EXHIBIT 10.1

 

                PARTIAL LEASE TERMINATION AGREEMENT

 

 

This Partial Lease Termination Agreement (the “Agreement”) is made as of the
27th day of September, 2002, by and between DEMOCRACY ASSOCIATES LIMITED
PARTNERSHIP (hereinafter referred to as “Landlord”) and E-centives, Inc. (f/k/a
Emaginet, Inc., “Tenant”)

 

WITNESSETH:

 

WHEREAS, by Lease Agreement dated as of September 23, 1997 (together with
Amendment No.1 to Lease Agreement dated as of December 23, 1998 (“Amendment No.
1”) and the Lease Modification Agreement, as defined below, the “Lease”),
Landlord leased to Tenant for a term of five (5) years 23,544 square feet of Net
Rentable Area located on the sixth (6th) floor  (the “Sixth Floor Premises”) and
23,544 square feet of Net Rentable Area located on the seventh (7th) floor  (the
“Seventh Floor Premises” and together with the Sixth Floor Premises, the
“Expanded Premises”)  of the nine (9) story office building known as One
Democracy Center having a street address of 6901 Rockledge Drive, Bethesda,
Maryland (the “Building”) within an office complex known as Democracy Center
(the “Complex”), as such space is more particularly described in the Lease;  and

 

WHEREAS, by Lease Modification and Extension Agreement dated as of June 29, 2000
(the “Lease Modification Agreement”) Landlord and Tenant amended the Lease
(i) to modify the description of the premises which are the subject of the
Lease, as set forth above, (ii) to extend the term of the Lease with respect to
the Expanded Premises on the terms and conditions set forth herein and (iii) to
modify certain other terms and provisions of the Lease as hereinafter set forth;
and

 

WHEREAS, the Extended Lease Term expires on September 30, 2005; and

 

WHEREAS, Tenant, prior to September 30, 2005, desires to terminate the Lease
with respect to the Seventh Floor Premises (alternatively referred to herein as
the “Released Premises”) and to vacate and to surrender the Released Premises to
Landlord; and

 

WHEREAS, Landlord has agreed to terminate the Lease with respect to the Released
Premises only and to accept said surrender of the Released Premises upon the
terms and conditions set forth herein.

 

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

 

1.             Defined Terms.  Except as otherwise provided herein, the
capitalized terms used herein shall have the same meanings as provided such
terms in the Lease.

 

2.             The Premises. (a)  Tenant shall quit, vacate and surrender the
Released Premises to Landlord at any time subsequent to the execution of this
Agreement, but in no event later than 5:00 p.m. on December 31, 2002 (the
“Partial Lease Termination Date”). Accordingly, effective on the day after the
Partial Lease Termination Date, the definition of the Premises currently set
forth in

 

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the Lease hereby is amended to exclude the Released Premises. As a result,
effective on the day after the Partial Lease Termination Date, the aggregate
number of square feet of Net Rentable Area comprising the Premises hereby is
reduced to comprise the Sixth Floor Premises only (i.e. 23,544 square feet of
Net Rentable Area on the sixth (6th) floor of the Building).

 

(b)           The Released Premises shall be surrendered in accordance with the
pertinent provisions of the Lease on the Partial Lease Termination Date in broom
clean condition, in the same order and condition in which they existed on the
Extended Lease Term Commencement Date, ordinary wear and tear excepted.  Tenant,
in accordance with the provisions of the Lease, shall remove all of its personal
property and moveable trade fixtures, furnishings and equipment from the
Released Premises, including, without limitation all of the cables, wiring and
equipment in and relating to the LAN room/data center, on or before the Partial
Lease Termination Date, provided that Tenant shall repair all damage caused by
such removal to the sole but reasonable satisfaction of Landlord.  Tenant’s
obligation to observe and perform the covenants provided in this Paragraph 1
shall survive the Partial Lease Termination Date.

 

                                (c)           Notwithstanding anything in this
Agreement to the contrary, on or before December 15, 2002, Tenant shall have the
right, subject to the terms and conditions of this Paragraph 1(c), to notify
Landlord (“Tenant’s Election Notice”) of its election to terminate the lease of
the Sixth Floor Premises in lieu of terminating the lease of the Seventh Floor
Premises. In the event Tenant timely delivers Tenant’s Election Notice to
Landlord, (i) the definition of the Released Premises shall be deemed to include
the Sixth Floor Premises only, (ii) the Premises shall be deemed to include the
Seventh Floor Premises only and (iii) the Lease shall continue in full force and
effect, subject to the terms and provision of this Agreement, with respect to
the Seventh Floor Premises only. The first sentence of this Paragraph 1(c)
notwithstanding, in the event Landlord notifies Tenant that Landlord has bona
fide prospective tenant who desires to lease the Seventh Floor Premises,
Landlord shall notify Tenant and Tenant shall within three (3) business days of
Landlord’s notice, notify Landlord of whether it will Lease Sixth Floor Premises
or the Seventh Floor Premises.

 

3.             Rent. (a) Regardless of whether Tenant vacates the Released
Premises prior to the Partial Lease Termination Date, all installments of annual
base rent with respect to the Released Premises which are due pursuant to
Article III of the Lease shall be paid through March 31, 2003 (the “Partial Rent
Termination Date”). Similarly, Tenant shall make estimated monthly payments in
respect of Additional Rent with respect to the Released Premises, as provided in
Article IV of the Lease, through the Partial Rent Termination Date. Tenant’s
obligation with respect to payment of Additional Rent with respect to the
Released Premises pursuant to Article IV of the Lease, as well as Landlord’s
obligation to refund any overpayment made with respect to the Released Premises
by Tenant in respect of Additional Rent, all with respect to the period prior to
and including the Partial Rent Termination Date, shall survive the Partial Lease
Termination Date and the Partial Rent Termination Date. All of Tenant’s other
obligations under the Lease with respect to the Released Premises shall continue
in full force and effect through the Partial Lease Termination Date.

 

(b)  Notwithstanding anything to the contrary in subparagraph (a) above, in the
event (i) Landlord is successful in its efforts to relet all or a portion of the
Released Premises, (ii) the new tenant takes occupancy of the Released Premises
and (iii) Landlord actually receives the payment of rent with respect to the
Released Premises, then the installments of annual base rent that Tenant is to
pay with respect to the Released Premises prior to March 31, 2003 shall be
reduced by the actual amount of the rent actually received by Landlord with
respect to the Released Premises.  To the

 

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extent Landlord receives payment of rent with respect to the Released Premises
by a new tenant, then Landlord shall credit against Tenant’s next monthly
installment of annual base rent an amount equal to the amount received from the
new tenant.

 

(c)  Tenant’s obligation to pay annual base rent, additional rent and all other
sums and charges due in accordance with the terms and provisions of the Lease
shall continue in full force and effect with respect to the Sixth Floor
Premises.  Except as provided in Paragraph 13 below, provided Tenant complies
with the terms hereof, Tenant shall have no further obligations with respect to
the Seventh Floor Premises commencing the day immediately following the Partial
Lease Termination Date.

 

                4.             Security Deposit.                 Paragraph 23,
Security Deposit, of the Lease Modification Agreement, hereby is modified as
follows:

 

                (a)           Landlord acknowledges that Tenant has delivered to
Landlord and is currently holding the Letter of Credit in the amount of
$449,578.80.  The Letter of Credit currently expires on September 30, 2002. 
Tenant shall cause the Letter of Credit to be renewed or extended for an
additional six (6) months in accordance with the provisions of Paragraph 23(a)
of the Lease Modification Agreement (e.g. the Letter of Credit shall be renewed
or extended through March 31, 2003), provided that the extended Letter of Credit
shall permit a partial draw by Landlord any time after January 1, 2003 in the
amount of $309,578.80 (the “Partial Payment”).  In addition, on or before
January 3, 2003,Tenant shall make the payment as identified in Paragraph 4(c)
below, such that Landlord shall have received by virtue of the Partial Payment
and Additional Payment (defined below) the full amount of the Letter of Credit.
Tenant shall provide to Landlord appropriate documentation and evidence of such
renewal or extension which is acceptable to Landlord in its sole judgment and
shall be delivered to Landlord on or before September 30, 2002.  In the event
Tenant fails to deliver to Landlord the appropriate documentation evidencing the
renewal or extension of the Letter of Credit in accordance with this Paragraph
4(a), (i) Landlord, without notice to Tenant, shall be entitled to immediately
draw on the Letter of Credit, (ii) this Agreement shall terminate and all
rights, obligations, and liabilities of the parties hereunder shall be released
and discharged and (iii) Tenant shall continue to comply with its obligations,
liabilities and responsibilities under the Lease with respect to the Sixth Floor
Premises and the Seventh Floor Premises through the expiration of the Extended
Lease Term. Landlord, at any time after January 1, 2003 and without any notice
to Tenant, shall be entitled to draw on the Letter of Credit in the amount of
the Partial Payment and retain the proceeds thereof and, thereafter, shall
continue to hold the Letter of Credit as the security deposit in accordance with
the provisions of the Lease.  In addition, Tenant shall be obligated to make the
Additional Payment set forth in subsection (c) below in addition to its rental
payment obligations  (the Partial Payment and Additional Payment collectively
referred to as the “Termination Payment”). The Termination Payment shall be in
addition to and not in replacement of Tenant’s obligation to make payments of
annual base rent and additional rent as set forth in Paragraph 2 above or to
deliver the Additional Payment to Landlord in accordance with the provisions of
subparagraph (c) below.

 

(b)           Paragraph 23(b) of the Lease hereby is deleted in its entirety and
the Letter of Credit shall not be subject to further reduction.

 

                (c)           On or before January 3, 2003, Tenant shall deliver
to Landlord a cash payment of $140,000.000 representing two (2) months of annual
base rent which Tenant is then obligated to

 

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pay with respect to the Seventh Floor Premises (the “Additional Payment”). In
the event Tenant fails to deliver the Additional Payment to Landlord, unless
Landlord has relet the Seventh Floor Premises and such tenant has taken
occupancy of the Seventh Floor Premises and commenced paying rent with respect
thereto (i) this Agreement shall terminate and all rights, obligations, and
liabilities of the parties hereunder shall be released and discharged, and (ii)
Tenant shall continue to comply with its obligations, liabilities and
responsibilities under the Lease with respect to the Sixth Floor Premises and
the Seventh Floor Premises through the expiration of the Extended Lease Term,
except that the amount of the Letter of Credit to be deposited by Tenant shall
not be subject to further reduction. In the event Tenant fails to deliver the
Additional Payment and Landlord has relet the Seventh Floor Premises and such
tenant has taken occupancy of the Seventh Floor Premises and commenced paying
rent with respect thereto then this Agreement shall remain in full force and
effect and Landlord shall have the right to pursue any and all of its rights and
remedies against Tenant with respect to the Sixth Floor Premises and the Seventh
Floor Premises, as applicable, in accordance with the terms and provisions of
the Lease.

 

(d)           Notwithstanding anything to the contrary in Paragraph 4(c) above,
at any time after April 1, 2003 provided that  (i) Tenant shall not then be in
default, beyond any applicable notice and cure period, under any of the terms
and provisions of this Lease, (ii) no physical damage to the Premises shall have
occurred, ordinary wear and tear excepted, and (iii) no other event shall have
occurred prior to April 1, 2003 which would entitle Landlord to use or to retain
all or a portion of the security deposit, then the amount of the security
deposit shall be reduced to an amount that is equal to one (1) month of the then
escalated annual base rent with respect to the Sixth Floor Premises (the
“Reduced Security Deposit”). Such reduction shall occur by means of (1) delivery
by Tenant to Landlord of a new letter of credit (the Substitute Letter of
Credit”) or an amendment or modification of the Letter of Credit which shall
comply with the provisions of Paragraph 23(a) of the Modification Agreement or
(2) delivery of cash to Landlord in the amount of the Reduced Security Deposit.
If Tenant delivers cash or a Substitute Letter of Credit to Landlord, the
original Letter of Credit shall be returned to the Tenant within ten (10)
business days following Landlord’s receipt of the Substitute Letter of Credit.

 

5.             Releasing of and Access to the Seventh Floor Premises.  (a) 
Tenant acknowledges that Landlord, commencing on the execution of this
Agreement, shall, but is not obligated to Tenant to,  endeavor to lease the
Seventh Floor Premises to another tenant.  In order that Landlord may present
the Seventh Floor Premises to prospective tenants in the most favorable manner,
Tenant agrees that it shall vacate the Seventh Floor Premises as soon as
practicable for Tenant and that Tenant shall maintain any furniture, fixtures,
furnishings and equipment remaining in the Seventh Floor Premises in a clean,
tidy and orderly manner.

 

(b)           Notwithstanding anything in this Agreement or the Lease to the
contrary, commencing on the day after the date on which this Agreement is
executed by Tenant, Landlord, its employees, contractors, architects, agents,
engineers and consultants and representatives of prospective tenants, shall be
allowed access to the Seventh Floor Premises, without charge therefor and
without diminution of the rent payable by Tenant, to examine and inspect the
Seventh Floor Premises and to prepare plans and drawings for the renovation and
modification of the Seventh Floor Premises. In connection with any such entry,
Landlord shall endeavor to provide Tenant with prior telephonic notice of such
entry.

 

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(c)            In the event Landlord, prior to the Partial Lease Termination
Date, executes a lease with a tenant for all or a portion of the Seventh Floor
Premises (the “New Lease”), (i) Tenant shall remove all of its furniture,
furnishings, trade fixtures and equipment from the Seventh Floor Premises in
accordance with the provisions of Paragraph 2 above and (ii) Landlord or such
tenant, as applicable, shall have the right to commence construction of any
alterations and renovations to the improvements in the Sixth Floor Premises as
required under the New Lease.

 

                                (d)           Landlord’s entry into the Seventh
Floor Premises in accordance with the provisions of subparagraphs (b) and (c)
above shall in no way entitle Tenant nor shall Tenant have any claim or cause of
action against Landlord for an abatement or other credit of rent due to such
access or Tenant’s vacation of the Seventh Floor Premises prior to the Partial
Lease Termination Date.

 

6.             Default.  In the event prior to March 31, 2003, Tenant is in
default under any of the terms and conditions of the Lease then, unless Landlord
has relet the Seventh Floor Premises and such tenant has taken occupancy of the
Seventh Floor Premises and commenced paying rent with respect thereto (i) this
Agreement shall, at Landlord’s sole and exclusive option, terminate and all
rights, obligations, and liabilities of the parties hereunder shall be released
and discharged, and (ii) if Landlord so elects to terminate this Agreement,
Tenant shall continue to comply with its obligations, liabilities and
responsibilities under the Lease with respect to the Sixth Floor Premises and
the Seventh Floor Premises through the expiration of the Extended Lease Term. In
the event prior to March 31, 2003, Tenant is in default under any of the terms
and conditions of the Lease and Landlord has relet the Seventh Floor Premises
and such tenant has taken occupancy of the Seventh Floor Premises and commenced
paying rent with respect thereto then this Agreement shall remain in full force
and effect and Landlord shall have the right to pursue any and all of its rights
and remedies against Tenant with respect to the Sixth Floor Premises and the
Seventh Floor Premises, as applicable, in accordance with the terms and
provisions of the Lease, provided that any such recovery shall be appropriately
limited or reduced by any rental or other payments received from a third-party
by Landlord for the Seventh Floor Premises.

 

7.             Renewal.                Tenant’s right of renewal as set forth in
Paragraph 11 of the Lease Modification Agreement shall apply to the Sixth Floor
Premises and all references to the “Premises” therein shall be deemed to refer
to the Sixth Floor Premises only.

 

8.             Incorporation of Lease Terms. Except as expressly modified or
amended by this Partial Termination of Lease Agreement, all of the terms,
conditions, covenants and agreements contained in the Lease (i) are incorporated
herein by reference, (ii) shall remain in full force and effect and (iii) shall
be applicable to and binding upon Landlord and Tenant during the Extended Lease
Term.

 

9.             Broker.   Landlord and Tenant acknowledge that Tenant has engaged
Julien J. Studley (“Tenant’s Broker”) as its broker to assist in the
negotiations relating to this Agreement. Tenant shall be solely responsible for
and shall pay any fees or commissions due and owing to said broker pursuant to a
separate agreement between said broker and Tenant. Landlord and Tenant each
represents and warrants to the other, except as expressly provided in the
preceding sentence, that neither of them has employed or dealt with any broker,
agent or finder in carrying on the negotiations relating to this Agreement. 
Tenant shall indemnify and hold Landlord harmless from and against any claim or
claims for brokerage or other commissions asserted by any broker, agent or
finder engaged

 

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by Tenant or with whom Tenant has dealt in connection with this Agreement,
including, without limitation, Tenant’s Broker.

 

10.           Corporate Authority.           Tenant hereby represents and
warrants to Landlord that all necessary corporate action has been taken to enter
this Lease and that the person signing this Lease on behalf of Tenant has been
duly authorized to do so.

 

11.           Mutual Negotiation.            Landlord and Tenant each hereby
covenant and agree that each and every provision of this Agreement has been
jointly and mutually negotiated and authorized by both Landlord and Tenant and
in the event of any dispute arising out of any provision of this Lease, Landlord
and Tenant do hereby waive any claim of authorship against the other party.

 

12.           LENDER APPROVAL. THIS AGREEMENT SHALL BE SUBJECT TO AND CONTINGENT
ON LANDLORD’S RECEIVING THE APPROVAL NO LATER THAN FOURTEEN (14) CALENDAR DAYS
FROM THE DATE OF EXECUTION OF  THIS AGREEMENT OF ALL OF THE TERMS AND CONDITIONS
CONTAINED HEREIN BY TIAA, THE LENDER THAT IS THE BENEFICIARY OF THE DEED OF
TRUST ENCUMBERING THE OFFICE COMPLEX.  LANDLORD AGREES TO USE ITS REASONABLE
EFFORTS TO SECURE SUCH APPROVAL.  IF SUCH APPROVAL CANNOT BE OBTAINED, LANDLORD
SHALL NOTIFY TENANT, THIS AGREEMENT SHALL TERMINATE AND ALL RIGHTS, OBLIGATIONS,
AND LIABILITIES OF THE PARTIES HEREUNDER SHALL BE RELEASED AND DISCHARGED AND
TENANT SHALL CONTINUE TO COMPLY WITH ITS OBLIGATIONS, LIABILITIES AND
RESPONSIBILITIES UNDER THE LEASE THROUGH THE EXPIRATION OF THE EXTENDED LEASE
TERM.

 

13.           Release. Provided the conditions set forth in paragraphs 2, 3, 4 ,
5 and 6 hereof shall have been fully satisfied and except as  expressly provided
in such paragraphs 2, 3, 4, 5 and 6 hereof, commencing on the day after the
Partial Lease Termination Date, Tenant shall be relieved of all further
liability under the Lease and shall receive no further benefits (e.g. the right
to purchase parking permits in the Garage beneath the Office Complex or the
surface parking lots pursuant to Article XXIV of the Lease) with respect to the
Seventh Floor Premises only.

 

                14.           Notices. In addition to the notice to be sent to
Landlord at its offices in Washington DC, copies of all notices to Landlord or
other communications required in connection with the Lease shall be addressed to
Landlord in care of Boston Properties, Inc., Prudential Center, 111 Huntington
Avenue, Suite 300, Boston, Massachusetts 02199-7610.

 

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IN WITNESS WHEREOF, Landlord and Tenant have executed this Partial Lease
Termination Agreement as of the date and year first above written.

 

LANDLORD:

 

 

DEMOCRACY ASSOCIATES LIMITED
PARTNERSHIP, a Maryland limited partnership

 

 

By:

Boston Properties LLC, a Delaware limited
liability company, its General Partner

 

 

By:

Boston Properties Limited Partnership, a
Delaware limited partnership, its Managing
Member

 

 

By:

Boston Properties, Inc., a Delaware
corporation, its General Partner

 

 

 

 

 

By:

/s/ Raymond A. Ritchey

 

 

Raymond A. Ritchey, Executive

 

 

Vice President

 

 

 

 

TENANT:

 

 

E-CENTIVES, INC., a Delaware corporation

 

 

 

 

 

By:

/s/ David Samuels

 

 

David A. Samuels, SVP and CFO

 

 

 

 

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