time promulgated by Landlord in its reasonable discretion,provided notice of such new Rules and Regulations is given to Tenant in writing and the same are not in conflict with the terms and conditions of this Lease. Landlord shall use commercially reasonable efforts to enforce such Rules and Regulations at the Property, provided, however, in no event shall Landlord be obligated to make any material expenditures in connection with the enforcement of such Rules and Regulations. Landlord shall not be liable for any damages arising from any use, act or failure to act of any other tenant or occupant(including such tenant's or occupant's invitees,agents or employees),if any,of the Property. PERMITTED USES 8. The permitted use of the Premises shall be:Office and Warehouse ("Permitted Use"). The Premises shall be used and wholly occupied by Tenant solely for the purposes of conducting the Permitted Use,and the Premises shall not be used for any other purposes unless Tenant obtains Landlord's prior written approval of any change in use. Landlord makes no representation or warranty regarding the suitability of the Premises for or the legality(under zoning or other applicable ordinances) of the Permitted Use for the Premises, provided however, that Landlord does represent that it has no contractual obligations with other parties which will materially interfere with or prohibit the Permitted Use of Tenant at the Premises. At Tenant's sole expense, Tenant shall procure, maintain and make available for Landlord's inspection from time to time any governmental license(s)or permit(s)required for the proper and lawful conduct of Tenant's business in the Premises. Tenant shall not cause or permit any waste to occur in the Premises and shall not overload the floor, or any mechanical, electrical,plumbing or utility systems serving the Premises. Tenant shall keep the Premises, and every part thereof,in a clean and wholesome condition, free from any objectionable noises,loud music,objectionable odors or nuisances. Page 4 of 13 STANDARD FORM 593-T Revised 7/2018 Tenant Initials Landlord Initials 07/2015 8 TAXES,msuxaNu. :AND COMMON AREA AND PROPERTY OPERATING EXPENSES 9. Landlord shall pay all taxes (including but not limited to, ad valorem taxes, special assessments and any other governmental charges)on the Property, shall procure and pay for such commercial general liability, broad form fire and extended and special perils insurance with respect to the Property as Landlord in its reasonable discretion may deem appropriate and shall maintain and operate the Common Areas and the Property. Tenant shall reimburse Landlord for its proportionate share of all taxes,insurance and Common Areas and Property Operating Expenses as provided herein within fifteen (15) days after receipt of notice from Landlord as to the amount due. Tenant shall be solely responsible for insuring Tenant's personal and business property and for paying any taxes or governmental assessments levied thereon. Tenant shall reimburse Landlord for its proportionate share of taxes, insurance and Common Areas and Property Operating Expenses during the term of this Lease, and any extension or renewal thereof. If boxes are checked below,the manner of reimbursement shall be as indicated: Taxes ❑ Its proportionate share of the amount by which all taxes (including but not limited to, ad valorem taxes, special assessments and any other governmental charges) on the Property for each tax year exceed all taxes on the Property for the tax year ; or ® Its proportionate share of all taxes (including but not limited to, ad valorem taxes, special assessments and any other governmental charges)on the Property for each tax year. If the final Lease Year of the term fails to coincide with the tax year,then any excess for the tax year during which the term ends shall be reduced by the pro rata part of such tax year beyond the Lease term. If such taxes for the year in which the Lease terminates are not ascertainable before payment of the last month's rental, then the amount of such taxes assessed against the Property for the previous tax year shall be used as a basis for determining the pro rats share, if any, to be paid by Tenant for that portion of the last Lease Year. ® If this box is checked, Tenant shall reimburse Landlord for its proportionate share of taxes by paying to Landlord, beginning on the Rent Commencement Date and on the first day of each calendar month during the term hereof, an amount equal to one-twelfth (1/12) of its proportionate share of the then current tax payments for the Property. Upon receipt of bills,statements or other evidence of taxes due,Landlord shall pay or cause to be paid the taxes. If at any time the reimbursement payments by Tenant hereunder do not equal its proportionate share of the amount of taxes paid by Landlord, Tenant shall upon demand pay to Landlord an amount equal to the deficiency or Landlord shall refund to Tenant any overpayment (as applicable) as documented by Landlord. Landlord shall have no obligation to segregate or otherwise account for the tax reimbursements paid hereunder except as provided in this paragraph 9. Insurance ❑ Its proportionate share of the excess cost of commercial general liability, broad form fire and extended and special perils insurance with respect to the Property over the cost of the first year of the Lease term for each subsequent year during the term of this Lease;or ® Its proportionate share of the cost of all commercial general liability, broad form fire and extended and special perils insurance with respect to the Property. ® If this box is checked, Tenant shall reimburse Landlord for its proportionate share of insurance by paying to Landlord,beginning on the Rent Commencement Date and on the first day of each calendar month during the term hereof, an amount equal to one-twelfth(1/12)of its proportionate share of the then current insurance premiums for the Property. Upon receipt of bills, statements or other evidence of insurance premiums due, Landlord shall pay or cause to be paid the insurance premiums. If at any time the reimbursement payments by Tenant hereunder do not equal its proportionate share of the amount of insurance premiums paid by Landlord,Tenant shall upon demand pay to Landlord an amount equal to the deficiency or Landlord shall refund to Tenant any overpayment (as applicable) as documented by Landlord. Landlord shall have no obligation to segregate or otherwise account for the insurance premium reimbursements paid hereunder except as provided in this paragraph 9. Provided however,notwithstanding any provision of the foregoing,that in the event Tenant's use of the Premises results in an increase in the rate of insurance on the Property,Tenant shall pay to Landlord, upon demand and as additional rental,the amount of any such increase. Page 5 of 13 STANDARD FORM 593-T Revised 7/201 Tenant Initials Landlord Initials 07/2018 9 Common Areas and Property Operating Expenses ® Its proportionate share of all Common Areas and Property Operating Expenses. For the purpose of this Lease,Common Areas and Property Operating Expenses shall include:(a)the cost of water and sewer services for any exterior landscaping irrigation systems; (b)the cost of utilities to service the Property(not separately metered to tenants and regardless of their allocation to Landlord under paragraph 6 hereof) including but not limited to, electric service for any parking lot lighting,marquee signs, ground signs,pylon signs, time clocks, irrigation systems, common electric outlets used in connection with maintenance of the Property,and such other electric costs,including the replacement of light bulbs in Common Areas light fixtures as necessary to properly maintain and operate the Common Areas; (c)the cost of the removal of any trash, including the rental cost of dumpster units and fees for refuse removal; (d) the cost of exterior window washing of vacant spaces, cleaning of any building exterior, awnings, sidewalks, driveways and parking areas; (e) the cost of any grounds maintenance, including but not limited to charges for maintaining plant materials,fertilizer,pesticides,grass mowing,pruning of plants,planting of annual flowers, removal of debris and trash from Common Areas, cleaning supplies, and such other expenses necessary to maintain the Property; (f)the cost of service contracts with independent contractors to maintain on a regular basis the plumbing systems outside the rentable areas of each tenant,and to provide for pest control and exterminating services for the Common Areas;(g)the cost of maintaining the parking areas and driveways, including the re-striping of parking spaces, patching of deteriorated pavement, replacement of parking signs or directional signs; (h)the cost of Landlord's personnel when such personnel are engaged directly in the maintenance of the Common Areas of the Property,including the cost of employer taxes and a proration of employee benefits;(i)the cost of snow and ice removal from parking areas, driveways, walkways and service areas; 0) the cost of telephone,telegraph, stationery, advertising, and mail or shipping costs related directly to the maintenance or operation of the Property; (k) the cost of all repairs and maintenance for the structure,Property and systems related thereto; and(1) such other costs and expenses as are typically incurred in the maintenance and operation of a property of this type,inclusive of a management fee paid by Landlord to a property manager or property management company or organization for the management of the Property and any owner association dues or assessments. Within one hundred eighty (180) days following the end of each calendar year, Landlord shall cause a statement to be prepared of the actual cost of Common Areas and Property Operating Expenses for such calendar year and shall provide Tenant a copy of same. Tenant's proportionate share of Common Areas and Property Operating Expenses is presently estimated to be the sum of$29,646,00 annually or$2,470.50 per month. ® If this box is checked,Tenant shall reimburse Landlord for its proportionate share of Common Areas and Property Operating Expenses by paying to Landlord, beginning on the Rent Commencement Date and on the first day of each calendar month during the term hereof, the amount set forth above as the presently estimated per month proportionate share of Common Areas and Property Operating Expenses for the Premises. Landlord shall pay or cause to be paid the Common Areas and Property Operating Expenses. Within one hundred eighty(180)days following the end of each calendar year,Landlord shall: (i)cause a statement to be prepared of the actual cost of Common Areas and Property Operating Expenses for such calendar year and shall notify Tenant of any overpayment or underpayment of Tenant's proportionate share of these items during such prior calendar year;and,(ii)establish an estimate of the cost of Common Areas and Property Operating Expenses for the then current calendar year. To the extent Tenant has overpaid Tenant's proportionate share of these items for the preceding calendar year, such overage shall be credited to Tenant's proportionate share of these items for the current calendar year.To the extent Tenant has underpaid Tenant's proportionate share of these items for the preceding calendar year,Tenant shall,on the first day of the calendar month following receipt of the statement from Landlord setting forth the amount of such underpayment,pay to Landlord the full amount of such underpayment for the preceding calendar year.In addition,beginning on the first day of the calendar month following the date upon which Landlord shall have delivered to Tenant the statement for the estimated Common Areas and Property Operating Expenses for the then current calendar year, Tenant shall pay to Landlord the product of one-twelfth (1/12) of Tenant's proportionate share of the estimated Common Areas and Property Operating Expenses for the then current calendar year multiplied by the number of calendar months in the calendar year which shall have begun as of said first day, minus the aggregate amount of the monthly payments for Tenant's proportionate share of expenses theretofore paid by Tenant during such calendar year. The remainder of Tenant's proportionate share of such expenses for the then current calendar year shall be paid by Tenant to Landlord on the first day of each succeeding month in equal consecutive monthly installments of one-twelfth(1/12)of the total amount of Tenant's proportionate share of Common Areas and Property Operating Expenses as shown on the estimate thereof provided by Landlord. Landlord shall have no obligation to segregate or otherwise account for the insurance premium reimbursements paid hereunder except as provided in this paragraph 9. For purposes of this paragraph 9, "Tenant's proportionate share"shall mean(check one): ® 50.1 %of the expenses above designated;or ❑ $. payable monthly,in satisfaction of all reimbursements under this paragraph 9;or Page 6of13 STANDARD FORM 593-T Revised 7/2018 Tenant Initials Landlord Initials ®712018 10 (Note:The following box should only be checked if there are no boxes checked above in this paragraph 9.) ❑ None-Tenant shall have no responsibility to reimburse Landlord for taxes,insurance or Common Areas and Property Operating Expenses. INSURANCE;WAIVER;INDEMNITY 10. (a) During the term of this Lease,Tenant shall maintain commercial general liability insurance coverage(occurrence coverage) with broad form contractual liability coverage and with coverage limits of not less than 2,000,000 combined single limit,per occurrence, specifically including liquor liability insurance covering consumption of alcoholic beverages by customers of Tenant should Tenant choose to sell alcoholic beverages. Such policy shall insure Tenant's performance of the indemnity provisions of this Lease, but the amount of such insurance shall not limit Tenant's liability nor relieve Tenant of any obligation hereunder. All policies of insurance provided for herein shall name as "additional insureds"Landlord, Landlord's Agent, all mortgagees of Landlord and such other individuals or entities as Landlord may from time to time designate upon written notice to Tenant.Tenant shall provide to Landlord,at least thirty(30)days prior to expiration,certificates of insurance to evidence any renewal or additional insurance procured by Tenant. Tenant shall provide evidence of all insurance required under this Lease to Landlord prior to the Lease Commencement Date. (b) Landlord (for itself and its insurer) waives any rights, including rights of subrogation, and Tenant (for itself and its insurer)waives any rights,including rights of subrogation, each may have against the other for compensation of any loss or damage occasioned to Landlord or Tenant arising from any risk generally covered by the "all risks" insurance required to be carried by Landlord and Tenant. The foregoing waivers of subrogation shall be operative only so long as available in the State of North Carolina. The foregoing waivers shall be effective whether or not the parties maintain the insurance required to be carried pursuant to this Lease. (c) Except as otherwise provided in paragraph 10(b), Tenant indemnifies Landlord for damages proximately caused by the negligence or wrongful conduct of Tenant and Tenant's employees, agents, invitees or contractors. Except as otherwise provided in paragraph 10(b), Landlord indemnifies Tenant for damages proximately caused by the negligence or wrongful conduct of Landlord and Landlord's employees, agents, invitees or contractors. The indemnity provisions in this paragraph 10 cover personal injury and property damage and shall bind the employees, agents, invitees or contractors of Landlord and Tenant (as the case may be). The indemnity obligations in this paragraph 10 shall survive the expiration or earlier termination of this Lease. REPAIRS BY LANDLORD 11. Landlord agrees to keep in good repair the roof, foundation, structural supports, exterior walls (exclusive of all glass and exclusive of all exterior doors) of the Premises and the Common Areas of the Property (including all capital replacements thereof) provided that Landlord shall not be responsible for repairs or capital replacements rendered necessary by the negligence or intentional wrongful acts of Tenant, its employees, agents, invitees or contractors. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair and failure to report such conditions shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such conditions. (Note: Should Landlord and Tenant need to further detail the allocation of responsibility hereunder,the Special Stipulations box at the end of the Lease should be checked and such allocation should be specified on an Exhibit C.) REPAIRS BY TENANT 12. (a) Tenant accepts the Premises in their present condition and as suited for the Permitted Use and Tenant's intended purposes.Tenant,throughout the initial term of this Lease,and any extension or renewal thereof,at its expense,shall maintain in good order and repair the Premises (except those repairs expressly required to be made by Landlord hereunder), specifically including but not limited to all light bulb and ballast replacements, plumbing fixtures and systems repairs within the Premises and water heater repairs. Tenant further agrees that it shall not use the Common Areas for storage or for the disposal of refuse or any other material. Tenant shall use only licensed contractors for repairs where such license is required. Landlord shall have the right to approve the contractor as to any repairs in excess of$,1,000.00 ❑If this box is checked,Tenant,at its expense,shall maintain the heating,ventilation and air conditioning system(s) serving the Premises in good order and repair,including but not limited to replacement of parts, compressors, air handling units and heating units. Provided that Tenant shall have obtained Landlord's prior written approval of the contractor and the repair or replacement expenses for heating,ventilation and air conditioning equipment,Tenant shall not be liable for more than $` (per occurrence)or$, (annually), and Landlord shall reimburse Tenant for the amount in excess of the stated amount upon the written request of Tenant. ® If this box is checked, Landlord, at its expense, shall maintain the heating, ventilation and air conditioning system(s) serving the Premises in good order and repair,including but not limited to replacement of parts, compressors, air handling units and heating units.Provided that,Tenant shall reimburse Landlord an amount up to$1,000.00 (per occurrence)or$5,000.00 Page 7 of 13 STANDARD FORM 593-T Revised 712018 Tenant Initials Landlord Initials ®7/2018 1 (Note:The following box should only be checked if there are no boxes checked above in this paragraph 9.) ❑ None-Tenant shall have no responsibility to reimburse Landlord for taxes,insurance or Common Areas and Property Operating Expenses. INSURANCE;WAIVER;INDEMNITY 10. (a) During the term of this Lease,Tenant shall maintain commercial general liability insurance coverage(occurrence coverage) with broad form contractual liability coverage and with coverage limits of not less than 2,000,000 combined single limit,per occurrence, specifically including liquor liability insurance covering consumption of alcoholic beverages by customers of Tenant should Tenant choose to sell alcoholic beverages. Such policy shall insure Tenant's performance of the indemnity provisions of this Lease, but the amount of such insurance shall not limit Tenant's liability nor relieve Tenant of any obligation hereunder. All policies of insurance provided for herein shall name as "additional insureds"Landlord, Landlord's Agent, all mortgagees of Landlord and such other individuals or entities as Landlord may from time to time designate upon written notice to Tenant.Tenant shall provide to Landlord,at least thirty(30)days prior to expiration,certificates of insurance to evidence any renewal or additional insurance procured by Tenant. Tenant shall provide evidence of all insurance required under this Lease to Landlord prior to the Lease Commencement Date. (b) Landlord (for itself and its insurer) waives any rights, including rights of subrogation, and Tenant (for itself and its insurer) waives any rights, including rights of subrogation, each may have against the other for compensation of any loss or damage occasioned to Landlord or Tenant arising from any risk generally covered by the "all risks" insurance required to be carried by Landlord and Tenant. The foregoing waivers of subrogation shall be operative only so long as available in the State of North Carolina. The foregoing waivers shall be effective whether or not the parties maintain the insurance required to be carried pursuant to this Lease. (c) Except as otherwise provided in paragraph 10(b), Tenant indemnifies Landlord for damages proximately caused by the negligence or wrongful conduct of Tenant and Tenant's employees, agents, invitees or contractors. Except as otherwise provided in paragraph 10(b), Landlord indemnifies Tenant for damages proximately caused by the negligence or wrongful conduct of Landlord and Landlord's employees, agents, invitees or contractors. The indemnity provisions in this paragraph 10 cover personal injury and property damage and shall bind the employees, agents, invitees or contractors of Landlord and Tenant (as the case may be). The indemnity obligations in this paragraph 10 shall survive the expiration or earlier termination of this Lease. REPAIRS BY LANDLORD 11. Landlord agrees to keep in good repair the roof, foundation, structural supports, exterior walls (exclusive of all glass and exclusive of all exterior doors) of the Premises and the Common Areas of the Property (including all capital replacements thereof) provided that Landlord shall not be responsible for repairs or capital replacements rendered necessary by the negligence or intentional wrongful acts of Tenant, its employees, agents, invitees or contractors. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair and failure to report such conditions shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such conditions. (Note: Should Landlord and Tenant need to further detail the allocation of responsibility hereunder, the Special Stipulations box at the end of the Lease should be checked and such allocation should be specified on an Exhibit C.) REPAIRS BY TENANT 12. (a) Tenant accepts the Premises in their present condition and as suited for the Permitted Use and Tenant's intended purposes.Tenant,throughout the initial term of this Lease, and any extension or renewal thereof,at its expense, shall maintain in good order and repair the Premises (except those repairs expressly required to be made by Landlord hereunder), specifically including but not limited to all light bulb and ballast replacements, plumbing fixtures and systems repairs within the Premises and water heater repairs. Tenant further agrees that it shall not use the Common Areas for storage or for the disposal of refuse or any other material. Tenant shall use only licensed contractors for repairs where such license is required. Landlord shall have the right to approve the contractor as to any repairs in excess of$1,000,00 ❑If this box is checked, Tenant,at its expense, shall maintain the heating,ventilation and air conditioning system(s) serving the Premises in good order and repair, including but not limited to replacement of parts, compressors, air handling units and heating units. Provided that Tenant shall have obtained Landlord's prior written approval of the contractor and the repair or replacement expenses for heating,ventilation and air conditioning equipment,Tenant shall not be liable for more than $_ (per occurrence)or$. (annually), and Landlord shall reimburse Tenant for the amount in excess of the stated amount upon the written request of Tenant. ❑ If this box is checked, Landlord, at its expense, shall maintain the heating, ventilation and air conditioning system(s) serving the Premises in good order and repair, including but not limited to replacement of parts, compressors, air handling units and heating units.Provided that,Tenant shall reimburse Landlord an amount up to$1,000.00 (per occurrence)or$5,000.00 Page 7of13 STANDARD FORM 593-T Revised 7018 Tenant Initials Landlord Initials ©712I2018 12 (annually), and Landlord shall be responsible for the amount in excess of the stated amount. Tenant shall reimburse Landlord for the amount of Tenant's obligation hereunder upon the written request of Landlord. (b) Tenant, Tenant's employees, agents, invitees or contractors shall take no action which may void any manufacturers or installers warranty with relation to the Premises or the Property. Tenant shall indemnify and hold Landlord harmless from any liability,claim,demand or cause of action arising on account of Tenant's breach of the provisions of this paragraph 12. ALTERATIONS 13. Tenant shall not make any alterations, additions, or improvements to the Premises without Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Landlord, in connection with Landlord's consent to same, may designate any such alterations, additions, or improvements to the Premises as subject to removal upon the expiration or earlier termination of this Lease, in which case, upon Landlord's written notice to Tenant to remove same at the expiration or earlier termination of this Lease,Tenant shall do so and restore the Premises to the condition that existed prior to such alterations, additions, or improvements being made. Tenant shall promptly remove any alterations, additions, or improvements constructed in violation of this paragraph 13 upon Landlord's written request. All approved alterations, additions, and improvements will be accomplished in a good and workmanlike manner,in conformity with all applicable laws and regulations,and by a contractor approved by Landlord, free of any liens or encumbrances. Tenant has no authority to allow, will not permit, and will indemnify Landlord and hold it harmless from, any contractors', laborers', mechanics', or materialmen's liens, or any other similar liens filed against the Premises in connection with any alterations,additions,or improvements to the Premises. SURRENDERING THE PREMISES 14. Tenant shall schedule its move date with Landlord, in writing, in advance of the expiration or earlier termination of this Lease. Tenant agrees to return the Premises to Landlord at the expiration or earlier termination of this Lease, broom clean and in as good condition and repair as on the Lease Commencement Date,natural wear and tear,damage by storm,fire,lightning,earthquake or other casualty alone excepted. By written notice to Tenant, Landlord may require Tenant to remove any alterations, additions or improvements at the expiration or earlier termination of this Lease (whether or not made with Landlord's consent and whether or not designated via paragraph 13 as subject to removal) and to restore the Premises to its prior condition as of the Lease Commencement Date, all at Tenant's expense. All alterations, additions and improvements which Landlord has not required Tenant to remove shall become Landlord's property and shall be surrendered to Landlord upon the termination of this Lease, except that Tenant may remove any of Tenant's personal property or trade fixtures which can be removed without material damage to the Premises. Tenant shall repair,at Tenant's expense,any damage to the Premises caused by the removal of any such personal property or trade fixtures. (Note: Should Landlord and Tenant need to further enumerate their intent/understanding as to the status of items or property as fixtures, trade fixtures, or personal property hereunder, the Special Stipulations box at the end of the Lease should be checked and such enumeration should be specified by listing same by category on an Exhibit B.) DESTRUCTION OF OR DAMAGE TO PREMISES 15. (a)If the Premises are totally destroyed by storm, fire, lightning, earthquake or other casualty, Landlord shall have the right to terminate this Lease on written notice to Tenant within thirty(30) days after such destruction and this Lease shall terminate as of the date of such destruction and rental shall be accounted for as between Landlord and Tenant as of that date. (b) If the Premises are damaged but not wholly destroyed by any such casualties or if the Landlord does not elect to terminate the Lease under paragraph 15(a) above, Landlord shall commence (or shall cause to be commenced)reconstruction of the Premises within one hundred twenty(120)days after such occurrence and prosecute the same diligently to completion,not to exceed two hundred seventy(270)days from the date upon which Landlord receives applicable permits and insurance proceeds. In the event Landlord shall fail to substantially complete reconstruction of the Premises within said two hundred seventy (270) day period, Tenant's sole remedy shall be to terminate this Lease. (c) In the event of any casualty at the Premises during the last one (1) year of the Lease Term, Landlord and Tenant each shall have the option to terminate this Lease on written notice to the other of exercise thereof within sixty (60) days after such occurrence. (d) In the event of reconstruction of the Premises, Tenant shall continue the operation of its business in the Premises during any such period to the extent reasonably practicable from the standpoint of prudent business management, and the obligation of Tenant to pay annual rental and any other sums due under this Lease shall remain in full force and effect during the period of reconstruction. The annual rental and other sums due under this Lease shall be abated proportionately with the degree to which Tenant's use of the Premises is impaired, commencing from the date of destruction and continuing during the period of such reconstruction. Tenant shall not be entitled to any compensation or damages from Landlord for loss of use of the whole or any part of the Premises, Tenant's personal property, or any inconvenience or annoyance occasioned by such damage, reconstruction or replacement. Page 8 of 13 STANDARD FORM 593-T Revised 7/201 Tenant Initials Landlord Initials ®7/2018 13 (e)In the event of the termination or this Lease under any of the provisions of this paragraph 15,both Landlord and Tenant shall be released from any liability or obligation under this Lease arising after the date of termination,except as otherwise provided for in this Lease. GOVERNMENTAL ORDERS 16. Tenant, at its own expense, agrees to comply with: (a) any law, statute, ordinance, regulation, rule, requirement, order, court decision or procedural requirement of any governmental or quasi-governmental authority having jurisdiction over the Premises,(b)the rules and regulations of any applicable governmental insurance authority or any similar body, relative to the Premises and Tenant's activities therein; (c)provisions of or rules enacted pursuant to any private use restrictions, as the same may be amended from time to time and(d)the Americans with Disabilities Act(42 U.S.C.S. §12101,et seq.)and the regulations and accessibility guidelines enacted pursuant thereto,as the same may be amended from time to time. Landlord and Tenant agree,however,that if in order to comply with such requirements the cost to Tenant shall exceed a sum equal to one (1)year's rent,then Tenant may terminate this Lease by giving written notice of termination to Landlord in accordance with the terms of this Lease,which termination shall become effective sixty (60) days after receipt of such notice and which notice shall eliminate the necessity of compliance with such requirements, unless, within thirty(30) days of receiving such notice, Landlord agrees in writing to be responsible for such compliance, at its own expense, and commences compliance activity,in which case Tenant's notice given hereunder shall not terminate this Lease. CONDEMNATION 17. (a) If the entire Premises shall be appropriated or taken under the power of eminent domain by any governmental or quasi- governmental authority or under threat of and in lieu of condemnation(hereinafter,"taken"or"taking"),this Lease shall terminate as of the date of such taking, and Landlord and Tenant shall have no further liability or obligation arising under this Lease after such date,except as otherwise provided for in this Lease. (b) If more than twenty-five percent (25%) of the floor area of the Premises is taken, or if by reason of any taking of the Property or the Premises,regardless of the amount so taken,the remainder of the Premises is not one undivided space or is rendered unusable for the Permitted Use, either Landlord or Tenant shall have the right to terminate this Lease as of the date the portion of the Premises of taking of the portion of the Premises or Property so taken,upon giving notice of such election within thirty(30)days after receipt by Tenant from Landlord of written notice that said portion of the Premises or the Property have been or will be so taken. In the event of such termination,both Landlord and Tenant shall be released from any liability or obligation under this Lease arising after the date of termination,except as otherwise provided for in this Lease. (c)Landlord and Tenant,immediately after learning of any taking,shall give notice thereof to each other. (d)If this Lease is not terminated on account of a taking as provided herein above,then Tenant shall continue to occupy that portion of the Premises not taken and the parties shall proceed as follows:(i)at Landlord's cost and expense and as soon as reasonably possible, Landlord shall restore (or shall cause to be restored) the Premises and/or Property remaining to a complete unit of like quality and character as existed prior to such appropriation or taking, and (ii) the annual rent provided for in paragraph 3 and other sums due under the Lease shall be reduced on an equitable basis, taking into account the relative values of the portion taken as compared to the portion remaining. Tenant waives any statutory rights of termination that may arise because of any partial taking of the Premises and/or the Property. (e)Landlord shall be entitled to the entire condemnation award for any taking of the Premises and/or the Property or any part thereof. Tenant's right to receive any amounts separately awarded to Tenant directly from the condemning authority for the taking of its merchandise, personal property, relocation expenses and/or interests in other than the real property taken shall not be affected in any manner by the provisions of this paragraph 17,provided Tenant's award does not reduce or affect Landlord's award and provided further,Tenant shall have no claim for the loss of its leasehold estate. ASSIGNMENT AND SUBLETTING 18. Tenant shall not assign 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 the Tenant, without Landlord's prior written consent, which consent shall not be unreasonably withheld, conditioned or delayed. Consent to any assignment or sublease shall not impair this provision and all later assignments or subleases shall be made likewise only on the prior written consent of Landlord. No sublease or assignment by Tenant shall relieve Tenant of any liability hereunder. EVENTS OF DEFAULT 19. The happening of any one or more of the following events (hereinafter any one of which may be referred to as an "Event of Default") during the term of this Lease, or any renewal or extension thereof, shall constitute a breach of this Lease on the part of the Tenant: (a)Tenant fails to pay when due the rental or any other monetary obligation as provided for herein; (b) Tenant abandons or vacates the Premises; (c) Tenant fails to comply with or abide by and perform any non-monetary obligation imposed upon Tenant under this Lease within thirty (30) days after written notice of such breach; (d) Tenant is adjudicated bankrupt; (e) A permanent Page 9 of 13 STANDARD FORM 593-T Revised 72018 Tenant Initials Landlord Initials 07/2018 14 receiver is appointed for Tenant's property and such receiver is not removed within sixty(60)days after written notice from Landlord to Tenant to obtain such removal; (f) Tenant, either voluntarily or involuntarily, takes advantage of any debt or relief proceedings under any present or future law,whereby the rent or any part thereof is,or is proposed to be,reduced or payment thereof deferred and such proceeding is not dismissed within sixty(60)days of the filing thereof;(g)Tenant makes an assignment for benefit of creditors; or(h)Tenant's effects are levied upon or attached under process against Tenant, which is not satisfied or dissolved within thirty(30) days after written notice from Landlord to Tenant to obtain satisfaction thereof. REMEDIES UPON DEFAULT 20. Upon the occurrence of Event of Default, Landlord may pursue any one or more of the following remedies separately or concurrently, without prejudice to any other remedy herein provided or provided by law: (a) Landlord may terminate this Lease by giving written notice to Tenant and upon such termination shall be entitled to recover from Tenant damages as may be permitted under applicable law; or (b) Landlord may terminate this Lease by giving written notice to Tenant and, upon such termination, shall be entitled to recover from the Tenant damages in an amount equal to all rental which is due and all rental which would otherwise have become due throughout the remaining term of this Lease, or any renewal or extension thereof (as if this Lease had not been terminated); or(c)Landlord,as Tenant's agent,without terminating this Lease, may enter upon and rent the Premises,in whole or in part, at the best price obtainable by reasonable effort, without advertisement and by private negotiations and for any term Landlord deems proper,with Tenant being liable to Landlord for the deficiency,if any,between Tenant's rent hereunder and the price obtained by Landlord on reletting,provided however,that Landlord shall not be considered to be under any duty by reason of this provision to take any action to mitigate damages by reason of Tenant's default and expressly shall have no duty to mitigate Tenant's damages. No termination of this Lease prior to the normal ending thereof,by lapse of time or otherwise,shall affect Landlord's right to collect rent for the period prior to termination thereof. Tenant acknowledges and understands that Landlord's acceptance of partial rental will not waive Tenant's breach of this Lease or limit Landlord's rights against Tenant hereunder or Landlord's right to evict Tenant through a summary ejectment proceeding,whether filed before or after Landlord's acceptance of any such partial rental. EXTERIOR SIGNS 21, Tenant shall place no signs upon the outside walls, doors or roof of the Premises or anywhere on the Property, except with the express written consent of the Landlord in Landlord's sole discretion. Any consent given by Landlord shall expressly not be a representation of or warranty of any legal entitlement to signage at the Premises or on the Property. Any and all signs placed on the Premises or the Property by Tenant shall be maintained in compliance with governmental rules and regulations governing such signs and Tenant shall be responsible to Landlord for any damage caused by installation, use or maintenance of said signs, and all damage incident to removal thereof. LANDLORD'S ENTRY OF PREMISES 22. Landlord may advertise the Premises "For Rent" or "For Sale". Landlord may enter the Premises upon prior notice at reasonable hours to exhibit same to prospective purchasers or tenants,to make repairs required of Landlord under the terms hereof, for reasonable business purposes and otherwise as may be agreed by Landlord and Tenant. Landlord may enter the Premises at any time without prior notice, in the event of an emergency or to make emergency repairs to the Premises. Upon request of Landlord, Tenant shall provide Landlord with a functioning key to the Premises and shall replace such key if the locks to the Premises are changed. QUIET ENJOYMENT 23. So long as Tenant observes and performs the covenants and agreements contained herein, it shall at all times during the Lease term peacefully and quietly have and enjoy possession of the Premises,subject to the terms hereof. HOLDING OVER 24. If Tenant remains in possession of the Premises after expiration of the term hereof,Tenant shall be a tenant at sufferance and there shall be no renewal of this Lease by operation of law. In such event,commencing on the date following the date of expiration of the term,the monthly rental payable under Paragraph 3 above shall for each month,or fraction thereof during which Tenant so remains in possession of the Premises,be twice the monthly rental otherwise payable under Paragraph 3 above. ENVIRONMENTAL LAWS 25. (a) Tenant covenants that with respect to any Hazardous Materials (as defined below) it will comply with any and all federal, state or local laws, ordinances, rules, decrees, orders, regulations or court decisions relating to hazardous substances, hazardous materials,hazardous waste, toxic substances, environmental conditions on,under or about the Premises or the Property or soil and ground water conditions, including, but not limited to, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, the Resource Conservation and Recovery Act, the Hazardous Materials Transportation Act, any other legal requirement concerning hazardous or toxic substances, and any amendments to the foregoing (collectively, all such matters being "Hazardous Materials Requirements"). Tenant shall remove from the Premises, all Hazardous Materials that were placed on the Premises by Tenant or Tenant's employees, agents, invitees or contractors, either after their use by Tenant or upon the expiration or earlier termination of this Lease,in compliance with all Hazardous Materials Requirements. Page 10 of 13 STANDARD FORM 593-T Revised 7/2018 Tenant Initials Landlord Initials ®7/201$ 15 (b) Tenant shall be responsible for obtaining all necessary permits in connection with its use, storage and disposal of Hazardous Materials, and shall develop and maintain, and where necessary file with the appropriate authorities, all reports, receipts, manifest, filings, lists and invoices covering those Hazardous Materials and Tenant shall provide Landlord with copies of all such items upon request. Tenant shall provide within five (5) days after receipt thereof, copies of all notices, orders, claims or other correspondence from any federal, state or local government or agency alleging any violation of any Hazardous Materials Requirements by Tenant, or related in any manner to Hazardous Materials. In addition, Tenant shall provide Landlord with copies of all responses to such correspondence at the time of the response. (c) Tenant hereby indemnifies and holds harmless Landlord, its successors and assigns from and against any and all losses, liabilities, damages,injuries,penalties, fines, costs, expenses and claims of any and every kind whatsoever(including attorney's fees and costs)paid, incurred or suffered by, or asserted against Landlord as a result of any claim, demand or judicial or administrative action by any person or entity(including governmental or private entities) for, with respect to, or as a direct or indirect result of,the presence on or under or the escape, seepage,leakage,spillage,discharge,emission or release from the Premises or the Property of any Hazardous Materials caused by Tenant or Tenant's employees, agents, invitees or contractors. This indemnity shall also apply to any release of Hazardous Materials caused by a fire or other casualty to the Premises if such Hazardous Materials were stored on the Premises or the Property by Tenant,its agents,employees,invitees or successors in interest. (d) For purposes of this Lease, "Hazardous Materials" means any chemical, compound, material, substance or other matter that: (i) is defined as a hazardous substance, hazardous material or waste, or toxic substance pursuant to any Hazardous Materials Requirements, (ii) is regulated, controlled or governed by any Hazardous Materials Requirements, (iii) is petroleum or a petroleum product, or (iv) is asbestos, formaldehyde, a radioactive material, drug, bacteria, virus, or other injurious or potentially injurious material(by itself or in combination with other materials). (e) The warranties and indemnities contained in this paragraph 25 shall survive the termination of this Lease. SUBORDINATION;ATTORNMENT;ESTOPPEL 26. (a) This Lease and all of Tenant's rights hereunder are and shall be subject and subordinate to all currently existing and future mortgages affecting the Premises. Within ten (10) days after the receipt of a written request from Landlord or any Landlord mortgagee, Tenant shall confirm such subordination by executing and delivering Landlord and Landlord's mortgagee a recordable subordination agreement and such other documents as may be reasonably requested, in form and content satisfactory to Landlord and Landlord's mortgagee. Provided, however, as a condition to Tenant's obligation to execute and deliver any such subordination agreement,the applicable mortgagee must agree that mortgagee shall not unilaterally, materially alter this Lease and this Lease shall not be divested by foreclosure or other default proceedings thereunder so long as Tenant shall not be in default under the terms of this Lease beyond any applicable cure period set forth herein. Tenant acknowledges that any Landlord mortgagee has the right to subordinate at any time its interest in this Lease and the leasehold estate to that of Tenant,without Tenant's consent. (b) If Landlord sells,transfers, or conveys its interest in the Premises or this Lease, or if the same is foreclosed judicially or nonjudicially, or otherwise acquired, by a Landlord mortgagee, upon the request of Landlord or Landlord's successor, Tenant shall attorn to said successor,provided said successor accepts the Premises subject to this Lease. Tenant shall,upon the request of Landlord or Landlord's successor, execute an attornment agreement confirming the same, in form and substance acceptable to Landlord or Landlord's successor and Landlord shall thereupon be released and discharged froze all its covenants and obligations under this Lease, except those obligations that have accrued prior to such sale, transfer or conveyance;and Tenant agrees to look solely to the successor in interest of Landlord for the performance of those covenants accruing after such sale, transfer or conveyance. Such agreement shall provide,among other things,that said successor shall not be bound by(a)any prepayment of more than one(1)month's rental(except the Security Deposit) or(b) any material amendment of this Lease made after the later of the Lease Commencement Date or the date that such successor's lien or interest first arose,unless said successor shall have consented to such amendment. (c) Within ten(10)days after request from Landlord,Tenant shall execute and deliver to Landlord an estoppel certificate(to be prepared by Landlord and delivered to Tenant) with appropriate facts then in existence concerning the status of this Lease and Tenant's occupancy, and with any exceptions thereto noted in writing by Tenant. Tenant's failure to execute and deliver the Estoppel Certificate within said ten(10)day period shall be deemed to make conclusive and binding upon Tenant in favor of Landlord and any potential mortgagee or transferee the statements contained in such estoppel certificate without exception. ABANDONMENT 27. Tenant shall not abandon the Premises at any time during the Lease term.If Tenant shall abandon the Promises or be dispossessed by process of law, any personal property belonging to Tenant and left on the Premises, at the option of Landlord, shall be deemed abandoned,and available to Landlord to use or sell to offset any rent due or any expenses incurred by removing same and restoring the Premises. Page 11 of 13 STANDARD FORM 593-T Revised 71201 Tenant Initials Landlord Initials 0712018 16 NOTICES 28. All notices required or permitted under this Lease shall be in writing and shall be personalty delivered or sent by U.S. certified mail, return receipt requested,postage prepaid.Notices to Tenant shall be delivered or sent to the address shown at the beginning of this Lease,except that upon Tenant taking possession of the Premises,then the Premises shall be Tenant's address for such purposes. Notices to Landlord shall be delivered or sent to the address shown at the beginning of this Lease and notices to Agent,if any,shall be delivered or sent to the address set forth in Paragraph 3 hereof. All notices shall be effective upon delivery.Any party may change its notice address upon written notice to the other parties,given as provided herein. BROKERS 29. Except as expressly provided herein, Tenant and Landlord agree to indemnify and hold each other harmless from any and all claims of brokers, consultants or real estate agents by,through or under the indemnifying party for fees or commissions arising out of the lease of the Property to Tenant. Tenant and Landlord represent and warrant to each other that: (i) except as to the brokers designated below(`Brokers"),they have not employed nor engaged any brokers,consultants or real estate agents to be involved in this transaction and(ii)that the compensation of the Brokers is established by and shall be governed by separate agreements entered into as amongst the Brokers,the Tenant and/or the Landlord. Pickett_Sprouse Commercial Real Estate ___ __ ('Listing Agency"), Mark O'Neal ("Listing Agent"—License 07119 ) Acting as: 0 Landlord's Agent; Dual Agent and ("Leasing Agency"), ("Leasing Agent"-License# J Acting as: Tenant's Agent; 0 Landlord's(Sub)Agent; ❑ Dual Agent GENERAL TERMS 30. (a) "Landlord"as used in this Lease shall include the undersigned,its heirs,representatives, assigns and successors in title to the Premises. "Agent"as used in this Lease shall mean the party designated as same in Paragraph 3,its heirs,representatives, assigns and successors. "Tenant"shall include the undersigned and its heirs,representatives,assigns and successors, and if this Lease shall be validly assigned or sublet, shall include also Tenant's assignees or sublessees as to the Premises covered by such assignment or sublease. "Landlord", "Tenant", and"Agent" include male and female, singular and plural, corporation,partnership or individual, as may fit the particular parties. (b) No failure of Landlord to exercise any power given Landlord hereunder or to insist upon strict compliance by Tenant of its obligations hereunder and no custom or practice of the parties at variance with the terms hereof shall constitute a waiver of Landlord's right to demand exact compliance with the terms hereof. All rights, powers and privileges conferred hereunder upon parties hereto shall be cumulative and not restrictive of those given by law. (c)Time is of the essence in this Lease. (d) This Lease may be executed in one or more counterparts,which taken together,shall constitute one and the same original document. Copies of original signature pages of this Lease may be exchanged via facsimile or e-mail, and any such copies shall constitute originals. This Lease constitutes the sole and entire agreement among the parties hereto and no modification of this Lease shall be binding unless in writing and signed by all parties hereto. The invalidity of one or more provisions of this Lease shall not affect the validity of any other provisions hereof and this Lease shall be construed and enforced as if such invalid provisions were not included. (e) Each signatory to this Lease represents and warrants that he or she has full authority to sign this Lease and such instruments as may be necessary to effectuate any transaction contemplated by this Lease on behalf of the party for whom he or she signs and that his or her signature binds such party. The parties acknowledge and agree that: (i)the initials lines at the bottom of each page of this Lease are merely evidence of their having reviewed the terms of each page,and(ii)the complete execution of such initials lines shall not be a condition of the effectiveness of this Lease. (f) Upon request by either Landlord or Tenant,the parties hereto shall execute a short form lease(memorandum of lease)in recordable form, setting forth such provisions hereof(other than the amount of annual rental and other sums due) as either party may wish to incorporate. The cost of recording such memorandum of lease shall be borne by the party requesting execution of same. (g) If legal proceedings are instituted to enforce any provision of this Lease,the prevailing party in the proceeding shall be entitled to recover from the non-prevailing party reasonable attorneys fees and court costs incurred in connection with the proceeding. SPECIAL STIPULATIONS ❑ If this box is checked, additional terms of this Lease are set forth on Exhibit C attached hereto and incorporated herein by reference. (Note: Under North Carolina law,real estate agents are not permitted to draft lease provisions.) Page 12 of 13 STANDARD FORM 593-T Revised 72018 Tenant Initials Landlord Initials 07/2018 17 THIS DOCUMENT IS A LEGAL DOCUMENT. EXECUTION OF THIS DOCUMENT HAS LEGAL CONSEQUENCES THAT COULD BE ENFORCEABLE IN A COURT OF LAW. THE NORTH CAROLINA ASSOCIATION OF REALTORSO MAKES NO REPRESENTATIONS CONCERNING THE LEGAL SUFFICIENCY,LEGAL EFFECT OR TAX CONSEQUENCES OF THIS DOCUMENT OR THE TRANSACTION TO WHICH IT RELATES AND RECOMMENDS THAT YOU CONSULT YOUR ATTORNEY. IN WITNESS WHEREOF,the parties hereto have hereunto caused this Lease to be duly executed. LANDLORD: Individual Business Entity Hillsborough Business Systems,Inc. _ (Name of Firm) Date: By: Date: _ _...._ Title Jeffrey J.Russell,President Date: TENANT: Individual Business Entity Orange County (Name of Firm) Date: By: Title:Bonnie B.Hammersley,County Manager Date: Date: Page 13 of 13 STANDARD FORM 593-T Revised 7/2018 C 7/2018 18 COMMERCIAL LEASE AGREEMENT THIS COMMERCIAL LEASE AGREEMENT ("Lease") is made and entered into as of the Lease Date (as hereinafter defined) by and between 105 WEST CORBIN STREET, LLC, a North Carolina limited liability company ("Landlord"); and ORANGE COUNTY, NORTH CAROLINA, a body politic and corporate and a political subdivision of the State of North Carolina("Tenant"). FOR AND IN CONSIDERATION of the terms, covenants and conditions set forth below and other good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the parties hereto covenant and agree as follows: 1. PREMISES. Subject to each of the terms, covenants and conditions set forth below, Landlord leases and rents unto Tenant, and Tenant leases and rents from Landlord, all of that certain real property located in Orange County,North Carolina,having the following physical address and description (the"Premises): Address: 105 West Corbin Street, Suite 103,Hillsborough,NC 27278 Additional Description: Approximately 1,895 square feet. (X) See attached Exhibit A for additional description of the Premises. When and as used in this Lease, the term "Building" shall mean (a) the building in which the Premises are located if the Premises are less than the entire building, or (b) any commercial use building, the entirety of which constitutes all or a part of the Premises. Unless otherwise expressly provided in this Lease,Landlord shall deliver the Premises to Tenant, and Tenant shall accept the Premises from Landlord, in such AS-IS condition as the Premises exist on the date of this Lease. 2. TERM. The term of this Lease shall commence on March 15, 2019 (the "Commencement Date"), and shall end at midnight (local time) on April 1, 2020, unless sooner terminated as hereinafter provided, or unless extended by mutual written agreement of the parties. When and as used in this Lease, "Lease Year" shall mean a twelve (12) month period beginning on April 1 of each calendar year during the Term. When and as used in this Lease,"Term" shall mean the initial term of this Lease and the period of any renewal and extension of the initial term that the parties may hereafter agree upon in writing. 3. RENT. Tenant shall pay to Landlord or Landlord's designated agent, without demand, deduction or set off, initial annual rent for the Premises in the amount of$30,000.00, payable in equal monthly installments in the amount of$2,500.00 each, in advance, commencing on April 1, 2019, and continuing on the first day of each successive month thereafter during the Term. Upon Tenant's execution and delivery of this Lease to Landlord, Tenant shall pay to Landlord the sum of$1,371.00 as a Partial Month's rent for the month of March, 2019 (March 15 through March 31). The amount of rent due for any period during the Term which is less than one (1) full calendar month (a "Partial Month") shall be determined by multiplying the amount of rent due for one (1)full calendar month(based upon the then prevailing monthly installment of annual rent) by a fraction which shall have as the numerator the actual number of days in such Partial Month and as the denominator the actual number of days in the calendar month during which such Partial Month occurs. On each Lease Year Anniversary, the annual rental payable hereunder (and each corresponding monthly installment of annual rent) shall be increased, if at all, as follows(if checked): 1 19 (� CPI. To reflect any increase in the Consumer Price Index, Urban Wage Earners and Clerical Workers, All Cities (CPI-W, 1982-1984=100) (the "Index"), by multiplying the annual rent then in effect by a fraction, the numerator of which shall be the value of the Index for the month which is two (2)months prior to the next Lease Year Anniversary, and the denominator of which shall be the value of the Index for the month which is two (2) months prior to the previous Lease Year Anniversary. For the purpose of determining the adjustment on the first Lease Year Anniversary, the denominator of such fraction shall be value of the Index for the month which is two (2) months prior to the first full month of the Term. Notwithstanding the foregoing, in no event shall annual rent be reduced at any time during the Term by reason of any decrease in the value of the Index. In the event the Index ceases to be published,there shall be substituted for the Index a measure published by the US Department of Labor which most nearly approximates the Index. (X)Other. Annual Rent shall increase by three percent (3%) effective on April of each renewal year,if any. Unless and until Landlord shall otherwise notify Tenant, in writing, all rent, additional rent and other charges, if any, due and owing pursuant to the terms of this Lease shall be (a) paid in cash or by personal or business check, official bank check, money order or other form of certified check made payable to Landlord, or order, and (b) delivered to the following address on or prior to the first day of each month during the Term(unless another due date is expressly specified in this Lease): 105 West Corbin Street,LLC c/o Sentry Property Management,LLC 960 Corporate Drive, Suite 404 Hillsborough,NC 27278 4. LATE PAYMENT CHARGES. If Landlord fails to receive any payment of rent within ten (10) days after it is due, Tenant shall pay to Landlord, as additional rent, a late payment charge in an amount equal to five percent (5%) of the overdue amount, plus any actual bank service fees or charges incurred by Landlord by reason of any returned or dishonored check. The parties agree that the above- stated late payment charge represents a fair and reasonable estimate of the cost Landlord will incur by reason of any such late payment. 5. SECURITY DEPOSIT. This Lease does not require a security deposit from Tenant. 6. UTILITIES AND SERVICES. (a) Tenant shall pay the following utilities and services with respect to the Premises: All electric,telephone, cable and internet, and all interior cleaning. (b) Landlord shall pay the following utilities and services with respect to the Premises: All water and sewer and exterior lighting. The responsibility to pay for any utility service shall include all metering, connection and other miscellaneous fees and/or charges associated with the installation and maintenance of such utility service in addition to any monthly or other periodic service or use fee or charge. 7. COMMON AREA COSTS. (_) CHECK IF APPLICABLE. The Premises are part of a larger building or group of buildings that share common area maintenance costs. Consequently, Tenant shall pay, as additional rent,the following pro-rata share of common area maintenance costs:_. 2 20 8. TAX AND INSURANCE ESCALATION. (, CHECK IF APPLICABLE. During the Term, Tenant shall pay to Landlord,upon demand, as additional rent(if checked): (_) the amount by which all taxes (including but not limited to, ad valorem taxes, special assessment and any other governmental charges) on the Premises for each tax year exceed all taxes on the Premises for the tax year 20_. (_) all taxes (including but not limited to, ad valorem taxes, special assessments and any other government charges)on the Premises for each tax year. In the event the Premises are less than the entire property assessed for such taxes for any such tax year, then the tax for any such year applicable to the Premises shall be determined by proration on the basis that the rentable floor area of the Premises bears to the rentable floor area of the entire Building in which the Premises are located. If the final year of the Term fails to coincide with the tax year, then any excess for the tax year during which the Term ends shall be reduced by the pro-rata part of such tax year beyond the Term. If such taxes for the year in which the Lease terminates are not ascertainable before payment of the last month's rent, then the amount of such taxes assessed against the property for the previous tax year shall be used as a basis for determining the pro-rata share, if any, to be paid by Tenant for that portion of the last Lease Year. During the Term, Tenant shall further pay,upon demand, as additional rent(if checked): (_) the excess cost of fire and extended coverage insurance including any and all public liability insurance on the Building over the cost of the first year of the Lease for each subsequent year during the Term. (_) all fire and extended coverage insurance including any and all public liability insurance on the Building. In the event the Premises are less than the entire property, then the insurance payable by Tenant for the Premises shall be determined by proration on the basis that the rentable floor area of the Premises bears to the rentable floor area of the entire Building in which the Premises are located. Tenant shall pay all taxes and insurance as provided herein within fifteen (15) days after receipt of notice from Landlord as to the amount due. Tenant shall be solely responsible for insuring Tenant's personal and business property and for paying any taxes or governmental assortments levied thereon. 9. USE OF PREMISES. The Premises shall be used for office purposes only and for no other purpose. All required federal, state and local business licenses, permits and approvals shall be obtained by Tenant and shall be maintained by Tenant during the Term. The Premises shall not be used(a) for any illegal purposes, (b) in any manner so as to create or constitute a nuisance or a trespass, or (c) in any manner which vitiates the insurance on the Premises or the Building or increases the rate of insurance on the Premises or the Building. In the event Tenant's use of the Premises results in an increase in the rate of insurance on the Premises or the Building, Tenant shall pay to Landlord,upon demand, as additional rent, the amount of any such increase. 10. RULES AND REGULATIONS. U CHECK IF APPLICABLE. The Rules and Regulations attached hereto as Exhibit _ are made a part of this Lease and are incorporated herein by reference. Tenant agrees to perform and abide by any and all such Rules and Regulations and any 3 21 additional Rules and Regulations that may be adopted from time to time during the Term by Landlord or its designated agent. 11. INSURANCE. Tenant shall, at all times during the Term and at Tenant's expense, maintain in full force and effect: (a) a commercial general liability insurance policy in an amount not less than $1,000,000.00 per occurrence with not less than a $2,000,000.00 general aggregate, or such other amounts as Landlord may reasonably require from time to time during the Term, insuring Tenant against liability for damages to persons (including injury or death) or property by reason of Tenant's use or occupancy of the Premises, including Tenant's principals, employees, agents, licensees, invitees and/or contractors; and (b), unless waived or modified by Landlord in writing, an additional policy of insurance on Tenant's trade fixtures,machinery, equipment, merchandise and other personal property located in, on or upon the Premises, in an amount equal to their full replacement value, which policy shall insure against any peril included within the classification of"fire and extended coverage." Landlord shall be named as an additional insured on each such policy. Tenant shall provide evidence of all such insurance to Landlord prior to the commencement of the Term. Tenant hereby releases and relieves Landlord, and waives any right of recovery, for loss or damage arising out of or incident to the perils insured against arising in, on or about the Premises or the Building, whether due to the negligence of Landlord or Landlord's principals, employees, agents, licensees, invitees and/or contractors, to the extent that such loss or damage is within the policy limits of and such policy of insurance. 12. REPAIRS BY LANDLORD. Landlord shall keep in good repair the roof, foundation and exterior walls (exclusive of all exterior glass and exterior doors of the Premises) of the Building and underground utility and sewer pipes outside the exterior walls of the Building, except repairs rendered necessary by the negligence or intentional wrongful acts of Tenant, its agents, employees or invitees. In the event the Premises shall constitute less than all of the Building, Landlord shall also keep in good repair all water and sewer pipes, electrical, telephone, internet and other utility cable and wiring located within the Building but outside the Premises. Landlord shall maintain the grounds surrounding the Building, including paving, the mowing of grass, care of shrubs and general landscaping. Tenant shall promptly report in writing to Landlord any defective condition known to it which Landlord is required to repair and failure to report such conditions shall make Tenant responsible to Landlord for any liability incurred by Landlord by reason of such conditions. Landlord shall be responsible for all major repairs including' but not limited to,the heating and air conditioning system servicing the Premises. 13. REPAIRS BY TENANT. Tenant accepts the Premises in their present condition and as suited for the uses intended by Tenant. Tenant shall, throughout the Term, at its expense, maintain in good order and repair the Premises, including the building, and other improvements located thereon, except those repairs expressly required to be made by Landlord as provided above. Tenant agrees to return the Premises to Landlord at the expiration or any prior termination of the Term, in as good condition and repair as when first received, natural wear and tear, damage by storm, fire, lightning, earthquake or other casualty alone excepted. Normal wear and tear shall not include, in any warehouse area, tow motor tire skid marks or damage to any drywall or masonry from the use of a forklift or similar equipment. In the event any part of the Premises Tenant and its principals, employees, agents, contractors and/or subcontractors shall take no action which may void any manufacturers or installers warranty with relation to the Premises or any equipment therein. Tenant shall indemnify and hold Landlord harmless from any liability, claim, demand or cause of action arising on account of Tenant's breach of the provisions of this paragraph. 14. ALTERATIONS. Tenant shall not make any alterations, additions or improvements to the Premises without Landlord's prior written consent. Tenant shall promptly remove any alterations, additions or improvements made by Tenant in violation of this Section upon Landlord's written request. All approved alterations, additions and improvements shall be made and completed (a) in a good and 4 22 workmanlike manner, (b) in conformity with all applicable laws and regulations, (c) by a contractor approved by Landlord, and(d)free of any liens or encumbrances. Landlord may require Tenant to remove any alterations, additions or improvements (whether or not made with Landlord's consent) at the expiration or any earlier termination of the Term and restore the Premises to its prior condition, all at Tenant's expense. Except to the limited extent otherwise expressly provided in this Lease, all alterations, additions and improvements which Landlord has not required Tenant to remove shall become Landlord's property and shall be surrendered to Landlord upon the expiration or any earlier termination of the Term, except that Tenant may remove any of Tenant's machinery, equipment and/or trade fixtures which can be removed without material damage to the Premises. Tenant shall repair, at Tenant's expense, any damage to the Premises caused by the removal of any such machinery, equipment and/or trade fixtures. 15. REMOVAL OF TRADE FIXTURES. Tenant may, at any time prior to the expiration or any earlier termination of the Term, and provided that Tenant is not in default hereunder, remove all machinery, equipment and trade fixtures which Tenant has placed and/or installed in or on the Premises and which can be removed without material damage to the Premises. Tenant shall, however, repair, at Tenant's expense, any and all damage to the Premises caused the removal of any such machinery, equipment and/or trade fixtures. Any and all fixtures placed and/or installed in or on the Premises by Tenant which cannot be removed without material damage to the Premises shall, at Landlord's option,be deemed a part of the Premises and shall not be removed by Tenant. 16. DESTRUCTION OF OR DAMAGE TO PREMISES. If the Premises are totally destroyed by storm, fire, lightning, earthquake or other casualty, this Lease shall terminate as of the date of such destruction and Tenant's obligation to pay rent shall terminate as of such date. Tenant shall, however, be responsible for the payment of all rent, additional rent and other charges, if any, due or owing pursuant to the terms of this Lease for any period prior to such date of termination. If the Premises are damaged but not wholly destroyed by any such casualty, rent shall abate in proportion to the extent that Tenant's effective use of the Premises has been diminished, and Landlord shall restore the Premises to substantially the same condition as before the damage occurred, in a reasonably expeditious manner, whereupon Tenant's obligation to make full payment of rental shall resume. 17. GOVERNMENTAL ORDERS. Tenant agrees, at its own expense, to comply promptly with all requirements of any legally constituted public authority made necessary by reason of Tenant's occupancy of the Premises. Landlord agrees to comply promptly with any such requirements if not made necessary by reason of Tenant's occupancy. It is mutually agreed by the parties that, if in order to comply with any such requirements, the cost to either party exceed an amount equal to one(1)year's rent,then(a) such party may elect to terminate this Lease by delivering written notice of termination to the other party as provided herein, which termination shall become effective not less than sixty (60) days after delivery of such notice, and (b) the delivery of notice of termination as provided above shall eliminate the necessity of compliance with such requirements by the party giving notice. The party who did not give notice of termination may, at any time prior to the effective date of such termination, cause the notice of termination to be canceled and this Lease to be maintained in place for the remainder of the Term by paying in full any and all such costs of compliance in excess of one (1)year's rent or securing payment of such amount in a manner reasonably satisfactory to the party giving notice. 18. CONDEMNATION. If the whole of the Premises, or such portion thereof as will make the Premises unusable for the purposes herein leased, is condemned by any legally constituted authority for any public use or purpose, then, upon either of said events, the Term shall be terminated effective as of the date on which possession of the Premises is taken by the public authority, and Tenant's obligation to pay rent shall also terminate on such date. Tenant shall, however, be responsible for the payment of all rent, additional rent and other charges, if any, due or owing pursuant to the terms of this Lease for any period prior to such date of termination. Such termination shall be without prejudice to the rights of 5 23 either Landlord or Tenant to recover compensation and damages caused by condemnation from the condemnor. It is further understood and agreed that Tenant shall not have any rights in or to any award made to Landlord by the condemnor. 19. ASSIGNMENT AND SUBLETTING. Tenant shall not assign 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, without the prior written consent of Landlord, which consent shall be given, if at all, at the sole discretion of Landlord. Landlord's consent to any assignment or sublease shall not impair this provision and all later assignments or subleases shall be made subject to the provisions of this Section. Any assignee of Tenant shall, at option of Landlord,become directly liable to Landlord for all obligations of Tenant pursuant to the terms of this Lease. No assignment of this Lease or any interest hereunder, or any sublet of the Premises or any part thereof, shall relieve Tenant of any liability to Landlord pursuant to the terms of this Lease. 20. EVENTS OF DEFAULT. The happening of any one or more of the following events during the Term(each an "Event of Default") shall constitute a breach of this Lease on the part of the Tenant: (a) Tenant fails to pay any rent, additional rent and/or other charge required to be paid by Tenant when and as provided herein; (b)Tenant abandons or vacates the Premises; (c)Tenant fails to comply with or abide by and perform any other obligation imposed upon Tenant as provided herein; (d) Tenant is adjudicated bankrupt; (e) a permanent receiver is appointed for Tenant's property and such receiver is not removed within sixty(60) days after appointment; (f)Tenant, either voluntarily or involuntarily,takes advantage of any debt or relief proceedings under any present or future law whereby the rent or any part thereof is,or is proposed to be, reduced or payment thereof deferred; (g) Tenant makes an assignment for benefit of creditors; or (h) Tenant's property is levied upon or attached under process against Tenant which is not satisfied or dissolved within thirty(30) days after such levy or attachment. 21. REMEDIES UPON DEFAULT. Upon the occurrence of any Event of Default, Landlord may pursue any one or more of the following remedies separately or concurrently, without prejudice to any other remedy herein provided or provided by law. If the Event of Default involves (a)nonpayment of rent, additional rent and/or any other charge required to be paid by Tenant as provided herein, and Tenant fails to cure such default with ten(10) days after receipt of written notice of default from Landlord, or(b) a default in the compliance or performance of any other obligation imposed upon Tenant as provided herein, and Tenant fails to cure such default within fifteen (15) days after receipt of written notice of default from Landlord, then, in any such event, Landlord may terminate this Lease by giving written notice to Tenant. Upon any such termination, Landlord shall be entitled to recover from Tenant any and all damages as may be permitted under applicable law. If the Event of Default involves any other than those set forth in (a) or (b) above, Landlord may terminate this Lease by giving written notice of termination to Tenant. Upon any such termination, Landlord shall be entitled to recover from Tenant damages in an amount equal to all rent, additional rent and other charges, if any, then due and owing by Tenant as provided herein and which would otherwise have become due and owing by Tenant during the remainder of the Term. In addition to the above-stated remedies, Landlord may, upon the occurrence of any Event of Default, as Tenant's agent and without terminating this Lease, enter upon and re-let the Premises, in whole or in part, at the best price obtainable by reasonable effort, without advertisement and by private negotiation, for such term as Landlord deems appropriate under the circumstances. Tenant shall be liable to Landlord for any deficiency, if any, between the amount of Tenant's rent hereunder and the amount of rent obtained by Landlord in re-letting the Premises, or any part thereof, provided, however, that Landlord shall not be under any duty, except to the extent required by applicable law, to mitigate its damages resulting from Tenant's default. In the event Landlord hires an attorney to enforce its rights upon the occurrence of any Event of Default, Tenant shall also be liable to Landlord for reasonable attorneys' fees incurred by Landlord, not to exceed fifteen percent (15%) of the aggregate amount of Tenant's indebtedness to Landlord,and all costs of collection. 6 24 22. EXTERIOR SIGNS. Tenant shall place no signs upon the outside walls or roof of the Building except with the express written consent of the Landlord. Any and all signs placed on the Building or the Premises by Tenant shall be maintained in compliance with governmental rules and regulations governing such signs and Tenant shall be responsible to Landlord for any damage caused by installation,use or maintenance of said signs, and all damages incident to removal thereof. 23. LANDLORD'S ENTRY OF PREMISES. Landlord may advertise the Premises "For Rent" or"For Sale" sixty(60) days prior to the expiration or any termination of the Term. Landlord may enter the Premises at reasonable hours to exhibit same to prospective purchasers or tenants and to make repairs required of Landlord under the terms hereof, or to make repairs to Landlord's adjoining property, if any. Landlord may enter upon the Premises, at any time, when and as reasonably necessary to repair or mitigate any emergency situation. 24. EFFECT OF TERMINATION OF LEASE. No termination of this Lease prior to the expiration of the Term, as stated herein, regardless of the reason for such termination, shall impair or affect Landlord's right to collect rent, additional rent and/or any other charge that may be due and owing by Tenant to Landlord, as provided herein, for any period prior to such termination. 25. MORTGAGEE'S RIGHTS. Tenant's rights under this Lease shall be subject and subordinate to any bona fide mortgage, deed of trust or other security interest which now encumbers or may hereafter encumber the Premises or any building in which the Premises are located. Tenant shall, if requested by Landlord, execute a separate agreement reflecting such subordination, and shall be obligated to execute such documentation as may facilitate Landlord's sale or refinancing of the Premises, including, but not limited to, estoppel certificates, subordination and/or attornment agreements. 26. QUIET ENJOYMENT. So long as Tenant observes, abides by and performs all of the terms, covenants and conditions contained in this Lease, Tenant shall, at all times during the Term, peacefully and quietly have and enjoy possession of the Premises, but always subject to all such terms, covenants and conditions. In the event Landlord shall sell or otherwise transfer its interest in the Premises, Tenant agrees to attorn to any new owner or interest holder and shall, if requested by Landlord, execute a separate agreement reflecting such attornment; provided, however, that such agreement shall require that the new owner or interest holder recognize its obligations and Tenant's rights under this Lease. 27. HOLDING OVER. In the event Tenant shall remain in possession of the Premises after the expiration or any earlier termination of the Term with Landlord's acquiescence and without any express agreement of the parties, (a) Tenant shall be a tenant at will, (b) commencing on the day following the date of such expiration or termination, Tenant shall pay to Landlord monthly rent at in an amount equal to the amount of the monthly installment of annual rent in effect on the date of such expiration or termination for each month, or fraction thereof, during which Tenant remains in possession of the Premises, and (c) there shall be no renewal or extension of the Term by operation of law. In the event Tenant shall remain in possession of the Premises after the expiration or any earlier termination of the Term without Landlord's acquiescence, (i) Tenant shall be a tenant at sufferance, and(ii) commencing on the day following the date of such expiration or termination, Tenant shall pay to Landlord monthly rent in an amount equal to the twice the amount of the monthly installment of annual rent in effect on the date of such expiration or termination for each month, or fraction thereof, during which Tenant remains in possession of the Premises. 7 25 28. ATTORNEY'S FEES. In the event that any action or proceeding is brought by Landlord or Tenant to enforce any term, covenant or condition of this Lease, the prevailing party in such litigation shall be entitled to recover its reasonable attorney's fees and court costs. 29. RIGHTS CUMULATIVE. Any and all rights, powers and privileges conferred hereunder upon either or both of the parties hereto shall be cumulative and not restrictive of those given by law. 30. WAIVER OF RIGHTS. Neither the failure of Landlord to exercise any right or power given or reserved to Landlord hereunder or to insist upon strict compliance by Tenant of any of Tenant's obligations hereunder,nor any custom,practice or course of dealing by or between the parties which is or may be at variance with the express terms hereof, shall constitute a waiver of Landlord's right to demand strict compliance with the terms hereof. 31. ENVIRONMENTAL LAWS. (a) Tenant shall not bring onto the Premises or the Building any Hazardous Materials (as defined below) without the prior written approval of Landlord. Any approval must be preceded by submission to Landlord of appropriate Material Safety Data Sheets(MSD Sheets). In the event of approval by Landlord, Tenant covenants that it will (i) comply with all requirements of any constituted public authority and all federal, state, and local codes, statutes, ordinances, rules and regulations, and laws, whether now in force or hereafter adopted, relating to Tenant's use of the Premises, or relating to the storage, use, disposal, processing, distribution, shipping or sales of any hazardous, flammable, toxic, or dangerous materials, waste or substance, the presence of which is regulated by a federal, state, or local law,ruling,rule or regulation(hereafter collectively referred to as "Hazardous Materials"); (ii) comply with any reasonable recommendations by the insurance carrier of either Landlord or Tenant relating to the use of such Hazardous Materials by Tenant on the Premises or in the Building; (iii) refrain from unlawfully disposing of or allowing the disposal of any Hazardous Materials upon, within, about or under the Premises or the Building; and (iv) remove all Hazardous Materials from the Premises and the Building, either after their use by Tenant or upon the expiration or any earlier termination of the Term, in compliance with all applicable laws. (b) Tenant shall be responsible for obtaining all necessary permits in connection with its use, storage and disposal of Hazardous Materials, and shall develop and maintain, and where necessary file with the appropriate authorities, all reports, receipts, manifest, filings, lists and invoices covering those Hazardous Materials and Tenant shall provide Landlord with copies of all such items upon request. Tenant shall provide within five (5) days after receipt thereof, copies of all notices, orders, claims or other correspondence from any federal, state or local government or agency alleging any violation of any environmental law or regulation by Tenant, or related in any manner to Hazardous Materials. In addition, Tenant shall provide Landlord with copies of all responses to such correspondence at the time of the response. (c) Tenant hereby indemnifies and holds harmless Landlord, its successors and assigns from and against any and all losses, liabilities, damages, injuries,penalties, fines, costs, expenses and claims of any and every kind whatsoever (including attorney's fees and costs, expenses or claims asserted or arising under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, from time to time, and regulations promulgated thereunder, any so-called state or local "Superfund" or "Superlien" law, or any other federal, state or local statute, law or ordinance, code, rule, regulation, order or decree regulating, relating to, or imposing liability or standards of conduct concerning any Hazardous Materials)paid, incurred or suffered by, or asserted against, Landlord as a result of any claim, demand or judicial or 8 26 administrative action by any person or entity(including governmental or private entities) for, with respect to, or as a direct or indirect result of, the presence on or under or the escape, seepage, leakage, spillage, discharge, emission or release from, the Premises or the Building, of any Hazardous Materials caused by Tenant or Tenant's agents, employees, invitees or successors in interest. This indemnity shall also apply to any release of Hazardous Materials caused by a fire or other casualty to the Premises or the Building if such Hazardous Materials were stored on the Premises or the Building by Tenant, its agents, employees, invitees or successors in interest. (d) If Tenant fails to comply with the covenants to be performed hereunder with respect to Hazardous Materials, or if an environmental protection lien is filed against the Premises as a result of the actions of Tenant, its principals, employees, agents or invitees, then the occurrence of any such events shall be considered an Event of Default hereunder. (e) Tenant will give Landlord prompt notice of any release of Hazardous Materials, reportable or non-reportable, to federal, state or local authorities, of any fire, or any damage occurring on or to the Premises. (f) Tenant will use and occupy the Premises and conduct its business in such a manner that the Premises are neat, clean and orderly at all times with all chemicals or Hazardous Materials marked for easy identification and stored according to all codes as outlined above. (g) The warranties and indemnities contained in this Section shall survive the expiration or any earlier termination of the Term. 32. TIME OF THE ESSENCE. Time is of the essence in this Lease. 33. ABANDONMENT. Tenant shall not abandon the Premises at any time during the Term. If Tenant shall abandon the Premises or be dispossessed of the Premises by process of law at any time during the Term, any machinery, equipment, trade fixtures and/or personal property belonging to Tenant and left on the Premises shall, at the option of Landlord, be deemed abandoned, and shall be available to Landlord to use or sell to offset any rent, additional or other charges due and owing by Tenant to Landlord, and any expenses incurred by Landlord to remove same and restore the Premises. 34. NOTICES. 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 (a) personally delivered to the parties or delivered by next day courier service (i.e. FedEx, UPS, etc.), or (b) 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),or(c)delivered by facsimile or electronic mail(email)to the appropriate party(ies)at the following facsimile number(s)or email address(es): If to Landlord: 105 West Corbin Street,LLC c/o Sentry Property Management,LLC 960 Corporate Drive, Suite 404 Hillsborough,NC 27278 Facsimile: (919)732-1477 Email: Tori.Reid@summitde.net 9 27 If to Tenant: Orange County,North Carolina Attention: County Manager P.O. Box 8181 Hillsborough,NC 27278 Facsimile: Email: adorman@orangecountync.gov 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. Any such notice or statement delivered by facsimile or email shall be deemed delivered and received as of the date sent. 35. ENTIRE AGREEMENT. This Lease and any attached exhibits contains the entire agreement of the parties hereto, and no representations, inducements, promises or agreements, oral or otherwise,between the parties,not embodied herein shall be of any force or effect. This Lease may not be modified except by a written instrument signed by each of the parties hereto. 36. TRANSFER OF LANDLORD'S INTEREST. In the event of the sale, assignment or transfer by Landlord of its interest in the Premises or in this Lease (other than a collateral assignment to secure a debt of Landlord) to a successor in interest who expressly assumes the obligations of Landlord under this Lease, Landlord shall thereupon be released and discharged from all its covenants, duties and obligations under this Lease, except those obligations that have accrued prior to such sale, assignment or transfer; and Tenant agrees to look solely to the successor in interest of Landlord for the performance of those covenants, duties and obligations arising after such sale, assignment or transfer. Landlord's assignment of this Lease, or of any or all of its rights pursuant to this Lease, shall not affect Tenant's obligations hereunder, and Tenant shall attom and look to such assignee as the landlord under this Lease; provided, however, that Tenant shall have first received written notice of the assignment of Landlord's interest. 37. ADDITIONAL PROVISIONS. Q�) CHECK IF APPLICABLE. The additional provisions set forth in the attached Exhibit B are incorporated into this Lease by reference and are a part hereof. To the extent any such additional provision shall be contrary to or in conflict with any provision contained in the body of this Lease, such additional provision shall be paramount and controlling and the Lease shall be construed and interpreted consistent therewith. 38. WARRANTIES OF TENANT. (__) CHECK IF APPLICABLE. Tenant represents, warrants and covenants to Landlord that Tenant is a nonprofit corporation duly created, validly existing and in good standing in accordance with the laws of the State of North Carolina. Tenant has full right,power and authority to enter into this Lease and all required action necessary to authorize Tenant to enter into this Lease has been taken. At all times during the Term Tenant shall keep and maintain its status as a nonprofit corporation active and in good standing pursuant to the laws of the State of North Carolina. 39. GUARANTY. (_) CHECK IF APPLICABLE. shall execute and deliver to Landlord a Lease Guaranty contemporaneously with Tenant's execution and delivery of this Lease. 40. AUTHORIZED LEASE EXECUTION. (N) CHECK IF APPLICABLE. Each individual executing this Lease as an officer, partner, member or agent of a corporation, partnership, limited liability company or governmental entity represents and warrants that he or she is duly authorized 10 28 to execute and deliver this Lease for and on behalf of such corporation, partnership, limited liability company or governmental entity. 41. MEMORANDUM OF LEASE. Upon request by either Landlord or Tenant, the parties hereto shall execute a short form lease (Memorandum of Lease), in recordable form, setting forth such provisions hereof(other than the amount of the annual rent and other sums due) as either party may wish to incorporate. The cost of recording such Memorandum of Lease shall be borne by the party requesting same. 42. GOVERNING LAW AND JURIDICTION. This Lease shall be governed by and construed, interpreted and enforced in accordance with the laws and decisions of the State of North Carolina. Any action or proceeding brought by any party to construe, interpret or enforce this Lease, or any provision hereof, shall be instituted and prosecuted in the District or Superior Court of Orange County, North Carolina, and each party hereto hereby submits and consents to the jurisdiction and venue of said court and waives any right or defense relating to such jurisdiction and venue. THIS LEASE IS A LEGAL DOCUMENT. EXECUTION OF THIS LEASE HAS LEGAL CONSEQUENCES THAT COULD BE ENFORCEABLE IN A COURT OF LAW. TENANT SHOULD CONSULT ITS ATTORNEY BEFORE EXECUTING THIS LEASE. IN WITNESS WHEREOF, each of the parties has caused this Lease to be executed by its duly authorized representative(s)effective as of the day and year first above written. LANDLORD: 105 WEST CORBIN STREET,LLC, a North Carolina limited liability company By: Hillsborough Holdings, LLC, a North Carolina limited liability company, its Manager By: (Seal) George A. Horton,III, Manager TENANT: ORANGE COUNTY,NORTH CAROLINA, a body politic and corporate and a political subdivision of the State of North Carolina By: (Seal) Bonnie B. Hammersley, County Manager 11 29 Exhibit A Premises Layout/Floor Plan 12 30 Exhibit B Additional Provisions Repairs and Upfit. Prior to the Commencement Date, Landlord shall, at its sole cost and expense, complete the following repairs to and/or upfit of the Premises to the reasonable satisfaction of Tenant: 1. Replace all ceiling titles in the reception area that are water damaged. 2. Ensure that the HVAC system servicing the Premises is functioning properly. 3. Clean the Premises. Signatures.ate. This Lease, together with any amendments or modifications, may be executed electronically. All electronic signatures affixed hereto evidence the consent of the parties to utilize electronic signatures and the intent of the parties to comply with Article 11A and Article 40 of North Carolina General Statute Chapter 66. Non-Appropriation. Landlord acknowledges that Tenant is a governmental entity, and the validity of this Lease is based upon the availability of public funding under the authority of its statutory mandate. In the event that public funds are unavailable and not appropriated for the performance of Tenant's obligations under this Lease, then this Lease shall automatically expire without penalty to Tenant immediately upon written notice to Landlord of the unavailability and non-appropriation of public funds. It is expressly agreed that Tenant shall not activate this non-appropriation provision for its convenience or to circumvent the requirements of this Lease, but only as an emergency fiscal measure during a substantial fiscal crisis. In the event of a change in the Tenant's statutory authority, mandate and/or mandated functions, by state and/or federal legislative or regulatory action, which adversely affects Tenant's authority to continue its obligations under this Lease,then this Lease shall automatically terminate without penalty to Tenant upon written notice to Landlord of such limitation or change in Tenant's legal authority. 13