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EXHIBIT 10.9
FIRST AMENDMENT TO LEASE
THIS FIRST AMENDMENT TO LEASE (the "Amendment to Lease") is entered
into as of the 1st day of January, 1999 by and between ELEVATION 8000+ LLC, a
Colorado limited liability company (alternately referred to as "Elevation," or
the "Landlord"), and CONCORDE CRIPPLE CREEK INC., a Colorado corporation
(alternately referred to as "Concorde," or the "Tenant").
R E C I T A L S
A. On or about July 21, 1997, Elevation, as Landlord, and Concorde, as
Tenant, entered into a written Lease ("Casino Lease or Lease") pertaining to
certain real property known as the Golden Gates Casino ("Casino") and legally
described as Lots 9-12, inclusive, Block 39, City of Black Hawk, County of
Xxxxxx, State of Colorado ("Golden Gates Casino Property") , and numbered as 000
Xxxx Xxxxxx, together with all improvements now or hereafter located thereon
("Improvements") and all rights of Landlord, if any, (including, but not limited
to, rights to adjacent streets or alleys, (now or hereafter vacated or conveyed
to Landlord), easements and appurtenances thereto (collectively the "Premises").
Initially capitalized terms not otherwise defined herein have the same meaning
ascribed to them in the Casino Lease.
B. Elevation and Concorde are parties to that certain Agreement of
Lease (Parking Lot) dated July 21, 1997 ("Parking Lot Lease") with respect to
Elevation's undivided 50% interest in Xxxx 0-0, xxxxxxxxx, Xxxxx 00, Xxxx xx
Xxxxx Xxxx, Xxxxxx of Xxxxxx, State of Colorado (the "Parking Lot"). A Short
Form of Agreement of Lease (Parking Lot) evidencing the existence and terms of
the Parking Lot Lease was recorded August 29, 1997, in Book 625 at Page 355.
C. Elevation and Concorde are parties to that certain Co-Ownership
Agreement dated August 14, 1997 ("Co-Ownership Agreement") with respect to the
Parking Lot (of which Elevation and Concorde each own an undivided fifty percent
(50%) interest), and with respect to certain real property legally described as
Xxx 0, Xxxxx 00, and the East 1/2 of Xxx 00, Xxxxx 00, Xxxx xx Xxxxx Xxxx,
Xxxxxx xx Xxxxxx, Xxxxx of Colorado (hereinafter called the "Xxxxxx Property")
(of which Elevation and Concorde each own an undivided fifty percent (50%)
interest). A Short Form of Co-Ownership Agreement evidencing the existence and
terms of the Co-Ownership Agreement was recorded August 29, 1997, in Book 625 at
Page 307.
D. Elevation and Concorde, and KMM Parking, LLC, a Colorado limited
liability company ("KMM") are parties to that certain Agreement to Subject
Property to Condominium Regime dated October 22, 1997, as amended ("Condominium
Agreement") with respect to a portion of the Golden Gates Casino Property, the
Parking Lot, the Xxxxxx Property, and certain real property legally described as
Lots 7, 8, 9, 10, and the West 1/2 of Xxx 00, Xxxxx 00 xxx Xxxx 0, 0, 0, 0 and
the West 15' of Xxx 0, Xxxxx 00, Xxxx xx Xxxxx Xxxx, Xxxxxx xx Xxxxxx, Xxxxx of
Colorado owned by KMM (hereinafter called the "KMM Property") and the
construction of a parking garage (the "Parking Garage") thereon.
E. The Condominium Agreement provides that as a result thereof certain
modifications to
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the Casino Lease, Parking Lot Lease and Co-Ownership Agreement must be agreed
upon by Elevation and Concorde as a condition to the agreements and undertakings
reflected in the Condominium Agreement. Elevation and Concorde executed that
certain Agreement Regarding Modifications to Leases and Co-Ownership Agreement
(the "Agreement Regarding Modifications") as the agreement contemplated by
paragraph 11 of the Condominium Agreement to reflect certain understandings and
agreements by and between Elevation and Concorde as to the nature of the
amendments which would be required and documented upon the occurrence of certain
events and circumstances contemplated by the Condominium Agreement.
F. In connection with the Condominium Agreement, KMM, Elevation,
Concorde, the City, the Black Hawk Business Improvement District ("BID"), Black
Hawk Brewery and Casino, LLC ("BHB"), Dakota/Blackhawk, LLC, a Colorado limited
liability company ("Dakota") and Miner's Mesa Development, LLC, a Colorado
limited liability company ("MMD") entered into that certain Xxxxxxx/Main Street
Fourth Leg Agreement dated May 26, 1998, as amended (the "City Agreement"),
which provides for, among other things, the City's vacation of that portion of
Xxxxxx Street abutting the KMM Lots and Elevation/Concorde Lots (the "Vacated
Xxxxxx Street Property"), the conveyance of certain real property known as the
"Bobtail Slivers" by the City and the dedication of certain portions of (i)
KMM's casino parcel, (ii) the Golden Gates Casino Property and (iii) the Parking
Lot by the owners of such parcels.
G. In connection with the Condominium Agreement, KMM, Elevation,
Concorde, MMD, Dakota, and BHB entered into that certain Development and Access
Agreement dated May 26, 1998, as amended (the "Dakota Agreement"), which
provides for, among other things, the granting of certain easements, the
dedication of certain parcels to the City, and the transfer of certain real
property (the "Dakota Property") to KMM, Elevation and Concorde by Dakota.
H. Following the consummation of the transactions outlined in the City
Agreement and the Dakota Agreement, KMM, Elevation and Concorde will (as their
interests appear) own all of the land upon which the Parking Garage will be
built, which land will have been replatted as the KMM Parking Garage Minor
Subdivision ("W-I"). Following conveyance by Concorde to Elevation of all of
Concorde's interest in the land upon which the Golden Gates Casino presently
sits, which land will have been replatted as the Golden Gates Minor Subdivision
("W-II"), Elevation will own all of W-II.
I. In consideration of the foregoing, Concorde and Elevation have
executed that certain First Amendment to Agreement Regarding Modifications to
Leases and Co-Ownership Agreement to allow Concorde and Elevation to terminate
the Parking Lot Lease and Co-Ownership Agreement, modify the Casino Lease and
enter into that certain W-I Co-Ownership Agreement with KMM (the "W-I
Co-Ownership Agreement") to set forth their respective rights and obligations in
W-I during such time as the Parking Garage is constructed on W-I.
J. The W-I Co-Ownership Agreement (in accordance with the Condominium
Agreement) provides that KMM will finance and construct the Parking Garage on
W-I and that, following the construction of the Parking Garage, Elevation and
Concorde will convert their individual ownership interests in W-I and KMM will
convert its interest in W-I and the Parking Garage to a condominium form of
ownership through the recordation of a condominium declaration, the form of
which is attached to the W-I Co-Ownership Agreement ("Condominium Declaration").
The Condominium Agreement, W-I Co-
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Ownership Agreement and Condominium Declaration all provide that, immediately
upon issuance of a certificate of occupancy, the Condominium Declaration shall
be recorded ("Condominiumization"), at which time the Units created thereby will
be available for use in accordance with the provisions thereof, and thereafter,
each of Elevation ("Unit 2"), Concorde ("Tenant's Unit") and KMM shall receive a
condominium unit in said condominium project.
K. Elevation and Concorde are contemporaneously herewith terminating
the Parking Lot Lease and the Co-Ownership Agreement and entering into the W-I
Co-Ownership Agreement.
L. Elevation and Concorde (as Landlord and Tenant under the Casino
Lease) now desire to amend the Casino Lease in the manner and form hereinafter
set forth to conform said lease to the terms and provisions of the foregoing
agreements.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, Elevation and Concorde, as
Landlord and Tenant, hereby agree as follows:
A M E N D M E N T
1. The definition of the Premises is hereby modified to include all of
the real property to be contained within the Golden Gates Minor Subdivision,
Parcel W-II (the "Golden Gates Casino Parcel"), more particularly described on
the attached Exhibit A, and Landlord's interest (as such interest shall appear)
in a portion of the real property contained within the KMM Parking Garage Minor
Subdivision, Parcel W-I more particularly described on Exhibit A-1 ("Landlord's
Interest"), subject in all instances to the Co-Ownership Agreement dated
December 29, 1998, by and between Tenant, Landlord and KMM. Accordingly prior to
Condominiumization the W-I Co-Ownership Agreement will control the use and
rights of Tenant with respect to Landlord's Interest.
2. Landlord and Tenant hereby acknowledge that, following the
Condominiumization and conveyance of the units pursuant to the W-I Co-Ownership
Agreement, Landlord's Interest will no longer exist, and Landlord, as to Xxxx 0,
and Tenant, as to Tenant's Unit, shall each own one condominium unit in the
Ultimate Parking Garage Condominiums. Accordingly, Landlord and Tenant hereby
agree that, following the Condominiumization, the definition of the Premises
shall automatically, without further action by Landlord or Tenant, be modified
to include only the Golden Gates Casino Parcel and Landlord's condominium unit
in the Ultimate Parking Garage Condominiums, Unit 2 as described in the
Condominium Declaration. From and after the Condominiumization, for the balance
of the term of the Lease, as it may be extended, the Premises shall mean the
Golden Gates Casino Parcel and Unit 2, which will be leased subject in all
events to the express terms of the Condominium Declaration and the express terms
of the Lease as amended hereby. In the event of any conflict between the
Condominium Declaration and the Lease with respect to Unit 2, its occupancy, use
and enjoyment, reconstruction following casualty or damage, provisions regarding
condemnation, repair obligations or other matters whether similar or dissimilar,
the Condominium Declaration shall control. Notwithstanding the foregoing, the
provisions of the Condominium Declaration that provide for elimination of the
exclusive use provisions to the extent they apply to Unit 2 or Tenant's Unit, by
a foreclosing lender, will not supersede the provisions of this Lease, which are
hereby clarified to provide that in all instances use of both Unit 2 and
Tenant's Unit are to be strictly for and in connection with the Golden Gates
Casino Parcel and for use by its customers and invitees.
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3. Landlord and Tenant acknowledge that Tenant shall continue to use
the Golden Gates Casino Parcel primarily as a Gaming Establishment as currently
provided in Section 1.2.A of the Casino Lease. Pursuant to the Condominium
Agreement and the W-I Co-Ownership Agreement, the Parking Garage will be
constructed on Landlord's Interest. During construction, Tenant shall have no
rights to use Landlord's Interest for any purpose inconsistent with the W-I
Co-Ownership Agreement, but Tenant shall be provided with alternate parking
pursuant to that certain Sublease Agreement directly with KMM ("Sublease
Agreement"). Tenant agrees to enter into and abide by the terms of the Sublease
Agreement. If for any reason the Sublease Agreement is terminated and the
provisions of the W-I Co-Ownership Agreement regarding KMM's obligation to make
an "in lieu" payment to Tenant become effective all amounts received by Tenant
from KMM as a result thereof shall be included in ANGR for the purposes of
computing Tenant's Percentage Rent obligations under the Lease. Following
Condominiumization, Tenant shall use Unit 2 for parking related to the Golden
Gates Casino Parcel as provided in the Condominium Declaration. Tenant may not
use Unit 2 for any other purpose or for any purpose that violates the
Condominium Declaration. Notwithstanding the modification of the definition of
the Premises, Section 1.2.C and any references in the Lease to Tenant's
obligation to maximize revenue shall apply only to the Golden Gates Casino
Parcel.
4. Section 1.4 shall apply only to the Golden Gates Casino Parcel. All
improvements constructed on the Golden Gates Casino Parcel, sometimes referred
to herein as "W-II," pursuant to the W-I Co-Ownership Agreement, including,
without limitation, all plaza improvements, lobby-area improvements and the
improvements required to be constructed by Tenant as provided herein, referred
to as the BID Work, will not be considered New Improvements as defined in the
Lease and will be owned by Landlord, and leased to Tenant pursuant to the terms
of the Lease, without any obligation to make additional rental payments.
However, all provisions of the Lease pertaining to maintenance and repair of
such Improvements shall apply with the exception of any such work that is
covered by the Condominium Declaration, in which event it will control.
5. Paragraph 3 and specifically Sections 3.1, 3.2 and 3.3 thereof shall
apply only to the Golden Gates Casino Parcel. In accordance with the foregoing,
despite the provisions of Section 3.1, Tenant shall have no right to construct
New Improvements on any of the Premises, except W-II, subject to and strictly in
accordance with the provisions of the Lease. Any and all revenue generated by or
from any New Improvements constructed by Tenant on any portion of W-II shall be
included in ANGR for purposes of computing Tenant's obligation to pay Percentage
Rent. Except as herein provided, all references in the Casino Lease to the
Parking Lot, Xxxxxx Property and Co-Ownership Agreement between Landlord and
Tenant relating to said parcels are hereby deleted in their entirety. Section
3.1.C is hereby deleted.
6. Sections 4.1 and 4.2 shall apply only to the Golden Gates Casino
Parcel. Section 4.3 shall be subject to the terms and obligations of the
Condominium Declaration, it being expressly understood that as to Xxxx 0, from
and after the date that a Certificate of Occupancy is issued for the Parking
Garage, and said Unit becomes a part of the Premises, all Landlord's obligations
as "owner" of Unit 2 under the Condominium Declaration shall be and belong to
Tenant under and pursuant to this Lease, with the express exception and
understanding that any consent or approval of all Owners required under the
Condominium Declaration may not be exercised by Tenant, but such voting rights
must be directly exercised by Landlord, including without limitation approval of
any special assessment that would
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accrue to or be payable as an obligation of the Owner of Unit 2. Any obligation
to pay such special assessment if approved by Landlord and Tenant would be
payable by them equally.
7. As of the date hereof, the Base Rent payable under Section 5.1 of
the Casino Lease is hereby increased by $6,200.00 per month for a total of
$22,200 per month. The increased Base Rent shall be due and payable commencing
immediately. Following the Condominiumization, the Base Rent payable under
Paragraph 5 of the Casino Lease shall automatically, without further action by
Landlord or Tenant, be increased again by $1,800 per month bringing the total
monthly Base Rent to $24,000, plus the amount set forth in Paragraph 8 below.
Such increase in the Base Rent shall be payable immediately as of the date Unit
2 is available for use by Tenant, and for every month thereafter; provided,
however, if such date is other than the first day of a calendar month, the
amount of the increase that shall be payable immediately shall be pro rated for
the remainder of the month, based on the day of the month of such availability.
Except for the foregoing increases in the Base Rent, Section 5.1 shall remain
unaltered.
8. From and after the date hereof, Landlord and Tenant hereby agree
that all references in the Lease to Acquisition Costs and Improvement Costs
shall be deemed deleted from the Lease. All references to Improvements Costs as
used therein, shall mean and refer to Additional Costs only, as defined in the
Lease and modified herein. Landlord and Tenant acknowledge that neither has
executed the Xxxxxxx Street Bridge Assessment Agreement. If subsequent to the
date hereof such execution is required by the City (and agreed to by Landlord
and Tenant) and the assessment attributable to the Premises (in the amount of
$117,660) is required to be paid, Landlord and Tenant shall each pay 50%
thereof, and the amounts actually so paid, as to Landlord and Tenant,
respectively, shall be deemed included within Additional Costs for all purposes
hereof. With respect to Section 5.2, Landlord and Tenant acknowledge that
Landlord has incurred Additional Costs in the amount of $33,000. Following
Condominiumization, Tenant's monthly Base Rent shall increase by $303.60 to
account for such Additional Costs. This increase is not included in the $24,000
in Base Rent due pursuant to paragraph 4 above and shall not be interpreted to
mean that Tenant may not be responsible for other Additional Rent as provided in
Section 5.2 of the Casino Lease.
9. Section 5.12 is hereby deleted and replaced with the following:
Commencing the first year of the First Extension Term the Base Rent
shall be increased by $400 a month. During the second year of the First
Extension Term, the Base Rent shall remain the same. Commencing the
third year of the First Extension Term, the Base Rent shall be
increased by $1,700 per month, which increased Base Rent will continue
to be paid for the remainder of the First Extension Term. (For example,
the Base Rent for the third year of the First Extension Term would be
$26,403.60 per month, computed as follows: $24,303.60, monthly Base
Rent at expiration of Initial Term, plus $400, plus $1,700) Commencing
on the first year of the Second Extension Term the Base Rent shall be
increased by $420 per month. For the final three years of the Second
Extension Term, the Base Rent will be further increased by $1,870 per
month.
10. With regard to Xxxxxxxxx 0, Xxxxxxxx and Tenant acknowledge that
the payment of taxes for Landlord's Interest will, during the time of
construction of the Parking Garage, be paid by KMM pursuant to the W-I
Co-Ownership Agreement. Following the date that Unit 2 is added to the
definition of the Premises, Tenant will be and become responsible for payment of
all taxes, assessments (special,
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regular, BID, or any others now or hereafter imposed on the Premises),
condominium dues and assessments and all other costs and charges associated with
or attributable to Unit 2 (except special assessments approved by Landlord as
provided herein, as to which Tenant shall only be responsible for 50% thereof),
and all references in the Lease to obligations relating to the Premises shall
automatically mean and refer to all such obligations arising or accruing under
the Condominium Declaration with respect to Unit 2 and for all purposes hereof
such obligations, even those payable directly to the Condominium Association,
shall be deemed included in the definition of Additional Rent.
11. Landlord and Tenant acknowledge that certain of Tenant's insurance
obligations set forth in Section 7 as they relate to Unit 2 will be satisfied by
the Condominium Association pursuant to the Condominium Declaration, and
accordingly, Tenant's obligations with respect thereto shall pertain solely to
it obligation to comply with any such insurance requirements and to pay its
share of costs thereof as part of its regular or special assessments. A new
Subparagraph 7.10 is added as follows:
7.10 Notwithstanding anything to the contrary herein, Landlord
reserves the right to make reasonable modifications to the
insurance requirements herein.
12. To the extent any provisions of Paragraphs 9 ("Casualty") or 10
("Condemnation") apply to Xxxx 0 and are inconsistent with the provisions of the
Condominium Declaration, the provisions of the Condominium Declaration shall
control, and both Landlord and Tenant shall be subject thereto. Nothing in
either of these paragraphs (or elsewhere in the Lease) relating to interruption
of use or interference with Tenant's use of the Premises shall mean or apply to
Landlord's Interest or Xxxx 0, once it becomes part of the Premises, but shall
instead mean and refer solely to W-II. Further, Landlord and Tenant agree that
the provisions of Sections 9.1B and 9.2 shall apply only with respect to the
Golden Gates Casino Parcel and do not relate to Unit 2. There is no concept of
"Restoration Shortfall" with respect to Unit 2. If there is a casualty or
condemnation affecting Xxxx 0, the provisions of the Condominium Declaration
shall control and any costs or amounts included as part of a Special Assessment
attributable to Unit 2 which has been approved by Landlord (as Owner of Unit 2
and Tenant as Owner of Tenant's Unit), shall be shared equally by Landlord and
Tenant, and the amount thereof actually paid by Landlord as to Unit 2 shall be
included as "Additional Costs" for purposes of paragraphs herein relating to
rights of Tenant to Purchase, and any such Special Assessment (approved by
Landlord) paid by Tenant with respect to Tenant's Unit shall similarly be
included in the definition of Additional Costs with respect to rights of
Landlord to Purchase or Lease Tenant's Unit, as hereafter provided.
13. With regard to Section 10.6 Landlord and Tenant acknowledge that
they have resolved their pending claims against the City. Notwithstanding the
provisions of Section 10.6, Tenant shall be entitled to 100% of the amount paid
by the BID in satisfaction of the claim and Landlord shall have no right, title
or interest in said monies. In consideration of such agreement, and as a
material part thereof, Tenant acknowledges that it is responsible, at its sole
cost and expense to complete the following items (in a manner and subject to the
other conditions set forth in the Lease): (i) installation of the heated
sidewalk in front of the Casino and the tie in thereof to the new Xxxxxxx
Street/Main Street intersection, including, but not limited to the costs of
materials, labor and electrical associated therewith; (ii) all finishing of the
plaza area (following completion of the excavation as contemplated by the plans
and specifications for the Parking Garage, and excluding any work included as
part of the Parking Garage), including without limitation, the necessary
railings and safety features, the finishing of the walls and base of such area,
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drainage, and any other work that is necessary or appropriate to "finish such
area" so that it is compatible with the Casino, safe and usable as an open area;
(iii) completion of the raised curb and landscaping area adjacent to the new
sidewalk; and (iv) the stairway at the west side of the Casino and the canopy
over said stairway. The foregoing is sometimes referred to as the "BID Work,"
and shall not require Landlord's prior written approval.
14. The provisions of Paragraph 11 B of the Lease shall be expanded so
that the provisions thereof apply not solely to the Premises, but to Tenant's
Unit as well.
15. The following new subparagraphs are added to Paragraph 12 of the
Lease as follows:
12.1.G Any material uncured default or any material failure of
Tenant to perform its obligations under the W-I Co-Ownership
Agreement or the Condominium Declaration, whether such default or
failure to perform relates to Landlord's Interest, Unit 2, or
Tenant's Unit.
12.1.H Any uncured default by Tenant under any Loan obtained by it
encumbering its interest in this Lease or the Premises, as
expressly permitted hereunder, or any uncured default under any
loan obtained by Tenant encumbering its interest in Tenant's Unit
in the Parking Garage. For purposes hereof any loan which is
primarily or secondarily secured by either the Premises or Tenant's
Unit shall be included within the provisions of this section.
16. A new subparagraph 12.2.D is added as follows:
12.2.G Redeem in any foreclosure action.
17. The provisions of Paragraph 13 of the Lease shall apply to any
failure by Landlord to comply with the W-I Co- Ownership Agreement or the
Condominium Declaration as it pertains to Landlord's Interest, or any default by
Landlord under any loan encumbering Landlord's Interest.
18. Paragraph 16 is hereby deleted and replaced with the following:
16. Purchase and Lease Rights and Obligations
16.1 Tenant's Option to Purchase. Effective during the third,
fourth and fifth Lease Years of the Initial Term, Tenant shall have
the exclusive and irrevocable right, if timely exercised, and
provided Tenant is not in default under the Casino Lease at said
time, to purchase the Premises (defined, as of this date, to
include the Golden Gates Casino Parcel and Landlord's Interest,
subject to the W-I Co-Ownership Agreement and, following the
Condominiumization, to include the Golden Gates Casino Parcel and
Unit 2), together with all Landlord's rights in any easements,
rights of way, and appurtenances, including any right of Landlord
in any adjoining streets and alleys (collectively, "Option to
Purchase"), on and subject to the terms and conditions set forth
below:
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A. If Tenant desires to exercise the Option to Purchase
contained herein, it shall notify Landlord not less than one
hundred eighty (180) days prior to the date Tenant desires to close
the Option to Purchase, but in no event less than 180 days prior to
the expiration of the Initial Term ("Exercise Notice"). If the
Exercise Notice is received timely, and the closing occurs during
the third Lease Year, the exercise price ("Exercise Price") shall
be $5,941,500.00; or if the closing occurs during the fourth Lease
Year, the Exercise Price shall be $6,115,500.00; or if the closing
occurs during the fifth Lease Year, the Exercise Price shall be
$6,294,720.00. If there are any "Additional Costs", which term for
purposes hereof shall include any costs or expenses incurred for
Special Assessments pursuant to the Condominium Declaration which
have been approved by Landlord and Tenant, the respective Exercise
Price shall be increased according to the following formula:
Exercise Price + ((Additional Costs paid by Landlord x 0.25% per
month) x number of months from date of payment for Landlord's share
of Additional Costs). Upon exercising the Option, Tenant shall pay
a non-refundable down payment of $200,000.00 to Landlord to be
applied against the Exercise Price and close the purchase no
earlier than six (6) months after the exercise. Upon exercising the
Option, Tenant shall continue to pay rent, which shall not be
applied towards the Exercise Price. Tenant will use its best
reasonable efforts to accommodate a 1031 exchange.
B. In the event of the exercise by Tenant of its rights
under this Section 16.1, the sale by Landlord to Tenant shall be
subject to the following agreements. Title to the Premises (which
shall include the Golden Gates Casino Parcel and either Landlord's
Interest (subject to the W-I Co-Ownership Agreement) or Unit 2,
shall be conveyed by special warranty deed subject only to matters
of record on the date hereof as specified in the attached title
policy with standard printed exceptions deleted. Landlord will pay
for a title insurance policy (or reimburse Tenant for an equivalent
amount) insuring title to the acquired property in an amount equal
to the purchase price therefor, subject to the title exceptions
delineated above. All closing costs and recording costs shall be
allocated as customary in Colorado at the time of such sale and
Buyer will be responsible for all transfer taxes, if any. Closing
will occur through a mutually agreed upon title company pursuant to
closing instructions which will require that the title insurance
company agree to insure title to the acquired property in the
manner required herein prior to releasing any funds to Landlord.
16.2 Landlord's Right to Purchase. In consideration of
Landlord's agreements set forth in this Lease, if Tenant fails to
timely
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exercise its Option to Purchase (even though it has exercised its
option to extend the term of the Lease), or the Casino Lease
otherwise expires or is terminated for any reason prior to the
expiration of the then current term thereof, then, and at all times
thereafter, and continuing for a period of 5 years from the date
the Casino Lease expires or otherwise terminates, upon one hundred
eighty (180) days written notice ("Landlord's Notice"), Landlord
(or any successor or assign of the Golden Gates Casino Parcel
without regard to any other limitations that may be in this Lease)
shall have the following purchase rights with respect to Tenant's
Unit (or if no Condominiumization has occurred then Tenant's rights
and interests in the real property to be contained within the KMM
Parking Garage Minor Subdivision as described more fully in the W-I
Co-Ownership Agreement) (which Unit or interest, as the case may
be, shall be referred to as "Tenant's Interest") ("Landlord's Right
to Purchase"). This Right to Purchase shall survive the expiration
or termination of the Lease, and upon request of Landlord shall be
evidenced and documented in a separate recordable instrument upon
the termination or expiration of the Lease. Landlord's Right to
Purchase shall be on the following terms:
A. In the event that Landlord delivers Landlord's Notice
after the expiration of the Initial Term of the Casino Lease, the
purchase price ("Purchase Price") for Tenant's Interest shall be
equal to the lesser of (i) the sum of (A) Nine Hundred Thirty Seven
Thousand Five Hundred and no/100 Dollars ($937,500.00) (the "Base
Price") and (B) any Additional Costs incurred by Tenant with
respect to Tenant's Unit as described above + interest computed on
said Additional Costs equal to 0.25% per month times the number of
months from the date of payment by Tenant for such Additional Costs
to the date the Purchase Price is paid, or (ii) the appraised fair
market value of Tenant's Interest, calculated as if Tenant's
Interest were unencumbered, assignable and ownership thereof was
vested in one owner, as determined by a real estate appraiser
mutually acceptable to Landlord and Tenant.
B. Notwithstanding the foregoing, if the Lease terminates
prior to the expiration of the Initial Term as a result of Tenant's
default or other express provisions of the Lease and Landlord
delivers Landlord's Notice at any time prior to what would have
been the expiration of the Initial Term of the Casino Lease, the
Purchase Price shall be Eight Hundred Sixty Eight Thousand Dollars
($868,800) ("Discounted Price"), plus an Escalation Factor. The
"Escalation Factor" shall be equal to an increase in the Discounted
Price of two percent (2%) per year (or pro rata portion thereof)
calculated from the first year of the Initial Term of the Lease to
the date of Landlord's Notice, but in no event shall be price be
greater than the Base Price set forth above.
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C. In the event of either the exercise by Landlord of its
rights under this Section 16.2 and Section 16.6, the sale by Tenant
to Landlord shall be subject to the following terms and conditions:
(i) title to Tenant's Interest shall be conveyed by special
warranty deed with standard printed exceptions deleted. Tenant will
pay for a title insurance policy (or reimburse Landlord for an
equivalent amount) insuring title to Tenant's Interest in an amount
equal to the purchase price therefor; ii) all closing costs and
recording costs shall be allocated as customary in Colorado at the
time of such sale and Landlord will be responsible for all transfer
taxes, if any; (iii) closing will occur through a Colorado title
company pursuant to closing instructions which will require that
the title insurance company agree to insure title to Tenant's
Interest in the manner required herein prior to releasing any funds
to Tenant; (iv) upon exercising Landlord's Right to Purchase,
Landlord shall pay a non-refundable down payment of twenty-five
percent (25%) of the Purchase Price (10% upon delivery of
Landlord's Notice and 15% upon the close of escrow) to Tenant to be
applied against the Purchase Price; (v) the balance of the Purchase
Price shall be evidenced by a non-recourse promissory note (the
"Note"), in a standard Xxxxxxxx Xxxxxxxx form, with right to cure,
in favor of Tenant, with installments of principal and interest
payable monthly, amortized over twenty (20) years at a compound
interest rate of twelve percent (12%), with the entire unpaid
balance payable at the end of five (5) years; (vi) the Note shall
be secured by a deed of trust, in a standard Xxxxxxxx Xxxxxxxx
form, creditworthy, encumbering Tenant's Interest; and (vii) the
close of escrow and the transfer of Tenant's Interest shall occur
no later than six (6) months following delivery of Landlord's
Notice. Landlord and Tenant shall consummate the purchase no later
than six (6) months after delivery of Landlord's Notice. Landlord
will use its best reasonable efforts to accommodate a 1031 exchange
16.3 Tenant's Obligation to Lease. If Tenant fails to exercise
its Option to Purchase, the Casino Lease is extended for the First
Extension Option as provided in the Lease, and Landlord exercises
Landlord's Right to Purchase and acquires Tenant's Interest, then
Tenant shall be obligated, and hereby agrees that the Lease will be
amended to revise the description of the Premises covered hereby to
include all of Tenant's Interest, which Landlord has acquired
pursuant to such exercise of its Right to Purchase. The monthly
rental rate provided for in the Lease will be amended concurrent
with the addition of said property to equal to the Purchase Price
paid by Landlord for Tenant's Interest x 11% divided by 12. All
other terms and provisions of the Lease will apply for the
remainder of the current term thereof.
16.4 Landlord's Right to Lease. Landlord shall have the right
to lease ("Landlord's Lease Right") Tenant's Interest on the
following terms and conditions.
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A. Upon the occurrence of either: (i) the failure of
Tenant to extend the initial term or any subsequent term of the
Lease or earlier termination of such Lease or (ii) the failure of
Tenant to exercise its Option to Purchase (each a "Lease Event")
Landlord shall have the right to lease Tenant's Interest. In the
event Landlord desires to exercise Landlord's Lease Right, Landlord
shall deliver written notice (the "Lease Notice") to Tenant within
one hundred eighty (180) days following the occurrence of a Lease
Event. In the event that the Lease Notice is timely received,
Landlord shall lease from Tenant Tenant's Interest or Unit 3, as
applicable, pursuant to the terms and conditions set forth herein.
In the event Landlord fails to timely deliver the Lease Notice,
Landlord's Lease Right shall be extinguished until the occurrence
of a new Lease Event.
B. In the event Landlord timely delivers Landlord's
Notice, Landlord and Tenant shall enter into a lease for Tenant's
Interest on the same basic terms as are set forth in this Lease as
they relate to Unit 2, except (i) the initial term of such lease
shall be for a five (5) year period with one (1) option to extend
for five (5) years, (ii) basic annual rent shall be equal to 12% of
the Purchase Price during the Initial Term as increased by any
Additional Costs thereafter expended by Tenant, as provided above,
and (iii) the parties shall make such other applicable
modifications to the Lease as reasonably necessary and mutually
agreed upon.
16.5 Landlord's Obligation to Purchase or Lease.
Notwithstanding anything to the contrary contained herein, provided
that the Lease has not terminated due to Tenant's default prior to
the expiration of the Initial Term, if: (A) Tenant (i) fails to
exercise the Option to Purchase, and (ii) fails to exercise the
first Extension Term; or (B) after the expiration of the Initial
Term the Lease terminates for any reason, then Landlord shall
purchase or lease Tenant's Interest pursuant to the terms and
conditions of this Section 16, as applicable.
16.6 Rights of First Offer. If Landlord or Tenant desire to
transfer, assign or otherwise convey all, or any portion of its
respective interest in the Golden Gates Casino Parcel, KMM Parking
Garage Minor Subdivision or the Units in the Ultimate Parking
Garage Condominium, other than to a wholly-owned subsidiary or any
entity which acquires all or substantially all of the assets of
such party, the following provisions shall apply: the party
desiring to sell its interest ("Selling Party") shall notify the
other party ("Receiving Party") in writing (the "Notice")
specifying the terms and conditions, and the price at which the
Selling Party intends to offer its interest herein for sale (the
"Terms"). The Receiving Party shall have thirty (30) days after
receipt of the Notice
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within which to notify Sending Party that the Receiving Party
desires to purchase the interest being offered on the Terms. If the
Receiver Party fails to timely notify the Sending Party, the
Sending Party shall be free to consummate a transaction with any
third party or parties on the Terms (provided that the sales price
is at least equal to ninety-six percent (96%) of the amount set
forth in the Terms) at any time within the next six (6) months
without reoffering the same to the Receiving Party. If no sale
occurs within said six (6) month period, then prior to consummating
any transaction, the provisions of this Section shall be complied
with again. If the Receiving Party timely notifies the Sending
Party that it desires to exercise the right to purchase, the
closing shall occur on the Terms within sixty (60) days of the date
of giving of the Notice. Notwithstanding the foregoing, Tenant
shall have no right to transfer Tenant's Interest without
simultaneously transferring its interest in this Lease to the same
party. In the event of a sale by Tenant, the sale shall be subject
to the terms of Section 16.1.C. In the event of a sale by Landlord,
the sale shall be subject to the terms of Section 16.2.D.
16.7 Further Alienation. Notwithstanding anything to the
contrary herein, either Landlord or Tenant may sell, lease,
exchange, transfer or contract to sell, lease, exchange, or
transfer its respective interest in the Golden Gates Casino Parcel
or the property contained within KMM Parking Garage Minor
Subdivision provided that it complies with this Section 16. Any
such sale, lease, exchange, transfer or contract to sell, lease
exchange or transfer will be subject to the terms and provisions
hereof and, following its recordation, the Ultimate Parking Garage
Condominium Declaration. Either Landlord or Tenant has the right to
separately mortgage or encumber their respective interest. Each
party shall be solely responsible for the timely performance of all
duties and obligations relating to such mortgage or encumbrance.
Notwithstanding anything to the contrary herein, neither Landlord
nor Tenant shall convey its interest in the Golden Gates Casino
Parcel without simultaneously transferring to such party its
interest in the real property (or condominium unit) contained
within the KMM Parking Garage Minor Subdivision. Neither Landlord
nor Tenant shall convey its interest in the real property (or
condominium unit) contained within the KMM Parking Garage Minor
Subdivision without simultaneously transferring to such party its
interest in the Golden Gates Casino Parcel.
19. If there is any conflict between the terms and provisions of this
Amendment to Lease and the terms and provisions of the Lease or any prior
Amendments thereto, the terms and provisions of the Amendment to Lease shall
govern. Except as herein specifically set forth, all of the provisions of the
Lease shall remain in full force and effect and be binding upon the parties in
accordance with their terms.
20. This document may be executed in multiple counterparts, any one of
which need not
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13
contain the signature of more than one party, but all of which counterparts,
taken together, shall constitute one and the same agreement. Signatures may be
exchanged by telecopy, with original signatures to follow. Each party shall be
bound by his or its own telecopied signature and shall accept the telecopied
signature of the other parties herein.
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IN WITNESS WHEREOF, the parties have hereunto set their hands and seals
the date and year first above written.
LANDLORD:
ELEVATION 8000+ LLC,
a Colorado limited liability company
By: /s/ J. Xxxxx Xxxxxxx
--------------------------------
J. XXXXX XXXXXXX, MANAGER
TENANT:
CONCORDE CRIPPLE CREEK, INC.,
a Colorado company
By: /s/ Xxxxx X. Xxxx
--------------------------------
XXXXX X. XXXX,
PRESIDENT AND
CHIEF EXECUTIVE OFFICER
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The undersigned Guarantor in order to induce Landlord to enter into
this Amendment to Lease with Tenant, hereby reaffirms and reiterates its
guarantee to Landlord all of Tenant's financial obligations owed to Landlord and
created by the Lease, as amended hereby (or any other obligations that can be
reduced to a financial obligation) until all such obligations have been paid in
full and such guarantee shall continue until payment is made of every financial
obligation of Guarantor and Tenant now due or hereafter to become due (together
with any and all other obligations of Tenant under this Lease which have been
reduced to a financial obligation), and until payment is made of any loss or
damage incurred by Landlord with respect to any matter covered by this Guaranty.
This guaranty is one of payment and not of collection and Landlord shall have
the right to pursue any and all rights against Guarantor alone, prior to
pursuing any rights against Tenant or simultaneous with such pursuit of rights.
Prior to the commencement of any New Improvements, Tenant agrees to provide
Landlord with the Guarantor's most current, public financial statement
evidencing Tenant's ability to perform the same, the payment of the costs for
which, in all events will be guaranteed by Guarantor.
CONCORDE GAMING CORPORATION, A COLORADO,
CORPORATION
By: /s/ Xxxxx X. Xxxx
-------------------------------------
Title: President
----------------------------------
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