[LOGO] AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION
STANDARD SUBLEASE
(LONG-FORM TO BE USED WITH PRE-1996 AIR LEASES)
1. PARTIES. This Sublease, dated, for reference purposes only, June
15, 1998, is made by and between ROCKSHOX, INC., a Delaware corporation
("Sublessor") and Media Arts Group, Inc., a Delaware corporation
("Sublessee").
2. PREMISES. Sublessor hereby subleases to Sublessee and Sublessee
hereby subleases from Sublessor for the term, at the rental, and upon all of
the conditions set forth herein, those certain premises including all
improvements therein, and commonly known by the street address of 000 Xxxxxxx
Xxxxxx, Xxxx xx Xxx Xxxx, Xxxxxx of Santa Xxxxx, State of California
consisting of approximately 35,512 square feet of gross leasable area and
more particularly described in the Master Lease (as hereinafter defined)
("PREMISES").
3. TERM.
3.1 TERM. The term of this Sublease shall be for thirty-two
(32) months and twelve (12) days commencing on August 20, 1998, and ending
on April 30, 2001 unless sooner terminated pursuant to any provision hereof.
3.2 DELAY IN COMMENCEMENT. Sublessor agrees to use commercially
reasonable efforts to deliver possession of the Premises by the commencement
date. If, despite said efforts, Sublessor is unable to deliver possession as
agreed, Sublessor shall not be subject to any liability therefor, nor shall
such failure affect the validity of this Sublease. Sublessee shall not,
however, be obligated to pay Rent or perform its other obligations until it
receives possession of the Premises. If possession is not delivered within
sixty days after the commencement date. Sublessee may, at its option, by
notice in writing within ten days after the end of such sixty day period,
cancel this Sublease, in which event the Parties shall be discharged from all
obligations hereunder. If such written notice is not received by Sublessor
within said ten day period, Sublessee's right to cancel shall terminate.
Except as otherwise provided, if possession is not tendered to Sublessee when
required and Sublessee does not terminate this Sublease, as aforesaid, any
period of rent abatement that Sublessee would otherwise have enjoyed shall
run from the date of delivery of possession and continue for a period equal
to what Sublessee would otherwise have enjoyed under the terms hereof, but
minus any days of delay caused by the acts or omissions of Sublessee. If
possession is not delivered within 120 days after the commencement date, this
Sublease shall automatically terminate unless the Parties agree, in writing,
to the contrary.
4. RENT.
4.1 BASE RENT. Sublessee shall pay to Sublessor as Base Rent for
the Premises equal monthly payments of $21,307.20 in advance, on the first
day of each month of the term hereof; provided, however, that Sublessee shall
pay Sublessor upon the execution hereof $21,307.20 as Base Rent for the
period August 20, 1998, through September 19, 1998, and on September 1, 1998,
shall pay the Base Rent for the period September 20, 1998, through September
30, 1998, of $7,812.64. Base Rent for any period during the term hereof which
is for less than one month shall be a pro rata portion of the monthly
installment.
4.2 RENT DEFINED. All monetary obligations of Sublessee to
Sublessor under the terms of this Sublease (except for the Security Deposit)
are deemed to be rent ("RENT"). Rent shall be payable in lawful money of the
United States to Sublessor at the address stated herein or to such other
persons or at such other places as Sublessor may designate in writing.
5. SECURITY DEPOSIT. Sublessee shall deposit with Sublessor upon
execution hereof $21,307.20 as security for Sublessee's faithful performance
of Sublessee's obligations hereunder. If Sublessee fails to pay Rent or other
charges due hereunder, or otherwise defaults with respect to any provision of
this Sublease, Sublessor may use, apply or retain all or any portion of said
deposit for the payment of any Rent or other charge in default or for the
payment of any other sum to which Sublessor may became obligated by reason of
Sublessee's default, or to compensate Sublessor for any loss or damage which
Sublessor may suffer thereby. If Sublessor so uses or applies all or any
portion of said deposit, Sublessee shall within ten days after written demand
therefore forward to Sublessor an amount sufficient to restore said Deposit
to the full amount provided for herein and Sublessee's failure to do so shall
be a material breach of this Sublease. Sublessor shall not be required to
keep said Deposit separate from its general accounts. If Sublessee performs
all of Sublessee's obligations hereunder, said Deposit, or so much thereof as
has not therefore been applied by Sublessor, shall be returned, without
payment of interest to Sublessee (or at Sublessor's option, to the last
assignee, if any, of Sublessee's interest hereunder) at the expiration of the
term hereof, and after Sublessee has vacated the Premises. No trust
relationship is created herein between Sublessor and Sublessee with respect
to said Security Deposit.
6. USE.
6.1 AGREED USE. The Premises shall be used and occupied only for
uses permitted by the Master Lease, and for no other purpose.
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6.3 ACCEPTANCE OF PREMISES AND LESSEE. Sublessee acknowledges that:
(a) It has been advised to satisfy itself with respect to the
condition of the Premises (including but not limited to the electrical, HVAC
and fire sprinkler systems, security, environmental aspects, and compliance
with legal requirements, and their suitability for Sublessee's intended use,
(b) Sublessee has made such investigation as it deems necessary
with reference to such matters and assumes all responsibility therefor as the
same relate to its occupancy of the Premises, and
(c) neither Sublessor, Sublessor's agents, nor any Broker has
made any oral or written representations or warranties with respect to any
matters other than as expressly set forth in this Sublease, and without
reference to the Master Lease.
In addition, Sublessor acknowledges that:
(a) Broker has made no representations, promises or warranties
concerning Sublessee's ability to honor the Sublease or suitability to occupy
the Premises, and
(b) it is Sublessor's sole responsibility to investigate the
financial capacity and/or suitability of all proposed tenants.
7. MASTER LEASE
7.1 Sublessor is the lessee of the Premises by virtue of a
lease, hereinafter the "MASTER LEASE", a copy of which is attached hereto
marked Exhibit 1, dated March 26, 1996, together with Summary of Basic Lease
Terms and Exhibits A, E, F, H, I, and J attached thereto, and First Addendum
to Lease dated March 26, 1996, wherein AMB Property, L.P., a Delaware limited
partnership (successor in interest to AMB Property, L.P., a Delaware limited
partnership) is the lessor, hereinafter the "MASTER LESSOR".
7.2 This Sublease is and shall be at all times subject and
subordinate to the Master Lease.
7.3 The terms, conditions and respective obligations of
Sublessor and Sublessee to each other under this Sublease shall be the terms
and conditions of the Master Lease except for those provisions of the Master
Lease which are directly contradicted by this Sublease in which event the
terms of this Sublease document shall control over the Master Lease.
Therefore, for the purposes of this Sublease, wherever in the Master Lease
the word "Lessor" is used it shall be deemed to mean the Sublessor herein and
wherever in the Master Lease the word "Lessee" is used it shall be deemed
to mean the Sublessee herein.
7.4 During the term of this Sublease and for all periods
subsequent for obligations which have arisen prior to the termination of this
Sublease, Sublessee does hereby expressly assume and agree to perform and
comply with, for the benefit of Sublessor and Master Lessor, each and every
obligation of Sublessor under the Master Lease except for the following
paragraphs which are excluded therefrom: None.
7.5 The obligations that Sublessee has assumed under paragraph
7.4 hereof are hereinafter referred to as the "SUBLESSEE'S ASSUMED
OBLIGATIONS". The obligations that sublessee has not assumed under paragraph
7.4 hereof are hereinafter referred to as the "SUBLESSOR'S REMAINING
OBLIGATIONS".
7.6 Sublessee shall hold Sublessor free and harmless from all
liability, judgments, costs, damages, claims or demands, including reasonable
attorneys fees and costs arising out of Sublessee's failure to comply with or
perform Sublessee's Assumed Obligations.
7.7 Sublessor agrees to maintain the Master Lease during the
entire term of this Sublease, subject, however, to any earlier termination of
the Master Lease without the fault of the Sublessor, and to comply with or
perform Sublessor's Remaining Obligations and to hold Sublessee free and
harmless from all liability, judgments, costs, damages, claims or demands
arising out of Sublessor's failure to comply with or perform Sublessor's
Remaining Obligations.
7.8 Sublessor represents to Sublessee that the Master Lease is
in full force and effect and that to Sublessor's actual knowledge no default
exists on the part of any Party to the Master Lease.
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9. CONSENT OF MASTER LESSOR.
9.1 In the event that the Master Lease requires that Sublessor
obtain the consent of Master Lessor to any subletting by Sublessor then, this
Sublease shall not be effective unless, prior to July 15, 1998, Master Lessor
signs a consent to this Subletting.
9.3 In the event that Master Lessor does give such consent then:
(a) Such consent shall not release Sublessor of its
obligations or alter the primary liability of Sublessor to pay the Rent and
perform and comply with all of the obligations of Sublessor to be performed
under the Master Lease.
(b) The acceptance of Rent by Master Lessor from Sublessee or
anyone else liable under the Master Lease shall not be deemed a waiver by
Master Lessor of any provisions of the Master Lease.
(c) The consent to this Sublease shall not constitute a
consent to any subsequent subletting or assignment.
(d) In the event of any Default of Sublessor under the Master
Lease, Master Lessor may proceed directly against Sublessor, any guarantors
or anyone else liable under the Master Lease or this Sublease without first
exhausting Master Lessor's remedies against any other person or entity liable
thereon to Master Lessor.
(f) In the event that Sublessor shall Default in its
obligations under the Master Lease, then Master Lessor, at its option and
without being obligated to do so, may require Sublessee to attorn to Master
Lessor in which event Master Lessor shall undertake the obligations of
Sublessor under this Sublease from the time of the exercise of said option to
termination of this Sublease but Master Lessor shall not be liable for any
prepaid Rent nor any Security Deposit paid by Sublessee, nor shall Master
Lessor be liable for any other Defaults of the Sublessor under the Sublease.
9.6 In the event that Sublessor Defaults under its obligations to
be performed under the Master Lease by Sublessor, Master Lessor agrees to
deliver to Sublessee a copy of any such notice of default. Sublessee shall
have the right to cure any Default of Sublessor described in any notice of
default within ten days after service of such notice of default on Sublessee.
If such Default is cured by Sublessee then Sublessee shall have the right of
reimbursement and offset from and against Sublessor.
11. ATTORNEY'S FEES. If any party named herein brings an action to
enforce the terms hereof or to declare rights hereunder, the prevailing party
in any such action, on trial and appeal, shall be entitled to his reasonable
attorney's fees and costs to be paid by the losing party as fixed by the
Court.
12. ADDITIONAL PROVISIONS. [If there are no additional provisions, draw
a line from this point to the next printed word after the space left here. If
there are additional provisions place the same here.] The Rider attached
hereto and of even date herewith is incorporated herein by reference.
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ATTENTION: NO REPRESENTATION OR RECOMMENDATION IS MADE BY THE AMERICAN
INDUSTRIAL REAL ESTATE ASSOCIATION OR BY ANY REAL ESTATE BROKER AS TO THE
LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCES OF THIS SUBLEASE OR THE
TRANSACTION TO WHICH IT RELATES. THE PARTIES ARE URGED TO:
1. SEEK ADVICE OF COUNSEL AS TO THE LEGAL AND TAX CONSEQUENCES OF THIS
SUBLEASE.
2. RETAIN APPROPRIATE CONSULTANTS TO REVIEW AND INVESTIGATE THE CONDITION OF
THE PREMISES. SAID INVESTIGATION SHOULD INCLUDE BUT NOT BE LIMITED TO: THE
POSSIBLE PRESENCE OF HAZARDOUS SUBSTANCES, THE ZONING OF THE PROPERTY, THE
STRUCTURAL INTEGRITY, THE CONDITION OF THE ROOF AND OPERATING SYSTEMS, AND
THE SUITABILITY OF THE PREMISES FOR SUBLESSEE'S INTENDED USE.
WARNING: IF THE SUBJECT PROPERTY IS LOCATED IN A STATE OTHER THAN CALIFORNIA,
CERTAIN PROVISIONS OF THE SUBLEASE MAY NEED TO BE REVISED TO COMPLY WITH THE
LAWS OF THE STATE IN WHICH THE PROPERTY IS LOCATED.
Executed at: San Jose CA ROCKSHOX, INC., a Delaware corporation
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on: 7-9-98 By /s/ Xxxxxxx X. Xxxxxx CFO
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Address: 000 Xxxxxxx Xxx By
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"Sublessor" (Corporate Seal)
Executed at: MEDIA ARTS GROUP, INC., a Delaware corporation
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on: By /s/ [Xxx Xxxxxxxx] CEO
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Address: By
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"Sublessor" (Corporate Seal)
NOTE: THESE FORMS ARE OFTEN MODIFIED TO MEET CHANGING REQUIREMENTS OF LAW
AND NEEDS OF THE INDUSTRY. ALWAYS WRITE OR CALL TO MAKE SURE YOU ARE
UTILIZING THE MOST CURRENT FORM: AMERICAN INDUSTRIAL REAL ESTATE ASSOCIATION,
000 XX. XXXXXX XX., XXXXX 000, XXX XXXXXXX, XX 00000. (000) 000-0000.
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