EX-10.12



 





EXHIBIT 10.12




OFFICE LEASE




	 	 	 	 	 
	STATE OF North Carolina:

	 	 
	 	FINAL
	COUNTY OF Mecklenburg :
	 	 	 	 






     THIS LEASE (the “Lease”), is made this the 26th day of May, 2000, by and
between HIGHWOODS REALTY LIMITED PARTNERSHIP, a North Carolina Limited
Partnership, [customize for each state’s ownership entity] hereinafter “Landlord” and
STRATEGIC OUTSOURCING, INC., a Delaware corporation, hereinafter (whether one or more)
“Tenant”:



W I T N E S S E T H :




     Upon the terms and conditions hereinafter set forth, Landlord leases to Tenant and Tenant
leases from Landlord property referred to as the Premises, all as follows:



     1. PREMISES. The property hereby leased to Tenant is that area shown on Exhibit A hereto
attached, which consists of approximately 16,878 rentable square feet, which is located in what is
sometimes called the Fourteen Parkway Building (the “Building”), located at 5260 Parkway Plaza
Business Park, Suite 140, Charlotte, North Carolina (the “Premises”).



     If Landlord and Tenant desire for improvements to be made to the Premises prior to the
Commencement Date such improvements shall be made pursuant to the workletter attached hereto as
Addendum 2 (the “Workletter”).



     2. TERM. This Lease Term (the “Term”) is for sixty-six (66) months, and shall commence on
August 1, 2000 (“Commencement Date”), and shall expire (unless sooner terminated or extended as
herein provided) at midnight on January 31, 2006 (“Expiration Date”). In the event Landlord shall
permit Tenant to take possession of the Premises prior to the Commencement Date referenced above,
all the terms and conditions of this Lease shall apply.



     If Landlord, for any reason whatsoever, cannot deliver possession of the Premises to Tenant on
the Commencement Date, then this Lease shall not be void or voidable, no obligation of Tenant shall
be affected thereby, and neither Landlord nor Landlord’s agents shall be liable to Tenant for any
loss or damage resulting from the delay in delivery of possession; provided, however, that in such
event, the Commencement Date and Expiration Date of this Lease, and all other dates that may be
affected by their change, shall be revised to conform to the date of Landlord’s delivery of
possession to Tenant. The above, however, is subject to the provision that the period permitted
for the delay of delivery of possession of the Premises shall not exceed sixty (60) days after the
Commencement Date set forth in the first sentence of this Section 2 (except that those delays
beyond Landlord’s control, including, without limitation, those encompassed in the meaning of the
term “force majeure”, or caused by Tenant (the “Delays”) shall be excluded in calculating such
period). If Landlord does not deliver possession to Tenant within such period, then Tenant may
terminate this Lease by written notice to Landlord; provided, that written notice shall be
ineffective if given after Tenant takes possession of any part of the Premises, or if given more
than seventy (70) days after the original Commencement Date plus the time of any Delays. Unless
expressly otherwise provided herein, Rent (as hereinafter defined) shall commence on the earlier
of: (i) the Commencement Date; (ii) occupancy of the Premises by Tenant for the operation of its
business; or (iii) the date Landlord could have had the Premises ready had there been no Delays
attributable to Tenant. Unless the context otherwise so requires, the term “Rent” as used herein
includes both Base Rent and Additional Rent as set forth in Section 4.



     If the Expiration Date, as determined herein, does not occur on the last day of a calendar
month, then Landlord, at its option, may extend the Term by the number of days necessary to cause
the Expiration Date to occur on the last day of the last calendar month of the Term. Tenant shall
pay Base Rent and Additional Rent for such additional days at the same rate payable for the portion
of the last calendar month immediately preceding such extension. The Commencement Date, Term
(including any extension by Landlord pursuant to this Section 2) and Expiration Date may be set
forth in a commencement letter (the “Commencement Letter”) prepared by Landlord and executed by
Tenant.



 









 





     3. USE. The Premises may be used only for general office purposes in connection with Tenant’s
present business and be occupied by no more than Six (6) persons per One Thousand (1,000) rentable
square feet (the “Permitted Use”), but for no other use without Landlord’s prior written consent.
Tenant shall never make any use of the Premises which is in violation of any governmental laws,
rules or regulations, whether now existing or hereafter enacted or which is in violation of the
general rules and regulations for tenants (a copy of the present rules are attached as Exhibit B)
as may be developed or modified from time to time by Landlord effective as of the date delivered to
Tenant or posted on the Premises providing such rules are uniformly applicable to all tenants in
the Building (the “Rules and Regulations”), nor may Tenant make any use of the Premises not
permitted, or otherwise prohibited, by any restrictive covenants which apply to the Premises.
Tenant may not make any use that is or may be a nuisance or trespass, which increases any insurance
premiums, or makes such insurance unavailable to Landlord on the Building. In the event of an
increase in any of Landlord’s insurance premiums which results from Tenant’s use or occupancy of
the Premises, if Tenant does not pay Landlord, on demand, the amount of such increase, Landlord may
treat such use as a default hereunder.



     4. RENT. As used herein, the term “Rent” shall mean Base Rent (as hereinafter defined) plus
Additional Rent (as hereinafter defined). Tenant shall pay to Landlord Rent, on or before the
first day of each calendar month during the Term, without previous demand or notice therefor by
Landlord and without set off or deduction; provided, however, if the Term commences
on a day other than the first day of a calendar month, then Rent for such month shall be (i)
prorated for the period between the Commencement Date and the last day of the month in which the
Commencement Date falls, and (ii) due and payable on the Commencement Date.
Notwithstanding anything contained herein to the contrary, Tenant’s obligation, to pay Rent
under this Lease is completely separate and independent from any of Landlord’s obligations under
this Lease. For each monthly Rent payment Landlord receives after the tenth (10th) day
of the month, Landlord shall be entitled to all remedies provided under Sections 13 and 14 below,
and a late charge in the amount of five percent (5%) of all Rent due for such month. If Landlord
presents Tenant’s check to any bank and Tenant has insufficient funds to pay for such check, then
Landlord shall be entitled to all remedies provided under Sections 13 and 14 below and a lawful bad
check fee or five percent (5%) of the amount of such check, whichever amount is less.



     4.1 BASE RENT. The minimum base rent for the Term shall be the sum of ONE MILLION FOUR
HUNDRED FOURTEEN THOUSAND SEVEN HUNDRED THIRTEEN AND 96/100 Dollars ($1,414,713.96) per Lease
Addendum No. 1 (the “Base Rent”). For the first twelve months of the Term, Base Rent shall be
payable, in advance, in equal monthly installments of TWENTY-ONE THOUSAND FOUR HUNDRED FORTY-NINE
AND 12/100 Dollars ($21,449.12) and thereafter shall be increased pursuant to Section 27 below or
as set forth on Lease Addendum No. 1.



     4.2 ADDITIONAL RENT. As used in this Lease, the term “Additional Rent” shall mean all sums
and charges, excluding Base Rent, due and payable by Tenant under this Lease, including, but not
limited to, the following:



     (a) sales or use tax imposed on rents collected by Landlord or any tax on rents in lieu of ad
valorem taxes on the Building, even though laws imposing such taxes attempt to require Landlord to
pay the same; provided, however, if any such sales or use tax shall be imposed on Landlord and
Landlord shall be prohibited by applicable law from collecting the amount of such tax from Tenant
as Additional Rent, then Landlord, upon sixty (60) days prior written notice to Tenant, may
terminate this Lease, unless, legally, Tenant can and does reimburse Landlord for such tax.



     (b) Tenant’s Proportionate Share (as hereinafter defined) of the increase in Landlord’s
Operating Expenses (as hereinafter defined) as set forth in Addendum Number 3.



     5. SERVICES BY LANDLORD. Provided that Tenant is not then in default, Landlord shall cause to
be furnished to the Building, or as applicable, the Premises, in common with other
tenants, during business hours of 8:00 A.M. to 6:00 P.M. Monday through Friday (excluding
National and State holidays) and Saturdays 8:00 A.M to 1:00 P.M., the following services;
janitorial services (five (5) days a week after normal working hours), water (if available from
city mains) for drinking, lavatory and toilet purposes, operatorless elevator service and heating
and air
conditioning for the reasonably comfortable use and occupancy of the Premises, provided
heating and cooling conforming to any governmental regulation prescribing limitations thereon shall
be deemed to comply with this service. Landlord shall furnish the Premises with electricity for
the
maintenance of building standard fluorescent lighting composed of 2’ x 4’ fixtures.
Incandescent fixtures, table lamps, all lighting other than the aforesaid building standard
fluorescent light,



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dimmers and all lighting controls other than controls for the aforesaid building standard
florescent lighting shall be serviced, replaced and maintained at Tenant’s expense. Landlord shall
also furnish the Premises with electricity for lighting for the aforesaid building standard
fluorescent lighting and for the operation of general office machines, such as electric typewriters, desk
top computers, word processing equipment, dictating equipment, adding machines and calculators,
and general service non-production type office copy machines. Landlord shall have the right
to enter and inspect the Premises and all electrical devices therein from time to time, provided
that Landlord shall have no obligation to provide more than (3.5) watts per usable square foot of
electricity for convenience outlets serving the Premises. After hours heating and air conditioning
is available at a current charge of ($15.00) per hour, with a minimum of Two (2) hour per
occurrence. All additional costs resulting from Tenant’s extraordinary usage of heating, air
conditioning or electricity shall be paid by Tenant upon demand as Additional Rent for each month
or portion thereof, and Tenant shall not install equipment with unusual demands for any of the
foregoing without Landlord’s prior written consent, which Landlord may withhold if it determines
that in its opinion such equipment may not be safely used in the Premises or that electrical
service is not adequate therefor. If heat generating machines or equipment or other intensive activities
shall be used or carried on in the Premises by Tenant which affect the temperature otherwise
maintained by the heating and air conditioning system, Landlord shall have the right to install
supplemental air conditioning units in the Premises and the cost thereof, including the cost of
engineering and installation, and the cost of operation and maintenance thereof, shall be paid by
Tenant upon demand by Landlord. Landlord shall further provide six (6) parking spaces per One
Thousand rentable square feet of unreserved free parking, for Tenant’s employees and visitors
throughout the term of this Lease and any extensions thereof. There shall be no abatement or reduction
of Rent by reason of any of the foregoing services not being continuously provided to Tenant.
Landlord shall provide Tenant with 101 after hour access cards to the Premises. Should Tenant
require additional cards, or require replacement cards, a Ten Dollar ($10.00) charge will be
assessed, for each additional card or to replace each card.




     Tenant shall report to Landlord immediately any defective condition in or about the Premises
known to the best of Tenant’s knowledge and if such defect is not so reported and such failure to
promptly report results in other damage, Tenant shall be liable for same. Landlord shall not be
liable to Tenant for any damage caused to Tenant and its property due to the Building or any
part or appurtenance thereof being improperly constructed or being or becoming out of repair, or
arising from the leaking of gas, water, sewer or steam pipes, or from problems with electrical
service.



     6. TENANT’S ACCEPTANCE AND MAINTENANCE OF PREMISES; LANDLORD’S DUTIES AND RIGHTS. Subject to
the terms of the attached Workletter, if any, Tenant’s
occupancy of the Premises is Tenant’s representation to Landlord that Tenant has examined and
inspected the same, finds the Premises to be as represented by Landlord and satisfactory for
Tenant’s intended use, and constitutes Tenant’s acceptance “as is”. Landlord makes no
representation or warranty as to the condition of said Premises. During Tenant’s move-in, a
representative of Tenant must be on-site with Tenant’s moving company to insure proper treatment of
the Building and the Premises. Any specialized use of elevators must be coordinated with Landlord’s
property manager. Tenant must properly dispose of all packing material and refuse in accordance
with the Rules and Regulations. Any damage or destruction to the Building or the Premises due to
moving will be the sole responsibility of Tenant. Tenant shall deliver at the end
of this Lease each and every part of the Premises in good repair and condition, ordinary wear
and tear and damage by insured casualty excepted. The delivery of a key or other such tender of
possession of the Premises to Landlord or to an employee of Landlord shall not operate as a
termination of this Lease or a surrender of the Premises except upon written notice by Landlord.
Tenant shall: (i) keep the Premises and fixtures in good order; (ii) make repairs and replacements
to the Premises or Building needed because of Tenant’s misuse or primary negligence; (iii) repair
and replace special equipment or decorative treatments installed by or at Tenant’s request and
that serve the Premises only, except if this Lease is ended because of casualty loss or
condemnation; and (iv) not commit waste. Tenant, however, shall make no structural or interior
alterations of the Premises. If Tenant requires alterations, Tenant shall provide Landlord’s
managing agent with a complete set of construction drawings, and such agent shall then determine
the actual cost of the work to be done (to include a construction supervision fee of five percent
(5%) to be paid to Landlord’s managing agent). Tenant may then either agree to pay Landlord to have
the work done
or withdraw its request for alterations. On termination of this Lease or vacation of the
Premises
by Tenant, Tenant shall restore the Premises, at Tenant’s sole expense, to the same condition
as existed at the Commencement Date, ordinary wear and tear and damage by insured casualty only
excepted. Landlord, however, may elect to require Tenant to leave alterations performed for
Tenant unless at the time of such alterations Landlord agreed in writing such alterations
could be



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after the filing thereof. Should Tenant fail to discharge such lien within such ten (10) day
period,
then Landlord may discharge the same, in which event Tenant shall reimburse Landlord, within
thirty (30) days, as Additional Rent, for the amount of the lien or the amount of the bond, if
greater, plus all reasonable administrative costs incurred by Landlord in connection therewith. The
remedies provided herein shall be in addition to all other remedies available to Landlord under
this Lease or otherwise. Tenant shall have no power to do any act or make any contract that may
create or be the foundation of any lien, mortgage or other encumbrance upon the reversionary or
other estate of Landlord, or any interest of Landlord in the Premises. NO CONSTRUCTION LIENS OR
OTHER LIENS FOR ANY LABOR, SERVICES OR MATERIALS FURNISHED TO THE PREMISES SHALL ATTACH TO OR
AFFECT THE INTEREST OF LANDLORD IN AND TO THE PREMISES OR THE BUILDING.




     Notwithstanding anything to the contrary set forth above in this Section 6, if Tenant does
not perform its maintenance obligations in a timely manner as set forth in this Lease,
commencing the same within five (5) days after receipt of notice from Landlord specifying the work
needed and thereafter diligently and continuously pursuing completion of unfulfilled maintenance
obligations, then Landlord shall have the right, but not the obligation, to perform such
maintenance, and any amounts so expended by Landlord shall be paid by Tenant to Landlord within
thirty (30) days after demand, with interest at the maximum rate allowed by law (or the rate of
fifteen percent (15%) per annum, whichever is less) accruing from the date of expenditure through
the date paid.



     Except for repairs and replacements that Tenant must make under this Section 6, Landlord shall
pay for and make all other repairs and replacements to the Premises, common areas and Building
(including Building fixtures and equipment). This maintenance shall include the roof, foundation,
exterior walls, interior structural walls, all structural components, and all exterior
(outside of walls) systems, such as mechanical, electrical, HVAC, and plumbing. Repairs or
replacements required under Section 6 shall be made within a reasonable time (depending on the
nature of the repair or replacement needed) after receiving notice from Tenant or Landlord having
actual knowledge of the need for a repair or replacement.



     7. DAMAGES TO PREMISES. If the Premises shall be partially damaged by fire or other casualty
insured under Landlord’s insurance policies, and if Landlord’s lender(s) shall permit insurance
proceeds paid as a result thereof to be so used, then upon receipt of the insurance proceeds,
Landlord shall, except as otherwise provided herein, promptly repair and restore the Premises
(exclusive of improvements made by Tenant, Tenant’s trade fixtures, decorations, signs, and
contents) substantially to the condition thereof immediately prior to such damage or
destruction; limited, however, to the extent of the insurance proceeds received by Landlord.
If by reason of such occurrence: (i) the Premises is rendered wholly untenantable; (ii) the
Premises is damaged in whole or in part as a result of a risk which is not covered by Landlord’s
insurance policies; (iii) Landlord’s lender does not permit a sufficient amount of the insurance
proceeds to be used for restoration purposes; (iv) the-Premises is damaged in whole or in part
during the last two years of the Term; or (v) the Building containing the Premises is damaged
(whether or not the Premises is damaged) to an extent of fifty percent (50%) or more of the fair
market value thereof, then Landlord may elect either to repair the damage as aforesaid, or to
cancel this Lease by written notice of cancellation given to Tenant within forty-five (45) days
after the date of such occurrence, and thereupon this Lease shall terminate. Tenant shall vacate
and surrender the Premises to Landlord within thirty (30) days after receipt of such notice of
termination. In addition, Tenant may also terminate this Lease by written notice given to Landlord
at any time between the one hundred twenty-first (121st) and one hundred thirty-sixth (136th) days
after the occurrence of any such casualty, if Landlord has failed to restore the damaged portions
of the Building (including the Premises) within one hundred twenty (120) days of such casualty.
However, if Landlord is
prevented by Delays as defined in Section 2, from completing the restoration within said one
hundred twenty (120) day period, and if Landlord provides Tenant with written notice of the cause
for the Delays within fifteen (15) days after the occurrence thereof, such notice to contain
the reason for the Delays and a good faith estimate of the period of the Delays caused thereby,
then Landlord shall have an additional period beyond said one hundred twenty (120) days, equal to
the Delays in which to restore the damaged areas of the Building; and Tenant may not elect to



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terminate this Lease until said additional period requited for completion has expired with the
Building not having been substantially restored. In such case, Tenant’s fifteen (15) day notice of
termination period shall begin to run upon the expiration of Landlord’s additional period for
restoration set forth in the preceding sentence. Upon the termination of this Lease as aforesaid,
Tenant’s liability for the Rent and other charges reserved hereunder shall cease as of the
effective date of the termination of this Lease, subject, however, to the provisions for Abatement
of Rent hereinafter set forth.




     Unless this Lease is terminated as aforesaid, this Lease shall remain in full force and
effect, and Tenant shall promptly repair, restore, or replace Tenant’s improvements, trade
fixtures, decorations, signs, and contents in the Premises in a manner and to at least a. condition
equal to that existing prior to their damage or destruction, and the proceeds of all insurance
carried by Tenant on said property shall be held in trust by Tenant for the purposes of such
repair, restoration, or replacement.



     If, by reason of such fire or other casualty, the Premises is rendered wholly untenantable,
then the Rent payable by Tenant shall be fully abated, or if only partially damaged, such Rent and
other charges shall be abated proportionately as to that portion of the Premises rendered
untenantable, in either event (unless the Lease is terminated, as aforesaid) from the date of such
casualty until the Premises have been substantially repaired and restored, or until Tenant’s
business operations are restored in the entire Premises, whichever shall first occur. Tenant
shall continue the operation of Tenant’s business in the Premises or any part thereof not so
damaged during any such period to the extent reasonably practicable from the standpoint of prudent
business management. However, if such damages or other casualty shall be caused by the
negligence or other wrongful conduct of Tenant or of Tenant’s subtenants, licensees, contractors,
or invitees, or their respective agents or employees, there shall be no abatement of Rent.
Except
for the abatement of the Rent hereinabove set forth, Tenant shall not be entitled to, and
hereby waives, all claims against Landlord for any compensation or damage for loss of use of the
whole
or any part of the Premises and/or for any inconvenience or annoyance occasioned by any such
damage, destruction, repair, or restoration.



     8. ASSIGNMENT-SUBLEASE. Tenant may not assign or encumber this Lease or its interest in the
Premises arising under this Lease, and may not sublet any part or all of the Premises without first
obtaining the written consent of Landlord first had and obtained, which consent shall
not be unreasonably withheld. Any assignment or sublease to which Landlord may consent (one
consent not being any basis that Landlord should grant any further consent) shall not relieve
Tenant of any or all of its obligations hereunder. For the purpose of this Section 8, the
word “assignment” shall be defined and deemed to include the following: (i) if Tenant is a
partnership,
the withdrawal or change, whether voluntary, involuntary or by operation of law, of partners
owning thirty percent (30%) or more of the partnership, or the dissolution of the partnership; (ii)
if Tenant consists of more than one person, an assignment, whether voluntary, involuntary, or by
operation of law, by one person to one of the other persons that is a Tenant; (iii) if Tenant is a
corporation,
any dissolution or reorganization of Tenant, or the sale or other transfer of a controlling
percentage (hereafter defined) of capital stock of Tenant other than to an affiliate or subsidiary
or the sale of
fifty-one percent (51%) in value of the assets of Tenant; (iv) if Tenant is a limited
liability company, the change of members whose interest in the company is fifty percent (50%) or
more. The phrase “controlling percentage” means the ownership of, and the right to vote, stock
Possessing at least fifty-one percent (51%) of the total combined voting power of all classes of
Tenant’s capital stock issued, outstanding and entitled to vote for the election of directors, or
such lesser percentage as
is required to provide actual control over the affairs of the corporation. Acceptance of Rent
by Landlord after any non-permitted assignment shall not constitute approval thereof by Landlord.
Notwithstanding the foregoing provisions of this Section 8, Tenant may assign or sublease part
or all of the Premises without Landlord’s consent to: (i) any corporation or partnership that
controls, is controlled by, or is under common control with, Tenant; or (ii) any corporation
resulting from the merger or consolidation with Tenant or to any entity that acquires all of
Tenant’s assets as a going concern of the business that is being conducted on the Premises, as long
as the assignee or sublessee is a bona fide entity and assumes the obligations of Tenant, and
continues the same Permitted Use as provided under Section 3. However, Landlord must be given prior
written notice
of any such assignment or subletting, and failure to do so shall be a default hereunder.
Landlord
will never consent to an assignment or sublease that might result in a use that conflicts with
the rights of an existing tenant under its lease.
In no event shall this Lease be assignable by operation of any law, and Tenant’s rights
hereunder may not become, and shall not be listed by Tenant as an asset under any bankruptcy,
insolvency or reorganization proceedings. Tenant is not, may not become, and shall never



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represent itself to be an agent of Landlord, and Tenant acknowledges that Landlord title is
paramount, and that it can do nothing to affect or impair Landlord’s title.




     If Landlord consents to any assignment or subletting, Tenant shall pay all reasonable
out-of-pocket costs and expenses incurred by Landlord in connection with the assignment or sublease
transaction, including Landlord’s reasonable attorneys’ fees.



     If this Lease shall be assigned or the Premises or any portion thereof sublet by Tenant at a
rental that exceeds the rentals to be paid to Landlord hereunder, attributable to the Premises or
portion thereof so assigned or sublet, then fifty percent (50%) of any such excess shall be paid
over to Landlord by Tenant. If Landlord assists Tenant in finding a permissible subtenant Landlord
shall be paid a mutually agreeable fee for such assistance in addition to a fee in an amount
necessary
to cover the subtenant’s improvements to the Premises or any portion thereof so assigned or
sublet.



     9. TENANT’S COMPLIANCE; INSURANCE REQUIREMENTS. Tenant shall comply with all applicable laws,
ordinances and regulations affecting the Premises, now existing or hereafter adopted, including the
Rules and Regulations.



     Throughout the Term, Tenant, at its sole cost and expense, shall keep or cause to be kept for
the mutual benefit of Landlord, Landlord’s managing agent, (presently Highwoods Realty Limited
Partnership and its affiliates) and Tenant, Commercial General Liability insurance (1986 ISO Form
or its equivalent) with a combined single limit, each Occurrence and General Aggregate-per location
of at least TWO MILLION DOLLARS ($2,000,000), which policy shall insure against liability of
Tenant, arising out of and in connection with Tenant’s use of the Premises, and which
shall insure the indemnity provisions contained herein. Not more frequently than once every
three
(3) years, Landlord may require the limits to be increased if in its reasonable judgment (or
that of
its mortgagee) the coverage is insufficient. Tenant shall also carry the equivalent of ISO
Special Form Property Insurance on its personal property and fixtures located in the premises and
any improvements made by Tenant for their full replacement value and with coinsurance waived, and
Tenant shall neither have, nor make, any claim against Landlord for any loss or damage to the same,
regardless of the cause thereof.



     Prior to taking possession of the Premises, and annually thereafter, Tenant shall deliver to
Landlord certificates or other evidence of insurance satisfactory to Landlord. All such policies
shall be non-assessable and shall contain language to the extent obtainable that: (i) any loss
shall be payable notwithstanding any act or negligence of Landlord or Tenant that might otherwise
result
in forfeiture of the insurance, (ii) that the policies are primary and non-contributing with
any insurance that Landlord may carry, and (iii) that the policies cannot be canceled, non-renewed,
or coverage reduced except after thirty (30) days’ prior written notice to Landlord. If Tenant
fails to provide Landlord with such certificates or other evidence of insurance coverage, Landlord
may obtain such coverage and Tenant shall reimburse the cost thereof on demand.



     Anything in this Lease to the contrary notwithstanding, Landlord hereby releases and waives
unto Tenant (including all partners, stockholders, officers, directors, employees and agents
thereof), its successors and assigns, and Tenant hereby releases and waives unto Landlord
(including all partners, stockholders, officers, directors, employees and agents thereof), its
successors and assigns, all rights to claim damages for any injury, loss, cost or damage to persons
or to the Premises or any other casualty, as long as the amount of which injury, loss, cost or
damage has been paid either to Landlord, Tenant, or any other person, firm or corporation,
under the terms of any Property, General Liability, or other policy of insurance, to the extent
such releases or waivers are permitted under applicable law. As respects all policies of insurance
carried or maintained pursuant to this Lease and to the extent permitted under such policies,
Tenant and Landlord each waive the insurance carriers’ rights of subrogation. Subject to the
foregoing: (a)Tenant shall indemnify and hold Landlord harmless from and against any and all
claims arising out of (i) Tenant’s use of the Premises or any part thereof, (ii) any activity,
work, or other thing done, permitted or suffered by Tenant in or about the Premises or the
Building, or any part thereof, (iii) any breach or default by Tenant in the performance of any of
its obligations under this Lease, or (iv) any act or negligence of Tenant, or any officer, agent,
employee contractor, servant, invitee or guest of Tenant; and in each case from and against any and
all damages,
losses, liabilities, lawsuits, costs and expenses (including attorneys’ fees at all tribunal
levels) arising in connection with any such claim or claims as described in (i) through, (iv) above,
or any action brought thereon; and (b) Landlord shall indemnify and hold Tenant harmless from and
against any and all claims arising out of any act of negligence of Landlord with respect to
the Premises and, the common areas of the Building, including any and
all damages, losses,
liabilities,



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lawsuits, costs and expenses including attorney’s fees at all tribunal levels arising in connection
with any such claim or claims as described above.




     If such action is brought against Landlord, Tenant upon notice from Landlord shall defend the
same through counsel selected by Tenant’s insurer, or other counsel acceptable to Landlord. Tenant
assumes all risk of damage or loss to its property or injury or death to persons in, on, or about
the Premises, from all causes except those for which the law imposes liability on Landlord
regardless of any attempted waiver thereof, and Tenant hereby waives such claims in respect thereof
against Landlord. The provisions of this paragraph shall survive the termination of this
Lease.



     Landlord shall keep the Building, including the improvements, insured against damage and
destruction by perils insured by the equivalent of ISO Special Form Property Insurance in the
amount of the full replacement value of the Building.



     Each party shall keep its personal property and trade fixtures in the Premises and Building
insured with the equivalent of ISO Special Form Property Insurance in the amount of the full
replacement cost of the property and fixtures. Tenant shall also keep any non-standard
improvements made to the Premises at Tenant’s request insured to the same degree as Tenant’s
personal property.



     Tenant’s insurance policies required by this Lease shall: (i) be issued by insurance companies
licensed to do business in the state in which the Premises are locked with a general policyholder’s
ratings of at least A- and a financial rating of at least VI in the most current Best’s Insurance
Reports available on the Commencement Date, or if the Best’s ratings are changed or discontinued,
the parties shall agree to a comparable method of rating insurance companies; (ii) name the
non-procuring party as an additional insured as its interest may appear [other landlords or tenants
may be added as additional insureds in a blanket policy]; (iii) provide that the insurance
not be canceled, non-renewed or coverage materially reduced unless thirty (30) days advance
notice is given to the non-procuring party; (iv) be primary policies; (v) provide that any
loss shall be payable notwithstanding any gross negligence of Landlord or Tenant which, might
result in a forfeiture thereunder of such insurance or the amount of proceeds payable; (vi) have no
deductible exceeding TEN THOUSAND DOLLARS ($10,000), unless accepted in writing by Landlord; and
(vii) be maintained during the entire Term and any extension terms.



     10. SUBORDINATION-ATTORNMENT-LANDLORD FINANCING. Tenant agrees that this Lease will be either
subordinate or superior to any mortgage heretofore or hereafter executed by Landlord covering the
Premises, depending on the requirements of such mortgagee. Tenant,
within ten (10) days after request to do so from Landlord or its mortgagee, will execute such
agreement making this Lease superior or subordinate and containing such other agreements and
covenants on Tenant’s part as Landlord’s mortgagee may request, and will agree to attorn to said
mortgagee provided the mortgagee agrees not to disturb Tenant’s possession hereunder so long
as Tenant is in compliance with this Lease. Further, Tenant agrees to execute within five (5)
days after request therefor, and as often as reasonably requested, estoppel certificates confirming
any factual matter requested therein which is true and is within Tenant’s knowledge regarding this
Lease, the Premises, or Tenant’s use thereof, including, but not limited to date of occupancy,
Expiration Date, the amount of Rent due and date to which Rent is paid, whether or not Tenant has
any defense or offsets to the enforcement of this Lease or the Rent payable hereunder or
knowledge of any default or breach by Landlord, and that this Lease together with any
modifications or amendments is in full force and effect. Tenant shall attach, to such estoppel
certificate copies of all modifications or amendments.



     Tenant agrees to give any mortgagee of Landlord which has provided a non-disturbance agreement
to Tenant, notice of, and a reasonable opportunity (which shall in no event be less than thirty
(30) days after written notice thereof is delivered to mortgagee as herein, provided) to cure, any
Landlord default hereunder; and Tenant agrees to accept such cure it effected by such mortgagee.
No termination of this Lease by Tenant shall be effective until such notice has been given and the
cure period has expired without the default having been cured. Further, Tenant agrees to permit
such mortgagee (or other purchaser at any foreclosure sale), and its successors and assigns, on
acquiring Landlord’s interest in the Premises and the Lease, to become substitute Landlord
hereunder, with liability only for such Landlord obligations as accrue after Landlord’s interest is
so acquired. Tenant agrees to attorn to any successor Landlord.



     11. SIGNS. Tenant may not erect, install or display any sign or advertising material upon the
Building exterior, the exterior of the Premises (including any exterior doors), or the exterior
walls



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therefor, or in any window therein, without the prior written consent of Landlord. Landlord
will provide a sign for Tenant at the entrance to its Premises and on a building directory.
Landlord agrees that Tenant, as part of Tenant’s improvements as set forth in Addendum ___, and at
Tenant’s sole cost and expense, shall be allowed to erect Park standard building mounted signage,
the design and
location of which shall be subject to the prior written consent of Landlord. No sign other
than the Landlord’s standard building sign may be placed on the Premises without the prior consent
of Landlord.




     12. ACCESS TO PREMISES. Landlord shall have the right, at all reasonable times with
reasonable notice (provided however no notice shall be required in any circumstance that Landlord
considers an emergency situation), either itself or through its authorized agents, to enter the
Premises (i) to make repairs, alterations or changes as Landlord deems necessary, (ii) to inspect
the Premises, and (iii) to show the Premises to prospective mortgagees and purchasers.
Landlord shall have the right, either itself or through its authorized agents, to enter the
Premises at all reasonable times for inspection to show prospective tenants if within one hundred
eighty (180) days prior to the Expiration Date as extended by any exercised option. Tenant, its
agents, employees, invitees, and guests, shall have the right of ingress and egress to common and
public areas of the Building, provided Landlord by reasonable regulation may control such access
for the comfort, convenience, safety and protection of all tenants in the Building, or as needed
for making repairs and alterations. Tenant shall be responsible for providing access to the
Premises to its agents, employees, invitees and guests after hours, but in no event shall Tenant’s
use of and access to the Premises after hours compromise the security of the Building. Landlord
shall have the right to
enter the Premises at any time in the event of an emergency.



     13. DEFAULT. If Tenant: (i) fails to pay when due any Rent, or any other sum of money which
Tenant is obligated to pay, as provided in this Lease; or (ii) breaches any other agreement,
covenant or obligation herein set forth and such breach shall continue and not be remedied within
fifteen (15) days after Landlord shall have given Tenant written notice specifying the breach, or
if such breach cannot, with due diligence, be cured within said period of fifteen (15) days and
Tenant does not within said fifteen (15) day period commence and thereafter with reasonable
diligence completely cure the breach within thirty (30) days after notice; or (iii) files (or has
filed against it and not stayed or vacated within sixty (60) days after filing) any petition or
action for relief under any creditor’s law (including bankruptcy, reorganization, or similar
action), either in state or federal
court; or (iv) makes any transfer in fraud of creditors as defined in Section 548 of the
United States Bankruptcy Code (11 U.S.C. 548, as amended or replaced), has a receiver appointed for
its assets (and appointment shall not have been stayed or vacated within thirty (30) days), or
makes an assignment for benefit of creditors; then Tenant shall be in default hereunder, and, in
addition to
any other lawful right or remedy which it may have, Landlord at its option may do the
following: (i) terminate this Lease; (ii) repossess the Premises, and with or without terminating,
relet the same
at such amount as Landlord deems reasonable; and if the amount for which the Premises is relet
is less than Tenant’s Rent and all other obligations of Tenant to Landlord hereunder, then
Tenant shall immediately pay the difference on demand to Landlord, but if in excess of tenant’s
Rent, and
all other obligations of Tenant hereunder, the entire amount obtained from such reletting
shall
belong to Landlord, free of any claim of Tenant thereto; or (iii) without obtaining any court
authorization, lock the Premises and deny Tenant access thereto. All reasonable expenses of
Landlord in repairing, restoring, or altering the Premises for reletting as general office space,
together with leasing fees and all other expenses in seeking and obtaining a new Tenant, shall be
charged to and be a liability of Tenant. Landlord’s reasonable attorneys’ fees in pursuing any of
the foregoing remedies, or in collecting any Rent due by Tenant hereunder, shall be paid by
Tenant.



     All rights and remedies of Landlord are cumulative, and the exercise of any one shall not
be an election excluding Landlord at any other time from exercise of a different or
inconsistent remedy. No exercise by Landlord of any right or remedy granted herein shall
constitute or effect
a termination of this Lease unless Landlord shall so elect by written notice delivered to
Tenant.



     The failure of Landlord to exercise its rights in connection with this Lease or any breach or
violation of any term, or any subsequent breach of the same or any other term, covenant or
condition herein contained shall not be a waiver of such term, covenant or condition or any
subsequent breach of the same Or any other covenant or condition herein contained.



     No acceptance by Landlord of a lesser sum than the Base Rent, administrative charges,
Additional Rent and other sums then due shall be deemed to be other than on account of the
earliest installment of such payments due, nor shall any endorsement or statement on any check
or any letter accompanying any check or payment be deemed as accord and satisfaction, and



8









 




Landlord may accept such check or payment without prejudice to Landlord’s right to recover the
balance of such installment or pursue any other remedy provided in this Lease.




     In addition, no payments of money by Tenant to Landlord after the expiration or termination of
this Lease after the giving of any notice by Landlord to Tenant shall reinstate or extend the Term,
or make ineffective any notice given to Tenant prior to the payment of such money. After the
service of notice or the commencement of a suit, or after final judgment granting Landlord
possession of the Premises, Landlord may receive and collect any sums due under this Lease, and the
payment thereof shall not make ineffective any notice or in any manner affect any pending suit
or any judgment previously obtained.



     Tenant further agrees that Landlord may obtain an order for summary ejectment from any court
of competent jurisdiction without prejudice to Landlord’s rights to otherwise collect rents from
Tenant.



     14. MULTIPLE DEFAULTS.



     (a) Tenant acknowledges that any rights or options of first refusal, or to extend
the Term, to expand the size of the Premises, to purchase the Premises or the Building, or
other such or similar rights or options which have been granted to Tenant under this Lease are
conditioned upon the prompt and diligent performance of the terms of this Lease by Tenant.
Accordingly, should Tenant default under this Lease on two (2) or more occasions during any
twelve (12) month period, in addition to all other remedies available to Landlord, all such
rights and options shall automatically, and without further action on the part of any party, expire
and be
deemed canceled and of no further force and effect.



     (b) Should Tenant default in the payment of Base Rent, Additional Rent, or any
other sums payable by Tenant under this Lease on two (2) or more occasions during any twelve
(12) month period, regardless of whether any such default is cured, then, in addition to all
other remedies otherwise available to Landlord, Tenant shall, within ten (10) days after demand by
Landlord, post a security deposit in, or increase the existing Security Deposit by, a sum equal to
two (2) months’ installments of Base Rent. Any security deposit posted pursuant to the
foregoing sentence shall be governed by Section 20 below.



     (c) Should Tenant default under this Lease on more than two (2) or more
occasions during any twelve (12) month period, in addition to all other remedies available to
Landlord, any notice requirements or cure periods otherwise set forth in this Lease with respect to
a default by Tenant shall not apply.



     15. PROPERTY OF TENANT. Tenant shall pay timely any and all taxes levied or assessed against
or upon Tenant’s equipment, fixtures, furniture, leasehold improvements and personal property
located in the Premises. Tenant (if not in default hereunder), prior to the Expiration Date
of this Lease may remove all fixtures and equipment which it has placed in the Premises,
providing Tenant repairs all damages caused by such removal; provided, however, that Tenant grants
Landlord a valid first lien security interest (and Tenant shall sign financing statements so
evidencing) to secure all rents and other sums of money due hereunder, upon all of Tenant’s
personal property situated in the Premises, and said property shall not be removed therefrom
without the consent of Landlord until all sums due Landlord have been paid and satisfied, which
lien herein granted may be foreclosed in the manner and form provided by law for foreclosure
of a security interest in personal property. Any statutory lien for Rent is not waived, the
contractual
lien herein granted being in addition thereto. If Tenant does not remove its property from
the Premises upon termination (for whatever cause) of this Lease, such property shall be deemed
abandoned by Tenant, and Landlord may dispose of the same in whatever manner Landlord may elect
without any liability to Tenant.



     16. BANKRUPTCY. Landlord and Tenant understand that, notwithstanding certain provisions to
the contrary contained herein, a trustee or debtor in possession under the United States Bankruptcy
Code, as amended, (the “Code”) may have certain rights to assume or assign
this Lease. Landlord and Tenant further understand that, in any event, pursuant to the Code,
Landlord is entitled to adequate assurances of future performance of the provisions of this Lease.
The parties agree that, with respect to any such assumption or assignment, the term “adequate
assurance” shall include at lease the following;



     (a) In order to assure Landlord that the proposed assignee will have the
resources with which to pay all Rent payable pursuant to the provisions of this Lease, any
proposed



9









 




assignee must have, as demonstrated to Landlord’s satisfaction, a net worth (as defined in
accordance with generally accepted accounting principles consistently applied) of not less than the
net worth of Tenant on the Effective Date (as hereinafter defined), increased by seven percent
(7%), compounded annually, for each year from the Effective Date through the date of the
proposed assignment. It is understood and agreed that the financial condition and resources of
Tenant were a material inducement to Landlord in entering into this Lease.




     (b) Any proposed assignee must have been engaged in the conduct of business
for the five (5) years prior to any such proposed assignment, which business does not violate
the Permitted Use allowed under Section 3 above and such proposed assignee shall continue to
engage in the Permitted Use. It is understood that Landlord’s asset will be substantially
impaired
if the trustee in bankruptcy or any assignee of this Lease makes any use of the Premises other
than the Permitted Use.



     (c) Any proposed assignee of this Lease must assume and agree to be
personally bound by the provisions of this Lease.



     17. EMINENT DOMAIN. If all of the Premises, or such part thereof as will make the
same unusable for the purposes contemplated by this Lease, be taken under the power of eminent
domain (or a conveyance in lieu thereof), then this Lease shall terminate as of the date possession
is taken by the condemnor, and Rent shall be adjusted between Landlord and Tenant as of such date.
If only a portion of the Premises is taken and Tenant can continue use of the remainder, then this
Lease will not terminate, but Rent shall abate in a just and proportionate amount to the loss of
use occasioned by the taking. Landlord shall be entitled to receive and retain the entire award
for
the affected portion of the Building. Tenant shall have no right or claim to advance any
claim.
against Landlord for 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, or its leasehold
estate,
or for costs of removal, relocation, business interruption expense or any other damages
arising out of such taking. Tenant, however, 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.
Any such award shall not reduce the amount of the award otherwise payable to Landlord, if any.



     18. ADA GENERAL COMPLIANCE. Tenant, at Tenant’s sole expense, shall comply
with all laws, rules, orders, ordinances, directions, regulations and requirements of federal,
state, county and municipal authorities now in force, which shall impose any duty upon Landlord or
Tenant with respect to the use, occupation or alteration of the Premises, and Tenant shall use
all reasonable efforts to fully comply with The Americans With Disabilities Act of 1990 (the
“ADA”). Landlord’s responsibility for compliance with ADA shall include the common areas and
restrooms
of the Building, but not the Premises.



     If Tenant receives any notices alleging violation of ADA relating to any portion of the
Building or of the Premises; any written claims or threats regarding non-compliance with ADA
and relating to any portion of the Building or of the Premises; or any governmental or regulatory
actions or investigations instituted or threatened regarding non-compliance with ADA and relating
to any portion of the Building or of the Premises, then Tenant shall, within ten (10) days after
receipt of such, advise Landlord in writing, and provide Landlord with copies of any such claim,
threat, action or investigation (as applicable).



     19. QUIET ENJOYMENT. If Tenant promptly and punctually complies with each of its obligations
hereunder, Tenant shall have and enjoy peacefully the possession of the Premises during the Term
hereof, provided that no action of Landlord or other tenants working in other space in the Budding,
or in repairing or restoring the Premises, shall be deemed a breach of this
covenant, or give to Tenant any right to modify this Lease either as to term, rent payables or
other obligations to be performed.



     20. SECURITY DEPOSIT.



     21. NOTICES. All notices, demands and requests which may be given or which are
required to be given by either party to the other must be in writing. All notices, demands
and requests by Landlord or Tenant shall be addressed as follows (or to such other address as a
party may specify by duly given notice):



	 	 	 
	RENT PAYMENT
	 	 
	ADDRESS:

	 	HIGHWOODS REALTY LIMITED PARTNERSHIP






10









 






	 	 	 
	 

	 	P.O. Box 65224
	 

	 	Charlotte, North Carolina 28265-0224
	 

	 	Tax ID# 56-1869557
	 
	 	 
	LEGAL NOTICE
	 	 
	ADDRESS FOR LANDLORD:

	 	HIGHWOODS REALTY LIMITED PARTNERSHIP
	 

	 	c/o Highwoods Properties, Inc.
	 

	 	 4944 Parkway Plaza Boulevard, Suite 250
	 

	 	Charlotte, North Carolina 28217
	 

	 	Attn: Manager, Lease Administration
	 

	 	Facsimile: (704) 357-1342
	 
	 	 
	WITH A
	 	 
	COPY TO:

	 	HIGHWOODS REALTY LIMITED PARTNERSHIP
	 

	 	c/o Highwoods Properties, Inc.
	 

	 	3100 Smoketree Court, Suite 600
	 

	 	Raleigh, North Carolina 27604
	 

	 	Attn: Manager, Lease Administration
	 
	 	 
	TENANT:

	 	Strategic Outsourcing, Inc.
	 

	 	 5260 Parkway Plaza Blvd. Suite 140
	 

	 	Charlotte, North Carolina 28217
	 

	 	Attn: John Thigpen
	 

	 	Facsimile # (704) 523-2158
	 
	 	 
	WITH A
	 	 
	COPY TO:

	 	Strategic Outsourcing, Inc.
	 

	 	P.O. Box 241448
	 

	 	Charlotte, North Carolina 28224
	 

	 	Attn: John Thigpen
	 

	 	Facsimile#: (704) 523-2289






     Notices, demands or requests which Landlord or Tenant are required or desire to give the other
hereunder shall be deemed to have been properly given for all purposes if (i) delivered
against a written receipt of delivery, (ii) mailed by express, registered or certified mail of
the United States Postal Service, return receipt requested, postage prepaid, or (iii) delivered to
a nationally recognized overnight courier service for next business day delivery, to its addressee
at such party’s address as set forth above or (iv) delivered via telecopier or facsimile
transmission to the facsimile number listed above, provided, however, that if such communication is
given via telecopier or facsimile transmission, an original counterpart of such communication shall
be sent concurrently
in either the manner specified in section (ii) or (iii) above and written confirmation of
receipt of transmission shall be provided. Each such notice, demand or request shall be deemed to
have
been received upon the earlier of the actual receipt or refusal by the addressee or three (3)
business days after deposit thereof at any main or branch United States post office if sent in
accordance with section (ii) above, and-the next business day after deposit thereof with the
courier
if sent pursuant to section (iii) above. The parties shall notify the other of any change in
address, which notification must be at least fifteen (15) days in advance of it being effective.



     Notices may be given on behalf of any party by such party’s legal counsel.



     22. HOLDING OVER. If Tenant shall hold over after the Expiration Date or other
termination of this Lease, such holding over shall not be deemed to be a renewal of this Lease
but shall be deemed to create a tenancy-at-sufferance and by such holding over Tenant shall
continue to be bound by all of the terms and conditions of this Lease, except that during such
tenancy-at-sufferance Tenant shall pay to Landlord (i) Rent at the rate equal to one hundred
fifty percent (150%) of that provided for in the foregoing Section 4.1, as such rental amount may
have been increased in accordance with the terms of such Section 4.1 hereof, and (ii) any and all
Operating Expenses and other forms of Additional Rent payable under this Lease. The increased Rent
during such holding over is intended to compensate Landlord partially for losses, damages and
expenses, including frustrating and delaying Landlord’s ability to secure a replacement tenant.
If Landlord loses a prospective tenant because Tenant fails to vacate the Premises on the



11









 




Expiration Date or any termination of the Lease after notice to do so, then Tenant will be
liable for such damages as Landlord can prove because of Tenant’s wrongful failure to vacate.




     23. RIGHT TO RELOCATE. If the Premises comprise less than fifty percent (50%) of the floor
where located, Landlord, at its option, may substitute for the Premises other space (hereafter
called “Substitute Premises”) within the “Parkway Plaza at any
time during the Term or any extension of this Lease. Insofar as reasonably possible, the
Substitute Premises shall be of comparable quality and shall have a comparable square foot area and
a configuration substantially similar to the Premises.
Landlord shall give Tenant at least sixty (60) days written notice of its intention to
relocate Tenant to the Substitute Premises. This notice will be accompanied by a floor plan of the
Substitute Premises. After such notice, Tenant shall have thirty (30) days within which to
agree
with Landlord on the proposed Substitute Premises and unless such agreement is reached within
such period of time, Landlord may terminate this Lease at the end of the one hundred and
eighty (180) days from the date of the aforesaid notice. In the event Landlord exercises its
rights
hereunder to terminate this Lease, Landlord shall provide Tenant with up to two dollars
($2.00) per rentable square foot of the Premises as reimbursement to Tenant for Tenant’s actual
moving costs.



     Landlord agrees to construct or alter, at its own expense, the Substitute Premises as
expeditiously as possible so that they are in substantially the same condition that the Premises
were in immediately prior to the relocation. Landlord shall have the right to reuse the
fixtures, improvements and alterations used in the Premises. Tenant agrees to occupy the
Substitute Premises as soon as Landlord’s work is substantially completed.



     If such relocation occurs after the Commencement Date, then Landlord shall pay Tenant’s
reasonable cost of moving Tenant’s furnishings, telephone and computer wiring, and other property
to the Substitute Premises, and reasonable printing costs associated with the change of address.



     Except as provided herein, Tenant agrees that all of the obligations of this Lease, including
the payment of Rent, will continue despite Tenant’s relocation to the Substitute Premises. Upon
substantial completion of the Substitute Premises, the same terms and conditions of this Lease will
apply to the Substitute Premises as if the Substitute Premises had been the space originally
described in this Lease, including, without limitation, Tenant’s Rent, which shall not increase as
a result of Tenant’s relocation to the Substitute Premiese.



     Except as provided above, Landlord shall not be liable or responsible in any way for damages
or injuries suffered by Tenant pursuant to the relocation in accordance with this provision
including, but not limited to, the loss of goodwill, business, or profits.



     24. BROKER’S COMMISSIONS. Tenant represents and warrants that it has not dealt with any real
estate broker, finder or other person, with respect to this Lease in any manner, except Lincoln
Harris/Chase Monroe whose address is 4201 Congress Street, Suite 175, Charlotte, North
Carolina 28209. Landlord shall pay only any commissions or fees that are payable to the
above-named broker with respect to this Lease in accordance with the rules and regulations of
the North Carolina Real Estate Commission. Tenant shall indemnify and hold Landlord harmless
from any and all damages resulting from claims that may be asserted against Landlord by any
other broker, finder or other person (including, without limitation, any substitute or
replacement broker claiming to have been engaged by Tenant in the future), claiming to have dealt
with Tenant
in connection with this Lease or any amendment or extension hereto, or which may result in
Tenant leasing other or enlarged space from Landlord. The provisions of this paragraph shall
survive the termination of this Lease.



     25. ENVIRONMENTAL COMPLIANCE.



     (a) Tenant’s Responsibility. Tenant shall not (either with or without negligence) cause or
permit the escape, disposal or release of any biologically active or other hazardous substances,
or materials. Tenant shall not allow the storage or use of such substances or materials in
any manner not sanctioned by law or in compliance with the highest standards prevailing in the
industry for the storage and use of such substances or materials, nor allow to be brought into the
Building any such materials or substances except to use in the ordinary course of Tenant’s
business, and then only after written notice is given to Landlord of the identity of such
substances or materials. Tenant covenants and agrees that the Premises will at all times during
its use or occupancy thereof be kept and maintained so as to comply with all now existing or
hereafter enacted or issued
statutes, laws, rules, ordinances, orders, permits and regulations of all state, federal,
local and



12









 




other governmental and regulatory authorities, agencies and bodies applicable to the Premises,
pertaining to environmental matters or regulating, prohibiting or otherwise having to do with
asbestos and all other toxic, radioactive, or hazardous wastes or material including, but not
limited to, the Federal Clean Air Act, the Federal Water Pollution Control Act, and the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980, as from time to time
amended (all hereafter collectively called “Laws”). Tenant shall execute affidavits,
representations and the
like, from time to time, at Landlord’s request, concerning Tenant’s best knowledge and belief
regarding the presence of hazardous substances or materials on the Premises.




     (b) Tenant’s Liability: Tenant shall hold Landlord free, harmless, and indemnified from any
penalty, fine, claim, demand, liability, cost, or charge whatsoever which Landlord shall incur, or
which Landlord would otherwise incur, by reason of Tenant’s failure to comply with this Section 25
including, but not limited to: (i) the cost of bringing the Premises into compliance with all Laws
and
in a non-contaminated state, the same condition as prior to occupancy; (ii) the reasonable
cost of
all appropriate tests and examinations of the Premises to confirm that the Premises have been
brought into compliance with all Laws; and (iii) the reasonable fees and expenses of Landlord’s
attorneys, engineers, and consultants incurred by Landlord in enforcing and confirming compliance
with this Section 25.



     (c) Property. For the purposes of this Section 25, the Premises shall include the real estate
covered by this Lease; all improvements thereon; all personal property used in connection with the
Premises (including that owned by Tenant); and the soil, ground water, and surface water
of the Premises, if the Premises includes any ground area.



     (d) Inspections by Landlord. Landlord and its engineers, technicians, and consultants
(collectively the “Auditors”) may, from time to time with reasonable notice, (provided however no
notice shall be required in any circumstance that Landlord considers an emergency situation), as
Landlord deems appropriate, conduct periodic tests and examinations (“Audits”) of the Premises
to confirm and monitor Tenant’s compliance with this Section 25. Such Audits shall be
conducted
in such a manner as to minimize the interference with Tenant’s Permitted Use; however in all
cases, the Audits shall be of such nature and scope as shall be reasonably required by then
existing technology to confirm Tenant’s compliance with this Section 25. Tenant shall fully
cooperate with Landlord and its Auditors in the conduct of such Audits. The cost of such
Audits
shall be paid by Landlord unless an Audit shall disclose a material failure of Tenant to
comply with this Section 25, in which case, the cost of such Audit, and the cost of all subsequent
Audits made during the Term and within thirty (30) days thereafter (not to exceed two (2) such
Audits per
calendar year), shall be paid for on demand by Tenant.



     (e) Landlord’s Liability. Provided, however, the foregoing covenants and undertakings of
Tenant contained in this Section 25 shall not apply to any condition or matter constituting a
violation of any Law: (i) which existed prior to the commencement of Tenant’s use or occupancy
of the Premises; (ii) which was not caused, in whole or in part, by Tenant or Tenant’s agents,
employees, officers, partners, contractors or invitees; or (iii) to the extent such violation is
caused
by, or results from the acts or neglects of Landlord or Landlord’s agents, employees,
officers, partners, contractors, guests, or invitees.



     (f) Tenant’s Liability After Termination of Lease. The covenants contained in this Section
25 shall survive the expiration or termination of this Lease, and shall continue for so long
as Landlord and its successors and assigns may be subject to any expense, liability, charge,
penalty,
or obligation against which Tenant has agreed to indemnify Landlord under this Section 25.



     26. MISCELLANEOUS. Headings of sections are for convenience only and shall not be considered
in construing the meaning of the contents of such section. The invalidity of any portion
of this Lease shall not have any effect on the balance hereof. Should Landlord institute any
legal proceedings against Tenant for breach of any provision herein contained, and prevail in such
action, Tenant shall be liable for the costs and expenses of Landlord, including its
reasonable attorneys’ fees (at all tribunal levels). This Lease shall be binding upon the
respective parties
hereto, and upon their heirs, executors, successors and assigns. This Lease supersedes and
cancels all prior negotiations between the parties, and no changes shall be effective unless in
writing signed by both parties. Tenant acknowledges and agrees that it has not relied upon
any statements, representations, agreements or warranties except those expressed in this Lease, and
that this Lease contains the entire agreement of the parties hereto with respect to the subject
matter hereof. Landlord may sell the Premises or the Building without affecting the
obligations of Tenant hereunder; upon the sale of the Premises or the Building, Landlord shall be
relieved of all responsibility for the Premises and shall be released from any liability thereafter
accruing under this



13









 




Lease. If any Security Deposit or prepaid Rent has been paid by Tenant, Landlord may transfer
the Security Deposit or prepaid Rent to Landlord’s successor and upon such transfer, Landlord
shall be released from any liability for return of the Security Deposit or prepaid Rent. This
Lease
may not be recorded without Landlord’s prior written consent, but Tenant agrees on request of
Landlord to execute a memorandum hereof for recording purposes. The singular shall include the
plural, and the masculine, feminine or neuter includes the other. If Landlord, or its employees,
officers, directors, stockholders or partners are ordered to pay Tenant a money judgment because
of Landlord’s default under this Lease, said money judgment may only be enforced against and
satisfied out of: (i) Landlord’s interest in the Building in which the Premises are located
including
the rental income and proceeds from sale; and (ii) any insurance or condemnation proceeds received
because of damage or condemnation to, or of, said Building that are available for use by Landlord.
No other assets of Landlord or said other parties exculpated by the preceding sentence shall be
liable for, or subject to, any such money judgment. This Lease shall be interpreted and enforced
in accordance with the laws of the State of North Carolina. If requested by Landlord, Tenant shall
furnish appropriate legal documentation evidencing the valid existence in good
standing of Tenant, and the authority of any person signing this Lease to act for the Tenant. If
Tenant signs as a corporation, each of the persons executing this Lease on behalf of Tenant does
hereby covenant and warrant that Tenant is a duly authorized and existing corporation, that Tenant
has and is qualified to do business in the State of North Carolina, that the corporation has a full
right and authority to enter into this Lease and that each of the persons signing on behalf of the
corporation is authorized to do so. The submission of this Lease to Tenant for review does not
constitute a reservation of or option for the Premises, and this Lease shall become effective as a
contract only upon the execution and delivery by both Landlord and Tenant. The date of execution
shall be entered on the top of the first page of this Lease by Landlord, and shall be the date on
which the last party signed the Lease, or as otherwise may be specifically agreed by both parties.
Such date, once inserted, shall be established as the final day of ratification by all parties to
this Lease, and shall be the date for use throughout this Lease as the “Effective Date”.




     27. SPECIAL CONDITIONS OR ADDENDA. The following special conditions, if any, shall apply, and
where in conflict with earlier provisions in this Lease shall control. If any addenda are noted
below, such addenda are incorporated herein and made a part of this Lease. [If there are no
special conditions or addenda, the word NONE shall be written in the blank below.]



     27.1 FIRST RIGHT OF OFFER. Provided Tenant is not in default, and has neither sublet nor
assigned this Lease, during the Term of this Lease Tenant shall have the first right of offer
to lease all first generation “shell” space contiguous to the Premises, (“Additional Space”)
on the following terms: (a) Landlord shall, before leasing all or any portion of the Additional
Space to any person or entity, first offer to lease all or such portion of the Additional Space to
Tenant on the
terms and conditions of the market rate of space in the Fourteen Parkway Plaza
Building at the
time this first offer is made available; (b) Tenant shall then have five (5) business days in
which to accept or reject such offer by written notice to Landlord; and (c) If Tenant does not
accept such
offer within said five (5) business days, Landlord shall thereafter be free, for a period of
ninety (90) days, to lease all or any portion of the Additional Space to a third party on such
terms and
conditions as Landlord deems appropriate. If Tenant declines any two offers of Additional
Space during the Term of this Lease, then Tenant’s rights under this Section 27.1 shall be deemed
terminated and this Section 27.1 shall automatically be of no further force or effect.



27.2 EXPANSION/TERMINATION OPTION.




     (a) Provided that the Tenant is not in default and Tenant has given Landlord two hundred and
seventy (270) days prior written notice, (the “Expansion Notice”) then Tenant shall have an
expansion option between the thirtieth and forty-eighth month of the original Term of this Lease
subject to the following:




	 	(i)	 	IKON Office Solutions’ (or its successors) right of first refusal on all second
generation space in Fourteen Parkway Plaza;
	 
	 	(ii)	 	The minimum expansion space shall be 5,000 rentable square feet and the maximum
shall be 10,000 rentable square feet.
	 
	 	(iii)	 	In the event Tenant exercises its expansion option within Fourteen Parkway
Plaza, the rental rate shall be at the then current rental rate for the Building at the
time of expansion;




14









 






	 	(iv)	 	The Term of the Lease shall be extended such that the minimum remaining Term shall
be sixty (60) months from the effective date of the expansion; and
	 
	 	(v)	 	Landlord shall provide Tenant with an upfit allowance of $17.00 per rentable
square foot for the expansion space and $2.00 per rentable square foot refurbishment
allowance for the original space.





     (b) In the event Landlord cannot accommodate Tenant’s expansion requirement in
Fourteen Parkway Plaza; Landlord may provide alternative contiguous space at Parkway Plaza or
Oakhill Business Parks subject to the following terms:




	 	(i)	 	Minimum lease term of 5 years from the effective date of the
expansion/relocation;
	 
	 	(ii)	 	The rental rate shall be adjusted to the rental market rate for the applicable
building/park. Landlord agrees to hire an independent third party to determine the
“market rate”; and
	 
	 	(iii)	 	Landlord shall provide an upfit allowance of $15.00 per square foot, less any
unamortized improvements remaining from the Premises at Fourteen Parkway
Plaza. In the event the Tenant moves into First Generation “shell space” within
Parkway Plaza or Oakhill Business Park, Landlord shall provide an allowance of
$17.00 per square foot, less any unamortized improvements remaining from Fourteen
Parkway Plaza.





     (c) In the event Landlord is unable to confirm space availability at parkway Plaza or
Oakhill Business Park within 90 days (effective date which is within Tenant’s Expansion Notice
period) from the date of receipt of Tenant’s Expansion Notice, Tenant may cancel this Lease upon
sixty (60) days prior written notice after the thirty-sixth month with no penalty.



15









 





IN WITNESS WHEREOF, Landlord and Tenant have executed this lease in two originals, of the day and
year first above written.



	 	 	 	 	 	 	 	 	 	 	 
	LANDLORD:	 	 	 	TENANT:	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Highwoods REALTY LIMITED PARTNERSHIP	 	 	 	STRATEGIC OUTSOURCING, INC.	 	 
	a North Carolina Limited Partnership	 	 	 	 	 	 	 	 
	By: Highwoods Properties, Inc.	 	 	 	 	 	 	 	 
	a Maryland Corporation	 	 	 	 	 	 	 	 
	Its: General Partner	 	 	 	 	 	 	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	By:

	 	//s//
	 	 	 	By:
	 	//s// John B. Thigpen	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	Senior Vice President
	 	 	 	Title:
	 	Vice President — Financing	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witness:

	 	//s// CHRIS ANN BROTHERTON
	 	 	 	Witness:
	 	//s// DANIEL A. WELBOURNE	 	 
	 

	 	 	 	 	 	 	 	 	 	 
	 

	 	(signature)
	 	 	 	 	 	(signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Chris Ann Brotherton	 	 	 	Daniel A. Welbourne	 	 
	 	 	 	 	 	 	 
	(print name)	 	 	 	(print name)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Witness:      //s// PATRICIA UNDERWOOD WYNNE	 	 	 	Witness:      //s// JAMES W. NEAL	 	 
	 

	 	 
	 	 	 	 	 	 	 	 
	 

	 	(signature)
	 	 	 	 	 	(signature)	 	 
	 
	 	 	 	 	 	 	 	 	 	 
	Patricia Underwood Wynne	 	 	 	James W. Neal	 	 
	 	 	 	 	 	 	 
	(print name)	 	 	 	(print name)	 	 






16









 






ADDENDUM ONE



Minimum Rent




	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	Annual	 	Monthly
	From (1)	 	 	 	 	 	Through (2)	 	 	 	 	 	Rate (3)	 	Amount (4)	 	Installment (5)
	Commencement Date	 	Month	 	 	4	 	 	$	0.00	 	 	$	0.00	 	 	$	0.00	 
	Month
	 	 	5	 	 	Month	 	 	16	 	 	$	15.25	 	 	$	257,389.50	 	 	$	21,449.13	 
	Month
	 	 	17	 	 	Month	 	 	28	 	 	$	15.71	 	 	$	265,153.38	 	 	$	22,096.12	 
	Month
	 	 	29	 	 	Month	 	 	40	 	 	$	16.18	 	 	$	273,086.04	 	 	$	22,757.17	 
	Month
	 	 	41	 	 	Month	 	 	52	 	 	$	16.66	 	 	$	281,187.48	 	 	$	23,432.29	 
	Month
	 	 	53	 	 	Month	 	 	64	 	 	$	17.16	 	 	$	289,626.48	 	 	$	24,135.54	 
	Month
	 	 	65	 	 	Month	 	 	66	 	 	$	17.16	 	 	$	48,271.08	 	 	$	24,135.54	 
	 
	 	 	 	 	 	 	 	 	 	 	 	 	 	 	 	$	1,414,713.96	 	 	 	 	 








 




			
	(1)	 	Unless otherwise indicated, beginning on the first day of the specified full calendar
month following the Commencement Date.
	 
	(2)	 	Unless otherwise indicated, through and including the last day of the specified full
calendar
month following the Commencement Date.
	 
	(3)	 	Per rentable square foot per year.
	 
	(4)	 	Expressed on an annualized basis even though the applicable period may be longer or
shorter than twelve (12) months.




1









 










LEASE ADDENDUM NO. [ALLOWANCE]




     WORKLETTER. This Lease Addendum Number 2 (the “Second Addendum”) shall set forth the rights
and obligations of Landlord and Tenant with respect to space planning, engineering, final workshop
drawings, and the construction and installation of any improvements to the Premises to be completed
before the Commencement Date (“Tenant Improvements”). This Second Addendum contemplates that the
performance of this work will proceed in four stages in accordance with the following schedule: (i)
preparation of a space plan; (ii) final design and engineering and preparation of final plans and
working drawings; (i) preparation by the Contractor (as hereinafter defined) of an estimate of the
additional cost of the initial Tenant Improvements; (iv) submission and approval of plans by
appropriate governmental authorities and construction and installation of the Tenant Improvements
by the Commencement Date.



     In consideration of the mutual covenants hereinafter contained, Landlord and Tenant do
mutually agree to
the following:




	1.	 	Space Planning Design and Working Drawings. On Tenant’s behalf, Landlord shall
provide and designate architects and engineers, who, at Tenant’s expense, which expense shall
be deducted from the Allowance (as hereinafter defined), will do the following:






	 	a.	 	Attend a reasonable number of meetings with Tenant and Landlord’s agent to define
Tenant’s requirements. Landlord shall provide one complete space plan prepared by
Landlord’s architect in order to obtain Tenant’s approval. Tenant shall approve such space
plans, in writing, within Ten (10) days after receipt of the space plans.
	 
	 	b.	 	Complete construction drawings for Tenant’s partition layout, reflected ceiling grid,
telephone and electrical outlets, keying, and finish schedule (subject to the limitation
expressed in Section 2 below).
	 
	 	c.	 	Complete building standard mechanical plans where necessary (for installation of air
conditioning system and duct work, and heating and electrical facilities) for the work to
be done in the Premises.
	 
	 	d.	 	All plans and working drawings for the construction and completion of the Premises
shall be subject
to Landlord’s prior written approval. Any changes or modifications Tenant desires to make to
such plans or working drawings shall also be subject to Landlord’s prior approval. Landlord
agrees that it will not unreasonably withhold its approval of the plans and working drawings
floor the construction of the Premises, or of any changes or modifications thereof;
provided, however, Landlord shall have sole and absolute discretion to approve or disapprove
any improvements that will be visible to the exterior of the Premises, or which may affect
the structural integrity of the Building. Any approval of such plans and working drawings by
Landlord shall not constitute approval of any delays caused by Tenant and shall not be
deemed a waiver of any rights or remedies that may arise as a result of such delays.
Landlord may condition its approval of plans and working drawings upon extension of the
Commencement Date of the Lease if such plans and drawings in design or materials for the
Building in which the Premises are located and may condition its approval of Tenant design
in advance for such improvements estimated to cost more than the Allowance.






	2.	 	Allowance. Landlord agrees, at its sole cost and expense to provide an allowance of
up to $19.00 per rentable square foot, to design, engineer, install, supply and otherwise to
construct the Tenant Improvements in the Premises that will become a part of the Building (the
“Allowance”); otherwise, Tenant is fully responsible for the payment of all costs in
connection with the Tenant implements. Landlord has already contributed $.10 per rentable
square foot for a preliminary space plan and Tenant agrees that said $. 10 shall be deducted
from the $19.00 allowance. Tenant shall be allowed to designate any portion of the Allowance
to be applied against Tenant’s moving costs, (including cabling, furniture breakdown, moving
or furniture set up) provided however, Tenant shall be responsible for any Tenant Improvement
costs (including moving costs if so designated) that exceed $19.00 per rentable square foot.
	 
	3.	 	Signage and Keying. Door and/or directory signage and suite keying in accordance with
building standards shall be provided and installed by Landlord and deducted from the
Allowance.
	 
	4.	 	Work and Materials at Tenant’s Expense






	 	a.	 	Landlord shall deliver the Premises in “shell” condition with ceiling grid, high
pressure HVAC, distribution
and control systems completed and with ceiling tile and lights stacked on the floor or
installation. Low




1









 






	 	 	 	pressure HVAC duct and distribution shall not be included in the above described “shell”
condition. Prior
to commencing and providing any such work or materials to the Premises, Landlord shall select
a
licensed general contractor or contractors (the “Contractor”) to construct and install the
Tenant Improvements and Landlord shall submit to Tenant written estimates of the cost of such
work and
materials and Tenant shall approve said estimates in writing within five (5) business days
after the
receipt thereof. Landlord shall not be authorized to proceed thereon until such estimate is
mutually
agreed upon and approved in writing and delivered to Landlord. Landlord’s written estimate
shall
include a construction supervision fee of N/A% to manage and oversee the work to be done on
Tenant’s behalf.






	 	b.	 	Tenant agrees to pay to Landlord, promptly upon being billed therefor, all costs and
expenses in excess
of the Allowance incurred in connection with the Tenant Improvements. Such costs and
expenses shall include all amounts charged by the Contractor for performing such work and
providing such materials (including the Contractor’s general conditions, overhead and
profit). Tenant will be billed for such costs
and expenses as follows: (i) N/A% of such costs and expenses shall be due and payable upon
Tenant’s approval of the cost estimates for the Tenant Improvements; (ii) N/A% of such costs
and
expenses shall be due and payable when such work is substantially completed as defined in
Section
6 below; (iii) one hundred percent (100%) of such costs and expenses shall be due and
payable upon
final completion of such work. If unpaid within ten (10) days after receipt of invoice, then
the
outstanding balance shall accrue at the rate of one percent (1%) per month until paid in
full; or (iv) amortized over the Term of the Lease at an interest rate of eleven and
one-half percent (11.5%)
payable as part of Tenant’s monthly installments of Rent.






	5.	 	Tenant Plan Delivery Date






	 	a.	 	Tenant covenants and agrees that although certain plans and drawings may be prepared by
Landlord’s architect or engineer, Tenant shall be solely responsible for the timely
completion of plans and drawings and it is hereby understood time is of the essence.
	 
	 	b.	 	Tenant covenants and agrees to deliver to Landlord final plans and working drawings for
the Tenant Improvements on or before June 15, 2000, (the “Tenant Plan Delivery Date”). It
is vital
that the final working drawings be delivered to Landlord by the Tenant Plan Delivery Date in
order to allow Landlord sufficient time to review such plans and working drawings, to
discuss with Tenant any changes therein which Landlord believes to be necessary or
desirable, to enable the Contractor to prepare an estimate of the cost of the initial Tenant
Improvements, and to substantially complete the Premises within the time frame provided in
the Lease.






	6.	 	Substantial Completion






	 	a.	 	The Premises shall be deemed to be substantially complete when the work to the
performed by Landlord pursuant to the plans and working drawings approved by Landlord and
Tenant has been completed and approved by the appropriate governmental authorities, as
certified by Landlord and architect, except
for items of work and adjustment of equipment and fixtures that can be completed after the
Premises
are occupied without causing material interference with Tenant’s use of the premises (i.e.,
“punch list items”).
	 
	 	b.	 	Notwithstanding the foregoing, if Landlord shall be delayed in substantially completing
the Premises as
a result of:




	 
	 	(i)	 	Tenant’s failure to furnish to Landlord on or before the Tenant Plan Delivery Date
the final plans and working drawings for the construction and completion of the Premises;
or
	 
	 	(ii)	 	Tenant’s failure to furnish plans and/or Tenant’s failure to approve Landlord’s cost
estimates
within the time specified in Section 4 herein and/or Tenant’s failure to approve the
space plan within the time specified in Section 1 herein; or
	 
	 	(iii)	 	Tenant’s changes in the Tenant Improvements or the plans therefor (notwithstanding
Landlord’s approval of any such changes); or
	 
	 	(iv)	 	Tenant’s request for changes in or modifications to such plans or working drawings
subsequent
to the Tenant Plan Delivery Date; or




2









 






	 	(v)	 	Inability to obtain non-building standard materials, finishes or installations requested by Tenant; or
	 
	 	(vi)	 	The performance of any work by any person, firm or corporation employed or retained by
Tenant; or
	 
	 	(vii)	 	Any other act or omission by Tenant or its agents, representatives, and/or employees;






	 	 	then, in any such event, for purposes of determining the Commencement Date, the Premises shall
be deemed to have been substantially completed on the date that Landlord and architect determine
that the Premises would have been substantially completed if such delay or delays had not
occurred.






	7.	 	Materials and Workmanship. Landlord covenants and agrees that all work performed in
connection with the construction of the Premises shall be performed in a good and workmanlike
manner and in accordance with all applicable laws and regulations and with the final approved
plans and working drawings. Landlord agrees to exercise due diligence in completing the
construction of the Premises.
	 
	8.	 	Repairs and Corrections. Landlord agrees to repair and correct any work or materials
installed by Landlord or its Contractor in the Premises that prove defective as a result of
faulty materials, equipment,
or workmanship and that first appear within ninety (90) days after the date of occupancy of the
Premises. Notwithstanding the foregoing, Landlord shall not be responsible to repair or correct
any defective work or materials installed by Tenant or any contractor other than Landlord’s
Contractor, or any work or materials that prove defective as a result of any act or omission of
Tenant or any of its employees, agents, invitees, licensees, subtenants, customers, clients, or
guests.
	 
	9.	 	Possession by Tenant. The taking of possession of the Premises by Tenant shall
constitute an acknowledgment by Tenant that the Premises are in good condition and that all
work and materials provided by Landlord are satisfactory as of such date of occupancy, except
as to any defects or incomplete work that are described in a written notice given by Tenant to
Landlord no later than thirty (30) days after Tenant commences occupancy of the Premises, and
except for any equipment that is used seasonally if Tenant takes possession of the Premises
during a season when such equipment is not in use.
	 
	10.	 	Access During Construction. During construction of the Tenant Improvements in the
Premises with the approval of Landlord, Tenant shall be permitted reasonable access to the
Premises, as long as such access does not interfere with or delay construction work on the
Premises for the purposes of taking measurements, making plans, installing trade fixtures, and
doing such other work as may be appropriate
or desirable to enable Tenant eventually to assume possession of and operate in the Premises.






3









 








LEASE ADDENDUM NO. 3 [EXPENSE STOP]




     ADDITIONAL RENT — OPERATING EXPENSE PASS THROUGH. For each Calendar
Year (as hereinafter defined) during the Term, Tenant agrees to pay to Landlord, as Additional
Rent, in a lump sum, Tenant’s Proportionate Share of any increase in Operating Expenses (as
hereinafter defined) incurred by Landlord’s operation or maintenance of the Building, above $4.75
per rentable square foot of the Building or $432,250 (the “Expense Stop”). For purposes of
calculating Tenant’s Proportionate Share of real and personal property taxes, Landlord shall use
the first full Calendar Year or the Calendar Year in which the Building and improvements are
completed and are fully assessed, whichever shall be later. Tenant’s Proportionate Share shall be
calculated by dividing the 16,878 rentable square feet of the Premises by 91,000 net rentable
square feet of the Building, which equals 18.5% during any Calendar Year the occupancy of
rentable area in the Building is less than full, then Operating Expenses (as hereinafter
defined) will be adjusted for such Calendar Year as though at least 95% of the rentable area had
been
occupied. As used herein, the term “Calendar Year” shall mean each of the twelve month
periods (or any portion thereof) during the Term beginning on January 1 and ending on the next
following December 31. The year 2000 operating expenses, which are subject to change prior to the
Commencement Date, are estimated to be as follows:



	 	 	 	 	 
	Category	 	2000 (Project)
	Taxes
	 	$	1.08	 
	Insurance
	 	$	0.04	 
	Tenant Electric
	 	$	1.60	 
	Utilities (Water/Sewer/Gas/Trash)
	 	$	0.11	 
	Cleaning/Janitorial
	 	$	0.90	 
	Repair/Maintenance
	 	$	0.05	 
	Grounds/Security/CAM
	 	$	0.40	 
	Administration/Mgmt. Fee
	 	$	0.47	 
	Other Misc.
	 	$	0.10	 
	 
	Total
	 	$	4.75	 






     As used herein, the term “Operating Expenses” shall mean direct costs of operation, repair and
maintenance as determined by standard accounting practices, including, but not limited to ad
valorem real and personal property taxes, hazard and liability insurance premiums, utilities, heat,
air conditioning, janitorial service, labor, materials, supplies, equipment and tools, permits,
licenses, inspection fees, management fees (not to exceed three percent (3%), and common area
expenses; provided, however, the term “Operating Expenses” shall not include depreciation on the
Building
or equipment therein, interest, executive salaries, real estate brokers’ commissions, or other
expenses that do not relate to the operation of the Building. The annual statement of Operating
Expenses shall be accounted for and reported in accordance with generally accepted accounting
principles (the “Annual Statement”).



     For the Calendar Year commencing on [the first January 1 immediately following the
Commencement Date] and for each Calendar Year thereafter during the Term, Landlord shall
estimate the amount the Operating Expenses shall increase for such Calendar Year above the Expense
Stop. Landlord shall send a written statement of the amount of Tenant’s Proportionate Share of any
estimated increase in Operating Expenses and Tenant shall pay to Landlord, monthly or annually,
Tenant’s Proportionate Share of such increase in Operating Expenses. Within ninety (90) days after
the end of each Calendar Year, Landlord shall send a copy of the Annual Statement to Tenant.
Pursuant to the Annual Statement, Tenant shall pay to Landlord Additional Rent as
owed or Landlord shall adjust Tenant’s Rent payments if Landlord owes Tenant a credit, such
payment or adjustment to be made within thirty (30) days after the Annual Statement is received
by Tenant. After the Expiration Date or any termination of this Lease, Landlord shall send
Tenant
the final Annual Statement for the Term, and Tenant shall pay to Landlord Additional Rent as
owed or if Landlord owes Tenant a credit, then Landlord shall pay Tenant a refund. If this Lease
expires



 









 




or terminates on a day other than the December 31, then Additional Rent shall be prorated on a
365-day Calendar Year (or 366 if a leap year).





 









 








ADDENDUM NO. 4



OPTION TO EXTEND LEASE TERM




     1. Option to Extend. Tenant shall have the right and option to extend the Lease (the “Renewal
Option”) for one additional period of Five (5) years (the “Renewal Lease Term”); provided however
such Renewal Option is contingent upon the following (i) Tenant is not in default at the time
Tenant gives Landlord written notice of Tenant’s intention to exercise the Renewal Option; (ii)
upon the Expiration Date Tenant has no outstanding default; (iii) no event has occurred that upon
notice or the passage of time would constitute a default; (iv) Tenant is not disqualified by
multiple defaults
as provided in the Lease; and (v) Tenant is occupying the Premises. Tenant shall exercise each
Renewal Option by giving Landlord written notice at least one hundred eighty (180) days prior to
the Expiration Date. lf Tenant fails to give such notice to Landlord prior to said one
hundred eighty
(180) day period, then Tenant shall forfeit the Renewal Option. If Tenant exercises the
Renewal Option, then during any such Renewal Lease Term, Landlord and Tenant’s respective rights,
duties and obligations shall be governed by the terms and conditions of the Lease.



     2. Term. If Tenant exercises the Renewal Option, then during any such Renewal Lease Term, all
references to the term “Term”, as used in the Lease, shall mean the “Renewal Lease Term”.



     3. Termination of Renewal Option on Transfer by Tenant. In the event Landlord consents to an
assignment or sublease by Tenant, then the Renewal Option shall automatically terminate
unless otherwise agreed in writing by Landlord.



     4. Base Rent for Renewal Lease Term. The Rent for the Renewal Lease Term shall be a the Fair
Market Rental Rate, determined as follows:



     Definition. The term “Fair Market Rental Rate” shall mean the market rental
rate for the
time period such determination is being made for office space in class “A” office buildings in
the Charlotte, North Carolina area (“AREA”) of comparable condition for space of equivalent
quality, size, utility and location. Such determination shall take into account all relevant
factors, including, without limitation, the following matters: the credit standing of Tenant; the
length of the term; expense stops; the fact that Landlord will experience no vacancy period and
that Tenant will not suffer the costs and business interruption associated with moving its offices
and negotiating a new lease; construction allowances and other tenant concessions that would be
available to tenants comparable to Tenant in the AREA (such as moving expense allowance, free rent
periods, and
lease assumptions and take-over provisions, if any, but specifically excluding the value of
improvements installed in the Premises at Tenant’s cost), and whether adjustments are then being
made in determining the rental rates for renewals in the AREA because of concessions being
offered by Landlord to Tenant (or the lack thereof for the Renewal Lease Term in question).
For purposes or such calculation, it will be assumed that Landlord is paying a representative of
Tenant
a brokerage commission in connection with the Renewal Lease Term in question, based on the
then current market rates.



     Determination. Landlord shall deliver to Tenant notice of the Fair Market Rental Rate
(the “FMR Notice”) for the Premises for the Renewal Lease Term in question within thirty (30) days
after Tenant exercises the option giving rise for the need to determine the Fair Market Rental
Rate. If Tenant disagrees with Landlord’s assessment of the Fair Market Rental Rate specified in a
FMR Notice, then it shall so notify Landlord in writing within ten (10) business days after
delivery of such FMR Notice; otherwise, the rate set forth in such notice shall be the Fair Market
Rental Rate. If Tenant timely delivers to Landlord written notice that Tenant disagrees with
Landlord’s assessment of the Fair Market Rental Rate, then Landlord and Tenant shall meet to
attempt to determine the
Fair Market Rental Rate. If Tenant and Landlord are unable to agree on such Fair Market
Rental Rate within ten (10) business days after Tenant notifies Landlord of Tenant’s disagreement
with Landlord’s assessment thereof, then Landlord and Tenant shall each appoint an independent real
estate appraiser with at least five (5) years’ commercial real estate appraisal experience in the
AREA market. The two appraisers shall then, within ten (10) days after their designation, select
an independent third appraiser with like qualifications. If the two appraisers are unable to
agree
on the third appraiser within such ten (10) day period, either Landlord or Tenant, by giving
five (5) days prior written notice thereof to the other, may apply to the then presiding Clerk of
Superior
Court of Mecklenburg County for selection of a third appraiser who meets the
qualifications stated above. Within twenty (20) business days after the selection of the third
appraiser, a majority of the appraisers shall determine the Fair Market Rental Rate. If a majority
of the appraisers is unable



1









 




to agree upon the Fair Market Rental Rate by such time, then the two (2) closest appraisals shall
be averaged and the average will be the Fair Market Rental Rate. Tenant and Landlord shall each
bear the entire cost of the appraiser selected by it and shall share equally the cost of the third
appraiser.




          Administration. If Tenant has exercised the Renewal Option and the Fair Market Rental
Rate for the Renewal Lease Term has not been determined in accordance with this Lease Addendum
No. Four by the time that Rent for the Renewal Lease Term is to commence in accordance with
the terms hereof, then Tenant shall pay Rent for the Renewal Lease Term based on the Fair Market
Rental Rate proposed by Landlord pursuant to this Lease Addendum No. Four until such time
as the Fair Market Rental Rate has been so determined, at which time appropriate cash adjustments
shall be made between Landlord and Tenant such that Tenant is charged Rent based on the Fair Market
Rental Rate (as finally determined pursuant to this Lease Addendum No. Four) for the
Renewal Lease Term during the interval in question.





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EXHIBIT A



Legal Description/Space Plan



(to be provided)





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EXHIBIT B




Rules and Regulations





	1.	 	Access to Building. On Saturdays, Sundays, legal holidays and weekdays between the hours
of 6:00 P.M. and 8:00 A.M., access to the Building and/or to the halls, corridors, elevators
or stairways in the Building may be restricted and access shall be gained by use of a key or
electronic card to the outside doors of the Buildings. Landlord may from time to time
establish security controls for the purpose of regulating access to the Building. Tenant shall
be responsible for providing access to the Premises for its agents, employees, invitees and
guests at times access is restricted, and shall comply with all such security regulations so
established.
	 
	2.	 	Protecting Premises. The last member of Tenant to leave the Premises shall close and
securely lock all doors or other means of entry to the Premises and shut off all utilities in
the Premises.
	 
	3.	 	Building Directories. The directories for the Building in the form selected by Landlord
shall be used exclusively for the display of the name and location of tenants. Any additional
names and/or name change requested by Tenant to be displayed in the directories must be
approved by Landlord and, if approved, will be provided at the sole expense of Tenant.
	 
	4.	 	Large Articles. Furniture, freight and other large or heavy articles may be brought into the
Building only
at times and in the manner designated by Landlord and always at Tenant’s sole responsibility.
All damage done to the Building, its furnishings, fixtures or equipment by moving or
maintaining such furniture, freight
or articles shall be repaired at Tenant’s expense.
	 
	5.	 	Signs. Tenant shall not paint, display, inscribe, maintain or affix any sign, placard,
picture, advertisement, name, notice, lettering or direction on any part of the outside or
inside of the Building, or on any part of the inside of the Premises which can be seen from
the outside of the Premises, without the written consent of Landlord, and then only such name
or names or matter and in such color, size, style, character and material as shall be first
approved by Landlord in writing. Landlord, without notice to Tenant, reserves the right to
remove, at Tenant’s expense, all matter other than that provided for above.
	 
	6.	 	Compliance with Laws. Tenant shall comply with all applicable laws, ordinances, governmental
orders or regulations and applicable orders or directions from any public office or body
having jurisdiction, whether now existing or hereinafter enacted with respect to the Premises
and the use or occupancy thereof. Tenant shall not make or permit any use of the Premises
which directly or indirectly is forbidden by law, ordinance, governmental regulations or order
or direction of applicable public authority, which may be dangerous to persons or property or
which may constitute a nuisance to other tenants.
	 
	7.	 	Hazardous Materials. Tenant shall not use or permit to be brought into the Premises or the
Building any flammable oils or fluids, or any explosive or other articles deemed hazardous to
persons or property, or do or permit to be done any act or thing which will invalidate, or
which, if brought in, would be in conflict with any insurance policy covering the Building or
its operation, or the Premises, or any part of either, and will not do or permit to be done
anything in or upon the Premises, or bring or keep anything therein, which shall not comply
with all rules, orders, regulations or requirements of any organization, bureau, department or
body having jurisdiction with respect thereto (and Tenant shall at all times comply with all
such rules, orders, regulations or requirements), or which shall increase the rate of
insurance on the Building, its appurtenances, contents or operation.
	 
	8.	 	Defacing Premises and Overloading. Tenant shall not place anything or allow anything to be
placed in the Premises near the glass of any door, partition, wall or window that may be
unsightly from outside the Premises. Tenant shall not place or permit to be placed any article
of any kind on any window ledge or on the exterior walls; blinds, shades, awnings or other
forms of inside or outside window ventilators or similar devices shall not be placed in or
about the outside windows in the Premises except to the extent that the character, shape,
color, material and make thereof is approved by Landlord. Tenant shall not do any painting or
decorating in the Premises or install any floor coverings in the Premises or make, paint, cut
or drill into, or in any way deface any part of the Premises or Building without in each
instance obtaining the prior written consent of Landlord. Tenant shall not overload any floor
or part thereof in the Premises, or
any facility in the Building or any public corridors or elevators therein by bringing in or
removing any large
or heavy articles and Landlord may direct and control the location of safes, files, and all
other heavy articles
and, if considered necessary by Landlord may require Tenant at its expense to supply whatever
supplementary supports necessary to properly distribute the weight.




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	9.	 	Obstruction of Public Areas. Tenant shall not, whether temporarily, accidentally or otherwise,
allow anything to remain in, place or store anything in, or obstruct in any way, any sidewalk,
court, hall, passageway, entrance, or shipping area. Tenant shall lend its full cooperation to
keep such areas free from
all obstruction and in a clean and slightly condition, and move all supplies, furniture and
equipment
as soon as received directly to the Premises, and shall move all such items and waste (other
than waste customarily removed by Building employees) that are at any time being taken from
the Premises directly to the areas designated for disposal. All courts, passageways,
entrances, exits, elevators, escalators, stairways, corridors, halls and roofs are not for the
use of the general public and Landlord shall in all cases retain the
right to control and prevent access thereto by all persons whose presence, in the judgment of
Landlord, shall be prejudicial to the safety, character, reputation and interest of the
Building and its tenants; provided, however, that nothing herein contained shall be construed
to prevent such access to persons with whom Tenant deals within the normal course of Tenant’s
business so long as such persons are not engaged in illegal activities.
	 
	10.	 	Additional Locks. Tenant shall not attach, or permit to be attached, additional Iocks or
similar devices to any door or window, change existing locks or the mechanism thereof, or make
or permit to be made any keys for any door other than those provided by Landlord. Upon
termination of this Lease or of Tenant’s possession, Tenant shall immediately surrender all
keys to the Premises,
	 
	11.	 	Communications or Utility Connections. If Tenant desires signal, alarm or other utility or
similar service connections installed or changed, then Tenant shall not install or change the
same without the approval of Landlord, and then only under direction of Landlord and at
Tenant’s expense. Tenant shall not install in the Premises any equipment which requires a
greater than normal amount of electrical current for the permitted use without the advance
written consent of Landlord. Tenant shall ascertain from Landlord the maximum amount of load
or demand for or use of electrical current which can safely be permitted in the Premises,
taking into account the capacity of the electric wiring in the Building and the Premises and
the needs of other tenants in the Building, and shall not in any event connect a greater load
than that which is safe.
	 
	12.	 	Office of the Building. Service requirements of Tenant will be attended to only upon
application at the office of Highwoods Properties, Inc. Employees of Landlord shall not
perform, and Tenant shall not engage them to do any work outside of their duties unless
specifically authorized by Landlord.
	 
	13.	 	Restrooms. The restrooms, toilets, urinals, vanities and the other apparatus shall not be
used for any purpose other than that for which they were constructed, and no foreign substance
of any kind whatsoever shall be thrown therein. The expense of any breakage, stoppage or
damage resulting from the violation of this rule shall be borne by the Tenant whom, or whose
employees or invitees, shall have caused it.
	 
	14.	 	Intoxication. Landlord reserves the right to exclude or expel from the Building any person
who, in the judgment of Landlord, is intoxicated, or under the influence of liquor or drugs,
or who in any way violates any of the Rules and Regulations of the Building.
	 
	15.	 	Nuisances and Certain Other Prohibited Uses. Tenant shall not (a) install or operate any
internal combustion engine, boiler, machinery, refrigerating, heating or air conditioning
apparatus in or about the Premises; (b) engage in any mechanical business, or in any service
in or about the Premises or Building, except those ordinarily embraced within the Permitted
Use as specified in Section 3 of the Lease; (c) use the Premises for housing, lodging, or
sleeping purposes; (d) prepare food in the demises (heating coffee and individual lunches of
employees excepted) except by express permission or Landlord; (e) place any radio or
television antennae on the roof or on or in any part of the inside or outside of the Building
other than the inside of the Premises, or place a musical or sound producing instrument or
device inside or outside the Premises which may be heard outside the Premises; (f) use any
power source for the operation
of any equipment or device other than dry cell batteries or electricity; (g) operate any
electrical device from which may emanate waves that could interfere with or impair radio or
television broadcasting or reception from or in the Building or elsewhere; (h) bring or permit
to be in the Building any bicycle, other vehicle, dog (except in the company of a blind
person), other animal or bird; (i) make or permit any objectionable noise or odor to emanate
from the Premises; (j) disturb, harass, solicit or canvass any occupant of the Building; (k)
do anything in or about the Premises which could be a nuisance or tend to injure the
reputation of the Building; (i) allow any firearms in the Building or the Premises except as
approved by Landlord in writing.
	 
	16.	 	Solicitation. Tenant shall not canvass other tenants in the Building to solicit business or contributions
and shall not exhibit, sell or offer to sell, use, rent or exchange any products or services
in or from the Premises unless ordinarily embraced within the Tenant’s Permitted Use as
specified in Section 3 of the Lease.




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	17.	 	Energy Conservation. Tenant shall not waste electricity, water, heat or air conditioning and
agrees to cooperate fully with Landlord to insure the most effective operation of the
Building’s heating and air conditioning, and shall not allow the adjustment (except by
Landlord’s authorized Building personnel) of any controls.
	 
	18.	 	Building Security. At all times other than normal business hours the exterior Building doors
and suite entry door(s) must be kept locked to assist in security. The janitorial service,
upon completion of its duties, will lock all Building doors. Problems in Building and suite
security should be directed to Landlord at (704) 357-8873.
	 
	19.	 	Parking. Parking is in designated parking areas only. There may be no vehicles in “no
parking” zones or at curbs. Handicapped spaces are for handicapped persons and the Police
Department will ticket unauthorized (unidentified) cars in handicapped spaces. Landlord
reserves the right to remove vehicles that do not comply with the Lease or these Rules and
Regulations and Tenant shall indemnify and hold harmless Landlord from its reasonable exercise
of these rights with respect to the vehicles of Tenant and its employees, agents and invitees.
	 
	20.	 	Janitorial Service. The janitorial staff will remove all trash from trash cans. Any container
or boxes left
in hallways or apparently discarded unless clearly and conspicuously labeled DO NOT REMOVE may
be removed without liability to Tenant. Any large volume of trash resulting from delivery of
furniture,
equipment, etc., should be removed by the delivery company, Tenant, or Landlord at Tenant’s
expense. Janitorial service will be provided after hours five (5) days a week. All requests
for trash removal other than normal janitorial services should be directed to Landlord at
(704) 357-8873.
	 
	21.	 	Construction. Tenant shall make no structural or interior alterations of the Premises. All
structural and nonstructural alterations and modifications to the Premises shall be
coordinated through Landlord as outlined in the Lease. Completed construction drawings of the
requested changes are to be submitted to Landlord or its designated agent for pricing and
construction supervision.






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