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EXHIBIT 10.1
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
THIS PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS ("Agreement") dated,
for reference purposes only, October 9, 1996, is between ▇▇▇▇▇▇▇▇▇ & ASSOCIATES,
INC., a Nevada corporation and ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, individually (collectively
"Seller"), and AMERICAN CASINO ENTERPRISES, INC., a Nevada corporation
("Buyer").
This Agreement is entered into with reference to the recitals set forth
in Article 1 and constitutes (i) a contract of purchase and sale between the
parties, and (ii) escrow instructions to United Title of Nevada ("Escrow Agent"
and "Title Company"), whose consent appears at the end of this Agreement.
ARTICLE 1- Recitals
1.1 The Property. Seller is the present optionee under that certain
Option to Purchase Real Property dated March 9, 1996, entered into by and
between LOS ▇▇▇▇▇ CORPORATION, as Optionor ("Los ▇▇▇▇▇"), and Seller, as
Optionee, pursuant to which Seller has been granted the exclusive option to
purchase (the "Los ▇▇▇▇▇ Option") that certain real property located in ▇▇▇▇▇
County, Nevada, as more particularly described in Exhibit "A" attached hereto
and by this reference made a part hereof, together with all water rights and
other appurtenances and entitlements appurtenant to or used in connection
therewith (the "Property").
1.2 Intention of the Parties. Seller has exercised the Los ▇▇▇▇▇
Option, and concurrently with Seller's purchase of the Property pursuant to the
closing of the Los ▇▇▇▇▇ Option (the "Los ▇▇▇▇▇ Closing") Buyer intends to
purchase, and Seller intends to sell, the Property pursuant to the provisions of
this Agreement.
ARTICLE 2 - Purchase Price
2.1 Amount of Purchase Price. In consideration of the covenants
contained in this Agreement, Seller will sell, and Buyer will purchase, the
Property upon the terms and conditions set forth in this Agreement for a total
purchase price of FIVE MILLION TWO HUNDRED THOUSAND AND NO/100THS DOLLARS
($5,200,000.00), together with Buyer's share of the Closing Costs (below
defined) (collectively, the "Purchase Price") payable as below provided.
2.2 Method of Payment. THREE MILLION FIVE HUNDRED TWENTY-SEVEN THOUSAND
SEVEN HUNDRED EIGHTEEN AND NO/l00THS DOLLARS ($3,527,718.00), of the Purchase
Price shall be paid at Closing (below defined) in U.S. currency, cashier's check
issued by a bank or other depository acceptable to Escrow Agent, or via
wire-transferred funds ("Immediately Available Funds"). The balance of the
Purchase Price shall be deemed paid pursuant to Buyer's taking title to the
Property subject to the existing note ("Note") secured by a deed of trust
presently encumbering the Property; provided, however, that Buyer shall, as
between Buyer and Seller, assume the Note and make all required payments
thereafter so long as Buyer continues to own the Property.
ARTICLE 3 - Escrow
3.1 Opening. Immediately upon Buyer's and Seller's mutual execution and
delivery of this Agreement, Buyer shall deliver to Escrow Agent a copy of a
fully executed original of this Agreement. The date by which such delivery is
made shall be the "Escrow Opening Date." This Agreement shall serve as escrow
instructions to Escrow Agent, and Escrow Agent is hereby authorized and
instructed to act in accordance with the terms of this Agreement. The parties
shall execute any additional instructions to Escrow Agent necessary to carry out
the terms and conditions of this Agreement, provided such escrow instructions
shall be subject to approval by the parties hereto. The terms of the escrow
instructions shall not supersede the terms of this Agreement; and in the event
of conflict, the terms of this Agreement shall be controlling, unless a contrary
intent is clearly indicated by the parties.
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3.2 Closing. Escrow shall close on the earlier of (1) five (5) days
from the date of execution of this Agreement by both parties; (b) October 8,
1996; or (c) the date upon which the Los ▇▇▇▇▇ Closing occurs (the "Closing
Date"), but in no event later than October 10, 1996. The Closing is subject to
the condition that the Los ▇▇▇▇▇ Closing occurs concurrently with the Closing of
this transaction.
ARTICLE 4 - Conditions Precedent to Buyer's Obligation to Perform
4.1 Buyer's duty to perform its obligations under this Agreement is
expressly made contingent upon the satisfaction of each of the following
conditions precedent:
4.1.1 Title Matters. Immediately upon the Escrow Opening Date,
Seller shall delivery to Buyer a preliminary title report ("Title Report") for
the Property. Buyer shall have until 5:00 p.m. on the day which is two (2) days
prior to the Closing Date to notify Seller and Escrow Agent, in writing, of
Buyer's objection to one or more of the title exceptions and/or conditions shown
therein. Buyer's failure to notify Seller and Escrow Agent, in writing, of
Buyer's objection to any exceptions and/or conditions within such time period
shall constitute Buyer's approval of the Title Report, whereupon this
contingency shall be deemed fully met and satisfied; subject, however, to
Buyer's right to approve matters which are disclosed by Title Company subsequent
to the receipt by Buyer of the Title Report, such right of approval being
reserved only as to such new matters. In the event Buyer objects to any such
conditions of title as reflected in the Title Report, Seller shall use its best
efforts to remove such exceptions prior to Closing. In the event Seller fails to
satisfy Buyer's objections prior to or at Closing, then Buyer shall elect either
(i) not to close the transaction contemplated hereby, in which event this
Agreement shall be of no further force or effect; or (ii) to close the Escrow
with no reduction in the Purchase Price. All exceptions and conditions to title
accepted, or deemed accepted, by Buyer pursuant to this Section 4.1.1 are
"Permitted Title Exceptions."
4.1.2 Materials. Immediately upon the Escrow Opening Date,
Seller shall make available to Buyer, at no cost to Buyer, copies of all maps,
surveys, engineering studies, soils reports, Seller's contracts with architects
and engineers, if any, and other similar documentation relating to the Property
which are in Seller's possession (collectively, the "Materials"). Seller hereby
authorizes any consultants who have prepared any of the materials for Seller to
discuss the same openly and directly with Buyer. However, Seller has not made,
and hereby expressly disclaims, any express or implied representation or
warranty whatsoever as to the truth, accuracy or completeness of any of the
Materials or their fitness for any particular use or purpose. The foregoing
obligation of Seller to deliver Materials to Buyer shall be continuing in nature
and shall include, without limitation, delivery of all Materials received by
Seller pursuant to the Los ▇▇▇▇▇ Closing.
ARTICLE 5 - Deliveries at Closing
5.1 Buyer's Deliveries. Buyer shall deliver to Escrow Agent, on or
before Closing, the following:
5.1.1 Purchase Money. The Purchase Price in the form provided
for in Section 2.2.
5.1.2 Additional Documentation. Such additional documents and
instruments as may be reasonably required by Escrow Agent to consummate the
Closing.
5.2 Seller's Deliveries. Seller shall deliver to Escrow Agent, on or
before Closing, the following:
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5.2.1 The Seller's Deed. A grant, bargain and sale deed on
Escrow Agent's standard form (the "Seller's Deed") conveying the Property to
Buyer signed and acknowledged by Seller.
5.2.2 Seller's IRS Section 1445 Affidavit. An Affidavit on
Escrow Agent's standard form executed in satisfaction of the requirements of
Section 1445 of the United States Internal Revenue Code.
5.2.3 Seller's Charges. If the funds deposited with Escrow
Agent by Buyer are insufficient to (i) discharge all record encumbrances other
than Permitted Title Exceptions and (ii) pay the charges to Seller under the
Article of this Agreement entitled "Prorations, Fees and Costs," Seller shall
deliver to Escrow Agent sufficient funds and instruments to discharge and pay
such encumbrances and charges.
ARTICLE 6 - The Closing
6.1 Conditions to Closing. Escrow Agent shall close Escrow (the
"Closing") on or before the Closing Date. Escrow Agent shall effect the Closing
by (i) filing for record the Seller's Deed (and such other documents as may be
necessary to procure the title policy); and (ii) delivering funds and documents
to the parties as appropriate WHEN AND ONLY WHEN each of the following
conditions has been satisfied:
6.1.1 Deliveries. All funds and documents described in Article
5 have been delivered to Escrow Agent.
6.1.2 Conditions Precedent. All of the conditions precedent in
Article 4 have been satisfied or waived in the manner set forth therein.
6.1.3 Closing Statement. Escrow Agent shall have delivered to
the parties and the parties shall have approved the proposed Closing statement.
6.1.4 Title Policies. Title Company is prepared to, and will,
issue a standard form American Land Title Association ("ALTA") (as required by
Buyer) owner's policy of title insurance with coverage in the amount of the
Purchase Price, insuring that fee simple title to the Property vests in Buyer
subject only to (i) standard printed form exclusions from coverage of such
policy of title insurance, and (ii) the Permitted Title Exceptions.
6.1.5 Option Agreement. Buyer and Seller shall have deposited
with Escrow Agent a fully executed and original option agreement pursuant to
which Buyer has granted to Seller an exclusive option to purchase the Property
on terms and conditions mutually acceptable to Buyer and Seller.
ARTICLE 7 - Prorations. Credits and Costs
7.1 Prorations. Escrow Agent shall prorate (that is, apportion) between
the parties, in cash, to the Closing Date on the basis of a 30-day month, the
following:
7.1.1 Taxes. General and special real estate and personal
property taxes, based on the regular tax ▇▇▇▇ for the fiscal year in which the
Escrow closes (or, if such tax ▇▇▇▇ has not been issued as of the Closing Date,
the regular tax ▇▇▇▇ for the fiscal year preceding that in which the Escrow
closes).
7.1.2 Utilities. To the extent applicable, all utilities,
including gas, water, sewer, electricity, telephone and other utilities supplied
to the Property shall be read as of the Closing Date. Seller shall be
responsible for payment of all amounts applicable to time periods prior to the
Closing, and Buyer shall be responsible for all time periods thereafter.
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7.1.3 Other Items. All other proratable items including,
without limitation, insurance premiums, licenses, permits, and refuse
collection.
7.2 Closing Costs. Each party shall pay the cost of preparing the
instruments to be furnished by such party and any attorneys' fees incurred by
such party. The cost of the ALTA title insurance policy premium, the recording
fee for the deed and the real estate transfer tax shall be paid by Seller. All
other closing costs shall be paid equally by the parties.
ARTICLE 8 - Warranties. Representations and Assurances of Seller
Seller hereby represents and warrants to Buyer all of the following,
each of which is true in all respects as of the date of this Agreement and shall
be so at Closing.
8.1 Actions. Suits or Proceedings. Seller has not received notice of,
and has no knowledge of, any actions, suits, or proceedings which are pending or
threatened before any court or governmental department, commission, board,
bureau, agency or instrumentality that would materially and adversely affect the
Property or the right to occupy or utilize it.
8.2 Power and Authority. Seller has the full right and authority to
enter into this Agreement and consummate the transactions contemplated herein;
each of the persons signing this Agreement on behalf of Seller is authorized to
so sign; and the execution, consent or acknowledgement of no other person or
entity is necessary in order to validate the execution of this Agreement by
Seller.
8.3 Other Agreements. Entry into this Agreement, and the performance by
Seller of its obligations hereunder, does not contravene or constitute a breach
of any agreement, contract or indenture to which Seller is a party.
8.4 Liens and Encumbrances. To the knowledge of Seller, except as may
be disclosed in the Title Report or the Materials, there are no unrecorded
leases, easements or encumbrances which affect title to the Property.
8.5 No Notice of Pending Condemnation. Seller has not received notice
of, and has no knowledge of, any pending or threatened condemnation of all or
any part of the Property.
8.6 Compliance. Seller has no knowledge of any aspect or condition of
the Property which violates applicable laws, rules, regulations, codes, or
covenants, conditions or restrictions, or of improvements or alterations made to
the Property without a permit where one was required, or of any unfulfilled
order or directive from any applicable governmental agency, or any casualty
insurance company that any work of investigation, remediation, repair,
maintenance or improvement is to be performed on the Property.
8.7 Maintenance During Escrow and Condition at Closing. Seller shall
maintain the Property until Closing in its present condition, acts of God
excepted.
8.8 Changes in Agreements. Prior to Closing, Seller will not knowingly
violate or modify, either orally or in writing, any agreement affecting the
Property, or create any new agreements affecting the Property, without Buyer's
written approval.
8.9 Possessory Right. No person, except Los ▇▇▇▇▇ presently and Seller
at Closing, has any right to possession of the Property.
8.10 Mechanics' Liens. To the best knowledge of Seller, there will be
no unsatisfied mechanic's or materialman's lien rights concerning the Property
after
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Closing.
8.11 No Seller Bankruptcy Proceedings. Seller is not the subject of a
bankruptcy proceeding.
8.12 True and Correct Documents. All copies of documents furnished to
Buyer by Seller or its counsel in connection with this transaction are true,
correct and complete copies of the originals.
8.13 Hazardous Substances/Storage Tanks. Seller has no knowledge,
except as otherwise disclosed to Buyer in writing, of the existence or prior
existence on the Property of any hazardous substance which would, under any
applicable federal, state or local laws, rules or regulations, require remedial
action, or of the existence or prior existence of any above or below ground
storage tank or tanks on or about the Property.
8.14 Notice of Change. Seller will promptly notify buyer of any fact or
circumstance which becomes actually known to Seller between the date of this
Agreement and the Closing which renders untrue any representation made by Seller
in this Article.
8.15 Los ▇▇▇▇▇ Option. Seller will exercise good faith and diligent
efforts to comply with and fulfill all remaining obligations of Seller under the
Los ▇▇▇▇▇ Option, as exercised, in order to purchase the Property from Los
▇▇▇▇▇.
8.16 No Material Defaults. There are no material defaults in the
Development Agreement with ▇▇▇▇▇ County concerning the Property. The Development
Agreement is valid and enforceable.
ARTICLE 9 - Warranties, Representations and Assurances of Buyer
Buyer warrants and represents to Seller as follows:
9.1 Power and Authority. Buyer has the full right and authority to
enter into this Agreement and consummate the transactions contemplated herein;
each of the persons signing this Agreement on behalf of buyer is authorized to
so sign; and the execution, consent or acknowledgement of no other person or
entity is necessary in order to validate the execution of this Agreement by
Buyer.
9.2 Other Agreements. Entry into its Agreement, and the performance by
Buyer of its obligations hereunder, does not contravene or constitute a breach
of any agreement, contract or indenture to which Buyer is a party.
9.3 Note Payments. Buyer will not prepay any portion of the Note prior
to the lapse of one hundred twenty (120) days from and after the Closing Date.
ARTICLE 10 - Seller's Indemnity
In addition to any remedies and claims for damages Buyer may have as a
result of Seller's breach, if any, of the representations and warranties set
forth in Article 8, Seller shall indemnify and hold Buyer harmless from and
against any and all claims, losses, liabilities and expenses (including court
costs and reasonable attorneys' fees) arising out of or in connection with any
failure of the Property to comply fully, as of the Closing, with any and all
environmental laws, ordinances, rules and regulations applicable to the
Property.
ARTICLE 11- Brokerage Commissions
Each party warrants to the other that the warranting party has incurred no
obligations, by reason of this Agreement or the transaction contemplated hereby,
for a real estate brokerage commission or finder's fee for which the other party
would be liable. Each party will hold the other party free and harmless from and
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against any damage or expense the other party may incur by reason of the untruth
as to the warranting party of the foregoing warranty, including expenses for
attorneys' fees and court costs.
ARTICLE 12 - Default by Seller or Buyer
12.1 LIQUIDATED DAMAGES FOR BUYER'S DEFAULT. BUYER AND SELLER
ACKNOWLEDGE AND AGREE THAT: (1) IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT
TO DETERMINE SELLER'S ACTUAL DAMAGE IN THE EVENT OF BUYER'S FAILURE TO CLOSE
ESCROW FOR ANY REASON OTHER THAN SELLER'S DEFAULT; AND (2) TAKING INTO ACCOUNT
ALL OF THE CIRCUMSTANCES EXISTING ON THE DATE OF THIS AGREEMENT, INCLUDING THE
EXISTENCE OF OTHER INTERESTED PURCHASERS, THE AMOUNT OF ONE MILLION FIVE HUNDRED
THOUSAND DOLLARS ($1,500,000.00) IS A REASONABLE ESTIMATE OF SELLER'S ACTUAL
DAMAGES IN THE EVENT OF BUYER'S BREACH OR FAILURE TO CLOSE ESCROW. CONSEQUENTLY,
FOR ANY REASON OTHER THAN SELLER'S BREACH, SELLER'S SOLE AND EXCLUSIVE REMEDY AT
LAW OR IN EQUITY SHALL BE TO TERMINATE THIS AGREEMENT AND TO RECEIVE FROM BUYER
AND BUYER AGREES TO IMMEDIATELY PAY TO SELLER, THE LIQUIDATED DAMAGES AMOUNT OF
ONE MILLION FIVE HUNDRED THOUSAND DOLLARS ($1,500,000.00).
12.2 Buyer's Remedies. If Seller fails to complete the sale of the
Property, such failure constitutes a breach of this Agreement, and Buyer is not
in breach of this Agreement, Buyer shall be entitled to all remedies available
in equity or at law.
ARTICLE 13 - Notices
13.1 Time of Delivery, Addresses. Unless otherwise specifically
provided in this Agreement, all notices, demands or other communications given
hereunder shall be in writing and will be deemed to have been duly delivered
upon personal delivery, as of the next day after deposit with a commonly
accepted courier for overnight delivery, or as of the third business day after
mailing by United States certified mail, return receipt requested, postage
prepaid, and addressed as follows:
If to Seller, to: ▇▇▇▇▇▇▇▇▇ & Associates, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
With copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Buyer, to: American Casino Enterprises, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
With copies to: ▇▇▇▇ ▇▇▇▇▇, Esq.
Hale, Lane, Peek, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇ and Pearl
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇. ▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
If to Escrow
Agent, to: United Title of Nevada
▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇
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or such other address as any party may designate to the others for such purpose
in the manner set forth above.
ARTICLE 14 - General Provisions
14.1 Survival of Provisions. The representations, warranties,
agreements and indemnities set forth in this Agreement shall remain operative,
shall be deemed made at Closing, and shall survive the Closing for a period not
to exceed one year.
14.2 Captions. Captions in this Agreement are inserted for convenience
of reference only and do not define, describe or limit the scope or the intent
of this Agreement.
14.3 Entire Agreement. This Agreement contains the entire agreement
between the parties relating to the transactions contemplated hereby, and all
prior or contemporaneous agreements, understandings, representations and
statements, oral or written, are merged into this Agreement.
14.4 Modification. No modification, waiver or discharge of this
Agreement shall be valid unless it is in writing and signed by the party against
which the enforcement of the modification, waiver or discharge is or may be
sought.
14.5 Attorneys' Fees and Costs. If either party commences litigation or
other proceedings (including, without limitation, arbitration) for the
interpretation, reformation, enforcement or rescission of this Agreement, the
prevailing party shall be entitled to recover from the other party an amount
equal to reasonable attorneys' fees and court and other costs incurred.
14.6 Successors. All terms of this Agreement shall be binding upon and
inure to the benefit of the parties and their respective administrators or
executors, successors and assigns; provided, however, that Buyer's rights and
obligations hereunder may not be assigned or delegated.
14.7 Counterparts. This Agreement may be executed in any number of
counterparts, each of which will be deemed to be an original, but all of which
together will constitute but one instrument.
14.8 Time. Time is of the essence of this Agreement and in the
performance and enforcement of each of the promises, covenants, representations
and warranties of the parties contained herein. If an act is required to be
performed on a certain day and such day is not a regular business day of Escrow
Agent, the time of performance or measurement shall be extended to and including
the next regular business day of Escrow Agent.
14.9 Further Assurances. Each of the parties hereto shall execute and
deliver any and all additional papers, documents and other assurances, and shall
do any and all acts and things reasonably necessary in connection with the
performance of their obligations hereunder and to carry out the intent and
agreements of the parties hereto.
14.10 Authority. Each person signing this Agreement represents and
warrants that he or she has the proper authority to bind the party on whose
behalf he or she signs.
14.11 Governing Law. This Agreement shall be construed in accordance
with the laws of the State of Nevada.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date and year appearing with their respective signatures.
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SELLER:
▇▇▇▇▇▇▇▇▇ & ASSOCIATES, INC.,
a Nevada corporation
Dated: October 9, 1996 By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇
▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, PRESIDENT
Dated: October 9, 1996 /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Individually
BUYER:
Dated: October 9, 1996 AMERICAN CASINO ENTERPRISES, INC.,
a Nevada corporation
By:___/s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Vice Pres.
CONSENT OF ESCROW AGENT
United Title of Nevada agrees to (i) accept the foregoing Agreement,
(ii) be Escrow Agent under the Agreement, and (iii) be bound by the Agreement in
the performance of its duties as Escrow Agent; however, the undersigned shall
have no obligations, liability or responsibility (i) under this consent or
otherwise, unless and until the Agreement, fully signed by the parties, has been
delivered to the undersigned, or (ii) under any amendment to the Agreement
unless and until the amendment is accepted by the undersigned in writing.
UNITED TITLE COMPANY,
a Nevada corporation
By: /s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Its: Senior Escrow Officer
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Exhibit A
Parcel 1:
The Southeast Quarter (SE l/4) of Section 20, Township 22 South, Range 60 East,
M.D.B. & M., ▇▇▇▇▇ County, Nevada.
Parcel 2:
The Southeast Quarter (SE 1/4) of the Southwest Quarter (SW 1/4) of the
Southwest Quarter (SW 1/4) of the Northeast Quarter (NE 1/4) of Section 20,
Township 22 South, Range 60 East, M.D.M., ▇▇▇▇▇ County, Nevada.
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