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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