EXHIBIT 10.4
000 XXXXX XXXXXX
XXXXXXX, XXXXXXXXXXXXX
AMENDED AND RESTATED SUBLEASE
BASIC INFORMATION
DATE: July 6, 1999
SUBLESSOR: Innovation Associates, Inc., a
Massachusetts corporation
SUBLESSEE: StorageNetworks, Inc., a
Delaware corporation
SUBLEASED Sixth (6th) floor
PREMISES: 000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxxx
NET RENTABLE
AREA OF SUBLEASED
PREMISES: 21,000 square feet
TERM COMMENCEMENT: August 1, 1999; existing Sublease and License
Agreement will remain in effect until August 1,
1999
TERM EXPIRATION: January 14, 2001
BASE RENT: $40,250 per month
SECURITY DEPOSIT: $120,750
XXXXXXXXX'S AND
XXXXXXXXX'S ADDRESS
FOR NOTICES: See Section 15
EXHIBITS: Exhibit A - Copy of Master Lease
Exhibit B - Diagram of Subleased Premises
Exhibit C - Form of Letter of Credit
Exhibit D - Letter from Sublessee to Xxxxxx X. Xxxxxx,
Inc.
AMENDED AND RESTATED SUBLEASE
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This Amended and Restated Sublease (this "Sublease") is entered into as of
the 6th day of July, 1999, by and between Innovation Associates, Inc.
("Sublessor") and StorageNetworks, Inc. ("Sublessee") as a sublease under that
certain Lease (the "Master Lease") dated December 1995, between Prospect Hill
Acquisition Trust ("Master Lessor"), as Lessor, and Innovation Associates, Inc.,
as Lessee. A copy of the Master Lease is attached hereto as Exhibit A.
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WHEREAS, pursuant to that certain Sublease and License Agreement (the
"Agreement") dated as of April 9, 1999, Sublessee subleased from Sublessor 9,036
net rentable square feet on the 6th floor of the premises at 000 Xxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxxxxx, and licensed from Sublessor the use of 2,274 net
rentable square feet on the 6th floor of such premises;
WHEREAS, Sublessee and Sublessor desire to amend and restate the Agreement
in order that Sublessee shall sublease from Sublessor the entire premises leased
by Sublessor at 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx pursuant to the Master
Lease, on the terms and conditions set forth below:
WITNESSETH
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Sublessor hereby subleases to Sublessee and Sublessee hereby subleases from
Sublessor the area and space described in Section I below as the Subleased
Premises for the term and subject to the terms, covenants, agreements, and
conditions hereinafter set forth, to each and all of which Sublessor and
Sublessee hereby mutually agree, and further subject to the written approval of
Master Lessor.
1. The "Subleased Premises" consist of 21,000 square feet of net rentable area
on the 6th floor of 000 Xxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxxxxx, as shown on
Exhibit B. Such square footage has been computed in the same manner as
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provided in the Master Lease.
2. All of the terms, covenants, and conditions of the Master Lease, insofar as
they relate to the Subleased Premises, are hereby incorporated by reference
in this Sublease and made a part hereof as if the same were set forth in full
in this Sublease, except: (a) the basic lease provisions applicable to this
Sublease shall be as set forth on the first page hereof; (b) the base rent
and additional rent payable by Sublessee to Sublessor in respect of the
Subleased Premises shall be in the amount and shall be payable as provided in
Section 4 hereof; (c) for defaults in the payment of rent, additional rent
(including Sublessee's share of Operating Expenses and Real Property Taxes
(each as defined in the Master Lease) increases), or any other amounts due
under this Sublease, the grace period shall be five (5) days after the due
date of such payment (without any requirement of notice); (d) for defaults
other than payment defaults, the grace period shall be five (5) days less
than that provided for Sublessor, as lessee, under the Master Lease; (e)
Sublessor's Extension Option (as described in Exhibit D of the Master Lease)
shall not operate for the benefit of Sublessee and may not be enforced by
Sublessee; and (f) the term "Landlord" as used in the Master Lease shall
mean Sublessor hereunder and the term "Tenant" under the Master Lease shall
mean Sublessee hereunder.
In the event of any default on the part of Sublessee under any of the terms,
covenants, and conditions of this Sublease (including those terms, covenants,
and conditions of the Master Lease incorporated by reference herein),
Sublessor shall have the same rights and remedies against Sublessee under
this Sublease as are available to Master Lessor against Sublessor, as lessee,
under the Master Lease.
Sublessee represents to Sublessor that it has read the Master Lease and that
it is familiar with the contents thereof. Sublessee covenants and agrees that
it will perform, comply with, and observe all of the terms, covenants, and
conditions contained in the Master Lease insofar as they relate to the use
and occupancy of the Subleased Premises, except for those provisions made
inapplicable by the express provisions of this Sublease or superseded by the
context of the specific provisions hereof.
Sublessor acknowledges that Sublessee is negotiating with Master Lessor to
extend the term of Sublessor's tenancy in the Subleased Premises. To that
end, Sublessor will cooperate with Sublessee and Master Lessor by executing
relevant documents provided, however, that Sublessor will not assume any
obligations, financial or otherwise, other than those that Sublessor is
otherwise obligated to perform pursuant to the Master Lease and the Sublease.
3. The Sublease term shall commence on August 1, 1999 and shall end on January
14, 2001, or on such earlier date upon which said term may expire or be
terminated pursuant to a termination of the Master Lease or any of the
conditions or limitations or other provisions of this Sublease or pursuant
to law. Notwithstanding the foregoing or any other provision of this Sublease
to the contrary, until such August 1 commencement date, the terms and
provisions of the Agreement shall remain in full force and effect. Provided
that the Master Lessor has approved this Sublease, Sublessee shall be allowed
access to the Subleased Premises on and after July 15, 1999, for the purpose
of installing Sublessee's telephone systems and performing related work,
provided that such work shall not disrupt Sublessor's business and Sublessee
shall provide at least 24 hours' prior notice to Sublessor of Sublessee's
desire to enter into the Subleased Premises for such purposes.
4. Sublessee shall pay to Sublessor during the term base rent for the Subleased
Premises in the amount of $40,250 per month, payable in advance on the
fifteenth day of each month. Payments of base rent shall not commence until
the date that this Sublease has been signed by both parties and approved by
the Master Lessor. The base rent payable hereunder shall be increased by the
amount, if any, of any increase in Operating Expenses and Real Property Taxes
(as such terms are defined in the Master Lease) allocable to the Subleased
Premises over the Base Year. Sublessee and Sublessor agree that the
proportionate share of Operating Expenses and Real Estate Taxes allocable to
the Subleased Premises is 14.0%. The term "Base Year" shall mean calendar
year 1999 for purposes of computing Operating Expenses, and fiscal year 1999
for purposes of computing Real Property Taxes. Sublessor shall notify
Sublessee in writing as to any such increase, and the base rent payable under
this Sublease shall be deemed to be amended to reflect any such increase.
Sublessor and Sublessee agree that the base rent, as the same may be
increased pursuant to the foregoing sentence, shall be
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deemed to include a pro rata share based on the square footage of the
Subleased Premises of any amounts payable by Sublessor to Master Lessor for
Operating Expenses or Real Property Taxes in respect of the Subleased
Premises pursuant to the Master Lease, and that Sublessee shall not be
obligated to pay to Sublessor a pro rata portion of Operating Expenses or
Real Property Taxes, or any escalations thereof, except in accordance with
this Section 4. Notwithstanding the foregoing, Sublessee shall be
responsible for paying all charges for electricity related to the Subleased
Premises. Such electricity shall be separately metered at Sublessor's sole
cost and expense.
5. Upon the execution of this Sublease, Sublessee shall pay and Sublessor shall
hold one hundred twenty thousand seven hundred fifty dollars ($120,750) as
security (the "Security Deposit) for the payment of all rent and other sums
of money payable under the terms of this Sublease and for the faithful
performance by Sublessee of each of its other obligations hereunder. Sixty
thousand dollars ($60,000) (of which Sublessor currently is holding $51,957)
of the Security Deposit shall be paid to Sublessor by check, subject to
collection. At Sublessee's option, the balance of the Security Deposit
($60,750) shall be paid to Sublessor by check, subject to collection, or
shall be secured by an irrevocable Letter of Credit from a Massachusetts
bank or other financial institution reasonably acceptable to Sublessor, of
even date and execution herewith, in the form of Exhibit C attached hereto
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and made a part hereof (together with any additional or replacement letter
of credit, the "Letter of Credit"). Sublessee shall pay any and all fees
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charged by the issuing bank in respect of the Letter of Credit. If the bank
on which the Letter of Credit is drawn elects not to renew the Letter of
Credit or is declared insolvent or placed into conservatorship or
receivership, Sublessee shall, within ten (10) days after such election or
event, replace the Letter of Credit with a like Letter of Credit from
another bank or financial institution reasonably acceptable to Sublessor. In
the event of an Event of Default (as defined in the Master Lease, subject to
the terms hereof), Sublessee hereby authorizes Sublessor, at Sublessor's
election and with or without terminating this Sublease and without prejudice
to any other right or remedy Sublessor may have, to apply all or any portion
of the Security Deposit necessary to remedy such default, including by
drawing on the Letter of Credit. The order in which Sublessor applies the
proceeds of the cash portion of the Security Deposit and the proceeds of the
Letter of Credit shall be determined by Sublessor from time to time in its
sole discretion. If all or any of the cash portion of the Security Deposit
is so applied, Sublessee, upon demand by Sublessor, shall immediately
deposit with Sublessor an amount equal to the amount of the cash portion of
the Security Deposit so applied. If all or any of the proceeds of the Letter
of Credit is so applied, Sublessee, upon demand by Sublessor, shall
immediately arrange for the issuance of an additional or replacement Letter
of Credit in an amount equal to the amount of the proceeds of the then-
outstanding, Letter of Credit so applied. The cash portion of the Security
Deposit or any portion thereof not previously applied by Sublessor shall be
returned to Sublessee within thirty (30) days after the expiration or
earlier termination (other than a termination resulting from Sublessee's
default) of the term of this Sublease, provided that Sublessee shall have
fully vacated the Subleased Premises and such premises are left in the same
condition as on the term commencement date, reasonable wear and tear
excepted. Notwithstanding any provision of this Sublease to the contrary,
for purposes of the foregoing sentence, the term commencement date with
respect to the 11,310 square feet of the Subleased Premises occupied by
Sublessee on the date hereof shall be April 15, 1999. The intention of the
parties is that the Security Deposit shall secure Sublessor not only as to
default by Sublessee, but also shall secure Sublessor from any deficiency in
rent or other charges payable to Sublessor by Sublessee during the term of
this Sublease.
6. The Subleased Premises shall be delivered to Sublessee in "as is" condition,
provided that Sublessor shall vacate the Subleased Premises in broom-clean
condition and remove its personal property and signs from the Subleased
Premises prior to Sublessee's occupancy thereof. Any improvements, changes,
or additions made by Sublessee shall be subject to the prior written consent
of Sublessor and Master Lessor in accordance with the provisions of the
Master Lease and shall be made at Sublessee's expense. Sublessor hereby
consents to any work proposed to be performed by Sublessee provided that
Master Lessor consents thereto. Master Xxxxxx's consent to this Sublease
shall not be or be deemed a consent to such work in the Subleased Premises.
Any such work by Sublessee in the Subleased Premises and Master Xxxxxx's
consent thereto shall be in accordance with Section 7.3 of the Master Lease,
except that Section 7.3(a) with respect to Permitted Alterations (as defined
in the Master Lease) shall not be applicable to Sublessee. Sublessor
acknowledges that there are no alterations or improvements in the Subleased
Premises as of the date hereof that must be removed upon the expiration of
the Master Lease, other than alterations or improvements made by Sublessee
(including, without limitation, the alterations and improvements described
in that certain letter dated June 7, 1999 from Sublessee to Xxxxxx X.
Xxxxxx, Inc., a copy of which is attached hereto as Exhibit D and made a
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part hereof).
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7. Sublessee shall not voluntarily, involuntarily, or by operation of law,
assign, transfer, sublease, mortgage, pledge, or encumber (hereinafter
referred to as transfer) this Sublease or any interest herein without the
prior written consent of Sublessor, which shall not be unreasonably
withheld, and without the prior written consent of Master Lessor. A consent
to a transfer shall not release Sublessee of any of its obligations
hereunder or be deemed to be a consent to any subsequent transfer. Any
transfer without written consent will be null and void. Any dissolution,
merger, consolidation, or other reorganization of Sublessee or the sale or
other transfer or disposition (in a single transaction or a series of
transactions) of a controlling percentage of the stock of Sublessee shall
constitute a transfer of this Sublease.
8. Sublessee shall maintain insurance in accordance with the Master Lease. Such
policies of insurance shall name Sublessor and Master Lessor and its
property manager (currently, The Xxxxxx Companies, Ltd.) as an additional
insured, shall contain a cross liability endorsement, and shall provide that
the same may not be cancelled except upon 30 days prior written notice to
Sublessor and Master Lessor and its property manager. Sublessee shall
provide Sublessor and Master Lessor and its property manager with a
certificate or certificates of said policies. Sublessee agrees that such
insurance shall not be deemed to limit its liability under this Sublease.
9. To the fullest extent permitted by law, Sublessee hereby agrees to indemnify
and hold harmless and defend Sublessor from and against any and all actions,
claims, demands, damages, losses, liabilities, costs, and expenses
(including reasonable attorneys' fees) asserted against, imposed upon, or
incurred by Sublessor by reason of (a) any violation of any of the terms,
covenants, or conditions of the Master Lease or this Sublease caused,
suffered, or permitted by Sublessee, its agents, servants, employees, or
invitees, and (b) any damage or injury to persons or property occurring upon
or in connection with the use or occupancy of the Subleased Premises, except
to the extent caused by the negligence or willful misconduct of Sublessor,
its agents, servants, employees, or invitees. Notwithstanding anything in
this Sublease to the contrary, including but not limited to this Section 9,
Sublessee will indemnify Master Lessor to the same extent as Sublessor is
obligated to indemnify Master Lessor under the Master Lease.
10. As between the parties hereto, Xxxxxxxxx agrees to observe and perform the
terms, covenants and conditions on its part to be observed and performed
hereunder and to use diligent efforts to cause Master Lessor to observe and
perform those applicable terms, covenants and conditions to be observed and
performed by Master Lessor under the Master Lease with respect to the
Subleased Premises. Sublessee covenants and agrees that Sublessee will not
do anything which would constitute a default under the Master Lease or omit
to do anything which Sublessee is obligated to do under the terms of this
Sublease and which would constitute a default under the Master Lease.
Sublessor covenants and agrees to pay the rent and any additional rent
payable as required under the Master Lease and will not do anything or omit
to do anything which Sublessor is obligated to do under the terms of the
Master Lease and which would constitute a default under the Master Lease.
Sublessor shall not be liable to Sublessee for Master Xxxxxx's negligence or
misconduct or breach of the Master Lease. If Master Lessor shall default in
any of its obligations to Sublessor with respect to the Subleased Premises,
Sublessee shall be entitled to participate with Sublessor in the enforcement
of Sublessor's rights against Master Lessor with respect to the Subleased
Premises, but except as hereinafter expressly provided, Sublessor shall have
no obligation to bring any action or proceeding or to take any steps to
enforce Sublessor's rights against Master Lessor. If, after written request
from Sublessee, Sublessor shall unreasonably fail or refuse to take
appropriate action for the enforcement of Sublessor's rights against Master
Lessor with respect to the Subleased Premises, Sublessee shall have the
right to take such action in its own name and at its own expense, and for
that purpose, and only to such extent, all of the rights of Sublessor under
the Master Lease shall be and hereby are conferred upon and assigned to
Sublessee and Sublessee shall be and is hereby subrogated to such rights to
the extent that the same shall apply to the Subleased Premises, provided and
to the extent that such action against Master Lessor in Sublessee's name
shall be barred by reason of lack of privity of contract. If Sublessor shall
take, or participate in, or shall be requested to participate or assist in
any action in the enforcement of Sublessee's rights against Master Xxxxxx,
Sublessee agrees to reimburse Sublessor for all expenses reasonably incurred
by Sublessor, including without limitation, the attorney's fees of
Sublessor. Sublessee hereby agrees to indemnify and hold harmless and defend
Sublessor from and against any and all damages, claims, and liabilities to
others resulting or allegedly resulting from any action or proceeding taken
or instituted by Sublessee (or by Sublessor at Sublessee's request) pursuant
to this section whether or not Sublessor joins in the same.
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11. Sublessor shall promptly request any necessary consents and approvals from
Master Lessor for the parties to enter into this Sublease and shall provide
reasonable written evidence thereof to Sublessee as a condition precedent to
the commencement of this Sublease.
12. Sublessee hereby represents and warrants to Sublessor that it has not dealt
with any broker or agent in connection with this Sublease other than The
Xxxxxx Companies, whose fee shall be paid in full by Sublessor. Sublessor
hereby represents and warrants to Sublessee that it has not dealt with any
broker or agent in connection with this Sublease other than The Xxxxxx
Companies, whose fee shall be paid in full by Sublessor. Each of Sublessee
and Xxxxxxxxx agrees to indemnify and hold harmless the other against any
claim by any broker or agent arising out of a breach of their respective
representations and warranties in this Section 12.
13. This Sublease, together with those provisions of the Master Lease applicable
hereto, contains all of the covenants, agreements, terms, provisions,
conditions, warranties and understandings relating to the leasing of the
Subleased Premises and Sublessor's obligations in connection therewith, and
neither Sublessor nor any agent or representative of Sublessor has made or
is making, and Sublessee in executing and delivering this Sublease is not
relying upon, any warranties, representations, promises or statements
whatsoever, except to the extent expressly set forth in this Sublease. The
failure of Sublessee or Sublessor to insist in any instance upon the strict
keeping, observance or performance of any covenant, agreement, term,
provision or condition of this Sublease or to exercise any election herein
contained shall not be construed as a waiver or relinquishment for the
future of such covenant, agreement, term, provision, condition or election,
but the same shall continue and remain in full force and effect. Except as
expressly provided in Section 4 hereof, no waiver or modification of any
covenant, agreement, term provision or condition of this Sublease shall be
deemed to have been made unless expressed in writing and signed by Master
Xxxxxx, Sublessee and Sublessor. No surrender of possession of the Subleased
Premises or of any part thereof or of any remainder of the term of this
Sublease shall release Sublessee from any of its obligations hereunder
unless accepted by Sublessor in writing. The receipt and retention by
Sublessor of monthly base rent or additional rent from anyone other than
Sublessee shall not be deemed a waiver of the breach by Sublessee of any
covenant, agreement, term or provision of this Sublease, or as the
acceptance of such other person as a tenant, or as a release of Sublessee
from the further keeping, observance or performance by Sublessee of the
covenants, agreements, terms, provisions and conditions herein contained.
The receipt and retention by Sublessor of monthly base rent or additional
rent with knowledge of the breach of any covenant, agreement, term,
provision or condition herein contained shall not be deemed a waiver of such
breach.
14. The obligations of this Sublease shall bind and benefit the successors and
permitted assigns of the parties with the same effect as if mentioned in
each instance where a party hereto is named or referred to.
15. All notices to Sublessor shall be sent to Innovation Associates, c/o Xxxxxx
X. Xxxxxx, Inc., 00 Xxxxx Xxxx, Xxxxxxxxx, XX 00000, Attn: Xxxxxxx X.
Xxxxxx, with a copy to Xxxxxx X. Xxxxxx, Inc., 00 Xxxxx Xxxx, Xxxxxxxxx, XX
00000, Attn: Xxxx Xxxxxx; all notices to Sublessee shall be sent to
StorageNetworks, Inc., 000 Xxxxx Xxxxxx, Xxxxxxx, XX 00000, Attn: Xxxx X.
Xxxxxxxx, with a copy to Xxxxxx Xxxxxxx, Esq., Xxxx and Xxxx LLP, 00 Xxxxx
Xxxxxx, Xxxxxx, XX 00000, or to such other address and attention as either
party shall notify the other in writing.
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16. Sublessee will have access to the Subleased Premises 24 hours per day, seven
days a week via a card reader access system. Nightly janitorial service, on-
site property management, elevator service and card key access are all
included in the base rent. Sublessee shall have the non-exclusive right to
use 63 parking spaces in the parking area serving the Subleased Premises at
no extra charge. Signage for Sublessee, at Sublessee's sole cost and
expense, shall be approved in advance by Sublessor and Master Lessor in
accordance with the Master Lease.
[Intentionally left blank]
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1N WITNESS WHEREOF, the parties have executed this Sublease as of the date
first set forth above.
Sublessor:
INNOVATION ASSOCIATES, INC.
By: /s/ Xxxx X. Xxxxx
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Xxxx X. Xxxxx
Vice President
Sublessee:
STORAGENETWORKS, INC.
By: /s/ Xxxx X. Xxxxxxxx
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Print Name: Xxxx X. Xxxxxxxx
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Title: CFO
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