Common use of Determination of Market Rate Clause in Contracts

Determination of Market Rate. For purposes of this Section 6, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord.

Determination of Market Rate. For purposes of this Section 6Exhibit “E”, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable spacespace (excluding any removable personal property), for a comparable use, for a comparable period of time (“Comparable Transactions”)) in the Raleigh/Durham area. In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (ia) through (ve) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord.

Determination of Market Rate. For purposes of this Section 6, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord.

Determination of Market Rate. For purposes Tenant shall send Landlord a preliminary expression of Tenant’s willingness to renew this Section 6, Lease (the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rentalRenewal Notice”) and non-equity tenants of comparable credit-worthinessno earlier than September 30, for comparable space2029, for a comparable useor later than December 31, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given 2029, with respect to the annual rental rates per rentable square footfirst Renewal Option and, if the standard of measurement by which Term is extended for the rentable square footage is measuredfirst Renewal Term in accordance with this Article XXV, the ratio of rentable square feet to usable square feetno earlier than September 30, the type of escalation clause implemented2034, the age and condition of the spaceor later than December 31, the extent of tenant’s liability under the lease2034, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent with respect to the commencement date as to the space in question, parking considerations, length of the lease term, size second Renewal Option. Tenant and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall negotiate in good faith to determine and mutually agree upon the Market Rate for the applicable Renewal Term. If Landlord and Tenant are unable to agree upon the Market Rate for the applicable Renewal Term, on or before 240 days prior to the expiration of the initial Term of this Lease with respect to the first Renewal Term or the expiration of the first Renewal term with respect to the second Renewal Term, as applicable (the “Negotiation Period”), as evidenced by using its good faith judgment. an amendment to the Lease executed by both Landlord shall provide and Tenant, then within 10 days after the last day of the applicable Negotiation Period, Tenant may, by written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord (the “Notice of Exercise”), irrevocably elect to exercise such Renewal Option. In order for Tenant to exercise such Renewal Option, Tenant shall send the Notice of Exercise to Landlord stating (i) that Tenant is irrevocably exercising Tenant’s option rights which require a calculation its right to extend the Term pursuant to Article XXV; and (ii) Landlord and Tenant shall be irrevocably bound by the determination of Market Rate set forth hereinafter in this Section 25.2, and if applicable, Section 25.4. If Tenant shall fail to deliver the Notice of Exercise on or before 10 days after the last day of the Market Rate. applicable Negotiation Period, then Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of waived any right to exercise the new rental within which Renewal Options. In the event any date referenced in this Section 25.2 falls on a day other than a business day, such date shall be deemed to accept such rental or to object thereto in writingbe the next following business day. In the event Tenant objectstimely delivers the Notice of Exercise to Landlord, Landlord and Tenant shall attempt each simultaneously present to agree upon such Market Rate using the other party their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval determinations of the Market Rate for the applicable Renewal Term (the “Final Offers”) within 15 days after the last day of the applicable Negotiation Period. If the Market Rate as determined by Landlordthe lower of the two (2) proposed Final Offers is not more than ten percent (10%) below the higher, then the Market Rate shall be determined by averaging the two (2) Final Offers. If the difference between the lower of the two (2) proposed Final Offers is more than ten percent (10%) below the higher, then the Market Rate shall be determined by the procedure (“Baseball Arbitration”) set forth in Section 25.4.

Determination of Market Rate. For purposes Tenant shall send Landlord a preliminary expression of Tenant’s willingness to renew this Section 6Lease no earlier than January 31, 2030, or later than April 30, 2030 (the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable TransactionsRenewal Notice”). In any determination , together with financial statements meeting the requirements of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writingSection 24.20. In the event Tenant objectstimely provides Landlord with Tenant's Renewal Notice, Landlord shall notify Tenant (“Landlord's Response”), on or before July 31, 2030, of the Renewal Rent to be payable by Tenant during the Renewal Term. Tenant and Landlord shall negotiate in good faith to determine and mutually agree upon the Market Rate for the Renewal Term. If Landlord and Tenant are unable to agree upon the Market Rate for the Renewal Term, on or before August 31, 2030 (the “Negotiation Period”), as evidenced by an amendment to the Lease executed by both Landlord and Tenant and amending the Lease to provide for the extension of the Term for the Renewal Term, the Renewal Rent, any other terms set forth in Landlord’s Response to improve the Premises or provide any improvement allowance as contemplated in Section 25.1(b) and any other any other terms mutually agreed to by Landlord and Tenant, if applicable, then within 10 days after the last day of the Negotiation Period, Tenant may, by written notice to Landlord (the “Notice of Exercise”), irrevocably elect to exercise such Renewal Option. In order for Tenant to exercise such Renewal Option, Tenant shall send the Notice of Exercise to Landlord stating (i) that Tenant is irrevocably exercising its right to extend the Term pursuant to Article XXV; and (ii) Landlord and Tenant shall be irrevocably bound by the determination of Market Rate set forth hereinafter in this Section 25.2, and if applicable, Section 25.4. If Tenant shall fail to deliver the Notice of Exercise on or before 10 days after the last day of the Negotiation Period, then Tenant shall have waived any right to exercise the Renewal Option. In the event any date referenced in this Section 25.2 falls on a day other than a business day, such date shall be deemed to be the next following business day. In the event Tenant timely delivers the Notice of Exercise to Landlord, Landlord and Tenant shall attempt each simultaneously present to agree upon such Market Rate using the other party their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval determinations of the Market Rate for the Renewal Term (the “Final Offers”) within 15 days after the last day of the Negotiation Period. If the Market Rate as determined by Landlordthe lower of the two (2) proposed Final Offers is not more than five percent (5%) below the higher, then the Market Rate shall be determined by averaging the two (2) Final Offers. If the difference between the lower of the two (2) proposed Final Offers is more than five percent (5%) below the higher, then the Market Rate shall be determined by the procedure (“Baseball Arbitration”) set forth in Section 25.4.

Determination of Market Rate. For purposes of this Section 6If Tenant duly exercises the Extension Option, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. , and Landlord shall provide Tenant with written notice of such amount within thirty fifteen (3015) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising "Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s 's Review Period”") after receipt of Landlord’s 's notice of the new rental Base Rent within which to accept such Base Rent. If Tenant fails to accept in writing such rental or to object thereto in writing. In the event Tenant objectsproposal by Landlord, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt to agree upon such Market Rate Rate, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty fifteen (3015) days following Tenant’s 's Review Period (“"Outside Agreement Date”"), then each party shall place in a separate sealed envelope its their final proposal as to the Market Rate Rate, and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure In the event that Landlord fails to timely generate the initial notice of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval Landlord's opinion of the Market Rate determined Rate, then Tenant may commence such negotiations by providing the initial notice, in which event Landlord shall have fifteen (15) days ("Landlord.'s Review Period") after receipt of Tenant's notice of the new Base Rent within which to accept each Base Rent proposed by Tenant, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt in good faith to agree upon the Market Rate, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within fifteen (15) days following Landlord's Review Period (which shall be, in such event, the "Outside Agreement Date" in lieu of the above definition of such date), then each proposal as to Market Rate, and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below:

Determination of Market Rate. For purposes of this Section 6Exhibit “E”, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its their final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (ia) through (ve) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord. In the event that Landlord fails to timely generate the initial written notice of Landlord’s opinion of the Market Rate, Tenant may commence such negotiations by providing the initial notice, in which event Landlord shall have thirty (30) days (“Landlord’s Review Period”) after receipt of Tenant’s notice of the proposed rental within which to accept such rental. In the event Landlord fails to accept in writing such rental proposed by Tenant, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt in good faith to agree upon such Market Rate, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Landlord’s Review Period (which shall be, in such event, the “Outside Agreement Date” in lieu of the above definition of such date), then each party shall place in a separate sealed envelope their final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (a) through (e) below.

Determination of Market Rate. For purposes of this Section 67, the term “"Market Rate” " shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “"fair market rental”") and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, use/ for a comparable period of time (“"Comparable Transactions”"). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s 's liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length length, of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, make/ and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s 's option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“"Tenant’s 's Review Period”") after receipt of Landlord’s 's notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s 's Review Period (“"Outside Agreement Date”"), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (i) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s 's Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord.

Determination of Market Rate. For purposes of this Section 6Exhibit "E", the ---------------------------- ----------- term “"Market Rate” " shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “"fair market rental”") and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“"Comparable Transactions”"). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s 's liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s 's option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“"Tenant’s 's Review Period”") after receipt of Landlord’s 's notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s 's Review Period (“"Outside Agreement Date”"), then each party shall place in a separate sealed envelope its final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (ia) through (ve) below. Failure of Tenant to so accept in writing such rental within Tenant’s 's Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord.

Determination of Market Rate. For purposes of this Section 6, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing, which written objection shall specify Tenant’s determination of the Market Rate and the basis therefor in reasonable detail. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its final proposal as to the Market Rate and such determination shall be submitted to determined by arbitration in accordance with subsections the procedures set forth on Exhibit I. Notwithstanding the foregoing, Tenant shall have the right to rescind its Renewal Notice by written notice to Landlord (ia “Recission Notice”) through if Tenant concludes in its sole discretion that the prospects for agreement on a Market Rate are unlikely, provided, however, that such Recission Notice must be delivered by Tenant, if at all, not later than the sooner to occur of (vx) belowthe Outside Agreement Date, and (y) the date that is twelve (12) months prior to the scheduled Expiration Date. Failure If Tenant does not deliver a Recission Notice to Landlord by the earlier of such dates, then Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed to have waived its disapproval of right to rescind the Market Rate determined by LandlordRenewal Notice.

Determination of Market Rate. For purposes of this Section 6Third Amendment, the term “Market Rate” as it applies to the Expansion Space shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable space, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights which require a calculation of the Market Rate. Tenant shall have thirty (30) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental within which to accept such rental or to object thereto in writing. In the event Tenant objects, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall place in a separate sealed envelope its their final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (ia) through (ve) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval of the Market Rate determined by Landlord. In the event that Landlord fails to timely generate the initial written notice of Landlord’s opinion of the Market Rate, Tenant may commence such negotiations by providing the initial notice, in which event Landlord shall have thirty (30) days (“Landlord’s Review Period”) after receipt of Tenant’s notice of the proposed rental within which to accept such rental. In the event Landlord fails to accept in writing such rental proposed by Tenant, then such proposal shall be deemed rejected, and Landlord and Tenant shall attempt in good faith to agree upon such Market Rate, using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty (30) days following Landlord’s Review Period (which shall be, in such event, the “Outside Agreement Date” in lieu of the above definition of such date), then each party shall place in a separate sealed envelope their final proposal as to Market Rate and such determination shall be submitted to arbitration in accordance with subsections (a) through (e) below.

Determination of Market Rate. For purposes of this Section 6Section, the term “Market Rate” shall mean the annual amount per rentable square foot that comparable landlords of comparable buildings have accepted in then-current transactions between non-affiliated parties from new, non-expansion, non-renewal (unless the lease involved a procedure invoked by landlord and tenant for a 100% determination of “fair market rental”) and non-equity tenants of comparable credit-worthiness, for comparable spacespace in the RTP/1-40 submarket of the Durham, North Carolina market, for a comparable use, for a comparable period of time (“Comparable Transactions”). In any determination of Comparable Transactions appropriate consideration shall be given to the annual rental rates per rentable square foot, the standard of measurement by which the rentable square footage is measured, the ratio of rentable square feet to usable square feet, the type of escalation clause implemented, the age and condition extent of the space, the extent of tenant’s liability under the lease, abatement provisions reflecting free rent and/or no rent during the period of construction or subsequent to the commencement date as to the space in question, parking considerations, length of the lease term, credit guarantees, size and location of premises being leased, building standard work letter and/or tenant improvement allowances, if any, or any other tenant concessions and other generally applicable conditions of tenancy for such Comparable Transactions. The intent is that Tenant will obtain the same rent and other economic benefits that Landlord would otherwise give in Comparable Transactions and that Landlord will make, and receive the same economic payments and concessions that Landlord would otherwise make, and receive in Comparable Transactions. Landlord shall determine the Market Rate by using its good faith judgment. Landlord shall provide written notice of such amount within thirty (30) days (but in no event later than forty-five (45) days) after Tenant provides the notice to Landlord exercising Tenant’s option rights right which require requires a calculation of the Market Rate. Tenant shall have thirty fifteen (3015) days (“Tenant’s Review Period”) after receipt of Landlord’s notice of the new rental Market Rate within which to accept such rental Market Rate or to object thereto in writing. Failure of Tenant to accept or reject in writing such rent within Tenant’s Review Period shall conclusively be deemed its approval of the Market Rate determined by Landlord. In the event Tenant objectsdoes not accept Landlord’s determination of the Market Rate, Landlord and Tenant shall attempt to agree upon such Market Rate using their best good faith efforts. If Landlord and Tenant fail to reach agreement within thirty fifteen (3015) days following Tenant’s Review Period (“Outside Agreement Date”), then each party shall, within ten (10) business days following the Outside Agreement Date, choose an appraiser who shall place by profession be a real estate appraiser or broker who shall have been active over the five (5) year period ending on the date of such appointment in a separate sealed envelope the leasing of comparable commercial properties in the vicinity of the Premises. If Tenant does not choose an appraiser as set forth in the preceding sentence, such appointment shall be made by Landlord in its final proposal as to reasonable discretion. The appraisers shall jointly determine the Market Rate and such determination for the Premises. If within thirty (30) days following appointment of the two (2) appraisers, as described above, the two (2) appraisers are unable to agree upon the Market Rate, a third independent appraiser shall be submitted to arbitration in accordance with subsections chosen within ten (i10) through (v) below. Failure of Tenant to so accept in writing such rental within Tenant’s Review Period shall conclusively be deemed its disapproval days thereafter by the mutual consent of the first two (2) appraisers or, if such first two (2) appraisers fail to agree upon the appointment of a third appraiser, such appointment shall be made by Landlord in its reasonable discretion. The Market Rate determined by the third appraiser so appointed and chosen shall be given within ten (10) days after the selection of such third appraiser. If three (3) appraisers shall be appointed and the determination of one appraiser is disparate from the median of all three (3) appraisers by more than twice the amount by which the other determinations are disparate from the median, then the determination of such appraiser shall be excluded, the remaining two (2) determinations shall be averaged and such average shall be binding and conclusive on Landlord and Tenant; otherwise the average of all three (3) determinations shall be binding and conclusive on Landlord and Tenant. The fees and expenses of the appraiser to be appointed by Tenant shall be paid by Tenant, the fees and expenses of the appraiser to be appointed by Landlord shall be paid by Landlord., and the fees and expenses of the third appraiser shall be divided equally between Landlord and Tenant. In the event that the Market Rate is not determined prior to the Expiration Date, Tenant shall pay as Minimum Rent during such period of time between the Expiration Date and determination of the Market Rate, a monthly amount equal to the monthly Minimum Rent applicable immediately prior to the Expiration Date multiplied by 110%, together with Tenant’s payment of Tenant’s Proportionate Share of Operating Expenses and all other amounts due under the Lease. Immediately after the Market Rate is determined, Landlord and Tenant shall execute an amendment to the Lease regarding the Renewal Term and the new Minimum Rent shall be adjusted effective as of the commencement date of the Renewal Term. [Signatures appear on following page] “LANDLORD” Crown Royal Associates, LLC, a Delaware limited liability company By: Name: Xxxxxx Xxxxxxx Its: Auth Xxxxxx By: Name: Its: “TENANT” Novan, Inc. a Delaware corporation By: Name: Xxxxxx Xxxxxx Its: President By: Name: Its: EXHIBIT “A” PREMISES Royal Center I Suite 470 4222 Emperor Boulevard EXHIBIT “B” NOTICE OF LEASE TERM DATES TO: DATE: RE: Lease dated , 200 , between (“Landlord”), and (“Tenant”), concerning Suite , located at .. Ladies and Gentlemen: In accordance with the Lease, Landlord wishes to advise and/or confirm the following: