THIRD AMENDMENT TO OFFICE LEASE
Exhibit 10.1
THIRD AMENDMENT TO OFFICE LEASE
THIS THIRD AMENDMENT TO OFFICE LEASE (this “Amendment”) is made as of the 28th day of October, 2010
by and between DUKE REALTY LIMITED PARTNERSHIP, an Indiana limited partnership doing business in
North Carolina as Duke Realty of Indiana Limited Partnership (“Landlord”), and SCIQUEST, INC., a
Delaware corporation (“Tenant”).
WITNESSETH:
WHEREAS, Landlord and Tenant heretofore entered into that certain Office Lease dated May 17,
2005, as amended by that certain First Amendment to Office Lease dated February 21, 2008 (the
“First Amendment”), and as amended by that certain Second Amendment to Office Lease dated February
27, 2008 (collectively, the “Lease”) for the lease of approximately 24,473 rentable square feet
being Suite 200 located in the building (the “Building”) at 0000 Xxxxxx Xxxxxxx, Xxxxx 000, Xxxx,
Xxxxx Xxxxxxxx, 00000, located within Weston Corporate Park, said space being more particularly
described therein (collectively, the “Existing Premises”); and
WHEREAS, Landlord and Tenant desire to (i) expand the Existing Premises by approximately
12,963 rentable square feet (the “Second Expansion Space”) known as Suite 190, (ii) expand the
Existing Premises by approximately 7,224 rentable square feet of space (the “Third Expansion
Space”) known as Suite 250, which Tenant is currently occupying pursuant to that certain Assignment
of Lease dated February 11, 2008, between Kroy Building Products, Inc. (“Kroy”), and Tenant,
whereby Tenant assumed and Kroy assigned all its right, title and interest to the premises under
that certain Office Lease dated September 29, 2006, by and between Landlord and Kroy (as amended,
the “Kroy Lease”), and (iii) extend the Lease Term.
NOW, THEREFORE, for and in consideration of Ten and No/100 Dollars ($10.00) and other good and
valuable consideration in hand paid by each party hereto to the other, the receipt and sufficiency
of which are hereby acknowledged, the parties hereto do hereby agree as follows:
1. Incorporation of Recitals and Definitions. The above recitals are hereby
incorporated into this Amendment as if fully set forth herein. All capitalized terms used herein but
undefined shall have the meaning as defined in the Lease.
2. Phase I Amendment of Article 1. Lease of Premises. Commencing as of the
date (the “Second Expansion Date”) that Substantial Completion (as defined in Exhibit B hereto)
of the Second Expansion Space Improvements (as defined below) occurs (except for Subsection (f) below, which
shall apply as of January 1, 2011, even if the Second Expansion Date has not yet occurred), the
following paragraphs of Article 1, Section 1.01 of the Lease are hereby amended as
follows:
“(a) Leased Premises. The Lease is hereby amended by substituting Amended Exhibit
A, attached hereto and incorporated herein by reference, on which the Existing Premises are
striped and the Second Expansion Space is cross-hatched, in lieu of Exhibit A attached to
the Lease. The Existing Premises and Second Expansion Space shall collectively hereinafter be
referred to as the “Leased Premises”.
(b) Rentable Area.
| Existing Premises: approximately 24,473 rentable square
feet Second Expansion Space: approximately 12,963 rentable square feet |
| Leased Premises: approximately 37,436 rentable square feet |
| (c) | Tenant’s Proportionate Share. | ||
| Existing Premises: 26.04% Second Expansion Space: 13.79% Leased Premises: 39.83% |
| (d) | Minimum Annual Rent. |
| Second Expansion Space: |
01/14/2011-01/31/2012 |
$ 0.00(1 year and 17 days) | |
02/01/2012-01/31/2013 |
$249,148.92 | |
02/01/2013-01/31/2014 |
$255,371.16 | |
02/01/2014-01/31/2015 |
$261,723.00 | |
02/01/2015-01/31/2016 |
$268,334.16 | |
02/01/2016-01/31/2017 |
$275,074.92 |
NOTE: In the event the Second Expansion Date occurs prior to January 14, 2011, then
Tenant shall be entitled to occupy the Second Expansion Space free of charge as of the Second
Expansion Date and continuing through January 14, 2011 (the “Early Occupancy Period”), and the
foregoing schedule shall commence as of January 14, 2011. The foregoing schedule shall be in
addition to, and not in derogation of, the Minimum Annual Rent for the Existing Premises set
forth in the Lease and the First Amendment. To the extent that the Second Expansion Date
occurs later than January 14, 2011, all of the dates contained in the foregoing schedule shall
be adjusted accordingly (except that the expiration date shall not be extended beyond January
31, 2017, provided that this Amendment is executed by Tenant on or before October 20, 2010).
| (e) | Monthly Rental Installments. |
| Second Expansion Space: |
01/14/2011-01/31/2012 |
$ 0.00* | |
02/01/2012-01/31/2013 |
$20,762.41 | |
02/01/2013-01/31/2014 |
$21,280.93 | |
02/01/2014-01/31/2015 |
$21,810.25 | |
02/01/2015-01/31/2016 |
$22,361.18 | |
02/01/2016-01/31/2017 |
$22,922.91 |
NOTE: In the event the Second Expansion Date occurs prior to January 14, 2011, then
Tenant shall be entitled to occupy the Second Expansion Space free of charge during the Early
Occupancy Period, and the foregoing schedule shall commence as of January 14, 2011. The
foregoing schedule shall be in addition to, and not in derogation of, the Monthly Rental
Installments for the Existing Premises set forth in the Lease and the First Amendment. To the
extent that the Second Expansion Date occurs later than January 14, 2011, all of the dates
contained in the foregoing schedule shall be adjusted accordingly (except that the expiration
date shall not be extended beyond January 31, 2017, provided that this Amendment is executed
by Tenant on or before October 20, 2010).
| (f) | Base Year: 2011 for the entire Leased Premises. |
| (g) | Target Second Expansion Date: January 14, 2011. |
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(h) Lease Term. The Lease is hereby modified to reflect that the Lease Term for the
Second Expansion Space shall commence on the Second Expansion Date and shall continue for a period
of up to six (6) years and seventeen (17) days (which shall not include the Early Occupancy Period,
if any) (the “Second Expansion Term”), and the Lease Term with respect to the Existing Premises
shall be extended to be coterminous with the Lease Term for the Second Expansion Space (except that
the expiration date shall not be extended beyond January 31, 2017, provided that this Amendment is
executed by Tenant on or before October 20, 2010).
| (j) | Broker: Synergy Commercial Advisors representing Tenant. |
| (l) | Addresses for notices and payments are as follows: |
Landlord:
|
Duke Realty Limited Partnership | |
| c/o Duke Realty Corporation Attn.: Raleigh Market — Vice President, Asset Management & Customer Service 0000 Xxxxxxxxxx Xxxx Xxxx, Xxxxx 000 Xxxxxxxxxxx, Xxxxx Xxxxxxxx 00000 |
||
With a copy to:
|
Duke Realty
Limited Partnership c/o Duke Realty Corporation Attn: Raleigh Market Attorney 0000 Xxxxxxxxxxx Xxxx, Xxxxx 000 Xxxxxx, Xxxxxxx 00000-0000 |
|
With Payments to:
|
Duke Realty Limited Partnership 00 Xxxxxxxxxx Xxxxx, Xxxxx 0000 Xxxxxxx, Xxxxxxxx 00000-0000 |
|
Tenant:
|
SciQuest, Inc. 0000 Xxxxxx Xxxxxxx, Xxxxx 000 Xxxx, Xxxxx Xxxxxxxx 00000 Attn: Xxxxxxxx Xxxxxx |
|
With a copy to:
|
Smith, Anderson, Blount, Dorsett, Xxxxxxxx
& Xxxxxxxx, L.L.P. Attn: Xxxx X. Xxxxx 0000 Xxxxxxxx Xxxxxxx Xxxxxx Xxxxxxx, Xxxxx Xxxxxxxx 00000” |
3. Construction of Second Expansion Space Improvements. Landlord shall construct and
install all leasehold improvements to the Second Expansion Space (the “Second Expansion Space
Improvements”) in accordance with Exhibit B attached hereto and made a part hereof.
Landlord shall
use reasonable speed and diligence to Substantially Complete the Second Expansion Space
Improvements
on or before the Target Second Expansion Date.
4. Phase II Amendment of Article 1. Lease of Premises. Commencing as of
January 1,
2014 (the “Third Expansion Date”), the following paragraphs of Article 1, Section
1.01 of the Lease are
hereby amended as follows:
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“(a) Leased Premises. The Lease is hereby amended by substituting Further
Amended Exhibit A, attached hereto and incorporated herein by reference, on which the Existing
Premises and the Second Expansion Space are striped and the Third Expansion Space is cross-hatched,
in lieu of Amended Exhibit A attached to the Lease. The Existing Premises, the Second
Expansion Space and the Third Expansion Space shall collectively hereinafter be referred to as the
“Leased Premises”.
| (b) | Rentable Area. |
||
| Existing Premises: approximately 24,473 rentable square feet Second Expansion Space: approximately 12,963 rentable square feet Third Expansion Space: approximately 7,224 rentable square feet Leased Premises: approximately 44,660 rentable square feet |
| (c) | Tenant’s Proportionate Share. |
||
| Existing Premises: 26.04% Second Expansion Space: 13.79% Third Expansion Space: 7.69% Leased Premises: 47.52% |
| (d) | Minimum Annual Rent. |
| Third Expansion Space: |
01/01/2014-01/31/2014 |
$ 12,672.10 (1 month) | |
02/01/2014-01/31/2015 |
$114,048.90 (3 months’ abated, 9 months’ rent) | |
02/01/2015-01/31/2016 |
$116,216.10 (3 months’ abated, 9 months’ rent) | |
02/01/2016-01/31/2017 |
$157,555.44 |
The foregoing schedule shall be in addition to, and not in derogation of, the Minimum Annual
Rent for the Second Expansion Space and the Existing Premises set forth in the Lease and this
Amendment. In addition, the expiration date of the Lease as set forth in the foregoing schedule
shall be extended so that it is coterminous with the Second Expansion Space (except that the
expiration date shall not be extended beyond January 31, 2017, provided that this Amendment is
executed by Tenant on or before October 20, 2010).
| (e) | Monthly Rental Installments. |
| Third Expansion Space: |
01/01/2014-01/31/2014 |
$12,672.10 | |
02/01/2014-04/30/2014 |
$ 0.00 | |
05/01/2014-01/31/2015 |
$12,672.10 | |
02/01/2015-04/30/2015 |
$ 0.00 | |
05/01/2015-01/31/2016 |
$12,912.90 | |
02/01/2016-01/31/2017 |
$13,129.62 |
The foregoing schedule shall be in addition to, and not in derogation of, the Monthly Rental
Installments for the Second Expansion Space set forth in the Lease and this Amendment. In addition,
the expiration date of the Lease as set forth in the foregoing schedule shall be extended so that
it is coterminous with the Second Expansion Space (except that the expiration date shall not be
extended
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beyond January 31, 2017, provided that this Amendment is executed by Tenant on or
before October 20, 2010).
(h) Lease Term. The Lease is hereby modified to reflect that the term of the
Third Expansion Space shall commence on the Third Expansion Date and shall be coterminous
with the Lease Term for the Existing Premises and the Second Expansion Space (except that the
expiration date shall not be extended beyond January 31, 2017, provided that this Amendment
is executed by Tenant on or before October 20, 2010).”
5. Condition of Third Expansion Space. Tenant acknowledges and agrees that
Tenant is
accepting possession of the Third Expansion Space as of the Third Expansion Date in its
existing
condition (subject to Landlord’s obligations (such as repair and maintenance) under the
Lease), and except
as expressly provided herein, no free rent, moving allowances, tenant improvement
allowances or other
financial concessions contained in the Lease shall apply.
6. Existing Premises. Commencing as of February 1, 2014, the following
paragraphs of
Article 1, Section 1.01 of the Lease are hereby amended as follows:
| “(d) | Minimum Annual Rent. |
| Existing Premises: |
02/01/2014-01/31/2015 |
$386,367.48 (3 months’ abated, 9 months’ rent) | |
02/01/2015-01/31/2016 |
$393,709.41 (3 months’ abated, 9 months’ rent) | |
02/01/2016-01/31/2017 |
$533,756.16 |
The foregoing schedule shall be in addition to, and not in derogation of, the Monthly
Rental Installments for the Second Expansion Space and the Third Expansion Space as set
forth in the Lease and this Amendment. In addition, the expiration date of the Lease as
set forth in the foregoing schedule shall be extended so that it is coterminous with the
Second Expansion Space (except that the expiration date shall not be extended beyond
January 31, 2017, provided that this Amendment is executed by Tenant on or before October
20, 2010).
| (e) | Monthly Rental Installments. |
| Existing Premises: |
02/01/2014-04/30/2014 |
$ | 0.00 | ||
05/01/2014-01/31/2015 |
$ | 42,929.72 | ||
02/01/2015-04/30/2015 |
$ | 0.00 | ||
05/01/2015-01/31/2016 |
$ | 43,745.49 | ||
02/01/2016-01/31/2017 |
$ | 44,479.68 |
The foregoing schedule shall be in addition to, and not in derogation of, the Monthly
Rental Installments for the Second Expansion Space and the Third Expansion Space as set
forth in the Lease and this Amendment. In addition, the expiration date of the Lease as
set forth in the foregoing schedule shall be extended so that it is coterminous with the
Second Expansion Space (except that the expiration date shall not be extended beyond
January 31, 2017, provided that this Amendment is executed by Tenant on or before October
20, 2010).”
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7. Amendment of Article 4. Security Deposit. Upon the Third Expansion
Date, the security
deposit in the amount of Ten Thousand Eight Hundred Thirty-Six and 00/100 dollars ($10,836.00)
originally deposited by Tenant in connection with the Kroy Lease assignment shall be returned
to Tenant,
provided that Tenant is not then in default under the Kroy Lease.
8. Amendment of Article 6. Utilities and Other Building Services. Subsection
6.01 (a) is hereby amended by replacing “6:00 p.m.”
with “7:00 p.m.” and deleting the Saturday hours. HVAC
will be available on Saturdays by request from Tenant no later than noon on the day before and such
Saturday
service will be billed to Tenant at the after-hours rate. As of the date of this Amendment,
the charge for
after-hours HVAC is $35.00 per hour per zone which charge is subject to change from time to
time in
Landlord’s reasonable discretion; provided, however, that any increase in said charge will be
uniformly applied to all tenants of the Building.
9. Amendment of Article 8. Indemnity and Insurance. Sections 8.04 and
8.05 of the Lease are amended as follows:
(a) Subsections (i), (ii) and (iii) of Section 8.04(a) of the Lease are hereby
deleted and
replaced with the following:
“(i) Liability Insurance. Commercial General Liability Insurance, ISO Form CG 00
01, or its equivalent, covering Tenant’s use of the Leased Premises against claims for bodily
injury or death or property damage, which insurance shall be primary and non-contributory and shall
provide coverage on an occurrence basis with a per occurrence limit of not less than $6,000,000,
for each policy year, which limit may be satisfied by any combination of primary and excess or
umbrella per occurrence policies.
(ii) Property Insurance. Special Form Insurance in the amount of the
full replacement cost of Tenant’s Property (including, without limitation, alterations or additions
performed by Tenant pursuant hereto, but excluding those improvements, if any, made pursuant to
Section 2.02 above and the Second Expansion Space Improvements), which insurance shall
waive coinsurance limitations.
(iii) Worker’s Compensation Insurance. Worker’s Compensation insurance in amounts
required by applicable law; provided, if there is no statutory requirement for Tenant, Tenant shall
still obtain Worker’s Compensation insurance coverage.”
(b) The following new subsection (v) is hereby incorporated into Section 8.04(a):
“(v) Automobile Insurance. Comprehensive Automobile Liability Insurance insuring
bodily injury and property damage arising from all owned, non-owned and hired vehicles, if any,
with minimum limits of liability of $1,000,000 combined single limit, per accident.”
(c) Subsections (a) and (b) of Section 8.05 of the Lease are hereby deleted and
replaced with the following:
“(a) Liability Insurance. Commercial General Liability Insurance, ISO Form CG 00
01, or its equivalent, covering the Common Areas against claims for bodily injury or death and
property damage, which insurance shall be primary and non-contributory and shall provide coverage
on an occurrence basis with a per occurrence limit of not less than $6,000,000, for each policy
year, which limit may be satisfied by any combination of primary and excess or umbrella per
occurrence policies.
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(b) Property Insurance. Special Form Insurance (which shall not exclude flood)
in the amount of the full replacement cost of the Building, including, without limitation, any
improvements, if any, made pursuant to Section 2.02 above (and the Second Expansion Space
Improvements), but excluding Tenant’s Property and any other items required to be insured by Tenant
pursuant to Section 8.04 above.”
(d) Section 8.06 of the Lease is hereby deleted in its entirety and replaced
with the following:
“Section 8.06. Waiver of Subrogation. Notwithstanding anything contained in
this Lease to the contrary, Landlord (and its affiliates, property managers and mortgagees) and
Tenant (and its affiliates) hereby waive any rights each may have against the other on account of
any loss of or damage to their respective property, the Leased Premises, its contents, or other
portions of the Building or Common Areas arising from any risk which is required to be insured
against by Sections 8.04(a)(ii), 8.04(a)(iii), and 8.05(b) above. The special form
property insurance policies and worker’s compensation insurance policies maintained by Landlord and
Tenant as provided in this Lease shall include an endorsement containing an express waiver of any
rights of subrogation by the insurance company against Landlord and Tenant, as applicable.”
10. Amendment of Section 16.10. Signage. Section 16.10 is hereby
amended to reflect that
Landlord shall provide Tenant, at Landlord’s sole cost and expense, building standard signage
on all of the monument signs serving the Building, which shall be subject to all terms and conditions of
Section 16.10.
11. Amendment of Section 8 of the First Amendment. Options to Extend.
Section 8 of the
First Amendment shall remain in full force and effect.
12. Amendment of Section 9 of the First Amendment. Right of First Refusal.
Section 9 of
the First Amendment shall remain in full force and effect and shall apply to the entire Leased
Premises
and the Amended Exhibit D attached hereto shall replace Exhibit D to the
Lease. Additionally, if
Tenant requires additional space and no reasonably suitable Refusal Space is available in the
Building,
then Landlord will use commercially reasonable efforts to find substitute premises to lease to
Tenant in
one of Landlord’s other buildings.
13. Allowance. On or before January 31, 2011, Landlord shall pay to Tenant (or
Tenant’s
designee) the amount of One Hundred Thousand and No/100 Dollars ($100,000.00) for use by
Tenant in
connection with alterations to the Existing Premises, if any. Tenant acknowledges and agrees,
however,
that the construction and installation of any such alterations to the Existing Premises shall
be subject to
and performed in accordance with the Lease. Notwithstanding the foregoing, Tenant shall not be
required
to pay Landlord’s affiliate a construction oversight fee for any alterations to the Existing
Premises which
Tenant uses the Allowance to pay for, provided, however, Tenant uses contractors approved by
Landlord
(whose approval shall not be unreasonably withheld, conditioned or delayed), Tenant provides
Landlord
with “as built” drawings for any modifications or written specifications, if as-builts are not
applicable,
Tenant provides Landlord with its contractor’s evidence of insurance prior to making such
alterations and
Tenant notifies Landlord prior to making such alterations. Notwithstanding anything herein to
the
contrary, Tenant shall be under no obligation to complete said alterations unless it elects,
in its sole
discretion, to do so and Landlord will not be entitled to a refund of any of the Allowance.
Furthermore,
Tenant will not need to provide Landlord with an accounting of the use of the Allowance,
provided it
complies with the terms and conditions of the Lease and this Amendment.
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14. Representations and Warranties.
(a) Tenant represents and warrants to Landlord that (i) Tenant is duly organized, validly
existing and in good standing in accordance with the laws of the state under which it was
organized and if
such state is not the state in which the Leased Premises is located, that it is authorized to
do business in
such state; (ii) all action necessary to authorize the execution of this Amendment has been
taken by
Tenant; and (iii) the individual executing and delivering this Amendment on behalf of Tenant
has been
authorized to do so, and such execution and delivery shall bind Tenant. Tenant, at Landlord’s
request,
shall provide Landlord with evidence of such authority.
(b) Landlord represents and warrants to Tenant that (i) Landlord is duly organized, validly
existing and in good standing in accordance with the laws of the state under which it was
organized and if
such state is not the state in which the Leased Premises is located, that it is authorized to
do business in
such state; (ii) all action necessary to authorize the execution of this Amendment has been
taken by
Landlord; and (iii) the individual executing and delivering this Amendment on behalf of
Landlord has
been authorized to do so, and such execution and delivery shall bind Landlord. Landlord, at
Tenant’s
request, shall provide Tenant with evidence of such authority.
15. Brokers. Except for Synergy Commercial Advisors, whose commission shall be paid by
Landlord, Landlord and Tenant each represents and warrants to the other that neither party has
engaged or
had any conversations or negotiations with any broker, finder or other third party concerning
the matters
set forth in this Amendment who would be entitled to any commission or fee based on the
execution of
this Amendment. Landlord and Tenant each hereby indemnifies the other against and from any
claims for
any brokerage commissions and all costs, expenses and liabilities in connection therewith,
including,
without limitation, reasonable attorneys’ fees and expenses, for any breach of the foregoing.
The
foregoing indemnification shall survive the termination of the Lease for any reason.
16. Examination of Amendment. Submission of this instrument for examination or
signature
to Tenant does not constitute a reservation or option, and it is not effective until execution
by and delivery
to both Landlord and Tenant.
17. Incorporation. This Amendment shall be incorporated into and made apart of the
Lease,
and all provisions of the Lease not expressly modified or amended hereby shall remain in full
force and
effect. As amended hereby, the Lease is hereby ratified and confirmed by Landlord and Tenant.
To the
extent the terms hereof are inconsistent with the terms of the Lease, the terms hereof shall
control.
18. HVAC Unit Replacement. Landlord agrees, at its sole cost and expense (subject to
any
reimbursement pursuant to the Operating Expense provisions of the Lease, as amended), to
replace one
(1) HVAC Unit serving the portion of the Leased Premises located on the second floor of the
Building on
or before May 31, 2011. Landlord further agrees, at its sole cost and expense (subject to any
reimbursement pursuant to the Operating Expense provisions of the Lease, as amended), to
replace one
(1) HVAC unit serving the portion of the Leased Premises located on the first floor of the
Building on or
before May 31, 2012. Nothing in this Section 18 shall be interpreted or is intended to reduce
or replace
Landlord’s obligations under Sections 6.01, 7.01, and 7.02 of the Lease.
19. Additional Landlord Work. Landlord agrees, at its sole cost and expense (subject
to any reimbursement pursuant to the Operating Expense provisions of the Lease, as amended), to complete the following work to the bathrooms in the second (2nd ) floor of the Leased Premises
on or before March 31, 2012: (i) install new wallcoverings, (ii) re-tile the floor, (iii) install one (1) new mirror,
and (iv) install new countertops, using Building standard materials and finishes. Nothing in this Section
19 shall be
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interpreted or is intended to reduce or replace Landlord’s obligations under Sections 6.01,
7.01, and 7.02 of the Lease.
20. Amended Memorandum of Lease. Landlord and Tenant shall record an amended
Memorandum of Lease, to reflect the expansion of the Leased Premises and extension of the Lease
Term, as provided herein.
(SIGNATURES CONTAINED ON THE FOLLOWING PAGE)
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IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be executed as of the
date first set forth above.
LANDLORD:
DUKE REALTY LIMITED PARTNERSHIP,
an Indiana limited partnership doing business in
North Carolina as Duke Realty of Indiana Limited
Partnership
an Indiana limited partnership doing business in
North Carolina as Duke Realty of Indiana Limited
Partnership
By: Duke Realty Corporation,
its General Partner
its General Partner
| Dated:10/28/2010 | By: | /s/ Xxxxxxx X. Xxxxxxx | ||
| Xxxxxxx X. Xxxxxxx | ||||
| Senior Vice President Raleigh Operations |
||||
| TENANT: SCIQUEST, INC., a Delaware corporation |
||||
| Dated:10/20/2010 | By: | /s/ Xxxx X. Xxxxxx | ||
| Name: | Xxxx X. Xxxxxx | |||
| Title: | CFO | |||
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