EXHIBIT 10.1
FIRST AMENDMENT TO LEASE
(WITH OPTION)
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This First Amendment to Lease (With Option) ("Agreement") is entered
into on this 1st day of April, 1999 (the "Effective Date"), by and between
PALACE STATION HOTEL & CASINO, INC., a Nevada corporation or its designee
(hereinafter "Optionee" or "Tenant") and FLAMINGO ASSOCIATES, INC., a Nevada
corporation (hereinafter, "Optionor" or "Landlord") based upon the following
recitals:
A. Landlord is the owner of certain Property, as defined below and as set
forth on the attached Exhibit "A".
B. Pursuant to two (2) separate leases, which are attached hereto as
Exhibits B-1 and B-2, respectively, Landlord leases the Property to
Tenant as follows: one lease between Landlord and Tenant for
approximately 6.44 acres ("Lease B-1") and one lease between Landlord
and Tenant for approximately .84 acres ("Lease B-2") (collectively,
the "Leases").
C. Landlord and Tenant desire to amend the Leases as described herein.
D. Subject to the terms and conditions as set forth herein, and for and
in consideration of the amendments to the Leases as described herein,
Optionor has agreed to grant to Optionee the exclusive option to
purchase the Property and Optionee has agreed to purchase the Property
upon Optionee's exercise of the Option, as defined below.
NOW, THEREFORE, in consideration of the terms, covenants, conditions and
provisions hereinafter set forth and other good and valuable consideration,
the parties hereby agree to amend and modify the Lease to the limited extent
set forth herein. Any capitalized terms used in this First Amendment not
otherwise defined herein shall be defined as set forth in the Lease.
I. AMENDMENTS TO RENTAL PROVISIONS OF LEASES
A. LEASE B-1
1. The Rental provision as set forth in Lease B-1 at Section 2 shall
be deleted and the following shall be inserted in its place:
As of the Effective Date, Tenant shall pay to Landlord as
monthly rental for the Demised Premises the sum of
$8,293.27.
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The term "Lease Year" (or "lease year") as used herein shall
mean a period of twelve (12) consecutive months, the first
of which shall commence on the Effective Date.
2. In the "Addendum to Lease Agreement between ▇▇▇▇▇ ▇▇▇▇
Enterprises and Mini-Price Motor Inn, Inc., dated May 8, 1973,"
the third paragraph therein entitled "Page 28 - Paragraph 31,"
shall be deleted in its entirety.
B. LEASE B-2
The Rental provision as set forth in the Lease B-2 at Section 2 shall
be deleted and the following shall be inserted in its place:
As of the Effective Date, Tenant shall pay to Landlord as monthly
rental for the Demised Premises the sum of $1,081.73.
The term "Lease Year" (or "lease year") as used herein shall mean
a period of twelve (12) consecutive months, the first of which
shall commence on the Effective Date.
II. OPTION TO PURCHASE.
A. OPTION.
1. Grant of Option. Optionor hereby grants to Optionee an option to
purchase all, but not less than all, of the Property (the
"Option"). Optionee may exercise the Option, in Optionee's sole
and absolute discretion, by giving written notice to Optionor in
the manner described in Section IX.C. below (the "Notice") at any
time during the ten (10) year period following the Effective Date
(the "Option Term"). Upon exercise of the Option, Optionee shall
immediately open an escrow for the transaction (the "Escrow") at
Nevada Title Company (the "Title Company"), and Closing shall
occur through Escrow.
2. Consideration. Optionor agrees that adequate and just
consideration has passed from Optionee to Optionor based upon the
amendments to Leases as set forth above, that no further
consideration is due, and that Optionee, as of the Effective
Date, is entitled to exercise the Option in accordance with the
terms of this Agreement.
3. Purchase Price. At the Closing, Optionee shall pay Optionor,
through Escrow, the purchase price in the amount and manner set
forth on Exhibit "C" (the "Purchase Price"), in cash or
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readily available U.S. funds. The rental increases in the
Leases as set forth above are not applicable to the Purchase
Price. If at any time prior to Closing, Optionor has been
awarded or received any amount for the condemnation of any
portion of the Property, Optionor shall be entitled to receive
or retain such award(s) and the Purchase Price shall be
reduced by an amount equal to all such awards.
4. Memorandum of Option. At the Effective Date, the parties shall
record a memorandum of option in the form attached hereto as
Exhibit "D" (the "Memorandum of Option") to provide public notice
that Optionee has obtained an Option to acquire the Property from
Optionors.
III. TITLE MATTERS.
A. CLTA POLICY. This Agreement is subject to the condition precedent that
on or before the Effective Date, the Title Company shall issue a CLTA
Policy (the "CLTA Policy") in the form of the Pro Forma attached
hereto as Exhibit "E" (the "Pro Forma"). The cost of the premium for
the CLTA Policy shall be paid solely by Optionee.
B. TITLE COMPANY. The Title Company shall provide an ALTA Policy (as
hereinafter defined) at Closing unless all parties hereto agree that
another title company shall provide such policy; provided however that
such selection of a substitute title company shall not delay the
Closing.
C. SURVEY. Upon giving Notice of its exercise of the Option, Optionee, at
its sole cost and expense, shall select a civil engineering firm to
promptly commence preparation of an ALTA-ACSM survey of the Property
to be delivered to Optionee (the "Survey"). The Survey shall comply
with all requirements of the Title Company for issuance of the ALTA
Policy and shall be otherwise acceptable to Optionee. If it is
necessary to prepare and file a record of survey or parcel map in
order to file the Deed, the parties shall cooperate in good faith with
one another to expeditiously complete and file such map. Optionee
shall bear the cost of preparing and filing said record of survey or
parcel map, if required.
D. ALTA POLICY. The Closing is subject to the Title Company delivering to
Optionee an ALTA Extended Coverage Owners Policy of Title Insurance
(the "ALTA Policy") issued by the Title Company, dated on the date of
the Closing, in the amount of the Purchase Price, insuring Optionee as
owner of fee title to the Property subject only to those exceptions to
title set forth on the Pro Forma and those exceptions
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shown of record at the time of Closing that are common to the area
and which do not cause a materially adverse effect upon Optionee's
continued use of the Property as part of a resort hotel & casino
(the "Permitted Exceptions"). Optionee shall pay all costs
attributable to the ALTA Policy.
E. LIENS, ENCUMBRANCES, ETC. Except for the Permitted Exceptions,
Optionor will transfer and convey good and marketable title to the
Property to Optionee at Closing by grant, bargain and sale deed in
substantially the form of Exhibit "F" attached hereto (the "Deed"),
free and clear of any liens, encumbrances or security interests of any
nature whatsoever, and Optionee shall not succeed to or be responsible
for any liens, claims, charges, encumbrances, mortgages, pledges,
obligations or liabilities of any kind whatsoever, whether known or
unknown, fixed or contingent, contractual or statutory, of Optionors
including, without limitation:
1. Any of Optionors' liabilities or obligations for federal, state,
local or foreign taxes, assessments, impositions, deficiencies,
penalties or interest, whether or not imposed on or measured by
income, except for real property taxes and assessments payable
after the Closing; or
2. Any contract obligations with third parties of any nature
whatsoever, except as specifically assumed by Optionee in
writing, and in Optionee's sole and unlimited discretion.
IV. REPRESENTATIONS AND WARRANTIES.
A. OPTIONOR'S REPRESENTATIONS AND WARRANTIES. Optionor hereby represents
and warrants, which representations and warranties shall be true and
correct as of the date of Closing (unless otherwise specified below):
1. That Optionor is the owner of the Property and is able to convey
good, marketable title thereto, subject to the matters disclosed
in the Pro Forma.
2. That ▇▇▇▇▇▇▇ ▇▇▇ has full authority to execute this Agreement on
behalf of Optionor and to bind Optionor to this Agreement.
3. That Optionor is duly organized and validly existing as a
corporation in its state of incorporation, in good standing and
qualified to conduct its business, to own real property and to
consummate the transactions contemplated herein under the laws of
the State of Nevada.
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4. That all necessary corporate action has been taken to authorize
all transactions herein contemplated.
5. That the execution, delivery and performance of this Agreement by
Optionor will not, with or without the giving of notice and/or
the passage of time, violate or constitute a default under any
provision of law, any administrative regulation or any judicial,
administrative or arbitration order, award, judgment or decree
applicable to Optionor or the Property or conflict with, violate,
result in a breach or termination of or cause a default under
Optionor's articles of incorporation or bylaws, or any other
agreement or obligation by which Optionor or the Property are
bound.
6. That no consent or approval of this Agreement is required by any
third party.
7. That there are no actions or claims pending or to Optionor's
knowledge threatened before any court, governmental agency,
arbitrator or other tribunal which would prevent Optionor from
completing the transactions provided herein in accordance with
the terms of this Agreement.
8. That Optionor has not received any notice of zoning changes or
any actions threatening condemnation of any part of the Property
through exercise of eminent domain by any governmental authority.
9. That Optionor has no actual knowledge of any violations of law,
municipal or county ordinances or other legal requirements
affecting the Property, or with respect to the use or occupancy
thereof.
10. That to the best of Optionor's knowledge, all documents that will
affect title to the Property at Closing have been provided to
Optionee.
11. That there are no mechanic's liens recorded against the Property
and none threatened to Optionor's knowledge; and all contractors,
subcontractors, workmen, materialmen and employees engaged by
Optionor have been paid in full for any labor, services or
materials supplied or delivered to the Property.
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12. That Optionor has not caused and shall not cause to be created
any encumbrances on the Property in favor of any person other
than Optionee or liens that have been previously released.
13. That all taxes, governmental assessments and utility charges to
the Property billed to Optionor are current and not delinquent.
14. That all representations and warranties made by Optionor and all
information contained in any of the documents furnished or to be
furnished to Optionee pursuant to this Agreement, do not and
shall not contain any untrue statement of a material fact or omit
to state any fact necessary in order to make the statements
contained herein or therein not misleading.
15. That Landlord is the owner of the Property and is the landlord
under the Lease.
16. That the Leases were validly assigned from ▇▇▇▇▇ ▇▇▇▇
Enterprises, the original landlord under the Lease, to Landlord,
with Landlord succeeding to all rights and assuming all
obligations thereunder.
17. That Landlord has reviewed and certified that the Leases attached
hereto as Exhibit B-1 and Exhibit B-2 constitute true and correct
copies of the Leases and all amendments and modifications thereto
and that there are no leases affecting the Property currently in
effect not contained in Exhibit B-1 and Exhibit B-2.
B. OPTIONEE'S REPRESENTATIONS AND WARRANTIES. Optionee hereby represents
and warrants, which representations and warranties shall be true and
correct as of the date of Closing (unless otherwise specified below):
1. That the execution, delivery and performance of this Agreement by
Optionee will not, with or without the giving of notice and/or
the passage of time, violate or constitute a default under any
provision of law, any administrative regulation or any judicial,
administrative or arbitration order, award, judgment or decree
applicable to Optionee or conflict with, violate, result in a
breach or termination of or cause a default under Optionee's
articles of incorporation or bylaws, or any other agreement or
obligation by which Optionee is bound.
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2. That no consent or approval of this Agreement is required by any
third party, other than any approvals required by Optionee's
secured lenders.
3. That there are no actions or claims pending or to Optionee's
knowledge threatened before any court, governmental agency,
arbitrator or other tribunal which would prevent Optionee from
completing the transactions provided herein in accordance with
the terms of this Agreement.
4. That Optionee is duly organized and validly existing as a
corporation in its state of incorporation, in good standing and
qualified to conduct its business, to own real property and to
consummate the transactions contemplated herein under the laws of
the State of Nevada.
5. That all necessary corporate action has been taken to authorize
all transactions herein contemplated.
6. That the execution, delivery and performance of this Agreement by
Optionee will not, with or without the giving of notice and/or
the passage of time, violate or constitute a default under any
provision of law, any administrative regulation or any judicial,
administrative or arbitration order, award, judgment or decree
applicable to Optionee or conflict with, violate, result in a
breach or termination of or cause a default under Optionee's
articles of incorporation or bylaws, or any other agreement or
obligation by which Optionee is bound.
7. That all representations and warranties made by Optionee and all
information contained in any of the documents furnished or to be
furnished to Optionor pursuant to this Agreement, do not and
shall not contain any untrue statement of a material fact or omit
to state any fact necessary in order to make the statements
contained herein or therein not misleading.
C. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. Except as otherwise set
forth herein, all of Optionor's and Optionee's Representations and
Warranties set forth in Sections IV.A. and IV.B. shall survive for a
period of sixty (60) months.
V. CLOSING
A. COVENANTS PENDING CLOSING. Pending and prior to the Closing, Optionor
covenants and agrees as follows:
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1. That Optionor, without prior written consent of Optionee, shall
not cause any liens or encumbrances, other than mortgages or
deeds of trust securing consensual loans as permitted in Section
X, to be filed or recorded against the Property and shall not
assign, transfer, encumber, hypothecate or convey any or all of
Optionor's interest in the Property to any third party or
parties.
2. That Optionor shall give Optionee written notice of any casualty
occurring on the Property or of any condemnation or proposed
condemnation of all or any part of the Property of which Optionor
has or obtains actual knowledge.
B. EXPRESS CONDITIONS TO CLOSING.
1. In the event Optionee exercises the Option, Optionee's obligation
to proceed to Closing shall be subject to the satisfaction of the
following:
a) Optionor shall not be in material default of any of its
covenants set forth herein.
b) Optionor's representations and warranties as set forth
herein shall be true and correct as of the date of Closing.
c) The Title Company shall be irrevocably committed to issuing
the ALTA Policy.
d) Optionor shall have executed and delivered into an escrow
account (the "Escrow") at the Title Company all other
documents and instruments and shall have taken all actions
necessary to consummate the transactions contemplated hereby
in accordance with the terms of this Agreement.
2. Optionor's obligation to proceed to Closing shall be subject to
satisfaction of the following:
a) Optionee shall not be in material default of any of its
covenants set forth herein.
b) Optionee's representations and warranties as set forth
herein shall be true and correct as of the date of Closing.
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c) Optionee shall have deposited the Purchase Price into
Escrow.
d) Optionee shall have executed and delivered into Escrow all
other documents and instruments and shall have taken all
actions necessary to consummate the transactions
contemplated hereby in accordance with the terms of this
Agreement.
C. CLOSING. Subject to the satisfaction of the conditions set forth in
Section V(B), on or before the sixtieth (60th) day after Optionee
gives Optionor Notice of the exercise of the Option, the parties shall
perform as follows (the "Closing"):
1. Optionor shall deliver or cause to be delivered the following:
a) The Deed to Escrow for recordation in the property records
of ▇▇▇▇▇ County, with subsequent delivery to Optionee;
b) An affidavit as required by the Foreign Investment Real
Property Tax Act, Internal Revenue Code Sections1445
("FIRPTA"), to Escrow;
c) An assignment, if applicable, by Optionor to Optionee of all
rights to additional compensation and all rights in or to
any abandoned or vacated portion of the Property which is
the subject of any condemnation proceeding; this assignment
of all of Optionor's rights in and to any additional
compensation beyond any condemnation award, and any portion
of the Property that, after the Closing, is abandoned or
vacated, shall be recorded in the public records, at
Closing, if applicable, and such obligations as set forth in
this paragraph shall survive the Closing indefinitely
irrespective of any other limitation of liability contained
herein or in law or equity.; and
d) To Optionee or Title Company, as applicable, any other
documents, fully executed, as are customarily executed in
the State of Nevada in connection with the conveyance of
real property, including all required closing statements,
releases, affidavits and any other instrument that the
parties may agree to in good faith;
e) Exclusive possession of the Property.
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2. Optionee shall deliver or cause to be delivered the following:
a) The Purchase Price, subject to the Prorations (as defined in
Section V.D. below), for disbursement pursuant to Optionor's
instructions; and
b) To Optionor or Title Company, as applicable, any other
documents, fully executed, as are customarily executed in
the State of Nevada in connection with the conveyance of
real property, including all required closing statements,
releases, affidavits and any other instrument that the
parties may agree to in good faith.
D. CLOSING COSTS, EXPENSES AND PRORATIONS. All of the following closing
costs, expenses and prorations shall be collectively defined as the
"Prorations."
1. Optionor hereby agrees to pay for the following costs and
expenses associated with the consummation of this Agreement and
the Closing:
a) All real property transfer taxes and documentation taxes;
b) One-half (1/2) of any Escrow or closing fees charged by the
Title Company; and
c) Any other closing costs customarily paid by a seller of real
property in the State of Nevada.
2. Optionee hereby agrees to pay for the following costs and
expenses associated with the consummation of this Agreement and
the Closing:
a) Recording fees for the Deed;
b) One-half (1/2) of any Escrow or closing fees charged by the
Title Company;
c) All costs of the ALTA Policy;
d) The cost of the Survey;
e) Any other closing costs customarily paid by a purchaser of
real property in the State of Nevada.
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3. All real estate taxes, assessments and utilities relating to the
Property and not paid by Optionee under the Leases shall be paid
as of Closing by Optionor. Nothing herein shall limit the
parties' respective obligations elsewhere contained in this
Agreement.
VI. INDEMNITIES
A. From and after the Closing, Optionor shall indemnify, defend and hold
Optionee harmless from any and all claims, demands, liabilities,
judgments or expenses (including without limitation attorney's fees)
arising out of or resulting from Optionor's breach of any of its
representations, warranties or covenants set forth herein.
B. From and after the Closing, Optionee shall indemnify, defend and hold
Optionor harmless from any and all claims, demands, liabilities,
judgments or expenses (including without limitation attorney's fees)
arising out of or resulting from (i) Optionee's breach of any of its
representations, warranties or covenants set forth herein, or (ii)
events occurring on or with respect to the Property after Closing.
C. If either party receives notice of any matter which would give rise to
a claim for indemnity under subsections A or B above, that party shall
promptly notify the other party, and such other party shall be
entitled to defend the claim at its own expense with counsel of its
own choosing, subject to the approval of such counsel by the
indemnified party, which approval shall not unreasonably be withheld
or delayed.
VII. REMEDIES UPON DEFAULT
A. If Optionee exercises the Option and the Closing fails to occur solely
as a result of Optionor's default, Optionee shall be entitled as its
only remedies, to either (i) recover from Optionor the reasonable
costs incurred by Optionee for the Survey, attorney's fees associated
with this Agreement and transaction, and other costs of due diligence,
and to terminate the Escrow; or (ii) to obtain a decree of specific
performance.
B. If Optionee exercises the Option and the Closing fails to occur solely
as a result of Optionee's default, Optionor, shall be entitled as its
sole and exclusive remedy to reasonable attorney's fees and
out-of-pocket costs associated with this Agreement.
VIII. 1031 EXCHANGE. Optionee agrees to cooperate with Optionor in qualifying
this transaction as a tax-free exchange under Section 1031 of the Internal
Revenue Code as long as such cooperation does not result in any
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additional expense, liability, or obligation on the part of Optionee or
in the delay of the Closing. Failure to qualify this transaction as a
tax-free exchange will not release Optionor from its obligations
hereunder.
IX. MISCELLANEOUS.
A. ATTORNEY'S FEES. Each party shall pay all attorneys' fees incurred by
that party in the negotiation and delivery of this Agreement. However,
in the event that any action or proceeding is instituted to interpret
or enforce the terms and provisions of this Agreement, the prevailing
party shall be entitled to its costs and attorneys' fees, in addition
to any other remedies it may obtain or be entitled to.
B. BROKERS' COMMISSIONS. The parties each represent one to the other that
no broker, finder or other financial consultant has acted on their
behalf in connection with this agreement or the transactions
contemplated hereby. The parties each agree to indemnify and hold the
other harmless from any claim, settlement, cost or demand for
commission or other compensation by any broker, finder, financial
consultant or similar agent claiming to have been employed by or on
behalf of the indemnifying party, and to bear the cost of legal
expenses incurred in defending against such claims.
C. NOTICES. Any notices desired or required to be given hereunder (a
"Notice") shall be faxed, with the original deposited in the U.S.
Mail, postage prepaid, or sent by overnight courier service, and shall
be deemed received upon the earlier of attempted delivery or receipt.
Either party hereto may change its address hereunder by providing the
other party with notice of such changed address.
If to Optionor, ▇▇▇▇▇▇▇ ▇▇▇
addressed to: ▇▇▇▇▇▇▇ ▇▇▇ Investments
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇ Shadlaus
▇▇▇▇▇▇▇ ▇▇▇ Investments
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇.
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
If to Optionee, Palace Station Hotel & Casino, Inc.
addressed to: ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attn: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
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General Counsel
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
With a copy to: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
12th Floor Bank of America Plaza
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇.▇. ▇▇▇▇▇, Esq.
Facsimile: (▇▇▇)▇▇▇-▇▇▇▇
D. COUNTERPARTS. This agreement may be executed in multiple counterparts,
which together shall constitute one and the same document.
E. FURTHER ASSURANCES. The parties agree to negotiate diligently and in
good faith at all times, to execute and deliver such other and further
documents and instruments as may be necessary to fully effectuate the
transactions contemplated hereby. The parties further agree to execute
and deliver to the Title Company such other and further escrow
instructions, documents and instruments as may be reasonably necessary
to effectuate this transaction in accordance with its terms.
X. LANDLORD'S RIGHT TO ENCUMBER. Notwithstanding any provision of the Lease to
the contrary, Landlord shall have the right from time-to-time, to pledge,
mortgage or encumber its interest in the Lease or assign its interest in
the Rental amounts due thereunder without the prior consent of Tenant;
provided, however, that if and when Landlord makes such assignment, pledge,
mortgage or encumbrance, any such lender shall agree that Tenant's quiet
possession and enjoyment of the Demised Premises will not be disturbed as a
result of such assignment, pledge, mortgage or encumbrance or for any
reason related thereto so long as Tenant pays all amounts due pursuant to
the Lease and keeps the covenants on its part to be performed thereunder
and that said assignment, pledge, mortgage or encumbrance shall be
subordinate to the Option in favor of Optionee. In the event of such
assignment, pledge, mortgage or encumbrance, Landlord shall provide Tenant
with a copy of the documents evidencing such action prior to the effective
date thereof.
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XI. BINDING EFFECT ON LEASE. All terms and provisions of the Lease, other than
as set forth above, shall remain in full force and effect in their
entirety.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement the day
and year first above-written
"Optionor"
FLAMINGO ASSOCIATES, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
-----------------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇
-----------------------------------
Title: President
-----------------------------------
Date: 4/7/99
-----------------------------------
"Optionee"
PALACE STATION HOTEL & CASINO, INC.,
a Nevada corporation
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
-----------------------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
-----------------------------------
Title: Secretary
-----------------------------------
Date: 4/7/99
-----------------------------------
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TITLE COMPANY
RECEIPT AND CONSENT
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The Title Company acknowledges receipt of an executed copy of the Agreement
and agrees to perform as the Title Company thereunder.
Nevada Title Company, a Nevada corporation
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Title: Commercial Title Officer
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Dated: 4/8/99
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EXHIBIT "A"
[PROPERTY]
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The "Property" is hereby defined as all property owned by Optionor which is
generally located at the intersection of Sahara Avenue and Rancho Drive, in the
County of ▇▇▇▇▇, State of Nevada, as described below, as shown on the attached
diagram, and as described on the legal descriptions that follow, together with
Optionor's interest, if any, in any buildings and improvements located thereon
and all rights, licenses and easements appurtenant there and any contiguous real
property owned by Optionor or that is subsequently conveyed or awarded to
Optionor as a result of the vacation or abandonment of any easement, right of
way or public street. Upon completion of the Survey, the legal description of
the Property therein shall be used for all purposes hereunder.
The Property consists of three (3) contiguous parcels, which for
convenience are numbered as set forth on the Pro Forma, and which are owned by
Optionor as follows:
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Optionor Approx. Affecting Lease (as Owned by
owner Acreage Parcels numbered on Grant,
Pro Forma) Bargain, Sale
(legal Deed
descriptions (Lease #)
follow) (recording
information:
book/number)
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Flamingo 6.44 Parcels II & II-A 6 (Lease B-1) 740/699146
Associates
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Flamingo .84 Parcel I 8 (Lease B-2) 740/699147
Associates
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ATTACHMENT
[PROPERTY DIAGRAM AND LEGAL DESCRIPTIONS]
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EXHIBIT "B-1"
[LEASE B-1]
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EXHIBIT "B-2"
[LEASE B-2]
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EXHIBIT "C"
Purchase Price Formula and Appraisal Process
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The Purchase Price in the first seven (7) years of the Option Term
shall be determined by the following schedule:
Year Purchase Price
---- --------------
1 $1,250,000
2 $1,250,000
3 $1,250,000
4 $1,312,500
5 $1,375,000
6 $1,437,500
7 $1,500,000
During years eight (8), nine (9) and ten (10) of the Option Term, the
Purchase Price shall be determined by the following appraisal process:
A. Within ten (10) days of Optionee's Notice to Optionor to exercise the
Option, each party shall appoint an appraiser. Within thirty (30) days
of Optionee's Notice, the two (2) appraisers (the "Two Appraiser
Board") shall meet and confer and attempt to agree on a fair market
value of the Property to serve as the Purchase Price.
B. If the Two Appraiser Board is unable to agree on a Purchase Price
within said thirty (30) days, they shall promptly notify the parties
in writing. The Two Appraiser Board will, within two (2) business days
thereafter, appoint a third appraiser who shall be an MAI with at
least ten (10) years experience in appraising gaming real estate and
improvements in southern Nevada. In the event the Two Appraiser Board
cannot agree on the name of the third appraiser within said two (2)
days, then application shall be made to the Eighth Judicial District
Court of the State of Nevada for appointment of the third appraiser
pursuant to NRS 38.055, who is an MAI with at least ten (10) years
experience in appraising commercial real estate in southern Nevada.
The third appraiser shall promptly determine the Purchase Price, which
shall not be lower than the lowest appraisal or higher than the
highest appraisal of the Two Appraiser Board.
C. The Purchase Price determined by this appraisal process shall be
binding on the parties.
D. In the event one party fails to appoint an appraiser to the Two
Appraiser Board, the other party's appraisal shall be binding.
E. The parties agree that the Closing shall be postponed until this
appraisal process is complete, and the Closing shall take place
promptly thereafter.
Further, in the event that at Closing, if any Optionor has received a
condemnation award or the ability to withdraw or obtain a condemnation award
because any portion of the Property was condemned or was or is the subject of
any pending proceeding in eminent domain, the Purchase Price as determined by
the formula set forth above shall be reduced by the amount of any condemnation
award awarded to any Optionor.
-20-
EXHIBIT "D"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇. ▇▇▇ ▇▇▇▇▇▇, ▇▇▇. ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇.▇. ▇▇▇▇▇, Esq.
MEMORANDUM OF OPTION
NOTICE IS HEREBY GIVEN THAT:
Effective as of April 1, 1999 (the "Effective Date") and pursuant to that
certain First Amendment to Lease (With Option) (the "Agreement"), by and between
Flamingo Associates, Inc., a Nevada corporation ("Optionor"), and Palace Station
Hotel & Casino, Inc., a Nevada corporation ("Optionee"), Optionor has granted to
Optionee an option to purchase that certain real property generally located at
Sahara Avenue and Rancho Drive, as specifically described on the attached
Exhibit "A," which may be exercised within ten (10) years of the Effective Date.
IN WITNESS WHEREOF, this Memorandum of Option is effective as of the
Effective Date.
OPTIONOR:
Flamingo Associates, Inc.,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇
---------------------------
Name: ▇▇▇▇▇▇▇ ▇▇▇, President
---------------------------
Dated: 4/7/99
---------------------------
OPTIONEE:
Palace Station Hotel & Casino, Inc.,
a Nevada corporation
By: /s/ ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
---------------------------
Name: ▇▇▇▇▇ ▇ ▇▇▇▇▇▇▇
---------------------------
Dated: 4/7/99
---------------------------
STATE OF NEVADA )
) ss.
COUNTY OF ▇▇▇▇▇ )
Signed or attested before me on April 7, 1999 by ▇▇▇▇▇▇▇ ▇▇▇, as President
of Flamingo Associates, Inc.
SEAL /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
My commission expires Jan. 22, 2002 Signature of Notarial Officer
-21-
EXHIBIT "D"
STATE OF NEVADA )
) ss.
COUNTY OF ▇▇▇▇▇ )
Signed or attested before me on April 7, 1999 by ▇▇▇▇▇ ▇▇▇▇▇▇▇, as
Secretary of Palace Station Hotel & Casino.
SEAL /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------
My commission expires Jan. 22, 2002 Signature of Notarial Officer
-22-
EXHIBIT "E"
[PRO FORMA POLICY]
-23-
EXHIBIT "F"
[THE DEED]
-24-