SUBLEASE
THIS SUBLEASE, dated as of April 30, 1997, is entered into by
and between ODYSSEY SPORTS, INC., a California corporation
("Sublessor") and MCHENRY METALS, an Illinois corporation
("Sublessee").
RECITALS
A. Sublessor currently leases certain premises (the
"Premises") consisting of approximately 5,799 rentable square feet
of space (reduced from 8206 square feet), as shown on Exhibit A
attached hereto, located in that certain building located at 0000
Xxxxxx Xxx Xxxxx, Xxxxxxxx, Xxxxxxxxxx (the "Building"). Sublessor
leases the Premises from Pacific Ridge Commerce Centre Associates
("Master Lessor") pursuant to that certain Standard Industrial
Lease (Multi-Tenant) dated September 15, 1993 (the "Master Lease").
An accurate and complete copy of the Master Lease is attached
hereto as Exhibit B. Except as otherwise expressly provided herein,
any capitalized terms herein without definition shall have the same
meaning as they have in the Master Lease.
B. Sublessor desires to sublease to Sublessee, and Sublessee
desires to Sublease from Sublessor, the Premises, pursuant to the
terms and provisions hereof.
Now, THEREFORE, in consideration of the covenants and
conditions contained herein, Sublessor and Sublessee agree as
follows:
AGREEMENT
1. Subleased Premises. Sublessor hereby leases to
Sublessee, and Sublessee hereby leases from Sublessor, the
Premises, subject to the following terms and conditions set forth
herein.
2. Term. The initial term of this Sublease shall commence
on May 1, 1997 (the "Commencement Date") and shall expire, unless
sooner terminated or extended pursuant to the further provisions
hereof, at 11:59 p.m. on October 31, 1998, or such earlier date as
the Master Lease may be terminated pursuant to the terms thereof.
3. Rent. Notwithstanding anything to the contrary contained
in the Master Lease relating to Rent, Sublessee shall pay to
Sublessor fixed monthly rent ("Rent") as provided below.
(a) Commencing on the Commencement Date and continuing
thereafter through October 31, 1997, Sublessee shall pay to
Sublessor as monthly Rent for the Premises on the first day of each
calendar month, the sum of $4,260.73, which sum includes the
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following monthly charges: $3.363/42 for Base Rent ("Base Rent"),
$120.00 for water/trash services, and $777.31 for Operating
Expenses charges applicable to the Premises. The foregoing amount
does not include any charges for utilities which Sublessee shall
pay directly as provided in Section 9 hereof. If the term of this
Sublease commences on a day other than the first day of a calendar
month or if the term of this Sublease terminates on a day other
than the last day of a calendar month, the Rent for such first or
last month of the term of the Sublease, as the case may be, shall
be prorated based on the number of days the term of this Lease is
in effect during such month.
(b) In addition, effective as of November 1, 1997, Rent may
be increased as provided in Section 5 of the Addendum to the Lease.
Charges for water/trash services and Operating Expenses may also
increase as provided in Section 5 of the Addendum to Lease.
Sublessee shall pay all increases in such charges commencing on
November 1, 1997.
(c) Sublessee shall pay, as additional rent ("Additional
Rent") within ten (10) days after demand, all other amounts payable
by Sublessor under the Master Lease which are incurred at the
request of Sublessee or which are applicable to the Premises. It
is the intent of the parties that Sublessee shall pay all costs and
expenses relating to the Premises which arise under the Master
Lease, whether or not such costs and expenses are specifically
referred to herein.
(d) Rent shall be payable to Sublessor, in advance, in lawful
money of the United States, without prior notice, demand, or
offset, on or before the first day of each calendar month during
the term hereof.
(e) In the event of any casualty or condemnation affecting
the Premises, Rent payable by Sublessee shall be abated hereunder,
but only to the extent that Rent under the Master Lease is abated.
Sublessee waives any right to terminate the Sublease in connection
with such casualty or condemnation except to the extent the Master
Lease is also terminated as to the Premises or any portion thereof.
4. Condition of the Premises/Tenant Improvements. Sublessee
has inspected the Premises and agrees to accept the Premises "where
is, as is" without any obligation on the part of Sublessor to
modify, improve or otherwise prepare the Subleased Premises for
Sublessee's occupancy, except as hereinafter provided. Sublessor,
at its expense, shall (a) clean carpets, (b) paint walls, and (c)
provide such additional maintenance as is mutually agreed upon to
deliver Premises in presentable, broom-clean condition.
5. Use. Sublessee may use the Premises for the manufacture,
storage and distribution of golf products.
6. Master Lease. This Sublease shall be subject and
subordinate to all of the terms and provisions of the Master Lease.
Except for payments of Rent (which payments shall be made by
Sublessor and as otherwise expressly provided herein), Sublessee
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hereby assumes and agrees to perform for Sublessor's benefit,
during the term of this Sublease, all of Sublessor's obligations
under the Master Lease (hereinafter the "Assumed Obligations").
7. Incorporation of Master Lease. Except as provided below,
all of the terms and provisions of the Master Lease are
incorporated into and made a part of this Sublease and the rights
and obligations of the parties under the Master Lease are hereby
imposed upon the parties hereto with respect to the Premises, the
Sublessor being substituted for the "Landlord" in the Master Lease,
the Sublessee being substituted for the "Tenant" in the Master
Lease, and this Sublease being substituted for the "Lease" in the
Master Lease. Notwithstanding the foregoing, the following
Paragraphs of the Master Lease are not incorporated herein:
Paragraphs 3, 5, 8.2, 9 (excepting therefrom 9.6 and 9.7), 12.2,
38, and 39 and Addendum. The parties specifically agree that any
provisions relating to any construction obligations of "Landlord"
under the Master Lease with respect to construction which occurred
or was to have occurred prior to the Commencement Date hereof, are
hereby deleted.
Notwithstanding the provisions of the preceding paragraph, for
the purposes of incorporating the terms and provisions of the
Master Lease into this Sublease, the Master Lease is hereby amended
as follows:
(a) Insurance. With respect to Sublessee's insurance
obligations under Paragraphs 8 of the Master Lease, Sublessee's
policies of liability insurance shall name Master Lessor and its
property manager, as well as Sublessor, as additional insurers.
(b) Default. The three (3) day cure period provided for rent
defaults in Paragraph 13. 1 (b) is reduced to one (1) day and the
thirty (30) day cure period provided for defaults other than Rent
is reduced from thirty (30) days to twenty (20) days.
(c) Notices. The addresses specified in Paragraph 23 for
receipt of notices to each of the parties are deleted and replaced
with the following:
To Sublessor at: Odyssey Sports, Inc.
0000 Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
To Sublessee at: XxXxxxx Metals
0000 Xxxxxx Xxx Xxxxx
Xxxxxxxx, XX
Attn: Xxx Xxxxxx
Vice President of Finance
(d) Sublessor's Liability. With respect to Paragraph 17, the
following language is added at the end of said section:
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Notwithstanding any other term or provision of this Sublease,
the liability of Sublessor for its obligations under this
Sublease is limited solely to Sublessor's interest in the
Master Lease, and no personal liability shall at any time be
asserted or enforceable against any other assets of Sublessor
or against Sublessor's stockholders, directors, officers or
partners on account of any of Sublessor's obligations or
actions under this Sublease.
8. Sublessor's Obligations.
(a) Provided Sublessee is not in default under the terms of
this Sublease, Sublessor agrees to make timely payments of the Base
Rent and Additional Rent due under the Master Lease to the end that
the Master Lease shall not be terminated due to the default of
Sublessor.
(b) To the extent that the provision of any services or the
performance of any maintenance or any other act (collectively
"Master Lessor Obligations") is the responsibility of Master
Lessor, Sublessor, upon Sublessee's request, shall make reasonable
efforts to cause Master Lessor to perform such Master Lessor
Obligations; provided, however, that in no event shall Sublessor be
liable to Sublessee for any liability, loss or damage whatsoever in
the event that Master Lessor should fail to perform the same, nor
shall Sublessee be entitled to withhold the payment of Base Rent or
terminate this Sublease.
(c) Except as provided in this Paragraph 8, Sublessor shall
have no other obligations to Sublessee with respect to the Premises
or the performance of the Master Lease Obligations. Sublessee
acknowledges that Sublessor is not in a position to furnish the
services set forth in the Master Lease, obtain a nondisturbance
agreement, or to perform certain other obligations which are not
within Sublessor's control, including but not limited to,
maintenance, repairs and replacements, compliance with laws, and
restoration of the Premises after casualty or condemnation.
9. Utilities. Sublessee agrees to have all utilities
serving the Premises billed directly to Sublessee in Sublessee's
name and Sublessee shall pay the cost of any such utilities
directly to such utility company or service provider.
10. Early Termination of Master Lease. If, without the fault
of Sublessor or Sublessee, the Master Lease should terminate prior
to the expiration of this Sublease, neither party shall have any
liability to the other party. To the extent that the Master Lease
grants Sublessor any discretionary right to terminate the Master
Lease, whether due to casualty, condemnation, or otherwise,
Sublessor shall be entitled to exercise or not exercise such right
in its complete and absolute discretion.
11. Consent of Master Lessor. If Sublessee desires to take
any action which requires the consent of Master Lessor pursuant to
the terms of the Master Lease, including, without limitation,
making any alterations or entering into a further sublease or
assignment of this Sublease, then, notwithstanding anything to the
contrary herein, (a) Sublessor shall have the same rights of
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approval or disapproval as Master Lessor has under the Master
Lease, (b) Sublessee shall not take any such action until it
obtains the consent of both Sublessor and Master Lessor, and (c)
Sublessee shall request that Sublessor obtain Master Lessor's
consent on Sublessee's behalf, unless Sublessor agrees that
Sublessee may contact Master Lessor directly with respect to the
specific action for which Master Lessor's consent is required.
12. Surrender of Premises. Upon the termination of the
Sublease, Sublessee shall surrender the Premises to Sublessor
broom-clean and in the same condition as on the Commencement Date,
ordinary wear and tear excepted. In addition, Sublessor may
require Sublessee to remove any alterations, additions and
improvements (whether or not made with Sublessor's consent) prior
to the termination of the Sublease and to restore the Premises to
its prior condition, normal wear and tear excepted, repairing all
damage caused by or related to any such removal, all at Sublessee's
expense.
13. No Third Party Rights. The benefit of tile provisions of
this Sublease is expressly limited to Sublessor and Sublessee and
their respective permitted successors and assigns. Under no
circumstances will any third party be construed to have any rights
as a third party beneficiary with respect to any of said
provisions; provided, however, that Master Lessor shall be entitled
to the benefit of Sublessee's assumption of Sublessor's
obligations, as "Tenant" under the Master Lease, pursuant to
Paragraph 6 above.
14. Time of Essence. It is expressly understood and agreed
that time is of the essence with respect to each and every
provision of this Sublease.
15. Attorneys Fees. If any action or proceeding at law or in
equity shall be brought to enforce or interpret any of the
provisions of this Sublease, the prevailing party shall be entitled
to recover from the other party its reasonable attorneys' fees and
costs incurred in connection with the prosecution or defense of
such action or proceeding.
16. Approval of Master Lessor. This Sublease shall be
conditioned upon, and shall not take effect until, receipt of the
written approval of Master Lessor thereto. Upon receipt of such
approval, this Sublease shall be effective as of the date first
written above.
IN WITNESS WHEREOF, the parties have executed this Sublease as
of the date first written above.
"SUBLESSOR" "SUBLESSEE"
ODYSSEY SPORTS, INC., McHENRY METALS,
a California corporation an Illinois corporation
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CONSENT OF MASTER LESSOR
PACIFIC RIDGE COMMERCE CENTRE ASSOCIATES, a "Master Lessor"
under the Master Lease identified in that certain Sublease dated as
of April 30, 1997 to which this Consent is attached, hereby
consents to said Sublease. This Consent shall not be deemed to
relieve Sublessor, as Tenant under the Master Lease, from any
obligation or liability thereunder, nor shall this Consent be
deemed Master Lessor's consent to any further subletting or
assignment.
MASTER LESSOR:
PACIFIC RIDGE COMMERCE CENTRE ASSOCIATES
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ADDENDUM TO SUBLEASE
This Addendum is made to that certain Sublease by and between
Odyssey Sports, Inc., a California corporation ("Sublessor") and
McHenry Metals, Inc., an Illinois corporation ("Sublessee"), dated
as of April 30, 1997, (the "Sublease"), and the parties further
agree as follows:
1. At Sublessee's option, Sublessor shall exercise its
option to extend the term of the Master Lease in accordance with
the terms of the Master Lease and Addendum thereto, subject to the
following terms and conditions:
a. Sublease shall give Sublessor written notice of its
request to exercise such option not less than sixty (60) days prior
to the expiration of the initial term of the Master Lease;
b. Sublessee shall not be in default of any of the terms of
the Sublease or the obligations of the Master Lease assumed by
Sublessee;
c. Upon exercise of such option by Sublessor, Sublessee
shall assume all obligations of Sublessor under the Master Lease;
d. Sublessee shall pay to Sublessor any security deposit or
unused prepaid rent paid to the Master Lessor; and
e. The Master Lessor shall, upon exercise of such option,
consent to assignment of the Master Lease to Sublessee and the full
release of Sublessor from all of its obligations thereunder.
2. Capitalized terms not otherwise defined in this Addendum
shall have the meanings defined in the Sublease.
IN WITNESS WHEREOF this Addendum has been executed as of this
30th day of April, 1997.
SUBLESSOR SUBLESSEE
ODYSSEY SPORTS, INC. XxXXXXX METALS, INC.
