HomeMy WebLinkAboutAgenda 05-24-22; 5-a - Public Hearing Regarding Proposed Lease Agreement and Economic Development Incentive Agreement for Well Dot, Inc. 1
ORANGE COUNTY
BOARD OF COMMISSIONERS
ACTION AGENDA ITEM ABSTRACT
Meeting Date: May 24, 2022
Action Agenda
Item No. 5-a
SUBJECT: Public Hearing Regarding Proposed Lease Agreement and Economic
Development Incentive Agreement for Well Dot, Inc.
DEPARTMENT: Economic Development,
County Manager's Office,
County Attorney's Office, &
Asset Management Services
ATTACHMENT(S): INFORMATION CONTACT:
1) Resolution with Lease Agreement Travis Myren, Deputy County Manager,
between Orange County & Well (919) 245-2308
Dot, Inc. Steve Brantley, Economic Development
2) Performance Agreement between Director, (919) 245-2326
Orange County & Well Dot, Inc. Steve Arndt, Asset Management
3) Company Summary PowerPoint Director, (919) 245-2658
4) Public Hearing Media Notice
5) PowerPoint Presentation for the
Public Hearing
PURPOSE: To:
1) Receive and hold a public hearing on the proposed lease agreement and issuance of a
"performance-based" economic development incentive by the County to a private
company; and
2) Consider adopting a resolution authorizing approval of the proposed lease agreement and
economic incentive agreement, with claw-back provisions, for the expansion of Well Dot,
Inc.'s health care IT operations in Orange County, NC.
BACKGROUND: Local and state governments in North Carolina have the goal to promote
economic development by encouraging the location of new businesses and the expansion of
existing businesses. This activity serves to diversify the local tax base, increase employment
opportunities and introduce desired job skills and related benefits to a community, and for the
benefit of its residents. The Local Government Act, North Carolina General Statute (NCGS) 158-
7.1, outlines the requirements of public hearings, and NCGS 158-7.1(a) specifically addresses
the requirement that economic development appropriations "must be determined by the governing
body of the city or county to increase the population, taxable property, agriculture industries,
employment, industrial output, or business prospects of the city or county". This public hearing
has been scheduled in compliance.
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Well Dot, Inc. is an early-stage healthcare technology and services company that incorporated in
January 2019. The company provides technology-enabled healthcare solutions to consumers via
employers through a platform that enables consumers to navigate their health and wellness
needs. Well Dot's current client portfolio includes firms such as the Bank of America, LabCorp,
Extended Stay Hotels, FEDEX and Walmart. During the second quarter of 2019, Well Dot
approached the Town of Chapel Hill and Orange County and expressed a desire to expand
operations in either Chapel Hill, NC or Boston, MA, where the company also has an existing
presence.
On November 19, 2019, North Carolina Governor Roy Cooper, joined by company
representatives and local, county and state elected officials, announced the location of a new
operations center in Chapel Hill. The Chapel Hill center will serve as the primary center for clinical
and health experts, while also housing software developers, data analysts and corporate
personnel. The North Carolina Department of Commerce committed $3,394,500 over 12 years
through a performance-based agreement with the Job Development Invest Grant (JDIG) program.
Over the course of the 12-year term of that grant, the project is estimated to grow the state's
economy by $609 million. The North Carolina Community College System also committed to
supporting the company with $480,000 in value through its Customized Training Program.
The Company will create at least 360 new full time jobs, at an annual rate of$63,665 plus benefits.
Well Dot's salary average is higher than the 2022 Orange County average private sector wage of
$59,026 per year. Other economic benefit multipliers to the County include additional daytime
workers in downtown Chapel Hill, and enhanced job skills for those employees through
customized training to be provided by the Orange County campus of Durham Technical
Community College in Hillsborough. Also, construction employment for the facility upfit and
remodeling will create additional skilled trade jobs.
On March 4, 2020 the Chapel Hill Town Council approved a performance based incentive
agreement with a maximum investment of $900,000, with $450,000 tied to job creation and
$450,000 in parking credits, payable over 8 years. The town's incentive program will be awarded
based on the company meeting specific targets for new jobs.
Well Dot has an existing office location in Orange County at 419 W. Franklin St., Chapel Hill,
highlighted in red on the map below, which will accommodate up to 85 initial employees in senior
management. To house an additional 300+ jobs Well Dot plans to hire through 2025, a second
location is envisioned nearby in downtown Chapel Hill. Therefore, the Company has identified
the County's former Visitors Bureau building and the adjacent space previously occupied by the
Skills Development Center as its desired and ideal location. These properties, highlighted in
purple on the map below, are located at:
• 501 W. Franklin Street, Chapel Hill, NC 27517 (PIN) 9788151996
• 503 W. Franklin Street, Chapel Hill, NC 27517 (PIN) 9788151829
• 108 S. Roberson Street, Chapel Hill, NC 27517 (PIN) 9788152822
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On January 21, 2020 the Board of County Commissioners (BOCC) approved the relocation of
both the Skills Development Center and Visitors Bureau from the existing Franklin Street location.
In March 2020, the Skills Development Center moved its operations to the Europa Center in
Chapel Hill. The BOCC has since approved locating the Skills Development Center into the 203
South Greensboro, Carrboro facility when it is completed. The Visitors Bureau has also relocated
its operations to 308 West Franklin Street in Chapel Hill. For these reasons the properties to be
leased are not needed for Orange County operations during the term of the Lease.
FINANCIAL IMPACT: The economic development considerations for this project are contained
in two agreements. The first is a lease agreement with Well Dot, Inc. that provides favorable short
term lease terms to the Company with options to purchase during the course of the lease. The
lease relieves the County of any ongoing maintenance or operating expenses during its term. The
second is a performance agreement that would provide initial funding to upfit the space based on
employment and wage targets.
Lease Agreement
The initial lease is for a term of ten (10) years. The lease allows for an extension for two additional
five year periods with mutual consent. The company may exercise an option to purchase the
facility each year on the anniversary date of the lease agreement. The purchase price will be
determined according to the appraised value of the property at the time of purchase less the value
of the initial deposit and rent paid up to the date of closing.
According to the financial terms of the lease, Well Dot would make a non-refundable, initial deposit
of $250,000 to the County. The company would then make monthly rent payments totaling
$404,576.04 annually to the County for the first six years of the lease. Beginning in year seven,
the rent would be adjusted to market rate based on prevailing commercial lease rates at that time.
This provides an incentive for Well Dot to exercise the option to purchase on or before the seventh
year of the lease. Annual rent increase of two percent (2%) would begin in year eight. Any
renewal will reflect similar base rental fees and increases.
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Year Payment Due
1 $250,000 initial deposit
1 $404,576
2 $404,576
3 $404,576
4 $404,576
5 $404,576
6 $404,576
7 Market Rent Established
8 2% Increase
9 2% Increase
10 2% Increase
Based on current commercial rates, the market rent for the facility would total approximately
$850,000 annually. If the company continues to rent the facility for the ten year lease term, the
County will have collected approximately $6.2 million in lease revenue. If the company exercises
the option to purchase during the term of the lease, it will pay property taxes starting at
approximately $85,000 annually and increasing according to market value following each
revaluation.
Performance Agreement
The performance agreement between Orange County and Well Dot, Inc. offers up to to $2 million
for the company to use to offset facility development and remodeling costs. The payment would
be based on actual expenditures incurred by the company and will be paid over a period of not
more than two (2) years from the first installment. These funds would be borrowed with an average
annual debt service payment of approximately $137,000. Proceeds from the lease would be used
to pay the debt.
As part of the performance agreement, the company agrees to create at least 360 new full time
jobs, at an annual salary of $63,665 plus benefits. If job creation targets are not met, penalties of
$500 per job will accrue annually and will be added to the purchase price of the facility.
SOCIAL JUSTICE IMPACT: The following Orange County Social Justice Goal is applicable to
this item:
• GOAL: ENSURE ECONOMIC SELF-SUFFICIENCY
The creation and preservation of infrastructure, policies, programs and funding necessary
for residents to provide shelter, food, clothing and medical care for themselves and their
dependents.
ENVIRONMENTAL IMPACT: There is no direct Orange County Environmental Responsibility
Goal impact associated with this item.
RECOMMENDATION(S): The Manager recommends that the Board:
1) Receive the proposal to consider entering a lease agreement and the issuance of
incentives to a private company for the recruitment & expansion of Well Dot, Inc.'s
operations in Orange County;
2) Open and conduct the Public Hearing and receive BOCC and public comments;
3) Close the Public Hearing; and
4) Approve the "performance-based" economic development incentive agreement and the
lease by adopting the resolution authorizing the lease between Orange County and Well
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Dot, Inc., each subject to final review by the County Attorney, and authorize the Chair to
sign the resolution, the agreement and the lease on behalf of the County.
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RES-2022-026 Attachment 1
ORANGE COUNTY BOARD OF COMMISSIONERS
RESOLUTION LEASING PROPERTY UP TO TEN YEARS
Whereas, Orange County owns properties located at 501 W. Franklin Street, Chapel Hill,
NC 27517 (PIN 9788 15 1996), 503 W. Franklin Street, Chapel Hill, NC 27517 (PIN 9788
15 1829), 108 S. Roberson Street, Chapel Hill, NC 27517 (PIN 9788 15 2822), (the
"Premises"); and
Whereas, Well Dot, Inc., a Delaware Corporation with health care operation facilities in
Chapel Hill, North Carolina, desires to lease the Premises to expand its business in North
Carolina; and
Whereas, the Premises will not be needed for Orange County operations during the term
of such lease; and
Whereas, North Carolina General Statute 160A-272 authorizes the lease of county-
owned properties for terms of up to ten years upon resolution of the Board of
Commissioners at a regular meeting after thirty (30) days' public notice and North
Carolina General Statute 158-7.1 also authorizes the lease of county-owned properties
subject to public notice, which public notice has been published; and
Whereas, in consideration of the economic development opportunities including the
creation of 360 new full time jobs, at an annual salary of Sixty Three Thousand Six
Hundred Sixty Five dollars ($63,665.00) plus benefits, and new capital investment in
Orange County of $3,493,600, the Board of Commissioners of Orange County desires to
lease the Premises to Well Dot, Inc., for a base rental fee of Thirty Three Thousand Seven
Hundred Fourteen Dollars and Sixty-seven Cents ($33,714.67) per month, the fair market
value lease rate, for a ten (10) year term with two optional renewal terms of five (5) years,
with such renewal subject to additional Board of Commissioner approvals and granting
an option to purchase to Well Dot, Inc., as described in the Lease and as authorized by
North Carolina General Statute 158-7.1.
THEREFORE BE IT RESOLVED, that Board of County Commissioners of Orange
County hereby approves the lease of the county property described above to Well Dot,
Inc., for a term of ten (10) years commencing subsequent to a 120 day inspection period
with a two potential renewal terms of five years each and directs the execution,
recordation, and filing of all necessary instruments accordingly.
This the 24t" Day of May, 2022.
Renee Price, Chair
Orange County Board of Commissioners
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LEASE PROVISIONS TERM SHEET
TYPE OF LEASE: 0 New ❑ Renewal ❑ Expansion ❑ Option ❑ Change/Adj.
BUSINESS NAME: WELL DOT, Inc.
TENANT: WELL DOT, Inc.
ADDRESS: 419 W. Franklin Street, Chapel Hill NC 27516
(0) (415)216-8434
(e-mail)jared.sokolsky@well.co
PROPERTY ADDRESS: 501 W. Franklin Street
503 W. Franklin Street
108 S. Roberson Street
Chapel Hill, NC 27517
LANDLORD: Orange County, a Political Subdivision of the State of North Carolina
NOTICE ADDRESS: Orange County, Asset Management Services
P.O. Box 8181 Hillsborough, NC 27278
RENT PAYMENTS : Orange County, Finance and Administrative Services
P.O. Box 8181 Hillsborough, NC 27278
LEASE TERM: Ten (10)Years RENT PSF: $18.72
RENTABLE SQ. FTG: —21,612 LEASE SIGNED: , 2022
INSPECTION PERIOD: 120 days.
COMMENCEMENT DATE: The date of Substantial Completion (as hereinafter defined).
RENT COMMENCES: Commencement Date LEASE EXPIRES: 120 months from Commencement
Date
MONTHLY BASE RENT: $33,714.67 ANNUAL BASE RENT: $404,576.04
RENT ADJUSTMENTS: No adjustment for the first six (6) Lease Years (as hereinafter defined). An annual fixed
increase of Two percent(2%)to the Base Rent starting with the seventh (7th) Lease Year, subject to the reset of Base
Rent provided for in Section 4(b) below.
PRORATION: Calculation of Rents is based on the annual rent amount divided by a 365-day year.
OPTION TO RENEW: Provided the Tenant is not in default of any terms of this Lease beyond the expiration of any
applicable notice and cure period,at the end of the initial ten-year Lease Term,this Lease may be extended for Two(2)
terms of five(5)years each, commencing at the expiration of the initial term or prior extension term,as applicable,with
Ninety (90)days prior written notice, and upon mutual consent.
OPTION TO PURCHASE: Provided the Tenant is not in default of any terms of this Lease beyond the expiration of any
applicable notice and cure period, the Tenant shall have the option to purchase the Property, which option may be
exercised on any anniversary of the Commencement Date annually during the first 120-month term of the Lease. Should
the option on the Property be exercised,the purchase price shall be based on appraisals using income methodology with
each party selecting an independent appraiser and negotiating any differences in the appraisals to arrive at a purchase
price, but shall also be less the value of the initial $250,000 deposit and rent paid up to the date of closing. Further,
Landlord and Tenant are parties to that certain Performance Agreement dated as of the date hereof (the "Incentive
Agreement"). The final purchase price for the Property shall be subject to any adjustments required by Section 2(D)of
the Incentive Agreement.
ALL RENTS ARE DUE ON THE 1st DAY OF EACH MONTH: Any payment not received by the 5th of the month will
incur an automatic late fee of Five (5%) percent.
DEPOSIT: Tenant shall pay a one-time deposit. The amount of the deposit shall be equal to the full amount expended
by Landlord to up-fit the Orange County Skills Development Center up to and not to exceed two hundred fifty thousand
dollars($250,000.00). Such deposit shall not be refundable and may only be utilized as provided in this paragraph, but
shall be applied to the purchase price of the Property in the event that Tenant elects to exercise the option to purchase
the Property set forth herein.
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PAID BY LANDLORD: N/A
PAID BY TENANT: Property Taxes, Insurance, Exterior\Maintenance, Parking Area Maintenance,All Utilities including
\Electrical,Water&Sewer)\,Security, Management, HVAC Maintenance,Janitorial,Trash Removal and Extermination,
Fire & Extended Coverage Insurance for tenant contents, Commercial General Liability Insurance for Tenant, and all
telephone, cable, internet, etc. installation costs and monthly service charges. It is the intent of this Lease that all costs
related to the Property shall be paid by Tenant.
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RENT SUMMARY
(Tenant)
21,612 (Sq. Ft)
Months below measured from Commencement Date
Term Year #of Months Start Date End Date SF $Month Total $
1 12 Month 1 Month 12 21,612 33,714.67 404,576.04
2 12 Month 13 Month 24 21,612 33,714.67 404,576.04
3 12 Month 25 Month 36 21,612 33,714.67 404,576.04
4 12 Month 37 Month 48 21,612 33,714.67 404,576.04
5 12 Month 49 Month 60 21,612 33,714.67 404,576.04
6 12 Month 61 Month 72 21,612 33,714.67 404,576.04
7 12 Month 73 Month 84 21,612
8 12 Month 85 Month 96 —21,612
9 12 Month 97 Month 108 21,612
10 12 Month 109 Month 120 —21,612
Term Year #of Months Start Date End Date SF $Month Total $
Op 1-1 12 Month 121 Month 132 21,612
Op 1-2 12 Month 133 Month 144 21,612
Op 1-3 12 Month 145 Month 156 21,612
Op 1-4 12 Month 157 Month 168 —21,612
Op 1-5 12 Month 169 Month 180 21,612
60
Term Year #of Months Start Date End Date SF $Month Total $
Op 2-1 12 Month 181 Month 192 21,612
Op 2-2 12 Month 193 Month 204 21,612
Op 2-3 12 Month 205 Month 216 21,612
Op 2-4 12 Month 217 Month 228 —21,612
Op 2-5 12 Month 229 Month 240 —21,612
60
* Subject to adjustment based upon Section 4(b) below.
MAKE RENT PAYMENTS TO: Orange County
Finance and Administrative Services
P.O. Box 8181
Hillsborough, NC 27278
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CONTENTS OF LEASE BY SECTION
SECTION NUMBER AND SUBJECT
Lease Provisions Information
Rent Summary
Contents of Lease
1. Definitions
2. Demise
3. Term
4. Rent
5. Late Payment
6. Deposit
7. Use of Leased Premises
8. Signs
9. Care and Maintenance
10. Alterations by Tenant
11. Acceptance of Leased Premises
12. Delay in Commencement
13. Subleasing and Assignment
14. Default
15. Holding Over
16. Surrender of Rented Space
17. Damage to Rented Space or Building
18. Tenant's Indemnity and Tenant's Insurance
19. Tenant's Waiver of Claim; Mutual Releases
20. Eminent Domain
21. Utilities and Other Services
22. Covenants of Title and Quiet Enjoyment
23. Inspection Period
24. Use of Parking Facilities
25. Information Concerning Tenant
26. Authority of Tenant
27. Estoppel
28. Right to Relocate
29. Landlord's Access to Rented Space
30. Managing Agent
31. Subordination
32. Reservation of Rights
33. Notices
34. Entire Agreement; Modification
35. Riders and Exhibits
36. Section Headings
37. Number and Gender
38. Governing Law
39. Severability
40. Modification by Mortgagee
41. Binding Effect
42. Limitation on Right of Recovery
43. Brokerage
44. Memorandum
45. Force Majeure
46. Taxes
47. Counterparts
48. Miscellaneous
EXHIBITS
EXHIBIT A- Site of Property
EXHIBIT B - Sketch of Rented Space
EXHIBIT C - Memorandum of Lease
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LEASE
This lease (the "Lease") is made as of , 2022 by and between Orange County, a political
Subdivision of the State of North Carolina ("Landlord")and WELL DOT, Inc. ("Tenant"). In consideration of
the reciprocal obligations stated herein, Landlord and Tenant agree as follows:
1. DEFINITIONS. When used in this Lease, the terms listed below shall have the meanings stated in
this Section 1.
(a) "Building": the office building in which the Rented Space is located.
(b) "Commencement Date": the actual date on which the term of this Lease commences, as
provided in Section 3 below.
(c) "CPI" shall mean the Consumer Price Index— U.S. City Averages for Urban Wage Earners
and Clerical Workers—All Items (base year 1982-84=100), published by the United States Bureau of Labor
Statistics.
(d) "Lease Year": each twelve(12)month period of the Term beginning with the Commencement
Date (or anniversary thereof)and ending on the subsequent anniversary of the Commencement Date. The
first Lease Year shall begin on the Commencement Date and shall end on the immediately prior to the first
anniversary of the Commencement Date.
(e) "Leased Premises": the Property, including the Rented Space.
(f) "Property": those tracts of land located at 501 W. Franklin Street, 503 W. Franklin Street, and
108 S. Roberson Street in Chapel Hill Township, Orange County, North Carolina, described in Exhibit A
attached hereto and incorporated herein, and all improvements situated thereon.
(g) "Rentable Square Feet": the useable square feet of any area.
(h) "Rented Space": that office space area shown as the cross-hatched area on Exhibit B
attached hereto and incorporated herein,which consists of approximately 21,612 Rentable Square Feet and
the entirety of each tract of land making up the Property.
(i) "Term": the term of this Lease as specified in subsection (a) of Section 3 below.
2. DEMISE. Subject to the terms and conditions stated in this Lease, Landlord hereby leases the
Leased Premises to Tenant, and Tenant hereby leases the Leased Premises from Landlord.
3. TERM AND OPTION.
(a) Term. The term of this Lease shall commence on the Commencement Date. The term shall
terminate at 11:59 P.M. on the date that is one hundred twenty(120)months following the Commencement
Date, if not sooner terminated by Landlord pursuant to the terms of this Lease.
(b) Option to Renew. Provided the Tenant is not in default of any terms of this Lease beyond the
expiration of any applicable notice and cure period, at the end of the initial ten-10 year Lease Term, this
Lease may be extended for Two (2)terms of Five (5)years each, commencing at the expiration of the initial
(or then current) term with Ninety (90) days prior written notice. See Rent Summary for scheduled rent
increases for each Option to Renew. Such Option to Renew must be agreed to in writing by both parties and
is subject to the terms of North Carolina General Statute 160A-272.
(c) No Reinstatement. No receipt of money by Landlord from Tenant or any other party after the
termination of this Lease shall reinstate, continue or extend the Term or affect any notice of termination
served on Tenant by Landlord.
(d) Option to Purchase. Provided the Tenant is not in default of any terms of this Lease beyond
the expiration of any applicable notice and cure period, the Tenant shall have the option to purchase the
Property, which option may be exercised on any anniversary date of the Commencement Date annually
during the first 120-month term of the Lease. Tenant shall provide written notice to Landlord of its intent to
exercise the option to purchase.
(i) If the option to purchase is exercised, Landlord (seller) shall convey marketable fee-
simple title to the described portion of the Property, and this conveyance shall be subject to no exceptions or
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encumbrances of record other than those (i) existing as of the effective date of this Lease, or (ii)which are
approved by Tenant, such approval not to be unreasonably withheld. All closing costs related to the transfer
of the Property shall be paid by the Tenant (buyer), except that the Landlord shall be responsible for
attorneys'fees for any attorneys representing Landlord. Tenant shall be responsible for all funds required to
satisfy and cancel any assessments, judgments, liens, deeds of trust, or other financial encumbrances
against the Property and the described portion of the Property save and except any such encumbrances
incurred by the Landlord.
(ii) If the option to purchase is exercised, Landlord shall credit against the purchase price
the amount of the Deposit and the amount of Rent paid by Tenant to Landlord up to the date of the closing.
(iii) This option to purchase is contingent upon and subject to the following terms and
conditions: This option to purchase shall commence on the date of the full execution of this Lease and shall
continue through the end of the initial 120-month term thereof. The purchase price shall be based on
appraisals using income methodology with each party selecting an independent appraiser and negotiating
any differences in the appraisals to arrive at a purchase price, but shall also be less the value of the initial
$250,000 deposit and rent paid up to the date of closing. If the option to purchase is exercised by the Tenant
the sale of the described portion of the Property shall occur within sixty (60)days after the date of the option
to purchase notice.
4. RENT.
(a) Initial Annual Base Rent. Tenant shall pay to Landlord annual base rent in the amounts set forth in
the Rent Summary set forth hereinabove (during the first six (6) Lease Years) and pursuant to Section 4(b)
below thereafter.
For each succeeding Lease Year of the Term and any optional extensions, Tenant shall pay to Landlord
annual base rent as determined pursuant to this schedule and subsection (b) below, payable in equal
monthly installments commencing on the first day of each Lease Year. All monthly base rent payments shall
be due on the first day of each month in advance, without notice or demand. All rent payments shall be
made to Landlord at: Orange County, Finance and Administrative Services, P.O. Box 8181
Hillsborough, NC 27278, or at such other place as Landlord may designate from time to time in writing.
(b) Annual Base Rent after Sixth Lease Year. In the event that Tenant has not elected to
purchase the Premises pursuant to Section 3(d) above, within one hundred eighty (180) days prior to the
commencement of the seventh (7th) Lease Year, Landlord and Tenant shall work together diligently and in
good faith to determine the fair market rental value of the Premises for the seventh (7th) Lease Year,with the
parties to select a commercial property broker with at least 10 years' relevant experience in the Chapel Hill
market area. In the event that the parties cannot agree upon a commercial property broker for such
determination, they shall each select a commercial property broker with at least 10 years' relevant
experience in the Chapel Hill market area, and the rent shall be the average of the good faith determination
made by both such brokers. The parties shall then enter into an amendment to this Lease setting forth the
annual base rent for the seventh (711) Lease Year, which annual base rent shall thereafter escalate by two
percent (2%) per annum at the beginning of each further Lease Year thereafter.
(c) Base Rent for Partial Month. Base rent due for any partial month at the beginning of the
Term shall be $1,108.41 per day, payable in advance on the Commencement Date. Base rent due for any
partial month at the end of the Term shall be determined on a per diem basis, using the then applicable
annual base rent. Calculation of Rents is based on the annual rent amount divided by a 365-day year.
(d) Intentionally omitted.
(e) Intentionally omitted.
(f) Additional Rent. All other charges, costs and sums required to be paid by Tenant to
Landlord under this Lease shall be deemed to be additional rent, and shall be collectable by Landlord as
such.
(g) Independent Covenant. The obligation to pay any and all rent hereunder is a separate and
independent covenant of Tenant, and no breach or alleged breach by Landlord of the terms hereof shall give
Tenant any right to withhold or escrow any rental payments when due.
5. LATE PAYMENT. Tenant recognizes and acknowledges that if rent payments are not received when
due, Landlord will suffer damages and additional expense. Tenant therefore agrees that a late fee equal to
five (5%)percent of the rent which is late may be assessed by Landlord as additional rent if the Landlord has
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not received any monthly installment of annual rent or other rent or additional rent due pursuant to this Lease
within five (5)days of its due date. If any check given in payment of rent is not honored when due, Landlord
may assess the late fee and may also require that subsequent rent payments be made by certified or
cashier's check. Landlord's rights under this Section 5 are in addition to and may be exercised cumulatively
with Landlord's rights and remedies under Section 14 below.
6. DEPOSIT. Within ten (10) business days following the expiration of the Inspection Period, Tenant
shall pay to Landlord the sum of two hundred fifty thousand dollars($250,000.00)as a deposit. The deposit,
once made, is non-refundable. The equivalent value of such deposit shall be applied to the purchase price
for the Property if Tenant exercises its purchase option set forth herein. In the event that Tenant terminates
this Lease during the Inspection Period, Tenant shall have no obligation with respect to the deposit.
7. USE OF LEASED PREMISES AND COMPLIANCE WITH LAW. The Leased Premises shall be used
only for general office purposes, and for no other purposes without the Landlord's prior written consent, such
consent not to be unreasonably withheld, conditioned or delayed. Tenant shall not use the Leased Premises
for any unlawful purpose or in any manner that might constitute a nuisance. Tenant shall comply with all land
use covenants and all ordinances and regulations of governmental authorities applicable to the Leased
Premises.
8. SIGNS. Tenant shall be solely responsible for all signage at the Property. This includes, but is not
limited to, approvals, cost, installation, maintenance, and repair.
9. CARE AND MAINTENANCE. Subject to the provisions of Section 29, Tenant shall, at the Tenant's
own expense, keep the Rented Space and Property in good condition and shall pay for the repair of any part
of the Property that needs repair due to wear and tear or damages caused by third parties or the Tenant, its
agents, employees, invitees, or contractors. Tenant shall make at its sole cost and expense, replacements
or restorations, in quality equivalent to or better than the original work, as may be required to maintain the
Rented Space in good repair and condition, ordinary wear excepted. Landlord is not responsible for
maintenance. Tenant is responsible for all maintenance of interior and exterior spaces, structure and
structural areas, walls, floors, roof, plumbing, heating and air, and electrical systems. It is the intent of this
Lease that Tenant have full responsibility for all maintenance and care of the Property and all Buildings
thereon.
10. ALTERATIONS BY TENANT.
(a) Requirements. Tenant is responsible for all up-fit costs and construction. The Tenant shall
furnish to the Landlord before commencement of the work or delivery of any materials to the Property all of
the following:
(i) all plans and specifications;
(ii) names and addresses of all contractors;
(iii) copies of all contracts;
(iv)all necessary permits;
(v) an indemnification of Landlord by all contractors in form and amount satisfactory to Landlord; and
(vi) certificates of insurance from all contractors performing labor or furnishing materials, insuring
against any and all claims, costs, damages, liabilities and expenses which may arise in
connection with such alterations.
Landlord shall not unreasonably withhold, condition or delay its approval of any alterations, up-fit, or
improvements requested by Tenant, and shall respond to Tenant within fifteen (15) days of receipt of any
requests for such approval with either its approval or with detailed comments on the reasons for its
disapproval, with Tenant being permitted to modify its plans and specifications and re-submit the same for
further approval. Notwithstanding the foregoing, without Landlord's consent, Tenant may make interior
changes and alterations to the Premises that(i)do not affect the structural integrity of the improvements, (ii)
do not materially reduce the market value of the Premises, and (iii) do not cost more than $100,000.00 in
total during any Lease Year.
(b) Liability. Regardless of who performs any alterations, up-fit, and remediation and
notwithstanding Landlord's consent thereto, Tenant shall hold the Landlord, its agents and employees
forever harmless from any and all liabilities of every kind and description which may arise out of or be
connected in any way with the alterations, up-fit, and remediation. Any mechanic's lien filed against the
Rented Space or the Property for work or materials claimed to have been furnished to the Tenant shall be
discharged of record by the Tenant within ten (10) days after filing, at the Tenant's expense. Upon
completion of such work, Tenant shall furnish Landlord with contractors' affidavits, full and final waivers of
lien and receipted bills covering all labor and materials expended. Should any claim of lien or lien action be
filed directly against Landlord Tenant shall indemnify and hold harmless Landlord from such claim or action
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and shall reimburse all costs, including reasonable attorneys' fees, incurred by Landlord in defending said
claim or action. Upon completing any alterations, up-fit, and remediation the Tenant shall furnish the
Landlord with contractors' affidavits, full and final waivers of lien and receipted bills covering all labor and
materials expended and used. All alterations, up-fit, and remediation shall comply with all insurance
requirements and with all ordinances and regulations of any applicable public authority. All alterations, up-fit,
and remediation shall be performed in a good and workmanlike manner, using first class materials. Liability
described herein shall be limited to the term of the Lease,whether or not extended, and shall terminate with
the acceptance of the Rented Space upon return by Tenant to Landlord.
(c) Ownership. All alterations and up-fit, made by either party, including without limitation all
paneling, walls, decorations, partitions, railings, floors, carpets, galleries, heating or air conditioning
equipment, plumbing, electrical machinery and equipment, and any other up-fit shall become the property of
Landlord and shall remain upon and be surrendered with the Rented Space and Property as a part of the
Rented Space and Property at the end of the Term. Notwithstanding the foregoing, in the event that the
Term ends because Tenant has exercised its option to purchase the Property, then all such alterations and
upfit shall remain with the Property and shall be conveyed to Tenant at the closing on the Property(by a bill
of sale or other appropriate instrument). Furniture, equipment, personal property and movable trade fixtures
which are installed by Tenant at its expense, except for those referred to above, shall remain Tenant's
property and may be removed at any time prior to the termination of the Term provided Landlord has not
asserted a lien against such property and further provided that Tenant promptly repairs any damage caused
by such removal. Any such trade fixtures which Tenant has the right to remove under the above provisions,
or personal property belonging to Tenant or to any invitee, assignee or subtenant, shall be deemed
abandoned by Tenant if not removed prior to termination of the Term (except in the event that the term ends
because Tenant has elected to purchase the Property), and shall become the property of the Landlord
without any payment or offset for the property, if Landlord so elects. If the Landlord does not so elect, the
Landlord may remove any fixtures or property from the Leased Premises and store them at the Tenant's sole
risk and expense or dispose of them in any manner, including the sale, scrapping or destruction thereof, and
to the extent permitted by law Tenant waives all claims against Landlord therefor. The Tenant shall repair
and restore, and save the Landlord forever harmless from, any and all damage to the Leased Premises
caused by such removal, whether by the Tenant or by the Landlord. Should Tenant exercise its option to
purchase all Alterations and up-fit shall convey with the Property. Tenant hereby agrees that upon its
surrender of the Property, it shall assign to Landlord any and all warranties given to Tenant with respect to
any work performed pursuant to this Lease.
11. ACCEPTANCE OF LEASED PREMISES. Occupation by Tenant shall constitute acceptance of the
Leased Premises AS IS. Landlord makes no representation or warranty, oral or written, as to the condition of
the Leased Premises nor as to the use or fitness of the Leased Premises for any particular purpose except
for general office use. Landlord shall not be responsible for obtaining any governmental approvals or permits
necessary to enable Tenant to occupy or use the Leased Premises. Obtaining all approvals and certificates
shall be the sole responsibility of the Tenant. The Landlord shall not be responsible for obtaining any
certificate of occupancy or other approvals required in connection with construction work and up-fit done by
the Tenant or contractors engaged by the Tenant.Tenant acknowledges it has been notified certain areas of
the Property have moisture intrusion and mold growth. Tenant acknowledges and accepts this notification
and accepts the Property with this and any other defect, known or unknown, including other potential areas
of moisture intrusion or mold growth and Tenant is solely responsible for all costs related to full remediation
of such moisture intrusion and mold growth and any other issues arising related to such moisture intrusion,
provided that Tenant does not elect to terminate this Lease during the Inspection Period (if Tenant does elect
to terminate this Lease during the Inspection Period, Tenant shall have no liability for such costs or for such
remediation). Tenant releases Landlord from any further responsibility or obligation to provide further notice
of or remediate any moisture intrusion and mold growth and releases, indemnifies, and holds harmless
Landlord from any and all claims related to such moisture intrusion, if Tenant does not elect to terminate this
Lease during the Inspection Period.
12. COMMENCEMENT. Landlord shall deliver exclusive possession of the Leased Premises to Tenant
in its current"as-is"condition upon the full execution of this Lease. Following the expiration of the Inspection
Period, Tenant shall commence its upfit of the Leased Premises pursuant to plans and specifications
approved by Landlord (such approval not to be unreasonably withheld, conditioned or delayed)(the"Tenant
Improvements"). Tenant shall prosecute the Tenant Improvements without delay in a commercially
reasonable manner beginning on the date hereof. Upon Tenant's substantial completion of the Tenant
Improvements such that Tenant can commence operations in the Premises in accordance with its customary
office usage, and Tenant's receipt of a Certificate of Occupancy for the Premises, "Substantial Completion"
shall be deemed to have occurred. If not sooner obtained, but subject to delays in Substantial Completion
due to events of force majeure, Substantial Completion and the Commencement Date shall be deemed to
have occurred on the date that is two hundred seventy(270)days following the expiration of the Inspection
Period, even if Tenant has not received a Certificate of Occupancy for the Premises or commenced
operations in the Premises by that date. Time is of the essence with regard to the Substantial Completion.
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13. ASSIGNMENT OR SUBLEASE.
(a) Assignment. Tenant may not mortgage, encumber, pledge, or assign this Lease without
Landlord's prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.
Notwithstanding the foregoing, Tenant may, without Landlord's consent, assign this Lease to (i) an entity
controlling, controlled by or under common control with Tenant, (ii) a successor to Tenant by merger or
acquisition, or(iii)the purchaser of all (or substantially all)of Tenant's assets at the Premises, provided that
Tenant shall remain liable under this Lease.
(b) Subletting. Tenant may not sublet the Leased Premises or any part thereof without Landlord's
prior written consent, such consent not to be unreasonably withheld, conditioned or delayed.
(c) Requirements. In the event of a proposed assignment of this Lease or subletting of all or a
substantial part of the Leased Premises, Tenant shall submit to Landlord, in writing, (i) the name of the
proposed assignee or subtenant, (ii)current financial statements available to Tenant disclosing the financial
condition of the proposed assignee or subtenant(any assignment or subletting being subject to confirmation
the assignee or subtenant has the same or similar financial position as Tenant,the absence of which by the
proposed assignee or subtenant shall constitute absolute grounds for Landlord's denial of the requested
assignment or subletting), (iii) the nature of the business of the proposed assignee or subtenant, and its
proposed use of the Leased Premises (any assignment or subletting being subject to restrictions on use
contained in this Lease, the violation of which by the proposed assignee or subtenant shall constitute
absolute grounds for Landlord's denial of the requested assignment or subletting), and (iv) the proposed
commencement date of the assignment or subletting, together with a copy of the proposed assignment or
sublease. If approved by Landlord, Tenant shall promptly deliver a copy of the fully executed assignment of
sublease to Landlord upon its receipt of same. In no event shall this Lease be assignable by operation of
any law except as provided herein, 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, ay not
become, and shall never represent itself to be an agent of Landlord, and Tenant acknowledges that
Landlord's title is paramount, and that it can do nothing to affect or impair Landlord's title. Tenant shall
remain primarily liable for the performance of all terms of this Lease in the event of any assignment or
subletting. Tenant shall pay all reasonable costs incurred by Landlord in connection with such assignment or
sublease, including without limitation, attorneys'fees, up to a maximum of$2,000 per request. Tenant shall
pay to Landlord fifty percent (50%) of any rental and fees received by Tenant in excess of(y) any amount
payable to Landlord hereunder plus (z) any amounts expended by Tenant (including brokerage
commissions) in procuring such subtenant.
14. DEFAULT BY TENANT AND LANDLORD'S REMEDIES.
(a) Events of Default. In addition to the other occurrences listed elsewhere in this Lease, the
occurrence of any one or more of the following shall constitute a default hereunder:
(i) If Tenant fails to pay any rent or other monetary payments as and when provided in this
Lease, and such failure continues for more than ten (10)days following Tenant's receipt of written notice of
such failure;
(ii) If Tenant breaches any other obligation set forth in this Lease and fails to cure such
breach within thirty (30)days after notice thereof; or if cure of the breach would require more than thirty(30)
days to effect, if Tenant fails to initiate action necessary to cure such breach within the thirty(30)day period
and to pursue such action diligently thereafter until the breach is cured;
(iii) If there is a levy, execution, attachment or taking of property, assets or the leasehold
interest of Tenant by process of law or otherwise or in satisfaction of any judgment, debt or claim or if Tenant
files, or has filed against it, any petition or action for relief under any debtor's relief law(including bankruptcy,
reorganization or similar actions or proceedings) either in state or federal court.
(b) Landlord's Rights and Remedies. In the event of any default, Landlord may at any time
thereafter, with or without notice or demand and without limiting Landlord in the exercise of any right or
remedy which Landlord may have by reason of default:
(i) Terminate this Lease.
(ii) Without terminating this Lease, terminate Tenant's right to possession of the Leased
Premises, enter upon and take possession of the Leased Premises and rent the Leased Premises for a
reasonable rental for the account of Tenant, and after paying from rents collected the reasonable costs of
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such entry, reletting and collection and the costs of any necessary repairs made by Landlord which Tenant is
obligated to make hereunder, apply the remainder of the rent collected to the amounts due and to become
due from Tenant hereunder;
(iii) Pursue any other remedy now or hereafter available to Landlord under this Lease or
under the laws of the state of North Carolina.
All rights and remedies of Landlord pursuant to this Section shall be cumulative, and may be exercised
singly, successively or, if appropriate, concurrently. In the event Landlord terminates this Lease or
terminates Tenant's right to possession of the Leased Premises,then Tenant shall surrender possession of
the Premises to Landlord, and Landlord shall have the full and free right to enter into and upon the Rented
Space with or without process of law, to repossess the Rented Space, to expel or remove the Tenant and
any others who may be occupying or be within the Rented Space, to remove any and all property from the
Rented Space and to the change the locks on the Rented Space,without being deemed in any manner guilty
of trespass, eviction or forcible entry or detainer. In any event of default by Tenant, Landlord shall be entitled
to recover from Tenant all damage incurred by Landlord by reason of Tenant's default, including but not
limited to: any unpaid rent; the cost of recovering possession of the Premises, including reasonable
attorney's fees; expenses of reletting, including necessary renovation and alteration of the Premises,
reasonable attorney's fees, and any real estate commission actually paid; any loss of future rental that would
have been due during the then current Term, provided that such amount shall be offset by the fair market
rental value of the Premises for such remaining period of the current Term; and a pro rata portion of any
leasing commission paid by Landlord based on the number of days of any period for which a commission
was paid that remain after the date of Tenant's default. Any rent unpaid when due, including additional rent
not paid upon demand, shall bear interest from the date due at the rate of twelve percent (12.00%) per
annum.
(c) Treatment of Tenant's Property. Any and all property which may be removed from the Rented
Space by the Landlord pursuant to the authority of the Lease or law, to which the Tenant is or may be
entitled, may be handled, removed or stored by the Landlord at the risk, cost and expense of the Tenant, and
except strictly as required by law the Landlord shall in no event be responsible for the value, preservation or
safekeeping thereof. The Tenant shall pay to the Landlord, upon demand, any and all expenses incurred in
such removal and all storage charges for such property so long as the property shall be in the Landlord's
possession or under the Landlord's control. Any such property of the Tenant not retaken from storage by the
Tenant within thirty(30)days after the end of the term, however terminated, may be disposed of by Landlord
in any manner whatsoever, including without limitation, the sale, scrapping or destruction of the property
without any further obligation to the Tenant, and Tenant shall pay to Landlord promptly on demand the
reasonable expenses of such disposal.
(d) Landlord's Lien on Tenant's Property. Tenant hereby grants to Landlord a lien for the payment of
rent, additional rent and all other monies to be paid by Tenant to Landlord under this Lease, upon all of the
goods, wares, chattels, fixtures, furniture, equipment and other property of Tenant which may be in or upon
the Rented Space or the Property. Such lien may be enforced in any lawful manner by the Landlord.
Notwithstanding the foregoing, Landlord acknowledges that Tenant may seek financing from a third-party,
institutional lender which may require a first priority lien on such goods, wares, chattels, fixtures, furniture,
equipment and other property, and in such circumstance, Landlord agrees to enter into and provide a
commercially reasonable subordination agreement subordinating Landlord's lien rights in and to such goods,
wares, chattels, fixtures, furniture, equipment and other property to the lien rights of such lender.
(e)Landlord's Option to Cure. If Tenant defaults in the performance of any of its obligations under this
Lease, including without limitation, its obligations under Section 9 hereof,then Landlord or any mortgagee or
ground lessee of Landlord may, at its option, cure such default, and Tenant shall pay to Landlord or such
mortgagee or ground lessor, as the case may be, the cost of such cure immediately upon being billed for
same.
(f) No Waiver. The failure of Landlord to declare Tenant to be in default at any time or to exercise
any of its rights or remedies upon default any by Tenant shall not be deemed to be a waiver by Landlord of
any of its rights or remedies hereunder.
(g) Incentive Agreement. Landlord shall be entitled to any rights and remedies provided for in the
Incentive Agreement for an event of default under this Lease. However, in the event of a default under the
Incentive Agreement, in the absence of an event of default under this Lease, Landlord's rights and remedies
shall be limited to those provided in the Incentive Agreement.
Notwithstanding anything to the contrary contained herein, in no event shall Tenant be liable for
consequential, punitive, or special damages.
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15. HOLDING OVER. In the event the Tenant remains in possession of the Rented Space after the
expiration of the Term without the written consent of Landlord (unless Tenant has properly exercised the
option to purchase the Leased Premises), then the Tenant shall be a tenant at sufferance from month to
month only, and the Tenant shall then be obligated to pay one hundred fifty percent (150%) of the then
current Base Rent and all other sums then payable hereunder("Holding Over Rent"), in equal installments on
the first day of each calendar month for so long as Landlord is kept out of possession of the Rented Space.
Neither such payment nor the acceptance of such payment shall in any way constitute a waiver of the rights
of Landlord to dispossess the Tenant and recover possession of the Rented Space and the just and former
estate of the Landlord and to bring any action for damages suffered by Landlord on account of Tenant's
failure to vacate the Rented Space.
16. SURRENDER OF RENTED SPACE. Upon the expiration or other termination of the Term, Tenant
shall quit and surrender to Landlord the Rented Space, broom clean, in good order and condition, ordinary
wear excepted, and Tenant shall remove all of its property except as otherwise provided in Section 10.
17. DAMAGE TO RENTED SPACE OR BUILDING.
(a) Tenant's Insurance. Tenant shall maintain standard fire and extended coverage insurance
covering the Building in an amount not less than 80% (or such greater percentage as may be necessary to
comply with the provisions of any co-insurance clauses of the policy) of the "replacement cost" thereof as
such term is defined in the Replacement Cost Endorsement to be attached thereto, insuring against special
causes of loss(including the perils of fire and lighting), such coverages and endorsements to be as defined,
provided and limited in the standard bureau forms prescribed by the insurance regulatory authority for the
State of North Carolina. Subject to the provisions of Section 19 below, such insurance shall also be for the
benefit of Landlord.
(b) Notice by Tenant. If the Rented Space is damaged or destroyed by any peril covered by the
insurance to be provided by subparagraph (a) above, Tenant shall give immediate written notice thereof to
Landlord.
(c) Extensive Damage. If the Rented Space is so damaged by any peril covered by the insurance to
be provided under subparagraph (a) above that rebuilding or repairs cannot in the estimation of a licensed
North Carolina General Contractor selected by Landlord, be completed within one hundred fifty (150)days
after the date of such damage, Tenant may elect, in its sole discretion, to terminate this Lease, and the rent
shall be abated during the unexpired portion of this Lease, effective upon the date of the occurrence of such
damage.
(d) Repairable Damage. If the Rented Space is damaged by any peril covered by the insurance to
be provided under subparagraph (a) above, but only to such extent that rebuilding or repairs can, in the
estimation of a licensed North Carolina General Contractor selected by Landlord, be completed within one
hundred fifty(150) days after the date of such casualty, this Lease shall not terminate, and Tenant shall, at
its sole cost and expense, thereupon proceed with reasonable diligence to rebuild and repair the Rented
Space to substantially the condition in which it existed prior to such damage. There shall be no abatement of
rent during any such period of rebuilding and repair.
(e) Landlord's Option to Terminate. Notwithstanding any other provision herein, if any portion of the
Rented Space is materially damaged or destroyed during the final Lease Year of the initial term or any
extension term of this Lease,then Landlord shall have the option to terminate this Lease upon written notice
to Tenant delivered within forty-five (45) days of the date of such damage.
18. TENANT'S INDEMNITY OF LANDLORD AND TENANT'S INSURANCE.
(a) Tenant's Indemnity of Landlord. To the extent authorized by North Carolina law, Tenant shall
indemnify and save the Landlord and its agents, officers, and employees harmless against any and all
claims, demands, costs, and expenses, including reasonable attorney's fees for the defense thereof, arising
directly or indirectly out of or in connection with Tenant's occupancy at the Property or from any breach or
default on the part of Tenant in the performance of any covenant or agreement on the part of Tenant to be
performed pursuant to the terms of this Lease, or from any act or negligence of Tenant, its agents, servants,
employees or invitees, in or about the Property.
(b) Tenant's Commercial General Liability Insurance. Tenant shall at all times during the Term,at its
sole cost and expense, procure and maintain in force and effect a policy or policies of commercial general
liability insurance issued by a company or companies from time to time approved by Landlord, which
companies must be authorized to transact business in North Carolina. Such policy or policies shall insure
against loss, damage or liability for injury to or death of persons and loss or damage to property occurring
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from any cause whatsoever in, upon or about the Property. Such policies of public liability insurance shall
name Landlord as an additional insured and shall be in amounts and afford coverage against perils as
reasonably required from time to time by Landlord. Coverage shall initially be in the single limit amount of
one million dollars ($1,000,000.00). Such policy or policies shall include affirmative coverage of Tenant's
indemnity of Landlord pursuant to subsection (a) above.
(c) Tenant's Property Insurance. Tenant shall obtain and maintain property insurance upon its
furniture, equipment, trade fixtures, and any other personal property of Tenant or of any third parties which
may from time to time be located in, on or around the Property. Such insurance shall be maintained in the
amount of the full replacement cost of such property. All such policies shall include a waiver of subrogation
of any and all claims against the Landlord and name the Landlord as an additional insured. Tenant shall look
solely to its insurance policy for recovery of any loss for any such property, and in no event shall it make any
claim against the Landlord for any loss to any such property. The Tenant hereby releases Landlord from any
such liability, and Tenant shall indemnify and hold the Landlord harmless from and against any claim of
Tenant's insurance carrier or arising out of Tenant's failure to maintain such insurance.
(d) Tenant's Business Interruption Insurance. Tenant shall at all times during the Term maintain
business interruption insurance, insuring Tenant from loss, damage, cost or expense from any disruption to
or interruption to its business resulting from damage to or malfunction of the Rented Space or the Property or
any components thereof or any of the systems (heating, plumbing, mechanical or otherwise) or utilities
serving them. Such insurance shall cover a continuous period of disruption or interruption of not less than
one hundred eighty (180) days per occurrence.
(e) Policies or Certificates of Insurance. At the request of Landlord,the Tenant shall furnish certified
copies of policies or certificates of insurance in the form of or on ACORD 27, or equivalent document,
bearing notations evidencing the payment of premiums and evidencing the insurance coverage required to
be carried by Tenant under this Lease, including but not limited to,the insurance policies required by Section
17(a) and Sections 18 (b) — (d) hereunder. Each policy and certificate shall contain an endorsement or
provision requiring not fewer than thirty (30) days written notice to Landlord prior to the cancellation,
diminution in the perils insured against or reduction of the amount of coverage of the particular policy in
question.
19. TENANT'S WAIVER OF CLAIMS; MUTUAL RELEASES.
(a) Tenant's Waiver of Claims. To the extent permitted by law, the Tenant releases the Landlord and
its agents, officers, and employees from, and waives all claims for damage or injury to person or property or
disruption to business sustained by the Tenant, any guest, invitee, trespasser, or any occupant of the
Property, the Building or the Rented Space, or any part or any of them, resulting from any accident, mishap
or other occurrence in or about the Property, whatever the cause. This shall include but not be limited to,
the flooding of surface areas, basements or other subsurface areas, and damage caused by refrigerators,
sprinkling devices, air conditioning or electrical equipment,water, snow,frost, steam, excessive heat or cold,
falling plaster, broken glass, sewage, gas, odors or noise or the bursting or leaking of pipes or plumbing
fixtures, and shall apply equally whether any such damage results from the act or neglect of the Landlord,
other tenants, occupants or servants in the Building or any other person, and whether such damage be
caused or result from anything or any circumstance above mentioned or referred to, or any other thing or
circumstance whether of a like nature or of a wholly different nature.
(b) Tenant's Release. Notwithstanding anything to the contrary contained in this Lease, Tenant
hereby releases Landlord from any and all liability for loss or damage coverable by the insurance required to
be carried by Tenant in Section 18 above, even if the insured peril shall be brought about by the default,
negligence or other action of the Landlord, its agents, employees, tenants, invitees or any of them.
20. EMINENT DOMAIN. If all of the Rented Space, 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 condemner, and
rent shall be adjusted between Landlord and Tenant as of that date. If only a portion of the Rented Space is
taken and Tenant can continue use of the remainder,then the 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 any award made to or received by Landlord for any taking and no right or claim for any
alleged value of the unexpired portion of this Lease; 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's personal property (other than its leasehold estate) to which Tenant may be
entitled. In the event of a temporary taking of ninety(90)days or less, this Lease shall not terminate, but the
term of this Lease shall be extended by the period of the taking and the rent shall abate in proportion to the
area taken for the period of such taking.
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21. UTILITIES AND OTHER SERVICES.
(a) Standard Services. Tenant is solely responsible for the cost, maintenance, operation, and
provision of all utilities including but not limited to electrical, HVAC, plumbing, etc.
(b) Intent. It is the intent of this Lease that Landlord is released from responsibility to provide utilities
access on the Property and such responsibility rests solely with Tenant.
22. COVENANT OF TITLE AND QUIET ENJOYMENT. Landlord covenants that it has full right and
power to execute this Lease and to grant the estate demised in this Lease. The Landlord's title is and always
shall be paramount to the title of the Tenant, and nothing herein contained shall empower the Tenant to do
any act which can, shall or may encumber such title. Landlord also covenants that if Tenant promptly and
punctually complies with each of its obligations hereunder, it shall peacefully have and enjoy the possession
of the Leased Premises during the term of this Lease, provided that no action of Landlord in repairing or
restoring the Rented Space or in working in other space in the Building, shall be deemed a breach of this
covenant.
23. INSPECTION PERIOD. For a period of one hundred twenty(120)days following the date of the full
execution of this Lease (the "Inspection Period"), Tenant may, at Tenant's sole expense, make such
inspections of the Premises as it deems necessary, including the taking of soil samples in conjunction with
engineering studies, and examining of permitted uses on the Premises. Tenant may obtain an ALTA/ACSM
or other form of survey of the Premises during the Inspection Period, and, in the event the legal description of
the Premises materially differs from the legal description attached hereto as Exhibit A, this Lease shall be
amended to replace Exhibit A with the legal description from Tenant's survey. Tenant may further obtain
from a reputable company actively engaged in the business of environmental engineering and testing, such
reports as Tenant deems necessary to assess the presence of, and risk caused by, asbestos, petroleum
products or other potentially hazardous,toxic or dangerous materials in the Premises. Landlord shall allow
Tenant, its agents and representatives, access to the Premises during the Inspection Period for the purposes
of the such testing and inspections, and Tenant agrees to leave the Premises in substantially as good of
condition as existed prior to such inspections. During the Inspection Period, Tenant shall also be permitted
to apply for any and all permits, approvals and licenses for the construction of Tenant's improvements on the
Premises, and the operation of Tenant's business therein (collectively, the "Permits"). Landlord agrees to
join in any necessary applications for such Permits. At any time during the Inspection Period,Tenant may, in
its sole discretion, notify Landlord that the Premises is not suitable for its intended use by Tenant, upon
which notice the Lease shall be terminated and of no further force and effect, and neither party shall have
any further liability or obligations to the other hereunder. During the Inspection Period, the County shall be
permitted to continue to occupy the Premises, provided that(i)the County fully vacates the Premises by the
expiration of the Inspection Period, and (ii)the County does not unreasonably interfere with the performance
of Tenant's inspections.
24. Intentionally Omitted
25. INFORMATION CONCERNING TENANT. Tenant shall furnish within fifteen (15)days after request
from Landlord such current information concerning the financial condition of Tenant as Landlord may
reasonably require. Such financial information shall include (but is not necessarily limited to) a financial
statement dated not more than twelve (12) months prior to Landlord's request. Such financial statement
shall be prepared in accordance with generally accepted accounting principles and, if such request is
following the applicable year-end of Tenant's fiscal year, may be certified by a certified public accountant. A
general partner or officer or manager of Tenant shall furnish a certification to Landlord to the effect that there
either has or has not been any material adverse change in the financial condition of Tenant since the date of
the financial statement submitted, and if such certification states that there has been a material adverse
change, furnishing such details concerning same as landlord may request. If Tenant does not execute and
return such certificate as required above, Tenant hereby irrevocably appoints Landlord as its attorney in fact
to execute such certificate on behalf of Tenant.
26. AUTHORITY OF TENANT. Tenant represents and warrants to Landlord that (i) Tenant is duly
formed, validly existing and in good standing under the laws of its State of Incorporation or Organization and
(ii) the persons executing this Lease on behalf of Tenant are authorized to do so. Tenant shall furnish to
Landlord within fifteen (15) days after request from Landlord such corporate or company resolutions,
certificates of incumbency, partnership resolutions, partnership agreements, operating agreements, bylaws
or legal opinions or other information as Landlord may reasonably request in order to confirm that the
execution and delivery of this Lease has been duly authorized by Tenant and that the person(s) executing
this Lease on behalf of Tenant were duly authorized to do so. All such company, corporate, or partnership
resolutions, certificates or agreements shall be certified as being duly adopted and in full force and effect,
without amendment, by an appropriate officer, manager or partner of Tenant.
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27. ESTOPPEL. Within ten (10)days after request therefore by Landlord,Tenant agrees to execute and
deliver to Landlord a certificate prepared by Landlord to any proposed mortgagee, ground lessee or
purchaser of the Property or to Landlord certifying (if such is the case) that this Lease is in full force and
effect,that there are no defenses or offsets thereto, or stating those claimed by Tenant, and such other facts
related to this Lease, the Leased Premises or Tenant as Landlord may request. If Tenant does not execute
and return such certificate as required above, Tenant hereby irrevocably appoints Landlord as its attorney in
fact to execute such certificate on behalf of Tenant.
28. RIGHT TO RELOCATE. This Lease is exclusive to the Property. Should the Property become
untenantable the Tenant shall have no right to relocate to other property owned by the Landlord, nor shall
Landlord have any obligation or responsibility to assist Tenant to relocate. Tenant's rights in any event in
which the Rented Space becomes untenantable are limited to those rights established herein.
29. LANDLORD'S ACCESS TO RENTED SPACE. The Landlord or Landlord's agent shall have the right
to periodically enter upon the Rented Space and the Property to inspect them by providing Tenant with at
least 48 hours prior notice and the opportunity for Tenant to have a representative accompany Landlord and
its agents. Such inspection shall occur during regular business hours and the Tenant shall be personally
present to open and permit an entry into the Rented Space and Property. In the event of an emergency the
Landlord or Landlord's agents may enter the same by a master key, or may forcibly enter the same, without
prior notice and without rendering the Landlord or such agents liable therefore(if during such entry Landlord
or Landlord's agents shall accord reasonable care to Tenant's property)and without in any manner affecting
the obligations and covenants of this Lease. Nothing herein contained, however, shall be deemed or
construed to impose upon the Landlord any obligations, responsibility or liability whatsoever, for the care,
supervision or repair of the Building or any part thereof, other than as provided in this Lease. The Landlord
shall have the right to show the Rented Space and Property to prospective new tenants during the last 120
days of the Term. The Landlord shall not be liable to the Tenant for any expense, injury, loss or damage
resulting from work done in or upon, or the use of, any adjacent or nearby building, land, street or alley.
30. MANAGING AGENT. Landlord reserves the right to designate a Managing Agent and to delegate
any or all of Landlord's powers, duties, obligations, or rights under this Lease to the Managing Agent. To the
extent Landlord's duties or obligations under this Lease are assumed in writing by the Managing Agent,
Landlord shall not be responsible for the assumed duties or obligations. Tenant's rights and obligations
under this Lease shall not be affected by designation of a Managing Agent by the Landlord.
31. SUBORDINATION. This Lease is subject and subordinate to all security liens, mortgages, deeds of
trust and related financing instruments which may now or hereafter affect the Property or any part thereof,
and to all renewals, modifications, consolidations, replacements, amendments and extensions thereof,
unless Landlord or any lender secured by a mortgage, deed of trust or similar security instrument elects to
make this Lease superior to same, which it may do at its option. Tenant shall execute within ten (10) days
after request any certificate, subordination agreement, priority agreement or other form of instrument in
confirmation of such subordinate or superior status that Landlord may request, including an agreement to
attorn, provided that such agreement contains commercially reasonable non-disturbance language.
Tenant shall have the right at any time to grant a security interest in Tenant's Property. Landlord hereby
consents to any such security interest and disclaims any interest of any kind in any such goods and property
installed or kept on the Premises. Landlord agrees that it will, within ten (10) days after any written request
by Tenant, confirm the foregoing consent and disclaimer in writing in such form as may be requested by
Tenant. Further, Tenant may,without the approval of the Landlord, at any time mortgage, encumber, pledge
or assign as security its right, title and interest in and to the leasehold estate created hereby. Tenant may, at
any time, give the Landlord a notice(hereinafter referred to as a"Mortgage Notice")containing the name and
address of a lender(hereinafter referred to as a "Mortgage Lender") to which the leasehold estate created
hereby has been or will be mortgaged, encumbered, pledged or assigned as security. Landlord agrees to
join in (and cause all other parties whose consent or joinder is required to join in)Tenant's encumbrance of
Tenant's leasehold interest to any Mortgage Lender. Provided, however, that any such mortgage,
encumbrance, pledge, assignment or security interest may not provide for any liability of Landlord except as
may be explicitly provided in this Lease and Landlord shall not be personally liable for any loan secured by
any mortgage, encumbrance, pledge, assignment or security interest in Tenant's Leasehold estate created
32. RESERVATION OF RIGHTS. Landlord hereby reserves to itself and its successors and assigns the
following rights (all of which are hereby consented to by Tenant):
(a) to change the street address of the Building.
Landlord may exercise any or all of the foregoing rights without being deemed to be guilty of an eviction,
actual or constructive, or a disturbance or interruption of the business of Tenant or Tenant's use or
occupancy of the Leased Premises.
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33. NOTICES. Any notices which Landlord or Tenant requires or desires to give to the other relating to
this Lease or the Leased Premises must be in writing and shall be deemed sufficiently given and delivered if:
(a) Hand-delivered to the following addresses:
If to Landlord: Orange County
Director, Asset Management Services
Margaret Lane
Hillsborough, NC 27278
If to Tenant: 419 W. Franklin St.
Chapel Hill, NC 27516
Attn: Jared Sokolsky
With a copy to: Moore & Van Allen PLLC
100 North Tryon Street, Suite 4700
Charlotte, NC 28205
Attn: Christopher D. Thompson, Esq.
-AND-
(b) Sent by email transmission to the following:
If to Landlord: ALL_AMS_MANAGEMENT@orangecountync.gov
If to Tenant: iared.sokolskyP-well.co
thompsonc(c mvalaw.com
(c) Payment made to: Orange County
Finance and Administrative Services
P.O. Box 8181
Hillsborough, NC 27278
Either party may change its designated address or email address for receipt of notice by written notice to the
other party pursuant to this Section 33.
34. ENTIRE AGREEMENT; MODIFICATION. Except as otherwise referenced herein this Lease contains
the entire agreement of the parties in regard to the Leased Premises. There are no oral agreements existing
between them and there shall be no oral changes. Neither Landlord nor any agent of Landlord has made
any representations, warranties or promises with respect to the Rented Space, the Building or the Property,
or the use of any amenities or facilities, except as expressly set forth in this Lease. Any agreement made
after this Lease is signed shall be ineffective to change,waive, modify, discharge, or terminate it in whole or
in part unless such agreement is in writing and executed by both Landlord and Tenant.
35. RIDERS AND EXHIBITS. All riders and exhibits attached to this Lease and initialed by the Landlord
and the Tenant are hereby made a part of this Lease as though inserted in this Lease.
The following Exhibits are attached hereto and incorporated herein:
Exhibit A Site and Legal Description of Property
Exhibit B Sketch of Rented Space
Exhibit C Memorandum of Lease
36. SECTION HEADINGS. The headings of sections are for convenience only and do not limit or alter
the contents of the sections.
37. NUMBER AND GENDER. The words"Landlord"and "Tenant"wherever used in the Lease shall be
construed to mean plural where necessary, and the necessary grammatical changes required to make the
provisions hereof apply either to corporations, partnerships or individuals, men or women, shall in all cases
be assumed as though in each case fully expressed.
38. GOVERNING LAW AND TENANT'S RELEASE. This Lease shall be governed and construed
pursuant to the laws of North Carolina. Any action brought to enforce or contest any term or provision of this
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Lease shall be brought in the North Carolina General Court of Justice sitting in Orange County, North
Carolina. The Parties hereto stipulate to the jurisdiction of said court. It is agreed by the Parties that no
other court shall have jurisdiction or venue with respect to any claims, complaints, suits, or actions arising out
of or related to this Lease. Binding arbitration may not be initiated by either party, however,the Parties may
agree to nonbinding mediation of any dispute prior to the bringing of a claim, complaint, suit, or action.
Should any court having jurisdiction determine this Lease in whole or in material part is unlawful or the
entering thereof is or was outside the scope of Landlord's authority, Landlord may terminate this Lease
without further obligation (except as provided herein) and Tenant specifically releases and holds harmless
Landlord, its agents, employees, officers and assigns from any loss, liability, claim or damage suffered by
Tenant as a result thereof and waives the right to bring any action or complaint against Landlord to recover
for same. Notwithstanding the foregoing, in the event of any such termination, Tenant may elect to exercise
the option to purchase set forth in Section 3(d)herein by providing Landlord with written notice thereof within
sixty(60)days of such termination, and such termination shall not void Tenant's option to purchase so long
as Tenant provides such written notice within the aforesaid 60-day period.
39. SEVERABILITY. If any term, covenant or condition of this Lease or the application thereof to any
person or circumstance shall,to any extent, be invalid or unenforceable,the remainder of this Lease shall not
be affected thereby; and each term, covenant or condition of this Lease shall be valid and be enforced to the
fullest extent permitted by law.
40. Intentionally Omitted.
41. BINDING EFFECT. Each provision of this Lease shall extend to and shall bind and inure to the
benefit of the Landlord and the Tenant and their respective heirs, legal representatives, successors, and
assigns.
42. LIMITATION ON RIGHT OF RECOVERY AGAINST LANDLORD. Tenant acknowledges and agrees
that the liability of Landlord under this Lease shall be limited to its interest in the Property and anyjudgments
rendered against Landlord shall be satisfied solely out of the proceeds of the sale of its interest in the
Property. No personal judgment shall lie against Landlord upon extinguishment of its rights in the Property
and any judgment so rendered shall not give rise to any right of execution or levy against Landlord's assets.
The provisions hereof shall inure to Landlord's successors and assigns, including any Mortgagee. The
foregoing provisions are not intended to relieve Landlord from the performance of any of Landlord's
obligations under this Lease, but only to limit the personal liability of Landlord in case of recovery of a
judgment against Landlord; nor shall the foregoing be deemed to limit Tenant's rights to obtain injunctive
relief or specific performance or to avail itself of any other right or remedy which may be awarded Tenant by
law or under this Lease.
43. BROKERAGE. The Tenant and Landlord each represents to the other that it has not dealt directly
with any brokers in connection with this Lease, and that no broker procured this Lease or is entitled to any
commission in connection with the Lease, and in the event either party has hired a broker such hiring party
shall indemnify, defend, and hold forever harmless the other party from and against any claim by such hired
broker and from and against any and all costs directly or indirectly arising out of any such hiring.
44. MEMORANDUM. Concurrently with the execution of this Lease, the Landlord and Tenant shall
execute and deliver a memorandum of lease in the form provided for on Exhibit C attached hereto and
incorporated herein, which memorandum of lease shall reference Tenant's right to purchase the property,
and such memorandum of lease may be recorded by Tenant with the Orange County Register of Deeds
following the expiration of the Inspection Period.
45. FORCE MAJEURE. Except for the payment by Tenant to Landlord of any sum due under this Lease,
neither Landlord nor Tenant shall be considered in default of any of the terms, covenants and conditions of
this Lease on such party's part to be performed if such party fails to timely perform same, and such failure is
due, in whole or in part, to any strike, lockout, labor trouble, whether legal or illegal, civil disorder, inability to
procure materials, failure of power, restrictive governmental laws and regulations, riots, insurrections, war,
fuel shortages, accidents, pandemic or epidemic, casualties,Acts of God, acts caused directly or indirectly by
the other party or its's agents, employees or invitees, or any other cause beyond the reasonable control of
the performing party. Force Majeure does not include failure of the Tenant to secure permitting necessary
for the up-fit, occupancy, or other use of the Property.
46. TAXES. Tenant shall be responsible for all ad valorem taxes on the Property (if any) during the Term,
taxes on its personal property and on the value of any leasehold improvements.
47. COUNTERPARTS. This Lease may be executed in counterparts. Each fully executed counterpart shall
be an original and it shall not be necessary in making proof of this Lease to produce or account for more than
one such counterpart. The submission of this Lease by Landlord, its agent or representative,for examination
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or execution by Tenant does not constitute an option or offer to lease the Leased Premises upon the terms
and conditions contained herein or a reservation of the Property in favor of Tenant. It is intended hereby that
this Lease shall only become effective upon the execution hereof by Landlord and delivery of a fully executed
counterpart hereof to Tenant.
48. MISCELLANEOUS. All rights and remedies of Landlord under this Lease shall be cumulative and none
shall exclude any other rights or remedies allowed by law. In the event this Lease or any term or condition
hereof is prohibited by law, it shall be considered null and void and of no further effect. In the event of a
conflict between the terms and conditions of this Lease and the Lease Provisions Term Sheet, the terms of
the Lease shall govern and control.
IN WITNESS WHEREOF, Landlord and Tenant have duly executed this Lease,to be effective as of the date
first stated above.
LANDLORD:
Orange County North Carolina
P.O. Box 8181
Hillsborough, North Carolina 27278
w
Attest:
Renee Price, Chair
TENANT:
Well Dot, Inc.
Attest: By:
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EXHIBIT A
SITE AND DESCRIPTION OF THE PROPERTY
Attached to and Made Part of Lease
1
PIT 9788-15-1.829 PIN 9788-15-1996 PIN 9788-15-2922
TAX K" NO. 7.92,F.2A TAX ZAP NO. 7.92.1'.2 TAX X" NO. 7.92.F.
All those certain tracts or parcels of land, together with all improvements
thereon situated, lying and. being at the Southwestern intersection of West
F'rarskhn and South Roberson Streets in the Town of Chapel Hill, North Carolina
and more particularly described as;
BEGINNING at a stake in the intersection and running thence along* the
West property line of South Roberson Street, South 250 15' 18" East 200 feet to a
stake; thence continuing with the "lest property line of South Roberson Street,
,youth 25° 15" 18" East 65 feet to a stake; thence leaving the Fest property line of
South Roberson Street and following with a northern Line of property novo or
Formerly owned by Pecolia Hogan, South 641 36' 31" West 135.56 feet to a stake;
thence South 25° 48' 27" Fast 65.91 feet to a stake; thence Soxith 65° 16' 21" West
37.70 feet to a stake; thence North 25° 23' 00" West 350.30 feet to a stake in the
South property lime of West Franklin Street; thence with the South property line
of West Franklin Street North 64' 33' 05" East 1461 2.5 feet to a stake, thence
continuing with the South property lime of West Franklin Street North 64' 33' 05"
East 69.67 feet to a stake, the point and place of BEGINNING, according to plat of
survey entitled "Physical Survey Prepared For The County of Orange" by
Ballentine 8& Riley Surveyors, dated 7-8-96 and last revised July 17, 1996, and
recorded in Plat ]hook 76, Page 103, Grange County Registry, to which plat
reference is hereby made for a more particular description of the property
conveyed.
Same being Lots 1-A, 1-B, 2 and 3 as per plat and survey entitled "Property of
Forest Bills Shopping Center, Inc., et al." by Robert J. Ayers, Surveyor, dated
October 1963, as revised July, 1967, which plat is recorded in Plat Book 16, Page
27, Grange County Registry and also being part of the property shown on the plat
entitled "Recombination of the Property of Orville Campbell" by Freeland
Surveyors, Inc., dated December 22, 1987 and revised January 14, 1388 and
January 21, 1988, which plat is recorded in plat Book 49, Page 72, Orange
County Registry.
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EXHIBIT B
SKETCH OF RENTED SPACE
Attached to and Made Part of Lease
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EXHIBIT C
FORM OF MEMORANDUM OF LEASE
Mail after Recording to: Steven A. Arndt, P.O. Box 8181 Hillsborough, NC 27278
STATE OF NORTH CAROLINA
MEMORANDUM OF LEASE
ORANGE COUNTY
THIS MEMORANDUM OF LEASE ("Memorandum"), made and entered into as of the last date set forth in
the notary acknowledgments below (the "Effective Date"), by and between ORANGE COUNTY, a political
subdivision of the State of North Carolina, hereinafter referred to as ("Landlord") and WELL DOT, Inc.,
hereinafter referred to as ("Tenant'). Landlord and Tenant may be collectively referred to hereinafter as the
"Parties" or individually as the "Party."
WITNESSETH:
WHEREAS, the Parties executed a Lease Agreement for the Leased Premesis; and
WHEREAS, the Parties desire to record this Memorandum for the purpose of providing record notice
of the existence of the Lease and certain of the terms contained therein.
NOW,THEREFORE, for and in consideration of the terms, covenants, and conditions set forth in the
Lease and other good and valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, Landlord and Tenant hereby acknowledge and declare as follows:
1. Leased Premises. 501 W. Franklin Street, 503 W. Franklin Street, and 108 S. Roberson Street
Chapel Hill, NC 27517, three parcels situated in Chapel Hill, North Carolina having approximately 21,612
square feet of office space.
2. Term. The term of the Lease shall be for a period of 120 months and shall commence on the date of
Substantial Completion, as that term is defined in the Lease Agreement(the"Term"). Upon mutual consent
the Lease may be extended by Tenant for two additional terms of five years each.
3. Option. During the initial 120 month term, the Tenant may exercise an option to purchase the Leased
Premises.
4. Incorporation. All of the terms, covenants, and conditions contained in the Lease Agreement are
incorporated herein by reference. Should the terms, covenants, and conditions contained in this
Memorandum conflict with the terms, covenants, and conditions contained the Lease Agreement,the terms,
covenants, and conditions of the Lease Agreement shall control.
[signature on following page]
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IN WITNESS WHEREOF the Parties have caused this Memorandum to be duly executed and
recorded as of the effective date.
LANDLORD: ORANGE COUNTY
By:
STATE OF NORTH CAROLINA
COUNTY OF ORANGE
I, a Notary Public for County, North Carolina, do hereby certify
that personally appeared before me this day and acknowledged the due
execution of the foregoing instrument.
WITNESS my hand and official seal, this the day of , 2022.
SEAL Notary Public
My Commission Expires:
TENANT:
By:
And:
STATE OF NORTH CAROLINA
COUNTY OF
I, a Notary Public for County, North Carolina, do hereby certify
that and personally appeared before me this day and
acknowledged the due execution of the foregoing instrument.
WITNESS my hand and official seal, this the day of 2022.
SEAL Notary Public
My Commission Expires:
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Attachment 2
STATE OF NORTH CAROLINA
ORANGE COUNTY
PERFORMANCE AGREEMENT BETWEEN ORANGE COUNTY,NORTH CAROLINA,AND
WELL DOT,INC.
This Performance Agreement("Agreement")made and entered into this the 24th day of May, 2022 by
and between Orange County, a political subdivision of the State of North Carolina("County") and Well
Dot, Inc., a Delaware corporation, with facilities to be located in Chapel Hill, Orange County,North
Carolina("Company"), for the purpose of incentivizing Company's investment in Orange County.
County and Company may be jointly referred to as the "Parties."
Company is a privately-held Delaware corporation situated and doing business in the Town of Chapel
Hill, Orange County,North Carolina. Company's Facility shall serve as the corporate offices and the
company's health care operations center. Company represents it is duly authorized to conduct business
in North Carolina. It is understood that the levels of performance required by this Agreement are to be
met by Company as a whole at its Facility in Orange County. Accordingly,the term"Company" as used
in this Agreement refers to the entire group at such Facility.
WITNESSETH
THAT WHEREAS,the County has offered to the Company an inducement package as hereinafter set
forth; and
WHEREAS,the State of North Carolina and the Town of Chapel Hill,North Carolina have offered
separate inducement packages to the Company; and
WHEREAS, Pursuant to G.S. Section 153A-449, 158-7.1, and 158-7.2, as construed by the North
Carolina Supreme Court in its opinion in Maready v. The City of Winston-Salem, et al, 342 N.C. 708
(1996), and other judicial authority,the County may enter into an agreement with the Company in
connection therewith; and
WHEREAS,the County finds that awarding the Company an inducement package based on its
Employment Goals and Total Taxable Investment will increase the taxable property base for the County
and help create new jobs in the County at the agreed average annual salary, all of which will result in an
added and valued benefit to the taxpayers of the County; and
WHEREAS,but for the offer of an inducement package the Company would not be locating its facility
within Orange County.
NOW, THEREFORE,the Parties hereto in consideration of these mutual covenants and agreements
passing from each to the other do hereby agree as follows:
1. DEFINITIONS. As used in this Agreement the terms below will have the following meanings:
CHAR2\2378371v11
CHAR2\2378371v15
30
A. "90% Target."The cumulative number(360) of net new positions filled with full time
equivalent employees by year as provided for on Exhibit A.
B. "Affiliate." A company that the Company controls, controls the Company, or is under
common control with the Company.
C. "Baseline Employment." Number of employees, 17, employed by Company as of the
December 31, 2021.
D. "Baseline Valuation." Current taxable valuation of the Subject Property, excluding 419
West Franklin Street, or the other real property in the County as may used by the
Company as applicable at the time of certification by the Company and Personal
Property as assessed by the Orange County Tax Administrator as of January 1, 2020
prior to the investment contemplated in this Agreement. Upon revaluation by the
County,the Baseline Valuation shall be adjusted as determined by the Orange County
Tax Administrator.
E. "Company." Well Dot, Inc. and includes its Affiliates, successors, and assigns.
F. "Eligible Property." Includes (a)the Subject Property(as defined in Exhibit D,Legal
Description of Real Property), other Company owned real property in Orange County,
North Carolina and all improvements the Company or an Affiliate of the Company
constructs or installs, or causes to be constructed or installed, at the Subject Property or
such other real property, including all buildings,building systems, and building
improvements, and(b) all personal property(as defined in Exhibit C, Personal Property)
the Company or an Affiliate of the Company purchases or leases and installs, at or
relocates to,the Facility or such other real property. Does not include property used or
valued for the Baseline Valuation.
G. "Expansion Inducement Grant."An economic development grant equivalent to seventy-
five percent(75%) of the value of the ad valorem property taxes paid on the Eligible
Property for which Company shall become eligible as provided for in Section 3.C. of
this Agreement.
H. "Grant."An economic incentive development grant to the County from the State of
North Carolina pursuant to Section 2 of this Agreement.
I. "Inducement Grant." An economic development grant provided to Company for the
purpose of securing the Company's location of its facility in Orange County,North
Carolina on the Subject Property.
J. "Job Creation Shortfall Penalty" shall have the meaning provided for in Section 2D of
this Agreement.
K. "Lease." The Lease by and between the Parties for the Subject Property excluding 419
West Franklin Street.
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L. "Minimum Taxable Investment." The aggregate Qualifying Expenditures made by the
Company that Company anticipates will be made annually as reflected in Exhibit B and
verified by the Orange County Tax Assessor,which verification may be supplemented
by proof of investment from Company at Company's discretion.
M. "Orange County Facility"or"Facility." The Company constructed and/or owned
primary and secondary structures,utilities, and operations and service areas situated on
the Subject Property or other real property in the Town of Chapel Hill, Orange County,
North Carolina in and on which Company conducts its business and/or operations.
N. "Person." Any individual,partnership,trust, estate, association, limited liability
company, corporation, custodian,nominee, governmental instrumentality or agency,
body politic or any other entity in its own or any representative capacity.
O. "Personal Property." All personal property the Company or an Affiliate owns or leases
located at the Facility, including all(a) machinery and equipment, (b) furniture,
furnishings, and fixtures, (c)property that is capitalized for federal or state income tax
purposes, (d) all additions to any of the foregoing, and all replacements of any of the
foregoing in excess of$100,000.
P. "Qualifying Expenditure." All expenditures the Company, an Affiliate, or lessor to the
Company or an Affiliate makes for Eligible Property which is subject to Tax in the
County, and is not subject to an exemption or exclusion from Tax, that the Company
uses.
Q. "State." The State of North Carolina.
R. "Subject Property." The property on which Company constructs and/or operates the
Orange County Facility located at 419 West Franklin Street, 501 West Franklin Street,
503 West Franklin Street, and 108 South Roberson Street, Chapel Hill,North Carolina.
S. "Tax"or"Taxes." Ad valorem property tax levied on real and personal property located
in the Count y pursuant to Article 25, Chapter 105 of the North Carolina General
Statutes or any successor statute relating to ad valorem property tax the County levies on
property.
T. "Term"or"Full Term." The duration of this Agreement meaning the date first above
recorded through and including June 30, 2030,unless otherwise delayed or extended, as
may be agreed by the Parties in writing in advance and as permitted by this Agreement
and applicable law.
U. "Total Taxable Investment." The taxable value of all Qualifying Expenditures made by
Company in and to its Orange County Facility as of December 31, 2025.
2. INDUSTRIAL INVESTMENT AND EMPLOYMENT AGREEMENT
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A. INVESTMENT
1. The Company anticipates it shall, during the Term of this Agreement, directly invest a
Minimum Taxable Investment annually in accordance with the real property investment
plan attached as Exhibit B in addition to assessments in taxable business Personal
Property also provided on described in Exhibit C.
2. The Company shall achieve the Total Taxable Investment by December 31, 2025.
3. The Baseline Valuation shall be excluded from calculations to determine whether the
investment goals have been met.
B. EMPLOYMENT
1. On or before December 31,2025, at least 400 net new positions filled with full time
equivalent employees will be created and maintained at the Facility as reflected in
Exhibit A. The number of full time positions shall be evidenced by one or more
Quarterly Tax and Wage Reports (Form NCUI 10 1) filed with the N.C. Employment
Security Commission. Except as otherwise provided herein the Company will not be
penalized if it reaches at least 360 (the 90% Target)net new positions filled with full
time equivalent employees prior to the expiration of this Agreement.
2. During the Term and at the expiration of this Agreement,the Company, and its
Affiliates, shall employ, at the Facility in Orange County,new full time equivalent
employees equal to at least the 90% Target. Employees counted toward the totals
reflected in Exhibit A shall include only new employees of the Company employed and
assigned to the Company's Facility in Orange County,North Carolina provided such
employees are employed in Orange County on a full time basis and are eligible to
participate in Company sponsored health insurance programs. New full time equivalent
employees who are assigned to the Company's Facility in Orange County,but who
work from a North Carolina based home office may also be counted towards the totals
reflected in Exhibit A. For purposes of this Section"full time equivalent employees"
shall be defined as actively employed individuals and shall not include vacant positions
for which the Company is actively or otherwise recruiting and shall not include
positions counted toward the Baseline Employment. It is understood that vacancies
occur and that when such occur the Company will immediately, or as soon as is
reasonably possible thereafter, fill said vacancies. The average wage of the up to 400
new full time equivalent employees shall be, as of the last day of this Agreement, at the
annual rate of Sixty Three Thousand Six Hundred Sixty Five dollars ($63,665.00).
C.DEVELOPMENT GRANT PARTICIPATION: Should the State of North Carolina agree to
provide additional development Grants to the County, the Company agrees to partner, through the
commitment to create new jobs, with Orange County and other agencies to apply for development
Grants that will improve and/or add water, sewer, road or other necessary infrastructure in order to
facilitate the successful completion of this project. The Company agrees to meet with program
representatives, and to participate in the grant request process as necessary to secure the required
funding.
D. GUARANTEED MINIMUM LEVEL OF PERFORMANCE: The Company agrees that its
minimum level of performance pursuant to this Agreement in terms of employment shall be as set
out in this Section 2. Company agrees that failure to meet and maintain the 90%Target as
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required by Section 2B of this Agreement shall entitle the County to increase the purchase price
of the option to purchase as such option to purchase is provided for in the Lease. Such increase in
the purchase price of the option to purchase shall be equal to five hundred dollars ($500)per job
in each job creation year in which the 90% Target is not achieved(the "Job Creation Shortfall
Penalty"). The Job Creation Shortfall Penalty shall be applied to the purchase price of the option
to purchase on a cumulative basis following the year in which the 90%Target is not achieved, as
applicable, in accordance with Exhibit A to this Agreement,which is attached hereto and
incorporated herein by reference.Notwithstanding the foregoing provisions of this Section 2(D),
if the Company believes that it will not meet employment goals that are to be met pursuant to this
Agreement by June 1, 2024 and the Company has not yet purchased the property, then the the
hiring schedule outlined in Exhibit A, and all other applicable dates and deadlines hereunder may
be delayed up to one (1)year, at the option of the Company. Written notification of the exercise
of this option to delay onset must be received by the County no later than June 15, 2024.
E. STATUTORY COMPLIANCE: The Company understands that the County's participation is
contingent upon authority found in North Carolina General Statute 158-7.1 and other relevant
North Carolina General Statutes and that should such statutory authority be withdrawn by the
State of North Carolina the County may terminate this Agreement without penalty and without
further compliance with this Agreement.
3. INDUCEMENT GRANT
A.COUNTY INDUCEMENT GRANT: Subject to the limitations set out herein the County,
upon execution of this Agreement and the Lease and subsequent to the Lease Inspection Period,
shall provide to the Company an Inducement Grant to offset Facility development,upfit,
remodeling, expansion, and acquisition costs in the amount of Two Million Dollars
($2,000,000.00)payable in not more than four(4) installments equaling the actual eligible
expenditures then incurred by the Company to the date of such expenditure over a period of not
more than two (2)years from the first installment. Installments shall be paid within thirty (30)
days of County's receipt of Company's request for payment and documentation. Such
documentation shall demonstrate invoices,purchase orders, and/or receipts describing the
anticipated expenditure of funds for upfit,remodeling, and construction on and to Leased
Premises have been submitted. The Inducement Grant SHALL NOT EXCEED Two Million
Dollars ($2,000,000.00). This is the maximum allowable Inducement Grant amount to be paid
in installments to the Company. Should the Company exercise its right to terminate the Lease
during the Lease Inspection Period or for any reason, except purchase of the Subject Property,
during the Term, the Company shall not be eligible for, and the County shall not be obligated to
pay,the Inducement Grant and the County shall be released from all further responsibility
except as described in Section 3.C. below.
B. PAYMENT OF INDUCEMENT GRANT: Participation in this Agreement shall not exclude
the Company from consideration for additional inducements from the County either during or
upon completion of this Agreement.
C. ADDITIONAL COUNTY COMMITMENT: The Company shall be eligible for an annual
Expansion Inducement Grant if it either(i)purchases the Subject Property prior to September
30, 2026 or(ii)terminates the Lease during the Inspection Period as described in Section 23 of
Page 5 of 17
34
the Lease,but locates its Facility in Orange County creating jobs and new taxable investment in
the County either through new construction or new upfit to existing developed property. The
Company will be eligible to receive Expansion Inducement Grants for up to four(4)years
following its first request. The County may provide the Expansion Inducement Grant based on
new taxable investment and job creation in excess of the minimum levels outlined in Section 2
above. Any such agreement providing for the annual Expansion Inducement Grant shall require
a separate performance agreement,which shall conform to all relevant North Carolina Statutes
and Orange County Ordinances,Policies or Resolutions, shall be in writing, and shall be
mutually agreed upon by the Parties.
4. PROOF AND CERTIFICATION
The Parties to this Agreement shall furnish the necessary reports and certificates to verify that
each party's respective goals are met as may be reasonably requested during the Term hereof.
Acceptable forms of proof for taxable investment shall be the records of the County Tax
Administrator. Acceptable forms of proof of payment of taxes shall be in the form of cancelled
checks and receipts of payment from the County Tax Administrator. Acceptable forms of proof
for employment numbers shall be in the form of one or more Quarterly Tax and Wage Reports
(Form NCUI 101) filed with the N.C. Employment Security Commission. Company shall
provide copies of each NCUI within thirty(30) days of filing the same with the N.C.
Employment Security Commission throughout the Term. Acceptable forms of proof of
expenditures on upfit,remodeling, and construction on and to the Eligible Property shall be in
the form of cancelled checks and receipts.
Until that date which is one (1)year following the date of the final Inducement Grant
installment, the Company shall allow representatives of the County to enter the Facility during
normal business hours upon forty-eight(48)hours prior notice for the purpose of confirming
that the claimed investment and employment goals have been met. Company will not be held
liable for injuries to representatives of the County while at the Facility.
5. REMEDY
If the County does not meet and maintain the terms set forth in this Agreement,the Company
may terminate this Agreement upon thirty(30) days written notice to the County.
6. EVENT OF DEFAULT AND RIGHT TO CURE.
Notwithstanding anything contained in this Agreement or the Lease to the contrary, if the
Company is in default of Section 15 of this Agreement or Section 14 of the Lease,the County
shall give the Company written notice of such default. If the default is reasonably capable of
being cured within thirty (30) days after the County shall have given the Company written notice
of such default, Company shall have such period to effect a cure. If the default is such that it is
not reasonably capable of being cured within thirty(30) days, and if Company(a) initiates
corrective action within said period, and(b) diligently, continually, and in good faith works to
effect a cure as soon as possible,then Company shall have such additional time as is reasonably
necessary to cure the default prior to exercise of any remedies by the County. In no event shall
the County be precluded from exercising remedies if the default is not cured within ninety(90)
Page 6 of 17
35
days after the first notice of default is given. If the Company does not cure said default as
provided for herein,the Company shall not receive further Inducement Grant payments and shall
not be eligible for Expansion Inducement Grants as provided for in Section 3C of this
Agreement.
7. SEVERABILITY
If any term or provision of this Agreement is held to be illegal, invalid, or unenforceable, the
legality, validity, or enforceability of the remaining terms, or provisions of this Agreement shall
not be affected thereby; and in lieu of such illegal, invalid or unenforceable term or provision,
there shall be added by mutually agreed upon written amendment to this Agreement, a legal,
valid, or enforceable term or provision, as similar as possible to the term or provision declared
illegal, invalid, or unenforceable.
8. COMPLIANCE WITH THE LOCAL GOVERNMENT BUDGET AND FISCAL CONTROL
ACT OF NORTH CAROLINA GENERAL STATUTES
All appropriations and expenditures pursuant to this Agreement shall be subject to the provisions
of the Local Government Budget and Fiscal Control Act of the North Carolina General Statutes
for cities and counties and shall be listed in the annual report submitted to the Local Government
Commission by the County.
9. GOVERNING LAWS,DISPUTE RESOLUTION, & FORUM
This Agreement shall be governed and construed by the Laws of the State of North Carolina.
Any action brought to enforce or contest any term or provision of this Agreement shall be
brought in the North Carolina General Court of Justice sitting in Orange County,North
Carolina. The Parties hereto stipulate to the jurisdiction of said court. It is agreed by the
Parties that no other court shall have jurisdiction or venue with respect to any claims,
complaints, suits, or actions. Binding arbitration may not be initiated by either party,however,
the Parties may agree to nonbinding mediation of any dispute prior to the bringing of a claim,
complaint, suit or action.
10. INDEMNIFICATION
The Company hereby agrees to indemnify, protect, and save the County and its officers,
directors, and employees harmless from all liability, obligations, losses, claims, damages,
actions, suits,proceedings, costs and expenses, including reasonable attorneys' fees, arising out
of, connected with, or resulting directly or indirectly from the business, construction,
maintenance, or operations of the Company or the Facility or any Company activities on or
about the Subject Property or the transactions contemplated by or relating to this Agreement,
including without limitation, the possession, condition, construction or use thereof, insofar as
such matters relate to events subject to the control of the Company and not the County. The
indemnification arising under this Section shall continue until the termination of this Agreement,
whether by expiration of the Term or by mutual agreement of the Parties to terminate this
Agreement. Provided, however, that the indemnification arising under this Section shall apply
after the termination of this Agreement if and to the extent that any such liability, obligation,
Page 7 of 17
36
loss, claim, damage, action, suit,proceeding, cost or expense arises, is connected with, or
directly results from the business, construction, maintenance, or operations of the Company or
the Facility or any Company activities on or about the Subject Property during the Term of this
Agreement. It is the intent of this Section 10 that, to the extent applicable, the Company
indemnify the County in an amount not to exceed value of the benefits actually received by the
Company from the County under this Agreement. In no event shall the Company be obligated to
indemnify the County in an amount in excess of the not to exceed amount in Section 3A.
11. TERMINATION
A. COUNTY: The County shall have the option of terminating this Agreement if the Company
ceases substantially all operations at the Facility. Cessation of substantially all operations at the
Facility shall be defined as a period in excess often(10)weeks during which the Company's
level of full time equivalent employees falls below thirty percent(30%) of the number of target
full time equivalent employees as provided on Exhibit A,whether working at the Facility or
remotely in North Carolina for the benefit of the Facility. and described in Section 2 of this
Agreement. Should the Company be determined to have ceased its operations,the Company
will reimburse the County the total amount of the Inducement Grant previously disbursed
pursuant to this Agreement. Notwithstanding the foregoing, if the aforesaid decline in the
number of full time equivalent employees is attributable to an overall national economic decline
(as such may be recognized by the United States Bureau of Labor Statistics) or other Force
Majeure,this shall not be deemed a cessation of substantially all operations entitling the County
to terminate this Agreement, and the Company shall not be deemed in default. In such event, the
Company's and the County's obligations shall be suspended for a period of one (1)year and
resume thereafter. If after one year the Company has not returned to the then applicable 90%
Target the County may declare substantially all operations ceased at the Facility and proceed as
set forth herein. Upon such declaration the Company will reimburse the County the total
amount of the Inducement Grant disbursed to Company up to and including the date of the
declaration. If Company is in Default of Section 14 of the Lease and has failed to cure such
default as provided herein County may terminate this Agreement and shall have no further
liability or obligations to the Company under this Agreement.
B. NATURAL: In any event, the above terms notwithstanding, this Agreement shall terminate
upon the 30th day of June of the final year of the Term.
C. AUTOMATIC TERMINATION AND SURVIVAL: In the event the Company (defined as
the Tenant in the Lease)terminates the Lease during the Inspection Period as described in
Section 23 of the Lease, the provisions of this Agreement, except for Section 3C,the definition
of"Expansion Inducement Grant" and the definition of"Subject Property" of the Agreement,
shall automatically terminate and be of no further force and effect and neither Party shall have
further liability or obligations to the other under this Agreement. For the avoidance of doubt, the
rights and obligations contained in Section 3C,the definition of"Expansion Inducement Grant"
and the definition of"Subject Property"of this Agreement shall survive automatic termination
of this Agreement. In the event of such automatic termination the County may suspend the
surviving sections of this Agreement until the earlier of(i)the date upon which the Company
provides documentation satisfactory to the County verifying that the Company has met all
requirements of the surviving sections of this Agreement or(ii) for up to one year from the date
of automatic termination in order for the County to determine, in its sole discretion,whether the
Company has met all requirements of the surviving sections of this Agreement.
Page 8 of 17
37
12. LIMITATION OF COUNTY'S OBLIGATION
NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED OR
INTERPRETED AS CREATING A PLEDGE OF THE FAITH AND CREDIT OF THE
COUNTY WITHIN THE MEANING OF ANY CONSTITUTIONAL DEBT
LIMITATION. NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED
OR INTERPRETED AS DELEGATING GOVERNMENTAL POWERS NOR AS A
DONATION OR A LENDING OF THE CREDIT OF THE COUNTY WITHIN THE
MEANING OF THE STATE CONSTITUTION.
THIS AGREEMENT SHALL NOT DIRECTLY OR INDIRECTLY OR
CONTINGENTLY OBLIGATE THE COUNTY TO MAKE ANY PAYMENTS BEYOND
THOSE APPROPRIATED IN THE COUNTY'S SOLE DISCRETION FOR ANY
FISCAL YEAR IN WHICH THIS AGREEMENT SHALL BE IN EFFECT.
NO PROVISION OF THIS AGREEMENT SHALL BE CONSTRUED TO PLEDGE OR
TO CREATE A LIEN ON ANY CLASS OR SOURCE OF THE COUNTY'S MONEYS,
NOR SHALL ANY PROVISION OF THE AGREEMENT RESTRICT TO ANY
EXTENT PROHIBITED BY LAW,ANY ACTION OR RIGHT OF ACTION ON THE
PART OF ANY FUTURE COUNTY GOVERNING BODY.
TO THE EXTENT OF ANY CONFLICT BETWEEN THIS SECTION AND ANY
OTHER PROVISION OF THIS AGREEMENT, THIS SECTION SHALL TAKE
PRIORITY.
13. LIABILITY OF PUBLIC OFFICERS
No officer, agent, or employee of the County or the Company shall be subject to any personal
liability or accountability by reason of the execution of this Agreement or any other documents
related to the transactions contemplated hereby. Such officers, agents, or employees shall be
deemed to execute such documents in their official capacities only, and not in their individual
capacities. This Section shall not relieve any such officer, agent, or employee from the
performance of any official duty provided by law.
14. MISCELLANEOUS
A. ENTIRE AGREEMENT: This Agreement, including all exhibits attached, constitutes the
entire contract between the Parties, and this Agreement shall not be amended except in writing
signed by the Parties.
B. BINDING EFFECT: Subject to the specific provisions of this Agreement, this Agreement
shall be binding upon and inure to the benefit of and be enforceable by the Parties and their
respective successors and assigns.
C. TIME: Time is of the essence in this Agreement and each and all of its provisions.
D. CONSTRUCTION: Nothing in this Agreement shall be construed to the effect that the
County has any right to influence the Company's business decisions or to receive business
Page 9 of 17
38
information from the Company(except as expressly provided in Section 2B and Section 5
hereof).
E. SIGNATURES: This Agreement together with any amendments or modifications may be
executed electronically. All electronic signatures affixed hereto evidence the intent of the
Parties to comply with Article I IA and Article 40 of North Carolina General Statute Chapter 66.
F. AUTHORITY: The Parties and each person executing this Agreement on behalf thereof
represent and warrant that they have the full right and authority to enter into this Agreement,
which is binding, and to sign on behalf of the parry indicated, and are acting on behalf of
themselves, the constituent members and the successors and assigns of each of them. The Parties
shall reasonably assist one another and cooperate in the defense(should any defense ever be
necessary) of this Agreement and/or the incentives granted hereunder, so as to support and in no
way undercut the same.
G. FORCE MAJEURE: Subject to the provisions of Section 6 of this Agreement neither party
shall be liable for non-compliance with its contractual obligations hereunder, if and to the extent
such non-compliance is directly attributable to events of force majeure. Events of force majeure
are events or causes which are not under a party's reasonable control that render the execution of
a party's obligations impossible, including,but not limited to: (i) fire; (ii)hurricanes, tornados,
floods, and other weather events beyond normal conditions, including any such weather events
declared/determined by the National Oceanic and Atmospheric Conditions; (iii) strikes, lockouts
or other labor or industrial disturbances; (iv)national emergency, state declaration of
emergency, civil disturbance, act of public enemy,war,riot, terrorism sabotage or embargo; (v)
earthquake, epidemic,pandemic, or other natural disaster or acts of God; (vi) governmental
action or inaction; or(vii) any other similar occurrences or events outside the party's reasonable
control. Each party shall forthwith inform the other Parties of the occurrence of a Force Majeure
event preventing such party from complying with its contractual obligations. Force Majeure
does not include failure of the Company to secure permitting necessary for the project to
proceed.
15. COMPLIANCE WITH LAW
A. NON-DISCRIMINATION: Company shall at all times remain in compliance with all
applicable local, state, and federal laws, rules, and regulations including but not limited to all
state and federal anti-discrimination laws,policies,rules, and regulations and the Orange County
Non-Discrimination Policy. Company shall not discriminate against any person based on age,
race, ethnicity, color, national origin, religion, creed, sex, sexual orientation, gender, gender
identity, gender expression,marital status, familial status, source of income, disability,political
affiliation, veteran status, disabled veteran status. Any violation of this requirement is a breach
of this Agreement and County may immediately terminate this Agreement without further
obligation on the part of the County. This Section is not intended to limit and does not limit the
definition of breach to discrimination.
B. E-VERIFY, ISRAEL BOYCOTT,AND IRAN DIVESTMENT: By executing this
Agreement Company affirms that Company, and any North Carolina Affiliates of Company, is
and shall remain in compliance with Article 2 of Chapter 64 of the North Carolina General
Statutes. By executing this Agreement Company certifies that Company, and any North
Carolina Affiliates of Company,have not been identified, and have not utilized the services of
Page 10 of 17
39
any agent or subcontractor, on the list created by the North Carolina State Treasurer pursuant to
Articles 6E and 6G of Chapter 147 of the North Carolina General Statutes.
16.NOTICES
Any notices pursuant to and/or required by this Agreement shall be in writing and shall be
delivered via United States Mail, certified, return receipt requested:
If to Orange County; If to Well Dot, Inc.;
County Manager Chief Financial Officer
P.O. Box 8181 419 W. Franklin Street
Hillsborough,NC 27278 Chapel Hill,NC 27516
Any addressee may designate additional or different addresses for communications by notice
given under this Section to the other Party.
Page 11 of 17
40
AGREEMENT REVIEWED AND ACCEPTED BY:
President Attest:
Well Dot, Inc.
Chair Attest: Lauren Jensen
Orange County Board of Commissioners Clerk to the Board
Orange County Commissioners
This instrument has been pre-audited in the manner required by the Local Government Budget and
Fiscal Control Act.
Chief Financial Officer
Approved as to form and legal sufficiency.
Office of the County Attorney
Page 12 of 17
41
EXHIBIT A
Year-end Dec. Baseline New Employees 90% of Total
31 Employees Added in Year Cumulative Cumulative
New Employee Employees
Target Added
by Year(the
"90% Target")
2021 17 9 8 26
2022 17 81 96 124
2023 17 101 187 225
2024 17 95 272 320
2025 17 97 360 417
Total at
Natural 17 400 360 417
Termination of
Agreement
6/30/30
CHAR2\2378371v15
42
EXHIBIT B - INVESTMENT GOALS
Year Ended 2022 2023 2024 2025 Total
Dec. 31
Real $1,500,000 $750,000 $250,000 $0 $2,500,000
Property
Personal $238,400 $337,000 $275,400 $142,800 $993,600
Property
CHAR2\2378371v15
43
EXHIBIT C - BUSINESS PERSONAL PROPERTY
Year Ended 2022 2023 2024 2025 Total
Dec. 31
Personal $238,400 $337,000 $275,400 $142,800 $993,600
Property*
*The Personal Property provided in this Exhibit C is the same Personal Property provided in Exhibit B and does not
constitute additional Taxable Investment.
CHAR2\237837lvl5
44
EXHIBIT D DESCRIPTION OF REAL PROPERTY
[Legal Description for 419 W Franklin Street to be inserted]
CHAR2\237837M5
45
EXHIBIT E - OPTION TO PURCHASE PENALTY
(See attached 501 503 Performance Scenario Worksheet
CHAR2\2378371v15
Reimagining Engagement.
Improving Health.
Reducing Cost.
Economic Development
Opportunity Update
well
April 2022
47
Opportunity Overview
• Founded in 2019, Well Dot Inc. ("Well") is a well-funded healthcare technology & services
company that continues to rapid expand
• Well's executive team and the majority of personnel are currently split between
Chapel Hill, NC and Newton (Boston), MA
• The Company has committed to building its major operations center in NC
• This major operations center is anticipated to generate over 400 jobs with an average
salary of $65K/year over the next f ve years
• In conjunction with Orange County, we have been evaluating 501/503 W Franklin St. as a
prospective location for this operations center
well Conf dentia)and Proprietary I All Rights Reserved
Company Fact Sheet 48
• Company Overview: Well is a healthcare technology company that provides technology-enabled solutions to
consumers to enable them to navigate their health and wellness needs.
o Well uses a combination of personalized guidance, motivation and rewards paired with concierge support from Well
Guides to engage members in the advancement of their health. The approach is designed to help each member
identify and pursue opportunities to improve their health and lower costs.
o The platform encourages health empowerment for all members, notjust those with acute conditions and higher cost
of care, and encompasses the full spectrum of healthcare needs, including prevention and wellness, health education,
chronic disease and behavioral health management, medication support and healthcare system navigation.
• Incorporation: January 2019/ DE Corporation Website: https://well.co/
• Financing:
• Raised +$118M (Seed - 2019, Series A - 2020, Series B - 2021)
• Series B raise of$72M closed in Dec 2021
• Key investors include co-founders, Mosaic Health Solutions (BCBS NC), General Catalyst, Hellman &
Friedman Partners, Valeas Capital Partners,John Doerr, Tom Nelson, and other strategic healthcare
investors
• Primary Locations: Chapel Hill, NC; Newton (Boston), MA; New York, NY; and Minneapolis, MN
• Headcount (as of March 2022): 138, including 42 in NC
well Conf dentia)and Proprietary I All Rights Reserved 3
49
Personalized Health Weto a
lcome
Engagement Platform New Day for Health
•
Jourrie
i 6
well
For you
All About You
WithArnaarlAsell membership yo, 01
now access curate's app,and
•� Hypertension journey
Your avg blootl pressure was Novated over 11
Lays.Our hePIIM1 guides<on M1elp wilM1 rzal
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+ ndersfondfng
• v � � �` stress
Trusted On-Demand Personalized E"~
Clinically-robust, Digital health and Proactive interventions + �S
on-your-side whole concierge and incentives,just for
health support experience you
Well Directly Addresses 5the
Top Needs Facing Employers
Differentiated Whole Health
Engagement Improvement
Personalized engagement= "Top of funnel"behavioral health=
Improved retention Reduced burn-out
Members receive a fully We engage significantly more
personalized experience, shared members in behavioral health by
community challenges and offering whole health support,
ongoing content engaging them in reducing barriers and following the
their health and company members'health focus areas
Tangible Impact
Well Moments=Health and cost outcomes
We use our Al Health Engine to identify every member's health
and cost improvement opportunities.And,we offer personalized
digital+human guidance and incentives to empower each member
to take action and achieve real outcomes
S
Well's Member & Client Results 51
Differentiated Engagement Whole Health Improvement J1
Well is by far my favorite app You have no idea how much checking
on my phone"- Well Member in helps keep me on track"- Well Member
80+ NPS 80%+ report improved health or healthy lifestyle habits
Based on health assessment respondents
Up to 80% activation rate
Based on client construct 200+healthy actions completed per member per year
Including 30+behavioral health actions for those who screen at-risk for depression
25%+ daily active user rate
60%+ action conversion rate (including behavioral health)
70%+view Well as at least one On key physical condition,behavioral health and benefit referral exploration actions
of their better health benefits
Tangible Impact
"Making Well available is the best thing [my employer] has ever done"- Well Member
Total savings = $17.48 PMPM 10%+higher employee retention
Including$11.33 PMPM in direct medical cost savings driven by--10%lower costs in Activated members compared to non-activated members
condition and utilization management value driver categories.Additional indirect
savings based on absenteeism productivity drivers,with further analysis ongoing
Observational analysis based on activated members compared
Savings based on preliminary observational analysis of Well members with claims data in the 2021 to non-activated members for clients on the platform for 2+years
calendar year compared to a similar set of'matched controls'from an external claims data set
Engagement and whole Health Improvement stats based on active users in Q4 2021.Activation Rates vary based on employee activation construct and are lower for other clients
Well Conf dential and Proprietary I All Rights Reserved Real member quotes;Well provided gift cards for select member testimonials and these opinions do not reflect the opinions of all Well users 6
Well's Whole Health Engagement Platform 52
Well Members
-Access for All
Member Omnichannel • •
ement
ExperienceEl o' iOS Mln-App Phone [E�j Email 4f�� Alerts Web and Android) essaging Notifications
Whole Health Expert Well Guides Dynamic Incentives Proactive
Improvement On-Demand & Engagement Utilization
• Whole person health (Human Team) • Personalized incentives for • Roster of Well Moments to
guidance-from goals to • Health coaching(eg, set& every action impact health and cost
Platform evidence-based actions track health goals) • Community&individual outcomes
Capabilities • Integrated physical and • Personal assistant for challenges • Coordinated,proactive,
behavioral health,inc.70+ health(eg,find&schedule • Configurable rewards omnichannel outreach
conditions(from in-network doctor visits, redemption model • Targeted member
hypertension to anxiety) site of care navigation) communications
• Behavioral economics
• Proprietary and partner • HR-related questions and • Promotion of your benefits
intervention&content navigation(eg,benefits and healthcare services(eg,
library offered) virtual health,point
solutions)
AI/Data/
Analytics Personalization
Insights
Personalized experience for every member based on an evolving holistic health profile
•
Well Conf dentia)and Proprietary I All Rights Reserved 7
The Well Member Experience: Meet Jon 53
Easy to Get Started Guidance on Your Make Healthcare Behavioral Health Positive Health
• Jon activates Well as Focus Areas Easier Intervention Lifecycle
part of an employee • Jon receives tips on his • Well adds incentives for • Jon progresses through • Jon has been using the
team challenge diet digitally and from Jon to engage in a Well's stress-related Well app daily and
• He chooses to work on his Well Guide "Lower your blood actions,which confirms earning personalized
his diet and sets a • He responds to a pressure"journey his self-reported high incentives for staying
nutrition-related health "Question of the Day" • Well identifies a way to stress levels engaged in his health
goal with a Well Guide that he is feeling save money on his • He is routed in • Post-therapy,Jon
• We also learn he has burnt-out medications,and a real-time to use your continues to engage
hypertension • We engage him in Well Guide helps switch therapy benefit and is with Well by
stress journeys and to a mail order 90-day later diagnosed with participating in
actions on work-life supply depression emotional wellness
balance • Jon is prepared to • He completes 6 actions designed to
discuss his blood therapy sessions and mitigate depression
pressure at his next his mood improves • Jon's blood pressure
provider visit,which has also been
was also scheduled for improving
him by his Well Guide
•
Balancing your diet
How often has your stress level
may„ been more than you could handle?
145/95
d with Well' ® Stage Daily '
L
t, + Employee engagement + Personal health focus + Health impact/cost + Benefits utilization + Condition outcomes
+ Sense of community + Behavioral health reduction(in-network + Health impact/cost + Employee retention
C + Convenience stigma reduction and PCP visit,Rx refill) reduction(based on BH + Productivity
engagement access and reduction in
PHQ-9)
•
Well Conf dentia)and Proprietary I All Rights Reserved 8
54
Well's History & Progress
Our Beginnings First-class Investors
Well was founded in January 2019 with a Raised over$118M from investors including
world-class leadership team from both consumer General Catalyst,John Doerr, Mosaic Health
and healthcare backgrounds. Scaled to 130+ Solutions (BCNC), partners from Hellman &
headcount today. Friedman,Valeas Capital Partners, and other
prominent healthcare investors.
Customer Ramp Product Build
Well has successfully launched with +12 We have rapidly developed and launched the
organizations,with multiple implementations Well platform over the past three years and
underway, across different channels. Our active continue to make signif cant advancements in
customer base features Jumbo and Mid-sized product capability. Our solution is proving to
businesses that represent over 30,000 initial lives. be a highly effective and engaging tool with
the ability to produce positive health outcomes.
Well Conf dentia)and Proprietary I All Rights Reserved 9
55
Well's Current Operations Center
Overview
Location: 419 W Franklin St., Chapel Hill, NC
Channels: In-app messaging and phone
, r
calls; email support also available
Multi-Disciplinary Team: Well Guide team
supported by clinical experts, including
behavioral health and pharmacy, to help
members navigate healthcare �w
Languages Supported: English and Spanish ;-
Development Opportunity 56
• Well is planning for the development of a major operations center that is anticipated to generate
over 400 jobs with an average salary of $65K/year
• • Types ExamplesFTEs for Well Operations Center
• Operations • Corporate
o Member Service o Executive
Operator/ o Account Management
Supervisor o Software Engineer/ '
o Clinical & Nurse Developer
Operator/Supervisor o Data Scientist
o Pharmacy Specialist o Business Analyst
o Behavioral Health o Administrative Support 26
Specialist
o Operations Director 2021 2022 2023 2024 2025
well Conf dentia)and Proprietary I All Rights Reserved 11
57
Our Founders
ww. IM Gary Loveman ■ David Werry
Chairman & CEO President
Gary was previously the EVP of Consumer Health Services at David was previously the VP of Transformation at Aetna where he
Aetna where he led transformative efforts in the areas of oversaw the member-facing capabilities for the enterprise.These
consumer,data,analytics, marketing, pharmacy and clinical. areas included Aetna's digital assets,concierge services,Apple
Before Aetna,Gary was the long-time Chairman &CEO of Caesars partnership,and high-touch clinical services as well as business
Entertainment Company,one of the largest gaming companies in units in healthcare payments, benef is enrollment and population
the world,where he pioneered the customer loyalty and rewards health management.
program that revolutionized the use of analytics to influence
consumer behavior in the hospitality industry. Prior tojoining Aetna, David was the Head of Biotech at PPD,a
global clinical research organization. David began his career at
Gary began his career as an HBS professor after completing his Morgan Stanley and then Hellman &Friedman,a large private
PhD in economics from the Massachusetts Institute of equity f rm,where he focused on healthcare investing. David was
Technology. He serves on the boards of several healthcare a Morehead Scholar at the University of North Carolina and holds
companies and the Boston Children's Hospital.Gary is also an an MBA from Harvard Business School.
owner and Director of the Boston Celtics.
well Conf dentia)and Proprietary I All Rights Reserved 12
58
Well's Leadership Team
Healthcare & consumer expertise brought together
Ruben Sigala Beth Gullette O!U— Will Aiken Amy Molten
Chief Marketing & Chief People Ml� Chief Operating Chief Medical
Analytics Off cer Off cer '` Off cer Off cer
e.
` Oz Ataman Kathy Howell Alex Vannoni Jared Sokolsky
Chief Technology Chief Legal Chief Product Chief Financial
Off cer Off cer UPI „ Off cer Off cer
i �
Jeff Hortman Todd Metzker
Head of Senior Director,
Consumer Member Services
Experience
•
Well Conf dentia)and Proprietary I All Rights Reserved 13
59
Board of Directors
Cary Loveman David Werry Ad Jo Abernathy
Co-Founder, Co-Founder, Chief Information Off cer
Chairman and President of Well of Blue Cross North
CEO of Well Carolina
^ ..
James I. Cash Todd Pope Katherine Hobbs
Former Professor CEO of WellAir. Knutson, MD
of Business at Former President Senior Vice President
Harvard Business and CEO of of United Health Group
School and Board TransEnterix, Inc. and and CEO of Optum
member of several Global President of Behavioral Care
prominent Johnson &Johnson
corporations Cordis
•
Well Conf dentia)and Proprietary I All Rights Reserved 14
Our mission is to be the world's most
effective partner in the advancement of
our members' health.
•
well
61
B22UfOFt Gazette The Herald-Pock Hill el Nuevo Herald-Miami Sun News;-Myrtle Beach
Belleville • Durham
DailyBell ingharn Herald Idaho Statesman Paleiigh News 9 Observer The Telegraph-Macon
Bradenton Herald Island Packet The Olympian San Luis Obispo TFibune
j&,MC-1CLATCHY Centre
Charlotte Ob--4--ryer Lexington Heirald-Leader Fort Worth Star-Telegram Wichita Eagle
Columbus Ledg2r-Encluirrer Merced Sun-Star The Starte-Columbia
FFesno Bee Miami Herald Sun Herald-Biloxi
AFFIDAVIT OF PUBLICATION
Account# Order Number Identification Order PO Amount Cols Depth
94057 250063 Print Legal Ad-IPL0069555 $585.00 2 90 L
Attention: Steve Brantley STATE OF NORTH CAROLINA
Orange County Economic Development COUNTY OF WAKE
131 W.Margaret Lane,Suite 205 Before the undersigned,a Notary Public of Dallas
Hillsborough,NC 27278 County,Texas,duly commissioned and authorized to
administer oaths,affirmations,etc.,personally
appeared Tara Pennington,who being duly sworn or
affirmed,according to law,doth depose and say that he
-- -- -- -- -- --- -- --- -- -- -- -- -- --- --- --- --- --- --- or she is Accounts Receivable Specialist of the News&
Observer Publishing Company,a corporation organized
f and doing business under the Laws of the State of North
Carolina,and publishing a newspaper known as The
17 52 Durham Herald-Sun,Durham and State aforesaid,the
said newspaper in which such notice,paper,document,
e or legal advertisement was published was,at the time of
°qtr, �scos�° each and every such publication,a newspaper meeting
NOTICE OF PUBLIC NEARING REGARDING PROPOSED LEASE all of the requirements and qualifications of Section 1-
AGREEMENT AND ECONOMIC DEVELOPMENT INCENTIVE AGREE- 597 of the General Statutes of North Carolina and was a
MENT FOR WELL DOT,INC.
qualified newspaper within the meaning of Section 1-597
PUBLIC HEARING ; of the General Statutes of North Carolina,and that as
Tuesday,May 24,2022-7.00 PM such he or she makes this affidavit;and is familiar with
3 Wit Tryonilding the books,files and business of said corporation and by
Hillsborough,NC 27278 reference to the files of said publication the attached
Notice is hereby given that in accordance with North Carolina General Statute advertisement for Orange County Economic
158-7.1 the Board of Commissioners of Orange County(the"Board")will hoW Development was inserted in the aforesaid newspaper
a public hearing on Tuesday,May 24,2022 at 700 PM at the Whiffed Building
300 W.Tyron St.,Hillsborough,N.C.27278.This public hearing concerns Or- on dates as follows:
ange County entering into two agreements outlined below with Well Dot.,Inc.
to encourage the company to expand health care IT operations in the County.
LEASE OF COUNTY PROPERTY No.of Insertions: 1
Pursuant to an economic development project the Board of County Commission-
ers of Orange County intends to vote at its meeting on May 24,2022 on whether Beginning Issue of: 04/22/2022
or not to enter into a lease of the following county-owned property: g g
501 W.Franklin Street,Chapel Hill,NC 27517 PIN 9788 15 1996
503 W.Franklin Street,Chapel Hill,NC 27517 PIN 9788 15 1829 Ending Issue of: 04/22/2022
108 S.Roberson Street,Chapel Hill,NC 27517 PIN 9788 15 2822
The lease of the property will be made to Well Dot,Inc.,a Delaware Corpora-
tion with facilities in Chapel Hill,North Carolina,for a term of ten years for the F
purpose of general office use related to healthcare operations. Upon mutual
agreement of the parties the lease may be renewed for two additional five year
terms. In consideration of the lease Well Dot,Inc.,will pay Orange County an h
initial deposit of Two Hundred Fifty Thousand Dollars($250,000.00)and a base
rental fee of Thirty Three Thousand Seven Hundred Fourteen Dollars and Six- 4}
ty-seven Cents($33,714.67)per month for the full term with a two percent(2%)
increase beginning in year seven of the Lease.Any renewal will reflect similar
base rental fees and increases.On any lease anniversary date during the initial I certify or declare)under penalty o perjury that the
term Well Dot,Inc.,may exercise an option to purchase the property.Upon the foregoing is true and correct.
exercise of the option to purchase,the price shall be based on appraisals using g g
income methodology with each parry selecting an independent appraiser and
negotiating any differences in the appraisals to arrive at a purchase price,but
shall also be less the value of the initial deposit and rent paid up to the date of
closing.Additional lease terms are available for review at the office of the Orange
County Clerk to the Board of Commissioners.
ECONOMIC DEVELOPMENT INCENTIVE AGREEMENT
The Board will consider the appropriation of county general funds for the
purpose of entering into an Economic Development Incentive Agreement with
Well Dot,Inc.,a Delaware Corporation with health care operation facilities in
Chapel Hill,North Carolina.The amount is not to exceed Two Million Dollars. Notar Public in and for the state of Texas,residin in
($2,000,000)payable in not more than four(4)installments equaling the actual y g
eligible expenditures then incurred by the Company to the date of such expendi- Dallas las Count
lure over a period of not more than two(2)years from the first installment.These a y
funds will be used to offset facility development,upfit,remodeling,expansion,
and acquisition costs. Location of the current Well Dot,Inc.facility in Orange
County will create public benefit for the County including the creation of 360
new fulltime jobs,at an annual rate of Sixty Three Thousand Six Hundred Sixty •' ,yf'
Five dollars($63,665.00)plus benefits,and new capital investment in Orange q p
County of$3,493,600. Y L S �11317 61
Anyone interested in the Economic Development Incentive Agreement or the yaI� ^�—a �,I��,+y� +yyyy
nature of Well Dot,Inc.may appear and be heard at the public hearing.Anyone •4;�f pe 41i�S�Ls�r tl,lLL
who wishes to make comments in writing prior to the public hearing may do so .vN
via email to ocbow@orangecountync.gov.Interested persons may contact the
Orange County Economic Development office at 919-245-2325 with any ques-
tions. Extra charge for lost or duplicate affidavits.
IPL0069555
Apr 22 2022 Legal document please do not destroy!
62
ORANGE COUNTY
NORTH CAROLINA
Well Dot , Inc .
Lease Agreement & Economic
Development Incentive
BOCC Public Hearing
May 24 , 2022
63
CompanyHistory and Announcement
7:7- well
Well Dot, Inc. is an early-stage
healthcare technology gY and
services company that was
incorporated in January 2019.
• The company provides technology-enabled healthcare solutions to
consumers via employers through a platform that enables consumers to
navigate their health and wellness needs.
• On November 19, 2019, Governor Roy Cooper, joined by company
representatives and local, county and state elected officials, announced
the location of a new operations center in Chapel Hill.
ORANGE COUNTY
2 NORTH CAROLINA
64
Job Creation
The Company will create at least 360 new full time jobs, at an annual
rate of $63,665.00 plus benefits.
New Full Time Jobs by Year
M��Ffflwv�
- w
8 88 91 85 88 360
Job Types/Examples:
Corporate Operations
o Executive o Member Service Operator/Supervisor
o Account Management o Clinical & Nurse Operator/Supervisor
o Software Engineer/Developer o Pharmacy Specialist
o Data Scientist o Behavioral Health Specialist
o Business Analyst o Operations Director
o Administrative Support
®RANGE COUNTY
3 NORTH CAROLINA
65
Chapel Hill Office Location
701-1A. I. A. 0,
im.o -A
I Fl.
•N
1
,,
• 419 W. Franklin St. — Existing Well Dot office location highlighted in
• 501 & 503 W. Franklin Street and 108 S. Roberson Street - Proposed
additional location highlighted in Purple
ORANGE COUNTY
4 NORTH CAROLINA
66
Lease Agreement
0 Initial ten year lease term with option for two additional five year
terms.
• Well Dot, Inc. , will pay Orange County an initial deposit of
$250,000.00 and then $404,576.04 in rent payments annually for the
first six years.
Rent will adjust to the market rate in year seven of the lease and
begin a 2% annual increase in year eight.
• On any lease anniversary date during the initial term Well Dot, Inc. ,
may exercise an option to purchase the property.
ORANGE COUNTY
5 NORTH CAROLINA
67
Lease Agreement
MP • Based on current commercial rates, the
$250,000 Initial Deposit market rent would total approximately
$404,576 $850,000 annually.
. $404,576
$404,576 • If the company continues to rent the facility for
$404,576 the full ten years, the County will have
$404,576 collected approx. $6.2 million in lease
$404,576 reve n u e.
Market Rent
Established
2% Increase If the company exercises the option to
2% Increase purchase, they will pay approx. $85,000
2% Increase annually in property taxes.
ORANGE COUNTY
6 NORTH CAROLINA
68
Performance Agreement
• Total financial impact not to exceed $2,000,000 payable in up to four
installments equaling the actual eligible expenditures then incurred
by the Company over a period of two years from the first installment.
• These funds will be used to offset facility development, upfit,
remodeling, expansion, and acquisition costs.
ORANGE COUNTY
7 NORTH CAROLINA
69
Manager Recommendation
1 ) Receive the proposal to consider entering into a lease agreement
and the issuance of incentives to a private company for the
recruitment & expansion of Well Dot, Inc.'s operations in Orange
County;
2) Open and conduct the Public Hearing and receive BOCC and
public comments;
3) Close the Public Hearing; and
4) Approve the "performance-based" economic development incentive
agreement and the lease by adopting the resolution authorizing the
lease between Orange County and Well Dot, Inc.
ORANGE COUNTY
8 NORTH CAROLINA