Exhibit
10.16
SUBLEASE
II
This
Sublease (“Sublease II”) is made as of the 25th day of
January, 2008, (the “Effective Date”) by and between ACCRUENT, INC., a Delaware
corporation (“ACC”), and CORNERSTONE OnDEMAND, INC., a
Delaware corporation (“CSOD”), with regard to the following
facts.
RECITALS
A. Sapient
Corporation, a Delaware corporation (“SAP”), and Water Garden Realty Holding
LLC, a California limited liability company (successor-in-interest to CST Water
Garden II, LLC, a Delaware limited liability company), as landlord (“Water Garden” or “Landlord”), are parties to that certain Office
Lease Agreement dated May 8, 2000 (the “Lease”), whereby SAP leased from Water Garden those certain
premises described as the fourth, fifth, and sixth floors in the South Tower
(the “Master Premises”), located in the office building
located at 1601 Cloverfield Avenue, Santa Monica. California (the “Building”) and more particularly described in
the Lease, a copy of which is attached hereto as Exhibit A.
B. ACC (successor-in-interest to
MyContracts, Inc., a Delaware corporation), as subtenant, and SAP, as sublandlord, are
parties to that certain sublease dated October 12, 2001, (“Original Sublease”) as amended by that certain (i) First
Amendment to Sublease dated March 24, 2006 (the “First Sublease Amendment”); and (ii) Second Amendment to
Sublease dated July 23, 2007 (the “Second Sublease Amendment”). The Original Sublease, First
Sublease Amendment, and Second Sublease Amendment are collectively referred to
as the “Sublease I”,
whereby ACC
subleased from SAP
approximately 27,444 rentable square feet, (the “Original Sublease Premises”). A copy of Sublease I is attached hereto
as Exhibit B.
C. CSOD desires to sublease from
ACC a portion of the
entire Original Sublease
Premises, measuring approximately 4,600 rentable square feet, and shown
in attached Exhibit C (which shall be hereafter be referred to as the “Subleased Premises”), and ACC has agreed to sublease the
Subleased Premises to
CSOD upon the terms,
covenants and conditions herein set forth.
D.
Capitalized terms not defined herein shall have the
meaning ascribed in the Lease.
AGREEMENT
In
consideration of the mutual covenants contained herein, the sufficiency of which
is hereby acknowledged, the parties hereto agree as follows.
1.
Sublease II.
ACC hereby leases and
demises to CSOD and CSOD
hereby hires and leases from ACC the Subleased Premises (“Sublease
II”). ACC shall deliver the Subleased Premises broom-clean and free of all
personal property, subject to Section 19(2) below.
2. Term.
2.1 Sublease II Term. The
term of this Sublease
II (the “Sublease II Term”) shall commence (the “Commencement Date”) on the later of: (i) the date that
SAP provides written
consent to this Sublease
II or (ii) the date that Water
Garden provides written consent to this Sublease II.
2.2 The
Sublease II Term shall expire on the first to occur of (x) November 30, 2011,
(y) the expiration or termination of Sublease I, and (z) the
expiration or termination of the Lease, unless terminated earlier as set
forth in this Sublease
II (the “Expiration Date”). CSOD shall have no right to
exercise any renewal rights (if any) set forth in the Lease or Sublease I.
2.3 Possession
of the Subleased Premises (“Possession”) will be delivered to CSOD upon
completion of the ACC Improvements (defined herein).
Notwithstanding
the foregoing, CSOD, at its option, may occupy the Subleased Premises prior to
the delivery of Possession (as set forth in herein). Should CSOD exercise this
option, CSOD shall begin paying rent on the day it begins to occupy the
Subleased Premises. Early occupancy of the Subleased Premises shall not relieve
ACC of its obligation to complete the ACC Improvements, which shall be performed
in a commercially reasonable and diligent manner.
3. Rent.
3.1
Base Rent.
CSOD shall pay base rent
(“Base Rent”) during the Sublease II Term in the following
amounts:
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Period of Time
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Monthly Base Rent
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Commencement
Date – Month 12
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$21,850.00
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Month
13 – Month 24
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$22,833.25
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Month
25 – Month 36
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$23,860.75
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$24,934.48
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Base Rent shall be payable
monthly in advance on the first day of each month during the Sublease II Term and shall be pro rated
for any partial month; CSOD
shall pay ACC the
Base Rent for the first
full month of the Sublease II
Term in the amount of $21,850.00 on the earlier of: (a) the date that
Possession is delivered to CSOD; and (b) the date that CSOD occupies the
Subleased Premises.
3.2 Additional Rent. In
addition to monthly installments of Base Rent payable by CSOD with respect to the Subleased Premises, CSOD shall
pay to ACC as Additional
Rent, the share of any “Expense Excess” and any “Tax Excess” (as those terms are
defined in the Lease) allocable to the Subleased Premises
only (as opposed to the Original Sublease Premises), provided that for purposes
of calculating the Expense Excess and Tax Excess, the Base Year shall be
calendar year 2008. Such Additional Rent shall be payable as and when the
Expense Excess and Tax Excess are payable by ACC and/or SAP to Landlord. If the Lease
provides for the payment by ACC
and/ or SAP of
Expense Excess and Tax Excess on the basis of an estimate thereof, then as and
when adjustments between estimated and actual Expense Excess and Tax Excess are
made under the Lease, the obligations of ACC and CSOD hereunder shall be
adjusted in a like manner; and if any such adjustment shall occur after the
expiration or earlier termination of this Sublease II, then the
obligations of ACC and
CSOD under this
SubSection 3.2 shall survive such expiration or termination. ACC shall, upon request by
CSOD, furnish CSOD with copies of all
relevant statements submitted by Landlord and/or SAP of actual or estimated
Expense Excess and Tax Excess during the Sublease II Term. All amounts payable
by CSOD under this
Sublease shall be collectively referred to herein as “Rent.”
4. Use. CSOD covenants and agrees to
use the Subleased Premises
in accordance with the provisions of the Lease and Sublease I and for no other
purpose and otherwise in accordance with the terms and conditions of the Lease, Sublease I and this Sublease II.
5. Lease. As applied to
this Sublease II, the words “Sublandlord” and
“Subtenant” as used in Sublease I shall be deemed to refer to ACC and CSOD hereunder, respectively.
Except as otherwise expressly provided in Section 7 hereof, the covenants,
agreements, terms, rights, obligations, provisions and conditions of Sublease I insofar as they
relate to the Subleased
Premises and insofar as they are not inconsistent with the terms of this
Sublease II are made a
part of and incorporated into this Sublease II as if recited
herein in full. As between the parties hereto only, in the event of a conflict
between the terms of the Lease
and/or Sublease I
and the terms of this Sublease II, the terms of this Sublease II shall
control.
6. Landlord’s Performance Under
Lease.
6.1 [Intentionally
deleted.]
6.2 Whenever
the consent of Landlord
or SAP shall be
required by, or Landlord
or SAP shall fail
to perform their respective obligations under, the Lease or Sublease I, ACC agrees to use its diligent good
faith efforts to obtain such consent and/or performance on behalf of CSOD, provided that ACC shall not be required to
(i) commence legal action; (ii) expend its own funds; or (iii) prejudice any of
its rights, except where necessary to perform its obligations under this
Sublease II.
6.3 ACC covenants as follows: (i)
not to voluntarily terminate this Sublease II except in the
event of casualty or condemnation, (ii) not to modify Sublease I so as to materially
adversely affect CSOD’s
rights hereunder, and (iii) to take all actions reasonably necessary to preserve
Sublease I and Sublease II.
6.4 ACC
represents and warrants to CSOD that: (i) Exhibit A is a true, correct, and
complete copy of the Lease, and that the Lease is in full force and effect and
has not been amended or modified (except as set forth in the exhibit); (ii)
Exhibit B is a true, correct, and complete copy of Sublease I, and that Sublease
I is in full force and effect and has not been amended or modified (except as
set forth in the exhibit); (iii) ACC has not entered into any other agreement
with respect to the Subleased Premises that could adversely affect CSOD’s
occupancy or that would impose any greater obligation on CSOD than as set forth
in this Sublease II; (iv) no default has occurred under Sublease I, ACC has not
received any notice of default under Sublease I, and that other than ACC’s
periodic vacancy of portions of the Original Sublease Premises, ACC is not aware
of any act or omission of ACC which, with the notice or passage of time or both,
would constitute a default under Sublease I; (v) ACC has no knowledge of any
claim by SAP that a default has occurred under any of the provisions of the
Lease or Sublease I; (vi) to ACC’s knowledge, SAP is not in default under
Sublease I; (vii) ACC shall cause to be delivered the Transfer Notice in
accordance with Section 7 of Sublease I and Section 14.1 of the Lease and
provide CSOD with a copy thereof; (viii) ACC shall pay any Transfer Premium
required either by the Lease or Sublease I; and (ix) ACC has not received any
notice of violation of any applicable laws, codes or regulations regarding the
Subleased Premises nor is ACC aware of any such violation.
7. Variations from
Lease.
7.1 The
term of this Sublease II
and Rent payable under this Sublease II and the amount of the
Security Deposit required of CSOD shall be as set forth in
Sections 2, 3, and 20.
7.2 As
between ACC and CSOD only: (i) all insurance
proceeds or condemnation awards received by ACC under the Lease or Sublease I shall be deemed to
be the property of ACC; and (ii) in the event of damage or
destruction of the Subleased
Premises, ACC shall have no
obligation to rebuild and may terminate the Sublease II without any liability to
CSOD.
7.3 Any
notice which may or shall be given by either party hereunder shall be either
delivered personally or sent by certified mail, return receipt requested,
addressed to the party for whom it is intended at 1601 Cloverfield Blvd., Suite
620, Santa Monica, CA 90404, to the attention of Perry Wallack (if to CSOD), or to ACC, 1601 Cloverfield Blvd., Suite 500,
Santa Monica, CA 90404, to the attention of Robert Pape (if to ACC), or to such other address as may
have been designated in a notice given in accordance with the provisions of this
Section 7.3.
7.4 All
applicable terms and conditions of the Lease are incorporated into and made a
part of this Sublease II as if ACC were the landlord and CSOD the tenant, and
the Subleased Premises the Master Premises, except for the following: (i)
Summary of Basic Lease Information, Sections 1, 2, 3, 4, 6.3, 7, 8, 9, 10, and
12; (ii) Sections 1.1.1, 1.3, 1.4, 1.5, 2.1, 2.2, 2.3, Article 3, (except as
specifically incorporated pursuant to Section 3 above), 7.2, Article 8 (except
to the extent specifically incorporated herein under Section 19 below), Sections
14.3, 14.8, 19.6, Article 21, Article 22, Sections 23.1, 23.5, Article 25,
Sections 29.14 and 29.20 of the Lease and (iii) Exhibits A, C, D and F attached
to the Lease. All applicable terms and conditions of Sublease I are incorporated
into and made a part of this Sublease II as if ACC were the landlord and CSOD
the tenant, and the Subleased Premises the Original Sublease Premises, except
for the following: (i) Sections 1(a), 1(c), 3, 4, 5, and 7. ACC will exercise
commercially reasonable efforts in attempting to cause SAP to perform its
obligations under Sublease I, and Water Garden to perform its obligations under
the Lease, for the benefit of CSOD, and CSOD shall be afforded any abatement of
rent received from SAP or Water Garden with respect to the Subleased Premises as
a result of an SAP or Water Garden default. Subject to Section 13 of Sublease I,
if the Lease or Sublease I terminates, at the option of Water Garden or SAP,
respectively, this Sublease II will terminate and the parties will be relieved
of any further liability or obligation under this Sublease II. However, if
either the Lease or Sublease I terminates as a result of a default or breach by
ACC under the Lease, Sublease I, or this Sublease II, ACC will be liable to CSOD
for the damage suffered as a result of the termination. Regardless, if Sublease
I gives ACC any right to terminate Sublease I in the event of the partial or
total damage, destruction, or condemnation of the Building, Master Premises,
Original Sublease Premises, or Subleased Premises, the exercise of this right by
ACC will not constitute a default or breach hereunder.
7.5 If
CSOD desires to install
improvements to the Subleased
Premises (the “Tenant
Improvements”): (i) CSOD shall construct the Tenant Improvements pursuant
to plans and specifications approved by ACC, Landlord and SAP, if applicable, and in compliance
with the terms of the Lease
and Sublease I, if applicable, and applicable laws
and codes; (ii) CSOD
shall pay for the cost of the Tenant Improvements and any
supervision fee required by ACC, Landlord or SAP; and (iii) CSOD shall be responsible for
removing the Tenant
Improvements at the end of the Sublease II Term if required by ACC, Landlord or SAP.
8. Indemnity.
Each
party shall indemnify, defend and hold the other harmless against all claims,
suits, losses, expenses and liabilities (including reasonable attorneys’ fees)
for bodily injury, personal injury, death and tangible property damage as a
result of the negligence, intentional wrongful acts or omissions,
misrepresentations, and/or illegal acts of the indemnifying party or any person
for whose actions it is legally liable, provided that the indemnifying party is
promptly notified, rendered reasonable assistance by the indemnified party as
required, and permitted to direct the defense or settlement
negotiations.
9.
Insurance. Prior to
commencement of the Sublease II
Term, CSOD shall deliver to
ACC the policies of
insurance specified in Article 10 of the Lease, naming each of ACC, SAP and Landlord as additional named
insureds thereunder.
10.
Assignment or
Subletting. Subject further to all of the rights of the Landlord and/or SAP under the Lease or Sublease I, as applicable, and the restrictions
contained in the Lease
and/or Sublease I, CSOD shall not be entitled to assign
this Sublease II or to
sublet all or any portion of the Subleased Premises without the
prior written consent of ACC, which consent shall not be
unreasonably withheld by ACC.
11.
Parking.
CSOD shall have the
right to use 3.96 unreserved parking spaces per 1,000 square feet leased, on the
terms and conditions set forth in the Lease, as assigned to ACC under Sublease I. Based on the 4,600 square feet to be
leased under this Sublease
II, CSOD shall have the right to
use eighteen (18) parking spaces. CSOD elects to use such
eighteen (18) parking spaces and shall pay ACC directly for such parking
spaces at the prevailing rate charged by Landlord.
12. Severability. If any term or
provision of this Sublease II
or the application
thereof to any person or
circumstances shall, to any extent, be invalid and unenforceable, the
remainder of this Sublease II or the application
of such term or provision to persons or circumstances other than those as to
which it is held invalid or unenforceable, shall not be affected thereby and
each term or provision of this Sublease II shall be valid and be
enforced to the fullest extent permitted by law.
13.
Entire Agreement;
Waiver. This Sublease
II, together with the Lease and Sublease I attached hereto and
incorporated herein by this reference, contains the entire agreement between the
parties hereto and shall be binding upon and inure to the benefit of their
respective heirs, representatives, successors and permitted assigns. Any
agreement hereinafter made shall be ineffective to change, modify, waive,
release, discharge, terminate or effect an abandonment hereof, in whole or in
part, unless such agreement is in writing and signed by the parties
hereto.
14. Captions and
Definitions. Captions to the Sections in this Sublease II are included for
convenience only and are not intended and shall not be deemed to modify or
explain any of the terms of this Sublease II.
15. Further Assurances.
The parties hereto agree that each of them, upon the request of the other party,
shall execute and deliver such further documents, instruments or agreements and
shall take such further action that may be necessary or appropriate to
effectuate the purposes of this Sublease II.
16. Governing Law. This
Sublease II shall be
governed by and in all respects construed in accordance with the internal laws
of the State of California.
17. Brokers. ACC and CSOD represent to one another
that each has dealt with no broker in connection with this Sublease II other than Cresa
Partners on behalf of CSOD
and Cushman & Wakefield of California, Inc. on behalf of ACC. ACC and CSOD shall indemnify, defend
and hold one another harmless from and against any and all liability, loss,
damage, expense, claim, action, demand, suit or obligation arising out of or
relating to a breach by the indemnifying party of such
representation.
18. Consent of Landlord.
The validity of this Sublease
II shall be subject to the Landlord’s prior written
consent hereto pursuant to the terms of the Lease and SAP’s prior written consent hereto
pursuant to the terms of Sublease I.
19. Condition of Subleased
Premises. CSOD
shall accept the Subleased Premises in their
currently existing “as-is” condition and none of Landlord, SAP or ACC shall not be responsible
for making any alterations or improvements to the Subleased Premises or for providing any
improvement allowance to CSOD, provided that ACC shall conduct the
following ACC Improvements at no cost to CSOD other than that which is
detailed in sub-point 4, below:
(1) Separately
demise the Subleased Premises from the Original Sublease Premises by building a
wall (in a location to be mutually agreed upon by CSOD and ACC), at no
additional cost to CSOD, as described in Exhibits C and D
herein,
(2) Grant
CSOD the use of any
furniture ACC elects, in
its sole discretion, to leave on the Subleased Premises for the
Sublease II Term, at no charge to CSOD. ACC will provide an inventory of all
such items that will be made available to CSOD as soon as practicable
before the Commencement Date. Any furniture left on the Subleased Premises which CSOD does not wish to use will
be removed by ACC at its
own cost in a commercially reasonable time,
(3) Secure
the conference room door leading from ACC conference room to Sublease Premises,
which shall remain secured during the Term of this Sublease II, and
(4) CSOD
shall be permitted to use the data and voice cabling, rack and patch panels
located within the Sublease Premises as of the Commencement Date (“Cabling”).
CSOD shall be able to modify the Cabling for its own use, upon the prior mutual
agreement between both parties, at CSOD’s expense.
20. Security Deposit.
Subject to review and approval of CSOD’s financials, CSOD shall deposit with ACC, concurrently with the
execution of this Sublease
II, the sum of Twenty-Four
Thousand Nine Hundred Thirty-Four Dollars and Forty-Eight cents ($24,934.48)
(the “Security Deposit”) as security for the full and
faithful performance by CSOD
of its obligations under this Sublease II. If CSOD fully and faithfully
performs all of its obligations under this Sublease II, the Security Deposit or so much
thereof as has not theretofore been applied by ACC and is not due to ACC, shall be returned to CSOD at the expiration of the
Sublease II Term. ACC shall not be required to keep
the Security Deposit separate from its general account nor shall ACC be required to pay CSOD any interest on the
Security Deposit.
21. Notice and
Payments.
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To
ACC:
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Accruent
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1601
Cloverfield Blvd., Suite 500
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Attn:
Michael Cordova
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Telephone
No: (310) 526-5707
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Facsimile
No: (310) 526-6300
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To
CSOD:
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Cornerstone
OnDemand
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1601
Cloverfield Blvd., Suite 620
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Attn:
Perry Wallack
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Telephone
No: (310) 752-0200
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Facsimile
No: (310) 752-0199
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22. Right of First Offer.
ACC grants to CSOD a right of first offer to sublease all or part of the
remaining Original Sublease Premises (i.e., excluding the Subleased Premises)
(the “Offer Space”) for a term expiring on the Expiration Date. ACC currently
occupies the Offer Space. If ACC should elect to vacate and offer any or all of
the Offer Space for sublet, subject to SAP’s exercise of its recapture rights
under Sublease I, ACC shall notify CSOD of the terms under which ACC intends to
offer all or any portion of the Offer Space for sublease. Provided CSOD is not
then in material default or breach of this Sublease II, CSOD shall have ten (10)
business days from receipt of ACC’s notification in which to notify ACC, in
writing, of its election to sublease the portion of the Offer Space that is the
subject of ACC’s notice upon the terms and conditions contained in ACC’s notice
for a term expiring on the Expiration Date. If CSOD accepts ACC’s offer, this
Sublease II shall be amended to incorporate the Offer Space that is the subject
of ACC’s notice under the terms and conditions contained in said ACC’s notice
for a term expiring on the Expiration Date. Such amendment shall be subject to
the approval of SAP and Water Garden as provided in Sublease I and the Lease.
Should CSOD reject or fail to timely respond to ACC’s notice, or should Water
Garden or SAP reject the proposed amendment to this Sublease II, CSOD’s Right of
First Offer as granted by this section shall be extinguished with respect to the
portion of the Offer Space which was the subject of ACC’s notice. The foregoing
notwithstanding, in the event that ACC receives a bona fide offer to sublease
the “Offer Space,” then CSOD shall be presented with written notice of said
offer and shall have two (2) business days to match said offer. If CSOD does
match the offer, CSOD shall be entitled to lease the Offer Space subject to the
terms of that offer. If CSOD does not match the offer, then ACC will have no
further obligation to sublease the Offer Space to CSOD. Nothing in this section
shall restrict ACC’s right to enter into a termination agreement with SAP to
terminate ACC’s obligations with respect to the Offer Space under Sublease I;
nor shall ACC be obligated to offer to sublease the Offer Space in the event of
any such agreement which substantially reduces or eliminates ACC’s obligations
under Sublease I.
IN
WITNESS WHEREOF, the parties hereto have caused this Sublease II to be executed
as of the day and year first above written.
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ACCRUENT,
Inc.,
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a
Delaware corporation
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By:
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Robert
G. Pape, CFO
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[Printed
Name and Title]
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CORNRESTONE
ONDEMAND,
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a
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/s/
Adam Miller
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By:
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Adam Miller
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CEO
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[Printed
Name and Title]
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