Exhibit 10.23
 

TEMPORARY SUBLEASE, ASSIGNMENT AND ASSUMPTION OF LEASE
 
AND CONSENT TO ASSIGNMENT
 
THIS TEMPORARY SUBLEASE, ASSIGNMENT AND ASSUMPTION OF LEASE AND CONSENT TO
ASSIGNMENT (the “Assignment”) is entered into as of the 7th  day of May, 2008
(the “Date of this Assignment”), by, between and among WESTPORT OFFICE PARK,
LLC, a California limited liability company (successor to WESTPORT JOINT
VENTURE) (“Landlord”); METRICSTREAM, INC., a Delaware corporation (formerly
known as “ZAPLET, INC.” and “Firedrop.com”) (“Assignor”); and SHUTTERFLY, INC.,
a Delaware corporation (the “Assignee”).
 
RECITALS
 
A.           By that certain Lease Agreement dated as of August 12, 1999,
between Landlord, as “Landlord,” and Assignor, as “Tenant”, as amended by that
certain Amendment No. 1 to Lease dated as of February 28, 2000 (“Amendment No.
1”) and further amended by that certain Amendment No. 2 to Lease dated as of
October 18, 2002 (collectively, the “Lease”), Landlord leased to Assignor
certain premises consisting of approximately 37,537 square feet of space (the
“Premises”) (11,847 square feet in Suite 101 on the first floor and 25,690
square feet in Suite 201 on the second floor), in the building located 3000
Bridge Parkway, Suite 201, Redwood City, California (the “Building”).
 
B.           Assignor desires to (i) sublet a portion of the Premises to
Assignee from June 1, 2008 through and including August 14, 2008, and (ii)
assign its rights and obligations under the Lease unto Assignee effective as of
August 15, 2008, and Assignee desires to assume the rights and obligations of
Assignor under the Lease.
 
C.           Subject to the terms hereof, Landlord has consented to and does
hereby consent to such sublet and assignment.
 
NOW, THEREFORE, in consideration of the above-stated premises, and other good
and valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, it is hereby agreed by, between and among Landlord, Assignor and
Assignee as follows:
 
1. Temporary Sublease of First Floor to Assignor.
 
(a) Subject to all terms, covenants or conditions of this Section 2, Assignor
does hereby sublease to Assignee and Assignee hereby agrees to sublease from
Assignor those certain premises consisting of approximately 11,847 square feet
of space (“Temporary Sublease Premises”) in the first floor of the Building as
described in Amendment No. 1 (the “Temporary Sublease”).   Assignee will also
have the right to 39 unreserved parking spaces available to Assignee under the
Lease.  The term of this Temporary Sublease shall commence as of June 1, 2008
(the “Sublease Effective Date”) and shall expire on August 14, 2008, unless
sooner terminated pursuant to any provision hereof.
 
(b) Assignee shall pay to Assignor, in lawful money of the United States, for
each calendar month of such term, monthly base rent (“Monthly Rent”) of
$29,617.50. In addition, Assignee shall tender to Assignor, all other amounts
which Assignor is required to pay to Landlord for the Temporary Sublease
Premises pursuant to the terms, covenants and conditions of the Lease
(“Additional Rent”), which amount is currrently $9,347.00 per month.   Monthly
Rent and Additional Rent for any period during the term hereof which is for less
than one month shall be prorated.  Amounts paid by Assignee to Assignor for
Monthly Rent and Additional Rent for the period June 1, 2008 through and
including August 15, 2008, shall subject to prompt readjustment upon receipt
from Landlord of actual amounts of Additional Rent due for such period.  Monthly
Rent and Additional Rent shall be payable in advance on or before the first day
of each calendar month of the term of this Temporary Sublease, without
deduction, offset, prior notice or demand, in lawful money of the United
States.  Monthly Rent shall be paid to Sublessor at 3000 Bridge Parkway, Redwood
Shores, CA 94065, Attn:  Corporate Controller, or at such place as Sublessor may
from time to time designate in writing.
 
(c) The provisions of the Lease are (except as otherwise herein specifically
provided) hereby incorporated in this Temporary Sublease with the same effect as
if entirely rewritten herein, and shall fix the rights and obligations of the
parties hereto with respect to the Temporary Sublease Premises with the same
effect as if Assignor and Assignee were, respectively, the landlord and tenant
named in the Lease.  Assignee hereby covenants to perform the covenants and
undertakings of tenant under the Lease during such term of this Temporary
Sublease, and agrees not to do or permit to be done any act which shall result
in a violation of any of the terms, covenants and conditions of the
Lease.  Except as otherwise specifically provided herein, Assignee is to have
the benefit of the covenants and undertakings of the Landlord as landlord in the
Lease to the extent the same are applicable to the Temporary Sublease Premises
during the term of this Temporary Sublease.  It is expressly understood and
agreed, however, that Assignor is not in the position to render any of the
services or to perform any of the obligations required of Assignor by the terms
of this Temporary Sublease, and that performance by Assignor of its obligations
hereunder are conditioned upon due performance by the Landlord of its
corresponding obligations under the Lease.  It is further understood and agreed,
therefore, that notwithstanding anything to the contrary contained in this
Temporary Sublease, Assignor shall not be in default under this Temporary
Sublease for failure to render such services or perform such obligations
required of Assignor by the terms of this Temporary Sublease which are the
responsibility of Landlord as landlord under the Lease, but Sublessor agrees to
take all reasonable measures to cause Landlord to perform said obligations.  The
term “reasonable measures” shall not include legal action against the Landlord
for Landlord’s failure to so perform unless Sublessee agrees to pay all costs
and expenses in connection therewith.

2. Assignment and Assumption of Lease.  Effective as of August 15, 2008 (the
“Assignment Effective Date”), Assignor hereby transfers, assigns and conveys to
Assignee all of the right, title and interest of Assignor in, to and under the
Lease, and all of Assignor’s obligations under the Lease.  Effective as of the
Assignment Effective Date, Assignee hereby accepts, assumes and agrees to
perform all of the obligations of “Tenant” arising under or out of the Lease
from and after the Assignment Effective Date, and shall fully comply with all
terms and conditions of the Lease to be performed by the Tenant under the Lease
as if Assignee were a signatory thereto.  Assignee accepts the Premises,
“AS-IS”, in its present condition, and without any representation or warranty as
to the condition of the Building or Premises, or as to the use or occupancy
which may be made thereof.
 
3. Warranties and Representations.  Assignor warrants and represents to Assignee
the following:
 
(a) Assignor, to the best of its knowledge, is in full and complete compliance
with all of its obligations under the Lease.
 
(b) The Lease, as described above, has not been otherwise amended or modified,
either orally or in writing, and represents the entire agreement between
Landlord and Assignor as to the Premises.
 
(c) Assignor, to the best of its knowledge, is not in default under the Lease,
and no state of facts exists which, but for the giving of notice and/or the
passage of time, would be a default by Assignor  under the Lease.
 
(d) Assignor has not received notice from the Landlord of any default under the
Lease.
 
(e) Assignor (i) has not received notice from the Landlord that Assignor shall
be obligated to remove any of its alterations, additions or improvements upon
expiration of the Lease, and (ii) requested such determination from Landlord at
the time it requested Landlord’s approval of such alterations, additions or
improvements.
 
(f) Neither the Lease nor any rights of the “Tenant” under the Lease have been
previously assigned by Assignor.  The Premises have not been sublet by Assignor,
except as listed in Exhibit A attached hereto (“List of Subleases”).  No person
or entity other than Assignee is entitled to possess, use or occupy the Premises
pursuant to any license, concession or other agreement, whether oral or written,
except for the subtenants set forth in the List of Subleases.  Assignor has
terminated in writing all subleases and/or occupancy agreements for all
subtenants and other occupanats described in the List of Subleases (except for
the sublease with Aster Data Systems).  Neither the Tenant’s estate under the
Lease nor any of its rights under the Lease have been mortgaged or pledged to
any third party, whether as security for a loan or otherwise.
 
4. Indemnities.  Assignor shall indemnify, hold harmless and defend Assignee
from and against any and all claims, demands, actions, losses, costs, damages or
expenses (including resonable attorneys’ fees) asserted against or suffered by
Assignee and arising out Assignor’s obligations accruing under the Lease prior
to the Assignment Effective Date, except for Assignee’s obligations accruing
under the Temporary Sublease pursuant to Section 1 above.  Assignee shall
indemnify, hold harmless and defend Assignor from and against any and all
claims, demands, actions, losses, costs, damages or expenses (including
reasonable attorneys’ fees) asserted against or suffered by Assignor and arising
out Assignee’s obligations accruing (i) under the Lease on and after the
Assignment Effective Date, and (ii) under the Temporary Sublease pursuant to
Section 1 above.
 
5. Further Assignment or Subletting.  This Assignment shall not be deemed or
construed as a consent by Landlord to, or as permitting, any other or further
assignment of the Lease or subletting of the Premises by Assignee or anyone
claiming under or through Assignee, and no other or further assignment or
sublease shall be made by Assignee or anyone claiming under or through Assignee,
without compliance in each instance with all of the requirements set forth in
the Lease.
 
6. No Release.  This Assignment shall not be deemed to release or discharge, in
any manner, the liability of Assignor, as “Tenant,” under the Lease, and
Assignor’s liabilities shall remain in full force and effect and to the same
extent as existed prior to this Assignment.
 
7. Assumption of Liability.   Assignor and Assignee shall, as of the Assignment
Effective Date, be jointly and severally liable for performance of all of the
obligations of the “Tenant” under the Lease.
 
8. Security Deposit.  The parties agree that (i) Assignor shall look directly to
the Landlord for the return to Assignor of the security deposit currently held
by Landlord under the Lease (the “Existing Security Deposit”), and (ii) Assignee
shall have no obligation with respect to the return of the Existing Security
Deposit to Assignor.
 
9. Cubicles, Security System and Moving Expenses.
 
(a) Assignor, as of the Sublease Effective Date as to the first floor cubicles
and as of the Assignement Effective Date as to the second floor cubicles, hereby
transfers, assigns and conveys to Assignee, all of its right, title and
interest, in and to all cubicles located in the Premises as of the Date of this
Amendment (the “Remaining Cubicles”) and agrees to leave the Remaining Cubicles
in the Premises for Assignee’s use.   Assignor hereby warrants and represents
that Assignor holds good title to the Remaining Cublices, free and clear of any
liens, security interests, charges, encumbrances or any other interests.
 
(b) Intentionally deleted.
 
(c) Assignee shall reimburse Assignor for an amount not to exceed $40,000.00 for
actual moving expenses incurred by Assignor to relocate its business from the
Premises.  Assignee shall reimburse Assignor for such moving expenses within
thirty (30) days of receipt of written demand from Assignor, together with
evidence reasonably satisfactory to Assignee substantiating such expenses, e.g.,
paid invoices.
 
10. Notices.  Any notice or demand given under this Assignment shall be given as
follows: (a) to Assignor at the address for notices to “Tenant” given in the
Lease, and to Assignee at the following address(es):  Shutterfly, 2800 Bridge
Parkway, Redwood City, CA 94065; and (b) to Landlord at the address for notices
to Landlord given in the Lease.
 
11. Conditions Precedent.  (a) A condition precedent to the effectiveness of
this Assignment is that the Landlord under the Lease shall have consented hereto
as set forth in the signature page below.  If such consent is not obtained by
May 15, 2008, this Assignment shall, at the option of Assignor or Assignee upon
written notice to the other, be null and void and of no force or effect.
 
(b)   A condition precedent to the effectiveness of this Assignment is that (i)
Assignor shall have terminated in writing all subleases and/or occupancy
agreements for all subtenants and other occupants of the Premises (except for
the sublease with Aster Data Systems), and (ii) all such subtenants and
occupants shall have vacated the Premises (except for the sublease with Aster
Data Systems.   If  the condition in (i) is not satisfied by May 15, 2008, this
Assignment shall, at the option of Assignee upon written notice to Assignor, be
null and void and of no force or effect. If the condition in (ii) for subtenants
and occupants in the Temporary Sublease Premises is not met by May 31, 2008,
and/or for subtenants and occupants in suite 201 is not met by August 14, 2008,
this Assignment shall, at the option of Assignee upon written notice to
Assignor, be null and void and of no force or effect.
 
12.           Counterparts.  This Assignment may be executed by the parties
signing different counterparts of this Assignment, which counterparts together
shall constitute the agreement of the parties.
 
[NEXT PAGE IS SIGNATURE PAGE]
 

 
 

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IN WITNESS WHEREOF, the parties hereto have executed this Assignment as of the
Date of this Assignment set forth above.
 
ASSIGNOR:
 
METRICSTREAM, INC.
 
By: /s/Shellye Archambeau
Name: Shellye Archambeau
Title: CEO
 
 
ASSIGNEE:
 
SHUTTERFLY, INC.
 
By: /s/Doug Appleton
Name: Doug Appleton
Title: VP, Legal
 
 

 

 
 

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Exhibit A
 
(List of Subleases)
 
1.  
Aster Data Systems.

 
2.  
Moka5.

 
3.  
Regalix.

 
4.  
cFares, Inc.