Purchase And Sale And Joint Escrow Agreement

Exhibit 10.33
-------------


AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS


Bay Meadows Racecourse
San Mateo, California


SELLER: PATRIOT AMERICAN HOSPITALITY, INC.,
a Virginia corporation


BUYER: PW ACQUISITIONS IV, LLC,
a Delaware limited liability company


April 18, 1997


AGREEMENT OF PURCHASE AND SALE
AND JOINT ESCROW INSTRUCTIONS
-----------------------------


THIS AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS ("Agreement") is made and entered into as of April 18, 1997, and constitutes an agreement by which PATRIOT AMERICAN HOSPITALITY, INC., a Virginia corporation ("Seller"), agrees to sell, and PW ACQUISITIONS IV, LLC, a Delaware limited liability company ("Buyer"), agrees to purchase the following:


A. Those certain parcels of land (the "Land") situated in the City of San Mateo, State of California, more particularly described on Exhibit A
--------- attached hereto.


B. All rights, privileges, easements, and appurtenances to the Land and any structures or other improvements situated on the Land (but specifically excluding any structures or other improvements situated on that portion of the Land which is (a) referred to as "Parcel Five" in the PTR (as defined in Section
------- 4 below) and (b) not a portion of said Parcel Five under contract to be sold - - pursuant to the "Franklin Contract" (as defined in Exhibit B) or the "Iacocca
--------- Contract" (as defined in Exhibit B) (the "Improvements"), and specifically
--------- excluding, however, (i) any intangible property (including, without limitation, the name "Bay Meadows") (except as specifically set forth herein) ("Intangible Property"), and (ii) any personal property ("Personal Property"). The term "Real Property" herein shall refer collectively to the Land, the Improvements, and all such attendant rights, privileges, easements and appurtenances, but shall specifically exclude Intangible Property, and Personal Property.


C. The Seller's interest in the contracts affecting the Real Property which are listed on Exhibit B hereto (the "Contracts"), and the
--------- Seller's interest in any development agreement executed by Seller and the City of San Mateo after the date hereof but prior to the closing of the transactions contemplated hereby (the "Development Agreement").


The Real Property and the Contracts are collectively referred to herein as the "Property."


The terms and conditions of this Agreement and the instructions to Chicago Title Company (the "Escrow Holder" and "Title Company") with regard to the escrow (the "Escrow") created pursuant hereto are as follows:


1. Purchase and Sale. For valuable consideration, the receipt and
----------------- sufficiency of which are hereby acknowledged, Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, upon the terms and conditions set forth herein.


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2. Purchase Price. The purchase price (the "Purchase Price") for the
-------------- Property shall be Seventy Eight Million Fifty Thousand and 00/100 Dollars ($78,050,000.00), subject to any adjustments to the terms hereof, payable as follows:


(a) Not later than April 30, 1997, Buyer shall deposit with Escrow Holder
the sum of One Million Dollars ($1,000,000.00), which sum shall be
invested by Escrow Holder in an interest-bearing account selected by
Buyer. Such sum plus all accrued interest thereon shall hereafter be
referred to as the "Deposit". The Deposit shall be applied toward
payment of the Purchase Price upon the "Close of Escrow" (as hereafter
defined).


(b) Upon the Close of Escrow, Buyer shall deposit or cause to be deposited
with Escrow Holder, in the form of a confirmed wire transfer of funds,
the balance of the Purchase Price plus such additional funds, if any,
as may be required to pay Buyer's share of prorations and closing
costs, as set forth herein.


3. Escrow.
------


(a) Opening of Escrow. For the purposes of this Agreement, the Escrow
-----------------
shall be deemed opened (the "Opening of Escrow") on the date Escrow
Holder shall have received an executed counterpart of this Agreement
from both Buyer and Seller. Escrow Holder shall notify Buyer and
Seller, in writing, of the date Escrow is opened.


(b) Close of Escrow. For purposes of this Agreement, the "Close of
---------------
Escrow" or "Closing" shall be defined as the date that the grant deed
(the "Grant Deed") conveying the Land to Buyer is recorded. The Escrow
shall close on the date that the Merger (as defined in Section 38
----------
below) closes, unless extended by mutual agreement of Buyer and Seller
("Closing Date"). On or before three (3) business days before the
scheduled Closing Date, Escrow Holder shall prepare a proforma closing
statement, setting forth the estimated adjustments and prorations as
of the scheduled Closing Date.


4. Condition of Title. It shall be a condition to Buyer's obligations
------------------ hereunder that Title Company shall be committed to issue its ALTA Owner's Extended Coverage Title Insurance Form B-1970 Policy together with such endorsements as Buyer may reasonably require (the "Title Policy") in the amount of the Purchase Price, showing fee title to the Land and Improvements vested in Buyer, subject to the following (the "Condition of Title"):


(a) A lien to secure payment of real estate taxes, not delinquent;


(b) Matters affecting the Condition of Title created with the written
consent of Buyer; and


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(c) Exceptions disclosed by the current Preliminary Title Report (the
"PTR") with respect to the Land and Improvements issued by the Title
Company and dated March 13, 1997 (excluding the land described in the
PTR as "Parcel Two"), a copy of which is attached as Exhibit C hereto,
---------
which are approved pursuant to this section. Seller shall provide
Buyer with legible copies of the instruments underlying any exceptions
referred to in the PTR (the "Exceptions") within ten (10) days
following the Opening of Escrow, and an ALTA survey of the Land and
Improvements certified to Buyer and the Title Company (the "Survey")
within thirty (30) days following the Opening of Escrow (the PTR, the
Exceptions, and the Survey collectively referred to herein as the
"Title Documents"). Buyer shall have fifteen (15) days following the
delivery of the last of the Exceptions and the Survey to disapprove
any items set forth in the Title Documents. If Buyer fails to notify
Seller within such period, the Title Documents shall conclusively be
deemed approved. If Buyer disapproves any items described therein,
Seller shall thereafter have the right to attempt to eliminate or
ameliorate to Buyer's satisfaction such matters as Buyer shall have so
disapproved on or before the expiration of the Contingency Period.
Seller shall give written notice to Buyer within such period whether
Seller is unable or unwilling to eliminate such disapproved matters.
If Seller so notifies Buyer that it is unable or unwilling to
eliminate any such disapproved matters, Buyer shall have the right,
exercisable by written notice delivered to Seller and Escrow Holder on
or before the date that is fifteen (15) days following the delivery of
such notice, to: (i) waive its prior disapprovals of those matters
which Seller is unable to eliminate, in which event such disapproved
matters shall conclusively be deemed approved, or (ii) terminate the
Escrow, in which event the Deposit shall be returned to Buyer and
thereafter the Escrow, this Agreement and the rights and obligations
of the parties hereunder shall terminate; provided, however, that in
any event Seller shall be obligated to remove any monetary liens
against the Property prior to Closing.


5. Contingency Period. For a period commencing on the Opening of Escrow
------------------ and terminating on the date of the consummation of the Merger (as defined in Section 38 below) (the "Contingency Period"), Buyer shall have the right to - ---------- satisfy itself that the physical and legal aspects of the Property are acceptable to Buyer. Buyer's obligations hereunder shall be conditioned upon Buyer's satisfaction with or waiver of such matters in its sole discretion. If Buyer, at any time on or before the expiration of the Contingency Period, fails to disapprove, in a writing delivered to Seller and Escrow Holder, the matters set forth in this paragraph, then all of such matters shall conclusively be deemed approved. If Buyer shall disapprove any such matter in a written notice given to Seller and Escrow Holder prior to the end of the Contingency Period, then this Agreement shall terminate, and neither party shall have any further rights or obligations hereunder, provided that, (a) the Escrow Holder shall be required to refund the Deposit to Buyer if Buyer shall have terminated this Agreement (1) prior to May 27, 1997 due to the commencement (by such date) of any appeal of the approval by the City of San Mateo of the Specific Plan or the Environmental Impact Report relating to the proposed


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development of a portion of the Real Property, or (2) prior to the end of the Contingency Period due to any act or omission by Cal Jockey that results in a breach or default by Cal Jockey under the Franklin Contract or Iacocca Contract or that gives the purchaser under either the Franklin Contract or Iacocca Contract a right to terminate thereunder, and (b) if Buyer shall have terminated this Agreement for any reason not set forth in the preceding clause (a) or in any other Section of this Agreement, then the Escrow Holder shall pay the Deposit to Seller, and Seller shall be entitled to retain the Deposit in such case as fair and reasonable consideration for Seller's covenants and agreements hereunder. During the term of the Escrow, Buyer, its agents, contractors and subcontractors shall have the right to enter upon the Property at reasonable times during ordinary business hours, upon reasonable prior notice to Seller and subject to the rights of tenants under the Leases, to make any and all inspections and tests as may be necessary or desirable in Buyer's judgment, subject, however to the terms and conditions of the Acquisition Agreement (as defined in Section 38 below). Buyer acknowledges and agrees that Seller shall
---------- be entitled to have its representatives present during any time Buyer or its agents or independent contractors are on the Real Property. Buyer shall (i) perform all work permitted under this Agreement in a safe and professional manner, (ii) not create any dangerous or hazardous condition on the Real Property, (iii) comply with all applicable laws with respect to Buyer's inspections, and (iv) obtain all permits required to be obtained with respect to Buyer's inspections. Any investigation which physically alters or changes the condition of the Real Property in any material respect shall be subject to Seller's prior approval, which approval shall not be unreasonably withheld or delayed and also shall be subject to the Acquisition Agreement. Except as expressly required by applicable law, Buyer shall (and shall request its agents to) keep confidential the results and findings of Buyer's studies and investigations of the Property. Buyer shall indemnify and hold Seller harmless from damages resulting from Buyer's entry and/or activities upon the Real Property by Buyer, its agents, contractors and/or subcontractors, except to the extent any such damages are the result of Seller's negligence.


6. Estoppel Certificates. Seller shall use reason-able efforts to cause
--------------------- Cal Jockey (as defined in Section 38 below) to obtain from each of the
---------- respective other parties to the Contracts and deliver to Buyer on or before the date that is ten (10) days prior to the originally scheduled Closing Date a duly executed estoppel certificate stating that no default exists under the applicable Contract (the "Estoppel Certificate(s)"). The Estoppel Certificates shall be initially pre-pared by Seller, shall be approved by Buyer, and shall be dated no earlier than thirty (30) days prior to the originally scheduled Closing Date.


7. Racecourse Leases. During the Contingency Period, Seller and Buyer
----------------- shall use reasonable good faith efforts to negotiate the form of the following documents: (a) a new lease (the "Racecourse Lease"), containing the terms and conditions set forth on the schedule attached hereto as Exhibit D and containing
--------- other reasonable and customary terms for such a lease covering the portion of the Property designated as the "Main Track & New Barns" on the diagram attached hereto as Schedule D-l the "Racecourse Parcel"); (b) a lease or other agreement
------------- providing for the temporary use of the land and existing facilities on the portion of the Property designated as the "Stables and Training Area" during the construction of new


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stables facilities on the Racecourse Parcel (the "Temporary Stables Lease"); and (c) a lease or other agreement leasing to Seller at a quarterly rental of Seven Thousand Five Hundred and 00/100 Dollars ($7,500.00), cancelable on ninety (90) days notice, that portion of the Property commonly known as the Sun-down Tennis Club and more fully described as "Parcel One" in the PTR (the "Temporary Tennis Club Lease"). (The Racecourse Lease, the Temporary Stables Lease, and the Temporary Tennis Club Lease are collectively referred to hereinafter as the "New Leases".) Concurrently with Closing, Seller shall terminate the existing lease between Seller and BMOC dated March 29, 1993 covering the Racecourse Parcel (the "Old Lease") and shall cause BMOC to enter into a Termination and Release Agreement in connection therewith, and also concurrently with Closing, Seller and Buyer shall enter into the New Leases.


8. Buyer's Representations and Warranties. Buyer makes the following
-------------------------------------- representations and warranties to Seller:


(a) This Agreement has been duly and validly authorized, executed and
delivered by Buyer and no other action is requisite to the valid and
binding execution, delivery and performance of this Agreement by
Buyer. Other than as disclosed to Seller, no consents or waivers of or
by any third party are necessary to permit the consummation by Buyer
of the transactions contemplated pursuant to this Agreement. At all
times during the pendency of this Agreement, Buyer shall be a legal
entity duly incorporated or organized, validly existing and in good
standing under the laws of its incorporation or organization, and
shall have the requisite power and authority and all governmental
permits, approvals and authorizations necessary to own, lease and
operate its properties and to carry on its business as it is now being
conducted. Buyer has the financial ability to perform all of its
obligations under this Agreement.


(b) Buyer has not: (i) made a general assignment for the benefit of
creditors, (ii) filed any voluntary petition in bankruptcy or suffered
the filing of any involuntary petition by Buyer's creditors, (iii)
suffered the appointment of a receiver to take possession of all or
substantially all of Buyer's assets, (iv) suffered the attachment or
other judicial seizure of all, or substantially all, of Buyer's
assets, (v) admitted in writing Buyer's inability to pay its debts as
they come due, or (vi) made an offer of settlement, extension, or
composition to its creditors generally.


9. Seller's Representations and Warranties. Solely as a condition of
--------------------------------------- Buyer's obligation to consummate the transactions contemplated by this Agreement, Seller makes the following representations and warranties to Buyer:


(a) This Agreement has been duly and validly authorized, executed and
delivered by Seller and no other action is requisite to the valid and
binding execution, delivery and performance of this Agreement by
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