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EXHIBIT 20.01
SIXTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE
THIS SIXTH AMENDMENT TO AGREEMENT OF PURCHASE AND SALE (the "Sixth
Amendment") is made as of this 18th day of August, 1996, by and between
CALIFORNIA JOCKEY CLUB, a Delaware corporation ("Seller"), and PROPERTY
RESOURCES, INC., a California corporation ("Buyer").
RECITALS:
Effective as of May 31, 1995, Buyer and Seller entered into that certain
Agreement of Purchase and Sale (the "Purchase Agreement"), under the terms of
which Buyer agreed to acquire, and Seller agreed to convey, certain real
property located in San Mateo, California, as more particularly described in the
Purchase Agreement. On June 21, 1995, Buyer and Seller entered into that
certain First Amendment to Agreement of Purchase and Sale (the "First
Amendment"). On December __, 1995, Buyer and Seller entered into that certain
Second Amendment to Agreement of Purchase and Sale (the "Second Amendment"). On
January 31, 1996, Buyer and Seller entered into that certain Third Amendment to
Agreement of Purchase and Sale (the "Third Amendment"). On March 18, 1996,
Buyer and Seller entered into that certain Fourth Amendment to Agreement of
Purchase and Sale (the "Fourth Amendment"). On April ____, 1996, Buyer and
Seller entered into that certain Fifth Amendment to Agreement of Purchase and
Sale (the "Fifth Amendment"). Buyer and Seller now desire to further amend the
Purchase Agreement in several respects.
NOW, THEREFORE, Buyer and Seller hereby agree as follows:
1. All defined terms as used in this Sixth Amendment shall have the same
meanings as set forth in the Purchase Agreement, unless otherwise specifically
set forth herein.
2. Section 2.01(a) of the Purchase Agreement is hereby amended in its
entirety to read as follows:
The total purchase price for the Property (the "Purchase Price") shall
be in an amount equal to the sum of (i) the product of (A) Six Hundred
Fifty-Three Thousand Four Hundred Dollars ($653,400.00); and (B) the number
of Net Acres (as hereinafter defined) in the Subject Real Property; and
(ii) Four Million Nine Hundred Fifty Thousand Dollars ($4,950,000.00).
3. Section 2.02(c) of the Purchase Agreement is hereby amended in its
entirety to read as follows:
In addition, the Purchase Price payable at the Close of Escrow shall
be further increased or decreased (as the case may be) subject to the
terms, provisions and limitations as set forth in Section 7.02, by
forty-four percent (44%) of the difference between (i) the actual cost of
the Off-Site Improvements (as hereinafter defined) as set forth on Seller's
fixed price contracts for such Off-Site Improvements; and (ii) Eleven
Million Dollars ($11,000,000.00) (the "Base Amount"). The cost of the
Off-Site Improvements shall include engineering and other associated costs
reasonably and actually incurred in connection with the design and
construction of the Off-Site Improvements.
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4. The first paragraph of Section 2.03 of the Agreement is hereby amended
as follows:
The Close of Escrow shall occur on the three hundred thirtieth (330th)
calendar day following the date the Entitlements are granted by the City of
San Mateo as provided in Section 3.02 below; provided that Buyer's
obligation to close Escrow is expressly subject to and conditioned upon:
(a) Buyer's receipt of satisfactory evidence that Seller has posted the
requisite security as described in Section 7.02; (b) the City of San Mateo
has confirmed in conjunction with the grant of the Entitlements that it
will issue grading, foundation and/or building permits to Buyer
notwithstanding that the Off-Site Improvements are not completed (the
"Permit Confirmation"); (c) the City of San Mateo has confirmed in
conjunction with the grant of the Entitlements that it will issue
Certificates of Occupancy to Buyer for not less than six hundred sixty
thousand (660,000) square feet of office space notwithstanding that
construction of the Off-Ramp may not be completed (the "Occupancy
Confirmation"); and (d) Seller has complied with all of the other terms and
provisions of this Agreement. If Seller elects, in accordance with Article
XII below, to effect the transfer of the Property to Buyer as part of a
tax-free exchange of the Training Facility (as hereinafter defined in
Article XII), then the Close of Escrow shall occur on the later of (x) the
three hundred thirtieth (330th) calendar day following the date the
Entitlements are granted by the City of San Mateo as provided in Section
3.02 below, and (y) five (5) business days following the date of
substantial completion of construction of the Training Facility; provided
that Buyer's obligation to close Escrow is expressly subject to and
conditioned upon: (1) Buyer's receipt of satisfactory evidence that Seller
has posted the requisite security as described in Section 7.02; (2) Buyer's
receipt of the Permit Confirmation; (3) Buyer's receipt of the Occupancy
Confirmation; and (4) Seller's compliance with all of the other terms and
provisions of this Agreement. In either case, if Buyer has not received
either the Permit Confirmation or the Occupancy Confirmation by the date
Close of Escrow would otherwise occur, Buyer shall either waive receipt of
same or terminate this Agreement.
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5. In accordance with Section 2.03(a) of the Purchase Agreement, Seller
hereby agrees to cause to be removed, on or before the Close of Escrow, Item 4
as shown on Schedule B (Part II) of the Pro Forma. Buyer hereby waives its
objection to Item 10 as shown on Schedule B (Part II) of the Pro Forma. In
addition, Seller shall advise Buyer in writing, on or before August 31, 1996,
whether Seller agrees to remove Items 5, 6 and 7 as shown on Schedule B (Part
II) of the Pro Forma.
6. Section 3.02 of the Purchase Agreement (as amended by Section 6 of the
Second Amendment) is hereby amended to provide that the Entitlements Timetable
shall be in the form attached hereto as Exhibit "A", which Entitlements
Timetable is hereby incorporated into the Purchase Agreement by this reference.
Section 3.02 of the Purchase Agreement is hereby further amended to provide that
the Entitlement Procurement Date shall mean March 17, 1997.
7. Section 6.06 of the Purchase Agreement is hereby amended by the
deletion of the third (3rd) sentence thereof.
8. Section 7.01 of the Purchase Agreement is hereby amended to provide
that, so long as the Entitlements Procurement Date is not delayed, Buyer hereby
consents to (a) Seller's prosecution of the Alternative Land Use Program for
Parcel 3 as set forth on Exhibit "B" attached hereto; and (b) the construction
of one (1) or more barns containing up to two hundred ten (210) stalls on the
Race Track.
9. Section 3.06 of the Purchase Agreement is hereby deleted in its
entirety.
10. Section 7.02 of the Purchase Agreement is hereby amended in its
entirety to read as follows:
7.02. Off-Site Improvements. Seller shall be responsible, at its
sole cost and expense, to construct all Off-Site Improvements which are
required by the City of San Mateo and the State of California as a
condition to the grant of the Entitlements. Seller covenants and agrees to
complete all such Off-Site Improvements (other than the Off-Ramp, but
including the Retention Basin as described in Section 14.11 of the
Agreement) not later than the second (2nd) anniversary of the date of the
grant of the Entitlements (subject to the effect of any events of Force
Majeure (as hereinafter defined). Seller shall commence the surcharging of
Saratoga Drive (and shall diligently prosecute such surcharging to
completion) not later than thirty (30) calendar days following the grant of
the Entitlements. Until such time as the Off-Site Improvements are
complete, Buyer shall have the right to utilize all available traffic
capacity/trip generation allocable to the Subject Real Property and to
Parcel 3. For purposes of this Section 7.02, the term "Force Majeure"
shall mean a delay or impediment in completing the Off-Site Improvements
caused by reason of strikes, lockouts, labor troubles, inability to procure
materials, failure of power, riots, insurrection, war, fire, casualty,
earthquake, acts of God or other reason of a like nature not the fault of
Seller. Seller shall immediately advise Buyer in writing if Seller asserts
the occurrence of an event of Force Majeure. If Seller is delayed in
completing such Off-Site Improvements for reasons other than Force Majeure,
Buyer shall not have a remedy for monetary damages against Seller unless
such delay materially adversely affects Buyer's development timetable. In
addition, Seller covenants and agrees to complete the Off-Ramp not later
than December 31, 1999, subject to the effect of any event of Force
Majeure. If any of the Off-Site Improvements (including the Off-Ramp and
the Retention Basin) are not completed as of the Close of Escrow, then
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Seller shall post with Buyer security in an amount equal to one hundred
twenty-five percent (125%) of the reasonably estimated cost to complete the
Off-Site Improvements, which security shall be in the form of an
irrevocable standby letter of credit, set-aside letter from Seller's bank
or surety bond; provided, however, that if, as a condition to the grant of
the Entitlements, the City of San Mateo and/or the State of California
requires that Seller post with such governmental authority adequate
security assuring the completion of all of the required Off-Site
Improvements, then Seller shall not be required to post any such additional
security with Buyer. For purposes of this Agreement, such Off-Site
Improvements shall be deemed to be completed when such Off-Site
Improvements are accepted by the City of San Mateo or the State of
California. Seller shall be solely responsible for the cost of, and Buyer
shall have no contribution obligation with respect to, any warranty
required with respect to the Off-Site Improvements by the City of San Mateo
and/or the State of California.
(a) In addition, Seller hereby represents, warrants and covenants to
Buyer (which representation, warranty and covenant shall survive the Close
of Escrow), that in no event shall the sum of the payments made by Buyer
pursuant to Section 2.02(c) of the Purchase Agreement together with any
comparable sums paid to Seller by the purchaser(s) of Parcel 3, exceed one
hundred percent (100%) of the cost of the Off-Site Improvements.
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(b) The Off-Site Improvements shall include construction of the
proposed pedestrian path (including, but not limited to, the cost of
paving, lighting and landscaping) from Saratoga Drive to the southwesterly
boundary line of the Race Track. Seller's Deed to Buyer for the Subject
Real Property may contain a reservation for an easement over such
pedestrian path appurtenant to the Race Track and Parcel 3.
(c) Seller and Buyer hereby further agree that, notwithstanding the
parties' agreement as set forth herein with respect to the allocation of
responsibility for the cost of the Off-Site Improvements, any fee credits
or offsets received from the City of San Mateo (including, but not limited
to, any credits against the City's Transportation Improvements Fee) shall
be apportioned between the Subject Real Property and Parcel 3 in a manner
reasonably intended to eliminate the applicable fee burden on both
properties. Where the development on either property does not generate any
fee burden, any fee credit or offset received from the City of San Mateo
shall be retained and utilized solely by the property subject to any such
fee.
(d) If the City of San Mateo, the County of San Mateo, the State of
California or any other third party (exclusive of any purchaser of Parcel
3) makes a financial contribution toward the cost of the Off-Site
Improvements such that the net cost to Seller of the Off-Site Improvements
is less than the Base Amount, Buyer shall be entitled to receive a credit
against the Purchase Price in an amount equal to forty-four percent (44%)
of the difference between the Base Amount and the net cost to Seller of the
Off-Site Improvements. Seller, at its option, may assign the construction
contracts for the Off-Site Improvements (collectively, the "Improvement
Contracts") to Buyer, as of the Close of Escrow, in which event Buyer shall
assume the obligation to complete the Off-Site Improvements and the
Purchase Price, rather than being increased or decreased as provided in
Section 2.02(c), shall be adjusted as follows:
(i) The percentage of work completed under the Improvement Contracts
shall be determined reasonably and in good faith by Seller and Buyer
and multiplied by forty-four percent (44%) of the fixed prices set
forth therein (the "Contract Sum"), said product being referred to
herein as the "Partial Completion Value";
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(ii) The Purchase Price shall be increased by the amount, if any, by which
the Partial Completion Value exceeds Four Million Nine Hundred Fifty
Thousand Dollars ($4,950,000.00) or decreased by the amount, if any,
by which Four Million Nine Hundred Fifty Thousand Dollars
($4,950,000.00) exceeds the Partial Completion Value.
Concurrently with the Close of Escrow, Seller shall pay the balance of the
Partial Completion Value to the contractors performing the Improvement
Contracts (the "Improvement Contractors"). Thereafter, except as provided
below, as payments are called for under the Improvement Contracts, Buyer
shall pay forty-four percent (44%) thereof to the Improvement Contractors
and Seller shall pay the remaining fifty-six percent (56%). As security
for Seller's obligation to fund the remaining fifty-six percent (56%) of
the Contract Sum (the "Unfunded Balance"), concurrently with the Close of
Escrow, Seller shall, at its election, do one of the following:
(1) deposit with an independent third party reasonably acceptable to
Buyer an amount equal to the Unfunded Balance;
(2) deliver to Buyer security in an amount equal to the Unfunded
Balance, which security shall be in the form of an irrevocable
standby letter of credit or set-aside letter from Seller's bank;
or
(3) accept from Buyer in partial satisfaction of the Purchase Price a
promissory note (the "Note") from Buyer (as secured by a deed of
trust recorded against the Subject Real Property) in an amount
equal to the Unfunded Balance, accruing interest at the then
Applicable Federal Rate and with the entire unpaid balance of
principal and accrued interest due and payable on the earlier to
occur of (A) the second anniversary of the Close of Escrow; and
(B) payment by Seller in full of the Unfunded Balance. The Note
shall provide that Buyer may off-set against any sums due Seller
thereunder any reimbursements by Seller of the Unfunded Balance
which are not timely paid to Buyer, and shall otherwise contain
customary terms and provisions.
Seller may delegate its payment obligation to the Improvement Contractors
with respect to Parcel 3 to the party then in contract with Seller to
purchase Parcel 3 (the "Parcel 3 Purchaser"), in which event following the
Close of Escrow and such delegation, as payments are called for under the
Improvement Contracts, Buyer shall pay forty-four percent (44%) thereof,
the Parcel 3 Purchaser shall pay fifty-three and 33/100 percent (53.33%)
thereof, and Seller shall pay the balance; provided that in no event shall
such delegation relieve Seller of its liability for the performance of such
payment obligations.
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Buyer shall have the right to approve the Improvement Contracts, which
approval not to be unreasonably withheld; provided that in no event shall
Buyer be obligated to assume non-fixed price contracts.
11. Section 14.11 of the Purchase Agreement (as added thereto by Section
18 of the Second Amendment) is hereby amended in its entirety to read as
follows:
14.11. Storm Drainage Easement. At the Close of Escrow, Seller shall
deliver to Buyer, a perpetual storm drainage easement, in recordable form
and otherwise in a form and content reasonably acceptable to Seller and
Buyer, permitting Buyer, its successors and assigns, to discharge Buyer's
storm water run-off into a holding pond located on the Race Track (the
"Retention Basin"). Seller shall be responsible, at its sole cost and
expense, for the construction and maintenance of the Retention Basin, as
are necessary to afford appropriate drainage for the Subject Real Property
upon the occurrence of a "Twenty-Five Year" storm; provided that if the
cost of the Retention Basin exceeds the amount of Seven Hundred Thousand
Dollars ($700,000.00) (as evidenced by an estimate reasonably acceptable to
Buyer, prepared by Seller's civil engineer and delivered to Buyer), then
Buyer shall fund thirty-three percent (33%) of such additional costs. For
the purposes of this Section 14.11, the costs of construction of the
Retention Basin shall not include any imputed land costs, but shall include
all construction, engineering and other associated costs and the cost of
installation of necessary pumps, lines, or pipes and associated equipment
originating at the property line of the Subject Real Property and
terminating at such Retention Basin. Seller shall also be responsible for
the installation, maintenance and repair of the necessary lines or pipes
and associated equipment originating at the property line of the Subject
Real Property and terminating at such Retention Basin.
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12. In all other respects, the Purchase Agreement, as amended by the
terms of the First Amendment, the Second Amendment, the Third Amendment, the
Fourth Amendment and the Fifth Amendment remains unchanged and in full force and
effect.
IN WITNESS WHEREOF, Buyer and Seller have executed this Sixth Amendment to
Agreement of Purchase and Sale as of the date set forth above.
SELLER: BUYER:
CALIFORNIA JOCKEY CLUB, PROPERTY RESOURCES, INC.,
a Delaware corporation a California corporation
By: /s/ Xxxxx X. Xxxxx By: /s/ Xxxxxxx X. XxXxxxxxx
---------------------- --------------------------
Its: Chairman Xxxxxxx X. XxXxxxxxx
--------------------- Its: Executive Vice President
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EXHIBIT "A"
ENTITLEMENTS TIMETABLE
o Complete Conceptual Site Plan and submit to Accomplished
Buyer for approval
o Buyer approves Conceptual Site Plan Accomplished
o City makes application to the State of Accomplished
California Department of Transportation for
approval to construct a new southbound off-ramp
to Highway 101
o Complete planning and design for submittal of Accomplished
Entitlement application/submit application
o City determines application is complete Accomplished
o City selects EIR consultant Accomplished
o EIR consultant prepares draft EIR On or before September 23, 1996
o Complete public review of draft EIR November 11, 1996
o EIR consultant responds to public comment and Ninety (90) days following end of
prepares final EIR public comment period, but in no
event later than December 15, 1996
o Planning Commission approves grant of Sixty (60) days following receipt of
Entitlements final EIR, but in no event later than
February 15, 1997
o City Council approves grant of Entitlements and Thirty (30) days following Planning
files a notice of determination indicating the Commission decision, but in no event
certification of the EIR later than March 17, 1997
o CALTRANS grants final approval to PSR/PR for March 17, 1997
Off-Ramp
o Expiration of CEQA appeal period Thirty (30) days following filing of
Notice of Determination, but in no
event later than April 17, 1997
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