EXHIBIT 10.2
SECOND MODIFICATION TO OPTION AGREEMENT
THIS SECOND MODIFICATION TO OPTION AGREEMENT (the "Second Modification to
Option Agreement"), made this 12th day of September, 1997, by and between
LIBERTY LANDING ASSOCIATES, a Pennsylvania general partnership ("Optionor"),
and PRESIDENT RIVERBOAT CASINO-PHILADELPHIA, INC., a Pennsylvania corporation,
its designee or assignee ("Optionee").
WITNESSETH:
WHEREAS, Optionor and Optionee have entered into that certain Option
Agreement dated July 31, 1996 (the "Option Agreement"); and
WHEREAS, Optionor and Optionee have entered into that certain
Modification to Option Agreement dated December 12, 1996 (the "First
Modification to Option Agreement"); and
WHEREAS, Optionor and Optionee desire to modify the payment terms under
the Option Agreement for Base Payments due from Optionee to Optionor, and to
modify certain other terms of the Option Agreement.
NOW, THEREFORE, in consideration of the sum of TEN AND 00/100 DOLLARS
($10.00), and other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, and intending to be legally bound
hereby, the parties hereto agree as follows:
1. The recitals set forth above are incorporated herein by reference. All
capitalized terms not defined herein shall have the meaning given to such
terms in the Option Agreement. All references to the Option Agreement shall
include the terms of the First Modification to Option Agreement and this
Second Modification to Option Agreement. The parties hereto acknowledge that
under the terms of the First Modification to Option Agreement, Optionee has
previously extended the Term of the Option for the First Extension Period from
January 1, 1997 through December 31, 1997.
2. Paragraph 6a of the Option Agreement is hereby modified and amended to
add the following language to the end of existing Paragraph 6a of the Option
Agreement:
"Notwithstanding anything to the contrary contained in this Paragraph 6a
or anywhere else in the Option Agreement, the total amount of all of the
monthly Base Payments payable by Optionee to Optionor for the period from
January 1, 1998 through September 30, 1998 shall be One Million Two Hundred
Thousand Dollars ($1,200,000.00) payable by Optionee to Optionor in the
following manner:
(i) on or before September 15, 1997, Optionee shall pay to Optionor the
sum of ONE MILLION TWO HUNDRED THOUSAND AND 00/100 DOLLARS ($1,200,000.00).
The aforesaid $1,200,000.00 payment due by no later than September 15, 1997 as
set forth above, shall be deemed to be payment in full by Optionee of the
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total amount of all monthly Base Payments due from Optionee to Optionor for
the period from January 1, 1998 through September 30, 1998. In the event that
Optionee thereafter desires to extend the Term of the Option for the months of
October, November and December, 1998, then Optionee shall extend the Term of
the Option for each month by paying to Optionor a monthly Base Payment in the
amount of $100,000.00 for each month (payable on or before the 10th day of
each month) in accordance with the terms and conditions of the Option
Agreement."
3. Paragraph 5b and Paragraph 5e of the Option Agreement are hereby modified
and amended in the following manner:
(i) the Second Extension Period referenced in Paragraph 5b of the Option
Agreement is now to be for an initial period of nine (9) months commencing on
January 1, 1998 and expiring on September 30, 1998. The Total Base Payments
due for the Second Extension Period shall be the $1,200,000.00 payment
referenced in Paragraph 2 of this Second Modification to Option Agreement.
Additionally, the Second Extension Period may thereafter be further extended
by Optionee for each of the months of October, November and December, 1998, by
Optionee paying to Optionor a monthly Base Payment in the amount of
$100,000.00 for each month (payable on or before the 10th day of each month)
in accordance with the terms and conditions of the Option Agreement.
Therefore, if extended by Optionee pursuant to the terms hereof, the Second
Extension Period will expire on December 31, 1998.
(ii) the Fifth Extension Period referenced in Paragraph 5e of the Option
Agreement is now to be for an initial period of six (6) months (January 1,
2000 to June 30, 2000); provided, however, that the Fifth Extension Period may
thereafter be extended by Optionee for an additional six (6) month period
commencing on July 1, 2000 and ending on December 31, 2000 by Optionee paying
to Optionor the monthly Base Payments in the amount of $277,000.00 per month
(payable on or before the 10th day of each month) for each month during such
additional extension. Therefore, if extended by Optionee pursuant to the
terms hereof, the Fifth Extension Period will expire on December 31, 2000.
The First Amendment to Lease Agreement shall be concurrently amended to
reflect the inclusion of the above referenced new dates for the Fifth
Extension Period."
4. Paragraph 9 of the Option Agreement was previously amended in Paragraph 4
of the First Modification to Option Agreement. The terms of Paragraph 4 of
the First Modification to Option Agreement are hereby deleted. This Paragraph
4 of the Second Modification to Option Agreement shall supersede in all
respects the terms of Paragraph 4 of the First Modification to Option
Agreement.
Paragraph 9 of the Option Agreement is hereby amended to read as follows:
"It is the intention of the Optionor (as Landlord) and Optionee (as
Tenant) that Optionee is and shall continue to be the "Tenant" under the terms
of the Lease Agreement, First Amendment to Lease Agreement, Modification to
First Amendment to Lease Agreement, and the Second Amendment to Lease
Agreement. The Optionor (as Landlord) and Optionee (as Tenant) do
acknowledge, however, that the Premises may be capable of and are intended to
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be shared by two (2) separate licensed gaming facilities (in whatever
proportion of the Premises that Tenant and the New Gaming Company may agree
upon), and that the Premises may be capable of the development of a common
infrastructure containing two (2) separate licensed riverboat gaming
facilities. Following the execution of this Option Agreement and during the
pendency of any Option Periods, Optionee, on an exclusive basis with Optionor,
will attempt to market and enter into a separate option agreement (or other
agreement) with an entity desiring to operate a gaming facility on a site
located on the Premises (the "New Gaming Company") for such New Gaming Company
to sublease, sublicense, or otherwise occupy a second gaming site located on
the Premises. The New Gaming Company shall be subject to the approval of
Optionor and Optionee, which approval shall not be unreasonably conditioned,
delayed or withheld (and which approval shall be granted or denied, in
writing, within ten (10) days after written request). If Optionee or Optionor
succeeds in securing a New Gaming Company to execute an option agreement (or
other agreement) to sublease, sublicense, or otherwise occupy a second gaming
site on the Premises, the Option agreement (or other agreement) for the second
gaming site shall be entered into by the New Gaming Company and Optionee, and
such option agreement or other agreement will provide that the New Gaming
Company will make an initial up-front consideration payment to Optionee, the
sum of which shall be negotiated by Optionee. Optionee shall receive the
first One Million Two Hundred Thousand and 00/100 Dollars ($1,200,000.00) from
the New Gaming Company's initial up-front consideration payment for the option
(or other agreement) for the second gaming site, which payment would reimburse
Optionee in full for the One Million Two Hundred Thousand and 00/100 Dollars
($1,200,000.00) consideration which Optionee has paid Optionor to enter into
this Second Modification to Option Agreement. Thereafter, Optionee agrees
that it will equally split with Optionor any initial payment amount which
Optionee negotiates and receives from new Gaming Company which is in excess of
One Million Two Hundred Thousand and 00/100 Dollars ($1,200,000.00). The new
option agreement (or other agreement) to be entered into by Optionee with the
New Gaming Company (for the second gaming site) shall contain option periods
which shall run concurrently with the Option Periods as set forth in this
Option Agreement.
5. Except as specifically set forth herein, the terms and conditions of the
Option Agreement shall remain in full force and effect.
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WITNESS the due execution hereof on the day and year first above written.
LIBERTY LANDING ASSOCIATES
Delaware Avenue Development
Corporation, Partner
By: /s/ Xxxx Xxxxxxxxx
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Delaware-Washington Corporation, Partner
By: /s/ Xxxxxx X. Xxxxx
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PRESIDENT RIVERBOAT CASINO-
PHILADELPHIA, INC.
By: /s/ Xxxx X. Xxxxxxxxx
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