SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "SUBLEASE") dated the 30th day of September
1999, between NETRIX CORPORATION ("SUBLANDLORD"), a Delaware corporation with an
office at 13595 Dulles Technology Drive, Herndon, Virginia 20171; and
SCOREBOARD, INC. ("SUBTENANT"), a Delaware corporation with offices at 1035
Sterling Road, Suite 103, Herndon, Virginia 20170.
RECITALS:
A. By Office Lease Agreement dated as of March 25, 1999 (the "PRIME
LEASE"), Sublandlord, as tenant, leased from Bedminster Capital Funding LLC, as
landlord ("LANDLORD"), certain premises (the "PRIME PREMISES") which consists of
an entire two story building, containing approximately 55,880 rentable square
feet and commonly known as 13595 Dulles Technology Drive, Herndon, Virginia.
Sublandlord has initialed a copy of the Prime Lease for identification and has
delivered same to Subtenant and Subtenant has reviewed all of the terms of the
Prime Lease.
B. Subtenant desires to sublease from Sublandlord approximately 12,082
square feet on the first floor of the Prime Premises ("FIRST FLOOR PREMISES")
and approximately 11,751 square feet on the second floor of the Prime Premises
("SECOND FLOOR PREMISES") for a total of approximately 23,833 square feet of
space (according to BOMA 96 standard measurements) at the Prime Premises, as
shown on EXHIBIT A hereto (the First Floor Premises and the Second Floor
Premises, collectively, the "PREMISES"). The Premises comprise 43% ("SUBTENANT'S
SHARE") of the Prime Premises. Sublandlord desires to sublease the Premises to
Subtenant on the terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, for and in consideration of the mutual covenants
hereinafter contained, the parties hereby agree as follows:
1. DEMISE.
Sublandlord hereby subleases the Premises to Subtenant. Sublandlord
represents that the Prime Lease is in full force and effect; that Sublandlord is
not in default under the Prime Lease; and that, to its best knowledge, Landlord
is not in default under the Prime Lease.
2. TERM; AS-IS CONDITION; USE.
(a) The term (the "TERM") of this Sublease shall commence on October 1,
1999 (the "COMMENCEMENT DATE") and shall terminate on September 30, 2004, unless
sooner terminated or extended pursuant to the provisions of this Sublease,
provided however, that Subtenant shall have the right of occupancy and
possession only as to the Second Floor Premises effective on the Commencement
Date, and provided further that Subtenant shall have the right of occupancy and
possession of the First Floor Premises commencing on January 1, 2000.
(b) Prior to the Commencement Date, Subtenant shall have access to the
Second Floor Premises to perform any and all wiring and construction required to
install a certain T-1 line. Subtenant shall take possession of the Premises in
its present "as is" condition. No representations have been made to Subtenant
concerning the condition of the Premises, nor have any promises to alter or
improve the Premises been made by Sublandlord or any party on behalf of
Sublandlord.
(c) Subtenant's use of the Premises shall be for general (non-medical and
non-governmental) office use only and only for such other uses as are expressly
permitted pursuant to Section 6.1 of the Prime Lease.
3. INCORPORATION BY REFERENCE.
To the extent not inconsistent with the provisions of this Sublease, the
terms, provisions, covenants, and conditions of the Prime Lease are hereby
incorporated by reference on the following basis: Subtenant hereby assumes all
of the obligations, accruing or payable during the Term, of Sublandlord under
the Prime Lease with respect to the Premises as if Subtenant had executed the
Prime Lease. The term "LANDLORD" therein shall refer to Sublandlord hereunder,
its successors and assigns; and the term "TENANT" therein shall refer to
Subtenant hereunder, its permitted successors and assigns. The obligations
assumed by Subtenant hereunder which accrue during the Term shall survive and
extend beyond the termination of this Sublease.
4. SUBTENANT'S ACCEPTANCE OF PRIME LEASE.
Subtenant shall abide by all restrictions and obligations of the Prime
Lease. Subtenant represents that it has reviewed and accepted all the terms of
the Prime Lease. Pursuant to Section 7.6 of the Prime Lease, Subtenant agrees
that if Landlord succeeds to Sublandlord's interest in the Prime Lease then
Landlord at its option may continue the terms of this Sublease and upon such
occurrence, Subtenant agrees to recognize Landlord and be bound to Landlord
under the terms of this Sublease. Subtenant shall execute a written document
certifying the term, the rent and other relevant information concerning the
Premises or the Prime Premises upon five (5) days' prior written request of
Landlord or Sublandlord pursuant to Section 25.4 of the Prime Lease.
5. RENT.
(a) Subtenant shall pay to Sublandlord at its office referred to above, or
to such other address as Sublandlord shall notify Subtenant in writing pursuant
to SECTION 25(H) below, a base rent ("BASE RENT") which shall be due and payable
in advance in monthly installments on the first (1st) day of each month,
commencing on the Commencement Date as follows:
October 1, 1999 and November 1, 1999 $14,000.00
December 1, 1999 $20,564.00
January 1, 2000 through March 1, 2000 $32,328.00
April 1, 2000 through September 1, 2000 $41,707.75
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October 1, 2000 through September 1, 2001 $42,958.98
October 1, 2001 through September 1, 2002 $44,247.75
October 1, 2002 through September 1, 2003 $45,575.18
October 1, 2003 through September 1, 2004 $46,942.44
All other payments owed by Subtenant hereunder shall be paid as Additional Rent.
Base Rent and Additional Rent are herein collectively called "RENT".
(b) Rent shall be paid without deduction or setoff, and Base Rent shall be
paid without notice or demand. If any Rent shall not be paid on or before the
fifth (5th) day after the due date thereof, Subtenant shall, in addition
thereto, pay a late charge of 5% of the overdue installment.
6. SECURITY DEPOSIT.
(a) Subtenant herewith deposits the sum of $125,123.25 (the "DEPOSIT") with
Sublandlord as a security deposit to assure the faithful performance by
Subtenant of all of the obligations assumed by it hereunder. Should part or all
of the Deposit be applied by Sublandlord for the payment of overdue Rent or
other obligations of Subtenant hereunder, then Subtenant shall, within 15 days
after the written demand of Sublandlord, remit to Sublandlord a sufficient
amount in cash to restore the Deposit to the then current sum taking into
consideration any application of the Deposit to installments of Base Rent
pursuant to subsection (b) below, and Subtenant's failure to do so shall
constitute a default hereunder. Upon the termination of this Sublease,
Sublandlord shall promptly inspect the Premises and return any unapplied balance
of the Deposit to Subtenant.
(b) Provided that Subtenant shall not then be in default hereunder, the
Deposit shall be reduced effective October 1, 2000, to $83,415.50 and the amount
of said reduction shall be applied by Sublandlord as part of the Base Rent
installment which is due October 1, 2000. Provided that Subtenant shall not then
be in default hereunder, the Deposit shall be further reduced effective October
1, 2001, to $41,707.75 and the amount of said reduction shall be applied by
Sublandlord as part of the Base Rent installment which is due October 1, 2001.
(c) Subtenant acknowledges that the security deposit paid by Sublandlord to
Landlord pursuant to the terms of the Prime Lease is the property of Sublandlord
and that Subtenant has no claim or right to any portion of such security
deposit.
7. ESCALATIONS AND ELECTRICAL CHARGES.
(a) Pursuant to Section 5 of the Prime Lease, Sublandlord is obligated to
pay amounts to cover increases in certain taxes imposed upon Landlord. Subtenant
shall pay to Sublandlord Subtenant's Share of tax increases payable to Landlord
during or with respect to the Term and in accordance with the Prime Lease, over
and above tax charges of Landlord, provided however, that the Real Estate Taxes
Base Year (as defined in the Prime Lease) shall be deemed to mean the calendar
year 2000 for purposes of this Sublease.
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(b) Pursuant to Section 5 of the Prime Lease, Sublandlord is obligated to
pay amounts to cover increases in operating expenses of Landlord. Subtenant
shall pay to Sublandlord Subtenant's Share of operating expense increases
imposed by Landlord during or with respect to the Term and in accordance with
the Prime Lease, over and above operating expense charges of Landlord, provided
however, that the Operating Charges Base Year (as defined in the Prime Lease)
shall be deemed to mean the calendar year 2000 for the purposes of this
Sublease.
(c) The minimum electrical power provided to the Premises shall be seven
watts per rentable square foot. In the event that Subtenant's use of electricity
at the Premises is in excess of the amount reasonably required for general
office use, as reasonably determined by Sublandlord, then Subtenant shall
reimburse Sublandlord for the cost of such excess use.
(d) Subtenant shall pay to Sublandlord the cost of any excess water or
sewage usage at the Premises, as determined pursuant to Section 14.3 of the
Prime Lease.
(e) The amounts required to be paid by Subtenant to Sublandlord under this
Section shall constitute Additional Rent and shall be paid within thirty (30)
days after Sublandlord shall render a statement therefor. Subtenant shall
reimburse Sublandlord for any costs payable to Landlord in connection with this
Sublease. Sublandlord's statement shall be accompanied by copies of any relevant
statements or bills received from Landlord.
8. SUBLETTING AND ASSIGNMENT.
(a) Subtenant shall not, without the prior written consent of Sublandlord
(a) further sublet all or any part of the Premises; (b) transfer, hypothecate,
assign, convey, or mortgage this Sublease or any interest under it or allow any
lien upon Subtenant's interest hereunder by operation of law; or (c) suffer,
tolerate, permit, or allow the use or occupancy of the Premises by anyone other
than Subtenant, its agents and employees. Sublandlord shall not unreasonably
withhold or delay its consent to a further subletting of the Premises or an
assignment of this Sublease by Subtenant. Sublandlord's consent to any such
subletting or assignment shall be conditional upon and subject to Subtenant
obtaining the written consent of Landlord thereto when required under the Prime
Lease. No such transaction shall release Subtenant from liability hereunder.
Notwithstanding the provisions in this Section 8, subject only to the Landlord's
consent if required under the Prime Lease, Subtenant shall have the right to
sublet or assign the Premises to a Permitted Assignee. A Permitted Assignee
shall be an assignment or transfer to any of the following: (a) to a corporation
or other business entity (herein sometimes referred to as a "successor
corporation") into or with which Subtenant shall be merged or consolidated, or
to which substantially all of the assets of Subtenant may be transferred or
sold, provided that (1) such successor corporation shall have a net worth and
liquidity at least equal to the net worth and liquidity of Subtenant immediately
prior to such transfer, (2) the successor corporation shall assume in writing
all of the obligations and liabilities of Subtenant under this Sublease, and (3)
the use of the Premises pursuant to such assignment or sublease is in compliance
with the Prime Lease; or (b) to a corporation or other business entity (herein
sometimes referred to as a "related corporation") that shall control, be
controlled by or be under common control with Subtenant or, if unrelated to
Subtenant, that shall purchase all of the assets of Subtenant, provided that (1)
such corporation shall have a net worth and liquidity at least equal to the net
worth and liquidity of Subtenant immediately prior to such transfer, (2) the
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corporation shall assume in writing all of the obligations and liabilities of
Subtenant under this Sublease and (3) the use of the Premises pursuant to such
assignment or sublease is in compliance with Prime Lease. In the event of any
such assignment, transfer or subletting, Subtenant shall remain fully liable as
a primary obligor for the payment of rent and other charges required hereunder
and for the performance of obligations to be performed hereunder. For purposes
subparagraph (b) above, "control" shall be deemed to be the ownership of fifty
percent (50%) or more of the stock or other voting interest of the controlled
corporation or other business entity. A successor corporation described in
subparagraph (a) above or a related or other corporation described in
subparagraph (b) above shall be referred to sometimes in this Sublease as a
"Permitted Assignee."
(b) If any sublease or assignment (whether by operation of law or
otherwise, including without limitation an assignment pursuant to the provisions
of the Bankruptcy Code or any other Insolvency Law) provides that the subtenant
or assignee thereunder is to pay any amount in excess of the sum of (a) the
rental and other charges due under this Sublease, plus (b) the reasonable,
out-of-pocket expenses (including (i) the gross rent paid to Sublandlord by
Subtenant with respect to the subject portion of the Premises during any period
in which alterations are being performed for the assignee or subtenant prior to
its occupancy; (ii) improvement allowances or other economic concessions granted
by Subtenant to the assignee or sublessee; (iii) alterations to the subject
portion of the Premises performed solely for such assignee's or subtenant's
occupancy and paid for by Subtenant; (iv) costs incurred by Subtenant to buy out
or take over the previous lease of the assignee or sublessee; (v) all costs
incurred by Subtenant to advertise the subject portion of the Premises for
assignment or sublease; and (vi) brokerage commissions and/or legal fees paid by
Subtenant in connection with the assignment or sublease; but excluding any costs
attributable to vacancy periods or "downtime" other than those explicitly
included in clause (i) above) which Subtenant reasonably incurred in connection
with the procurement of such sublease or assignment, then whether such excess be
in the form of an increased monthly or annual rental, a lump sum payment,
payment for the sale, transfer or lease of Subtenant's fixtures, leasehold
improvements, furniture and other personal property (in excess of the market
rates there for), or any other form (and if the subleased or assigned space does
not constitute the entire Premises, the existence of such excess shall be
determined on a pro-rata basis), Subtenant shall pay to Sublandlord fifty
percent (50%) of any such excess or other premium applicable to the sublease or
assignment, which amount shall be paid by Subtenant to Sublandlord as additional
rent as the same is received by Subtenant.
9. INSURANCE COMPLIANCE.
(a) Subtenant shall maintain, at its sole cost and expense, for the Term,
general public liability insurance (naming Sublandlord, Landlord and designees
of Landlord as additional insureds) against claims for personal injury, death,
or property damage occurring upon, in, about, or adjacent to the Premises, such
insurance to afford protection with combined coverage of at least $4,000,000
with respect to personal injury, death and property damage. Subtenant shall also
maintain, at its sole expense, for the Term, any and all insurance in the
amounts and form required of Sublandlord by and pursuant to the provisions of
the Prime Lease with respect to the Premises. All such policies shall be issued
by reputable insurance companies approved by Landlord and shall be endorsed to
provide that they shall not be modified or cancelled without 30 days' prior
written notice to Sublandlord and Landlord. Prior to the Commencement Date,
Subtenant shall furnish said policies to Sublandlord evidencing that the
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required coverage is being maintained, together with such evidence as
Sublandlord shall deem satisfactory of the payment of premiums thereon.
(b) Notwithstanding anything to the contrary contained herein, Sublandord
and Subtenant each hereby waive any and all right to recover against the other
(or against their respective officers, directors, trustees, partners, joint
venturers, employees or agents) for any loss or damage to such waiving party
arising from any cause covered by any property damage insurance required to be
carried by such party pursuant to this Sublease or, if greater, actually carried
by such party. Sublandlord and Subtenant shall secure appropriate waivers of
subrogation from their respective insurance carriers; and each party will, upon
request, deliver to the other a certificate evidencing such waiver of
subrogation by the insurer.
10. INDEMNIFICATION.
(a) Except as explicitly hereinafter set forth, Sublandlord, its employees
and agents shall not be liable to Subtenant, any invitee or any other person or
entity for any damage (including indirect and consequential damage), injury,
loss, or claim (including claims for the interruption of or loss to business)
based on or arising out of any cause whatsoever (except as otherwise provided in
this Section), including without limitation the following: repair to any portion
of the Premises or the building; interruption in the use of the Premises or any
equipment therein; any accident or damage resulting from any use or operation
(by Sublandlord, Subtenant or any other person or entity) to elevators or
heating, cooling, electrical, sewerage or plumbing equipment or apparatus;
termination of this Sublease by reason of damage to the Premises or the
building; any fire, robbery, theft, vandalism, mysterious disappearance or any
other casualty; actions of any other subtenant of the building or of any other
person or entity; failure or inability to furnish any service specified in this
Sublease; and leakage in any part of the Premises or the building from water,
rain, ice or snow that may leak into, or flow from, any part of the Premises or
the building, or from drains, pipes or plumbing fixtures in the Premises or the
building. If any condition exists which may be the basis of a claim of
constructive eviction, then Subtenant shall give Sublandlord written notice
thereof and a reasonable opportunity to correct such condition, and in the
interim Subtenant shall not claim that it has been constructively evicted or is
entitled to a rent abatement. Any property placed by Subtenant or any invitee in
or about the Premises or the building shall be at the sole risk of Subtenant,
and Sublandlord shall not in any manner be held responsible therefor. Any person
receiving an article delivered for Subtenant shall be acting as Subtenant's
agent for such purpose and not as Sublandlord's agent. For purposes of this
Section, the term "building" shall be deemed to include the Land.
Notwithstanding the foregoing provisions of this Section, but subject to Section
9(b), Sublandlord shall not be released from liability to Subtenant for any
physical injury to any natural person (including death) or damage to Subtenant's
property caused solely and directly by Sublandlord's negligence or willful
misconduct to the extent such injury is not covered by insurance (a) carried by
Subtenant or such person, or (b) required by this Sublease to be carried by
Subtenant; provided, however, that Sublandlord shall not under any circumstances
be liable for any consequential or indirect damages.
(b) Except to the extent caused by Sublandlord's negligence or willful
misconduct, and subject to Section 9(b) above, Subtenant shall reimburse
Sublandlord, its employees and agents for (as additional rent), and shall
indemnify, defend upon request and hold them harmless from and against all
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costs, damages (but not consequential damages), claims, liabilities, expenses
(including reasonable attorneys' fees), losses, penalties and court costs
suffered by or claimed against them, to the extent resulting solely and directly
from (i) use and occupancy of the Premises by Subtenant or any invitee or the
business conducted therein by Subtenant or any invitee, or (ii) any negligence
or willful misconduct by Subtenant or any invitee.
(c) Except to the extent caused by Subtenant's negligence or willful
misconduct, and subject to Section 9(b) above, Sublandlord shall reimburse
Subtenant, its employees and agents for, and shall indemnify, defend upon
request and hold them harmless from and against all costs, damages (but not
consequential damages), claims, liabilities, expenses (including reasonable
attorneys' fees), losses, penalties and court costs suffered by or claimed
against them, to the extent resulting solely and directly from Sublandlord's
negligence or willful misconduct in connection with the management, operation or
repair of the building.
(d) If Subtenant or any invitee is awarded a money judgment against
Sublandlord, then recourse for satisfaction of such judgment shall be limited to
execution against Sublandlord's leasehold interest in the building, including
Sublandlord's interest in all rents, income, profits, insurance proceeds,
condemnation proceeds and sales proceeds arising therefrom. No other asset of
Sublandlord, any partner, director, member, officer or trustee of Sublandlord
(each, an "officer") or any other person or entity shall be available to satisfy
or be subject to such judgment, nor shall any officer or other person or entity
be held to have personal liability for satisfaction of any claim or judgment
against Sublandlord or any officer.
11. CASUALTY.
If the Prime Premises or the Premises are damaged by fire or other
casualty, and Landlord or Sublandlord shall, pursuant to the terms of the Prime
Lease, elect to terminate the Prime Lease, this Sublease shall cease and
terminate on the date of termination of the Prime Lease, and Rent shall be
apportioned from the time of the damage. Otherwise, this Sublease shall remain
in full force and effect, subject to the terms of the Prime Lease. Sublandlord
shall have no obligation hereunder to repair any portion of the Premises,
whether or not this Sublease shall be terminated. If Sublandlord receives any
rent abatement under the Prime Lease, then Subtenant shall accordingly receive
rent abatement. In the event that the Premises are damaged or destroyed,
Subtenant shall have the right to terminate this Sublease if the Restoration
Estimate, as defined in the Prime Lease and as delivered to Sublandlord, has a
repair and restoration date that is more than two hundred seventy (270) days
from the date of the damage or destruction.
12. RIGHTS OF LANDLORD.
(a) Subtenant acknowledges any and all rights specifically reserved by
Landlord under the Prime Lease and Subtenant further acknowledges that its
possession and use of the Premises shall at all times be subject to such rights.
Subtenant hereby releases Sublandlord from all liability in connection with
Landlord's exercise of such rights, except for Sublandlord's gross negligence
and willful misconduct.
(b) After reasonable notice, if Subtenant fails to perform any act required
of it hereunder or under the Prime Lease, Sublandlord may perform same, and
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Subtenant shall pay the cost thereof as Additional Rent within thirty (30) days
after receiving Sublandlord's statement therefor.
13. DEFAULT BY LANDLORD.
Sublandlord shall not be liable to Subtenant for Landlord's failure to
perform any of Landlord's obligations under the Prime Lease, nor shall
Sublandlord have any obligation to perform same or to bring legal proceedings or
take any other action against Landlord to assure performance of Landlord's
obligations under the Prime Lease. Except as otherwise provided herein, whenever
Sublandlord shall have the right to enforce any rights against Landlord or any
other party under the Prime Lease because of the default or breach of Landlord
or such other party with respect to the Premises, and if, within a reasonable
period after Subtenant's request, Sublandlord fails to enforce such rights, then
Subtenant shall have the right, in the name of Subtenant or, if necessary, in
the name of Sublandlord, to enforce any such rights of Sublandlord with respect
to the Premises. Such enforcement shall be at the sole expense of Subtenant, and
Subtenant shall indemnify Sublandlord against all costs and expenses, including
but not limited to reasonable attorneys' fees, which may be incurred by
Sublandlord in connection with any claim, action, or proceeding so undertaken by
Subtenant. Any amount of recovery obtained by Subtenant shall be the property of
Subtenant.
14. BROKER.
The parties acknowledge that this Sublease was procured through the
efforts of Trammell Crow Real Estate Services (Sublandlord's Broker) and Hinders
Realty, Inc. (Subtenant's Broker), and Sublandlord's Broker shall compensate
Subtenant's Broker pursuant to separate agreements. Subtenant and Sublandlord
represent and warrant that they dealt with no other broker in connection with
this Sublease and shall hold each other harmless from any liability or loss,
including reasonable attorneys' fees, to any broker or salesman (other than as
aforesaid) claiming a commission as a result of having an interested Subtenant
in the Premises.
15. TAXES.
Subtenant shall pay any taxes or fees imposed by any governmental
authority upon or as the result of this Sublease or the transfer of any property
or interests in property hereunder, except that Subtenant shall not be liable
for any federal, state, or municipal income tax imposed upon Sublandlord as a
result of this Sublease or any profits derived hereunder.
16. REMEDIES.
The taking of any action by Subtenant, the occurrence of any event in
regard to Subtenant, or the failure to act by Subtenant which would be a default
under the Prime Lease if taken by Sublandlord or if occurring or failing to
occur in regard to Sublandlord, shall entitle Sublandlord to take all action
with regard to Subtenant under this Sublease which Landlord is permitted to take
against Sublandlord under the terms of the Prime Lease. Subtenant hereby
indemnifies and holds Sublandlord harmless from and against all loss, cost,
injury, liability, or expense (including reasonable attorneys' fees and court
costs) caused by or arising out of Subtenant's default, breach, or violation of
the terms of this Sublease.
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17. GRACE PERIODS; INTEREST.
(a) All provisions of Article 19 of the Prime Lease have been incorporated
herein by reference, except that the grace period provided for in Section
19.1(a) shall be deemed to be seven (7) days and the grace period provided for
in Section 19.1(b) of the Prime Lease shall be deemed to be thirty (30) days.
(b) Any Rent not paid on the due date thereof shall thereafter be payable
with interest at the rate of three percentage points per annum plus the prime
rate published in the Wall Street Journal and in effect on the due date of such
rent, which interest shall be payable for the period from the due date to the
date of the receipt of such payment by Sublandlord.
18. SUBTENANT'S WORK.
(a) Subtenant shall not perform or cause to be performed any work at the
Premises without Sublandlord's and Landlord's prior written consent, which
consent shall not be unreasonably withheld. All of Subtenant's work shall be
performed in accordance with the terms of the Prime Lease, including without
limitation, Section 9 thereof, and all of Subtenant's work shall be completed in
a good, workmanlike and first-class manner. Sublandlord shall assist Subtenant
in securing Landlord's consent for any such work. Provided Subtenant gives
Landlord prior written notice, Subtenant may perform in the Premises, without
obtaining Landlord's prior written consent, minor, non-structural alterations of
a decorative nature which are reasonably comparable to the colors and finishes
in the Premises as of the date of this Sublease and which do not require a
building permit.
(b) Subtenant shall have the right to install a key card security system to
the perimeter doors and entrances of the Premises at Subtenant's sole expense,
provided however that such right shall be subject to Landlord's consent pursuant
to Section 10 of Exhibit B ("Rules and Regulations") of the Prime Lease.
(c) Sublandlord shall make available to Subtenant for purposes of
identifying the Premises a portion of a monument sign, so called, at the
Premises and an interior lobby sign in the second floor lobby, provided however,
that all costs associated with this provision shall be paid by Subtenant. Such
signage shall be of comparable size and location as Sublandlord's subject to
Subtenant's approval, Landlord's approval and applicable municipal regulations.
(d) Subtenant and Sublandlord shall cooperate so that both parties have
access to and efficient use of all telephone, data, network, fiber optic and T-1
line access at the Premises, provided however, Sublandlord and Subtenant shall
each secure their own systems at their respective locations and at their own
cost.
19. SERVICES AND OTHER PRIVILEGES.
(a) Sublandlord shall provide or cause to be provided janitorial services
for the Premises on a daily basis but not on weekends and federal holidays.
(b) Subtenant shall have the right to park 95 vehicles, of which four (4)
spaces shall be reserved parking spaces at the front of the building at the
Premises. The parking provided for herein is furnished solely for the
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accommodation of Subtenant, and Sublandlord assumes no responsibility or
liability of any kind whatsoever from whatever cause with respect to the
automobile parking areas, including adjoining streets, sidewalks, driveways,
property and passageways, or the use thereof by Subtenant or Subtenant's
representatives. Sublandlord shall have no obligation to enforce or to protect
the sole use of said reserved parking spaces by Subtenant.
(c) Subtenant shall have non-exclusive access to and use of the first floor
cafeteria at the Premises 24 hours a day, seven days a week, subject to the
terms of the Prime Lease. Such access shall be at no cost to Subtenant, provided
however, that Subtenant shall pay the cost of drinks, coffee and similar items
supplied to Subtenant's employees.
(d) Subtenant may utilize Sublandlord's training rooms for client and
employee training at no cost to Subtenant, provided however, that such use is
subject to the availability of said rooms at Sublandlord's sole discretion. Upon
reasonable notice to Subtenant, Sublandlord reserves the right to modify the
Premises to remove all or part of said training rooms.
(e) Subject to Section 1.19 of the Prime Lease, Subtenant shall have access
to the Premises twenty four hours a day, seven days a week, 365 days a year.
(f) Subtenant shall have the right to utilize certain furniture at the
Premises as set forth in EXHIBIT B and shall pay to Sublandlord a fee for such
use pursuant to EXHIBIT B. Any provision herein requiring the removal of
furniture from the Premises shall be contingent upon Sublandlord's consent and
Landlord's consent pursuant to Section 19.7 of the Prime Lease.
(g) Sublandlord does not warrant that any of the services or utilities
referred to in this Sublease, or any other services or utilities which Landlord
may supply, will be free from interruption, and Subtenant acknowledges that any
one or more such services may be suspended by reason of accident, repairs,
inspections, alterations, improvements or other reasons. Any such interruption
or discontinuance of service shall not be deemed an eviction or disturbance of
Subtenant's use and possession of the Premises, or any part thereof, nor render
Sublandlord liable to Subtenant for damages by abatement of the Rent or
otherwise, nor relieve Subtenant from performance of Subtenant's obligations
under this Sublease.
20. RIGHT TO RENEW.
(a) Subtenant shall have one option to extend the Term of this Sublease
until the last day of the term of the Prime Lease, which is scheduled to
terminate on April 30, 2009 (the "Renewal Option"). The terms of the Renewal
Option shall be in accordance with all of the terms and conditions of this
Sublease, except that Base Rent shall be based on the then current market rental
value.
(b) The Renewal Option may only be exercised by Subtenant by written notice
of exercise given by Subtenant to Sublandlord and received by Sublandlord not
earlier than March 30, 2004, and not later than May 30, 2004. Failure to so
exercise within such period shall render any subsequent attempted exercise void
and of no effect, any principles of law to the contrary notwithstanding.
Subtenant shall have no right to exercise the Renewal Option, and any attempted
exercise shall be void and of no effect, if: (i) the named Subtenant has
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assigned this Lease or has at any time subleased, in the aggregate, more than
50% of the Premises; or (ii) Subtenant shall be in default hereunder and such
default shall not have been cured at the time of the attempted exercise or, if
such default occurs after Subtenant's attempted exercise of the option, at the
time of the proposed commencement of the extension Term.
(c) In the event that the parties have not agreed upon the current market
rental value of the Premises prior to the date two months before the
commencement of the extension Term, such value shall be determined by
arbitration in the City of Washington, D.C., before a single arbitrator as
follows:
(i) Sublandlord and Subtenant shall have ten days within which to
select one mutually agreeable arbitrator who shall have a minimum of ten (10)
years' experience in Northern Virginia commercial real estate. If Sublandlord
and Subtenant fail to agree on one arbitrator within the ten day period, either
party may promptly request the president of the local Board of Realtors to
appoint an arbitrator for the matter, and said president's selection shall be
binding upon Sublandlord and Subtenant.
(ii) Sublandlord and Subtenant shall each submit to the arbitrator, in
writing, a good faith determination of the current market rental value of the
Premises.
(iii) The appraiser selected must choose either Sublandlord's or
Subtenant's good faith determination of the rental value of the Premises and the
appraiser's choice shall be final and binding upon the parties. From the date of
appointment, the arbitrator shall have 30 days within which to render a decision
as to the rental value of the Premises. Judgment upon the award rendered by the
arbitrator shall be binding upon the parties and may be entered in any court of
competent jurisdiction. The arbitrator shall determine the liability of the
parties for the costs of the arbitration and may allocate counsel fees, witness
fees and other costs between the parties.
21. RIGHT OF FIRST REFUSAL.
(a) If, at any time during the Initial Term any rentable space in the
portion of the Prime Premises occupied by Sublandlord either is vacant or
becomes available and Sublandlord does not desire to occupy such space itself,
then before entering into a lease for such space with another Subtenant,
provided Subtenant is not in default hereunder, Sublandlord shall send Subtenant
a notice describing the premises (the "INTENT TO LEASE Notice") and shall offer
to lease such space to Subtenant upon the same terms set forth in this Sublease.
Provided that Subtenant is not in default hereunder, Subtenant shall have
fifteen (15) business days after receipt of the Intent to Lease Notice to accept
such offer by notice to Sublandlord, time being of the essence. After accepting
such offer, Subtenant shall promptly, at Sublandlord's option, execute an
amendment to this Sublease prepared by Sublandlord.
(b) If Subtenant does not accept such offer within the fifteen (15)
business day period provided above, then Sublandlord shall be free to lease such
space to any party upon any terms or conditions Sublandlord shall determine,
from time to time during the Term, without any further obligation to Subtenant
under this Sublease so long as such terms of rent are not less favorable to
Sublandlord. If Subtenant does not accept such offer within such period, then
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Subtenant shall, within ten days after demand by Sublandlord, confirm in writing
to Sublandlord that Subtenant has declined to exercise or has waived its rights
under this Section.
(c) Sublandlord shall have no obligation to make such offer, and any
attempted acceptance shall be void and of no effect, if (i) the named Subtenant
has assigned this Lease to an entity other than a Permitted Assignee or shall
have subleased, in the aggregate, 50% or more of the Premises to an entity other
than a Permitted Assignee at any time prior to the Intent to Lease Notice; or
(ii) Subtenant or any Permitted Assignee shall have committed an event of
default hereunder which has not been cured at the time of the proposed
commencement of the lease of such additional space.
(d) This Section shall not preclude preliminary discussions, whether oral
or in writing, between Sublandlord and any prospective Subtenant concerning
terms and conditions for the leasing of any space in the Prime Premises.
22. EXPANSION OF SPACE.
(a) At any time prior to the third anniversary of the Commencement Date,
Subtenant shall have the right to sublease approximately five thousand (5,000)
square feet of additional space which is immediately adjacent to the Second
Floor Premises and currently occupied by Sublandlord's training room and which
is shown on EXHIBIT C attached hereto (the "EXPANSION SPACE") upon the same
terms of this Sublease and upon not more than nine (9) months' and not less than
six (6) months' prior written notice to Sublandlord (the "EXPANSION NOTICE").
Upon receipt of the Expansion Notice, Sublandlord shall send Subtenant an
amendment to this Sublease incorporating the Expansion Space. The execution of
an amendment for the Expansion Space shall give Landlord the right to recapture
the Premises pursuant to Section 7.4 of the Prime Lease. Sublandlord and
Subtenant shall proceed with said amendment pursuant to SECTION 23 of this
Sublease.
(b) Sublandlord shall have no obligation to lease the Expansion Space, if
(i) the named Subtenant has assigned this Lease to an entity other than a
Permitted Assignee or shall have subleased, in the aggregate, 50% or more of the
Premises to an entity other than a Permitted Assignee at any time prior to the
Expansion Proposal; or (ii) Subtenant or any Permitted Assignee shall have
committed an event of default hereunder which has not been cured at the time of
the proposed commencement of the lease of such additional space.
23. RIGHT TO RECAPTURE.
Both parties acknowledge that pursuant to Section 7.4 of the Prime Lease,
Landlord has the right to recapture the Premises if Sublandlord subleases more
than 50% of the Prime Premises. The parties acknowledge that if Subtenant,
pursuant to SECTION 21 or SECTION 22 of this Sublease, subleases from
Sublandlord additional space, then Landlord may exercise said recapture rights.
In such event, Sublandlord shall endeavor to negotiate with and otherwise
encourage Landlord to use Landlord's best efforts to negotiate first with
Subtenant prior to leasing the Premises to any other tenant.
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24. SURRENDER AND HOLDOVER.
(a) Upon any termination of this Sublease, by expiration of the Term or
otherwise:
(i) Subtenant shall immediately vacate the Premises and surrender
possession thereof to Sublandlord in the condition required under the Prime
Lease as of the expiration date of the Prime Lease;
(ii) Subtenant shall surrender the Premises free and clear of all
liens and encumbrances; and
(iii) Sublandlord shall have full authority and license to enter the
Premises and take possession of same.
(b) Subtenant shall pay to Sublandlord 150% of the Base Rent hereunder plus
all other costs for each month or portion thereof that Subtenant shall retain
possession of the Premises or any part thereof after the termination of this
Sublease, whether by lapse of time or otherwise, and shall also pay all damages
sustained by Sublandlord to Landlord or otherwise on account thereof.
Furthermore, Subtenant shall be subject to eviction proceedings and any other
remedy or right accorded to Sublandlord in law or at equity. Any holding over by
Subtenant upon termination of this Sublease shall not be evidence of an
extension or renewal of the Term hereof, nor shall acceptance of Rent or other
payments by Sublandlord from Subtenant be evidence of the same, but shall be on
a month to month basis, terminable by either party on 30 days' notice.
25. MISCELLANEOUS.
(a) Each provision of this Sublease shall extend to and shall bind and
inure to the benefit of Sublandlord and Subtenant and their respective permitted
successors and assigns.
(b) Subtenant acknowledges that this Sublease is subordinate to the Prime
Lease. In the event of any conflict between the terms and conditions of this
Sublease and the terms and conditions of the Prime Lease, the terms and
conditions of this Sublease shall control.
(c) In the event that any provision of this Sublease is deemed to be
invalid or unenforceable for any reason (except for Section 2 of this Sublease
as it pertains to the right of possession and use of the Premises) then this
Sublease shall be construed as not containing such provision, and the invalidity
or unenforceability thereof shall not render any other provision of this
Sublease invalid or unenforceable.
(d) Any provision of this Sublease or the Prime Lease which requires
Sublandlord not to unreasonably withhold its consent shall never be the basis
for an award of loss of business damages or give rise to a right of setoff to
Subtenant, but may be the basis for a declaratory judgment or specific
injunction with respect to the matter in question.
(e) Whenever Subtenant must obtain the consent of Landlord, Sublandlord
shall cooperate with Subtenant (at Subtenant's sole cost and expense) in
obtaining Landlord's consent. Sublandlord shall promptly forward to Subtenant
copies of all notices, requests, demands and communications received by
13
Sublandlord from Landlord (or its agent) with respect to the Premises. If
Subtenant shall not give timely directions to Sublandlord, Sublandlord may give
such notice to Landlord as Sublandlord desires, or no notice or direction with
respect to the matter in question. If Sublandlord's consent is required under
this Sublease or the Prime Lease and Subtenant has requested in writing
Sublandlord's consent, Sublandlord's failure to respond to Subtenant within
thirty (30) days from the date of Subtenant's request shall be deemed to be the
consent of Sublandlord. Landlord's failure to respond to a request for consent
shall not be deemed to be the consent of Landlord.
(f) Subtenant shall receive notice of any default by Sublandlord under the
Prime Lease and shall have the right to cure said default if Sublandlord fails
to do so in a reasonable time. Any costs incurred by Subtenant to remedy
Sublandlord's default may be setoff against the Rent.
(g) Subtenant shall indemnify and hold Sublandlord harmless from the costs
of any special services which Subtenant may order directly from Landlord with
respect to the Premises.
(h) All notices shall be in writing, mailed certified mail, return receipt
requested, postage prepaid, or sent by recognized overnight courier such as
United Parcel Service, addressed to the parties at the addresses first above
written, except that after the Commencement Date, Subtenant's address shall be
the Premises. Either party may, by such notice, change the address to which
notices are to be sent. A copy of any notice to Sublandlord alleging a breach by
it of its obligations hereunder shall be simultaneously sent to Kelley Drye &
Warren LLP, 281 Tresser Boulevard, Stamford, Connecticut 06901, Attn: Jay R.
Schifferli, Esq. . A copy of any notice to Subtenant alleging a breach by it of
its obligations hereunder shall be simultaneously sent to Whiteford, Taylor &
Preston L.L.P., 1025 Connecticut Avenue, N.W., Washington, D.C. 20036-5405,
Attn: Glenn T. Bonard, Esq.
(i) Each provision of this Sublease has been mutually negotiated, prepared
and drafted; each party has been represented by legal counsel; and, in
connection with the construction of any provision hereof or deletion herefrom,
no consideration shall be given to the issue of which party actually prepared,
drafted, requested or negotiated any such provision or deletion.
(j) Neither party shall record this Sublease or the Prime Lease or a
memorandum of this Sublease or the Prime Lease, pursuant to Section 25.16 of the
Prime Lease.
(k) Subtenant shall not cause or permit any Hazardous Materials to be
generated, used, released, stored or disposed of in or about the Premises
provided that Subtenant may use and store reasonable quantities of standard
cleaning materials as may be reasonably necessary for Subtenant to conduct
normal general office use operations in the Premises and reasonable quantities
of Hazardous Materials commonly used in light electronic assembly and testing of
computers in connection with the operations in the Premises of which Subtenant
has provided Landlord and Sublandlord prior written notice, provided the same
are handled, stored and disposed of in accordance with all Laws. At the
expiration or earlier termination of this Sublease, Subtenant shall surrender
the Premises to Sublandlord free of Hazardous Materials generated, used,
released, stored, or disposed of by Subtenant or its invitees not in violation
14
of any Environmental Laws as a result of the acts or omissions of Subtenant or
its invitees. "Hazardous Materials" means (a) asbestos and any asbestos
containing material and any substance that is then defined or listed in, or
otherwise classified pursuant to, any Environmental Law or any other applicable
Law as a "hazardous substance," "hazardous material," "hazardous waste,"
"infectious waste," "toxic substance," "toxic pollutant" or any other
formulation intended to define, list, or classify substances by reason of
deleterious properties such as ignitability, corrosivity, reactivity,
carcinogenicity, toxicity, reproductive toxicity, or Toxicity Characteristic
Leaching Procedure (TCLP) toxicity, (b) any petroleum and drilling fluids,
produced waters, and other wastes associated with the exploration, development
or production of crude oil, natural gas, or geothermal resources, and (c) any
petroleum product, polychlorinated biphenyls, urea formaldehyde, radon gas,
radioactive material (including any source, special nuclear, or by-product
material), medical waste, chlorofluorocarbon, lead or lead-based product, and
any other substance whose presence could be detrimental or hazardous to health
or the environment. "Environmental Law" means any present and future Law and any
amendments (whether common law, statute, rule, order, regulation or otherwise),
permits and other requirements or guidelines of governmental authorities
applicable to the and relating to the environment and environmental conditions
or to any Hazardous Material (including, without limitation, CERCLA, 42 U.S.C.
ss. 9601 et seq., the Resource Conservation and Recovery Act of 1976, 42 U.S.C.
ss. 6901 et seq., the Hazardous Materials Transportation Act, 49 U.S.C. ss. 1801
et seq., the Federal Water Pollution Control Act, 33 U.S.C. ss. 1251 et seq.,
the Clean Air Act, 33 U.S.C. ss.7401 et seq., the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq., the Safe Drinking Water Act, 42 U.S.C. ss. 300fet
seq., the Emergency Planning and Community Right-To-Know Act, 42 U.S.C. ss. 1101
et seq., the Occupational Safety and Health Act, 29 U.S.C. ss. 651 et seq., and
any so-called "Super Fund" or "Super Lien" law, any Law requiring the filing of
reports and notices relating to hazardous substances, environmental laws
administered by the Environmental Protection Agency, and any similar state and
local Laws, all amendments thereto and all regulations, orders, decisions, and
decrees now or hereafter promulgated thereunder concerning the environment,
industrial hygiene or public health or safety).
(i) Notwithstanding any termination of this Sublease, Subtenant shall
indemnify and hold Sublandlord, its employees and agents harmless from and
against any damage, injury, loss, liability, charge, demand or claim based on or
arising out of the presence or removal of, or failure to remove, Hazardous
Materials generated, used, released, stored or disposed of by Subtenant or any
invitee in or about the Premises, whether before or after Sublease Commencement
Date. In addition, Subtenant shall give Sublandlord immediate verbal and
follow-up written notice of any actual or threatened Environmental Default,
which Environmental Default Subtenant shall cure in accordance with all
Environmental Laws and only after Subtenant has obtained Sublandlord's and
Landlord's prior written consent, which shall not be unreasonably withheld,
conditioned, or delayed. An "Environmental Default" means any of the following
by Subtenant or any invitee: a violation of any applicable Environmental Law; a
release, spill or discharge of a Hazardous Material on or from the Premises, the
land or the building in violation of any applicable Environmental Law; an
environmental condition. Upon any Environmental Default, in addition to all
other rights available to Sublandlord under the Sublease and to Landlord under
the Prime Lease, at law or in equity, Sublandlord and Landlord shall have the
right but not the obligation to immediately enter the Premises, to supervise and
approve any actions taken by Subtenant to address the Environmental Default,
and, if Subtenant fails to immediately address same to Sublandlord's and
Landlord's reasonable satisfaction, to perform, at Subtenant's sole cost and
15
expense, any lawful action necessary to address same. If any governmental agency
shall require testing to ascertain whether an Environmental Default is pending
or threatened, then Subtenant shall pay the reasonable costs therefor as
additional rent. If any lender shall require testing to ascertain whether an
Environmental Default is pending or threatened, and such testing reveals an
Environmental Default, then Subtenant shall pay the reasonable costs therefor as
additional rent. Promptly upon request, Subtenant shall execute from time to
time affidavits, representations and similar documents concerning Subtenant's
best knowledge and belief regarding the presence of Hazardous Materials at or in
the building, the Land or the Premises.
(ii) As of the date of Sublandlord's execution of this Sublease,
Sublandlord represents and warrants that it has no actual knowledge of the
violation of any Environmental Law applicable to the building or the land which
remains uncured, and that, to its knowledge based solely on the Landlord's
representation in Section 6.5 of the Prime Lease relying on that certain Phase I
Environmental Report prepared by Dames & Moore, Inc., dated June 10, 1997,
except as otherwise set forth therein no Hazardous Materials are present in the
building or the land that are in violation of any Environmental Law as of the
date of Sublandlord's execution of this Sublease. Unless caused by Subtenant's
or an invitee's negligence or willful misconduct, and subject to Section 9(b)
above, Sublandlord shall indemnify, defend upon request and hold harmless
Subtenant, its employees and agents from and against any and all costs, damages
(but not consequential damages), claims, liabilities, expenses (including
reasonable attorneys' fees) and court costs suffered by or claimed against
Subtenant as the sole and direct result of the generation, storage or release of
Hazardous Materials by Sublandlord, its invitees, agents, employees,
contractors, family members of employees, licensees, or guests (except to the
extent the same also constitute Subtenant or its invitees) in or about the
building, to the extent such generation, storage, or release violates
Environmental Laws. Subtenant shall notify Sublandlord promptly in the event a
claim is made against Subtenant as aforesaid.
26. LANDLORD'S APPROVAL.
Upon execution of this Sublease, Sublandlord shall submit this Sublease to
Landlord for Landlord's approval. In the event that Landlord fails to approve
this Sublease within fifteen (15) business days of the date hereof, either
party, upon notice to the other within five (5) business days after the
expiration of such fifteen (15) business day period, may elect to terminate this
Sublease, whereupon Sublandlord shall promptly refund any amounts deposited
hereunder, and this Sublease shall be of no further force and effect. The
parties hereto shall not bring any claim against each other for any loss, cost,
expense, damage, or injury caused by or arising out of the failure of Landlord
to consent to this Sublease.
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IN WITNESS WHEREOF, the parties have executed this Sublease the day and
year first above written.
SUBLANDLORD:
NETRIX CORPORATION
By:___________________________________
Name:
Title:
SUBTENANT:
SCOREBOARD, INC.
By:___________________________________
Name:
Title:
CONSENT OF LANDLORD
Bedminster Capital Funding LLC hereby executes this Sublease solely for
the purpose of consenting to same. Landlord consents to this Sublease without
approving any terms or conditions in such Sublease as the ______ day of
_____________________ 1999.
LANDLORD:
BEDMINSTER CAPITAL FUNDING LLC
By:__________________________
Name:
Title:
17
STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
______________ 1999, by _______________________, ____________________________ of
Netrix Corporation, a Delaware corporation, on behalf of the corporation.
----------------------------------------
Notary Public
My Commission Expires
STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
______________ 1999, by _______________________, ____________________________ of
ScoreBoard, Inc., a Delaware corporation, on behalf of the corporation.
----------------------------------------
Notary Public
My Commission Expires
18
STATE OF )
) ss:
COUNTY OF )
The foregoing instrument was acknowledged before me this ___ day of
______________ 1999, by _______________________, ____________________________ of
Bedminster Capital Funding LLC, a New Jersey limited liability company, on
behalf of said limited liability company.
----------------------------------------
Notary Public
My Commission Expires
19
EXHIBIT A
Description of Premises
20
EXHIBIT B
Terms of Furniture Use
21
EXHIBIT C
Description of Expansion Space
22