Document:

LEASE TERMINATION
AGREEMENT

     

    This
Lease Termination Agreement (the “Agreement”) is made this
30th
day of June 2010 (the “Effective Date”) by and
between OTR, an Ohio general partnership, acting as the duly authorized nominee
of the Board of the State Teachers Retirement System of Ohio (“OTR”), and STEELCLOUD, INC.,
a Virginia corporation (“SteelCloud”).  The
signatories to this Agreement will hereafter be referred to jointly as the “Parties”.

    

    RECITALS

    

    A.         Pursuant
to a Standard Industrial Gross Lease dated November 5, 2004, as amended by (i)
that certain Lease Amendment #1 dated March 28, 2005, and (ii) that certain
Lease Amendment #2 dated March __, 2009 (as amended, the “Lease”), pursuant to which
SteelCloud leased from OTR approximately 24,240 rentable square feet of space
designated as Bays 3-5 (collectively, the “Premises”) in the building
known as Building 8 (the “Building”) with an address of
13960-13964 Park Center Road, Herndon, Virginia 20171 and located in the
industrial park known as Renaissance Park at Dulles (the “Industrial
Park”). Capitalized terms used but not otherwise defined herein
shall have the meanings ascribed to such terms in the Lease.

     

    B.         SteelCloud
has failed to timely pay to Landlord Fixed Minimum Rent and Additional Rent
(collectively, “Rent”)
to Landlord in accordance with the terms of the Lease (the “Event of
Default”).  As of the date of this Agreement, SteelCloud owes
Landlord past-due Rent in the amount of twenty thousand, two hundred
eighty-eight and 87/100 dollars ($20,288.87) and Rent for the remaining Term of
the Lease in the amount of one million, seven hundred forty-seven thousand, one
hundred twenty-two and 13/100 dollars ($1,747,122.13).

     

    C.         SteelCloud
acknowledges and agrees that:

     

    
      	
               
      

            	
              (i)

            	
              the
      Security Deposit (defined below) has been previously applied to past due
      amounts owing under the Lease; and

            

    

     

    
      	
               
      

            	
              (ii)

            	
              SteelCloud
      is in default of the conditions of the Lease beyond all applicable notice,
      grace and cure periods on account of, among other things, the Event of
      Default.

            

    

     

    D.         OTR
and SteelCloud desire to establish the terms by which SteelCloud will deliver
possession of the Premises to Landlord.

     

    NOW,
THEREFORE, in consideration of the mutual promises contained herein and other
good and valuable consideration exchanged between OTR and SteelCloud, the
receipt and sufficiency of which is hereby acknowledged, the Parties agree as
follows:

     

    
      	
              1.0

            	
              INCORPORATION
      OF RECITALS

            

    

     

    1.1           The
foregoing Recitals are incorporated into this Agreement as if fully set out
herein.

    
      
         

      

      
         

        
          

        

      

      
         

      

    

    
      	
              2.0

            	
              RELEASE
      OF PREMISES AND SECURITY DEPOSIT

            

    

     

    
      	 	
              2.1.

            	
              On
      the date of this Agreement:

            

    

     

    
      	
               
      

            	
              a)

            	
              SteelCloud
      will surrender the Premises to OTR in broom clean condition and hereby
      waives and releases any and all rights, title and interests it may have in
      and to the Premises and the Personal Property contained therein;
      and,

            

    

     

    
      	
               
      

            	
              b)

            	
              The
      Term of the Lease is terminated subject, however, to the survival of
      indemnification in other provisions of the Lease which by their terms
      survive the expiration or earlier termination of the Term of the
      Lease.

            

    

     

    2.2.          In
consideration of OTR’s agreement to terminate the remainder of the Term of the
Lease as provided herein, SteelCloud shall pay OTR the amount of three hundred
thirteen thousand, six hundred fifty-four 87/100 dollars ($313,654.87) in
immediately available funds within ten days of the date of this
Agreement.

     

    2.3.          OTR
has previously applied in accordance with the terms of the Lease the security
deposit in the amount of Ninety-Six Thousand Six Hundred Eighty-Five and 00/100
Dollars ($96,685.00) (such amount, the “Security Deposit”) posted by
SteelCloud pursuant to the Lease and SteelCloud hereby waives and releases any
and all rights, title, and interests it may have in and to the Security
Deposit.

     

    
      	
              3.0

            	
              MISCELLANEOUS
      TERMS AND CONDITIONS

            

    

     

    3.1.          In
consideration hereof, SteelCloud and its successors, affiliates,
assigns,  agents, and attorneys hereby release and forever discharge
OTR, and all of its predecessors, successors, parents, direct subsidiaries,
indirect subsidiaries, affiliates, assigns, heirs, agents, attorneys,
principals, officers, partners, employees, members and managers, jointly and
severally, from and against all actions, causes of action, claims, suits, debts,
damages, judgments, liabilities, and demands whatsoever, whether matured or
un-matured, whether at law or in equity, whether before a local, state or
federal court or state or federal administrative agency, tribunal, or commission
regardless of location, and whether now known or unknown, liquidated or
un-liquidated, that SteelCloud now has or may have had, or that may hereafter
accrue, arising out of the Lease or the Premises.

     

    3.2.          This
document contains the complete Agreement between the Parties and shall be
binding upon the Parties thereto, their predecessors, successors, parents,
subsidiaries, partners, affiliates, assigns, agents, directors, officers,
employees, and attorneys.  Each of the signatories of this Agreement
represents and warrants that he is authorized to execute this Agreement and to
bind the Parties hereto.  This Agreement may be modified only by a
written document signed by the Parties.  No waiver of this Agreement
or of any of the promises, obligations, terms, or conditions hereof shall be
valid unless it is written and signed by the Party against whom the waiver is to
be enforced.  This Agreement may be executed in identical
counterparts, each of which shall constitute an original and all of which shall
constitute one and the same Agreement.  Signatures received via
facsimile or pdf electronic transmission shall be acceptable as
originals.  If any part or any provision of this Agreement shall be
finally determined to be invalid or unenforceable under applicable law by a
court of competent jurisdiction, that part or provision shall be ineffective to
the extent of such invalidity or unenforceability only, without in any way
affecting the remaining parts of said provision or the remaining provisions of
this Agreement.

    
      
         

      

      
        2

        
          

        

      

      
         

      

    

    3.3.          The
Parties acknowledge that they have had the opportunity to consult with legal
counsel of their choosing prior to entering into this Agreement and that they
enter this Agreement knowingly and voluntarily.

     

    3.4.          Any
notices required under this Agreement shall be served upon the Parties via
telecopier and/or overnight priority mail as follows:

    

    
      
        	
                Notices
      to OTR:

              
	 
      	 
      
	 
      	
                OTR,
      Renaissance Park

              
	 
      	
                275
      E. Broad Street

              
	 
      	
                Columbus,
      Ohio 43215

              
	 
      	
                Attention:
      Real Estate Manager

              
	 
      	 
      
	
                With
      a copy to:

              
	 
      	 
      
	 
      	
                Seyfarth
      Shaw LLP

              
	 
      	
                975
      F Street, NW

              
	 
      	
                Washington,
      DC 20004

              
	 
      	
                Attn:  Alexander
      X. Jackins, Esquire

              
	
                Notices
      to SteelCloud:

              
	 
      	 
      
	 
      	
                SteelCloud,
      Inc.

              
	 
      	
                20110
      Ashbrook Place, Suite 130

              
	 
      	
                Ashburn,
      Virginia 20147

              
	 
      	
                Attn:
      Brian H. Hajost

              

      

    

    

    3.5.           This
Agreement shall be governed, in all respects, under the laws of the Commonwealth
of Virginia, without reference to or consideration of its choice of law
rules.

    

    [Signatures
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    IN WITNESS WHEREOF, we have
hereunto set our hands and seals as of the date above written.

     

    
      
        
          
            
              
                	
                        OTR,
      an Ohio general partnership, acting as the duly authorized nominee of the
      Board of the State Teachers Retirement System of Ohio

                      	 
      	
                        STEELCLOUD,
      INC.,

                        a
      Virginia corporation

                      
	 
      	 
      	 
      
	
                        By:

                      	
                        /s/ Russ Nicholson

                      	 
      	
                        By:

                      	
                        /s/ Brian H. Hajost

                      
	 	 	 	 	 
	
                        Name:

                      	
                        Russ Nicholson

                      	 
      	
                        Name:

                      	
                        Brian H. Hajost

                      
	 	 	 	 	 
	
                        Title:

                      	
                        Authorized Officer

                      	 
      	
                        Title:

                      	
                        President &
  CEO

                      

              

            

          

        

      

    

     

    
      
         

      

      
        4RECEIVABLE PURCHASE
AGREEMENT

     

    This
RECEIVABLE PURCHASE AGREEMENT (this
“Agreement”) is dated as
of July 1, 2010, by and between OTR, an Ohio general partnership, acting as the
duly authorized nominee of the Board of the State Teachers Retirement System of
Ohio (“OTR”) and Clipper
Investors LLC, an Illinois limited liability company (“Buyer”).  The
signatories to this Agreement will hereafter be referred to jointly as the “Parties”.

     

    WHEREAS, OTR has entered into
a Agreement with Steel Cloud Inc., a Virginia corporation (“Steel Cloud”) dated as of
June 30, 2010 for the termination of OTR’s Lease (as defined therein), which
gives rise to a payment obligation from Steel Cloud to OTR (“Settlement
Receivable”);

     

    WHEREAS, the Buyer wishes to
purchase the Settlement Receivable, and OTR wishes to sell the Settlement
Receivable; and

     

    WHEREAS, Buyer has agreed to
purchase the Settlement Receivable on the terms set forth herein.

     

    NOW, THEREFORE, in
consideration of the mutual promises and agreements set forth herein, OTR and
the Buyer agree as follows:

     

    1.           Purchase of Settlement
Receivable.  Buyer hereby purchases from OTR, and OTR hereby
sells, assigns, transfers and delivers to Buyer, all of its right, title and
interest in and to the Settlement Receivable.  In consideration of the
sale of the Settlement Receivable to Buyer, Buyer shall pay upon the execution
of this Agreement one hundred-seventy thousand dollars ($170,000) to OTR as the
full purchase price for the Settlement Receivable.

     

    2.           Representations and
Warranties.  This sale is “as is, where is” without recourse to
OTR and without any representations or warranties.  Notwithstanding
the foregoing, OTR represents and warrants to the Buyer that OTR is the owner of
the Settlement Receivable and that the Settlement Receivable has not been
previously sold or assigned.

     

    3.           Miscellaneous Terms And
Conditions.  This document contains the complete Agreement
between the Parties and shall be binding upon the Parties thereto, their
predecessors, successors, parents, subsidiaries, partners, affiliates, assigns,
agents, directors, officers, employees, and attorneys.  Each of the
signatories of this Agreement represents and warrants that he is authorized to
execute this Agreement and to bind the Parties hereto.  This Agreement
may be modified only by a written document signed by the Parties.  No
waiver of this Agreement or of any of the promises, obligations, terms, or
conditions hereof shall be valid unless it is written and signed by the Party
against whom the waiver is to be enforced.  This Agreement may be
executed in identical counterparts, each of which shall constitute an original
and all of which shall constitute one and the same
Agreement.  Signatures received via facsimile or pdf electronic
transmission shall be acceptable as originals.  If any part or any
provision of this Agreement shall be finally determined to be invalid or
unenforceable under applicable law by a court of competent jurisdiction, that
part or provision shall be ineffective to the extent of such invalidity or
unenforceability only, without in any way affecting the remaining parts of said
provision or the remaining provisions of this Agreement.

    
      
         

      

      
        
        

        
          

        

      

      
         

      

    

     

    4.           Consultation With
Counsel.  The Parties acknowledge that they have had the
opportunity to consult with legal counsel of their choosing prior to entering
into this Agreement and that they enter this Agreement knowingly and
voluntarily.

     

    5.           Notices.  Any
notices required under this Agreement shall be served upon the Parties via
telecopier and/or overnight priority mail as follows:

    

    Notices
to OTR:

    

    OTR,
Renaissance Park

    275 E.
Broad Street

    Columbus,
Ohio 43215

    Attention:
Real Estate Manager

    

    With a
copy to:

    

    Seyfarth
Shaw LLP

    975 F
Street, NW

    Washington,
DC 20004

    Attention:
Alexander X. Jackins, Esquire

     

    Notices
to Kenneth A. Merlau:

    

    Clipper
Investors LLC

    1095
Fisher Lane

    Winnetka,
Illinois 60093

    Attention:
Kenneth A. Merlau

    

    With a copy to:

    

    Ungaretti
& Harris LLP

    70 West
Madison, Suite 3500

    Chicago,
Illinois 60602

    Attention:  Michael
W. Black, Esquire

    

    6.           Governing
Law.  This Agreement shall be governed, in all respects, under
the laws of the Commonwealth of Virginia, without reference to or consideration
of its choice of law rules.

    

    [Signatures
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    IN WITNESS WHEREOF, we have
hereunto set our hands and seals as of the date above written.

     

    
      
        
          
            
              
                	
                        OTR,
      an Ohio general partnership, acting as the duly authorized nominee of the
      Board of the State Teachers Retirement System of Ohio

                      	 
      	
                        Clipper
      Investors LLC, an Illinois limited liability company

                      
	 
      	 
      	 
      
	
                        By:

                      	
                        /s/ Russ Nicholson

                      	 
      	
                        By:

                      	
                        /s/ Kenneth A. Merlau

                      
	 	 	 	 	 
	
                        Name:

                      	
                        Russ Nicholson

                      	 
      	
                        Name:

                      	
                        Kenneth A. Merlau

                      
	 	 	 	 	 
	
                        Title:

                      	
                        Authorized Officer

                      	 
      	
                        Title:

                      	
                        Manager

                      

              

            

          

        

      

    

    
      
         

      

      
        3

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