EXHIBIT 10.23
SUBLEASE
1. Parties. This Sublease, dated February 8, 1999, is made between TIMES
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DIRECT MARKETING, INC., a California corporation ("Sublandlord"), and Critical
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Path, a California corporation ("Subtenant").
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2. Master Lease. Sublandlord is the tenant under a lease dated December
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23, 1996, as amended April 15, 1998, wherein 000 Xxxxxx Xxxxxx Building ("Master
Landlord") leased to Sublandlord certain premises located on the 0xx Xxxxx ("0xx
Xxxxx Premises") and 0xx Xxxxx ("0xx Xxxxx Premises") in that certain building
(the "Building") commonly known as 000 Xxxxxx Xxxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx
(the 3rd Floor Premises and the 4th Floor Premises are collectively referred to
as the "Premises"). A copy of the "Master Lease" is attached hereto as Exhibit
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A. Each capitalized term used herein without definition shall have the meaning
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ascribed to such term in the Master Lease.
3. Subleased Premises. Sublandlord hereby subleases to Subtenant on the
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terms and conditions set forth in this Sublease the entirety of the Premises.
4. Sublease Term.
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4.1 Sublease Term. The term ("Sublease Term") of this Sublease shall
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commence (the "Commencement Date") on the later of (a) the date hereof or (b)
when Master Landlord consents in writing to this Sublease, and end on March 31,
2002 ("Sublease Expiration Date"), unless otherwise sooner terminated in
accordance with the provisions of this Sublease. In the event the Sublease Term
commences on a date other than the date set forth in clause (a), Sublandlord and
Subtenant shall execute a memorandum setting forth the actual date of
commencement of the Sublease Term. Subtenant shall have no right or option to
extend the Sublease Term under any circumstances. Delivery of the Premises
shall take place in accordance with Section 5 hereof.
4.2 Termination Right. This Sublease shall be of no force or effect
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unless consented to in writing by Master Landlord. If for any reason Sublandlord
does not obtain Master Landlord's consent to this Sublease on or before April 1,
1999, then, unless and until such consent is obtained, either Subtenant or
Sublandlord may terminate this Sublease and all of the obligations of the
parties hereunder upon written notice thereof to the other party. In the event
of such termination, the Security Deposit shall be promptly returned to
Subtenant.
5. Delivery. Possession of the 3rd Floor Premises shall be delivered to
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Subtenant on the Commencement Date; possession of the 4th Floor Premises shall
be delivered to Subtenant on the later of the Commencement Date or the date
Sublandlord vacates the 4th Floor Premises, which is currently estimated
(without warranty thereof by Sublandlord) to be May 1, 1999. If the Sublandlord
has not vacated the 4th Floor Premises and tendered possession thereof by May 1,
1999, then Subtenant's payment to Sublandlord of prepaid rent pursuant to the
third sentence of Section 6.2 below shall be reduced by $185 per day for each
day of delay.
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6. Rent.
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6.1 Monthly Rent. Commencing upon the later of the Commencement Date or
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the delivery of the 3rd Floor Premises, Subtenant shall pay to Sublandlord
during the Sublease Term as monthly base rent for the 3rd Floor Premises the sum
of $13,825.89 in respect of the leasing of the 3rd Floor Premises and commencing
upon the later of the Commencement Date or the delivery of the 4th Floor
Premises Subtenant shall pay to Sublandlord during the Sublease Term as monthly
base rent for the 4th Floor Premises the sum of $11,300.00 in respect of the
leasing of the 4th Floor Premises. Rent for any period during the term hereof
which is for less than one (1) month shall be a pro rata portion of the monthly
installment, based upon a thirty (30) day month.
6.2 Prepaid Rent. Upon delivery of the 3rd Floor Premises, Subtenant
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shall prepay to Sublandlord the sum of $143,659.38 which shall be deemed
additional prepaid rent in respect of the leasing of the 3rd Floor Premises.
Said additional prepaid rent shall be amortized evenly over the same period
Monthly Rent is due in respect of the 3rd Floor Premises pursuant to Section
6.1. Upon delivery of the 4th Floor Premises, Subtenant shall prepay to
Sublandlord the sum of $143,659.38 which shall be deemed additional prepaid rent
in respect of the leasing of the 4th Floor Premises. Said additional prepaid
rent shall be amortized evenly over the same period Monthly Rent is due in
respect of the 4th Floor Premises pursuant to Section 6.1. The rent due under
this Section 6.2 shall be in addition to the rent due under Section 6.1. All
rent due under Section 6.1 and this Section 6.2 shall collectively be referred
to hereinafter as the "Sublease Base Rent." All Sublease Base Rent shall be paid
without deduction, setoff, notice or demand, at the address set forth in Section
10, or at such other place as Sublandlord shall designate from time to time by
notice to Subtenant, and, in the case of the Sublease Base Rent due pursuant to
Section 6.1, in advance, on the first day of each month,
6.3 Additional Rent. All amounts over and above, or in addition to,
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Sublease Base Rent which are payable by Subtenant to Sublandlord under the terms
of this Sublease, shall be deemed additional rent hereunder and Sublandlord
shall have all the rights and remedies in the event of the nonpayment thereof as
it would have had in the event of the nonpayment of any installment of Sublease
Base Rent.
7. Security Deposit. Subtenant shall deposit with Sublandlord upon
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execution of this Sublease the sum of $33,125.00 as security for Subtenant's
faithful performance of Subtenant's obligations hereunder (the "Security
Deposit"). If Subtenant fails to pay rent or other charges within any applicable
cure period under this Sublease, or fails to perform any of its other
obligations hereunder, Sublandlord may use or apply all or any portion of the
Security Deposit for the payment of any rent or other amount then due hereunder
and unpaid, for the payment of any other sum for which Sublandlord may become
obligated by reason of Subtenant's default or breach, or for any loss or damage
sustained by Sublandlord as a result of Subtenant's default or breach beyond any
applicable cure period. If Sublandlord so uses any portion of the Security
Deposit, Subtenant shall, within seven (7) days after written demand by
Sublandlord, restore the Security Deposit to the full amount originally
deposited, and Subtenant's failure to do so shall constitute a default under
this Sublease. Sublandlord shall not be required to keep the Security Deposit
separate from its general accounts, and shall have no obligation or liability
for payment of interest on the Security Deposit. In the event Sublandlord
assigns its interest in this Sublease, Sublandlord shall deliver to its assignee
so much of the Security Deposit as is then held by Sub-
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landlord. Within thirty (30) days after the Sublease Term has expired, or
Subtenant has vacated the Premises, whichever shall last occur, and provided
Subtenant is not then in default of any of its obligations hereunder, the
Security Deposit, or so much thereof which has not previously been applied by
Sublandlord, shall be returned to Subtenant or to the last assignee, if any, of
Subtenant's interest hereunder. In the event Sublandlord has not delivered the
4th floor Premises to Subtenant on or prior to June 1, 1999, then Sublandlord
shall return to Subtenant a portion of the security deposit equal to $19,375.00;
said portion shall be redeposited with Sublandlord at such later date, if at
all, as such delivery occurs.
8. Condition of Subleased Premises. In entering into this Sublease
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Subtenant has not relied upon or been induced by any statements or
representations of any persons with respect to the physical condition of the
Building or the Premises or with respect to any other matter affecting the
Premises, that might be pertinent in considering the leasing of the Premises or
the execution of this Sublease. Sublessee has, on the contrary, relied solely on
such investigations, examinations and inspections as Subtenant has chosen to
make or have made on its behalf. Subtenant acknowledges that Sublandlord has
afforded Subtenant the opportunity for full and complete investigations,
examinations and inspections. Upon taking possession of the Premises, Subtenant
shall be deemed to have accepted the Subtenant Premises in an "as-is" condition.
Notwithstanding the foregoing to the contrary, Sublandlord shall deliver the
Premises clean and in broom-swept condition, with all building systems which
Sublandlord is responsible to maintain under the provisions of the Master Lease
in good, working order as of the Commencement Date.
9. Incorporation of Master Lease.
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(a) Subject to the following provisions of this Section 9, all terms and
conditions of the Master Lease, including, without limitation, all default
provisions, are incorporated into and made a part of this Sublease, except the
following provisions, and all references thereto, shall be deemed deleted from
the Master Lease for the purpose of incorporation herein: 1.3; 1.5; 1.6(a); 1.7;
1.10(a) and (b), 2.1; 2.2; 2.3; 2.4; 2.5; 3; 4.1; 5; 8.2(b); 8.3(a); 8.3(d); the
final sentence of 12.3(a); 15; 25; 39; 50; 51; 52; 53; 54 and 55. All references
in such incorporated provisions to Lease, Lessor, Lessee, Term, Expiration Date
and Base Rent shall mean, respectively, Sublease, Sublandlord, Subtenant,
Sublease Term, Sublease Expiration Date and Sublease Base Rent. Subtenant
assumes and agrees to perform for the benefit of Sublandlord the tenant's
conditions, covenants and obligations under the Master Lease to the extent the
same are incorporated in this Sublease. Subtenant shall not commit or suffer any
act or omission that will violate any of the provisions of the Master Lease.
The foregoing incorporated provisions are modified in the following
respects:
(b) The time limits contained in the Master Lease for the giving of
notices, making of demands or performing of any act, condition or covenant on
the part of tenant under the Master Lease, or for the exercise by the tenant
thereunder of any right, remedy or option incorporated herein are changed for
the purpose of incorporation herein by reference by shortening the same, in each
instance, by three (3) days, so that, in each instance, Subtenant shall have
three (3) days less time to observe or perform hereunder than Sublandlord has as
tenant under the Master Lease. If the Master Lease, as incorporated herein, only
allows six (6) days or less for Subtenant
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to perform any act or to correct any failure relating to the Premises or this
Sublease, then, except in the event of an emergency, Subtenant shall
nevertheless be allowed three (3) days to perform any such act or correct any
such failure.
(c) In determining whether to grant or withhold any consent or response,
Sublandlord may expressly condition the same upon the consent or approval of
Master Landlord.
(d) Sublandlord shall not be required to perform any of the covenants and
obligations of Master Landlord under the Master Lease and, insofar as any of the
obligations of the Sublandlord hereunder are required to be performed under the
Master Lease by Master Landlord, Subtenant shall rely on and look solely to
Master Landlord for the performance thereof. Sublandlord shall not be
responsible for any representations or warranties of Master Landlord in any
incorporated text.
(e) Any reference to Paragraph 8 within the Master Lease shall mean
Paragraph 8 as modified by Section 11 of the Sublease.
(f) In the event of any conflict between any provision of the Master Lease
which is incorporated herein as described above and any provision in any other
Section of this Sublease, the later shall control.
10. Notices. All notices and demands which may be or are required or
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permitted to be given by either party to the other party hereunder shall be sent
to the address hereinbelow:
To Sublandlord: 000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Attn: Xxxxxx XxXxxxx
To Subtenant: 000 Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx
Attn: Xxxxx Xxxxxxxx
11. Insurance. Subtenant shall comply with all of the insurance
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requirements and obligations of Sublandlord, as tenant under the Master Lease,
except that the amount of coverage of liability insurance to be maintained as of
the Commencement Date by Subtenant under Section 8.2(a) of the Master Lease
incorporated herein shall be increased to $2,000,000 per occurrence; thereafter,
if Master Landlord requires Sublandlord to increase its coverage pursuant to the
Master Lease to an amount greater than $2,000,000, then Subtenant shall also
increase its coverage to such greater amount. Notwithstanding anything to the
contrary in the Master Lease or Sublease, Subtenant shall be obligated to
maintain the casualty insurance required of the tenant under Section 8.4 of the
Master Lease with respect to any and all personal property, Trade Fixtures and
Lessee-Owned Alterations and Utility Installations whether placed or installed
in the Premises by Sublandlord prior to the Commencement Date or by Subtenant
thereafter. Subtenant shall, whether required by the Master Lease or not, name
Master Landlord and Sublandlord as additional insureds, as their interests may
appear, on all policies of insurance required to be carried by Subtenant
hereunder or thereunder.
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12. Subordination to the Master Lease. This Sublease is expressly
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subject and subordinate to the Master Lease, and, if the Master Lease terminates
(including, without limitation, upon the occurrence of any casualty or
condemnation pertaining to the Premises or the Building), this Sublease shall
terminate. Subtenant acknowledges that it has received a copy, and has reviewed
the terms, of the Master Lease. Subtenant shall indemnify and hold Sublandlord
harmless from and against any and all claims, suits, liabilities, costs and
expenses, including reasonable attorneys' fees and costs, asserted against or
sustained by Sublandlord resulting from a breach or default under or termination
of the Master Lease caused by Subtenant. Subtenant shall not do, omit to do, or
permit to be done or omitted any act in or related to the Premises which could
or does constitute a breach or default under the terms of the Master Lease. If
any of the express provisions of this Sublease shall conflict with any of the
provisions of the Master Lease as incorporated herein, such conflict shall be
resolved in favor of the express provisions of this Sublease. Sublandlord, to
the best of its knowledge, represents to Subtenant that the Master Lease is in
full force and effect and that no default exists on the part of any party to the
Master Lease and that Sublandlord has received no written notice from any
governmental authority that the Premises are in violation of any applicable law.
Sublandlord shall not default under the Master Lease in respect of any required
rental payment thereunder provided Subtenant shall have previously paid to
Sublandlord the full amount thereof and Sublandlord shall have failed to pay the
same to Master Landlord.
13. Representations and Covenants of Master Landlord. Master Landlord
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represents that, to the best of Master Landlord's knowledge, (a) no default
presently exists under the Master Lease with respect to obligations to be
performed by Sublandlord, (b) the Master Lease is in full force and effect, (c)
there is no event which with the giving of notice and/or the passage of time
would constitute a default as of the commencement of the term of the Sublease
(d) the Master Lease attached hereto as Exhibit A is a true and complete copy of
the lease, and (e) there are no other agreements of any kind affecting
Sublandlord's lease and occupancy of the Premises. In the event that
Sublandlord is in Breach (as such term is defined in the Master Lease) with
respect to any obligation under the Master Lease, Master Landlord agrees to
deliver to Subtenant a notice thereof. Master Landlord agrees that Subtenant
shall have the right to cure such Breach within ten (10) days after such notice.
In the event the Master Lease between Master Landlord and Sublandlord is
canceled or terminated for any reason, or involuntarily surrendered by operation
of law before the Sublease Expiration Date, Subtenant agrees at the sole option
of Master Landlord, to attorn to the Master Landlord for the balance of the term
of this Sublease and on the then-executory terms of this Sublease. Such a
recognition and attornment will be evidenced by an agreement in form and
substance reasonably satisfactory to the Master Landlord and Subtenant.
Subtenant agrees to execute and deliver such an agreement at any time within ten
(10) business days after request by the Master Landlord.
14. Right to Cure Subtenant's Defaults. If Subtenant shall at any time
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fail to make any payment or perform any other obligation of Subtenant hereunder,
then Sublandlord shall have the right, but not the obligation, after the lesser
of five (5) days notice to Subtenant or the time within which Master Landlord
may act on Sublandlord's behalf under the Master Lease, or without notice to
Subtenant in the case of any emergency, and without waiving or releasing
Subtenant from any obligations of Subtenant hereunder, to make such payment or
perform such other obligation of Subtenant in such manner and to such extent as
Sublandlord shall deem necessary, and in exercising any such right, to pay any
reasonable incidental costs and expenses,
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employ attorneys and other professionals, and incur and pay reasonable
attorneys' fees and other costs reasonably required in connection therewith.
Subtenant shall pay to Sublandlord upon demand, as additional rent, all sums so
paid by Sublandlord and all incidental costs and expenses of Sublandlord in
connection therewith, together with interest thereon at the maximum legal rate
and late fees as provided in the Master Lease.
15. Bonus Rent. In the event that Subtenant shall assign, sublease or
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otherwise transfer the Sublease to a party for consideration in excess of the
Sublease Base Rent, Sublandlord and Subtenant shall evenly divide such excess
consideration after first deducting the portion of any such bonus rent payable
to Master Landlord by either Sublandlord or Subtenant.
16. Survival. Except as otherwise set forth in this Sublease, any
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obligations of Subtenant (including, without limitation, rental and other
monetary obligations, repair obligations and obligations to indemnify
Sublandlord), shall survive the expiration or sooner termination of this
Sublease, and Subtenant shall immediately reimburse Sublandlord for any expense
incurred by Sublandlord in curing Subtenant's failure to satisfy any such
obligation (notwithstanding the fact that such cure might be effected by
Sublandlord following the expiration or earlier termination of this Sublease).
This Sublease has been executed on the day and year first written above.
SUBLANDLORD SUBTENANT
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TIMES DIRECT MARKETING, a California CRITICAL PATH, a California
corporation corporation
By /s/ Xxxxx Xxxxxxxx By /s/ Xxxxx Xxxxxxxx
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Name Xxxxx Xxxxxxxx Name Xxxxx Xxxxxxxx
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Title President Title EVP/CFO
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Subject to the provisions of the Consent to Sublease, a copy of which is
attached hereto as Exhibit B, Master Landlord, by its signature below, hereby
consents to the foregoing Sublease:
000 XXXXXX XXXXXX XXXXXXXX
Xx /s/ Xxxxx Xxxxx
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Name Xxxxx Xxxxx
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Title Partner
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EXHIBIT A
(MASTER LEASE)
A-1
