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HomeMy WebLinkAboutAgenda - 03-10-20; 8-k - Lease of 1000 Corporate Drive, Suites 401 and 402, Hillsborough 1 ORANGE COUNTY BOARD OF COMMISSIONERS ACTION AGENDA ITEM ABSTRACT Meeting Date: March 10, 2020 Action Agenda Item No. 8-k SUBJECT: Lease of 1000 Corporate Drive, Suites 401 and 402, Hillsborough DEPARTMENT: Asset Management Services (AMS) ATTACHMENT(S): INFORMATION CONTACT: Lease of 1000 Corporate Drive Steven Arndt, AMS Director, 919-245-2628 Alan Dorman, AMS Assistant Director, 919-245-2627 PURPOSE: To approve and authorize the Manager to sign a lease of 1000 Corporate Drive, Suites 401 and 402, in Hillsborough upon final review by the County Attorney. BACKGROUND: During 2019, occupants of the John M. Link, Jr. Government Services Center were moved to alternative office locations to allow for the performance of moisture remediation activities. In April 2019, the staff of the Human Rights and Relations and the County Attorney's Offices were relocated to a small rental office suite located at 105 W. Corbin Street in Hillsborough. Originally, the move was envisioned to be short term, and staff has been able to work with less than ideal circumstances. For instance, the walls separating offices are not very sound proof, which impacts the ability of staff to discuss sensitive legal matters. In addition, offices are small, cramped, and lack adequate meeting space. Unfortunately, conditions within the Link Center continued to deteriorate and at the November 7, 2019 Board of County Commisioners meeting, a decision was made to relocate all staff from the building. Planning efforts are now underway to determine the best approach to resolve the long term facilities needs of Orange County. Due to changing circumstances, the Human Rights and Relations and the County Attorney's Offices now require office space that can better serve the needs. Vacant office space at 1000 Corporate Drive, located across the street from the Sportsplex, is a little larger and configured in a way to better accommodate both departments. The cost of the lease for the first 12 months would be $45,600, with a 3% increase each year after the base year. Additional renovations, budgeted at $91,850, would be necessary. Renovations include adding fiber to the facility, new paint and carpet, and improvements to a conference room. The County would be responsible for all interior maintenance, cleaning, and utilities. 2 FINANCIAL IMPACT: At the November 7, 2019 BOCC meeting, the Board approved Budget Amendment #2-C with $970,000, which included money to fund leases, renovation costs, and other expenses related to the temporary office moves. Funds needed for FY 2019-20, including the rent and the costs of the renovations at 1000 Corporate Drive, are $105,150. These expenses will be covered from funds authorized in the previously approved budget amendment. The total rental costs for FY 2020-21 is $46,968. SOCIAL JUSTICE IMPACT: There is no Orange County Social Justice Goal impact associated with this item. ENVIRONMENTAL IMPACT: There is no Orange County Environmental Responsibility Goal impact associated with this item. RECOMMENDATION(S): The Manager recommends that the Board approve and authorize the Manager to sign the lease for 1000 Corporate Drive, Suites 401 and 402, in Hillsborough, upon final review by the County Attorney. 3 COMMERCIAL LEASE AGREEMENT THIS COMMERCIAL LEASE AGREEMENT ("Lease") is made and entered into as of the Date of Lease (as hereinafter defined) by and between 1000 CORPORATE DRIVE, 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: 1000 Corporate Drive, Suites 401 and 402,Hillsborough,NC 27278 Additional Description: Approximately 2,850 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 initial term of this Lease shall commence on March 16, 2020 (the "Commencement Date") and shall end at midnight (local time) on February 28, 2023 (the "Expiration Date") unless sooner terminated as hereinafter provided. Notwithstanding the foregoing, and provided that Tenant is not in default under any term, covenant and/or condition contained in this Lease, Tenant shall have the right and option to extend the initial term of this Lease for two(2)terms of one (1)year each as provided below. The first extension term shall commence,if at all,on March 1,2023 and end at midnight(local time) on February 29, 2024 unless sooner terminated as hereinafter provided. Tenant shall exercise its right and option to extend the initial term of this Lease for a term of one(1)year, if at all,by delivering written notice of Tenant's exercise of its right and option to extend the Lease to Landlord not later than October 31, 2022. In the event Tenant shall deliver such written notice to Landlord when and as provided above,the initial term of this Lease shall then and thereupon be extended, subject to all of the terms, covenants and conditions contained in this Lease, until midnight (local time) on February 29, 2024 unless sooner terminated as hereinafter provided. In the event Tenant shall fail,for any reason,to deliver such written notice to Landlord on or before October 31, 2022 as hereinabove provided, the initial term of this Lease shall end at midnight (local time) on the Expiration Date unless sooner terminated as hereinafter provided. The second extension term shall commence, if at all, on March 1, 2024 and end at midnight (local time) on February 28, 2025 unless sooner terminated as hereinafter provided. Tenant shall exercise its right and option to extend the Lease for a second additional term of one(1)year, if at all,by delivering written notice of Tenant's exercise of its right and option to extend the Lease to Landlord not later than October 31, 2023. In the event Tenant shall deliver such written notice to Landlord when and as provided above, the term of this Lease shall then and thereupon be extended, subject to all of the terms,covenants and conditions contained in this Lease,until 1 4 midnight (local time) on February 28, 2025 unless sooner terminated as hereinafter provided. In the event Tenant shall fail, for any reason,to deliver such written notice to Landlord on or before October 31, 2023 as hereinabove provided,the term of this Lease shall end at midnight(local time) on February 29,2024 unless sooner terminated as hereinafter provided. When and as used in this Lease, "Lease Year" shall mean a twelve (12) month period beginning on March 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 extension of the initial term as provided above. 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 $45,600.00, payable in equal monthly installments in the amount of$3,800.00 each, in advance, commencing on March 16, 2020 (pro- rated for March, 2020), and continuing on the first day of each successive month thereafter during the Term. 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): (_) 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. Commencing on March 1,2021, Tenant shall pay to Landlord or Landlord's designated agent, without demand, deduction or set off, annual rent for the Premises in the amount of$46,968.00, payable in equal monthly installments in the amount of$3,914.00 each, in advance, commencing on March 1,2021 and continuing on the first day of each successive month thereafter. Commencing on March 1, 2022, Tenant shall pay to Landlord or Landlord's designated agent, without demand, deduction or set off, annual rent for the Premises in the amount of$48,377.04,payable in equal monthly installments in the amount of$4,031.42 each, in advance, commencing on March 1,2022 and continuing on the first day of each successive month thereafter. Commencing on March 1, 2023, Tenant shall pay to Landlord or Landlord's designated agent, without demand, deduction or set off, annual rent for the Premises in the amount of$49,828.32,payable in equal monthly installments in the amount of$4,152.36 each, in advance, commencing on March 1,2023 and continuing on the first day of each successive month thereafter. Commencing on March 1, 2024, Tenant shall pay to Landlord or Landlord's designated agent, without demand, deduction or set off, annual rent for the Premises in the amount of$51,323.16, payable in equal monthly installments in the amount of$4,276.93 each, in advance, commencing on March 1,2024 and continuing on the first day of each successive month thereafter for the remainder of the Term. 2 5 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): 1000 Corporate Drive,LLC 320 Executive Court 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:_. 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_. U 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 3 6 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): U 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. U 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. (X CHECK IF APPLICABLE. The Rules and Regulations attached hereto as Exhibit C 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 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 4 7 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 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 5 8 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 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 6 9 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. 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 7 10 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. 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 8 11 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 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. 9 12 (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: 1000 Corporate Drive,LLC c/o Sentry Property Management,LLC 960 Corporate Drive, Suite 404 Hillsborough,NC 27278 Email: Tori.Reid@summitde.net 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 contain(s) 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 10 13 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 attorn 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. 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 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. 43. DATE OF LEASE. When and as used herein, Date of Lease" shall mean the date as of which both Landlord and Tenant shall have executed this Lease as indicated below. 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. 11 14 IN WITNESS WHEREOF, each of the parties has caused this Lease to be executed by its duly authorized representative(s)on the day and year indicated below. LANDLORD: 1000 CORPORATE DRIVE,LLC, a North Carolina limited liability company By: Hillsborough Holdings,LLC, a North Carolina limited liability company,its Manager By: (Seal) James W. Parker,Jr.,Manager Date: TENANT: ORANGE COUNTY,NORTH CAROLINA, a body politic and corporate and a political subdivision of the State of North Carolina By: (Seal) County Manager Date: 12 15 Exhibit A Premises Layout/Floor Plan 13 16 Exhibit B Additional Provisions Tenant Upfit. Notwithstanding any provision in the Lease to the contrary, Tenant shall have the right, at Tenant's sole cost and expense, and with the prior consent of Landlord, which consent shall not be unreasonably withheld, to perform such repair and/or upfit of the Premises that Tenant may deem necessary or desirable, including,without limitation, a build out of the conference room space. HVAC System. Prior to the Commencement Date, Landlord shall, at its sole cost and expense, cause the HVAC system in the Premises to be inspected and shall ensure that it is in good working order. Signatures. The 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 I IA and Article 40 of North Carolina General Statute Chapter 66. Non-Appropriation. Landlord acknowledges that Tenant is a governmental entity, and the validity of the 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 the Lease, then the 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 the 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 the Lease, then the Lease shall automatically terminate without penalty to Tenant upon written notice to Landlord of such limitation or change in Tenant's legal authority. Landlord Tenant 14 17 Exhibit C RULES AND REGULATIONS "The Summit Office Campus" 1. The sidewalks, entrances, green areas and parking areas in front of each unit shall not be obstructed or used for any purpose other than ingress to and egress from the units. 2. All garbage refuse is to be deposited only in the facilities provided each building for that purpose. All recyclable refuse must be disposed of properly by each tenant. The City of Hillsborough does not allow any cardboard boxes of any kind to be disposed of in the dumpster, so we ask that each tenant carry all material to the Cardboard Container located at end of Corporate Drive. 3. Automobile parking spaces shall be used solely and exclusively for that purpose. They shall not be used for the storage of boats, inoperative vehicles, or any purpose other than parking facilities, as aforesaid. Tenant is provided with unassigned parking spaces. 4. Each Tenant shall keep his/her unit in a good state of preservation and cleanliness and shall not sweep or throw or permit to be swept or thrown therefrom, or from the doors or windows thereof, any dirt or other substance. 5. No radio or television aerial and or satellite dish shall be attached to or hung from the exterior of units without the prior written approval of the Manager of"The Summit"Office Campus. 6. Tenants shall not cause or permit any unusual or objectionable noise, lights or odors to be produced upon or to emanate from their units. There will not be any pets allowed on the premises without prior permission from the Property Manager. The only exception is if the animal is used for handicap purposes only. 7. Tenant shall not store or use any dangerous or hazardous chemical, substance or material on the leased premises, including but not limited to asbestos,toxic chemicals,radioactive materials,chemical waste, medical waste or pollutants. Tenant shall not release or discharge any dangerous or hazardous chemical, substance or material on the leased premises. In the event that the tenant causes or allows any environmental discharge or damage to the leased premises, tenant shall be fully responsible for all environmental clean-up expenses, attorneys' fees and other cost of compliance with applicable environmental laws and regulations. 8. These rules and regulations may be amended at any time and at the sole discretion of the Property Manager of"The Summit"Office Campus. Landlord Tenant 15