Document:

exv10w2

 

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT (the “Agreement”) is entered into by and between Todd Gibby (“you”) and
Blackboard Inc. (“Blackboard”).

     WHEREAS, Blackboard desires to employ you on the terms and conditions hereinafter set forth
and you desire to accept such employment;

     NOW, THEREFORE, in consideration of the promises and the mutual agreements contained herein,
the parties agree as follows:

1.     Responsibilities. Blackboard agrees to hire you as Executive Vice President for
Operations. You shall devote your entire business time, attention, skill and energy exclusively to
the business of Blackboard and perform the responsibilities assigned to you in accordance with the
standards and policies that Blackboard may from time to time establish. With prior written notice
to Blackboard, you may engage in appropriate civic, charitable or religious activities and devote a
reasonable amount of time to private investments or boards or other activities provided that such
activities do not interfere or conflict with your responsibilities and are not or are not likely to
be contrary to Blackboard’s interests. You and Blackboard agree that your position is essential to
Blackboard’s success and that the highest level of performance is required from you.

2.     Term of Employment. Blackboard agrees to employ you, and you agree to remain in
employment with Blackboard, from the date hereof until June 30, 2006 (the “Initial Term”), unless
your employment terminates earlier pursuant to Section 5 below. This Agreement shall automatically
renew for successive one (1) year periods (each, a “Renewal Term” and together with the Initial
Term, the “Term”) unless either party provides prior written notice of its intent not to renew at
least thirty (30) days before commencement of the applicable Renewal Term.

3.     Compensation.

     (a)     Base Compensation. Your annual base compensation shall initially be US$200,000
(“Base Compensation”), less applicable taxes and withholdings, payable in accordance with
Blackboard’s regular payroll practices from time to time in effect. Blackboard’s Board of
Directors (the “Board”) may review and adjust your Base Compensation periodically.

     (b)     Bonus Compensation. To be eligible to receive an annual bonus for any year, you
must meet financial performance targets set by the Board and be employed through March
31st of the following year. Your initial bonus may be up to 50% of your Base
Compensation. The actual amount of the bonus, if any, will be determined by the Board in its sole
good faith discretion. If a bonus is awarded, it will be paid in the year following that for which
the bonus is being awarded. You will receive your first bonus, if any, in fiscal year 2006 for
fiscal year 2005.

     (c)     Business Expenses. During the Term, Blackboard shall pay or reimburse you for all
ordinary and reasonable business-related expenses you incur in the performance of your duties under
this Agreement. Blackboard will reimburse you for all such expenses upon the presentation by you
of an itemized account of such expenditures, together with supporting receipts and other
appropriate documentation.

4.     Employee Benefits.

     (a)     In General. During the Term, you shall be eligible for all employee benefits that
Blackboard may provide to employees who are officers of Blackboard, which may include, but are not
limited to benefits such as health insurance plans, a stock option plan, paid holidays and 401(k),
subject in each case to the generally applicable terms and conditions of any such plan or program
in question and to the determinations of any person or committee administering any such plan or
program in accordance with the terms of such plan or program. Blackboard reserves the right to
modify or terminate any such benefit plan or program at any time.

     (b)     Vacation. You shall be eligible to take paid vacation during each calendar year
in accordance with Blackboard’s Employment Handbook.

5.     Termination of Employment. Upon the effective date of termination of your employment
with Blackboard (the “Termination Date”), you will not be eligible for further compensation,
benefits or perquisites under Sections 3 and 4

 

 

of this Agreement, other than those that have already accrued or vested as of the Termination Date.
Termination of your employment may occur under any of the following circumstances:

     (a)     Expiration of Term. Your employment will terminate if the Term provided for under
Section 2 expires pursuant to the notice requirements of Section 2; or

     (b)     Termination of Employment by Blackboard. Blackboard has the right to terminate
your employment at any time with or without Cause. For all purposes under this Agreement,
(“Cause”) shall mean:

          (i)     a failure by you to substantially perform your obligations under this Agreement or your
job responsibilities, other than a failure resulting from your complete or partial incapacity due
to physical or mental illness or impairment;

          (ii)     an act or omission by you that constitutes gross misconduct, moral turpitude or fraud;

          (iii)     a conviction for, or a plea of “guilty” or “no contest” to, a
felony; or

          (iv)     a material breach of any duty owed to Blackboard, including but not limited to the duties
of loyalty and confidentiality.

     (c)     Resignation by You. You have the right to resign your employment with Blackboard
at any time, with or without Good Reason, provided that you may resign with Good Reason only if you
provide notice of such reason for resignation to Blackboard stating that such reason will be
grounds for resignation with Good Reason, and if Blackboard fails to cure such reason within thirty
(30) days following receipt of such notice.

          (i)     For purposes of this Agreement, “Good Reason” shall mean (A) a material failure by
Blackboard to perform its obligations under this Agreement; (B) your relocation outside of the your
current residential area without your consent; or (C) a material diminution of your compensation,
duties or responsibilities within three (3) months of (I) a sale or transfer of more than 50% of
the total number of shares of the outstanding capital stock of Blackboard or all or substantially
all of the assets of Blackboard to a single unrelated entity or group of affiliated entities (not
related to Blackboard) in one or a series of closely related transactions, or (II) a merger or
consolidation in which Blackboard is not the surviving entity or in which the shareholders in
Blackboard prior to the merger or consolidation own less than 50% of the shares of outstanding
capital stock of Blackboard.

          (ii)     During the Term, you agree to provide Blackboard three (3) months’ prior written notice
of your resignation, with or without Good Reason. Blackboard may in its sole discretion place you
on paid administrative leave as of any date prior to the end of such three (3) month notice period
and request that you no longer be present on Blackboard premises. During any period of paid
administrative leave, you will not be authorized to act as a representative, or make any statements
on behalf of, Blackboard; or

     (d)     Death or Disability. Your employment shall be deemed to have been terminated by
you upon your (i) death or (ii) inability to perform your duties under this Agreement, even with
reasonable accommodation, for more than twenty-six (26) weeks, whether or not consecutive, in any
twelve-month period (“Disability”). Termination will be effective upon the occurrence of such
event.

6.     Severance Payments.

     (a)     If Blackboard terminates your employment without Cause (as defined in Section 5(b)) or
does not renew this Agreement pursuant to Section 2, then Blackboard will pay you your then current
Base Salary, less applicable tax withholdings (and if you elect COBRA coverage, COBRA premiums) for
nine (9) months (in each case, the “Severance Payments”). The Severance Payments shall be made
consistent with Blackboard’s regular payroll schedule. To receive the Severance Payments you must
sign a release of any and all claims in the form provided by Blackboard. Such Severance Payments
shall begin at the later of (A) the first pay period following your Termination Date or (B) ten
(10) days after you deliver the signed release to Blackboard. The Severance Payments will end
nine (9) months after they begin.

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     (b)     If during the Term you resign for Good Reason, as defined in Section 5(c), you shall be
entitled to the Severance Payment as described in Section 6(a), provided that you continue working
for Blackboard for a period of at least three (3) months following Blackboard’s receipt of written
notice from you of your resignation pursuant to Section 5(c)(i)(A) or such shorter period as may be
mutually agreed upon by you and Blackboard. To receive the Severance Payment, you must sign a
release of any and all claims in the form provided by Blackboard. Such Severance Payment shall
begin at the later of (i) the first pay period following your Termination Date or (ii) ten (10)
days after you deliver the signed release to Blackboard. The Severance Payments will end nine (9)
months after they begin.

7.     Return of Property. Upon termination of your employment with Blackboard for any reason,
you agree to immediately return to Blackboard all equipment, credit cards and other property
belonging to Blackboard. This includes all documents and other information prepared by you or on
your behalf or provided to you in connection with performing your duties for Blackboard, regardless
of the form in which such documents or information are maintained or stored, including computer,
typed, written, imaged, audio, video, micro-fiche, electronic or any other means of recording or
storing documents or other information. You hereby warrant that you will not retain in any form
any such document or other information or copies thereof, except as provided in the following
sentence. You may retain your business cards, a copy of this Agreement and any documents
describing any rights or obligations you may have after the Termination Date, including rights and
obligations under any employee benefit plan or other agreements, and any other information that
Blackboard informs you in writing at the time of the termination that you may retain.

8.     Confidentiality, Non-Solicitation and Non-Competition Agreement.

     (a)     Confidential Information. You shall not disclose or use at any time, either
during or after your Termination Date, any confidential information, including, but not limited to,
the terms of this Agreement, existing and prospective investments, trade secrets or proprietary
information, strategic sourcing information or analysis, financing information and sources,
patents, patent applications, developmental or experimental work, formulas, test data, prototypes,
models, know how and product specifications, financial information, financial projections and pro
forma financial information, sales and marketing strategies, plans and programs and product
development information, employees’ and consultants’ benefits, perquisites, salaries, stock
options, compensation, formulas or bonuses, and their non-business addresses and telephone numbers,
organizational structure and reporting relationships, business plans, names, addresses, phone
numbers of customers, contracts, including contracts with clients, suppliers, independent
contractors or employees, business plans and forecasts, and existing and prospective projects or
business opportunities (“Confidential Information”) of Blackboard, whether patentable or not, which
you learn as a result of your employment with Blackboard, whether or not you developed such
information. “Confidential Information” shall not include, without limitation, your business
cards, information that is or later becomes publicly available in a manner wholly unrelated to any
breach of this Agreement by you as of the date it enters the public domain. If you are uncertain
whether something is Confidential Information you should treat it as Confidential Information until
you receive clarification from Blackboard that it is not Confidential Information. Confidential
Information shall remain at all times the property of Blackboard. You may use or disclose
Confidential Information only as authorized and necessary in performing your responsibilities under
this Agreement during your employment with Blackboard; with the General Counsel’s prior written
consent; in a legal proceeding between you and Blackboard to establish the rights of either party
under this Agreement, provided that you stipulate to a protective order to prevent any unnecessary
use or disclosure; or subject to a compulsory legal process that requires disclosure of such
information, provided that you have complied with the following procedures to ensure that
Blackboard has an adequate opportunity to protect its legal interests in preventing disclosure.
Upon receipt of a subpoena that could possibly require disclosure of Confidential Information, you
shall provide a copy of the compulsory process and complete information regarding the circumstances
under which you received it to Blackboard by hand delivery within twenty-four (24) hours. You will
not make any disclosure until the latest possible date for making such disclosure in accordance
with the compulsory process (“Latest Possible Date”). If Blackboard seeks to prevent disclosure in
accordance with the applicable legal procedures, and provides you with notice before the Latest
Possible Date that it has initiated such procedures, you will not make disclosures of any
Confidential Information that is the subject of such procedures, until such objections are
withdrawn or ruled on. You hereby acknowledge that any breach of this Section 8(a) would cause
Blackboard irreparable harm. Notwithstanding anything to the contrary herein, you are not
prohibited from disclosing the terms of this Agreement for the purposes of enforcement of this
Agreement, tax compliance and personal finances.

     (b)     Outside Activities. You shall submit to Blackboard’s General Counsel, within a
reasonable time prior to dissemination, the text of any speech, professional paper, article or
similar communication created by you which

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relates to Blackboard’s present or future business or research and development endeavors. The
General Counsel then will notify you if the dissemination of the communication is permitted under
the terms of this Agreement.

     (c)     Ownership of Confidential Information; Return of Materials. All Confidential
Information, including without limitation that which is produced by or for Blackboard by you or
anyone else, all materials embodying Confidential Information, and all copies thereof, will remain
the property of Blackboard or of the third party who has furnished it to Blackboard. On your
Termination Date, or at the written request of Blackboard at any time, you will immediately deliver
to Blackboard all materials, and copies thereof, which are in your possession or control and which
contain or are related in any way to any Confidential Information. This includes all documents and
other information prepared by you or on your behalf or provided to you in connection with your
duties while employed by Blackboard, regardless of the form in which such document or information
are maintained or stored, including computer, typed, written, imaged, audio, video, micro-fiche,
electronic or any other means of recording or storing documents or other information. You hereby
warrant that you will not retain in any form any such document or other information or copies
thereof. You may retain a copy of this Agreement and any documents describing any rights or
obligations you may have after the Termination Date, including rights under any employee benefit
plan or other agreements, and any other information that Blackboard informs you at the time of the
termination that you may retain.

     (d)     Intellectual Property.

          (i)     For purposes of this Agreement the following terms will be defined as indicated:

               (A) “Inventions” shall mean inventions, ideas, formula, developments, designs, systems,
software, discoveries, and improvements to existing technology, whether or not patentable.

               (B) “Improvements” shall mean all inventions, developments, modifications, changes, whether or
not patentable, made to any Inventions and/or Confidential Information.

               (C) “Copyrighted Work” shall mean any work of authorship eligible for copyright protection
under the federal and state laws of the United States and foreign countries.

               (D) “Copyrights” shall mean any and all rights granted in Copyrighted Works under the laws of
the United States and foreign countries.

          (ii)     Exclusions. An Invention, Copyright or Copyrighted Work will not be subject to
this Agreement when all the following criteria are met: (A) no equipment, supplies, facilities, or
Confidential Information of Blackboard was used in developing the Invention or Copyrighted Work or
in applying for or obtaining a patent or Copyright; (B) the Invention or Copyrighted Work was
developed entirely on your own time; (C) the Invention or Copyrighted Work does not relate directly
to the business of Blackboard or to Blackboard’s actual or demonstrably anticipated research or
development; and (D) the Invention, Copyright or Copyrighted Work does not result from any work
performed by you for Blackboard or at the request of Blackboard.

          (iii)     Ownership and Assignment of Rights.

               (A)     All Inventions, Improvements, or Confidential Information that you have or will conceive
or develop, either alone or with others, shall be the exclusive property of Blackboard. You hereby
assign, and agree to assign, to Blackboard your entire right, title, and interest in and to (I) any
and all such Improvements and Inventions, (II) any and all applications for patent, domestic and
foreign that may be filed on said Improvements and Inventions, and (III) any and all patents that
may issue or be granted on such applications, except those excluded under Section 8(d)(ii) of this
Agreement. Both during and after your Termination Date you will on request immediately sign and
deliver to Blackboard without further consideration any and all documents necessary to perfect the
assignments granted in this Section.

               (B)     You understand and agree that all Copyrighted Works conceived, developed, created or
contributed to by you shall be considered works made for hire under the copyright laws of the
United States and shall be the exclusive property of Blackboard. Blackboard shall be considered
the author of such Copyrighted Works. You further understand and agree that in the event any
Copyrighted Work created by you within the scope of, or in connection with, your work with
Blackboard, or at the request of Blackboard, fails to meet the legal requirements

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of a work made for hire owned by Blackboard, then this Agreement shall operate to assign to
Blackboard all of your rights, title, and interest, including copyrights, in, to and under such
Copyrighted Works. Blackboard shall have sole and absolute discretion to register, enforce, and/or
assign Copyrights for such Copyrighted Works.

          (iv)     Assistance and Designation of Agent.

               (A)     Both during and after your Termination Date, you will on request immediately sign and
deliver to Blackboard without further consideration, all instruments in writing requiring your
signature and deemed by Blackboard to be necessary or advisable in, or in connection with, filing
or prosecuting of any application for any patent covering Improvements, Inventions or any
divisional, continuing, renewal or reissue application or reexamination request based upon any
application for patent. In the event that Blackboard is unable for any reason whatsoever to secure
your signature to any lawful and necessary documents required to apply for or execute any patent
application with respect to such idea, process, development, design, system, program, discovery,
invention, improvement or writing (including renewals, extensions, continuations, divisions or
continuations in pat thereof), you hereby irrevocably designate and appoint Blackboard and its
officers and agents, as your agents and attorneys-in-fact to act for and on your behalf and instead
of you, to execute and file any such application and to do all other lawfully permitted acts to
further the prosecution and issuance of patents thereon with the same legal force and effect as if
executed by you.

               (B)     You will aid Blackboard promptly on request, and without further consideration, in any
matter pertaining to or relating to the protection of any of the Improvements, Inventions,
applications for patents covering Inventions or Improvements, and/or Copyrighted Works. If such
request is made after your employment has ended, Blackboard will reimburse you for any expenses
incurred and compensate for any services rendered in complying with such request at the same rate
at which you were compensated during the final month of your employment.

9.     Non-Solicitation/Non-Competition. During your employment and for one (1) year following
your Termination Date (the “Restricted Period”) you will not, except with prior written approval of
Blackboard’s General Counsel, directly or indirectly, individually or as part of or on behalf of
any other person, company, employer or other entity: (a) hire or attempt to solicit for hire, or
encourage to end their relationship with Blackboard, any persons who have been employed by
Blackboard at any time within the previous six (6) months (a “Covered Employee”); (b) solicit for
the purposes of selling or otherwise providing, services or products that are similar or related to
those sold by Blackboard as of the Termination Date to any person or entity that has within the
twelve (12) months preceding the Termination Date purchased any such services or products from
Blackboard and with whom you had direct contact on behalf of Blackboard during that time; or (c)
own, manage, operate, control, be employed by, participate in, work in, advise, consult or contract
with, or support in any manner any business that is substantially similar to the type of business
conducted by Blackboard as of the Termination Date within the geographical area in which, as of the
Termination Date, Blackboard is actively marketing or has made a significant investment in time and
money to prepare to market its products or services within the six (6) month period after the
Termination Date. You agree that these provisions are necessary to protect Blackboard’s legitimate
business interests. You warrant that the provisions will not unreasonably interfere in your
ability to earn a living or to pursue your occupation after the Termination Date. You agree to
notify any person or entity to which you provide services during the Restricted Period of your
obligations under this Section 9.

10.     Non-Disparagement. You agree to refrain from making any derogatory or defamatory
remarks or comments that may disparage Blackboard, or any officer, employee or agent of Blackboard
during or after your Termination Date. Blackboard agrees that none of its officers or
directors will make any derogatory or defamatory remarks or comments that may disparage you during
or after your employment.

11.     Other Obligations. You warrant that you are not subject to any other obligations
that would conflict with or inhibit your ability to perform your duties under this Agreement. You
represent that you have disclosed to Blackboard the existence and contents of all covenants not to
compete that you have entered into with any other entity. You further warrant that you have not
and will not bring to Blackboard or use in the performance of your responsibilities at Blackboard
any equipment, supplies, facility or trade secret information (that is not generally available to
the public) of any current or former employer or organization other than Blackboard to which you
provided services, unless you have obtained written authorization for their possession and use.

12.     Miscellaneous Provisions.

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     (a)     Notices. Unless otherwise provided herein, any notice or other communication
required to be given under the terms of this Agreement must be in writing and must be personally
delivered (i.e., left with an individual 18 years of age or older) or sent by overnight delivery.
Documents sent by overnight delivery will be presumed received on the next business day following
the day sent.

	 	 	 	 
	If notice is to be sent to Blackboard, it will be sent to:

	 	 	If notice is to be sent to you, it will be sent to:
	 
	 	 	 
	Matthew Small, Esq.

	 	 	Todd Gibby
	Blackboard Inc

	 	 	5127 Baltimore Avenue
	1899 L Street, N.W., 5th Floor

	 	 	Bethesda, MD 20816
	Washington DC 20036
	 	 	 
	 
	 	 	 
	With a copy to:
	 	 	 
	 
	 	 	 
	Douglas B. Mishkin, Esq.
	 	 	 
	Patton Boggs, LLP
	 	 	 
	2550 M Street, NW
	 	 	 
	Washington, DC 20037
	 	 	 

     (b)     Dispute Resolution. You and Blackboard agree that any dispute between you and
Blackboard will be finally resolved by binding arbitration in accordance with the Federal
Arbitration Act (“FAA”). You and Blackboard agree to follow the Dispute Resolution Procedures set
forth in Attachment A to this Agreement.

(c)     Nature of Agreement. This Agreement and the attachment hereto constitute the entire
agreement between you and Blackboard and supercede all prior agreements and understandings between
you and Blackboard relating to the matters covered by this Agreement. Any long-term equity
incentives between Blackboard and you shall be contained in a separate agreement. In making this
Agreement, the parties warrant that they did not rely on any representations or statements other
than those contained in this Agreement. No modification of or amendment to this Agreement will be
effective unless in writing and signed by the Senior Vice President for Human Resources of
Blackboard. A delay or failure by Blackboard to exercise any right that is the subject of this
Agreement will not be construed as a waiver of that right. A waiver of a breach on any one
occasion will not be construed as a waiver of any other breach. Regardless of the choice of law
provisions of the District of Columbia or any other jurisdiction, the parties agree that this
Agreement shall be otherwise interpreted, enforced and governed by the laws of the District of
Columbia. This Agreement will continue in effect until all obligations under it are fulfilled. If
any part of this Agreement is held by a court of competent jurisdiction to be void or
unenforceable, the remaining provisions shall continue with full force and effect. This Agreement
is not assignable by you. This Agreement is binding on you with respect to Blackboard, its
successors or assigns. This Agreement may be executed in any number of counterparts each of which
shall be an original, but all of which together shall constitute one instrument. The headings in
this Agreement are for convenience only and shall not effect the interpretation of this Agreement.
You further certify that you fully understand the terms of this Agreement and have entered into it
knowingly and voluntarily.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

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IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of
Blackboard by its authorized officer, as of the day and year set forth under their signatures
below.

    	 	 	 	 	 	 	 
	 	 	Blackboard Inc.
	 
	 	 	 	 	 	 
	/s/ Todd
            Gibby 
	 	By: 	 	/s/ Michael Chasen	 	 
	 
          
	 	 	 	 	 	 
	Todd Gibby
          
	 	 	 	Michael Chasen, CEO and President	 	 
	 
	 	 	 	 	 	 
	Date: May 11,
            2005 
	 	Date: May 11, 2005	 	 

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Attachment A

DISPUTE RESOLUTION PROCEDURES

     The parties agree to make a good faith effort to informally resolve any dispute before submitting
the dispute to arbitration in accordance with the following procedures:

	A.  	The party claiming to be aggrieved shall furnish to the other a written statement of the
grievance, all persons whose testimony would support the grievance, and the relief requested
or proposed. The written statements must be delivered to the other party within the time
limits for bringing an administrative or court action based on that claim.
	 
	B.  	If the other party does not agree to furnish the relief requested or proposed, or otherwise
does not satisfy the demand of the party claiming to be aggrieved within thirty (30) days and
the aggrieved party wishes to pursue the issue, the aggrieved party shall by written notice
demand that the dispute be submitted to non-binding mediation before a mediator jointly
selected by the parties.
	 
	C.  	If mediation does not produce a resolution of the dispute and either party wishes to pursue
the issue, that party shall request arbitration of the dispute by giving written notice to the
other party within thirty (30) days after mediation. The parties will attempt to agree on a
mutually acceptable arbitrator and, if no agreement is reached, the parties will request a
list of nine arbitrators from the American Arbitration Association and select by alternately
striking names. The arbitration will be conducted consistent with JAMS/Endispute’s rules
governing employment disputes (“Rules”) that are in effect at the time of the arbitration. If
there is any conflict between those Rules and the terms of the Employment Agreement
(“Agreement”), including all attachments thereto, the Agreement will govern. The arbitrator
shall have authority to decide whether the conduct complained of under Subsection (a) above
violates the legal rights of the parties. In any such arbitration proceeding, any hearing
must be transcribed by a certified court reporter and any decision must be supported by
written findings of fact and conclusions of law. The arbitrator’s findings of fact must be
supported by substantial evidence on the record as a whole and the conclusions of law and any
remedy must be provided for by and consistent with the laws of District of Columbia and
federal law. The arbitrator shall have no authority to add to, modify, change or disregard
any lawful term of the Agreement. Blackboard will pay the arbitrator’s fee.
	 
	D.  	Arbitration shall be the exclusive means for final resolution of any dispute between the
parties, except 1) for workers’ compensation and unemployment claims and 2) when injunctive
relief is necessary to preserve the status quo or to prevent irreparable injury, including,
without limitation, any claims concerning an alleged or threatened breach of your
Confidentiality, Non-Solicitation and Non-Competition Agreement. Injunctive relief may be
sought from any court of competent jurisdiction located in the District of Columbia.exv10w12

 

Exhibit 10.12

LICENSE AND NON-COMPETITION AGREEMENT

     This
LICENSE AND NON-COMPETITION AGREEMENT (this
“Agreement”), made as of May 12,
2005, by and among BRESLER & REINER, INC., a Delaware corporation (“B&R”), MIDLANTIC OFFICE
TRUST, INC., a Maryland corporation (“MDA”), and, solely for purposes of Sections 3, 5(c),
9 and 11, Charles S. Bresler, an individual residing in the state of Maryland, recites and provides
as follows:

RECITALS

     A. MDA has been formed to invest in commercial office properties located in the Mid-Atlantic
Region (as hereinafter defined) and will acquire substantially all of its initial properties from,
and utilize the proprietary management techniques of, B&R.

     B. In furtherance thereof, B&R and MDA or their Subsidiaries (as hereinafter defined) are, or
will become, parties to certain Purchase and Sale Agreements further described on Schedule
A attached hereto, pursuant to which B&R will sell to MDA various commercial office properties
(collectively, the “Properties”) located in the Mid-Atlantic Region (as hereinafter
defined) for an aggregate purchase price of approximately $270.6 million (the “Purchase
Agreements”).

     C. In addition, B&R and MDA or their Subsidiaries are, or will become, parties to a certain
Assignment Agreement further described on Schedule B attached hereto, pursuant to which B&R
assigns to MDA or one of its Subsidiaries its rights and interests (the “Purchase Rights”)
in a certain purchase and sale agreement to acquire a certain commercial office property located in
the Mid-Atlantic Region.

     D. MDA intends to file a registration statement on Form S-11 (the “Registration
Statement”) with the Securities and Exchange Commission to register its common stock, par value
$.01 per share (“Common Stock”), in connection with its proposed initial public offering
(the “Initial Public Offering”).

     E. MDA intends to utilize the proceeds from its Initial Public Offering to, among other
things, acquire the Properties from B&R and B&R will materially benefit from MDA’s acquisition of
any of the Properties.

     F. In connection with the Initial Public Offering, acquisition of the Properties and
assignment of the Purchase Rights, B&R agrees to (i) license to MDA certain intellectual property
rights of B&R that MDA and its Subsidiaries will utilize in connection with their operations, (ii)
not compete against MDA in the commercial office property sector within New Jersey, Pennsylvania,
Delaware, Maryland, Virginia or Washington D.C. (the “Mid-Atlantic Region”), (iii) grant
MDA certain rights to acquire additional properties owned by B&R and (iv) refer future
opportunities to acquire additional properties in the Mid-Atlantic Region to MDA, in each case in
accordance with, and subject to, the terms and conditions set forth herein.

     G. MDA will cause to be issued to B&R in consideration for the benefits and protections
afforded hereunder and recited herein, long term incentive plan (“LTIP”) units that

 

 

upon vesting and achieving parity with units in MDA’s operating partnership, Midlantic
Partnership, LP, will be convertible into 2.0% of MDA’s outstanding shares of Common Stock,
excluding the shares issuable upon exercise of such LTIP units and based upon the number of shares
of Common Stock outstanding immediately following completion of the Initial Public Offering plus
any shares issued by MDA within 30 days thereafter to cover over-allotments (the “Green
Shoe”), if any, in accordance with the terms of the applicable underwriting agreement between
the Company and Friedman, Billings, Ramsey & Co, Inc.

     H. Charles S. Bresler will receive substantial benefits, both directly and indirectly, upon
the successful completion of the Initial Public Offering and MDA’s formation transactions
contemplated in the Registration Statement and in connection therewith agrees to (i) not compete
against MDA in the Mid-Atlantic Region and (ii) refer future investment opportunities to MDA for
additional properties in the Mid-Atlantic Region, in each case in accordance with and subject to
the terms and conditions hereof.

     I. B&R and Charles S. Bresler acknowledge and agree that MDA would not proceed with its
Initial Public Offering or the acquisition of the Properties without the benefits and protections
afforded MDA under the terms hereof.

AGREEMENT

     The parties, in consideration of the premises and of the mutual representations, warranties,
covenants, conditions and agreements set forth herein, intending to be legally bound, agree as set
forth below:

     1. B&R’s Representations and Warranties  B&R represents and warrants as follows:

          (a) Organization and Corporate Power. B&R is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware and is qualified to do
business and in good standing in the State of Delaware and in each other jurisdiction where the
character or location of its assets or its properties owned, leased or operated by it, or the
nature of its activities makes such qualification necessary, except to the extent that the failure
to so qualify or be in good standing would not reasonably be expected to have a material adverse
effect on B&R’s business, financial condition, operations or its ability to perform its obligations
under this Agreement. B&R has the corporate power and authority necessary to own and operate its
properties, to conduct its business as conducted, and to perform its obligations under this
Agreement.

          (b) Authority for Agreement. B&R has the corporate power and authority to enter into
and perform its obligations under this Agreement. The board of directors of B&R has approved of
this Agreement and the transactions contemplated hereby and has authorized the execution, delivery
and performance of this Agreement. No other corporate proceedings on the part of B&R or any of its
stockholders is, or will be, necessary to approve and authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by B&R and is a legal, valid and binding obligation of B&R, enforceable
against it in accordance with its terms, except as such

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enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium
or other similar laws affecting the rights of creditors generally.

          (c) No Violation. The execution, delivery and performance by B&R of this Agreement,
does not and will not, directly or indirectly (with or without notice or lapse of time): (i)
violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration
of the performance required by (x) any of the terms of the Certificate of Incorporation or Bylaws
of B&R, as amended, or any resolution adopted by the board of directors or stockholders of B&R, or
(y) any note, debt instrument, security agreement, mortgage or any other agreement or contract
(collectively, “Contracts”) to which B&R is a party or by which it or its properties are
bound, or (z) any law, judgment, decree, order, rule, regulation, permit, license or other legal
requirement of any government authority applicable to B&R; (ii) give any person or entity the right
to exercise any remedy under any such Contract or cancel, terminate or modify any such Contracts;
(iii) give any government authority or other person or entity the right to challenge any of the
transactions contemplated by this Agreement; (iv) give any government authority the right to
revoke, withdraw, suspend, cancel, terminate or modify, any permit or license that is held by B&R
or that otherwise relates to B&R’s business or to any of the assets or properties owned or used by
B&R; or (v) result in the creation or imposition of any material pledge, lien, restriction or other
encumbrance in favor of any person or entity. No notice to, filing with, or consent of, any person
or entity is necessary in connection with the execution, delivery or performance by B&R of this
Agreement other than such notices, filings or consents that have already been received, made or
given, as the case may be.

     2. MDA’s Representations and Warranties MDA represents and warrants as follows:

          (a) Organization and Corporate Power. MDA is a corporation duly organized, validly
existing and in good standing under the laws of the State of Maryland and is qualified to do
business and in good standing in the State of Maryland and in each other jurisdiction where the
character or location of its assets or its properties owned, leased or operated by it, or the
nature of its activities makes such qualification necessary, except to the extent that the failure
to so qualify or be in good standing would not reasonably be expected to have a material adverse
effect on MDA’s business, financial condition, operations or its ability to perform its obligations
under this Agreement. MDA has the corporate power and authority necessary to own and operate its
properties, to conduct its business as conducted, and to perform its obligations under this
Agreement.

          (b) Authority for Agreement. MDA has the corporate power and authority to enter into
and perform its obligations under this Agreement. The board of directors of MDA has approved of
this Agreement and the transactions contemplated hereby and has authorized the execution, delivery
and performance of this Agreement. No other corporate proceedings on the part of MDA or any of its
stockholders is, or will be, necessary to approve and authorize the execution, delivery and
performance of this Agreement and the transactions contemplated hereby. This Agreement has been
duly executed and delivered by MDA and is a legal, valid and binding obligation of MDA, enforceable
against it in accordance with its terms, except as such enforceability may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws affecting the rights of
creditors generally.

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          (c) No Violation. The execution, delivery and performance by MDA of this Agreement,
does not and will not, directly or indirectly (with or without notice or lapse of time): (i)
violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration
of the performance required by (x) any of the terms of the Certificate of Incorporation or Bylaws,
as amended, of MDA or any resolution adopted by the board of directors or stockholders of MDA, or
(y) any Contract to which MDA is a party or by which it or its properties are bound, or (z) any
law, judgment, decree, order, rule, regulation, permit, license or other legal requirement of any
government authority applicable to MDA; (ii) give any person or entity the right to exercise any
remedy under any such Contract or cancel, terminate or modify any such Contracts; (iii) give any
government authority or other person or entity the right to challenge any of the transactions
contemplated by this Agreement; (iv) give any government authority the right to revoke, withdraw,
suspend, cancel, terminate or modify, any permit or license that is held by MDA or that otherwise
relates to MDA’s business or to any of the assets or properties owned or used by MDA; or (v) result
in the creation or imposition of any material pledge, lien, restriction or other encumbrance in
favor of any person or entity. No notice to, filing with, or consent of, any person or entity is
necessary in connection with the execution, delivery or performance by MDA of this Agreement other
than such notices, filings or consents that have already been received, made or given, as the case
may be.

     3. Bresler Representations and Warranties Charles S. Bresler represents and warrants
as follows:

          (a) Binding Agreement. This Agreement has been duly executed and delivered by him and
is a legal, valid and binding obligation of his, enforceable against him in accordance with its
terms, except as such enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting the rights of creditors generally.

          (b) No Violation. The execution, delivery and performance by him of this Agreement,
does not and will not, directly or indirectly (with or without notice or lapse of time): (i)
violate, breach, conflict with, constitute a default under, accelerate or permit the acceleration
of the performance required by (x) any Contract or (y) any law, judgment, decree, order, rule,
regulation, permit, license or other legal requirement of any government authority applicable to
him; (ii) give any person or entity the right to exercise any remedy under any such Contract or
cancel, terminate or modify any such Contracts; (iii) give any government authority or other person
or entity the right to challenge any of the transactions contemplated by this Agreement; or (iv)
result in the creation or imposition of any material pledge, lien, restriction or other encumbrance
in favor of any person or entity. No notice to, filing with, or consent of, any person or entity
is necessary in connection with the execution, delivery or performance by him of this Agreement
other than such notices, filings or consents that have already been received, made or given, as the
case may be.

     4. License

          (a) Grant. B&R hereby grants to MDA and to current and future subsidiaries
(“Subsidiaries”) of MDA and their Affiliates (as hereinafter defined), the license to use,
copy, modify, display, perform, make and distribute (with or without consideration), all to the
extent

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applicable, any and all trade secrets, proprietary and confidential information or other
intellectual property of B&R now in existence (including, without limitation, ideas, strategies,
formulas, compositions, know-how, processes, copyright works, techniques, methods, plans,
proposals, management guidelines, technical data, lease terms, investment objectives, underwriting
criteria and lists and information regarding current and prospective tenants, property owners,
lenders, property managers, leasing agents, service providers and suppliers) that relate to or that
could benefit the business of identifying, acquiring, financing, renovating, owning, maintaining,
managing, leasing or selling Target Properties (as hereinafter defined), including, without
limitation, any of the foregoing that is explicitly or implicitly identified, referred to or
referenced in the registration statement filed by MDA on Form S-11 with the Securities and Exchange
Commission in connection with its Initial Public Offering, as such may be amended from time to time
(collectively, the “Intellectual Property”).

          (b) Scope and Royalty. The license granted hereunder is paid-up and royalty free,
perpetual, irrevocable and worldwide in scope and is also exclusive to MDA and its Subsidiaries and
Affiliates within the Mid-Atlantic Region. MDA and its Subsidiaries and Affiliates may utilize the
Intellectual Property in their sole discretion, both within and outside of the Mid-Atlantic Region.
MDA and any of its Subsidiaries and Affiliates may sublicense to third parties any or all of their
rights hereunder. Notwithstanding the foregoing, MDA and its Subsidiaries shall require any third
party to whom it discloses or sublicenses any Intellectual Property to keep such Intellectual
Property confidential to the maximum extent practicable under the circumstances.

          (c) Further License by B&R. B&R may not license the Intellectual Property to any
third party or use the Intellectual Property for the benefit of others within the Mid-Atlantic
Region without the prior written consent of MDA, which may be granted or denied in MDA’s sole
discretion. Subject to Section 5, nothing contained in this Section 4 shall limit or restrict B&R
from utilizing the Intellectual Property for its own benefit, including, but not limited to, with
respect to the activities and properties described on Schedule C hereto and the Retained
Target Properties (as hereinafter defined).

5. Non-Compete

          (a) Scope of B&R Non-Compete. Except as set forth on Schedule C attached
hereto or unless waived in writing by MDA in its sole and absolute discretion following approval by
a majority of MDA’s independent directors, B&R, on behalf of itself and on behalf of any of its
Subsidiaries, agrees that it and its Subsidiaries, during the Term (as hereinafter defined), shall
not, directly or indirectly, purchase, develop, lease, manage, own, control or otherwise invest in
any building or series of buildings that (i) have, in any of the past three years, derived at least
50% of their gross rental revenue from commercial office rent or are reasonably expected (as
determined in the reasonable discretion of MDA) to derive at least 50% of their gross rental
revenue from commercial office rent presuming full occupancy (collectively, the “Target
Properties”) and (ii) are located in the Mid-Atlantic Region. B&R shall be deemed to be in
breach of the terms hereof if any Affiliate of B&R engages in conduct that would be in breach of
the terms hereof had such conduct been undertaken directly by B&R. For purposes of this Agreement,
(i) Affiliates shall mean any other person or entity that, directly or indirectly through
one or more intermediaries, controls, is controlled by or is under common control with the

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applicable person or entity, whether by contract, voting equity, legal right, court order or
otherwise, and (ii) Term shall mean the period of time which is the later of (a) five years
following the closing date of the Initial Public Offering or (b) such date as when B&R and MDA have
had no common directors or officers for a period of 365 consecutive days.

          (b) Permitted Activities. MDA acknowledges and agrees that B&R and its Subsidiaries
shall not be restricted from purchasing, developing, leasing, managing, owning or controlling any
Target Properties located outside of the Mid-Atlantic Region, or from engaging or participating in
any business or operations of any kind other than as described in clause (a) above, both within and
outside of the Mid-Atlantic Region.

          (c) Scope of Charles S. Bresler Non-Compete. Except set forth on Schedule D
attached hereto, with respect to MDA or B&R and their respective Subsidiaries, or unless waived in
writing by MDA in its sole and absolute discretion following approval by a majority of MDA’s
independent directors, Charles S. Bresler agrees that during the Term he shall not, directly or
indirectly, purchase, develop, lease, manage, own or otherwise invest in any building or series of
buildings in which he will have a controlling interest (namely the power to direct the management
or policies of such venture or entity undertaking such activity, whether by contract, voting
equity, legal right, court order or otherwise) and that (i) are Target Properties and (ii) are
located in the Mid-Atlantic Region. Charles S. Bresler shall be deemed to be in breach of the
terms hereof if any entity that he controls engages in conduct that would be in breach of the terms
hereof had such conduct been undertaken directly by Charles S. Bresler.

     6. Right of First Offer

          (a) Notice of Intent to Sell. During the Term, prior to marketing or otherwise
offering for sale, or soliciting any offer to buy, any of the properties described on Schedule
E attached hereto or any right, title or interest therein (the “Retained Target
Properties”), B&R shall offer to sell the Retained Target Properties to MDA (the “Right of
First Offer”) by written notice to MDA containing the Basic Terms (as hereinafter defined) of
such proposed sale (the “Offer Notice”). MDA may assign this Right of First Offer to any
of its Subsidiaries.

          (b) Offer to Purchase. MDA shall have thirty (30) days after receipt of the Offer
Notice to give written notice to B&R of its desire to purchase the applicable Retained Target
Property for the Basic Terms stated in the Offer Notice (the “Offer”). Such notice will
include a purchase and sale agreement prepared by MDA, containing the Basic Terms pursuant to
which MDA would agree to purchase the applicable Retained Target Property (the “Offer
Agreement”). Failure by MDA to give such written notice on a timely basis shall be deemed a
waiver of the Right of First Offer.

          (c) Acceptance or Rejection of Offer.

                (i) B&R may reject the Offer and Offer Agreement if B&R delivers written notice to MDA within
twenty (20) business days after the date of receipt of the Offer and Offer Agreement (the
“Response Period”) stating in detail all of the reasons for such rejection (the
“Rejection Notice”). The failure of B&R to deliver to MDA the Rejection Notice within the
Response Period shall constitute an acceptance of the Offer and the terms and conditions of the

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Offer Agreement and B&R shall be obligated to promptly execute the Offer Agreement and deliver
the same to MDA.

                (ii) If B&R rejects the Offer, then MDA and B&R will negotiate in good faith for a period of
not more than ten (10) business days after expiration of the Response Period, and attempt to agree
upon Basic Terms and the form of the Offer Agreement that are mutually acceptable to both MDA and
B&R. In the event that MDA and B&R, after negotiating in good faith, are unable to agree within
such ten (10) business day period, MDA’s Right of First Offer shall be deemed satisfied, subject to
clause (e) below.

                (iii) If B&R accepts the Offer, MDA will have an additional thirty (30) days to conduct due
diligence. During said 30-day diligence period, if MDA determines, in its sole discretion, that
the applicable Retained Target Property is unsuitable for its needs, MDA may elect not to execute
and deliver the Offer Agreement and shall have no obligations thereafter in connection therewith.
MDA shall provide B&R with prompt written notice of its decision to not accept the Offer. Should
MDA elect to accept the Offer during such additional thirty (30) day period, MDA shall execute the
Offer Agreement and deliver it to B&R, and the sale transaction shall be consummated in accordance
with the terms of the Purchase Agreement.

          (d) Further Restrictions. If B&R and MDA are unable to reach an agreement within the
time period set forth in clause (c)(ii) above, subject to Section 7 below, B&R shall be free to
consummate a sale or transfer to any party for any consideration and upon any terms, so long as the
consideration is equal to or more than the sales price stated in the Offer and all other “Basic
Terms” of the sale or transfer are not materially more favorable to such party than the terms of
the Offer and terms set forth in the final draft of the Offer Agreement delivered by MDA to B&R via
email or otherwise during the period referred to in clause (c)(ii). “Basic Terms” means (i)
purchase price (ii) the terms of any financing, (iii) closing costs and expenses, (iv) timing of
due diligence review and closing, and (v) the terms of any representations, warranties and
indemnification provisions.

          (e) Reinstatement. Following compliance with the procedures set forth above and MDA’s
waiver of the Right of First Offer in accordance with the terms hereof, if B&R shall not have
conveyed title to the applicable Retained Target Property on or before 180 days after the
expiration of the Response Period, then the Right of First Offer contained herein shall be
reinstated, and B&R shall be required to reoffer the applicable Retained Target Property to MDA in
accordance with the terms and conditions of this Section 6 prior to undertaking any further
marketing, offering or soliciting efforts with respect to the Retained Target Property.

          (f) Exceptions to Applicability. This Right of First Offer shall not apply to (i)
conveyance of a security interest in the Retained Target Property to a mortgagee or (ii) transfer
of the Retained Target Property or any interest therein to (a) a wholly-owned Subsidiary of B&R or
(b) a successor to B&R by merger or consolidation of substantially all of the assets or stock of
B&R and its Subsidiaries, in any case, provided that such Subsidiary or successor agrees in writing
to be bound by the terms hereof.

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     7. Right of First Refusal

          (a) Notice of Intent to Sell. During the Term, B&R covenants that it shall not sell,
transfer or assign its right, title or interest in or to any of the Retained Target Properties
(which, with respect to any single Retained Target Property, it shall only do in whole and not in
part) to any party unless B&R (i) secures a bona fide written offer containing the Basic Terms for
the applicable Retained Target Property from such party and (ii) by written notice (the “First
Refusal Notice”) to MDA, offers to sell B&R’s right, title or interest in the applicable
Retained Target Property to MDA upon the terms and conditions contained in such party’s offer or
draft purchase agreement, a copy of which shall be delivered to MDA with the First Refusal Notice
(collectively, the “Right of First Refusal”); provided, however, that B&R’s obligations
under this Section 7 shall not apply with respect to any Retained Target Property during the period
in which B&R is free to consummate a sale or transfer of such Retained Target Property following
B&R’s compliance with the procedures set forth in Section 6 hereof. MDA may assign this Right of
First Refusal to any of its Subsidiaries.

          (b) Response and Right to Sell. Within the thirty (30) day period following the date
MDA receives the First Refusal Notice (the “Refusal Response Period”), MDA may, by
delivering a written notice to B&R, elect to purchase B&R’s right, title and interest in the
applicable Retained Target Property upon the terms and conditions contained in the third party’s
offer, at a closing to take place at a date determined by MDA within thirty (30) days after the
date the closing with such third party would otherwise have occurred; provided, however, if B&R has
already complied with the Right of First Offer procedures set forth in Section 6 and would
otherwise be entitled to sell the applicable Retained Target Property in accordance with Section
6(d), the thirty (30) day period set forth above shall be reduced to a ten (10) day period. If MDA
shall fail to elect to purchase such right, title or interest within the Refusal Response Period,
B&R shall be free to sell, assign or transfer its entire right, title or interest in the applicable
Retained Target Property to the party who made the original offer or the direct assignee of such
party at any time within the period specified in such original offer, which shall not exceed 180
days from the date of such original offer, or, if no such period is so specified, within 180 days
from the date of such original offer, but not otherwise; provided, however, such sale, assignment
or transfer may only occur if the consideration is equal to or more than the sales price stated in
the First Refusal Notice and all other Basic Terms of the sale, assignment or transfer are no more
favorable to the party who made the original offer than the terms that were offered to MDA pursuant
to the First Refusal Notice.

          (c) Reinstatement. Following compliance with the procedures set forth above and MDA’s
election not to purchase the applicable Retained Target Property pursuant to the Right of First
Refusal, if B&R shall not have conveyed title to the applicable Retained Target Property on or
before the applicable 180 day period set forth in clause (b) above, then the Right of First Refusal
contained herein shall be reinstated, and B&R shall be required to reoffer to sell the applicable
Retained Target Property to MDA in accordance with the terms and conditions of this Section 7 prior
to selling, transferring or assigning its right, title or interest in the applicable Retained
Target Property to any third party.

          (d) Exceptions to Applicability. This Right of First Refusal shall not apply to (i)
conveyance of a security interest in the Retained Target Property to a mortgagee or (ii)

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transfer of the Retained Target Property to (a) a wholly-owned Subsidiary of B&R or (b) a
successor to B&R by merger or consolidation of substantially all of the assets or stock of B&R and
its Subsidiaries, in any case, provided that such Subsidiary or successor agrees in writing to be
bound by the terms hereof.

     8. Option to Purchase Retained Target Properties

          (a) Option. B&R hereby grants and conveys to MDA the exclusive right and option (the
“Option”) to purchase any or all of the Retained Target Properties from B&R during the Term
at the purchase price (as determined below) and upon the other terms and conditions hereinafter set
forth; provided, however, nothing contained in this Section 8 shall restrict B&R from selling or
otherwise transferring its interest in any Retained Target Property provided that B&R complies with
Sections 6 and 7 hereof. MDA may exercise the Option during the Term by giving B&R written notice
thereof. Upon such date (the “Exercise Date”) that MDA delivers written notice of the
exercise of the Option to B&R, B&R agrees to sell and, subject to clause (c) below, MDA agrees to
purchase, upon the terms and conditions set forth herein, the real estate, more particularly
described on Schedule E attached hereto. B&R and MDA agree that they will use commercially
reasonable efforts to assure that the closing for such purchase and sale will occur within a
reasonable period of time after the Exercise Date. MDA may assign this Option to any of its
Subsidiaries.

          (b) Purchase Price of Retained Target Property.

                (i) The purchase price of any Retained Target Property subject to the Option shall be the
price determined, if possible, by negotiation between MDA and B&R within 10 days following the
Exercise Date, during which time MDA and B&R agree to negotiate in good faith to establish a
mutually agreeable purchase price. If MDA and B&R are unable to agree upon a purchase price in
accordance with the prior sentence, the purchase price for the applicable Retained Target Property
shall be its appraised price as determined in accordance with the remaining provisions hereof.
First, MDA shall elect an appraiser within ten (10) days following the Exercise Date, which shall
be an M.A.I. appraiser that does not have any relationship or affiliation with MDA (the “First
Appraiser”). The First Appraiser shall appraise the Retained Target Property and submit to
both MDA and B&R its written appraisal of the fair market value of the Retained Target Property,
determined on the basis of an arm’s length sale for cash by an informed and willing buyer (under no
compulsion to sell) to an informed and willing purchaser (under no compulsion to purchase) as of
the date of completion of the appraisal (the “Determination Date”) in writing within thirty
(30) days after the Determination Date.

                (ii) If B&R agrees with the fair market value so determined, such value shall be the appraised
value of the Retained Target Property (the “Appraised Value”). If B&R does not deliver to
MDA its written notice of objection to the appraisal within ten (10) days of receipt of same, B&R
shall be deemed to have approved the appraisal. If B&R does, within ten (10) days after receipt of
such appraisal, give written notice of its objection to MDA as to the fair market value as
determined by such appraisal, then the B&R shall also, within such ten (10) days, select its own
appraiser (the “Second Appraiser”) who shall be an M.A.I. appraiser who does not have any
relationship or affiliation with the B&R, and the Second Appraiser shall determine the fair market
value of the Retained Target Property on the same basis as described in

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Section 8(b)(i) and submit its appraisal in writing, including its determination of the fair
market value, to both the MDA and the B&R within thirty (30) days after written objection notice is
given by the B&R to the MDA objecting to the First Appraisal.

                (iii) If the higher of the two fair market values determined by the First Appraiser and Second
Appraiser is equal to or less than one hundred and ten percent (110%) of the lower of such fair
market values, the Appraised Value shall be the mean average of the two fair market values so
determined. If the higher of such fair market values is greater than one hundred and ten percent
(110%) of the lower of such fair market values, the two appraisers shall designate a third
appraiser (by the drawing of lots, if they are unable to agree) (the “Third Appraiser”) who
does not have any relationship or affiliation with either MDA or B&R. The Third Appraiser (which
shall not be informed of the results of the prior determinations) shall independently determine the
fair market value of the Retained Target Property on the same basis as described in Section 8(b)(i)
within thirty (30) days after its appointment and the Appraised Value shall be the average of the
fair market value as determined by the Third Appraiser and the fair market value as determined by
whichever of the First Appraiser and the Second Appraiser is closest to the fair market value
determined by the Third Appraiser.

          (c) In the event that MDA, in its sole discretion, determines that it does not want to acquire
the applicable Retained Target Property at the purchase price as determined by appraisal after it
is finally determined in accordance with clause (b) above, MDA shall inform B&R in writing of such
determination within ten (10) days following the final determination of the purchase price as
determined by appraisal in accordance with the procedures described above. In such event, MDA
shall have not further obligation to purchase the applicable Retained Target Property but shall
forfeit the Option to purchase the applicable Retained Target Property during the Term pursuant to
this Section 8.

     9. Notice of Opportunity

          In the event any executive officer of B&R, or Charles S. Bresler in his individual capacity,
becomes aware of any Target Properties, or other properties that any of them reasonably expect may
derive at least 50% of their gross rental revenue from commercial office rent, that are located in
the Mid-Atlantic Region during the Term and that are available for sale or with respect to which an
investment becomes available, B&R or Charles S. Bresler, as the case may be, shall promptly inform
MDA of such fact in writing addressed to such person or persons as MDA may designate in writing
from time to time.

     10. Effective Time of Agreement and Definition of Term

          (a) Effective Time. MDA shall cause to be issued to B&R, and this Agreement shall
become effective when, and only when, MDA causes to be issued to B&R, LTIP units that upon vesting
and achieving parity with units in MDA’s operating partnership, Midlantic Partnership, LP, will be
convertible into 2.0% of MDA’s outstanding shares of Common Stock based upon the number of shares
of Common Stock outstanding immediately following completion of the Initial Public Offering,
assuming B&R redeems the LTIP units in accordance with the terms of Midlantic Partnership, LP’s
partnership agreement and Midlantic Parnership, LP or MDA, as the case may be, elects to issue
shares of Common Stock to B&R

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rather than cash upon the happening of such event (it being understood and agreed that cash
may be provided instead of Common Stock upon any such redemption in accordance with the terms of
the partnership agreement). In the event of the completion of a Green Shoe, this Agreement shall
only remain effective if MDA causes to be issued to B&R such additional LTIP Units that upon
vesting and achieving parity with units in MDA’s operating partnership, B&R shall own LTIP Units
convertible (as described in the preceding sentence) into 2.0% of the number of shares of MDA’s
Common Stock outstanding immediately following completion of the Initial Public Offering plus the
number of shares of MDA’s Common Stock issued as a result of the Green Shoe. If B&R fails to cause
either issuance reasonably promptly after the Initial Public Offering or Green Shoe, as the case
may be, this Agreement shall be null and void and shall have no force or effect.

          (b) Definition of Term. In the event of a Change of Control of MDA and termination of
Sidney M. Bresler’s employment agreement with MDA thereafter by MDA without cause or by Sidney M.
Bresler for good reason (as defined therein), the definition of Term as defined in Section 5(a) of
this Agreement shall, for all purposes hereunder, thereafter be five years following the closing
date of the Initial Public Offering. For purposes hereof, Change of Control means (a) the
acquisition by an Acquiring Person, together with its Affiliates, of the beneficial ownership (as
determined by Rule 13d-3 of the Securities and Exchange Act of 1934, as amended and in effect on
the date of the Agreement (the “Exchange Act”)) of fifty percent (50%) or more of the issued and
outstanding shares of Common Stock of MDA or (b) the acquisition by an individual, firm,
corporation, partnership or other entity, together with its Affiliates, other than a Subsidiary, of
all or substantially all of the assets of MDA. For purposes hereof, an Acquiring Person
means any individual, firm, corporation, partnership or other entity, other than (i) MDA, (ii) any
Subsidiary of MDA or (iii) any employee benefit plan of MDA or of any Subsidiary of MDA, or any
individual, firm, corporation, partnership or other entity organized, appointed or established by
MDA for or pursuant to the terms of any such plan.

     11. Miscellaneous

          (a) Restrictions on Sale. B&R shall not sell, transfer or assign or otherwise convey
any of the Retained Target Properties or any portion thereof except in compliance with the terms
and conditions set forth in this Agreement. Any sale, transfer or assignment or other conveyance
of any Retained Target Property not in compliance with the terms and provisions of this Agreement
shall be null and void and of no force or effect.

          (b) Access to Properties. During the Term, B&R shall provide MDA with access to each
of the Retained Target Properties and related books and records during normal business hours and
upon reasonable advance notice so that MDA may inspect such properties and associated tenants and
leases in MDA’s reasonable discretion. MDA shall use commercially reasonable efforts not to
disrupt operations at the applicable properties or of the tenants at such properties. In
particular, MDA shall not disrupt, in any material respect, any tenant’s right to quiet enjoyment
of any leased premises in connection with its inspection of the applicable properties.

          (c) Time. Time is of the essence for all purposes hereof.

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          (d) Amendment. This Agreement may not be amended or modified except by an instrument
in writing signed by all of the parties hereto.

          (e) Waiver. The parties may waive compliance with any of the covenants, agreements or
conditions contained herein; provided that unless otherwise expressly set forth herein, any
agreement on the part of any party to any such waiver shall be valid only if set forth on an
instrument in writing signed on behalf of such party and any waiver shall only act with respect to
the specific matter waived and shall not be deemed a continuing waiver.

          (f) Entire Agreement. This Agreement constitutes the entire agreement between the
parties pertaining to the subject matter hereof, and supersedes all prior and contemporaneous
agreements, understandings, negotiations and discussions of the parties, whether oral or written,
and there are no other agreements between the parties in connection with the subject matter hereof,
except as specifically set forth herein and therein.

          (g) Expenses. Each of the parties hereto shall pay their own fees and expenses
incident to the negotiation, preparation and performance of this Agreement.

          (h) Governing Law. This Agreement shall be construed and interpreted according to the
laws of the State of Delaware without regard to the conflicts of law rules thereof.

          (i) Assignment. This Agreement and each party’s respective rights and obligations
hereunder may not be assigned at any time except as expressly set forth herein without the prior
written consent of the other party hereto and any such attempt shall be null and void; provided,
however, either party may assign their rights and obligations hereunder to any person or entity
that purchases all or substantially of such party’s assets by giving the other party hereto written
notice thereof at least five business days prior to the date of such assignment.

          (j) Binding Effect. This Agreement shall be binding upon each of the parties hereto
as well as their successors and permitted assigns.

          (k) Notices. All communications, notices and disclosures required or permitted by
this Agreement shall be in writing and shall be deemed to have been given when delivered personally
or by messenger or by overnight delivery service, or when mailed by registered or certified United
States mail, postage prepaid, return receipt requested, or when received via facsimile, in all
cases addressed to the person for whom it is intended at his address set forth below or to such
other address as a party shall have designated by notice in writing to the other party in the
manner provided by this Section:

	 	 	 
	If to:

	 	Midlantic Office Trust, Inc.

Attn: Sidney M. Bresler

11140 Rockville Pike, Suite 620

Rockville, Maryland 20852

Facsimile: to be determined

12

 

	 	 	 
	In each case, with a copy to:

	 	Hunton & Williams LLP

Attn: Ronald J. Lieberman

Bank of America Plaza

600 Peachtree Street, N.E., Suite 4100

Atlanta, GA 30308

Facsimile: (404) 888-4190

	 
	If to:

	 	Bresler & Reiner, Inc.

Attn: Darryl M. Edelstein

11140 Rockville Pike, Suite 620

Rockville, Maryland 20852

Facsimile: (301) 945-4301

	 
	In each case, with a copy to:

	 	Shaiman Drucker Beckman Sobel & Stutman, LLP

Attn: S. Laurence Shaiman

1845 Walnut Street, 15th Floor

Philadelphia, PA 19103

Facsimile: (215) 972-0048

	 
	If to:

	 	Charles S. Bresler

c/o Bresler & Reiner, Inc.

11140 Rockville Pike, Suite 620

Rockville, Maryland 20852

Facsimile: (301) 945-4301

	 
	In each case, with a copy to:

	 	Shaiman Drucker Beckman Sobel & Stutman, LLP

Attn: S. Laurence Shaiman

1845 Walnut Street, 15th Floor

Philadelphia, PA 19103

Facsimile: (215) 972-0048

          (l) Counterparts. This Agreement may be executed in several counterparts, each of
which shall be deemed an original, but such counterparts shall together constitute but one and the
same Agreement.

          (m) Headings. The Section headings in this Agreement are inserted for convenience of
reference only and shall not constitute a part hereof.

          (n) Specific Performance. In the event of a breach or threatened breach by B&R or
Charles S. Bresler of the provisions of this Agreement, MDA shall be entitled to temporary and
permanent injunctive relief without the posting of any bond or other security, and any other legal
and equitable relief to which they may be entitled (including monetary damages which MDA may incur
as a result of such breach or threatened breach). MDA may pursue any remedy available, including
declaratory relief, concurrently or consecutively in any order, and

13

 

the pursuit of any one remedy at any time will not be deemed an election of remedies or waiver
of the right to pursue any other remedy.

          (o) Interpretation. Each party hereto has been represented by counsel and has had an
opportunity to negotiate the provisions hereof. Therefore, this Agreement shall not be read in a
light more favorable to one party than another by reason of the drafting of this Agreement or
otherwise.

          (p) Severability. If any provision, clause or part of this Agreement, or the
application thereof under certain circumstances, is held invalid, the remainder of this Agreement,
or the application of such provision, clause or part under other circumstances, shall not be
affected thereby and the provision that is held invalid shall be re-construed to give such
provision the maximum effect as permitted under applicable law.

          (q) No Reliance. No third party other than successors and permitted assigns of the
parties hereto is entitled to rely on any of the agreements contained in this Agreement, and the
parties hereto assume no liability to any third party because of any reliance on the agreements
contained herein.

[Signature Page to Follow]

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     IN WITNESS WHEREOF, the parties have caused this Agreement to be duly executed as of the day
and year first above written.

BRESLER & REINER, INC.

By: /s/ Darryl Edelstein 

Name: Darryl Edelstein

Title: Chief Operating Officer and

           Chief Financial Officer

MIDLANTIC OFFICE TRUST, INC.

By:  /s/ Sidney M. Bresler 

Name: Sidney M. Bresler

Title: Chairman, President and Chief Executive Officer

CHARLES S. BRESLER

By:  /s/ Charles S. Bresler

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