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EXHIBIT 10.18
FIRST AMENDMENT TO SUBLEASE AGREEMENT
THIS FIRST AMENDMENT TO SUBLEASE AGREEMENT ("First Amendment") is made
as of this 15th day of December, 1998, between SOUTHERN COMPANY SERVICES, INC.,
having an office at 00 Xxxxxxxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxxxx 00000
("Sublessor"), and SAGE NETWORKS, INC., having an office at 00 Xxxxxxxxx Xxxxxx
Xxxx, Xxxxx X-000, Xxxxxxx, Xxxxxxx 00000 ("Tenant", hereinafter referred to as
"Sublessee").
W I T N E S S E T H:
WHEREAS, Sublessor and Sublessee entered into that certain Sublease
Agreement, dated the 29th day of May, 1998 ("the "Sublease"), for space known as
Suite G-300 (the "Sublease Premises") located in that certain building known as
00X Xxxxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxx (the Building"); and
WHEREAS, pursuant to the Sublease, Sublessee has notified Sublessor of
Sublessee's desire to sublease additional space in the Building; and
WHEREAS, Sublessor and Sublessee desire to enter into this First
Amendment for the purpose of evidencing their mutual understanding and agreement
regarding the expansion of the Sublease Premises and certain other matters
relating thereto as set forth in this First Amendment;
NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements hereinafter contained, and for Ten and No/100ths Dollars ($10.00) and
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, Sublessor and Sublessee, intending to be legally bound,
agree as follows:
1. DEFINED TERMS. All terms used herein and denoted by their initial
capitalization shall have the meanings set forth in the Sublease unless
set forth herein to the contrary.
2. DATA CENTER EXPANSION PREMISES. The approximately 7,240 rentable square
feet in the Building leased to Sublessee pursuant to the Sublease is
defined in the Sublease and in this First Amendment as the "Sublease
Premises". As of the Data Center Expansion Premises Commencement Date
(hereinafter defined), the Sublease Premises is expanded to include the
approximate 8,500 rentable square feet of Data Center Space (the "Data
Center Expansion Premises") on floor G2 of the Building as shown on the
drawing attached as Exhibit "A".
Adding the Data Center Expansion Premises increases the Sublease
Premises to 15,740 rentable square feet. Sublessor and Sublessee agree
the measurement of 8,500 rentable square feet of Data Center Expansion
Premises represents Sublessor's estimate in accordance with preliminary
Sublessee designs. On or before January 31, 1999, this First Amendment
shall be reasonably modified to reflect the actual rentable square feet
of the final design of the Data Center Expansion Premises, such
modification to be mutually determined by Sublessor and Sublessee.
Usable square
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feet shall be measured according to the Standard Method for Measuring
Area in Office Buildings, ANSI Z65.1-1996 (BOMA).
Sublessee hereby subleases the Data Center Expansion Premises and the
Temporary Office Space (as hereafter defined) on the same terms and
conditions as the Sublease Premises except as otherwise set forth
herein to the contrary; provided, however, Sublessee shall receive no
concessions or allowance on account of subleasing the Data Center
Expansion Premises, except as specifically set forth in this First
Amendment. Among those same terms and conditions of the Sublease which
shall apply to the Data Center Expansion Premises, but not in
limitation thereof, shall be Sublessee's renewal rights set forth in
Paragraph 5 of the Sublease.
3. DATA CENTER EXPANSION PREMISES TERM. The term for the Data Center
Expansion Premises (as part of the Sublease Premises) shall commence on
the Data Center Expansion Premises Commencement Date (as herein
defined) and end on June 30, 2003 (subject to Sublessee's renewal
rights set forth in Paragraph 5 of the Sublease). The Data Center
Expansion Premises Commencement Date shall be the later of August 1,
1999, or 30 days after the Data Center Expansion Premises are made
available to Sublessee for Sublessee to commence its improvement work.
Sublessee recognizes that the Data Center Expansion Premises are (a)
being made available because Sublessor is relocating the users of such
space into another building and that Sublessor anticipates that such
relocation shall be accomplished and the Data Center Expansion Premises
shall be available to Sublessee for Sublessee to commence its
improvement work, by June 30, 1999; (b) that such relocation may be
delayed if the space in the other building is not available, and (c)
any such delay in the relocation and resulting availability of such
space for use by Sublessee shall not eliminate or limit the obligations
of Sublessee under the Sublease or this First Amendment, or create any
claims against Sublessor, except to the extent the commencement date
and corresponding rent obligations of Sublessee hereunder may be
delayed. Notwithstanding anything to the contrary stated herein, if the
Data Center Expansion Premises is not available to Sublessee for
Sublessee to commence its improvement work by June 30,1999, then
Sublessee may, at its option, and as its sole and exclusive remedy for
such late availability, terminate the portion of this First Amendment
relative to the Data Center Expansion Premises, by a notice to
Sublessor indicating such termination, such notice to be delivered to
Sublessor on or before July 15, 1999.
4. BASE RENT FOR THE DATA CENTER EXPANSION PREMISES. The Base Rent for the
Data Center Expansion Premises shall be equal to the Base Rent in the
Sublease on a per rentable square foot basis as shown in Exhibit "B"
attached hereto and incorporated herein by this reference. The Base
Rent shown in Exhibit "B" includes the escalations required by
Paragraph 1.b of the Sublease.
5. TENANT IMPROVEMENT ALLOWANCE. Sublessor shall provide to Sublessee a
Tenant Improvement Allowance equal to $0.05 per rentable square foot
per month from the Data Center Rent Commencement Date to the end of the
Term (i.e., June 30, 2003). By way of illustration only, assuming a
Data Center Rent Commencement Date of August 1, 1999, the Tenant
Improvement Allowance will be $14,875.00 (35 months times $0.05 per
month per rentable square foot times 8,500 rentable square feet). Such
Tenant Improvement Allowance will be payable to Sublessee by Sublessor
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within 15 days of the Data Center Expansion Premises being made
available to Sublessee for Sublessee to commence its improvement work.
6. TEMPORARY OFFICE SPACE. Sublessor agrees to sublease, "as-is, where
is", the space indicated in Exhibit "A.1." for use as temporary office
space (the "Temporary Office Space"). The commencement date for the
term of the sublease of the Temporary Office Space on the 1st floor
consisting of 15,000 rentable square feet shall be the later of
December 15, 1998 or the date that Sublessee takes occupancy of the
Temporary Office Space. On or before January 31, 1999, this First
Amendment shall be reasonably modified to reflect the actual rentable
square feet of the final design of the Temporary Office Space, such
modification to be mutually determined by Sublessor and Sublessee.
Usable square feet shall be measured according to the Standard Method
for Measuring Area in Office Buildings, ANSI Z65.1-1996 (BOMA). The
rental rate for the Temporary Office Space shall be $19.00 per rentable
square foot which is a full service rate including operating expenses.
Set forth in Exhibit B is a schedule of rent for the Temporary Office
Space during the period from December 15, 1998 to December 14, 1999,
subject to appropriate adjustment if the Commencement Date is other
than December 15th. The term of the sublease of the Temporary Office
Space shall end twelve (12) months from the date of commencement of
same. Notwithstanding the foregoing, Sublessee shall have the option to
extend the term of all or a portion of the Temporary Office Space (such
portion as, in the sole opinion of the Sublessor, must not interfere
with the use or sublease of the remainder of the Temporary Office Space
and shall be no less than 2,000 rentable square feet) for an additional
period of time terminating on the same date as the expiration of the
Term of the Sublease (including any renewal thereof) upon the same
terms and conditions set forth herein except the Base Rent therefore
shall escalate by 3% per annum on each anniversary date, by delivering
to Sublessor notice of its intent to do so provided such notice is
delivered at least 90 days prior to the expiration of the term of the
sublease of the Temporary Office Space.
7. CONDITION OF SUBLEASE PREMISES. Sublessee shall take the Data Center
Expansion Premises and the Temporary Office Space "as-is, where is",
except that Sublessor has agreed to and shall provide, at no additional
cost or expense to Sublessee, demising walls separating the Data Center
Expansion Premises from other space on floor G2 and separating the
Temporary Office Space from the other space on the 1st floor, in
accordance with all applicable codes, but otherwise as Sublessor deems
appropriate. In the case of the Data Center Expansion Premises, such
demising wall shall be constructed during the time Sublessee is
performing its construction in the Data Center Expansion Premises prior
to the Data Center Expansion Premises Commencement Date, reasonably
coordinated with Sublessee's construction so as not to interfere or
cause a delay therewith. In the case of the Temporary Office Space,
such demising wall(s) shall be constructed at such times as to minimize
the disturbance of Sublessee's operations in the applicable areas.
Sublessee has had the opportunity to and has inspected the Data Center
Expansion Premises and the Temporary Office Space, and Sublessor makes
and has made no representations or warranties whatsoever with respect
to the Data Center Expansion Premises or Temporary Office Space or the
fitness thereof for Sublessee's use. Notwithstanding anything to the
contrary contained herein, all demising walls to be constructed by the
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Sublessor in the Data Center Expansion Premises and the Temporary
Office Space shall be constructed in such locations as mutually agreed
upon by the parties.
8. PARKING ARRANGEMENTS. Paragraph 35 of the Sublease is deleted in its
entirety and the following is substituted therefor: Sublessee shall be
entitled to 2 parking passes per 1,000 rentable square feet of data
center space and 4 parking passes per 1,000 rentable square feet of
office space (including Temporary Office Space during the term of the
Sublease for the Temporary Office Space) and Sublessee shall use no
more than said amount of parking passes.
9. LETTER OF CREDIT. The initial Letter of Credit amount of $99,999.00 as
specified in Paragraph 7, subpart (a) of the Sublease will be replaced
by a letter of credit of $140,000.00 with all other stipulations of
Paragraph 7, subpart (a) of the Sublease remaining in effect. The
reduced letter of credit referenced in Paragraph 7, subpart (b) of the
Sublease is increased to $125,000. The reduced letter of credit
referenced in Paragraph 7, subpart (c) of the Sublease is increased to
$99,999.00.
10. BROKERAGE COMMISSIONS. CB XXXXXXX XXXXX, INC. ("CBRE") HAS ACTED AS
AGENT FOR SUBLESSOR IN THIS TRANSACTION. THE XXXXXX COMPANY HAS ACTED
AS AGENT FOR SUBLESSEE IN THIS TRANSACTION. CBRE AND THE XXXXXX COMPANY
SHALL EACH BE PAID A COMMISSION BY SUBLESSOR PURSUANT TO A SEPARATE
AGREEMENT. Sublessor shall indemnify and hold Sublessee harmless, from
and against all loss, cost, damage or expense, including, but not
limited to, attorney's fees and court costs, incurred by Sublessee as
result of Sublessor's breach of the foregoing covenant to pay CBRE and
the Xxxxxx Company their respective commissions due in connection with
this transaction. Sublessor and Sublessee hereby indemnify one another,
and hold one another harmless, from and against all loss, cost, damage
or expense, including, but not limited to, attorney's fees and court
costs, incurred by a party hereto as a result of any claims for
brokerage fees or commissions due which are made by reason of such
party having dealt with any broker (other than CBRE or THE XXXXXX
COMPANY). Sublessee shall cause any agent or broker representing
Sublessee to execute a lien waiver to and for the benefit of Sublessor
and Prime Landlord, upon receipt by such agent or broker of any
commission due hereunder, waiving any and all lien rights with respect
to the Building or Property such agent or broker has or might have
under Georgia law.
11. BINDING EFFECT. This First Amendment shall be governed by and construed
in accordance with the laws of the State of Georgia, and shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors, representatives and assigns, but always
subject, in case of the Sublessee, to the limitations on assignment and
sublease set forth in the Sublease. In the event of any inconsistency
or conflict between the terms of this First Amendment and the Sublease,
the terms hereof shall control. Time is of the essence of all terms of
this First Amendment.
12. CONTINUED VALIDITY. Except as hereinabove provided, all other terms and
conditions of the Sublease shall remain unchanged and in full force and
effect, and are hereby ratified and confirmed by Sublessor and
Sublessee. Sublessee and Sublessor hereby
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each acknowledge and agree that, as of the date hereof, the Sublease is
subject to no offsets, claims, counterclaims or defenses of any nature
whatsoever and no Events of Default on the part of Sublessor or
Sublessee have occurred under the Sublease.
13. MODIFICATIONS. This First Amendment may not be changed, modified,
discharged or terminated orally or in any manner other than by an
agreement in writing signed by the Sublessor and Sublessee or their
respective heirs, representatives, successors and permitted assigns.
14. AUTHORITY. The person executing this First Amendment on behalf of
Sublessee does hereby personally represent and warrant that Sublessee
is a validly existing corporation and is fully authorized and qualified
to do business in the State of Georgia, that the corporation has full
right and authority to enter into this First Amendment, and the
undersigned, who is signing on behalf of the corporation, is a duly
authorized officer of the corporation and is authorized to sign on
behalf of the corporation.
IN WITNESS WHEREOF, the parties have set their hands and affixed their
seals to this First Amendment to be effective as of the day and year first above
written.
"SUBLESSOR"
SOUTHERN COMPANY SERVICES, INC.
By: /s/ Xxxxxx X. Xxxxxxx
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its Corporate Services Manager
Attest: ------------------------------
its
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"SUBLESSEE"
SAGE NETWORKS, INC.
By: /s/ Xxxxxxx Xxxxx
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its President
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Attest:
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its
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Exhibit "B"
Schedule of Rent Due
DATA
CENTER TOTAL TEMPORARY
EXPANSION DATA MONTHLY TEMPORARY OFFICE TEMPORARY
SUBLEASE PREMISES CENTER DATA OFFICE SPACE OFFICE TOTAL
SQUARE SQUARE SQUARE CENTER SPACE SQUARE SPACE MONTHLY
RENT FOR RATE FEET FEET FEET RENT RATE FEET RENT RENT
-------- ---- -------- --------- ------ ------- --------- --------- --------- -------
Jul-98 $25.59 7,240 0 7,240 $15,439.30 $15,439.30
Aug-98 $25.59 7,240 0 7,240 $15,439.30 $15,439.30
Sep-98 $25.59 7,240 0 7,240 $15,439.30 $15,439.30
Oct-98 $25.59 7,240 0 7,240 $15,439.30 $15,439.30
Nov-98 $25.59 7,240 0 7,240 $15,439.30 $15,439.30
Dec-98 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $11,875.00 $27,314.30
Jan-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
Feb-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
Mar-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
Apr-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
May-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
Jun-99 $25.59 7,240 0 7,240 $15,439.30 $19.00 15,000 $23,750.00 $39,189.30
Jul-99 $26.36 7,240 0 7,240 $15,902.48 $19.00 15,000 $23,750.00 $39,652.48
Aug-99 $26.36 7,240 0 7,240 $15,902.48 $19.00 15,000 $23,750.00 $39,652.48
Sep-99* $26.36 7,240 8,500 15,740 $34,575.53 $19.00 15,000 $23,750.00 $58,325.53
Oct-99 $26.36 7,240 8,500 15,740 $34,575.53 $19.00 15,000 $23,750.00 $58,325.53
Nov-99 $26.36 7,240 8,500 15,740 $34,575.53 $19.00 15,000 $23,750.00 $58,325.53
Dec-99 $26.36 7,240 8,500 15,740 $34,575.53 $19.00 15,000 $11,875.00 $46,450.53
Jan-2000 - $26.36 7,240 8,500 15,740 $34,575.53 $34,575.53
Jun-2000
Jul-2000 - $27.15 7,240 8,500 15,740 $35,611.75 $35,611.75
Jun-2001
Jul-2001 - $27.96 7,240 8,500 15,740 $36,674.20 $36,674.20
Jun-2002
Jul-2002 - $28.80 7,240 8,500 15,740 $37,776.00 $37,776.00
Jun-2003
* Assuming a Commencement Date of September 1, 1999 for the Data Center
Expansion Premises; otherwise, the schedule will be adjusted accordingly.
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