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2021-315 Arts Commission-Eno River Mill-Annual Rent
ORANGE COUNTY-DEPARTMENT USE ONLY Party/Vendor Name : Eno River Mill, LLC Party/Vendor Contact Person : Jocelyn Wells Contact Phone : 919 755 -2250 Party/Vendor Address : PO Box 12929 City Raleigh State : NC Zip : 27605 Department : Coun Manager Amount: 72 000 Purpose : Annual Rent Budget Code(s) : 37601020 - 580000 -71390 Vendor # 65919 (N/A if new vendor) Vendor is a BOCC consultant? Yes ❑ No ❑ Contract Type : (Check one) New ❑ Renewal ❑ Amendment ❑ Effective Date Approved by Board Yes ® No ❑ Agenda Date : 5400 2021 This agreement is approved as to technical form and content and I as Department Director affirmatively state work on this project has not been initiated prior to execution of the agreement : JOY Department Director ' s Signature Date : 5 Agreements for emergency services or r it are not subject to the above affirmation . If services re ated to this agreement have already begun or been completed please briefly describe the nature of the emergency condition that was addressed : Information Technologies (Applicable only to hardware/software purchases or related services) This agreement has been reviewed and is approved as to information technology content and specifications : Office of the Chief Information Officer Date : Risk Management This agreement is approved for sufficiency of insurance standards , specifications, and requirements : Office of the Risk Management Officer 01, woo Date . 511 C. Financial Services This instrument has been pre- audited in the in equired by the Local Government Budget and Fiscal Control Act : Office of the Chief Financial Officer Date . $ Legal Services This agreement is approved as to legal fo and suff ' cy : Office of the County y Attorne Date : Clerk to the Board Received for record retention : All Docusign contracts must be copied to Sherri Ingersoll upon completion : smgersoll@orangecountync . gov The following signature block is for har opies only a =not quired for Docusign contracts : Office of the Clerk to the Board Date . A LJ Revised 11 /19 i I LEASE AGREEMENT THIS LEASE is made as of the Effective Date by and between Eno River Mill, LLC , a North Carolina limited liability company ("Landlord") and Orange County, a political subdivision of the State of North Carolina, ("Tenant") . Upon the terms and conditions herei nafter set forth Landlord leases to Tenant, and Tenant leases from Landlord, the property referred to as the Demised Premises, all as follows . 1 . Overview. (a) Tenant ' s Notice Address : Orange County County Manager ' s Office j 300 W . Tryon Street Hillsborough, NC 27278 With a copy to : Katie Murray Arts Commission Director 405 Meadowlands Drive Hillsborough, NC 27278 (b) Landlord ' s Notice Address : Eno River Mill , LLC PO Box 12929 Raleigh, NC 27605 Attn : Jocelyn Wells (c) Demised Premises : Approximately 6 , 000 rentable square feet consisting of Suites 17A and 17B which are depicted on Exhibit A and to be known located on the ground floor of the Building, together with a nonexclusive right to use the Common Areas in accordance with the terms of this Lease . (d) Building : A combination of a three (3 ) story building known as the Spinning Room and a two (2) story building, known as the Card Room and with approximately 19 ,346 rentable square feet of ground floor space constructed on the Land as outlined in Exhibit Awn attached hereto . r (e) Land : That parcel of land described on Exhibit B attached hereto and having a street address of 437 Dimmocks Mill Road, Hillsborough, Orange County , North Carolina . (f) Property : The Land and the buildings having the address of 437 Dimmocks Mill Road, Hillsborough, NC 27217 . (g) Common Areas : Subject to this Lease , inclusive of the Rules and Regulations attached hereto (as the same may be amended and revised by Landlord), the areas within the Building and on the Property reserved for the common use and enjoyment of all tenants of the Building, including, but not limited to , corridors on multi-tenant floors , elevators, the first floor lobby, sidewalks, and the areas designated by Landlord for the parking of motor vehicles . (h) Term : The term of this Lease commences on the Effective Date and continues through the Rent Commencement Date and expiring, if not sooner terminated, at noon of the Expiration Date, unless renewed or extended to the extent provided in this Lease . OCAC Lease- 17A and 17B ( 1) Permitted Use : The Tenant shall use the Demised Premises for general office, classroom , and gallery purposes . (j ) Rent Commencement Date : The date on which possession of the Demised Premises is available to Tenant which date shall be the earlier of (1) June 1 , 2021 (the "Projected Rent Commencement Date") , or (ii) the date upon which the Tenant shall first occupy any part of the Demised Premises for any purpose other than preparing the same for the conduct of business . (k) Effective Date : May , 2021 , the date of this Lease . (1) Expiration Date : The date which is the last day of the calendar month in which the fifth ( 5th) anniversary date of the Rent Commencement Date occurs, provided, however, if the Rent Commencement Date is on the first day of any calendar month, then the Expiration Date is on the day immediately before the fifth ( 5th) anniversary date of the Rental Commencement Date . Assuming the Rent Commencement Date is June 1 , 2021 , the Expiration Date is May 31 , 2026 . I (m) Minimum Rent : The Minimum Rent payable during the first year of the Term of the Lease, commencing on the Rent Commencement Date, is the sum of $ 12 . 00 per Rentable Square Foot per annum , payable in equal , monthly installments . Rent will increase annually as follows . j r 4 START END ANNUAL MONTHLY E 6/ 1/ 2021 5/31/ 2022 $ 721000 . 00 $ 6, 000 . 00 - -- _6/ 1/ 2022- 5/31/ 2023 $ 73 , 800000 $ 6, 150 . 00 6/ 1/ 2023 5/31/2024 $ 75 , 645 . 00 y $ 61303 . 75 $ 6 6/ 1/ 2024 , f 5/31/2025 $ 77, 536913 ? ` 461 . 34 6/ 1/ 2025 5/31/2026 $ 79, 474 . 53 - $ 6, 622 . 88 (n) Rent : Minimum Rent, Additional Rent, and any and all additional sums of money payable f by Tenant to Landlord under the terms of this Lease . (o) Lease Year : Lease Year 1 is the period commencing on the Rent Commencement Date and ending on the date immediately preceding the one-year anniversary thereof, provided however, if the Rent Commencement Date occurs on a date other than the first day of a calendar month , then Lease Year 1 shall be the period beginning on the Rent Commencement Date and ending on the last day of the calendar month in which the first anniversary of the Rent Commencement Date occurs . Each Lease Year thereafter shall be a successive twelve calendar month period . (p) Additional Rent : All sums of money whatsoever other than Minimum Rent due and payable by Tenant to Landlord under this Lease, including without limitation, the Operative Expense Differential provided for in Exhibit D hereof. (q) Omitted . (r) Security Deposit : The sum of $ 6, 000 . 00 to be held and used in accordance with article 19 hereof. ( s ) Omitted . OCAC Lease Page 2 F (t) Omitted . (u) Fit-Up : Landlord will complete a turn-key fit-up consistent with Exhibit F , entitled Landlord Work . Tenant will contribute seventy thousand dollars and 00/ 100 toward the fit-up ( $ 70 , 000 . 00 ) . Tenant may pay its contribution in a lump sum payable on the rent commencement date, or it may pay its contribution as a component of Additional Rent, beginning on the rent commencement date in monthly installments of One thousand one hundred sixty- six and 66/ 110 ($ 1 , 166 . 66) per month . (v) Exhibits : The exhibits listed below are incorporated into and form a part of this Lease : Exhibit A : Description of Demised Premises Exhibit A. 1 : Description of Building Exhibit B : Description of Land Exhibit Co Rules and Regulations Exhibit D : Additional rent- Operating Expense-Pass Throughs . Exhibit E . Environmental Compliance Exhibit F : Landlord Work Exhibit G : Memorandum of Acceptance of Demised Premises Exhibit H : Option to Extend Term Exhibit I : Memorandum of Lease 2 . Demised Premises . In consideration of the payment of the Rent and the performance of the soossooss terms by Tenant contained in this Lease, Landlord hereby leases to Tenant, and Tenant leases from the Landlord, the Demised Premises , possession for which for purposes of the commencement of upfit or improvement by the Tenant in accordance with Exhibit F attached hereto , shall be delivered on the Effective Date . By execution of this Lease, Landlord and Tenant expressly acknowledge the accuracy and correctness of the measurement of the rentable square footage of the Demised Premises set forth above and further agree to be bound by same . 3 . Term . The term of this Lease shall be the Term ; provided, however, that Landlord shall deliver possession of the Demised Premises to Tenant on the Effective Date . The actual Rent Commencement Date and the Expiration Date shall be confirmed by Landlord and Tenant by execution of the Memorandum Of Acceptance of the Demised Premises , the form of which is attached hereto as Exhibit G, which shall be executed by Landlord and Tenant within 10 days of request therefor by Landlord and which constitutes an amendment of the Lease . If Landlord, for any reason whatsoever, cannot deliver possession of the Demised Premises to Tenant on Effective Date, this Lease shall not be void or voidable, no obligation of Tenant shall be affected thereby, and neither Landlord nor Landlord ' s agents shall be liable to Tenant for any loss or damage resulting therefrom ; provided, however, that in such event, the actual Rent Commencement Date , the Expiration Date, and all other dates affected thereby, shall be revised to conform to the date of delivery of the Demised Premises . 4 . Use. Tenant shall use the Demised Premises for the Permitted Use, but for none other, provided further, that in no event shall Tenant make use of the Demised Premises which is in violation of any governmental laws , rules or regulations whether now existing or hereafter enacted insofar as they might relate to Tenant ' s use and occupancy of the Demised Premises , nor may Tenant make any use of the Demised Premises not permitted by any restrictive covenants which apply to the Demised Premises , or which is or might constitute a nuisance or trespass, or which increases the fire or hazard insurance premiums (or makes such insurance unavailable to Landlord) on the Building . In the event of an increase OCAC Lease Page 3 in Landlord ' s fire or hazard insurance premiums which results from Tenant ' s use or occupancy of the Demised Premises , Tenant shall pay Landlord, on demand, the amount of such increase . 5 . Rent. All Rent (as hereinafter defined) payable by Tenant shall be without previous demand or notice therefor by Landlord, and without set off or deduction . The minimum rent (the "Minimum Rent") during the Term of this Lease is the sum set forth in paragraph 1 (m) and is payable on the Rent Commencement Date , and on the first day of each calendar month thereafter during the term of this Lease in the amounts as set forth in paragraph 1 (m) . Provided further, in addition, if the Rent Commencement Date is on a day other than the first day of a calendar month, Minimum Rent at the above rate until the end of that calendar month is to be prorated over the actual number of days in such partial calendar month . In addition to such remedies as may be provided under the default provisions of article 15 of this Lease and without waiving any such default, Landlord shall be entitled to (1) a late charge of 5 % of the amount of any Rent if not received by the fifth day after the date it is due and payable ; and ( ii) a charge of 5 % of the amount of any check given by Tenant not paid when first presented by Landlord . 6 . Additional Rent. Tenant shall pay as additional Rent such sums due and owing pursuant to Exhibit D which shall not exceed $ 10 , 000 per annum of or $ 833 . 33 per month throughout the initial term of the Lease . Additional rent shall cover Tenant ' s proportionate share of Operating Expenses as defined in Exhibit D . 7 . Services by Landlord and Utilities . (a) Landlord shall cause to be furnished to the Demised Premises in common with other tenants , during reasonable business hours , as determined by Landlord in its reasonable discretion, Monday through Friday (excluding national or state holidays) , the following services : water if available from city mains for drinking, lavatory and toilet purposes ; nonhazardous trash removal from dumpsters located in the parking lot in accordance with city schedules ; and heating and air conditioning for the reasonably comfortable use and occupancy of the Demised Premises , provided, however, heating and cooling conforming to any governmental regulation prescribing limitations thereon shall be deemed to comply with this service . Landlord shall have the right to enter and inspect the Demised Premises and all electrical devices therein from time to time during regular business hours or otherwise upon reasonable advance notice to Tenant . All additional costs resulting from Tenant ' s extraordinary usage of heating, air conditioning or electricity, such as with respect to an electrical or computer server room , if any , shall be paid by Tenant upon demand as Additional Rent for each month or portion thereof, but Tenant shall not install equipment with unusual demands for any of the foregoing without Landlord ' s prior written consent, which Landlord may withhold if it determines that in its opinion such equipment may not be safely used in the Demised Premises or that electrical service is not adequate therefor . If heat generating machines or equipment shall be used in the Demised Premises by Tenant which affect the temperature otherwise maintained by the heating and air conditioning system, Landlord shall have the right to install supplemental air conditioning units in the Demised Premises and the cost thereof, including the cost of installation and the cost of operation and maintenance thereof, shall be paid by Tenant upon demand by Landlord . i So long as Landlord acts reasonably and in good faith, there will be no abatement or reduction of Rent by reason of any of the foregoing services not being continuously provided to Tenant . Except in the event of Landlord ' s willful acts or gross negligence, Landlord shall not be liable to Tenant for any damage caused to Tenant and its property due to the Demised Premises, the Building, the Property or any Part or appurtenance thereof being improperly constructed or being or becoming out of repair, or arising from the leaking of gas , water, sewer or steam pipes , or from electricity . Tenant shall report immediately to Landlord any defective condition in or about the Demised Premises known to Tenant, and if such defect is not so re ported and such failure results in other damage , Tenant shall be liable able for same . Page 4 OCAC Lease k e in ood re air at its ex ense , the structural portions of the roof, p Landlord agrees to e g p P foundations , and exterior walls of the Building (exclusive of all glass and exterior doors) and underground pipes outside the exterior was of the building, if any, except repairs rendered necessary utility and sewer p by the acts or negligence of Tenant, or Tenant' s employees , guests , agents , customers , independent contractors or invitees, the repair of which shall be paid by the Tenant within 10 days of Landlord ' s written demand . Landlord also agrees to keep in good condition and repair and perform the periodic maintenance of the outside area, Common Areas and the roof membrane, at a cost to be a part of the Operating Expenses of the Building . Landlord shall be under no obligation to inspect the interior of the Demised Premises . (b) Electricity and natural gas service to the Demised Premises is to be separately metered . ide separate meters to measure Tenant ' s usage of water and Landlord may at its sole discretion prov sewerage in the Demised Premises . Tenant shall be solely responsible to the utility company or government agency for the payment of all separately metered electric, water, sewerage, gas and other utility service to the Demised Premises and shall pay for the installation, repair, and replacement of the separate meters as necessary (including, but not limited to tap on or access fees) . Landlord reserves the right to select on or more utility companies to exclusively provided electricity, water, sewer, and gas to the Building and each of its tenants . Any utilities not separately metered shall be a part of Operating Expenses . 8 . Tenant ' s Acceptance and Maintenance of Demised Premises . Upon acceptance of possession and commencement of Tenant ' s upfit of the Demised Premises , Tenant represent to Landlord that it has examined and inspected the Demised Premises, finds such to be as represented by Landlord and satisfactory for Tenant ' s intended use, which examination and findings constitute Tenant ' s acceptance "AS IS , WHERE IS , SUBJECT TO ALL FAULTS . " Landlord makes no representation or warranty as to the condition of the Demised Premises . Tenant shall maintain during the Term and shall deliver at the end of this Lease each and every part of the Demised Premises (including, but not limited to walls, carpets, doors , plumbing, electrical, HVAC) in good repair and condition, subject to Landlord ' s obligations under article 7 of this Lease . Tenant shall make at its sole cost and expense replacements or restorations in quality equivalent or better than the original work, as may be required to so maintain the same, ordinary wear and tear only excepted . i Notwithstanding anything herein to the contrary, Tenant shall make no structural or interior lc performed b n n work consent and a prior written co Y alteration s of the Demised Premises without Landlord ' sp Y P Tenant shall be done in a good and workmanlike manner, and so as not to disturb , inconvenience or interfere with other tenants or occupants of the Building . Tenant shall provide Landlord with at least 15 business days ' prior written notice of the commencement of any such alterations to the Demised Premises , which notice shall include a complete set of construction drawings . For any work performed by Tenant or its contractors, (1) Tenant shall not at any time permit any work to be performed on the Demised Premises except by duly licensed contractors or artisans , each of whom must carry general public liability insurance, certificates of which shall be furnished to Landlord prior to the commencement of any work; (ii) Tenant shall obtain such building or other permits as may be required by any governmental authority having jurisdiction thereof; (iii) if Tenant agrees for Landlord to perform Tenant' s requested alterations , the cost thereof shall include a construction supervision fee of 5 % of the cost of such construction alterations ; (iv) if Tenant elects to have the alterations performed by a licensed contractor and not by Landlord, Tenant agrees to pay to Landlord a supervision fee of 5 % of the cost of such construction or alterations to protect Landlord ' s investment in the Building , and (v ) unless Landlord requires otherwise, Tenant shall not remove such alterations or improvements from the Demised Premises at the expiration or termination of the Lease, but if Landlord shall so require , then Tenant shall remove same at Tenant' s sole cost and expense and repair any damage to the Demised Premises caused by such removal . Tenant shall keep the Demised Premises and the Property free from any liens arising out of any OCAC Lease Page 5 work performed, materials ordered, or obligations incurred by or on behalf of Tenant, and Tenant hereby agrees to indemnify and hold Landlord and its agents harmless from any liability, costs or expenses (including, but not limited to , reasonable attorneys ' fees) for such liens . Tenant shall cause any such lien imposed to be released of record by payment or bonding upon terms acceptable to Landlord within 10 days after a written request by Landlord therefor . If Tenant fails to cause the release or bonding of any lien within the prescribed 10 - day period, then Landlord may do so at Tenant ' s expense, including costs and reasonable attorney ' s fees , which expenses shall be due as Additional Rent hereunder . Notwithstanding anything to the contrary set forth above in this article 8 , if Tenant does not perform its maintenance obligations in a timely manner as set forth in this Lease and diligently and continuously pursue completion of unfulfilled maintenance obligations, then after reasonable notice of same to Tenant and Tenant ' s failure to perform its maintenance obligations within 30 days of such notice , Landlord shall have the right, but not the obligation, to perform such maintenance, and any amounts so expended by Landlord shall be paid by Tenant to Landlord promptly after demand as Additional Rent with interest at the legal rate from the date of expenditure through the date paid . 9 . Casualty Loss ; Destruction of Demised Premises and/or Building . If the Demised Premises or the Building, as the case may be, is damaged or destroyed by fire or other casualty to the extent of 50 % or more of the value thereof in the reasonable opinion of Landlord, and not resulting from the act or omission of Tenant, then either Landlord, the Mortgagee ( as defined in article 12 ), or Tenant may, by da s after the date of fire or other casual terminate this Lease written notice given not later than 60 y ty� effective to the date of such fire or other casualty . If the Lease is not so terminated as provided in this article 9 , then subject to and to the extent of available insurance proceeds, Landlord shall proceed with diligence to rebuild and restore the Building or the Demised Premises (exclusive of Tenant ' s property) , as g g the case may be, so damaged or destroyed substantially to the condition thereof existing immediately prior to such damage or destruction within 280 days after the date of such fire or other casualty (exclusive of Tenant Delay and Force Majeure Delay) , in which event the Term of this Lease shall not terminate, but any Minimum Rent and Additional Rent payable under article 6 and Exhibit D hereof shall abate on a per diem basis while the Demised Premises remain untenantable . If, subject to the sufficiency of insurance proceeds, Landlord shall fail to complete the rebuilding and restoration of the Building and/or the Demised Premises such that a certificate of occupancy (temporary or final) shall not have been issued within the aforesaid 280 - day period, exclusive of Force Majeure Delay and Tenant Delay, then either Landlord or Tenant, by written notice to the other given within 30 days next following the last day of the aforesaid 280 - day period, may terminate this Lease retroactive to the date of such fire or casualty, and any Minimum Rent and Additional Rent payable under article 6 and Exhibit D hereof shall be abated or apportioned ( as the case may be) on a per diem basis and paid to the date of such fire or casualty . Termination of the Lease by Tenant shall be Tenant ' s sole remedy for Landlord ' s failure to rebuild or restore the Demised Premises and/or Building under this article 9 . If the Demised Premises or the Building, as the case may be, is damaged by fire or other casualty to the extent of less than 50% of the value thereof in the reasonable opinion of Landlord, and not resulting from the act or omission of Tenant, then Landlord shall, except as otherwise provided herein, proceed with diligence to rebuild and restore the Building and/or the Demised Premises (exclusive of Tenant ' s property) , as the case may be, so damaged substantially to the condition thereof existing immediately prior to such damage or destruction . Notwithstanding the foregoing, if by reason of such occurrence, (i) the Building and/or the Demised Premises is damaged in whole or in part as a result of a risk which is not covered by insurance policies in force and carried by Landlord; or (ii) Mortgagee shall not permit a sufficient amount of the insurance proceeds to be used for restoration purposes ; or (iii) the Building and/or the Demised Premises is damaged during the final twelve month period of this Lease (including any properly exercised extensions and renewals , if any , or ( iv) Landlord does not reasonably believe that the rebuilding and/or restoration can be completed within 200 days after the occurrence of such casualty, Page 6 OCAC Lease f �3 then in any event, Landlord may cancel this Lease by written notice of cancellation given to Tenant within 60 days after the date of such casualty, and thereupon this Lease shall terminate . If such cancellation notice is not given by Landlord within said 60 - day period, then Landlord shall repair and restore the Building and/or the Demised Premises as provided above . In addition, Tenant may also terminate this Lease , by written notice to Landlord at any time between the 200th and 230th day (exclusive of Force Majeure Delay and Tenant Delay) after the occurrence of any such casualty if Landlord shall fail to complete the rebuilding and restoration of the Building and/or the Demised Premises such that a certificate of occupancy (temporary or final) shall not have been issued prior to the issuance of the notice of termination by Tenant . Termination of the Lease by Tenant shall be Tenant ' s sole remedy for Landlord' s failure to rebuild or restore the Demised Premises and/or Building under this article 9 hereof. Upon termination of this Lease , Tenant ' s liability for Rent and other charges reserved hereunder and accruing after the date of such fire or casualty shall cease as of the effective date of the termination of this Lease . Except as hereafter provided to the contrary, if by reason of such casualty, the Demised Premises is rendered wholly untenantable, Minimum Rent and Additional Rent payable under article 6 and Exhibit j D_ herein shall be fully abated, or if only partially damaged, such Minimum Rent and Additional Rent payable under article 6 and Exhibit D herein shall be abated proportionately as to that portion of the Demised Premises rendered untenantable in either event (unless the Lease is terminated, as aforesaid) from the date of such fire or casualty until 15 days after notice by Landlord to Tenant that the Demised Premises have been substantially restored or until Tenant has resumed its business operations in the Demised Premises , whichever occurs sooner . Tenant shall continue the operation of Tenant ' s business in the Demised Premises or any part thereof not so damaged during any such period to the extent reasonably practicable from the standpoint of prudent business management, and, except for such abatement of Rent and other charges as hereinabove set forth, nothing herein contained shall be construed to abate Tenant' s obligations hereunder . C Notwithstanding any other provision of this Lease to the contrary , if the Building or the Demised Premises are destroyed or damaged by the negligence or willful act of Tenant, its agents , contractors, invitees , and employees , Landlord shall have no obligation to Tenant of any kind whatsoever with respect to any duty to rebuild, restore or repair the Building or the Demised Premises , and Landlord may proceed to restore such damage without prejudice to its rights to make a claim against Tenant for the full cost of I' such restoration or repair to the Demised Premises or the Building . Landlord, at all times , reserves the right to recover any damages suffered as a result of Tenant ' s negligent or intentional acts . Except for the abatement of the Minimum Rent and other charges hereinabove set forth, Tenant shall not be entitled to, and hereby waives , all claims against Landlord for any compensation or damage for loss of use of the "! whole or any part of the Demised Premises and/or Building, and for any inconvenience or annoyance occasioned by any such casualty, damage , destruction, repair or restoration . ' For purposes of this Lease, the terms ( 1 ) " Tenant Delay " means an event of delay due as the c result of the conduct or fault of the Tenant, its contractors , employees , or agents , including, without limitation, Tenant ' s failure to furnish information or items in accordance with Exhibit F , Tenant ' s request for materials , finishes or installations other than Landlord ' s building standard or Tenant ' s initial plans and specifications of which Landlord gives Tenant written notice, or other acts or omissions constituting negligence or willful misconduct by Tenant, its contractors, employees or agents ; and (ii) "Force Majeure Delay" means a delay (other than with respect to a delay in the payment of money) due to an act of God, public enemy, riot, strike, insurrection, war, adverse order of governmental authority, fire or other j casualty , extreme , unusual or adverse weather conditions , or any other similar material cause beyond Landlord ' s or Tenant ' s , as the case may be, reasonable control . Page 7 OCAC Lease o 10 . Assignment - Sublease . Tenant may not assign, transfer, mortgage or encumber this Lease , and may not sublet all of the Demised Premises without the written consent of Landlord first had and obtained . Tenant may , however sublet the portions of the Demised Premises to multiple individuals and/or entities . Any assignment or sublease to which Landlord may consent (one consent not being any basis to contend that Landlord should consent to a further change) shall not relieve Tenant of all of its obligations hereunder . For the purpose of this article 10 , the word " assignment" includes the following : if Tenant is a partnership or limited liability company, the withdrawal or change, whether voluntary, involuntary or by operation of law, of partners or members o*ning 30 % or more of the partnership or the limited liability company , or the dissolution thereof; or if Tenant consists of more than one person, an assignment, whether voluntary, involuntary or by operation of law, by one persons or, if Tenant is a corporation, any dissolution or reorganization of Tenant, or the sale or other transfer of a controlling percentage of capital stock of Tenant, or the sale of excess of 50 % in value of the assets of Tenant . The phrase "controlling percentage" means the ownership of, and the right to vote, stock possessing at least 50 % of the total combined voting power of all classes of Tenant ' s capital stock issued, outstanding and entitled to vote for the election of directors, or such lesser percentage as is required to provide actual control over the affairs of the corporation . Acceptance of Rent by Landlord after any non-permitted assignment shall not constitute approval thereof by Landlord . In no event shall this Lease be assignable by operation of law, and Tenant ' s rights hereunder may not become, and shall not be listed by Tenant as an asset under any bankruptcy, insolvency or reorganization proceedings . Tenant is not, may not become , and shall never represent itself to be an agent of Landlord, and Tenant expressly recognizes that Landlord ' s title is paramount, and that it can do nothing to affect or impair Landlord ' s title other than the creation of Tenant ' s leasehold interest arising under this Lease . If this Lease shall be assigned or the Demised Premises or any portion thereof sublet by Tenant at a rental that exceeds all rentals to be paid to Landlord hereunder attributable to the Demised Premises or portion thereof so assigned or sublet, then and in such event any such excess shall be paid over to Landlord by Tenant . Landlord reserves the right to charge Tenant for any actual, out- of-pocket costs , such as those of attorneys or other consultants , for the preparation and review of documents , for its review and approval or disapproval of Tenant ' s assignment or sublease request . 11 . Tenant ' s Compliance ; Insurance Requirements ; Waiver of Subrogation . Tenant shall comply with all applicable laws , ordinances and regulations affecting the Demised Premises , now existing or hereafter adopted, including general rules and regulations for tenants (a copy of the present rules being j attached as Exhibit C) as may be developed from time to time by Landlord and delivered to Tenant or posted on the Demised Premises . Throughout the term of this Lease, Tenant at its sole cost and expense shall keep or cause to be kept for the mutual benefit of Landlord, Landlord ' s managing agent, if applicable, and Tenant the following insurance : ( i) commercial general liability insurance naming Landlord and Landlord ' s managing agent, if applicable , as additional insureds against any and all claims for bodily injury and property damage occurring in, or about or arising out of Tenant ' s , Tenant ' s authorized representatives , and anyone for whom Tenant is responsible arising out of and in connection with the Demised Premises, with combined single limit coverage of at least $ 1 , 000 , 000 . 00 per occurrence and $ 2 , 000 , 000 aggregate limit (and if Tenant has other locations that it owns or leases , the policy shall include an aggregate limit per location endorsement) , and which shall insure Tenant ' s performance of the indemnity provisions contained herein, provided in no event shall the limits of such insurance be considered as limiting the liability of Tenant under this Lease ; (ii) personal property insurance insuring all equipment, trade fixtures, r in the Demised Premises for perils covered by the inventory, fixtures and personal property located ono P causes of loss- special form (all risk) , such insurance to be written on a replacement cost basis in an amount equal to full replacement value of the aggregate of the foregoing property , (iii) workers ' compensation insurance in accordance with statutory law and employer ' s liability insurance with a limit i Page 8 OCAC Lease of not less than $ 100 , 000 per employee and $ 500 , 000 per occurrence ; and ( iv) such other insurance as required by law . The policies required to be maintained by Tenant shall be with companies rated A-XIII or better in the most current issue of Best ' s Insurance Reports (or if Best ' s ratings are changed or discontinued, the parties shall agree to a comparable method of rating insurance companies) and which are licensed to do business in the state of North Carolina . Any deductible amounts under any insurance policies required under this article 11 shall not exceed $ 10 , 000 . Landlord annually may require the limits of such policies to be increased if the coverage is insufficient based upon insurance, then carried by imilarly situated . Tenant shall neither have nor make any claim against Landlord for comparable tenants s any loss or damage to any personal property of Tenant or its employees , agents or contractors , regardless of the cause thereof. The proceeds from any such policies covering personal property shall be used by Tenant for the replacement of Tenant" personal property . Tenant shall have the right to provide insurance coverage which it is obligated to carry pursuant to the terms hereof in a blanket policy, provided such blanket policy expressly affords coverage to the Demised Premises and to Landlord and its managing agent, if applicable, as required by this Lease . l Prior to taking possession of the Demised Premises and thereafter at least 10 days prior to the renewal dates thereof, Tenant shall deliver to Landlord copies of original policies or satisfactory certificates thereof. All such policies shall be non- assessable and shall contain language , to the extent obtainable, that (a) any loss shall be payable notwithstanding any act or negligence of Landlord or Tenant that might otherwise result in forfeiture of the insurance, (b) that the policies are primary and non- contributing with any insurance that Landlord may carry, and (c) that they cannot be canceled or changed except after 3 0 days ' notice to Landlord . Anything in this Lease to the contrary notwithstanding, Landlord releases , and waives unto Tenant (including all partners , stockholders , officers , directors , employees , and agents thereof) , its successors and assigns , and Tenant releases and waives unto Landlord ( including all partners , stockholders, officers , directors , employees and agents thereof), its successors and assigns , all rights to claim damages for any injury, loss , cost, or damage to persons or to the Demised Premises or the Property which is occasioned by fire, explosion, accident, occurrence or condition in, on or about the Demised Premises or the Property or any other casualty, as long as and to the extent of the amount of which injury, loss, cost or damage has been paid either to Landlord, Tenant, or any other person, firm or corporation, under the terms of any fire , extended coverage, public liability or other policy of insurance, and to the extent such releases or waivers are permitted under applicable law . All policies of insurance carried or maintained pursuant to this Lease shall contain or be endorsed to contain a provision whereby the insurer waives all rights of subrogation against either Tenant or Landlord, as the case may be, provided such a provision shall be obtainable . If insurance policies which such waiver of subrogation provision shall not be obtainable, then the provisions relating to waiver of subrogation as contained in this article 11 shall have no effect during such time as insurance policies with a waiver of subrogation shall not be obtainable . If any provision relating to a waiver of subrogation as set forth in this article I shall contravene any present or future law with respect to exculpatory agreements , the liability of the party affected shall be deemed not released but shall be secondary to the other' s insurer . To the extent authorized by North Carolina law Tenant shall indemnify and hold Landlord harmless from and against any and all claims arising out of (a) Tenant ' s use of the Demised Premises or any part thereof, (b) any activity, work, or other thing done, permitted or suffered by Tenant in or about the Demised Premises or the Property, or any part thereof, (c) any breach or default by Tenant in the j performance of any of its obligations under this Lease , or (d) any act or negligence of Tenant, or any officer, agent, employee , contractor, servant, invitee or guest of Tenants and in each case from and against any and all damages , losses , liabilities , costs and expenses (including reasonable attorneys ' fees at all tribunal levels) arising in connection with any such claim or claims as described in (a) through (d) above, or any action brought thereon . Tenant assumes all risk of damage or loss to its property or injury or death R i Page 9 OCAC Lease i - I to persons in, on, or about the Demised Premises , the Building or the Property, from all causes except those for which the law imposes liability on Landlord regardless of any attempted waiver thereof, and Tenant hereby waives such claims in respect thereof against Landlord . The provisions of this paragraph shall survive the expiration or termination of this Lease . 12 . Subordination ; Attornment • Landlord Financing . Tenant agrees that this Lease will either be subordinate or superior to any mortgage or deed of trust heretofore or hereafter executed by Landlord covering the Demised Premises , depending on the requirements of such mortgagee or beneficiary of such deed of trust (collectively, "Mortgagee") . Upon request, Tenant will execute such agreement(s) making this Lease superior or subordinate as the Mortgagee may request, and will agree to attorn to such Mortgagee provided the Mortgagee agrees not to disturb Tenant ' s possession hereunder so long as Tenant is in compliance with this Lease and provided that such non- disturbance agreement shall recite that it shall extend to any successor- in- interest to Mortgagee including, but not limited to , any purchaser at a judicial foreclosure or a foreclosure sale under power of sale contained in the deed of trust or mortgage . Landlord consents to Tenant ' s execution of Landlord ' s Mortgagee ' s subordination, attornment and non- disturbance agreement, and to be bound by the provisions thereof. Further, Tenant agrees to execute within 10 days of request therefor, and as often as requested, estoppel certificates setting forth the facts with respect to date of occupancy, expiration date of this Lease, the amount of rent due and date to which rent is paid, whether or not it has any defense or offsets to the enforcement of this Lease or knowledge of any default or breach by Landlord, that this Lease is in full force and effect except as to any modifications or amendments , copies of which Tenant shall attach to such estoppel certificate , and any other facts reasonably requested . If in connection with financing by Landlord of the Property, Mortgagee shall request Tenant to execute reasonable modifications of this Lease as a condition to such financing, Tenant will not unreasonably withhold, delay or defer its consent thereto , provided that such modifications do not increase the monetary obligations of Tenant hereunder, extend or reduce the term of this Lease, or adversely affect to any substantial extent the leasehold interest hereby created . Subject to the foregoing, Tenant agrees, not later than 20 days after demand, and without cost, to execute such instruments that may be required by Landlord ' s Mortgagee or lender . Tenant agrees to give any Mortgagee which has provided Tenant with an address pursuant to article 20 hereof notice of and a reasonable opportunity (which in no event shall be less than 30 days after written notice thereof as delivered to such Mortgagee as provided herein) to cure any Landlord default hereunder ; and Tenant agrees to accept such cure effected by such Mortgagee . No termination of this Lease by Tenant shall be effective until such notice has been given and the cure period has expired without the default by Landlord having been cured . Further, Tenant agrees to permit such Mortgagee , lender or other purchaser at any foreclosure sale, and their respective successors and assigns , on acquiring Landlord ' s interest in the Demised Premises and the Lease, to become substitute landlord hereunder, with liability only for such landlord obligations as accrue after Landlord' s interest is so acquired. Tenant agrees to attorn to any successor landlord in accordance with the provisions hereof. 13 . Signs . Tenant may not erect, install or display any sign or advertising material upon the Property, Building exterior, Demised Premises , or the walls thereof, or in any window therein, without the prior written consent of the Landlord . Landlord shall furnish, install and maintain a building directory at a convenient location in the lobby listing the name of Tenant and the room number of Tenant ' s entrance office . At such entrance area Tenant may install a directory of the occupants/sublessees . Landlord must approve of any sign before it is installed and will not unreasonably delay approval . 14 . Access to Premises . Landlord shall have the right, either itself or through its authorized agents, to enter the Demised Premises during regular business hours or, upon reasonable advance notice , at all OCAC Lease Page 10 i r reasonable times (1) to examine the same, (ii) to show it to prospective tenants for other spaces in the Building, (iii) to show it to prospective tenants for the Demised Premises if within 180 days of the Expiration Date (no option to extend having been exercised or available), ( iv) to allow inspection by Mortgagees, (v) to show it to prospective purchasers of the Building; and (vi) to make such repairs , alterations or changes as Landlord deems necessary . Tenant, its agents , employees , invitees , and guests, shall have the right of ingress and egress to the Common Areas , provided Landlord by reasonable regulation may control such access for the comfort, convenience and protection of all tenants and users of the Building . 15 . Default. If Tenant ( 1) fails to pay any Rent or installment thereof as provided in this Lease when due and such failure continues for 5 days after written notice from Landlord ; provided however, Tenant shall not be entitled to more than 2 notices of a failure to pay in any 12 month period, and thereafter, Tenant shall be in default if Tenant fails to pay any Rent or installment thereof as provided in this Lease within 5 days of the due date thereof; (ii) breaches any other agreement or obligation herein set forth and such breach is not cured within 15 days of written notice from Landlord; ( ill) files (or has filed against it any petition or action for relief under any creditor' s law (including bankruptcy, reorganization, or similar ) becomes insolvent, makes any transfer in fraud of creditors, actions), either in state or federal court; ( iv has a receiver appointed for its assets , or makes an assignment for benefit of creditors ; (v) fails to timely deliver the estoppel certificate described in article 12 hereof; or (vi) vacates , abandons or ceases to conduct business at the Demised Premises , then in any event, Tenant shall be in default hereunder and subject to an Event of Default . Upon the occurrence of an Event of Default, Landlord shall, without any further notice or demand, in addition to , and not in limitation of, any other remedy permitted by North Carolina law or this Lease, have the option to do any one or more of the following : (a) Terminate this Lease, in which event Tenant shall immediately surrender the Demised Premises to Landlord in good condition and repair, reasonable wear and tear excepted . Should Tenant fail to so surrender the Demised Premises , Landlord may, without prejudice to any other remedy available, but pursuant to any required legal process, re- enter and take possession of the Demised Premises with or without prior notice and remove Tenant or anyone occupying the Demised Premises and all property of such occupants from the Demised Premises , which property may be removed and ilding in which the Demised Premises are situated, or in any other stored in any other place in the Bu place , for the account of, at the expense and risk of Tenant . Tenant waives all claims for damages which k may be caused by Landlord ' s re- entry and taking possession of the Demised Premises or removing or storing the occupant ' s furniture and property . Tenant shall save Landlord harmless from any loss , fees , costs or damages and expenses (including reasonable attorneys ' fees) suffered by Landlord because of any termination and re- entry . No re- entry shall be considered or construed to be an illegal forcible entry . (b) Without terminating this Lease, declare the entire amount of all Rent which would have become due and payable during the remainder of this Term to be due and payable immediately discounted by the prime rate of interest as reported in the Wall Street Journal on the date of the declaration of the acceleration of Rent, in which event Tenant agrees to pay the same to Landlord immediately . This payment shall constitute payment in advance of the Rent stipulated for the remainder Y pY pY of the Term . Acceptance by Landlord of the payment of this Rent shall not constitute a cure or waiver for non- a ment of n subsequent default other than an existing defaultp y of any then- existing default or any q g Rent . (c) Enter upon and take possession of the Demised Premises , without terminating this Lease and without being liable to prosecution or any claims for damages . Landlord may then relet all or any OCAC Lease Page 11 portion of the Demised Premises for any term or terms and at any rental or rentals and upon any other terms and conditions as Landlord, in its sole discretion, may deem advisable , with the right to make alterations and repairs to the Demised Premises . In the event of any reletting, rentals received by Landlord from reletting shall be applied : first, to the payment of any indebtedness , other than Rent, due from Tenant to Landlord ; second, to the payment of all expenses of Landlord in repairing, restoring or altering the Demised Premises for reletting, together with leasing fees and all other expenses in seeking and obtaining a new tenant, the unamortized portion of Landlord' s paid allowance for Tenant up-fit and other previously paid Tenant costs, the unamortized portion of any up- fit costs paid on account of this Lease by Landlord, the unamortized portion of any brokerage fees for the unexpired Lease Term , and any other damages and costs suffered by Landlord except as expressly provided; third, to the payment of the Rent due and unpaid ; and the residue, if any, shall be held by Landlord and applied in payment of future Rent as the same may be due and payable . Should rentals received from reletting during any month and applied to the Rent be less than the Rent reserved hereunder, then Tenant shall immediately pay any deficiency to Landlord . Deficiencies shall be calculated and paid monthly . Should rentals received from reletting during any month and applied to the Rent be greater than the Rent reserved hereunder, the entire amount shall belong to Landlord free of any claim of Tenant thereto . No re- entry on or taking possession of the Premises by Landlord shall be construed as an election on its part to terminate this Lease unless either a written notice of this intention is given to Tenant . (d) Notwithstanding any re- letting without termination, Landlord may at any time elect to terminate this Lease for any previous Event of Default . Should Landlord at any time terminate this Lease for any Event of Default, in addition to any other remedy it may have, Landlord may recover from Tenant all damages it may incur by reason of any Event of Default . Landlord ' s recovery shall include the cost of recovering the Demised Premises , legal fees , and any and all past- due amounts owing under the Lease . (e) Upon failure by Tenant to pay the Rent, to make distress, and upon such distress, this tenancy, at the option of Landlord, shall terminate, and the Landlord shall have the rights set forth above . (f) Make such payment or do such act that Tenant has failed but is required to do under this Lease, and the expenses of Landlord thereof, shall constitute Additional Rent hereunder due and payable by Tenant within 10 days of demand therefor by Landlord . (g) Without obtaining any court authorization, lock up the Demised Premises and deny Tenant access thereto . Landlord ' s reasonable attorneys ' fees in pursuing any of the foregoing remedies , or in collecting any Rent due from Tenant hereunder, shall be paid by Tenant, which fees as to Rent collected shall be deemed to be 15 % of the amount of such Rent or other sum due from Tenant . All rights and remedies of Landlord are cumulative, and the exercise of anyone shall not be an election excluding Landlord at any other time from exercise of a different or inconsistent remedy . No waiver by Landlord of any covenant or condition shall be deemed to imply or constitute a further waiver of the same at a later time, and acceptance of Rent by Landlord even with knowledge of a default by Tenant shall not constitute a waiver of such default . An election by Landlord to terminate this Lease shall only be deemed to occur upon the express , written election by Landlord to do so . 16 . Property of Tenant. To the extent required by law Tenant shall timely pay any and all taxes levied or assessed against or upon Tenant ' s furnishings, equipment, trade fixtures , furniture, inventory, leasehold improvements and personal property located in the Demised Premises ( collectively, " Tenant Property") . Tenant (if not in default hereunder), prior to the Expiration Date , may remove all Tenant i OCAC Lease Page 12 I Property which it has placed in the Demised Premises provided Tenant repairs all damages caused by such removal . If Tenant does not remove Tenant Property from the Demised Premises within 5 days after expiration or termination (for whatever cause) of this Lease, such property (other than that containing radioactive, biologically active or other hazardous substances or in shall be deemed conclusively abandoned by Tenant, and Landlord may dispose of the same in whatever manner Landlord may elect . IT Eminent Domain . If all of the Demised Premises , or such part thereof as will make the same unusable for the purposes contemplated by this Lease, be taken under the power of eminent domain (or a conveyance in lieu thereof), then this Lease shall terminate as of the date possession is taken by the condemnor, and Rent shall be adjusted between Landlord and Tenant as of such date . If only a portion of the Demised Premises are taken and Tenant can continue use of the remainder, then this Lease will not terminate, but Rent shall abate in a just and proportionate amount to the loss of use occasioned by the taking . Tenant shall have no right or claim to any part of the award made to or received by Landlord for any taking ; provided, however, that Tenant shall not be prevented from making a claim against the condemning party (but not against Landlord) for any moving expenses , loss of profits, or taking of Tenant Property (other than its leasehold estate) to which Tenant may be entitled provided such claim does not reduce the award otherwise payable or due Landlord . 18 . Quiet Enjoyment. If Tenant promptly and punctually complies with each of its obligations hereunder, it shall, subject to the terms of this Lease, peacefully have and enjoy the possession of the Demised Premises during the term hereof, provided that no action of Landlord, which does not impair Tenant ' s normal business , in working in other space in the Building, or in repairing or restoring the Demised Premises , shall be deemed a breach of this covenant, giving Tenant any right to modify this Lease either as to term , Rent payable, or other obligations to be performed . 19 . Security Deposit. Landlord hereby acknowledges receipt from Tenant the sum set forth in paragraph l (r) hereof, which sum Landlord shall retain as security for the performance by Tenant of each of its obligations hereunder . If Tenant fails at any time to perform its obligations , Landlord may at its option apply said deposit, or so much thereof as is required, to cure Tenant ' s default, but if prior to the termination of this Lease , Landlord depletes said deposit in whole or in part, Tenant shall immediately restore the amount so used by Landlord . This deposit shall not bear interest for the benefit of Tenant and unless Landlord uses the same to cure a default of Tenant, or to restore the Demised Premises to the condition that Tenant is required to leave them at the conclusion of the Term . If Tenant shall not be in default hereunder, Landlord shall within 30 days of the termination or expiration of this Lease refund to Tenant so much of the deposit as it continues to hold . 20 . Notices . Any notice which Landlord or Tenant is required or desires to give to the other shall be deemed sufficiently given or rendered if in writing, either personally via hand delivery or sent by United States Postal System certified mail, postage or fees prepaid; or sent by recognized overnight courier ( such as Fed Ex or UPS ) for next business day delivery to the notice addresses set forth in article 1 or to such other notice address as such party shall render to the other at least 10 days prior . All such notices or communications shall be deemed delivered, given, and received upon actual receipt (by personal delivery) or when the return receipt or receipt therefor is signed, or refusal to accept the mailing by the addressee as noted thereon by the postal authority or recognized overnight courier, not in any event to exceed 3 j business days from the date when the notice was deposited for delivery regardless of the refusal to accept delivery or inability to deliver due to the recipient having failed to keep the sender informed of the recipient' s current address . Any notice required to be given to a Mortgagee hereunder shall only be required to be given by Tenant to the extent that Tenant itself has received actual notice of the address of Mortgagee . Notwithstanding anything herein to the contrary, notices may be given on behalf of any party by such party ' s legal counsel , and if such notice is to be received at 2 or more addresses as set forth I 4 4 G i Page 13 OCAC Lease C c i above, then the receipt or deemed receipt by any one addressee shall be deemed effective notice to such party for all purposes of this article . 2 L Surrender ; Holding Over. Tenant will vacate and deliver up the Demised Premises and all improvements , additions and alterations thereto (except Tenant Property installed by Tenant at its expense which are permitted to be removed by Tenant) at the expiration or sooner termination of this Lease, in a good, clean and rentable condition as the same were at the beginning of Tenant' s occupancy, excepting ordinary wear and tear . If Tenant shall hold over after the expiration or termination of this Lease, such holding over shall not be deemed to be a renewal of this Lease, but shall be deemed to create a tenancy- at- sufferance and by such holding over, Tenant shall be deemed to have agreed to be bound by all of the terms and conditions of this Lease except those as to the term hereof and except that during such tenancy- at- sufferance, Tenant shall pay to Landlord Rent at the rate equal to 150% of that otherwise provided for in this Lease . The increased Rent during such holding over is intended to partially compensate Landlord for losses, damages and expenses , including frustrating and delaying Landlord' s ability to secure a replacement tenant . In n lord harmless from an and all loss and damages , direct addition, Tenant expressly agrees to hold Lad y g and consequential , which Landlord may suffer in defense of claims by parties against Landlord arising out I of the holding over by Tenant, including, without limitation, reasonable attorneys ' fees in connection with- Landlord ' s defense of such claims . Acceptance of all or any portion of Rent by Landlord subsequent to the Expiration Date or the termination of this Lease shall not constitute Landlord ' s consent to a wrongful holding over . Landlord shall have the right to apply all payments received after the Expiration Date toward payment for use and occupancy of the Demised Premises subsequent to the Expiration Date and toward any other sums owed by Tenant to Landlord . Landlord, at its option, may forthwith re- enter and take possession of the Demised Premises without process or by any legal process or force . 22 . Brokers ' Commissions . Tenant represents and warrants that it has not had dealings with any real estate broker, finder or other person, with respect to this Lease in any manner except as set forth in section l (r) hereof. Landlord ' s total liability for brokerage commissions in connection with the execution of this Lease is limited to and calculated pursuant to the agreement between Landlord and Landlord ' s broker set forth in section l (r) hereof. Tenant shall indemnify and hold Landlord harmless from any and ' all damages resulting from any claims that may be asserted against Landlord by any other broker, finder or other person (including, without limitation, any substitute or replacement broker claiming to have been engaged by Tenant) , claiming to have dealt with Tenant in connection with the negotiation and/or execution of this Lease . The provisions of this paragraph shall survive the termination or expiration of this Lease . I 23 . Indemnification . To the extent authorized by North Carolina law Tenant shall indemnify and hold harmless Landlord, its partners, members , managers , stockholders , officers , directors , employees , and agents thereof, and their respective successors and assigns , from and against any and all liabilities , E judgments , demands, causes of action, claims , losses , damages , costs and expenses , including reasonable 1 arising out of the use, occupancy, conduct, operation, or management of the attorneys ' fees and costs , Demised Premises by, or the willful misconduct or negligence of, Tenant, its officers, contractors , licensees , agents , servants, employees , guests , invitees or visitors in or about the Property . Tenant assumes all risk of damage or loss to its property or injury or death to persons in, on or about the Demised Premises , from all causes except those resulting from Landlord' s negligence or willful misconduct . The provisions of this paragraph shall survive the termination or expiration of this Lease . 24 . Landlord ' s Liability. Tenant agrees that Landlord shall not be liable for injury to Tenant ' s business or any loss of income therefrom or for any damage to any goods , wares , merchandise, or other Tenant Property, Tenant ' s contractors , agents , employees , invitees , customers or any other person in or 4 1% Page 14 OCAC Lease i d about the Property or the Demised Premises unless such damage or loss is caused during the term of this Lease by the gross negligence or willful misconduct of Landlord (and not other tenants) , and Landlord shall not be liable for injury to the person of Tenant or to Tenant ' s contractors , agents , employees , invitees or customers whether such damage or injury is caused by or results from fire , steam , electricity, gas , water or rain, or from the breakage , leakage , obstruction or other defects of pipes, sprinklers , wires , appliances , plumbing, air conditioning or lighting fixtures or from any other cause, whether such damage or injury results from conditions arising upon the Demised Premises or upon other portions of the Property or from other sources or places, and regardless of whether the cause of such damage or injury or means of repairing the same is inaccessible to Tenant unless such damage or injury was due to the gross negligence or willful misconduct of Landlord ( and not other tenants) . Anything in this Lease to the contrary notwithstanding, the covenants , undertakings and agreements herein made on the part of Landlord are made and intended not for the purpose of binding Landlord personally or the assets of the Landlord, but are made and intended to bind only the Landlord ' s interest in the Demised Premises , the Building, and the Property, as the same may, from time to time, be encumbered, and no personal liability shall at any time be asserted or enforceable against Landlord on account of the Lease or on account of any covenant, undertaking or agreement of the Landlord in this Lease except as against Landlord ' s interest in the Demised Premises , the Building and the Property . 25 . Non-Appropriation . Landlord acknowledges 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 terminate without penalty or further obligation 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 or further obligation to Tenant upon written notice to Landlord of such limitation or change in Tenant ' s legal authority . 26 . Miscellaneous . Headings of articles and sections are for convenience only and are not to be considered in construing the meaning of the contents of same . The invalidity of any portion of this Lease shall not have any effect on the balance hereof. Should Landlord or Tenant institute any legal proceedings against the other for breach of any provision herein contained, and prevail in such action, the losing party shall in addition be liable for the costs and expenses of the prevailing party including its reasonable attorneys ' fees . This Lease is binding upon the respective parties hereto , and upon their heirs , executors , successors , and assigns . This Lease supersedes and cancels all prior negotiations between the parties , and no changes , amendments or modifications hereto shall be effective unless in writing signed by the party affected by such change, amendment or modification . Landlord reserves the right to promulgate (and change from time to time) reasonable regulations it deems appropriate for the common use and benefit of all tenants, with which regulations Tenant shall comply . Landlord may assign this Lease without the consent of Tenant or may sell the Property or the Building without affecting the obligations of Tenant hereunder, and upon such assignment or sale, Landlord shall be relieved of all obligations under this Lease and the term "Landlord" as used in this Lease shall refer to and mean such successor landlord . If id by Tenant, Landlord shall transfer the security deposit any security deposit or prepaid Rent has been pa or prepaid Rent to Landlord ' s successor or return to Tenant . Tenant agrees to attorn to any successor to Landlord . This Lease may not be recorded without Landlord ' s prior written consent, but Tenant and Page 15 OCAC Lease r Landlord agree on request of the other to execute a memorandum hereof and record the same . The singular shall include the plural , and the masculine, feminine or neuter includes the other . Each of Landlord and Tenant represents to the other that each has lawful authority to enter into this Lease and by signing it in their name as set forth below, to be legally bound in accordance with the terms and conditions hereof. This Lease , and the rights and obligations of each of Landlord and Tenant hereunder, shall be governed by and construed in accordance with the laws of the state of North Carolina . 27 . Special Conditions or Addenda . The following special conditions , if any, shall apply, and where in conflict with earlier provisions in this Lease, shall control . If any addenda are noted below, such addenda are incorporated herein and made a part of this Lease . If there are no special conditions or addenda, the word NONE is written in the blank below . (a) ATTACHMENTS : Exhibits A, A4 B , C , D , E, F , G, H, and I are attached and made a part hereof. [remainder of page left intentionally blank] i i i c i c OCAC Lease Page 16 i Landlord agree on request of the other to execute a memorandum hereof and record the same . The singular shall include the plural, and the masculine, feminine or neuter includes the other. Each of Landlord and Tenant represents to the other that each has lawful authority to enter into this Lease and by signing it in their name as set forth below, to be legally bound in accordance with the terms and conditions hereof. This Lease , and the rights and obligations of each of Landlord and Tenant hereunder, shall be governed by and construed in accordance with the laws of the state of North Carolina, 27 . Special Conditions or Addenda. The following special conditions, if any, shall apply, and j where in conflict with earlier provisions in this Lease, shall control . If any addenda are noted below, such addenda are incorporated herein and made a part of this Lease . If there are no special conditions or addenda, the word NONE is written in the blank below . (a) ATTACHMENTS : Exhibits A, A- I , B , C , D, E, F, G, H, and I are attached and made a part hereof. I IN WITNESS WHEREOF , Landlord and Tenant have executed this Lease under seal , in duplicate originals , all as of the day and year first above written . I, LANDLORD : (SEAL) a North Carolina united liabili , company By : _ Frank R. Gailor Title : Managing Member [remainder of page left intentionally blank] OCAC Lease Page 16 i IN WITNESS WHEREOF , Landlord and Tenant have executed this Lease under seal , in duplicate originals , all as of the day and year first above written . LANDLORD : (SEAL) a North Carolina limited liabili company i By : — Frank R . Gailor Title : Managing Member i i I TENANT : I (SEAL) a political subdivision of state of North Carolina By : _ ---Bonnie B . Hammersley, Title : County Manager — I I This inst me or h been pre- audited in the manner required by the Local Government Budget and Fiscal Control ct : Chieftiwanbial Officer, Orange County i I i Page 17 OCAC Lease r EXHIBIT A DEMISED PREMISES rm - ( ' 1 IV 13 94 IN i } k 1 +� 0 7 ° 1 - - r � 5 � FIN I 17A OCAC Lease Page 18 r EXHIBIT A4 DESCRIPTION OF BUILDING i < < . . . . . . . . . . . GUARDIAN BAND SUITE 29 SUITE 28 CRAWL SPACE SUITE 27 DESERT HARVEST II W M h SOON TO BE DESERT HARVEST SUITE 17A FZi VACANT . ■ . • KUTZ SUITE 178 [UNLIMITED OCAC Lease Page 19 EXHIBIT B PROPERTY DESCRIPTION Tract : 452998 PIN : 9 864 - 64 - 6207 . 006 Map Number : 4 . 3 8 . B a 10 i Page 20 OCAC Lease r i I EXHIBIT C RULES AND REGULATIONS i To the extent these Rules and Regulations are in conflict with the terms of the Lease, the terms of the Lease shall control . (1) Access to Building. On Saturdays, Sundays , legal holidays and on weekdays between the hours of 6 : 00 P .M . and 8 . 00 A . M . , access to the Building and/or to the halls , corridors , elevators or stairways in the Building may be restricted and access shall be gained by use of a key to the outside doors of the Building . Landlord may from time to time establish security controls for the purpose of regulating access to the Building . Tenant shall abide by all such security regulations so established . Before leaving the Demised Premises unattended, Tenant shall (2) Protecting Demised Premises . g 1 close and securely lock all doors or other means of entry to the Demised Premises and shut off all utilities in the Demised Premises . • shall be used exclusive) for the display of (3) Building Directories . The directories of the Building sha y P Y the name and location of tenants only and will be provided at the expense of Landlord . Any additional names and/or name change requested by Tenant to be displayed in the directories must be approved by Landlord and, if approved, which approval shall not be unreasonably withheld, will be provided at the sole expense of Tenant . (4) Large Articles . Furniture, freight and other large or heavy articles may be brought into the i Building only at times and in the manner designated by Landlord and always at Tenant ' s sole responsibility . All damage done to the Property or the Building, its furnishings , fixtures or equipment by moving or maintaining such furniture, freight or articles shall be repaired at the expense of Tenant . (5) Signs . Tenant shall not paint, display, inscribe, maintain or affix any sign, placard, picture, advertisement, name, notice , lettering or direction on any part of the outside or inside of the Building, or on any part of the inside of the Demised Premises which can be seen from the outside of the Demised Premises , without the written consent of Landlord, and then only such name or names or matter and in such color, size, style, character and material as shall be first approved by Landlord in writing . Landlord reserves the right to remove at Tenant' s expense all matters other than that above provided for without notice to Tenant . (6) Compliance with Laws . Tenant shall comply with all applicable laws , ordinances, governmental orders or regulations and applicable orders or directions from any public office or body having jurisdiction, whether now existing or hereinafter enacted with respect to the Demised Premises and the use or occupancy thereof. Tenant shall not make or permit any use of the Demised Premises which i directly or indirectly is forbidden by law, ordinance, governmental regulations or order or direction of applicable public authority, or which may be dangerous to person or property . (7) Hazardous Materials . Tenant shall not use or permit to be brought into the Demised Premises or the Building any flammable oils or fluids, or any explosive or other articles deemed hazardous to it to be done any act or thing which will invalidate or which if brought persons or property, or do or perm in would be in conflict with any insurance policy covering the Property, the Building or its operation, or the Demised Premises , or any part of either, and will not do or permit to be done anything in or upon the Property, or bring or keep anything therein, which shall not comply with all rules , orders , regulations or requirements of any organization, bureau, department or body having jurisdiction with respect thereto (and Tenant shall at all times comply with all such rules, orders , regulations or requirements ), or which shall increase the rate of insurance on the Building, its appurtenances , contents or operation . Page 21 OCAC Lease (8) Defacing Demised Premises and Overloading. Tenant shall not place anything or allow anything to be placed in the Demised Premises near the glass of any door, partition, wall or window which may be unsightly from the outside the Demised Premises . Tenant shall not place or permit to be placed any article of any kind on any window ledge or on the exterior walls , blinds , shades , awnings or other forms of inside or outside window ventilators or similar devices shall not be placed in or about the outside windows in the Demised Premises except to the extent that the character, shape , color material and make thereof is approved by Landlord . Tenant shall not do any painting or decorating in the Demised Premises or install any floor coverings in the Demised Premises or make, paint, cut or drill into , or in any way deface any part of the Demised Premises or Building without in each instance obtaining the prior written consent of Landlord . Tenant shall not overload any floor or part thereof in the Demised Premises , or any facility in the Building or any public corridors or elevators therein by bringing in or removing any large or heavy articles and Landlord may direct and control the location of safes , files , and all other heavy articles and, if considered necessary by Landlord, require supplementary supports at Tenant ' s expense of such material and dimensions necessary to properly distribute the weight . (9) Obstruction of Common Areas . Tenant shall not, whether temporarily, accidentally or otherwise, allow anything to remain in, place or store anything in, or obstruct in any way , any sidewalk, court, passageway, parking area, entrance stairway or shipping area. Tenant shall lend its full cooperation to keep such areas free from all obstruction and in a clean and sightly condition, and move all supplies , furniture and equipment as soon as received directly to the Demised Premises , and shall move all such items and waste, including medical wastes , (other than waste customarily removed by Building employees) that are at any time being taken from the Demised Premises directly to the areas designated for disposal . All courts , passageways , entrances , exits , elevators , stairways , corridors , halls and roofs are not for the use of the general public, and Landlord shall in all cases retain the right to control and prevent access thereto by all persons whose presence in the judgment of Landlord shall be prejudicial to the safety , character, reputation and interest of the Building and its tenants provided, however, that nothing herein contained shall be construed to prevent such access to persons with whom Tenant deals with in the normal course of Tenant' s business unless such persons are engaged in illegal activities . ( 10) Additional Locks . Tenant shall not attach or permit to be attached additional locks or similar devices to any door or window that is a means of access to a common area or change existing locks or of the mechanism thereof, or make or permit to be made any keys for any door other than those provided by Landlord . Upon request of Tenant, Landlord shall allow Tenant to install additional or separate locks within the Demised Premises . Upon installation of such additional or separate locks Tenant shall ensure Landlord has access to the Demised Premises as required by the Lease . Upon termination of this Lease or of Tenant' s possession, Tenant shall surrender all keys to the Demised Premises . (11 ) Communications or Utility Connections . If Tenant desires signal , alarm or other utility or similar service connections installed or changed, Tenant shall not install or change the same without the approval of Landlord, and then only under direction of Landlord and at Tenant ' s expense . Tenant shall not install in the Demised Premises any equipment which requires a substantial amount of electrical current without the advance written consent of Landlord . Tenant shall ascertain from Landlord the maximum amount of load or demand for or use of electrical current which can safely be permitted in the acity of the electric wiring in the Building and the Demised J Demised Premises , taking into account the cap Premises and the needs of other tenants in the Building, and shall not in any event connect a greater load than that which is safe . he Buildin . Service re uirements of Tenant will be attended to only upon application ( 12) Office oft g q at the office of manager of the Building selected by Landlord . Employees of Landlord shall not perform any work outside of their duties unless under special instructions from Landlord . Page 22 i OCAC Lease j ( 13) Rest Rooms . The rest rooms , toilets , urinals , vanities and the other apparatus shall not be used for any purpose other than that for which they were constructed and no foreign substance of any kind whatsoever shall be thrown therein and the expense of any breakage, stoppage or damage resulting from the violation of this rule shall be borne by Tenant . ( 14) Intoxication . Landlord reserves the right to exclude or expel from the Building any person who , in the judgment of Landlord, is intoxicated or under the influence of liquor or drugs , or who shall in any manner do any act in violation of any of the rules and regulations of the Building . (15) Nuisances and Certain Other Prohibited Uses . Tenant shall not (a) install or operate any internal combustion engine, boiler, machinery, refrigerating, heating or air conditioning apparatus in or about the Demised Premises except those ordinarily embraced within the Permitted Use of the Demised Premises ; (b) engage in any mechanical business , utilize any article or thing, or engage in any service in or about the Property, the Demised Premises or Building, except those ordinarily embraced within the Permitted Use of the Demised Premises ; (c) use the Demised Premises for housing, lodging, or sleeping purposes ; (d) permit preparation or warming of food in the Demised Premises or permit food to be brought into the Demised Premises for consumption therein (warming of coffee and individual lunches of employees excepted) except by express permission of Landlord $ (e) place any radio or television antennae or satellite dish on the roof or on or in any part of the inside or outside of the Building other than the inside of the Demised Premises , or place a musical or sound producing instrument or device that may constitute a nuisance to other tenants or occupants of the Building or interfere with other tenant ' s or occupants quiet enjoyment of its Demised Premises ; (f) use any illumination or power for the operation of any equipment or device other than electricity; ( g) operate any electrical device from which may emanate electrical waves which may interfere with or impair radio or television broadcasting or reception from or in the Building or elsewhere except with the consent of the Landlord, which consent shall not be unreasonably withheld, and consistent with the Permitted Use ; (h) bring or permit to be in the Building any bicycle or other vehicle , or dog (except in the company of a blind person) or other animal or bird; (1) make or permit any objectionable noise or odor to emanate from the Demised Premises ; (j ) disturb , solicit or canvass any occupant of the Building; or (k) do anything in or about the Demised Premises tending to create or maintain a nuisance or do any act tending to injure the reputation of the Building . (16) Solicitation . Tenant shall not make any room-to-room canvass to solicit business from other tenants or occupants in the Building and shall not exhibit, sell or offer to sell , use, rent or exchange any products or services in or from the Demises Premises unless ordinarily embraced within the Tenant' s use of the Demised Premises specified herein and specific authority granted in the Lease . (17) Energy Conservation . Tenant shall not waste electricity, water, heat or air conditioning and agrees to cooperate fully with Landlord to assure the most effective operation of the Building ' s heating and air conditioning, and water usage and shall not allow the adjustment (except by Landlord ' s authorized Building personnel) of any controls . ( 18) Building Security. Upon entry to or exit from the Building on weekends , or after normal � business hours , the exterior Building doors and suite entry door( s) should be kept locked at all times to assist in security . The janitorial service, upon completion of its duties , will lock all Building doors . Problems in Building and suite security should be directed to Landlord ' s manager . ( 19) Parking. Parking is in designated parking areas only . There should be no vehicles in "no parking" zones or at curbs . Handicapped spaces are for handicapped persons and the police department will ticket unauthorized (unidentified) cars in handicapped spaces . i Page 23 OCAC Lease f EXHIBIT D ADDITIONAL RENT — OPERATING EXPENSES — PASS THROUGHS (a) As a component of Additional Rent, Tenant agrees to pay Landlord, for each calendar year during the Term, " Tenant 's Proportional Share" (as defined below) of the " Operating Expense Differential," meaning the increase, if any, of (1) Operating Expenses (defined below in section (b)) in a calendar year over (ii) the Operating Expenses incurred by Landlord in the prior calendar year . In no event will Tenant be entitled to a credit, reimbursement or payment from Landlord in the event of a negative Operating Expense Differential . (b) The term " Operating Expenses" as used herein means all costs and expenses incurred by Landlord in the provision of services to tenants and occupants of the Building in which the Demised Premises are located (and in the operation, maintenance, repair, replacement and management of the Property and all components thereof and all personal property used in connection therewith, all as determined by Landlord' s reasonable accounting practices consistently applied . For the purposes of this agreement, "Operating Expenses" shall be calculated using the same method as other similar tenants of the Complex including The Cloth Mill and Weaver Street Market . Operating Expenses in those lease agreements as in this Lease Agreement include (1) ad valorem real and personal property taxes and assessments, including without limitation ordinary, annual, special, specific and any other dues or assessments levied by owners associations having authority over all or portions of the Demised Premises, (ii) insurance for the Property, including rent loss, hazard, casualty and liability insurance premiums and deductibles, (iii) landscaping, security, exterior repairs, site repairs, sprinkler system maintenance, and other services provided by or on behalf of Landlord to the Building, (iv) labor, materials, supplies , equipment and tools ; (v) expenses of any proceedings for abatement of taxes and assessments, (vi) permits, licenses and inspection fees , (vii) the wages, salaries, benefits and other compensation (including Landlord ' s portion of FICA, unemployment taxes and insurance) of all employees to an extent commensurate with such employees ' involvement required to supervise, implement and accomplish all of the foregoing, (viii) property management fees not to exceed 5 % of the gross rents and associated fees received on account of the Property, and (ix) other reasonable expenses related to the Common Areas . Notwithstanding the preceding two paragraphs , Operating Expenses expressly do not include (I) depreciation on the Property or equipment or personal property therein, (II) interest on loans to Landlord, (III) executive salaries , (IV) real estate brokers ' commissions or other expenses in connection with the negotiation or preparation of a lease with present or prospective tenants of the Building, (V) the costs of capital improvements unless Landlord installs a new or replacement capital item for the purpose of reducing Operating Expenses, and then only the cost thereof as reasonably amortized by Landlord with reasonable interest on the unamortized amount shall be included in Operating Expenses for each year, (VI) the cost of correcting defects in the initial design or construction of the Building or expansion; (VII) any costs or expenses incurred by Landlord in bringing the Property or Building or any portion thereof into compliance with any applicable federal, state or local statutes, codes, ordinances or rules including, without limitation, the Americans with Disabilities Act, as a result of a violation existing as of the Lease Commencement Date; (VIII) the costs relating to the restoration obligations of Landlord with respect to the Property, Building, or the Demised Premises following a casualty to the extent reimbursed by insurance ; and (IX) reserves for anticipated future expenses . For any partial calendar year during the Term, the amount shown as due by Tenant on the Statement of Actual Adjustment shall reflect a proration based on the proportion that the number of days this Lease was in effect during such calendar year bears to 365 . Landlord ' s right to recover Tenant ' s Proportionate Share of the Operating Expenses Differential shall survive the expiration or prior termination of this Lease . Page 24 OCAC Lease g f (c) The "Tenant 's Proportional Share " is the percentage that will be used to calculate the Tenant ' s share of the Operating Expenses that are incurred during a calendar year . The amount of the Tenant ' s share of an expense is dependent on the type of expense category, and the share will be calculated using two methods . (i) The rentable square footage of the Demised Premises as then configured, ivided by the commercial rentable square footage of the Building as initially 6 , 000 RSF, d defined in paragraph 1 (d) , as then configured, initially 19 , 346 RSF . Thus, the quotient is ill be used to calculate Tenant ' s Proportionate Share of initially 31 % . That percentage w expenses including, but not limited to janitorial, electrical repair, flooring maintenance , HVAC repair, interior repairs , locks or door repair, property management fees , materials and supplies , painting, pest control, plumbing repair, fees , security services , signs, utilities, and window repair necessary for the operation of the Building . The rentable square footage of the Demised Premises as then configured, ivided by the commercial rentable square footage of the buildings initially 6 , 000 RSF , d on the Property as defined in paragraph 1 (f) , as then configured , initially 238 , 749 RSF . Thus , the quotient is initially 2 . 51 % . That percentage will be used to calculate Tenant ' s Proportionate Share of expenses including, but not limited to parking lot repairs, property taxes, trash removal , landscaping, snow/ice removal , sprinkler services necessary to the operation of the Property . By way of hypothetical example, if the cost incurred in the Lease Year 1 for the janitorial services to the Common Areas of the Building is $ 7 ,200 , and that cost increased to $ 7 , 350 in Lease Year 2 , the Tenant ' s proportional share would be calculated using method (1) : 7 , 350 - 7 ,200 = $ 150 x 3 1 % _ $46 . 50 . If the property tax bill in Lease Year 1 for the Property is $ 52 , 300 and increased to $ 54 , 000 in Lease Year 2 , the Tenant ' s proportional share of property taxes would be calculated using method (ii) : 5000 - 52 , 300 = 1 , 700 x 2 . 51 % _ $42 . 67 . The Tenant ' s Operating Expense Differential is the sum of the Tenant ' s share of the expenses in excess of the prior year ' s Operating Expenses . The Operating Expense Differential shall be calculated by subtracting the prior calendar year ' s Operating Expenses from the current calendar year ' s Operating Expenses . Notwithstanding the foregoing, should the Operating Expense Differential exceed $ 10 ,000 in any calendar year, Tenant' s share of the Operating Expense Differential shall be capped at $ 10 ,000 . 00 per year. i OCAC Lease Page 25 EXHIBIT E ENVIRONMENTAL COMPLIANCE Tenant ' s Responsibility . Tenant shall not (either with or without negligence) cause or permit the escape, disposal or release of any radioactive, biologically active or other hazardous substances or materials in or around the Building, the Property or in the Demised Premises . Tenant shall not allow the storage or use of such substances or materials in any manner not sanctioned by law or by the highest standards prevailing in the industry for the storage and use of such substances or materials , nor allow to be brought into the Building or upon the Property any such materials or substances except as used in the ordinary course of Tenant ' s business and then only after written notice is given to Landlord of the identity of such substances or materials . Tenant covenants and agrees that the Demised Premises will , at all times during its use or occupancy thereof, be kept or maintained so as to comply with all now existing or hereafter enacted or issued statutes , laws, rules , ordinances, orders, permits , and regulations of all state, federal, local, and other governmental and regulatory authorities , agencies , and bodies applicable to the Demised Premises, pertaining to environmental matters , or regulating, prohibiting or otherwise having to do with asbestos and all other toxic , radioactive, or hazardous wastes or material including, but not limited to the Federal Clean Air Act, the Federal Water Pollution Control Act, and the Comprehensive Environmental Response, Compensation, and Liability Act 1980 , as from time to time amended (all hereafter collectively called "Laws") . Tenant ' s Liability . Tenant shall hold Landlord, its managing agent and Mortgagee and their respective successors and assigns (collectively, the "Indemnified Parties") free, harmless , and, to the extent authorized by North Carolina law, indemnified from any penalty , fine, claim , demand, liability, cost, or charge whatsoever which the Indemnified Parties shall incur, or which the Indemnified Parties would otherwise incur, by reason of Tenant ' s failure to comply with this Exhibit E including, but not limited to (1) the cost of bringing the Demised Premises , the Building and/or Property into compliance with all Laws ; (ii) the reasonable costs of all appropriate tests and examinations of the Demised Premises , the Building and the Property to confirm that the same have been brought into or are in compliance with all Laws ; and (iii) the reasonable fees and expenses of the Indemnified Parties ' attorneys , engineers , and consultants incurred by the Indemnified Parties in enforcing and confirming compliance with this exhibit i E . Proper1y , For the purposes of this Exhibit E, the Property includes all improvements thereon ; all personal property used in connection therewith (including that owned by Tenant and other tenants) ; and the soil, ground water, and surface water of the Property . Inspections by Landlord . Landlord and its engineers, technicians , and consultants (collectively the "Auditors") may, from time to time during regular business hours as Landlord deems appropriate, or otherwise upon advance notice to Tenant, conduct periodic tests and examinations ("Audits") of the Demised Premises to confirm and monitor Tenant ' s compliance with this Exhibit E . The Audits shall be conducted in such a manner as to minimize the interference with Tenant ' s permitted activities on the Demised Premises ; however, in all cases , the Audits shall be of such nature and scope as shall be reasonably required by then existing technology to confirm Tenant ' s compliance with this Exhibit E . Tenant shall fully cooperate with Landlord and its Auditors in the conduct of such audits . The cost of the id by Landlord unless such audit shall disclose a material failure of Tenant to comply Audits shall be pa with this exhibit E, in which case the cost of such audit, and the cost of all subsequent Audits made during the Term and within 30 days thereafter shall be paid for on demand by Tenant . Landlord ' s Responsibility . This Exhibit E shall not apply to any condition or matter constituting a violation of any Law ( 1) which existed prior to the commencement of Tenant ' s use or occupancy of the Demised Premises and was not caused or permitted to be caused, in whole or in part, by Page 26 OCAC Lease Tenant or Tenant ' s agents , employees , officers , partners , contractors, or invitees ; or ( n) to the extent such violation is caused by, or results from , an act or neglect of Landlord or Landlord ' s agents , employees, officers, partners , contractors , guests , or invitees . Tenant ' s Liability After Expiration or Termination of Lease . The covenants contained in this exhibit E shall survive the expiration or termination of this Lease, and shall continue for so long as an Indemnified Party may be subject to any expense , liability, charge , penalty, or obligation against which Tenant has agreed to indemnify an Indemnified Party under this Exhibit E . i i i i f G i I i i I f I I i c i ' A i r i- OCAC Lease Page 27 i EXHIBIT F i LANDLORD WORK r Fit-Up 17A Classroo m Area Patch at paint the walls in bright white satin paint . Paint the trim in semi- gloss paint . i Replace lights with pendant lights . Clean and paint the ceiling . Trim out the windows . Add a door into the small storage room from the classroom . Move the sink into the classroom area, replace the basin with a mop sink, and add a paint trap . 17B Offices : Replace mismatched door hardware . Replace mismatched trim and add trim where it is missing . Paint trim in bright white semigloss paint to match the walls . i Take out the drop ceilings in all areas allowed by fire code . Replace lighting with pendant lights . Patch and paint the walls in two coats of satin bright white wall paint . Knock down the half wall in the conference room . Replace the interior window with a door . Build a small breakroom area consisting of approximately 8 ' of base cabinetry and ADA sink in the current sink location in 17B . OCAC Lease Page 28 i i I i EXHIBIT G MEMORANDUM OF ACCEPTANCE OF DEMISED PREMISES i i i Attached to and forming a part of the Lease dated , 20 made by and between ("Landlord") and (" Tenant") . This Memorandum is made and executed as of the day of , 20 , by and between Landlord and Tenant . Pursuant to the Lease , the parties hereto desire to execute this Memorandum to confirm certain issues relating to that certain lease agreement dated , 20 between Landlord and Tenant . NOW, THEREFORE, Landlord and Tenant, each intending to be legally bound hereby, agree as follows : 1 . Tenant hereby accepts the Demised Premises as tenantable, and, except as may be i otherwise noted in the Lease , the Landlord has no further obligations with respect to the construction or j completion of the Demised Premises . Tenant acknowledges that both the Building and the Demised Premises are satisfactory in all respects for the purpose of Tenant ' s use and occupancy of the Demised Premises . 2 . The Rent Commencement Date of the Lease is hereby agreed to be the day of c c I The Expiration Date of the Lease is hereby agreed to be the day of 4 . Any capitalized term used herein shall have the same meaning as that set forth in the Lease . IN WITNESS WHEREOF , Landlord and Tenant have executed this Memorandum in duplicate originals , all as of the day and year first above written . LANDLORD : By : Title : Manager TENANT : By : Title : GGt� 141 a''zt> Page 29 OCAC Lease A EXHIBIT H OPTION TO EXTEND LEASE i Provided that Tenant is not then subject to an Event of Default as defined in article 15 of the Lease (or with the passage of time or the giving of notice will ripen into a default) , Tenant gives Landlord at least 9 months ' but not more than 12 months ' prior written notice of Tenant ' s exercise of its option to extend hereunder (failure to give such notice being an absolute bar to any right on the part of Tenant to so j extend) , and Tenant has not assigned the Lease or sublet the Demised Premises or any portion thereof, Landlord hereby gives to Tenant one consecutive option right to extend this Lease Term for an additional term of five years . Upon such exercise, all the terms and conditions of this Lease shall remain and be in effect during the extension term save and except (1) the Expiration Date shall be accordingly adjusted to reflect such extension and (ii) the Minimum Rent to be paid by Tenant during such extension term shall be the greater of (A) the Minimum Rent would be payable as follows : i Annual Minimum Rent Monthly Installment Lease Year 6 r $ 811461 . 39 $ 6 , 788 . 45 Lease Year 7 j $ 83, 497 . 93 $ 6 , 958416 g F -_ - - . 132 . 11 Lease Year 8 $ 85, 585 . 37 $ 7_ , Lease Year 9 ' $87, 725 01 $ 7 , 310442 Lease Year 10 $ 89, 918 . 13 $ 7 , 493 . 18 c or (B ) an amount equal to the then market rate equivalent for comparable space in the Hillsborough, North Carolina area as determined by Landlord within 10 days of the date of Tenant ' s exercise of such extension option; provided, however, that if Tenant shall give Landlord written notice of its disagreement with such rate of Minimum Rent within 10 days of the delivery to Tenant of Landlord ' s aforesaid I determination of Minimum Rent for the extension term , then such Minimum Rent for the extension term shall be calculated by appraisal in accordance with the next paragraph of this exhibit . Each of Landlord and Tenant shall specify within 5 days after the delivery of Tenant ' s notice of [ disagreement a selection of a qualified appraiser by written notice to the other . Within 20 days after the i selection of the last appraiser, the 2 appraisers (one selected by Landlord and the other selected by Tenant) shall render a joint written determination of the Minimum Rent for the extension term . If the 2 appraisers are unable to agree upon a joint, written determination within the aforesaid 20 - day period, each appraiser shall then render his or her determination and shall jointly select a third appraiser within such 20- day period . Within 10 days after the appointment of the third appraiser, the third appraiser shall select one of the determinations of the 2 appraisers duly selected, or if neither of such appraisal represents that I illing to pay to Landlord in an arms- length negotiation, in the value which a third party would be w then the third appraiser shall select a value which represents a number opinion of the third appraiser, between the 2 appraisal values originally determined by the 2 original appraisers . All appraisers selected r pursuant to this Exhibit G shall be unaffiliated and disinterested appraisers or licensed real estate brokers E having at least five 5 years ' prior experience in making rent value appraisals for similar and comparable type property and usage in the Hillsborough , North Carolina, area . If either of the Landlord or the Tenant fails or refuses to select an appraiser, the other appraiser alone shall determine the Minimum Rent for the extension term in accordance with the terms hereof. Each party shall bear the fees and expenses of their c selected appraiser and, if necessary, to select a third appraiser, the parties hereto shall equally bear the fees and expenses of the third appraiser . The appraised Minimum Rent determined pursuant to this Exhibit G shall be binding upon the parties as a rental to apply for the extension term . Page 30 OCAC Lease i I i i EXHIBIT I j MEMORANDUM OF LEASE i i i Prepared by : Ellis & Winters LLP (DLH) , P . O . Box 33550 , Raleigh, NC 27636 Return to : Orange County, i STATE OF NORTH CAROLINA, COUNTY OF ORANGE PIN : 9864 - 64 - 6207 . 006 MEMORANDUM OF LEASE i THIS MEMORANDUM OF LEASE (this "Memorandum") is made and entered into as of 2020 , by and between Eno River Mill, LLC , a North Carolina limited liability company ("Landlord ') , and Orange County, a political subdivision of the State of North Carolina (" Tenant") . Landlord and Tenant are parties to that certain Lease Agreement dated on or about December 2019 (the "Lease") for approximately 6 , 000 rentable square feet more particularly described therein (the "Premises") . The Premises are located at 437 Dimmocks Mill Road, Hillsborough , NC 27217 on the real property more particularly described on Exhibit A attached hereto and incorporated herein by reference . I The term of the Lease commenced on , 2020 and is scheduled to expire on 20_. Tenant has one option to extend the term of the Lease for five ( 5 ) additional years on t the terms and conditions more particularly set forth in the Lease . G Tenant shall cooperate in causing this Memorandum to be promptly terminated of record r following the expiration or prior termination of the Lease . Nonetheless , this Memorandum may be terminated of record by unilateral action of Landlord upon the occurrence of an Event Default by Tenant r under the Lease (including thee expiration of applicable notice and cure periods) or the valid termination of the Lease for any reason prior to the expiration of the term of the Lease . This Memorandum is not a complete summary of the Lease . The sole purpose of this Memorandum is to give notice of the Lease and all of its terms , covenants, and conditions to the same extent as if the Lease were fully set forth herein . Provisions in this Memorandum shall not be used to interpret the Lease Agreement and, in the event of a conflict between this Memorandum and the Lease , the latter shall control . I I I i Page 31 OCAC Lease i i IN WITNESS WHEREOF , the parties hereto have caused this Memorandum to be executed and delivered as of the day and year first above written . LANDLORD : Eno River Mill , LLC a North Carolina limited liability company By $ Name : AYV.Voa. o )/ Title : Pz Y STATE OF NORTH CAROLINA ) COUNTY OF WAKE ) I certify that the following person( s) personally appeared before me this day, each acknowledging to `Mme that he or she signed the foregoing document in the capacity indicated thereon : Date : 7D 2020 o No ry P bi Print Na e . ` My Commission Expires : e [Official Seal] , `' ° ` ` '° [Signature page I of 2] y COMM, jj - s 4 ' 00 t &yg & �B6 i& e808k4ffi6 qa't OCAC Lease Page 32 TENANT . O RANGE COUNTY By : Name : 10o Title : STATE OF NORTH CAROLINA ) COUNTY OF Ova^ ) I certify that the following person( s) personally appeared before me this day, each acknowledging to me , that he or she signed the foregoing document in the capacity indicated thereon : ¢, Date : , 2024 2A4 Notary Public Print Name : Lea Q-n My Commission Expires : ` d [Official Seal] %,► �;;0 E '' •r, ♦ .M .� 0 r [Signature page 2 of 2] =t � D tA4Y •00 Page 33 OCAC Lease I 0 t 4 i ADDENDUM (to Memorandum of Lease) illsborough Township, Orange County, North Carolina, and described That certain parcel located in H i as follows : Mill Unit 4 Condominium established pursuant to that All of Unit 17A and 17B of the Eno River certain "Declaration of Condominium for Eno River Mill Unit 4 Condominium" recorded in Book 6049 , Page 501 , in the Office of the Register of Deeds , Orange County, North Carolina, and that certain condominium plan (consisting of three (3 ) sheets) entitled "Plan of Condominium Eno River Mill Unit 4 Condominium" recorded in Condominium Map Book 115 , Pages 43 -45 , in the Office of the Register of Deeds , Orange County, North Carolina. E k I OCAC Lease Page 34 i ��---, HEDGHOL-01 SZUDERHAVENS ACOR � " DATE (MM/DD/YYYY) CERTIFICATE OF LIABILITY INSURANCE 5/17/2021 THIS CERTIFICATE IS ISSUED AS A MATTER OF INFORMATION ONLY AND CONFERS NO RIGHTS UPON THE CERTIFICATE HOLDER. THIS CERTIFICATE DOES NOT AFFIRMATIVELY OR NEGATIVELY AMEND , EXTEND OR ALTER THE COVERAGE AFFORDED BY THE POLICIES BELOW. THIS CERTIFICATE OF INSURANCE DOES NOT CONSTITUTE A CONTRACT BETWEEN THE ISSUING INSURER(S) , AUTHORIZED REPRESENTATIVE OR PRODUCER, AND THE CERTIFICATE HOLDER. i IMPORTANT: If the certificate holder is an ADDITIONAL INSURED , the policy ( ies) must have ADDITIONAL INSURED provisions or be endorsed . If SUBROGATION IS WAIVED , subject to the terms and conditions of the policy , certain policies may require an endorsement. A statement on this certificate does not confer rights to the certificate holder in lieu of such endorsement(s) . CONTACT PRODUCER NAME : Maury , Donnelly & Parr PHONE 685 -4625 FAx 410 685 -3071 24 Commerce St. (A/C, No, Ext) : (410 ) (A/C, No) : ( ) Baltimore, MD 21202 ADDRIESS : INSURERS AFFORDING COVERAGE NAIC # INSURER A : Hanover American Insurance Company 36064 INSURED INSURER B : Hedgehog Holdings, LLC INSURER C : P . O . Box 12929 INSURER D : Raleigh , NC 27605 INSURER E : INSURER F : COVERAGES CERTIFICATE NUMBER : REVISION NUMBER : THIS IS TO CERTIFY THAT THE POLICIES OF INSURANCE LISTED BELOW HAVE BEEN ISSUED TO THE INSURED NAMED ABOVE FOR THE POLICY PERIOD ' INDICATED . NOTWITHSTANDING ANY REQUIREMENT, TERM OR CONDITION OF ANY CONTRACT OR OTHER DOCUMENT WITH RESPECT TO WHICH THIS CERTIFICATE MAY BE ISSUED OR MAY PERTAIN , THE INSURANCE AFFORDED BY THE POLICIES DESCRIBED HEREIN IS SUBJECT TO ALL THE TERMS , EXCLUSIONS AND CONDITIONS OF SUCH POLICIES . LIMITS SHOWN MAY HAVE BEEN REDUCED BY PAID CLAIMS , INSR TYPE OF INSURANCE ADDL SUBR POLICY NUMBER POLICY EFF POLICY EXP LIMITS LTR I SD WVD MM/DD/YYYY /Y M/DDYYY 1 , 0001000 A X COMMERCIAL GENERAL LIABILITY EACH OCCURRENCE $ CLAIMS-MADE a OCCUR LHQD200661 -04 3/15/2021 3/15/2022 DAMAGE TO RENTED 100 , 000 PREMISES Ea occurrence $ MED EXP (Any oneperson) $ 10 , 000 PERSONAL & ADV INJURY $ 110001000 GEN' L AGGREGATE LIMIT APPLIES PER: GENERAL AGGREGATE $ 27000 , 000 X CT POLICY PE LOC PRODUCTS - COMP/OP AGG $ 2 , 000 , 000 r OTHER : $ AUTOMOBILE LIABILITY Ea accidentSINGLE LIMIT $ ANY AUTO BODILY INJURY Perperson) $ OWNED SCHEDULED AUTOS ONLY AUTOS BODILY INJURY Per accident $ HIRED NON-OWNED PROPERTY DAMAGE AUTOS ONLY AUTOS ONLY Per accident $ $ I UMBRELLA LIAB OCCUR EACH OCCURRENCE $ EXCESS LIAB CLAIMS-MADE AGGREGATE $ DIED 71 RETENTION $ $ WORKERS COMPENSATION PER OTH- AND EMPLOYERS' LIABILITY �, / N STATUTE ER ANY PROPRIETOR/PARTNER/EXECUTIVE ❑ E. L. EACH ACCIDENT $ j OFFICER/MEMBER EXCLUDED? N / A (Mandatory in NH) E. L. DISEASE - EA EMPLOYE $ I If yes , describe under DESCRIPTION OF OPERATIONS below E. L. DISEASE - POLICY LIMIT $ DESCRIPTION OF OPERATIONS / LOCATIONS / VEHICLES (ACORD 101 , Additional Remarks Schedule, may be attached if more space is required) RE : Eno River Mill , Suite 27, 17A, and 17B 0 CERTIFICATE HOLDER CANCELLATION ! SHOULD ANY OF THE ABOVE DESCRIBED POLICIES BE CANCELLED BEFORE Orange Count Arts Commission THE EXPIRATION DATE THEREOF, NOTICE WILL BE DELIVERED IN g Y ACCORDANCE WITH THE POLICY PROVISIONS . Orange County 300 W. Tryon Street Hillsborough , NC 27278 AUTHORIZED REPRESENTATIVE ACORD 25 (2016103 ) © 1988 =2015 ACORD CORPORATION . All rights reserved . The ACORD name and logo are registered marks of ACORD