SUBOCCUPANCY AGREEMENT
THIS Suboccupancy Agreement ("SOA") is made as of the 26th day of
February, 1997, by and between COLLEGE GOLF CENTER PARTNERSHIP, a California
general partnership (hereinafter referred to as "Sublandlord") and PALM
DESERT FAMILY GOLF CENTERS, INC., a Delaware corporation (hereinafter
collectively referred to as "Subtenant") with regard to the following facts.
RECITALS
A. Sublandlord is the "Operator" under that certain Joint Occupancy
Agreement dated June 15, 1995, as amended by that certain First Amendment
dated July 1, 1995, Second Amendment dated September 8, 1995, and Third
Amendment dated December 13, 1996 (collectively "Master Occupancy
Agreement"), with The Desert Community College District of Riverside County,
California ("District"), (a copy of which Master Occupancy Agreement is
attached hereto as Exhibit A and by this reference made a part hereof)
concerning certain Premises more particularly described in the Asset Purchase
Agreement of even date herewith, by and between Sublandlord and Subtenant
("Agreement").
B. Subtenant desires to sublease from Sublandlord the Premises and
Sublandlord has agreed to sublease the Premises to Subtenant upon the terms,
covenants and conditions herein set forth.
C. Capitalized terms used herein and otherwise defined shall have the
meaning assigned to such terms in the Agreement.
AGREEMENT
In consideration of the mutual covenants contained herein, the sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
1. Sublease. Sublandlord hereby subleases and demises to Subtenant and
Subtenant hereby hires and takes from Sublandlord the Premises.
2. Term. The Term of this SOA shall commence as of the date hereof and
shall end, unless sooner terminated as provided in the Master Occupancy
Agreement, on July 31, 2000, subject to Section 9 below.
3. Rent.
(a) Base Rent. The base rent payable under this SOA shall equal the "Fixed
Rent" payable under the Master Occupancy Agreement, provided, however,
Subtenant shall not be required to pay any installment of such base rent to
Sublandlord
unless and until Sublandlord has delivered evidence to Subtenant that
Sublandlord has paid such Base Rent to the District (i.e. Sublandlord shall
pay the District such rent in advance and Subtenant shall pay such rent to
Sublandlord in arrears). Sublandlord shall deliver Subtenant evidence of
Sublandlord's payment of each monthly Fixed Rent payment obligation to the
District at least fifteen (15) days prior to the due date thereof. If
Sublandlord fails to deliver Subtenant evidence of such payment within three
(3) business days after Subtenant's notice to Sublandlord that Subtenant has
failed to timely receive evidence of such payment, Subtenant may pay such
rent payment directly to the District. In addition to such Base Rent,
Subtenant shall pay to the District all other payments and charges payable by
Operator under the Master Occupancy Agreement, including by not limited to,
Percentage Rental as and when required to be paid under the Master Occupancy
Agreement.
(b) Overage Rent. In addition to such Fixed Rent, Subtenant shall pay to
Sublandlord, during the term hereof, overage rent in the monthly amount of
Two Hundred Thirty-Three Dollars ($233.00) which amount shall be payable to
Sublandlord, without notice, on the first day of each month during the term.
4. Master Occupancy Agreement. Subtenant and this SOA shall be subject in
all respects to the terms of, and the rights of the District under, the
Master Occupancy Agreement. Subject to Section 6 hereof, the covenants,
agreements, terms and provisions of the Master Occupancy Agreement insofar
are made a part of and incorporated into this SOA as if recited herein in
full, and Subtenant shall perform and comply with all of the covenants,
agreements, terms and provisions of Operator under the Master Occupancy
Agreement. As between the parties hereto only, in the event of a conflict
between the terms of the Master Occupancy Agreement and the terms of this
SOA, the terms of this SOA shall control.
5. Performance Under Master Occupancy Agreement.
5.1 Subtenant recognizes that Sublandlord is not in a position to render
any of the services or to perform any of the obligations required of
Sublandlord by the terms of this SOA. Therefore, subtenant shall not have
any claim against Sublandlord by reason of the District's failure or
refusal to comply with any of the provisions of the Master Occupancy
Agreement unless such failure or refusal is a result of Sublandlord's act
or failure to act. Subtenant covenants and warrants that it fully
understands and agrees to be subject to and bound by all of the covenants,
agreements, terms, provisions and conditions of the Master Occupancy
Agreement, except as modified herein. Furthermore, Subtenant and
Sublandlrod further covenant not to take any action or do or perform any
act or fail to perform any act which would result in the failure or breach
of any of the covenants, agreements, terms, provisions or conditions of
the Master Occupancy Agreement on the part of the Operator thereunder.
5.2 Sublandlord covenants as follows: (i) not to voluntarily terminate
the Master Occupancy Agreement, (ii) not to modify the Master Occupancy
Agreement,
and (iii) to take all actions reasonably necessary to preserve the Master
Occupancy Agreement.
6. Variations from Master Occupancy Agreement. The following covenants,
agreements, terms, provisions and conditions of the Master Occupancy
Agreement are hereby modified or not incorporated herein:
6.1 Rent shall be payable in the manner described in Section 3 above.
6.2 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 the
addresses set forth in the Agreement, or to such other address as may have
been designated in a notice given in accordance with the provisions of
this Section 6.2
6.3 Sublandlord shall deliver the Premises to Subtenant in its current
"as is" condition subject to the covenants, representations and warranties
set forth in the Agreement.
6.4 Subtenant shall carry all of the insurance required under the Master
Occupancy Agreement and Sublandlord shall be named as an additional
insured under its liability policy.
7. Indemnity. Subtenant hereby agrees to indemnify and hold Sublandlord
harmless from and against any and all claims, losses and damages, including,
without limitation, reasonable attorneys' fees and disbursements, which may
at any time be asserted against Sublandlord by (a) the District for failure
of Subtenant to perform any of the covenants, agreements, terms, provisions
or conditions contained in the Master Occupancy Agreement which by reason of
the provisions of this SOA Subtenant is obligated to perform, or (b) any
person by reason of Subtenant's use and/or occupancy of the Premises. The
provisions of this Section 7 shall survive the expiration or earlier
termination of the Master Occupancy Agreement and/or this SOA, except to the
extent any of the foregoing is caused by or due to the negligence or willful
misconduct of Sublandlord. Sublandlord shall indemnity and hold Subtenant
harmless from and against any and all claims, losses and damages, including
without limitation reasonable attorneys' fees and disbursements which arise
due to the negligence or willful misconduct of Sublandlord.
8. Assignment or Subletting. Subject further to all of the rights of the
District under the Master Occupancy Agreement and the restrictions contained
in the Master Occupancy Agreement and the restrictions contained in the
Master Occupancy Agreement, Subtenant shall not be entitled to assign this
SOA or to sublet all or any portion of the Premises without the prior written
consent of Sublandlord, which consent will not be unreasonably withheld,
conditioned or delayed by Sublandlord.
9. Assignment Option. For the consideration set forth below, Sublandlord
hereby grants to Subtenant the option to acquire all of Sublandlord's right,
title and interest in the Premises and the Master Occupancy Agreement
effective as of the date which is five (5) years after the date hereof. To
exercise such option, Subtenant shall give Sublandlord written notice of such
exercise on or prior to the date which five (5) years after the date hereof.
Notwithstanding the foregoing, Sublandlord shall have the right to require
Subtenant to exercise such option at any time during the term hereof upon
thirty (30) days prior written notice in which event such assignment shall
occur on or before the date which is forty-five (45) days after Sublandlord's
delivery of such notice. The consideration for such option shall equal Four
Hundred and Ninety Thousand Dollars ($490,000). Four Hundred and Forty
Thousand Dollars ($440,000) of such option consideration shall be
nonrefundable and shall be payable to Sublandlord, in cash, on the date
hereof with the remaining Fifty Thousand Dollars ($50,000) to be payable, in
cash, on the effective date of the assignment, subject to Subtenant's offset
rights set forth in Section 10 of the Agreement. Sublandlord shall execute
and deliver to Subtenant any and all documents reasonably requested by
Subtenant to evidence the assignment of all of Sublandlord's right, title and
interest in the Premises and under the Master Occupancy Agreement to
Subtenant at the time of such assignment. The obligations of this Section 9
shall survive the expiration or early termination of this SOA. Upon such
assignment, this SOA shall be null and void.
10. Severability. If any term or provision of this SOA or the application
thereof to any person or circumstances shall, to any extent, be invalid and
unenforceable, the remainder of this SOA 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 SOA shall be valid and be enforced to the fullest extent
permitted by law.
11. Entire Agreement; Waiver. This SOA and the Agreement contain 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.
12. Further Assurances. The parties hereto agree that each of them, upon
the request of the other party, shall execute and deliver, in recordable form
if necessary, such further documents, instruments or agreements and shall
take such further action that may be necessary or appropriate to effectuate
the purposes of this SOA.
13. Governing Law. This SOA shall be governed by and in all respects
construed in accordance with the internal laws of the State of California.
14. Consent of District. The validity of this SOA shall be subject to the
District's prior written consent hereto pursuant to the terms of the Master
Occupancy Agreement.
15. Counterparts. This SOA may be executed in multiple counterparts, all
of which together shall constitute one and the same agreement.
16. Quiet Enjoyment. Sublandlrod agrees that upon Subtenant paying rent
and observing and performing all obligations under this SOA Subtenant shall
quietly have, hold and enjoy the Premises without hindrance by or from
Sublandlord.
17. Remedies. Notwithstanding any rights and remedies at law or in equity,
in the event of Subtenant's default hereunder Sublandlord shall only have the
right to collect monetary damages from Subtenant. In no event shall
Sublandlord have the right to terminate this SOA.
18. Guaranty. This SOA is subject to and conditional upon Subtenant's
delivery to Sublandlord of a Guaranty of SOA in the form of Exhibit B
attached hereto, which shall be fully executed by Family Golf Centers, Inc.,
a Delaware corporation.
IN WITNESS WHEREOF, the parties hereto have caused this SOA to be executed
as of the day and year first above written.
"SUBLANDLORD"
COLLEGE GOLF CENTER PARTNERSHIP,
a California general partnership
By: Xxxx Xxxxxxxxxxx, Inc.
By:
-----------------------------
Name: Xxxx Xxxxxxxxxxx
Title: President
By: COLLEGE GOLF CENTER LLC
By: REGOLF CORP., its
member
By:
-------------------------
Name: Xxxxxx Xxxxxx
Title: President
"SUBTENANT"
PALM DESERT FAMILY GOLF CENTERS,
INC., a Delaware corporation
By:
-------------------------
Its:
By:
-------------------------
Its: