<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
SCHEDULE l3D
Under the Securities Exchange Act of 1934
THE SANDS REGENT
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(Name of Issuer)
Common Stock, par value $.05 per share
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(Title of Class of Securities)
800091100
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(CUSIP Number)
David R. Wood
The Sands Regent
345 N. Arlington, Ave.
Reno, Nevada 89501
(702) 348-2298
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(Name, Address and Telephone Number of Persons
Authorized to Receive Notices and Communications)
July 16, 1997
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(Date of Event which Requires Filing of this Statement)
If the filing person has previously filed a statement on Schedule l3G to report
the acquisition which is the subject of this Schedule 13D, and is filing this
schedule because of Rule 13d-1(b)(3) or (4), check the following box. [ ]
Note: Six copies of this statement, including all exhibits, should be filed with
the Commission. See Rule l3d-1(a) for other parties to whom copies are to be
sent.
*The remainder of this cover page shall be filled out for a reporting person's
initial filing on this form with respect to the subject class of securities, and
for any subsequent amendment containing information which would alter
disclosures provided in a prior cover page.
The information required on the remainder of this cover page shall not be deemed
to be "filed" for the purpose of Section 18 of the Securities Exchange Act of
1934 ("Act") or otherwise subject to the liabilities of that section of the Act
but shall be subject to all other provisions of the Act (however, see the
Notes).
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1) Names of Reporting Persons (S.S. or I.R.S. Identification Nos. of Above
Persons):
Deborah Lundgren
SSN: ###-##-####
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2) Check the Appropriate Box if a Member of a Group (See Instructions):
(a) Not
(b) Applicable
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3) SEC Use Only
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4) Source of Funds (See Instructions): Not Applicable (See Item 3)
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5) Check if Disclosure of Legal Proceedings is Required Pursuant to Items
2(d) or 2(e):
Not Applicable
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6) Citizenship or Place of Organization: Nevada, United States
Number of 7) Sole Voting Power: *
Shares Beneficially 8) Shared Voting Power: *
Owned by
Each Reporting 9) Sole Dispositive Power: *
Person With: 10) Shared Dispositive Power: *
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11) Aggregate Amount Beneficially Owned by Each Reporting Person: 658,678
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12) Check if the Aggregate Amount in Row (11) Excludes Certain Shares (See
Instructions):
Not Applicable
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13) Percent of Class Represented by Amount in Row (11): 14.6%*
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14) Type of Reporting Person (See Instructions): IN
- ---------------------
* 554,298 shares (12.3%) of The Sands Regent common stock are owned by The
Deborah R. Lundgren 1986 Trust. 2 shares (0.0%) of The Sands Regent Common
Stock are owned by Deborah Lundgren as Custodian for Katherene R. Lundgren
under the Nevada uniform gift to minors act. 52,189 shares (1.2%) of The
Sands Regent
<PAGE> 3
common stock are owned by trusts for the benefit of Katherene Lundgren.
52,189 shares (1.2%) of The Sands Regent common stock are owned by trusts
for the benefit of Gregory Lundgren. Deborah Lundgren is the sole trustee of
each of the trusts listed above and possesses full investment authority. See
Item 5 for further information on the computation of percentages set forth
herein.
<PAGE> 4
Item 1. Security and Issuer.
This statement relates to the common stock, par value $.10 per share,
of The Sands Regent (the "Company"), whose principal executive offices are
located at 345 North Arlington Avenue, Reno, Nevada 89501.
Item 2. Identity and Background.
The person filing this statement is Deborah Lundgren; Deborah Lundgren
trustee of the Deborah R. Lundgren 1986 Trust; Deborah Lundgren as custodian for
Katherene Lundgren under the Nevada Uniform Gift to Minors Act; Deborah Lundgren
trustee of trusts for the benefit of Katherene Lundgren; and Deborah Lundgren
trustee of trusts for the benefit of Gregory Lundgren (collectively, the
aforementioned trusts and custodianship are referred to herein as the "Trusts").
All shares reported herein were acquired by the Reporting Person's
family prior to the public registration of The Sands Regent in February 1985.
The address of Deborah Lundgren and the Trusts is in care of Andy Pearl, Esq.,
100 West Liberty St., 10th Floor, Reno, Nevada 89501.
During the past five years, neither Deborah Lundgren nor the Trusts
have been convicted in any criminal proceeding, nor have they been a party to
any civil proceeding commenced before a judicial or administrative body of
competent jurisdiction as a result of which he was or is now subject to a
judgment, decree or final order enjoining future violations of, or prohibiting
or mandating activities subject to, federal or state securities laws or finding
any violation with respect to such laws. Deborah Lundgren is a citizen of the
United States.
Item 3. Source and Amount of Funds or Other Consideration.
All common Shares owned, as reported herein, were received in exchange
for shares of Common Stock of Zante, Inc., a wholly owned subsidiary of the
Issuer. Such exchanges took place prior to the registration of the Common Stock
of The Sands Regent under Section 12(g) of the Securities and Exchange Act of
1934, as amended.
Subsequent to the above mentioned exchanges, various non-monetary
transfers, primarily gifts, have taken place between the Reporting Person,
family members and the Trusts.
Item 4. Purpose of Transaction.
Item 4 to the Schedule 13D is hereby amended in pertinent part as
follows.
Letter Agreement
On June 27, 1997, as amended July 16, 1997, the Reporting Person entered
into a Letter Agreement with Desert Golden Sun, LLC, a Nevada limited-liability
company ("DGC"), and certain other shareholders of the Issuer whereby the
Reporting Person agreed upon the happening of certain events and conditions to
sell all of the 658,678 Common Shares beneficially owned by them to DGC.
Information in Item 6 concerning the Letter Agreement is incorporated herein by
reference. The Letter Agreement is filed as an exhibit pursuant to Item 7.
<PAGE> 5
Item 5. Interest in Securities of the Issuer.
As of the close of business on July 27, 1997, there were issued and
outstanding 4,498,722 shares of common stock of the Company. As of July 27,
1997, the Trusts owned 658,678 of such shares, or 14.6% of those outstanding.
Deborah Lundgren has the sole power to vote an dispose of the 658,678 Common
Shares. Deborah Lundgren does not have any shared power to vote, direct the
vote, dispose or direct the disposition of any other Common Shares.
Item 6. Contracts, Arrangements, Understandings or Relationships With Respect
to Securities of the Issuer.
On June 27, 1997, as amended July 16, 1997, the Reporting Person
entered into a Letter Agreement with DGC and certain other shareholders of the
Issuer. The Letter Agreement provides that DGC will purchase all of the
outstanding Common shares of the Reporting Person and certain other shareholders
of the Issuer upon the happening of certain events and conditions. The Letter
Agreement is attached hereto as Exhibit 1 and is incorporated herein by
reference.
Item 7. Material to be Filed as Exhibits.
Exhibit 1. Letter Agreement dated June 27, 1997, as amended July 16,
1997.
Signature
After reasonable inquiry and to the best of the undersigned's
knowledge and belief, the undersigned hereby certifies that the information set
forth in this statement is true, complete and correct.
July 29, 1997
/s/ Deborah Lundgren
------------------------------------------------------
Deborah Lundgren in her capacity as trustee of The
Deborah R. Lundgren 1986 Trust; as Custodian for
Katherene R. Lundgren under the Nevada uniform gift to
minors act; as trustee of trusts for the benefit of
Katherene Lundgren; and as trustee of trust for the
benefit of Gregory Lundgren.
ATTENTION: INTENTIONAL MISSTATEMENTS OR OMISSIONS OF FACT CONSTITUTE FEDERAL
CRIMINAL VIOLATIONS (SEE 18 U.S.C. 1001).
<PAGE> 6
EXHIBIT 1
Desert Golden Sun, LLC
1055 E. Tropicana Avenue
Suite 200
Las Vegas, Nevada 89119
June 27, 1997
Pete Cladianos, Jr.
345 North Arlington Avenue
Reno, Nevada 89501
Dear Pete:
By execution of this letter agreement (this "Letter Agreement"), each
of the undersigned shareholders (the "Shareholders") of The Sands Regent (the
"Company") hereby irrevocably agrees to sell (the "Purchase") to Desert Golden
Sun, LLC (the "Purchaser") the number of shares of common stock of the Company
set forth opposite such Shareholder's name on Exhibit A annexed hereto, totaling
2,057,618 shares (collectively, the "Shares"), upon the terms and conditions set
forth herein.
1. CONSIDERATION FOR THE PURCHASE. As consideration for entering into
this Letter Agreement, the Purchaser shall pay to the Shareholders
an aggregate amount of $100.00. Within Five (5) days of the date
of this Letter Agreement, the Purchaser shall place in escrow,
upon terms mutually agreeable to the parties hereto, $499,900.00
(the "Escrow Amount"). The Purchaser shall have Twenty-One (21)
days from the date of this Letter Agreement to commence proceeding
for approval from all appropriate gaming authorities. The
Purchaser shall have Ninety (90) days from the date of this Letter
Agreement to negotiate with Wells Fargo Bank (the "Bank"), the
holder of certain debt owed by the Company, to receive the Bank's
approval of the consummation of the transaction outlined herein or
to purchase the Company's debt from the bank. If the Purchaser
does not reach agreement with the Bank, this Letter Agreement will
terminate and the Escrow Amount will be returned to the Purchaser.
The Shareholders will not be obligated to place the Shares in the
escrow until (i) an agreement between the Bank and the Purchaser
has been reached, or (ii) the Purchaser has placed the entire
Purchase Price in escrow.
The Escrow Amount shall be immediately payable to the
Shareholders, and credited toward the Purchase Price, if, on or
before the Expiration Date, the Purchaser has received all
requisite approvals from all applicable gaming and regulatory
authorities
<PAGE> 7
with respect to the Purchase. The Escrow Amount shall be payable
to the Shareholders if the Purchase is not consummated as a
consequence of the Purchaser's breach of any representation,
warrant or covenant set forth herein. The Escrow Amount shall not
be payable to the Shareholders and it shall be refunded to the
Purchaser by the Shareholders if previously distributed, if any
approvals received from gaming authorities have been rescinded or
cease to be in effect or if the Shareholders have breached any
representation, warranty or covenant set forth herein. If the Bank
rescinds its consent to the transaction contemplated hereby or
fails to consummate the sale of the Company's debt to the
Purchaser, then the Purchaser still has the obligation to proceed
to consummate the purchase of the Stock.
2. CLOSING. The Purchaser shall have until November 30, 1997 (the
"Expiration Date") to consummate the Purchase (the "Closing"). The
Purchaser shall notify the Shareholders of the date of Closing by
written notice.
3. PURCHASE PRICE. The Purchase shall be consummated upon payment by
the Purchaser to the Shareholders of a total of $6,172,854 (i.e.
$3.00 per Share) (the "Purchase Price") in cash at the Closing,
inclusive of the Escrow Amount, pursuant to definitive agreements
reasonably acceptable to the parties hereto. In addition,
Purchaser agrees to compensate Shareholders for all of their costs
and expenses associated with the Purchase, including attorneys
fees, provided, however, that such costs and expenses shall not
exceed $35,000.
4. REPRESENTATIONS OF THE SHAREHOLDERS. Each of the Shareholders,
jointly and severally, represents, warrants and covenants that as
of the date hereof and through the Closing (i) each Shareholder
owns and will own the Shares set forth opposite such Shareholder's
name on Schedule A hereto free and clear of any lien or
encumbrance, (ii) each Shareholder has and will have the authority
to enter into the Letter Agreement and perform its obligations
hereunder and (iii) this Letter Agreement is and will be
enforceable against each Shareholder in accordance with its terms.
5. REPRESENTATIONS OF THE PURCHASER. The Purchaser, and Shawn Scott
individually, jointly and severally, represent, warrant and
covenant that as of the date hereof through the Closing (i) Shawn
Scott has and will have the authority to enter into the Letter
Agreement on behalf of the Purchaser, (ii) Purchaser has the
authority to perform its obligations hereunder (iii) this Letter
Agreement is and will be enforceable against Purchaser in
accordance with its terms and (iv) the Shares will
<PAGE> 8
not be acquired by Purchaser with a view to the distribution
thereof within the meaning of the Securities act of 1933, as
amended.
6. DEFINITIVE DOCUMENTATION: BEST EFFORTS; CONTROL OF BOARD. Each of
the Shareholders jointly and severally agrees to cause the Company
to make available to the Purchaser and its representatives, such
information as the Purchaser may reasonably request. Except as may
be required by applicable law or applicable regulatory or
governmental authorities and regulations, non-public information
thus obtained by the Purchaser will be treated as confidential
and, if the Purchase is not consummated, all documents or copies
thereof obtained by the Purchaser will be returned to the Company
or the Shareholders. Each of the Shareholders jointly and
severally agrees to use best efforts to enter into definitive
documentation prior to the Expiration Date and to cooperate with
the Purchaser and the applicable gaming and regulatory authorities
in obtaining prior to the Expiration Date all requisite approvals
from such authorities for the Purchase. The shareholders jointly
and severally agree to use their best efforts to assist the
Purchaser in gaining control of the Company's board of directors
promptly after the Closing.
7. OPERATION OF BUSINESS; NO OTHER SALE. After the date hereof and
prior to the termination of the Letter Agreement, each of the
Shareholders jointly and severally agrees to cause the Company to
be operated in the ordinary course of business. The Shareholders
jointly and severally agree that none of them will accept any
other offer to obtain control of, or ownership or, all or any
portion of the Shares prior to the Expiration Date.
8. EMPLOYMENT AGREEMENTS. After the Closing, Pete Cladianos, Jr., and
Pete Cladianos, III, have agreed to continue their employment with
the Company. The basic terms for employment are set forth on
Exhibit B which is attached to this Letter Agreement and made a
part of it by this reference. Pete Cladianos, Jr., and Pete
Cladianos, III, have agreed to be bound by the terms of those
agreements. The parties will enter into formal employment
agreements, the execution of which will be a condition of Closing.
9. NO PURCHASE OF BANK DEBT. The Shareholders jointly and severally
agree that they will not, directly or indirectly, purchase the
Company's debt to the Bank.
10. NO PUBLIC ANNOUNCEMENT. None of the Shareholders, on the one hand,
or the Purchaser, on the other hand, will make any public
statement or announcement with respect to the subject matter of
this Letter Agreement without the prior approval of
<PAGE> 9
the other, except that in the event the parties are unable to
agree on a public statement or announcement and legal counsel for
a party is of the opinion that such statement or announcement is
required by law, then such party may issue the legally required
statement or announcement.
11. TERMINATION. This Letter Agreement shall terminate if the Closing
has not occurred by November 30, 1997 (the "Expiration Date") or
as provided in Sections 1 above unless extended by mutual written
agreement among the parties hereto.
12. ENFORCEABILITY. The Shareholders' obligation to sell the Shares on
the terms set forth in paragraph 3 shall be binding upon the
Shareholders during the term of this Letter Agreement. This Letter
Agreement is a binding and enforceable agreement between the
parties hereto, and each party agrees not to institute or
participate in any proceeding seeking to establish that this
Letter Agreement does not constitute a binding and enforceable
agreement. The representations, warranties and covenants herein
shall survive the Closing. All parties shall be considered the
draftsman of the Letter Agreement in any dispute where that issue
is relevant.
13. GOVERNING LAW. This Letter Agreement may be governed by the laws
of the state of Nevada applicable to agreements made and to be
performed entirely within such State.
14. EXCLUSIVE JURISDICTION. It is agreed that the Second Judicial
District Court of the State of Nevada, in and for the County of
Washoe, shall be the sole and exclusive forum for the resolution
of any disputes arising among any of the parties to this Letter
Agreement. In the event that any litigation commenced in the
Second Judicial District Court of the State of Nevada, in and for
the County of Washoe, is properly removable to a Federal Court
under the laws of the United States of America, such removal shall
take place if the legal basis for removal exists; provided,
however, that the parties to this Letter Agreement agree that the
exclusive venue of the Federal forum for the resolution of any
disputes shall be the United States District Court for the
District of Nevada, Northern Nevada Division, located in Reno,
Nevada.
15. COUNTERPARTS. This Letter Agreement may be executed in
counterparts, each of which shall be an original, and all of which
together shall constitute one and the same Letter Agreement.
16. ATTORNEY'S FEES. If a legal action or other proceeding is brought
for enforcement of the Letter Agreement because of an alleged
dispute, breach, default, or
<PAGE> 10
misrepresentation in connection with any of the provisions of this
Letter Agreement, the successful or prevailing party shall be
entitled to recover reasonable attorney's fees and costs incurred,
both before and after judgment, in addition to any other relief to
which they may be entitled.
If this Letter Agreement accurately reflects our understanding, please so
indicate by signing the original and duplicate of this letter and returning a
fully executed copy to the undersigned.
Very truly yours,
Desert Golden Sun, LLC
By: /s/ Shawn Scott
---------------------------------
Shawn Scott, Manager
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, Jr.
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PETE CLADIANOS, JR., Trustee PETE CLADIANOS, JR., Trustee of the
of the Pete Cladianos, Jr. Trust Pete Cladianos, Jr. Trust
FBO Allison Cladianos FBO Leslie Cladianos
/s/ Pete Cladianos, Jr. /s/ Katherene Johnson Latham
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee KATHERENE JOHNSON LATHAM, Trustee
of the Antonia Cladianos II Grantor of the Katherene J. Latham 1988 Trust
Retained Annuity Trust (Living Trust)
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos, Jr. Trust of the Deborah R. Lundgren 1986 Trust
FBO Antonia Cladianos II (Living Trust)
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Katherene Johnson Latham Trust of the Gregory Kent Lundgren Trust
FBO Antonia Cladianos II
<PAGE> 11
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Second Amended of the Pete Cladianos, Jr. Trust
Antonia Cladianos II Trust FBO Gregory K. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos III Grantor of the Katherene Johnson Latham Trust
Retained Annuity Trust FBO Gregory K. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos Jr. Trust of the Katherene R. Lundgren Trust
FBO Pete Cladianos III
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Katherene Johnson Latham Trust of the Pete Cladianos, Jr. Trust
FBO Pete Cladianos III FBO Katherene R. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Second Amended of the Katherene Johnson Latham Trust
Pete Cladianos III Trust FBO Katherene R. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Custodian
of the Leslie Cladianos Grantor for Katherene R. Lundgren under Nevada
Retained Annuity Trust Uniform Transfers to Minors Act
<PAGE> 12
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, Jr.
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR., Trustee PETE CLADIANOS, JR., Trustee
of the Katherene Johnson Latham Trust of the Pete Cladianos, Jr.
FBO Leslie Cladianos Living Trust
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, III
- ------------------------------------ -------------------------------------
PETE CLADIANOS, JR. PETE CLADIANOS, III
<PAGE> 13
EXHIBIT "A"
<TABLE>
<CAPTION>
Number of
Shareholder Date of Trust Shares
- ----------- ------------- ---------
<S> <C> <C>
Pete Cladianos, Jr. Trust FBO Allison 12/09/91 6,293
Cladianos, Pete Cladianos, Jr., Trustee
Antonia Cladianos II Grantor Retained 08/13/93 100,000
Annuity Trust, Pete Cladianos, Jr., Trustee
Pete Cladianos, Jr. Trust FBO Antonia 12/22/86 17,013
Cladianos II, Pete Cladianos, Jr., Trustee
Katherene Johnson Latham Trust FBO 12/22/86 10,567
Antonia Cladianos II, Pete Cladianos, Jr., Trustee
Second Amended Antonia Cladianos II Trust 02/22/87 213,376
Pete Cladianos, Jr., Trustee
Pete Cladianos III Grantor Retained Annuity 08/13/93 100,000
Trust, Pete Cladianos, Jr., Trustee
Pete Cladianos, Jr. Trust FBO Pete 12/22/86 17,013
Cladianos III, Pete Cladianos, Jr., Trustee
Katherene Johnson Latham Trust FBO Pete 12/22/86 10,567
Cladianos III, Pete Cladianos, Jr., Trustee
Second Amended Pete Cladianos III Trust, 02/19/87 224,162
Pete Cladianos, Jr., Trustee
Leslie Cladianos Grantor Retained Annuity 08/13/93 200,000
Trust, Pete Cladianos, Jr., Trustee
Pete Cladianos, Jr. Trust FBO Leslie 11/26/91 17,103
Cladianos, Pete Cladianos, Jr., Trustee
Katherene Johnson Latham Trust FBO Leslie 12/08/92 2,949
Cladianos, Pete Cladianos, Jr., Trustee
</TABLE>
<PAGE> 14
<TABLE>
<S> <C> <C>
Pete Cladianos, Jr. Living Trust, Pete 05/25/89 156,041
Cladianos, Jr., Trustee
Katherene J. Latham 1988 Trust (Living 08/08/88 345,674
Trust), Katherene J. Latham, Trustee
Deborah R. Lundgren 1986 Trust (Living 09/03/86 547,026
Trust), Deborah R. Lundgren, Trustee
Gregory Kent Lundgren Trust Deborah R 03/29/93 28,175
Lundgren, Trustee
Pete Cladianos, Jr. Trust FBO Gregory K 12/01/88 10,659
Lundgren, Deborah R. Lundgren, Trustee
Katherene Johnson Latham Trust FBO
Gregory K. Lundgren, Deborah R 12/01/88 6,083
Lundgren, Trustee
Katherene R. Lundgren Trust, Deborah R 03/29/93 28,175
Lundgren, Trustee
Pete Cladianos, Jr., Trust FBO Katherene R 12/22/86 10,659
Lundgren, Deborah R. Lundgren, Trustee
Katherene Johnson Latham Trust FBO
Katherene R. Lundgren, Deborah R 12/22/86 6,083
Lundgren, Trustee ----------
2,057,618
=========
</TABLE>
<PAGE> 15
EXHIBIT "B"
The employment agreements would be structured as follows:
Terms of agreements to be 72 months.
For Pete Cladianos, Jr., compensation will be $20,000 per month for the
first 36 months and $15,000 per month for the next 36 months. For Pete
Cladianos, III, compensation will be $10,000 per month for the first 36
months and $15,000 for the next 36 months. These amounts will be
adjusted annually to reflect changes in the Consumer Price Index.
Both will receive:
Company rental car provide through rental care agency for the term.
Membership in Prospectors Club for the term.
Membership in Montreux or similar comparable facility for the term.
Health Insurance at a level comparable to current coverage for the
term.
Declining term life insurance in an amount equal to the remaining
unpaid balance of the agreed salary for the term.
Indemnity from the lawsuit regarding the Copa Casino from The Company.
The agreements will be structured in a way that if Pete Cladianos, Jr.,
and Pete Cladianos, III, determine that it would be more advantageous to shift
workload to one or the other of them, that compensation will be adjusted to take
into account that determination.
The agreements will not become effective until approved by the
Company's board of directors. The buyer agrees to use his best efforts to secure
approval of the board. In the event the agreements are disapproved or modified
by the board of directors, Purchaser will make a payment to Pete Cladianos, Jr.,
and Pete Cladianos, III, equal to the value of the agreements outlined above,
or, if the modified agreements are acceptable to Pete Cladianos Jr., and Pete
Cladianos, III, in their sole discretion, the difference between the value of
the agreements outlined above and the value of the modified agreements.
<PAGE> 16
Desert Golden Sun, LLC
1055 E. Tropicana Avenue
Suite 200
Las Vegas, Nevada 89119
July 16, 1997
Pete Cladianos, Jr.
345 North Arlington Avenue
Reno, Nevada 89501
Dear Pete:
By execution of this letter agreement amendment ("Amendment "), each of
the undersigned shareholders (the "Shareholders") of The Sands Regent (the
"Company") hereby agrees to amend the Letter Agreement dated June 27, 1997,
between Desert Golden Sun, LLC (the "Purchaser") and the Shareholders (the
"Letter Agreement"). Any capitalized words not defined herein will have the
meaning ascribed to them in the Letter Agreement. Sections 1 and 6 of the Letter
Agreement are amended in their entirety to read as follows:
1. CONSIDERATION FOR THE PURCHASE. As consideration for entering into
this Letter Agreement, the Purchaser shall pay to the Shareholders
an aggregate amount of $100.00. Within Five (5) days of the date
of this Letter Agreement, the Purchaser shall place in escrow,
upon terms mutually agreeable to the parties hereto, $499,900.00
(the "Escrow Amount"). The Purchaser shall have Twenty-One (21)
days from the date of this Letter Agreement to commence proceeding
for approval from all appropriate gaming authorities.
The purchaser shall have until the Closing to to negotiate with
Wells Fargo Bank (the "Bank"), the holder of certain debt owed by
the Company (the "Debt"), to receive the Bank's approval of the
consummation of the Purchase or to purchase the Debt from the
Bank. The Purchaser may also choose to attempt to reach an
agreement with the Company to protect the Company from any action
by the Bank to accelerate the maturity date of the Debt due to the
Closing. If the Purchaser does not receive approval from the Bank
and does not reach agreement with the Company, either the
Shareholders or the Purchaser shall have the right to terminate
this Agreement,
The Escrow Amount shall be immediately payable to the
Shareholders, and credited toward the Purchase Price, if, on or
before the Expiration Date, the Purchaser has received all
requisite approvals from all applicable gaming and regulatory
authorities with respect to the Purchase. The Escrow Amount shall
be payable to the Shareholders if the Purchase is not consummated
as a consequence of the Purchaser's breach of any representation,
warrant or covenant set forth herein. The Escrow Amount shall not
be payable to the Shareholders and it shall be refunded to the
Purchaser by the Shareholders if previously distributed, if any
approvals received from gaming authorities have been rescinded or
cease to be in effect or if the Shareholders have breached any
representation, warranty
<PAGE> 17
or covenant set forth herein, or if the Purchaser is not able to
reach agreement with the Bank or the Company regarding the Debt as
outlined in the above paragraph.
6. DEFINITIVE DOCUMENTATION: BEST EFFORTS; CONTROL OF BOARD. Each of
the Shareholders jointly and severally agrees to cause the Company
to make available to the Purchaser and its representatives, such
information as the Purchaser may reasonably request. Except as may
be required by applicable law or applicable regulatory or
governmental authorities and regulations, non-public information
thus obtained by the Purchaser will be treated as confidential
and, if the Purchase is not consummated, all documents or copies
thereof obtained by the Purchaser will be returned to the Company
or the Shareholders. Each of the Shareholders jointly and
severally agrees to use best efforts to enter into definitive
documentation prior to the Expiration Date and to cooperate with
the Purchaser and the applicable gaming and regulatory authorities
in obtaining prior to the Expiration Date all requisite approvals
from such authorities for the Purchase. The shareholders jointly
and severally agree to use their best efforts to assist the
Purchaser in gaining control of the Company's board of directors
promptly after the Closing. The Shareholders agree, prior to
Closing, to take all actions within their power, to move the next
annual meeting of the shareholders of the Company to as soon as is
practicable after the Closing, and to ensure that a majority of
the board of directors will be elected at that annual meeting.
If this Amendment accurately reflects our understanding, please so
indicate by signing the original and duplicate of this letter and returning a
fully executed copy to the undersigned.
Very truly yours,
Desert Golden Sun, LLC
By: /s/ Shawn Scott
-------------------------------------
Shawn Scott, Manager
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, Jr.
- ---------------------------------- -----------------------------------------
PETE CLADIANOS, JR., Trustee PETE CLADIANOS, JR., Trustee of the
of the Pete Cladianos, Jr. Trust Pete Cladianos, Jr. Trust
FBO Allison Cladianos FBO Leslie Cladianos
<PAGE> 18
/s/ Pete Cladianos, Jr. /s/ Katherene Johnson Latham
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee KATHERENE JOHNSON LATHAM, Trustee
of the Antonia Cladianos II Grantor of the Katherene J. Latham 1988 Trust
Retained Annuity Trust (Living Trust)
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos, Jr. Trust of the Deborah R. Lundgren 1986 Trust
FBO Antonia Cladianos II (Living Trust)
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Katherene Johnson Latham Trust of the Gregory Kent Lundgren Trust
FBO Antonia Cladianos II
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Second Amended of the Pete Cladianos, Jr. Trust
Antonia Cladianos II Trust FBO Gregory K. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos III Grantor of the Katherene Johnson Latham Trust
Retained Annuity Trust FBO Gregory K. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Pete Cladianos Jr. Trust of the Katherene R. Lundgren Trust
FBO Pete Cladianos III
<PAGE> 19
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Katherene Johnson Latham Trust of the Pete Cladianos, Jr. Trust
FBO Pete Cladianos III FBO Katherene R. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Trustee
of the Second Amended of the Katherene Johnson Latham Trust
Pete Cladianos III Trust FBO Katherene R. Lundgren
/s/ Pete Cladianos, Jr. /s/ Deborah R. Lundgren
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee DEBORAH R. LUNDGREN, Custodian
of the Leslie Cladianos Grantor for Katherene R. Lundgren under Nevada
Retained Annuity Trust Uniform Transfers to Minors Act
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, Jr.
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR., Trustee PETE CLADIANOS, JR., Trustee
of the Katherene Johnson Latham Trust of the Pete Cladianos, Jr. Living Trust
FBO Leslie Cladianos
/s/ Pete Cladianos, Jr. /s/ Pete Cladianos, III
- ---------------------------------- ----------------------------------------
PETE CLADIANOS, JR. PETE CLADIANOS, III
