Document:

EXHIBIT 10.11B

 

AMENDMENT TO OPTION AGREEMENT

 

This
AMENDMENT TO OPTION AGREEMENT (the “Amendment”) is made as of
July 6, 2010 by and between Jacobs Entertainment, Inc., a
Delaware corporation (“Tenant”) and Nautica Phase 2 Limited Partnership, an
Ohio limited partnership (“Landlord”).

 

	
  1.

  	
  Original
  Agreement: Tenant and Landlord previously executed that certain Option
  Agreement dated July 11, 2006 (the “Original Agreement”) for the lease
  of certain property on the west bank of the Cuyahoga River in Cleveland, Ohio
  forming part of the parking lot of the Nautica Entertainment Complex.

  
	
   

  	
   

  
	
  2.

  	
  Purpose:
  The purpose of this Amendment is to (a) extend the Option Period (as
  defined in the Agreement) granted to Tenant an additional two years on the
  same terms and conditions as in the Original Agreement and (b) ratify,
  affirm and restate (except to the extent modified herein) the Original
  Agreement as set forth below.

  
	
   

  	
   

  
	
  3.

  	
  Extension
  of Option: The Option Period shall be extended to July 11, 2012.

  
	
   

  	
   

  
	
  4.

  	
  Remaining
  Terms: Except as set forth in Section 3 of this Amendment, all other
  terms and provisions of the Original Agreement are hereby ratified and
  affirmed and restated as if set out word for word herein.

  
	
   

  	
   

  
	
   

  	
  TENANT

  	
   

  	
  LANDLORD

  
	
   

  	
  Jacobs Entertainment, Inc.

  	
   

  	
  Nautica Phase 2 Limited Partnership

  
	
   

  	
   

  	
   

  	
  By: Nautica Phase 2 LLC, its General Partner

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  /s/
  Stanley Politano

  	
   

  	
  By:

  	
  /s/ David
  C. Grunenwald

  
	
   

  	
  Stanley Politano

  	
   

  	
  David C.
  Grunenwald

  
	
   

  	
  Executive Vice President

  	
   

  	
  Vice
  President of Development/Leasing

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
  By:

  	
  /s/
  Patrick J. McKinley

  
	
   

  	
   

  	
   

  	
  Patrick J.
  McKinley

  
	
   

  	
   

  	
   

  	
  Executive
  Vice PresidentEXHIBIT 10.12B

 

PURCHASE AGREEMENT

 

THIS
PURCHASE AGREEMENT (“Agreement”), dated as of the 7th day of July, 2010, by and between Flats Development, Inc. (“Seller), an
Ohio corporation and Jacobs Sugar
Warehouse, Inc. (“Purchaser”), a Delaware corporation, and
provides as follows:

 

RECITALS

 

A.                                   Seller
is the owner of fee simple title to property, comprised of land of
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., subject to
adjustment based on the Survey (as hereinafter defined), with improvements
thereon, if any, on the West Bank of the Flats in Cleveland, Ohio (the
“Property”).

 

B.                                     Seller
and Jacobs Entertainment, Inc. (“JEI”) are parties to that certain Option
Agreement dated April 18, 2006, as amended by that certain Amendment to
Option Agreement dated as of April 17, 2008, (collectively, the “Option
Agreement”) which grants to JEI the right to purchase the Property.

 

C.                                     By
Assignment dated effective July 7, 2010, JEI assigned its rights under the
Option Agreement to Purchaser, its wholly owned subsidiary.

 

D.                                    By
written notice dated effective July 7, 2010, Purchaser has notified Seller
of its exercise of the option to purchase the Property pursuant to the Option
Agreement.

 

AGREEMENT

 

NOW,
THEREFORE, in consideration of their mutual promises hereinafter set forth and
other good and valuable consideration, the receipt and sufficiency of which are
hereby mutually acknowledged, the parties hereto covenant and agree as follows:

 

1.                                       CONTRACT
FOR PURCHASE AND SALE.  This Agreement shall
constitute a binding contract, on the terms and conditions herein set forth,
for the purchase and sale of the Property.

 

2.                                       PURCHASE
PRICE.

 

a.                                       Purchase
Price.  The purchase price (the “Purchase
Price”) for the Property shall be $3,000,000.00.  The Purchase Price shall
be payable in immediately useable funds at Closing (as such term is defined in
Paragraph 3) minus the Option Payment Credit.  At Closing, Purchaser shall
receive credit against the Purchaser Price for the four option payments of
$50,000 each previously paid to Seller pursuant to the Option Agreement (the
“Option Payment Credits”).

 

b.                                      Additional
Purchase Price.  In the event that gaming
becomes legal in Ohio within seven (7) years of Closing and a for-profit
casino is licensed at Nautica, additional purchase price shall be paid to the Seller
within ninety (90) days following issuance of the license (the “Additional
Purchase Price”).  The Additional
Purchase Price is equal to the fair market

 

 

value of the
Property at the time that a license is issued for a for-profit casino at
Nautica less the Purchase Price paid in Paragraph 2a.  The fair market value of the Property shall
be the average of three (3) appraisals prepared, at the cost of Purchaser,
by independent appraisers selected and approved by Seller and Purchaser.

 

3.                                       CLOSING.

 

a.                                       The
closing of the purchase and sale of the Property shall be conducted at
Provident Title Agency, Inc., 26301 Curtiss Wright Parkway,
Suite 210, Richmond Heights, Ohio  44143 (the “Title Company”) or at
such other place as the parties may agree upon in writing (the “Closing”).

 

b.                                      The
Closing shall take place no later than thirty (30) days after Purchaser has
notified Seller of its intention to purchase the Property.

 

c.                                       At
Closing, the Purchaser shall pay to the Seller the Purchase Price (minus the
Option Payment Credit) and contemporaneously the Seller shall deliver to
Purchaser:

 

(i)                                     the
Deed (as defined in Paragraph 4);

 

(ii)                                  an
affidavit for the benefit of Purchaser and the Title Company, satisfactory to
both (the “Affidavit”), stating, inter alia that: (A) no right to a
mechanic’s or materialmen’s lien has accrued with respect to the Property as a
result of any act or omission by the Seller and (B) except for the lease
between Seller and Purchaser, there are no outstanding leases or agreements
with regard to, or other parties in or entitled to possession of, the Property;

 

(iii)                               a
Certificate of Non-Foreign Status as required by Section 1445 of the
Internal Revenue Code of 1986 and any other certificates required by any
governmental authority or agency;

 

(iv)                              evidence
of registration with the State of Ohio Department of Taxation or such other
evidence of registration and good standing as may be acceptable to the Title
Company;

 

(v)                                 Assignment
and Assumption of Contracts;

 

(vi)                              Assignment
of Tenant Leases and Deposits;

 

(vii)                           Bill
of Sale; and

 

(viii)                        possession
of the Property.

 

d.                                      Seller
shall pay the costs of preparing the Deed and the Transfer Tax thereon. 
Purchaser shall pay all costs and expenses incurred in connection with its
examination of title to the Property and the Survey and all premiums charged by
the Title Company for the Title Policy (including endorsements and extended
coverage).

 

 

e.                                       Real
estate taxes and utilities, including “rollback” taxes, if any, shall be
prorated between the Seller and the Purchaser as of Closing, according to the
number of days of the year which the Property is owned or to be owned by each
party.

 

f.                                         Each
party shall pay its own legal, accounting and other expenses incurred in
connection with this Agreement or Closing hereunder. Other closing costs shall
be split 50-50% between the parties.

 

4.                                       DEED;
TITLE; SURVEY.

 

a.                                       At
Closing, Seller shall deliver to Purchaser a general warranty deed (the “Deed”)
conveying to Purchaser a good and marketable, fee simple title to the Property,
free and clear of all liens, encumbrances, conditions and restrictions except:
(i) the lien for real estate taxes not yet due and payable;
(ii) standard utility easements of record, (iii) zoning ordinances
and (iv) any liens, encumbrances, conditions, restrictions or other
objections to title which do not, in Purchaser’s reasonable opinion, adversely
affect Purchaser’s use of the Property.

 

b.                                      Title
Commitment; Title Policy.  At Closing or as soon
as reasonably practicable after Closing, Seller shall cause the Title Company
to issue to Purchaser an ALTA Owners Policy of Title Insurance -2006 Form,
satisfactory to Purchaser (the “Title Policy”).

 

c.                                       Survey. 
The parties also acknowledge that Purchaser has caused the preparation of an
updated survey of the Property prepared by MNeff Design Group, 5422 East 96th
Street, Suite 120, Cleveland, Ohio 44125 (the “Survey”).  Purchaser
shall bear the sole cost and expense of the preparation of such Survey.

 

5.                                       RISK
OF LOSS.  The risk of loss or damage to the Property by fire
or other casualty prior to Closing shall be on the Seller, except as otherwise
provided in the Option Agreement.  If such loss or damage materially and
adversely affects the Purchaser’s intended use and enjoyment of the Property as
of Closing, the Purchaser shall be entitled to terminate this Agreement and the
parties hereto shall have no further obligations or liabilities to one another
hereunder.

 

6.                                       DEFAULT
BY SELLER.  The parties agree that, in
the event of a default by Seller under this Agreement, Purchaser shall be
entitled to enforce this Agreement by specific performance.

 

7.                                       REPRESENTATIONS
AND WARRANTIES OF SELLER.  Seller represents and
warrants to Purchaser the following:

 

a.                                       Seller
has and will have at Closing title to the Property sufficient to convey to
Purchaser the Property as set forth in this Agreement.

 

b.                                      To
Seller’s knowledge, there are no claims, liens, mortgages, security interests,
encumbrances, covenants, conditions, restrictions, rights-of-way, easements,
judgments or other matters affecting title to the Property, other than as
disclosed on the Title Commitment.

 

c.                                       This
Agreement has been duly authorized and executed by Seller and is a valid and
binding obligation of, and is enforceable, in accordance with its terms,
against Seller.

 

 

d.                                      The
documents delivered to Purchaser at Closing will be duly authorized and
executed by Seller and will be a valid and binding obligation of, and will be
enforceable in accordance with their terms, against Seller.

 

e.                                       No
party or entity has a right of first refusal for the purchase of the Property
or any portion thereof which has not been irrevocably waived in accordance with
the terms of Seller’s governing documents and applicable Ohio law.  The
persons executing this Agreement on behalf of Seller are authorized to do so in
accordance with the terms of the governing documents of Seller.

 

f.                                         To
Seller’s knowledge, there is no pending or threatened condemnation or similar
proceeding affecting the Property or any portion thereof, or pending public
improvements, liens, or special assessments, in, about or outside the Property
which will in any manner affect the Property or access to the Property, nor any
legal action of any kind or character whatsoever affecting the Property which will
in any manner affect Purchaser upon the consummation of the Closing.

 

g.                                      There
is no legal action of any kind or character whatsoever affecting Seller which
will in any manner affect Seller’s ability to perform under this Agreement.

 

h.                                      Seller
has not received notice from any governmental authority that the Property is
not in compliance with any law, ordinance, regulation, statute, rule or
restriction.

 

i.                                          The
performance of this Agreement by Seller will not result in any breach of, or
constitute any default under, or result in imposition of, any lien or
encumbrance upon the Property under any agreement or other instrument to which
Seller is a party or by which Seller or the Property might be bound.

 

j.                                          Seller
will maintain the physical condition of the Property in the same or better
condition as it presently exists to the date of Closing.

 

k.                                       There
are no other contracts or tenant leases affecting the Property, other than
those disclosed on the “Assignment of Contracts” and the “Assignment of Tenant
Leases and Deposits”.

 

l.                                          No
action has been taken with respect to work performed or delivery of material
which would give rise to a lien on the Property. At Closing, there will be no
claim (or right to a claim) in favor of any person or entity which is or could
become a lien on the Property, arising out of the furnishing of labor or
materials at Seller’s request and there will be no unpaid assessments against
the Property, except for property taxes assessed but not due and payable at the
time of Closing.

 

m.                                    All
due and owing: (i) ad valorem taxes and personal property taxes, and
(ii) all assessments or other charges for utilities, roads or the widening
of such roads, or any other fees imposed by any governmental authority with
respect to the Property, have been paid in full.

 

 

n.                                      To
Seller’s knowledge, Seller has not received notice (written or oral) from any
governmental jurisdiction or authority that the Property is in violation of any
environmental laws.

 

o.                                      The
representations, warranties and covenants of the Seller contained in this
Agreement or in any document delivered to Purchaser pursuant to the terms of
this Agreement shall be true and correct in all material respects and not in
default at the time of Closing, just as though they were made at such time, and
shall expressly survive the Closing.

 

8.                                       AGENTS
AND BROKERS.  Each party hereunder
represents and warrants that it did not consult or deal with any broker or
agent, real estate or otherwise, with regard to this Agreement or the
transactions contemplated hereby, and each party hereto agrees to indemnify and
hold harmless the other party from all liability, expense, loss, cost or
damage, including reasonable attorneys’ fees, that may arise by reason of any
claim, demand or suit of any agent or broker arising out of facts constituting
a breach of the foregoing representations and warranties.

 

9.                                       BINDING
AGREEMENT.  This Agreement shall bind
and inure to the benefit of the parties hereto and their respective successors
and assigns.

 

10.                                 NOTICES. 
Any notice, request or demand required or permitted to be given pursuant to
this Agreement shall be conform to the Notice provision outlined in the Option
Agreement.

 

11.                                 INTERPRETATION. 
When the context in which words are used in this Agreement indicates that such
is the intent, words in the singular number shall include the plural, and vice
versa, and words in the masculine gender shall include the feminine and neuter
genders, and vice versa.

 

12.                                 TITLE
AND HEADINGS; REFERENCES. Titles and headings to
paragraphs and subparagraphs herein are inserted for the convenience or
reference only, and are not intended to be a part of or to affect the meaning
or interpretation of this Agreement. All paragraph and subparagraph references
in this Agreement are to the paragraphs or subparagraphs of this Agreement
unless expressly stated to the contrary.

 

13.                                 ENTIRE
AGREEMENT, MODIFICATION.  This Agreement
contains the entire agreement between the parties hereto relating to the
Property and supersedes all prior and contemporaneous negotiations,
understandings and agreements, written or oral, between the parties
hereto.  This Agreement shall not be amended or modified and no waiver of
any provision hereof shall be effective unless set forth in a written
instrument executed with the same formality as this Agreement.

 

14.                                 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.

 

15.                                 CHOICE
OF LAWS.  This Agreement shall be governed by and construed
under the laws of the State of Ohio without regard to conflict of laws
provisions.

 

16.                                 FURTHER
ACTS.  Prior to and after Closing, each party hereto agrees
to perform any and all such further and additional acts and execute and deliver
any and all such further and additional instruments and documents as may be
reasonably necessary in order to carry out the provisions and effectuate the
intent of this Agreement.  This provision shall survive the Closing.

 

 

IN WITNESS
WHEREOF, each of the parties hereto has caused this Agreement to be executed in
its name pursuant to due authority as of the dates set forth below.

 

 

SELLER:

 

FLATS
DEVELOPMENT, INC.,

 

an Ohio
corporation

 

 

	
  By:

  	
  /s/ David
  C. Grunenwald

  	
   

  

 

Printed
Name: David C. Grunenwald

 

Title: Vice
President

 

 

PURCHASER:

 

JACOBS SUGAR
WAREHOUSE, INC.,

a Delaware
corporation

 

 

	
  By:

  	
  /s/
  Stanley Politano

  	
   

  

 

Printed
Name: Stanley Politano

 

Title: Vice
President

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