Document:

Exhibit
10.1

 

The Prudential
Tower

Prudential Center

Boston, Massachusetts 02199

(the “Building”)

 

FIRST AMENDMENT

 

Execution
Date:  October 7, 2004

 

	
   

  	
   

  	
  LANDLORD:

  	
   

  	
  BP Prucenter
  Acquisition LLC

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TENANT:

  	
   

  	
  The First Marblehead
  Corporation, a Delaware corporation

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  EXISTING PREMISES:

  	
   

  	
  The entirety of the
  thirty-fourth (34th) floor of the Building, containing 26,296
  rentable square feet, in accordance with the floor plan annexed to the Lease
  as Exhibit D

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  ORIGINAL LEASE DATA

  	
   

  	
  DATE OF LEASE:

  	
   

  	
  September 5, 2003

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  COMMENCEMENT DATE OF
  EXISTING PREMISES:

  	
   

  	
  December 1, 2003

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  RENT COMMENCEMENT DATE
  OF EXISTING PREMISES:

  	
   

  	
  April 1, 2004

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  TERMINATION DATE:

  	
   

  	
  March 31, 2014

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PREVIOUS LEASE
  AMENDMENTS:

  	
   

  	
  None

  

 

1

 

	
   

  	
   

  	
  FIRST AMENDMENT
  PREMISES:

  	
   

  	
  The entirety of
  the twenty-ninth (29th) floor of the Building, containing 25,676
  rentable square feet, substantially as shown on Exhibit A, First Amendment,
  Sheet 1, a copy of which is attached hereto and incorporated by reference
  herein

  

 

WHEREAS, Tenant desires
to lease additional Premises from Landlord, to wit, the First Amendment
Premises;

 

WHEREAS, Landlord is
willing to lease the First Amendment Premises to Tenant on the terms and conditions
hereinafter set forth;

 

NOW THEREFORE, the
above-described lease (the “Lease”) is hereby amended as follows:

 

1.                                       DEMISE
OF THE FIRST AMENDMENT PREMISES

 

Landlord hereby demises
and leases to Tenant and Tenant hereby hires and takes from Landlord, the First
Amendment Premises for a Term commencing as of the CD, as hereinafter defined
in Paragraph 1.A, and terminating as of March 31, 2014 (“Termination
Date”).  Said demise of the First
Amendment Premises shall be upon all of the terms and conditions of the Lease
(including, without limitation, (i) Tenant’s obligation to pay Annual Fixed
Rent, as hereinafter provided, (ii) Tenant’s obligation to pay Tax Excess, in
accordance with Section 6.2 of the Lease, and (iii) Tenant’s obligation to
pay Operating Cost Excess, in accordance with Section 7.5 of the Lease),
except as follows:

 

A.                                   The
Commencement Date in respect of the First Amendment Premises (“CD”) shall be
the first to occur of (a) the day on which the First Amendment Premises are
deemed to be substantially completed, as defined in Section 4.1(C) of the
Lease, based upon the performance of Landlord’s First Amendment Premises Work,
as defined in Section 2 below, or (b) the date upon which Tenant commences
use of the First Amendment Premises for business purposes (the parties hereby
agreeing that the installation of Tenant’s furniture, fixtures and equipment
shall not be considered to be business purposes).

 

B.                                     The
Rent Commencement Date in respect of the First Amendment Premises (“RCD”) shall
be the date six (6) months after the CD (“Fixed Rent Abatement Period”) (i.e.,
Tenant shall have no obligation to pay Annual Fixed Rent during the first (1st)
six (6) months of the Term of the Lease in respect of the First Amendment
Premises (“Abated Fixed Rent “). 
Notwithstanding anything to the contrary herein contained, if Tenant
defaults at any time during the Term of the Lease and fails to cure such
default

 

2

 

within any applicable
cure period under the Lease, all Abated Fixed Rent shall immediately become due
and payable.  The payment by Tenant of
the Abated Fixed Rent in the event of a default shall not limit or affect any
of Landlord’s other rights, pursuant to this Lease or at law or in equity.  During the Fixed Rent Abatement Period, only
Annual Fixed Rent payable in respect of the First Amendment Premises shall be
abated, and Tax Excess, Operating Cost Excess and all other costs and charges
specified in the Lease shall remain as due  and payable
pursuant to the provisions of the Lease. 
In the event that Tenant pays to Landlord the Abated Fixed Rent in
accordance with this Paragraph 1(B), then the monthly installments of Annual
Fixed Rent thereafter (i.e., after Tenant makes such payment) payable by Tenant
during the remainder of the initial Term of the Lease shall be reduced by the
Monthly Abated Fixed Rent Reduction, as hereinafter defined.  The “Monthly Abated Fixed Rent Reduction”
shall be defined as the amount of Abated Fixed Rent actually paid by Tenant to
Landlord, amortized a straight-line basis in equal monthly installments over
the remainder of the initial Term of the Lease.

 

C.                                     No
Annual Fixed Rent shall be payable in respect of the First Amendment Premises
prior to the RCD.  The Annual Fixed Rent
payable in respect of the First Amendment Premises for the period from and
after the RCD shall be as follows:

 

	
  Time
  Period

  	
   

  	
  Rent PSF

  	
   

  	
  Annual Fixed Rent

  	
   

  	
  Monthly Payment

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  RCD
  through the date 55 months(1) after the CD:

  	
   

  	
  $

  	
  39.50

  	
   

  	
  $

  	
  1,014,202.00

  	
   

  	
  $

  	
  84,516.84

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  The
  date 55 months after the CD through March 31, 2014:

  	
   

  	
  $

  	
  43.50

  	
   

  	
  $

  	
  1,116,906.00

  	
   

  	
  $

  	
  93,075.50

  	
   

  

 

D.                                    Base
Operating Expenses in respect of the First Amendment Premises means Operating
Expenses for the Building for calendar year 2005 (that is the period beginning
January 1, 2005 and ending December 31, 2005).

 

E.                                      Base
Taxes in respect of the First Amendment Premises means Landlord’s Tax Expenses
for fiscal tax year 2005 (that is the period beginning July 1, 2004 and
ending June 30, 2005).

 

F.                                      In
accordance with the provisions of Section 2.1 of the Lease, Landlord shall
have no right to relocate the First Amendment Premises prior to the third (3rd)
anniversary of the Rent Commencement Date in respect the Existing Premises.

 

(1) The fixed rent
adjustment date shall occur in the 55th month after the CD on the
same day of the month as the CD occurs. 
For example, if the CD occurs on January 15, 2005, then the Annual
Fixed Rent shall be increased from $1,014,202.00 to $1,116,906.00 effective as
of July 15, 2009.

 

3

 

G.                                     Tenant’s
Extension Options as set forth in Section 3.2 of the Lease, shall apply to
the First Amendment Premises.  The
parties hereby acknowledge that Tenant’s Extension Options may be exercised
with respect to (i) both the Existing Premises and the First Amendment
Premises, (ii) only the Existing Premises, or (iii) only the First Amendment
Premises.  If Tenant exercises its option
to extend the Term of the Lease for an Extended Term pursuant to
Section 3.2 of the Lease, then the Term of the Lease shall be extended
with respect to premises set forth in Tenant’s notice.  In the event Tenant exercises said option
with respect to only one of the premises, then the Term of the Lease shall
expire with respect to the other premises on the then Termination Date.

 

H.                                    In
the event that any of the provisions of the Lease are inconsistent with this
Amendment or the state of facts contemplated hereby, the provisions of this
Amendment shall control.

 

2.                                       CONDITION
OF FIRST AMENDMENT PREMISES

 

Landlord shall perform
the work (“Landlord’s First Amendment Premises Work”) necessary to prepare the
First Amendment Premises for Tenant’s occupancy (including renovation of the
bathrooms on the twenty-ninth (29th) floor) in accordance with all
of the terms and conditions set forth in Article IV of the Lease and
Exhibit B to the Lease, except as follows:

 

A.                                   Definitions.  With respect to Landlord’s First Amendment
Premises Work, the terms set forth in this Paragraph 2.A shall be defined as
follows:

 

	
  •
  Authorization to Proceed Date:

  	
   

  	
  September 28, 2004

  
	
   

  	
   

  	
   

  
	
  •
  Estimated Commencement Date:

  	
   

  	
  January 14, 2005

  
	
   

  	
   

  	
   

  
	
  •
  Outside Completion Date:

  	
   

  	
  January 14, 2006

  
	
   

  	
   

  	
   

  
	
  •
  Tenant’s Construction Representative:

  	
   

  	
  Robert Campbell

  
	
   

  	
   

  	
   

  
	
  •
  Landlord’s Construction Representative:

  	
   

  	
  Gretchen McGill

  

 

B.                                     Exhibit
B-1.  Exhibit B-1, First Amendment, a
copy of which is attached hereto shall apply to Landlord’s First Amendment
Premises Work in lieu of Exhibit B-1 attached to the Lease.

 

C.                                     Tenant’s
Termination Right in respect of First Amendment Premises.  Section 4.2 of the Lease shall have no
applicability to the First Amendment Premises or Landlord’s First Amendment
Premises Work, and in lieu thereof the following shall be substituted in its
place:

 

4

 

“If the Commencement Date
in respect of the First Amendment Premises shall not have occurred on or before
Outside Completion Date in respect of the First Amendment Premises (which Outside
Completion Date shall be extended automatically for such periods of time as
Landlord is prevented from proceeding with or completing the same by reason of
Force Majeure as defined in Section 14.1 of the Lease, as well as for any
Tenant Delay as defined in Section 4.1(B) of the Lease, without limiting
Landlord’s other rights on account thereof), Tenant shall have the right to
terminate the Lease in respect of the First Amendment Premises only (i.e.
Tenant’s termination right pursuant to this paragraph shall not affect Tenant’s
demise of the Existing Premises) by giving notice to Landlord of Tenant’s
desire to do so at any time before such completion and within the time period
from the Outside Completion Date in respect of the First Amendment Premises (as
so extended) until the date which is thirty (30) days subsequent to the Outside
Completion Date in respect of the First Amendment Premises (as so extended);
and, upon the giving of such notice, the Term of the Lease in respect of the
First Amendment Premises shall cease and come to an end, this First Amendment
shall be void and without further force or effect, and without further
liability or obligation on the part of either party under this First Amendment
or with respect to the First Amendment Premises, unless, within thirty (30)
days after receipt of such notice, the Commencement Date in respect of the
First Amendment Premises occurs.  Each
day of Tenant Delay shall be deemed conclusively to cause an equivalent day of
delay by Landlord in substantially completing Landlord’s First Amendment
Premises Work, and thereby automatically extend for each such equivalent day of
delay the date of the Outside Completion Date in respect of the First Amendment
Premises.  The remedies set forth in this
paragraph are Tenant’s sole and exclusive rights and remedies based upon any
delay in the performance of Landlord’s First Amendment Premises Work.”

 

E.                                      Special
Allowance in Respect of First Amendment Premises.  Landlord shall provide to Tenant a special
allowance in respect of the First Amendment Premises equal to $1,668,940.00,
being the product of (i) $65.00 and (ii) the Rentable Floor Area of the First
Amendment Premises (“First Amendment Tenant Allowance”).  The First Amendment Tenant Allowance shall be
paid upon all of the same terms and conditions set forth in Section 4.4 of
the Lease.  Landlord hereby acknowledges
that Tenant may apply up to twenty percent (20%) of the First Amendment Tenant
Allowance towards the payment of various “soft” costs (including, without limitation,
wiring and cabling costs, telecommunications costs, business wire services
costs, architectural and engineering fees, general construction fees and
management fees) incurred by Tenant in connection with the preparation of the
First Amendment Premises for Tenant’s occupancy.

 

F.                                      Bathroom
Allowance in Respect of First Amendment Premises.  Landlord shall provide to Tenant an allowance
to be used for the renovation of the bathrooms in the First Amendment Premises
of up to $134,000.00 (“Bathroom Allowance”). 
The Bathroom Allowance shall be paid upon all of the same terms and
conditions set forth in Section 4.4 of the Lease, except that the only
costs which may be reimbursed from the Bathroom Allowance shall be those costs
related to the renovation of the bathrooms in the First Amendment Premises.

 

5

 

G.                                     Potential
Verizon Strike. 
Section 4.1(C)(6) of the Lease shall have no applicability to
Landlord’s First Amendment Premises Work.

 

H.                                    Payment
of Tenant Plan Excess Costs.  Tenant
shall be obligated to pay all Tenant Plan Excess Costs in respect of the
Landlord’s First Amendment Premises Work in accordance with Section 4.5 of
the Lease, except as follows:

 

(i)                                     Maximum
Amount, as defined in Section 4.5 of the Lease, with respect to Landlord’s
First Amendment Premises Work shall be $513,520.00 (being the product of (i)
$20.00 and (ii) the Rentable Floor Area of the First Amendment Premises) rather
than $525,920.00;

 

(ii)                                  In
the second (2nd) paragraph of Section 4.5 of the Lease, (i) the
phrase “one hundred twenty-three (123) months” is deleted and the phrase “the
number of full calendar months between the RCD and March 31, 2014” is
substituted in its place, and (ii) the phrase “one hundred twenty-three (123)
monthly payments” is deleted and the phrase “in equal monthly payments” is
substituted in its place; and

 

(iii)                               The
last sentence of the second (2nd) paragraph of Section 4.5 of
the Lease is deleted in its entirety.

 

I.                                         Initial
Fit Allowance.  Section 4.4(D) of
the Lease shall have no applicability to Landlord’s First Amendment Premises
Work.  However, Landlord agrees to
provide Tenant with an allowance (“First Amendment Premises Fit Allowance”) of
up to $2,567.60, being the product of ((i) $0.10 and (ii) the Rentable Floor
Area of the First Amendment Premises toward the cost of the initial fit plans
for the First Amendment Premises.

 

3.                                       RIGHT
OF FIRST OFFER

 

A                                      Subject
to the provisions of this Paragraph 3 (including, without limitation,
Subparagraph F of this Paragraph 3), provided that at the time that any portion
of the RFO Space, as hereinafter defined, first becomes available for reletting
(i) there exists no “Event of Default” (defined in Section 15.1 of the
Lease), (ii) this Lease is still in full force and effect, and (iii) Tenant has
neither assigned this Lease nor sublet more than twenty percent (20%) of the
Rentable Floor Area of the Premises (except for an assignment or subletting
permitted without Landlord’s consent under Section 12.2 of the Lease), Landlord
agrees not to enter into a lease to relet such portion of the RFO Space without
first giving to Tenant an opportunity to lease such space as hereinafter set
forth.

 

B.                                     The
“RFO Space” shall be defined as the twenty-sixth (26th) and
twenty-seventh (27th) floors of the Building.  The RFO Space is presently leased to another
tenant, The Gillette Company (“Gillette”), pursuant to a lease with Landlord,
the term of which expires as of December 31, 2009, with Gillette having
the right to further extend

 

6

 

the term of such
lease.  Any portion of the RFO Space
shall be deemed to be “available for reletting” when Landlord, in its sole
judgment, determines that: (x) such portion of the RFO Space will be vacated by
Gillette, and anyone claiming through Gillette, and (y) Landlord intends to
offer such area for lease.  Tenant
acknowledges that Gillette may surrender the entire RFO Space to Landlord at
the same time, or Gillette may surrender portions of the RFO Space at different
times.  All portions of the RFO Space
which are surrendered to Landlord at the same time shall be deemed to be
available for reletting by Tenant at such time (i.e. and Tenant shall have the
option to lease the entirety, but not less than the entirety, of the portions
of the RFO Space so surrendered by Gillette).

 

C.                                     When
Landlord determines that any portion of the RFO Space becomes so available for
reletting, Landlord shall notify Tenant of the availability of such space, the
date when Landlord estimates that the Commencement Date in respect of such
portion of the RFO Space will occur, and Landlord’s designation of the
Prevailing Market Rent applicable to such portion of the RFO Space (“Landlord’s
Notice”).  If Tenant wishes to exercise
Tenant’s right of first offer, Tenant shall do so, if at all, by giving
Landlord notice (“Tenant’s RFO Exercise Notice”) of Tenant’s desire to lease
the entire amount of such space on the terms set forth in this Paragraph 3
herein within fifteen (15) days after receipt of Landlord’s Notice to Tenant,
time being of the essence.  If Tenant and
Landlord do not agree upon the Prevailing Market Rent applicable to the RFO
Space, then, provided that Tenant has timely given Tenant’s RFO Exercise
Notice, Tenant shall have the right to submit such Prevailing Market Rent to
Broker Determination in accordance with Exhibit H attached to the Lease.   If Tenant shall fail to timely give Tenant’s
RFO Exercise Notice with respect to any portion of the RFO Space, time being of
the essence in respect to such exercise, Tenant shall have no further right to
lease such portion of the RFO Space.

 

D.                                    The
leasing to Tenant of any portion of the RFO Space shall be upon all of the same
terms and conditions of the Lease applicable to the Premises initially demised
to Tenant, except as follows:

 

(1)                                  Commencement
Date

 

The Commencement
Date in respect of any portion of the RFO Space shall be the later of:  (x) the estimated Commencement Date in
respect of such portion of the RFO Space as set forth in Landlord’s Notice, or
(y) the date that Landlord delivers such portion of the RFO Space to Tenant.

 

(2)                                  Rent
Commencement Date

 

The Rent
Commencement Date in respect of any portion of the RFO Space shall be the
earlier of: (x) the date ninety (90) days after the Commencement Date in
respect of such portion of the RFO Space, or (y) the date that Tenant commences
to use such portion of the RFO Space (or

 

7

 

any portion of such portion of the RFO Space) for business purposes.

 

(3)                                  Termination
Date

 

The Termination
Date in respect of the RFO Space shall be the Termination Date of the Term of
the Lease in respect of the Existing Premises.

 

(4)                                  Annual
Fixed Rent

 

The Annual Fixed
Rent in respect of such portion of the RFO Space shall be based upon the
Prevailing Market Rent, as defined in Exhibit H attached to the Lease, of such
portion of the RFO Space as of the Commencement Date in respect of such portion
of the RFO Space.  Tenant may only
request a Broker Determination of the Prevailing Market Rent at the time that
Tenant unconditionally gives Tenant’s RFO Exercise Notice with respect to such
portion of the RFO Space.  Without
limiting any other factors which may be taken into account in determining such
Prevailing Market Rent, such Prevailing Market Rent shall take into account:
(x) the fact that the Rent Commencement Date in respect of such portion of the
RFO Space may be ninety (90) days after the Commencement Date in respect of
such portion of the RFO Space, and (y) the fact that, unless otherwise agreed
to by the parties in writing, Tenant will, in accordance with Paragraph 3D(5),
be taking the RFO Space “as-is”, without any obligation on the part of Landlord
to provide any allowance or contribution to Tenant towards the preparation of
such portion of the RFO Space for Tenant’s occupancy.   If the Broker Determination with respect to
a Prevailing Market Rent has not been resolved before the commencement of
Tenant’s obligation to pay rent based upon such Prevailing Market Rent, then
Tenant shall pay Annual Fixed Rent and other charges under the Lease in respect
of the premises in question based upon the Prevailing Market Rent designated by
Landlord until either the agreement of the parties as to the Prevailing Market
Rent, or the decision of the Brokers, as the case may be, at which time Tenant
shall pay any underpayment of rent and other charges to Landlord, or Landlord
shall refund any overpayment of rent and other charges to Tenant.

 

(5)                                  Condition
of RFO Space

 

Tenant shall take
each portion of the RFO Space “as-is” in its then (i.e. as of the date of
premises delivery) state of construction, finish, and decoration, without any
obligation on the part of Landlord to construct or prepare such portion of the RFO
Space for Tenant’s occupancy, and without any obligation on the part of
Landlord to provide any allowance or

 

8

 

contribution towards the preparation of such portion of the RFO Space
for Tenant’s occupancy.

 

(6)                                  Parking

 

Landlord shall
provide to Tenant one (1) unreserved parking space per 2,000 square feet of
Rentable Floor Area of each portion of the RFO Space effective as of the
Commencement Date in respect of such portion of the RFO Space.  Tenant shall not be entitled to any reserved
parking spaces based upon its demise of the RFO Space.  Tenant’s use of such parking spaces shall be
on all of the same terms and conditions as are applicable to the unreserved
parking spaces provided to Tenant in connection with the Premises in initially
demised to Tenant, as set forth in Article X of the Lease.

 

(7)                                  Base
Years

 

Base Taxes in respect of each portion of the RFO Space shall be defined
as Landlord’s Tax Expenses for the fiscal tax year in which the Commencement
Date in respect of such portion of the RFO Space occurs. Base Operating
Expenses in respect of each portion of the RFO Space shall be defined as
Operating Expenses for the Building for the calendar year in which the
Commencement Date in respect of such portion of the RFO Space occurs, adjusted
to 95% occupancy in accordance with the provisions of Section 7.4 of the
Lease.

 

E.                                      If
Tenant shall exercise any such right of first offer and if, thereafter, the
then occupant of any portion of the RFO Space wrongfully fails to deliver
possession of such premises at the time when its tenancy is scheduled to
expire, commencement of the term of Tenant’s occupancy and lease of such
additional space shall, in the event of such holding over by such occupant, be
deferred until possession of the additional space is delivered to Tenant.  The failure of the then occupant of such
premises to so vacate shall not constitute or default or breach by Landlord and
shall not give Tenant any right to terminate this Lease or to deduct from,
offset against or withhold Annual Fixed Rent or additional rent (or any
portions thereof). However, Landlord agrees to use good faith efforts (which
shall be limited to the commencement and prosecution of eviction proceedings
but shall not require the taking of any appeal) to cause the then occupant of
the RFO Space to vacate such space when its tenancy expires.

 

F.                                      Notwithstanding
anything to the contrary herein contained, if the estimated Commencement Date
with respect to an RFO Space is on or after the date which is three (3) years
prior to the scheduled termination date of the Lease, then Tenant shall have no
right to lease such RFO Space unless: (i) Tenant has the right, pursuant to
Section 3.2 of the Lease, to extend the Term of the Lease in respect of
both the Existing Premises and First Amendment Premises for at least one
additional Extended Term which is not yet

 

9

 

lapsed unexercised, and
(ii) Tenant, at the time that Tenant gives Tenant’s Exercise Notice with
respect to such RFO Space, gives Tenant’s Extension Exercise Notice pursuant to
Section 3.2 of the Lease, extending the Term of the Lease for such
Extended Term in respect of both the Existing Premises and First Amendment
Premises.  If Tenant exercises its right
to extend the Term for such Extended Term pursuant to this Paragraph 3F, then,
notwithstanding anything to the contrary in Section 3.2 or elsewhere in
the Lease contained:

 

•                  Landlord
agrees that Tenant shall have the right to give Tenant’s Extension Exercise
Notice with respect to such Extended Term prior to the date fifteen (15) months
prior to the expiration of the Term of the Lease;

•                  Tenant
shall have no right to request, and Landlord shall not be required to give,
Landlord’s Rent Quotation with respect to such Extended Term prior to the time
that Tenant is required to give such Tenant’s Exercise Notice; and

•                  Landlord
may give Landlord’s Rent Quotation at any time after the date fifteen (15)
months prior to the expiration of the Term of the Lease, but prior to the
commencement of such Extended Term (Tenant hereby acknowledging that Tenant
shall be deemed to unconditionally have exercised its right to extend the Term
for such Extended Term in respect of both the Existing Premises and First
Amendment Premises after it has given Tenant’s Extension Exercise Notice even
though it has not received any Landlord’s Rent Quotation and the parties may
not have entered into any negotiations as to the Annual Fixed Rent payable with
respect to such Extended Term), and,  if
Landlord has not already given Landlord’s Rent Quotation to Tenant, Landlord
shall, within thirty (30) days after Landlord’s receipt of Tenant’s request
therefore made after the date fifteen (15) months prior to the expiration of
the Term of the Lease, give Landlord’s Rent Quotation to Tenant.

 

G.                                     Execution
of Lease Amendments

 

Notwithstanding
the fact that Tenant’s exercise of the above-described option to lease any
portion of the RFO Space shall be self-executing, as aforesaid, the parties
hereby agree promptly to execute a lease amendment reflecting the addition of
any portion of the RFO Space, except that the Annual Fixed Rent payable in
respect of such portion of the RFO Space may not be as set forth in such
Amendment.  At the time that such Annual
Fixed Rent is determined, the parties shall execute a written agreement
confirming the same.  The execution of
such lease amendment shall not be deemed to waive any of the conditions to Tenant’s
exercise of its right of first offer, unless otherwise specifically provided in
such lease amendment.

 

4.                                       EXPANSION
OPTION

 

Provided that there is no
Event of Default by Tenant, Tenant shall have the option to lease the entirety
of the twenty-eighth (28th) floor of the Building (“Expansion
Area”).  The Expansion Area contains
approximately 25,676 rentable square feet, and is

 

10

 

substantially as shown on
Exhibit A, First Amendment, Sheet 2. 
Landlord hereby represents to Tenant that the Expansion Area is
presently occupied by Constellation New Energy, Inc. (“Existing Occupant”) and
the Landlord expects that the Expansion Area will be available for occupancy by
Tenant as of January 1, 2010 because the Existing Occupant’s lease expires
as of December 31, 2009.

 

A.                                   Exercise
of Rights to Expansion Areas

 

Tenant may exercise its
option to lease the Expansion Area by giving written notice (“Exercise Notice”)
to Landlord on or before December 1, 2008. 
If Tenant fails timely to give such notice, Tenant shall have no further
right to lease such Expansion Area, time being of the essence of this Paragraph
4.  Upon the timely giving of such
notice, Landlord shall lease and demise to Tenant, and Tenant shall hire and
take from Landlord, such Expansion Area, without the need for further act or
deed by either party, for the term and upon all of the same terms and
conditions of this Lease, except as hereinafter set forth.

 

B.                                     Lease
Provisions Applying to Expansion Area

 

The leasing to Tenant of
the Expansion Area shall be upon all the same terms and conditions of the Lease
except as follows:

 

(1)                                  Commencement
Date

 

The Commencement Date in
respect of the Expansion Area shall be the later of: (x) January 1, 2010,
or (y) the date that the Existing Occupant, and anyone claiming under the
Existing Occupant, vacates the Expansion Area and delivers the Expansion Area
to Landlord.

 

(2)                                  Rent
Commencement Date

 

The Rent Commencement
Date in respect of the Expansion Area shall be the earlier of: (x) the date
ninety (90) days after the Commencement Date in respect of the Expansion Area,
or (y) the date that Tenant commences to use the Expansion Area (or any portion
of the Expansion Area) for business purposes.

 

(3)                                  Annual
Fixed Rent

 

Annual Fixed Rent in
respect of the Expansion Area shall be based upon the Prevailing Market Rent,
as defined in Exhibit H attached to the Lease, of the Expansion Area as of the
Commencement Date in respect of the Expansion Area. Without limiting any other
factors which may be taken into account in determining such Prevailing Market
Rent, such Prevailing Market Rent shall take into account: (x) the fact that
the Rent Commencement Date in respect of such portion of the Expansion Area may
be ninety (90) days after the Commencement Date in respect of such portion of
the

 

11

 

Expansion Area, and (y)
the fact that, unless otherwise agreed to by the parties in writing, Tenant
will, in accordance with Paragraph 4B(6), be taking the Expansion Area “as-is”,
without any obligation on the part of Landlord to provide any allowance or
contribution to Tenant towards the preparation of such portion of the Expansion
Area for Tenant’s occupancy.

 

(4)                                  Base
Operating Expenses in respect of the Expansion Area means Operating Expenses
for the Building for calendar year 2010, adjusted to 95% occupancy in
accordance with the provisions of Section 7.4 of the Lease.

 

(5)                                  Base
Taxes in respect of the Expansion Area means Landlord’s Tax Expenses for fiscal
tax year 2010 (that is the period beginning July 1, 2009 and ending
June 30, 2010).

 

(6)                                  Condition
of Expansion Area

 

The Expansion Area shall
be delivered by Landlord and accepted by Tenant “as-is”, in its then (i.e. as
of the Commencement Date in respect of the Expansion Area), state of
construction, finish and decoration, without any obligation on the part of
Landlord to prepare or construct the Expansion Area for Tenant’s occupancy. In
implementation of the foregoing, Landlord shall have no obligation to provide
any allowance in respect of such Expansion Area.

 

C.                                     Notwithstanding
the fact that Tenant’s exercise of the above-described expansion option shall
be self-executing, as aforesaid, the parties hereby agree promptly to execute a
lease amendment reflecting the addition of the Expansion Area, except that the
Annual Fixed Rent payable in respect of such Expansion Area shall not be as set
forth in such Amendment. Subsequently, after such Annual Fixed Rent is
determined, the parties shall execute a written agreement confirming the
same.  The execution of such lease
amendment shall not be deemed to waive any of the conditions to Tenant’s
exercise of the herein expansion options, unless otherwise specifically
provided in such lease amendment.

 

5.                                       ALLOCATION
OF ELECTRICITY CHARGES IN RESPECT OF THE FIRST AMENDMENT PREMISES

 

The First Amendment
Premises shall be separately metered for electricity, as part of Landlord’s
First Amendment Premises Work, and Tenant shall pay for all electricity charges
in respect of the First Amendment Premises directly to the supplier of the
same.

 

12

 

6.                                       SECURITY
DEPOSIT

 

The parties hereby
acknowledge that Landlord is holding a Letter of Credit in the amount of Five
Hundred Thousand and 00/100 ($500,000.00) Dollars, pursuant to
Section 16.26 of the Lease and subject to reduction in accordance with
Section 16.26 of the Lease.  The
parties hereby further acknowledge that Landlord shall continue to hold said
Letter of Credit throughout the Term of the Lease, pursuant to and in
accordance with said Section 16.26 of the Lease.

 

7.                                       PARKING
PRIVILEGES IN RESPECT OF FIRST AMENDMENT PREMISES.

 

In addition to the
Parking Privileges granted to Tenant pursuant to Article X of the Lease,
Landlord shall provide to Tenant, in respect of the First Amendment Premises,
monthly parking privileges (“Additional Parking Privileges”) in the Prudential
Center Garage (the “Garage”) for seventeen (17) passenger automobiles for the
parking of motor vehicles, fifteen (15) in unreserved stalls and two (2) in
reserved stalls, in the Garage by Tenant’s employees commencing on the
Commencement Date in respect of the First Amendment Premises.  Tenant’s reserved parking stalls shall be as
shown on Exhibit B attached hereto.  
Said Additional Parking Privilege shall be upon all of the same terms
and conditions set forth in said Article X, except that the second (2nd),
third (3rd) and fourth (4th) sentences of
Section 10.1 of the Lease shall not apply to the Additional Parking
Privileges.

 

8.                                       SIGNAGE

 

Tenant shall have the
right, subject to Landlord’s prior written approval, which approval shall not
be unreasonably withheld, to install a logo sign in the twenty-ninth (29th)
floor elevator lobby.  The parties hereby
acknowledge that Tenant’s current logo installed in the elevator lobby of the
thirty-fourth (34th) floor is acceptable to Landlord.

 

9.                                       STORAGE
SPACE; GENERATOR SPACE

 

A.                                   Sections
16.31A and B of the Lease are hereby deleted and the following is substituted
in their place:

 

B.                                     Tenant
shall have the right, by written election given to Landlord not more than one
hundred twenty (120) days after the CD, to license up to 3,000 rentable square
feet in the aggregate of dry storage space (“Additional Storage Space”) at a
location or locations designated by Landlord within the Prudential Center.  The Additional Storage Space need not be
contiguous, but each portion of the Additional Storage Space must be useable
for storage purposes for items typically stored in connection with office
uses.  Tenant shall pay a fee for such
Additional Storage Space at the rate of $15.00 per rentable square foot per
annum, increased by the increase in the Consumer Price Index every three (3)
years.  Tenant shall not be obligated to
pay Operating Expenses Excess or Tax Excess

 

13

 

with respect to such
Additional Storage Space.  Landlord shall
not be obligated to provide any services to such Additional Storage Space.  Upon Tenant’s election to license such Additional
Storage Space, the parties shall enter into Landlord’s standard form of license
agreement therefor.

 

C.                                     Tenant
shall have the right, by written election given to Landlord not more than one
hundred twenty (120) days after the CD, to license up to 72 rentable square
feet of space for an emergency generator (“Additional Generator Space”) at a
location designated by Landlord within the Prudential Center.  Tenant shall pay a fee for such Additional
Generator Space at the rate of $20.00 per rentable square foot per annum,
increased by the increase in the Consumer Price Index every three (3)
years.  Tenant shall not be obligated to
pay Operating Expenses Excess or Tax Excess with respect to such Additional
Generator Space.  Landlord shall not be
obligated to provide any services to such Additional Generator Space.  Any generator to be installed by Tenant in
the Additional Generator Space shall be subject to Landlord’s reasonable
approval, and Tenant shall be responsible for the installation and maintenance
thereof in accordance with all applicable laws, including without limitation
obtaining and maintaining any required permits. 
Upon Tenant’s election to license such Additional Generator Space, the
parties shall enter into Landlord’s standard form of license agreement
therefor.

 

10.                                 BROKERAGE.

 

(A)                              Tenant
warrants and represents that Tenant has not dealt with any broker in connection
with the consummation of this First Amendment other than The Codman Company,
(the “Broker”), and in the event any claim is made against the Landlord
relative to Tenant’s dealings with brokers other than the Broker, Tenant shall
defend the claim against Landlord with counsel of Tenant’s selection, subject
to Landlord’s reasonable approval, and save harmless and indemnify Landlord on
account of loss, cost or damage which may arise by reason of such claim.

 

(B)                                Landlord
warrants and represents that Landlord has not dealt with any broker in
connection with the consummation of this First Amendment other than the Broker,
and in the event any claim is made against the Tenant relative to Landlord’s
dealings with brokers other than the Broker, Landlord shall defend the claim
against Tenant with counsel of Landlord’s selection, subject to Tenant’s
reasonable approval, and save harmless and indemnify Tenant on account of loss,
cost or damage which may arise by reason of such claim.

 

(C)                                Landlord
agrees that it shall be solely responsible for the payment of brokerage
commissions to the Broker.

 

14

 

11.                                 TENANT
PLAN EXCESS COSTS AND MONTHLY IMPROVEMENT COST PAYMENTS IN RESPECT OF EXISTING
PREMISES

 

The parties confirm and
agree that the total amount of Tenant Plan Excess Costs in respect of
Landlord’s Work in respect of the Existing Premises was $525,920.00 and that
the amount of Monthly Improvement Costs Payments payable by Tenant to Landlord
in respect of the Existing Premises during the initial Term of the Lease is
$6,561.91.

 

12.                                 INTERNAL
STAIRWAY

 

If, at any time during
the Term, Tenant is leasing space in the Building that is vertically
contiguous, then Tenant shall have the right to construct, at Tenant’s expense
or as part of a tenant improvement package from Landlord, an internal stairwell
connecting the vertically contiguous spaces. 
Such work shall be governed by the provisions of Article IX of the
Lease.  Tenant’s use of such internal
stairwell shall be conditioned upon the following:

 

(A)                              Tenant
shall maintain its improvements in such internal stairwell in good condition,
reasonable wear and tear, fire and other casualty excepted, throughout the Term
of the Lease.

 

(B)                                Tenant
shall, upon expiration or prior termination of the Term of the Lease, remove
all improvements made by Tenant in such internal stairwell, and restore such
internal stairwell to the condition in which it was in immediately prior to the
making of such improvements.

 

(C)                                Tenant
shall obtain all governmental approvals necessary for the use of such
stairwell.

 

(D)                               Tenant’s
use of the internal stairwell shall be solely for the purpose of pedestrian
egress and ingress.

 

(E)                                 Tenant
shall indemnify, defend and hold Landlord harmless, from and against all loss,
cost or damage arising from Tenant’s use of such stairwell.

 

(F)                                 Tenant
shall install such security measures are reasonably required by Landlord or
which are required by law in connection with Tenant’s use of such stairwell.

 

13.                                 CONDITION
OF LANDLORD’S EXECUTION

 

The parties hereby
acknowledge that Landlord is only willing and able to execute this First
Amendment if Digitas agrees to terminate the term of its lease in respect of
the First Amendment Premises.  Therefore,
if, on or before the date forty-five (45) days after the Execution Date of this
First Amendment, Landlord does not enter into in agreement, in form and
substance acceptable to Landlord, in its sole discretion, with Digitas agreeing

 

15

 

to terminate the
term of its lease in respect of the First Amendment Premises, both parties
shall have the right, exercisable upon written notice to the other party, to
render this First Amendment void and without further force or effect.

 

14.                                 As
hereby amended, the Lease is ratified, confirmed and approved in all respects.

 

EXECUTED under seal as of
the date first above-written.

 

	
  LANDLORD:

  	
  TENANT:

  
	
  BP PRUCENTER
  ACQUISITION LLC

  	
  THE FIRST MARBLEHEAD

  
	
  By:

  	
  Boston Properties
  Limited Partnership,

  	
  CORPORATION

  
	
   

  	
  a Delaware limited
  partnership

  	
   

  
	
   

  	
  Its:

  	
  Manager

  	
  By:

  	
  /s/ Donald R. Peck

  	
   

  
	
   

  	
   

  	
   

  	
  Name:

  	
  Donald R. Peck

  	
   

  
	
   

  	
  By:

  	
  Boston Properties,
  Inc., a

  	
   

  	
  Title:

  	
  Executive Vice
  President and  

  	
   

  
	
   

  	
   

  	
  Delaware corporation

  	
   

  	
   

  	
  Chief Financial Officer

  
	
   

  	
   

  	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ David C. Provost

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  David C. Provost

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  Senior Vice President

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  Hereunto Duly
  Authorized

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Date Signed:

  	
  10/7/04

  	
   

  	
  Date Signed:

  	
  10/7/04

  	
   

  
															

 

16

 

EXHIBIT A, FIRST
AMENDMENT, SHEET 1

 

FIRST AMENDMENT
PREMISES PLAN

 

17

 

EXHIBIT A, FIRST
AMENDMENT, SHEET 2

 

EXPANSION AREA

 

18

 

EXHIBIT B-1, FIRST
AMENDMENT

 

PLANS AND CONSTRUCTION
SCHEDULE

 

	
  Permit/GMP Plans (i.e., a set of plans sufficiently
  detailed to permit Landlord to apply for all permits and approvals necessary
  for the performance of Landlord’s Work and to permit Landlord to obtain
  guaranteed maximum price bid(s) for the cost of Landlord’s Work).  These plans will also be used to generate
  the list of, and associated costs for, long lead time items.

  	
   

  	
  September 3,
  2004

  
	
   

  	
   

  	
   

  
	
  Construction Drawings (i.e., full construction
  drawings for the performance of Landlord’s Work, based on the approved GMP
  Plans)

  	
   

  	
  September 17,
  2004

  
	
   

  	
   

  	
   

  
	
  Long Lead Items Release Date

  	
   

  	
  September 17,
  2004

  
	
   

  	
   

  	
   

  
	
  Authorization to Proceed Date

  	
   

  	
  September 28,
  2004

  

 

19Exhibit
10.1

 

EMPLOYMENT
AGREEMENT

 

THIS EMPLOYMENT AGREEMENT is made as of July 21, 2004 among DPL
INC., an Ohio corporation (“DPL”), The Dayton Power and Light Companies, an
Ohio corporation (“DP&L”; and, collectively with DPL, the “Companies”) and
Robert Biggs (“Executive”) under the following circumstances:

 

A.                                   DPL
is a holding company headquartered in Dayton, Ohio, having as its principal
subsidiary DP&L.

 

B.                                     Executive is currently the acting
non-executive Chairman of the Board of Directors of the DPL and DP&L;

 

C.                                     Executive has rendered extraordinary
services to the Companies in the preceding months and has had to forgo certain
benefits from his prior employer in connection with his employment hereunder;
and

 

D.                                    The Companies and Executive believe that
it is in the best interests of the Companies for Executive to assume the duties
of Executive Chairman of DPL and DP&L; and

 

E.                                      Subject to the terms and considerations
hereinafter set forth, the Companies wish to employ Executive in the positions
set forth herein and Executive wishes to accept such employment.

 

NOW, THEREFORE, the
parties agree as follows:

 

Section 1.  Employment and Duties.  The Companies hereby employ Executive and
Executive hereby accepts such employment, as an executive of the Companies,
subject to the terms and conditions set forth in this Agreement.  Executive shall serve as Executive Chairman
of the Boards of Directors of DPL and DP&L and shall properly perform such
duties as may reasonably be assigned to him from time to time by each such
Board of Directors.  If requested by the
Companies’ Boards of Directors, Executive shall serve on any committee of the
Companies’ Boards of Directors without additional compensation.  During the Term of this Agreement, Executive
shall devote such time as Executive and Companies’ Boards of Directors deem
necessary for the performance of Executive’s duties hereunder.

 

Section 2.  Term.  The term of this Agreement (the “Term”) shall commence on May 16,
2004 (the “Effective Date”) and shall continue until the second anniversary of
the Effective Date; provided that the Term shall automatically be extended for
successive one-year periods unless either party shall give the other at least
ninety (90) days written notice of its intention not to extend the Term.

 

 

Section 3.  Compensation.  As compensation for his services hereunder,
Executive shall receive the following:

 

(a)                                  Base
Salary.  During the Term,
the Companies shall pay to Executive an annual base salary of Two Hundred Fifty
Thousand Dollars ($250,000) for his services hereunder.  Executive’s base salary, as in effect at any
time, is hereinafter referred to as the “Base Salary.”  Executive’s Base Salary shall be paid in substantially
equal installments on a basis consistent with the Companies’ payroll practices.

 

(b)                                 Participation
in MICP.  For each
calendar year during the Term (commencing with calendar year 2004), Executive
shall be eligible to receive an annual bonus under the Companies’ Management
Incentive Compensation Plan (“MICP”) in an amount, if any, determined by the
Board of Directors of DPL in its discretion.

 

(c)                                  Stock
Options.  DPL shall grant
to Executive an option to purchase 200,000 common shares of DPL (the “Option”)
under the DPL Inc. Stock Option Plan (the “Option Plan”).  The per share exercise price of the Option
will be the Fair Market Value (as defined in the Option Plan) on the Effective
Date. The Option will become vested and exercisable as to 50% of the shares
subject thereto on each of the first two anniversaries of the Effective Date;
provided that the Option shall become fully vested and exercisable upon the
consummation of a Change of Control (as defined below).  The Option shall be exercisable for a period
of five years from the date(s) it becomes vested.  In connection with Executive’s exercise of the Option at any time
during which Executive is employed by or serving as a director of either of the
Companies, Executive may sell a sufficient number of DPL shares to satisfy any
exercise price and income taxes arising in connection with such exercise.  However, Executive agrees that he will hold
any DPL shares delivered in connection with the exercise of the Option, which
remain after giving effect to the foregoing sentence, until the earlier of (i)
the first anniversary of the date of exercise or (ii) the first date on which
he is neither an employee nor a director of either of the Companies.

 

(d)                                 Annuity.  As soon as practicable following the
Effective Date, in consideration of the existing pension benefits foregone by
Executive to accept employment hereunder, DPL shall purchase an annuity for the
benefit of the Executive that provides the Executive with a lifetime annual
benefit of $71,000 and that includes a joint and survivor benefit feature that
provides thirty [30] percent of the amount of Executive’s annual annuity
benefit to his surviving spouse for her lifetime.  In addition, DPL shall pay Executive an amount in respect of any
income taxes incurred by Executive as a result of its provision of the annuity
to Executive (the “Annuity Taxes”) such that after payment of the Annuity Taxes
and any additional taxes as a result of the additional payments provided for in
this sentence, Executive is in the same position as if no Annuity

 

2

 

Taxes had been incurred
(such a payment in respect of a tax liability by Executive incurred under this
Agreement shall hereinafter be referred to as a “Tax Gross Up”).

 

(e)                                  Benefits.  During the Term, Executive shall be entitled
to receive such fringe benefits as are generally made available to non-employee
directors of the Companies in accordance with the plans, practices, programs
and policies of the Companies in effect from time to time.  In addition, during the Term, the Companies
shall provide Executive with a term life insurance policy with a death benefit
of $500,000.

 

Section 4.  Dayton Residence and Automobile.  During the Term, the Companies shall
provide, at their expense, such place of residence and automobile for
Executive’s use while in Dayton, Ohio as Executive and the Companies may
reasonably agree.  In addition, the
Companies shall pay Executive a Tax Gross Up in respect of such residence and
automobile.

 

Section 5.  Expenses; Corporate Aircraft.  The Companies shall reimburse Executive for
all reasonable out-of-pocket expenses properly incurred by him in connection
with the performance of his duties hereunder in accordance with the policies
established from time to time by the Companies.  In addition, the Companies shall provide Executive with the use
of corporate aircraft in connection with Executive’s travel between Dayton and
Executive’s home in Florida and shall pay the Executive a Tax Gross Up in
respect of such use.  Other use of
corporate aircraft shall be in accordance with the policies of the Companies.

 

Section 6.  Withholding.  The Companies may withhold from any amounts payable to Executive
hereunder such federal, state or local taxes or other amounts as the Companies
shall be required to withhold pursuant to applicable law.

 

Section 7.  Termination.  (a)  Executive’s
employment with the Companies may be terminated at any time, with or without
Cause, by either the Companies or Executive upon ninety [90] days’ prior
written notice; provided this Agreement and Executive’s employment with the
Companies may be terminated by the Companies for Cause without prior
notice.  In addition, this Agreement and
Executive’s employment with the Companies shall automatically terminate upon
Executive’s death or Disability.

 

(b)  Upon the termination of Executive’s
employment with the Companies, there shall be no further liability on the part
of either party, other than based upon its obligations under this Agreement.

 

(c)  Any termination of Executive’s employment
with the Companies, other than due to Executive’s death or due to expiration of
the term, shall be communicated by a Notice of Termination. For this purpose, a
“Notice of Termination” means a written notice given by the Companies to
Executive or by Executive to the Companies which (i) indicates the specific
termination provision(s) relied upon, (ii) to the extent applicable, sets forth
in reasonable detail

 

3

 

the facts and
circumstances claimed to provide a basis for termination and (iii) specifies
the Date of Termination.

 

Section 8.  Severance Benefits.  (a) 
In the event of termination of Executive’s employment hereunder for any
reason, Executive shall be entitled to his Base Salary earned through the Date
of Termination and any accrued benefits under any of the Companies’
compensation or benefit plans or arrangements (including, without limitation,
this Agreement) in accordance with their terms, including, without limitation,
any unpaid bonus payable in respect of a completed fiscal period.

 

(b)  If the Companies terminate Executive’s
employment with the Companies without Cause prior to a Change of Control, then,
in addition to the payments and benefits provided for under Section 8(a)
and contingent upon execution by Executive of a full and unconditional release
of any claims which he may have against the Companies:

 

(i)                                     the
Companies shall pay to Executive as severance compensation a lump sum in cash
not later than the fifteenth day after the Date of Termination in an amount
equal to the aggregate amount of the Base Salary which would have been payable
to Executive during the remainder of the Term;

 

(ii)                                  the
Companies shall, at their expense, continue to provide to Executive benefits
substantially equivalent to the benefits required to be provided to him
pursuant to Section 3(e) during the remainder of the Term; and

 

(iii)                               all
unvested stock options awarded to Executive under the Stock Option Plan shall
become fully vested.

 

(c)  If Executive’s employment is terminated by
the Companies without Cause or due to non-extension of the Term by the
Companies, in each case within one year following a Change of Control, then in
addition to the payments and benefits provided for under Section 8(a) and
contingent upon execution by Executive of a full and unconditional release of
any claims which he may have against the Companies:

 

(i)                                     the
Companies shall pay to Executive as severance compensation a lump sum in cash
not later than the fifteenth day after the Date of Termination in an amount
equal to the sum of: (x) 200% of Executive’s Base Salary, (y) 200% of the
annual bonus paid or payable to Executive for the calendar year immediately
preceding the year in which the Date of Termination occurs; provided that if
executive has not had an opportunity to earn an annual bonus prior to the Date
of Termination, the annual bonus amount shall be deemed to be $250,000 for
purposes of this clause (y), and (z) any amount payable to Executive pursuant
to Section 9;

 

(ii)                                  the
Companies shall, at their expense, continue to provide to Executive benefits
substantially equivalent to the benefits required to be provided to him
pursuant to Section 3(e) until the second anniversary of the Date of
Termination.

 

4

 

(iii)                               all
unvested stock options awarded to Executive under the Stock Option Plan shall
become fully vested.

 

Notwithstanding the
foregoing or any other provision of this Agreement, if (x) the event
constituting a Change of Control is only the commencement of a tender offer,
(y) the tender offer is abandoned or terminated and (z) a majority of the
Original Directors and/or their Successors (as such terms are defined within
the definition of “Change of Control”) determine that the tender offer will not
be effectuated or result in a subsequent Change of Control and gives Executive
written notice of such determination, then, as to that particular event only, a
subsequent termination of employment by the Company will not entitle Executive
to the benefits provided for in this Section 8(c). For purposes of this
Agreement, termination of employment shall be deemed to have occurred within 12
months following the occurrence of a Change of Control if a Notice of
Termination with respect thereto is given within such 12 month period.

 

Section 9.  Gross-Up Payment.  In the event that any payment pursuant to
this agreement or any other agreement will be subject to the tax (the “Excise
Tax”) imposed by Section 4999 of the Internal Revenue Code of 1986
(“Code”) or any successor or similar provision, the Company shall pay Executive
an additional amount (the “Gross-Up Payment”) such that the net amount retained
by Executive after deduction of any Excise Tax on such payments (excluding
payments pursuant to this paragraph 9), and after deduction for any federal,
state and local income tax and Excise Tax upon the payment provided for by this
paragraph, shall be equal to the amount of such payments (excluding payments
pursuant to this paragraph 9) before payment of any Excise Tax (hereinafter the
“Excise Tax Compensation Net Payment”). For purposes of determining whether any
of such payments will be subject to the Excise Tax and the amount of such
Excise Tax, any payments or benefits received or to be received by Executive in
connection with a Change of Control or Executive’s termination of employment
shall be treated as “parachute payments” within the meaning of
Section 280G of the Code, and all “excess parachute payments” within the
meaning of Section 280G of the Code shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company’s
independent auditors and acceptable to Executive such payments or benefits do
not constitute parachute payments or excess parachute payments. For purposes of
determining the amount of the Gross-Up Payment, Executive shall be deemed to
pay all federal income taxes at the highest marginal rate of federal income
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income taxes at the highest marginal rates of taxation in the
state and locality in which Executive is taxed on the payments giving rise to
the Gross-Up Payment, net of the maximum reduction in federal income taxes
which could be obtained from deduction of such state and local taxes. In the
event that the Excise Tax is subsequently determined to be less than the amount
taken into account hereunder, Executive shall repay to the Company, at the time
that the amount of such reduction in Excise Tax is finally determined, an
amount necessary so that the total payments hereunder equal the Excise Tax
Compensation Net Payment, plus interest on the amount of such repayment at a
rate equivalent to the rate described in Section 280G (d) (4) of the Code.
In the event that the Excise Tax is determined to exceed the amount taken into
account hereunder, the Company shall make an additional Gross-Up Payment in
respect of such excess (plus any interest payable with respect to such excess)
at the time that the amount of such excess is finally determined.  The Gross-Up Payment shall be

 

5

 

paid not later than the
date on which the payments giving rise to the Gross-Up Payment are made, or, if
and to the extent such payment is not known or calculable as of such date, as
soon as the amount is known and calculable.

 

Section 10.                                   Indemnification.  The Companies shall indemnify Executive
against any and all losses, liabilities, damages, expenses (including
attorneys’ fees) judgments, fines and amounts paid in settlement incurred by
Executive in connection with any claim, action, suit or proceeding (whether
civil, criminal, administrative or investigative), including any action by or
in the right of either of the Companies, by reason of any act or omission to act
in connection with the performance of his duties hereunder to the full extent
that the Companies are permitted to indemnify a director, officer, employee or
agent against the foregoing under Ohio law, including, without limitation,
Section 1701.13(E) of the Ohio Revised Code.  The Companies shall at all times cause Executive to be included,
in his capacities hereunder, under all liability insurance coverage (or similar
insurance coverage) maintained by any of the Companies from time to time.

 

Section 11.                                   Legal
Expenses.  The Companies
shall reimburse Executive in full for all legal fees and expenses reasonably
incurred by him in connection with this Agreement (including, without
limitation, any such fees and expenses incurred in contesting or disputing any
termination of this or related Agreement or in seeking to obtain or enforce any
right or benefit provided herein, regardless of the outcome), unless, in the
case of a legal action brought by Executive or in his name, a court finally
determines that such action was not brought in good faith.

 

Section 12.  Non-Competition
and Confidentiality.  In
consideration of the Companies entering into this Agreement and as an
inducement for them to do so, Executive agrees that for a period of two years
after termination of his employment for any reason, he will not, without the
Companies’ prior written consent, directly or indirectly, (i) participate or be
interested in any business (aa) which is engaged in Ohio, Indiana, Kentucky,
Michigan and/or Pennsylvania in providing (as a public utility or otherwise)
electric power or services on a retail and/or wholesale basis or in providing
energy marketing, aggregation and/or procurement services, or (bb) which is
engaged in any other business being conducted or proposed to be conducted by
the Companies; (ii) solicit for employment with himself or any firm or entity
with which he is associated, any employee of the Companies or otherwise
disrupt, impair, damage or interfere with the Companies’ relationship with
their employees; (iii) solicit for his own behalf or on behalf of any other
person(s), any customer of the Companies that has purchased products or
services from the Companies at any time in the twelve (12) months preceding his
Date of Termination or that the Companies are actively soliciting or have known
plans to solicit, for the purpose of marketing or distributing any product,
pricing or service competitive with any product, pricing or service then
offered by the companies or which the Companies have known plans to offer; or
(iv) engage or be affiliated with any person(s), in the development or
marketing, including but not limited to the establishment of product or service
prices, of any product or service which will compete with any product or
service the Companies are then developing or marketing in any geographic market
where the Companies are doing or preparing to do business.

 

At all times, Executive (i) will keep all confidential, nonpublic
and/or proprietary

 

6

 

information
(including, for example, trade secrets, financial information, customer
information and business and strategic plans) of the Companies (regardless of
when he became aware of such information) in strict confidence and (ii) will
not, directly or indirectly, use or disclose to any person in any manner any of
such information, except to the extent directly related to and required by his
performance of the duties assigned to him by the Companies.  Executive will take all appropriate steps to
safeguard such information and to protect it against unauthorized disclosure,
misuse, loss or theft.  Upon termination
of his employment, he will promptly return to the Companies, without retaining
any copies, all written or computer readable material containing any of such
information, as well as all other property and records of the Companies, in his
possession or control.

 

Section 13.  Certain Definitions.  For purposes of this Agreement, the
following terms have the following meanings:

 

“Cause”
shall mean (a) commission of a felony, (b) embezzlement; (c) the illegal use of
drugs, or (d) if no Change of Control has occurred (other than the commencement
of a tender offer and/or the entering into of an agreement referred to in
clauses (ii) or (iii) of the definition of Change of Control), the failure by
Executive to substantially perform his duties with the Companies (other than
any such failure resulting from Executive’s physical or mental illness or other
physical or mental incapacity) as determined by the Board of Directors.
Notwithstanding the foregoing, Cause shall not be deemed to exist unless and
until there shall have been delivered to Executive a copy of a resolution duly
adopted by written consent of not less than three-fourths of the number of
directors then in office (after reasonable notice to Executive and an
opportunity for Executive, together with Executive’s counsel, to be heard at a
meeting of the Board of Directors called and held for that purpose), finding
that in the good faith opinion of the Board of Directors Executive is guilty of
conduct set forth above in clauses (a), (b), (c) or (d) of the first sentence
of this definition and specifying the particulars thereof in detail.

 

“Change of Control”
shall mean any change in control of DPL, or its principal subsidiary, DP&L,
of a nature that would be required to be reported in response to Item 6 (e) of
Schedule 14A of Regulation 14A promulgated under the Securities Exchange
Act of 1934, as amended (the ‘Exchange Act’) as determined by the Board of
Directors of DPL in its sole discretion; provided that, without limitation,
such a Change of Control shall be deemed to have occurred if (i) any ‘person’
(as such term is defined in Sections 13 (d) and 14 (d) (2) of the Exchange Act;
hereafter, a ‘Person’) other than DPL or DP&L or an entity then directly or
indirectly controlling, controlled by or under common control with DPL or
DP&L is on the date hereof or becomes or commences a tender offer to become
the beneficial owner, directly or indirectly, of securities of DPL or DP&L
representing (A) 15% or more of the combined voting power of the then
outstanding securities of DPL or DP&L if the acquisition of such beneficial
ownership or such tender offer is not approved by the Board of Directors of DPL
prior to the acquisition or the commencement of such tender offer or (B) 50% or
more of such combined voting power in all other cases; (ii) DPL or DP&L
enters into an agreement to merge or consolidate itself, or an agreement to
consummate a ‘combination’ or ‘majority share acquisition’ in which it is the
‘acquiring corporation’ (as such terms are defined in Ohio Rev. Code
§ 1701.01 as in effect on December 31, 1990) and in which
shareholders of DPL or DP&L, as the case may

 

7

 

be, immediately prior to
entering into such agreement, will beneficially own, immediately after the
effective time of the merger, consolidation, combination or majority share
acquisition, securities of DPL or DP&L or any surviving or new corporation,
as the case may be, having less than 50% of the ‘voting power’ of DPL or
DP&L or any surviving or new corporation, as the case may be, including
‘voting power’ exercisable on a contingent or deferred basis as well as
immediately exercisable ‘voting power’, excluding any merger of DPL into
DP&L or of DP&L into DPL; (iii) DPL or DP&L enters into an
agreement to sell, lease, exchange or otherwise transfer or dispose of all or
substantially all of its assets to any Person other than to a wholly owned
subsidiary or, in the case of DP&L, to DPL or a wholly owned
subsidiary(ies) of DPL; but not including (A) a mortgage or pledge of assets
granted in connection with a financing or (B) a spin-off or sale of assets if
DPL continues in existence and its common shares are listed on a national
securities exchange, quoted on the automated quotation system of a national
securities association or traded in the over-the-counter market; (iv) any
transaction referred to in (ii) or (iii) above is consummated; or (v) those
persons serving as directors of DPL or DP&L on July 1, 2004 (the
‘Original Directors’) and/or their Successors do not constitute a majority of
the whole Board of Directors of DPL or DP&L, as the case may be (the term
‘Successors’ shall mean those directors whose election or nomination for
election by shareholders has been approved by the vote of at least two-thirds
of the Original Directors and previously qualified Successors serving as
directors of DPL or DP&L, as the case may be, at the time of such election
or nomination for election).

 

“Date of Termination”
shall mean (a) the date specified in a Notice of Termination or (b) if this
Agreement is terminated due to executive’s death or expiration of the Term, the
date of such termination.

 

“Disability”
shall mean, for the purposes of this agreement, Executive’s inability to
perform the duties required of Executive on a full-time basis for a period of
six consecutive months because of physical or mental illness or other physical
or mental disability or incapacity.

 

Section 14.  Parties in Interest.  This Agreement is for the sole benefit of
the parties and shall not create any rights to any person not a party.  This Agreement is personal and may not be
assigned by any party without the prior written consent of the other
party.  Subject to the foregoing, this
Agreement shall be binding upon, inure to the benefit of, and be enforceable
by, the respective successors and assigns of the parties (including the heirs
and estate of Executive), but no assignment shall, of itself, relieve any party
of its obligations hereunder.

 

Section 15.  Entire Agreement.  This Agreement sets forth the entire
agreement and understandings of the parties in respect to the subject matter
hereof and supersedes all prior agreements, arrangements and understandings
relating to the subject matter hereof.

 

Section 16.  Interpretation.  The section and other headings
contained in this Agreement are for reference purposes only and shall not
affect in any way the meaning or interpretation of this Agreement.  Words used in this Agreement in the singular
number shall include the plural, and vice versa, unless the context requires
otherwise.  Words of gender used in this
Agreement may be read as masculine, feminine or neuter as the context may
require.  The terms “this

 

8

 

Agreement”, “hereto”
“herein”, “hereby”, “hereof” and similar expressions refer to this Agreement in
its entirety and not to any particular provision or portion of this
Agreement.  When a reference is made to
Sections, such reference shall be to a Section of this Agreement, unless
otherwise indicated.  Whenever the words
“include”, “includes” or “including” are used herein, they shall be deemed to
be followed by the words “without limitation”.

 

Section 17.  Law Governing.  This Agreement shall be governed by, and
construed and enforced in accordance with, the laws of the State of Ohio
without regard to its conflicts of laws rules.

 

Section 18.  Counterparts.  This Agreement may be executed simultaneously in two or more
counterparts, each of which shall be deemed an original but all of which taken
together shall constitute one and the same instrument.

 

Section 19.  Amendment.  Any amendment to this Agreement or any waiver of rights or any
consent hereunder shall not be operative unless it is in writing and signed by
the party sought to be charged.

 

Section 20.  Equitable Relief.  Executive acknowledges that the Companies
may be irreparably injured by any breach of Section 12.  Accordingly, the Companies shall be entitled
to specific performance and other injunctive relief as remedies for any breach
(or threatened breach) of Section 12, in addition to all other remedies
available at law or in equity.

 

Section 21.  Severability.  If any provision of this Agreement or the application thereof to
any party or circumstance shall be held invalid or unenforceable to any extent,
the remainder of this Agreement and the application of such provision to
another party or circumstance shall not be affected thereby and such provision
shall be enforced to the greatest extent permitted by applicable law.

 

Section 22.  Waiver.  The failure or delay on the part of any party to insist upon
strict performance of any of the terms or conditions of this Agreement will not
constitute a waiver of any of its rights hereunder.  No right or remedy herein conferred upon or reserved to any party
is intended to be exclusive of any other right or remedy and all such rights
and remedies shall be cumulative.

 

Section 23.  No Mitigation.  Executive shall not be required to mitigate
the amount of any payment provided for pursuant to this Agreement by seeking
other employment and, to the extent that Executive obtains or undertakes other
employment, the payment will not be reduced by the earnings of Executive from
the other employment.

 

IN WITNESS WHEREOF, the
parties have executed this Agreement as of the date first written above.

 

9

 

	
   

  	
  DPL INC.

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Its:

  	
  /s/ Chief Executive
  Officer

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Robert Biggs

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  W
  August Hillenbrand

  	
   

  
	
   

  	
  Vice Chairman

  	
   

  
						

 

10

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