**Exhibit 10.3**

 

275 WYMAN LLC 

 

225 Wyman Street 

 

TERMINATION AGREEMENT 

 

STORAGENETWORKS, INC.****

 

Termination Agreement dated as of July 17, 2003 between 275 Wyman LLC, (“Landlord”) and StorageNetworks, Inc. (“Tenant”). 

 

Background 

 

Reference is made to a lease dated July 31, 2000 from Landlord to Tenant for certain premises totaling approximately 134,876 square feet of Rentable FloorArea of office space and approximately 7,750 square feet of Rentable Floor Area of storage space to be delivered in three phases: (1) Area A, (2) Area B, Storage Space B and (3) Area C, Storage Space C (the “Original Premises”) in thebuilding at 225 Wyman Street, Waltham, MA (the “Building”), and as amended by the First Amendment to Lease dated July 11, 2002 (the “Lease”) thereby reducing the Original Premises of the Lease by approximately 22,581 square feetof Rentable Floor Area of office space, Area C, and 2,937 rentable square feet of storage space, Storage Space C, (the “Surrendered Premises”, as shown in Exhibit A attached to the First Amendment to Lease), to approximately 112,295rentable square feet of office space, and 4,813 rentable square feet of storage space (the “Reduced Premises”). Capitalized terms used and not defined herein shall have the same meaning given in the Lease. 

 

The Term of the Lease is currently scheduled to expire on December 31, 2010.

 

Agreement 

 

In consideration of the mutual covenants herein contained, Landlord andTenant hereby agree and confirm the following: 

 

1. The Term ofthe Lease shall expire at 12 midnight on July 31, 2003, (the “Termination Date”), as though such date were the Term Expiration Date originally set forth in Section 1.1 of the Lease, and Tenant shall pay all Annual Fixed Rent and AdditionalCharges for the Reduced Premises through July 31, 2003. 

 

2.Tenant shall have a temporary license to continue to occupy the Reduced Premises from the Termination Date until August 31, 2003 without payment of rent (including rent for operating expenses and taxes) but upon and subject to all of the other termsand provisions of the Lease (including the obligation to pay for electricity and any other utilities consumed by Tenant). No later than August 31, 2003, Tenant shall vacate and surrender the Reduced Premises to Landlord in the condition requiredunder Section 5.10 of the Lease (except with respect to the furniture, fixtures, equipment and Tenant Improvements as set forth in Section 4 below), provided, however, that Tenant shall be under no obligation to repair or restore the ReducedPremises as contemplated by Section 5.10 of the Lease other than the repair of damage to the Reduced Premises resulting from an act or omission of Tenant or its employees, agents or contractors after an inspection of the Reduced Premises conductedby the Landlord prior to the execution of this Termination Agreement. Any failure of Tenant to so vacate and surrender the Reduced Premises in their entirety on or before August 31, 2003 shall be subject to provisions of Section 8.1 of the Leasewith holdover rent (but only for such period from and after August 31, 2003) equal to 150% of the “Monthly Fixed Rent” due at the expiration of the Term (such “Monthly Fixed Rent” being deemed to be the Fixed Rent in effect forthe month of July, 2003). Notwithstanding the establishment of any holdover tenancy, if Tenant fails to vacate the Reduced Premises on or before August 31, 2003 as required herein, Tenant shall save Landlord harmless and indemnified against anyclaim, loss, damage, cost or expense (including reasonable attorneys’ fees and disbursements) arising out of Tenant’s failure by August 31, 2003 to vacate the Reduced Premises (or any portion thereof). 

 

3. In consideration of Landlord’s agreement to the early termination ofthe Lease, subject to the provisions of Section 6 and 10 hereof, simultaneous with the full execution of this Termination Agreement: (a) the Landlord shall deliver to the Escrow Agent (as defined below) the undrawn original outstanding letters ofcredit issued for its benefit pursuant to the terms of the Lease by Fleet National Bank, letters of credit numbers MS1227623 and MS1227650, totaling $8,500,000 (collectively, the “Letters of Credit”); and (b) the Tenant shall transfer tothe Escrow Agent (as defined below) by wire transfer of immediately available funds the amount of $8,000,000.00 (Eight Million) Dollars (the “Termination Fee”). 

 

4. In addition, and as further consideration for the early termination of the Lease, on the Termination Date the Tenantshall convey to Landlord all of its right, title and interest in all furniture, fixtures, equipment and Tenant Improvements set forth on the Inventory attached hereto as Exhibit A, within the Original and Reduced Premises in “as is, 

where is” condition without any representation or warranty except as provided in the last sentence of this Section4, and the same shall become, on the Termination Date, immediately and without further action, the sole and exclusive property of Landlord, Tenant hereby irrevocably waiving all rights and claims therein and thereto, provided that Tenant shall havethe right to use such furniture, fixtures, equipment and Tenant Improvements until August 31, 2003 or such earlier date as Tenant shall vacate and surrender the Reduced Premises to Landlord. Tenant warrants and represents that such furniture,fixtures, equipment and Tenant Improvements are owned by Tenant free and clear of any liens, encumbrances or security interests. 

 

5. Except for the Landlord’s and Tenant’s obligations under this agreement, Landlord and Tenant hereby release and forever discharge the otherand their respective present and former agents, employees, legal representatives, affiliates, subsidiaries, directors and officers, and each of their predecessors, successors and assigns (the “Releasees”) from any and all claims,obligations, liabilities and responsibilities any of the Releasees now has or hereafter may have against the other, whether known or unknown, arising out of the Lease or relating to the Premises. Notwithstanding the foregoing, the provisions ofSection 5.2 of the Lease shall survive the termination of the Lease. 

 

6. Tenant hereby acknowledges that this Termination Agreement is subject to and contingent upon Landlord’s mortgagee executing and delivering an original signed consent in form and substance reasonably satisfactory to the Tenant (the“Consent”) on or before July 25, 2003 at 5 p.m. EST. If the Escrow Agent (as defined below) fails to receive an originally executed Consent from the mortgagee on or prior to July 25, 2003 at 5 p.m. EST, this Termination Agreement shall benull and void and of no further force or effect, the property held in escrow will be distributed in accordance with Section 10 hereof, and the Lease shall continue in full fore and effect, all rights therein being reserved. 

 

7. Tenant represents and warrants to Landlord that it has full right andauthority to execute this Termination Agreement, and that (i) its current assets exceed its liabilities and (ii) is generally able to pay its obligations as they may come due. Furthermore, Tenant represents and warrants that consummation of thetransaction contemplated herein will not render Tenant insolvent. Tenant represents and warrants to Landlord that other than The Columbia Group (whose fees are being paid directly by the Tenant), it has not dealt with any broker in connection withthis transaction and Tenant shall save Landlord harmless and indemnified against any claim, loss, damage, cost or expense (including reasonable attorneys’ fees and disbursements) arising out of any actual or alleged dealings by Tenant with anybroker. 

 

8. Additional representations and warranties.

 

a) Landlord and Tenant represent and warrant to each otherthat they are duly organized, validly existing under the laws of the jurisdiction of their organization, that they have the limited liability company or corporate power and authority, as applicable, to enter into this Termination Agreement and thatthe Termination Agreement will be binding and enforceable against the Landlord and the Tenant in accordance with its terms. 

 

b) Landlord and Tenant represent and warrant to each other that other than the consent from the mortgagee contemplated by Section 6 above, no otherconsents, waivers or authorizations are required to consummate the transaction contemplated by this Termination Agreement. 

 

c) Landlord represents and warrants to the Tenant that it is solvent and that the entering into and performance of the Termination Agreement will notrender the Landlord insolvent. 

 

d) The Lease has not beenamended other than the First Amendment to Lease dated July 11, 2002. 

 

e) All rent is paid in full through July 31, 2003, including all additional rent. 

 

f) Neither the Tenant nor the Landlord has any knowledge of (1) the existence of hazardous materials on the Premises in violation of the terms of the Lease, or (2) any release of any hazardous materials on thePremises. 

 

g) To the best of the Tenant’s andLandlord’s knowledge, there are no uncured defaults on the part of either party under the Lease. 

 

h) Landlord represents and warrants to Tenant that it has not dealt with any broker in connection with this transaction and Landlord shall save Tenantharmless and indemnified against any claim, loss, damage, cost or expense (including reasonable attorneys’ fees and disbursements) arising out of any actual or alleged dealings by Landlord with any broker. 

 

9. Miscellaneous. 

 

This Termination Agreement shall be deemed to have been executed anddelivered within The Commonwealth of Massachusetts, and the rights and obligations of Landlord and Tenant shall be construed and enforced in accordance with, and governed by, the laws of The Commonwealth of Massachusetts. Upon becoming effective,the Termination Agreement is binding upon and shall inure to the benefit of the Landlord and Tenant, their respective agents, employees, representatives, officers, directors, divisions, limited and general partners, members, managers, subsidiaries,affiliates, assigns, successors-in-interest and shareholders. Each party has cooperated in the drafting and preparation of this Termination Agreement and, therefore, in any construction to be made of this 

Termination Agreement, the same shall not be construed against either party. This Termination Agreementmay be executed in counterparts, and when both Landlord and Tenant have signed and delivered at least one such counterpart, each counterpart shall be deemed an original, and, when taken together with other signed counterparts, shall constitute oneTermination Agreement, which shall be binding upon and effective as to Landlord and Tenant. Delivery of an executed signature page of this Termination Agreement by facsimile transmission shall be effective as delivery of a manually executedcounterpart hereof. 

 

10. Escrow. 

 

The parties acknowledge that the following are being delivered into escrow onthe date hereof with Fidelity National Title Insurance Company, Attention: Toni Mitchell, Esq., 133 Federal Street, Boston, Massachusetts 02110 (Telephone (617) 350-8828) (“Escrow Agent”): 

 

1) the Letters of Credit; and 

 

2) the Termination Fee. 

 

If on or before 5:00 p.m. EST on July 25, 2003, the Escrow Agent has received(a) an originally executed Consent and (b) written acknowledgement from the Tenant stating that the Consent is satisfactory (the “Acknowledgement”)            , the Escrow Agentis hereby expressly authorized to, and shall, without consent or further instruction from any other party, on the next business day following the receipt of the Consent and the Acknowledgement, do the following: 

 

a) deliver the Termination Fee to the Landlord; and 

 

b) deliver the Letters of Credit and an originally executed Consent to theTenant. 

 

If an originally executed Consent and Acknowledgementare not delivered to the Escrow Agent by July 25, 2003 at 5 p.m. EST, the Escrow Agent is hereby expressly authorized to, and shall, without consent or further instruction from any other party, on July 28, 2003, do the following: 

 

a) return the Letters of Credit to the Landlord; and 

 

b) return the Termination Fee to the Tenant. 

 

If for any reason an originally executed Consent is not received by theEscrow Agent by July 25, 2003 at 5 p.m. EST, the property in escrow will be returned as set forth above, this Termination Agreement shall be void *ab initio*, and the parties shall be restored to their respective positions as if thisTermination Agreement had never been entered into. 

 

Executed asa sealed Massachusetts instrument as of the date first written above. 

 

LANDLORD: 

 

275 WYMAN LLC 

 

By: /s/THOMAS M. DUSEL            

Thomas M. Dusel 

Manager 

 

TENANT: 

 

STORAGENETWORKS, INC., 

By: /S/ DEAN J. BREDA                

Name: Dean J. Breda 

Title: President or Vice President 

 

By: /s/ PAUL C. FLANAGAN            

Name: Paul C. Flanagan 

Title: Treasurer or Assistant Treasurer 

**JOINDER BY ESCROW AGENT**

 

Escrow Agent has executed this Termination Agreement solely for the purpose of confirming that Escrow Agent will comply withthe provisions of Section 10 of this Termination Agreement. Escrow Agent agrees that all costs, expenses, fees and other amounts payable to Escrow Agent in connection with this Termination Agreement shall be paid by Tenant, at its sole cost andexpense, and neither Landlord nor any of its agents assumes any responsibility for the payment of such costs, expenses, fees or other amounts payable to Escrow Agent. 

 
FIDELITY NATIONAL TITLE INSURANCE COMPANY
By:
 
/s/    TONI MITCHELL        

Name:

Title:
 
Toni Mitchell

VP

 

Date executed by Escrow Agent:

 

7/17/03

**AMENDMENT TO TERMINATION AGREEMENT**

 

This Amendment to Termination Agreement (the “Amendment”) is entered into as of July 25, 2003 by and between 275Wyman LLC (“Landlord”) and StorageNetworks, Inc. (“Tenant”). 

 

WHEREAS, Landlord and Tenant are parties to a Termination Agreement dated as of July 17, 2003 relating to the lease dated July 21, 2000 from Landlord to Tenant (the “Termination Agreement”). All capitalizedterms used herein and not otherwise defined shall have the meaning ascribed to them in the Termination Agreement; and 

 

WHEREAS, Landlord and Tenant desire to amend certain provisions of the Termination Agreement as provided herein. 

 

NOW THEREFORE, for good and valuable consideration, the receipt andsufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree as follows: 

 
 1. Each reference to “July 25, 2003” contained in Section 6 and 10 of the Termination Agreement is hereby changed to “July 28, 2003” and the reference to “July28, 2003” in Section 10 thereof is hereby changed to “July 29, 2003.” 
 
 2. Except as amended hereby, the Termination Agreement shall remain in full force and effect in accordance with its terms. 
 

Executed as a sealed Massachusetts instrument as of the date first written above. 

 

LANDLORD

 

275 WYMAN LLC
   
TENANT

 

STORAGENETWORKS, INC.
By: 
/s/    THOMAS M. DUSEL        
   By: 
/s/    DEAN J. BREDA        

Name:

Title:
 
Thomas M. Dusel

Manager
   
Name:

Title:
 
Dean J. Breda

VP and GeneralCounsel
      By: 
/s/    PAUL C. FLANAGAN        
      
Name:

Title:
 
Paul C. Flanagan

Treasurer

 

 

**ESCROW AGENT ACKNOWLEDGEMENT**

 

Fidelity National Title Insurance Company, the Escrow Agent under the Agreement, hereby acknowledges its receipt of this Amendment and the changes to the Agreement affected pursuant hereto. 

 
      FIDELITY NATIONAL TITLE INSURANCE COMPANY      By: 
/s/    TONI MITCHELL        
      
Name:

Title:
 
Toni Mitchell

VP

**SECOND AMENDMENT TO TERMINATION AGREEMENT**

 

This Second Amendment to Termination Agreement (the “Amendment”) isentered into as of July 25, 2003 by and between 275 Wyman LLC (“Landlord”) and StorageNetworks, Inc. (“Tenant”). 

 

WHEREAS, Landlord and Tenant are parties to a Termination Agreement dated as of July 17, 2003, as amended by the Amendment to Termination Agreement datedJuly 25, 2003, relating to the lease dated July 21, 2000 from Landlord to Tenant (as amended, the “Termination Agreement”). All capitalized terms used herein and not otherwise defined shall have the meaning ascribed to them in theTermination Agreement; and 

 

WHEREAS, Landlord and Tenant desireto amend certain provisions of the Termination Agreement as provided herein. 

 

NOW THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, Landlord and Tenant hereby agree as follows: 

 

3. Section 6 of the Termination Agreement is amended and restated in itsentirety as follows: 

 

“Tenant hereby acknowledges thatthis Termination Agreement is subject to and contingent upon Landlord’s mortgagee executing and delivering a signed consent in form and substance reasonably satisfactory to the Tenant (the “Consent”) on or before July 28, 2003 at 5p.m. EST. If the Escrow Agent (as defined below) fails to receive an executed Consent from the mortgagee on or prior to July 28, 2003 at 5 p.m. EST, and an originally executed Consent by 2:00 p.m. by July 29, 2003, this Termination Agreement shallbe null and void and of no further force or effect, the property held in escrow will be distributed in accordance with Section 10 hereof, and the Lease shall continue in full force and effect, all rights therein being reserved.” 

 

2. Section 10 of the Termination Agreement is amended as follows: 

 

A. In the second paragraph of Section 10, the phrase “(a) anoriginally executed Consent” is replaced in its entirety by the phrase “(a) an executed Consent”; 

 

B. following the second occurrence of the phrase “Escrow Agent” in the second paragraph of Section 10, insert the phrase “upon receipt ofan originally executed Consent,”; 

 

C. In the thirdparagraph of Section 10, the word “originally” is hereby deleted; and 

 

D. The reference in the final paragraph of Section 10 to “July 28, 2003 at 5:00 p.m.” is hereby replaced with “July 29, 2003 at 2:00 p.m.”. 

 

4. Except as amended hereby, the Termination Agreement shall remain in fullforce and effect in accordance with its terms. 

 

Executed as asealed Massachusetts instrument as of the date first written above. 

 

LANDLORD

 

275 WYMAN LLC
   
TENANT

 

STORAGENETWORKS, INC.
By: 
/s/    RICHARD D. RUDMAN      
   By: 
/s/    DEAN J. BREDA        

Name:

Title:
 
Richard D. Rudman

ItsAttorney
   
Name:

Title:
 
Dean J. Breda

VicePresident
      By: 
/s/    PAUL C. FLANAGAN        
      
Name:

Title:
 
Paul C. Flanagan

Treasurer

**ESCROW AGENT ACKNOWLEDGEMENT**

 

Fidelity National Title Insurance Company, the Escrow Agent under the Agreement, hereby acknowledges its receipt of thisAmendment and the changes to the Agreement affected pursuant hereto. 

 
      FIDELITY NATIONAL TITLE INSURANCE COMPANY      By: 
/s/    TONI MITCHELL        
      
Name:

Title:
 
Toni Mitchell

VP