Document:

exv10w8

 

EXHIBIT 10.8

Deed of Lease

Alliance Home Funding, LLC

Page i of 63

DEED OF LEASE

by and between

WEST STREET DEVELOPMENT, LLC

(“Landlord”)

and

Alliance Home Funding, LLC

a Virginia limited liability company

(“Tenant”)

at

9200 Church Street

Manassas, Virginia

First Floor

(The VFN Building)

 

 

Deed of Lease

Alliance Home Funding, LLC

Page ii of 63

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	1.	 	
TERMS
	 	 	1	 
	2.	 	
PAYMENT OF BASE RENT & ADDITIONAL RENT
	 	 	4	 
	3.	 	
SECURITY DEPOSIT
	 	 	4	 
	4.	 	
USES; TENANT COVENANTS
	 	 	5	 
	5.	 	
ENVIRONMENTAL PROVISIONS; RECYCLING
	 	 	6	 
	6.	 	
LATE CHARGES; INTEREST LATE CHARGES; INTEREST
	 	 	9	 
	7.	 	
REPAIRS AND MAINTENANCE
	 	 	9	 
	8.	 	
UTILITIES AND SERVICES
	 	 	10	 
	9.	 	
OPERATING COSTS
	 	 	11	 
	10.	 	
REAL ESTATE TAXES
	 	 	15	 
	11.	 	
ADDITIONAL PROVISIONS; OPERATING COSTS
AND REAL ESTATE TAXES

	 	 	16	 
	12.	 	
TENANT’S INSURANCE
	 	 	17	 
	13.	 	
LANDLORD’S INSURANCE
	 	 	19	 
	14.	 	
DAMAGE OR DESTRUCTION
	 	 	19	 
	15.	 	
MACHINERY AND EQUIPMENT; ALTERATIONS AND
ADDITIONS; REMOVAL OF FIXTURES

	 	 	21	 
	16.	 	
ACCEPTANCE OF PREMISES
	 	 	22	 
	17.	 	
TENANT IMPROVEMENTS
	 	 	22	 
	18.	 	
ACCESS
	 	 	22	 
	19.	 	
MUTUAL WAIVER OF SUBROGATION
	 	 	22	 
	20.	 	
INDEMNIFICATION
	 	 	23	 
	21.	 	
ASSIGNMENT AND SUBLETTING
	 	 	24	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page iii of 63

	 	 	 	 	 	 	 
	22.	 	
ADVERTISING
	 	 	26	 
	23.	 	
LIENS
	 	 	26	 
	24.	 	
DEFAULT
	 	 	26	 
	25.	 	
SUBORDINATION
	 	 	29	 
	26.	 	
SURRENDER OF POSSESSION
	 	 	30	 
	27.	 	
NON-WAIVER
	 	 	30	 
	28.	 	
HOLDOVER
	 	 	30	 
	29.	 	
CONDEMNATION
	 	 	30	 
	30.	 	
NOTICES
	 	 	31	 
	31.	 	
MORTGAGEE PROTECTION
	 	 	31	 
	32.	 	
COSTS AND ATTORNEYS’ FEES
	 	 	32	 
	33.	 	
BROKERS
	 	 	32	 
	34.	 	
LANDLORD’S LIABILITY
	 	 	32	 
	35.	 	
ESTOPPEL CERTIFICATES
	 	 	33	 
	36.	 	
EXCLUSIVITY
	 	 	33	 
	37.	 	
TRANSFER OF LANDLORD’S INTEREST
	 	 	33	 
	38.	 	
RIGHT TO PERFORM
	 	 	34	 
	39.	 	
COMMON AREAS
	 	 	34	 
	40.	 	
SALES AND AUCTIONS; SIGNAGE
	 	 	34	 
	41.	 	
ACCESS TO ROOF
	 	 	35	 
	42.	 	
ACCESS; SECURITY
	 	 	36	 
	43.	 	
AUTHORITY OF LANDLORD AND TENANT
	 	 	36	 
	44.	 	
NO ACCORD OR SATISFACTION
	 	 	36	 
	45.	 	
LEGAL REQUIREMENTS
	 	 	36	 
	46.	 	
PARKING
	 	 	37	 
	47.	 	
GENERAL PROVISIONS
	 	 	37	 
	48.	 	
RULES AND REGULATIONS
	 	 	39	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page iv of 63

	 	 	 	 	 	 	 
	49.	 	
ARBITRATION
	 	 	39	 
	50.	 	
WAIVER OF JURY TRIAL
	 	 	40	 
	51.	 	
RENEWAL TERM
	 	 	40	 
	EXHIBIT A	 	
Conceptual Floor Plans
	 	 	43	 
	EXHIBIT B	 	
Site Plan
	 	 	44	 
	EXHIBIT C	 	
Construction Provisions (including Schedule C-1)
	 	 	45	 
	EXHIBIT D	 	
Rules and Regulations
	 	 	55	 
	EXHIBIT E	 	
Declaration of Lease Commencement
	 	 	59	 
	EXHIBIT F	 	
Form of Estoppel Certificate
	 	 	60	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page  1  of 63

DEED OF LEASE

               THIS
DEED OF LEASE (“Lease”) is made as of the 15th day of November
2002, by and between WEST STREET DEVELOPMENT, LLC, a Virginia limited
liability company (“Landlord”), and ALLIANCE HOME FUNDING, LLC, a Virginia
limited liability company (“Tenant”).

R E C I T A L S:

          Landlord, for and in consideration of the rents and all other charges and
payments hereunder and of the covenants, agreements, terms, provisions and
conditions to be kept and performed hereunder by Tenant, grants and conveys to
Tenant, and Tenant hereby hires and takes from Landlord, a leasehold interest
in the premises described below (“Premises”), subject to all matters
hereinafter set forth and upon and subject to the covenants, agreements,
terms, provisions and conditions of this Lease for the term hereinafter
stated.

          NOW THEREFORE Landlord and Tenant hereby agree to the following:

1.      TERMS.

          1.1        
Premises. (a) The premises demised by this Lease will consist of
approximately Two Thousand Two Hundred Ninety Six (2,296) rentable square
feet of space (the “Premises”) to be measured and certified in accordance with
the BOMA modified standard of measurement, located on the First (1st) floor of
that certain building located at 9200 Church Street, Manassas, Virginia (the
“Building”), together with common non-reserved parking with other tenants of
the Building throughout the initial Lease Term and any Renewal Terms, and the
non-exclusive use of various Common Areas (as defined in Section 39 hereof),
as more particularly set forth herein. The land upon which the Building is
situated, which is generally depicted on the diagram attached hereto as
Exhibit “B” (the “Site Plan”) and incorporated herein by reference, shall be
referred to hereinafter as the “Land”. The Land and the Building are
collectively referred to herein as the “Project”. The location and dimensions
of the Premises are shown on the conceptual floor plans attached hereto as
Exhibit “A” and incorporated herein by reference. No easement for light or
air is incorporated in or intended to be conveyed with the Premises.

          1.2        
Tenant’s Share. “Tenant’s Share” shall mean a fraction, the numerator
of which is the total rentable square footage of the Premises as determined in
accordance with Section 1.1 hereof (2,296 rentable square feet), and the
denominator of which is the total rentable square footage of the Building
(25,905 rentable square feet).

          1.3        
Lease Term. The term of this Lease (the “Term” or “Lease Term”) shall
commence on the “Rent Commencement Date” as defined in Section 1.4 below (and
as more fully set forth in Exhibit “C” hereto), and shall expire eighty four
(84) months after the Rent Commencement Date (the “Lease Expiration Date”);
provided that if the Rent Commencement Date is a date other than the first day
of a calendar month, the Lease Term shall run for the number of months set
forth above from the first day of the calendar month following the Rent
Commencement Date.

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 2 of 63

          1.4        Commencement and Rent Commencement Dates.

                       1.4.1    The “Commencement Date”, currently anticipated to be on or about
January 1, 2003 shall be the date upon which Landlord’s Work is “substantially
completed”, as such term is defined below, except to the extent modified by
operation of the remedial provisions of Exhibit C attached hereto and made a
part hereof by this reference. Notwithstanding the foregoing, for purposes of
this Lease, the term “Commencement Date” shall also mean any adjusted
Commencement Date which may be established pursuant to the provisions of this
Lease. Landlord and Tenant hereby agree to execute a Declaration, in the form
attached hereto as Exhibit “E”, to confirm the Commencement Date. Tenant’s
failure to execute said Declaration shall not affect the Commencement Date, or
the Lease Expiration Date, as the same may be determined by the terms of this
Lease. For purposes hereof, the term “Substantial Completion” shall mean that
(1) Landlord’s Work (as defined in Exhibit C) has been completed in accordance
with the Approved Plans (as defined in Exhibit C), other than (A) special,
non-standard items requested by Tenant that require an unacceptably long lead
time for procurement and/or installation, provided Landlord notifies Tenant in
writing of the materials that are long lead items and within a reasonable
period of time, Tenant decides not to select more readily available alternative
materials, and (B) “punch list” items and other minor defects which will not
unreasonably interfere with Tenant’s ability to lawfully take occupancy of the
Premises or to conduct its business therein; and (2) Landlord has obtained all
governmental inspection and other approvals capable of being obtained by
Landlord in connection with such construction prior to the performance of
Tenant’s Work, if any, and the Tenant’s installation of its trade fixtures,
furniture and equipment (including without limitation a permanent or temporary
non-residential use permit or its equivalent permitting Tenant to lawfully
occupy the Premises, unless the same cannot be obtained by Landlord because of
any incomplete Tenant Work, or because the same cannot be obtained prior to
Tenant’s installation of its Tenant improvements, trade fixtures, furniture and
equipment or because such installation is in violation of any applicable legal
or code requirements, in which event the non-issuance of such permanent or
temporary non-residential use permit or its equivalent shall not affect the
status of the Premises as “substantially completed”).

                       1.4.2    The “Rent Commencement Date” shall be that date which is the earlier
of (i) the Commencement Date, or (ii) the date on which Tenant occupies all or
any part of the Premises.

          1.5
        Base Rent. The base rent payable by Tenant hereunder (“Base Rent”) is
set forth in this Section 1.5.1, below. This Lease is intended to be a
“triple-net” lease and the Base Rent is in addition to (and not to be reduced
by) any payment of Additional Rent (as hereinafter defined) hereunder. Base
Rent shall be payable monthly, in equal monthly installments, in advance, on
the first day of each calendar month of the Term, without prior notice, demand,
deduction or offset.

                       1.5.1    Subject to the provisions of Section 1.5.2 below, the annual Base
Rent for the Premises (monthly installments of which may be referred to herein
as “Monthly Base Rent”) for the initial Lease Year of the Term shall be
Twenty-Two Dollars ($22.00) per square foot of the Premises. Thereafter, as of
the first twelve (12) month anniversary of the Commencement Date and each
annual anniversary thereafter, the Base Rent shall be increased to an amount equal to one
hundred three and one-half percent (103.5%) of the Base Rent for the
immediately preceding Lease Year.

                       1.5.2    In the event Tenant exercises its Renewal Option in accordance with
Section 51 of this Lease, Base Rent and escalations for any Renewal Term(s)
under this Lease shall be as set forth in Section 51 below.

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 3 of 63

          1.6         Additional Rent. Tenant’s Share (as hereinafter defined) of Real
Estate Taxes (as defined in Section 10), Operating Costs (as defined in Section
9) and any other sum owed or reimbursable by Tenant to Landlord under this
Lease (excluding Base Rent) shall be considered additional rent hereunder
(collectively “Additional Rent”), and, except for items of Additional Rent for
which demand is required pursuant to the express terms of this Lease, shall be
payable without demand, set-off or deduction. Estimates of those items of
Additional Rent described in Section 9 and Section 10 of this Lease shall be
payable monthly, in advance, on the first day of each calendar month of the
Term, together with Tenant’s monthly payment of Base Rent, without demand,
set-off or deduction.

          1.7        Notice and Payment Addresses. Any notices under this Lease shall be
governed by the terms of Section 30, below. The notice addresses of the
parties are as follows:

	 	 	 
	If to Landlord:	 	 
	 	(effective Lease execution)
	 
	 	
	9324 West Street, Suite 400

Manassas, Virginia 20110

Attention: Michael R. Vanderpool, Manager

	 	 	 
	 	(effective Lease Commencement)
	 
	 	
	
9200 Church Street, Fourth Floor

Manassas, Virginia 20110

Attention: Michael R. Vanderpool, Manager

	 	 	 
	If to Tenant:	 	 
	 	(effective Lease execution)
	 
	 	
	12735 Shops Lane

Fairfax, Virginia 22033

Attention: Paul M. Harbolick, V.P.

	 	 	 
	 	(effective Lease Commencement)
	 
	 	
	
12735 Shops Lane

Fairfax, Virginia 22033

Attention: Paul M. Harbolick, V.P.

Either party may, by ten (10) days’ prior written notice to the other,
designate a new address to which all notices hereunder shall be directed.

          1.8         Rent Payment Address. Tenant shall send payments of Base Rent and
Additional Rent hereunder to Landlord at the following address, or to such
other address of which Landlord may advise Tenant in writing:

	 	 	 
	 	(effective Lease execution)
	 
	 	
	West Street Development, LLC

9324 West Street, Suite 400

Manassas, Virginia 20110

Attention: Michael R. Vanderpool, Manager

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 4 of 63

	 	 	 
	 	(effective Lease Commencement)
	 
	 	
	West Street Development, LLC

9200 Church Street, Fourth Floor

Manassas, Virginia 20110

Attention: Michael R. Vanderpool, Manager

          1.9         Lease Year. Each twelve (12) month period within the Lease Term shallbe referred to herein as a “Lease Year.” The first Lease Year shall commence
on the Rent Commencement Date and terminate on the last day of the twelfth full
calendar month after the Rent Commencement Date. Each subsequent Lease Year
shall commence on the date immediately following the last day of the preceding
Lease Year and shall continue for a period of twelve (12) full calendar months,
except that the last Lease Year of the Lease Term shall terminate on the date
this Lease expires or is otherwise terminated.

          1.10        Deed of Lease. To the extent required under applicable law to make
this Lease legally effective, this Lease shall constitute a deed of lease.

2.       PAYMENT OF BASE RENT & ADDITIONAL RENT.

          Commencing as of the Rent Commencement Date, Tenant shall pay Landlord the
Base Rent and Additional Rent due under this Lease without prior notice,
demand, deduction or offset, in lawful money of the United States. Base Rent
and Additional Rent shall be paid at the address noted in Section 1.8, or to
such other party or at such other place as Landlord may hereafter from time to
time designate in writing. Base Rent and Additional Rent under this Lease for
any partial month at the beginning or end of the Lease Term shall be prorated.
Except for monthly installments of estimated Additional Rent as set forth in
Sections 9 and 10 of this Lease, or as otherwise provided in this Lease, all
payments of Additional Rent shall be paid no later than thirty (30) days after
the date Landlord notifies Tenant in writing of the amount thereof. In the
event of any dispute concerning the computation of the amount of any Additional
Rent due, Tenant shall pay the amount specified by Landlord pending the
resolution of the dispute, and, subject to Section 9.4 hereof, such payment
shall be without prejudice to Tenant’s right to continue to challenge the
disputed computation.

3.       SECURITY DEPOSIT.

          3.1         Security Deposit. Simultaneously with the execution of this Lease by
Tenant, the Tenant shall provide Landlord with a security deposit in an amount
equal to one month’s Base Rent equal to Four Thousand and 00/100 Dollars
($4,000.00) (the “Security Deposit”). The Security Deposit shall constitute
security for payment of Base Rent and Additional Rent and for any and all other
obligations of Tenant under this Lease. If Tenant defaults, beyond any
applicable cure period, with respect to any covenant or condition of this
Lease, including but not limited to the payment of Base Rent, Additional Rent
or any other payment due under this Lease, and the obligation of Tenant to
maintain the Premises and deliver possession thereof back to Landlord at the
expiration or earlier termination of the Lease Term in the
condition required herein, then Landlord may (without any waiver of
Tenant’s default being deemed to have occurred) apply all or any part of the
Security Deposit to the payment of any sum in default beyond any applicable
cure period, or any other sum which Landlord may be required or deem necessary
to spend or incur by reason of Tenant’s default, or to satisfy in part or in
whole any damages suffered by Landlord as a result of Tenant’s default which
continues to exist beyond any applicable cure period. In the event of such
application, Tenant shall promptly deposit with Landlord the amount necessary
to restore the Security

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 5 of 63

Deposit to the full amount set forth above. The
parties expressly acknowledge and agree that the Security Deposit is not an
advance payment of Base Rent or Additional Rent, nor a measure of Landlord’s
damages in the event of any default by Tenant. If Tenant shall have fully
complied with all of the covenants and conditions of this Lease, but not
otherwise, the amount of the Security Deposit then held by Landlord shall be
repaid to Tenant within thirty (30) days after the expiration or sooner
termination of this Lease. In the event of a sale or transfer of Landlord’s
estate or interest in the Building, Landlord shall transfer the Security
Deposit to the purchaser or transferee, and upon such transfer Landlord shall
be considered released by Tenant from all liability for the return of the
Security Deposit, provided Landlord’s purchaser or transferee acknowledges said
transfer of the Security Deposit in writing.

          3.2         Advance Deposit. Simultaneously with the execution of this Lease by
Tenant, the Tenant shall deposit with Landlord the sum of Three Thousand Six
Hundred Sixty Six and 66/100 Dollars ($3,666.66), which sum shall be subject to
adjustment upon final measurement of the Premises pursuant to Section 1.1, as a
deposit of the first month’s Rent (the “Advance Deposit”), which shall be
applied by Landlord on behalf of the Tenant to the payment of the first month’s
Rent when due and payable. Any good faith deposit made at the time Tenant
executed and delivered to Landlord any letter of intent or proposal to lease
shall be applied toward the amount of the Advance Deposit. The Advance
Deposit, prior to its being applied to the payment of monthly Rent, shall
constitute security for the payment and performance by Tenant of all of
Tenant’s obligations, covenants, conditions and agreements under this Lease,
but shall not be deemed liquidated damages, but shall be applied in reduction
of Tenant’s total obligation(s) to Landlord.

          3.3         No Separate Account. Landlord shall not be obligated to hold the
Security Deposit or Advance Deposit in a separate account or shall be obligated
to pay interest thereon.

4.       USES; TENANT COVENANTS.

          4.1        
Permitted Uses. The Premises are to be used for a first class retail,
private and commercial mortgage and banking facility and for related banking
and mortgage services and for no other purpose whatsoever.

          4.2        
Automatic Teller Machine. The Tenant shall have the right to install
one (1) automated teller machine (the “ATM”). The location, size and aesthetic
design of the ATM shall be subject to approval by the Landlord, which approval
shall not be unreasonably withheld, conditioned or delayed. Notwithstanding the
foregoing, no ATM may be installed on the exterior facade of the Building
facing Church Street and no freestanding ATM may be located in the lobby of the
Building without Landlords written consent, which consent may conditioned,
delayed or refused at Landlord’s sole discretion. Any proposed ATM location
which may be visible from the exterior of the Building, shall at all times be
subject to approval by the City of Manassas and the Manassas City Architectural
Review Board.

          4.3         Other General Use Covenants. Tenant shall not commit or allow to be
committed any waste upon the Premises, or any public or private nuisance.
Tenant, at its expense, shall comply with all laws relating to its use and
occupancy of the Premises and shall observe the Rules and Regulations attached
hereto as Exhibit D. No act shall be done in or about the Premises that is
unlawful, or which will increase the existing rate of insurance on the
Building. In the event of a breach of the covenant set forth in the
immediately preceding sentence regarding insurance rates, Tenant shall cease
the activity giving rise to such increase, and provided that the Landlord has
delivered timely notice to Tenant and Tenant has failed

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 6 of 63

to cease any such
conduct or activity, and further provided that the increased insurance premiums
were in fact paid by Landlord as a result of such activity, Tenant shall pay to
Landlord any and all such increases in insurance premiums resulting from such
breach. So long as Tenant continues to pay such increases in premiums, and
provided that the activity giving rise to such increased premiums is an
activity permitted under Section 4.1, above, the continuation of such activity
by Tenant shall not be prohibited or constitute a breach of this Lease.

5.       ENVIRONMENTAL PROVISIONS; RECYCLING.

          5.1         General. Tenant agrees to comply (and to cause its agents, employees,
contractors and, while within the Premises, invitees to comply) with any and
all applicable Environmental Laws (as defined below) in connection with (A)
Tenant’s use and occupancy of the Premises, (B) any use and occupancy of the
Premises arising in connection with any assignment of this Lease, or sublease
or license of the Premises or any part thereof, and (C) any other fact or
circumstance the existence of which legally imposes on Tenant the obligation to
so comply therewith. Tenant shall provide all information within Tenant’s
control requested by Landlord and/or governmental authorities in connection
with Environmental Laws or Hazardous Materials (defined below) relating to the
matters contemplated in the preceding sentence.

          5.2         Tenant’s Warranties and Covenants

               During the Term and any Renewal Term (as hereafter defined) of the Lease,
Tenant warrants, represents and covenants to and with Landlord as follows:

                       5.2.1    Tenant will not introduce, or permit or suffer the introduction,
within the Premises or the Project of (A) asbestos in any form, (B) urea
formaldehyde foam insulation, (C) transformers or other equipment which contain
dielectric fluid containing polychlorinated biphenyls, or (D) except as
permitted below, any flammable explosives, radioactive materials or other
substance constituting “hazardous materials” or “hazardous wastes” pursuant to
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended (42 U.S.C. Sections 9601 et seq.), the Hazardous Materials
Transportation Act, as amended (49 U.S.C. Sections 1801 et seq.), the Resource
Conservation and Recovery Act, as amended (42 U.S.C. Sections 9601 et seq.) and
the regulations adopted and promulgated pursuant thereto, the Federal Water
Pollution Control Act (33 U.S.C. Section 1251 et seq.), the Clean Air Act (42
U.S.C. Section 7401 et seq.), and in the regulations adopted and publications
promulgated pursuant thereto, or successor legislation thereto, or any other
Federal, state or local environmental law, ordinance, rule, regulation and/or
other statute of a governmental or quasi-governmental authority relating to
pollution or protection of the environment (collectively, “Environmental
Laws”). The substances described in (A), (B), (C) or (D) above are hereinafter
collectively referred to herein as “Hazardous Materials”.

                       5.2.2    Except as expressly permitted hereby, the Premises will never be
used by Tenant for any activities involving, directly or indirectly, the use,
generation, treatment, transportation, storage or disposal of any Hazardous
Materials, or to refine, produce, store, handle, transfer, process or transport
Hazardous Materials.

                       5.2.3    Tenant (A) shall comply with the Environmental Laws and all other
applicable laws, rules and regulations or orders pertaining to health, the
environment or Hazardous Materials, in so far as such laws pertain to Tenant’s
use and occupancy of the Premises or the need for such compliance arises

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

Deed of Lease

Alliance Home Funding, LLC

Page 7 of 63

due to
the acts of Tenant, its agents, employees, contractors, invitees (while within
the Premises), subtenants or assignees, (B) shall not, except as specifically
permitted hereby, store, utilize, generate, treat, transport or dispose of (or
permit or acquiesce in the storage, utilization, generation, transportation,
treatment or disposal of) any Hazardous Materials on or from the Premises, (C)
shall cause its agents, employees, licensees, contractors, invitees (while
within the Premises), subtenants and assignees to comply with the
representations, warranties and covenants herein contained and be responsible
for any non-compliance by any such party(ies), (D) agrees that no portion of
the Premises will be used by Tenant or any assignee or subtenant of Tenant as a
landfill or a dump, and (E) will not install any underground tanks of any type.

                       5.2.4    In the event of any future storage, presence, utilization,
generation, transportation, treatment or disposal of Hazardous Materials in, on
or about the Premises, or in the event of any Hazardous Materials Release (as
hereinafter defined) which in either case is attributable, in whole or in part,
to the presence of Hazardous Materials existing in, on or about on the Project
subsequent to the Commencement Date and is caused, directly or indirectly, by
Tenant or Tenant’s agents, employees, contractors, licensees, invitees (while
within the Premises), sub-tenants or assignees, or is otherwise Tenant’s
responsibility under the terms of this Lease, Tenant shall, at the direction of
Landlord or any federal, state, or local authority or other governmental
authority, remove or cause the removal of any such Hazardous Materials and
rectify any such Hazardous Materials Release, and otherwise comply or cause
compliance with the laws, rules, regulations or orders of such authority, all
at the expense of Tenant, including without limitation, the undertaking and
completion of all investigations, studies, sampling and testing and all
remedial, removal and other actions necessary to clean up and remove all
Hazardous Materials, on, from or affecting the Premises. If, under such
circumstances, Tenant shall fail to proceed with such removal or otherwise
comply with such laws, rules, regulations or orders within the cure period
permitted under the applicable regulation or order, the same shall constitute a
Default under this Lease (without any notice to Tenant required), and Landlord
may, but shall not be obligated to, take such action as may be reasonably
necessary under the circumstance to eliminate such Hazardous Materials from the
Premises or otherwise comply with the applicable law, rule, regulation or
order, acting either in its own name or in the name of Tenant pursuant to this
Section, and the cost thereof shall be borne by Tenant and thereupon become due
and payable as Additional Rent hereunder; provided, however, that Landlord
shall not exercise its self-help rights hereunder, nor exercise any right
otherwise provided herein to terminate this Lease or Tenant’s right of
possession due to Tenant’s failure or inability to correct such problem within
a time certain as long as Tenant is at all times using its best efforts its
efforts to correct the problem (provided however, that if Landlord determines,
in its reasonable discretion, that there exists a substantial risk of
governmental enforcement action against Landlord, or governmental or third
party civil liability to Landlord, if Landlord fails to take independent action
immediately to remediate an environmental problem which is otherwise Tenant’s
responsibility under this Section 5, then Landlord shall, notwithstanding
Tenant’s continuing best efforts to correct the problem, be entitled to take
such independent action, and to recover the reasonable and actual costs
associated therewith from Tenant). Tenant shall give to Landlord and its
authorized agents
and employees access to the Premises for such purposes and hereby
specifically grants to Landlord a license to remove the Hazardous Materials and
otherwise comply with such applicable laws, rules, regulations or orders,
acting either in its own name or in the name of the Tenant pursuant to this
Section.

                       5.2.5    Each of Tenant and Landlord hereby indemnifies and holds the other
and their respective shareholders, constituents, subsidiaries, affiliates,
officers, directors, partners, employees, agents and trustees harmless from,
against, for and in respect of, any and all damages, losses, settlement
payments, obligations, liabilities, claims, actions or causes of actions,
encumbrances, fines, penalties, and

	 	 	 	 	 
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costs and expenses suffered, sustained,
incurred or required to be paid by any such indemnified party (including,
without limitation, lost rent, diminished value, reasonable fees and
disbursements or attorneys, engineers, laboratories, contractors and
consultants) because of, or arising out of or relating to a violation of any of
the indemnifying party’s representations, warranties and covenants under this
Section, including any Environmental Liabilities (as hereinbelow defined)
arising therefrom. For purposes of this indemnification clause, “Environmental
Liabilities” shall include all costs and liabilities with respect to the
presence, removal, utilization, generation, storage, transportation, disposal
or treatment of any Hazardous Materials or any release, spill, leak, pumping,
pouring, emitting, emptying, discharge, injection, escaping, leaching, dumping
or disposing into the environment (air, land or water) of any Hazardous
Materials (each a “Hazardous Materials Release”), including without limitation,
cleanups, remedial and response actions, remedial investigations and
feasibility studies, permits and licenses required by, or undertaken in order
to comply with the requirements of, any federal, state or local law,
regulation, or agency or court, any damages for injury to person, property or
natural resources, claims of governmental agencies or third parties for cleanup
costs and costs of removal, discharge, and satisfaction of all liens,
encumbrances and restrictions on the Premises relating to the foregoing. The
foregoing notwithstanding, the foregoing indemnifications shall not encompass
consequential damages or damages related to loss of business or business
interruption which may arise on account of the presence of any Hazardous
Materials on or about the Project. The foregoing indemnification and the
responsibilities of Tenant and Landlord under this Section shall survive the
termination or expiration of this Lease.

                       5.2.6    Tenant shall promptly notify Landlord in writing of the occurrence
of any Hazardous Materials Release or any pending or threatened regulatory
actions, or any claims made by any governmental authority or third party,
relating to any Hazardous Materials or Hazardous Materials Release on or from
the Premises, and shall promptly furnish Landlord with copies of any
correspondence or legal pleadings or documents in connection therewith.
Landlord shall have the right, but shall not be obligated, to notify any
governmental authority of any state of facts which may come to its attention
with respect to any Hazardous Materials or Hazardous Materials Release on or
from the Premises following consultation with Tenant.

                       5.2.7    Tenant agrees that Landlord shall have the right (but not the
obligation) to conduct, or to have conducted by its agents or contractors, such
periodic environmental inspections of the Project as Landlord shall reasonably
deem necessary or advisable from time to time. Landlord shall provide Tenant
with no less than seventy-two (72) hours prior notice of any such inspection
within the interior of the Premises, except in case of an emergency, in which
case only such notice as may be practicable under the circumstance shall be
required. The cost of any such inspection shall be borne by Tenant in the
event such inspection determines that Tenant has breached the covenants set
forth in Section 5.2.3 above.

     5.3                Permitted Materials. Notwithstanding the foregoing, Tenant and its
assignees, subtenants and licensees shall be permitted to store reasonable
amounts of Hazardous Materials that are typically used
in an ordinary office use environment such as ordinary cleaners, printer
and duplication supplies and similar materials (the “Permitted Materials”)
provided such Permitted Materials are properly used, stored and disposed of in
a manner and location meeting all Environmental Laws. Any such use, storage
and disposal shall be subject to all of the terms of this Section (except for
the terms prohibiting same), and Tenant shall be responsible for obtaining any
required permits and paying any fees and providing any testing required by any
governmental agency with respect to the Permitted Materials. If Landlord in
its reasonable opinion determines that said Permitted Materials are being
improperly stored, used or disposed of, then Tenant shall immediately take such
corrective action as requested by Landlord. Should Tenant fail

	 	 	 	 	 
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to take such
corrective action within twenty-four (24) hours, Landlord shall have the right
to perform such work on Tenant’s behalf and at Tenant’s sole expense, and
Tenant shall promptly reimburse Landlord for any and all costs associated with
said work.

          5.4         Recycling Regulations. Tenant shall be solely responsible for
compliance with all orders, requirements and conditions now or hereafter
imposed by any ordinances, laws, orders and/or regulations (hereinafter
collectively called “regulations”) of any governmental body having jurisdiction
over the Premises or the Building regarding the collection, sorting, separation
and recycling of waste products, garbage, refuse and trash (hereinafter
collectively called “waste products”).

6.       LATE CHARGES; INTEREST LATE CHARGES; INTEREST.

          6.1        Tenant hereby acknowledges that late payment to Landlord of Base Rent
or Additional Rent will cause Landlord to incur administrative costs and loss
of investment income not contemplated by this Lease, the exact amount of which
will be extremely difficult to ascertain. If any Base Rent or Additional Rent
due from Tenant is not received by Landlord or Landlord’s designated agent
within ten (10) days after the date due, then Tenant shall pay to Landlord a
late charge equal to five percent (5%) of such overdue amount. The parties
hereby agree that such late charges represent a fair and reasonable estimate of
the administrative cost that Landlord will incur by reason of Tenant’s late
payment. Landlord’s acceptance of such late charges shall not constitute a
waiver of Tenant’s Default with respect to such overdue amount or otherwise
estop Landlord from exercising any of the other rights and remedies granted
hereunder.

          6.2         In addition to the administrative late charge provided for under
Section 6.1, above, if any Base Rent or Additional Rent or any other sum due
hereunder from Tenant to Landlord is not paid as and when due under this Lease,
and such amount remains unpaid ten (10) days after such due date, then the
unpaid amount shall bear interest from the date originally due until the date
paid at an annual rate of interest equal to the “prime rate” of interest as
published in the Wall Street Journal (or, if not published, as established by
the then largest national banking association in the United States of America)
from time to time (the “Prime Rate”) plus five percent (5%) (the “Default
Rate”).

7.        REPAIRS AND MAINTENANCE.

           7.1         Landlord’s Obligations. Landlord shall maintain, repair, replace and
keep in good operating condition, comparable to similar properties in the
Prince William County, Virginia area, as reasonably determined by the landlord,
the Common Areas (as defined in Section 39 below), the roofs, foundations,
load-bearing elements, conduits and structural walls and other structural
elements of the Building, the underground utility and sewer pipes of the
Building, all base building mechanical, electrical, plumbing, HVAC system in
the Common Areas and the sprinkler system and other fire and life-safety
systems, the cost of which shall be included within Operating Costs except to
the extent set forth in Section 9.6, hereof;
provided that, to the extent the need for any such repairs or replacements
arise as a the result of the gross negligence or willful misconduct of Tenant
(or Tenant’s agents, employees, contractors, invitees (while within the
Premises), assignees or sub-tenants) and the same is not covered under the
policies of casualty insurance which are required to be carried by the parties
pursuant to this Lease (in which case the proceeds of such insurance will be
utilized to satisfy the cost thereof), the cost of such repairs or replacements
shall be reimbursable by Tenant to Landlord as Additional Rent under this
Lease, and such reimbursement shall be due not later than thirty (30) days
after Landlord’s written demand therefore. Provided, further, that any
blockage or damage to plumbing and utility pipes which is caused, in Landlord’s
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operation of Tenant’s business shall be repaired by
Landlord, but be paid for solely by Tenant as Additional Rent.

          7.2.         Repair Standards. All repairs and maintenance required of Landlord
pursuant to this Section or elsewhere in this Lease shall be performed in
accordance with standards applicable to comparable buildings in Prince William
County, Virginia, as reasonably determined by landlord, the applicable building
and governmental codes, and performed in a timely and diligent fashion.
Landlord agrees to diligently attend to any routine repairs or maintenance
needs brought to its attention by Tenant as soon as reasonably practicable and
in a manner reasonably calculated to minimize to the extent possible disruption
of Tenant’s business activities.

          7.3         Tenant’s Obligations. Subject to Landlord’s obligations as set forth
in Section 7.1 above and its right of access pursuant to Section 18, Tenant
shall be exclusively responsible for the cleaning, maintenance and repairs to
the interior non-structural portions of the Premises, as the same were
installed by Landlord on behalf of tenant as part of Landlord’s TI Work or were
subsequently directly installed by Tenant. Tenant shall have the option of
using Landlord’s janitorial service for cleaning the interior of the Premises,
the pro-rata cost of which shall be charged to the Tenant. Tenant shall
promptly report in writing to Landlord any defective condition in the Premises
known to Tenant which Landlord is required to repair, and failure to so report
such defects shall excuse any delay by Landlord in commencing and completing
such repair to the extent the same would otherwise be Landlord’s responsibility
under this Lease, provided that (A) Landlord shall not be so excused if
Landlord had actual knowledge of the need for such repair independent of
Tenant’s notification, and (B) once Landlord is notified or has actual
knowledge of the need for such repair, Landlord’s repair obligation under
Section 7.1, above, shall be fully effective as to such item (and, to the
extent any delay in reporting such defects results in the otherwise avoidable
need to perform a capital repair or replacement which under Section 9.5 is
excluded from Operating Costs, in lieu of an ordinary repair which under
Section 9.5 would be included within Operating Costs, Tenant shall be
responsible for the reasonable and actual cost of such capital repair or
replacement unless Tenant can demonstrate that a capital repair or replacement
to such item would in any event have been necessary within twelve (12) months
thereafter, even if the defective condition had been reported to Landlord or
known by Landlord in a timely fashion). Notwithstanding anything to the
contrary above, Landlord, at Landlord’s expense and in accordance with the
punch list correction procedure outlined in Exhibit C, shall be responsible for
the repair of any items installed by Landlord as part of Landlord’s TI Work.
Furthermore, to the extent any of the components installed by Landlord on
behalf of the Tenant as part of Landlord’s TI Work come standard with a trade
or manufactures warranty, Landlord shall use its best efforts to cause the
manufacturer or the trade installer, as the case may be, to make all needed
warranty repairs to the installed component during the applicable warranty
period for said component.

8.       UTILITIES AND SERVICES.

          8.1         Services. Landlord shall furnish Tenant with the following services
and facilities: (A) cold running water sufficient for needs attributable to
Tenant’s office use with usage for which to be paid for by Tenant; (B)
electricity with usage for which to be paid for by Tenant; and (C) access to
the Building and parking areas; all collectively 24 hours a day, 365 days a
year, including holidays; and the cost of which shall be deemed an Operating
Cost hereunder unless otherwise provided above. For purposes hereof,
“holidays” shall be: New Year’s Day, Memorial Day, July 4th, Labor Day,
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and business hours shall be 7:30 a.m. to 6:00 p.m.
Monday through Friday, excluding holidays, and 9:00 a.m. to 2:00p.m. on
Saturdays, excluding holidays (provided that Tenant shall have access to the
Premises 24 hours per day, 7 days per week). Landlord may provide perimeter
security for the Building via a key-card or other similar system. All
key-cards for such system shall be obtained by Tenant in accordance with
Section 42 hereof. Tenant shall be responsible for any and all security
required for the Premises and the business to be conducted therein.

          8.2         Additional Services. If Tenant requires services on weekends or
holidays beyond the parameters of Section 8.1 above, Landlord shall make
reasonable efforts to provide such additional service after receipt of
reasonable prior written request for such services from Tenant, and Tenant
shall reimburse Landlord for such additional service within ten (10) days of
request therefore, at the actual direct cost to Landlord.

          8.3         Additional Provisions. Except as specifically and expressly set forth
hereinbelow and unless caused by the gross negligence or willful misconduct of
Landlord, its agents, employees, contactors or invitees, in no event shall
Landlord be liable to Tenant for (A) any damage to the Premises, or (B) any
loss, damage or injury to any property therein or thereon, or (C) any claims
for the interruption of or loss to Tenant’s business or for any damages or
consequential losses occasioned by bursting, rupture, leakage or overflow of
any plumbing or other pipes or other similar cause in, above, upon or about the
Premises or the Building, or (D) any interruption in any utility or other
services to the Premises, which interruption is not directly due to Landlord’s
failure to pay for such services, if so required by this Lease; provided,
however, that if any such services are not furnished to the Premises for seven
(7) or more consecutive days after Landlord received notice from Tenant and the
Premises are thereby rendered unusable by Tenant for the purpose for which they
were intended, the Basic Rent and Additional Rent shall be abated until the
Premises are again tenantable. If any public utility or governmental body
shall require Landlord or Tenant to restrict the consumption of any utility or
reduce any service to the Premises or the Building, Landlord and Tenant shall
comply with such requirements, without any abatement or reduction of the Base
Rent, Additional Rent or other sums payable by Tenant hereunder.

          8.4         Direct Metering. Gas, electricity and water provided to the Tenant’s
Premises shall be separately metered and directly paid for by the Tenant. The
cost of all other utilities and services provided by the Landlord to the Common
Areas of the Building shall be deemed as Operating Costs.

9.       OPERATING COSTS.

          9.1         Defined. Commencing with the first day of the first Lease Year and
continuing during each calendar year or portion thereof during the Term, Tenant
shall pay as Additional Rent to Landlord, without diminution, set-off or
deduction, Tenant’s Share of “Operating Costs” (as defined in Section 9.4,
below) for each calendar year. For purposes hereof, Tenant’s Share of Operating
Costs shall mean Tenant’s Share
of the amount of all Operating Costs which are attributable to all tenants in
the Building, inclusive of retail tenants (as determined by Landlord from time
to time), plus a percentage of all Operating Costs attributable to only the
retail portions of the Building to the exclusion of office tenants within the
Building; such percentage determined by a fraction, the numerator of which is
the square footage of the Premises and the denominator of which is the square
footage of the aggregate retail space within the Building being served with the
services for which such Operating Costs are being incurred.

	 	 	 	 	 
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          9.2         Estimated Payments. Tenant shall make monthly installment payments
toward Tenant’s Share of Operating Costs on an estimated basis, based on
Landlord’s reasonable estimate of Operating Costs for such calendar year.
Tenant shall pay Landlord, as Additional Rent, commencing on the first day of
the Term and on the first day of each month thereafter throughout the Term (and
any extension thereof), one-twelfth (1/12th) of Landlord’s estimate of Tenant’s
Share of Operating Costs for the then-current calendar year. If at any time or
times during such calendar year it appears to Landlord that Tenant’s Share of
Operating Costs for such calendar year will materially vary from Landlord’s
estimate, Landlord may, by written notice to Tenant, once during any calendar
year, reasonably revise its estimate for such calendar year and Tenant’s
estimated payments hereunder for such calendar year shall thereupon be based on
such revised estimate.

          9.3         Annual Reconciliation. Landlord shall provide to Tenant within a
reasonable time after the end of each calendar year (Landlord agreeing to
endeavor so to do within one hundred-twenty (120) days after the end of the
applicable year, provided that such shall not be a condition of Tenant’s
obligations arising as a result thereof or based thereon), a detailed, itemized
statement (the “Expense Statement”), calculated in accordance with Section 9.1,
above, setting forth the total actual Operating Costs for such calendar year,
Tenant’s Share of Operating Costs and the increase in Tenant’s Share of
Operating Costs. The Expense Statement shall be certified by Landlord as being
true and correct in all material respects. Landlord shall respond to any
inquiries and requests for invoices or other information with respect to
Operating Costs within thirty (30) days of any written request therefore by
Tenant. Within thirty (30) days after the delivery of such Expense Statement,
Tenant shall pay to Landlord the amount of any shortfall in the amount of
estimated payments made to Landlord pursuant to Section 9.2 on account of
Tenant’s Share of Operating Costs for such calendar year, and the actual
amount shown as Tenant’s Share of Operating Costs for such calendar year. In
the event the Expense Statement reflects an overpayment of Tenant’s Share of
Operating Costs for such year, such overpayment shall be credited against the
next due Base Rent hereunder, except if Tenant’s Lease is no longer in effect
then Landlord shall refund such amount to Tenant within thirty (30) days.
Tenant’s obligation to pay Operating Expenses shall survive expiration or
termination of this Lease as to any such expenses incurred during the term
hereof.

          9.4         Operating Costs. The term “Operating Costs” shall mean all reasonable
expenses incurred by Landlord in connection with the operation, management,
maintenance and repair of the Building, Common Areas and the Land as reasonably
determined by Landlord in accordance with the standards applicable to similar
first class properties in the Prince William County, Virginia area, subject to
the qualifications set forth below. All Operating Costs shall be determined
according to generally accepted accounting principles which shall be
consistently applied. Operating Costs include, but are not limited to, the
following items:

                       (A)   the cost of the personal property used in conjunction with the
operation, management, maintenance and repair of the Building and the Project;

                       (B)   costs to repair and maintain the Building, the Building roof and the
Common Areas;

                       (C)   all expenses paid or incurred by Landlord for water, gas, electric,
sewer and oil services for the Building, which are not being reimbursed to
Landlord by any tenant in the Building;

                       (D)   the costs and expenses incurred in connection with the provision of
the services set forth in Section 8, above and any other services provided by
Landlord to the Building from time to time;

                       (E)   building supplies and materials used in connection with repairs to the
Project;

                       (F)   cleaning and janitorial services in or about the Premises, the
Building (including without limitation Common Areas) and the Land, which are
not being reimbursed to Landlord by any tenant in the Building;

	 	 	 	 	 
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                       (G)   window glass replacement, repair and cleaning;

                       (H)   repair, replacement and maintenance of the grounds, including costs of
landscaping, lighting, Project and Building signage, gardening and planting,
including service or management contracts with independent contractors,
including but not limited to security and energy management services and costs;

                       (I)   operational costs to achieve compliance with any governmental laws,
rules, orders or regulations, and excluding capital expenses associated
therewith except to the extent specifically set forth below;

                       (J)   utility taxes;

                       (K)   compensation (including employment taxes, fringe benefits, salaries,
wages, medical, surgical, and general welfare benefits (including health,
accident and group life insurance), pension payments, payroll taxes for all
personnel employed by Landlord or its management company who perform duties in
connection with the operation, maintenance and repair of the Building
(allocated among all properties served by such employees as determined by
Landlord in its reasonable discretion, if such employees are utilized by more
than one property) plus the salary and benefits of the property manager
specifically assigned to the Project;

                       (L)   any (i) capital expenditures incurred to reduce Operating Costs, to
the extent of such reduction (and with any amount remaining unrecovered by
virtue of such limitation to carry forward to subsequent calendar years, to the
extent of any such continuing reduction achieved in each such subsequent
calendar year, until recovered in full), (ii) capital expenditures incurred to
comply with any governmental law, order, regulation or other requirement which
is enacted or becomes effective after the Commencement Date, and (iii) capital
expenditures made for the replacement of items (the repair of which would be
includable within Operating Costs) in lieu of repairs thereto, provided (a)
replacement of the item in lieu of repair is either less costly on an annual
basis than repair of the item in question, or is necessary given the
non-functioning condition of the item in question, as determined by Landlord in
good faith, (b) this provision shall not apply to general renovations, as
opposed to needed repairs, of the Building or any elements therein, and (c)
such expenditure shall be recoverable only over the useful life of the item in
question by amortizing such expenditure over such useful life (in accordance
with applicable federal income tax guidelines) at an annual interest rate equal
to the Prime Rate at the time of such expenditure, and only the sum of all
amortization payments payable during the year in question shall be includable
in Operating Costs in each year during such recovery period;

                       (M)   cost of premiums for casualty and liability insurance policies
required to be maintained by Landlord hereunder and any other insurance carried
by Landlord with respect to the Project;

                       (N)   license, permit and inspection fees;

                       (O)   reasonable management fees based upon a percentage of gross rental
receipts, and actual Operating Costs and Real Estate Taxes (which management
fee is not to exceed four (4%) percent of the gross rents for the Building);

      
           
      (P)   consulting fees
 in connection with the provision of common area
maintenance services;

      
           
      (Q)   typical
personal property used in the operation, management and
maintenance of the Building and BPOL taxes;

      
           
      
(R)    trash removal, including all costs incurred in connection with waste
product recycling;

      
           
      (S)   snow and ice removal or prevention;

      
           
      (T)   Lease payments for any additional parking spaces or parking areas
leased by Landlord for the benefit of the tenants of the Building; maintenance,
repair and striping of all parking areas

	 	 	 	 	 
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 used by tenants of the Building; and
any other cost or assessment payable in connection with the maintaining of such
parking areas;

                       (U)   uniforms and dry cleaning;

                       (V)   telephone, cellular phone, paging, telegraph, postage, stationery
supplies and other materials and expenses required for the routine operation of
the Building;

                       (W)   association and other assessments for maintenance of offsite
improvements serving or benefiting the Building or the Land;

                       (X)   costs and expenses relating to compliance with any ongoing existing
proffer obligations applicable to the Project;

                       (Y)   the cost of acquisition, repair, maintenance and replacement of
seasonal Building decoration; and

                       (Z)   the cost of operating, maintaining, repairing and replacing conduits
and other electrical fixtures, fire protection, alarm and sprinkler systems,
Building and Project plumbing and storm and sanitary sewer systems.

          9.5         Exclusions. Except as otherwise provided in this Lease, Operating
Costs shall not include any of the following:

                       (A)   capital expenditures, except those specifically set forth above;

                       (B)   costs of any special services rendered to individual tenants
(including Tenant), for which a special, separate charge shall be made directly
to such Tenant (and which charge shall be payable within thirty (30) days of
written demand);

                       (C)   painting, redecorating or other work which Landlord performs for
specific tenants, the expenses of which are paid by such tenants;

                       (D)   Real Estate Taxes (as defined in Section 10);

                       (E)   depreciation or amortization of costs required to be capitalized in
accordance with generally accepted accounting practices (except as set forth in
Section 9.4, above);

                       (F)   interest and amortization of funds borrowed by Landlord;

                       (G)   leasing commissions, and advertising, legal, space planning and
construction expenses incurred in procuring tenants for the Building;

                       (H)   salaries, wages, or other compensation paid to officers or executives
of Landlord or its property management company in their capacities as officers
and executives (but specifically including in Operating Expenses the property
management fees set forth in Section 9.4 above whether or not paid to Landlord
or its officers or executives);

                       (I)   any other expenses for which Landlord actually receives direct
reimbursement from insurance, condemnation awards, warranties, other tenants or
any other source but excluding general payments of Operating Costs pursuant to
this Section 9 by Tenant and other tenants of the Building;

                       (J)   net basic rents under ground leases, if any;

                       (K)   all costs incurred in the initial construction of the Project;

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

                       (M)   legal fees and other expenses incurred by Landlord except in
administering, contracting for services which are a part of, and disputing
Operating Costs;

                       (N)   costs or fees relating to the defense of Landlord’s title or interest
in the Land;

                       (O)   costs incurred due to violation by Landlord of the terms and
conditions of this Lease;

                       (P)   renovation of the Project made necessary by casualty or the exercise
of eminent domain;

	 	 	 	 	 
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                       (Q)   costs arising from the presence of Hazardous Materials in, about or
below the Project;

                       (R)    costs incurred for any items to the extent of Landlord’s recovery
under a manufacturer’s, materialmen’s, vendor’s or contractor’s warranty
(except to the extent of costs incurred in such recovery);

                       (S)   income, excess profits, franchise taxes or other such taxes imposed on
or measured by the net income of Landlord from the operation of the Building
(other than business professional occupational license tax);

                       (T)   reserves for repairs, maintenance and replacements;

                       (U)   Landlord’s general overhead expenses;

                       (V)   costs incurred to achieve compliance with any governmental laws,
ordinances, rules, regulations or orders, except to the extent recoverable
under Section 9.4(i) and 9.4(l), above;

                       (W)   any penalties or interest expenses incurred because of Landlord’s
failure timely to pay any Operating Costs (unless the same is the result of
Tenant’s failure to timely make any payment in respect thereof required
hereunder);

                       (X)   accounting fees other than those attributable to reviewing and
preparing operating statements for the Building;

                       (Y)   rental or similar payments made in connection with the leasing of any
equipment deemed to be capital in nature except to the extent the acquisition
of such item would have been recoverable under Section 9.4(l), above;

                       (Z)   any Operating Costs and services provided to full service or office
tenants in the Building and Project that are not provided to net or retail
tenants; and

                       (AA)   the extent to which expenses for services, supplies or materials for
the Building paid by the Landlord to its subsidiaries or affiliates exceeds the
usual and customary cost of similar services, supplies or materials which can
be obtained in the market place from unrelated third parties.

          9.6          Further Adjustment. Operating Costs for each calendar year shall be
adjusted to include all costs, expenses and disbursements which vary by
occupancy or not otherwise provided to all tenants that Landlord reasonably
determines would have been incurred if Landlord had provided all utilities and
services within the definition of Operating Costs to tenants and occupants in
the Building had the Building been one hundred percent (100%) occupied
throughout such year and Landlord provides Tenant with written documentation
and calculation of such Operating Costs.

10.       REAL ESTATE TAXES.

          10.1         Defined. Commencing with the first day of the first Lease Year and
continuing during each calendar year or portion thereof during the Term, Tenant
shall pay as Additional Rent to Landlord, without diminution, set-off or
deduction, Tenant’s Share of “Real Estate Taxes” (as defined in Section 10.3,
below) paid in such calendar year. For purposes hereof, Tenant’s Share of Real
Estate Taxes shall mean Tenant’s Share of all Real Estate Taxes for the year in
question.

          10.2         Estimated Payment. Tenant shall make monthly installment payments
toward Tenant’s Share of Real Estate Taxes on an estimated basis, based on
Landlord’s reasonable estimate of Real Estate Taxes for such calendar year.
Tenant shall pay Landlord, as Additional Rent, commencing on the first day of
the Term and on the first day of each month thereafter throughout the Term (and
any extension thereof), one-twelfth (1/12th) of Landlord’s estimate of Tenant’s
Share of Real Estate Taxes for the then-current calendar year. If at any time
or times during such calendar year it appears to Landlord that Tenant’s Share

	 	 	 	 	 
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of Real Estate Taxes for such calendar year will materially vary from
Landlord’s estimate, Landlord may, by written notice to Tenant, once during any
calendar year, reasonably revise its estimate for such calendar year and
Tenant’s estimated payments hereunder for such calendar year shall thereupon be
based on such revised estimate.

          10.3         Real Estate Taxes. For purposes of this Lease, “Real Estate Taxes”
shall mean all taxes and assessments, general or special, ordinary or
extraordinary, foreseen or unforeseen, assessed, levied or imposed upon the
Building or the Land, or assessed, levied or imposed upon the fixtures,
machinery, equipment or systems in, upon or used in connection with the
operation of the Building or the Land under the current or any future taxation
or assessment system or modification of, supplement to, or substitute for such
system. Real Estate Taxes shall include all reasonable expenses (including,
but not limited to, reasonable attorneys’ fees, disbursements and actual costs)
incurred by Landlord in obtaining or attempting to obtain a reduction of such
taxes, rates or assessments, including any legal fees and costs incurred in
connection with contesting or appealing the amounts or the imposition of any
Real Estate Taxes. In the event Real Estate Taxes (including special
assessments) may be paid in installments, they may be paid in installments or
in lump sum, at Landlord’s election (and in such event Real Estate Taxes shall
include such installments and interest paid on the unpaid balance of the
assessment, or the entirety thereof, as applicable). The foregoing
notwithstanding, Real Estate Taxes shall not include: (A) any franchise,
corporation, income or net profits tax which may be assessed against Landlord
or the Project or both, (B) transfer taxes assessed against Landlord or the
Project or both, (C) penalties or interest on any late payments of Landlord,
unless the same is due to a late payment by Tenant, or (D) personal property
taxes of Tenant.

          10.4         Annual Reconciliation. Landlord shall provide to Tenant within a
reasonable time after the end of each calendar year (Landlord agreeing to
endeavor so to do within one hundred-twenty (120) days after the end of the
applicable year, provided that such shall not be a condition of Tenant’s
obligations arising as a result thereof or based thereon), with Landlord’s
calculation of Tenant’s Share thereof (the “Tax Statement”). Within thirty (30)
days after the delivery of the Tax Statement, Tenant shall pay to Landlord the
amount of any shortfall in the amount of estimated payments made to Landlord
pursuant to Section 10.2 on account of Tenant’s Share of Real Estate Taxes for
such calendar year, and the actual amount shown as Tenant’s Share of Real
Estate Taxes for such calendar year. In the event the Tax Statement reflects an
overpayment of Tenant’s Share of Real Estate Taxes for such year, such
overpayment shall be credited against the next due Base Rent hereunder, except
if Tenant’s Lease is no longer in effect then Landlord shall refund such amount
to Tenant within thirty (30) days.

11.       ADDITIONAL PROVISIONS; OPERATING COSTS AND REAL ESTATE TAXES.

          11.1         Partial Year; End of Term. To the extent that a more accurate method
of allocating same cannot be implemented by Landlord, Tenant’s Share of
Operating Costs and Real Estate Taxes for any partial calendar year shall be
determined by multiplying the amount of Tenant’s Share thereof for the full
calendar year by a fraction, the numerator of which is the number of days
during such partial year falling within the Term and the denominator of which
is 365. If this Lease terminates on a day other than the last day of a
calendar year, the amount of any adjustment to Tenant’s Share of Real Estate
Taxes with respect to the year in which such termination occurs shall be
prorated on the basis which the number of days from January 1 of such year to
and including such termination date bears to 365; and any amount payable by
Landlord to Tenant or Tenant to Landlord with respect to such adjustment shall
be payable within thirty

	 	 	 	 	 
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(30)  days after delivery by Landlord to Tenant of the
applicable Expense Statement and Tax Statement with respect to such year.

          11.2         Other Taxes. In addition to Tenant’s Share of Operating Costs and
Real Estate Taxes, Tenant shall pay, prior to delinquency, all personal
property taxes payable with respect to all property of Tenant located in the
Premises or the Building, and shall provide promptly, upon request of Landlord,
written proof of such payment.

          11.3         Contesting Real Estate Taxes. Landlord will have the right to
employ a tax consulting firm to attempt to assure a fair tax burden on the
Project, provided Landlord will use reasonable efforts to minimize the cost of
such service. The reasonable cost of such service shall be included in the
Real Estate Taxes hereunder in the year same were incurred or paid, at
Landlord’s election. Additionally, during any such period, Landlord shall have
the right, in its reasonable judgment, to contest any tax assessment, valuation
or levy against the Project, and to retain legal counsel and expert witnesses
to assist in such contest and otherwise to incur expenses in such contest, and
any reasonable fees, expenses and costs incurred by Landlord in contesting any
assessments, levies or tax rate applicable to the Project, whether or not such
contest is successful, shall be included in Real Estate Taxes as set forth
above.

          11.4         Arbitration. Disputes regarding Operating Costs, Real Estate Taxes,
and any audit thereof, shall be subject to arbitration in accordance with the
provisions of Section 49 hereof.

          11.5         Tenant’s Right to Inspect. Landlord shall maintain at all times
during the term of this Lease, within the Metropolitan Washington, D.C. area,
full, complete and accurate books of account and records with respect to
Operating Costs, and shall retain such books and records, as well as such other
documents as are customarily maintained by Landlord and reasonably necessary to
properly authenticate the Operating Costs. Upon reasonable notice from Tenant,
but not more than once per year, Landlord shall make available at such place as
Landlord may designate, for Tenant’s inspection (or inspection performed by
Tenant’s accountant and/or consultants) Landlord’s books and records relating
to the Operating Costs for the immediately preceding year. No copies shall be
made by or provided to Tenant. In the event that Tenant’s inspection discloses
that Landlord’s billings to Tenant for increased Operating Costs exceeded the
actual Operating Costs attributable to Tenant, then Landlord shall refund the
difference. In the event Landlord’s billings exceeded by five percent (5%) the
actual Operating Charges attributable to Tenant, Landlord will pay Tenant for
the reasonable expense incurred for an independent third-party in performing
such inspection. Tenant shall not provide the information it reviews or the
results of its inspection to any third party, who is not Tenant’s direct agent,
further provided that said agent agrees to comply with the provisions of this
section.

12.       TENANT’S INSURANCE.

          12.1         Coverage Requirements. Tenant shall during the Term of this Lease,
procure at its expense and keep in force the following insurance:

	 	 	 	 	 
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                       (A)   Commercial general liability insurance naming the Landlord and
Landlord’s managing agent as additional insureds against any and all claims for
bodily injury and property damage occurring in or about the Premises or any
appurtenances thereto covering the operation of the Tenant and any subtenants,
licensees and concessionaires of the Tenant. Such insurance shall be written
on an “Occurrence Form” and shall include, without limitation, blanket
contractual liability recognizing provisions of this Lease, broad form property
damage, coverage for independent contractors, personal injury liability and
coverage for hired auto and non-ownership auto liability. Such insurance shall
be primary and not contributing to any insurance available to Landlord and
Landlord’s insurance shall be in excess thereto. Such insurance shall have a
limit of not less than One Million Dollars ($1,000,000.00) per occurrence with
a Two Million Dollars ($2,000,000.00) general aggregate with an excess
(umbrella) liability insurance in the amount of Three Million Dollars
($3,000,000.00) per occurrence and Five Million Dollars ($5,000,000.00)
annually in the aggregate; provided, however that no such limits shall be
deemed limitation of the liability of Tenant hereunder. If Tenant has other
locations that it owns or leases, the policy shall include an aggregate limit
per location endorsement. Such liability insurance shall be primary and not
contributing to any insurance available to Landlord and Landlord’s insurance
shall be in excess thereto. In no event shall the limits of such insurance be
considered as limiting the liability of Tenant under this Lease;

                       (B)   Personal property insurance insuring all equipment, trade fixtures,
inventory, fixtures and personal property located within the Premises
(excluding leasehold improvements, which shall be insured by and remain the
property of Landlord, but specifically including plate glass insurance covering
breakage of any glass frontage installed by or on behalf of Tenant within or as
a part of the Premises). Such insurance shall be written on a replacement cost
basis in an amount equal to one hundred percent (100%) of the full replacement
value of the aggregate of the foregoing; Workers’ compensation and occupational
disease insurance, employee benefit insurance and any other insurance in the
statutory amounts required by the laws of the State where the operations are to
be performed with broad-form all-states endorsement.

                       (C)   Employer’s liability insurance with a limit of One Million Dollars
($1,000,000.00) for each accident;

          12.2         Rating; Certificates; Cancellation. The policies required to be
maintained by Tenant shall be with companies rated A-X or better in the most
current issue of Best’s Insurance Reports. Insurers shall be licensed to do
business in the Commonwealth of Virginia and domiciled in the USA. Any
deductible amounts under any insurance policies required hereunder shall be
commercially reasonable, as reasonably determined by Landlord. Certificates of
insurance and certified copies of the policies shall be delivered to Landlord
prior to the Commencement Date and annually thereafter at least thirty (30)
days prior to the expiration date of the old policy. Tenant shall have the
right to provide insurance coverage which it is obligated to carry pursuant to
the terms hereof in a blanket policy, provided such blanket policy expressly
affords coverage to the Premises and to Landlord as required by this Lease.
Each policy of insurance shall provide notification to Landlord and any
mortgagee(s) of Landlord at least thirty (30) days prior to any cancellation or
modification to reduce the insurance coverage.

          12.3         Other. In the event Tenant does not purchase the insurance required
by this Lease or keep the same in full force and effect, and the same is not
corrected within five (5) business day following written notice thereof from
Landlord to Tenant, then Landlord may, but shall not be obligated to, purchase
the necessary insurance and pay the premium therefore. Tenant shall repay to
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Rent, any and all reasonable expenses (including
attorneys’ fees) and damages which Landlord may sustain by reason of the
failure of Tenant to obtain and maintain insurance.

13.      LANDLORD’S INSURANCE.

          13.1        Coverage. At all times during the Lease Term, Landlord will
maintain, the cost of which shall be included in the Operating Cost hereunder,
(A) fire and extended coverage insurance covering the Project, including all of
Landlord’s Work, in an amount equal to one hundred percent (100%) of the
replacement value thereof, and (B) public liability and property damage
insurance in such amounts as Landlord deems reasonable from time to time.
Landlord shall also have the right to obtain such other types and amounts of
insurance coverage on the Building (including loss of rental insurance) and
Landlord’s liability in connection with the Building as are customary or
advisable for a comparable project in the Prince William County, Virginia
area, as determined by Landlord in Landlord’s reasonable judgment. Any dispute
regarding the appropriateness of such additional insurance coverage shall be
subject to arbitration pursuant to Section 49 of this Lease.

14.      DAMAGE OR DESTRUCTION.

          14.1        Damage Repair.

                       14.1.1    If the Premises shall be destroyed or rendered untenantable, either
wholly or in part, by fire or other casualty (the “Casualty”), then Landlord
shall, within thirty (30) days after the date of such casualty, provide Tenant
with Landlord’s good faith written estimate (the “Estimate”) of how long it
will take to repair or restore the Premises.

                       14.1.2    If Landlord determines as set forth in its Estimate that it will
require in excess of one hundred twenty (120) days after the date of Casualty
to fully repair or restore the Premises in accordance herewith, then, within
thirty (30) days after Landlord delivers Tenant the Estimate, Tenant and
Landlord shall each have the right to terminate this Lease by written notice to
the other, which termination shall be effective as of the date of such
Casualty, and all liabilities and obligations of Landlord and Tenant thereafter
accruing shall terminate and be of no legal force and effect except as
otherwise specifically set forth herein. Notwithstanding the foregoing, Tenant
shall not have the right to terminate this Lease if the fire or other casualty
was the result of Tenant’s gross negligence or willful misconduct.

                       14.1.3    If neither party elects to terminate this Lease in accordance with
the terms hereof following any Casualty, then Landlord, subject to the receipt
of insurance proceeds sufficient to fully repair the Casualty, shall commence
promptly and diligently prosecute to completion the restoration of the Premises
to their previous condition, subject to Force Majeure as defined herein and
delays caused by Tenant; and pending substantial completion of such
restoration, the Base Rent and Additional Rent shall be abated in the same
proportion as the untenantable portion of the Premises bears to the whole
thereof, and this Lease shall continue in full force and effect provided Tenant
can conduct its intended business use in the remaining portion of the Premises.

                       14.1.4    In the event Landlord is unable to complete such restoration within
one hundred twenty (120) days after the date of Casualty (or such longer period
as was referenced in the Estimate, if applicable), as such period may be
extended due to Force Majeure or due to any Tenant Delays (as such term is
defined in Exhibit C hereof, and not limited as to the number of days) then
within thirty (30) days

	 	 	 	 	 
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after the expiration of such period (but in all events
prior to the date Landlord completes its restoration of the Premises), Tenant
shall again have the right to terminate this Lease upon thirty (30) days prior
written notice to Landlord; provided, however, that if Landlord substantially
completes such restoration prior to the end of the thirty (30) day notice
period, Tenant’s notice of termination shall be deemed rescinded and
ineffective for all purposes, and this Lease shall continue in full force and
effect. The provisions of this Section are in lieu of any statutory termination
provisions allowable in the event of casualty damage.

                       14.1.5    If at any time in the course of its restoration of damaged portions
of the Premises, Landlord believes in good faith that its original Estimate is
no longer accurate for reasons other than Force Majeure (in which event the
provisions of Section 14.1.4 shall control), Landlord shall have the right to
deliver a revised Estimate to Tenant of the additional time period which
Landlord believes will be required to fully repair or restore the Premises,
and, unless Tenant terminates this Lease by written notice to Landlord within
ten (10) business days after its receipt of such revised Estimate from
Landlord, Tenant shall be deemed to have agreed that, for all purposes of this
Section 14.1, to the number of additional days needed to fully repair and
restore the Premises as estimated by Landlord within such revised Estimate. If
Tenant elects to terminate this Lease as to the damaged Building after
receiving such a revised Estimate from Landlord, as aforesaid, such termination
shall be effective as of the date of such notice of termination, and all
liabilities and obligations of Landlord and Tenant thereafter accruing
hereunder with respect to such Building shall terminate and be of no legal
force and effect except as otherwise specifically set forth herein.

          14.2        Reconstruction. If all or any portion of the Premises is damaged by
fire or other casualty and this Lease is not terminated in accordance with the
provisions hereof, then all insurance proceeds under the policy referred to in
Section 13.1 hereof that are recovered by Landlord on account of any such
damage by fire or casualty shall be made available for the payment of the cost
of repair, replacing and rebuilding.

          14.3        Business Interruption. Other than rental abatement as and to the
extent provided in Section 14.1, no damages, compensation or claim shall be
payable by Landlord for inconvenience or loss of business arising from
interruption of business, repair or restoration of the Building or Premises.

          14.4        Repairs. Landlord’s repair obligations, should it elect to repair,
shall be limited to the base Building, Common Areas and all interior
improvements to and property within the Premises which are covered or required
to be covered hereunder by Landlord’s insurance. Landlord shall use reasonable
efforts to commence such repairs and restorations within a reasonable period
after Landlord elects to restore the Premises, and to complete such repairs
within the time frames referenced in Section 14.1, above. Tenant acknowledges
that any such repairs or restorations shall be subject to applicable laws and
governmental requirements, any disbursement requirements imposed by Landlord’s
mortgagee (if any), and to delay in the process of adjusting any insurance
claim associated therewith; and delays resulting from any of the foregoing
shall constitute a “Force Majeure” hereunder, shall not in any event constitute
a breach of this Lease by Landlord, and shall extend the time for completing
such restoration as long as Landlord uses reasonable efforts to commence and
complete such repairs and restorations in a timely fashion. Notwithstanding the
foregoing or any other provision in this Lease, in the event Landlord’s
restoration of
the Premises exceeds a period of nine (9) months from the date of
Casualty, the Tenant shall have the option to terminate this Lease upon thirty
(30) days prior written notice to Landlord given pursuant and subject to the
provisions of Section 14.1.4 above.

	 	 	 	 	 
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          14.5        End of Term Casualty. Anything herein to the contrary
notwithstanding, if more than thirty percent (30%) of the Premises is destroyed
or damaged during the last eighteen (18) months of the Lease Term, then either
Landlord or Tenant shall have the right to terminate this Lease (in whole if
the damage extends to all of the Premises or otherwise as to the affected
portion of the Premises within the Building) upon thirty (30) days prior
written notice to the other, which termination shall be effective on the date
of such casualty. Such notice must be delivered within thirty (30) days after
such casualty, or shall be deemed waived; provided, however, that Tenant may
revoke such termination notice, and require Landlord to restore the Premises,
by exercising any renewal option provided herein, if any.

15.      MACHINERY AND EQUIPMENT; ALTERATIONS AND ADDITIONS; REMOVAL OF FIXTURES.

          15.1        Tenant shall not place a load upon the floor of the Premises which
exceeds the maximum live load of eighty (80) pounds per square foot which
Landlord (or Landlord’s architect or engineer) reasonably determines is
appropriate for the Building without Landlord’s prior written consent which
consent shall not be unreasonably withheld, conditioned or delayed. Tenant
will not install or operate in the Premises any electrical or other equipment
requiring any changes, replacements or additions to any base building system,
without Landlord’s prior written consent (and if such consent is granted Tenant
shall be responsible for the costs of such changes, replacements or additions).

          15.2        Other than the initial improvements to be performed by Landlord and
set forth in Exhibit C hereto, Tenant shall not make or allow to be made any
alterations, additions or improvements to or on the Premises without Landlord’s
prior written consent, which consent shall not be unreasonably withheld,
conditioned or delayed. Landlord will make every effort to respond to Tenant’s
request within five (5) business days of the receipt of the request and
supporting documentation from Tenant. Landlord may impose a reasonable fee for
the review of any proposed alterations, additions or improvements. Any such
alterations, additions or improvements, including, but not limited to, wall
covering, paneling and built-in cabinet work, shall be made at Tenant’s sole
expense (and, with respect to structural alterations, according to plans and
specifications approved in writing by Landlord), in compliance with all
applicable laws, by a licensed contractor, and in a good and workmanlike manner
conforming in quality and design with the Premises existing as of the
Commencement Date, shall not diminish the value of the Building or the Premises
and shall at once become a part of the realty and shall be surrendered with the
Premises (except as provided in Section 15.3, below).

          15.3        Upon the expiration or sooner termination of the Lease Term, Tenant
shall, at Tenant’s sole expense, with due diligence, remove any alterations,
additions, or improvements made by Tenant which are designated by Landlord to
be removed at the time its consent to the installation thereof is granted, and
repair any damage to the Premises caused by such removal. Tenant shall remove
any of its movable property, trade fixtures and roof devices. Tenant shall pay
Landlord any reasonable damages for injury to the Premises or Building
resulting from such removal. All items of Tenant’s personal property that are
not removed from the Premises or the Building by Tenant at the termination of
this Lease shall be deemed abandoned and become the exclusive property of
Landlord, within five (5) days of written notice to or demand upon Tenant. If
the Premises are not surrendered as and when aforesaid, Tenant shall indemnify
Landlord against all claims, losses, costs, expenses (including reasonable
attorneys’ fees) and liabilities resulting from the delay by Tenant in so
surrendering the same, including without limitation any loss of rent or claims
made by any succeeding occupant founded on such delay. Tenant’s obligations
under these Sections 15.2 and 15.3 shall survive the expiration or termination
of this Lease.

	 	 	 	 	 
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16.      ACCEPTANCE OF PREMISES.

          Landlord shall tender, and Tenant shall accept possession of, the Premises
in accordance with the terms of Exhibit C attached hereto. All provisions
regarding delivery of possession of the Premises, construction of leasehold
improvements to the Premises and any adjustments which may be made with respect
to the Commencement Date (as defined in Section 1.4) are set forth in Exhibit
C.

17.      TENANT IMPROVEMENTS.

          The provisions governing initial improvements to be performed by Landlord
or Tenant to the Premises are set forth in Exhibit C hereto.

18.      ACCESS.

          18.1        Subject to the restrictions set forth below, Tenant shall permit
Landlord and its agents to enter the Premises at all reasonable times, upon
reasonable advance notice except for emergencies, during Tenant’s normal
business hours to inspect the same; to show the Premises to prospective tenants
or interested parties such as prospective lenders and purchasers; to exercise
its rights under Section 48; to access common areas, shafts, electrical closets
or similar common or mechanical elements located within the Tenant’s Premises;
to clean, maintain, repair, alter or improve the Premises or the Building, to
discharge Tenant’s obligations when Tenant has failed to do so within a
reasonable time after written notice from Landlord; to post notices of
non-responsibility and similar notices and “For Sale” signs and to place “For
Lease” signs upon or adjacent to the Building or the Premises. Tenant shall
permit Landlord and its agents to enter the Premises at any time in the event
of an emergency. When reasonably necessary, Landlord may temporarily close
entrances, doors, corridors, elevators or other facilities without liability to
Tenant by reason of such closure. In exercising the foregoing rights, Landlord
shall use reasonable efforts to minimize any disruption to Tenant’s business.
Landlord shall coordinate any entry into the Premises with Tenant’s facilities
supervisor at least 24 hours in advance (except in cases of emergency involving
fire or other casualty, or other risk of injury or death to persons), and
Landlord acknowledges that Tenant may require Landlord and its agents to be
accompanied by a representative of Tenant for security purposes upon Landlord’s
entry to the Premises (other than in cases of emergency involving fire or other
casualty, or other risk of injury or death to persons) for legitimate,
documented security purposes. Tenant shall supply Landlord with telephone
numbers for Tenant’s facilities supervisor so that Landlord will be able to
comply with established security procedures to the extent feasible under the
circumstances in the event Landlord requires immediate access to the Premises
to cure any emergency situation.

          18.2        Landlord shall be excused from such of its obligations under this
Lease as are directly and materially impacted by the inability of Landlord to
access the Premises or any applicable part thereof due to Tenant’s security
restrictions, if and to the extent the performance of such obligations was in
fact hindered, frustrated, or rendered impossible or impracticable due to the
effect of such restrictions on access.

19.      MUTUAL WAIVER OF SUBROGATION.

          19.1        Tenant. Notwithstanding anything to the contrary in this Lease,
whether the loss or damage is due to the negligence of Landlord or Landlord’s
agents or employees, or any other cause, Tenant hereby

	 	 	 	 	 
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releases Landlord and
Landlord’s agents and employees from responsibility for and waives its entire
claim of recovery for (A) any and all loss or damage to the personal property
of Tenant located in the Project, arising out of any of the perils which are
covered by Tenant’s property insurance policy, with extended coverage
endorsements which Tenant is required to obtain under the applicable provisions
of this Lease, whether or not actually obtained, or (B) loss resulting from
business interruption at the Premises, arising out of any of the perils which
may be covered by the business interruption insurance policy required to be
carried by Tenant under this Lease.

          19.2        Landlord. Notwithstanding anything to the contrary in this Lease,
whether the loss or damage is due to the negligence of Tenant or Tenant’s
agents or employees, or any other cause, Landlord hereby releases Tenant and
Tenant’s agents and employees from responsibility for and waives its entire
claim of recovery for any and all loss or damage to the Building or any
personal property of Landlord located about the Project and the Building
generally and all property attached thereto (excluding any such property
required to be insured by Tenant hereunder), arising out of any of the perils
which are covered by Landlord’s property insurance policy which Landlord is
required to obtain under the applicable provisions of this Lease, whether or
not actually obtained.

          19.3        Carriers. Landlord and Tenant shall each cause its respective
insurance carrier(s) to consent to such waiver of all rights of subrogation
against the other, and to issue an endorsement to all policies of insurance
obtained by such party confirming that the foregoing release and waiver will
not invalidate such policies.

20.      INDEMNIFICATION.

          20.1        Subject to the provisions of Section 19 hereof and other provisions
of this Lease, Tenant shall indemnify and hold harmless Landlord, its agents,
employees, officers, directors, partners and shareholders from and against any
and all third party claims, liabilities, judgments, demands, causes of action,
claims, losses, damages, costs and expenses, including reasonable attorneys’
fees and costs, arising out of such third party claims, to the extent arising
out of (A) the use and occupancy of the Premises by Tenant, its officers,
contractors, licensees, agents, servants, employees, guests, invitees,
visitors, assignees or subtenants; (B) the negligence or willful misconduct of
Tenant, its officers, contractors, licensees, agents, servants, employees,
guests, invitees, visitors, assignees or subtenants, in or about the Project;
and/or (C) any breach or Default by Tenant under this Lease; provided that this
indemnity shall not apply to any loss, damage, liability or expense resulting
from injuries to third parties caused by the gross negligence or willful
misconduct of Landlord, or its officers, contractors, licensees, agents,
employees or invitees (while within the Premises).

          20.2        Subject to the provisions of Section 19 hereof and other provisions
of this Lease, Landlord shall indemnify and hold harmless Tenant, its agents,
employees, officers, directors, partners and shareholders from and against any
and all third party claims, liabilities, judgments, demands, causes of action,
claims, losses, damages, costs and expenses, including reasonable attorneys’
fees and costs, arising out of such third party claims, to the extent arising
out of (A) the use and occupancy of the Building by the Landlord, its officers,
contractors, licensees within Landlord’s control, agents, servants, employees,
or
guests, invitees and/or visitors to the extent within Landlord’s control;
and/or (B) the negligence or willful misconduct of Landlord, its officers,
contractors, agents, servants, or employees, in or about the Project; provided
that this indemnity shall not apply to any loss, damage, liability or expense
resulting from injuries

	 	 	 	 	 
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to third parties caused by the gross negligence or
willful misconduct of Tenant, or its officers, contractors, licensees, agents,
employees or invitees (while within the Premises).

          20.3        The indemnifications set forth in this Section 20 shall survive
termination of this Lease.

21.      ASSIGNMENT AND SUBLETTING.

          21.1        Consent Required. Except as specifically set forth herein to the
contrary, Tenant shall not assign, encumber, mortgage, pledge, license,
hypothecate or otherwise transfer the Premises or this Lease, or sublease all
or any part of the Premises, or permit the use or occupancy of the Premises by
any party other than Tenant, without the prior written consent of Landlord,
which consent, subject to the remaining express terms and provisions of this
Section, shall not be unreasonably withheld, conditioned or delayed.

          21.2        Procedure. Tenant must request Landlord’s consent to such assignment
or sublease in writing at least thirty (30) days prior to the commencement date
of the proposed sublease or assignment, which written request must include (A)
the name and address of the proposed assignee or subtenant, (B) the nature and
character of the business of the proposed assignee or subtenant, (C) financial
information (including financial statements) of the proposed assignee or
subtenant, and (D) all other terms of the proposed sublet or assignment as well
as a copy of the agreement evidencing same. Tenant shall also provide any
additional information Landlord reasonably requests regarding such proposed
assignment or subletting. Within ten (10) days after Landlord receives Tenant’s
request (with all required information included), Landlord shall, by written
notice to Tenant, elect either: (A) to grant its consent to such proposed
assignment or subletting, or (B) to deny its consent to such proposed
assignment or subletting, setting forth with specificity the reason for such
denial. If Landlord does not exercise either of the above options within
twenty (20) business days after Landlord receives Tenant’s request, then Tenant
may assign or sublease the Premises upon the terms stated in Tenant’s request.

          21.3        Conditions. Any subleases and/or assignments hereunder are also
subject to all of the following terms and conditions:

                       21.3.1    If Landlord approves an assignment or sublease as herein provided
(other than an assignment or sublease pursuant to Section 21.4 hereof), Tenant
shall pay to Landlord, as Additional Rent due under this Lease (which amounts
shall be due immediately upon receipt by Tenant), fifty percent (50%) of the
“Net Profits” (as defined below) generated from such transaction during each
Lease Year. For purposes hereof, the term “Net Profits” means:

                                   (A) with respect to assignment, the amount paid by the assignee to acquire
Tenant’s rights under the Lease, less (i) the portion of such sum fairly
attributable to the acquisition of Tenant’s leasehold improvements or personal
property which were funded solely by Tenant, and (ii) all reasonable and actual
out-of-pocket expenses incurred and paid by Tenant in procuring such
assignment, including, without limitation, brokerage fees, advertising costs,
legal fees, allowances, the cost of leasehold improvements and other
concessions; and

                                   (B) with respect to a sublease, the amount, if any, by which the rent, any
additional rent and any other sums payable by the subtenant to Tenant under
such sublease exceeds the sum of (i) that portion of the Base Rent plus
Additional Rent payable by Tenant hereunder which is allocable to the
portion of the Premises which is the subject of such sublease, (ii) all
reasonable and actual out-of-pocket expenses incurred by Tenant in procuring
such sublease, including, without limitation, brokerage fees, advertising
costs, legal fees, allowances, the cost of leasehold improvements and other
concessions, and

	 	 	 	 	 
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(iii)  the amortized costs of any leasehold improvements or
personal property provided as a part of such transaction and existing prior to
the commencement of the sublease term to the extent funded solely by Tenant.
The foregoing payments shall be made to Landlord by Tenant within ten (10) days
upon receipt of such sums by Tenant.

                       21.3.2    No consent to any assignment or sublease shall constitute a further
waiver of the provisions of this Section, and all subsequent assignments or
subleases may be made only with the prior written consent of Landlord, which
consent shall not be unreasonably withheld, conditioned or delayed. In no
event shall any consent by Landlord be construed to permit reassignment or
resubletting by a permitted assignee or sublessee.

                       21.3.3    Tenant shall remain liable for all Lease obligations, all of which
shall be unaffected by any such sublease or assignment, and which Lease
obligations shall remain in full force and effect for all purposes. An
assignee of Tenant, at the option of Landlord, shall become directly liable to
Landlord for all obligations of Tenant hereunder, but no sublease or assignment
by Tenant shall relieve Tenant of any liability hereunder.

                       21.3.4    Any assignment or sublease without Landlord’s prior written consent
shall be void, and shall, at the option of the Landlord, constitute a Default
under this Lease except as provided for in Section 21.2 and Section 21.4 below.

                       21.3.5    The term of any such assignment or sublease shall not extend beyond
the Lease Term. In no event will any assignee or subtenant (other than
pursuant to a transfer of the Lease within the scope of Section 21.4, below)
have the right to renew or extend the term of this Lease pursuant to Section
51, below.

                       21.3.6    Without limitation, it shall not be unreasonable for Landlord to
deny its consent to any proposed assignment or sublease if the proposed
assignee or subtenant fails to satisfy, in Landlord’s reasonable judgment any
one or more of the following criteria: (A) if the proposed assignee or
sublessee has a net worth such that Landlord determines in its reasonable
judgment that the proposed assignee or subtenant may be unable to meet its
financial and other obligations under this Lease after such assignment or
sublease; (B) if the proposed assignee or subtenant proposes to use the
Premises for a purpose which is not a permitted use hereunder; (C) if the
proposed assignee or subtenant has a history of landlord/tenant or
debtor/creditor problems (such as, but not limited to, defaults, evictions, or
other disputes) with Landlord, other landlords or other creditors; or (D)
Landlord determines, in its reasonable judgment, that the proposed
assignment/sublease documentation is not acceptable and provides written
reasonable proposed revisions.

          21.4       
Affiliated Entity; Sale of Business. Notwithstanding anything to the
contrary in this Lease, so long as such transfer is not effectuated as part of
a transaction or series of transfers orchestrated in order to effect a transfer
of this Lease (or Tenant’s interest herein) in isolation to Tenant’s other
leasehold interests and assets, Landlord’s written consent shall not be
required for any sublease, assignment or other transfer of this Lease to any
other entity which (i) controls or is controlled by Tenant, or (ii) is
controlled by Tenant’s parent company, or (iii) which purchases all or
substantially all of the assets of Tenant, or (iv)
which purchases all or substantially all of the ownership interests or stock of
Tenant, provided, however, that in each such event Tenant shall continue to
remain fully liable under the Lease, on a joint and several basis with the
assignee or acquirer of such assets or stock. Tenant shall be required to give
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least thirty (30) days written notice in advance of any such
sublease or assignment, except with respect to transfers by operation of law
occasioned through a sale of publicly or privately traded shares in Tenant.

22.      ADVERTISING.

          Notwithstanding Tenant’s signage rights under Section 40 hereto, Tenant
shall not display any sign, graphics, notice, picture, or poster, or any
advertising matter whatsoever, anywhere in or about the Premises or the
Building at places visible from anywhere outside or at the entrance to the
Premises without first obtaining Landlord’s written consent thereto, which
Landlord may grant or withhold in its sole discretion. Tenant shall be
responsible to maintain any permitted signs and remove the same at Lease
termination. If Tenant shall fail to do so, Landlord may do so at Tenant’s
cost. Tenant shall be responsible to Landlord for any damage caused by the
installation, use, maintenance or removal of any such signs.

23.      LIENS.

          Tenant shall keep the Premises and the Building free from any liens
arising out of any work performed, materials ordered or obligations incurred by
or on behalf of Tenant, and Tenant hereby agrees to indemnify and hold
Landlord, its agents, employees, independent contractors, officers, directors,
partners, and shareholders harmless from any liability, cost or expense
(including attorneys’ fees and defense costs) for or arising from such liens.
Tenant shall cause any such lien imposed to be released of record by payment or
posting of the proper bond acceptable to Landlord within thirty (30) days after
written request by Landlord. Tenant shall give Landlord written notice of
Tenant’s intention to perform work on the Premises which might result in any
claim of lien at least thirty (30) days prior to the commencement of such work
to enable Landlord to post and record a Notice of Nonresponsibility or other
notice deemed proper before commencement of any such work. If Tenant fails to
remove any lien within the prescribed thirty (30) day period, then Landlord may
do so at Tenant’s expense and Tenant’s reimbursement to Landlord for such
amount, including reasonable attorneys’ fees and costs, shall be deemed
Additional Rent hereunder.

24.      DEFAULT.

          24.1        Tenant’s Default. A “Default” under this Lease by Tenant shall exist
if any of the following occurs (taking into account the expiration of the
notice and cure periods provided for below):

                       24.1.1    If Tenant fails to pay Base Rent, Additional Rent or any other sum
required to be paid hereunder within ten (10) days after written notice from
Landlord that such payment was due, but was not paid as of the due date
(provided, however, if Landlord has delivered two (2) such notices to Tenant
within the prior twelve (12) month period, any subsequent failure to pay Base
Rent, Additional Rent or any other sum required to be paid to Landlord
hereunder on or before the due date for such payment occurring shall constitute
a Default by Tenant without requirement of such ten (10) day notice and
opportunity to cure; but in the event a full year elapses between such failures
then Tenant shall again have the right to such cure period); or

                       24.1.2    If Tenant fails to perform any term, covenant or condition of this
Lease except those requiring the payment of money to Landlord as set forth in
Section 24.1.1 above, and Tenant fails to cure such breach within thirty (30)
days after written notice from Landlord where such breach could reasonably be
cured within such thirty (30) day period; provided, however, that where such
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reasonably be cured within the thirty (30) day period, that
Tenant shall not be in Default if it commences such performance promptly after
its receipt of Landlord’s written notice and diligently thereafter prosecutes
the same to completion; provided that no such grace period to be permitted in
the event of any one or more of the following: (A) the Default relates to the
maintenance of insurance obligations, (B) the Default relates to the assignment
and subletting provisions, (C) the Default relates to a violation of Section
5.2 of this Lease, (D) the Default is of a nature as set forth in Section
24.1.3, in which event the periods set forth therein shall control, or Section
24.1.4, in which event there shall be no applicable cure period, or (E) there
exists a reasonable possibility of danger to the health or safety of the
Landlord, the Tenant, Tenant’s invitees, or any other occupants of, or visitors
to, the Building; or

                       24.1.3    If Tenant shall (A) make an assignment for the benefit of
creditors, (B) acquiesce in a petition in any court in any bankruptcy,
reorganization, composition, extension or insolvency proceedings, (C) seek,
consent to or acquiesce in the appointment of any trustee, receiver or
liquidator of Tenant and of all or substantially all of Tenant’s property, (D)
file a petition seeking an order for relief under the Bankruptcy Code, as now
or hereafter amended or supplemented, or by filing any petition under any other
present or future federal, state or other statute or law for the same or
similar relief, or (E) fail to win the dismissal, discontinuation or vacating
of any involuntary bankruptcy proceeding within sixty (60) days after such
proceeding is initiated; or

                       24.2    Remedies. Upon a Default, Landlord shall have the following
remedies, in addition to all other rights and remedies provided by law or
available in equity or otherwise provided in this Lease, any one or more of
which Landlord may resort to cumulatively, consecutively, or in the
alternative:

                       24.2.1    Landlord may continue this Lease in full force and effect, and this
Lease shall continue in full force and effect as long as Landlord does not
terminate this Lease, and Landlord shall have the right to collect Base Rent,
Additional Rent and other charges when due.

                       24.2.2    Landlord may terminate this Lease, or may terminate Tenant’s right
to possession of the Premises without terminating this Lease, at any time by
giving written notice to that effect. Upon the giving of a notice of the
termination of this Lease, this Lease (and all of Tenant’s rights hereunder)
shall immediately terminate, provided that, without limitation, Tenant’s
obligation to pay Base Rent, Additional Rent, and any damages otherwise payable
under this Section 24 when due in accordance with the terms of this Section,
shall specifically survive such termination and shall not be extinguished
thereby. Upon the giving of a notice of the termination of Tenant’s right of
possession, all of Tenant’s rights in and to possession of the Premises shall
terminate but this Lease shall continue subject to the effect of this Section
24. Upon either such termination, Tenant shall surrender and vacate the
Premises in the condition required by Section 26, and Landlord may re-enter and
take possession of the Premises and all the remaining improvements or property
and eject Tenant or any of the Tenant’s subtenants, assignees or other person
or persons claiming any right under or through Tenant or eject some and not
others or eject none. This Lease may also be terminated by a judgment
specifically providing for termination. Any termination under this Section
shall not release Tenant from the payment of any sum then due Landlord or from
any claim for damages or Base Rent, Additional Rent or other sum previously
accrued or thereafter accruing against Tenant, all of which shall expressly
survive such termination. Reletting may be for a period shorter or
longer than the remaining Lease Term. No act by Landlord other than
giving written notice to Tenant shall terminate this Lease. Acts of
maintenance, efforts to relet the Premises or the appointment of a receiver on
Landlord’s initiative to protect Landlord’s interest under this Lease shall not
constitute a constructive or other termination of Tenant’s right to possession
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an express written
notice from Landlord to Tenant. On termination, Landlord shall have the right
to remove all Tenant’s personal property and store same at Tenant’s cost, and
to recover from Tenant as damages:

                       (1)   The worth at the time of award of unpaid Base Rent, Additional Rent
and other sums due and payable which had been earned at the time of
termination; plus

                       (2)   The worth at the time of award of the amount by which the unpaid Base
Rent, Additional Rent and other sums due and payable which would have been
payable after termination for the balance of the Lease Term exceeds the fair
rental value of the Premises for the balance of the Term; plus

                       (3)   Any other amount necessary to compensate Landlord for all of the
out-of-pocket costs incurred on account of Tenant’s failure to perform Tenant’s
obligations under this Lease, including, without limitation, any costs or
expenses reasonably incurred by Landlord: (i) in retaking possession of the
Premises; (ii) in maintaining, repairing, preserving, restoring, replacing,
cleaning, altering or rehabilitating the Premises or a portion thereof,
including such acts for reletting to a new tenant or tenants; (iii) for leasing
commissions; or (iv) for any other costs necessary or appropriate to relet the
Premises together with the unamortized portion of any improvements made for
Tenant by Landlord and paid for by Landlord; real estate commissions paid by
Landlord in connection with Tenant’s lease; and any rental abatement. To the
extent any of such costs are incurred in connection with a lease transaction
having a term in excess of the remaining Term hereof, all of the foregoing
costs incurred in connection therewith shall be amortized on a straight-line
basis over the term of such new lease, assuming equal monthly installments of
principal and interest, at an interest rate of eight percent (8%), and Tenant’s
liability shall be limited to the amortized portion of the same (i.e., the
monthly payments as so determined) falling within the Term hereof.

                       (4)   The “worth at the time of award” of the amounts referred to in Section
24.2.2.1 is computed by allowing interest at the Default Rate through the date
of payment. The “worth at the time of award” of the amounts referred to in
Section 24.2.2.2 shall be computed by discounting the same to present value
using a commercially reasonable discount rate. In lieu of the amounts
recoverable by Landlord pursuant to Section 24.2.2.2, above, but in addition to
the amounts specified in Section 24.2.2.1 and 24.2.2.3 (or any other portion of
this Section 24), Landlord may, at its sole election, recover “Indemnity
Payments,” as defined hereinbelow, from Tenant. For purposes of this Lease
“Indemnity Payments” means an amount equal to the Base Rent, Additional Rent
and other payments provided for in this Lease which would have become due and
owing hereunder from time to time during the unexpired Lease Term after the
effective date of the termination, but for such termination, less the Base
Rent, Additional Rent and other payments, if any, actually collected by
Landlord and allocable to the Premises. If Landlord elects to pursue Indemnity
Payments as set forth above, Tenant shall, on demand, make Indemnity Payments
monthly, and Landlord may sue for all Indemnity Payments at any time after they
accrue, either monthly, or at less frequent intervals. Tenant further agrees
that Landlord may bring suit for Indemnity Payments and/or any other damages
recoverable herein at or after the end of the Lease Term as originally
contemplated under this Lease, and Tenant agrees that, in such event,
Landlord’s cause of action
to recover the Indemnity Payments shall be deemed to have accrued on the
last day of the Lease Term as originally contemplated. In seeking any new
tenant for the Premises, Landlord shall be entitled to grant any concessions it
deems reasonably necessary. In no event shall Tenant be entitled to any excess
of any rental obtained by reletting over and above the rental herein reserved.
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law, Tenant waives redemption or relief from
forfeiture under any other present or future law, in the event Tenant is
evicted or Landlord takes possession of the Premises by reason of any Default
of Tenant hereunder.

                       24.2.3    Landlord may, with or without terminating this Lease, re-enter the
Premises pursuant to judicial process (except in the event of Tenant’s
abandonment of the Premises in which event no judicial process shall be
required) and remove all persons and property from the Premises; such property
may be removed and stored in a public warehouse or elsewhere at the cost of and
for the account of Tenant. No re-entry or taking possession of the Premises by
Landlord pursuant to this Section shall be construed as an election to
terminate this Lease unless a written notice of such intention is given to
Tenant.

                       24.2.4    Tenant, on its own behalf and on behalf of all persons claiming
through or under Tenant, including all creditors, does hereby specifically
waive and surrender any and all rights and privileges, so far as is permitted
by law, which Tenant and all such persons might otherwise have under any
present or future law (A) except as may be otherwise specifically required
herein, to the service of any notice to quit or of Landlord’s intention to
re-enter or to institute legal proceedings, which notice may otherwise be
required to be given, (B) to redeem the Premises, (C) to re-enter or repossess
the Premises, (D) to restore the operation of this Lease, with respect to any
dispossession of Tenant by judgment or warrant of any court or judge, or any
re-entry by Landlord, or any expiration or termination of this Lease, whether
such dispossession, re-entry, expiration or termination shall be by operation
of law or pursuant to the provisions of this Lease, (E) to the benefit of any
law which exempts property from liability for debt or for distress for rent or
(F) to a trial by jury in any claim, action proceeding or counter-claim arising
out of or in any way connected with this Lease.

25.      SUBORDINATION.

          This Lease shall at all times be and remain subject and subordinate to the
lien of any mortgage, deed of trust, ground lease or underlying lease now or
hereafter in force against the Premises, and to all advances made or hereafter
to be made upon the security thereof. Tenant shall execute and return to
Landlord any customary documentation requested by Landlord in order to confirm
the foregoing subordination within ten (10) days after Landlord’s written
request. In the event any proceedings are brought for foreclosure, or in the
event of the exercise of the power of sale under any mortgage or deed of trust
made by the Landlord covering the Premises, Tenant shall attorn to the
purchaser at any such foreclosure, or to the grantee of a deed in lieu of
foreclosure, and recognize such purchaser or grantee as the Landlord under this
Lease. Tenant agrees that no mortgagee or successor to such mortgagee shall be
(A) bound by any payment of Base Rent or Additional Rent for more than One (1)
month in advance, (B) liable for damages for any breach, act or omission of any
prior landlord, or (C) subject to any claim of offset or defenses that Tenant
may have against any prior landlord; provided that such mortgagee or successor
shall not be relieved of the obligation to comply with all of the Landlord’s
obligations under the Lease accruing from and after the date such mortgagee or
successor takes title to the Project, irrespective of whether the original
non-compliance with any such obligation arose prior to and is continuing as of
such date, or arose on or after such date (provided however that if such
obligation arose prior to the date such mortgagee or successor took title to
the Project, such mortgagee or successor shall not be deemed in
default until after the provision of any notice of default required by
this Lease to such mortgagee or successor, and its failure to cure same within
the cure period provided for herein).

	 	 	 	 	 
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          The foregoing notwithstanding, Landlord shall use commercially reasonable
efforts to obtain (provided the same shall not be deemed a condition precedent
to the effectiveness hereof) from any current and future mortgagee of the
Building, a subordination and non-disturbance agreement in favor of Tenant, on
such mortgagee’s standard form, protecting the interests of Tenant and
providing that Tenant’s occupancy of the Premises shall not be disturbed as a
result of a foreclosure of the Building as long as Tenant is not then in
default hereunder.

26.      SURRENDER OF POSSESSION.

          Upon expiration of the Lease Term, Tenant shall promptly and peacefully
surrender the Premises to Landlord in as good condition as when received by
Tenant from Landlord or as thereafter improved, reasonable use and wear and
tear and damage by fire, casualty and condemnation excepted. If the Premises
are not surrendered in accordance with the terms of this Lease, Tenant shall
indemnify Landlord and its agents, employees, independent contractors,
officers, directors, partners, and shareholders against any loss or liability
including reasonable attorneys’ fees and costs, and including liability to
succeeding tenants, resulting from delay by Tenant in so surrendering the
Premises. This indemnification shall survive termination of this Lease.

27.      NON-WAIVER.

          Waiver by Landlord of any breach of any term, covenant or condition herein
contained shall not be deemed to be a waiver of such term, covenant, or
condition(s), or any subsequent breach of the same or any other term, covenant
or condition of this Lease, other than the failure of Tenant to pay the
particular rental so accepted, regardless of Landlord’s knowledge of such
preceding breach at the time of acceptance of such Base Rent.

28.      HOLDOVER.

          If Tenant shall, without the written consent of Landlord, hold over after
the expiration of the Lease Term, Tenant shall be deemed, at Landlord’s option,
a trespasser or a tenant at sufferance, which tenancy may be terminated as
provided by applicable state law. During any holdover tenancy (whether or not
consented to by Landlord), unless Landlord has otherwise agreed in writing,
Tenant agrees to pay to Landlord, a per diem occupancy charge equal to one
hundred fifty percent (150%)of the per diem Base Rent and Additional Rent as
was in effect under this Lease for the last month of the Lease Term. Such
payments shall be made within five (5) days after Landlord’s demand, and in no
event less often than once per month (in advance). In the case of a holdover
which has been consented to by Landlord, unless otherwise agreed to in writing
by Landlord and Tenant, Tenant shall give to Landlord thirty (30) days prior
written notice of any intention to quit the Premises, and Tenant shall be
entitled to thirty (30) days prior written notice to quit the Premises, except
in the event of non-payment of Base Rent or Additional Rent in advance or the
breach of any other covenant or the existence of a Default. Upon expiration of
the Lease Term as provided herein, Tenant shall not be entitled to any notice
to quit, the usual notice to quit being hereby expressly waived under such
circumstances, and Tenant shall surrender the Premises on the last day of the
Lease Term as provided in Section 26, above.

29.      CONDEMNATION.

	 	 	 	 	 
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          29.1        Definitions. The terms “eminent domain”, “condemnation”, and
“taken”, and the like in this Section 29 include takings for public or
quasi-public use, and sales under threat of condemnation and private purchases
in place of condemnation by any authority authorized to exercise the power of
eminent domain.

          29.2        Taking. If a material portion of the Premises is taken, either
permanently or temporarily, by eminent domain or condemnation and as a result
of such taking the Tenant can no longer reasonably use the Premises for its
intended purpose, this Lease shall automatically terminate as of the date title
vests in the condemning authority, and Tenant shall pay all Base Rent,
Additional Rent, and other payments up to that date. If any part of the
Premises is permanently taken, or if access to the by Tenant is, by virtue of a
taking, permanently denied, by eminent domain or condemnation, then Landlord or
Tenant shall have the right (to be exercised by written notice to the other
within sixty (60) days after receipt of notice of said taking) to terminate
this Lease from the date when possession is taken thereunder pursuant to such
proceeding or purchase. If neither party elects to terminate this Lease, as
aforesaid, then Landlord shall within a reasonable time after title vests in
the condemning authority, repair and restore, at Landlord’s expense, the
portion not taken so as to render same into an architectural whole to the
fullest extent reasonably possible, and, if any portion of the Premises is
taken, thereafter the Base Rent shall be reduced (on a per square foot basis)
in proportion to the portion of the Premises taken. If there is a temporary
taking involving the Premises or Building, if a taking of other portions of the
Building or Common Areas does not deny Tenant access to the Building and
Premises, then this Lease shall not terminate, and Landlord shall repair and
restore, at its own expense, the portion not taken so as to render same into an
architectural whole to the fullest extent reasonably possible, and, if any
portion of the Premises was taken, thereafter the Base Rent shall be reduced
(on a per square foot basis) in proportion to the portion of the Premises
taken.

          29.3        Award. Except as set forth below, Landlord reserves all rights to
damages to the Premises or arising out of the loss of any leasehold interest in
the Premises created hereby, arising in connection with any partial or entire
taking by eminent domain or condemnation. Except as referred to in this
Section 29.3, Tenant hereby assigns to Landlord any right Tenant may have to
such damages or award, and Tenant shall make no claim against Landlord or the
condemning authority for damages for termination of Tenant’s leasehold interest
or for interference with Tenant’s business as a result of such taking. The
foregoing notwithstanding, Tenant shall have the right to claim and recover
from the condemning authority compensation for any loss which Tenant may incur
for Tenant’s moving expenses or taking of Tenant’s personal property (but
specifically excluding any leasehold interest in the Building or Premises)
under the then applicable law provided that Tenant shall not make any claim
that will detract from or diminish any award for which Landlord may make a
claim.

30.      NOTICES.

          All notices and demands which may be required or permitted to be given to
either party hereunder shall be in writing, and shall be delivered personally
or sent by United States certified mail, postage prepaid, return receipt
requested, and by Federal Express or other reputable overnight carrier, to the
addresses set out in Section 1.7, and to such other person or place as each
party may from time to time designate in a notice to the other. Notice shall
be deemed given upon the earlier of actual receipt or refusal of delivery.

31.       MORTGAGEE PROTECTION.

	 	 	 	 	 
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          Tenant agrees to give any mortgagee(s) and/or trust deed holder(s), by
registered mail, a copy of any notice of default served upon the Landlord,
provided that prior to such notice Tenant has been notified in writing (by way
of notice of assignment of rents and leases, or otherwise) of the addresses of
such mortgagee(s) and/or trust deed holder(s). Tenant further agrees that if
Landlord shall have failed to cure such default within the time provided for in
this Lease, then the mortgagee(s) and/or trust deed holder(s) shall have an
additional thirty (30) days within which to cure such default or if such
default cannot be cured within that time, then such additional time as may be
necessary if within such thirty (30) days any mortgagee and/or trust deed
holder(s) has commenced and is diligently pursuing the remedies necessary to
cure such default, during which time Tenant shall not have the right to pursue
any claim against Landlord, such mortgagee and/or such trust deed holder(s),
including but not limited to any claim of actual or constructive eviction.

32.      COSTS AND ATTORNEYS’ FEES.

          In any litigation between the parties arising out of this Lease, and in
connection with any consultations with counsel and other actions taken or
notices delivered, in relation to a default by any party to this Lease, the
non-prevailing party shall pay to the prevailing party all reasonable expenses
and court costs including attorneys’ fees incurred by the prevailing party, in
preparation for and (if applicable) at trial, and on appeal. Such attorney’s
fees and costs shall be payable upon demand.

33.      BROKERS.

Tenant represents and warrants to Landlord that neither it nor its officers or
agents nor anyone acting on its behalf has dealt with any real estate broker in
the negotiating or making of this Lease. Tenant agrees to indemnify and hold
Landlord, its agents, employees, partners, directors, shareholders and
independent contractors harmless from all liabilities, costs, demands,
judgments, settlements, claims and losses, including reasonable attorney’s fees
and costs, incurred by Landlord in conjunction with any such claim or claims of
any other broker or brokers claiming to have interested Tenant in the Building
or Premises or claiming to have caused Tenant to enter into this Lease.
Landlord represents that it has not dealt with any brokers other than the
parties listed above in negotiating and entering into this Lease, and shall
indemnify, defend and hold Tenant harmless from any breach of the foregoing
representation and warranty. Tenant, at its option, may use the consulting
services of Alan Asman, Senior Vice President, Transwestern Commercial
Services, with regard to non-legal review of this Lease, the cost of which
shall be paid for by Landlord upon Lease execution and charged against Tenant’s
tenant improvement Allowance.

34.      LANDLORD’S LIABILITY.

          Anything in this Lease to the contrary notwithstanding, covenants,
undertakings and agreements herein made on the part of the Landlord are made
and intended not for the purpose of binding Landlord personally or the assets
of Landlord but are made and intended to bind only the Landlord’s interest in
the Premises and Building, as the same may, from time to time, be encumbered,
and no personal liability shall at any time be asserted or enforceable against
Landlord or its stockholders, officers, members, partners or their respective
heirs, legal representatives, successors and assigns on account of the Lease or
on account of any covenant, undertaking or agreement of Landlord in this Lease.
Accordingly, Tenant agrees to look solely to Landlord’s interest in the
Building to satisfy any claim it may have against Landlord. In addition,
in no event shall Landlord be in default of this Lease unless Tenant
notifies Landlord in writing of the precise nature of the alleged breach by
Landlord, and Landlord fails to cure such breach within thirty (30)

	 	 	 	 	 
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days after
the date of Landlord’s receipt of such notice (provided that if the alleged
breach is of such a nature that it cannot reasonably be cured within such
thirty (30) day period, then Landlord shall not be in default if Landlord
commences a cure within such thirty (30) day period and diligently thereafter
prosecutes such cure to completion). In no event shall Tenant have any right
to terminate this Lease by virtue of any uncured default by Landlord during any
applicable cure period.

35.      ESTOPPEL CERTIFICATES.

          Tenant shall, from time to time, within ten (10) days of Landlord’s
written request, execute, acknowledge and deliver to Landlord or its designee a
written statement stating: the date the Lease was executed and the date it
expires; the date the Tenant entered occupancy of the Premises; the amount of
Base Rent, Additional Rent and other charges due hereunder and the date to
which such amounts have been paid; that this Lease is in full force and effect
and has not been assigned, modified, supplemented or amended in any way (or
specifying the date and terms of any agreement so affecting this Lease); that
this Lease represents the entire agreement between the parties as to this
leasing; that all conditions under this Lease to be performed by the Landlord
have been satisfied (or specifying any such conditions that have not been
satisfied); that all required contributions by Landlord to Tenant on account of
Tenant’s improvements have been received (or specifying any such contributions
that have not been received); that to Tenant’s knowledge, following reasonable
investigation and inquiry, there are no existing defenses or offsets which the
Tenant has against the enforcement of this Lease by the Landlord; that no Base
Rent or Additional Rent has been paid more than one (1) month in advance; that
no security has been deposited with Landlord (or, if so, the amount thereof)
other than the Security Deposit; or any other customary factual matters
evidencing the status of the Lease, as may be reasonably required either by a
lender making a loan to Landlord to be secured by a deed of trust or mortgage
against the Building, or a purchaser of the Building, which written statement
shall, to the extent the certifications required to be made therein are true
and correct as of such time, be in substantially the same form as Exhibit “F”
attached hereto and made a part hereof by this reference. It is intended that
any such statement delivered pursuant to this paragraph may be relied upon by a
prospective purchaser of Landlord’s interest or a mortgagee of Landlord’s
interest or assignee of any mortgage upon Landlord’s interest in the Building.
If Tenant fails to respond within twenty (20) days after receipt by Tenant of a
written request by Landlord as herein provided, Tenant shall be deemed to have
given such certificate as above provided without modification and shall be
deemed to have admitted the accuracy of any information supplied by Landlord to
a prospective purchaser or mortgagee consistent with the terms of the estoppel
so requested.

36.      EXCLUSIVITY.

          Provided that Tenant is not in default hereunder, Landlord agrees that
during the Term and any applicable Renewal Term(s), it shall not directly lease
space in any Building to any party other than tenant for use as a retail
banking or mortgage facility.

37.      TRANSFER OF LANDLORD’S INTEREST.

          In the event of any transfer(s) of Landlord’s interest in the Premises or
the Building to a bona-fide third-party purchaser, other than a transfer for
security purposes only, the transferor shall be automatically relieved of any
and all obligations and liabilities on the part of Landlord accruing from and
after the date of
such transfer, and Tenant agrees to attorn to the transferee, provided the
transferee assumes all of transferor’s prospective obligations and liabilities
under the Lease.

	 	 	 	 	 
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38.      RIGHT TO PERFORM.

          If Tenant shall fail to pay any sum of money, other than Base Rent and
Additional Rent, required to be paid by it hereunder or shall fail to perform
any other act on its part to be performed hereunder, and (except in the event
of emergency in which case no grace or cure period shall be applicable or
required) such failure shall continue for ten (10) days after written notice
from Landlord (or such longer cure period as may be provided for herein),
Landlord may, but shall not be obligated so to do, and without waiving or
releasing Tenant from any obligations of Tenant, make any such payment or
perform any such other act on Tenant’s part to be made or performed as provided
in this Lease. Landlord shall have (in addition to any other right or remedy
of Landlord) the same rights and remedies in the event of the nonpayment of
sums due under this section as in the case of Default by Tenant in the payment
of Base Rent. All sums paid by Landlord and all penalties, interest and costs
in connection therewith, shall be due and payable by Tenant upon written demand
within ten (10) business days after such payment by Landlord, together with
interest thereon at the Default Rate from such date to the date of payment.

39.      COMMON AREAS.

          For purposes hereof, the term “Common Areas” shall mean (i) all portions
of the Land other than portions upon which the Building is situated, including
landscaped areas and the like, as the same may be modified from time to time by
Landlord; (ii) all loading docks, corridors, hallways, lobbies, elevator cabs,
stairs and other portions of the Building that would customarily be made
available to tenants of the Building, as the same may be modified from time to
time by Landlord; (iii) any covered or surface parking facility; and (iv) any
areas which are common areas for, on, or utilized in general by tenants, owners
and/or occupants of the Building.

40.      SALES AND AUCTIONS; SIGNAGE.

          Tenant may not display or sell merchandise outside the exterior walls and
doorways of the Premises and may not use such areas for storage. Tenant shall
not conduct or permit to be conducted any sale by auction in, upon or from the
Premises whether said auction be voluntary, involuntary, pursuant to any
assignment for the payment of creditors or pursuant to any bankruptcy or other
insolvency proceedings.

          Except with respect to Building directory signage provided in Landlord’s
standard directory format, Tenant shall not display any sign, graphics, notice,
picture, or poster, or any advertising matter whatsoever, anywhere in or about
the Premises or the Building at places visible from anywhere outside or at the
entrance to the Premises without first obtaining Landlord’s written consent
thereto, which consent may be withheld, conditioned or delayed at Landlord’s
sole discretion. Tenant shall be provided with a pro rata portion (based upon
Tenant’s Share or other appropriate reasonable criteria as established by
Landlord from time to time) of space within the Building lobby directory,
within which to install Building standard lobby directory identification, the
cost of which shall be at the expense of Landlord. In addition, subject to
Landlord’s approval thereof in accordance with the terms and conditions of
Exhibit C attached hereto, Tenant shall be permitted to install one (1)
exterior sign (the “Tenant’s Exterior Sign”), the location, size and design of
which shall at all times be subject to compliance with applicable codes and
zoning ordinance
of the City of Manassas, Virginia, City of Manassas Architectural Review
Board (“ARB”) approval, and to any comprehensive signage plan applicable to the
Building and the Project. The Tenant shall be

	 	 	 	 	 
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responsible to maintain any
permitted signs and remove the same at Lease Expiration Date. If Tenant shall
fail to do so, Landlord may do so at Tenant’s cost. Tenant shall be
responsible to Landlord for any damage caused by the installation, use,
maintenance or removal of any such signs. All signage permitted by Landlord may
be assigned or utilized by any Landlord consented assignee or subtenant for the
entire Premises, subject to the prior written reasonable approval of Landlord,
and may not be changed in any manner without the prior written approval of
Landlord in each case. Tenant shall be responsible to Landlord for any damage
caused by the installation, use, maintenance or removal of any such permitted
signs. Notwithstanding the above, the Landlord, at no additional cost to
Tenant, will submit on behalf of the Tenant the customary applications to the
ARB and the City of Manassas for the Tenant’s Exterior Sign, which Landlord
will make a good faith effort to first locate at the North East corner of the
Building, or in the alternative, on the front of the Building as it faces
Church Street.

41.      ACCESS
TO ROOF.

          41.1        Generally. Subject to: (A) compliance with all rules, regulations,
statutes and codes of any governmental authority having jurisdiction thereover;
(B) compliance with any covenants, conditions and restrictions applicable to
the Building in effect as of the date of this Lease; (C) the rights of other
tenant in the Building as the same exist as of the date hereof; and (D) subject
to Landlord’s prior written consent, which consent shall not be unreasonably
withheld, conditioned or delayed, Tenant shall have the non-exclusive right of
access to and the use of a to be designated portion of the roof of the Building
for the installation of communication equipment (“Roof Use”), provided further
that (i) such installation and the Roof Use shall not void any roof or other
warranty applicable to the Building; (ii) the Roof Use shall be for Tenant’s
business purposes only and not for commercial resale; (iii) all such
installations shall be located and screened in a manner acceptable to Landlord
and any governmental authority having jurisdiction over the Building; and (iv)
any such equipment shall be of a size acceptable to Landlord in its reasonable
discretion.

          41.2        No Representations. Landlord has not made any representations,
warranties or promises pertaining to the suitability of the Building’s rooftop
for the Roof Use. Tenant accepts the rooftop in its “as is” condition.

          41.3        Compliance with Legal Requirements. Prior to installation, Tenant
will obtain any and all licenses, approvals, permits, etc., necessary for the
installation, maintenance and use of any equipment installed pursuant to this
Section 41. Tenant’s Roof Use shall not in any way conflict with any
applicable law, statute, ordinance or governmental rules or regulation now in
force or which may hereafter be enacted, or with the utilization of the roof as
granted to any other tenant. The Tenant will, at its sole cost and expense,
promptly comply with all laws, statutes, ordinances, governmental rules or
regulations, or requirements of any board of fire insurance underwriters or
other similar bodies now or hereafter constituted relating to or affecting
Tenant’s Roof Use. Tenant shall indemnify and hold Landlord harmless from and
against any and all loss, cost (including reasonable attorney’s fees incurred
in defending Landlord), damage or liability arising out of any violations of
said laws, statutes, ordinances, rules or regulations.

          41.4
       Additional Covenants. Tenant’s Roof Use shall be exercised: (A) in
such manner as will not create any hazardous condition or interfere with or
impair the operation of the heating, ventilation, air conditioning, plumbing,
electrical, fire protection, life safety, public utilities or other systems or
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in the Building (including any other communications equipment
installed by or with the permission of Landlord); (B) in such a manner as will
not directly or indirectly interfere with, delay, restrict or impose any
expense, work or obligation upon Landlord in the use or operation of the
Building; (C) at Tenant’s sole cost and expense, including the cost of
repairing all damage to the Building and any personal injury and/or property
damage attributable to the installation, inspection, adjustment, maintenance,
removal or replacement of any equipment or apparatus on the roof approved
hereunder; and (D) solely in the ordinary course of Tenant’s business
operations (and Tenant may not sublease, license or otherwise permit third
parties to establish communications transmission facilities as part of Tenant’s
Roof Use).

42.      ACCESS; SECURITY.

          Landlord may, at its sole discretion, install access control systems to
the Common Area entrances of the Building and Landlord shall provide on or
before the Commencement Date, up to ten (10) key cards therefore, the cost of
which shall be paid by Landlord. Thereafter, Tenant may obtain from the
applicable security system vendor as many key cards as Tenant requires, at
Tenant’s sole expense. All monitoring costs attributable to such system(s), if
any, shall constitute Operating Costs for all purposes hereof.

          The Building access control system referenced above, if installed, is not
intended to constitute security for Tenant’s Premises. Tenant shall have the
right, at its sole cost and expense and upon obtaining Landlord’s consent,
which consent shall not be unreasonable withheld, conditioned or delayed, to
install a security system securing its Premises, subject to and in accordance
with the terms and conditions of Exhibit C attached hereto. Tenant shall be
solely responsible for the repair and maintenance of any such security system
securing Tenant’s Premises. Further, Tenant shall be solely responsible
(irrespective of whether Tenant installs an independent security system within
the Premises) for securing the Premises and Tenant’s business therein, and
Landlord shall have no obligation or liability therefor. Tenant may separately
lock and secure the interior doors to its premises, so long as the Landlord is
provided with a duplicate key for the same, to be used by the Landlord only in
the case of an Emergency.

43.      AUTHORITY OF LANDLORD AND TENANT.

          Each of Landlord and Tenant shall furnish the other with appropriate
partnership and/or corporate resolutions, as applicable, confirming that the
individual executing this Lease on behalf of each has been duly authorized to
execute and deliver this Lease on behalf of such party and that this Lease is
binding upon such party.

44.      NO
ACCORD OR SATISFACTION.

          No payment by Tenant or receipt by Landlord of a lesser amount than the
Base Rent, Additional Rent and other sums due hereunder shall be deemed to be
other than on account of the earliest Base Rent or other sums due, nor shall
any endorsement or statement on any check or accompanying any check or payment
be deemed an accord and satisfaction; and Landlord may accept such check or
payment without prejudice to Landlord’s right to recover the balance of such
Base Rent, Additional Rent or other sum and to pursue any other remedy provided
in this Lease.

45.      LEGAL REQUIREMENTS.

	 	 	 	 	 
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          Landlord shall, as part of Landlord’s Work (but not as an Operating Cost),
cause the Building to comply as of the Commencement Date with all laws, orders,
ordinances and regulations of Federal and local authorities and with directions
of public rules, recommendations, requirements and regulations of the Board of
Fire Underwriters, Landlord’s insurance companies and any other organization
establishing insurance rates in the geographical area where the Project is
located and all applicable building codes, to the extent the same are
applicable to the Building, respecting all matters of the Project other than
the use and occupancy of the Premises by Tenant, including, without limitation,
the accessibility requirements of the Americans with Disabilities Act (“ADA”),
all zoning and other land use laws, and all Environmental Laws.

46.      PARKING.

          Tenant shall have the right (together with Landlord and its agents,
employees and contractors, and together with the rights of other tenants in the
Building and the Project) to use, from the parking areas available to the
Project in the covered and surface parking on the Project and Common Areas as
set forth in Section 1.1 hereof. Such parking right shall be non-exclusive, and
on an unreserved basis, and Tenant agrees not to overburden the Building’s
parking facilities. The foregoing shall in no event limit Landlord’s ability to
impose or amend restrictions from time to time on portions of available parking
for the Building, or the Common Areas in general without restricting Tenant’s
rights and ability to conduct business under this Lease, in accordance with the
terms of this Lease and the rules and regulations attached hereto. Landlord
reserves the right to designate parking spaces for visitors and to assign
reserved parking spaces from time to time. In the event parking spaces are
specifically reserved or designated by Landlord to other tenants in the
Building, reserved parking spaces will also be allocated to Tenant on a pro
rata basis as related to the square footage leased by each tenant in the
Building.

47.      GENERAL PROVISIONS.

          47.1        Acceptance. This Lease shall only become effective and binding upon
full execution hereof by Landlord and Tenant and delivery of a signed copy by
Landlord to Tenant.

          47.2        Joint Obligation. If there be more than one Tenant, the obligations
hereunder imposed shall be joint and several.

          47.3        Marginal Headings, Etc. The marginal headings, Table of Contents,
lease summary sheet and titles to the sections of this Lease are not a part of
the Lease and shall have no effect upon the construction or interpretation of
any part hereof.

          47.4        Choice of Law. This Lease shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia (without regard to the
choice of law and/or conflict of law principles applicable in such State).

          47.5        Successors and Assigns. The covenants and conditions herein
contained, subject to the provisions as to assignment, inure to and bind the
heirs, successors, executors, administrators and assigns of the parties hereto.

          47.6        Recordation. Except to the extent otherwise required by law, neither
Landlord nor Tenant shall record this Lease or a memorandum hereof.

	 	 	 	 	 
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          47.7        Quiet Possession. Upon Tenant’s paying the Base Rent and Additional
Rent reserved hereunder and observing and performing all of the covenants,
conditions and provisions on Tenant’s part to be observed and performed
hereunder, Tenant shall have quiet possession and enjoyment of the Premises for
the Lease Term hereof, free from any disturbance or molestation by Landlord, or
anyone claiming by, through or under Landlord, but in all events subject to all
the provisions of this Lease

          47.8        Inability to Perform; Force Majeure. This Lease and the obligations
of the Tenant hereunder shall not be affected or impaired because either
Landlord or Tenant is unable to fulfill any of its obligations hereunder or is
delayed in doing so, to the extent such inability or delay is caused by reason
of war, civil unrest, strike, labor troubles, unusually inclement weather,
governmental delays, inability to procure services or materials despite
reasonable efforts, third party delays, acts of God, or any other cause(s)
beyond the reasonable control of the Landlord (which causes are referred to
collectively herein as “Force Majeure”). Any time specified obligation of
Landlord or Tenant in this Lease shall be extended one day for each day of
delay suffered by Landlord or Tenant as a result of the occurrence of any Force
Majeure. The foregoing notwithstanding in no event will an event of Force
Majeure extend the time within which Tenant or Landlord must perform any of its
monetary obligations under this Lease.

          47.9        Partial Invalidity. Any provision of this Lease which shall prove to
be invalid, void, or illegal shall in no way affect, impair or invalidate any
other provision hereof and such other provision(s) shall remain in full force
and effect.

          47.10       Cumulative Remedies. No remedy or election hereunder shall be
deemed exclusive but shall, whenever possible, be cumulative with all other
remedies at law or in equity.

          47.11       Entire Agreement. This Lease contains the entire agreement of the
parties hereto and no representations, inducements, promises or agreements,
oral or otherwise, between the parties, not embodied herein, shall be of any
force or effect.

          47.12       Survival. All indemnities set forth in this Lease shall survive the
expiration or earlier termination of this Lease.

          47.13       Saving Clause. In the event (but solely to the extent) the
limitations on Landlord’s liability set forth in Section 8.3 of this Lease
would be held to be unenforceable or void in the absence of a modification
holding the Landlord liable to Tenant or to another person for injury, loss,
damage or liability arising from Landlord’s omission, fault, negligence or
other misconduct on or about the Premises, or other areas of the Building
appurtenant thereto or used in connection therewith and not under Tenant’s
exclusive control, then such provision shall be deemed modified as and to the
extent (but solely to the extent) necessary to render such provision
enforceable under applicable law. The foregoing shall not affect the
application of Section 34 of this Lease to limit the assets available for
execution of any claim against Landlord.

          47.14       Rule Against Perpetuities. In order to ensure the compliance of
this Lease with any rule against perpetuities that may be in force in the state
in which the Premises are located, and without limiting or otherwise affecting
either Landlord’s or Tenant’s obligations under this Lease, as stated in the
other
sections hereof, or modifying any other termination rights which may be
set forth herein, Landlord and Tenant agree that, irrespective of the reasons
therefor (other than a Default by Tenant), in the event Tenant

	 	 	 	 	 
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fails to take
possession of the Premises and commence paying Base Rent and Additional Rent
hereunder within ten (10) years after the date of execution of this Lease, then
this Lease, and the obligations of the parties hereunder, shall be deemed to be
null and void and of no further force and effect. Without affecting the
specific timing requirements otherwise applicable thereto under this Lease, any
and all options granted to Tenant under this Lease (including, without
limitation, expansion, renewal, right of first refusal, right of first offer,
and like options) must be exercised by Tenant, if at all, during the term or
Renewal Terms of this Lease.

48.      RULES AND REGULATIONS.

          Tenant agrees to comply with the Rules and Regulations attached hereto as
Exhibit “D”, as the same may be modified from time to time by Landlord.
Failure to do so shall be a breach of this Lease.

49.      ARBITRATION.

          49.1        If arbitration is specifically agreed upon hereunder as a dispute
resolution procedure, the arbitration shall be conducted as provided in this
Section. All proceedings shall be conducted according to the Commercial
Arbitration Rules of the American Arbitration Association, except as
hereinafter provided. No action at law or in equity in connection with any
such dispute shall be brought until arbitration hereunder shall have been
waived, either expressly or pursuant to this Section. The judgment upon the
award rendered in any arbitration hereunder shall be final and binding on both
parties hereto and may be entered in any court having jurisdiction thereof.
During any arbitration proceeding pursuant to this Section, the parties shall
continue to perform and discharge all of their respective obligations under
this Lease, except as otherwise provided in this Lease.

          49.2        All disputes that are required to be arbitrated in accordance with
this Lease shall be raised by notice to the other party, which notice shall
state with particularity the nature of the dispute and the demand for relief,
making specific reference by article number and title of the provisions of this
Lease alleged to have given rise to the dispute. The notice shall also refer
to this Section and shall state whether or not the party giving the notice
demands arbitration under this Section.

          49.3        Within thirty (30) days of any demand for arbitration, each of
Tenant and Landlord shall appoint one (1) arbitrator, and within ten (10) days
of their appointment, the two (2) arbitrators thus selected shall jointly
select a third (3rd) arbitrator. All arbitrators shall have at least ten (10)
years’ experience in commercial real estate matters and, in particular, the
subject matter of the dispute, to act as arbitrator hereunder. If either party
fails to select an arbitrator within the initial thirty (30) day period, or if
the two (2) arbitrators are unable to agree upon a third (3rd) arbitrator,
then, upon the request of either party, the remaining arbitrator(s) shall be
appointed by The American Arbitration Association. The arbitration proceedings
shall take place a mutually acceptable location in the Washington, D.C.
metropolitan areas.

          49.4        The right of Landlord and Tenant to submit a dispute to arbitration
is limited to issues specifically agreed in this Lease to be submitted to
arbitration, and specifically does not apply to any remedial action undertaken
by Landlord pursuant to the provisions of Section 24 hereof. When resolving
any dispute, the arbitrator shall apply the pertinent provisions of this Lease
without departure therefrom in
any respect. The arbitrator shall not have the power to change any of the
provisions of this Lease, but this Section shall not prevent in any appropriate
case the interpretation, construction and determination by the

	 	 	 	 	 
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arbitrator of
the applicable provisions of this Lease to the extent necessary in applying the
same to the matters to be determined by arbitration.

          49.5        Without limitation, any dispute between Landlord and Tenant regarding
the application, interpretation or effect of the provisions of Exhibit C to
particular factual circumstances, including without limitation any dispute
regarding approval of plans and specifications for Landlord’s Work, compliance
of construction with the approved plans and specifications therefor (or as
otherwise required by this Lease), Substantial Completion of all or any part of
Landlord’s Work, completion of punch list items and Landlord’s calculation of
the total Costs, shall be subject to arbitration pursuant to this Section 49 if
Landlord and Tenant cannot resolve such dispute voluntarily.

50.      WAIVER OF JURY TRIAL.

          Landlord and Tenant hereby waive trial by jury in any action, proceeding
or counterclaim brought by either of them against the other on all matters
arising out of this Lease, or the use and occupancy of the Premises. If
Landlord commences any summary proceeding for non-payment of Base Rent or
Additional Rent, Tenant will not interpose (and waives the right to interpose)
any non-mandatory counterclaim in any such proceeding.

51.      RENEWAL TERM.

          51.1        Provided Tenant is not in Default of this Lease at the time its
rights hereunder are to be exercised, Tenant shall have the option (each, a
“Renewal Option”) to extend the Lease Term for two (2) period of sixty (60)
months ( the “Renewal Term”) provided Tenant gives written notice to Landlord
of its election to exercise such Renewal Option (the “Renewal Notice”) not more
than Eighteen (18) nor less than six (6) months prior to the expiration of the
last day of the prior Lease Term. Time is of the essence in this Section 51.

          51.2        All terms and conditions of this Lease, including without limitation,
all provisions governing the payment of Additional Rent, shall remain in full
force and effect during the Renewal Term(s), except the Base Rent shall be as
set forth in this Section 51.

          51.3        The Base Rent payable upon the commencement of the Renewal Term shall
equal One Hundred Percent (100%) of the then prevailing market rental rate
(including base rental rate and annual escalation rate) applicable to renewal
terms with respect to comparable space in comparable buildings in the vicinity
of the Project, (the “Fair Market Rate” or “FMR”) at the time of the
commencement of the applicable Renewal Term, determined based upon then
existing renewal market conditions applicable to the leasing of comparable
space in comparable buildings in the vicinity of the Project (taking into
consideration use, location, quality, age and location of the applicable
building and the definition of net rentable area as well as then market lease
concessions, and improvement allowances), but in no event at a rate less than
the Base Rent and Additional Rent payable during the last year of the prior
term. Further, the Fair Market Rate shall be determined on a net basis, with
Tenant remaining responsible for all Additional Rent as set forth herein.
Landlord and Tenant shall negotiate in good faith and in accordance with the
procedure set forth in Section 51.4, below, to determine the Fair Market Rate
which will be applicable during the Renewal Term, with the goal of concluding
such negotiation or triggering a determination of the
FMR using a three-broker method (as described in Section 51.5, below)
within not more than sixty (60) days after the date of Landlord’s receipt of
the Renewal Notice.

	 	 	 	 	 
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          51.4        Within ten (10) days after Landlord receives Tenant’s Renewal Notice
exercising either of the Renewal Options referenced above, Landlord will
provide Tenant with a written notice (the “FMR Notice”) indicating the base
rental rate and annual escalation rate which Landlord in good faith believes
represents the then current FMR for the Premises. If Tenant is in agreement
with the base rental rate and annual escalation rate stated in the FMR Notice,
Tenant shall so notify Landlord within ten (10) business days after its receipt
thereof, in which case such base rental rate and annual escalation rate shall
constitute the FMR for such Renewal Term within the meaning of this Section 51.
If Tenant believes in good faith that the base rental rate and annual
escalation rate stated by Landlord in the FMR Notice are in excess of actual
FMR for the Premises, Tenant shall so notify Landlord in writing prior to the
end of the ten (10) business day period after Tenant received Landlord’s FMR
Notice, stating in its response (hereinafter referred to as “Tenant’s
Counterproposal”) the base rental rate and annual escalation rate which Tenant
in good faith believes represents the then current FMR for the Premises. If
Tenant does provide Tenant’s Counterproposal to Landlord in a timely fashion,
and Landlord agrees that the base rental rate and annual escalation rate stated
in Tenant’s Counterproposal represent the then current FMR, Landlord shall so
notify Tenant in writing within ten (10) days after its receipt thereof, in
which case such base rental rate and annual escalation rate shall constitute
the FMR for such Renewal Term within the meaning of this Section 51. If either
the Landlord or the Tenant fails to respond to the others proposal within the
time period provided above, or rejects the counterproposal of the other party,
the parties agree to submit the issue of what constitutes the appropriate FMR
for the Premises for the Renewal Term to determination using a “three broker
method” as described in Section 51.5, below.

          51.5        If the parties submit the issue of what constitutes the appropriate
FMR for the Premises for the Renewal Term to determination using a “three
broker method”, then the Base Rent and annual escalations applicable during the
Renewal Term shall, subject to the minimum set forth above, be equal to the FMR
and annual escalation rates determined by a board of three (3) licensed real
estate brokers, one of whom shall be named by Landlord, one by Tenant, and the
two so appointed shall select the third. Each member of the board of brokers
shall be licensed in the Commonwealth of Virginia as a real estate broker, with
a substantial familiarity in the field of commercial leasing in Prince
William/City of Manassas, Virginia market having no less than ten (10) years
experience in such field, and recognized as ethical and reputable within the
field. Landlord and Tenant agree to make their appointments within five (5)
business days after the earlier to occur of (i) the expiration of the ten (10)
day period after Landlord’s receipt of Tenant’s Counterproposal, or (ii) the
date Landlord notifies Tenant of its rejection of Tenant’s Counterproposal. The
two (2) brokers selected by Landlord and Tenant shall promptly select a third
broker within ten (10) days after they both have been appointed, and each
broker, within ten (10) days after the third broker is selected, shall submit
his or her determination of the said FMR and escalations (taking into account
the provisions of Section 51.3 hereof). If either of the parties fail to
select a broker within the aforesaid time periods, the broker selected by the
other party shall select the other two (2) brokers to participate in the
determination, each of which shall meet the selection criteria set forth above,
and be affiliated with a different company from the first broker and from each
other; and if the brokers selected by Landlord and Tenant are unable to reach
agreement on the identity of the third broker within the applicable ten (10)
day period, then the third broker shall be designated (in compliance with the
applicable criteria set forth above) by an agent of the Virginia Board of
Realtors in office at such time. The FMR shall be the average of amount
determined by the two brokers whose determinations are closest in amount to
each other (or if two brokers reach an identical determination, the
determination of such two brokers), provided
that if the two (2) most proximate determinations of FMR differ by more
than five percent (5%), then the determination of FMR by such board of three
brokers shall be null and void, and Landlord and Tenant

	 	 	 	 	 
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shall, within five (5)
business days thereafter, appoint a new board of three different real estate
brokers meeting the above-stated criteria, who shall convene in accordance with
the procedures and time frames set forth above in order to render a new
determination, as if the first determination had never taken place. After the
Fair Market Rent has been established, the brokers shall immediately notify the
parties in writing, and such determination shall be conclusive and binding upon
the parties. Landlord and Tenant shall each pay the fee of the broker selected
by it, and they shall equally share the payment of the fee of the third broker.

          IN WITNESS WHEREOF, Landlord and Tenant have executed this Deed of Lease,
or have caused this Deed of Lease to be executed on their respective behalves
by their duly authorized officers, as of the day and year first above written.

	 	 	 
	LANDLORD:	 	 
	 
	 	
WEST STREET DEVELOPMENT, LLC

a Virginia limited liability company

	 	 	 
	 	By:
	/s/ Michael R. Vanderpool

	 	 	
Name: Michael R. Vanderpool

Title: Manager

Date: November 19, 2002

	 	 	 
	TENANT:	 	 
	 
	 	
ALLIANCE HOME FUNDING, LLC,

a Virginia limited liability company

	 	 	 
	 	By: 	/s/ Robert H.
Turley

	 	 
	
Name:  Robert H. Turley

Title: President

Date: November 15, 2002

	 	 	 	 	 
	Landlord’s Initials:	 	 	
Tenant’s Initials:	 
	 	 	 	 	 

 

 

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EXHIBIT “A”

(CONCEPTUAL FLOOR PLANS)

	 	 	 	 	 	 	 	 	 
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EXHIBIT “B”

(SITE PLAN)

	 	 	 	 	 	 	 	 	 
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Initials:

 

 

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EXHIBIT “C”

Construction Exhibit

to

DEED OF LEASE

by and between

WEST STREET DEVELOPMENT, LLC

(“Landlord”)

and

ALLIANCE HOME FUNDING, LLC

(“Tenant”)

          1.     Base Building Improvements. Landlord agrees, at Landlord’s sole
expense, to construct the interior and exterior Base Building improvements and
site improvements described in Schedule “C-1” attached hereto and made a part
hereof (collectively, the “Base Building Improvements”, and Landlord’s
construction thereof, the “Base Building Work”). The Base Building Work and
the Landlord’s TI Work, described below, are collectively referred to as the
“Landlord’s Work.”

          2.     Landlord’s TI Work.

               (A)   In addition to the Base Building Work, Landlord shall be responsible
for the construction of the Tenant’s leasehold improvements within the Premises
in accordance with the final space plan that is prepared by Tenant’s architect
(the “Space Plan”), which Space Plans has heretofore been approved by Landlord
(“Landlord’s TI Work”). The term “Landlord’s TI Work” shall not include the
Base Building Work. The cost of Landlord’s TI Work shall be at the sole cost
of Tenant, subject to an Allowance granted by Landlord to Tenant hereunder, as
more fully set forth in Paragraph 3(B), below.

               (B)   Landlord’s TI Work is intended to be completed and the Premises
delivered to Tenant by January 1, 2003, in all cases subject to Force Majeure
(as defined in the Lease) and Tenant Delays (as defined herein). Landlord
projects that it can achieve substantial completion of Landlord’s TI Work by
January 1, 2003 provided final Tenant selections are made by November 8, 2002,
and subject only to change orders, Tenant Delay (as hereinafter defined) and to
delays caused by Force Majeure.

               (C)   Tenant shall prepare a complete list, to be delivered to Landlord by
November 8, 2002, in tabular form of Tenant’s special equipment, including the
quantities and locations of the following: personal computers, special computer
rooms and other equipment therein, continuously operating electric motors,
copiers, other special requirements for other heat-generating equipment, and
any future load that Tenant requires or anticipates requiring. The foregoing
listing is herein referred to as “Tenant’s Load Letter.” The Space Plan and the
Tenant’s Load Letter shall hereinafter be together referred to as the “Approved
Space Plan”.

	 	 	 	 	 	 	 	 	 
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          3.     Performance of Landlord’s TI Work.

               (A)   Following final approval of the Approved Plans, Landlord agrees, in a
prompt, orderly and diligent fashion, to complete the bidding process described
below, enter into a construction contract for Landlord’s TI Work with the
General Contractor (as defined in 3(C) below), apply for a building permit and
upon issuance thereof, cause Landlord’s TI Work to be completed, installed or
performed, as the case may be, in accordance therewith, subject only to
variations necessitated by the unavailability of specified materials and
equipment, provided that Tenant received notice thereof and an opportunity to
substitute items in replacement thereof. Landlord shall promptly submit for
necessary building permits as set forth in Section 5 hereof, and shall
diligently pursue the processing thereof. Except as herein provided, no
deviation from the Approved Space Plan shall be made by either party except by
written change order approved by the other party, which approval shall not be
unreasonably withheld or delayed. In the event Tenant requests or causes the
need for any change orders with respect to Landlord’s TI Work, the net cost of
such change orders shall be paid for solely by Tenant, and any delays resulting
therefrom, if any, shall constitute “Tenant Delays” hereunder. In the event any
change orders requested increase the cost of Landlord’s TI Work or the Base
Building Work, or if the cost of the Landlord’s TI Work exceeds the Allowance,
Tenant shall pay Landlord Fifty Percent (50%) of the incremental additional
cost associated with any such change orders (to the extent not paid for out of
the Allowance provided for herein) within fifteen (15) days after Landlord’s
demand and receipt by Tenant of evidence of the amount therefor and Fifty
Percent (50%) upon Substantial Completion of the Premises.

               (B)   Tenant shall bear financial responsibility for all hard and soft costs
associated with the performance of Landlord’s TI Work including (i) the
architectural, engineering and professional fees and blueprinting costs payable
by Tenant to Tenant’s Architect and any other architects and engineers engaged
by Landlord in connection with its preparation of Drawings and Specifications,
and Approved Plans, as required under Section 2, above, and any permitting
costs, inspection fees and other governmental charges associated with
Landlord’s TI Work (the “Soft Costs”), and (ii) all costs of labor and
materials for the installation of Landlord’s TI Work (the “Hard Costs”). The
total Soft Costs and Hard Costs of Landlord’s TI Work, including any sums due
by virtue of approved change orders, is herein referred to collectively as the
“Costs”. Tenant shall be entitled to receive from Landlord a credit against
the Costs (herein referred to as the “Allowance”) in an amount equal to Twenty
Seven and 50/100 Dollars ($27.50) multiplied by the total number of rentable
square feet in the Premises to be applied against the Costs to construct
Landlord’s TI Work within the Premises.

               (C)   Landlord shall prepare a bidding package for Landlord’s Work based
upon the Approved Space Plan. Landlord’s TI Work shall be competitively bid
after final approval of the Approved Space Plan is achieved, as follows:

                    (1)   Landlord designates Rector Construction Company as the general
contractor (the “General Contractor”) to supervise the performance of
Landlord’s TI Work, on the basis of a pre-determined OH&P fee of eighteen
percent (18%) to be added to the actual costs incurred under contracts and
subcontracts for labor and materials, with such work to be competitively bid at
the subcontractor level.

                    (2)   All subcontractors shall submit their bids directly to the General
Contractor and Landlord (and Landlord shall promptly provide copies thereof to
Tenant), who will review and analyze all bids submitted, and Landlord shall
format all the bids for review by Tenant; and either

	 	 	 	 	 	 	 	 	 
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Landlord or the General Contractor will prepare a bid format which
includes copies of all submitted bids (the “Bid Format”) listing all bids
received, which shall be delivered to Tenant within Seven (7) days after
receipt of the last subcontractor bid. The Bid Format is intended to make each
bid submitted comparable in scope so that the bid prices reflected are based on
substantially equal services and materials. Within five (5) days after
providing Tenant with the Bid Format, Landlord (with the input of Tenant) and
the General Contractor shall select the subcontractors determined by Landlord
and the General Contractor to be the acceptable bid (“Final Bid”), provided
such selection shall be based upon the lowest bid unless there is a reasonable
basis to select a bidder other than the lowest bidder (for example, due to
enhancement of coordination between different subcontractors and trades in the
performance of Landlord’s TI Work in furtherance of the goal of timely
completion thereof) and the costs associated with each such subcontract shall
be incorporated within the total Costs.

                    (3)   Landlord agrees to cause the General Contractor (or each bidding
contractor) to identify “long lead” items or materials which will delay
Substantial Completion of Landlord’s Work by the dates contemplated herein, and
shall notify Tenant in writing of the same promptly after such identification
can be made. Landlord and Tenant shall cooperate in good faith to avoid such
“long lead” items or materials and Tenant shall be given the opportunity to
substitute replacement items therefore, and such substitution shall not
constitute Tenant Delays provided that such substitution is made promptly
following written notice to Tenant that any item(s) constitutes a long lead
item, and the delay in obtaining Tenant’s approval thereto does not cause
actual delay in the completion of Landlord’s Work.

          4.     Tenant’s Work.

               (A)   Notwithstanding anything to the contrary in this Exhibit C, Tenant
shall be responsible for all work, construction, installations or improvements
in or to the Premises which is not designated as Landlord’s TI Work (including
but not limited to the installation of all computer and telephone cabling and
systems, fixtures, furniture, equipment and other office installations unless
designated as Landlord’s TI Work in the Approved Plans.) To the extent there
is any such work to be performed independently by Tenant, such work shall
hereinafter be referred to as “Tenant’s Work,” and shall be at Tenant’s sole
cost and expense. Prior to commencing Tenant’s Work, Tenant shall submit
drawings and specifications describing Tenant’s Work to Landlord, showing all
aspects of such work in reasonable detail, to Landlord for Landlord’s review
and approval, not to be unreasonably withheld, conditioned or delayed.
Tenant’s Work shall be treated as an “alteration” or “improvement” under the
Lease, and shall be subject to the terms of (and approval procedures described
in) the Lease with regard to alterations. Tenant may access the Premises
during the fifteen (15) days prior to the Commencement Date for purposes of
installing special equipment, furniture, computers and telephone equipment,
provided such access does not unreasonably impede completion of the Landlord
Work pursuant to this Exhibit C. Tenant’s consultants and subcontractors may
access the Premises during construction to install cabling and wiring prior to
any partitions being enclosed and for the installation of systems furniture,
provided such access does not unreasonably impede completion of the Landlord
Tenant Improvement Work pursuant to Exhibit C and Tenant shall be responsible
for coordinating such access with Landlord’s contractors.

               (B)   Tenant shall be responsible for and shall pay when due all costs
associated with the preparation of plans and the performance of Tenant’s Work
incurred in accordance with this Exhibit C. Failure by Tenant to pay the costs
associated with Tenant’s Work on a timely basis so as to avoid the assertion of
any statutory and/or common law lien against the Premises or the Building shall
constitute a default by Tenant for all purposes of the Lease.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

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          5.     Permits.

               (A)   Except as provided below, Landlord shall obtain all necessary permits
and approvals in connection with Landlord’s TI Work and the Base Building Work.
For all purposes of this Lease, the terms “Substantial Completion,”
“substantially complete,” and phrases of a similar nature shall mean, with
regard to particular work, completion of the applicable work in accordance with
the approved plans therefor (as modified by any approved change orders
thereto), exclusive of incomplete or defective items of the type normally
included within a punch list. In addition, Substantial Completion of each
phase of Landlord’s TI Work shall mean that Landlord’s Work has been completed
in accordance with the Approved Plans, other than (A) special, non-standard
items requested by Tenant that require an unacceptably long lead time for
procurement and/or installation (“Long Lead Items”) and of which Tenant was
notified in writing (and failed, within a reasonable time after such
notification, to substitute replacement items) by Landlord that the same were
of such nature as described in this subsection (A), and (B) “punch list” items
which will not interfere with Tenant’s ability to lawfully take occupancy of
the Premises or to conduct its business therein, provided that Landlord uses
diligent efforts to cause its contractor to comply with its punch list
obligations, and Landlord secures an occupancy permit on Tenant’s behalf. Any
punch list items shall be completed by Landlord within thirty (30) days of
Tenant’s occupancy. Substantial Completion shall also be dependent upon the
issuance of a final non-residential use permit (or its equivalent) provided
that any delay in obtaining such final non-residential use permit as a result
of Tenant’s installation of its computer and telephone cabling and systems,
fixtures, furniture, equipment, and other office installations shall not affect
the status of the Premises as “substantially completed”.

               (B)   Tenant shall be responsible for applying for and obtaining all permits
required for Tenant to perform Tenant’s Work and to operate within the
Premises, and for obtaining any final fire inspection approval to the extent
the same cannot be obtained until after completion of Tenant’s Work and the
installation of Tenant’s fixtures, furniture and equipment in the Premises.
Tenant shall also pay the cost of the permits obtained by Landlord under
Section 5(a), above, to the extent allocable to Landlord’s TI Work, provided
that such permit cost shall constitute a “Soft Cost” for purposes of this
Exhibit C.

          6.     First-Class Lien-Free Completion. Except as noted on the Approved
Plans and approved by the parties, Landlord and Tenant shall only use new,
first-class materials in connection with Landlord’s TI Work and Tenant’s Work.
All such work shall be paid for in full and in a timely fashion by the party
who is responsible for such payment under this Exhibit C, and shall be
performed in a lien-free, first-class, and good and workmanlike manner, and in
accordance with applicable codes and requirements. Tenant and Tenant’s
architect shall be responsible for the compliance of the Premises with the
Americans With Disabilities Act (“ADA”) and other applicable legal
requirements.

          7.     Bonding. All contractors and subcontractors performing work on behalf
of either party within the Premises with funds made available from the
Allowance, or otherwise prior to Tenant’s initial occupancy of the Premises,
shall be subject to Landlord’s reasonable approval, shall be licensed to do
business in the Commonwealth of Virginia, and, at Landlord’s request, the
General Contractor shall obtain for Landlord’s benefit, a performance bond
serving as a surety to Landlord for such contractor’s performance of Landlord’s
TI Work, the cost of which shall be paid from the Allowance.

          8.     Delivery & Acceptance of Possession. When
Landlord’s TI Work is substantially

	 	 	 	 	 	 	 	 	 
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complete, Landlord shall deliver to Tenant a written notice (the
“Completion Notice”) certifying that Landlord’s TI Work is “Substantially
Complete” (as defined above). Within three (3) business days after Landlord
delivers the Completion Notice, Tenant and a representative of Landlord shall
jointly inspect the Premises, and, provided Landlord’s TI Work is substantially
complete as of such time, Tenant shall be deemed to have accepted the Premises
(in its condition as of the date of the Completion Notice but without waiving
Landlord’s obligation to correct punch list items pursuant to Paragraph 9
below) effective on the later of (i) the date of such joint inspection, or (ii)
the first (1st) business day after Landlord delivers the Completion Notice. In
the event Tenant in good faith determines that the Landlord’s TI Work is not
substantially complete, Tenant shall, within three (3) business days of the
foregoing three (3) business day period, deliver to Landlord with specificity,
a report identifying its determination of those items of Landlord’s TI Work
which are not substantially complete. Tenant’s failure to deliver such report
shall be deemed (for purposes hereof but for no other purpose) Tenant’s
certification that the Premises is substantially complete. Notwithstanding
anything to the contrary, the issuance of a non-residential use permit by the
appropriate governmental authority, irrespective any punch list items to be
completed by the Landlord, shall be deemed as conclusive evidence of
Substantial Completion of Landlord’s TI Work.

          9.     Punch List. If, as a result of the final joint inspection of
Landlord’s TI Work as described in Section 8 above, Tenant discovers deviations
or variations from the Approved Plans, or items which are incomplete, defective
or in need of repair or replacement, of a nature commonly found on a “punch
list” (as that term is used in the construction industry), Tenant shall
promptly notify Landlord of such items; provided, however, that in the event of
a dispute, Landlord and Tenant shall negotiate in good faith, using their
reasonable discretion, to determine which items constitute punch list items.
If the parties cannot agree, the matter shall be decided by an architect
mutually selected by Landlord and Tenant, whose fee shall be paid equally by
Landlord and Tenant. If after such inspection, Tenant discovers additional
latent defects in Landlord’s TI Work which may still be claimed as “punch list”
items with the contractor performing Landlord’s TI Work under the terms of the
applicable construction contract, Tenant may notify Landlord of the particular
item and Landlord will use diligent efforts to cause such contractor to comply
with its warranty or punch list obligations with regard thereto
provided (i)
Tenant shall have the burden of establishing that any punch list items
discovered after the final inspection are in fact defects in construction and
not items damaged by Tenant, its agents, employees, contractors and invitees,
or in need of repair due to ordinary wear and tear, and (ii) Tenant’s right to
claim additional punch list items shall cease on that date which is fifteen
(15) days after the date of the final inspection. Except to the extent that the
same would prevent Tenant from lawfully occupying, or would interfere with
Tenant’s use of, the Premises, the existence of such punch list items shall not
postpone the date of Substantial Completion, the Commencement Date of this
Lease nor the obligation of Tenant to pay Rent, additional rent or any other
charges due under this Lease. Landlord will cause its contractor(s) to correct
the items noted on the punch list promptly thereafter.

          10.     Provisions Regarding Tenant’s Work. The following shall apply with
respect to Tenant’s Work, if any, and any subsequent alterations to the
Premises (hereafter, “alterations”) by Tenant.

               (A)   First-Class Lien-Free Completion. Tenant shall only use new,
first-class materials in connection with Tenant’s Work and alterations, and
same shall be paid for in full and in a timely fashion by Tenant, and shall be
performed in a lien-free, first-class, and good and workmanlike manner, and in
accordance with applicable codes and requirements. Tenant’s Work and
alterations shall comply with the requirements of the ADA.

	 	 	 	 	 	 	 	 	 
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          (B)     (1)     Tenant shall secure, pay for, and maintain, or cause its
contractors and subcontractors to secure, pay for, and maintain, during the
continuance of construction and fixturing work within the Premises, all of the
insurance policies required in the amounts as set forth herein, together with
such insurance as may from time to time be required by city, county, state or
federal laws, codes, regulations or authorities.

                    (2)     Tenant’s Work and alterations may not commence, nor may Tenant permit
its contractors and subcontractors to commence any work, until all required
insurance has been obtained, and, if Landlord requests, until Tenant’s
certificates of such insurance have been delivered to Landlord. Tenant’s
insurance policies shall name the Landlord, Landlord’s mortgagee(s), Landlord’s
management company as additional insureds. Tenant’s certificates of insurance
shall provide that no change or cancellation of such insurance coverage shall
be undertaken without thirty (30) days prior written notice to Landlord.

                    (3)     Landlord shall have the right to require Tenant, and Tenant shall have
the duty, to stop work in the Premises immediately if any of the coverage
Tenant is required to carry herein lapses during the course of the work, in
which event Tenant’s Work (or alterations) may not be resumed until the
required insurance is obtained and satisfactory evidence of same is provided to
Landlord.

                    (4)     In the event Tenant employs a contractor or subcontractor to perform
all or part of Tenant’s Work and/or alterations, Tenant shall purchase, or
cause its contractor to carry, General Contractor’s and Subcontractor’s
Required Minimum Coverages and Limits of Liability as follows (the insurance
required under this Exhibit C shall be in addition to any and all insurance
required to be procured by Tenant pursuant to the terms of the Lease):

                         (i)     Workers’ Compensation and Employers’ Liability Insurance, as required
by state law, and any insurance required by any Employee Benefit Act or similar
statute applicable where the work is to be performed, as will protect the
contractor and subcontractors from any and all liability under the
aforementioned act(s) or similar statute.

                         (ii)     Comprehensive General Liability Insurance (including Contractor’s
Protective Liability) in an amount not less than $1,000,000 per occurrence
whether involving personal injury liability (or death resulting therefrom) or
property damage liability or a combination thereof (combined single limit
coverage) with a minimum aggregate limit of $2,000,000. Such insurance shall
insure Tenant’s general contractor against any and all claims for personal
injury, death, and damage to the property of others arising from its operations
under its contract, whether such operations are performed by Tenant’s
contractors, subcontractors, or sub-subcontractors, or by anyone directly or
indirectly employed by any of them.

                         (ii)     Builder’s Risk insurance in form and amount reasonably satisfactory
to Landlord based upon the scope of work.

               (C)     Tenant agrees that Landlord will have the right to inspect the
performance of Tenant’s Work or alterations by Tenant’s contractor(s) and
subcontractor(s), through Landlord’s construction manager, and Tenant agrees to
cooperate with Landlord to facilitate such inspection, including without
limitation: (a) notifying Landlord prior to any and all government inspections
of Tenant’s Work so that Landlord’s construction manager can be present
therefor; and (b) permitting Landlord’s construction

	 	 	 	 	 	 	 	 	 
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manager free and clear access to the Premises during the construction
period, as necessary to perform such inspections. Landlord shall use
reasonable efforts not to interfere with the performance of Tenant’s Work
during the course of any inspections by Landlord or Landlord’s construction
manager pursuant to this Paragraph 10(C).

               (D)     In the performance of Tenant’s Work or alterations in accordance with
this Lease, Tenant shall not, without Landlord’s prior written consent, which
consent shall not be unreasonably withheld, conditioned or delayed, begin
Tenant’s Work until Landlord’s TI Work is substantially complete and shall
cause its contractor to use reasonable and diligent efforts not to interfere
with ongoing operations in the Building and to work in harmony with Landlord’s
contractors. Without limiting the foregoing, Tenant agrees to cause its
contractor to use reasonable and diligent efforts to limit its construction
activities to the portion of the Premises being constructed, and shall not in
any way (including, but not limited to, the generation of noise) interfere with
other tenants. Any delay in the completion of Landlord’s TI Work (including
delay in the completion of the Base Building Improvements or the Site
Improvements) caused by Tenant or its contractors, shall be Tenant’s
responsibility and shall constitute a “Tenant Delay” hereunder.

               (E)     Tenant’s contractor shall be responsible for all utility costs
associated with the performance of Tenant’s Work or alterations and shall
either supply its own electricity and other utilities, or shall reimburse
Landlord for all utility consumption associated with such work at Landlord’s
actual cost therefor. Tenant’s contractor shall keep all construction areas
reasonably clean and free of trash and debris, shall police the activities of
its contractors, subcontractors and their respective employees with regard to
keeping the Building and land clean, and shall otherwise comply with any other
reasonable rules and regulations established by Landlord with regard to
construction activities within the Building. Tenant’s construction contract
shall indemnify Tenant and Landlord from damages, losses and expenses
associated with the acts and omissions of Tenant’s contractor, its agents,
employees and subcontractors. Tenant shall provide prior notice to Landlord
of, and coordinate with Landlord and its contractor, the delivery of any
materials, furniture or equipment to the Premises.

               (F)     Tenant shall provide to Landlord copies of all applications for
permits, copies of all governmental inspection reports and/or certificates, and
any and all notices or violations communicated in writing to Tenant or its
contractors by applicable governmental authorities, promptly upon receipt
and/or submission thereof, as the case may be. Tenant agrees to comply (or to
cause its contractors to comply) with all applicable federal, state and local
laws, regulations and ordinances in the performance of Tenant’s Work or
alterations, and to promptly rectify any violations of such laws caused by the
acts or omission of Tenant, its employees, agents and/or contractors, and
Tenant shall be responsible for any non-compliance by Tenant or its agents,
employees and contractors. In the event (i) of any violation of this Exhibit C
by Tenant, or (ii) the construction of any improvements in the Premises by
Tenant which are not within the scope of the Approved Plans (or other
Landlord-approved plans), Landlord shall have the right to cause Tenant and
Tenant’s contractor to stop Tenant’s Work or alterations and to seek any and
all appropriate legal and equitable relief in order to enforce the provisions
of this Exhibit C.

          11.     Tenant Delays. “Tenant Delay(s)” shall mean actual delays in
substantial completion of the Landlord’s TI Work by the date set forth in
paragraph 2(B) herein (as the same may be adjusted pursuant to the terms
hereof), caused by (i) Tenant’s failure to meet its obligations under the Lease
or under this Exhibit C thereto, (ii) delays caused by Tenant’s failure to meet
mandatory response times provided for

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 52 of 63

hereinabove, (iii) Tenant’s failure to achieve Approved Plans by the dates
set forth herein, other than as a result of Landlord’s fault or failure to meet
a mandatory response time provided for hereinabove, or Landlord’s failure to
promptly deliver to Tenant any available information requested by Tenant in
respect of the Base Building Work, (iv) any delay associated with a change
order requested by Tenant after Landlord’s approval of Tenant’s plans, except
as a result of changes to the plans for the Base Building Work made by or on
behalf of Landlord, and/or (v) any other delay which is defined in any part of
the Lease as a “Tenant Delay.” Notwithstanding anything contrary to the above,
no delay by Tenant shall be deemed to have occurred unless Landlord gives
Tenant prior written notice, reasonable under the circumstances, specifying the
delays and Tenant shall not promptly cure or correct them.

          12.     Remedies.

               (A)     Landlord has agreed to use reasonable and diligent efforts to achieve
Substantial Completion of the Premises within the time frames contemplated
elsewhere in this Lease. To the extent that any item of Landlord’s TI Work is
not completed as of such date as will permit the Premises to be delivered
within the time frames referenced in subparagraph 2(B) hereof, subject to
Tenant Delays and events of Force Majeure (as defined in the Lease), then the
validity of the Lease shall not be in any way affected and the Commencement
Date shall coincide with the date upon which the Premises is substantially
complete (as adjusted for events of Force Majeure and pursuant to subparagraph
12(B), below, for any Tenant Delay). Notwithstanding the foregoing, and
provided that any delay in substantially completing the Premises is not
attributable to any Tenant delay, then, if the Premises are not delivered to
Tenant by March 31, 2003, Tenant shall have the right to terminate this Lease,
and the Advance Deposit and the Security Deposit shall promptly be returned to
Tenant.

               (B)     To the extent the completion of any item of Landlord’s TI Work is
delayed due to Tenant Delay, and the delayed completion of such item
does not
materially affect Landlord’s ability to achieve Substantial Completion of
Landlord’s TI Work by the date for the delivery thereof, then provided Tenant
continues to pursue the elimination of such Tenant Delay with all due
diligence, such Tenant Delay shall not affect the Commencement Date of this
Lease or otherwise result in or give rise to any damages or penalties payable
by Tenant to Landlord, or otherwise constitute a default by Tenant under this
Lease, except that Tenant shall be responsible for any reasonable increase in
the cost of Landlord’s TI Work occasioned thereby. If and to the extent the
non-completion of any such item(s) due to Tenant Delay does materially affect
Landlord’s ability to achieve Substantial Completion of Landlord’s TI Work by
the date set forth for the delivery thereof, then the Commencement Date shall
be deemed to have occurred on the day upon which the Commencement Date would
have occurred but for the delay caused by Tenant Delay, and Tenant shall be
responsible for any increase in the cost of Landlord’s TI Work occasioned
thereby.

               (C)     The time period set forth in subparagraph 12(A) above, shall be
adjusted on a day for day basis for Tenant Delays, subject to subparagraph
12(B) above, and due to events of Force Majeure.

               (D)     Each party shall use all reasonable and diligent efforts to perform
the responsibilities and work required to be performed by it hereunder without
unreasonable delay, and to avoid and minimize the duration of any delays for
which such party is responsible hereunder; and each party agrees to use
commercially reasonable efforts (but without material out-of-pocket expense) to
mitigate the damages and adverse effect of any delay for which the other party
is responsible.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 53 of 63

SCHEDULE “C1”

VFN Building

Base Building Improvements

Alliance Home Funding, LLC Lease

Except as otherwise noted, Landlord, at its sole cost, shall construct and
deliver to Tenant the following Base Building Improvements (the “Landlord’s
Improvements”). Landlord shall be responsible for all Landlord Improvements
being constructed in conformance with all required fire, life safety, and
building codes, including but not limited to ADA requirements

Upon acceptance of the Premises Tenant acknowledges it has inspected the
Landlord’s work and verified that it is acceptable for installation of Tenant’s
work.

	 	 	 
	Building
	 	
(A) Elevator and elevator core walls.
	Core and	 	 	 
	Common
 Area:	 	
(B) Electrical and telephone closets with all the standard gear and power required
to meet normal and customary office tenant requirements, including such items as
slab penetration sleeves/conduits, bus ducts, wire troughs, terminal cabinets,
transformers, panels. Sufficient panel space for normal and customary office/retail
tenant requirements assuming all employees will have their own PC. 3.5 watts per
square foot for receptacle consumption and 1.5 watts per square foot for light
consumption, HVAC excluded. All sub-panels, circuits, circuit breakers and
telecommunications backing board provided by Landlord.

	 	 	 
	 	 	
(C) Elevator call buttons and lanterns.
	 	 	 
	 	 	
(D) Emergency exit lights at lobbies, stairwells and egress points.
	 	 	 
	 	 	
(E) Smoke/Heat detectors, duct detectors, fire pull stations and bells in public
areas.
	 	 	 
	 	 	
(F) Fire alarm combination strobe light and fire audibles in public areas.
	 	 	 
	
Concrete
 Floor:	 	
(A) All floors shall be constructed of concrete, smooth and level to within 3/8” in
10 lineal feet ready for installation of Tenant’s glue down
carpeting.

	 	 	 
	 	 	
(B) Areas identified by Tenant requiring reinforcement due to Tenant’s excess or
concentrated loads may be reinforced by Landlord at Tenant’s
expense.

	 	 	 
	Perimeter:	 	
Interior perimeter walls and interior columns to be finished with 1/2” gypsum
drywall board, spackled, finished, taped, sanded from slab to finished ceiling and
ready for painting or wall covering, the cost of which shall be charged against the
Tenant’s TI Allowance. Perimeter walls to include insulation and weatherproofing,
the cost of which shall be charged against

	 	 	 
	Landlord’s Initials:	 	
 Tenant’s Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 54 of 63

	 	 	 
	 	 	
Tenant’s TI Allowance.
	 	 	 
	HVAC:	 	
Not included.
	 	 	 
	Fire Protection:	 	Fire standpipes and hose valve connections, flow and tamper devices. Sprinkler
loop installed with heads turned up in accordance with applicable fire codes. The
Building fire alarm system shall have sufficient capacity to accommodate typical
additional Tenant fire protection devices
	 	 	 
	Electrical:	 	
Tenant will obtain electrical service from the trough located in the main
electrical room.
	 	 	 
	First Floor

Lobby:	 	
Landlord shall provide a finished Lobby on the first floor of the Building.
	 	 	 
	Ceiling: 	 	
Unfinished slab ceiling is to be provided by Landlord except that the Landlord
shall install a suspended acoustical ceiling grid, the cost of which shall be
charged against Tenant’s TI Allowance. Ceiling tiles will not be provided by
Landlord.
	 	 	 
	Safety

Placards:	 	
Appropriate life safety placards in the common areas of the Building.
	 	 	

	Window

Covering:	 	Thin line horizontal Levolor Contract (or equivalent) mini-blinds shall be provided
for all exterior windows, the cost of which shall be charged against Tenant’s TI
Allowance.
	 	 	 
	Plumbing:	 	
Wet stacks with risers water supply, vent and waste taps are available. The cost to
access these will be charged against Tenant’s TI Allowance.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 55 of 63

EXHIBIT “D”

Rules and Regulations

     1.     The sidewalks, halls, passages, exits, entrances, elevators and
stairways of the Building shall not be obstructed by Tenant, its agents or
employees or used by any of them for any purpose other than for ingress to and
egress from the Premises. The halls, passages, exits, entrances, elevators,
and stairways are not for the general public, and Landlord shall in all cases
retain the right to control and prevent access thereto of all persons whose
presence in the judgment of Landlord would be prejudicial to the safety,
character, reputation and interests of the Building and its tenants, provided
that nothing herein contained shall be construed to prevent such access to
persons with whom any tenant normally deals in the ordinary course of its
business, unless such persons are engaged in illegal activities.

     2.     Except as set forth in the Lease, no sign, placard, picture, name,
advertisement or notice, visible from the exterior of the Premises shall be
inscribed, painted, affixed or otherwise displayed by Tenant on any part of the
Building without the prior written consent of Landlord. Landlord will adopt
and furnish to Tenant general guidelines relating to signs inside the Building
on the office floors. Tenant agrees to conform to such guidelines. All
approved signs or lettering on doors shall be printed, painted, affixed or
inscribed at the expense of Tenant by a person approved by Landlord. Material
visible from outside the Building will not be permitted.

     3.     Tenant shall not allow a fire or bankruptcy sale or any auction to be
held on the Premises or allow the Premises to be used for the storage of
merchandise held for sale to the general public.

     4.     Tenant shall not use or permit the use of the Premises for lodging. No
cooking shall be done or permitted by Tenant on the Premises, except the use of
Underwriters’ Laboratory approved microwaves, toasters and equipment for
brewing coffee, tea, hot chocolate and similar beverages or other equipment or
appliances shown on the Drawings and Specifications and approved by the
Landlord shall be permitted, provided that such use is in accordance with all
applicable federal, state and city laws, codes ordinances, rules and
regulations.

     5.     Tenant shall not employ any person or persons other than the janitor of
Landlord for the purpose of cleaning the Premises, unless otherwise agreed to
by Landlord in writing, such consent shall not be unreasonably withheld,
conditioned or delayed. Except with the written consent of Landlord, no person
or persons other than those approved by Landlord shall be permitted to enter
the Building for the purpose of cleaning the Premises. Tenant shall not cause
or permit any unnecessary labor by reason of carelessness or indifference in
the preservation of good order and cleanliness, on the part of Tenant, its
agents, employees or contractors. Janitor services will not be furnished on
nights when rooms are occupied after 9:30 p.m. unless, by agreement in writing,
such service is extended to a later hour for specifically designated rooms.

     6.     Unless specified otherwise in the Lease, Landlord will furnish Tenant
free of charge with two keys to each door lock in the Premises. Landlord may
make a reasonable charge for additional keys. Tenant shall not alter any lock
or install a new or additional lock or any bolt on any door of the Premises

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 56 of 63

without the prior written consent of Landlord, and Tenant shall in each
such case shall furnish Landlord with a key for any such lock, exclusive of
Tenant’s vaults and safes, provided that such keys shall be safeguarded and
protected by Landlord. Tenant, upon the expiration or termination of its
tenancy, shall deliver to Landlord all keys to doors in the Building which
shall have been furnished to the Tenant.

     7.     Landlord shall designate how all office equipment, furniture,
appliances and other large objects or property (“Equipment”) shall be moved in
and/or out of the Building. The persons employed to move any Equipment in or
out of the Building must be reasonably acceptable to Landlord. Landlord will
not be responsible for loss or damage to any such Equipment from any cause, and
all damage done to the Building by moving or maintaining such Equipment shall
be paid at the expense of Tenant.

     8.     Tenant shall not permit, use or keep in the Premises or the Building
any kerosene, gasoline or inflammable or combustible fluid or material other
than limited quantities thereof reasonably necessary for the operation and
maintenance of office equipment or for other general office uses, or, without
Landlord’s prior written approval, use any method of heating or air
conditioning other than that supplied by Landlord. Tenant shall not use or keep
or permit to be used or kept any foul obnoxious gas or substance in the
Premises, or permit or suffer the Premises to be occupied or used in a manner
offensive or objectionable to Landlord or to other occupants of the Building by
reason of noise, odors, or vibrations, or interfere in any way with other
Building tenants or those having business therein.

     9.     Landlord reserves the right to exclude from the Building between the
hours of 6:00 p.m. and 7:00 a.m. and at all hours on Sundays, legal holidays
and on Saturdays any person who, in Landlord’s sole opinion, has no legitimate
business in the Building (provided that such shall not in any event preclude
Tenant’s employees from entering the Premises provided they are identified as
such). Landlord shall in no case be liable for damages for any error with
regard to the admission to or exclusion from the Building of any person. In
the case of invasion, mob, riot, public excitement or other circumstances
rendering such action advisable in Landlord’s opinion, Landlord reserves the
right to prevent access to the Building during the continuance of the same by
such action as Landlord may deem appropriate, including closing and/or locking
of doors.

     10.   The directory of the Building will be provided for the display of the
name and location of Tenants. Any additional name which Tenant shall desire to
place upon said directory must first be approved by Landlord in writing and, if
so approved, a charge will be made based upon Landlord’s actual cost therefor.

     11.   No curtains, draperies, blinds, shutters, shades, screens or other
coverings, hangings or decorations shall be attached to, hung or placed in, or
used in connection with any window of the Building without the prior written
consent of Landlord, other than the Base Building blinds per Schedule C1, and
such items shall be installed as instructed by Landlord.

     12.   Tenant shall use good faith efforts to ensure that the doors of the
Premises are closed and locked, and that all water faucets, water apparatus and
utilities are shut off before Tenant or Tenant’s employees leave the Premises
at the end of the day, so as to prevent waste or damage, and for any default or
carelessness in this regard Tenant shall be responsible for any and all
injuries sustained by other tenants or occupants of the Building and/or
Landlord. All tenants shall use good faith efforts to keep the doors to the
Building corridors closed at all times except for ingress and egress.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 57 of 63

     13.   All Building toilet rooms, toilets, urinals, wash basins and other
apparatus shall not be used for any purpose other than that for which they were
constructed, 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 that Building tenant who, or whose
agents, employees or invitees, shall have caused it.

     14.   Except with the prior written consent of Landlord, Tenant shall not
sell, nor shall Tenant permit the sale at retail, of newspapers, magazines,
periodicals, theater tickets or any other goods or merchandise to the general
public in or on the Premises, nor shall Tenant carry on, or permit or allow any
employee or other person to carry on, the business of stenography, typewriting
or any similar business in or from the Premises for the service or
accommodation of occupants of any other portion of the Building, nor shall the
Premises be used for manufacturing of any kind, or any business or activity
other than that specifically provided for in Tenant’s Lease.

     15.   Hand trucks shall not be used in any space or public halls of the
Building, either by Tenant or others, except those equipped with rubber tires
and side guards or such other material-handling equipment as Landlord may
approve. No other vehicles of any kind shall be brought by Tenant into the
Building or kept in or about the Premises.

     16.   Tenant agrees to coordinate all moving activity of office equipment
and furniture in and out of the Building with Landlord or Landlord’s agent, and
to use the services of an insured professional moving company.

     17.   Tenant shall store all its trash and garbage within the Premises. No
material shall be placed in the trash boxes, receptacles or common areas if
such material is of such nature that it may not be disposed of in the ordinary
and customary manner of removing and disposing of trash and garbage as is
required by Landlord for the Building, without being in violation of any law or
ordinance governing such disposal. All garbage and refuse disposal shall be
made only through entryways and elevators provided for such purposes and at
such times as Landlord shall designate.

     18.   Canvassing, soliciting, distribution of handbills, or any other
written material peddling in the Building are prohibited, and Tenant shall
cooperate to prevent the same.

     19.   Tenant agrees to abide by all governmental rules and regulations
pertaining to thermostatic control of the temperature of the Premises.

     20.   Tenant agrees not to allow or keep any animals or pets of any kind on
the Premises, except those seeing-eye dogs which are for the direct purpose of
aiding and assisting the visually impaired.

     21.   The Project, the Building, the parking facilities serving the Building
and all Common Areas, including Tenant’s Premises, are designated as
non-smoking areas. Tenant shall not allow its employees, guests or invitees to
smoke anywhere in the Building or in the parking lot servicing the Building.
The Landlord may, at its sole discretion, designate a limited smoking area
outside of the Building.

     22.   Employees of Landlord shall not perform any work or do anything
outside of their regular duties unless under special instructions from
Landlord.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 58 of 63

     23.   Landlord may waive any one or more of these Rules and Regulations for
the benefit of any particular Building tenant or tenants, but no such waiver by
Landlord shall be construed as a waiver of such Rules and Regulations in favor
of any other Building tenant or tenants, nor prevent Landlord from thereafter
enforcing any such Rules and Regulations against any or all of the tenants of
the Building.

     24.   These Rules and Regulations are in addition to, and shall not be
construed to in any way modify or amend, in whole or in part, the terms,
covenants, agreements and conditions of any lease of any premises in the
Building, including Tenant’s Lease.

     25.   Landlord reserves the right to make such other reasonable rules and
regulations as in its judgment may from time to time be needed for the safety,
care, and cleanliness of the Building, and for the preservation of good order
therein; provided the same shall (a) not diminish tenant’s rights under the
Lease, (b) does not increase the financial burdens of Tenant, or (c) is not
inconsistent with the Lease.

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 59 of 63

EXHIBIT “E”

Declaration of Lease Commencement

     THIS DECLARATION is attached to and made a part of that certain Deed of
Lease dated the day of     , 200   , (the “Lease”) entered into by and
between West Street Development, LLC, a Virginia limited liability company
(“Landlord”) and Alliance Home Funding, LLC, a Virginia limited liability
corporation (“Tenant”).

     Landlord and Tenant are parties to the Lease. All capitalized terms used
herein shall have the same meaning as was ascribed to such terms in the Lease,
unless otherwise indicated.

     Landlord and Tenant do hereby declare that (a) the “Commencement Date” is
hereby established to
be               , (b) the Rent Commencement Date is          and (c) the Term of the Lease shall expire on               .
The Lease is in full force and effect as of the date
hereof, Landlord has fulfilled all of its obligations under the Lease required
to be fulfilled by Landlord on or prior to such date with the exception of
punch list items, and Tenant has no right of setoff against any rentals.

     IN WITNESS WHEREOF Landlord and Tenant have executed this Declaration as
of the     day of          , 20   .

	 	 	 	 	 
	LANDLORD:	 
	 	 	 	 	 	 	 
	 	 	
WEST STREET DEVELOPMENT, LLC

a Virginia limited liability company
	 	 	 	 
	 	 	By:	
 
	 	 	 	

	 	 	 	
Name: Michael R. Vanderpool
Title:
Manager
	 	 	 	 	 	 	 
	TENANT:	 	 	 
	 	 	 	 	 	 	 
	 	 	
ALLIANCE HOME FUNDING, LLC,

a Virginia limited liability company
	 	 	 	 
	 	 	By:	
 
	 	 	 	

	 	 	 	
Name:	 
	 	 	 	 	

	 	 	 	
Title:	 
	 	 	 	 	

 

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 60 of 63

EXHIBIT “F”

Form of Estoppel Certificate

TO:

RE: Premises known as and located at 9200 Church Street, Suite     ,
Manassas, Virginia (the “Building”)

     The undersigned, ALLIANCE HOME FUNDING, LLC (“Tenant”), does hereby
certify to the Lender as follows:

     1.     Tenant is the tenant under that certain lease dated                  ,
between Tenant and West Street Development, LLC, as landlord
(“Landlord”), as amended, modified or supplemented by                                ,
leasing a portion of the Building (the
“Premises”) as more particularly described in the said lease. Said lease, as so
amended, modified or supplemented, is hereinafter referred to as the “Lease”.

     2.     The Lease is in full force and effect and, except as set forth
above, has not been amended, modified or supplemented.

     3.     The Lease represents the entire agreement between Tenant and
Landlord with respect to the leasing and occupancy of the Premises, and there
are no other agreements or representations of any kind between Landlord and
Tenant with respect thereto. Without limiting the foregoing, Tenant does not
have any rights of first refusal for additional space, options to increase or
relocate its space or options to purchase the Premises or any interest therein,
other than as may be set forth in the Lease.

     4.     To the best of Tenant’s knowledge, except as set forth below, all
obligations of Landlord to be performed or complied with by Landlord through
the date hereof have been fully performed and complied with including, without
limitation, any obligations of Landlord to prepare the Premises for Tenant’s
occupancy, and there exists no default or condition, state of facts or event
that, with the passing of time or the giving of notice, or both, would
constitute a default by Landlord in the performance of its obligations under
the Lease.

     5.     To the best of Tenant’s knowledge, all obligations of Tenant to be
performed or complied with by Tenant through the date hereof have been fully
performed and complied with and there exists no default or condition, state
facts or event that, with the passing of time or the giving of notice, or both,
would constitute a default by Landlord in the performance of its obligations
under the Lease.

     6.     The term of the Lease commenced on                  , and
shall expire on                  , unless sooner terminated in
accordance with the terms of the Lease. Tenant has no rights to extend the term
of the Lease except as set forth in the Lease.

     7.     The current base monthly rent under the Lease is $                  per
month and has been paid for the period through                  . All
additional rent for monthly payments of Tenant’s Share of Operating Costs and
Real Estate Taxes for the current fiscal year have been paid for the period
through                           , and all other charges due under the Lease have been
paid to date. Tenant has no claim for overpayment of additional rent for any
period, prior to calendar year         .

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s
Initials:

 

 

Deed of Lease

Alliance Home Funding, LLC

Page 61 of 63

     8.     There are no existing offsets or defenses by Tenant to the payment
of rent and other charges payable by Tenant or otherwise to the enforcement by
the Landlord of the Lease.

     9.     Tenant has delivered a cash security deposit under the Lease. No
other security has been given to Landlord under the Lease. The amount of the
security deposit is $                       .

     10.     Except as set forth below, there is no free rent period or any
unexpired concession in or abatement of rent, and any construction, build-out,
improvements, alterations, or additions to the Premises required under the
Lease have been fully completed.

     11.     Tenant is in sole possession of the Premises and has not assigned,
sublet, pledged, mortgaged, transferred or otherwise conveyed all or any
portion of its interest in the Premises or the Lease.

     12.     Tenant has not filed, and has not received notice that any other
person has filed, any actions against Tenant under the bankruptcy or insolvency
laws of the United States or any other state or territory of the United States.

     13.     Tenant understands and acknowledges that this certificate is
delivered to, and shall be relied on by                  
     , the Lender/Purchaser
in connection with an extension of a loan financing/acquisition of the
Landlord’s interest in the Building and the land on which it stands (the
“Mortgaged Property”).

     14.     Tenant confirms and agrees that the Lease is and shall at all times
be subject and subordinate to any mortgages or deeds of trust now or hereafter
affecting the Mortgaged Property, and any amendments, modifications,
consolidations, substitutions, replacements, additions, renewals, extensions,
or re-advances thereof.

     15.     All insurance required of Tenant by the Lease has been provided by
Tenant and all premiums therefore have been paid.

     16.     The address for notices to Tenant under the Lease is correctly set
forth in the Lease.

     17.     The person signing this letter on behalf of Tenant is duly
authorized by Tenant to do so on behalf of Tenant.

     18.     Tenant agrees to promptly provide the Lender at its offices at                  ,
Attention:                  , with copies of any notices of
default given by or received by Tenant with respect to the Lease and\or the
Premises.

	 	 	 	 
	 	 	
ALLIANCE HOME FUNDING, LLC
	 	 	 	 
	 	 	
By:	 
	 	 	 	

	 	 	
Name:	 
	 	 	 	

	 	 	Title:	 
	 	 	 	

	 	 	 	 	 	 	 	 	 
	Landlord’s Initials:	 	
 
	 	 
	 	 
	 	Tenant’s Initials:

 

 

UNCONDITIONAL GUARANTY

OF LEASE

     THIS
GUARANTY (“Guaranty”), is made this 15th day of November, 2002, by
ALLIANCE BANK, a Virginia banking corporation, having a business address at
12735 Shops Lane, Fairfax, Virginia 22033 (hereinafter individually and
collectively called the “Guarantor” as context requires), to and for the
benefit of West Street Development, LLC, a Virginia limited liability company,
having its principal place of business at 9324 West Street, Suite 400,
Manassas, Virginia 20110, its successors and assigns (the
“Landlord”).

     DEFINITIONS. The following words shall have the following meanings when
used in this Guaranty:

          Tenant.
The word “Tenant” means Alliance Home Funding, LLC, a Virginia
limited liability company, and its successors and assigns.

          Landlord.
The word “Landlord” means West Street Development, LLC, a
Virginia limited liability company, and its successors and assigns.

          Guarantor.
The word “Guarantor” means Alliance Bank, a Virginia banking
corporation, and its successors and assigns.

          Guaranty.
The word “Guaranty” means this Guaranty made by Guarantor for
the benefit of Landlord.

          Lease.
The word “Lease” means that certain lease dated November15, 2002,
between Landlord and Tenant for the lease of the Premises as that term is
defined in the Lease located at 9400 Church Street (first floor), Manassas,
Virginia 20110.

          Premises.
The word “Premises ” means and refers to all that certain real
property with improvements thereon, more particularly described in the Lease.

          Guaranty As Condition To Lease. It was a condition to Landlord’s
agreement to enter into the Lease that Guarantor be jointly and severally
liable for, and unconditionally guarantee, the full and punctual payment of the
rent and any other charges provided for in the Lease, and the performance by
Tenant of all of the covenants on its part to be performed pursuant to the
Lease.

          Benefit to Guarantor. Guarantor is benefited materially by the execution
of the Lease by Landlord and has agreed to jointly and severally guarantee
unconditionally the payment and performance of the Lease as provided herein.

 

 

     NOW,
THEREFORE, in consideration of the premises and the sum of Ten and
00/100 Dollars ($10.00) and for other good and valuable consideration, this
receipt of which consideration is hereby acknowledged, as evidenced by the
signature of Guarantor hereto, under seal, Guarantor does jointly and
severally, without offset, hereby warrant, covenant, and agree as follows:

     1.     Joint
and Several Obligation. This Guaranty shall be the joint and
several obligation of each Guarantor and shall apply to and bind them and each
of them and their respective heirs, successors, personal representatives and
assigns.

     2.     Guaranty. The undersigned Guarantor hereby unconditionally and
absolutely guarantees to Landlord the prompt payment, whether at maturity or by
acceleration or otherwise, of all rental and other payments due under the
Lease, and the punctual performance and observance by Tenant of all other
terms, covenants, and conditions of the Lease, together with all other charges
to the extent provided for therein, including all attorneys’ fees and expenses
and all other costs and expenses paid or incurred by Landlord in the
enforcement of the obligations against Tenant.

     3.     Waiver of Subrogation. Guarantor hereby waives and agrees that he
shall have no right of subrogation whatsoever with respect to the Lease, or to
any money due and unpaid thereon or any collateral securing the same, unless
and until Landlord shall have received payment in full of all sums due under
the Lease and the performance of all covenants and conditions contained in the
Lease.

     4.     Subrogation of Guarantor’s Claims Against Tenant to Landlord.
Guarantor hereby subrogates any and all claims of any kind whatsoever it may
have against Tenant, including without limitation, claims for distributions and
dividends, to Landlord’s claims against Tenant pursuant to the Lease.

     5.     Modifications and Other Matters Not Affecting Guarantor’s Liability.
Guarantor agrees that his liability hereunder shall not be affected by (i) any
amendment or modification of the provisions of any of the Lease made to or with
Landlord by Tenant, (ii) any extensions of time for performance granted by
Landlord, or any subsequent owner of the Premises without notice to Guarantor,
(iii) the release of Tenant by Landlord, or by operation of law, from
performance or observance of any of the agreements, covenants, terms, or
conditions contained in the Lease, whether made with or without notice to
Guarantor, (iv) any extension, modification, renewal, or change in the Lease by
Landlord or any subsequent owner of the Premises by agreement with Tenant, it
being the intention hereof that Guarantor shall remain liable notwithstanding
any act, omission, or thing that otherwise might operate as a legal or
equitable discharge of Guarantor.

     6.     Right to Pursue Guarantor Directly. Guarantor agrees that his
obligation is an unconditional, continuing guaranty of performance and payment
and not of collection and that Landlord may enforce this Guaranty by proceeding
against Guarantor directly and independently of Tenant and in any order without
first exercising or exhausting any right or remedy provided

	 	 	 	 	 	 	 	 	 
	Alliance Home Funding Lease	 	
 
	 	 
	 	 
	 	Alliance Bank
Guaranty

Page 2 of 5

 

for under the Lease or any applicable law to enforce performance or
payment by Tenant. Landlord may also, at its option, enforce this Guaranty
concurrently with, or at any time subsequent to, the exercise of any right or
remedy under the Lease or applicable law.

     7.     Guarantor’s
Waivers. The Guarantor and all others who may become
liable for all or any part of the Lease obligations, hereby agree to be jointly
and severally bound, and jointly and severally, to the extent applicable; (i)
waive and renounce any and all homestead exemption rights and the benefits of
all valuation and appraisement privileges as against this Guaranty or any
renewal or extension hereof; (ii) waive presentment, demand, protest, notice of
nonpayment, notice of dishonor, and any and all lack of diligence or delays in
the collection or enforcement hereof; (iii) waive any rights to require
Landlord to pursue others; expressly waive any rights set forth in Virginia
Code Sections 49-25 and 49-26; (iv) expressly consent to the release or
substitution of any of the collateral securing the Lease; (v) waive any right
to require a marshalling of assets; and (vi) expressly consent to any extension
of the time for payment and any other indulgence or forbearance by Landlord
under the Lease. Any such extension, release, substitution, indulgence, or
forbearance may be made without notice to any party and without in any way
affecting the personal liability of any party liable hereon.

     8.     Absolute
and Unconditional Guaranty. Guarantor expressly agrees that
this obligation of Guaranty shall be absolute and unconditional and enforceable
in accordance with its terms irrespective of (i) the entry of a decree or order
for relief by a court having jurisdiction in the premises or property of the
Tenant in an involuntary case under the federal bankruptcy laws, as now or
hereafter constituted, or any other applicable federal or state bankruptcy,
insolvency, or other similar law, or appointing a receiver, liquidator,
assignee, custodian, trustee, sequestrator (or similar official) of Tenant, or
for any substantial part of Tenant’s property, or ordering the winding-up or
liquidation of the affairs of Tenant and the continuance of such decree or
order unstayed and in effect for a period of sixty (60) consecutive days, or
the commencement by Tenant of a voluntary case under the federal bankruptcy
laws, as now or hereafter constituted, or any other applicable federal or state
bankruptcy, insolvency, or other similar law, or the consent by Tenant to the
appointment of or taking possession by a receiver, liquidator, assignee,
trustee, custodian, sequestrator (or other similar official) of Tenant or for
any substantial part of the property of Tenant, or the making by Tenant of any
assignment for the benefit of creditors, or the failure of Tenant to pay its
debts as such debts become due, or the taking of action by Tenant in
furtherance of any of the foregoing; (ii) the validity, genuineness,
regularity, or enforceability of the obligations of Tenant contained in the
Lease; (iii) the absence of any action to enforce such obligations; (iv) any
waiver or consent with respect to any of the provisions of the Lease; or (v)
any other circumstances that otherwise might constitute a legal or equitable
discharge or defense of a surety, endorser, or guarantor.

	 	 	 	 	 	 	 	 	 
	Alliance Home Funding Lease	 	
 
	 	 
	 	 
	 	Alliance Bank
Guaranty

Page 3 of 5

 

     9.          Costs
of Collection. Guarantor promises to pay all costs of
collection, including all actual reasonable attorney’ fees incurred by the
Landlord in enforcing the Lease or this Guaranty, whether or not suit is filed
hereon. Such costs shall include, but not be limited to, all costs and
expenses incurred in connection with the protection of or realization upon the
collateral securing the Lease. Such costs shall further include, but not be
limited to, attorney’s fees incurred in defending any claim, counterclaim or
crossclaim related to the indebtedness evidenced by the Lease, as well as
attorney’s fees incurred by Landlord in bankruptcy and/or on appeal. In the
event judgment is confessed as herein provided, Landlord shall be entitled to
an award of attorney’s fees equal to fifteen percent (15%) of the rent due and
owing as of the date of judgment.

     10.     Landlord’s
Rights Cumulative. Guarantor expressly agrees that no
right, power, or remedy conferred upon Landlord in this Guaranty or in the
Lease is intended to be exclusive of any other right, power, or remedy, and
shall be cumulative and shall be in addition to every other remedy given under
this Guaranty or the Lease, or hereafter existing at law or in equity. In the
event of default, Landlord may exercise any one or more of such remedies from
time to time as often as deemed expedient, separately or concurrently, and such
exercise shall not be deemed a waiver of any other remedy nor an election of
remedies.

     11.     Successors
And Assigns Bound. This Guaranty unconditionally shall
bind Guarantor, his heirs, legal representatives, successors, and assigns, and
shall inure to the benefit of and may be enforced by Landlord, its successors
and assigns.

     12.     Severability. In the event any provisions contained in this Guaranty
shall for any reason be held to be invalid, illegal, or unenforceable in any
respect, such invalidity, illegality, or unenforceability shall not affect any
other provision of this Guaranty, but this Guaranty shall be construed as if
such invalid, illegal, or unenforceable provisions had never been set forth
herein.

     13.     Guarantor’s
Representations. Guarantor represents and warrants that
(i) the execution of this Guaranty will not result in a breach of any of the
terms or provisions of, or constitute a default under, any indenture, mortgage,
deed of trust, note, or other agreement or instrument to which Guarantor is a
party, (ii) this Guaranty is a valid and legally binding instrument for the
purposes herein expressed, and (iii) this Guaranty is the legal, valid,
binding, and enforceable obligation of Guarantor in accordance with its terms.

     14.     Jurisdiction
and Venue. Guarantor hereby consents to personal
jurisdiction in the courts of the Commonwealth of Virginia or in any federal
court located in Virginia if any suit is brought to enforce this Guaranty or
otherwise relating to this Guaranty.

     15.     Modifications. This Guaranty may not be modified or amended except by
an instrument in writing executed by Landlord and Guarantor.

     16.     Controlling
Provisions. The terms and provisions of this Guaranty
supersede any inconsistent terms and conditions of the other Lease.

     17.     Choice
of Law. This Guaranty and the substantive and procedural
rights of the

	 	 	 	 	 	 	 	 	 
	Alliance Home Funding Lease	 	
 
	 	 
	 	 
	 	Alliance Bank
Guaranty

Page 4 of 5

 

parties hereunder shall be governed by and construed in accord with the
laws of the Commonwealth of Virginia.

     18.     Time
of Essence. Time is of the essence of all provisions of this
Guaranty.

     19.     Interpretation. The language contained herein shall be deemed to have
been approved by all parties and no rule of strict construction shall be
applied against any party.

     IN
WITNESS WHEREOF, Guarantor has executed this Guaranty, under
seal, the
day and year first above written.

	 	 	 
	 	 	
ALLIANCE BANK,

a Virginia banking corporation
	 	 	 
	 	By:	
 /s/ Thomas A. Young, Jr. (SEAL)
	 	 	

	 	 	
  Name: Thomas A. Young, Jr.
	 	 	
  Title: President

COMMONWEALTH OF VIRGINIA

CITY/COUNTY OF Fairfax, to wit:

     The
foregoing Guaranty was acknowledged before me this 15th day of
November, 2002, by Thomas A. Young, Jr. as in his/her capacity as President &
CEOand on behalf of Alliance Bank, a Virginia corporation.

	 
	/s/ Joyce E.
Vanneman (SEAL)

Notary Public

My Commission Expires: March 31, 2003

	 	 	 	 	 	 	 	 	 
	Alliance Home Funding Lease	 	
 
	 	 
	 	 
	 	Alliance Bank
Guaranty

Page 5 of 5<PAGE>
                                                              EXHIBIT 10(ii)(ak)

                               ECKERD CORPORATION

                         SUPPLEMENTAL RETIREMENT PROGRAM

                       ADOPTED EFFECTIVE FEBRUARY 25, 1993
                              BY THRIFT DRUG, INC.

                 AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 1995
                              BY THRIFT DRUG, INC.

                  AMENDED AND RESTATED EFFECTIVE MARCH 21, 2002
                              BY ECKERD CORPORATION

         ==============================================================
                                DOCUMENT HISTORY

         This document is the amended and restated plan adopted
         by the Thrift Drug, Inc. board of directors effective
         December 1, 1995, as amended and restated effective
         March 21, 2002 by the board of directors of Eckerd Coporation.
         ==============================================================

<PAGE>
                               ECKERD CORPORATION
                         SUPPLEMENTAL RETIREMENT PROGRAM

                       ADOPTED EFFECTIVE FEBRUARY 25, 1993

                 AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 1995

                  AMENDED AND RESTATED EFFECTIVE MARCH 21, 2002

                            TABLE OF CONTENTS
<Table>
<Caption>

Article                                                                    Page
-------                                                                    ----
<S>                                                                         <C>
ARTICLE I.  INTRODUCTION  ................................................   1

ARTICLE II.  DEFINITIONS  ................................................   2

ARTICLE III.  PARTICIPATION  .............................................  11

ARTICLE IV.  BENEFITS  ...................................................  12

    (1)    At Early, Traditional, or Delayed Retirement Date..............  12
    (2)    Minimum Benefit................................................  15
    (3)    Social Security Make-up........................................  16
    (4)    Death Benefit..................................................  16
    (5)    Life Insurance Coverage........................................  17
    (6)    Effect of Certain Payments made in December 1992...............  18
    (7)    Nonduplication of Benefits.....................................  18

ARTICLE V.  FORM AND COMMENCEMENT OF BENEFIT PAYMENTS  ...................  19

    (1)    Delayed Commencement of Benefits...............................  19
    (2)    Optional Forms of Benefit Payment..............................  19
    (3)    Small Annuities................................................  19

ARTICLE VI.  ADMINISTRATION  .............................................  20

ARTICLE VII.  TYPE OF PLAN  ..............................................  21

ARTICLE VIII.  MISCELLANEOUS..............................................  22

    (1)    Additional Credited Service and Other Adjustments..............  22
</Table>

                                       i

<PAGE>
<Table>

<S>                                                                        <C>
    (2)    Amendment and Termination......................................  22
    (3)    Rights of Associates...........................................  24
    (4)    Mistaken Information...........................................  24
    (5)    Liability......................................................  24
    (6)    Benefits for Reemployed Eligible Management Associates.........  24
    (7)    Construction...................................................  24
    (8)    Non-assignability of Benefits..................................  25
    (9)    Governing Law..................................................  25
    (10)   Transferred Eligible Management Associates.....................  25

ARTICLE IX.  CLAIMS PROCEDURES  ..........................................  26

APPENDIX I       .........................................................  27
</Table>

                                       ii

<PAGE>

                               ECKERD CORPORATION
                         SUPPLEMENTAL RETIREMENT PROGRAM

                       ADOPTED EFFECTIVE JANUARY 25, 1993
                              BY THRIFT DRUG, INC.

                 AMENDED AND RESTATED EFFECTIVE DECEMBER 1, 1995
                              BY THRIFT DRUG, INC.

                  AMENDED AND RESTATED EFFECTIVE MARCH 21, 2002
                              BY ECKERD CORPORATION

ARTICLE I.  INTRODUCTION

         The Eckerd Corporation Supplemental Retirement Program (formerly known
as Supplemental Retirement Program for Management Profit-Sharing Associates of
Thrift Drug, Inc.) is a plan maintained primarily for the purpose of providing
deferred compensation for a select group of management or highly compensated
associates.

         This document amends and restates the Plan, effective March 21, 2002,
to allow Eckerd Corporation to adopt and continue the Program as the successor
to Thrift Drug, Inc.

         With respect to any Eligible Management Associate who terminated
employment prior to March 21, 2002, eligibility for benefits shall be determined
pursuant to the terms and conditions of the Supplemental Retirement Program for
Management Profit-Sharing Associates of Thrift Drug, Inc. in effect prior to
March 21, 2002.

                                       1
<PAGE>

ARTICLE II.  DEFINITIONS

         For the purpose of this Plan the following terms shall have the
following meanings:

         ASSOCIATE: Any person who is classified as an associate and employed by
a Controlled Group Member if the relationship between a Controlled Group Member
and such person would constitute the legal relationship of employer and
employee.

         AVERAGE FINAL COMPENSATION: The average annual Compensation of an
Eligible Management Associate with respect to the three calendar years of his
highest Compensation determined by taking into account (a) the Compensation
attributable to the Eligible Management Associate's Credited Service in the
calendar year in which occurs such Early Retirement Date, Traditional Retirement
Date, or Delayed Retirement Date, as the case may be, and (b) the Compensation
during either of the following, whichever is appropriate:

(i)      the 9 full calendar years of Final Service immediately preceding the
         calendar year in which occurs the Eligible Management Associate's Early
         Retirement Date, Traditional Retirement Date, or Delayed Retirement
         Date, as the case may be; or

(ii)     if such Eligible Management Associate has less than 9 full calendar
         years of Final Service, the entire number of full calendar years of
         such Final Service immediately preceding the calendar year in which
         occurs the Eligible Management Associate's Early Retirement Date,
         Traditional Retirement Date, or Delayed Retirement Date, as the case
         may be.

         If such Eligible Management Associate has less than three full calendar
years of Final Service prior to the calendar year in which occurs his Early
Retirement Date, Traditional Retirement Date, or Delayed Retirement Date,
Average Final Compensation shall mean the aggregate Compensation earned with
respect to the Eligible Management Associate's Final Service immediately
preceding the calendar year in which occurs his Early Retirement Date,
Traditional Retirement Date or Delayed Retirement Date, divided by the total
number of full months of such Final Service, multiplied by 12.

         BENEFICIARY: The one or more persons or entities entitled to receive a
distribution of the Eligible Management Associate's interest in the Plan in the
event of his death.

         BENEFITS ADMINISTRATION COMMITTEE: The committee appointed by the Board
of Directors to administer the Plan.

                                       2
<PAGE>

         BENEFIT COMMENCEMENT DATE: The date upon which payment of a Pension
Plan Participant's retirement benefit is scheduled to begin pursuant to the
terms of the Pension Plan.

         BENEFIT RESTORATION PLAN: J. C. Penney Corporation, Inc. Benefit
Restoration Plan, as amended from time to time.

         BOARD OF DIRECTORS: Board of Directors of the Company.

         CODE: The Internal Revenue Code of 1986, as amended from time to time.
References to "regulations" are to regulations published by the Secretary of the
Treasury under applicable provisions of the Code, unless otherwise expressly
indicated.

         COMPANY: Eckerd Corporation and any successor corporation that adopts
the Plan.

         COMPANY ACCOUNT(S): The account(s) of that name and any successor
account(s) and/or fund(s) established and maintained pursuant to the Mirror
Savings Plans and the Savings Plan in which are reflected all employer
contributions allocated to an Eligible Management Associate together with all
assets attributable thereto.

         COMPENSATION: The wages paid to an Associate by the Company, or, for
the purpose of determining Average Final Compensation only, by a Controlled
Group Member, as the term wages is defined in Code Section 3401(a), determined
without regard to any reduction for workers' compensation and state disability
insurance reimbursements, and all other compensation payments for which the
Company or other Controlled Group Member is required to furnish the Associate a
written statement under Code Sections 6041(d), 6051(a)(3) and 6052, reduced by
the following items:

(a)      all expatriate and foreign service allowances, including without
limitation cost-of-living adjustments;

(b)      tax gross-up payments;

(c)      noncash prizes;

(d)      income attributable to employer-provided group term life insurance;

(e)      income recognized with respect to stock options and stock awards;

(f)      tax equalizations payments;

(g)      taxable and nontaxable relocation payments;

                                       3
<PAGE>

(h)      payments of deferred amounts under the Company's long term incentive
plans or any other nonqualified plan of deferred compensation;

(i)      [Reserved]

(j)      severance pay, outplacement pay, and/or critical pay;

(k)      third-party disability payments (State of New York);

(l)      home sale bonus payments;

(m)      mortgage interest assistance payments;

(n)      senior management perquisites, tax preparation fees, and allowances for
travel from Alaska and Hawaii;

(o)      legal settlements constituting back pay or other wage payments;

(p)      non-Associate travel reimbursements;

(q)      clothing allowance payments; and

(r)      payments made pursuant to a non-compete agreement.

         In addition, Compensation includes any contributions made by the
Company or other Controlled Group Member on behalf of an Associate pursuant to a
deferral election under any employee benefit plan containing a cash or deferred
arrangement under Code Section 401(k), and any amounts that would have been
received as cash but for an election to receive benefits under a cafeteria plan
meeting the requirements of Code Section 125, and amounts deferred by an
Associate under the Mirror Savings Plans.

         An Associate who is in the service of the Armed Forces of the United
States during any period in which his reemployment rights are guaranteed by law
will be considered to have received the same rate of Compensation during his
absence he was receiving immediately prior to his absence, provided he returns
to employment with a Controlled Group Member within the time such rights are
guaranteed.

         CONTROLLED GROUP: The Company and all other corporations, trades and
businesses, the employees of which, together with employees of the Company, are
required by the first sentence of subsection (b) , by subsection (c) , by
subsection (m) , or by subsection (o) of Code section 414 to be treated as if
they were employed by a single employer.

                                       4
<PAGE>

         CONTROLLED GROUP MEMBER: Each corporation or unincorporated trade or
business that is or was a member of a Controlled Group, but only during such
period as it is or was such a member.

         CREDITED SERVICE: The years of credited service, up to a total maximum
of 40 years, credited to an Eligible Management Associate (a) under the terms of
the Pension Plan, determined without regard to any yearly limitation imposed by
the terms of the Pension Plan (excluding any periods of Disability Service), (b)
under Paragraph (1) of Article VIII, and (c) years of Service with the Company
or other Controlled Group Member after he ceases earning credited service under
the terms of the Pension Plan.

         DELAYED RETIREMENT DATE: The first day of the month immediately
following the date on which an Eligible Management Associate Separates from
Service after having attained Traditional Retirement Age.

         DISABILITY SERVICE: The years of disability service credited to an
Eligible Management Associate under the terms of the Pension Plan.

         EARLY RETIREMENT AGE: The first date on which an Eligible Management
Associate has attained age 55 and has completed at least 15 years of Service.

         EARLY RETIREMENT DATE: The first day of the month immediately following
the date on which an Eligible Management Associate Separates from Service after
having attained Early Retirement Age but before attainment of such Eligible
Management Associate's Traditional Retirement Age.

         ELIGIBLE MANAGEMENT ASSOCIATE: An Associate who is employed by the
Company and who is classified under the Company's personnel policy as a
management associate in an Eckerd Position Level 9 or higher on his Separation
from Service after attainment of Early Retirement Age or Traditional Retirement
Age and

         (a)  who is listed in Appendix I to the Plan; or

         (b)  who transfers employment to the Company after March 21, 2002 and
              who on December 31, 1995 was classified as an eligible management
              associate under the terms of the Supplemental Retirement Program
              for Management Profit-Sharing Associates of J. C. Penney
              Corporation, Inc.; or

         (c)  who is employed by the Company after March 21, 2002 and who on
              December 31, 1995 was classified as an eligible management
              associate under the terms of the Supplemental Retirement Program
              for Management Profit-Sharing Associates of Thrift Drug, Inc.

         ERISA: Employee Retirement Income Security Act of 1974, as amended from
time to time.

                                       5
<PAGE>

         ESTIMATED SOCIAL SECURITY BENEFIT: (1) For purposes of the benefit
provided in Paragraph (3) of Article IV the monthly benefit the Eligible
Management Associate would receive under the Social Security Act at age 62 based
on the following assumptions:

         (i)    All compensation earned (a) prior to the later of 1951 or the
                year the Eligible Management Associate attains age 22 or (b) in
                the year in which the Eligible Management Associate Separates
                from Service if such separation occurs prior to the last day of
                the calendar year will be disregarded;

         (ii)   Earnings for the years prior to the Eligible Management
                Associate's employment with the Participating Employer are in
                the same proportion to the Taxable Wage Base in effect for the
                prior years as that which the first full year of earnings bore
                to the Taxable Wage Base in existence at that time;

         (iii)  Earnings are averaged over a number of full calendar years as
                determined by the following:

<Table>
<Caption>

                                                           Number of Full
                        Year of Birth                      Calendar Years
                        -------------                      --------------
<S>                      <C>                                     <C>
                          1925                                    31
                          1926                                    32
                          1927                                    33
                          1928                                    34
                          After 1928                              35
</Table>

                If the Eligible Management Associate's total calendar years of
                earnings determined under clauses (i) and (ii) above exceed the
                number of full years of earnings that are to be averaged based
                on the year of such Eligible Management Associate's birth, one
                or more of the Eligible Management Associate's lowest years of
                earnings will be disregarded until his total years of earnings
                equals the number of full years of earnings that are to be
                averaged based on the year of such Eligible Management
                Associate's birth.

         (iv)   Social Security indexing factors used are those actually used by
                the Social Security Administration in determining the Eligible
                Management Associate's Social Security benefit, and if those
                factors are not available, the latest published factors will be
                used.

(2)      For Eligible Management Associates who reach Traditional Retirement Age
         on or prior to August 1, 2000, for purposes of clause (iii) of
         Subparagraph (b) of

                                       6
<PAGE>

         Paragraph (1) of Article IV the lesser of the benefit determined under
         (A) or (B) below:

         (A)  The product of (a) multiplied by (b) with (a) being the monthly
              benefit the Eligible Management Associate would receive under the
              Social Security Act at age 62, or if retirement is later than age
              62, the benefit payable at actual retirement, based on the
              following assumptions:

              (i)    The benefit is based solely on the compensation earned
                     during the Eligible Management Associate's calendar years
                     of service and disregarding the Eligible Management
                     Associate's last calendar year of service if less than a
                     full year and disregarding completely all other years;

              (ii)   Earnings are averaged over the number of years of actual
                     credited service, as defined in the Pension Plan;

              (iii)  Social Security indexing factors used are those actually
                     used by the Social Security Administration in determining
                     the Eligible Management Associate's Social Security
                     benefit, and if those factors are not available, the latest
                     published factors will be used;

              and (b) being a fraction, not exceeding one, the numerator of
              which is the Eligible Management Associate's years of credited
              service, as defined by the Pension Plan and the denominator of
              which is 30.

         (B)  The monthly benefit the Eligible Management Associate would
              receive under the Social Security Act at age 62, or if retirement
              is later than age 62, the benefit payable at actual retirement,
              based on the following assumptions:

              (i)    All compensation earned (a) prior to the later of 1951 or
                     the year the Eligible Management Associate attains age 22
                     or (b) in the year in which the Eligible Management
                     Associate Separates from Service if such separation occurs
                     prior to the last day of the calendar year will be
                     disregarded;

              (ii)   The Eligible Management Associate earned no compensation
                     for calendar years before the Eligible Management Associate
                     was employed by the Participating Employer, which years
                     will be included in the calculation as years of zero
                     earnings;

              (iii)  Earnings are averaged over a number of full calendar years
                     as determined by the following:

                                       7

<PAGE>

<Table>
<Caption>

                                                              Number of Full
                          Year of Birth                       Calendar Years
                         ----------------                    ----------------
                            <S>                                  <C>
                            1925                                     31
                            1926                                     32
                            1927                                     33
                            1928                                     34
                            After 1928                               35
</Table>

                     If the Eligible Management Associate's total calendar years
                     of earnings determined under clauses (i) and (ii) above
                     exceed the number of full years of earnings that are to be
                     averaged based on year of such Eligible Management
                     Associate's birth, one or more of the Eligible Management
                     Associate's lowest years of earnings will be disregarded
                     until his total years of earnings equals the number of full
                     years of earnings that are to be averaged based on the
                     year of such Eligible Management Associate's birth.

              (iv)   Social Security indexing factors used are those actually
                     used by the Social Security Administration in determining
                     the Eligible Management Associate's Social Security
                     benefit, and, if those factors are not available, the
                     latest published factors will be used.

              For Eligible Management Associates who reach Traditional
Retirement Age after August 1, 2000, for purposes of clause (iii) of
Subparagraph (b) of Paragraph (1) of Article IV, Estimated Social Security
Benefit shall be determined under (B) above.

              FINAL SERVICE: An Eligible Management Associate's years of
credited service under the terms of the Pension Plan plus his years of Service
with the Company or other Controlled Group Member after he ceases earning
credited service under the terms of the Pension Plan. Calendar years that
include a period of Disability Service will not be included in the determination
of Final Service. Calendar years of Service or of Credited Service that are
interrupted by a Separation from Service or by one or more years in which the
Eligible Management Associate did not receive Compensation for the entire year
will be considered to be consecutive for purposes of determining consecutive
years of Final Service.

              HUMAN RESOURCES AND INVESTMENT COMMITTEE: The Human Resources and
Investment Committee appointed by the Board of Directors.

              INTEREST INCOME ACCOUNT(s): The account(s) of that name and any
successor account(s) and/or fund(s) established and maintained pursuant to the
Savings and Profit-Sharing Retirement Plan, the Savings, Profit-Sharing and
Stock Ownership Plan, and the Savings Plan.

              MATCHED DEPOSITS: An Eligible Management Associate's deposits, not
in excess of 6% of his compensation (as defined in the Savings and
Profit-Sharing

                                        8

<PAGE>

Retirement Plan, the Savings, Profit-Sharing and Stock Ownership Plan and the
Mirror Savings Plans), made pursuant to the Savings and Profit-Sharing
Retirement Plan, the Savings, Profit-Sharing and Stock Ownership Plan, and the
Mirror Savings Plans, and his deposits not in excess of 3% of his compensation
(as defined in the Savings Plan) made pursuant to the Savings Plan.

         MIRROR SAVINGS PLANS: The J. C. Penney Corporation, Inc. Mirror Savings
Plan I, the J. C. Penney Corporation, Inc. Mirror Savings Plan II, and the J. C.
Penney Corporation, Inc. Mirror Savings Plan III.

         OFFICER: An Associate who is an officer of the Company or a subsidiary
of the Company as determined by the Chief Executive Officer of the Company, or
his successor by position or title.

         PENNEY STOCK (COMPANY) ACCOUNT: The account(s) of that name and any
successor account(s) and/or fund(s) established and maintained pursuant to the
Savings and Profit-Sharing Retirement Plan, the Savings, Profit-Sharing and
Stock Ownership Plan, and the Savings Plan.

         PENSION PLAN: J. C. Penney Corporation, Inc. Pension Plan, as amended
from time to time.

         PENSION PLAN PARTICIPANT: An Associate or former Associate who is
treated as a participant under the Pension Plan.

         PLAN: Eckerd Corporation Supplemental Retirement Program, as amended
from time to time, and formerly known prior to March 21, 2002 as the
Supplemental Retirement Program for Management Profit-Sharing Associates of
Thrift Drug, Inc.

         SAVINGS PLAN: Eckerd Corporation 401(k) Savings Plan, as amended from
time to time.

         SAVINGS AND PROFIT-SHARING RETIREMENT PLAN: J. C. Penney Company, Inc.
Savings and Profit-Sharing Retirement Plan, as amended from time to time, which
was merged into the Savings, Profit-Sharing and Stock Ownership Plan effective
January 1, 1999.

         SAVINGS, PROFIT-SHARING AND STOCK OWNERSHIP PLAN: J. C. Penney
Corporation, Inc. Savings, Profit-Sharing and Stock Ownership Plan, as amended
from time to time.

         SEPARATION FROM SERVICE OR SEPARATES FROM SERVICE: Termination of
Service after having attained age 55 by reason of disability, discharge,
retirement (including resignation), or death. Termination of Service due to a
disability is deemed to occur

                                       9
<PAGE>

upon the later of termination of the Eligible Management Associate's sick pay or
at the end of any leave of absence granted the Eligible Management Associate.

         SERVICE: The period of time credited to an Eligible Management
Associate as service under the terms of the Pension Plan to his Separation from
Service.

         SPOUSE: The individual to whom an Eligible Management Associate is
legally married under the laws of the State (within the meaning of section 3(10)
of ERISA) in which the Eligible Management Associate is domiciled, or if
domiciled outside the United States, under the laws of the State of Florida.

         TRADITIONAL RETIREMENT AGE: The date on which an Eligible Management
Associate attains age 60.

         TRADITIONAL RETIREMENT DATE: The first day of the month immediately
following the date an Eligible Management Associate attains Traditional
Retirement Age if such Eligible Management Associate Separates from Service on
such date.

         VALUATION DATE: With respect to the Company Accounts, excluding the
Penney Stock (Company) Account, each day of the calendar year. With respect to
the Penney Stock (Company) Account(s), each day of a calendar year on which the
New York Stock Exchange is open. If the New York Stock Exchange is closed, the
Penney Stock (Company) Account(s) will have the same value as of the last
immediately preceding day the Exchange was open.

                                       10

<PAGE>

ARTICLE III.  PARTICIPATION

         Each Eligible Management Associate shall participate in the Plan as of
such Eligible Management Associate's Early Retirement Date, Traditional
Retirement Date, or Delayed Retirement Date, as the case may be; provided,
however, that such Eligible Management Associate who has a Separation from
Service in the month of December shall commence participation in the Plan as of
the last day of that December. Notwithstanding the preceding sentence, effective
on and after January 1, 1996, any Associate who, on December 31, 1995, was not
classified by Thrift Drug, Inc. as a management associate with a position
responsibility level of 14 or higher or who was not participating in a profit
incentive compensation program shall not be considered an Eligible Management
Associate and shall not participate in the Plan.

         An Associate whose name appears in Appendix II or Appendix III of the
Supplemental Retirement Program for Management Profit-Sharing Associates of J.
C. Penney Corporation, Inc. shall not be eligible to participate in the Plan.

         The determination of whether an Associate is an Eligible Management
Associate entitled to participate in the Plan shall be made on the Associate's
Separation from Service.

                                       11
<PAGE>

ARTICLE IV. BENEFITS

         (1) AT EARLY, TRADITIONAL, OR DELAYED RETIREMENT DATE: The annual
amount of benefit payable from the Plan in monthly installments to an Eligible
Management Associate commencing on such Eligible Management Associate's Early
Retirement Date, Traditional Retirement Date, or Delayed Retirement Date, as the
case may be, and terminating with the installment payable on the first day of
the month in which such Eligible Management Associate dies, shall be:

     (a)    the sum of

         (i)    3% of the Eligible Management Associate's Average Final
                Compensation multiplied by such Eligible Management Associate's
                Credited Service not in excess of 10 years;

                                      plus

         (ii)   1% of the Eligible Management Associate's Average Final
                Compensation multiplied by such Eligible Management Associate's
                Credited Service in excess of 10 years but not in excess of 30
                years;
                                      plus

         (iii)  1/2 of 1% of the Eligible Management Associate's Average Final
                Compensation multiplied by such Eligible Management Associate's
                Credited Service in excess of 30 years but not in excess of 40
                years;
                                      less

         (iv)   1/3 of 1% for each month by which the Eligible Management
                Associate's Early Retirement Date shall precede such Eligible
                Management Associate's Traditional Retirement Date multiplied by
                the Eligible Management Associate's Average Final Compensation;

LESS

         (b) the sum of

         (i)   the single-life, no-death-benefit annuity equivalent of (a) the
               annual amount of pension payable pursuant to the Pension Plan
               (disregarding Disability Service) assuming that the Eligible
               Management Associate's Benefit Commencement Date is the first day
               of the month immediately following the date of such Eligible
               Management Associate's Separation from Service, (b) the annual
               amount payable pursuant to the terms of a domestic relations
               order qualified under Code Section 414(p), (A) from the Pension
               Plan and (B) from benefits accrued pursuant to Paragraph (1) of
               Article IV of the Benefit Restoration Plan and (c) the accrued
               benefit payable pursuant to Paragraph (1) of Article IV of the
               Benefit Restoration Plan;

                                      plus

         (ii)  the single-life, no-death-benefit annuity equivalent, as of the
               Valuation Date which is the next trading date of the New York
               Stock Exchange following the Eligible Management Associate's
               Separation from Service, of

                                       12
<PAGE>

                  (a)    the value of all assets allocated to the Eligible
                         Management Associate in the Company Account(s) under
                         the Savings Plan; and

                  (b)    the value of any additional assets which would have
                         been allocated to the Eligible Management Associate's
                         Company Account(s) under the Savings and Profit-Sharing
                         Retirement Plan, the Savings, Profit-Sharing and Stock
                         Ownership Plan, the Mirror Savings Plans, and the
                         Savings Plan had such Eligible Management Associate
                         made all further permissible Matched Deposits under
                         each said plan; and

                  (c)    the value of dividends attributable to units in his
                         Company Account (within the meaning of the Savings,
                         Profit-Sharing and Stock Ownership Plan and the Savings
                         Plan) and distributed to the Eligible Management
                         Associate pursuant to Section 9.04 of the Savings,
                         Profit-Sharing and Stock Ownership Plan and Section
                         9.04 of the Savings Plan; and

                  (d)    the value of any amounts payable pursuant to the terms
                         of a domestic relations order qualified under Code
                         Section 414(p) out of such Eligible Management
                         Associate's Company Account(s) from the Savings and
                         Profit-Sharing Retirement Plan, the Savings,
                         Profit-Sharing and Stock Ownership Plan, and the
                         Savings Plan; and

                  (e)    the value of benefits payable to the Eligible
                         Management Associate (or another person on behalf of
                         the Eligible Management Associate from (A) his annual
                         benefit limit make-up account pursuant to paragraph (2)
                         of Article IV of the Benefit Restoration Plan prior to
                         January 1, 1999, and (B) his Company Accounts under the
                         Mirror Savings Plans;

                                      plus

            (iii) 50% (less 1/4 of 1% for each month by which the Eligible
                  Management Associate's Early Retirement Date shall precede
                  such Eligible Management Associate's Traditional Retirement
                  Date) of the Eligible Management Associate's Estimated Social
                  Security Benefit;
                                      plus

            (iv)  in the case of an Eligible Management Associate whose Credited
                  Service is increased pursuant to Paragraph (1) of Article
                  VIII, the amount of annual retirement benefit (or any
                  commutations thereof or substitutions therefor) payable to an
                  Eligible Management Associate from any other employer, but
                  only to the extent determined by the Benefits Administration
                  Committee, expressed in the form of a single-life,
                  no-death-benefit annuity equivalent (as determined by the
                  Benefits Administration Committee), commencing on such
                  Eligible Management Associate's Separation from Service.

                                       13
<PAGE>

In determining the amount referred to in clause (ii) of subparagraph (b) of this
Paragraph (1) of this Article IV, it shall be deemed that:

         (i)    an Eligible Management Associate who has not, at all times when
                he was eligible to participate in the Savings and Profit-Sharing
                Retirement Plan and the Savings, Profit-Sharing and Stock
                Ownership Plan, the Mirror Savings Plans, and the Savings Plan
                contributed an amount sufficient to share, to the maximum
                extent, in the Company contribution to such Plan or such
                predecessor plan has so contributed and that an Eligible
                Management Associate who did not share, to the maximum extent,
                in Company contributions for which he was eligible under the
                Savings and Profit-Sharing Retirement Plan due to any withdrawal
                of taxed Matched Deposits, be deemed not to have any such
                withdrawal;

         (ii)   the share of any such Company contribution deemed to have been
                credited to an Eligible Management Associate pursuant to this
                Paragraph (1) shall be deemed to have experienced the same rate
                of dividends, earnings, and change in value as the actual rate
                of dividends, earnings, and change in value experienced from the
                time such share of a Company contribution is deemed to have been
                credited:

                (a)    for plan years ending before January 1, 1989, the Penney
                       Stock (Company) Account under the Savings and
                       Profit-Sharing Retirement plan; and

                (b)    for plan years beginning after December 31, 1988 and
                       ending before January 1, 2002, the Interest Income
                       Account or Fund under the Savings, Profit-Sharing and
                       Stock Ownership Plan; and

                (c)    for plan years beginning after December 31, 2001, the
                       Interest Income Fund under the Savings Plan;

         (iii)  the value of the amount of the Company Account(s) and annual
                limit make-up account paid out pursuant to a domestic relations
                order qualified under Section 414(p) of the Code deemed to have
                been credited to an Eligible Management Associate pursuant to
                this Paragraph shall be deemed to have experienced the same rate
                of earnings and change in value experienced by the Interest
                Income Account under the Savings, Profit-Sharing and Stock
                Ownership Plan from the time such amount is deemed to have been
                credited; and

         (iv)   the rates used to determine the single-life, no-death-benefit
                annuity equivalent shall be the rates that the Benefits
                Administration Committee, in its discretion, shall determine.

                                       14
<PAGE>

Notwithstanding any provision to the contrary, the annual benefit payable from
the Plan under this Paragraph (1) to an Officer shall not be less than the
annual benefit that would have been payable on his Traditional Retirement Date.

         (2) MINIMUM BENEFIT: For the purpose of determining the minimum benefit
payable under this Paragraph (2), an Eligible Management Associate shall be
deemed to have actively participated in the Pension Plan until his Separation
from Service and that his average final pay and credited service (as both terms
are defined by the Pension Plan) continued to his Separation from Service.

In no event will the amount payable to an Eligible Management Associate under
Paragraph (1) of this Article IV at such Eligible Management Associate's
Traditional Retirement Date or Delayed Retirement Date, as the case may be, be
less than the difference between:

         (A)   the amount of pension payable pursuant to the early retirement
               pension benefit provision of the Pension Plan (determined without
               regard to any compensation or benefit limits imposed by the Code)
               that would be applicable if the Eligible Management Associate
               elected to receive benefits pursuant to that provision prior to
               such Eligible Management Associate's normal retirement date, as
               defined in the Pension Plan (disregarding Disability Service, if
               any, and including as Credited Service any increase granted under
               Article VIII hereof) assuming the Eligible Management Associate's
               Benefit Commencement Date is the first day of the month
               immediately following the day of such Eligible Management
               Associate's Separation from Service under this Plan, and

         (B)   the amount of pension payable pursuant to the early retirement
               pension benefit provision of the Pension Plan (determined without
               regard to any compensation or benefit limits imposed by the Code)
               that would be applicable if the Eligible Management Associate did
               not elect to receive benefits pursuant to that provision prior to
               the Eligible Management Associate's normal retirement date, as
               defined in the Pension Plan (disregarding Disability Service, if
               any, and including as Credited Service any increase granted under
               Article VIII hereof).

In no event will the amount payable under Paragraph (1) of this Article IV to an
Eligible Management Associate who Separates from Service on his Early Retirement
Date within one year prior to his Traditional Retirement Date and who is granted
additional Credited Service pursuant to Paragraph (1) of Article VIII at his
Early Retirement Date be less than the difference between:

               (A) the amount of pension that would be payable (determined
               without regard to any compensation or benefit limits imposed by
               the Code) at such

<PAGE>

               Eligible Management Associate's normal retirement date, as
               defined by the Pension Plan (disregarding Disability Service, if
               any, and including as Credited Service, as defined by the Pension
               Plan, any increase granted under Article VIII hereof), and

               (B) the amount of pension payable pursuant to the early
               retirement pension benefit provision of the Pension Plan
               (determined without regard to any compensation or benefit limits
               imposed by the Code) that would be applicable if the Eligible
               Management Associate elected to receive benefits pursuant to that
               provision prior to such Eligible Management Associate's normal
               retirement date, as defined by the Pension Plan (disregarding
               Disability Service, if any, and excluding as Credited Service any
               increase granted under Article VIII hereof) assuming the Eligible
               Management Associate's Benefit Commencement Date is the first day
               of the month following such associate's Separation from Service,
               but in no event prior to the date such associate reaches age 59.

Notwithstanding any provision to the contrary, the annual benefit payable from
the Plan under this Paragraph (2) to an Officer shall not be less than the
annual benefit that would have been payable on his Traditional Retirement Date.

         (3) SOCIAL SECURITY MAKE-UP: In addition to any other benefit payable
under this Plan, an annual benefit equal to the Estimated Social Security
Benefit shall be payable in monthly installments to an Eligible Management
Associate commencing on such Eligible Management Associate's Traditional
Retirement Date or Delayed Retirement Date up to age 62, as the case may be,
(or, for an Eligible Management Associate who Separates from Service within one
year prior to his Traditional Retirement Date and who is granted any adjustment
pursuant to either clause (i) or (ii) of Paragraph (1) of Article VIII, on his
Early Retirement Date) and terminating with the installment payable on the first
day of the month in which such Eligible Management Associate dies or with the
installment payable on the first day of the month prior to the month in which
the Eligible Management Associate first becomes eligible for the primary old age
benefit payable under the United States Social Security laws by reason of
disability or attainment of age 62, whichever comes first.

         An Eligible Management Associate, who, on his Separation from Service,
is entitled to disability benefits under the United States Social Security laws,
shall not be eligible for any Social Security make-up benefits provided for in
this paragraph.

         (4) DEATH BENEFIT: If an Eligible Management Associate has elected a
form of payment with a guaranteed number of payments and the Eligible Management
Associate dies before receiving all benefits payable under that option,
remaining payments will be made to the person designated by the Eligible
Management Associate as his Beneficiary at the time the form of payment was
selected.

                                       16
<PAGE>

         If an Eligible Management Associate is married at the time such
Eligible Management Associate Separates from Service by reason of death after
attaining Early Retirement Age, or if an Eligible Management Associate who has
Separated from Service after attaining Early Retirement Age and who is married
at the time of his death, dies before payment has begun under the Plan, such
Eligible Management Associate's Spouse will receive the benefit that would have
been payable if the Eligible Management Associate had a Separation from Service
immediately prior to such Eligible Management Associate's death (if he was an
active Associate on the date of his death), and had begun to receive benefits
immediately prior to his death in the form of a 100% (75% if death occurs prior
to January 1, 1996) joint and survivor annuity without payment certain with the
Spouse as the beneficiary.

         (5) LIFE INSURANCE COVERAGE: Commencing on an Eligible Management
Associate's Traditional Retirement Date or Delayed Retirement Date, as the case
may be, and ending on such Eligible Management Associate's attainment of age 70,
the Company will continue to provide an Eligible Management Associate who has at
least 10 years of uninterrupted employment with the Company or a Controlled
Group Member with term life insurance coverage at Company expense on a
decreasing coverage basis.

         The amount of coverage to be provided into retirement shall be equal,
at such Eligible Management Associate's Traditional Retirement Date, to 100% of
the amount of coverage being provided to him at Company expense immediately
prior to the attainment of his Traditional Retirement Age reduced to 90%, 80%,
70%, 60%, 50%, 40%, 30%, 20%, and 10% of such amount of coverage on the first
day of the month following his attainment of age 61, 62, 63, 64, 65, 66, 67, 68,
and 69, respectively.

         The amount of coverage to be provided at a Delayed Retirement Date
shall be the applicable percentage based upon the Eligible Management
Associate's age on such Delayed Retirement Date multiplied by the amount of
coverage being provided to him at Company expense immediately prior to his
Delayed Retirement Date and decreasing thereafter as provided in the preceding
sentence.

         If, on the Eligible Management Associate's Traditional Retirement Date
or Delayed Retirement Date, as the case may be, such Eligible Management
Associate is already covered by term life insurance under the Company's term
life insurance plan on account of the Eligible Management Associate's total
disability, such Eligible Management Associate shall not be eligible for any
term life insurance coverage provided for in this paragraph. Benefits payable
under this Plan will be paid to the Beneficiary designated by the Eligible
Management Associate as soon as practicable after receipt of a properly
submitted claim.

         A Participant whose group term life insurance coverage under the Plan
terminates because of his attainment of age 70 will have the right to convert
his group term life insurance coverage to an individual policy to the extent,
and only to the extent,

                                       17
<PAGE>

permitted under the group policy applicable to the Participant. Any election to
convert to individual coverage must be made within 31 days after the
Participant's coverage under the Plan terminates and must be made in accordance
with all requirements specified in such policy. The amount of coverage that may
be converted shall be the amount in effect immediately before the Participant
attained age 70.

         (6) EFFECT OF CERTAIN PAYMENTS MADE IN DECEMBER 1992: In the event
Thrift Drug, Inc., in its discretion, made payments to a current or former
Eligible Management Associate on or before December 31, 1992 under the Thrift
Drug, Inc. profit incentive compensation program and under the Thrift Drug, Inc.
Performance Unit Plan, or J. C. Penney Company, Inc. 1984 Performance Unit Plan
or any successor plans, and such payments were attributable to the fiscal year
ending on January 30, 1993, this Paragraph shall apply. The effect of such
payments on the benefits payable to such individual under the Pension Plan and
under the J. C. Penney Company, Inc. Savings, Profit-Sharing and Stock Ownership
Plan shall be determined with respect to whether an increase or decrease in
benefits resulted. Benefits payable under this Plan to such current or former
Eligible Management Associate shall be adjusted (a) to offset any such increase
in benefits and/or (b) to restore any such decrease in benefits so that no
advantage or detriment, as the case may be, shall be experienced by any such
current or former Eligible Management Associate with respect to total retirement
benefits under the above-referenced plans and this Plan.

         (7) NONDUPLICATION OF BENEFITS: The benefits payable to or on behalf of
an Eligible Management Associate under the Plan shall not duplicate benefits
payable from the Pension Plan, the Benefit Restoration Plan, the Mirror Savings
Plans, or any separation pay program of the Company or a Controlled Group
Member. To the extent that any benefits otherwise payable under the Plan are
paid from one or more of the plans or programs described in the prior sentence,
such benefits under the Plan shall be cancelled.

                                       18
<PAGE>

ARTICLE V.  FORM AND COMMENCEMENT OF BENEFIT PAYMENTS

         (1) DELAYED COMMENCEMENT OF BENEFITS: An Eligible Management Associate
may elect that the commencement of his annual benefit payable under Paragraph
(1) or (2) of Article IV be delayed to the first day of any month following his
Early Retirement Date, Traditional Retirement Date, or Delayed Retirement Date,
as the case may be (but not beyond the first day of the month in which he
attains age 70). In such a case, the amount of annual benefit payable under
Paragraph (1) or (2) of Article IV shall be increased by 1/2 of 1% for each
month that the commencement of such benefits is delayed.

         (2) OPTIONAL FORMS OF BENEFIT PAYMENT: Except as otherwise provided in
this Plan and subject to such rules and regulations as the Benefits
Administration Committee may establish from time to time with respect to time
and manner of election, an Eligible Management Associate may elect, prior to the
commencement of his annual benefit payable under Paragraph (1) or (2) of Article
IV, to receive a benefit of equivalent actuarial value (applying factors
utilized in the Pension Plan) to such benefit, which may be one of the forms of
benefit options described in the Pension Plan. The Benefits Administration
Committee has full authority to revise the forms of benefit options available
under this Plan.

         (3) SMALL ANNUITIES: If the total benefit payable to an Eligible
Management Associate under Paragraph (1) or (2) of Article IV would not provide
monthly payments exceeding $100, the benefit shall be converted into an
actuarially equivalent lump sum payment (applying the actuarial factors utilized
in the Pension Plan). If an Eligible Management Associate who has begun to
receive payments under the Plan and who has elected a form of payment with a
guaranteed number of payments dies, and if the monthly benefit that becomes
payable to the beneficiaries of the Eligible Management Associate does not
exceed $100 per beneficiary, the monthly benefit shall be converted into an
actuarially equivalent lump sum payment (applying the actuarial factors utilized
in the Pension Plan).

                                       19
<PAGE>

ARTICLE VI.  ADMINISTRATION

         Except as otherwise provided, the Plan shall be administered by the
Benefits Administration Committee which shall have all rights and powers
necessary to carry out its functions under the Plan. The Benefits Administration
Committee shall have the discretionary authority under the Plan to determine
eligibility for benefits and to construe the terms of the Plan. Such authority
shall include, but not be limited to, the right to:

         (a)      correct any defect, supply any omission or reconcile any
                  inconsistency or ambiguity in the Plan in the manner and to
                  the extent that the Benefits Administration Committee deems
                  desirable to carry on the purpose of the Plan;

         (b)      resolve all questions relating to the eligibility of
                  Associates to become Eligible Management Associates and the
                  eligibility of Eligible Management Associates to participate
                  in the Plan;

         (c)      determine the amount of benefits payable to Eligible
                  Management Associates and authorize and direct the Company
                  with respect to the payment of benefits under the Plan;

         (d)      make all other determinations and resolve all questions of
                  fact necessary or advisable for the administration of the
                  Plan; and

         (e)      make, amend, and rescind such rules as it deems necessary for
                  the proper administration of the Plan.

         The Benefits Administration Committee will keep a written record of its
action and proceedings regarding the Plan and all dates, records, and documents
relating to its administration of the Plan.

                                       20
<PAGE>

ARTICLE VII.  TYPE OF PLAN

         The Plan is an unfunded plan maintained by the Company primarily for
the purpose of providing deferred compensation for a select group of management
or highly compensated employees. The Plan shall be construed according to the
provisions of ERISA applicable to such plans. As such, the Plan is intended to
be construed so as not to provide income to any Eligible Management Associate or
Beneficiary for purposes of the Code prior to actual receipt of benefit payments
from the Plan. Benefits under the Plan (other than the life insurance benefits
referred to in Paragraph (5) of Article IV which may be insured) are paid from
the general assets of the Company and are not guaranteed.

         In the event that it should subsequently be determined by statute or by
regulation or ruling that the Plan is not "a plan which is unfunded and is
maintained primarily for the purpose of providing deferred compensation for a
select group of management or highly compensated employees" within the meaning
of sections 201(2), 301(a)(3), 401(a)(1), and 4021(b)(6) of ERISA and section
2520.104-24 of Chapter 29 of the Code of Federal Regulations, participation in
the Plan shall be restricted by the Benefits Administration Committee to the
extent necessary to assure that it will be such a plan within the meaning of
such sections.

         Notwithstanding any other provision of the Plan, if the benefits of an
Eligible Management Associate become taxable prior to distribution from the
Plan, such amounts shall be distributed as soon as practicable to the affected
Eligible Management Associate.

                                       21
<PAGE>

ARTICLE VIII.  MISCELLANEOUS

         (1) ADDITIONAL CREDITED SERVICE AND OTHER ADJUSTMENTS: For all purposes
of the Plan, the Credited Service of an Eligible Management Associate may be
increased, and with respect to an Eligible Management Associate whose Early
Retirement Date is within one year prior to his Traditional Retirement Date, (i)
the percentage reduction on account of early retirement referred to in clause
(iv) of Subparagraph (a) of Paragraph (1) of Article IV may be decreased or
waived, and (ii) the entitlement to and the amount of benefits or coverage
referred to in Paragraphs (2), (3), and (5) of Article IV may be accelerated or
increased, as the case may be, in the discretion of the Human Resources and
Investment Committee.

         For all purposes of the Plan, the Human Resources and Investment
Committee in its discretion, may make adjustments in Compensation and Credited
Service with respect to payments of severance pay, including, but not limited
to, outplacement pay and critical pay.

         (2) AMENDMENT AND TERMINATION: The Board of Directors may amend or
modify the Plan at any time, without prior notice or approval. The Board of
Directors may suspend, discontinue, or terminate the Plan at any time without
prior notice or approval. In no event will any amendment, modification,
suspension, discontinuance, or termination adversely affect existing life
insurance coverage for retirees or the Plan benefit for any Eligible Management
Associate for whom benefit payments have already begun in accordance with the
Plan as in effect prior to the effective date of the amendment, modification,
suspension, discontinuance, or termination unless otherwise required to comply
with applicable law.

         If the Plan is terminated, any Eligible Management Associate who, as of
the effective date of Plan termination, has reached Traditional Retirement Age
but who has not reached age 65 shall be entitled to receive, at his actual
Separation from Service, the benefits, if any, to which he would have been
entitled under Paragraph (1) or (2) of Article IV had he Separated from Service
on the day before the effective date of Plan termination, reduced by the
percentage derived by dividing the number of months of Credited Service, if any,
from the Plan termination effective date to the date of actual Separation from
Service by the number of months of Credited Service from the Plan termination
effective date to the date the Eligible Management Associate will have reached
age 65. Any such Eligible Management Associate shall also be entitled to receive
at his actual Separation from Service (other than by reason of death) a benefit,
if any, to which he would have been entitled under Paragraph (3) of Article IV
had the Plan not been terminated. If, after Plan termination, such Eligible
Management Associate Separates from Service by reason of death, Paragraph (4) of
Article IV shall apply, if appropriate.

                                       22
<PAGE>

         If the Plan is terminated, any Eligible Management Associate who, as of
the effective date of Plan termination, has reached his Early Retirement Date
(assuming a Separation from Service on such date) shall be entitled to receive,
at his actual Separation from Service, the benefits, if any, to which he would
have been entitled under Paragraph (1) or (2) of Article IV calculated as if he
had reached his Traditional Retirement Age and Separated from Service on the day
before the effective date of Plan termination and disregarding the percentage
reduction on account of early retirement referred to in clause (iv) of
Subparagraph (a) of Paragraph (1) of Article IV, reduced by the percentage
derived by dividing the number of months of Credited Service, if any, after his
Traditional Retirement Date by 60. Any such Eligible Management Associate shall
also be entitled to receive at his actual Separation from Service (other than by
reason of death) a benefit, if any, to which he would have been entitled under
Paragraph (3) of Article IV had the Plan not been terminated. If after Plan
termination, such Eligible Management Associate Separates from Service by reason
of death, Paragraph (4) of Article IV shall apply, if appropriate.

         If the Plan is terminated, any Eligible Management Associate who, as of
the effective date of Plan termination (a) has reached age 50, (b) has 10 or
more years of credited service, as defined by the Pension Plan, as an Eligible
Management Associate, and (c) is not otherwise eligible for benefits under this
Paragraph (2) of this Article VIII, shall be entitled to receive, at his actual
Separation from Service but no earlier than his Traditional Retirement Date, a
benefit equal to the difference between the amount of pension which would be
payable pursuant to the early retirement pension benefit provision of the
Pension Plan that would be applicable if the Eligible Management Associate
elected to receive benefits pursuant to that provision prior to his normal
retirement date, as defined in the Pension Plan (disregarding Disability
Service, if any) and the amount of pension payable pursuant to the early
retirement pension benefit provision of the Pension Plan that would be
applicable if the Eligible Management Associate did not elect to receive
benefits pursuant to that provision prior to his normal retirement date, as
defined in the Pension Plan (disregarding Disability Service, if any) reduced by
the percentage derived by dividing the number of months of Credited Service, if
any, after Traditional Retirement Date (assuming a separation from Service) by
60.

         In no event will any future amendment or modification of the Plan
adversely affect the right to Plan benefits which vest on Plan termination as
set forth in this Paragraph (2) without the consent of at least 75 percent of
the affected Eligible Management Associates unless such amendment or
modification is specifically required to comply with applicable law.

         Each amendment to the Plan by the Board of Directors will be made only
pursuant to unanimous written consent or by majority vote at a meeting. Upon
such action by the Board of Directors, the Plan will be deemed amended as of the
date specified as the effective date by such action or in the instrument of
amendment. The

                                       23
<PAGE>

effective date of any amendment may be before, on, or after the date of such
action of the Board of Directors.

         (3) RIGHTS OF ASSOCIATES: Except for the Associate's non-forfeitable
interest as set forth in Paragraph (2) of this Article VIII, neither the
establishment of the Plan nor any action thereafter taken by the Company or any
Controlled Group Member or by the Benefits Administration Committee shall be
construed as giving to any Associate any vested right to a benefit from the Plan
or a right to be retained in employment or any specific position or level of
employment with the Company, or any Controlled Group Member. Moreover, no
Associate shall have any right or claim to any benefits under this Plan if the
Associate is summarily discharged (including resignation in lieu thereof) unless
the Benefits Administration Committee, in its discretion, determines that such
Associate shall be eligible for such benefits notwithstanding such summary
discharge.

         (4) MISTAKEN INFORMATION: If any information upon which an Eligible
Management Associate's benefit under the Plan is calculated has been misstated
by the Eligible Management Associate or is otherwise mistaken, such benefit
shall not be invalidated (unless upon the basis of the correct information the
Eligible Management Associate would not have been entitled to a benefit), but
the amount of the benefit shall be adjusted to the proper amount determined on
the basis of the correct information and any overpayments shall be charged
against future payments to the Eligible Management Associate or his Beneficiary.

         (5) LIABILITY: Neither the Board of Directors (including any committees
thereof) nor any member of the Benefits Administration Committee or the Human
Resources and Investment Committee nor any person to whom any of them may
delegate any duty or power in connection with administering the Plan shall be
personally liable for any action or failure to act with respect to the Plan.

         (6) BENEFITS FOR REEMPLOYED ELIGIBLE MANAGEMENT ASSOCIATES: If a
retired Eligible Management Associate subsequently is reemployed by the Company
or a Controlled Group Member, the payment of benefits hereunder shall continue.
Any life insurance coverage in effect pursuant to Paragraph (5) of Article IV
shall cease effective on the date a rehired Associate becomes eligible for
coverage under the Company's term life insurance plan. Upon such Associate's
Separation from Service he shall be entitled to receive applicable benefits, if
any, under Article IV pursuant to uniform rules approved by the Benefits
Administration Committee.

         (7) CONSTRUCTION: In determining the meaning of any provision of the
Plan, words imparting the masculine gender shall include the feminine and the
singular shall include the plural, unless the context requires otherwise.
Headings of paragraphs and Articles in the Plan are for convenience only and are
not intended to modify or affect the meaning of the substantive provisions of
the Plan.

                                       24
<PAGE>

         (8) NON-ASSIGNABILITY OF BENEFITS: The benefits payable hereunder or
the right to receive future benefits under the Plan may not be anticipated,
alienated, pledged, encumbered, or subjected to any charge or legal process, and
if any attempt is made to do so, or a person eligible for any benefits becomes
bankrupt, the interest under the Plan of the person affected may be terminated
by the Benefits Administration Committee which, in its sole discretion, may
cause the same to be held or applied for the benefit of one or more of the
dependents of such person or make any other disposition of such benefits that it
deems appropriate.

         (9) GOVERNING LAW: Except to the extent that the Plan may be subject to
the provisions of ERISA, the Plan will be construed and enforced according to
the laws of the State of Florida, without giving effect to the conflict of laws
principles thereof. Except as otherwise required by ERISA, every right of action
by an Associate, former Associate, or beneficiary with respect to the Plan shall
be barred after the expiration of three years from the date of Separation of
Service of the Eligible Management Associate or the date of receipt of the
notice of denial of a claim for benefits, if earlier. In the event ERISA's
limitations on legal actions do not apply, the laws of the State of Florida with
respect to limitations of legal actions shall apply.

         (10) TRANSFERRED ELIGIBLE MANAGEMENT ASSOCIATES: In the event of the
transfer of an Eligible Management Associate to a "non-participating employer"
as defined below, said Eligible Management Associate shall continue to be
eligible to participate in this Plan in accordance with Article III. The Service
and Compensation of the Eligible Management Associate with the non-participating
employer shall be recognized as attributable to the Company to the extent
permitted by the Plan in determining benefits under the Plan. A
non-participating employer shall mean a participating employer in the
Supplemental Retirement Program for Management Profit-Sharing Associates of J.
C. Penney Corporation, Inc.

                                       25
<PAGE>

ARTICLE IX.  CLAIMS PROCEDURES

         The Benefits Administration Committee shall be the named fiduciary of
the Plan for the review of denied claims and in reviewing claims it shall act in
accordance with Section 5.03 of ERISA and federal regulations thereunder. The
Company shall establish a reasonable claims procedure which shall be
communicated to Participants.

         Any action taken or determination made by the Benefits Administration
Committee will be conclusive on all parties.

                                       26
<PAGE>

                                   APPENDIX I

                               ECKERD CORPORATION
                         SUPPLEMENTAL RETIREMENT PROGRAM

          Potential Eligible Management Associates as of March 21, 2002

<Table>
<Caption>

                            NAME                                      OFFICER
<S>                                                                   <C>
                      BONSTROM, ROBERT

                      CAREY, JOHN                                       YES

                      CERRA, ENZO                                       YES

                      CLARK, PAUL

                      CORO, RICARDO                                     YES

                      EDMONSTON, RONALD

                      FISHER, KEN

                      GARRISON, GARRY

                      GENESIO, ROBERT

                      GONDI, MAURICIO

                      HALPERN, DAVID

                      JUSTISS, DONNA                                    YES

                      MARASCO, FRANCIS                                  YES

                      MARIANI, ANTHONY

                      MCDONALD, LLOYD                                   YES

                      MCGEOWN, RICHARD

                      MCLEMORE, RON

                      MILLER, DENNIS                                    YES

                      PESOTSKI, STANLEY

                      PETERSEN, KENNETH                                 YES

                      PROGAR, RALPH

                      SAUNDERS, DAVID

                      STIPANOVICH, CHARLES

                      THOMPSON, GERALD                                  YES

                      VELTRI, GEORGE

                      VERSCHAREN, ROBERT                                YES
</Table>

                                       27

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