Hollywood Park, Inc.
Exhibit 10.49
To Form 10-Q, June 30, 1998
AMENDED AND RESTATED OPTION AGREEMENT
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THIS AMENDED AND RESTATED OPTION AGREEMENT (this "AGREEMENT") is made as of
June 2, 1998, by and among XXXXXX XXXXXXX, a resident of the Commonwealth of
Kentucky, XXXXXX X. XXXXXXX, a resident of the Commonwealth of Kentucky, XXXXXXX
X. XXXXXXX, a resident of the Commonwealth of Kentucky, XXXX X. XXXXXXX, a
resident of the Commonwealth of Kentucky, J.R. SHOWERS, III, a resident of the
State of Indiana, and XXXXX X. SHOWERS, a resident of the State of Indiana
(collectively, "LANDLORD"), and PINNACLE GAMING DEVELOPMENT CORP., a Colorado
corporation ("TENANT").
RECITALS
A. Landlord and Indiana Ventures LLC, a Nevada limited liability company
("INDIANA VENTURE"), entered into that certain Option Agreement (Expansion
Parcel), dated December 22, 1995 (the "ORIGINAL AGREEMENT").
B. Tenant has assumed all of Indiana Venture's right, title and interest
in and to the Original Agreement.
C. Landlord is the owner of that certain real property in Switzerland
County, Indiana, described as Parcel B on EXHIBIT A (the "PROPERTY").
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D. Tenant is an applicant for an Indiana Riverboat Owner's License to be
issued by the Indiana Gaming Commission for the County of Switzerland, Indiana.
E. In the event a Certificate of Suitability is awarded to Tenant, Tenant
shall lease the Property and utilize the same for the development of a riverboat
casino complex on the Property (the "PROJECT").
F. Landlord and Tenant desire to amend and restate the Original Agreement
in its entirety as hereinafter provided, and upon and subject to the terms and
conditions hereinafter set forth.
NOW, THEREFORE, it is agreed as follows:
1. OPTION. Landlord hereby grants to Tenant the exclusive and irrevocable
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option (the "OPTION") to lease the Property, together with all improvements now
and hereafter located thereon.
2. OPTION PAYMENT. In consideration of this Option, Tenant has paid One
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Dollar ($1.00) to Landlord of even date hereof (the "OPTION PAYMENT"). The
Option Payment is nonrefundable.
3. OPTION PERIOD. The option to lease the Property granted by this
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Agreement shall be exercised by Tenant prior to 5:00 p.m. eastern standard time
on the date which is ten (10) business days after the Tenant or its Affiliate
(as defined in the Lease) is granted a Certificate of Suitability from the
Indiana Gaming Commission (the "COMMISSION") to operate a riverboat casino on
the Ohio River from Switzerland County, Indiana (a "CERTIFICATE"), provided,
that Tenant's right to exercise the option to lease the Property granted by this
Agreement shall expire on December 31, 1998 (the "OPTION EXPIRATION DATE")
unless Tenant extends such date as herein provided. Tenant shall not be entitled
to exercise the Option unless Tenant or its Affiliate receives a Certificate.
Tenant shall be entitled to extend the Option Expiration Date to December 31,
1999 by written notice and payment of the sum of Fifty Thousand Dollars
($50,000.00) to Landlord on or before December 31, 1998 (the "FIRST OPTION
EXTENSION PAYMENT"). Tenant shall be entitled to further extend the Option
Expiration Date to December 31, 2000 by written notice and payment of the sum of
Fifty Thousand Dollars ($50,000.00) to Landlord on or before December 31, 1999
(the "SECOND OPTION EXTENSION PAYMENT") (the First Option Extension Payment and
the Second Option Extension Payment are hereinafter referred to together as the
"OPTION EXTENSION PAYMENTS"). In the event the Option is exercised and the Lease
(as hereinafter defined) is executed, the Option Extension Payments shall be
credited against the Base Rent (as defined in the Lease) in accordance with the
terms of the Lease.
4. EXERCISE OF OPTION. Tenant shall exercise the Option within ten (10)
------------------
business days after the Tenant or its Affiliate receives a Certificate by
delivery of a notice to Landlord indicating Tenant's decision to exercise the
Option (the "NOTICE OF EXERCISE OF OPTION"). Within thirty (30) days after the
Notice of Exercise of Option is delivered, Landlord and Tenant or any entity
controlled or designated by Tenant shall each execute a lease agreement (the
"LEASE") in substantially the form of EXHIBIT B attached hereto.
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Notwithstanding the foregoing, Tenant shall not exercise the Option unless
Tenant shall concurrently exercise its option under that certain Option
Agreement dated June 2, 1998 between Tenant and The Xxxxxxx Family Limited
Partnership and The Xxxxxxx Family Limited Partnership (the "OTHER OPTION").
5. REMOVAL OF STRUCTURES. Tenant shall advise Landlord within ten (10)
---------------------
days prior to the exercise of the Option whether or not Tenant intends to
utilize the structures located on the Property. In the event Tenant intends not
to utilize such structures, Landlord shall have the right to remove such
structures from the Property at its sole cost and expense.
6. ACQUISITION OF LICENSE. Tenant shall pay to Landlord the sum of One
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Hundred Thousand Dollars ($100,000.00) upon the occurrence of any of the
following:
a. Tenant or its Affiliate acquires an existing License (as
hereinafter defined) or an interest in an existing License; or
b. Casino Magic, Inc. is acquired by Hollywood Park, Inc.
("HOLLYWOOD") and Hollywood or its Affiliate is awarded a Certificate of
Suitability to operate a riverboat casino on the Ohio River from a county
other than Switzerland County, Indiana by the Commission.
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The term "LICENSE" shall mean an owner?s License as defined in I.C.
(s) 4-33-2-15.
7. CERTIFICATE PAYMENT. Within three (3) business days after Tenant or
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its Affiliate is awarded a Certificate by the Commission, Tenant shall make a
nonrefundable payment in the amount of Fifty Thousand Dollars ($50,000.00) to
Landlord. Twenty-Five Thousand Dollars ($25,000.00) of such payment shall be
credited against the Base Rent in accordance with the terms of the Lease.
8. LICENSE PAYMENT. Within three (3) business days after Tenant or its
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Affiliate is awarded a License by the Commission, Tenant shall make a
nonrefundable payment in the amount of Fifty Thousand Dollars ($50,000.00) to
Landlord. Twenty-Five Thousand Dollars ($25,000.00) of such payment shall be
credited against the Base Rent in accordance with the terms of the Lease.
9. PERMIT APPLICATION. Tenant shall, at its sole cost and expense,
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diligently and actively pursue the processing of the existing permit application
(i.e., Permit Application No. 199500322) that is on file with the U.S. Army Corp
of Engineers. Landlord shall cooperate with Tenant and provide Tenant and/or any
agent, representative or independent contractor of Tenant, complete access to
the Property to conduct any and all environmental, archeological and engineering
tests or studies with respect to the Property.
10. TERMINATION. Tenant shall have the right to terminate this Agreement
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at any time prior to being awarded a Certificate. Landlord shall have the right
to terminate this Agreement and the Tenant's right to exercise the Option in the
event the Commission awards a fifth (5th) Certificate of Suitability to operate
a riverboat casino on the Ohio River to any entity other than Tenant or its
Affiliate.
11. LANDLORD'S COOPERATION. Landlord shall cooperate fully with Tenant
----------------------
and shall execute on behalf of Tenant any documents necessary for Tenant to
process the Property through local, city, state and county zoning and
development processes. Prior to Tenant's exercise of the Option, Landlord shall
not be obligated to cooperate with Tenant or execute any documents to process
the Property through any zoning or development processes if such processes would
result in an outcome that would be binding on the Property or Landlord if Tenant
shall fail to lease the Property. Landlord acknowledges that the transaction
contemplated in this Agreement is subject to regulation by governmental
authorities having jurisdiction over gaming in Switzerland County, Indiana, and
elsewhere (collectively referred to as "GAMING AUTHORITIES"). Landlord also
acknowledges that Tenant conducts business pursuant to privileged licenses
issued by Gaming Authorities. Accordingly, Landlord will fully cooperate with
Tenant or any Gaming Authorities concerning any inquiries, investigations and
requests for information made by any Gaming Authorities in connection with the
gaming operations of Tenant or any entity or individual related to or affiliated
with Tenant.
12. INFORMATION AND ACCESS. Within two (2) weeks after the date hereof,
----------------------
Landlord shall deliver to Tenant copies of all surveys, permits, approvals,
studies, analyses, maps, utility plans,
4
engineering reports, soils reports, title reports, commitments and policies, and
similar written instruments or documents relating to the Property in Landlord's
possession or control not previously provided to Tenant (the "PROJECT
DOCUMENTS"). Landlord shall immediately deliver to Tenant copies of all Project
Documents that Landlord receives after the date hereof. Landlord shall give to
Tenant and Tenant's counsel, accountants, and other representatives, full access
during normal business hours throughout the Option Period to the Property and
all of Landlord?s books, contracts, commitments and records with respect to the
Property and shall furnish Tenant during such period with all such information
concerning its affairs as Tenant may request. Tenant may conduct such tests upon
the Property as Tenant deems necessary, including, but not limited to,
engineering and environmental tests. Tenant shall indemnify Landlord from any
damages, costs or expenses arising out of Tenant's inspection, use or occupancy
of the Property. Copies of any Project Documents not in Landlord's possession or
control but which subsequently come into Landlord's possession or control shall
be delivered immediately to Tenant.
13. REPRESENTATIONS AND WARRANTIES. Landlord represents and warrants to
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Tenant as follows:
a. This Agreement constitutes legal, valid and binding obligations
of Landlord, enforceable in accordance with its respective terms.
b. Neither the execution, delivery or performance of this Agreement
will breach any statute, law, ordinance, rule or regulation of any
governmental authority or conflict with or result in a breach of any of the
terms, conditions or provisions of any judgment, order, injunction, decree
or ruling of any court or governmental authority to which Landlord or the
Property is subject or any agreement or instrument to which it is party or
by which it or the Property is bound, or constitute a default thereunder.
c. No consent, approval or authorization of any governmental authority
(except for the Gaming Authorities) or private party is required in
connection with the execution, delivery and performance of this Agreement
by Landlord.
d. Landlord has good and marketable title to the Property. There are
no monetary liens or encumbrances affecting the Property and Landlord will
not cause or permit any such lien or encumbrance to be placed against the
Property which has priority over the Memorandum of Option described in
Section 28 below.
14. CONFIDENTIALITY. Landlord and Tenant agree to treat confidentially
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the existence and terms of this Agreement and any information, analyses,
compilations, studies or other documents or records (collectively, the
"CONFIDENTIAL MATERIAL") which Tenant or any of Tenant's directors, officers,
employees, representatives, advisors or agents furnish to Landlord or Landlord's
employees, representatives, advisors or agents, and vice-versa (the
"RECIPIENTS"). Landlord and Tenant agree that the Confidential Material will be
kept confidential by Landlord and Tenant and
5
the other Recipients and that any such information will be disclosed only to
Recipients who need to know such information and any of the Gaming Authorities,
or any other State Agency that requests or requires such information and to no
other persons (it being understood that (a) such Recipients shall be information
by Landlord or Tenant, as the case may be, of the confidential nature of such
information, shall be directed by Landlord to treat such information
confidentially and shall agree to abide by the provisions of this Section, and
(b) in any event, Landlord or Tenant, as the case may be, shall be responsible
for any breach of this Section by any Recipient). The provisions of this Section
shall survive the termination or expiration of this Agreement.
15. BROKERAGE FEES. Each of the parties hereto represents to the other
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that it has not entered into any agreement for the payment of any fees,
compensation or expenses to any person, firm or corporation in connection with
the transactions provided for herein, and each agrees to hold and save the other
harmless from any such fees, compensation or expenses which may be suffered by
reason of any such agreement or purported agreement by the indemnifying party.
16. NOTICES. Any and all notices and demands by any party hereto to any
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other party required or desired to be given hereunder shall be in writing and
shall be validly given or made only if deposited in the United States mail,
certified or registered, postage prepaid, return receipt requested, or if made
by Federal Express or other similar delivery service keeping records of
deliveries and attempted deliveries or if sent by telecopy. Service by United
States Mail or by Federal Express or other similar delivery service shall be
conclusively deemed made on the first business day delivery is attempted or upon
receipt, whichever is sooner. Service by telecopy shall be deemed made upon the
next business day following confirmed transmission. The parties may change their
address for the purpose of receiving notices or demands as herein provided by a
written notice given in the manner aforesaid to the others, which notice of
change of address shall not become effective, however, until the actual receipt
thereof by the others.
17. GOVERNING LAW. This Agreement shall be deemed to be made under the
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laws of the State of Indiana and for all purposes shall be governed by and
construed in accordance with the laws thereof.
18. BINDING EFFECT. Subject to any limitation on assignment set forth in
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this Agreement, this Agreement shall inure to the benefit of and be binding upon
the parties hereto and their respective successors and assigns. It is
specifically agreed that Tenant may not assign, transfer or convey any or all of
its rights and obligations hereunder, by operation of law or otherwise, to any
person or entity other than an Affiliate of Tenant without the Landlord's prior
written consent. Landlord may not assign or transfer its rights and obligations
under this Agreement, by operation of law or otherwise, without the prior
consent of Tenant, which consent may be withheld in Tenant's sole discretion.
Notwithstanding the foregoing, Tenant shall have the right to assign or transfer
any or all of its rights and obligations under this Agreement to an Affiliate of
Tenant. No consent shall be required with respect to an acquisition of the
interests in Tenant of Hilton Hotel Corporation by Boomtown Hoosier, Inc. or an
Affiliate thereof or a subsequent transfer of such beneficial interest to
Horseshoe Gaming, Inc. or its Affiliate. Notwithstanding the foregoing, Landlord
shall have the
6
right to assign or transfer any or all of its rights and obligations under this
Agreement to any blood relative(s) of Landlord or any corporation, trust,
limited liability company or other entity which is controlled by or created for
the benefit of Landlord or Landlord's blood relative without Tenant's consent or
approval. Except as specifically provided above in this Section, this Agreement
is not intended to, and shall not, create any rights in any person or entity
whatsoever except Tenant and Landlord.
19. SEVERABILITY. If any term, provision, covenant or condition of this
------------
Agreement or any application thereof should be held by a court of competent
jurisdiction to be invalid, void or unenforceable by the laws applicable
thereto, such provision shall be deemed severable from and shall in no way
affect the enforceability and validity of the remaining provisions of this
Agreement, all provisions, covenants, and conditions of this Agreement, and all
applications thereof, not held invalid, void or unenforceable, shall continue in
full force and effect and shall in no way be affected, impaired or invalidated
thereby.
20. INTERPRETATION. This Agreement is an agreement between financially
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sophisticated and knowledgeable parties and is entered into by the parties in
reliance upon the economic and legal bargains contained herein and shall be
interpreted and construed in a fair and impartial manner without regard to such
factors as the party who prepared (or caused the preparation of) this instrument
or the relative bargaining power of the parties.
21. CALCULATION OF TIME PERIODS. If any date herein set forth for the
---------------------------
performance of any obligation by Landlord or Tenant or for the delivery of any
instrument or notice herein provided should be a Saturday, Sunday, or legal
holiday, such performance or delivery may be made on the next business day
following such Saturday, Sunday, or legal holiday. As used herein, the term
"legal holiday" means any state or federal holiday for which financial
institutions or post offices are closed in the local jurisdiction in which the
Property is located, for observance thereof, and the term "business day" means
any day which is not a Saturday, Sunday, or legal holiday.
22. EXHIBITS. All exhibits referred to herein and attached hereto are
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hereby made a part hereof and are incorporated herein by this reference.
23. ENTIRE AGREEMENT. This Agreement contains the entire agreement
----------------
between the parties relating to the transactions contemplated hereby, and amends
and restates in its entirety the Original Agreement, and all prior or
contemporaneous agreements, understandings, representations and statements, oral
or written, are merged herein. No modification, waiver, amendment, discharge or
change of this Agreement shall be valid unless the same is in writing and signed
by the party against which the enforcement of such modification, waiver,
amendment, discharge or change is or may be sought.
24. ATTORNEYS' FEES. In the event any action or proceeding is commenced
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by any party against any other in connection herewith, including but not limited
to any proceeding in bankruptcy, the prevailing party shall be entitled to
recover from the other party all costs and expenses, including, without
limitation, reasonable attorneys' fees and costs incurred in such action or
7
proceeding, including, but not limited to, any proceeding in bankruptcy, in
addition to any other relief awarded by the court.
25. TIME OF ESSENCE. Time is of the essence of this Agreement and all of
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the terms, provisions, covenants and conditions hereof.
26. CAPTIONS AND PRONOUNS. The captions appearing at the commencement of
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the sections hereof are descriptive only and for convenience in reference to
this Agreement and in no way whatsoever define, limit, amplify or describe the
scope or intent of this Agreement, nor in any way be used in interpreting the
terms of this Agreement or affect this Agreement. Personal pronouns used herein
shall be construed as though of the gender and number required by the context,
and the singular shall include the plural and the plural the singular as may be
required by the context.
27. FURTHER ASSURANCES. In addition to the acts and deeds recited herein
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and contemplated to be performed, executed and/or delivered by Landlord,
Landlord shall, at Tenant's cost and expense, perform, execute and/or deliver or
cause to be performed, executed and/or delivered any and all further acts, deeds
and assurances as may, from time to time, be reasonably requested by Tenant to
consummate the transactions contemplated in this Agreement and for the better
assuring to Tenant all of its rights hereunder.
28. COUNTERPARTS. This Agreement may be executed in any number of
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counterparts, each of which when executed and delivered shall be an original,
but all such counterparts shall constitute one and the same Agreement. The
parties contemplate that they might be executing counterparts of this Agreement
by facsimile and agree and intend that a signature by facsimile machine shall
bind each party so signing with the same effect as though the signature were an
original signature.
29. MEMORANDUM OF OPTION. Concurrently with execution of this Agreement
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the parties shall cause to be recorded in the real property records where the
Property is located a memorandum of the Option in form of EXHIBIT C attached
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hereto.
IN WITNESS WHEREOF, the parties have executed this Agreement to be
effective as of the date first above written.
[INTENTIONALLY BLANK]
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LANDLORD SIGNATURE PAGE
LANDLORD:
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxx Xxxxxxx
----------------------------------
Xxxxxx Xxxxxxx
/s/ Xxxxxxx X. Xxxxxxx
----------------------------------
Xxxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxx
----------------------------------
Xxxx X. Xxxxxxx
/s/ J.R. Showers, III
----------------------------------
J.R. Showers, III
/s/ Xxxxx X. Showers
----------------------------------
Xxxxx X. Showers
TENANT SIGNATURE PAGE
TENANT:
PINNACLE GAMING DEVELOPMENT CORP.,
a Colorado corporation
By: /s/ Xxxxxx X. List
----------------------------------
Xxxxxx X. List, Treasurer
EXHIBIT B
ASSIGNMENT OF OPTION AGREEMENT
------------------------------
THIS ASSIGNMENT OF OPTION AGREEMENT (the "ASSIGNMENT") is made this 2nd day
of June, 1998, by XXXXXX XXXXXXX, a resident of the Commonwealth of Kentucky and
XXXXXX X. XXXXXXX, a resident of the Commonwealth of Kentucky (together, the
"ASSIGNOR") to PINNACLE GAMING DEVELOPMENT CORP., a Colorado corporation
("ASSIGNEE").
RECITALS
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A. Assignor, as Buyers, and Xxxx Xxxxxx and Xxxxxxx Xxxxxx (together, the
"SELLERS") entered into that certain Option Agreement, dated November 9, 1997
(the "OPTION AGREEMENT"), whereby Assignor has the right or option to purchase
and Sellers have the obligation to sell to Purchaser until December 31, 1998, or
until December 31, 1999 if the option is extended, or until such later time as
the parties may agree, certain real property located in Switzerland County,
Indiana, as more particularly described in the Option Agreement (the
"PROPERTY").
B. Assignor, together with Xxxxxxx X. Xxxxxxx, Xxxx X. Xxxxxxx, X.X.
Showers, III and Xxxxx X. Showers (collectively, the "LANDLORD") have entered
into that certain Amended and Restated Option Agreement with Assignee dated of
even date herewith, a copy of which is attached hereto as EXHIBIT A and
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incorporated herein by reference (the "PARCEL B OPTION AGREEMENT").
C. Assignor has agreed to assign all of its right, title and interest in
and to the Option Agreement to Assignee.
D. Assignee has agreed to accept the assignment of all Assignor's right,
title and interest in and to the Option Agreement.
AGREEMENT
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NOW, THEREFORE, in consideration of the mutual covenants, conditions,
provisions and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
parties hereto agree as follows:
1. Assignor does hereby assign to Assignee all of its right, title and
interest in and to the Option Agreement upon the same covenants, terms,
conditions and provisions as are contained therein, effective as of the earlier
date of (a) Assignee's exercise of the Parcel B Option Agreement, or (b) the
payment by Assignee of the First Option Extension Payment (as defined in the
Parcel B Option Agreement) to Landlord (the "ASSIGNMENT DATE").
2. Assignee does hereby accept the assignment of all Assignor's right,
title and interest in and to the Option Agreement and does hereby assume
Assignor's obligations thereunder.
3. In addition to the mutual covenants and agreements contained herein,
Assignee has contemporaneously herewith paid to Assignor Twenty Thousand Dollars
($20,000), the receipt and sufficiency of which is hereby acknowledged by
Assignor. In addition, Assignee agrees to pay Fifty Thousand Dollars ($50,000)
to Assignor upon the closing of the Property in accordance with the terms of the
Option Agreement or Assignee or its direct affiliate otherwise acquires the
Property.
4. Assignor hereby represents and warrants to Assignee that Assignor has
not heretofore assigned, conveyed, sold or granted any interest in the Option
Agreement and that the Option Agreement is in full force and effect and neither
party is in default thereunder.
5. In the event Assignee fails to extend the Option as set forth in the
Option Agreement, Assignee will promptly notify Assignor.
6. Assignor and Assignee agree to release each other, and their
respective agents, employees, representatives, members and successors (the
"RELATED PARTIES") from and against any claims, demands, causes of action,
losses, damages, liabilities, costs and expenses asserted against, or imposed
upon or incurred by the Related Parties (including attorneys' fees and
expenses), whether suit is instituted or not, (a) arising by reason or failure
of Assignor or Assignee to perform or fulfill any of their obligations under the
Option Agreement arising from and after the Assignment Date, or (b) arising out
of or in accordance with the execution of the Option Agreement or the
circumstances surrounding the execution of the Option Agreement.
7. This Assignment shall be binding upon and inure to the benefit of
Assignor and Assignee and their respective legal representatives, successors and
assigns.
8. This Assignment may be executed in any number of counterparts, each of
which when executed and delivered shall be of the same binding effect as an
original.
9. Concurrently with execution of this Agreement the parties shall cause
to be recorded in the real property records where the Property is located a
memorandum of the Assignment in form of EXHIBIT A attached hereto.
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IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment of
Option Agreement as of the day and year first written above.
[INTENTIONALLY BLANK]
-12-
ASSIGNOR SIGNATURE PAGE
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"ASSIGNOR"
_____________________________________
Xxxxxx Xxxxxxx
_____________________________________
Xxxxxx X. Xxxxxxx
-13-
ASSIGNEE SIGNATURE PAGE
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"ASSIGNEE"
PINNACLE GAMING DEVELOPMENT CORP.,
a Colorado corporation
By:_________________________________
Xxxxxx X. List, Treasurer
