Exhibit 10.21
-------------
SUBLEASE AGREEMENT
------------------
7735 Old Georgetown Road
Bethesda, Maryland 20814
CHEVY CHASE BANK, F.S.B.
Sublandlord
and
ICONIXX CORPORATION
Subtenant
1
SUBLEASE
--------
This sublease (this "Sublease") is made and entered into as of the 24th
day of April, 2000, by and between Chevy Chase Bank, F.S.B., a federally
chartered depository institution qualified to do business in the State of
Maryland (the "Sublandlord"), and Iconixx, a Delaware corporation (the
"Subtenant").
Recitals
--------
WHEREAS, Sublandlord is the tenant under a certain office lease dated
May 9, 1997, by and between Commonwealth Fairmont Corporation ("Prime Landlord",
which term includes all successors and assigns of the Prime Landlord) and
Sublandlord for premises described therein, comprising sixty thousand six
hundred eighteen (60,618) square feet and identified as the fourth (4th), sixth
(6th), seventh (7th), eighth (8th), ninth (9th) and tenth (10th) floors of the
office building known as the Fairmont Building, located at 7735 Old Georgetown
Road, Bethesda, Maryland 20814 (such premises being herein referred to
collectively as the "Prime Premises", such building, in which the Prime Premises
is located, being the "Building", and said office lease being the "Prime Lease
Agreement");
WHEREAS, the Sublandlord and the Prime Landlord entered into an
addendum to the Prime Lease Agreement, also dated May 9, 1997 (such addendum
being the "Prime Addendum");
WHEREAS, the Sublandlord and Prime Landlord confirmed certain terms of
the Prime Lease Agreement in a document dated January 14, 1998 and entitled
"Exhibit C Certificate of Commencement" (such document being the "Commencement
Certificate", and the Prime Lease Agreement, together with the Prime Addendum
and the Commencement Certificate being, collectively, the "Prime Lease"); and
WHEREAS, Sublandlord desires to sublease to Subtenant, and Subtenant
desires to sublease from Sublandlord, the entire Prime Premises, subject to and
in accordance with the terms of this Sublease;
IT IS, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, hereby agreed by and between the
parties hereto as follows:
1. Subleased Premises; Reserved Premises.
-------------------------------------
Sublandlord hereby leases to Subtenant, and Subtenant hereby leases
from Sublandlord, the entire Prime Premises (which entire Prime Premises is
sometimes hereinafter also referred to as the "Subleased Premises"), as follows:
(a) First Space.
------------
2
The portion of the Subleased Premises which is located on the
fourth (4th) floor of the Building shall be herein referred to as the "First
Space".
(b) Second Space.
-------------
The portion of the Subleased Premises which is located on the
sixth (6th), seventh (7th), eighth (8th), ninth (9th) and tenth (10th) floors of
the Building shall be herein referred to as the "Second Space".
(c) Subleased Premises.
------------------
The First Space and the Second Space comprise the entire
Subleased Premises. Except as herein expressly provided, for all purposes
hereof: the First Space shall be deemed to contain ten thousand (10,000) square
feet; the Second Space shall be deemed to contain fifty thousand six hundred
eighteen (50,618) square feet; and the Subleased Premises shall be deemed to
contain sixty thousand six hundred eighteen (60,618) square feet.
(d) Parking.
-------
This Sublease includes the right of Subtenant to use
"Subtenant's Proportionate Share" (as hereinbelow defined) of Sublandlord's
rights to use the Building's parking facilities as set forth in Section 14(d) of
the Prime Lease Agreement (i.e., during the "Initial Term" (as hereinbelow
defined), 16.50% of the parking spaces granted to Sublandlord under the sixth
sentence of such section, and, during the "Second Space Term" (as hereinbelow
defined), 100% of such spaces), all in accordance with the terms set forth in
said Section 14(d) of the Prime Lease Agreement. Notwithstanding the foregoing,
such Subtenant's rights to such parking spaces shall only be effective to the
extent permitted by the Prime Lease and to the extent consented to by the Prime
Landlord (as provided for in Paragraph 7(b) hereinbelow) and Sublandlord makes
no warranty or agreement with respect to Subtenant actually receiving the right
to use such parking facilities.
2. Delivery.
---------
Sublandlord shall deliver to Subtenant, and Subtenant shall accept from
Sublandlord delivery of, the Subleased Premises, vacant and unencumbered by any
rights to possession other than those vested in Subtenant hereunder, and
otherwise in accordance with this Paragraph 2.
(a) First Space.
-----------
Delivery of the First Space shall be tendered by Sublandlord
to Subtenant on or before the later to occur of: (i) thirty (30) business days
following the "Execution Date" (as hereinafter defined), or (ii) ten (10) days
after Sublandlord's receipt of the Prime Landlord's consent to this Sublease (as
provided for in Paragraph 7(b) below); the actual date of such tender being the
"First Space Commencement Date". Sublandlord shall provide Subtenant with a
least five (5) business days advance written notice of the First Space
Commencement Date. The
3
"Execution Date" shall be the date upon which the Sublandlord executes this
Sublease (which date shall be inserted by Sublandlord in the introductory
paragraph of this Sublease); it being agreed that Subtenant shall first execute
this Sublease and that Sublandlord shall deliver an original, executed
counterpart of this Sublease to Subtenant within three (3) business days after
Sublandlord's execution hereof.
(b) Second Space.
-------------
Delivery of the Second Space shall be tendered by Sublandlord
to Subtenant between October 1, 2001, and January 1, 2002 upon no less than
thirty (30) days advance written notice to Subtenant; the actual date of such
tender being the "Second Space Commencement Date". Throughout calendar year
2001, Sublandlord shall provide to Subtenant, promptly following Subtenant's
written request (which request shall be made no more frequently than once per
month), Sublandlord's good faith estimate of the Second Space Commencement Date.
(c) Subleased Premises.
------------------
Tender of delivery of the First Space and Second Space may be
accomplished by Sublandlord's delivery to Subtenant of keys and/or access cards
(as applicable) to the applicable portion of the Subleased Premises. Each of the
First Space and Second Space are to be tendered by Sublandlord to Subtenant in
its then current, "as is" condition as of the date of each respective tender,
excepting only that Sublandlord shall remove all of Sublandlord's personal
property, and may remove Sublandlord's security system, from the Subleased
Premises prior to each respective tender. SUBLANDLORD HEREBY DISCLAIMS ANY AND
ALL WARRANTIES, EXPRESS OR IMPLIED, WHETHER OF MERCHANTABILITY, HABITABILITY,
FITNESS FOR A PARTICULAR PURPOSE, OR OTHERWISE, WITH RESPECT TO THE SUBLEASED
PREMISES. In making and executing this Sublease, Subtenant has relied solely on
such investigations, examinations and inspections as Subtenant has chosen to
make or has made with regard to the Subleased Premises and the Building.
Subtenant acknowledges that Subtenant has been afforded the opportunity for full
and complete investigations, examinations and inspections of the Subleased
Premises and the Building.
3. Term.
-----
The term of this Sublease shall commence upon the First Space
Commencement Date and shall expire (unless this Sublease is sooner terminated in
accordance with any applicable provision hereof) on October 30, 2007 (such term
being the "Sublease Term"). For the convenience of the parties, the time period
from the First Space Commencement Date to the Second Space Commencement Date is
sometimes herein referred to as the "Initial Term", and the time period from the
Second Space Commencement Date until the expiration of the Sublease Term (or
sooner termination of this Sublease in accordance with any applicable provision
hereof) is sometimes herein referred to as the "Second Space Term".
4. Minimum Annual Rent.
-------------------
4
Subtenant shall pay to Sublandlord the "Minimum Annual Rent" as
follows:
(a) First Space.
------------
Throughout the Sublease Term, commencing on the First Space
Commencement Date, Subtenant shall pay to Sublandlord an annual base rent with
respect to the First Space equal to Two Hundred Forty Thousand Dollars
($240,000.00) per year, payable in equal monthly installments of Twenty Thousand
Dollars ($20,000.00), subject to increase as hereinafter provided (such annual
base rent being the "First Space Base Rent"), subject only to the abatement of
First Space Base Rent provided for in this Paragraph 4(a). Provided Subtenant
shall not be in breach of any provision of this Sublease, the First Space Base
Rent payable for the sixty (60) day period commencing on the First Space
Commencement Date shall be waived and abated. On each January 1st throughout the
Sublease Term, commencing on January 1, 2001, the First Space Base Rent (and
monthly installments thereof) shall be increased by an amount equal to two and
one-half percent (2.50%) of the First Space Base Rent then in effect (for
example, the First Space Base Rent shall increase to Two Hundred Forty-Six
Thousand Dollars ($246,000.00) effective January 1, 2001).
(b) Second Space.
------------
Throughout the Second Space Term, commencing on the Second
Space Commencement Date, Subtenant shall pay to Sublandlord an annual base rent
with respect to the Second Space equal to One Million Two Hundred Fourteen
Thousand Eight Hundred Thirty-Two Dollars ($1,214,832.00) per year, payable in
equal monthly installments of One Hundred One Thousand Two Hundred Thirty-Six
Dollars ($101,236.00), subject to increase as hereinafter provided (such annual
base rent being the "Second Space Base Rent"). On each January 1st throughout
the Second Space Term, commencing on January 1, 2003, the Second Space Base Rent
(and monthly installments thereof) shall be increased by an amount equal to two
and one-half percent (2.50%) of the Second Space Base Rent then in effect (for
example, the Second Space Base Rent shall increase to One Million Two Hundred
Forty-Five Thousand Two Hundred Two and 80/100 Dollars ($1,245,202.80) effective
January 1, 2003).
(c) Subleased Premises.
------------------
As hereinabove provided, the "Minimum Annual Rent" shall mean,
during the Initial Term, the First Space Base Rent and, during the Second Space
Term, both the First Space Base Rent and the Second Space Base Rent. The Minimum
Annual Rent shall be payable, in equal monthly installments, on or before the
first day of each month (during the Sublease Term with respect to the First
Space Base Rent and during the Second Space Term with respect to the Second
Space Base Rent), except that the payment of First Space Base Rent for the first
full calendar month of the Sublease Term (following expiration of the sixty (60)
day abatement period provided for in Paragraph 4(a) above) shall be made upon
Subtenant's signing of this Sublease and the payment of the Second Space Base
Rent for the first full calendar month of the Second Space Term shall be made on
or before October 1, 2001. Notwithstanding the foregoing, the parties hereby
confirm and agree that Subtenant shall be liable for, among other things, the
5
entire amount of the Minimum Annual Rent due to Sublandlord under this Sublease
with respect to the entire Subleased Premises (i.e., both the First Space and
the Second Space) for the entire Sublease Term in the event of a default
(following notice and a five (5) day cure period (in the case of a monetary
default) and/or a fifteen (15) day cure period (in the case of a non-monetary
default; provided, however, that if such default is not reasonably capable of
being cured within such fifteen (15) day period, then so long as Subtenant has
commenced curative action within such period and thereafter continues to pursue
diligently such curative action, such fifteen (15) day period shall be extended
for the period necessary to cure such default, but not more than thirty (30)
days, inclusive of the original 15-day period) of Subtenant's obligations under
this Sublease during the Initial Term and/or at any time prior to Subtenant
taking possession to the Second Space. Except as herein expressly set forth, the
Minimum Annual Rent (and all other payments to be made by Subtenant to
Sublandlord in accordance with this Sublease) shall be payable without notice or
other demand, and without recoupment, counterclaim, set-off or other deduction,
at Sublandlord's address set forth in Paragraph 13 hereinbelow, or at such other
place as Sublandlord may designate from time to time by notice to Subtenant.
(d) Rent Abatement Under Prime Lease Agreement.
------------------------------------------
In the event, to the extent and for so long as any of the
"Minimum Annual Rent" (as defined in the Prime Lease and sometimes hereinafter
referred to as the "Prime Minimum Annual Rent") and/or "Tenant's Proportionate
Share" (as defined in the Prime Lease) of any increase in the "Basic Operating
Expenses" (as defined in the Prime Lease and such Tenant's Proportionate Share
of such increases in the Basic Operating Expenses being sometimes hereinafter
referred to as "Prime Operating Expense Increases") is abated under the Prime
Lease (whether by reason of interruption or reduction of services, condemnation,
casualty or otherwise), then a corresponding amount of the Minimum Annual Rent
and/or "Operating Expense Increases" (as defined in Paragraph 5 hereinbelow)
hereunder shall be abated hereunder in the same proportion as Prime Minimum
Annual Rent and/or Prime Operating Expense Increases are abated under the Prime
Lease.
5. Operating Expenses.
------------------
Subtenant shall pay "Operating Expense Increases" (as hereinafter
defined), as follows:
(a) Subtenant's Proportionate Share.
-------------------------------
As hereinbelow provided for, the parties hereby confirm and
agree that the "Proportionate Share", as such term is defined and provided for
in the Prime Lease Agreement (also referred to as "Tenant's Proportionate Share"
in the Prime Lease Agreement), is forty-eight and 70/100 percent (48.70%), as of
the date hereof; the First Space comprises sixteen and one-half percent (16.50%)
of the Prime Premises; and the Second Space comprises eighty-three and one-half
percent (83.50%) of the Prime Premises. "Subtenant's Proportionate Share" means:
(i) with respect to the First Space, eight and 04/100 percent [which is sixteen
and one-half percent (16.50%) of forty-eight and 70/100 percent (48.70%), i.e.,
16.50% X 48.70%] (such 8.04% being referred to herein as the "First Space
Share"); and, (ii) with respect to the Second Space, forty
6
and 66/100 percent (40.66%) [which is eighty-three and one-half percent (83.50%)
of forty-eight and 70/100 percent (48.70%), i.e., 83.50% X 48.70%] (such 40.66%
being referred to herein as the "Second Space Share").
(b) First Space Operating Expense Increase.
--------------------------------------
Commencing effective as of January 1, 2001, and thereafter
throughout the Sublease Term, for each calendar year (and each partial calendar
year) in the Sublease Term, Subtenant shall pay to Sublandlord an amount (pro
rated for any partial calendar year) equal to the First Space Share of the
increase, if any, of the "Basic Operating Expenses" (as defined and provided for
in the Prime Lease) for such calendar year over the Basic Operating Expenses
incurred during calendar year 2000. The First Space Share of each such full or
partial calendar year's increase is hereinafter referred to as such year's
"First Space Operating Expense Increase". For example, if the Basic Operating
Expenses for 2001 are One Hundred Ten Thousand Dollars ($110,000.00) and the
Basic Operating Expenses for 2000 are One Hundred Thousand Dollars
($100,000.00), then the First Space Operating Expense Increase for calendar year
2001 shall be Eight Hundred Four Dollars ($804.00) (i.e., $110,000.00 -
$100,000.00 = $10,000.00; 8.04% of $10,000.00 = $804.00)
(c) Second Space Operating Expense Increase.
---------------------------------------
Commencing effective as of January 1, 2003, and thereafter
throughout the Sublease Term, for each calendar year (and each partial calendar
year) in the Sublease Term, Subtenant shall pay to Sublandlord, in addition to
and together with the First Space Operating Expense Increase for such full or
partial calendar year, an amount (pro rated for any partial calendar year) equal
to the Second Space Share of the increase, if any, of the Basic Operating
Expenses for such full or partial calendar year over the Basic Operating
Expenses incurred during the calendar year 2002. The Second Space Share of each
such full or partial calendar year's increase is hereinafter referred to as such
year's "Second Space Operating Expense Increase".
(d) Operating Expense Increases.
---------------------------
The term "Operating Expense Increases" shall mean, during the
Initial Term, the First Space Operating Expense Increase and, during the Second
Space Term, both the First Space Operating Expense Increase and the Second Space
Operating Expense Increase. Prime Landlord's estimates, statements, and other
determinations of Basic Operating Expenses, pursuant to Section 5(d) of the
Prime Lease Agreement (including, but not limited to, Sections 5(d) (v) and
(vi)), shall be binding upon Subtenant, and Subtenant shall have no right to
dispute the accuracy of any such estimate, statement or other determination
except only as expressly provided as follows in this Paragraph 5(d). Commencing
on the Second Space Commencement Date and thereafter throughout the Sublease
Term, upon Subtenant's request Sublandlord shall request a detailed statement of
Basic Operating Expenses prepared by the Prime Landlord and a copy of Real
Estate Tax bills. Provided that Subtenant is not then in default under this
Sublease and has paid to Sublandlord all Operating Expense Increases (including
those Operating Expense
7
Increases then being disputed), Sublandlord, upon Subtenant's request, shall use
reasonable efforts to contest such detailed statement in accordance with, and to
the extent provided under, Section 5(d) of the Prime Lease Agreement. Subtenant
hereby agrees to reimburse Sublandlord, and hereby agrees to indemnify and hold
harmless Sublandlord, for and on account of all of the costs and expenses
(including, but not limited to, actual attorney's fees) Sublandlord incurs in
connection with any such contest and any increase in the Basic Operating
Expenses (and/or Tenant's Proportionate Share thereof) as a result of and/or in
connection with any such contest. In addition, Subtenant shall pay (to
Sublandlord), during the Initial Term, the First Space Share of, and, during the
Second Space Term, the First Space Share and the Second Space Share of, all
estimates (as the same may be revised by Sublandlord) and actual increases (as
determined by the Prime Landlord) in Basic Operating Expenses, as hereinbelow
provided for in Paragraph 5(e).
(e) Payment of Estimated and Actual Operating Expenses.
--------------------------------------------------
(i) Estimated Payments.
------------------
In order to provide for current monthly payments
of Operating Expense Increases (commencing effective as of January 1, 2001),
Sublandlord may submit to Subtenant, from time to time each calendar year during
the Sublease Term, a written statement based on the Prime Landlord's estimate of
the amount of the increases in Basic Operating Expenses, together with the
amount of the Operating Expense Increases estimated (by Sublandlord and/or Prime
Landlord) to result from such increases. Subtenant shall pay each month (during
the Sublease Term) one-twelfth (1/12) of the Operating Expense Increases so
estimated for such calendar year and Subtenant shall also pay, within fifteen
(15) days of receipt of such statement, the amount, if any, of such estimated
Operating Expense Increases accruing prior to the date of such statement.
Subtenant shall, in all cases, continue to make monthly payments of Operating
Expense Increases based on the last estimate received from Sublandlord until
Subtenant receives a revised estimate.
(ii) Actual Payments.
---------------
After the end of each calendar year during the
Sublease Term (and after the partial calendar year at the end of the Sublease
Term), commencing with the end of calendar year 2001, Sublandlord shall, as soon
as practicable (after receiving Prime Landlord's statement for same), submit to
Subtenant the Prime Landlord's statement of actual increases in Basic Operating
Expenses for the preceding calendar year over the Basic Operating Expenses for
the applicable Sublease Base Year(s). Subtenant shall pay to Sublandlord, within
twenty (20) days of Subtenant's receipt of such statement, the excess, if any,
of the actual Operating Expense Increases (as determined by reference to Prime
Landlord's statements for same) over the amount of Operating Expense Increases
theretofore paid by Subtenant during the previous year (as Subtenant's payment
of the estimated amounts for the Operating Expense Increases). If the amount of
Operating Expense Increases paid by Subtenant during the previous year exceeded
the actual Operating Expense Increases (as determined by reference to Prime
Landlord's statements for same), the excess shall be credited toward payment of
the next installment of Minimum
8
Annual Rent to be paid by Subtenant after Subtenant receives said statement. If
the amount of Operating Expense Increases paid by Subtenant with respect to the
last calendar year of the Sublease Term exceeds the actual Operating Expense
Increases (as determined by reference to Prime Landlord's statements for same)
payable by Subtenant for such year, Sublandlord shall pay to Subtenant the
excess amount within thirty (30) days after Sublandlord's submission to
Subtenant of the aforesaid statement of Operating Expense Increases for such
calendar year.
(iii) Pro Rata Payments.
-----------------
In addition, the Operating Expense Increases for
the partial calendar year during which the Sublease Term expires (i.e., January
1, 2007, to October 30, 2007) shall be prorated in the same manner as the Base
Operating Expenses are prorated under the Prime Lease Agreement.
(f) Additional Service Charges. In addition to the foregoing, Subtenant
--------------------------
agrees to pay Sublandlord, as additional rent hereunder, all charges payable by
Sublandlord under the Prime Lease Agreement for any additional services provided
to Subtenant by Prime Landlord, including, without limitation, any charges and
fees for alterations or after-hours heating and air conditioning services (all
such services being hereinafter referred to as the "Additional Services" and all
such charges being hereinafter referred to as the "Additional Service Charges").
At the request of Sublandlord and with the consent of the Prime Landlord,
Subtenant shall pay any such additional service charge amounts directly to or as
otherwise directed by Prime Landlord.
6. Rent.
-----
All sums (including, but not limited to, Minimum Annual Rent, Operating
Expense Increases, Additional Service Charges, late charges, interest and
attorney's fees) payable by Subtenant to Sublandlord shall be deemed rent, and
shall be payable to Sublandlord without notice (except as expressly provided for
herein) or other demand, and without recoupment, counterclaim, set-off or other
deduction (except only as herein expressly provided for) (all such sums being
herein sometimes collectively referred to as "Rent"). In the event that any
amount of Rent payable by Subtenant is not paid within three (3) days after the
date such payment is due (which due date, with respect to any non-scheduled
payments of Rent shall be the fifth (5th) day after Subtenant is invoiced
therefor if Subtenant is required to be invoiced under this Sublease for such
payment and if provision for another payment date is not provided for in this
Sublease), Subtenant shall pay to Sublandlord (upon request) a late charge equal
to five percent (5%) of the amount not so paid when due, as liquidated damages
for the additional charges incurred by Sublandlord as a result of such late
payment. In addition, if any portion of Rent is not paid within ten (10) days
after the same is due, Subtenant shall also pay to Sublandlord interest on such
unpaid amount, at the rate of five percent (5%) over the Prime Rate in the Money
Rate Section of the Wall Street Journal (or a comparable alternative index
-------------------
selected by Sublandlord in the event that for any reason the Wall Street Journal
-------------------
discontinues publication of the Prime Rate) (such rate being the "Stipulated
Rate") from the date such Rent is due until the date such Rent is received by
Sublandlord. No payment by Subtenant or receipt by Sublandlord of lesser amounts
of Rent than those herein provided for shall be deemed to be other than on
account of the earliest
9
unpaid Rent. No endorsement or statement on any check or any letter accompanying
any check or payment of Rent shall be deemed an accord and satisfaction, and
Sublandlord may accept any such check or other payment without prejudice to
Sublandlord's right to recover the balance of such Rent or pursue any other
remedy provided for in this Sublease or under applicable law. If Sublandlord
receives from Subtenant two (2) or more returned or "bounced" checks in any
twelve (12) month period, Sublandlord may require all future Rent payments to be
made by certified check. Except as hereinabove expressly provided, Rent for any
partial calendar month and/or calendar year during the Sublease Term shall be
prorated on a per diem basis.
7. Prime Lease.
-----------
(a) Prime Lease.
-----------
The Prime Lease, which consists of the Prime Lease Agreement,
the Prime Addendum, and the Commencement Certificate, is attached hereto as
Exhibit A, although certain economic terms of the Prime Lease have been
redacted. Notwithstanding anything to the contrary, this Sublease is subject and
subordinate to the Prime Lease and all provisions of the Prime Lease. Except as
otherwise provided for herein, all capitalized terms used in this Sublease which
are defined in the Prime Lease shall have the meaning provided in the Prime
Lease.
(b) Consent of Prime Landlord.
-------------------------
This Sublease shall be contingent upon receipt of the consent
of the Prime Landlord, as follows: Sublandlord agrees that Sublandlord shall
request the consent of the Prime Landlord to this Sublease promptly after the
Execution Date and Sublandlord and Subtenant shall each cooperate in endeavoring
to obtain the consent of the Prime Landlord to this Sublease. In the event that
such consent of the Prime Landlord shall not be obtained by Sublandlord within
thirty (30) days after the Execution Date, this Sublease shall be null and void
and of no further force and effect (without the obligation to provide notice),
whereupon there shall be no further rights and duties of either party to the
other hereunder, except that Sublandlord shall promptly refund to Subtenant any
advance payments of Rent theretofore made by Subtenant to Sublandlord and the
"Security Deposit" (as defined below) previously deposited with Sublandlord by
Subtenant.
(c) Incorporation of Prime Lease Provisions.
---------------------------------------
(i) Incorporation of Prime Lease Agreement Provisions.
-------------------------------------------------
The following provisions of the Prime Lease
Agreement are hereby incorporated into this Sublease in the manner provided as
follows. Except to the extent that the following provisions of the Prime Lease
Agreement are hereby made inapplicable and/or are modified by the provisions of
this Sublease (for the purpose of incorporation herein), the following listed
provisions of the Prime Lease Agreement are incorporated into this Sublease by
reference so that each and every such provision of the Prime Lease Agreement
binding upon, or inuring to the benefit of, the Prime Landlord shall, with
respect to this Sublease, bind upon, or
10
inure to the benefit of, Sublandlord; and each and every such provision of the
Prime Lease Agreement binding upon, or inuring to the benefit of, Tenant shall,
with respect to this Sublease, bind upon, or inure to the benefit of, Subtenant;
and, as so incorporated herein, Sublandlord agrees to perform and observe the
terms, covenants and conditions of the Landlord under the Prime Lease Agreement
to the extent incorporated herein (except as hereinafter modified); and, as so
incorporated herein, Subtenant agrees to perform and observe the terms,
covenants and conditions of the Tenant under the Prime Lease Agreement to the
extent incorporated herein; each and all with the same force and effect as if
the terms, covenants and condition of the following provisions of the Prime
Lease Agreement were completely set forth in this Sublease:
1. At Section 1(a), subsections 2, 4, 12, 16
and 17.
2. Section 1(b).
3. Section 1(c).
4. At Section 3, the definition of
"Lease Year", except that, for the purpose of incorporation herein, the first
Lease Year shall commence on the First Space Commencement Date.
5. Section 4(b).
6. Section 4(c), except that the following
words are deleted from the beginning thereof: "Subject to the provisions of
Section 4(d) of this Lease".
7. At Section 5(c)(ii), the definition of
"Basic Operating Expenses" (and the procedures applicable to the Prime
Landlord's determination of same) to the extent necessary to effectuate the
determination and payment of the Operating Expense Increases as hereinabove
provided for at Paragraph 5.
8 Section 7, in its entirety.
9. Section 8, in its entirety.
10. Section 9, in its entirety, together
with Exhibit F to the Prime Lease Agreement (entitled "RULES AND REGULATIONS"),
except that modifications of the Rules and Regulations shall only be made by the
Prime Landlord.
11. Section 10, in its entirety, except that
Sublandlord shall have the right to request that Subtenant deposit with
Sublandlord, and Subtenant shall make such deposit with Sublandlord upon
Sublandlord's request, reasonable security for the charges that will be due and
payable to the Prime Landlord in connection with any Additional Services.
12. Section 11, in its entirety.
11
13. Section 12, in its entirety.
14. Section 13, in its entirety, except that
any alterations and/or improvements requiring the consent of Sublandlord (by
incorporation of such Section 13 herein) shall also require the consent (and
satisfaction of the requirements) of the Prime Landlord, which consent of the
Prime Landlord the Sublandlord shall use reasonable efforts to procure, upon
Subtenant's written request from time to time.
15. Section 14, in its entirety.
16. Section 15, in its entirety, except that
upon the expiration of the Sublease Term, or sooner termination of this
Sublease, Subtenant shall quit and surrender the Subleased Premises in the
condition in which the Tenant is required to quit and surrender the Prime
Premises under the Prime Lease.
17. Section 16, in its entirety, except that
the words "one hundred fifty percent (150%)" in the fourth (4th) line thereof
shall be deleted and substituted with the words "two hundred percent (200%)".
18. Section 17, in its entirety, except
Subtenant shall, in no event, mortgage or encumber this Sublease (or any right
or interest thereunder) or permit the Subleased Premises to be used by others
(other than with respect to any permitted assignment or sublease in accordance
with the terms of this Sublease). Furthermore, any proposed sublease or
assignment requiring the consent of Sublandlord (by incorporation of such
Section 17 herein) shall also require the consent (and satisfaction of the
requirements) of the Prime Landlord, which consent of the Prime Landlord the
Sublandlord shall use reasonable efforts to procure, upon Subtenant's written
request from time to time, and which consent of Sublandlord shall be governed by
the standards of reasonableness set forth in such Section 17. Notwithstanding
the foregoing, any right of the Subtenant (incorporated herein from the Prime
Lease, as the same may also be modified herein) to assign Subtenant's interest
in this Sublease and/or to Sublet the Subleased Premises shall be further
restricted by and subject to the provisions of Paragraph 11 hereinbelow.
19. Section 18, in its entirety.
20. Section 19, in its entirety, except that in
the third line of Section 19(b) the words "in violation of Section 17" are
deleted and substituted with the words "in violation of this Lease" (i.e., in
violation of this Sublease).
21. Section 20, in its entirety.
22. Section 21, in its entirety.
23. Section 22, in its entirety.
24. Section 23, in its entirety, except that:
with regard to the first (1st)
12
sentence of Section 23(a) and Subtenant's insurance and payment obligations
arising by virtue of Section 23(c), Subtenant's restoration, insurance and
payment obligations shall include the obligation to restore, insure, and pay for
all leasehold improvements installed in the Subleased Premises by or at the
request of Subtenant and/or Sublandlord (as well as Subtenant's furniture,
furnishings, trade fixtures and equipment); references in Section 23(a) to rent
loss insurance shall mean and refer only to rent loss insurance procured by the
Prime Landlord; references in Sections 23(b) and (d) to "Landlord" shall mean
and refer to the Prime Landlord and/or the Sublandlord (it being agreed that
Sublandlord shall promptly provide to Subtenant a copy of any election or other
notice of Prime Landlord under Section 23(b) of the Prime Lease Agreement; and
Subtenant shall have the right to terminate the Sublease (and Sublandlord shall
terminate the Prime Lease) under or in connection with the provisions of Section
23(b) of the Prime Lease Agreement only during the first (1st) one-half (1/2) of
the Second Space Term (i.e., during the time period from the Second Space
Commencement Date to the date which is half-way between the commencement and
expiration of the Second Space Term)); it being agreed that Sublandlord shall
solely control any such termination prior to the Second Space Commencement Date
and during the second (2nd) one-half (1/2) of the Second Space Term.
25. Section 24, in its entirety, except that
references in Section 24 to "Landlord" shall mean and refer to the Prime
Landlord and/or the Sublandlord (it being agreed that Sublandlord shall promptly
provide to Subtenant a copy of any election or other notice of Prime Landlord
under Section 24 of the Prime Lease Agreement).
26. Section 25, in its entirety.
27. Section 26, in its entirety, except that
Section 26(d) is hereby deleted for the purpose of incorporation of Section 26
herein.
28. Section 27, in its entirety, except that
references to "Landlord" in Section 27(a) and in the second (2nd) and third
(3rd) sentences of Section 27(b) shall mean and refer to the Prime Landlord and
the Sublandlord, and during the Initial Term, the insurance coverage
requirements set forth in clause (a)(i) shall be maintained by Sublandlord, with
respect to the Second Space, and by Subtenant, with respect to the First Space.
29. Section 28, in its entirety.
30. Section 29, in its entirety.
31. Section 30, in its entirety, except that
Sublandlord shall not be required to provide any listings or signs, although
Sublandlord shall use reasonable efforts to procure a new listing and signs for
Subtenant from the Prime Landlord, all at Subtenant's expense and upon
Subtenant's request.
32. Section 32, in its entirety.
33. Section 33, in its entirety, except that
notwithstanding anything to
13
the contrary, no performance of any act required of Subtenant shall be excused
to the extent that the delay in performance of such act would result in the
breach of any obligation under the Prime Lease by Sublandlord as Tenant under
the Prime Lease.
34. Section 35, in its entirety.
35. Section 36, in its entirety.
36. Section 37, in its entirety.
37. Section 40, except that Sections 40(d) and
(i) are not incorporated herein.
38. Section 41, in its entirety.
39. Section 42, in its entirety.
(ii) Incorporation of Exhibits.
-------------------------
In addition, Exhibits A and B to the Prime Lease
Agreement are incorporated herein to the extent applicable to the Subleased
Premises.
(iii) Incorporation of Commencement Certificate Provisions;
-----------------------------------------------------
Size Adjustments.
----------------
Further, the Commencement Certificate is hereby
incorporated into this Sublease for the purpose of establishing and confirming
the following provisions of the Prime Lease (which are hereby incorporated
herein): the Rentable Floor Space of Prime Premises is sixty-eight thousand six
hundred eighteen (60,618) square feet; and the Proportionate Share (also known
as Tenant's Proportionate Share) is forty-eight and 70/100 percent (48.70%). In
addition, the parties hereby agree that in the event that the Rentable Floor
Space of Prime Premises, the Gross Leaseable Area (of the Building) and/or the
Proportionate Share (and/or words and provisions of similar import) are
modified, in accordance with the Prime Lease, after the date of this Sublease,
then proportionate adjustments shall be made in the Minimum Annual Rent,
Subtenant's Proportionate Share, and other components of Rent (if any) which
vary with the size of the Subleased Premises and/or the relation of the size of
the Subleased Premises to the size of the Building, all as reasonably determined
by Sublandlord (except that any determination in connection with same which is
binding upon Sublandlord as Tenant under the Prime Lease shall also bind
Subtenant under applicable provisions of this Sublease). Further, Sublandlord
and Subtenant each hereby agree both not to take any action which violates the
Prime Lease and not to fail to take any action required of such party to comply
with the Prime Lease (as the same may be incorporated herein); it being agreed
that the Sublandlord shall not be so responsible for the acts or omissions of
the Subtenant. If any of the provisions of this Sublease (exclusive of the
provisions of the Prime Lease incorporated herein) conflict with the provisions
of the Prime
14
Lease incorporated herein, such conflict shall be resolved in each instance in
favor of the provisions of this Sublease (exclusive of the provisions of the
Prime Lease incorporated herein).
(iv) Incorporation Generally.
-----------------------
Except as herein expressly provided for, to the
extent incorporated herein from the provisions of the Prime Lease, the words
"Landlord" and "Tenant", and words of similar import, whenever the same appear
in the Prime Lease, shall be construed to mean, respectively, Sublandlord and
Subtenant in this Sublease; the words "Leased Premises" and words of similar
import, whenever the same appear in the Prime Lease, shall be construed to mean
the Subleased Premises in this Sublease; the word "Lease", and words of similar
import, whenever the same appear in the Prime Lease, shall be construed to mean
this Sublease in this Sublease; the words "Lease Term" and words of similar
import, whenever the same appear in the Prime Lease, shall be construed to mean
the Sublease Term in this Sublease; and the words "Additional Rent" , "Rent" and
"rent", and words of similar import, whenever the same appear in the Prime
Lease, shall be construed to mean the Rent in this Sublease.
(v) Satisfaction of Incorporated Obligations.
----------------------------------------
Notwithstanding anything to the contrary, whenever
any provision of the Prime Lease which has been incorporated herein imposes on
the Sublandlord any obligation of the Landlord to the Tenant under the Prime
Lease (and, consequently, any obligation of the Sublandlord to the Subtenant
under this Sublease), Sublandlord may satisfy such obligation by using
reasonable efforts (in Sublandlord's capacity as Tenant under the Prime Lease)
to procure the Prime Landlord's satisfaction of such obligation and Sublandlord
shall have no further obligation or other liability whatsoever in connection
with the provisions of the Prime Lease which are incorporated herein; it being
agreed that such obligations of Sublandlord shall only be initiated by
Subtenant's written request to Sublandlord. Further, the Subtenant agrees that,
with Sublandlord's approval, the Prime Landlord may exercise any of the rights
of the Sublandlord under this Sublease. In addition, and notwithstanding
anything to the contrary, the time limits in the provisions of the Prime Lease
(incorporated herein) for the provision of notices, making of demands or
performing any act, condition or covenant on the part of the Tenant (and,
consequently, on the part of the Subtenant hereunder), and for the exercise by
the Tenant (and, consequently, the Subtenant) of any right, remedy, or option,
are changed for the purpose of incorporation herein by shortening the same in
each instance by four (4) business days, so that in each instance Subtenant
shall have four (4) business days less time to observe and/or perform under this
Sublease than the Sublandlord has as Tenant under the Prime Lease.
(d) Grant of Certain Rights of "Tenant" under the Prime Lease
----------------------------------------------------------
Agreement.
----------
Sublandlord shall use reasonable efforts, upon Subtenant's
request, to procure listings for Subtenant in the directory of tenants for the
Building; it being agreed that Subtenant shall reimburse Sublandlord for any and
all costs incurred by Sublandlord and/or payable to the Prime Landlord in
connection therewith.
15
(e) Certain Terms of Prime Lease not Incorporated Herein.
----------------------------------------------------
Provided that Subtenant shall not be in default under this
Sublease (after the expiration of any applicable notice and cure periods),
Sublandlord hereby agrees that Sublandlord shall pay the "Minimum Annual Rent"
and "Additional Rent" to Prime Landlord set forth under Section 5 of the Prime
Lease Agreement and, except to the extent that the Subtenant shall be obligated
to perform such obligations, Sublandlord shall also perform all of Sublandlord's
obligations (i.e., the obligations of the Tenant under the Prime Lease)
throughout the Sublease Term (all of such continuing monetary and non-monetary
obligations of the Sublandlord being the "Continuing Sublandlord Obligations").
8. Casualty, Condemnation.
----------------------
In the event a casualty or condemnation event affecting the Building or
the Subleased Premises occurs during the Sublease Term, then (i) in the event,
for so long as and to the extent Prime Minimum Annual Rent and Prime Operating
Expense Increases, respectively, are abated under the Prime Lease, then the
Minimum Annual Rent and Operating Expense Increases hereunder, respectively,
shall be proportionately abated, (ii) in the event and in the manner the
configuration, location or square footage of the Prime Premises is altered under
the Prime Lease, the Subleased Premises shall be altered hereunder, and (iii) in
the event the Prime Lease is terminated as a result of such event, this Sublease
shall also terminate. In the event all or any portion of the Subleased Premises
is taken by condemnation during the Sublease Term, Subtenant shall have,
together with Sublandlord during the Initial Term and exclusively thereafter,
any and all rights of tenant under the Prime Lease to assert claims to the
condemning authority for compensation for tangible personal property and
fixtures.
9. Sublandlord Performance under Prime Lease.
-----------------------------------------
Sublandlord hereby warrants and represents that Sublandlord has not
received any written notice of a "Tenant" default existing under the Prime Lease
as of the date hereof, and further warrants that it shall continue to observe
and perform all of its obligations under the Prime Lease until the Sublease
Commencement Date so that no "Tenant" default exists under the Prime Lease as of
such date. From and after the Sublease Commencement Date and for so long as
Subtenant is not in default hereunder, Sublandlord shall continue to perform the
Continuing Sublandlord Obligations (as such obligations differ between the
Initial Term and the Second Space Term) in order to prevent any default
thereunder or breach thereof during the Sublease Term. Provided, further, that
Sublandlord will not, at any time during the Sublease Term, exercise
Sublandlord's rights to expand the Prime Premises pursuant to the terms of
Section 4 of the Prime Addendum. Subtenant shall pay Sublandlord any and all
fees, costs (including actual attorneys' fees), liabilities, claims, demands,
damages and expenses incurred by or otherwise affecting the "Tenant" under the
terms of the Prime Lease by reason of and/or in connection with any such
exercise promptly upon Sublandlord's request. Sublandlord shall indemnify,
defend and hold Subtenant harmless from and against all claims, demands, actual
damages (but not punitive, consequential or other damages, all of which are
hereby expressly waived as a condition of this
16
Sublease), liabilities and expenses (including, without limitation, reasonable
attorneys' fees) of any kind whatsoever by reason of any breach by Sublandlord
of this Sublease (including, without limitation, default by Sublandlord in the
timely performance of the Continuing Sublandlord Obligations). The foregoing
indemnification obligation (as well as all other obligations of either party
accruing prior to any termination hereof) of Sublandlord shall survive the
termination of the Prime Lease and of this Sublease.
10. No Subtenant Default.
--------------------
Subtenant shall not cause or permit anything to be done which would
constitute a default or breach of Sublandlord's obligations as "Tenant" under
the Prime Lease assumed by and/or binding upon Subtenant hereunder, including,
without limitation, any breach or default which would cause the Prime Lease to
be terminated or forfeited by reason of any right of termination or forfeiture
reserved or vested in the Landlord under the Prime Lease. In the event of any
default or breach by Subtenant in the performance of the covenants and
agreements contained herein (including those incorporated herein), Sublandlord
shall have all of the rights as against Subtenant that the Landlord under the
Prime Lease has against the Sublandlord for a default under the Prime Lease.
Sublandlord shall promptly forward to Subtenant any notice of default received
by Sublandlord under the Prime Lease. Subtenant shall indemnify, defend and hold
Sublandlord harmless from and against all claims, demands, damages, liabilities
and expenses (including, without limitation, reasonable attorneys' fees) of any
kind whatsoever by reason of any breach or default on the part of Subtenant
hereunder or for any other damages, liabilities, costs, expenses (including,
without limitation, reasonable attorneys' fees), claims, demands or charges
suffered or which may be suffered by Sublandlord in connection with or arising
from this Sublease or the Subleased Premises. The foregoing indemnification
obligation (as well as all other obligations of either party accruing prior to
any termination hereof) of Subtenant shall survive the termination of the Prime
Lease and of this Sublease.
11. Assignment and Subletting.
-------------------------
(a) Assignment and Subletting.
-------------------------
The parties hereby confirm and agree that Subtenant shall not
assign, mortgage or encumber this Sublease, or any right or interest hereunder,
and shall not sublet the Subleased Premises, or any part thereof, and shall not
permit the Subleased Premises to be used by others, except only as hereinabove
expressly provided by the incorporation herein and modification of Section 17 of
the Prime Lease. However, and notwithstanding anything to the contrary, prior to
Subtenant attempting to assign Subtenant's interest in this Sublease and/or
subletting the Subleased Premises, or any part thereof, Subtenant shall first
comply with, and Subtenant's rights shall be subject to, the following
provisions of this Paragraph 11 of this Sublease. Furthermore, notwithstanding
anything to the contrary, any consent of Sublandlord (to any assignment or
subletting by Subtenant) shall be subject to the exercise by Sublandlord of the
"Recapture Option" (as hereinafter defined), and if Sublandlord shall not
exercise such Recapture Option such consent shall be expressly conditioned upon
compliance by Subtenant with all of the provisions of this Sublease (including
the provisions of the Prime Lease as modified and
17
incorporated herein), and any attempt by Subtenant to do otherwise shall be
absolutely and unconditionally null and void and of no force and effect
whatsoever.
(b) Notice.
------
If Subtenant desires to undertake any assignment of
Subtenant's interest in this Sublease and/or any sublease of the Subleased
Premises (or any part thereof) (any such desired assignment and subletting being
a "Proposed Transaction"), Subtenant shall provide Sublandlord with prior
written notice of such desire, specifying the consideration for, and all other
terms and conditions of, the Proposed Transaction and identifying the proposed
assignee or subtenant with respect thereto (the "Proposed Party"), which notice
shall be accompanied by a certified financial statement setting forth the
financial condition of the Proposed Party in sufficient detail so as to permit
Sublandlord's comprehensive assessment thereof.
(c) Recapture Option.
----------------
Sublandlord shall have the right (herein called the "Recapture
Option"), at Sublandlord's sole option, (i) in the event of a proposed
assignment of this Sublease or subletting of all of the Subleased Premises, to
terminate this Sublease in its entirety as of the "Effective Termination Date"
(as such term is hereinafter defined), or (ii) in the event of a proposed
subletting of part (but not all) of the Subleased Premises, to terminate this
Sublease only as to that portion of the Subleased Premises which Subtenant has
proposed to sublet, in which event Subtenant's obligations as to the Minimum
Annual Rent and Operating Expense Increases hereunder shall be reduced, as of
the Effective Termination Date, in the same proportion as the proportion of the
rentable area of the portion of the Subleased Premises so proposed to be sublet
bears to the total rentable area of the Subleased Premises. If Sublandlord
elects to exercise the Recapture Option to terminate this Sublease in whole or
in part, Sublandlord shall do so by the giving of written notice thereof to
Subtenant within thirty (30) days after Sublandlord's receipt of Subtenant's
notice described in Paragraph 11(b) hereinabove, which notice from Sublandlord
(the "Recapture Notice") shall specify the date (herein called the "Effective
Termination Date") on which such termination shall become effective; provided,
however, that such date shall in no event be more than sixty (60) nor less than
twenty (20) days after the date of the giving of such Recapture Notice; but,
provided further, however, that if Subtenant notifies Sublandlord within three
(3) business days after receipt of such Recapture Notice that it is withdrawing
its request to sublet such portion of the Subleased Premises or to assign this
Sublease, Landlord's Recapture Notice shall be of no force and effect. If
Sublandlord fails to timely exercise the Recapture Option in accordance with the
provisions of the preceding sentence, Subtenant may thereafter, subject to the
giving of Sublandlord's and the Prime Landlord's prior written consent (as
herein provided for), proceed with the Proposed Transaction contemplated by the
notice furnished to Sublandlord by Subtenant pursuant to the provisions of
Paragraph 11(b) hereinabove on the same terms and conditions as set forth in
said notice, provided, however, that any such consent by Sublandlord shall be
expressly conditioned upon Subtenant's compliance with the provisions of
Paragraph 11(d) hereinbelow.
(d) Assignment/Sublease Amendment.
-----------------------------
18
Notwithstanding anything to the contrary, any Proposed
Transaction shall be subject to the requirement that Subtenant and the Proposed
Party agree (which agreement shall be confirmed upon Sublandlord's request) to
pay to Sublandlord (as and when received by Subtenant) one hundred percent
(100%) of the following amounts in respect of the making of any Proposed
Transaction in excess of the reasonable costs actually incurred by Subtenant in
connection with such sublease or assignment for brokerage commissions,
advertising fees, attorneys' fees and tenant improvements: (i) in the case of a
sublease, any "Proposed Transaction Rent Profit" (as hereinafter defined),
and/or (ii) any other economic consideration in the form of money or property
payable to Subtenant or to any affiliate or subsidiary of Subtenant, either in a
lump sum, periodic payment or other form of consideration, with such payment to
Sublandlord to be made upon the payment thereof to Subtenant. "Proposed
Transaction Rent Profit" means the amount by which the "Proposed Transaction
Rent" (as hereinafter defined) exceeds the Rent payable pursuant to this
Sublease from and after the effective date of the applicable Proposed
Transaction. "Proposed Transaction Rent" means any and all rent and additional
rent paid to Subtenant on account of the applicable Proposed Transaction.
However, notwithstanding the foregoing, in the event of a partial subletting of
the Subleased Premises, the amount of the Proposed Transaction Rent Profit shall
the amount by which the Proposed Transaction Rent payable in respect of such
partial subletting exceeds the prorated amount (calculated on a proportionate
square footage basis) of Rent payable under this Sublease for that portion of
the Subleased Premises which is to be so sublet or occupied
(e) Miscellaneous.
-------------
Notwithstanding any other provision of this Paragraph 11 to
the contrary, in connection with any Proposed Transaction, (i) Subtenant shall
reimburse Sublandlord upon demand, for all expenses, including reasonable
attorneys' fees, incurred in connection with any such Proposed Transaction and
(ii) Subtenant and any Proposed Party shall, within ten (10) days after notice
from Sublandlord, provide such additional information, execute and deliver to
Sublandlord such documents and take such further action as Sublandlord may
reasonably require to effect such Proposed Transaction or to protect
Sublandlord's rights in respect of this Sublease. Neither the consent of
Sublandlord to an assignment or subletting nor the references in this Sublease
to assignees or subtenants shall in any way be construed to relieve Subtenant of
the requirement of obtaining the consent of Sublandlord to any further
assignment or subletting or to the making of any assignment or subletting for
all or any part of the Subleased Premises. In the event Sublandlord consents to
any assignment of this Sublease, the assignee shall execute and deliver to
Sublandlord an agreement in form and substance satisfactory to Sublandlord
whereby the assignee shall assume all of Subtenant's obligations under this
Sublease. Notwithstanding any assignment or subletting, including, without
limitation, any assignment or subletting permitted or consented to, the original
Subtenant named herein and any other person(s) who at any time was or were
Subtenant shall remain fully liable on this Sublease, and if this Sublease shall
be amended, modified, extended or renewed, the original Subtenant named herein
and any other person(s) who at any time was or were Subtenant shall remain fully
liable on this Sublease as so amended, modified, extended or renewed. If this
Sublease shall be assigned or if the Subleased Premises, or any part thereof,
shall be sublet by any person or persons other than the
19
original Subtenant named herein, then, at such time and for so long as Subtenant
is in default hereunder, Sublandlord may collect rent for any such assignee
and/or any subtenants, and apply the net amounts collected to the Rent, but no
such assignment, subletting or collection shall be deemed a waiver of any of the
provisions of this Paragraph 11, or the acceptance of the assignee or subtenant
as Subtenant, or a release of any person from the further performance by such
person of the obligations of Subtenant under this Sublease.
(f) No Violation of Prime Lease.
---------------------------
Anything to the contrary contained in this Paragraph 11
notwithstanding, it is expressly understood and agreed that no such subletting
or assignment shall be permitted which shall violate any applicable provisions
or requirements of the Prime Lease in respect thereto.
12. Security.
--------
(a) Security Deposit.
----------------
As security for Subtenant's performance of Subtenant's
obligations under this Sublease, Subtenant shall, on the Execution Date, deposit
with Sublandlord a cash deposit in an amount equal to Five Hundred Twenty-Five
Thousand Dollars ($525,000.00) (such amount being sometimes hereinafter referred
to as the "Collateral Amount" and such deposit being the "Security Deposit").
During the Sublease Term, Sublandlord shall retain the Security Deposit as
security for Subtenant's performance of Subtenant's obligations hereunder.
Interest shall accrue on the then current amount of the Security Deposit from
the fifth (5th) business day after the date on which Sublandlord actually
receives the Security Deposit through the fifth (5th) business day before the
date on which the Security Deposit is actually returned to Subtenant (and/or
applied by Sublandlord in accordance herewith) at the same rate Sublandlord is
paying to Sublandlord's customers holding "passbook" savings accounts with
Sublandlord (such interest on the Security Deposit being the "Interest"). The
Security Deposit shall be returned to Subtenant, together with the Interest,
within forty-five (45) days after the expiration of the Sublease Term, if and to
the extent Sublandlord has not applied the Security Deposit (and/or the
Interest) by reason of a breach by Subtenant of Subtenant's obligations
hereunder as set forth in the following sentence. Sublandlord may, from time to
time, in Sublandlord's sole discretion, apply the Security Deposit to cure
and/or compensate for any breach of any provisions of this Sublease by
Subtenant. Notwithstanding the foregoing, but only provided that Subtenant is
not in default under this Sublease (beyond any applicable notice and cure
periods), the Collateral Amount shall be reduced to Two Hundred Fifty Thousand
Dollars ($250,000.00) (and any excess of the Security Deposit over the then
current Collateral Amount shall be promptly returned to Subtenant, together with
any unapplied portion of the Interest previously accruing on such excess amount)
on the date upon which Subtenant has occupied for six (6) consecutive months
(and has paid all Rent for six (6) consecutive months payable for) both the
First Space and the Second Space.
(b) Letter of Credit.
----------------
Notwithstanding the foregoing, Subtenant may, at any time, and
in lieu of
20
providing the Security Deposit in the form of cash, as provided for above,
secure Subtenant's obligations to Sublandlord pursuant to this Sublease by
delivering to Sublandlord an irrevocable sight draft letter of credit in an
amount equal to the Collateral Amount and otherwise in such form, and issued by
a bank, reasonably approved by Sublandlord, and having an expiration date no
earlier than the date of expiration of the Sublease Term (it being agreed that
such letter of credit may be renewed on an annual basis, at least thirty (30)
days prior to the expiration of the then current letter of credit) (such letter
of credit being the "Letter of Credit"). In the event of any breach by Subtenant
of Subtenant's obligations under this Sublease, Sublandlord may, from time to
time, draw upon and apply such amount of the Letter of Credit as may be
necessary to cure and/or compensate for such a breach. In the event that
Subtenant so delivers the Letter of Credit in the then current Collateral
Amount, then the Security Deposit (if previously provided) shall be returned to
Subtenant, together with Interest thereon, no later than the date that is
forty-five (45) days after Sublandlord's receipt of the Letter of Credit.
Likewise, in the event that Subtenant has previously provided the Letter of
Credit, Subtenant may, at any time, deposit with Sublandlord the applicable
Collateral Amount of the Security Deposit (which shall be treated, and shall be
in an amount, as described in Paragraph 12(a) above), in which event Subtenant
shall no longer be required to maintain the Letter of Credit and the Security
Deposit shall be treated as provided for above (except that Interest thereon
shall be payable only on the Collateral Amount of the Security Deposit that the
Sublandlord actually has in Sublandlord's possession and only with respect to
the time period five (5) business days after Sublandlord actually is in
possession of the Security Deposit to the date five (5) business days before
Landlord returns the Security Deposit). Notwithstanding anything to the
contrary, in no event shall Sublandlord be required to pay to Subtenant any
Interest with respect to the Letter of Credit, and Subtenant must maintain the
Security Deposit or Letter of Credit, in the then current Collateral Amount,
throughout the Sublease Term (as hereinabove provided for).
(c) Generally.
---------
In the event of any use of the Security Deposit and/or Letter
of Credit in the manner hereinabove provided, Subtenant shall, within ten (10)
days of Sublandlord's request, restore the Security Deposit and/or Letter of
Credit, as applicable, to the amount originally provided for hereinabove.
13. Brokers.
-------
Sublandlord hereby represents that Sublandlord has had no dealings with
any real estate broker in connection with this Sublease, except for Cushman
Realty Corporation ("Sublandlord's Broker") and Tenant Partners ("Subtenant's
Broker"). Subtenant hereby represents that Subtenant has had no dealings with
any real estate broker in connection with this Sublease, except for
Sublandlord's Broker and Subtenant's Broker. Sublandlord hereby agrees to pay
all compensation due to Sublandlord's Broker in connection with this Sublease,
pursuant to a separate agreement, and to pay a portion of the compensation
payable to Subtenant's Broker, also pursuant to a separate agreement. Subtenant
hereby agrees to pay all sums due to Subtenant's Broker in connection with this
Sublease, pursuant to a separate agreement, except to the extent agreed to be
paid by Sublandlord pursuant to the separate agreement between Sublandlord and
21
Subtenant's Broker. Further, each party hereby agrees to indemnify and hold
harmless the other party from and against all claims, costs, damages and other
liabilities (including, but not limited to, attorneys fees) whatsoever in
connection with any breach of such party's representation hereinabove set forth
in this Paragraph 13.
14. Waiver of Jury Trial, Counterclaim, and Redemption.
--------------------------------------------------
Subtenant and Sublandlord hereby waive all right to trial by jury in
any summary or other action, proceeding or counterclaim arising out of or in any
way connected with this Sublease, the relationship of Sublandlord, Subtenant
and/or Prime Landlord, the Subleased Premises, and the use and occupancy
thereof, and any claim of injury or damages. Subtenant also hereby waives all
right to assert or interpose a counterclaim in any summary proceeding or other
action or proceeding to recover or obtain possession of the Subleased Premises.
Further, Subtenant waives all rights of redemption granted by law such that,
once Subtenant has committed a default and failed to cure that default within
any cure period provided by this Sublease, Subtenant waives all rights under law
to later cure the default and reclaim Subtenant's interest in this Sublease
and/or the Subleased Premises.
15. Costs Associated with Breach.
----------------------------
In addition to Sublandlord's other rights and remedies hereunder and/or
under applicable law, in the event of any breach of any provision of this
Sublease by Subtenant, Subtenant shall be obligated to pay to Sublandlord, upon
Sublandlord's request, all costs, damages and expenses incurred by Sublandlord
as a result of such breach, including, but not limited to, attorneys' and other
professional service fees, investigation costs, court costs, and all other
damages incurred and/or recoverable by Sublandlord under this Sublease or under
applicable law.
16. Notices.
-------
All notices, confirmations, documentation, and communications which may
or are to be required or permitted to be given hereunder shall be in writing,
either hand-delivered, sent by national overnight delivery service (e.g., FedEx
overnight delivery) specifying next business day delivery, or mailed by U.S.
certified mail, return receipt requested, postage prepaid, to the following
respective addresses.
To Sublandlord:
Chevy Chase F.S.B
8401 Connecticut Avenue
Chevy Chase, Maryland 20815
Attn: Leasing Department
With a copy to:
Jack Garson, Esquire
22
Garson & Associates, LLC
7735 Old Georgetown Road
Suite 550
Bethesda, Maryland 20814
To Subtenant:
Prior to the First Space Commencement Date:
Iconixx Corporation
8300 Boone Boulevard
Suite 250
Vienna, Virginia 22182
After the First Space Commencement Date:
Iconixx Corporation
7735 Old Georgetown Road
Suite _________
Bethesda, Maryland 20814
To Prime Landlord:
Prentiss Properties
3141 Fairview Park Drive
Suite 200
Falls Church, Virginia 22042
Attn: Mr. Robert K. Wiberg
All notices, confirmation, documentation and communications sent in
accordance with this Paragraph 16 shall be deemed effective upon the earliest to
occur of delivery, refusal of delivery, or inability to deliver in accordance
with this Paragraph 16. Sublandlord, Subtenant and/or Prime Landlord may change
the address(es) for receipt of such notices, confirmation, documentation and
communications by notice to the others in accordance with this Paragraph 16.
17. Further Assurances.
------------------
The parties shall execute and deliver such further and additional
instruments, agreements and other documents as may reasonably be necessary to
carry out the provisions of this Sublease.
18. Merger.
------
All prior understandings and agreements between the parties are merged
in this Sublease; this Sublease (including the provisions of the Prime Lease
incorporated herein) alone fully and
23
completely sets forth the understanding of the parties regarding the subject
matter hereof; and this Sublease may not be changed or terminated orally or in
any manner other than by an agreement in writing, signed by an authorized
officer of the party against whom enforcement of the change or termination is
sought.
19. Miscellaneous.
-------------
The terms "herein", "hereinafter", "hereof" and words of similar
import, shall mean and refer to this Sublease (including the provision of the
Prime Lease incorporated into this Sublease). This Sublease may be executed in
several counterparts, each of which shall be binding upon the party executing
same, but all of which shall constitute one and the same legal agreement. Any
liability of the parties to each other existing hereunder at the expiration or
earlier termination of this Sublease shall survive such expiration or earlier
termination.
24
IN WITNESS WHEREOF, Sublandlord and Subtenant have executed this
Sublease, under seal, as of the date first set forth herein above, intending
this Sublease to be legal binding and an instrument under seal.
WITNESS: SUBLANDLORD:
Chevy Chase F.S.B.
/s/ By: /s/ Paul Jackman (SEAL)
- --------------------------------------- --------------------------
Print Name: Paul Jackman
Title: Senior Vice President
ATTEST: SUBTENANT:
Iconixx Corporation
By: /s/ Patricia A. Withers By: /s/ Jason H. Levine (SEAL)
---------------------------------- -----------------------
Print Name: Patricia A. Withers Print Name: Jason H. Levine
Title: Assistant Secretary Title: Vice President
[CORPORATE SEAL]
The Exhibit to this Sublease Agreement is not included with this Registration
Statement on Form S-1. The Registrant will provide this Exhibit upon the request
of the Securities and Exchange Commission.
25