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EXHIBIT 10.23
SUBLEASE AGREEMENT
THIS SUBLEASE AGREEMENT (this "Sublease") is made this 15th day of January,
1998, by and between X.X.X.X. Software, Inc., a Georgia Corporation
("Sublessor"), UltimateCom of Atlanta, L.L.C., a Colorado Limited Liability
Company ("Sublessee").
RECITALS
A. TriNet Essential Facilities XXIII, Inc. (as successor in interest to
The Northwestern Mutual Life Insurance Company) as Landlord, and Sublessor have
executed a Lease Agreement, dated November 18, 1993, hereinafter called the
"Master Lease" (a copy of which is attached hereto and made a part hereof as
"Exhibit B"), for certain premises (the "Premises") comprising approximately
24,848 square feet of rentable space in the building located at 0000 XxxxxXxxx
Xxxxxxx, Xxxxxxx, XX 00000 (the "Building").
B. Sublessor desires to sublease to Sublessee a portion of the Premises
being leased by Sublessor under the terms of the Master Lease (the "Sublease
Premises" as defined below), and Sublessee desires to lease such space from
Sublessor.
NOW, THEREFORE, Sublessor and Sublessee agree as follows:
AGREEMENT
1. Sublease of Premises. Sublessor hereby subleases to Sublessee, and
Sublessee hereby subleases from Sublessor, the Sublease Premises which is
comprised of approximately 3,168 square feet of the Premises under lease to
Sublessor. The Sublease Premises is the crosshatched space as shown on "Exhibit
A" attached hereto and made a part hereof.
Except as otherwise expressed herein provided, such sublease of the
Sublease Premises shall be on all the terms, covenants, conditions and
provisions in the Master Lease, which terms, covenants, conditions and
provisions are incorporated herein and made a part hereof as if fully set forth
herein, and are imposed upon the respective parties to this Sublease, with
Sublessor herein being substituted for Landlord under the Master Lease, and
Sublessee hereunder being substituted for Tenant under the Master Lease, but
only with respect to the Sublease Premises. Notwithstanding the foregoing
incorporation of the Master Lease, Sublessor shall not be responsible for the
performance of any obligations to be performed by Landlord under the Master
Lease. Provided that Sublessor has performed all obligations of Sublessor as
Tenant under the Master Lease (except for those obligations that have been
delegated to Sublessee hereunder), Sublessor shall not be liable to Sublessee
for any failure by Landlord to perform such obligations under the Master Lease,
nor shall failure by Landlord to perform its obligations under the Master Lease
excuse performance by Sublessee of its obligations hereunder. To the extent the
succeeding provisions of this Sublease are inconsistent with or different from
the provisions of the Master Lease, the provisions of this Sublease shall
control.
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2. Term. (a) The term of this Sublease (the "Term") shall
commence on the later of February 1, 1998 or the day after receipt of Landlord's
consent hereto and shall continue for eighteen (18) full months.
(b) Sublessee shall have the option to request a
six (6) month extension of the Term by submitting to Sublessor a written request
to extend the Term by no later than the end of the twelfth (12th) month of the
Term. Within ten (10) business days of receipt of Sublessee's request to extend
the Term, Sublessor will respond in writing as to whether or not the Term will
be extended. Failure by the Sublessor to respond within the ten (1O) day notice
period shall mean that the Sublessor has declined Sublessee's request to extend
the Term and this Sublease shall expire as defined in Section 2(a). If the Term
is extended, the terms and conditions of the extension period shall be the same
as those herein defined (unless modified in writing and agreed upon by both
Sublessor and Sublessee) and an amendment to this Sublease will be executed
defining the new termination date.
3. Rent and Other Financial Obligations/Security Deposit. The
monthly installment of Base Rent payable by Sublessee to Sublessor shall be Five
Thousand Five Hundred Forty-four and no/100 Dollars($5,544.00) per month for the
term of this Sublease. In addition thereto, Sublessee also shall pay as
"additional rent" it's proportionate share of increases in the "Operating
Expenses" (as such term is defined in the Master Lease) attributable to the
Sublease Premises beyond the 1998 calendar year. For purposes of this Sublease,
Sublessee's proportionate share shall mean 12.75% of the "Operating Expenses"
payable by Sublessor. Base Rent and additional rent shall be due and payable
without notice in advance on the first day of each month. Sublessor agrees to
provide Sublessee with copies of expense estimates, xxxxxxxx, invoices or
reconciliation statements from Landlord which support increases in "additional
rent" owed by Sublessee to Sublessor hereunder.
Upon execution of this Sublease, Sublessee shall pay Sublessor the sum
of Twenty-two Thousand One Hundred Seventy-six and no/100 Dollars ($22,176.00),
of which Five Thousand Five Hundred Forty-four and no/100 Dollars ($5,544.00)
shall be applied to the first installment of monthly Base Rent under this
Sublease for January, 1998 and Sixteen Thousand Six Hundred Thirty-two and
no/100 Dollars (16,632.00) shall be held as a security deposit (the "Security
Deposit") by Sublessor for security for the performance by Sublessee of all the
terms, covenants, and conditions of this Sublease upon Sublessee's part to be
performed. Sublessor shall have the right to apply any part of said Security
Deposit to cure any default of Sublessee and if Sublessor does so, Sublessee
shall upon demand deposit with the Sublessor the amount so applied by Sublessor
so that Sublessor shall have the full Security Deposit on hand at all times
during the Term of this Sublease. So long as Sublessee is not in default
hereunder, portions of the Security Deposit will be applied to Sublessee's
monthly rental payment as follows; Five Thousand Five Hundred Forty-four and
no/100 Dollars ($5,544.00) shall be applied to the monthly Base Rent due for May
1998, and Three Thousand Five Hundred Eighty-eight and no/100 Dollars
($3,588.00) shall be applied to the monthly Base Rent due for August 1998. The
remaining Seven Thousand Five Hundred and no/100 Dollars ($7,500.00) shall be
held throughout the Term as security for Sublessee's performance and shall be
returned to Sublessee within thirty (30) days of the termination of this
Sublease.
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4. Furnishings. Sublessee shall have the right to use the
furniture, trade fixtures and other personal property (collectively, "Personal
Property") belonging to Sublessor located in the Sublease Premises and, upon
expiration or prior termination of this Sublease, Sublessee shall return to
Sublessor such Personal Property in good condition and repair, normal wear and
tear excepted. The Personal Property referenced herein shall mean fourteen (14)
modular workstations and matching upholstered chairs, one (1) conference table
and eight (8) tan conference chairs, and up to nineteen (19) telephone
handsets.
5. Telephone System. So long as Sublessee is not in default,
Sublessor will allow Sublessee to use Sublessor's telephone system and handsets,
and will separate up to ten (10) telephone lines for Sublessee's use. Sublessee
will be responsible for all costs associated with its use of Sublessor's
telephone system, including, but not limited to, monthly access charges and fees
associated with local and long distance service, all hardware/software and
service/consulting costs, and all move, add and change charges associated with
restructuring Sublessor's telephone system for Sublessee's use (the "System
Costs"). Sublessor will provide Sublessee with copies of any invoices or bills
associated with the System Costs. Failure by Sublessee to pay any System Costs
due of Sublessee within fifteen (15) days of receipt from Sublessor shall
constitute a default by Sublessee. In the event Sublessor elects to replace,
upgrade or change its telephone system, Sublessor will provide Sublessee with
notice of the change over date.
5. Signage. Sublessee shall be allowed to erect a sign of it's
logo at the primary entrance to the Sublease Premises in a size not to exceed 1'
x 1'. In addition, Sublessee may replace the "Appendix" sign at the
entrance to Sublessee's conference room and replace it with a sign stating
Sublessee's name. The new conference room sign shall be in the same size, color
and style as the existing "Appendix" sign. The signs, their design, location and
manner of fixture must be mutually agreed upon by Sublessor and Sublessee.
Sublessor will request that the Landlord include Sublessee's name on the
building directory in the lobby of the building. All costs associated with the
installation, maintenance, and removal of the signs and directory listing will
be the responsibility of Sublessee.
6. Rooftop Antenna. It is understood that this Sublease is
contingent upon receiving Landlord's approval to mount an antenna (the
"Antenna") on the roof of the Building for Sublessee. Failure to receive
approval for the Antenna will render this Sublease null and void, and any
prepaid sums paid to Sublessor by Sublessee shall be returned within ten (10)
days of receipt of Landlord's rejection of the Antenna. Sublessee will be
responsible for any and all costs associated with the installation, maintenance,
operation and removal of the Antenna. (See Landlord's consent letter attached
hereto and made a part hereof as "Exhibit C".)
7. Tenant Improvements. At Sublessor's cost, and after receiving
Landlord's consent to this Sublease and the improvements contemplated herein,
Sublessor will relocate the wall separating the Sublease Premises to incorporate
the executive office into the Sublease Premises and separate the Sublease
Premises from the balance of Sublessor's Premises. In addition, Sublessor will
install building standard mini-blinds on the windows between the Sublease
Premises and the Sublessor's Premises (including the doors if the mini-blinds
can be installed with no damage to the doors).
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8. Insurance. (a) Sublessee, at its sole cost and expense, shall
carry insurance against fire and other perils encompassed within the commonly
accepted term "All Risks", insuring Sublessee's interest in its improvements and
betterments to the Sublease Premises and any and all furniture, equipment,
supplies, and other property owned, leased, held, or possessed by it and
contained therein. Such insurance coverage shall be in an amount equal to the
full insurable value of such improvements and property, and shall contain a
clause whereby the insurer waives all rights of subrogation against Landlord and
Sublessor.
(b) Sublessee, at its sole cost and expense, shall carry
comprehensive general liability insurance, including contractual liability
endorsement concerning Sublessee's obligations under this Sublease, insuring
Sublessee against any and all liability for injury to or death of a person or
persons and for damage done to property occasioned by or arising out of any
construction work being done in the Sublease Premises by Sublessee, its agents,
contractors or employees, or arising out of Sublessee's use or occupancy of the
Sublease Premises, or in any way occasioned by or arising out of the activities
of Sublessee, its agents, contractors or employees on or about the Sublease
Premises or other portions of the Building, in the minimum amount of Two Million
Dollars ($2,000,000.00) per occurrence combined; provided, however, Sublessee
shall carry such greater limits of coverage as Sublessor or Landlord may
reasonably request from time to time so long as Sublessor and Landlord maintain
similar limits of coverage. Landlord and Sublessor shall be named as an
additional insured under such policy of comprehensive general liability
insurance, as its interests may appear.
(c) Sublessee, at its sole cost and expense, shall carry worker's
compensation insurance covering all employees of Sublessee employed in, on or
about the Sublease Premises or the Building in order to provide statutory
benefits as required by the laws of the State of Georgia. Such insurance
coverage shall contain a clause whereby the insurer waives all right of
subrogation against Sublessor and Landlord.
(d) Said insurance policies as described in the foregoing
subsections (a), (b) and (c) shall: (i) be issued by an insurance company that
is reasonably acceptable to Sublessor and Landlord and licensed to do business
in the State of Georgia, and (ii) provide that said insurance shall not be
canceled unless thirty (30) days' prior written notice shall have been given to
Sublessor and Landlord. Said policy or policies, or certificates thereof, shall
be delivered to Sublessor and Landlord by Sublessee upon commencement of the
term of this Sublease and upon each renewal of said insurance.
9. Agency/Broker Participation. Sublessor and Sublessee warrant
that they have dealt with no real estate broker in connection with this Sublease
other than TC Atlanta, Inc., and that no other broker is entitled to any
commission on account of this Sublease. Sublessor and Sublessee acknowledge and
agree that TC Atlanta, Inc. has acted as a dual agent in this transaction,
representing both parties. Each party will hold the other party harmless from
and against any and all costs (including attorneys fees), expense or liability
for any compensation, commissions, and charges claimed by any other broker with
respect to this Sublease. Sublessor will pay TC Atlanta, Inc. a commission based
upon a separate agreement.
10. Notwithstanding any provision to the contrary in the Master
Lease, Sublessor, Sublessee, and (to the extent agreed to by Landlord pursuant
to the
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Consent to Landlord attached hereto) Landlord each (i) hereby waives all claims
such party may have against the other to the extent such claims are covered by
insurance carried or required to be carried under the Master Lease, and (ii)
shall cause their respective insurers to similarly waive all rights of recovery
against the others, and against the officers, employees, partners, agents and
representatives of the others, for loss of or damage to the property of the
waiving party or the property of others under its control, to the extent such
loss or damage is (or would have been) insured against under any insurance
policy carried (or required to be carried) by Landlord, Sublessor, or Sublessee
hereunder. Each of Sublessee, Sublessor, and (to the extent agreed to by
Landlord pursuant to the Landlord's consent hereto) Landlord shall obtain a
clause or endorsement to the applicable insurance policies carried by such party
denying its insurer any rights of subrogation against the other parties.
11. Termination of Master Lease. This Sublease is and shall at all
times be subordinate to the Master Lease. In the event the Master Lease is
terminated for any reason, then, on the date of such termination, this Sublease
automatically shall terminate and be of no further force or effect. If the
termination of the Master Lease (and the resulting termination of this Sublease)
occurs through no fault of Sublessor, Sublessor shall have no liability therefor
to Sublessee. In the event Sublessor elects to terminate the Master Lease as per
Section 6 in the Special Stipulations of the Master Lease, Sublessor will
provide Sublessee the same written notice as provided the Landlord thereunder.
If Sublessor elects to terminate the Master Lease, Sublessee will not be
responsible for any portion of Sublessor's termination penalty as defined in
Special Stipulation #8 of the Master Lease.
12. Attorneys Fees. If any action shall be instituted by either of
the parties hereto for the enforcement or interpretation of any of its rights or
remedies under this Sublease, the prevailing party shall be entitled to recover
from the losing party all costs incurred by the prevailing party in said action
and any appeal therefrom, including reasonable attorneys' fees to be fixed by
the court therein. Said costs and attorneys' fees shall be included as part of
the judgment in any such action.
13. Notices. Any notice or demand permitted or required to be
given to either party by the other hereunder shall be in writing. All notices
and demands by the Sublessor or Sublessee to the other party shall be delivered
by hand or by courier service, or sent by registered or certified mail, postage
prepaid, return receipt requested. Each notice given by mail shall be deemed
received by the receiving party three (3) days after such notice shall have been
deposited, and each notice delivered by hand or by courier service shall be
deemed to have been received when actually received by the receiving party. With
respect to notices to Sublessee, the primary notice address at the Sublease
Premises in Atlanta listed first below shall be the official address for notices
herein, and the secondary address shall be for courtesy copies only. If either
party changes its address for notices, then such party shall given written
notice thereof in accordance with the foregoing, except that such notice of
change of address shall be deemed to have been given only when actually
received. All notices shall be effective on refusal of delivery.
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If To Sublessor: X.X.X.X. Software, Inc.
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Chief Financial Officer
If To Sublessee: UltimateCom of Atlanta
0000 Xxxxxxxxx Xxxxxxx
Xxxxx 000
Xxxxxxx, XX 00000
ATTN: Vice President, General Manager
With a courtesy
copy to: UltimateCom of Atlanta
0000 X. Xxxxxx Xxxxxx
Xxxxx 0000
Xxxxxx, XX 00000
ATTN: Vice President Operations
In addition, Sublessor will forward to Sublessee a copy of any notice received
from Landlord which is pertinent to Sublessee's use or occupancy of the Sublease
Premises.
14. Sublessor's Effort. In the event the Landlord defaults in any
of its obligations under the Master Lease, Sublessor will use its reasonable
efforts to enforce its rights under the Master Lease.
15. Severability. Any provision of this Sublease which shall
prove to be invalid, void or illegal in no way affects, impairs or invalidates
any other provision hereof, and such other provisions shall remain in full force
and effect.
16. Interpretation. This Agreement shall be construed and
interpreted in accordance with the laws of the State of Georgia.
17. Entire Agreement. This Sublease represents the entire
agreement of the parties with respect to the subject matter hereof, supersedes
all prior communications concerning the subject matter and may not be amended
except in writing signed by both parties' authorized officers. No provision of
this Sublease may be amended or added to except by an agreement in writing
signed by the parties hereto or their respective successors in interest.
18. Consent of Landlord. Whenever the consent of Landlord is
required under the Master Lease, Sublessee shall obtain the consent of both
Sublessor and Landlord. Furthermore, this Sublease shall not be operative or
deemed effective for any purpose whatsoever unless and until the consent of
Landlord to this Sublease has been obtained.
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IN WITNESS WHEREOF, the parties have caused this Sublease to be executed by
their duly authorized representatives as of the date first written above.
SUBLESSOR:
X.X.X.X. SOFTWARE, INC.
By: /s/ Xxxxxxx X. Xxxxxx
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Name: XXXXXXX X. XXXXXX
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Title: CORPORATE SECRETARY &
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DIRECTOR OF FINANCE/ADMINISTRATION
SUBLESSEE:
ULTIMATECOM OF ATLANTA, L.L.C.
By: /s/ Xxxxxxx X. Xxxxxxx
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Name: Xxxxxxx X. Xxxxxxx
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Title: Vice President-Operations
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(- description to come -)
