Exhibit 10.85

AGREEMENT OF SUBLEASE

THIS AGREEMENT OF SUBLEASE (“Sublease”) is made as of the 31st day of December,
2009 by and between Comstock Asset Management, L.C. (“Sublandlord”) and Comstock
Property Management, L.C., a Virginia limited liability company (“Subtenant”).

WITNESSETH

WHEREAS, pursuant to a Lease Agreement between Sublandlord and 11465 SH I, LC
(f/k/a Comstock Partners, L.C.) (“Landlord”) dated October 1, 2004, as amended
(“Lease”), Landlord leased to Sublandlord a portion (“Premises”) of Landlord’s
building (“Building”) at 11465 Sunset Hills Road, Reston, Virginia.

WHEREAS, Subtenant desires to sublet from Sublandlord a portion of the Premises,
and Subtenant and Sublandlord desire to enter into this Sublease to set forth
their respective rights, duties and liabilities relating to the Subleased
Premises.

NOW, THEREFORE, in consideration of the mutual covenants herein and for other
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged by the parties, Sublandlord and Subtenant mutually agree and intend
to be legally bound as follows:

 

1. Subleased Premises. Sublandlord leases to Subtenant those premises known as
“Suite 410,” comprising 7,620 rentable square feet, and “Suite 110,” comprising
550 rentable square feet, as the same are depicted on Exhibit A attached hereto
(collectively, the “Subleased Premises”).

 

2. Sublease Term.

 

  A. The “Sublease Term” shall commence on January 1, 2010, or at such later
date as the Subleased Premises becomes available for use and occupancy by
Subtenant, or when Sublandlord has secured the consent of the Landlord
(“Commencement Date”).

 

  B. The Sublease Term shall expire on the last day of the calendar month which
completes three years after the Commencement Date (i.e., December 31, 2012)
(“Expiration Date”).

 

  C. After the Commencement Date, the parties shall promptly execute a
Commencement and Expiration Date Memorandum substantially in the Landlord’s
standard form, which is attached hereto as Exhibit B, wherein the parties shall
specify the Commencement Date, the Expiration Date and the date on which
Subtenant is to commence paying Basic Rent.

 

3.

Basic Rent. Subtenant shall pay to Sublandlord rent in equal monthly
installments on the first (1st) day of each month. If the Commencement Date is
not the 1st of the month, then for the initial partial month of the Sublease
Term, Subtenant shall pay to Sublandlord a prorated amount of the Monthly Basic
Rent. The Basic Rent during the Sublease Term hereunder will be as follows:

 

      Suite 110 - 550 SF    Suite 410 – 7,620 SF    Premises      Annual   
Monthly    Rent PSF    Annual    Monthly    Rent PSF    Monthly Total

Lease Year 1

   $ 11,000.00    $ 916.67    $ 20.00    $ 188,595.00    $ 15,716.25    $ 24.75
   $ 16,632.92

Lease Year 2

   $ 11,440.00    $ 953.33    $ 20.80    $ 196,138.80    $ 16,344.90    $ 25.74
   $ 17,298.23

Lease Year 3

   $ 11,897.60    $ 991.47    $ 21.63    $ 203,984.35    $ 16,998.70    $ 26.77
   $ 17,990.16

 

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4.

Late Payments. Should Monthly installments of the Basic Rent not be made on or
before the 5th day of a calendar month, the payment shall be considered overdue
and Sublandlord may begin charging Subtenant an interest rate per annum equal to
the sum of (i) the prime rate of interest established and publicly announced by
The Chase Manhattan Bank, N.A., New York, plus (ii) four percent (4%), until
such payment is made. In no event shall the default rate of interest be less
then twelve percent (12%) nor more then eighteen percent (18%).

 

5. Subordination. This Sublease is in all respects subject and subordinated to
the Lease between Landlord and Sublandlord, a copy of which is attached hereto
and incorporated as Exhibit E.

 

6. Assignment. No assignment of this Sublease nor further sublease of any
portion of the Subleased Premises shall be made without the prior written
consent of Sublandlord and approval of Landlord.

 

7. Operating Expenses. A pro-rata portion of any operating expenses due under
the Lease in excess of the Sublease Base Year (2009) shall be payable as
additional rent hereunder in the same manner as Basic Rent.

 

8. Parking. Subtenant will have the right to utilize a proportionate share of
Sublandlord’s parking spaces at the Building at no cost during the Sublease
Term. The number of parking spaces and the location of reserved parking spaces,
if any, available for Subtenant’s use under the current parking program for the
Building are set forth on Exhibit C attached hereto and incorporated herein.

 

9. Condition, Acceptance and Use of Subleased Premises

 

  A. Sublandlord will deliver the Subleased Premises with certain improvements
having been constructed based upon plans and specifications previously approved
by the parties. Upon the Commencement Date, Subtenant shall accept the Subleased
Premises in their existing condition and state of repair. Sublandlord and
Subtenant acknowledge that the Subleased Premises contains certain furniture,
fixtures and/or equipment (“Existing FF&E”) which is the property of Landlord,
an inventory of which is set forth on Exhibit D attached hereto and incorporated
herein. Without payment of additional rent, Subtenant shall have the right to
use the Existing FF&E during the Sublease Term. At the expiration of the
Sublease Term, the Existing FF&E shall be delivered to Landlord in condition
substantially the same as its condition as of the effective date hereof, with
the exception of normal wear and tear. Subtenant acknowledges that no
representations, statements or warranties, express or implied, have been made by
or on behalf of the Sublandlord in respect to the condition of the Subleased
Premises, or the use or occupation that may be made thereof, and that
Sublandlord shall in no event whatsoever be liable for any latent defects in the
Subleased Premises or in the Existing FF&E. Sublandlord shall enforce the
provisions of the Lease with regard to Landlord’s obligations to provide
services to the Subleased Premises and common areas.

 

  B. Acceptance of the Subleased Premises by Subtenant shall be construed as
recognition that the Subleased Properties are in a good state of repair and in
sanitary condition. Sublandlord shall not be liable for any losses or damages
incurred by Subtenant due to failure of operation of the heating, cooling, or
other utility equipment or due to the necessity of repair of the same.

 

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  C. The Subleased Premises shall be used or occupied by Subtenant solely for
executive and general office uses as permitted in Section 6 of the Lease and
shall not be used for any other purpose. Subtenant shall not use or occupy the
Subleased Premises for any unlawful purpose nor place any excessive or
unreasonable demands upon the Building.

 

  D. Subtenant shall surrender the Subleased Premises at the expiration of the
Sublease Term, or upon earlier termination thereof, in the same condition as
when Subtenant took possession, reasonable wear and tear excepted.

 

  E. Except as specifically provided herein, Sublandlord shall have no
responsibility whatsoever with respect to the Subleased Premises, the condition
thereof or Subtenant’s property situated therein, except for loss, injury or
damage caused by Sublandlord’s gross negligence or willful misconduct.
Sublandlord shall not be liable for the failure by Landlord to keep and perform,
according to the terms of the Lease, Landlord’s duties, covenants, agreements,
obligations, restrictions, conditions and provisions, nor for any delay or
interruption in Landlord’s keeping and performing the same. Sublandlord hereby
assigns to Subtenant, for so long as this Sublease shall be in force and effect,
any and all rights of Sublandlord under the Lease with respect to the Subleased
Premises and causes of action which Sublandlord may have against Landlord with
respect to the Subleased Premises because of any default by Landlord under the
Lease, excluding, however, any right of self-help or rent abatement. Sublandlord
agrees to cooperate with and join Subtenant in any claims or suits brought by
Subtenant against Landlord under the Lease, provided that such participation
shall be without cost or expense to Sublandlord. Subtenant has inspected the
Subleased Premises and its contents to its satisfaction and, except as
specifically set forth herein, agrees to accept the Subleased Premises and its
contents in its “as-is, where-is” condition without any obligations on
Sublandlord to repair or modify the same.

 

  F. Sublandlord and Subtenant, and each of their affiliates, shall have a
shared right to use the reception area(s), conference room(s) and kitchen
facilities within Suite 410 and shall cooperate with each other to establish
reasonable requirements for advance scheduling (the parties acknowledging that
the rentable square footage of Suite 410 upon which Basic Rent and operating
expenses are determined has been reduced to reflect this right). Sublandlord
reserves the right to use and to grant other persons a license to use the
exterior hallway of Suite 110, the door to which shall remain unlocked at all
times.

 

10. Default Under Superior Leases.

 

  A.

Subtenant agrees to assume and perform, according to the terms of the Lease, all
of the duties, covenants, agreements and obligations of Sublandlord under the
Lease, as and when required by the Lease, with respect to the Subleased
Premises, except Sublandlord’s duty to make rent payments to Landlord. Subtenant
further agrees to keep and obey, according to the terms of the Lease, all of the
rules, restrictions, conditions and provisions which pertain to the Subleased
Premises, and are imposed by the terms of the Lease upon Sublandlord with
respect to the Subleased Premises or upon the use of the Subleased Premises.
Subtenant agrees that it will take good care of the Subleased Premises, and will
commit no waste, and will not do, suffer, or permit to be done any injury to the
same. It is hereby understood and agreed that Subtenant’s rights to use, possess
and enjoy the Subleased Premises are subject to the terms, conditions, rules and
regulations of the Lease and the rights and remedies of Landlord thereunder.
Subtenant agrees to indemnify, defend, and protect Sublandlord against, and to
hold Sublandlord

 

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harmless from, any liability, damages, costs or expenses of any kind or nature,
including court costs and reasonable attorneys’ fees, resulting from any failure
by Subtenant to perform, keep and obey the terms of this Sublease and the
requirements of the Lease with respect to the Subleased Premises. Any failure by
Subtenant to perform, keep and obey the same shall be a default by Subtenant
hereunder.

 

  B. Subtenant shall not act in any manner which would cause a default under the
terms of the Lease. Within five (5) business days of Sublandlord’s receipt of
notice of any default under the Lease which may jeopardize Subtenant’s quiet
enjoyment of the Subleased Premises, Sublandlord shall notify Subtenant of the
nature of the default and of Sublandlord’s intention to cure such default. In
the event Subtenant or Sublandlord receives a notice of default from Landlord as
a direct result of Subtenant’s actions, then Subtenant shall have all the rights
to cure such event of default that Sublandlord enjoys under the Lease; provided,
however, that in the event Subtenant fails to timely cure any event of default,
Sublandlord shall have the right to terminate this Sublease and Subtenant shall
vacate the Subleased Premises within thirty (30) days (or such lesser period as
may be required to effect a cure of the default under the Lease). Further,
Sublandlord shall have the right to recover from Subtenant all damages to which
Sublandlord is entitled including, without limitation, reletting expenses
(vacancy, commissions, improvements, etc.) and any unpaid rent due hereunder up
until the time of the reletting of the Subleased Premises; provided, that
Sublandlord’s re-occupying of the Subleased Premises will be deemed a reletting
with respect to such portion of the space as is re-occupied by Sublandlord.

 

  C. Subtenant shall be in default of this Sublease to the extent that Subtenant
fails to abide by the terms or conditions of this Sublease and/or the Lease,
with Subtenant being afforded the rights as to notice of default and curing of
default as set forth above. Furthermore, if any default under the Lease shall
occur with respect to Subtenant, or if Subtenant fails to perform of any of its
own covenants and obligations under this Sublease, then and in any of said
cases, Subtenant shall be deemed in default, and Sublandlord shall have the
right to exercise all remedies set forth in the Lease as if Sublandlord were
“Landlord” and Subtenant were “Tenant” thereunder.

 

  D. Subtenant hereby waives trial by jury in any action, proceeding, claim or
counterclaim brought by Landlord or Sublandlord with respect to any matter
whatsoever arising out of or in any way connected with this Sublease, the
relationship between Sublandlord and Subtenant, and/or Subtenant’s use or
occupancy of the Subleased Premises. Subtenant further waives receipt of any
notice to quit the Subleased Premises in the event of any default hereunder.

 

  E. In the event either party files suit at law or equity to enforce the terms
of this Sublease, the party substantially prevailing in such action shall
recover from the other party its reasonable expenses, including, but not limited
to, court costs and reasonable attorneys’ fees. All such expenses shall bear
interest at the highest rate allowable under the laws of the Commonwealth of
Virginia until paid in full by the substantially non-prevailing party.

 

11.

Insurance. During the Sublease Term, Subtenant shall maintain insurance in force
with a company licensed to do business in Virginia, with policy limits of at
least Two Million Dollars ($2,000,000.00) general liability and One Million
Dollars ($1,000,000.00) property damage. Sublandlord shall be named as an
additional insured thereunder and Subtenant shall provide Sublandlord with a
certificate of such insurance prior to the Commencement Date. Subtenant and

 

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Sublandlord each hereby waive any and all rights of recovery against the other,
or against the officers, employees, agents, members, managers and
representatives of the other, for loss of or damage to such waiving party or its
property of the property of other under its control to the extent that such loss
or damage is insured against under any insurance policy in force at the time of
such loss or damage and such loss or damage has been paid by the insurance
company. The insuring party shall, upon obtaining the policies of insurance
required hereunder, give notice to the insurance carrier or carriers that the
foregoing mutual waiver of subrogation is contained in this Sublease.

 

12. Notices. Every notice, approval, consent or other communication authorized
or required by this Sublease (“Notice”) shall not be effective unless same shall
be in writing and sent postage prepaid by the United States registered or
certified mail, return receipt requested, or delivered by hand, and a written
receipt acknowledging such postal or hand delivery obtained for each designated
recipient (or proof of refusal), directed to the other party at the following
addresses (indicating the date and to whom delivered), or such other address as
either party may designate by Notice given from time to time in accordance with
this paragraph:

 

  If to Subtenant:   Comstock Property Management, L.C.     11465 Sunset Hills
Road     Suite 410     Reston, Virginia 20190     Attention: Gregory Benson  
With a copy to:   Comstock Homebuilding Companies, Inc.     11465 Sunset Hills
Road     Suite 410     Reston, Virginia 20190     Attention: Jubal Thompson   If
to Sublandlord:   Comstock Asset Management, L.C.     11465 Sunset Hills Road  
  Suite 400     Reston, VA 20190     Attention: Christopher Clemente

 

13. Security. Upon full execution of the Sublease, Sublandlord shall deliver to
Subtenant a reasonable number of suite entry keys for the Subleased Premises and
a reasonable number of Building perimeter security access cards, at no cost to
Subtenant.

 

14. Identity. Sublandlord shall obtain Landlord’s consent, if necessary, for
Subtenant’s Building Directory strips.

 

15. Landlord Approval. In the event the Lease requires the prior written consent
of Landlord prior to an action by Subtenant, then Sublandlord, on behalf of
Subtenant, shall initiate action to gain consent from Landlord within ten
(10) days of Subtenant’s notice to Sublandlord concerning such proposed action.
The preceding sentence notwithstanding, in the event the Lease specifies the
time period in which Landlord must respond to such a request for consent, then
such specified time period shall control.

 

16. Quiet Enjoyment. Subtenant shall have the peaceful and quiet use of the
Subleased Premises, and all rights, servitude and privileges belonging or in
anywise appertaining thereto or granted thereby, for the Sublease Term, without
hindrance or interruption by Sublandlord. Sublandlord warrants that it has the
full right and authority to enter into this Sublease for the full term hereof.

 

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17. Security Deposit. Upon Sublease execution, Subtenant shall provide or cause
to be provided to Sublandlord a Security Deposit in the amount of $50,000.00.
Subtenant may satisfy this requirement by delivery of a promissory note
guaranteed by Comstock Homebuilding Companies, Inc.

 

18. Holdover. If Tenant shall hold over possession of the Subleased Premises
after the end of the Sublease Term, then in such event this Sublease shall
continue on a month-to-month basis at 150% of the Basic Rent, adjusted to a
monthly basis, and subject to all the other conditions, provisions and
obligations of this Sublease insofar as the same are applicable, or as the same
shall be adjusted, to a month-to-month tenancy.

 

19. Communications. Subtenant agrees that all communications regarding the
tenancy under this Sublease shall be directed or copied to the Sublandlord who
will in the case of property management issues contact Landlord.

 

20. Entire Agreement. This Sublease, together with the Exhibits attached hereto,
contains and embodies the entire agreement of the parties hereto, and no
representations, inducements or agreements, oral or otherwise, between the
parties not contained in this Sublease and the Exhibits, shall be of any force
and effect. This Sublease may not be modified, changed or terminated in whole or
in part in any manner other than by an agreement in writing duly signed by the
parties hereto.

IN WITNESS WHEREOF, this Agreement of Sublease has been executed by the parties
as of the date first hereinabove written.

 

SUBLANDLORD:     SUBTENANT: Comstock Asset Management, L.C.     Comstock
Property Management, L.C.       By: Comstock Homebuilding Companies, Inc. By:  

 

    By:  

 

  Christopher Clemente, Manager       Gregory Benson, Chief Operating Officer

* * *

 

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GUARANTY

For value received, the undersigned hereby absolutely, unconditionally, jointly
and severally guarantees performance of Subtenant’s obligations under the
Sublease, including but not limited to full payment of all amounts coming due
under this Sublease (including all reasonable attorneys fees and collection
expenses), waives notice demand and any reporting requirement, and agrees that
this guaranty is an obligation independent of the obligations of Subtenant
hereunder that may be enforced by Sublandlord pursuant to a separate action
regardless of whether any action is first brought against Subtenant.

 

    GUARANTOR: [Corporate Seal]   Comstock Homebuilding Companies, Inc.,     a
Delaware corporation By:  

 

  By:  

 

Name:  

 

    Gregory Benson Title:  

 

    Chief Operating Officer

LANDLORD’S CONSENT AND AGREEMENT

11465 SH I, LC, a Virginia limited liability company, as “Landlord” under the
Lease hereby consents to the foregoing Agreement of Sublease between Comstock
Asset Management, L.C. and Comstock Property Management, L.C. dated December 31,
2009 and the terms and conditions thereunder. Landlord’s consent herein shall
not modify or affect the Lease or relieve Sublandlord from any liability
thereunder.

 

11465 SH I, LC By:  

 

  Christopher Clemente, Manager

 

Date:  

 

 

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EXHIBIT A

Subleased Premises

LOGO [g57765ex10_85pg8.jpg]

Suite 410

 

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EXHIBIT A

Subleased Premises

(continued)

LOGO [g57765ex10_85pg9a.jpg]

SUITE 110

 

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EXHIBIT B

Form of Commencement Memorandum

Commencement and Expiration Date Memorandum

This Commencement and Expiration Date Memorandum is dated as of
                    , 20         between Comstock Asset Management, L.C.
(“Sublandlord”) and Comstock Property Management, L.C., a Virginia limited
liability company (“Subtenant”).

W I T N E S S E T H:

WHEREAS, Sublandlord and Subtenant are parties to that certain Agreement of
Sublease dated                         , 20         (the “Sublease”) relating to
premises in the Building located at 11465 Sunset Hills Road in Reston, Virginia.

NOW THEREFORE, Sublandlord and Subtenant hereby confirm as follows:

 

  1. The Sublease Commencement Date is                     , 20        .

 

  2. The scheduled Expiration Date is                     , 20        .

 

  3. The Rentable Area of the Subleased Premises is          square feet.

 

  4. Landlord may rely upon the foregoing statements.

IN WITNESS WHEREOF, Sublandlord and Subtenant have caused this Memorandum to be
executed by their respective duly authorized managers, members, partners or
officers as of the date first set forth above.

 

SUBLANDLORD:     SUBTENANT: Comstock Asset Management, L.C.     Comstock
Property Management, L.C.     By: Comstock Homebuilding Companies, Inc. By:  

 

    By:  

 

  Christopher Clemente, Manager       Gregory Benson, President

 

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EXHIBIT C

Number and Location of Parking Spaces

 

Category/Type of Space

   Number of Spaces

Reserved and Assigned to Tenant:

   5

Reserved for Tenants Only, but Unassigned:

   10

Unreserved and Unassigned:

   8

Total Spaces:

   23

Reserved Spaces:

   To be assigned
by Landlord

Landlord reserves the right to reconfigure the parking for the Property by
establishing or relocating reserved parking spaces, subject to and in accordance
with the Lease.

 

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EXHIBIT D

Existing FF&E

[Final approved list of Existing FF&E to be attached following occupancy.]

 

Item

   Quantity                                    

 

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EXHIBIT E

Lease

[To be attached.]

 

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