EXHIBIT 10.20
AGREEMENT OF SUBLEASE
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AGREEMENT OF SUBLEASE, made as of the 24th day of June, 1997 by and between
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Prodigy Services Corporation, with an office at 000 Xxxxxxxx Xxxxxx, Xxxxx
Xxxxxx, Xxx Xxxx, 00000 (hereinafter referred to as "Sublessor") and SplitRock
Services, Inc., a corporation having an office at 0000 Xxxxxxxxxx Xxxxx,
Xxxxxxxxx, Xxxxx 00000 (hereinafter referred to as "Sublessee").
WHEREAS, Sublessor is presently the tenant under that certain lease dated
June 6, 1988 between Xxxx Xxxxx #1, as landlord, and Sublessor, as tenant,
covering the entire building known as 0000 Xxxxx Xxxxxx, Xxxxxxxx Heights, New
York (the "Building") , which lease was modified by a Letter Agreement dated
January 20, 1989, and an Amendment to Lease dated the ____ day April, 1995,
between Federal Deposit Insurance Corporation as Receiver of New Bank of New
England, N.A., as successor in interest to Xxxx Xxxxx #1, with an address c/o
RECOLL Management Corporation at 000 Xxxxxx Xxxxxx, Xxxxxx, Xxxxxxxxxxxxx
00000, and Sublessor (which lease, as modified and amended, is hereinafter
referred to collectively as the "Prime Lease"); and
WHEREAS, Sublessee desires to lease from Sublessor and Sublessor is willing
to lease to Sublessee a portion of the premises leased under the Prime Lease,
consisting of approximately 12,500 rentable square feet as denoted on Schedule A
annexed hereto, (which space is hereinafter called the "Subleased Premises").
NOW, THEREFORE, in consideration of the mutual covenants herein contained,
the parties hereto, for themselves, their successors and assigns, hereby
covenant and agree as follows:
1. Term. Sublessor does hereby lease to Sublessee and Sublessee does
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hereby hire and take from Sublessor the Subleased Premises for a term commencing
as of July 1, 1997 and ending February 28, 2001 or until such term shall sooner
end as may be provided in this Sublease. Sublessee may terminate this Sublease
effective upon December 31 of 1999 or 2000 year upon three months prior written
notice to Sublessor. In the event Sublessor terminates for any reason the Full
Service Agreement between Sublessor and Sublessee of even date herewith, this
Sublease shall terminate upon the termination date of the Full Service
Agreement.
2. Fixed Rent. (a) The obligation of Sublessee to pay fixed annual rent
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hereunder shall commence on July 1,1997 and continue throughout the term hereof.
(b) Sublessee shall pay to Sublessor, commencing as of the rent
commencement date hereinbefore described, a fixed annual rent equal to $20.83
per square foot, in equal monthly installments in advance on the first day of
each month during the term of this Sublease. All amounts payable pursuant to
this Sublease shall be deemed rent, and shall be payable without set-off or
deduction whatsoever, at the offices of Sublessor or such other place as
Sublessor may designate in writing. The first month's rent payable hereunder
shall be paid to Sublessor at the time the assets are delivered pursuant to the
Definitive Agreement between the parties.
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(c) All costs, charges and expenses which Sublessee assumes or agrees
to pay to Sublessor, pursuant to this Sublease, shall be deemed additional rent
and, in the event of nonpayment, Sublessor shall have the rights and remedies
herein provided for in the case of nonpayment of rent.
3. Additional Rent. Sublessee shall also pay to Sublessor as additional
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rent hereunder, commencing as of the rent commencement date hereinbefore
described, a sum on account of additional rent, as calculated in accordance with
the attached Schedule B. Additional rent payable under this Paragraph 3
represents payment for (i) Sublessee's share of any increase of costs to
Sublessor with respect to insurance, taxes, and assessment on the Building for
any calendar year after 1997 and (ii) the following services which shall be made
available by Sublessor to Sublessee: the use of common areas of the Building;
the use of furniture, fixtures, desktop and laptop personal computers, and
leasehold improvements in the Subleased Premises which will be used by
Sublessee's employees and independent contractors; maintenance and cleaning of
and trash removal from the Subleased Premises; security for the Building;
maintenance and repair of heating, ventilation and air conditioning systems in
the Building; maintenance and repair of elevators in the Building, and other
base building type services. Sublessee's share of costs under this Paragraph
3.(B)(i) shall be 20.49% of the total costs. Sublessee shall purchase telephone
services from Sublessor at Sublessor's cost. Sublessor will establish its own
accounts for mail, courier, outside printing and similar services.
4. Use. Sublessee shall use and occupy the Subleased Premises solely for
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any use permitted by the Prime Lease, and for no other purpose. The Subleased
Premises are only a portion of the Building, and therefore, the parties
acknowledge that each party's employees shall have access to the common areas,
and unless security measures are installed and enforced, the employees, agents,
invitees, and licensees of each party ("Persons") may have access to each
other's premises within the Building. Notwithstanding installation of
appropriate security measures, such Persons shall have access to the common
areas. Sublessee and Sublessor will cause each of their employees having access
to the Subleased Premises to execute confidentiality agreements relating to each
other's confidential information.
5. Prime Landlord Consent. This Sublease is made pursuant to paragraph 20
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of the Prime Lease, and no consent is needed.
6. Subleased Premises "As Is". Sublessee acknowledges and agrees that it
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has examined the Subleased Premises, is fully familiar with the physical
condition thereof, and accepts possession of the Subleased Premises in their "as
is" condition
7. Prime Lease. (a) Sublessee acknowledges that it has read and examined
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the Prime Lease, and the modification and amendment thereof, and is fully
familiar with all the terms, covenants and conditions on the Sublessor's part to
be performed thereunder, and that, subject to the express provisions of this
Sublease, all of the terms, covenants and conditions of the Prime Lease are
incorporated hereinthis Sublease, all of the terms, covenants and conditions of
the Prime Lease
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are incorporated herein as if set forth at length, and those applying to the
Tenant therein shall apply to Sublessee.
(b) Sublessee does hereby assume and agree to be bound by and perform
all of the terms, covenants and conditions on Sublessor's part to be performed
thereunder as the same affect the Subleased Premises. In the event Sublessee
shall default in the full performance of any of the terms, covenants and
conditions on its part to be performed under this Sublease, then Sublessor shall
have the same rights and remedies with respect to such default as are given to
Landlord under the Prime Lease with respect to defaults by Sublessor, as tenant,
under the Prime Lease. Notwithstanding the foregoing, this Sublease is separate
from and subordinate to the Prime Lease.
8. Alterations. Sublessee shall not make or permit the making of any
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alterations, decorations, installments, additions or improvements, in or to the
Subleased Premises without Sublessor's prior written consent, which shall not be
unreasonably withheld or delayed, and, additionally, any necessary prior written
consent of Landlord in accordance with the Prime Lease. Any work by Sublessee
shall comply with the governing provisions of the Prime Lease. Sublessee agrees
to pay all costs and expenses in connection with obtaining any consent required
by Landlord and in making such alterations, decorations, installments, additions
or improvements.
9. Assignment/Subleasing/Mortgages. (a) Sublessee may assign to an
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affiliate of Sublessee this Sublease or further sublease the Subleased Premises
to an affiliate of Sublessee in whole or in part without the prior written
consent of Sublessor; provided however, that any such assignment shall not
release Sublessee from its obligations hereunder. Except as set forth in this
Paragraph 9(a), Sublessee may not mortgage, pledge or otherwise encumber,
whether voluntarily, by operation of law, or otherwise, this Sublease or further
sublease the Subleased Premises in whole or in part without the prior written
consent of Sublessor, which may be withheld by Sublessor in its sole discretion.
(b) If the Subleased Premises or any part thereof be sublet or
occupied by any person or persons other than Sublessee, whether or not in
violation of the provisions of this Sublease, Sublessor may, after default by
Sublessee, collect rent from the subtenant or occupant and apply the net amount
collected to the curing of any default hereunder in any order or priority
Sublessor may elect, any unexpended balance to be applied by Sublessor against
any rental or other obligations subsequently becoming due, but no such
subletting, occupancy or collection of rent shall be deemed a waiver of the
covenants in this Article, nor shall it be deemed acceptance of the subtenant or
occupant as a tenant or a release of Sublessee from the full performance by
Sublessee of all of the terms, conditions and covenants of this Sublease.
(c) Each and every assignee or transferee, whether as assignee or as
successor in interest of Sublessee or as assignee or successor in interest of
any assignees, shall immediately be and remain liable jointly and severally,
with Sublessee and with each other for the payment of the rent, additional rent
and other charges payable under this Sublease and for the due performance of all
covenants, agreements, terms and provisions of this Sublease on the part of
Sublessee to be paid
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and performed to the full end of the term of this Sublease.
(d) Any consent by Sublessor or the landlord under the Prime Lease
that may hereafter be given to any act of assignment, mortgage, pledge,
encumbrance or subletting shall be held to apply only to the specific
transaction thereby approved. Such consent shall not be construed as a waiver of
the duty of Sublessee or its successors or assigns to obtain from Sublessor and
the landlord under the Prime Lease consents to any other subsequent assignment,
mortgage, pledge, encumbrance or subletting, or as a modification or limitation
or the rights of Sublessor with respect to the foregoing covenants by Sublessee.
10. Services. (a) Sublessee shall be entitled to receive all services to
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be rendered to the Sublessor under the Prime Lease for the Subleased Premises.
(b) Subject to the provisions of Paragraph 11 hereof, Sublessee shall
also be entitled to receive all services which Sublessor secures for the
Subleased Premises. Sublessor shall continue to provide services to Sublessee as
such are existing on the date of this Sublease for the term of this Sublease, at
the same level as they exist on the date hereof. If Sublessor seeks to modify in
any material respect the services delivered to the Subleased Premises, Sublessor
shall consult in good faith with Sublessee in determining the scope, if any, of
such modification. Upon conclusion of any such agreement to modify such
services, Sublessee shall pay its pro-rata cost of any additional cost incurred
as a result of such modification, and will receive the benefit of any reduction
in cost as a result of such modification. If Sublessee does not agree to the
modification of services, then Sublessee shall not be required to pay any cost
of such modification.
11. Electrical Service. (a) Sublessee agrees not to connect any
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electrical equipment of any type to the Building electric distribution systems
not permitted under the Prime Lease or which would adversely affect the
electrical system without the prior written consent of Sublessor and Sublessor's
landlord under the Prime Lease.
(b) Sublessee agrees that in the event Sublessor is required to
provide electric service through an emergency power system Sublessor may
terminate the ancillary services to be provided by Sublessor under Paragraph 3.B
hereof during such period the emergency power system is used.
12. Prime Landlord Default. If the landlord under the Prime Lease shall
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default in the performance or observance of any of its agreements or obligations
under the Prime Lease (including any obligation for the payment of money),
Sublessor shall have no liability therefor to Sublessee and shall be excused
from performance of the corresponding obligation which may be owed to Sublessee
under this Sublease. In this connection, Sublessor shall fully cooperate with
Sublessee in the assertion of any claims hereunder, in the name of Sublessee or
otherwise, against Sublessor's landlord. No such default shall excuse Sublessee
from the performance of any of its obligations to be performed under this
Sublease, or entitle Sublessee to terminate this Sublease or to any reduction
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in or abatement of any of the rents provided for in this Sublease, unless, and
only to the extent that, Sublessor shall be excused from the performance of a
corresponding obligation as the tenant under the Prime Lease, or shall be
entitled to a reduction in or abatement of any of the rents provided for in the
Prime Lease with respect to these Subleased Premises, by reason of such default
by the Sublessor's landlord.
13. Sublessee's Obligation to Cure Defaults. Anything contained in any
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provision of this Sublease to the contrary notwithstanding, Sublessee agrees,
with respect to the Subleased Premises, to comply with and remedy any default in
this Sublease or the Prime Lease which is the Sublessee's obligation to cure,
within the period allowed to Sublessor as tenant under the Prime Lease even if
such time period is shorter than the period otherwise allowed therein due to the
fact that notice of default from Sublessor to Sublessee is given after the
corresponding notice of default from Sublessor's landlord to Sublessor.
Sublessor agrees to forward to Sublessee, promptly upon receipt thereof by
Sublessor, a copy of each notice of default received by Sublessor in its
capacity as tenant under the Prime Lease. Sublessee agrees to forward to
Sublessor, promptly upon receipt thereof, copies of any notices received by
Sublessee from the Sublessor's landlord or from any governmental authorities
affecting the Subleased Premises.
14. Indemnification. Sublessee does hereby indemnify Sublessor and
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agrees to defend and to hold Sublessor harmless of and from any claim,
liability, damage or loss whether under the Prime Lease or otherwise, by reason
of any negligent act or negligent omission on the part of Sublessee hereunder
including, without limitation, all cost and expense of Sublessor associated with
enforcing this indemnification.
15. Insurance. Sublessee shall obtain and maintain throughout the term
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hereof the insurance Sublessor is obligated to maintain as tenant under the
Prime Lease and Sublessee shall cause both the landlord under the Prime Lease
and Sublessor to be named as additional insureds on all such policies. Sublessee
shall deliver evidence of such insurance, in accordance with the terms of the
Prime Lease, to Sublessor on or before July 1, of each year of the term.
16. Security Deposit. Sublessee shall not be required to deposit any sums
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as security for its performance under this Sublease.
17. Sublessee's Representations. Sublessee represents that it is a duly
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organized Texas corporation, in good standing, and shall be qualified to do
business in New York effective July 1, 1997, that it has taken all necessary
corporate action to approve and authorize the execution and delivery of this
Sublease, and that this Sublease is enforceable in accordance with its terms.
18. Entire Agreement/Modifications. This Sublease contains the entire
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agreement and undertaking between the parties. There are no oral understandings,
terms or other conditions and neither party has relied upon any representation,
express or implied, not contained in this Sublease. All prior undertakings,
terms, representations, conditions or agreements, oral or written, are deemed
merged in this Sublease. This Sublease cannot be changed or supplemented orally
but only by an agreement in writing and signed by both parties hereto.
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19. Sublessor's Obligations. Sublessor covenants that so long as Sublessee
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is not in default under this Sublease, and subject to Sublessee's obligations
hereunder, Sublessor will not default in any of its material obligations under
the Prime Lease during the term hereof. If Sublessor shall default on any of its
material obligations under the Prime Lease, Sublessee may terminate this
Sublease with no further obligation hereunder. Sublessor further covenants that
subject to the provisions of the Amendment to Lease, if Sublessor seeks to
exercise its rights to early termination of the Prime Lease, pursuant to the
Amendment to Lease, it shall do so at its sole cost and expense and only with
Sublessee's consent, which consent shall not be unreasonably withheld. Sublessor
will not voluntarily enter into any agreement with the landlord under the Prime
Lease which would result in the termination of the Prime Lease prior to the
expiration or sooner termination of this Sublease, without Sublessee's express
prior written consent, which consent shall not be unreasonably withheld.
20. Successors. The covenants, terms, conditions, provisions and
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undertakings in this Sublease shall extend to and be binding upon the successors
and permitted assigns of the respective parties hereto.
21. Notices. Any notice or communication which either party hereto may
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desire or be required to give to the other, shall be deemed sufficiently given
or rendered if, in writing, it is sent by registered or certified mail or by
private, independent, same-day or overnight courier, addressed to the party at
the address set forth at the start of this Sublease or at such other address as
either party shall by written notice to the other from time to time designate.
The time of the giving of such notice shall be deemed to be five (5) days after
the time when same is mailed or one (1) day after delivery to a private courier,
as hereinabove provided. Attorneys to a party may deliver notices on behalf of
that party. Invoices, bills, statements and the like, may be sent by ordinary
first class mail.
22. Brokers. Sublessee represents and warrants that it neither consulted
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nor negotiated with any broker or finder with regard to the Subleased Premises
or this Sublease, Sublessee agrees to indemnity, defend and save Sublessor
harmless from and against any claims for fees or commissions from anyone who
claims to have dealt with Sublessee in connection with the Subleased Premises or
this Sublease.
23. Governing Law. The laws of the State of New York govern this Sublease,
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without regard to conflict of law rules.
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IN WITNESS WHEREOF, the parties hereto have caused this Sublease to be
executed as of the day and year first above written.
Sublessor:
PRODIGY SERVICES CORPORATION
By: /s/ Xxxx X. Xxxxxxx
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Name: Xxxx X. Xxxxxxx
Title: President
Sublessee:
SPLITROCK SERVICES, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: Xxxxxxx X. Xxxxxx
Title: President
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