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Agreement And Joint Escrow Instructions

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Sectors: Leisure and Entertainment
Governing Law: California , View California State Laws
Effective Date: January 24, 2001
Related Agreement Types:
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Exhibit 10.51
-------------


AGREEMENT
AND JOINT ESCROW INSTRUCTIONS


This Agreement and Joint Escrow Instructions ("Agreement") is made and entered into as of January 24, 2001, by and between Crystal Park Hotel and Casino Development Company, LLC, a California limited liability company ("Crystal Park"), and The Community Redevelopment Agency of the City of Compton, a public body, corporate and politic (the "Agency"), with reference to the following facts:


A. Crystal Park and the Agency are parties to that certain Amended and Restated Disposition and Development Agreement, Agreement of Purchase and Sale, and Lease with Option to Purchase, dated April 4, 1995, as amended (the "DDA"), pursuant to which Agency owns and leases certain real property in the City of Compton (the "City"), County of Los Angeles (the "County"), State of California, as more particularly described on Exhibit A attached hereto (collectively,
--------- "Property"). For the purposes of this Agreement, the Property consists of the (i) "Owned Property"; (ii) "Option Property" also described as the Hotel and Parking Property in the DDA; and (iii) "Relinquished Property," as identified on


Exhibit A. Crystal Park and the Agency are also parties to those agreements - --------- described on Exhibit B attached hereto (the "Related Agreements").
---------


B. The terms and conditions of this Agreement and the instructions to First American Title Company ("Escrow Holder") with regard to the escrow ("Escrow") created hereby are as set forth below.


NOW, THEREFORE, for and in consideration of the mutual covenants and agreements contained in this Agreement, and other good and valuable consideration, Crystal Park and the Agency hereby agree as follows:


1. DEFINED TERMS. Capitalized terms used herein but not defined herein shall
------------- have the meanings ascribed to such terms in the DDA.


2. PURCHASE AND SALE.
-----------------


2.1 Exercise of Option. Crystal Park hereby exercises its option to
------------------ purchase the Option Property pursuant to paragraph 30 of DDA. Agency shall sell and convey to Crystal Park and Crystal Park shall acquire and purchase from Agency, the Option Property.


2.2 Purchase Price.
--------------


2.2.1 Purchase Price. The Purchase Price for the Option Property shall
-------------- be Three Million Four Hundred Thousand Dollars ($3,400,000.00), all cash (the "Purchase Price").


3. TERMINATION OF DDA. Effective on the Closing Date, as hereinafter defined,
------------------ the DDA, including, without limitation, Crystal Park's lease of the Relinquished Property,


shall terminate and be of no further force and effect. On the Closing Date, Crystal Park shall pay to the Agency a termination fee ("Termination Fee") in the amount of Six Hundred Thousand Dollars ($600,000.00). Concurrently therewith, the parties respective obligations under the Related Agreements shall also terminate and be of no further force and effect. Notwithstanding the foregoing, the parties respective obligations under Sections 10(b) and 10(c) of the DDA shall survive the termination of the DDA:


DDA Section 10(b): Environmental Conditions of Property Prior to
----------------------------------------------------------------
Commencement of Lease. Agency shall be solely responsible for the costs of
---------------------
clean up or remediation of any deposit or discharge of Hazardous Materials
on or from the Property which occurred prior to the Effective Date, and
Agency shall indemnify, hold harmless and defend Redeveloper against any
and all loss, cost or obligation with respect thereto (including attorneys
fees and costs), provided, however, that Agency shall not be liable to
Redeveloper for any consequential damages suffered by Redeveloper by reason
of the existence of any Hazardous Waste on the Property which existed prior
to the Effective Date and which could have reasonably been discovered by a
competent environmental assessment of the Property.


DDA Section 10(c): Environmental Condition of the Property During Lease
------------------------------------------------------------------------
Term. Redeveloper shall indemnify, protect, defend and hold harmless Agency
----
from and against any and all claims, liabilities, suits, losses, costs,
expenses and damages, including but not limited to attorneys' fees and
costs, arising out of any claim for loss or damage to any property,
including the Property (including both the Convention Center Parcel and the
Leasehold Parcels), injuries to or death of persons, or for the cost of
cleaning up the Property, and removing hazardous or toxic substances,
materials and waste therefrom, by reason of contamination or adverse
effects on the environment, or by reason of any statutes, ordinances,
orders, rules or regulations of any governmental entity or agency requiring
the clean-up of the Property caused by or resulting any hazardous material,
substance or waste introduced to the Property during the Term of this
Lease. The foregoing indemnity shall survive the expiration or termination
of this Lease, and the close of escrow in the event of Redeveloper's
exercise of the option to purchase the Leasehold Parcels set forth below.
Moreover, upon the expiration of this Lease, if Redeveloper has not
purchased the Leasehold Parcels, then Redeveloper shall not thereafter be
liable on account of this indemnity as a result of hazardous or toxic
substances, materials, or waste that were located on the Leasehold Parcels
prior to the Effective Date, except to the extent such hazardous or toxic
substances, materials, or waste were deposited on the Property prior to the
Effective Date by Redeveloper or Redeveloper's agents, officers, employees,
contractors, sublessees, or assignees.


4. COVENANT TO OPERATE. Notwithstanding the provisions of Section 3 hereof,
------------------- Crystal Park agrees and covenants that all current uses and operations, including, without limitation, the card club casino and related uses, will be operated on the Option Property and the Owned Property until and through June 30, 2001 (the "Continued Operations Date"), when such restriction shall automatically expire without the need for any further action under the DDA. Further, Crystal Park agrees and covenants that if it ceases operating the card club casino and related uses, in whole or in part, prior to the Continued Operations Date, that Crystal Park shall pay to City an amount equal to the gaming tax that would be


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due on the discontinued operations through the Continued Operations Date, based on the previous year's receipts for the same time period. It is understood, however, that Crystal Park shall remain subject to all other laws, regulations and policies governing land use in the City through and after the Continued Operations Date. Crystal Park shall not be obligated to pay or shall be entitled to receive a refund or rebate of that portion of any possessory interest taxes or real property taxes allocable to the Owned Property and Option Property, to the extent payable or allocable to the Agency or the City during the period from the Closing through the earlier of (i) the date a card club casino ceases to be operated on the Owned Property and Option Property; and (ii) August 2, 2005.


5. MEMORANDUM OF UNDERSTANDING. Pursuant to that certain Memorandum of
--------------------------- Understanding dated September 30, 1996, between the Agency and Crystal Park, Crystal Park has usage rights to that certain sign owned by the City located between the east and westbound lanes of the 91 Freeway between Acacia Avenue and Alameda Street (the "Sign"). The parties agree that the Memorandum of Understanding shall continue to govern Crystal Park's use of the Sign after the Close of Escrow for so long as a casino is operated on the Owned Property and the Option Property. At Closing, the parties shall execute an Amendment of Memorandum of Understanding, a copy of which is attached as Exhibit C, to
--------- provide for Crystal Park's continued right to use the Sign after card club casino and hotel uses cease on the Owned Property and Option Property (the "MOU Amendment").


6. ESCROW AND CLOSING.
------------------


6.1 Opening of Escrow. For purposes of this Agreement, the Escrow shall be
----------------- deemed opened on the date Escrow Holder shall have received a mutually executed copy of this Agreement. Escrow Holder shall promptly notify Crystal Park and Agency, in writing, at the addresses noted in Section 11.14, of the date Escrow is opened ("Opening of Escrow"). In addition, Crystal Park and Agency agree to execute, deliver and be bound by any reasonable and customary supplemental escrow instructions of Escrow Holder or other instruments as may reasonably be required by Escrow Holder in order to consummate the transaction contemplated by this Agreement. Any such supplemental instructions shall not conflict with, amend or supercede any portions of this Agreement. If there is any conflict or inconsistency between such supplemental instructions and this Agreement, this Agreement shall control.


6.1.1 Costs and Prorations.
--------------------


a) Costs. Costs in connection with the Close of Escrow shall
----- be allocated as follows:


i) Agency shall pay:


(1) the cost of a CLTA Policy of Title Insurance (as
defined below),


(2) one-half ( 1/2) of the Escrow holder's fees,


(3) the documentary transfer taxes, if any.


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ii) Crystal Park shall pay


(1) one-half ( 1/2) of the Escrow Holder's fees, and


(2) if elected by Crystal Park, the increased cost of
obtaining an ALTA Policy of Title Insurance and any endorsements thereto
requested by Crystal Park (over and above the CLTA Policy of Title
Insurance that Agency is required to pay for).


(3) recording fees payable in connection with the
Recordable Documents, as hereinafter defined, and


iii) All other costs related to the transaction shall be paid by the parties in the manner consistent with common practice in the County of Los Angeles, California.


b) Prorations. All real and personal property taxes and special
---------- assessments, if any, assessed against the Option Property and the Relinquished Property for the period of time prior to the Closing Date, whether payable in installments or not, shall be paid by Crystal Park as of the Closing Date.


i) Other Items. Except as otherwise provided in this
----------- Paragraph 6.1.2(b), all other items as are normally prorated and adjusted in the sale of property similar to the Option Property and the Relinquished Property shall be prorated as of the Closing Date in the manner consistent with common practice in the County of Los Angeles, California.


6.2 Closing Date.
------------


6.2.1 The Close of Escrow shall occur on or before the date that is ten (10) days after the effective date of this Agreement (the "Closing Date").


6.2.2 As used in this Agreement, the "Close of Escrow" shall mean the date the Recordable Documents are recorded in the Official Records of the County. The Close of Escrow shall take place on the Closing Date at the offices of the Escrow Holder.


6.3 Conditions Precedent to Close of Escrow.
---------------------------------------


6.3.1 Conditions to Crystal Park's Obligations. The Close of Escrow
---------------------------------------- and Crystal Park's obligation to purchase the Option Property, are subject to the satisfaction of the following conditions or Crystal Park's written waiver of such conditions on or before the Closing Date.


a) As of the Closing Date, Agency shall have performed all of the material obligations required to be performed by Agency under this Agreement;


b) All representations made by Agency to Crystal Park in this Agreement shall be true and correct in all material respects as of the Closing Date;


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c) The Title Company shall be committed to issue to Crystal Park, as of the Closing Date, the Title Policy (defined below) covering the Option Property subject only to the Permitted Exceptions (defined below);


d) Old Republic Title shall be committed to issuing the endorsements described in Section 7 below;


e) As of the Closing Date, Agency shall have delivered to Crystal Park written certification (the "Certification") that the Property has all necessary land use entitlements, including without limitation zoning permits, development permits, conditional use permits, and subdivision approvals required for the development and operation of the hotel and casino thereon, including ancillary facilities which may include, without limitation, restaurants, a night club, a sports bar and other entertainment facilities, as a lawfully permitted conforming use under all applicable City laws, including, without limitation, the current City of Compton General Plan, Community Redevelopment Plan, and Zoning Code;


f) As of the Closing Date, the City Council of the City of Compton shall have adopted an Ordinance amending Section 9-10 of the Compton Municipal Code relative to the regulation of card clubs reasonably acceptable to Crystal Park and California Casino Management, Inc. ("CCM").


6.3.2 Conditions to Agency's Obligations. The Close of Escrow and
---------------------------------- Agency's obligation to consummate the transactions contemplated by this Agreement are subject to the satisfaction of the following conditions:


a) As of the Closing Date, Crystal Park shall have performed all of the material obligations required to be performed by Crystal Park under this Agreement; and


b) All representations made by Crystal Park to Agency in this Agreement shall be true and correct in all material respects as of the Closing Date.


6.4 Closing Documents. The parties shall deposit the following with
----------------- Escrow Holder prior to the Close of Escrow:


6.4.1 Crystal Park shall deposit:


a) the Purchase Price;


b) the Termination Fee;


c) Crystal Park's Escrow and other cash charges required in Section 6.1.2;


d) a Preliminary Change of Ownership Statement in form suitable for filing with the tax collector for the County; provided, however, that the delivery of this instrument shall not be a condition precedent to the Close of Escrow nor a default by Crystal Park;


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e) a Quitclaim Deed ("Quitclaim Deed") for the Relinquished Property, executed by Crystal Park, with Crystal Park's signature acknowledged, the form of which is attached hereto as Exhibit D;
---------


f) a counterpart Termination of Reciprocal Easement Agreement and Amended and Restated Disposition and Development Agreement, Agreement of Purchase and Sale and Lease with Option to Purchase, the form of which is attached hereto as Exhibit E (the "REA/DDA Termination"), executed by
--------- Crystal Park with Crystal Park's signature acknowledged, with respect to that certain Reciprocal Easement Agreement, dated as of January 30, 1997, and recorded as Instrument No. 97-574466 in the office of the County Recorder for the County of Los Angeles, California (the "REA") and the DDA; and


g) a counterpart MOU Amendment executed by Crystal Park.


6.4.2 Agency shall deposit:


a) a Grant Deed conveying fee title to the Option Property, the form of which is attached hereto as Exhibit F ("Grant Deed"), subject only
--------- to the Permitted Exceptions, executed by Agency with Agency's signature acknowledged;


b) an affidavit or qualifying statement, which satisfies the requirements of Paragraph 1445 of the Internal Revenue Code of 1986, as amended, and the regulations thereunder, and a Form 590(RE) to satisfy the requirements of California Revenue and Taxation Code Sections 18662(e) and 18668 (collectively, the "Non-Foreign Affidavits");


c) a counterpart REA/DDA Termination, executed by Agency, with Agency's signature acknowledged;


d) a Quitclaim Deed ("CC&R Termination"), in form attached hereto as Exhibit G, eliminating the covenants, conditions and restrictions
--------- described in that certain Grant Deed recorded on August 3, 1995 as Instrument Number 95-1265413 (the "Casino Parcel Deed"), executed by Agency, with Agency's signature acknowledged;


e) a Reconveyance of that certain Deed of Trust, Assignment of Rents, Security Agreement and Fixture Filing, dated as of July 31, 1995, recorded as Instrument No. 95-1265414 (the "Deed of Trust"), executed by the trustee thereunder, the form of which is attached as Exhibit H (the
--------- "Reconveyance");


f) a UCC-2 Termination of Financing Statement terminating the UCC-1 Financing Statement dated July 31, 1995, recorded as Instrument No. 95-1265415 (the "UCC-1 Financing Statement"), executed by Agency ; and


g) a counterpart MOU Amendment executed by Agency.


The "Recordable Documents" shall mean the documents described in Sections 6.4.1(e), (f) and Sections 6.4.2(a), (c), (d), (e) and (f).


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6.4.3 Additional Documents. Agency and Crystal Park shall each
-------------------- deposit such other instruments as are reasonably required by Escrow Holder or otherwise required to proceed to the Close of Escrow and consummate the sale of the Option Property and release of the Relinquished Property, in accordance with the terms of this Agreement.


6.5 Close of Escrow.
---------------


6.5.1 On the Close of Escrow, Escrow Holder shall (a) record the Recordable Documents in the Office of the County Recorder of the County, (b) pay any transfer taxes, (c) instruct the County Recorder to return the Grant Deed, the REA/DDA Termination, the CC&R Termination and the Reconveyance to Crystal Park, (d) instruct the County Recorder to return the Quitclaim Deed to the Agency, (e) deliver to Agency the Purchase Price and the Termination Fee, less Agency's escrow and cash charges, and an original MOU Amendment executed by Crystal Park, and (f) deliver to Crystal Park the Non-Foreign Affidavit and the Title Policy covering the Option Property subject only to the Permitted Exceptions, and an original MOU Amendment executed by Agency.


6.5.2 Upon the Close of Escrow, title to the Option Property shall be conveyed to Crystal Park, subject only to the Permitted Exceptions, free and clear of any rights of parties in possession, other than CCM, pursuant to that certain Amended and Restated Lease dated February 14, 2000, between Crystal Park
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