EXHIBIT 10.19


 


OPTION AGREEMENT


 


This OPTION AGREEMENT (“Agreement”) to acquire property is made this 11th
day of, July 2006 (“Effective Date”) by and between Jacobs Entertainment, Inc., a Delaware corporation,
hereinafter referred to as PURCHASER, and Sugar
Warehouse Limited Partnership, an Ohio Limited Partnership,
hereinafter referred to as SELLER.


 


WITNESSETH:


 


SELLER hereby grants PURCHASER the Option to purchase certain property
in Cleveland, Ohio as follows:


 


1.                                      GRANT OF
OPTION:  For two (2) years (“Option
Period”) following the Effective Date 
SELLER grants to PURCHASER the option to purchase (“Option”) the
property outlined herein. Such Option Period may be extended for two (2)
additional years at the election of the PURCHASER by notifying SELLER in
writing of its intention to extend such Option Period within thirty (30) days
prior to the expiration of the Option Period (“Extension Notice”).


 


2.                                      OPTION
PRICE:  PURCHASER shall pay to SELLER $250,000 (“Option Payment”) upon execution
of this Agreement and on each anniversary of the Effective Date including after
the Extension Notice, as consideration for such Option. The Option Payments
shall be non-refundable but applicable against the Purchase Price.


 


3.                                      PROPERTY:  That certain property on the West Bank of the
Cuyahoga River in Cleveland, Ohio forming part of the parking lot of the
Nautica Entertainment Complex (“Nautica”) comprised of  a building with approximately 47,380 s.f. and a leasehold interest until
June 30, 2026 in land comprised of approximately 380,795 s.f. and improvements thereon, if any, and which are
Parcels # 003-17-006, 003-17-009,
and approximately 83% of Parcel # ###-##-#### on the Tax Maps for Cuyahoga
County, Ohio (“Property”). A map of the Property is attached as Exhibit A.


 


4.                                      PURCHASE
AGREEMENT. The Purchase Agreement between the parties (“Purchase Agreement”)
shall reflect the terms of this Agreement and be in substantially the same form
as that attached as Exhibit B. The Purchase Agreement shall be executed within
five (5) days following exercise of the Option as provided herein.


 


5.                                      DUE
DILIGENCE:  Upon execution of this
Agreement, PURCHASER will evaluate the Property. During such evaluation,
PURCHASER shall conduct such tests as it deems necessary in its sole
discretion, including but not limited to environmental and geotechnical tests
and preparation of a survey and title report. SELLER shall cooperate with
PURCHASER during its evaluation, including providing access to the Property,
and provide to PURCHASER copies of existing reports concerning the Property.
The PURCHASER shall conduct its evaluation so as not to impede or otherwise
effect or 


 

















 


inconvenience SELLER’S use or enjoyment of the Property or any business
conducted thereon.


 


6.                                      EXERCISE OF THE
OPTION:  If PURCHASER decides to exercise
the Option granted herein, PURCHASER will notify the SELLER of its decision in
writing before the end of the Option Period and the parties shall proceed to
Purchase Agreement execution as provided herein. The Option may be exercised at
any time during the Option Period, as extended. If the PURCHASER does not
notify SELLER before the end of the Option Period, then this Option Agreement
shall expire and neither party shall have any further liability hereunder.


 


7.                                      NOTICES:  Any notice, request or demand required or
permitted to be given pursuant to this Agreement shall be in writing and shall
be deemed sufficiently given if, delivered by hand by messenger at the address
of the intended recipient, sent prepaid by Federal Express (or a comparable
guaranteed overnight delivery service), or deposited in the United States first
class mail (registered or certified, postage prepaid, with return receipt
requested), addressed to the intended recipient, at the intended recipient’s
address set forth below, or at such other address as the intended recipient may
have specified by written notice to the sender given in accordance with the
requirements of this Paragraph. Any such notice, request or demand so given
shall be deemed given on the day it is delivered by messenger at the specified
address, or on the day of deposit in the United States Mail, as the case may
be.


 


	
  For the SELLER:

  	
  Sugar Warehouse Limited Partnership

  
	
   

  	
  c/o Jacobs Investments Management Co., Inc.

  1231 Main Avenue

  Cleveland, Ohio

  Attention: David C. Grunenwald, 

  
	
   

  	
  Vice-President of Leasing/Development

  
	
  With a Copy to:

  	
  Stephen P. Owendoff, Esq.

  Hahn Loeser & Parks LLP

  200 Public Square

  3300 BP Tower

  Cleveland, Ohio 44114

  
	
   

  	
   

  
	
  For the PURCHASER:

  	
  Stephen A. Roark, CFO

  Jacobs Entertainment, Inc.

  17301 West Colfax

  Golden, Colorado 80401

  
	
   

  	
   

  
	
  With a Copy to:

  	
  Samuel E. Wing, Esq.

  Jones & Keller

  1625 Broadway, Suite 1600

  Denver, Colorado 80202

  



 

















 


8.                                      CHOICE OF
LAWS:  This Agreement shall be governed
by the laws of the State of Ohio, without regard to conflict of laws
principles.


 


9.                                      AUTHORITY:  Each party signing below warrants and
represents that he or it has the
authority to execute this Agreement. This Agreement shall be binding on and
inure to the benefit of each party’s successors and assigns.


 


10.                               SALES COMMISSION:  The parties acknowledge that neither has been
represented by a real estate broker or other agent in this transaction and each
party agrees to defend and indemnify the other from and against any and all
claims of a third-party real estate broker or agent for commissions being made
though such party.


 


11.                               ASSIGNMENT. This
Agreement may be assigned by the PURCHASER to an entity in which it owns a
controlling interest or to an entity acquiring all or substantially all of the
assets of the PURCHASER.


 


12.          COUNTERPARTS. This
Agreement may be executed in one or more counterparts, together which
constitute the Agreement.


 


13.                               ENTIRE AGREEMENT: This
Agreement together with the Purchase Agreement, contain the entire agreement
between the parties hereto relating to the Property and shall not be amended or
modified unless set forth in writing between the parties.


 


Agreed and Accepted as of the Effective Date.


 


	
  PURCHASER:

  	
   

  
	
   

  	
  Jacobs Entertainment, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Stephen R. Roark

  
	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Stephen R. Roark

  
	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
  President/Chief Financial Officer

  
	
   

  	
   

  
	
  SELLER:

  	
  Sugar Warehouse Limited Partnership

  
	
   

  	
   

  
	
   

  	
   

  	
  By: 

  	
  /s/ Patrick J. McKinley

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   Patrick J. McKinley

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   General Partner