QuickLinks
 -- Click here to rapidly navigate through this document

Exhibit 10.3  


 
  AGREEMENT OF SUBLEASE    
    



        THIS AGREEMENT OF SUBLEASE (this "Sublease") is made as of the 1st day of October, 2004 by and between COMSTOCK
ASSET MANAGEMENT, L.C. ("Sublandlord"), and COMSTOCK HOMES, INC., a Virginia Limited Liability Company ("Subtenant"). 


 
 

WITNESSETH    
    


        WHEREAS, Sublandlord has certain rights of possession and use of real estate and improvements for which Subtenant desires to utilize a portion of such real estate
and improvements; and 


        WHEREAS,
Subtenant and Sublandlord desire to enter into this Sublease for a portion of the same premises. 


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


	1.
	Premises.    Sublandlord leases to Subtenant all of Sublandlord's right, title and interest in that certain premise to be
known as Suite 405 ("Sublease Premises"), attached as Exhibit A, which has been measured as approximately Twenty Thousand Six Hundred and Nine
(20,609) rentable square feet. The Sublease Premises, is located on the fourth (4th) and fifth (5th) floors of the building known as 11465 Sunset Hills Road, Reston, Virginia 20190 (the "Building").
The Sublease Premises has been measured by the Sublandlord's architect, Architecture Design Associates, Inc.



	2.
	Sublease Term.



	A.
	The
"Sublease Term" shall commence (the "Commencement Date") on October 1st, 2004 or when the Sublandlord has secured the consent of the prime Landlord.



	B.
	The
Sublease Term shall expire upon the end of the Sixtieth (60th) month of the Sublease Term following the Commencement Date (i.e. September 30, 2009). Subtenant
is hereby given the option to renew this Sublease for two (2) periods of three (3) years, or one (1) period of either; three (3) years, five (5) years, or seven
(7) years ("Option Periods"), provided that the Lease Renewal Option has been exercised by the Sublandlord and there has been no Event of Default under any of the terms of this sublease either
at the time of the giving of any such notice or at the time of commencement of any renewal. Subtenant shall give notice in writing to the Sublandlord of its exercise of such option at least six
(6) months prior to the termination of the Initial Term. The Base Rent for each Option Period shall be based on the same terms, covenants and conditions as are contained in this Sublease except
that the Basic Rent for the first year of the renewal period shall be at the then current market rate (for comparable buildings in the general vicinity of the Building), as agreed to by the parties
hereto. In the event the parties can not agree to the current market rate as set forth above then the Sublandlord and Subtenant shall each select a licensed commercial real estate broker doing
business in Northern Virginia (the "Selected Brokers"), whereupon the Selected Brokers shall select a third similarly qualified broker, who shall each then provide to the parties their expert opinion
as to the then current market rate and the average of the three opinions shall be the current market rate for the purposes of this paragraph. In establishing the Basic Rent for the renewal term, the
parties or the brokers who determine the Basic Rent shall consider and take into account subtenant's continuing obligation to pay Additional Charges as defined in the Lease. Notwithstanding the
foregoing, in no event shall the Basic Rent for the first year of any Option Period be less then the current rate at the end of the most recent Sublease year.



	C.
	Space
shall be available for occupancy as of the Commencement Date. "Available for Occupancy" means that Subtenant may make use of the Sublease Premises for normal office 










 


purposes,
regardless of whether the Sublease Premises conform to the Subtenant's specific desired office purposes. 




	3.
	Base Rent.    Subtenant shall pay to Sublandlord rent equal to the product of Twenty-Three and 50/100ths Dollars ($23.50)
("Rental Rate") times the number of rentable square feet in the Sublease Premises (20,609) and shall be paid in equal monthly installments on the first (1st) of each month. If the
Commencement Date is not the 1st of the month, then for the initial partial month of the sublease, Subtenant shall pay to Sublandlord a prorated amount of the Monthly Base Rent. 



Accordingly,
the Basic Rent during the Initial Term hereunder will be as follows: 



	Fourth Floor—Suite 400—4,895 SF

	Lease Year
	 	Annual Rent
	 	Monthly Rent
	 	Rent/S.F.

	Lease Year 1	 	$	115,032.50	 	$	9,586.04	 	$	23.50
	Lease Year 2	 	$	119,633.80	 	$	9,969.48	 	$	24.44
	Lease Year 3	 	$	124,419.15	 	$	10,368.26	 	$	25.42
	Lease Year 4	 	$	129,395.92	 	$	10,782.99	 	$	26.43
	Lease Year 5	 	$	134,571.75	 	$	11,214.31	 	$	27.49






	Fifth Floor—Suite 510—15,714 SF

	Lease Year
	 	Annual Rent
	 	Monthly Rent
	 	Rent/S.F.

	Lease Year 1	 	$	369,279.00	 	$	30,773.25	 	$	23.50
	Lease Year 2	 	$	384,050.16	 	$	32,004.18	 	$	24.44
	Lease Year 3	 	$	399,412.17	 	$	33,284.35	 	$	25.42
	Lease Year 4	 	$	415,388.65	 	$	34,615.72	 	$	26.43
	Lease Year 5	 	$	432,004.20	 	$	36,000.35	 	$	27.49





	4.
	Late Payments.    Should Monthly Installments of the Base 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%).



	4.
	Escalation.    The Base Rent shall increase by four percent (4%) per annum commencing on the first anniversary of the Sublease
Term.



	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 is incorporated as Exhibit B.



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



	7.
	Operating Expenses.    A pro-rata portion of any passthroughs from the prime landlord of the Sublease Premises in
excess of the Base Year identified in the Lease shall result in a direct passthrough to the Subtenant.



	8.
	Parking.    Sublandlord shall provide Subtenant with the non-exclusive use of 3.5 parking spaces for each 1,000
square feet of leased space free of charge. Subtenant shall be provided reserved parking spaces (including covered parking spaces) as detailed on the Reserved Parking Plan attached hereto as  EXHIBIT D.



2







 
	9.
	Condition, Acceptance and Use of Sublease Premises



	A.
	Upon
the Commencement Date, Subtenant shall accept the Subleased Premises in their existing condition and state of repair. Sublandlord and Subtenant both acknowledge that a portion of
the Leased Premises currently contains certain Office Furniture and/or Equipment (Exhibit C) which is the property of Landlord. The Landlord
agrees that, without payment of additional rent, the Subtenant shall have the right to use such Office Furniture and/or Equipment during the Lease Term. At the expiration of the Lease Term, the Office
Furniture and/or Equipment shall be delivered to the 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 their condition, of 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 equipment therein. 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.



	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 term hereof, or any renewal thereof, or upon other termination hereunder, 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.






	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 Sublease Premises, except Sublandlord's duty to 





3







 


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 the Landlord thereunder. Subtenant agrees to indemnify, defend, and
protect Sublandlord against, and to hold Sublandlord 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 Sublease 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 shall receive 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, however, in the event Subtenant fails to timely cure any event of default within ten (10) business days, Sublandlord shall have the right to
terminate the lease and Subtenant shall vacate the Subleased Premises within thirty (30) days. Further, Sublandlord shall have the right to recover all damages to which Sublandlord is entitled
including reletting expenses (vacancy, commissions, improvements, etc.), and any unpaid rent up until the time of such reletting or occupancy of Sublease Premises by Sublandlord. If Sublandlord
occupies less than or equal to 50% of Sublease Premises, rent shall be abated proportionately; if Sublandlord occupies greater than 50% of Sublease Premises, then space shall be considered fully
occupied.



	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 the landlord and Subtenant were the 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 substantially prevailing party shall recover from the substantially
non-prevailing party its reasonable expenses, including, but not limited to, court costs. 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. 



4







 




	12.
	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 Sublandlord each hereby waive any and all rights of
recovery against the other, or against the officers, employees, agents, 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.



	13.
	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 HOMES, INC.

11465 Sunset Hills Road

Suite 510

Reston, Virginia 20190

ATTENTION: Gregory Benson
	

 	
 	

If to Sublandlord:	
 	

COMSTOCK ASSET MANAGEMENT, L.C.

11465 Sunset Hills Road

Suite 510

Reston, VA 20190

Attn: Christopher Clemente




	15.
	Security.    Upon full execution of the Sublease, Sublandlord shall deliver to Subtenant a reasonable number of suite entry
keys for the Sublease Premises and a reasonable number of Building perimeter security access cards, at no cost to Subtenant.



	16.
	Identity.    Sublandlord shall obtain Landlord's consent, if necessary, for Subtenant's Building Directory strips.



	17.
	Landlord Approval.    In the event the Lease requires the prior written consent of the Landlord prior to an action by the
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.



	18.
	Quiet Enjoyment.    Subtenant shall have the peaceful and quiet use of the Sublease Premises, and all rights, servitude and
privileges belonging or in anywise appertaining thereto or granted thereby, for the Term of this Sublease, without hindrance or interruption by Sublandlord. Sublandlord warrants that it has full right
and authority to enter into this Lease for the full term hereof.



	19.
	Security Deposit.    Upon Sublease execution, Subtenant shall provide Sublandlord with a Security Deposit equal to one
month's Base Rent. 


5







 
	20.
	Renewal Option.    In the event the Subtenent does not exercise its option to renew at the end of the Sublease Term, as
provided in paragraph 2 (B) then in such event this Sublease shall continue on a month to month basis until either party gives the other ninety (90) days prior written notice of
their intent to terminate this Sublease.



	21.
	Communications.    Subtenant agrees that all communications regarding their tenancy under this Sublease shall be directed 
or copied to the Sublandlord who will in the case of property management issues contact the Landlord.



	22.
	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 HOMES, INC.
	

By:	

/s/ Christopher Clemente
	
 	

By:	

/s/ Gregory Benson

	Name:	Christopher Clemente	 	Name:	Gregory Benson
	Title:	Managing Member	 	Title:	President





Attachments:



Exhibit A—Floor
Plan of Sublease Premises

Exhibit B—Lease

Exhibit C—Office Furniture and Equipment List

Exhibit D—Reserved Parking Plan 


6







 


LANDLORD'S CONSENT AND AGREEMENT  


        Comstock Partners, L.C., as Landlord under the Lease, hereby consents to the foregoing Sublease between COMSTOCK
ASSET MANAGEMENT, L.C. and COMSTOCK HOMES, INC. dated October 1, 2004 and the terms and conditions thereunder. Landlord's consent herein shall not modify or affect the Lease or relieve
Sublandlord from any liability thereunder. 



	Comstock Partners, L.C.	 
	

By:	

/s/ Christopher Clemente
	

 
	Name:	Christopher Clemente	 
	Title:	Managing Member	 
	Date:	October 1, 2004	 




7









 
 

EXHIBIT A
  Sublease Premises    
    









 
 

Exhibit B
  Lease    
    









 
 

Exhibit C
  Office Furniture and/or Equipment    
    









 
 

Exhibit D
  Reserved Parking Plan    
    











QuickLinks


AGREEMENT OF SUBLEASE

WITNESSETH


EXHIBIT A Sublease Premises


Exhibit B Lease


Exhibit C Office Furniture and/or Equipment


Exhibit D Reserved Parking Plan