<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 $.10 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).
<PAGE> 2
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1) Names of Reporting Persons (S.S. or I.R.S. Identification Nos. of Above
Persons):
Pete Cladianos, Jr.
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: *
- --------------------------------------------------------------------------------
11) Aggregate Amount Beneficially Owned by Each Reporting Person: 1,075,084
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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): 23.9%*
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14) Type of Reporting Person (See Instructions): IN
- ---------------------
* 6,909 shares (0.0%) of The Sands Regent common stock are owned by a
trust for the benefit of Bradley Cladianos. 98,228 shares (2.2%) of The
Sands Regent common stock are owned by the Pete Cladianos, Jr., Living
Trust dated 5-25-89. 366,286 shares (8.1%) of The Sands Regent
<PAGE> 3
common stock are owned by trusts for the benefit of Pete Cladianos, III.
355,500 shares (7.9%) of The Sands Regent common stock are owned by
trusts for the benefit of Antonia Cladianos, II. 234,596 shares (5.2%)
of The Sands Regent common stock are owned by trusts for the benefit of
Leslie Cladianos. 13,565 shares (0.3%)of The Sands Regent common stock
are owned by a trust For the benefit of Allison Cladianos. Pete
Cladianos, Jr., 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 Pete Cladianos, Jr.; Pete
Cladianos, Jr., trustee of the Pete Cladianos, Jr., Living Trust, dated May 25
1989; Pete Cladianos, Jr., trustee of a trusts for the benefit of Bradley
Cladianos; Pete Cladianos, Jr., trustee of trusts for the benefit of Pete
Cladianos, III; Pete Cladianos, Jr., trustee of trusts for the benefit of
Antonia Cladianos; Pete Cladianos, Jr., trustee of trusts for the benefit of
Allison Cladianos; Pete Cladianos, Jr., trustee of trusts for the benefit of
Leslie Cladianos (collectively, the aforementioned trusts are referred to herein
as the "Trusts").
All shares reported herein were acquired by the Cladianos Family prior
to the public registration of The Sands Regent in February 1985. The address of
Pete Cladianos, Jr. and the Trusts is 345 North Arlington Avenue, Reno, Nevada
89501
During the past five years, neither Pete Cladianos, Jr., 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. Pete Cladianos, Jr., 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 Cladianos, 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 1,075,084 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 1,075,084 of such shares, or 23.9% of those outstanding.
Pete Cladianos, Jr., has the sole power to vote an dispose of the 1,075,084
Common Shares. Pete Cladianos, Jr., 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/ Pete Cladianos, Jr.
------------------------------------
Pete Cladianos, Jr. in his capacity as trustee of the
Pete Cladianos, Jr., Living Trust, dated May 25 1989;
trustee of a trust for the benefit of Bradley
Cladianos; trustee of trusts for the benefit of Pete
Cladianos, III; trustee of trusts for the benefit of
Antonia Cladianos; trustee of trusts for the benefit
of Allison Cladianos; trustee of trusts for the
benefit of Leslie Cladianos
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
Pete Cladianos, Jr.
June 27, 1997
Page 9
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
Pete Cladianos, Jr.
June 27, 1997
Page 10
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
Pete Cladianos, Jr.
June 27, 1997
Page 11
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
Pete Cladianos, Jr.
June 27, 1997
Page 12
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.
- ---------------------------------- ----------------------------------
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
<PAGE> 11
Pete Cladianos, Jr.
June 27, 1997
Page 13
of the Katherene Johnson Latham Trust of the Gregory Kent Lundgren Trust
FBO Antonia Cladianos II
<PAGE> 12
Pete Cladianos, Jr.
June 27, 1997
Page 14
/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> 13
Pete Cladianos, Jr.
June 27, 1997
Page 15
/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
<PAGE> 14
EXHIBIT "A"
<TABLE>
<CAPTION>
Shareholder Date of Trust Number of
- ----------- ------------- ---------
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
Cladianos II, Pete Cladianos, Jr., Trustee 12/22/86 17,013
Katherene Johnson Latham Trust FBO
Antonia Cladianos II, Pete Cladianos, Jr., 12/22/86 10,567
Second Amended Antonia Cladianos II Trust
Pete Cladianos, Jr., Trustee 02/22/87 213,376
Pete Cladianos III Grantor Retained Annuity
Trust, Pete Cladianos, Jr., Trustee 08/13/93 100,000
Pete Cladianos, Jr. Trust FBO Pete
Cladianos III, Pete Cladianos, Jr., Trustee 12/22/86 17,013
Katherene Johnson Latham Trust FBO Pete
Cladianos III, Pete Cladianos, Jr., Trustee 12/22/86 10,567
Second Amended Pete Cladianos III Trust,
Pete Cladianos, Jr., Trustee 02/19/87 224,162
Leslie Cladianos Grantor Retained Annuity
Trust, Pete Cladianos, Jr., Trustee 08/13/93 200,000
Pete Cladianos, Jr. Trust FBO Leslie
Cladianos, Pete Cladianos, Jr., Trustee 11/26/91 17,103
Katherene Johnson Latham Trust FBO Leslie
Cladianos, Pete Cladianos, Jr., Trustee 12/08/92 2,949
</TABLE>
<PAGE> 15
<TABLE>
<S> <C> <C>
Pete Cladianos, Jr. Living Trust, Pete
Cladianos, Jr., Trustee 05/25/89 56,041
Katherene J. Latham 1988 Trust (Living
Trust), Katherene J. Latham, Trustee 08/08/88 345,674
Deborah R. Lundgren 1986 Trust (Living
Trust), Deborah R. Lundgren, Trustee 09/03/86 547,026
Gregory Kent Lundgren Trust Deborah R.
Lundgren, Trustee 03/29/93 28,175
Pete Cladianos, Jr. Trust FBO Gregory K.
Lundgren, Deborah R. Lundgren, Trustee 12/01/88 10,659
Katherene Johnson Latham Trust FBO
Gregory K. Lundgren, Deborah R.
Lundgren, Trustee 12/01/88 6,083
Katherene R. Lundgren Trust, Deborah R.
Lundgren, Trustee 03/29/93 28,175
Pete Cladianos, Jr., Trust FBO Katherene R.
Lundgren, Deborah R. Lundgren, Trustee 12/22/86 10,659
Katherene Johnson Latham Trust FBO
Katherene R. Lundgren, Deborah R.
Lundgren, Trustee 12/22/86 6,083
----------
2,057,618
==========
</TABLE>
<PAGE> 16
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> 17
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> 18
Pete Cladianos, Jr.
July 28, 1997
Page 20
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> 19
Pete Cladianos, Jr.
July 28, 1997
Page 21
/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> 20
/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
