Exhibit 10.36 Lease Agreement




EXHIBIT
10.36

HIGHWOODS
REALTY LIMITED PARTNERSHIP







SCI
SERVICES, INC.




BUILD-TO-SUIT
LEASE










 
































TABLE OF
CONTENTS










Section
1: Basic
Definitions and Provisions


	 	
      1.1
	
      Base
      Building





	 	
      1.2
	
      Building





	 	
      1.3
	
      Commencement
      Date





	 	
      1.4
	
      Common
      Areas





	 	
      1.5
	
      Delivery
      Date(s)





	 	
      1.6
	
      Land





	 	
      1.7
	
      Premises





	 	
      1.8
	
      Project





	 	
      1.9
	
      Project
      Architect





	 	
      1.10
	
      Project
      Plans and Project Outline
Specifications





	 	
      1.11
	
      Project
      Schedule





	 	
      1.12
	
      Rent
      Comments Data





	 	
      1.13
	
      Space
      Plans





	 	
      1.14
	
      Substantial
      Completion or Substantially Complete




Section
2. Leased
Premises


	 	
      a.
	
      Lease
      of the Premises





	 	
      b.
	
      Rentable
      Square Foot Determination





	 	
      c.
	
      Common
      Areas




Section
3: Construction:
Space Plan


	 	
      a.
	
      Construction
      of the Project





	 	
      b.
	
      Completion
      Dates; Delayed Completion





	 	
      c.
	
      Condition
      Precedent




Section
4: Term


	 	
      a.
	
      Initial
      Term





	 	
      b.
	
      Option
      to Renew





	 	
      c.
	
      Landlord
      Assignment Rights




Section
5: Use


	 	
      a.
	
      Permitted
      Use





	 	
      b.
	
      Prohibited
      Uses





	 	
      c.
	
      Prohibited
      Equipment in Premises




Section
6: Rent


	 	
      a.
	
      Payment
      Obligations





	 	
      b.
	
      Base
      Rent





	 	
      c.
	
      Additional
      Rent




Section
7: Security
Deposit


	 	
      a.
	
      Security
      Deposit





	 	
      b.
	
      Letter
      of Credit




Section
8: Services
by Landlord


	 	
      a.
	
      Base
      Services





	 	
      b.
	
      Landlord's
      Maintenance





	 	
      c.
	
      No
      Abatement





	 	
      d.
	
      Tenant's
      Obligation to Report Defects





	 	
      e.
	
      Limitation
      on Landlord's Liability





	 	
      f.
	
      Tenant’s
      Self-Help Rights




Section
9: Tenant’s
Acceptance and Maintenance of Premises


	 	
      a.
	
      Acceptance
      of Premises





	 	
      b.
	
      Tenant’s
      Maintenance





	 	
      c.
	
      Alterations
      to Premises





	 	
      d.
	
      Restoration
      of Premises





	 	
      e.
	
      Landlord's
      Performance of Tenant's Obligations





	 	
      f.
	
      Construction
      Liens




Section
10: Property
of Tenant


	 	
      a.
	
      Property
      Taxes





	 	
      b.
	
      Removal




Section
11: Signs

Section
12: Access
to Premises


	 	
      a.
	
      Tenant's
      Access





	 	
      b.
	
      Landlord's
      Access





	 	
      c.
	
      Emergency
      Access




Section
13: Tenant’s
Compliance


	 	
      a.
	
      Laws





	 	
      b.
	
      Rules
      and Regulations




Section
14: ADA
Compliance


	 	
      a.
	
      Tenant's
      Compliance





	 	
      b.
	
      Landlord's
      Compliance





	 	
      c.
	
      ADA
      Notices




Section
15: Insurance
Requirements


	 	
      a.
	
      Tenant's
      Liability Insurance





	 	
      b.
	
      Tenant's
      Property Insurance





	 	
      c.
	
      Certificates
      of Insurance





	 	
      d.
	
      Insurance
      Policy Requirements





	 	
      e.
	
      Landlord's
      Property Insurance





	 	
      f.
	
      Landlord’s
      Liability Insurance





	 	
      g.
	
      Mutual
      Waiver of Subrogation




Section
16: Indemnity

a. Tenant’s
Indemnity

b.Defense
Obligation

c.Landlord’s
Indemnity

d.Defense
Obligation

Section
17: Quiet
Enjoyment

Section
18: Subordination;
Attornment; Non-Disturbance; and Estoppel Certificate

a. Subordination
and Attornment

b. Non-Disturbance

c. Estoppel
Certificates

Section
19: Assignment
- Sublease

a. Landlord
Consent

b. Definition
of Assignment

c. Permitted
Assignments/Subleases

d. Notice
to Landlord

e. Prohibited
Assignments/Subleases

f. Limitation
on Rights of Assignee/Sublessee

g. Tenant
Not Released

h. Landlord's
Right to Collect Sublease Rents Upon Tenant Default

i. Excess
Rents

j. Landlord's
Fees

k. Unauthorized
Assignment or Sublease

Section
20: Damages
to Premises

a. Landlord's
Restoration Obligations

b. Termination
of Lease by Landlord

c. Termination
of Lease by Tenant

d. Rent
Abatement

e. Waiver
of Claims

f. Highwoods
II Casualty

Section
21: Eminent
Domain

a. Effect
on Lease

b.Right
to Condemnation Award

c.Highwoods
II Taking

Section
22: Environmental
Compliance

a. Environmental
Laws

b. Tenant's
Responsibility

c. Tenant's
Liability

d. Limitation
on Tenant's Liability

e. Inspections
by Landlord

f. Landlord's
Liability

g. Property

h. Tenant's
Liability after Termination of Lease

Section
23: Default

a. Tenant's
Default

b. Landlord's
Remedies

c. Attorneys
Fees/Costs

d. Remedies
Cumulative

e. No
Accord and Satisfaction

f. No
Reinstatement

g. Unlawful
Detainer

Section
24: Landlord
Default

Section
25: Bankruptcy

a. Trustee's
Rights

b. Adequate
Assurance

c.Assumption
of Lease Obligations

Section
26: Notices


	 	
      a.
	
      Addresses





	 	
      b.
	
      Form;
      Delivery; Receipt





	 	
      c.
	
      Address
      Changes





	 	
      d.
	
      Notice
      by Legal Counsel





	 	
      e.
	
      Notice
      During Construction Period





	 	
      f.
	
      Rent
      Payment Address




Section
27: Holding
Over

Section
28: Rooftopp
Licenseight to Relocate


	 	
      a.
	
      Grant





	 	
      b.
	
      Gran
      Non-Exclusive





	 	
      c.
	
      Term





	 	
      d.
	
      Use





	 	
      e.
	
      Termination





	 	
      f.
	
      Rent





	 	
      g.
	
      Equipment





	 	
      h.
	
      Equipment
      Installation





	 	
      i.
	
      Tenant’s
      Covenants





	 	
      j.
	
      Utility
      Service





	 	
      k.
	
      Acces





	 	
      l.
	
      Relocation





	 	
      m.
	
      Removal





	 	
      n.
	
      Assignment
      - Sublicense




Section
29: Broker’s
Commissions


	 	
      a.
	
      Broker





	 	
      b.
	
      Landlord's
      Obligation





	 	
      c.
	
      Indemnity




Section
30: Miscellaneous


	 	
      a.
	
      No
      Agency





	 	
      b.
	
      Force
      Majeure





	 	
      c.
	
      Limitation
      on Damages





	 	
      d.
	
      Satisfaction
      of Judgments Against Landlord





	 	
      e.
	
      Interest





	 	
      f.
	
      Legal
      Costs





	 	
      g.
	
      Sale
      of Premises or Building





	 	
      h.
	
      Time
      of the Essence





	 	
      i.
	
      Transfer
      of Security Deposit





	 	
      j.
	
      Tender
      of Premises





	 	
      k.
	
      Tenant’s
      Financial Statements





	 	
      l.
	
      Recordation





	 	
      m.
	
      Partial
      Invalidity





	 	
      n.
	
      Binding
      Effect





	 	
      o.
	
      Entire
      Agreement





	 	
      p.
	
      Good
      Standing





	 	
      q.
	
      Terminology





	 	
      r.
	
      Headings





	 	
      s.
	
      Choice
      of Law





	 	
      t.
	
      Effective
      Date




Section
31: Special
Conditions

Section
32: Addenda
and Exhibits




a. Lease
Addendum Number One- “Additional Rent - Operating Expense

Pass
Throughs” 

b. Exhibit
A - Owens and Minor Land

c. Exhibit
B - Project Plans

d. Exhibit
C-1 - Preliminary Project Outline Specifications

e. Exhibit
C-2 - Base Building vs. Tenant Improvements

f. Exhibit
D - Project Schedule

g. Exhibit
E - Clancy & Theys Tenant Improvement Contract

h. Exhibit
F - High Demand Electrical Equipment

i. Exhibit
G - Intentionally Deleted

j. Exhibit
H - Janitorial Specifications

k. Exhibit
I - Rules and Regulations

l. Exhibit
J - Rooftop Equipment













 

































 

 

 







BUILD-TO-SUIT
LEASE




THIS
BUILD-TO-SUIT LEASE (the
“Lease”) is made as of the tenth day of May, 2004, by and between HIGHWOODS
REALTY LIMITED PARTNERSHIP, a North
Carolina limited partnership (“Landlord”) and SCI
SERVICES, INC., a
Virginia corporation (“Tenant”), and provides as follows:




RECITALS

Tenant
leases space from Landlord in the Highwood II office building located at 4860
Cox Road, Glen Allen, Virginia (“Highwoods II”) pursuant to that certain Amended
and Restated Deed of Lease between Landlord and SCI effective as of November 15,
2001 (the “SCI Lease”). Tenant desires to lease space in a building (the
“Building”) to be constructed by Landlord on land to be acquired by Landlord, as
more particularly show on the survey attached hereto as Exhibit A (the
“Owens and Minor Site”) adjacent to Highwoods II. Upon the terms and conditions
hereinafter set forth, Landlord has agreed to construct such new building and
lease space therein to Tenant on the condition that Tenant enter into this
Lease. 

 

1.
BASIC
DEFINITIONS AND PROVISIONS. The
following basic definitions and provisions apply to this Lease:




1.1 Base
Building. The
items of construction and those improvements required to be furnished or
performed by Landlord, at its expense, in accordance with the Project Plans, the
Project Outline Specifications (as hereinafter defined) and the Base Building
versus Tenant Improvements attached to this Lease as Exhibit
C-2.




1.2 Building. A
four-story office building consisting of approximately 110,000 to 120,000 net
rentable square feet (“NRSF”) to be constructed adjacent to Highwoods II on the
Owens and Minor Site. The Building and Highwoods II will be connected by a
one-story enclosed connector, which shall be a part of the Building. The address
of the Building shall be determined. The NRSF of each floor of the Building
shall be measured by Landlord or its designated agent using the Computer Aided
Drafting and Design (“CADD”) system based on the American National Standard
Method of
Measuring Floor Area in Office Buildings, ANSI Z65.1-1996, published by the
Building Owners and Managers Association International (the “BOMA Standards”)
(as opposed to field surveys) as soon as practicable during the construction of
the Building. Landlord shall notify Tenant in writing of Landlord’s
determination of such measurements and the calculation of NRSF of the Building
and each floor thereof promptly following such measurement, and such
measurements shall be confirmed by Landlord and Tenant pursuant to the
provisions of Section 1.7 hereof.




1.3 Commencement
Date. The date
of Substantial Completion. Except as provided in Section 3 below, Landlord shall
pursue construction of the Project and the Building with due diligence and
continuity so as to cause Substantial Completion of the Project and the Building
to occur on or before July 1, 2005.




1.4 Common
Areas. All
areas, improvements, facilities and equipment from time to time designated by
Landlord for the common use or benefit of the Tenant of the Building and their
officers, partners, directors, employees, licensees, customers, contractors, and
invitees (“Agents”), including, without limitation, entrances and exits,
landscaped areas, exterior lighting, loading areas, pedestrian walkways,
sidewalks, courtyards, concourses, stairs, exterior ramps, exterior utility
lines and facilities, lobbies, elevators and their housing and rooms, common
window areas, common walls, common ceilings, common trash areas, parking areas
and any structured parking facility built to serve the Building.




1.5 Delivery
Date(s). The
date(s) access to portions of the Building is turned over to Tenant for purposes
of installing Tenant’s telecommunications and data wiring and cable
(collectively, “Tenant’s Wiring”), and Tenant’s furniture, fixtures and
equipment not constructed or installed as part of construction of the Tenant
Improvements, as set forth in Section 3(b)(iii) (collectively, “Tenant’s
Property”). Tenant shall have access to the Premises for the purpose of
installing Tenant’s Wiring when the Building is in Communications Ready
Condition. For purposes of this Lease, “Communications Ready Condition” shall
mean that the communications room serving the Building and the Premises,
together with any raised flooring, electrical connections, and the cooling
system serving Tenant’s communications room is complete, the UPS system serving
the Premises is installed and operational (the system may be powered by a
temporary generator). Landlord shall pursue construction of the Building with
due diligence and continuity so as to cause the Building to be in Communications
Ready Condition by May 15, 2005. In addition, Tenant shall have access to
portions of the Premises for the purpose of installing Tenant’s Property when
the Premises or a portion thereof are in Floor Ready Condition. For purposes of
this Lease, “Floor Ready Condition” shall mean that any floor (or any portion
thereof) within the Premises and the Tenant Improvements are sufficiently
complete to allow Tenant to install Tenant’s Property. Landlord shall pursue
construction of the Premises and the Tenant Improvements with due diligence and
continuity so as to cause the entire Premises to be in Floor Ready Condition by
a date sufficient to enable Tenant to install Tenant’s Property in the Premises
by July 1, 2005 (the anticipated date of Substantial Completion). Landlord
understands that Tenant is required to provide its furniture vendor with three
(3) weeks advance notice of the date Tenant desires furniture to be delivered
and installed in the Premises. To that end, during the periodic planning
meetings between Landlord and Tenant, Landlord will provide Tenant with a
schedule of dates that certain floors (or portions thereof) are expected to be
in Floor Ready Condition so that Tenant can coordinate delivery and installation
dates with its vendors in advance. If Landlord achieves Substantial Completion
before July 1, 2005, the target date for causing the Building to be in
Communications Ready Condition will be advanced accordingly from May 15, 2005.





1.6 Land.
The
parcel of land located in the Innsbrook Corporate Park upon which the Project is
to be developed, referred to as the Owens and Minor Site, as shown on
Exhibit
A attached
hereto. 




1.7
 Premises. The
Premises shall consist of all the NRSF in the Building, including the connector
between the Building and Highwoods II, the bathrooms, and the maintenance,
communications and utility rooms and closets in the Building. Within five (5)
business days following the Commencement Date, Landlord and Tenant agree to
execute an amendment to this Lease accomplishing the following: 




(a) Confirming
the size, location and configuration of the Premises and the Building, and
attaching, in lieu of the Preliminary Plans, final floor plans of each of the
floors in the Building containing the Premises; and




(b) Confirming
the number of square feet of NRSF within the Premises and the Building. All
measurements shall be made using the CADD system based on the BOMA Standards (as
opposed to field surveys); provided, however, that either party shall have the
right, within 30 days following the delivery of written notice of such
measurement to Tenant, to request field surveys by the Project Architect (the
cost of which shall be paid solely by the requesting party), and, if such field
surveys reveal that the total NSRF of the Premises or the Building, as
determined based upon Landlord’s CADD measurements and BOMA Standards
requirements was incorrect by more than 1/2 of 1% then the NSRF of the Premises
or the Building, as the case may be, shall be corrected to be based upon the
measurements determined by the Project Architect; provided, however, that within
thirty (30) days following the delivery to Tenant of written notice of the
Project Architect’s measurements, Tenant, at its sole cost and expense, may
elect to have Tenant’s architect determine such measurements (“Tenant’s
Architect”). If one of the parties elected to have the Project Architect perform
field surveys and the NRSF of the Premises or the Building, as determined based
upon Tenant’s Architect’s measurements differs at all from the total NRSF of the
Premises or the Building based upon the Project Architect’s measurements, then
the final determination of the NRSF of the Premises and the Building shall be
made based on the measurements chosen by an independent architect jointly
selected by Landlord and Tenant, provided that such independent architect shall
be limited to choosing either (i) the Project Architect’s measurements or
Landlord’s CADD measurements, as the case may be, or (ii) the measurements of
Tenant’s Architect, whichever measurements such independent architect shall
believe to be more nearly correct. The fees and expenses of the independent
architect shall be shared equally by Landlord and Tenant. Until such time as the
NRSF is determined and an amendment executed, Tenant shall pay all amounts
payable hereunder, including but not limited to Base Rent in accordance with the
terms hereof. The foregoing calculations shall in all events be subject to field
measurements after completion of the Building and any adjustment in such
calculations shall be made at that time. 




1.8 Project. The
Land, the Building, the Premises, the Building parking facilities, landscaping,
all improvements and all replacements and additions to the Building or the
parking area, now or hereafter standing upon or constructed on or under the
Land, and in general conformity with the Project Plans and the Project Outline
Specifications for the Project.




1.9 Project
Architect. CMSS
Architects, Virginia Beach, Virginia, which is the architectural firm selected
and employed by the Landlord for architectural and engineering services for the
Base Building.




1.10 Project
Plans and Project Outline Specifications. The
“Project Plans” shall mean the final working drawings and plans for the
construction of the Project approved by Landlord and Tenant which shall be
consistent with the preliminary plans and elevation drawings (the “Preliminary
Plans”) shown on Exhibit
B attached
hereto. The “Project Outline Specifications” shall mean the final working
specifications for the Project approved by Landlord and Tenant which shall be
consistent with the preliminary specifications for the Project as generally
described in Exhibit
C attached
hereto (the “Preliminary Specifications”).





	 	
      1.11
	
      Project
      Schedule.
      The schedule of dates described in Exhibit
      D attached
      hereto.







1.12 Rent
Commencement Date.  One month
after the Commencement Date. Provided the Commencement Date occurs on July 1,
2005, the Rent Commencement Date shall occur on August 1, 2005.




1.13 Space
Plans. The
drawings for the interior use by Tenant of the Premise, as the same may be
modified or revised, prepared by the Project Architect or another reputable
architectural or design firm mutually agreeable to Landlord and Tenant (the
“Space Planner”). The improvements contemplated by the Space Plans shall be
collectively referred to as the “Tenant Improvements.”




1.14 Substantial
Completion or Substantially Complete. The date
when the Project is complete, including, but not limited to, completion of the
HVAC systems, plumbing and Common Areas, the Tenant Improvements contemplated by
the approved Space Plans, the connector between the Building and Highwoods II,
and landscaping, paving and other site work on the Land, so that (i) the Project
Architect has issued a certificate of substantial completion for the Project,
(ii) the County of Henrico has issued a temporary or conditional certificate of
occupancy for the Building and the Premises sufficient to permit Tenant’s
occupancy of the entire Premises for the purposes specified in this Lease, (iii)
the parking area is complete and useable, and (iv) the only work remaining to be
performed by the Landlord consists of Punch-List items (as hereinafter
defined). Tenant
agrees that any actual delay in Landlord’s completion of the Building or the
Tenant Improvements caused by Tenant or Tenant’s contractor(s) (a “Tenant
Delay”) (including, without limitation, delays resulting from Tenant’s
installation of Tenant’s Wiring and Tenant’s Property after the Delivery Date(s)
to the extent that such interference does, in fact, cause a material delay,
Tenant requested change orders approved by Landlord, and Tenant delays in
meeting the deadlines set forth in the Project Schedule, which delay actually
results in a delay in the issuance of a certificate of occupancy for the
Premises, shall not delay the occurrence of Substantial Completion beyond the
date when all other conditions to Substantial Completion have occurred, or would
have occurred but for the Tenant Delay. Landlord and General Contractor will
alert Tenant at regular weekly construction progress meetings of Tenant Delays
or actions that have caused or might cause delay in Landlord’s meeting the
Commencement Date of July 1, 2005, and Landlord agrees to give Tenant timely
notice (but in all events within ten (10) days) of any event or circumstance of
which Landlord is aware that constitutes a Tenant delay in installing Tenant’s
Property. Landlord and Tenant shall cooperate to obtain the necessary bids and
pricing for the construction of the Tenant Improvements and to determine the
availability of materials that could cause a Tenant Delay in Substantial
Completion beyond July 1, 2005. For those items identified by Landlord as a
Tenant Delay, Tenant shall, within five (5) days after such determination,
notify Landlord that it will either (i) accept such items as Tenant Delay items
or (ii) substitute materials that would eliminate such delay. 

 




	 	
      2.
	
      LEASED
      PREMISES.







a.
Lease
of the Premises. In
consideration of the agreements contained herein, Landlord hereby leases the
Premise to Tenant and Tenant leases the Premises from Landlord, for the Term and
upon the terms and conditions set forth in this Lease. Tenant shall have the
non-exclusive right, together with other tenants of the Building and their
Agents, to use the Common Areas as an appurtenance to the Premises. The Premises
are leased subject to all present covenants, conditions and restrictions of
record which affect the Building, including without limitation those certain
limitations contained in the Innsbrook Protective Covenants, dated as of
September 25, 1981, recorded in the Clerk’s Office, Circuit Court of Henrico
County, Virginia, in Deed Book 1891, page 1106, as amended (the “Innsbrook
Protective Covenants”). During the Term, Landlord and Tenant will endeavor in
good faith and will use reasonable efforts to comply with the Innsbrook
Protective Covenants. 

 

b.
Rentable
Square Foot Determination. The NRSF
of the Premises as set forth in Section 1.7 shall be conclusive for all purposes
with respect to this Lease. 




c.
Common
Areas. Tenant
shall have non-exclusive access to the Common Areas of the Building. Landlord
has the exclusive right to (i) designate the Common Areas, (ii) change the
designation of any Common Area and otherwise modify the Common Areas, and (iii)
permit special use of the Common Areas, including temporary exclusive use for
special occasions, provided that, any such
change by Landlord in or to the Common Areas shall not deprive Tenant of access
to the Premises, unreasonably interfere with the use of the Premises, or reduce
the NRSF of the Premises or the number of parking spaces provided to Tenant
under this Lease. Tenant
shall not interfere with the rights of others to use the Common Areas. All use
of the Common Areas shall be subject to reasonable rules and regulations
promulgated by Landlord (the “Rules and Regulations”). 





	 	
      3.
	
      CONSTRUCTION;
      SPACE PLAN.







a.
Construction
of the Project. Landlord
shall at its expense construct the Project in a good and workmanlike manner and
in accordance with all applicable federal, state and local laws, codes and
ordinances, and in compliance with all private restrictions applicable to the
Land, including the Innsbrook Covenants, and substantially in accordance with
the Project Plans, the Project Outline Specifications, the Space Plans and the
Project Schedule. The general contractor shall be Clancy & Theys
Construction Company (the “General Contractor”). The Project will be designed
and constructed as a Class A suburban office building comparable to other Class
A office buildings in the Innsbrook Corporate Center, Glen Allen, Virginia.
Landlord acknowledges that Tenant has made its decision to enter into this Lease
based partly on Tenant’s understanding of the present Preliminary Plans and the
Preliminary Specifications for the design and construction of the Project.
Landlord hereby represents and agrees that prior to the Commencement Date, it
will not change the final Project Plans and the Project Outline Specifications
for the Project or any of the Common Areas without first obtaining Tenant’s
consent, if such change in the Project Plans and the Project Outline
Specifications would alter (i) the configuration of the Building, (ii) the
Common Areas of the Building, (iii) ingress or egress to the Project, the
Building or the Premises, (iv) the configuration of the floors in the Building
on which the Premises are located, or (v) the quality and quantity of the
Building materials and systems or the design of the Building or to any of the
Common Areas as shown on the Project Plans and the Project Outline
Specifications for the Building. Notwithstanding the foregoing sentence,
Landlord shall be permitted to make minor changes in the Project Plans and the
Project Outline Specification, including adjustments to provide for value
engineering or design, without
obtaining Tenant’s consent. If Tenant’s consent is required for any change,
Landlord
shall submit changes in the Project Plans and the Project Outline Specification
to Tenant
for its approval, however, Tenant’s approval shall not to be unreasonably
withheld or delayed. If Tenant does not advise Landlord in writing of its
disapproval of the changes, and a detailed explanation of the reasons therefor,
within ten (10) days after Tenant’s receipt of the details of the proposed
changes, the same shall be deemed approved by Tenant in all respects. If, after
completion of the approved Space Plans, Tenant approves Landlord’s changes to
the Project
Plans and the Project Outline Specifications requiring Tenant approval,
Landlord
and Tenant agree to cooperate with each other to make such modifications to the
Space Plans, at Landlord’s expense, as may be necessitated by such changes, so
long as such modifications do not adversely affect Tenant’s ability to implement
the Space Plans or delay Substantial Completion of the Project or alter the
overall design of the Project. The
Project Schedule shall be modified as appropriate as a result of such
modifications to permit Landlord reasonable additional time to complete
construction of the Building.

 

b.
Completion
Dates; Delayed
Completion. (i)
Landlord shall pursue construction of the Project and the Building with due
diligence and continuity so as to cause Substantial Completion of the Project
and the Building to occur by July 1, 2005. Tenant's
taking of total or partial occupancy of the Building after the Delivery Date(s)
shall not relieve Landlord of its obligation to proceed diligently to complete
any Tenant Improvements by July 1, 2005, or to correct any patent or latent
defects associated with the Building including all punch-list
items.




(ii) An
as-built set of plans for the Base Building provided by the General Contractor
shall be furnished to Tenant upon completion of the Base Building. 



(iii) To
assure achieving Substantial Completion of July 1, 2005, Landlord agrees to
accommodate Tenant’s need to have access to portions of the Premises during
construction of the Base Building for the purpose of installing Tenant’s
Property and Tenant’s Wiring. Tenant, Landlord and representatives of Landlord’s
General Contractor will coordinate such access by Tenant and Tenant’s vendors
and contractors. Tenant agrees that the work of Tenant and Tenant’s vendors and
contractors will be conducted in such a way so as to minimize disruption of
construction of the Project, and will be subject to such rules and requirements
as Landlord’s general contractor may reasonably impose. Tenant and Landlord
understand that access will be coordinated at different times for different work
by Tenant, and will be permitted as circumstances permit, in the reasonable
discretion of Landlord’s general contractor.




(iv) On
the Commencement Date, Landlord and Tenant shall inspect the Premise and prepare
a list of all items reasonably necessary to be completed in the Premise which,
in the aggregate, are minor in character and do not materially interfere with
Tenant’s beneficial use and occupancy of the Premises and the Common Areas, (the
“Punch-List”), which Punch-List shall be initialed by a representative of both
Landlord and Tenant. Landlord shall endeavor to complete all Punch-List items
prior to the Rent Commencement Date. If Landlord has failed to complete any
items on the Punch-List within sixty (60) days after the Commencement Date,
Tenant shall notify Landlord thereof in writing and if Landlord does not
complete such punch-list items within thirty (30) days after receipt of such
notice, Tenant shall have the right to complete such item or items and Landlord
shall reimburse Tenant for the reasonable cost thereof within ten (10) days
after receipt of Tenant’s statement, and if Landlord fails to make such
reimbursement within ten (10) days after demand therefor, Tenant may deduct such
costs and expenses, together with interest thereon, from any Rent thereafter
accruing hereunder; provided, however, if Landlord in good faith disputes
Tenant’s right to offset the amount claimed, Tenant shall have the right, until
such dispute is resolved, to offset only the amount that is not in
dispute.




(v)
Landlord agrees that Tenant and Tenant’s Agents shall have the right, but not
the obligation, to inspect periodically the work being performed on the Project.
Such Tenant inspections will require advance notice to Landlord. Moreover, such
Tenant inspections shall not relieve Landlord of its obligation to timely
construct the Project in strict accordance with the approved Project Plans and
the Project Outline Specifications. If Tenant’s inspections reveal deficiencies
in the quality of workmanship or noncompliance with the approved Project Plans
and the Project Outline Specifications or the integrity of improvements,
Landlord shall remedy such deficiencies at its cost without delay to the Project
Schedule. Tenant agrees that neither Tenant nor its Agents will interfere with
the contractors, subcontractors or Agents of Landlord, and Tenant agrees to
indemnify and hold Landlord harmless from any liability, damage, loss or costs
incurred or suffered by Landlord as a result of Tenant’s actions on the Premises
during construction of the Project. 




(vi)
During construction of the Project, Landlord will prepare and send to Tenant the
following three (3) reports (until Substantial Completion of the Project); (a) a
monthly report listing all general categories of activity on the Project and
detailing all progress, delays, or other occurrences of significance regarding
the Project, (b) a monthly, updated CPM schedule that details (i) all past,
present and future construction activities and projects, including, without
limitation, outstanding change orders whether approved or not, and notice of any
actual or potential Tenant Delay, and (ii) all delays to critical items and
Landlord's plan (to be enacted at Landlord’s cost) to regain the Project
Schedule; and (c) a monthly report with a detailed summary and status report of
the Project’s progress in all general categories of activity. Finally, Landlord
will prepare an updated Project Schedule on a monthly basis as indicated above.
Landlord agrees to require the General Contractor to notify Landlord of any
potential delay or problem involving Tenant of which the General Contractor is
aware that may give rise to a Tenant Delay and Landlord shall promptly bring
such matter or matters to Tenant’s attention. 




(vii)
Landlord and Tenant respectively agree to use good faith efforts to meet the
date of Substantial Completion of the Project scheduled herein and otherwise to
abide by the Project Schedule. 




(viii) Landlord
will provide an allowance (the “Allowance”) of $18.00 per NRSF. Tenant shall use
the Allowance to pay the costs of (i) the Tenant Improvements beyond the Base
Building, (ii) preparing Tenant’s construction documents for the Tenant
Improvements, (iii) installation of Tenant’s communications and telephone
equipment, (iv) installation of Tenant’s Property; and (vi) interior space
planning design and decorating services. Any unused portion of the Allowance may
be used to pay for moving expense, relocation expense, and future refurbishment
of the Building or the Tenant’s leased premises in Highwoods II. If the budget
approved by Tenant to complete the Tenant Improvements exceeds the Allowance,
Tenant will deposit with Landlord one-half the amount of the excess cost at the
time of approval of the construction drawings to implement the Space Plans, and
will pay the balance promptly upon Substantial Completion. The General
Contractor will be the contractor for construction of the Tenant Improvements.
The Allowance shall be applied to all bills and costs submitted for construction
of the Tenant Improvements. Landlord shall disburse all payments due in
connection with the Tenant Improvements directly to the General Contractor and
to any other appropriate parties as and when due. Landlord shall cause all
invoices or statements for labor, materials, fixtures, stored material and
equipment constituting the Tenant Improvements to be paid in full when due, and
shall cause the Tenant Improvements to be completed free of mechanics’ and
materialmens’ liens and claims. A copy of the contract with the General
Contractor for the Tenant Improvements is attached hereto as Exhibit
E. The
General Contractor will solicit competitive bids for all major trades of work
except MEP subcontractors working on the Base Building, which will be
competitively bid for both the Base Building and the Tenant Improvements.
Landlord and Tenant will agree in advance on the contractor’s fee to be paid the
General Contractor for the Tenant Improvement construction
services.




(ix)
Landlord shall use environmentally friendly and sensitive materials in the
construction of the Building, provided such materials are of equal or greater
quality, durability, reliability and availability as those customarily used by
Landlord in construction of similar Class A office buildings in the Innsbrook
Office Park, and of no greater cost to Landlord. Throughout the Term, Landlord
will maintain an indoor air quality monitoring program to insure that the
Building is in compliance with ASHRAE Standard 62-1989. Tenant and Landlord will
work together to identify and incorporate into the design and construction of
the Building and Premises economical methods and systems mutually agreeable to
Landlord and Tenant and consistent with the Base Building HVAC system to further
Tenant’s desire to achieve in the Premises Leadership in Energy and
Environmental Design (“LEED”) air quality standards. Landlord and Tenant will
work with the Project Architect to identify mutually agreeable LEED items.





(x)
Landlord will provide Tenant a refurbishment allowance of $5.50 per NRSF after
the sixth anniversary of the Commencement Date. The refurbishment work will be
performed by Landlord.




(xi) In
connection with this Lease, Landlord and Tenant acknowledge and agree that once
the entire Premises are Substantially Complete and all of Tenant’s Property is
installed, Tenant will need three (3) weekends to relocate its business to the
Premises from its existing space located at 4860 Cox Road, Richmond, Virginia
(the “Liberty Space”) leased from Liberty Property Limited Partnership
(“Liberty”). The parties further acknowledge that due to the nature of Tenant’s
mortgage business, Tenant will be unable to relocate any portion of its business
to the Premises during the last weekend of any month, and therefore, the
relocation may not occur over three (3) consecutive weekends. Therefore, if the
Commencement Date occurs after July 8, 2005, Tenant may be required to remain in
possession in the Liberty Space for an additional period of time in order to
accomplish its relocation. Therefore, if the Commencement Date occurs after July
8, 2005, for any reason other than Tenant Delays and Tenant is required to
remain in possession of the Liberty Space in order to accomplish its relocation
to the Premises, then in such event Landlord shall pay or credit to Tenant as
liquidated damages the amount of rent (i.e. base rent and additional rent)
Tenant actually pays to Liberty, for the period during which Tenant also pays
rent to Landlord under this Lease. Landlord understands that the Liberty Lease
will expire on July 31, 2005, and that Liberty has the right to charge Tenant
with a monthly rental of 125% (for the first two months) and 150% (thereafter)
of the monthly rent applicable to the last month of the Liberty Lease term
(estimated to be $ 99,482.29 per month). Landlord’s obligations under this
subsection are expressly limited as follows: (a) If the Commencement Date occurs
on any date in a month such that four weekends of the month remain after the
Commencement Date, Landlord will not be responsible to pay or credit Tenant any
amount attributable to Tenant’s rent obligations for the Liberty Space beyond
the month in which the Commencement Date occurs; and (b) If the Commencement
Date occurs on a date during a month such that fewer than four weekends of the
month remain after the Commencement Date, Landlord will not be responsible to
pay or credit Tenant any amount attributable to Tenant’s rent obligations for
the Liberty Space beyond the month following the month in which the Commencement
Date occurs. If Tenant agrees to hold over in the Liberty Space on a basis
longer than a month-to-month basis, Landlord’s obligations under this subsection
shall be calculated as if Tenant had held over on a month-to-month basis.
Landlord hereby irrevocably waives any right to contest the amount or
reasonableness of such liquidated damages payments, and Tenant agrees that the
foregoing sums represent the agreed upon liquidated damages for Tenant. Tenant
may deduct liquidated damages as described herein from any unpaid amounts then
or thereafter due Landlord under this Lease. Any liquidated damages not so
deducted from any unpaid amounts due Landlord shall be payable to the Tenant at
the demand of Tenant. 




c.
Condition
Precedent. This
Lease and the obligations of Landlord and Tenant hereunder shall be contingent
upon Landlord obtaining POD Approval (as hereinafter defined) for construction
of the Project. If POD Approval is not obtained by June 23, 2004, either Tenant
or Landlord may terminate this Lease by written notice to the other whereupon
this Lease shall be deemed terminated and neither party shall have any liability
to the other beyond those for which Tenant has agreed to indemnify Landlord
pursuant to separate agreement. For the purpose of this Lease, “POD Approval”,
shall be defined as approval by the Henrico County Planning Commission (the
“Planning Commission”) of Landlord’s POD application pursuant to the Project
Plans, provided such POD Approval shall not be subject to further
reconsideration or legal challenge or appeal under applicable law. Landlord
shall timely apply for POD Approval and shall diligently pursue the same in good
faith and with continuity and due diligence. If, during the review process, the
planning staff or Planning Commission requires revisions to the Project Plans,
any subsequent changes shall be subject to the approval of Tenant (which
approval shall not be unreasonably withheld) prior to final action by the
Planning Commission on the POD application. Landlord shall cause the Project
Plans to be prepared in accordance with all laws,
ordinances, regulations, codes, directives, permits, licenses, covenants and
restrictions now or hereafter applicable to the Land, including without
limitation, all applicable zoning ordinances. Landlord
shall bear all costs incurred in the preparation of such Preliminary Plans and
the final Project Plans and all filing and permit fees incurred by Landlord in
connection with pursing POD Approval. 




4.
TERM




a.
Initial
Term. The
initial term of this Lease (the "Term") shall be twelve (12) years, and shall
commence on the Commencement Date and shall expire at midnight on the day
preceding the twelfth anniversary of the Rent Commencement Date (the “Expiration
Date”). Landlord and Tenant agree to complete, execute and deliver in recordable
form a memorandum setting forth the Commencement Date. If Landlord shall permit
Tenant to take possession of any portion of the Premises prior to the
Commencement Date, all the terms and conditions of this Lease shall apply (other
than the requirement to pay Rent). 




b.
Option
to Renew. Tenant
shall have the right and option to renew the Lease (the "Renewal Option") for
two additional periods of five years each (the “Renewal Lease Terms”) (a
separate notice is required for each Renewal Lease Term); provided, however,
such Renewal Option is contingent upon the following (i) Tenant is not in
default (beyond the expiration of any applicable notice and cure period) at the
time Tenant gives Landlord notice of Tenant’s intention to exercise the Renewal
Option; (ii) upon the Expiration Date or the expiration of any Renewal Lease
Term, Tenant has no outstanding default; and (iii) no event has occurred that
upon notice or the passage of time would constitute a default. Following the
expiration of the second Renewal Term, Tenant shall have no further right to
renew the Lease pursuant to this provision.




(i) Exercise
of Option. Tenant
shall exercise each Renewal Option by giving Landlord notice at least 180 days
prior to the Expiration Date or the last day of any Renewal Lease Term. If
Tenant fails to give such notice to Landlord prior to said 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. Time is of the essence in exercising the Renewal Option.




(ii) 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”.




(iii) Base
Rent for Renewal Lease Term. The
Minimum Base Rent for the Renewal Lease Term shall be the Fair Market Rental
Rate, Terms and Conditions, determined as follows:




(A)
Definition. The
term "Fair
Market Rental Rate, Terms and Conditions" shall
mean the market rental rate, terms and conditions for the time period such
determination is being made for office space in class “A” office buildings in
the Innsbrook Office Park (the “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 of 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. The Fair Market Rental Rate,
Terms and Conditions shall also include a determination of the annual percentage
increase (if any) of the rental rate payable during the Renewal Lease
Term.




(B)
Determination.
Landlord shall deliver to Tenant notice of the Fair Market Rental Rate, Terms
and Conditions (the "FMRTC 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, Terms and
Conditions. If Tenant disagrees with Landlord's assessment of the Fair Market
Rental Rate, Terms and Conditions specified in a FMRTC 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, Terms and Conditions. If Tenant timely delivers to Landlord
notice that Tenant disagrees with Landlord's assessment of the Fair Market
Rental Rate, Terms and Conditions, then Landlord and Tenant shall meet to
attempt to determine the Fair Market Rental Rate, Terms and Conditions. If
Tenant and Landlord are unable to agree on such Fair Market Rental Rate, Terms
and Conditions 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 an MAI
designation and with at least ten (10) 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 notice thereof to the other, may apply to the then presiding Clerk of
the Circuit Court of Henrico County, Virginia 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, Terms and Conditions. If a majority of
the appraisers is unable to agree upon the Fair Market Rental Rate, Terms and
Conditions by such time, then the two (2) closest appraisals shall be averaged
and the average will be the Fair Market Rental Rate, Terms and Conditions.
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.




(C)
Administration. If
Tenant has exercised the Renewal Option and the Fair Market Rental Rate, Terms
and Conditions for the Renewal Lease Term has not been determined in accordance
with this Section 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, Terms and Conditions
proposed by Landlord pursuant to this Section until such time as the Fair Market
Rental Rate, Terms and Conditions 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, Terms and
Conditions (as finally determined pursuant to this Section) for the Renewal
Lease Term during the interval in question.




c.
Landlord
Assignment Rights. For
financial and tax-planning purposes, Landlord shall have the right to transfer
its rights under this Lease, prior to the Commencement Date, into a special
purpose entity controlled by or under joint control with Highwoods Properties,
Inc., or Highwoods Realty Limited Partnership. Landlord shall give Tenant
written notice thereof, and such assignment will be automatically effective upon
the giving of such notice provided the successor entity expressly assumed the
obligations of Landlord under this Lease as to matters arising after the date of
the assignment. The parties agree to modify this Lease to provide for the change
in ownership of the Project and the Building. No such transfer or assignment to
a special purpose entity shall release the initial Landlord from its liabilities
and obligations under this Lease




 




5. USE. 




a. Permitted
Use. The
Premises may be used only for general office, administrative and call center
purposes and in accordance with an occupancy limitation of no more than six (6)
persons per 1,000 NRSF. Tenant acknowledges that the Base Building is designed
on the basis of an occupancy limitation of no more than five (5) persons per
1,000 NRSF, and while some building systems will accommodate Tenant’s desired
occupancy limitations, certain others may not. Any upgrades in the Building
design and systems required by Tenant’s desired occupancy of up to six (6)
persons per 1,000 NRSF shall be paid for by Tenant as an overage on the
Allowance. During the determination of the Tenant Improvement budget and
completion of the plans and specifications for the Tenant Improvements, Landlord
and Tenant shall determine and agree upon the additional charge to Tenant for
such upgrades. Tenant may not use the Premises for any other purpose without
first obtaining Landlord’s prior written consent.




b. Prohibited
Uses. Landlord
and Tenant will not do or permit anything to be done which either knows
will:




i. Be in
violation of any restrictive covenants which apply to the Premises;




ii. Constitutes
a nuisance or trespass; 




iii. Subject
to the provisions of Section 15 hereof (Insurance), increase any insurance
premiums, or makes such insurance unavailable to Landlord on the Building or
Tenant on the Tenant’s Property. Tenant shall also, within ten (10) days
following notice from Landlord, discontinue any activity specified by such
notice which has caused or will cause the rate of fire or other insurance on the
Building to increase (unless Tenant, within ten (10) days of notice of such
increase, pays the cost of any such increase to Landlord and, thereafter, pays
all said increases attributable to such activity within ten (10) days of
Landlord’s demand;




iv. In any
manner that creates unusual demands for electricity, heating or air conditioning
beyond the needs anticipated and incorporated in the systems of the Base
Building as reflected in the Project Plans and Project Outline Specifications;
or 




v. For any
purpose except the Permitted Use, unless consented to by Landlord in
writing.




c. Prohibited
Equipment in Premises. Tenant
shall not install any equipment in the Premises that places unusual demands on
the electrical, heating or air conditioning systems (“High Demand Equipment”)
without Landlord’s prior written consent. The parties agree that the equipment
set forth on Exhibit
F shall
constitute High Demand Equipment. No such consent will be given if Landlord
determines, in its opinion, that such equipment may not be safely used in the
Premises or that electrical service is not adequate to support the equipment.
Landlord’s consent may be conditioned, without limitation, upon separate
metering of the High Demand Equipment and Tenant’s payment of all engineering,
equipment, installation, maintenance, removal and restoration costs and utility
charges associated with the High Demand Equipment and the separate meter. If
High Demand Equipment used in the Premises by Tenant 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
with the cost of engineering, installation, operation and maintenance of the
units to be paid by Tenant. All costs and expenses relating to High Demand
Equipment and Landlord’s administrative costs (such as reading meters and
calculating invoices) shall be Additional Rent, payable by Tenant upon
demand.




6. RENT. 




a. Payment
Obligations.
Commencing on the Rent Commencement Date, Tenant shall pay Base Rent and
Additional Rent (collectively, “Rent”) on or before the first day of each
calendar month during the Term, as follows:




i. Rent
payments shall be sent to the Rent Payment Address set forth in Section 26.f.,
or such other address as to which Landlord gives Tenant notice.



ii. Rent
shall be paid without previous demand or notice and without set off or
deduction, except as otherwise expressly permitted in this Lease. Tenant's
obligation to pay Rent under this Lease is completely separate and independent
from any of Landlord's obligations under this Lease.




iii. 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 Rent
Commencement Date and the last day of the month in which the Rent Commencement
Date falls, and (ii) due and payable on the Commencement Date.




iv. For each
Base Rent payment Landlord receives after the fifth (5th) day of the month,
Landlord shall be entitled to all default remedies provided under the terms
of this Lease, and a late charge in the amount of four percent (4%) of all Base
Rent due for such month. 




v. 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 default remedies
provided under the terms of this Lease and the maximum lawful bad check fee or
five percent (5%) of the amount of such check, whichever amount is
less.




b.
Base
Rent. The
minimum base rent (“Base Rent”) for the Term is $19.75 per NRSF payable in
monthly installments on the first day of each month. For purposes of this Lease,
“Net Rent”, which shall be the difference between (i) the Base Rent and (ii) the
Operating Expenses for the Base Year, shall increase by two percent (2%) per
annum. The “Base Year” shall be the twelve-month period beginning on the Rent
Commencement Date. Promptly after the completion of the Base Year, Landlord and
Tenant shall execute an amendment to this Lease establishing a monthly rent
schedule incorporating the Net Rent escalations described above.




c.
Additional
Rent.
In
addition to Base Rent, Tenant shall pay as rent all sums and charges due and
payable by Tenant under this Lease (“Additional Rent”), including, but not
limited to, the following:




vi. Tenant's
Proportionate Share of the increase in Landlord's Operating Expenses over the
Base Year Operating Expenses as set forth in Lease
Addendum Number One;




vii. Any 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; and




viii. Any
construction fee in connection with the construction of alterations to the
Premises requested by Tenant after the Commencement Date and completion of the
Tenant Improvements.




If any
sales or use tax, or any tax on rents in lieu of ad valorem taxes on the
Building, are imposed upon rents collected by Landlord under this Lease, and
Landlord is prohibited by applicable law from collecting the amount of such tax
from Tenant as Additional Rent, then Landlord shall notify Tenant in writing
that such taxes shall be collected by Landlord as Additional Rent. If Tenant
refuses to pay such taxes as Additional Rent under this Lease, then Landlord may
terminate this Lease upon ninety (90) days prior written notice to the other
party.




7. SECURITY
DEPOSIT. 




a. Security
Deposit. On or
before the Commencement Date, Tenant shall deposit with Landlord one month’s
rent in the amount of $197,500.00 (the “Security Deposit”). Landlord shall place
the Security Deposit in a United States Government securities fund of Landlord’s
choosing. Landlord shall not commingle the Security Deposit with other funds of
Landlord. All fees, costs and expenses of the fund will be deducted from the
interest earned on the Security Deposit or from the Security Deposit, if
necessary. The Security Deposit shall be returned to Tenant, with interest, and
less any authorized deductions within thirty (30) days after the day set for the
expiration of the Lease Term, or any extension or renewal thereof, provided
Tenant has fully and faithfully observed and performed all of the terms,
covenants, agreements, warranties and conditions hereof on its part to be
observed and performed. Landlord shall have the right, at any time, to apply all
or any part of said Security Deposit toward the cure of any default of Tenant
(beyond any applicable notice and cure period), the repair of any damage to the
Premises or otherwise caused by Tenant, or the amount of any Rent owing after
the expiration or sooner termination of this Lease. If all or any part of said
Security Deposit is so applied by Landlord during the Term, then Tenant shall
immediately pay to Landlord an amount sufficient to return said Security Deposit
to the balance on deposit with Landlord prior to said application.




b. Letter
of Credit. Tenant,
at any time during the Term, may deposit with Landlord in lieu of the Security
Deposit an irrevocable letter of credit issued by a commercial bank reasonably
acceptable to Landlord (referred to as the “Bank”) in favor of Landlord, in the
amount of the Security Deposit. Landlord shall have all of the same rights with
respect to the Letter of Credit as Landlord has hereunder with respect to the
Security Deposit. Upon Landlord’s receipt of the Letter of Credit, Landlord
shall return the cash Security Deposit to Tenant, together with interest
thereon, less any deductions authorized under this Lease. Tenant agrees to cause
the Bank to renew the Letter of Credit, in the same form from time to time
during the Term, at least thirty (30) days prior to the expiration of such
Letter of Credit or any renewal thereof, so that a Letter of Credit issued by
the Bank to Landlord shall be in full force and effect throughout the Term. If
Tenant defaults in respect to any of the terms, conditions or provisions of this
Lease (beyond applicable notice and cure periods), Landlord shall have the right
to require the Bank to make payment to Landlord from the Letter of Credit of the
sum necessary to cure Tenant’s default, provided that Landlord shall have given
Tenant ten (10) days’ notice of Landlord’s intent to draw on the Letter of
Credit, and Tenant has not, within such ten (10) day period, deposited in cash
with Landlord the amount of the alleged default. If Tenant shall fully and
faithfully comply with all of the terms, provisions, covenants, and conditions
of this Lease, the Letter of Credit shall be returned to Tenant within thirty
(30) days after the expiration of the Term.




8. SERVICES
BY LANDLORD.





a. Base
Services. Provided
that Tenant is not then in monetary default (beyond applicable notice and cure
periods), Landlord shall cause to be furnished to the Building, or as
applicable, the Premises, in common with other tenants (if any) the following
services:




i. Hot and
cold water (if available from city mains) for drinking, lavatory and toilet
purposes.




ii. Electricity
(if available from the utility supplier) for the building standard fluorescent
lighting and for the operation of general office machines, such as electric
typewriters, desk top computers, dictating equipment, adding machines and
calculators, network servers as required, and general service non-production
type office copy machines, together with other equipment and machines used by
Tenant in the conduct of its business consistent with the uses authorized under
Section 4 of this Lease. Tenant shall provide reasonable access to Landlord, its
contractors and any contractors for an electric service provider in connection
with any change in providers of electric service to the Building. Any reasonable
expenses incurred by Landlord in changing electric service providers shall be
included in the Operating Expenses for the Building. 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.




iii. Landlord
shall provide, at Landlord’s expense, one or more emergency generators adequate
to provide the entire electrical needs of Tenant in the Building and Highwoods
II. The cost of maintenance of such generator will be paid by Tenant, not as a
part of the Operating Expenses, but separately. If Tenant exercises its renewal
option at the end of the initial Lease Term, Landlord agrees, at Landlord’s
expense, to upgrade the generator to incorporate new or better technology and
equipment if necessary, in the reasonable discretion of Landlord, to provide the
service required in this paragraph. 




iv. Operatorless
elevator service.




v. Building
standard fluorescent lighting composed of 2' x 4' fixtures; Tenant shall
service, replace and maintain at its own expense any incandescent fixtures,
table lamps, or lighting other than the building standard fluorescent light, and
any dimmers or lighting controls other than controls for the building standard
fluorescent lighting.




vi. Heating
and air conditioning for the reasonably comfortable use and occupancy of the
Premises during the hours of 8:00 a.m. to 7:00 p.m. Monday through Friday and
8:00 a.m. to 1:00 p.m. Saturday (excluding national and state holidays)
(“Business Hours”); provided that, heating and cooling conforming to any
governmental regulation prescribing limitations thereon shall be deemed to
comply with this service.




vii. After
Business Hours, weekend and holiday heating and air conditioning at the After
Hours HVAC rate of $25.00 per hour, per zone, with a minimum two (2) hour per
occurrence, with such charges subject to commercially reasonable annual
increases as determined by Landlord.




viii. Janitorial
services five (5) days a week (excluding National and State holidays) after
Business Hours, in accordance with the provisions of Exhibit
H attached
hereto.




ix. A
reasonable pro-rata share of the unreserved parking spaces of the Building, not
to exceed 4.5 spaces per 1,000 NRSF for use by Tenant's employees and visitors
in common with the other tenants and their employees and visitors, if any. All
new parking spaces will be in keeping with the standards for similar buildings
in the Innsbrook Corporate Park, with a minimum width of nine feet. Landlord
agrees to make commercially reasonable efforts to increase the parking ratio
available to the Building through its design, location and integration of the
parking facilities serving the Building and the Highwoods II Building.





x. 
Landlord, at its expense, will construct a parking deck in the Project with a
minimum of 100 parking spaces (50 additional structured and 50 existing surface)
if such parking deck is either (i) required by applicable zoning requirements to
satisfy the minimum parking ratio set forth above, or (ii) if not required by
applicable zoning requirements but otherwise requested by Tenant during the
preparation of the Project Plans to be submitted by Landlord as part of the
application for POD Approval. In the case of (i) above, the Base Rent will
increase by $1.00 per NRSF. In the case of (ii) above, the Base Rent shall be
increased by $1.15 per NRSF. Tenant has also requested that Landlord prepare
several options for Tenant parking under the Building. Landlord and Tenant agree
to work together in good faith to achieve mutually agreeable plans, costs and
rental for such parking under the Building.



b. Landlord’s
Maintenance. Landlord
shall maintain, and make all repairs and replacements to, the Building
(including Building fixtures, systems and equipment), Common Areas and Building
Standard Improvements in the Premises, except for repairs and replacements that
Tenant must make under Section 8. Landlord’s maintenance, repairs and
replacements shall include the roof, foundation, exterior walls, interior
structural walls, all structural components, and all Building systems, such as
mechanical, electrical, HVAC, and plumbing, and all utility lines, pipes and
conduits located outside of or inside the Building, and also the sewage system,
gutters, downspouts, utility and water lines serving the Building. Landlord
shall undertake all maintenance, repairs and replacements with due diligence and
due care in a good and workmanlike manner and in compliance with applicable
governmental requirements and in accordance with first class standards of
professional property management at least equivalent to the standards maintained
in similar Class A office buildings in Innsbrook Office Park. In addition to the
foregoing, if Tenant owns any special HVAC units, Landlord agrees to provide
maintenance for such units at Tenant’s expense, at market rates for providing
such service, and such expense shall not be part of the Operating Expenses. In
making such repairs and replacements, Landlord shall use reasonable efforts to
prevent any interference with Tenant's use of the Premises, and shall promptly
restore any damage to any portion of the Premises resulting from any negligent
act or omission of Landlord, its agents, servants, employees or
contractors.




c. No
Abatement. Except
as otherwise provided herein, 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 have the right to shut down the Building systems
(including electricity and HVAC systems) for required maintenance and safety
inspections, and in cases of emergency, provided Landlord gives Tenant
reasonable advance notice of any required shut down, and to the extent
practicable, effects the system shut down during non-Business Hours or otherwise
at such times and in such manner so as to minimize interference with Tenant's
business operations in the Premises. However, if the Premises, or a material
portion of the Premises, is made untenantable for a period in excess of five (5)
consecutive business days as a result of a service failure caused by the
negligence or misconduct of Landlord, its employees, officers, agents or
contractors, then Tenant, as its sole remedy, shall be entitled to receive an
abatement of Rent payable hereunder during the period beginning on the 6th
consecutive business day of the service failure and ending on the day the
service has been restored. If the entire Premises has not been rendered
untenantable by the service failure, the amount of abatement that Tenant is
entitled to receive shall be prorated based upon the percentage of the Premises
rendered untenantable and not used by Tenant. 




d. Tenant’s
Obligation to Report Defects. Tenant
shall report to Landlord immediately any defective condition in or about the
Premises known to Tenant. Tenant will implement procedures reasonably
satisfactory to Landlord to assure the likelihood that such defective conditions
will be reported to Tenant’s supervisory personnel by Tenant’s
employees.




e. Limitation
on Landlord’s Liability. 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,
unless such damage is due to the negligence or willful misconduct of Landlord or
its Agents. Without limiting the foregoing, Landlord shall not be responsible
for providing telephone or other communication services to the Premises. Except
as otherwise provided herein, Landlord shall not be required to provide Tenant
access to any satellite dish. In no event shall Tenant have any responsibility
under this Lease to repair or replace any component or item required as a result
of any negligence of Landlord or its Agents, and Landlord shall remain fully
responsible therefor.




f. Tenant’s
Self-Help Rights.
Notwithstanding anything contained herein to the contrary, if Landlord has not
commenced any repair, replacement or maintenance required to be performed by
Landlord hereunder within ten (10) days after written notice thereof from
Tenant, or if so commenced, is not diligently pursuing same to completion,
Tenant shall have the right, but not the obligation, to make such repairs or
replacements and Landlord shall reimburse Tenant for the reasonable cost thereof
within ten (10) days after receipt of a bill therefor from Tenant, and if
Landlord fails to make such reimbursement within ten (10) days after demand
therefor, Tenant may deduct such costs and expenses, together with interest
thereon, from any Rent thereafter accruing hereunder; provided, however, if
Landlord in good faith disputes Tenant’s right to offset the amount claimed,
Tenant shall have the right, until such dispute is resolved, to offset only the
amount that is not in dispute. In the event of an emergency, Tenant may (but
shall not be obligated to) perform such repairs or replacements which would
otherwise be Landlord's obligation hereunder which may be reasonably necessary,
after having given Landlord notice thereof as may be reasonably practicable
under the circumstances and Landlord’s failure to respond timely to such notice.
Notwithstanding anything to the contrary set forth hereinabove, Tenant shall not
be required to perform any repairs or replacements that would otherwise be
Landlord's obligation hereunder. 




9. TENANT'S
ACCEPTANCE AND MAINTENANCE OF PREMISES.





a. Acceptance
of Premises. Tenant’s
occupancy of the Premises upon Substantial Completion is Tenant’s representation
to Landlord that (i) Tenant has examined and inspected the Premises, (ii) finds
the Premises to be as represented by Landlord and satisfactory for Tenant's
intended use, and (iii) constitutes Tenant's acceptance of the Premises “as is”,
subject, however, to Landlord’s obligation to complete the Punch List items and
to maintain and repair the Building and the Common Areas as set forth in this
Lease. Except as
otherwise expressly provided in this Lease, Landlord makes no representation or
warranty as to the condition of the Premises. Landlord represents and warrants
to Tenant that (i) on the Commencement Date, the Building, the Building systems
and equipment (including, without limitation, the mechanical, heating,
electrical, plumbing and sprinkler systems and equipment) and the Common Areas
either will be in good and proper working order and condition, free from defects
(latent or apparent) and in compliance with the requirements of applicable
governmental authorities; and (ii) Landlord has good title to the Project and
the authority to enter into this Lease.




b. Tenant’s
Maintenance. 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 negligence
or willful misconduct; (iii) repair and replace any special equipment or
decorative treatments, installed by or at Tenant's request that serve the
Premises (unless the Lease is ended because of casualty loss or condemnation);
and (iv) not commit waste. 




c. Alterations
to Premises. Without
Landlord’s prior consent, Tenant shall be entitled to make interior
nonstructural alterations and additions to the Premises which (i) do not
adversely affect the structural components, the roof, or the plumbing, heating,
air conditioning, ventilation, electrical and mechanical systems of the Premises
and the Building (ii) do not materially reduce the overall quality of the
leasehold improvements in the Premises, and (iii) are not visible from the
exterior of the Building or the Building elevator cabs (“Permitted Changes”).
Other than the Permitted Changes, Tenant shall make no alterations in or
additions to the Premises without first obtaining, in writing, Landlord’s
consent for such alterations or additions, which consent shall not be
unreasonably withheld, conditioned or delayed. If Tenant requests such
alterations, then Tenant shall provide Landlord's Property Manager with a
complete set of construction drawings. If Landlord consents to the alterations,
then the Property Manager shall determine the actual cost of the work to be done
(to include a mutually acceptable construction supervision fee to be paid to
Landlord). Tenant may then either agree to pay Landlord to have the work done or
withdraw its request for alterations. 




d. Restoration
of Premises. At the
expiration or earlier termination of this Lease, Tenant shall (i) deliver each
and every part of the Premises in good repair and condition, ordinary wear and
tear and damage by casualty excepted, and (ii) 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 casualty excepted. Tenant shall not be obligated to
remove the Tenant Improvements pursuant to which the Premises were originally
built out or for any subsequent alterations or additions to the Premises unless
agreed by Landlord and Tenant at the time approval for such alterations or
additions was given. All such alterations or additions if affixed to the
Building, shall become a part of the Building and shall become the property of
Landlord at the expiration or termination of the Term, unless and to the extent
that such alterations and additions are Tenant’s fixtures and equipment, which
are removable by Tenant. Notwithstanding the foregoing, if Landlord consents in
writing at the time such alterations or additions are constructed or installed
that Tenant may subsequently remove the alterations or additions, then such
alterations or additions shall become the property of Tenant and Tenant may
remove such alterations or additions or any portion thereof at Tenant’s expense
during the Lease Term, provided Tenant repairs, at Tenant’s expense, any damage
caused by such removal.




e. Landlord’s
Performance of Tenant’s Obligations. If
Tenant does not perform its maintenance or restoration obligations in a timely
manner, commencing the same within five (5) days after receipt of notice from
Landlord specifying the work needed, and thereafter diligently and continuously
pursuing the work until completion, then Landlord shall have the right, but not
the obligation, to perform such work. Any amounts expended by Landlord on such
maintenance or restoration shall be Additional Rent to be paid by Tenant to
Landlord within ten (10) days after demand.




f. Construction
Liens. Tenant
shall have no power or right 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. Tenant shall keep the Premises
and the Building free from any liens arising out of any work performed,
materials furnished, or obligations incurred by or on behalf of Tenant. Should
any lien or claim of lien be filed against the Premises or the Building by
reason of any act or omission of Tenant or any of Tenant’s agents, employees,
contractors or representatives, then Tenant shall cause the same to be canceled
and discharged of record by bond or otherwise within ten (10) days after the
filing thereof. Should Tenant fail to discharge the lien within ten (10) days,
then Landlord may discharge the lien. The amount paid by Landlord to discharge
the lien (whether directly or by bond), plus all administrative and legal costs
incurred by Landlord, shall be Additional Rent payable on demand. The remedies
provided herein shall be in addition to all other remedies available to Landlord
under this Lease or otherwise. 




10. PROPERTY
OF TENANT. 




a. Property
Taxes. Tenant
shall pay when due all taxes levied or assessed upon Tenant's equipment,
fixtures, furniture, leasehold improvements and personal property located in the
Premises. 




b. Removal. Provided
Tenant is not in monetary default (beyond applicable notice and cure periods),
Tenant may remove all of Tenant’s Property, which it has placed in the Premises;
provided, however, Tenant must repair all damages caused by such removal. If
Tenant does not remove its property from the Premises upon the expiration or
earlier 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.




11. SIGNS. Tenant’s
name will be placed on a monument sign associated with the Building and shown on
the POD drawings, the cost of which will be deducted from the Allowance. Tenant
may not erect, install or display any other sign or advertising material upon
the exterior of the Building or Premises (including any exterior doors, walls or
windows) without the prior written consent of Landlord, which consent may be
withheld in Landlord’s sole discretion. Directory signage will be provided and
installed by the Landlord. All signage shall comply with the rules and
regulations of the Innsbrook Owners Association and Henrico County ordinances.
The name of the Building shall be “Saxon Capital Building” the “SCI Services
Building” or, with Landlord’s approval, as otherwise specified by Tenant. During
the Term, as the same may be extended hereunder or otherwise, and provided
Tenant or an affiliate is occupying the Building and Tenant shall not have
committed a default under this Lease (beyond applicable notice and cure
periods), the Building shall never be named for any other person or
entity.




12. ACCESS
TO PREMISES.





a. Tenant’s
Access. Except
as set forth below, Tenant, its agents, employees, invitees, and guests, shall
have access to the Premises and reasonable ingress and egress to Common Areas of
the Building twenty-four hours a day, seven days a week; provided, however,
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 have access to the maintenance,
communications and utility rooms and closets in the Building only when
accompanied by Landlord. Tenant shall be responsible for providing access to the
Premises to its agents, employees, invitees and guests after Business Hours and
on weekends and holidays, but in no event shall Tenant’s use of and access to
the Premises during non-Business Hours compromise the security of the
Building.




b. Landlord’s
Access. Landlord
shall have the right, at all times and upon reasonable advance oral notice,
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, mechanical systems and electrical devices, and (iii) to
show the Premises to prospective mortgagees and purchasers. Within one hundred
eighty (180) days prior to the Expiration Date, Landlord shall have the right,
with notice, either itself or through its authorized agents, to enter the
Premises at all reasonable times to show prospective tenants. Any actions taken
by or on behalf of Landlord by reason of the provisions contained in this
paragraph shall be performed at such times and in such manner so as to minimize
interference with Tenant's business operations from within the Premises. Except
in case of an emergency or in response to Tenant’s service call, Landlord shall
provide Tenant at least one (1) business day prior notice of any entry which
Landlord will need to make to accomplish repairs or other work permitted by this
Section 12(b) which might disrupt the conduct of Tenant’s business, and Tenant
shall have the right to require that Landlord be accompanied by Tenant’s
representative while within the Premises to accomplish such repair or work.
During such time as such work is being carried on in or about the Premises, the
Rent provided herein shall not abate unless the Premises or any portion thereof
are rendered unusable for more than seven (7) consecutive days, and Tenant
waives any claim or cause of action against Landlord for damages by reason of
interruption of Tenant’s business or loss of profits therefrom because of the
prosecution of any such work or any part thereof. In the event Tenant is unable
to operate its business in the Premises (or any portion thereof) for more than
seven (7) consecutive days as a result of the performance by Landlord of work as
authorized by this Section 12(b), then the Rent under this Lease shall abate in
the proportion that the Premises are unusable until the entire Demised Premises
(or portion thereof that was rendered unusable) are again usable, such abatement
to commence on the seventh (7th )
consecutive day that the Premises (or portion thereof) are unusable. Landlord
shall exercise all due care in connection with any such entry into the Premises
and shall be liable to Tenant for any damages to real or personal property
caused by or in connection with any such entry. 




c. Emergency
Access. Landlord
shall have the right to enter the Premises at any time without notice in the
event of an emergency. On or before the Commencement Date, Landlord shall
provide Tenant with 400 security access cards at no expense to
Tenant.




13. TENANT’S
COMPLIANCE. 




a. Laws. Tenant
shall comply with all applicable laws, ordinances and regulations, whether now
existing or hereafter enacted, regarding the physical condition of the Premises,
but only to the extent the applicable laws pertain to the particular manner in
which Tenant uses the Premises; or (ii) that do not relate to the physical
condition of the Premises (unless Tenant’s actions have caused the Premises to
be in violation of such laws, ordinances or regulations) but relate to the
lawful use of the Premises and with which only the occupant can comply, such as
laws governing maximum occupancy, workplace smoking, and illegal business
operations. 




b. Rules
and Regulations. Tenant
shall comply with the Rules and Regulations attached as Exhibit
I. The
Rules and Regulations may be modified from time to time by Landlord, effective
as of the date delivered to Tenant or posted on the Premises, provided such
rules are uniformly applicable to all tenants in the Building (if any) and do
not increase Tenant’s monetary obligations or restrict Tenant’s rights under
this Lease. Any conflict between this Lease and the Rules and Regulations shall
be governed by the terms of this Lease. Landlord shall give Tenant reasonable
prior written notice before enforcement against Tenant of any changes in the
existing Rules and Regulations or any additions thereto properly promulgated
hereunder.




14. ADA COMPLIANCE. 




a. Tenant’s
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 or occupation of the Premises or alteration of the
Premises to accommodate persons with special needs, including using all
reasonable efforts to comply with The Americans With Disabilities Act (the
“ADA”).



b. Landlord’s
Compliance.
Landlord, at Landlord’s sole expense, shall comply with the requirements of the
ADA as it applies to the Common Areas and restrooms of the Building; but
Landlord shall have no responsibility for ADA compliance with respect to the
Premises. Landlord shall not be required to make changes to the Common Areas or
restrooms of the Building to comply with ADA standards adopted after
construction of the Building unless specifically required to do so by law.
Landlord represents and warrants that on the Commencement Date, the Building and
the Common Areas shall be in compliance with the ADA.




c. ADA
Notices. If
Tenant receives any notices alleging a violation of ADA relating to any portion
of the Building or Premises (including any governmental or regulatory actions or
investigations regarding non-compliance with ADA), then Tenant shall notify
Landlord in writing within ten (10) days of such notice and provide Landlord
with copies of any such notice.




15. INSURANCE
REQUIREMENTS.





a. Tenant’s
Liability Insurance.
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 Property Manager, 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 in this
Lease. 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 provided the increase reflects amounts
of coverage customarily maintained by prudent tenants of comparable Class A
office buildings in the Innsbrook Office Park.. 




b. Tenant’s
Property Insurance. Tenant
shall also carry the equivalent of ISO Special Form Property Insurance on
Tenant’s Property for full replacement value and with coinsurance waived. For
purposes of this provision, “Tenant’s Property” shall mean Tenant’s personal
property, furniture, equipment and fixtures. Tenant shall neither have, nor
make, any claim against Landlord for any loss or damage to the Tenant’s
Property, regardless of the cause of the loss or damage.




c. Certificates
of Insurance. 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 notice to Landlord. If Tenant fails to provide Landlord
with such certificates or other evidence of insurance coverage, Landlord may
obtain such coverage and the cost of such coverage shall be Additional Rent
payable by Tenant upon demand.




d. Insurance
Policy Requirements. 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 located
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 Landlord 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 Landlord;
(iv) be primary policies; (v) provide that any loss shall be payable
notwithstanding any 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) except catastrophic
coverages for earthquake and flood losses, unless approved in writing by
Landlord; and (vii) be maintained during the entire Term and any extension
terms.




e. Landlord’s
Property Insurance. Landlord
shall keep the Project, including the Building, Common Areas and improvements
(but excluding Tenant’s Property), 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.




f. Landlord’s
Liability Insurance.
Throughout the Term, Landlord shall keep for the mutual benefit of Landlord 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 Landlord, arising out of and in connection with Landlord’s
ownership and operation of the Project, and which shall insure the indemnity
provisions contained in this Lease.




g. Mutual
Waiver of Subrogation. 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 such 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. 




16. INDEMNITY.
Subject
to the insurance requirements, releases and mutual waivers of subrogation set
forth in this Lease, Tenant agrees as follows:




a. Tenant’s
Indemnity. Tenant
shall indemnify and hold Landlord harmless from and against any and all claims,
damages, losses, liabilities, lawsuits, costs and expenses (including attorneys'
fees at all tribunal levels) arising out of or related to (i) any activity,
work, or other thing done, permitted or suffered by Tenant in or about the
Premises or the Building, (ii) any breach or default by Tenant in the
performance of any of its obligations under this Lease, or (iii) any negligence
or willful misconduct of Tenant, or any officer, agent, employee, contractor,
servant, invitee or guest of Tenant. The foregoing indemnity shall not apply to
claims, damages, losses, liabilities, lawsuits, costs and expenses directly
caused by or resulting from the negligence or wrongful conduct of Landlord or
any third party tenant, officer, agent, employee, contractor, servant, invitee
or guest of Landlord.




b. Defense
Obligation. If any
such action is brought against Landlord, then Tenant, upon notice from Landlord,
shall defend the same through counsel selected by Landlord’s insurer, or other
counsel reasonably acceptable to Landlord. The provisions of this Section shall
survive the termination of this Lease.




c. Landlord’s
Indemnity. Landlord
hereby indemnifies and holds harmless Tenant and its officers, directors,
members, partners, employees and agents from and against any and all liability,
loss, cost, damage or expense, including without limitation, court costs and
reasonable attorneys’ fees, imposed on Tenant by any person whomsoever, caused
by or arising from any
activity, work, or thing done, permitted or suffered by Landlord in or about the
Building and the Common Areas, or from Landlord’s failure to perform its
maintenance and repair obligations under this Lease or any other failure to
perform its obligations under this Lease, or due to the
negligence or willful misconduct of Landlord or any of its employees,
contractors, servants, agents or legal representatives.




d. Defense
Obligation. If any
such action is brought against Tenant, then Landlord, upon notice from Tenant,
shall defend the same through counsel selected by Tenant’s insurer, or other
counsel reasonably acceptable to Tenant. The provisions of this Section shall
survive the termination of this Lease.




17. QUIET
ENJOYMENT. Landlord
has full right and power to execute this Lease and to grant the leasehold estate
demised herein. Provided that Tenant fully complies with its obligations under
this Lease, Tenant shall have quiet enjoyment and possession of the Premises for
the full term of the Lease, and any extension thereof, subject and subordinate
to all of the terms, covenants and conditions of this Lease, free from the
claims of any person claiming by, through or under Landlord. No action of
Landlord or other tenants working in other space in the Building outside the
Premises, or in repairing or restoring the Premises, shall be deemed a breach of
this covenant, nor shall such action give to Tenant any right to modify this
Lease either as to term, rent payables or other obligations to be performed
except as expressly set forth herein, including without limitation Sections 7(c)
and 19. Notwithstanding the foregoing, Landlord shall use commercially
reasonable efforts to prevent the actions of Landlord or other tenants working
in other space in the Building outside the Premises, or in repairing or
restoring the Premises, from unreasonably interfering with the Tenant’s use,
occupancy or possession of the Premises.




18. SUBORDINATION;
ATTORNMENT; NON-DISTURBANCE; AND ESTOPPEL CERTIFICATE. 




a. Subordination
and Attornment. Subject
to the provisions of Section 14(b) below, Tenant agrees to execute within ten
(10) days after request to do so from Landlord or its mortgagee an
agreement:




i. Making
this Lease superior or subordinate to the interests of the
mortgagee;




ii. Agreeing
to attorn to the mortgagee;




iii. Giving
the mortgagee notice of, and a reasonable opportunity (which shall in no event
be less than thirty (30) days after notice thereof is delivered to mortgagee) to
cure any Landlord default and agreeing to accept such cure if effected by the
mortgagee;




iv. Permitting
the 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; 





	 	
      v.
	
      
	
      Agreeing
      to attorn to any successor Landlord; and 







vi. Containing
such other agreements and covenants on Tenant's part as Landlord's mortgagee may
reasonably request.




b. Non-Disturbance. Tenant’s
obligation to subordinate its interests in this Lease or attorn to any mortgagee
is conditioned upon the mortgagee’s agreement (by way of a separate instrument)
not to disturb Tenant’s possession and quiet enjoyment of the Premises under
this Lease so long as Tenant is in compliance with the terms of the
Lease.




c. Estoppel
Certificates. Tenant
agrees to execute within thirty (30) business days after request, and as often
as requested, estoppel certificates confirming any factual matter requested by
Landlord which is true and is within Tenant's knowledge regarding this Lease,
and the Premises, including but not limited to: (i) the date of occupancy, (ii)
Expiration Date, (iii) the amount of Rent due and date to which Rent is paid,
(iii) whether Tenant has any defense or offsets to the enforcement of this Lease
or the Rent payable, (iv) any default or breach by Landlord, and (v) whether
this Lease, together with any modifications or amendments, is in full force and
effect. Tenant shall attach to such estoppel certificate copies of any
modifications or amendments to the Lease.




19. ASSIGNMENT
- SUBLEASE. 




a. Landlord
Consent. Tenant
may not assign or encumber this Lease or its interest in the Premises arising
under this Lease, and may not sublet all or any part of the Premises without
first obtaining the written consent of Landlord, which consent shall not be
unreasonably withheld, conditioned or delayed. Factors which Landlord may
consider in deciding whether to consent to an assignment or sublease include
(without limitation), (i) the creditworthiness of the assignee or sublessee,
(ii) the proposed use of the Premises, and (iii) any renovations to the Premises
or special services required by the assignee or sublessee. Landlord will not
consent to an assignment or sublease that might result in a use that conflicts
with the rights of any existing tenant. One consent shall not be the basis for
any further consent. Notwithstanding anything contained in this Section 15(a) to
the contrary, if Tenant proposes to sublet in the aggregate less than half a
floor of the Premises to a proposed subtenant, Landlord agrees that the factors
described in clauses (i) above shall not apply in connection with Landlord’s
determination of whether to grant or deny its consent.




b. Definition
of Assignment. For the
purpose of this Section 18, 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, parent 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; except
that, if the Tenant or Tenant’s parent company is a publicly traded company,
public trades or sales of the Tenant’s stock on a national stock exchange shall
not be considered an assignment hereunder even if the aggregate of the trades of
sales exceeds fifty percent (50%) of the capital stock of the company.





c. Permitted
Assignments/Subleases.
Notwithstanding the foregoing, Tenant may assign this Lease or sublease part or
all of the Premises without Landlord's consent to: (i) any corporation, limited
liability company, partnership or other entity that controls, is controlled by,
or is under common control with, Tenant or its parent company; or (ii) any
corporation, limited liability company or other entity resulting from the merger
or consolidation with Tenant or Tenant’s parent company, 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 (each a “Permitted Transfer”); provided however, the
assignor remains liable under the Lease and 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 4. 




d. Notice
to Landlord. Landlord
must be given prior written notice of every assignment or subletting, and
failure to do so shall be a default hereunder.




e. Prohibited
Assignments/Subleases. Except
in the event of a Permitted Transfer, 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. Acceptance of Rent by Landlord after any
non-permitted assignment or sublease shall not constitute approval thereof by
Landlord.




f. Limitation
on Rights of Assignee/Sublessee.
Intentionally Deleted. 




g. Tenant
Not Released. No
assignment or sublease shall release Tenant of any of its obligations under this
Lease. 




h. Landlord’s
Right to Collect Sublease Rents upon Tenant Default. If the
Premises (or any portion) is sublet and Tenant defaults under its obligations to
Landlord, then Landlord is authorized, at its option, to collect all sublease
rents directly from the Sublessee. Tenant hereby assigns the right to collect
the sublease rents to Landlord in the event of Tenant default. The collection of
sublease rents by Landlord shall not relieve Tenant of its obligations under
this Lease, nor shall it create a contractual relationship between Sublessee and
Landlord or give Sublessee any greater estate or right to the Premises than
contained in its Sublease.




i. Excess
Rents. If
Tenant assigns this Lease or subleases all or part of the Premises at a rental
rate that exceeds the rentals paid to Landlord, then half of any such excess
shall be paid over to Landlord by Tenant, after first deducting all of Tenant’s
actual out-of-pocket costs associated therewith.




j. Landlord’s
Fees. Tenant
shall pay Landlord an administration fee of $500.00 per assignment or sublease
transaction for which consent is required.




k. Unauthorized
Assignment or Sublease. Any
unauthorized assignment or sublease shall constitute a default under the terms
of this Lease and shall be considered null and void. 




20. DAMAGES
TO PREMISES. 




a. Landlord’s
Restoration Obligations. If the
Building or Premises are damaged by fire or other casualty (“Casualty”), then
Landlord shall repair and restore the Premises to substantially the same
condition of the Premises immediately prior to such Casualty, subject to the
following terms and conditions:





	 	
      i.
	
      
	
      The
      casualty must be insured under Landlord's insurance policies, and
      Landlord’s obligation is limited to the extent of the insurance proceeds
      received by Landlord. Landlord’s duty to repair and restore the Premises
      shall not begin until receipt of the insurance
proceeds.








	 	
      ii.
	
      
	
      Landlord’s
      lender(s) must permit the insurance proceeds to be used for such repair
      and restoration.








	 	
      iii.
	
      
	
      Landlord
      shall have no obligation to repair and restore Tenant’s trade fixtures,
      decorations, signs, or contents.







b. Termination
of Lease by Landlord. Landlord
shall have the option of terminating the Lease if: (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. If Landlord elects
to terminate this Lease, then it shall give notice of the cancellation to Tenant
within sixty (60) days after the date of the Casualty. Tenant shall vacate and
surrender the Premises to Landlord within fifteen (15) days after receipt of the
notice of termination.




c. Termination
of Lease by Tenant. Tenant
shall have the option of terminating the Lease if: (i) Landlord has failed to
substantially restore the damaged Building or Premises within one hundred eighty
(180) days of the Casualty (“Restoration Period”); (ii) the Restoration Period
has not been delayed by force
majeure; and
(iii) Tenant gives Landlord notice of the termination within fifteen 15 days
after the end of the Restoration Period (as extended by any force
majeure delays).
If Landlord is delayed by force
majeure, then
Landlord must provide Tenant with notice of the delays within fifteen (15) days
of the force
majeure event
stating the reason for the delays and a good faith estimate of the length of the
delays. If the Casualty occurs during the last two (2) years of the Term, and
such Casualty renders the Premises wholly untenantable, or the Premises are
materially damaged or destroyed by Casualty so that the Premises, in Tenant’s
reasonable determination, are no longer adequate for the conduct of Tenant’s
business, then in either event the Tenant shall have the right to automatically
terminate the Lease. In addition, if, in the reasonable opinion of Landlord’s
architect, given in writing to both parties within sixty (60) days after the
date of the Casualty, the Premises and such other portions of the Project cannot
be repaired or restored to the condition in all material respects that existed
prior to the Casualty within one hundred eighty (180) days after the date of
Landlord’s notice to Tenant, Tenant may terminate this Lease by giving notice to
Landlord within ninety (90) days after the Casualty.




d. Rent
Abatement. If Fifty
Percent (50%) or more of the Premises or the Building is rendered wholly
untenantable by the Casualty, then the Rent payable by Tenant shall be fully
abated. If the Premises is only partially damaged, then Tenant shall continue
the operation of Tenant's business in any part not damaged to the extent
reasonably practicable from the standpoint of prudent business management, and
Rent and other charges shall be abated proportionately to the portion of the
Premises rendered untenantable. The abatement shall be from the date of the
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. 




e. Waiver
of Claims. The
abatement of the Rent set forth above is Tenant’s exclusive remedy against
Landlord in the event of a Casualty. Tenant 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
Casualty and any resulting damage, destruction, repair, or
restoration.




f. Highwoods
II Casualty. If
Highwoods II is damaged by Casualty and as a result Tenant’s lease in Highwoods
II is terminated, Tenant shall have the right to terminate this Lease by
providing notice to Landlord of Tenant’s election to terminate within sixty (60)
days after the termination of the Highwoods II Lease. Tenant’s notice of
termination shall state the effective termination date of this
Lease.




21. EMINENT
DOMAIN. 




a. Effect
on Lease. If all
of the Premises are taken under the power of eminent domain (or by 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, in its
reasonable determination, can continue to use the remainder and otherwise has
adequate access to the Building, 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. 




b. Right
to Condemnation Award. Landlord
shall be entitled to receive and retain the entire condemnation award for the
taking of the Building and Premises. Tenant shall have no right or claim against
Landlord for any part of any award received by Landlord for the taking. Tenant
shall have 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; provided that any such award shall not
reduce the amount of the award otherwise payable to Landlord for the taking of
the Building and Premises.




c. Highwoods
II Taking. If
Highwoods II is taken under the power of eminent domain (or by conveyance in
lieu thereof) and as a result Tenant’s lease in Highwoods II is terminated,
Tenant shall have the right to terminate this Lease by providing notice to
Landlord of Tenant’s election to terminate within sixty (60) days after the
termination of the Highwoods II Lease. Tenant’s notice of termination shall
state the effective termination date of this Lease.




22. ENVIRONMENTAL
COMPLIANCE.





a. Environmental
Laws. The term
“ Environmental Laws” shall mean all now existing or hereafter enacted or issued
statutes, laws, rules, ordinances, orders, permits and regulations of all state,
federal, local and 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 materials 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.




b. Tenant's
Responsibility. Tenant
covenants and agrees that it will keep and maintain the Premises at all times in
compliance with Environmental Laws. 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 on the Property. 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 onto the Property any such materials or substances except to use in
the ordinary course of Tenant's business, and then only after notice is given to
Landlord of the identity of such substances or materials. No such notice shall
be required, however, for commercially reasonable amounts of ordinary office
supplies and janitorial supplies. 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.  




c. 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 22 including, but not limited to: (i) the cost of full
remediation of any contamination to bring the Property into the same condition
as prior to the Commencement Date and into full compliance with all
Environmental Laws; (ii) the reasonable cost of all appropriate tests and
examinations of the Premises to confirm that the Premises and any other
contaminated areas have been remediated and brought into compliance with all
Environmental 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 22.




d. Limitation
on Tenant’s Liability. Tenant’s
obligations under this Section 22 shall not apply to any condition or matter
constituting a violation of any Environmental Laws: (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.




e. Inspections
by Landlord.
Landlord and its engineers, technicians, and consultants (collectively the
"Auditors") may, from time to time as Landlord deems appropriate, conduct
periodic tests and examinations ("Audits") of the Premises to confirm and
monitor Tenant's compliance with this Section 22. 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 22. 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 22, 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.




f. Landlord's
Liability.
Landlord represents and warrants that, to the best of Landlord’s knowledge after
due inquiry and investigation, there are no hazardous materials on the Premises
as of the Commencement Date in violation of any Environmental Laws. Landlord
shall indemnify and hold Tenant harmless from any liability resulting from
Landlord’s violation of this representation and warranty. 




g. Property. For the
purposes of this Section 22, the term “Property” shall include the Premises,
Building, all Common Areas, the real estate upon which the Building is located;
all personal property (including that owned by Tenant); and the soil, ground
water, and surface water of the real estate upon which the Building is
located.




h. Tenant's
Liability After Termination of Lease. The
covenants contained in this Section 22 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 22.




23. DEFAULT. 




a. Tenant’s
Default. Tenant
shall be in material default under this Lease if Tenant: 





	 	
      i.
	
      
	
      Fails
      to pay within ten (10) days after Tenant’s receipt of written notice any
      Base Rent, Additional rent, or any other sum of money which Tenant is
      obligated to pay, as provided in this Lease or in the SCI Lease; provided,
      however, that Tenant shall be entitled to only one (1) such notice in each
      calendar year;








	 	
      ii.
	
      
	
      Breaches
      any other agreement, covenant or obligation in this Lease or the SCI Lease
      and such breach is not remedied within thirty (30) days after Landlord
      gives Tenant notice specifying the breach, or if such breach cannot, with
      due diligence, be cured within thirty (30) days, Tenant does not commence
      curing within thirty (30) days and with reasonable diligence completely
      cure the breach within a reasonable period of time after the
      notice;







iii. Files any
petition or action for relief under any creditor's law (including bankruptcy,
reorganization, or similar action), either in state or federal court, or has
such a petition or action filed against it which is not stayed or vacated within
sixty (60) days after filing; 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 the appointment is not stayed or vacated within
thirty (30) days), or makes an assignment for benefit of creditors.




b. Landlord’s
Remedies. In the
event of a material default by Tenant, Landlord at its option may do one or more
of the following: 




i.  Terminate
this Lease and recover all damages caused by Tenant’s breach, including
consequential damages for lost future rent (but no other consequential damages)
provided that in all events Landlord shall take commercially reasonable efforts
to mitigate its damages;




ii.  Repossess
the Premises, with or without terminating, and relet the Premises at such amount
as Landlord deems reasonable;




iii. [Intentionally
Deleted];




iv. Bring
action for recovery of all amounts due from Tenant;




v.  Seize and
hold any personal property of Tenant located in the Premises and assert against
the same a lien for monies due Landlord;




vi. Pursue
any other remedy available in law or equity.




c. Attorneys
Fees/Costs. If
Landlord or Tenant brings an action to enforce the terms hereof, to collect
Rent, Additional Rent or other sums due under the Lease, or to declare rights
hereunder, the prevailing party in any such action, or appeal thereon, shall be
entitled to its reasonable attorneys' fees and court costs to be paid by the
losing party as fixed by the court in the same or separate suit, and whether or
not such action is pursued to decision or judgment. The attorneys' fee award
shall not be computed in accordance with any court fee schedule, but shall be
such as to fully reimburse all attorneys' fees and court costs reasonably
incurred in good faith. Landlord shall be entitled to reasonable attorneys' fees
and all other costs and expenses incurred in the preparation and service of
notices of default and consultations in connection therewith, whether or not a
legal action is subsequently commenced in connection with such default. Landlord
and Tenant agree that attorneys' fees incurred with respect to defaults and
bankruptcy are actual pecuniary losses within the meaning of
section 365(b)(1)(B) of the Bankruptcy Code or any successor statute. An
award of costs to Landlord as the prevailing party shall also include all
reasonable expenses of Landlord incurred 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. 




d. Remedies
Cumulative. 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 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.




e. No
Accord and Satisfaction. No
acceptance by Landlord of a lesser sum than the Rent, 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 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.




f. No
Reinstatement. No
payment of money by Tenant to Landlord after the expiration or termination of
this Lease shall reinstate or extend the Term, or make ineffective any notice of
termination 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.




g. Unlawful
Detainer. Tenant
agrees that in addition to all other rights and remedies Landlord may obtain an
order for unlawful detainer from any court of competent jurisdiction without
prejudice to Landlord's rights to otherwise collect rents or breach of contract
damages from Tenant.




24. 
LANDLORD DEFAULT. If
Landlord shall default in the performance of any covenant or agreement of
Landlord contained in this Lease and shall not cure such default within thirty
(30) days after written notice by Tenant (or within
such shorter period as is otherwise expressly provided in this Lease) or if such
default is not reasonably susceptible of cure within thirty (30) days, then
after such period of time as is reasonably necessary to cure such default, so
long as Landlord promptly commences such cure within said thirty (30) day period
(or within
such shorter period as is otherwise expressly provided in this Lease) and
diligently prosecutes the same to completion, then Tenant may at
its option:




(i) do or
cause to be done, on behalf of and for the account of Landlord, whatever
Landlord is obligated to do under the terms of this Lease (other than performing
repairs or other work to the roof and structural portions of the Building), and
Landlord agrees to reimburse Tenant on demand for any and all costs and
expenses, including without limitation, reasonable attorneys’ fees, which Tenant
may incur in thus effecting compliance with Landlord’s obligations under this
Lease, and if Landlord fails to make such reimbursement within ten (10) days
after demand therefor, Tenant may deduct such costs and expenses, together with
interest thereon at the Determination Rate, from any Rent thereafter accruing
hereunder; provided, however, if Landlord in good faith disputes the occurrence
of the default or Tenant’s right to offset the amount claimed, Tenant shall have
the right, until such dispute is resolved, to offset only the amount that is not
in dispute; or




(ii) enforce
collection of its damages and/or obtain specific performance, injunctive or
other equitable relief.




25. BANKRUPTCY.





a. Trustee’s
Rights. Landlord
and Tenant understand that, notwithstanding contrary terms in this Lease, 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.
This Lease shall not be construed to give the trustee or debtor in possession
any rights greater than the minimum rights granted under the Code.




b. Adequate
Assurance. Landlord
and Tenant acknowledge that, pursuant to the Code, Landlord is entitled to
adequate assurances of future performance of the provisions of this Lease. The
parties agree that the term “adequate assurance” shall include at least the
following:





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








	 	
      ii.
	
      
	
      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 Use provisions under Section 4 above, and such
      proposed assignee shall continue to engage in the Permitted Use under
      Section 4. 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. Assumption
of Lease Obligations. Any
proposed assignee of this Lease must assume and agree to be personally bound by
the provisions of this Lease.




26. NOTICES.





a. Addresses. Except
as provided in subsection 26.e.and 26.f. below, all notices, demands and
requests by Landlord or Tenant shall be sent to the following addresses, or to
such other address as a party may specify by duly given notice:




LANDLORD:  Highwoods
Realty Limited Partnership

c/o
Highwoods Properties, Inc.

4501
Highwoods Parkway, Suite 400 

Glen
Allen, Virginia 23060

Attn: Lease
Administration 

Facsimile
#: 804-965-9001 




with a
copy to:  Highwoods
Properties, Inc.

3100
Smoketree Court, Suite 600

Raleigh,
North Carolina 27604

Attn:
Manager, Lease Administration

Facsimile
#: 919/876-2448




TENANT:
  Saxon
Capital, Inc.

4860 Cox
Road  

Glen
Allen, Virginia 23060

Attn:
Gerri Nolan, Real Estate Department  

Facsimile
#: 804-967-7521 




with a
copy to:  Saxon
Capital, Inc.

4951 Lake
Brook Drive, Suite 300  

Glen
Allen, Virginia 23060

Attn: General
Counsel  

Facsimile
#: 804-217-7679




b. Form;
Delivery; Receipt. 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 UNLESS OTHERWISE
SPECIFIED. Notices,
demands or requests 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 the receiving
party's address as set forth above or (iv) delivered via telecopier or facsimile
transmission to the facsimile number listed above, with an original counterpart
of such communication sent concurrently as specified in subsection (ii) or (iii)
above and with written confirmation of receipt of transmission 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 subsection (ii) above, and the next business day after
deposit thereof with the courier if sent pursuant to subsection (iii) above.





c. Address
Changes. 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. 

 

d. Notice
by Legal Counsel. Notices
may be given on behalf of any party by such party's legal counsel.




e. Notice
During Construction Period. Notwithstanding
the provisions of subsection 26.a. above, during construction of the Project and
until the Rent Commencement Date notice shall be given by Tenant to Landlord at
the notice address above to the attention of both Paul W. Kreckman and Hank
Robertson, and by Landlord to Tenant at the notice address above to the
attention of Kathy Gordon. Each of Landlord and Tenant represents and warrants
to the other that the parties identified in this subsection have been authorized
by the respective parties to make decisions required by this Lease regarding the
planning, design, and construction of the Project.




f. Rent
Payment Address. Rent and
all other amounts due hereunder shall be paid at the following
address:




Highwoods
Realty Limited Partnership

P.O. Box
65196

Charlotte,
North Carolina 28265

Attn:
Saxon Mortgage

Tax ID #:
56-1869557




27. HOLDING
OVER. If
Tenant holds over after the Expiration Date or other termination of this Lease,
such holding over shall not be a renewal of this Lease but shall create a
tenancy-at-sufferance. 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) Base Rent at the rate equal to one hundred fifty
percent (150%) of that provided for as of the expiration or termination date,
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 Tenant holds over after the Expiration Date or other termination of
this Lease for a period of more than ninety (90) days following written notice
by Landlord to Tenant that Landlord requires occupancy of the Premises relating
to Landlord’s lease of the Premises or a portion thereof to another tenant or
tenants pursuant to an executed lease, then Tenant shall be liable for damages
resulting to Landlord resulting from the loss of such prospective
tenants.




28. ROOFTOP
LICENSE. 




(a)
Grant.
Landlord
hereby grants to Tenant the non-exclusive right (hereinafter collectively the
“Rooftop Rights”): 





	 	
      i.
	
      To
      install, operate, maintain and remove, at Tenant’s sole expense and risk,
      certain rooftop communications equipment (hereinafter the “Equipment”) as
      described in Exhibit
      J
      attached hereto and made a part hereof.








	 	
      ii.
	
      To
      install, maintain, operate, and replace at Tenant’s sole expense and risk,
      certain connecting equipment, including, but not limited to, the cables,
      conduits, and connecting hardware necessary for the operation of the
      Equipment (hereinafter the Connecting
Equipment”).








	 	
      iii.
	
      To
      pull such Connecting Equipment through the Building Common Areas
      (utilizing a separate raceway to be installed by Tenant at Tenant’s sole
      cost and expense and routing as approved by Landlord) for the purpose of
      connecting Tenant’s rooftop Equipment to the related Equipment located in
      Tenant’s lease Premises.







(b)
Grant
Non-exclusive. The
Rooftop Rights granted herein are not exclusive and Landlord reserves the right
to grant, renew or extend rooftop communications rights to others; provided such
rights do not render Tenant’s utilization of the site impractical. If Landlord
grants Rooftop Rights to any future tenant, operator or licensee (“Future
Licensee”), and such Future Licensee’s equipment interferes with Tenant’s
operation and use of it Equipment, Landlord will direct the Future Licensee to
take all steps reasonably necessary to reduce the level of interference to a
level that does not materially impair Tenant’s operation and use of its
Equipment. If such Future Licensee cannot or does not reduce the interference to
a level that does not materially impair Tenant’s operation and use of its
Equipment, Landlord shall terminate the license with such Future Licensee and
require the Future Licensee to remove the equipment causing such
interference.




(c)
Term.
The
Rooftop Rights granted to Tenant by Landlord shall have an expiration date
co-terminous with the Lease Term (unless sooner terminated by Landlord or Tenant
as provided herein).




(d)  Use. Tenant
agrees to use the Equipment and Connecting Equipment exclusively for its own
use. Tenant shall not use the Equipment or Connecting Equipment to provide
services to any outside party without Landlord’s prior written consent, it being
acknowledged that changes in the use of Tenant’s Equipment or Connecting
Equipment may increase the value of the Rooftop Rights granted herein. Tenant
shall not utilize the Equipment or Connecting Equipment in any manner that is in
violation of any governmental laws, rules or regulations, whether now existing
or hereinafter enacted or which is in violation of the Building Rules and
Regulations. Tenant may not make any use of the Equipment or Connecting
Equipment that (i) is or may be a nuisance or trespass or otherwise disturbs the
other tenants in the Building, (ii) increases any insurance premiums, or (iii)
makes such insurance unavailable to Landlord on the Building under the insurer’s
standard underwriting criteria. Landlord makes no warranty or representation
that the Building, the Building rooftop, or any improvements therein (including
without limitation any existing equipment rooms, conduits, cables, and other
spaces and products related to the operation or installation Tenant’s Equipment)
(hereinafter collectively the “Equipment Space”) are suitable for Tenant’s
intended use. Landlord further makes no warranty or representation that Tenant’s
rooftop equipment will not be affected by or suffer interference from existing
rooftop equipment, provided such existing equipment is operating in compliance
with the terms and conditions allowed by the applicable rooftop agreement.
Tenant acknowledges (i) that Tenant shall perform all necessary studies and
reports to determine the suitability of the Equipment Space for Tenant’s
intended us; (ii) that Tenant has not relied on any statements, representations,
or any other indications (whether verbal, written, or both) made by Landlord,
its employees, officers, agents, representatives, contractors, or brokers
regarding the condition and suitability of the Equipment Space for Tenant’s
intended use; and (iii) that Tenant has inspected the Equipment Space and
accepts the same “as is” and agrees that Landlord is under no obligation to
perform any work or provide any materials in preparation for the installation,
maintenance or operation of Tenant’s Equipment or Connecting Equipment. Tenant
further acknowledges that the Equipment Space may be accessed by Landlord’s
authorized representatives, including but not limited to, authorized personnel
representing other communications carriers, and agents, employees, contractors,
representatives, and subcontractors, of Landlord.





	 	
      (e)
	
      Termination.
      Provided Tenant is not then in default, Tenant may terminate its Rooftop
      Rights at any time, with or without cause, with thirty (30) days priors
      written notice to Landlord. Termination rights granted to Landlord and
      Tenant in the Lease shall also be fully applicable to the Rooftop Rights
      granted herein.







(f) Rent.
[Intentionally Deleted.]




(g) Equipment. The
Equipment and the Connecting Equipment shall be installed behind the rooftop
screen to be constructed on the roof of the Building, and otherwise in strict
accordance with the covenants of the Innsbrook Corporate Park, the
specifications set forth in Exhibit J and any subsequent plans and
specifications approved by Landlord as set forth herein. Tenant shall at all
times operate and maintain the Equipment and the Connecting Equipment in good
condition and in compliance with all federal, state, and local laws, ordinances,
and rules. Equipment replacements shall be restricted to equipment substantially
similar in function and size to the Equipment described in Exhibit J. The
installation of any additional equipment or equipment dissimilar in function or
size to that described in Exhibit J shall be deemed an act of default by Tenant.
Tenant shall not place any load upon any floor or upon the roof of the Building
contrary to the weight, method of installation and position reasonably
prescribed by Landlord. The Equipment and Connecting Equipment shall remain at
the sole risk of Tenant, and Landlord shall not be liable for any damage, theft,
misappropriation or loss regardless of the cause thereof, and Tenant expressly
waives any and all claims it may have against Landlord with respect to the
same.




(h) Equipment
Installation. Prior to
the commencement of any work or the installation of any Equipment or Connecting
Equipment, Tenant shall:




i. Prepare
and deliver to Landlord an outline of the Building rooftop, indicating the
proposed location of the rooftop Equipment, a description of the proposed method
of installation, and the proposed routing of any rooftop Connecting Equipment.
Tenant shall also describe, in reasonable detail, the proposed routing of all
non-rooftop Connecting Equipment. No work shall commence until Landlord has
approved, in writing, all construction and installation plans, which approval
shall not be unreasonably withheld or delayed. Landlord shall indicate its
approval or disapproval and notify Tenant of any required changes within ten
(10) business days after Landlord receives such plans from Tenant. In on event
shall Landlord’s approval or change of such plans be deemed a representation
that Tenant’s Equipment and Connecting Equipment will not cause interference
with other systems in the Building or that Tenant’s plans comply with applicable
laws, rules or regulations; such responsibility shall remain solely with
Tenant.]




ii. Tenant
warrants that the installation of the Equipment and Connecting Equipment shall
be in strict compliance with (i) Exhibit J attached hereto; (ii) any subsequent
plans and specifications approved by Landlord; (iii) all Equipment
manufacturer’s recommendations; and (iii) all applicable laws, rules or
regulations. Tenant shall not make any material modifications to the Equipment
Space without Landlord’s prior written approval, which Landlord shall determine
tin its soles discretion. Tenant shall also insure that the installation and
construction shall be performed in a neat, responsible, and workmanlike manner,
using generally accepted construction standards, consistent with such reasonable
requirements as shall be imposed by Landlord. Tenant shall promptly notify when
all work has been completed and all work shall be inspected by Landlord. Within
five (5) business days following Tenant’s completion of the installation, Tenant
shall provided Landlord with documentation evidencing that all applicable
permits, licenses, and approvals required for the installation, maintenance, and
operation of the Equipment and Connecting Equipment have been
obtained.




iii. Tenant
acknowledges that the structural integrity of the load bearing capability of the
roof, the moisture resistance of the roof membrane, and the ability of Landlord
to safely access all parts of the roof are of critical importance to Landlord.
Tenant agrees that all specifications and plans will provide sufficient
specificity to ensure that these concerns are protected. Tenant shall not make
any penetrations of the roof membrane without the Landlord’s prior written
approval. Any penetrations of the roof membrane approved by Landlord shall be
made at Tenant’s sole cost and expense by a qualified roofing contractor
selected by Landlord to ensure full compliance with the terms of all existing
roof warranties. Tenant shall be fully liable to Landlord for any unauthorized
activities that violate the terms of any warranty on the roof membrane and
results in the full or partial loss of any roof warranty coverage otherwise
available to Landlord. Tenant shall handle all parts, materials, and substances
capable of damaging the roof membrane in a manner that fully protects the
integrity of the membrane. Any roof damage caused by Tenant or any of Tenant’s
agents, representative, employees, contractors, subcontractors or invitees shall
be made at Tenant’s sole cost and expense by a roofing contractor selected by
Landlord. Landlord, in its sole discretion, may require Tenant to install, at
Tenant’s sole cost and expense, rooftop walk pads if Landlord considers such
pads necessary to protect the integrity of the roof membrane.




iv. Tenant,
in the exercise of its Rooftop Rights granted herein, shall not at any time (as
determined by Landlord in its sole judgment), disrupt Building operations,
including but not limited to, blocking access to or in any way obstructing
Building entrances, lobbies, hallways, elevators, or interfere or hinder the use
of the Building’s loading docks. Any work activities deemed disruptive to
Building operations, including but not limited to core drillings, must be
performed after normal business hours as defined by Landlord.




v. Tenant
shall, at is sole cost and expense, repair or refinish any surface of the
Building damaged by or during the installation, operation, maintenance or
removal of Tenant’s Equipment or Connecting Equipment and caused by Tenant or
any of its agents, representatives, employees, contractors, subcontractors, or
invitees. In the event Tenant fails to promptly repair or refinish any such
damage, Landlord may, in its sole discretion, repair or refinish such damage to
Landlord’s satisfaction and Tenant shall reimburse Landlord for all costs and
expenses incurred in such repair or refinishing together with an administrative
charge of fifteen percent (15%) of such costs and expenses. All such sums shall
be deemed to be Additional Rent payable to Landlord.




vi. Tenant
shall attach a label to (i) all rooftop Equipment and Connecting Equipment
located on the rooftop and (ii) to all cabling passing through all Building
common area equipment and telephone rooms. Each label shall included, at a
minimum, the following information:





	 	
      a.
	
      Tenant’s
      name;





	 	
      b.
	
      Rooftop
      Lease #;





	 	
      c.
	
      If
      cabling, the floor where the cable originates and the floor where it
      terminates;







vii. Tenant
shall obtain, at its sole cost and expense, prior to the commencement of any
construction activities or Equipment or Connecting Equipment installations, any
necessary federal, state, and municipal permits, licenses and approvals.
Tenant’s Equipment and Connecting Equipment shall comply with all applicable
safety standards, as modified from time to time, of any governing body with
jurisdiction over Tenant’s operations.




viii. Any
specialized use of the elevators must be coordinated with Landlord’s property
manager.




ix. Tenant
must properly dispose of all packing material and refuse in accordance with the
Rules and Regulations.





	 	
      (i)
	
      Tenant’s
      Covenants.
      







a.  Tenant
shall at its sole cost and expense, maintain the Equipment and Connecting
Equipment in proper operating condition and maintain same in a safe
condition.




b. Tenant’s
Equipment and Connecting Equipment shall not disrupt, adversely affect, or
interfere with (i) the operation of any existing communications equipment at the
Building, (ii) any tenant’s or occupant’s use or operation of communications or
computer devices, or (iii) the operation of any Building system. In the event
interference occurs, Tenant shall correct such interference within twenty-four
(24) hours after receiving written notice that such interference is possibly
caused by Tenant’s Equipment. Landlord reserves the right to disconnect power to
any of Tenant’s Equipment in the event Tenant fails to correct such interference
within such twenty-four (24) hour period. Tenant hereby releases Landlord from
any and all liability and damages, which results or possibly results from any
such disconnection.




(j) Utility
Service. In the
event Tenant’s Equipment requires utility service beyond the limits set forth in
the Lease, Tenant shall pay for all related utility costs. Subject to
availability as determined by Landlord in its sole discretion, Tenant may
connect to the existing electrical service to the Building provided that Tenant,
at Tenant’s sole expense, installs an Emon Dmon sub-meter capable of measuring
both electricity consumption and demand. In such event, Tenant shall reimburse
Landlord for the costs of Tenant’s electrical use, including Landlord’s
administrative charge of $20.00 per month for meter reading and administrative
processing. Landlord shall invoice Tenant on a monthly basis (or such other
billing cycle as may be mutually acceptable to both Landlord and Tenant), and
all sum due related to Tenant’s electrical usage shall be due to Landlord as
Additional Rent. Landlord shall have no liability to Tenant or any third party
for any interruption, curtailment, stoppage, or suspension of any utility
service.




(k) Access. Tenant
hereby acknowledges that for reasons of safety and security, Landlord must
restrict access to the Building rooftop and Building common areas to authorized
personnel only. Landlord agrees that Tenant’s authorized representative shall
have access to the Equipment Space during normal business hours (typically
defined as 7:30 a.m. to 4:30 p.m., Monday through Friday, excluding state and
national holidays) free of charge. Access after normal business hours will
require Landlord to dispatch personnel and Tenant shall reimburse Landlord, as
Additional Rent, for the associated personnel costs at Landlord’s then current
overtime hourly billable rate (Landlord’s overtime rate is currently $52.50 per
hour). Except in the event of an emergency, Tenant agrees to give at least
twenty-four (24) hours notice to Landlord of its intent to enter the Equipment
Space. At the time such notice is given, Tenant shall inform Landlord of the
names of the person(s) who will be accessing the Equipment Space, the reasons
for the entry, and the expected duration of the work to be performed. Tenant
acknowledges that Landlord may not maintain personnel on-site and any requested
access without prior notification may result in unavoidable and unpredictable
delays. At no time shall Tenant or any of Tenant’s agents, employees,
contractors, subcontractors, or representative attempt to connection, tamper
with, adjust, alter, or otherwise affect the operation of any equipment or
systems belonging to Landlord or any other third-party without the prior written
approval of Landlord or the affected third-party, as appropriate. Landlord
reserves the right, in its sole discretion, to select or approve any contractor
whose work activities will connect, interact with, or potentially affect any
Building equipment or systems.




(l) Relocation.
Landlord, at its sole expense and discretion, may require Tenant to relocate any
or all of the Equipment and Connecting Equipment located on the rooftop or
within the Building, provided that such relocation does not materially and
adversely impair the operation of the Equipment and Connecting Equipment or
materially degrade the quality of transmission of the Equipment and Connecting
Equipment. In the event Landlord requires Tenant to relocate Tenant’s Equipment
or Connecting Equipment, as the case may be, Tenant shall within sixty (60) days
either: (i) terminate this License upon written notice to Landlord; or (ii)
commence efforts to relocate the Equipment or the Connecting Equipment, as the
case may be, and complete their relocation with on hundred twenty (120) days of
the date of Landlord’s original notice to Tenant to relocate, in which event
Landlord shall reimburse Tenant for any reasonable, actual, out-of-pocket costs
or expenses paid by Tenant to third parties in connection with such relocation.
Landlord will permit Tenant to perform a standard cutover procedure, if required
by any relocation of Equipment, which will ensure that the relocated Equipment
is operational for services prior to discontinuing service from the old
location. In the event all or a portion of the roof membrane must be repaired or
replaced, or any other Building maintenance need arises that requires the
temporary removal of the Equipment and Connecting Equipment, Tenant shall be
bully responsible, at its sole cost and expense, for the removal and
re-installation of all Equipment. Except in the case of emergencies, Landlord
shall provide Tenant with forty-eight (48) hours notice of any planned repairs
or replacements that will require the removal of Tenant’s Equipment, unless
Landlord is unable to provide forty-eight (48) hours notice due to the nature of
the repair or replacement, in which event Landlord shall provide as much notice
as reasonably possible. Landlord shall promptly notify Tenant when the repair or
replacement is complete and the re-installation of the Equipment may commence.
All Equipment shall be re-installed in strict accordance with the specifications
previously approved by Landlord and in effect at the time of the Equipment’s
removal. Landlord shall have no liability to Tenant or any third-party for any
losses incurred as a result of the relocation and re-installation.




(m) Removal.
Provided Tenant is not in default under the terms of the Lease or its
obligations under the Rooftop Rights granted herein, Tenant may, prior to the
Expiration Date, remove its Equipment from the Building; provided, however,
Tenant shall repair all damage caused by such removal and perform such
restoration as may be required under the terms of the Lease. In any event,
Tenant shall remove all of its Equipment and Connecting Equipment (unless Tenant
obtains Landlord’s prior written consent to allow the Connecting Equipment, or
portions thereof, to remain in place and become the property of Landlord, such
consent to be at Landlord’s sole discretion) prior to the Expiration Date or
earlier termination (for whatever cause) of Tenant’s Rooftop Rights. In the
event Tenant’s Equipment and Connecting Equipment or any portion thereof
(excepting any Connecting Equipment to remain in place per Landlord’s consent as
described above) is not removed prior to the Expiration Date or earlier
termination of Tenant’s Rooftop Rights, such property shall be deemed abandoned
by Tenant and Landlord may dispose of same in whatever manner Landlord may elect
without any liability to Tenant. Any expenses incurred by Landlord as a result
of the removal and disposition of Tenant’s Equipment and Connecting Equipment,
or any portion thereof, deemed abandoned by Tenant shall be paid to Landlord by
Tenant within thirty (30) days of Tenant’s receipt of Landlord’s
invoice.




(n) Assignment
- Sublicense. Tenant
shall not assign, sublicense, or otherwise transfer the Rooftop Rights or any
portion there of without Landlord’s prior written consent, which Landlord shall
determine in its sole discretion. Not withstanding the foregoing, Tenant shall
have the right, without Landlord’s consent, but upon written notification to
Landlord, to assign or sublicense Tenant’s Rooftop Rights pursuant to a
Permitted Transfer. Landlord must be given prior written notice of any such
assignment or sublicense, and failure to do so shall be a default by Tenant
hereunder. Acceptance of Rooftop Rent payments by Landlord after any
non-permitted assignment shall not constitute approval thereof by Landlord. In
no event shall Tenant’s Rooftop Rights be assignable by operation of any law,
and Tenant’s rights hereunder may not become, and shall not be listed by Tenant
s an asset under any bankruptcy, insolvency or reorganization proceedings.
Tenant is not, may not become, and shall never represent itself to be an agent
of Landlord, and Tenant acknowledges that Landlord’s title is paramount, and
that it can do nothing to affect or impair Landlord’s title. If Tenant’s Rooftop
Rights shall be assigned or sublicensed by Tenant at a Rooftop Rent that exceeds
the Rooftop Rent to be paid to Landlord hereunder, then any such excess shall be
paid over to Landlord by Tenant.




29.  BROKER'S
COMMISSIONS.





a. Broker. Each
party represents and warrants to the other that it has not dealt with any real
estate broker, finder or other person with respect to this Lease in any manner,
other than Advantis GVA, Inc., which will be paid by Landlord pursuant to
separate agreement. 




b. Landlord’s
Obligation. Landlord
shall pay any commissions or fees that are payable to the Broker with respect to
this Lease pursuant to Landlord’s separate agreement with the
Broker.




c. Indemnity. Each
party shall indemnify and hold the other party harmless from any and all damages
resulting from claims that may be asserted against the other party by any other
broker, finder or other person (including, without limitation, any substitute or
replacement broker claiming to have been engaged by indemnifying party in the
future), claiming to have dealt with the indemnifying party 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 Section
shall survive the termination of this Lease.




30. MISCELLANEOUS.





a. No
Agency. Tenant
is not, may not become, and shall never represent itself to be an agent of
Landlord, and Tenant acknowledges that Landlord's title to the Building is
paramount, and that it can do nothing to affect or impair Landlord's title.





b. Force
Majeure. The term
“force
majeure” means:
fire, flood, extreme weather, labor disputes, strike, lock-out, riot, government
interference (including regulation, appropriation or rationing), unusual delay
in governmental permitting, unusual delay in deliveries or unavailability of
materials, unavoidable casualties, Act of God, or other causes beyond Landlord’s
or Tenant’s reasonable control provided, however, that a party's lack of funds
shall not be deemed to be a cause beyond the control of such party, and
force
majeure shall be
deemed to exist only so long as the party relying on such delay to excuse its
performance promptly and specifically notifies the other party in writing of
such delay and exercises due diligence to remove or overcome it.




c. Limitation
on Damages. Except
as set forth in Section 3(b)(xi) of this Lease, Landlord shall not be liable to
Tenant for any special, consequential, incidental or punitive
damages.




d. Satisfaction
of Judgments Against Landlord. 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. 




e. Interest. Should
Landlord or Tenant fail to pay any amount due the other within 30 days of the
date such amount is due, then the amount due shall begin accruing interest
annually at a rate equal to the Prime Rate published in the Money Rates Section
of the Wall Street Journal (or a comparable prime rate if that index is not
available) plus Two Percent (2%), compounded monthly, or the highest permissible
rate under applicable usury law, whichever is less, from the date owed until
paid.




f. Legal
Costs. Should
Landlord or Tenant prevail in any legal proceedings against the other party for
breach of any provision in this Lease, then the non-prevailing party shall be
liable for the costs and expenses of the prevailing party, including its
reasonable attorneys' fees (at all tribunal levels). 




g. Sale
of Premises or Building. Landlord
may sell the Premises or the Building without affecting the obligations of
Tenant hereunder; upon the sale of the Premises or the Building and the express
assumption by the transferee of Landlord’s obligations under this Lease,
Landlord shall be relieved of all responsibility for the Premises and shall be
released from any liability thereafter accruing under this Lease. 




h. Time
of the Essence. Time is
of the essence in the performance of all obligations under the terms of this
Lease. 




i. Transfer
of Security Deposit. 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. 




j. Tender
of Premises. 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 unless requested in writing by
Landlord.




k. Tenant’s
Financial Statements. Upon
reasonable request of Landlord, Tenant agrees to furnish to Landlord copies of
Tenant’s most recent annual, quarterly and monthly financial statements, audited
if available. The financial statements shall be prepared in accordance with
generally accepted accounting principles, consistently applied. The financial
statements shall include a balance sheet and a statement of profit and loss, and
the annual financial statement shall also include a statement of changes in
financial position and appropriate explanatory notes. Landlord may deliver the
financial statements to any prospective or existing mortgagee or purchaser of
the Building.




l. Recordation. This
Lease may not be recorded without Landlord's prior written consent, but Tenant
and Landlord agree, upon the request of the other party, to execute a memorandum
hereof for recording purposes. The party requesting the memorandum of lease
shall be liable for payment of any recording taxes.




m. Partial
Invalidity. The
invalidity of any portion of this Lease shall not invalidate the remaining
portions of the Lease. 




n. Binding
Effect. This
Lease shall be binding upon the respective parties hereto, and upon their heirs,
executors, successors and assigns. 




o. Entire
Agreement. 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. 




p. Good
Standing. 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 in
which the Premises are located, 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. 




q. Terminology. The
singular shall include the plural, and the masculine, feminine or neuter
includes the other. 




r. Headings. Headings
of sections are for convenience only and shall not be considered in construing
the meaning of the contents of such section.




s. Choice
of Law. This
Lease shall be interpreted and enforced in accordance with the laws of the State
in which the Premises are located. 




t. Effective
Date. 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".




31. SPECIAL
CONDITIONS. The
following special conditions, if any, shall apply, and where in conflict with
earlier provisions in this Lease shall control: 




32. ADDENDA
AND EXHIBITS. If any
addenda are noted below, such addenda are incorporated herein and made a part of
this Lease. 




a. Lease
Addendum Number One- “Additional Rent - Operating Expense

Pass
Throughs” 

b. Exhibit
A - Owens and Minor Land

c. Exhibit
B - Project Plans

d. Exhibit
C-1 - Preliminary Project Outline Specifications

e. Exhibit
C-2 - Base Building vs. Tenant Improvements

f. Exhibit
D - Project Schedule

g. Exhibit
E - Clancy & Theys Tenant Improvement Contract

h. Exhibit
F - High Demand Electrical Equipment

i. Exhibit
G - Intentionally Deleted

j. Exhibit
H - Janitorial Specifications

k. Exhibit
I - Rules and Regulations

l. Exhibit
J - Rooftop Equipment




























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







TENANT:




SCI
SERVICES, INC., a
Virginia corporation




By:
        

Name:         

Title:
        




Date:
____________________________










LANDLORD:




HIGHWOODS
REALTY LIMITED PARTNERSHIP,

a North
Carolina limited partnership





	 	
      By:
      
	
      Highwoods
      Properties, Inc., a Maryland corporation, 




its
General Partner 







By:
      

Paul W.
Kreckman, Vice President



Date:
   

























ACKNOWLEDGMENTS







COMMONWEALTH
OF VIRGINIA



COUNTY OF
HENRICO




I, the
undersigned Notary Public, certify that Paul W. Kreckman personally came before
me this day and acknowledged that he is the Vice President of Highwoods
Properties, Inc. as general partner of Highwoods Realty Limited Partnership, a
North Carolina limited partnership, and that by authority duly given and as the
act of said partnership, the foregoing instrument was signed for the purposes
therein expressed.




WITNESS
my hand and notarial seal, this ____ day of _________________,
2004.




Notary
Public: ______________________________




My
Commission Expires: _____________________










STATE OF
_______________________   (Corporation)

COUNTY OF
_____________________




I, the
undersigned Notary Public, certify that ____________________________________
personally came before me this day and acknowledged that ____he is
_____________________ _____________ of
_____________________________________________________________, a
_________________________ corporation, and that by authority duly given and as
the act of the corporation, the foregoing instrument was signed in its name by
_______________________, as its _________________.




WITNESS
my hand and notarial seal, this ____ day of __________________,
2004.




Notary
Public: ______________________________

My
Commission Expires: _____________________































LEASE
ADDENDUM NUMBER ONE




[OPERATING
EXPENSE PASS THROUGHS]




ADDITIONAL
RENT - OPERATING EXPENSE PASS THROUGHS. 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 the amount for the Base
Year.

 

For the
period from the end of the Base Year to the end of 2006, Landlord
shall estimate the amount the Operating Expenses shall increase for the
remainder of 2006 above the Expense Stop (as hereinafter defined). 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,
on a monthly basis, Tenant's Proportionate Share of such annual increase in
Operating Expenses. Within ninety (90) days after the end of 2006, or as soon as
possible thereafter, 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. Operating Expenses during the Base Year shall be
referred to as the “Expense Stop.” For the Calendar Year commencing on January
1, 2007, 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, on a monthly basis, Tenant's Proportionate Share of such
annual increase in Operating Expenses. Within ninety (90) days after the end of
each Calendar Year or as soon as possible thereafter, 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. 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 there
is a decrease in Operating Expenses in any year below Expense Stop then no
additional rent shall be due on account of Operating Expenses, but Tenant shall
not be entitled to any credit, refund or other payment that would reduce the
amount of other additional rent or Base Rent owed. 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). All payments or
adjustments for Additional Rent shall be made within thirty (30) days after the
applicable Statement is sent to Tenant.




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 term
"Operating Expenses" shall mean all direct costs incurred by Landlord in the
provision of services to tenants and in the operation, repair and maintenance of
the Building and Common Areas as determined by generally accepted accounting
principles, including, but not limited to ad valorem real and personal property
taxes, hazard and liability insurance premiums, utilities, heat, air
conditioning, generator maintenance, janitorial service, labor, materials,
supplies, equipment and tools, permits, licenses, inspection fees, management
fees, 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").




In
addition, Operating Expenses shall not include:





	
      
	
      (a)
	
      original
      construction costs of the Building;







	
      
	
      (b)
	
      reserves
      for repairs, maintenance and replacements;








	
      
	
      (c)
	
      advertising,
      legal and space planning expenses and other leasing costs incurred in
      procuring tenants for the Building;








	
      
	
      (d)
	
      salaries,
      wages, or other compensation paid to employees of any property management
      organization being paid a fee by Landlord for its
  services;








	
      
	
      (e)
	
      amounts
      paid to any partners, shareholder, officer or director of Landlord, for
      salary or other compensation;








	
      
	
      (f)
	
      expenses
      for repairs, replacements or improvements arising from the initial
      construction of the Building to the extent such expenses are either (i)
      reimbursable to Landlord by virtue of warranties from contractors or
      suppliers or (ii) result by reason of deficiencies in design or
      workmanship;








	
      
	
      (g)
	
      accounting
      or legal fees other than those incurred in connection with reducing or
      attempting to reduce Operating Costs;








	
      
	
      (h)
	
      costs
      incurred to remedy, repair or otherwise correct any defects or violations
      of the Building, or by reason of any changes in governmental laws, rules
      or regulations occurring during the lease
term;








	
      
	
      (i)
	
      costs
      of repairs incurred by reason of fire or other casualty or condemnation to
      the extent Landlord is entitled to receive compensation therefor through
      proceeds of insurance under policies of insurance customarily maintained
      by other landlords or which are under this Lease required to be maintained
      by Landlord, or by reason of condemnation
awards;








	
      
	
      (j)
	
      costs
      relating to maintaining Landlord's existence, either as a corporation,
      partnership, or other entity, such as trustee's fees, annual fees,
      partnership organization or administration expenses, deed recordation
      expenses, legal and accounting fees (other than with respect to Building
      operations);








	
      
	
      (k)
	
      interest
      or penalties arising by reason of Landlord's failure to timely pay any
      Operating Expenses;








	
      
	
      (l)
	
      costs
      incurred with respect to any retail areas of the Building or which under
      generally accepted accounting principles would be properly allocable to
      retail areas of the Building (including, without limitation, costs
      incurred for parking areas of the Building which are properly allocable to
      the retail areas);








	
      
	
      (m)
	
      costs
      incurred for capital improvements of any nature unless specifically set
      forth in this Lease;








	
      
	
      (n)
	
      costs
      incurred to remove any hazardous or toxic wastes, materials or substances
      from either the Building or land upon which it is
  located;








	
      
	
      (o)
	
      Landlord's
      general corporate overhead and general and administrative
      expenses;








	
      
	
      (p)
	
      services
      provided and costs incurred in connection with the operation of any
      parking garage or off-site parking operations in the building, unless
      Tenant has exercised its option to require Landlord to construct
      structured parking as provided in Section
8(a)(x);








	
      
	
      (q)
	
      costs
      to comply with the Americans with Disabilities Act, as amended, as applied
      to the base Building only;








	
      
	
      (r)
	
      costs
      directly resulting from the negligence or willful misconduct of Landlord
      or its agents, contractors or employees;








	
      
	
      (s)
	
      the
      cost of any "tap fees" or one time lump sum sewer or water connection fees
      for the building;








	
      
	
      (t)
	
      any
      costs of selling, financing or mortgaging Landlord's interest in the
      Building and/or the land on which it is
located;








	 	
      (u)
	
      any
      costs of disputes between third parties;








	 	
      (v)
	
      costs
      of maintenance and repair of the generators serving the Building and any
      special HVAC units owned by Tenant, if such costs are paid directly by
      Tenant otherwise; and








	
      
	
      (w)
	
      any
      other costs or expenses not otherwise expressly stated herein which under
      generally accepted operating and/or management procedures would not be
      considered as a properly reimbursable Operating
Expense.







If the
aggregate of Controllable Operating Expenses, as hereinafter defined, in any
calendar year commencing January 1, 2006 increases by more than six percent (6
%) on a cumulative basis over the Controllable Operating Expenses payable during
the preceding calendar year, then for purposes of determining Tenant’s
proportionate share of Operating Expenses during the Lease Term, the amount by
which Controllable Operating Expenses increase during each calendar year shall
not exceed in any year an amount that such Controllable Operating Expenses would
have been if such Controllable Operating Expenses had increased by six percent
(6 %) during such calendar year (the “Cap”). In the event that in any calendar
year the increase in Controllable Operating Expenses over the Controllable
Operating Expenses for the immediate preceding lease year is less than or
greater than the Cap for such calendar year, any such shortfall or excess shall
be carried forward to later calendar years, thereby allowing Landlord to raise
the Cap for such years or apply the excess toward the Cap for such years, as the
case may be (provided that the average increase in the aggregate during the
Lease Term does not exceed six percent (6 %) per year). Tenant’s proportionate
share of Operating Expenses shall be calculated after the determination of
increases in Controllable Operating Expenses has been made pursuant to this
Section (subject to Tenant’s obligation to make estimated payments). The term
“Controllable Operating Expenses” shall mean all Operating Expenses other than
real estate taxes, utilities, janitorial services, security services, insurance,
and all other expenses that Landlord has no power to regulate.




During
the Lease Term, Landlord’s books and records pertaining to the calculation of
Operating Expenses for the two (2) immediately preceding calendar years may be
audited by a certified public accountant not retained by Tenant or Landlord for
other accounting, tax or other consulting work (which accountant shall not be
compensated in whole or in part on a contingency basis) at Tenant’s expense, at
any time within twelve (12) months after Tenant’s receipt of Landlord’s Annual
Statement; provided that Tenant shall give Landlord not less than thirty (30)
days prior written notice of any such audit. Tenant’s audit of Landlord's books
and records relating to the two (2) immediately preceding calendar years’
Operating Expenses shall occur at a mutually convenient time during reasonable
business hours at Landlord's office where Landlord’s books and records are
maintained. Tenant agrees to provide to Landlord copies of any and all reports,
summaries, conclusions, and other results of such audit within ten (10) days
following Tenant’s receipt thereof. If Landlord’s calculation of Tenant’s
Additional Rental for the audited calendar year was incorrect, then Tenant shall
be entitled (i) to a prompt refund of such overpayment, and (ii) the cost of
Tenant’s reasonable audit fees if the corrected Tenant’s Additional Rental is
less than 95% of Landlord’s calculation of Tenant’s Additional Rental; or Tenant
shall promptly pay to Landlord the amount of any underpayment, as the case may
be. Tenant and the accountant shall keep the results of any such audit
confidential as to all parties other than Landlord, and shall enter into a
written confidentiality agreement prior to conducting such audit. 








































EXHIBIT
A




[THE
OWENS AND MINOR LAND]

























EXHIBIT
B

[PROJECT
PLANS]




























EXHIBIT
C-1

[PRELIMINARY
PROJECT OUTLINE SPECIFICATIONS]






















EXHIBIT
C-2







Base
Building vs. Tenant Improvements




General
Note (applies to all sections of this Exhibit), wherever possible the Tenant’s
Interior Improvements will be constructed along with the Base Building
Construction in order to minimize or eliminate the cost of rework. For example
the fire sprinkler work will be installed in accordance with the then approved
tenant layout. In this example the Tenant pays for added sprinkler heads only as
costs to relocate sprinkler heads has been eliminated. 




DRYWALL/ACOUSTICAL





	
       

      Scope
      Item
	
       

       

      Applies
      to Base

      Building
	
       

      Applies
      to Tenant

      Allowance

	
      1. Drywall
      at exterior perimeter wall, taped and finished ready for
      paint.
	
      X
	 
	
      2. Drywall
      column wrap at exterior wall
	
      X
	 
	
      3. Drywall
      surrounding core elements and stairs on all floors, core internal and
      external faces of walls taped and ready for paint.
	
      X

       
	 
	
      4. Upper
      level elevator lobby, wall, and ceiling finishes 

      Excludes
      the external face of core walls outlined in item 3 above.
	 	
      X

	
      5. Drywall
      wrap at freestanding columns
	 	
      X

	
      6. Ceiling
      grid furnished and installed
	
      X
	 
	
      7. Ceiling
      tile installed, in accordance with shell building open plan (after
      completion of above ceiling work)
	
       

      X
	 
	
      8. Tenant
      corridor drywall
	 	
      X




























Base
Building vs. Tenant Improvements




ELECTRICAL








	
       

      Scope
      Item
	
       

       

      Applies
      to Base

      Building
	
       

      Applies
      to Tenant

      Allowance

	
      9. Lighting,
      one 2’ by 4’ fixture per 80 usable square feet 
	
      X
	 
	
      10. Power
      panel board (1 section 40 breaker panel for convenience
      outlets)

       

      10A.Additional
      panels for tenant’s convenience outlets
	
      X
	
       

       

       

      X

	
      11. Lighting,
      3 tube, 2’ x 4’ parabolic fixtures, 1 fixture / 80 usable square
      feet
	
      X
	 
	
      12. Lighting
      control system (first floor main lobby & parking lot)

       

      12A.
      Lighting control system for tenant areas (tied into base building control
      system.)
	
      X
	
       

       

       

      X

	
      13. Base
      building security system (first floor exterior doors)

       

      13A.
      Tenant Security System (excluding item 13 above)
	
      X
	
       

       

      X

	
      14. Main
      building Verizon demarcation with sleeves (4 per phone closet) through
      floor at base building phone closets.

       

      14A.
      Additional sleeves and conduits for internal voice/data
      distribution
	
      X
	
       

       

       

      X

	
      15. Telephone
      outlets, conduits or cable trays required in tenant space
	 	
      X

       

	
      16. Data
      service entry / riser
	 	
      X

	
      17. Data
      service connection and distribution
	 	
      X

	
      18. Lightning
      protection

       

      18A.
      Lightning protection conduits from roof to foundation

      at
      four corners of building inside column wraps.
	
       

       

       

      X
	
      X

	
      19. Emergency
      generator (For emergency use only)
	
      X

       
	 
	
      20. Tenant
      Lighting Grid, as outlined in items 9 & 11 above 
	
      X
	 
	
       

      21. Fire
      Alarm System for Base Building (shell building only)

      Includes
      main enunciator, remote enunciator and devices necessary for shell
      building compliance.

       

      21A.
      Additional Fire Alarm required for specific Tenant layout and design.
      Additional work will be connected to Base Building panel.
	
       

       

      X
	
       

       

       

       

       

      X































Base
Building vs. Tenant Improvements




FINISHES





	
       

      Scope
      Item
	
       

       

      Applies
      to Base

      Building
	
       

      Applies
      to Tenant

      Allowance

	
      22. Restroom
      tile, wall finishes, fixtures, counters, and partitions
	
      X
	 
	
      23. Main
      elevator lobby and building entry lobby floor, wall, and ceiling finishes.
      Finish selections to be approved by Tenant.
	
      X
	 
	
      24. Typical
      upper elevator floor, wall and ceiling finishes. Finishes selected by
      Tenant and approved by Landlord.
	 	
      X

	
      25. Typical
      tenant corridor at upper floors
	 	
      X

	
      26. Window
      blinds (by owner) one inch aluminum mini blinds.
	
      X
	 
	
      27.
      Telephone (with sleeves in floor) and Electrical Rooms on each
      floor.
	
      X
	 
	
      28.
      Landscape area on lake side with brick patio.

       

      29.
      Covered area or gazebo for smoking area.
	
      X

       

      X

       

       

       
	 






























Base
Building vs. Tenant Improvements




HVAC/PLUMBING





	
       

      Scope
      Item
	
       

       

      Applies
      to Base

      Building
	
       

      Applies
      to Tenant

      Allowance

	
      30.Main
      ductwork and core boxes (based on shell layout)
	
      X
	 
	
      31. Medium
      pressure ductwork and one VAV box for every 1,000 usable square feet in
      Tenant Space (based on open area shell layout).
	
      X
	 
	
      32. Modification
      to main ductwork and standard exterior zones (to accommodate tenant’s
      layout)
	 	
      X

	
      33. Modification
      to main ductwork and standard interior zones (to accommodate tenant’s
      layout)
	 	
      X

       

	
      34. Low
      pressure ductwork and air distribution at interior zones (one VAV box per
      1,000 usable square feet, based on shell building layout)
	
      X
	 
	
      35. Base
      building energy management system
	
      X
	 
	
      36. Two
      wet columns for tenant water/sewer connection
	
      X
	 
	
      37.
      Tenant plumbing fixtures and connection to wet columns (for fixtures added
      in the tenant improvement plan)
	 	
      X

	
      37. Sprinkler
      system with heads turned down at typical spacing for light hazard
      occupancy in Tenant space

       

      37A.
      Added sprinkler heads to accommodate Tenant’s layout and
      design.
	
      X
	
       

       

       

       

      X

	
       

      39.
      Complete common area bathrooms on each floor. Finish selections to be
      approved by Tenant.
	
      X
	 
	 	 	 






I:\WMCDLIB\JOHNMER\0891056.01

























EXHIBIT
D

[PROJECT
SCHEDULE]







Start
Civil Engineering      2/18/04

Preliminary
Plans and Outline Specifications    4/06/04

Site
Plan Layout       4/06/04

File
POD        4/09/04

Lease
Execution       4/30/04

Planning
Commission Hearing and Approval    5/26/04

Close
on Acquisition of Owens and Minor Land   6/15/04

Approval
of Shell Building Plans and Final Specifications  4/01/04
- 6/30/04

Tenant’s
Space Plans and Construction Drawings   4/01/04
- 9/01/04

Building
Construction       10/01/04
- 7/01/05

Tenant
Move-In       7/01/05
- 7/31/05

Rent
Commencement       8/01/05





































EXHIBIT
E

[CLANCY
& THEYS TI CONTRACT]




























EXHIBIT
F

[HIGH
DEMAND ELECTRICAL EQUIPMENT]







Supplemental
HVAC (Liebert Unit in Communications Room)






 
















EXHIBIT
G

[INTENTIONALLY
DELETED]




























EXHIBIT
H




[JANITORIAL
SPECIFICATIONS]







A. OFFICE
AREA:




Daily: (Monday
- Friday, 6:00 p.m. - 8:00 p.m., exclusive of holidays)




1. Empty and
clean all waste receptacles and ash trays and remove waste material from the
premises; wash receptacles as necessary. Replace liners if soiled or
torn.

2. Sweep and
damp mop all uncarpeted areas.

3. Vacuum
rugs and carpeted areas in traffic and work areas.

4. Hand dust
and wipe clean with treated cloths all horizontal surfaces including furniture
and convector tops, within normal reach.

5. Wash
clean all water fountains.

6. Clean
smudges and hand prints from glass and walls.

7. Upon
completion of cleaning, all lights will be turned off and doors locked, leaving
the Premises in an orderly condition.

8.
Janitorial contractor will not be responsible for arming/disarming any alarm
system installed by Tenant, or any false alarm charges billed to Landlord
because of the inability by Janitorial contractor to do so.








Weekly:




1. Dust coat
racks, window ledges, chair rails and door ledges.

2. Remove
all finger marks from private entrance doors, light switches and
doorways.

3. Vacuum
entire carpeted areas.

4. Spot
clean all carpets as needed.

5. Wipe
clean all brass and other bright work.

6. Hand dust
all grill work within normal reach.







Quarterly:




Render
high dusting not reached in daily cleaning to include:




1. Dusting
of all pictures, frames, charts, graphs, and similar wall hangings.

2. Dusting
all vertical surfaces such as walls, partitions, doors and ducts.

3. Dusting
of all pipes, ducts and high holdings.

4. Dusting
of all venetian blinds.




B. LAVATORIES:




Daily: (Monday
- Friday, exclusive of holidays)




1. Sweep and
damp mop floors.

2. Clean all
mirrors, powder shelves, dispensers and receptacles, bright work, flushometers,
piping and toilet seat hinges.

3. Wash both
sides of all toilet seats.

4. Wash
basin bowls and urinals

5. Dust and
clean all power room fixtures.

6. Empty and
clean paper towel/sanitary disposal receptacles. Change liners
nightly.

7. Remove
waste paper and refuse.

8. Refill
tissue holders, soap dispensers, towel dispensers, vending sanitary dispensers
and toilet seat covers. (Materials furnished by contractor).

9. A
sanitizing solution will be used in all lavatory cleaning.




Monthly:




1. Machine
scrub all lavatory floors.

2. Wash all
partitions and tile walls in lavatories.






















C. MAIN
LOBBY FLOOR, ELEVATORS, BUILDING EXTERIOR, AND
CORRIDORS




Daily: (Monday -
Friday, exclusively of holidays)




1. Sweep and
wash all floors.

2. Wash all
rubber mats.

3. Clean all
elevators, wash or vacuum floors, wipe down walls and doors.

4. Spot
clean any metal work inside lobby.

5. Spot
clean any metal work surrounding Building Entrance doors.

6. Spot
clean glass in entrance areas.

7. Empty all
trash and cigarette receptacles.

8. Clean
corridor carpets as necessary.







Monthly:




1. All
resilient tile floors in public areas to be treated equivalent to spray
buffing.

2. Clean
interior, exterior lobby glass.










D. SERVICE
LEVEL AND/OR JANITORS’ CLOSETS




Daily:




1. Maintain
Janitors closet in a clean, neat and orderly condition.

2. Clean and
maintain janitorial storage areas.

3. Place all
trash in approved receptacles.







DUTIES
FOR DAY PORTER

(Only
applies to specified Buildings)




1. Wipe down
elevator cab and doors, carpet swept, tracks clean on both floors, and free of
trash.

2. Check
trash can in parking lot and keep exterior cigarette cans clean, check dumpster
pads.

3. Wipe down
handrails to remove fingerprints.

4. Bathrooms:
Priority in all buildings - Empty trash and clean, but only dry mop or sweep the
floors, clean mirrors, make certain all toilets are clean and flushed. Check
partitions and clean, check toilet paper, soap, and paper towels. 

5. Clean all
glass, including storefronts and exterior doors.

6. Check
hallways and lobby - Vacuum as necessary.

7. Remove
cobwebs from exterior doorways and light fixtures.

8. Sweep
sidewalks, check for cigarette butts in grass and mulch beds.

9. Check
water fountains.

10. Check
stairwells - Clean as necessary.

11. Report to
Landlord any bulbs out - anywhere.

12. Wipe down
walls that have marks.

13. Polish
wood doors - any scratches use scratch cover.

14. May add
new duties as necessary.

15. Service
hours are Monday - Friday (business hours).




























EXHIBIT
I




[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 shall 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. If Tenant
      requires a replacement of the FOB key provided at the commencement of the
      Term, it shall be at Tenant’s expense. All additional keys and access
      cards requested by Tenant shall be provided at Tenant’s
      expense.








	
      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
      lights and equipment in the Premises, unless any equipment or lights are
      required to be operational after hours.








	
      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,
      including windows and doors, without the written consent of Landlord, and
      then only in such color, size, style, character and material as shall be
      first approved by Landlord in writing. 








	
      6.
	
      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
      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.








	
      7.
	
      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 sightly 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.








	
      8.
	
      Additional
      Locks.
      Tenant shall not attach, or permit to be attached, additional locks 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 posses-sion, Tenant shall immediately surrender all keys to
      the Premises.








	
      9.
	
      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 materially greater amount of
      electrical current than provided in Section 7(a)(ii) 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 Tenant shall
      not in any event connect a greater load than that which is
      safe.








	
      10.
	
      Office
      of the Building.
      Except as otherwise expressly provided in the Lease, 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.








	
      11.
	
      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.








	
      12.
	
      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.








	
      13.
	
      Nuisances
      and Certain Other Prohibited Uses.
      Tenant shall not (a) install or operate any internal combus-tion engine
      (other than the generator(s) contemplated by the Lease), 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 sleep-ing purposes; (d)
      prepare or warm food in the Premises or permit food to be brought into the
      Premises for consumption therein (heating coffee and individual lunches of
      employees excepted) except by express permission of 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.








	
      14.
	
      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.








	
      15.
	
      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.








	
      16.
	
      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.
      Problems in Building and suite security should be directed to Landlord at
      (804) 527-6204.








	
      17.
	
      Parking.
      Parking is in designated parking areas only. There shall be no vehicles in
      "no parking" zones or at curbs. Handicapped spaces are for handicapped
      persons only and the Police Department will ticket unauthor-ized
      (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.








	
      18.
	
      Janitorial
      Service.
      The janitorial staff will remove all trash from trashcans. 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 (804
      527-6204)































EXHIBIT
J

[ROOFTOP
EQUIPMENT]







The
following Equipment specifications are provided:








	 	
      1.
	
      The
      make, model and serial numbers of all transmitter, receivers, antennas and
      associated equipment.








	 	
      2.
	
      The
      dimensions and specifications for any Equipment to be positioned on the
      Building rooftop, including:







a) The
maximum height of the Equipment (from Building rooftop membrane to the highest
point on the Equipment), including any mounting hardware.




b) The
diameter of the satellite dish [if satellite dish] or the diameter of the
antenna [if an antenna].




c) The color
of any antenna that will extend above roof screens.

/

d) The
dimensions (footprint) of any satellite dish supports to be placed on the
rooftop and the ballast to be use [satellite dish].




e) The total
weight of the rooftop Equipment.




f) A
description of win-load characteristics.




g) The
frequencies of all transmitter, receiver, and antennas.




h) The
azimuth of all Equipment.




i) The
effective radiated power for all transmitting Equipment.




3.A
detailed description of power requirements and any proposed connections to
Building equipment or systems.





	 	
      4.
	
      A
      detailed description of mounting
requirements.







5. A
description of the intended use of the Equipment.







LEASE
AMENDMENT NUMBER ONE




This
LEASE AMENDMENT NUMBER ONE entered into this ______ day of _______________,
20____ (the “First Amendment”), by and between HRLP,
LLC, a
Delaware limited liability company as successor in interest to Highwoods Realty
Limited Partnership, with its principal office at 3100 Smoketree Court, Suite
600, Raleigh, North Carolina 27604 (the “Landlord”) and SCI
SERVICES, INC., a
Virginia corporation (the “Tenant”).




W
I T N E S S E T H:




WHEREAS,
Tenant and Landlord entered into that certain Build-To-Suit Lease dated May 10,
2004 (the “Lease”), whereby Landlord leased to Tenant all of the net rentable
square footage of that certain building known as the Saxon Capital Building, to
be constructed on that certain real property located at 4840 Cox Road, Glen
Allen, Virginia; and




WHEREAS,
the parties hereto desire to alter and modify said Lease in the manner
hereinafter set forth,




NOW
THEREFORE, in consideration of the mutual and reciprocal promises contained
herein and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree to
amend the Lease as follows:





	
      1.
	
      Additional
      Allowance. In
      addition to the existing Allowance of $18.00 per net rentable square foot
      provided to Tenant in Section 3b(viii) of the Lease, Landlord hereby
      grants to Tenant an additional allowance of $1,500,000.00 to use for
      payment of the costs of the Tenant Improvements beyond the Base Building
      (the “Additional Allowance”), as confirmed by that certain letter
      agreement dated ______________, 2005, a copy of which is attached hereto
      as Exhibit A. The Additional Allowance shall be amortized over the initial
      Term of the Lease at an annual interest rate of twelve percent (12%),
      compounded monthly. Tenant shall pay the amortized Additional Allowance as
      part of Base Rent in equal monthly installments of $19,549.69 ($2.09 per
      rsf annually), as shown in the rent schedule set forth in Section 2 below.
      The cost of any Tenant Improvements in excess of the Allowance and the
      Additional Allowance shall be paid by Tenant in accordance with Section
      3b(viii) of the Lease. 








	
      2.
	
      Base
      Rent.
      Section 6b of the Lease, entitled “Base Rent”, is hereby amended to
      include the following rent schedule:








	
       

       

       

       

       

       

       

       

      YEARS
	
       

       

       

      ANNUAL
      NET RENT (PER RSF)*
	
      ANNUAL
      AMORTIZED ADDITIONAL ALLOWANCE (PER RSF)
	
       

       

      TOTAL
      MONTHLY BASE RENT
	
       

       

       

      CUMULATIVE
      BASE RENT

	
      1
	
      $19.75
	
      $2.09
	
      $204,289.54
	
      $
      2,451,474.48

	
      2
	
      $20.03
	
      $2.09
	
      $206,908.64
	
      $
      2,482,903.68

	
      3
	
      $20.31
	
      $2.09
	
      $209,527.73
	
      $
      2,514,332.76

	
      4
	
      $20.59
	
      $2.09
	
      $212,146.83
	
      $
      2,545,761.96

	
      5
	
      $20.88
	
      $2.09
	
      $214,859.47
	
      $
      2,578,313.64

	
      6
	
      $21.18
	
      $2.09
	
      $217,665.64
	
      $
      2,611,987.68

	
      7
	
      $21.48
	
      $2.09
	
      $220,471.82
	
      $
      2,645,661.84

	
      8
	
      $21.79
	
      $2.09
	
      $223,371.53
	
      $
      2,680,458.36

	
      9
	
      $22.11
	
      $2.09
	
      $226,364.78
	
      $
      2,716,377.36

	
      10
	
      $22.43
	
      $2.09
	
      $229,358.04
	
      $
      2,752,296.48

	
      11
	
      $22.76
	
      $2.09
	
      $232,444.83
	
      $
      2,789,337.96

	
      12
	
      $23.10
	
      $2.09
	
      $235,625.16
	
      $
      2,827,501.92

	
      BASE
      RENT: $31,596,408.12




*Except
for Year 1, these amounts are all estimates and won’t be finalized until the
Base Year Operating Expenses have been determined. Additionally, all of the
above amounts are subject to change based on the final determination of the net
rentable square footage of the Building. Pursuant to Section 6b of the Lease,
the parties will execute an amendment establishing the actual rent schedule
promptly after the completion of the Base Year.





	
      3.
	
      Miscellaneous.
      The
      foregoing is intended to be an addition and a modification to the Lease.
      Unless otherwise defined herein, all capitalized terms used in this First
      Amendment shall have the same definitions ascribed in the Lease. Except as
      modified and amended by this First Amendment, the Lease shall remain in
      full force and effect. If anything contained in this First Amendment
      conflicts with any terms of the Lease, then the terms of this First
      Amendment shall govern and any conflicting terms in the Lease shall be
      deemed deleted in their entirety.







4. Tenant
Acknowledgment. Tenant
acknowledges that Landlord has complied with all of its obligations under said
Lease to date, and, to the extent not expressly modified hereby, all of the
terms and conditions of said Lease shall remain unchanged and in full force and
effect.










[REMAINDER
OF PAGE INTENTIONALLY BLANK

SIGNATURE
BLOCKS ON NEXT PAGE]






















IN
WITNESS WHEREOF, Tenant and Landlord have caused this instrument to be executed
as of the date first above written, by their respective officers or parties
thereunto duly authorized.




Tenant:





SCI
SERVICES, INC.

a
Virginia corporation




By:
       

Name:        

Title:
       




Date:
        













Landlord:





HRLP,
LLC

a
Delaware limited partnership

By:
 Highwoods
Realty Limited Partnership, a North Carolina




limited
partnership, its sole member

By:
Highwoods Properties, Inc., a Maryland corporation,

  its
general partner




By:
       

Paul W.
Kreckman, Vice President




Date:
       



















GUARANTOR
AGREEMENT







By
its execution of this First Amendment and subject to the terms set forth
therein, the undersigned (“Guarantor”) hereby: (a) consents to and approves of
the terms and conditions of this First Amendment; (b) acknowledges and agrees
that the Lease (as amended) continues to be guaranteed by Guarantor pursuant to
the terms of that certain Lease Guaranty dated May 10, 2004, executed by
Guarantor; (c) ratifies and reaffirms all of the terms and provisions of the
Restated Lease (as amended) and Guarantor’s guaranty; and (d) agrees that this
First Amendment shall not in any manner impair, diminish, extinguish, release,
reduce, terminate, limit, discharge or adversely affect the continuing liability
of Guarantor.










Guarantor:




SAXON
CAPITAL, INC.

a
Delaware corporation




By:
       

Name:        

Title:
       




Date: