Exhibit 10.36
AMENDMENT TO DEVELOPMENT MANAGEMENT AGREEMENT
THIS AMENDMENT dated as of October 21, 2002 (the "Amendment")
to the Development Management Agreement (the "Agreement") dated as of August 14,
1998, by and between San Elijo Hills Development Company, LLC, a Delaware
limited liability company (the "Owner"), formerly known as Provence Hills
Development Company, LLC, and HomeFed Corporation, a Delaware corporation (the
"Development Manager"). All capitalized terms not otherwise defined herein shall
have the meanings given to such terms in the Agreement.
WHEREAS, pursuant to the Agreement, the Development Manager is
entitled to receive from Owner a Project Management Fee, a Field Overhead Fee, a
Marketing and Advertising Fee and a Success Fee; and
WHEREAS, pursuant to a Stock Purchase Agreement dated as of
October 21, 2002, the Development Manager purchased (the "Acquisition") from
Leucadia National Corporation all of the issued and outstanding shares of
capital stock of CDS Holding Corporation, a Delaware corporation, which is the
indirect parent of the Owner; and
WHEREAS, Owner and Development Manager (the "Parties") wish to
amend the Agreement to terminate the Success Fee as of the date of the
Acquisition.
NOW, THEREFORE, in consideration of the foregoing premises and
the mutual promises and obligations contained herein, the Parties hereto hereby
agree as follows, to become effective as of October 21, 2002:
1.(a) The definition of "Project Costs" in Article I of the
Agreement is hereby amended by deleting the phrase "the Success Fee" from the
second sentence thereof.
(b) Article I of the Agreement is hereby amended by deleting
the definition of "Success Fee" in its entirety.
(c) Article IV, Section 4.2, is hereby amended by deleting
the words "and the Success Fee" from the second sentence thereof.
(d) Article VII, Section 7.1, is hereby amended in its
entirety to read as follows:
7.1 Fees to Development Manager. In consideration of its services
hereunder, Development Manager shall be entitled to payment from Owner of the
Project Management Fee, the Field Overhead Fee and the Marketing and Advertising
Fee as provided in this Article.
(e) Article VII is hereby amended by deleting Section 7.6 in
its entirety.
(f) Article IX, Section 9.2.2, is hereby amended in its
entirety to read as follows:
9.2.2 The accrued but unpaid portion of the Development
Management Fee. The accrued Development Management Fee shall only include the
fee for sales to Buyers that have already closed escrow or that are in escrow
for sale on the Termination Date and actually close pursuant to such escrow
within 120 days after the Termination Date. Within one hundred fifty (150) days
after the Termination Date, Owner shall pay to Development Manager any
Development Management Fee payable to Development Manager or Development Manager
shall pay to Owner any overpayment in the Development Management Fee. To the
extent that any advances of the Development Management Fee paid to Development
Manager pursuant to Section 7.5 exceed the amount of the accrued Development
Management Fee as of the Termination Date as provided in this Section,
Development Manager will repay to Owner such excess amount of the advances upon
termination of this Agreement.
2. All other terms and conditions of the Agreement shall remain
in full force and effect.
3. For purposes of this Amendment, notices will be deemed to have
been given upon personal delivery thereof, three (3) Business Days after having
been deposited in the United States mail, postage prepaid and properly
addressed, one (1) Business Day after having been sent by Federal Express or
other similar overnight delivery service or upon confirmation if sent by
facsimile. Any party hereto may from time to time, by written notice to the
other, designate a different address which shall be substituted for the one set
forth below.
Owner: San Elijo Hills Development Company, LLC
1903 Wright Place, Suite 280
Carlsbad, CA 92008
Attention: Paul J. Borden
Facsimile: (760) 918-8210
Telephone: (760) 918-8200
With a copy to: Pillsbury Winthrop LLP
11682 El Camino Real
Suite 200
San Diego, CA 92130
Attention: K. Michael Garrett
Facsimile: (858) 509-4010
Telephone: (858) 509-4019
Development Manager: HomeFed Corporation
1903 Wright Place, Suite 220
Carlsbad, CA 92008
Attention: Paul J. Borden
Facsimile: (760) 918-8210
Telephone: (760) 918-8200
With a copy to: Pillsbury Winthrop LLP
11682 El Camino Real
Suite 200
San Diego, CA 92130
Attention: K. Michael Garrett
Facsimile: (858) 509-4010
Telephone: (858) 509-4019
With an additional copy to: Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, NY 10153
Attention: Andrea A. Bernstein
Facsimile: (212) 310-8528
Telephone: (212) 310-8007
4. This Amendment may be executed in any number of counterparts,
and each of such counterparts for all purposes shall be deemed to be an
original, and all of such counterparts should constitute one and the same
agreement.
5. This Amendment shall be governed by, and construed in
accordance with, the laws of the State of California, without reference to
choice of law principles, including all matters of construction, validity and
performance, and shall be binding upon the successors and assigns of the parties
hereto.
IN WITNESS WHEREOF, this Amendment has been executed by the
Parties as of the date and year first above written.
SAN ELIJO HILLS DEVELOPMENT COMPANY, LLC
By: /s/ Curt R. Noland
----------------------------------------
Name: Curt R. Noland
Title: Vice President
HOMEFED CORPORATION
By: /s/ Paul J. Borden
----------------------------------------
Name: Paul J. Borden
Title: President
2