# Relet

Pursuant to that Lease Agreement dated January 17, 2017, entered into by Tenant and Landlord (the "Lease"), Tenant leased from Landlord approximately 40,420 rentable sq. ft. in that building located at 1010 Main Campus Dr. in Raleigh, NC and identified as the "Center for Technology and Innovation", (the "Premises"). (The Lease is incorporated into this Agreement by this reference and, except where specifically provided to the contrary in this document, the capitalized terms shall have the same meaning as those used in the Lease.) Pursuant to Section 6.1 of the Lease, Tenant delivered a $2,400,000 "Irrevocable Standby Letter of Credit", dated January 18, 2017, (No. IS0485461U) issued by Wells Fargo Bank, National Association in favor of Landlord (the "Letter of Credit") to Landlord as security for Tenant's obligations under the Lease. Tenant defaulted under the Lease ("Tenant's Default") and on March 16, 2017, advised Landlord: (i) that Tenant wanted to terminate the Lease; (ii) that Tenant was relinquishing all rights to possession of the Premises; and (iii) to begin efforts to **relet** the Premises. Landlord sent a notice of termination of Lease to Tenant on March 17, 2017. After negotiation, the parties have agreed to an early termination of the Lease on the terms and conditions set out below. In consideration of these Recitals and the promises of set out below, the parties agree as follows:

## 2.2. Lost Rents & Other Damages.
Pursuant to Section 17.2 of the Lease, Landlord is entitled to recover from Tenant: (i) any and all commercially reasonable costs (i.e., broker commissions, alteration/repair costs, attorneys' fees, etc.) incurred by Landlord in reletting the Premises; (ii) any deficiency between Tenant's scheduled Rent (i.e., Base Rent and Additional Rent) for the remainder of the Term and the rent charged to the new tenant; (iii) the unamortized portion of the funded Tenant Upfit Allowance; (iv) the Rent Abatement; (v) interest at 12% per annum on all sums due from Tenant; and (vi) all attorneys' fees incurred by Landlord in enforcing the Lease, (collectively, the "Termination Damages"). Landlord has begun the reletting process; but, as of yet, has been unable to **relet** any of the Premises. Because the Premises has not yet been **relet**, the parties acknowledge that it is not possible, with any certainty, to calculate the actual amount of the Termination Damages. The parties have nevertheless agreed that the rent reserved under the Lease for 15% of the remainder of the Term would not be less than $1,800,000.00. Acknowledging that the Termination Damages are somewhat speculative and that this Agreement contemplates that the Termination Damages shall be paid in one lump sum (as opposed to over time as contemplated by the Lease), Landlord has agreed to accept the sum of $1,615,590.00 as payment, in full, of the Termination Damages, payable solely from the Second Draw (defined below).

If Sublessee abandons or vacates the leased premises or is dispossessed for cause by Sublessor before the termination of this sublease, Sublessor may, on giving five (5) days' written notice to Sublessee, declare this lease forfeited and may then make reasonable efforts to **relet** the premises. Sublessee shall be liable to Sublessor for all damages suffered by reason of such forfeiture. Such damages shall include, but shall not be limited to, the following: (1) all actual damages suffered by Sublessor until the property is **relet**, including reasonable expenses incurred in attempting to **relet**; (2) the difference between the rent received when the property is **relet** and the rent reserved under this lease.

Until the premises have been **relet**, Sublessee agrees to pay to Sublessor, on the same days as the rental payments are due under this lease, the actual damages suffered by Sublessor since the last payment, either rent or damages, was made. After the premises have been **relet**, Sublessee agrees to pay to Sublessor, on the last day of each rental period, the difference between the rent received for the period from reletting and the rent reserved under this lease for that period.

and it is further agreed that each and all of the grounds for refusal set forth in clauses (1) through (8) above, both inclusive, of this sentence are reasonable grounds for Lessor's refusal to **relet** the Leased Premises, or (as to all other provisions of this Lease Agreement) for Lessor's refusal to issue any approval, or take any other action, of any nature whatsoever under this Lease Agreement. In the event the waiver set forth in this Section 16.E shall be ineffective, Lessee further agrees in favor of Lessor, to the maximum extent to which it may lawfully and effectively do so, that the following efforts to mitigate damages if made by Lessor (and without obligating Lessor to render such efforts) shall be conclusively deemed reasonable, and that Lessor shall be conclusively deemed to have used the efforts to mitigate damages required by applicable law if: Lessor places the Leased Premises on its inventory of available space in the Building; Lessor makes such inventory available to brokers who request same; and Lessor shows the Leased Premises to prospective tenants (or their brokers) who request to see it.

B. Terminate Lessee’s right of possession (but not this Lease Agreement) and may repossess the Leased Premises by forcible detainer suit or otherwise, without thereby releasing Lessee from any liability hereunder and without demand or notice of any kind to Lessee and without terminating this Lease Agreement. Lessor shall use reasonable efforts under the circumstances to **relet** the Leased Premises on such terms and conditions as Lessor in its sole discretion may determine (including a term different than the Term, rental concessions, alterations and repair of the Leased Premises); provided, however, Lessor hereby reserves the right (i) to lease any other comparable space available in the Building or in any adjacent building owned by Lessor prior to offering the Leased Premises for lease, and (ii) to refuse to lease the Leased Premises to any potential tenant which does not meet Lessor’s standards and criteria for leasing other comparable space in the Building. Lessor shall not be liable, nor shall Lessee’s obligations hereunder be diminished because of, Lessor’s failure or refusal to **relet** the Leased Premises or collect rent due in respect of such reletting. For the purpose of such reletting Lessor shall have the right to decorate or to make any repairs, changes, alterations or additions in or to the Leased Premises as may be reasonably necessary or desirable. In the event that (i) Lessor shall fail or refuse to **relet** the Leased Premises, or (ii) the Leased Premises are **relet** and a sufficient sum shall not be realized from such reletting (after first deducting therefrom, for retention by Lessor, the unpaid Rent due hereunder earned but unpaid at the time of reletting plus interest thereon at the rate specified in Section 5, the cost of recovering possession (including attorneys’ fees and costs of suit), all of the costs and expenses of such decorations, repairs, changes, alterations and additions, the expense of such reletting and the cost of collection of the rent accruing therefrom) to satisfy the Rent, then Lessee shall pay to Lessor as damages a sum equal to the amount of such deficiency. Any such payments due Lessor shall be made upon demand therefor from time to time and Lessee agrees that Lessor may file suit to recover any sums falling due under the terms of this Section 16 from time to time. No delivery to or recovery by Lessor of any portion due Lessor hereunder shall be any defense in any action to recover any amount not theretofore reduced to judgment in favor of Lessor, nor shall such reletting be construed as an election on the part of Lessor to terminate this Lease Agreement unless a written notice of such intention be given to Lessee by Lessor. Notwithstanding any such termination of Lessee’s right of possession of the Leased Premises, Lessor may at any time thereafter elect to terminate this Lease Agreement. In any proceedings to enforce this Lease Agreement under this Section 16, Lessor shall be presumed to have used its reasonable efforts to **relet** the Leased Premises, and Lessee shall bear the burden of proof to establish that such reasonable efforts were not used.

24B. Repossession and Re-Entry. Upon the occurrence of a default by Tenant hereunder, Landlord may, upon any applicable notice and opportunity to cure, immediately terminate Tenant’s right of possession of the Premises (whereupon all obligations and liability of Landlord hereunder shall terminate), but not terminate this Lease, and, without notice, demand or liability, enter upon the Premises or any part thereof, take absolute possession of the same, expel or remove Tenant and any other person or entity who may be occupying the Premises and change the locks. If Landlord terminates Tenant’s possession of the Premises under this Section 24B, (i) Landlord shall have no obligation whatsoever to tender to Tenant a key for new locks installed in the Premises, (ii) Tenant shall have no further right to possession of the Premises, and (iii) Landlord shall use reasonable effort to **relet** or attempt to **relet** the Premises. Landlord may, however, at its sole option, **relet** the Premises or any part thereof on such terms and conditions as are reasonable for the geographic area in which the Premises is located.

If Landlord elects to **relet** the Premises, rent received by Landlord from such reletting shall be applied first to the payment of any indebtedness other than Rent and additional charges due hereunder from Tenant to Landlord (in such order as Landlord shall designate), second, to the payment of any cost of such reletting, including, without limitation, advertising costs, brokerage fees and leasing commissions, and third, to the payment of Rent due and unpaid hereunder (in such order as Landlord shall designate), and Tenant shall satisfy and pay to Landlord any deficiency upon demand therefor from time to time. Except as otherwise provided herein, Landlord shall not be responsible or liable for any failure to **relet** the Premises or any part thereof or for any failure to collect any rent due upon any such reletting. No such re-entry or taking of possession of the Premises by Landlord shall be construed as an election on Landlord’s part to terminate this Lease unless a written notice of such termination is given to Tenant pursuant to Section 24A above. In the event of the reletting by Landlord of the Premises to a person expressly assuming Tenant’s obligations under this Lease, Tenant shall thereby be released from any further obligations hereunder, and Landlord agrees to look solely to such successor in interest of the Tenant for performance of such obligations. Upon such reletting, Tenant shall be relieved of all liability under any and all of its covenants and obligations contained in or derived from this Lease arising out of any act, occurrence or omission occurring after the reletting.

(2) **Relet** the Premises. Landlord at its option may **relet** the whole or any part of the Premises, from time to time, either in the name of Landlord or otherwise, to such tenants, for such terms ending before, on, or after the expiration date of the lease term, at such reasonable rentals and upon such other reasonable conditions (including concessions and free rent periods) as Landlord, in its sole discretion, may reasonably determine to be appropriate. Landlord shall have no obligation to **relet** the Premises or any part and shall not be liable for refusal or failure to **relet** the Premises, or in the event of any such reletting, for refusal or failure to collect any rent due upon such reletting. No such refusal or failure shall operate to relieve Tenant of any liability under this Lease or otherwise affecting such liability. Landlord at its option may make such physical changes to the Premises as Landlord, in its sole discretion, considers advisable or necessary in connection with any such reletting or proposed reletting without relieving Tenant of any liability under this Lease or otherwise affecting Tenant’s liability. If there is other comparable unleased space in the Project, Landlord shall have no obligation to attempt to **relet** the Premises prior to leasing other space in the Project.

(1) Retake Possession. With or without terminating the Lease, to the extent permitted by law, Landlord may re-enter and retake possession of the Premises and terminate Tenant’s tenancy, without notice, either by summary proceedings, force, any other applicable action or proceeding, or otherwise. Landlord may use the Premises for Landlord’s own purposes or **relet** it upon any reasonable terms without prejudice to any other remedies that Landlord may have by reason of Tenant’s default. None of these actions will be deemed an acceptance of surrender by Tenant. To the extent permitted by law, Tenant expressly waives the service of any notice of intention to terminate Tenant’s tenancy or Tenant’s right to possession or to retake the Premises, and waives service of any demand for payment of rent or for possession, and of any and every other notice or demand required or permitted under applicable law.

Lease renewals at the Company’s Hawaii properties, as a percentage of expiring square feet of such properties, were approximately 54%, 77% and 67% for the years ended December 31, 2009, 2010 and 2011, respectively. New leases (which include leases for properties for which the lease expired in an earlier period) with new tenants at the Company’s Hawaii properties, as a percentage of expiring square feet of such properties, were approximately 6%, 26% and 12% for the years ended December 31, 2009, 2010 and 2011, respectively. Occupancy at our Hawaii properties as a percentage of total Hawaii rentable square feet was 95.4%, 95.5% and 94.4% as of December 31, 2009, 2010 and 2011, respectively. Our assumed renewal/re **relet** rate would mean the that our occupancy would decrease to 93.2%. Finally, annual rents from leases entered into during the years ended December 31, 2009, 2010 and 2011 for the Company’s Hawaii properties increased by an average of 22%, 14% and 30%, respectively, as compared to rental rates under the expiring leases.

during the twelve months year ended September 30 December 31, 2011. We have based these assumptions on the characteristics of the properties for which leases are scheduled to expire, CWH’s experience with these properties and CWH’s experience with leasing our Hawaii properties generally. Rents from properties that we are assuming will be vacated amount to $840, or 20% of $4,200. We have based this assumption on historical experience at our Hawaii properties, including lease renewal and **relet** rates, occupancy rates and annual rents for the three-year period ended December 31, 2011. No leases relating to our mainland office and industrial properties are scheduled to expire during 2012. As a result, our assumption relates solely to our Hawaii properties.

The Company believes its assumption as to rate of lease renewal/ **relet** is reasonable based on historical experience with its Hawaii properties. Lease renewals at the Company’s Hawaii properties, as a percentage of expiring square feet of such properties, were approximately 54%, 77% and 67% for the years ended December 31, 2009, 2010 and 2011, respectively. Additionally, new leases (which include leases of properties for which the lease expired in an earlier period) with new tenants at the Company’s Hawaii properties, as a percentage of expiring square feet of such properties, were approximately 6%, 26% and 12% for the years ended December 31, 2009, 2010 and 2011, respectively.