EXHIBIT 10.5
FIRST AMENDMENT TO LEASE
(WITH OPTION)
-------------------------------------------------------------------------------
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 XXXXXXX XXX, Trustee, under Trust
Agreement Dated December 30, 1977 (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 three (3) separate leases, which are attached
hereto as Exhibits B-1, B-2, and B-3, respectively, Landlord
leases the Property to Tenant as follows: one lease between
Landlord and Tenant for approximately 3.47 acres ("Lease
B-1"), one lease between Landlord and Tenant for approximately
1.39 acres ("Lease B-2"), and one lease between Landlord, as a
co-tenant, and Tenant for approximately .34 acres
(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
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 $17,138.94.
-1-
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.
B. LEASE B-2
The Rental provision as set forth in the Lease B-2 at Xxxxxxx 0, 0, xxx
0 xxxxx xx 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 $7,236.06.
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 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
-2-
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 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.
-3-
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 Xxxxxxx Xxx has full authority to execute this
Agreement on behalf of Optionor and to bind Optionor
to this Agreement.
3. That Optionor is duly organized, is validly existing,
and is a trust in good standing under the laws of its
jurisdiction or organization.
4. That Optionor has all necessary power and authority
to carry on its business and to own, lease and
operate its properties, and is duly qualified and
authorized to do business in each jurisdiction in
which the nature of its business or its ownership or
leasing of property requires such qualification.
5. That the execution, delivery and performance of this
Agreement by Optionor will not, with or without the
giving of
-4-
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.
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.
-5-
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 Landlord has reviewed and certified that the
Leases attached hereto as Exhibit X-0, Xxxxxxx X-0,
and Exhibit B-3 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
X-0, Xxxxxxx X-0, and Exhibit B-3.
17. Irrespective of anything herein to the contrary, for
the remainder of the term of the Leases, Landlord
shall be solely responsible for making monthly
payments to Scripps Resources International in the
sum of $1,875.00 and to Xxxx Xxxxxxx Trust in the sum
of $750.00, and shall hold Tenant harmless from such
obligations.
19. Irrespective of anything herein to the contrary, at
the Closing, Optionor shall be solely responsible for
paying to Scripps Resources International the sum of
$250,000.00 and to Xxxx Xxxxxxx Trust the sum of
$100,000.00, and shall hold Optionee harmless from
such obligations.
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.
-6-
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:
-7-
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.
-8-
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 Xxxxx County, with
subsequent delivery to Optionee;
b) An affidavit as required by the Foreign
Investment Real Property Tax Act, Internal
Revenue Code Section1445 ("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.
-9-
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.
-10-
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
-11-
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, Xxxxxxx Xxx
addressed to: Xxxxxxx Xxx Investments
0000 Xxxx Xxxxxxxxxx Xxxx.
Xxx Xxxxx, Xxxxxx 00000
Facsimile: (000)000-0000
With a copy to: Xxx Shadlaus
Xxxxxxx Xxx Investments
0000 Xxxx Xxxxxxxxxx Xxxx.
Xxx Xxxxx, Xxxxxx 00000
Facsimile: (000)000-0000
If to Optionee, Palace Station Hotel & Casino, Inc.
addressed to: 0000 Xxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 000000
Attn: Xxxxx X Xxxxxxx
-12-
General Counsel
Facsimile: (000)000-0000
With a copy to: Xxxxxxx Xxxxxx
12th Floor Bank of America Plaza
000 Xxxxx Xxxxxx Xxxxxx
Xxx Xxxxx, Xxxxxx 00000
Attn: X.X. Xxxxx, Esq.
Facsimile: (000)000-0000
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.
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
-13-
"Optionor"
XXXXXXX XXX, TRUSTEE, U/T/A DATED DECEMBER 30, 1977
By: /s/ XXXXXXX XXX
------------------------------
Name: Xxxxxxx Xxx
------------------------------
Dated:
------------------------------
"Optionee"
PALACE STATION HOTEL & CASINO, INC.,
a Nevada corporation
By: /s/ XXXXX X XXXXXXX
------------------------------
Name: Xxxxx X Xxxxxxx
------------------------------
Title: Secretary
------------------------------
Dated: 4/7/99
------------------------------
-14-
TITLE COMPANY
RECEIPT AND CONSENT
-------------------------------------------------------------------------------
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/ XXXXX X. XXXXXX
-------------------------
Name: Xxxxx X. Xxxxxx
-------------------------
Title: Commercial Title Officer
-------------------------
Dated: 4/8/99
-------------------------
-15-
EXHIBIT "A"
[PROPERTY]
-------------------------------------------------------------------------------
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 Xxxxx, 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:
--------------------------------------------------------------------------------------------------------------
Optionor owner Approx. Acreage Affecting Parcels Lease Owned by Grant,
(legal descriptions (as Bargain, Sale Deed
follow) numbered on Pro Forma) (recording
(Lease #) information:
book/number)
--------------------------------------------------------------------------------------------------------------
Xxxxxxx Xxx, Trustee, 3.47 Parcel V 21 (Lease B-1) 949/908111
under Trust Agreement (Memorandum of Lease
dated December 30, 1977 AND Doc. 761414)
1.39 Parcel V-A
20 (Lease B-2)
(Memorandum of Lease
Doc. 761413)
Xxxxxxx Xxx, Trustee, .34 Parcel IV-undivided 1/3 7 (Lease B-3) 86037/00625
under Trust Agreement interest
dated December 30, 1977
--------------------------------------------------------------------------------------------------------------
-16-
ATTACHMENT
[PROPERTY DIAGRAMS AND LEGAL DESCRIPTIONS]
-17-
EXHIBIT "B-1"
[LEASE B-1]
-18-
EXHIBIT "B-2"
[Lease B-2]
-19-
EXHIBIT "B-3"
[Lease B-3]
-20-
EXHIBIT "C"
Purchase Price Formula and Appraisal Process
-------------------------------------------------------------------------------
The Purchase Price in the first seven (7) years of the Option Term
shall be determined by the following schedule:
Year Purchase Price
---- --------------
1 $3,250,000
2 $3,250,000
3 $3,250,000
4 $3,412,500
5 $3,575,000
6 $3,737,500
7 $3,900,000
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
-21-
Purchase Price as determined by the formula set forth above shall be reduced
by the amount of any condemnation award awarded to any Optionor.
-22-
EXHIBIT "D"
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
Xxxxxxx Xxxxxx
000 X. 0xx Xxxxxx, Xxx. 0000
Xxx Xxxxx, XX 00000
Attn.: X.X. Xxxxx, 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 Xxxxxxx Xxx, Trustee, U/T/A Dated December 30, 1977 ("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:
Xxxxxxx Xxx, Trustee, U/T/A Dated December 30, 1977
By: /s/ XXXXXXX XXX
------------------------------
Name: Xxxxxxx Xxx, Trustee
------------------------------
Dated: 4/7/99
------------------------------
OPTIONEE:
Palace Station Hotel & Casino, Inc.,
a Nevada corporation
By: /s/ XXXXX X XXXXXXX
------------------------------
Name: Xxxxx X Xxxxxxx
------------------------------
Dated: 4/7/99
------------------------------
STATE OF NEVADA )
) ss.
COUNTY OF XXXXX )
Signed or attested before me on April 7, 1999 by Xxxxxxx Xxx, as
Trustee of Xxxxxxx Xxx, Trustee.
SEAL /s/ Xxxxxxxx X. Xxxxxx
-----------------------------
My commission expires Jan. 22, 2002 Signature of Notarial Officer
-23-
EXHIBIT "D"
STATE OF NEVADA )
) ss.
COUNTY OF XXXXX )
Signed or attested before me on April 7, 1999 by Xxxxx Xxxxxxx, as
Secretary of Palace Station Hotel & Casino.
SEAL /s/ Xxxxxxxx X. Xxxxxx
-----------------------------
My commission expires Jan. 22, 2002 Signature of Notarial Officer
-24-
EXHIBIT "E"
[PRO FORMA POLICY]
-25-
EXHIBIT "F"
[THE DEED]
-26-
