EXHIBIT 10.16


 


OPTION
AGREEMENT


 


This OPTION AGREEMENT (“Agreement”) to
acquire property is made this 18th day of, April 2006 (“Effective
Date”) by and between Jacobs Entertainment, Inc.,
a Delaware corporation, hereinafter referred to as PURCHASER, and Flats Development, Inc., an Ohio
corporation, 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 $50,000 (“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 land approximately 76,913 s.f. and improvements thereon, if
any, and which are Parcels # 003-17-015, and
approximately 17% of Parcel # ###-##-#### on the Tax Maps for Cuyahoga
County, Ohio, as well as a reversionary interest at June 26, 2026 in land comprised of approximately 380,795 s.f. (“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


 


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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:

  	
   

  	
  Mrs. Helen Chaney

  
	
   

  	
   

  	
   

  	
  711 Spindlewood

  
	
   

  	
   

  	
   

  	
  Fearrington Post

  
	
   

  	
   

  	
   

  	
  Pittsboro, NC 27312

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  With a Copy to:

  	
   

  	
  David R. Frankstone

  
	
   

  	
   

  	
   

  	
  1414 Raleigh Road, Suite 320

  
	
   

  	
   

  	
   

  	
  The Exchange West at Meadowmount

  
	
   

  	
   

  	
   

  	
  Chapel Hill, NC 27517

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  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.


 


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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:

  	
  Chief Financial Officer

  
	
   

  	
   

  
	
  SELLER:

  	
  Flats Development, Inc.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
  /s/ Helen Chesney

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Helen Chesney

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
								



 


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