TO
BE EFFECTIVE AT THE CLOSING HEREUNDER AND CONTINGENT UPON THE SAME, SELLER,
JEFFREY P. JACOBS AND RICHARD E. JACOBS (COLLECTIVELY, THE "OPTIONORS") DO
HEREBY GRANT TO BUYER THE RIGHT, BUT NOT THE OBLIGATION, TO ACQUIRE ANY AND ALL
INTERESTS ANY OF THE OPTIONORS MAY OWN, WHETHER NOW OWNED OR HEREAFTER ACQUIRED
AND WHETHER HELD JOINTLY OR SEVERALLY, IN ANY GAMING ASSETS OR IN ANY ENTITY
THAT OWNS ANY GAMING ASSETS (THE "OPTION") DURING THE OPTION TERM.
THE PARTIES
ACKNOWLEDGE THAT THIS AGREEMENT IS INTENDED TO AND DOES GRANT MULTIPLE OPTIONS,
ONE FOR EACH GAMING ASSET COVERED BY THE OPTION DURING THE OPTION TERM AND THAT
THE EXERCISE OF THE OPTION WITH RESPECT TO ANY ONE GAMING ASSET SHALL NOT
PRECLUDE THE EXERCISE OF THE OPTION AT A LATER TIME WITH RESPECT TO ANY OTHER
GAMING ASSETS THAT ARE OR MAY BECOME SUBJECT TO THE OPTION.
NOTWITHSTANDING THE
FOREGOING, NO PASSIVE GAMING INVESTMENT HELD BY ANY OPTIONOR AT ANY TIME SHALL
BE SUBJECT TO THE OPTION OR THE COVENANTS DESCRIBED IN SECTION 2.4 BELOW.
2.2.
OPTION TERM.
THE OPTION
MAY NOT BE EXERCISED PRIOR TO THE EIGHTEENTH (18TH) MONTHLY ANNIVERSARY OF THE
NOTES CLOSING DATE, AND THE OPTION SHALL EXPIRE IMMEDIATELY UPON THE PAYMENT IN
FULL OF THE NOTES ("OPTION TERM").
THE OPTION SHALL BE EXERCISED BY DELIVERING
WRITTEN NOTICE ("OPTION NOTICE") OF THE BUYER'S INTENT TO EXERCISE THE OPTION
PURSUANT TO THE NOTICE PROVISIONS OF SECTION 13.4 BELOW, AND IDENTIFYING THE
SPECIFIC GAMING ASSET(S) TO BE PURCHASED.
THE OPTION MAY NOT BE RESCINDED OR
CANCELED WITHOUT THE PRIOR WRITTEN CONSENT OF THE MAJORITY OF THE HOLDERS OF THE
PRINCIPAL BALANCE THEN OUTSTANDING OF THE NOTES.
2.3.
PURCHASE PRICE AND
CLOSING.
THE PURCHASE PRICE FOR ANY GAMING
ASSETS PURCHASED PURSUANT TO THE EXERCISE OF THE OPTION ("OPTION PURCHASE
PRICE") SHALL BE EQUAL TO THE APPLICABLE OPTIONOR'S ACTUAL COST OF SUCH GAMING
ASSETS.
ABSENT MANIFEST ERROR, THE DETERMINATION OF THE OPTION PURCHASE PRICE
SHALL BE THE ACTUAL COST BASIS OF SUCH GAMING ASSETS AS REFLECTED IN THE BOOKS
AND RECORDS OF THE APPLICABLE OPTIONOR.
THE CLOSING OF ANY PURCHASE
2
UNDER THE OPTION SHALL TAKE PLACE AT THE BUYER'S PRINCIPAL PLACE OF BUSINESS AND
SHALL OCCUR NOT LATER THEN NINETY (90) DAYS FOLLOWING THE APPLICABLE OPTIONOR'S
RECEIPT OF THE OPTION NOTICE.
THE OPTION PURCHASE PRICE SHALL BE PAID IN CASH,
OR IMMEDIATELY AVAILABLE FUNDS, AT SUCH CLOSING.
THE PARTIES SHALL EXECUTE A
SEPARATE PURCHASE AGREEMENT IN FORM AND SUBSTANCE SUBSTANTIALLY SIMILAR TO THIS
AGREEMENT FOR THE PURCHASE OF ANY GAMING ASSETS FOLLOWING THE EXERCISE OF THE
OPTION, WITH SUCH ADDITIONS OR MODIFICATIONS AS SHALL BE NECESSARY TO CONVEY THE
PARTICULAR GAMING ASSETS THAT ARE THE SUBJECT OF THE OPTION.
2.4.
ADDITIONAL COVENANTS.
2.4.1.
IN ADDITION TO THE FOREGOING AND NOT IN LIEU THEREOF,
AS ADDITIONAL CONSIDERATION FOR THE BUYER'S PURCHASE OF THE MEMBERSHIP INTERESTS
HEREUNDER, EACH OF THE OPTIONORS COVENANTS AND AGREES THAT COMMENCING ON AND
AFTER THE NOTE CLOSING DATE AND CONTINUING THROUGHOUT THE OPTION TERM, EACH
OPTIONOR WILL