<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): May 31, 1995
SAHARA GAMING CORPORATION
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
NEVADA 1-9481 88-0304348
(STATE OR OTHER (COMMISSION FILE (I.R.S. EMPLOYER
JURISDICTION OF NUMBER) IDENTIFICATION NO.)
INCORPORATION)
2535 Las Vegas Blvd. South, Las Vegas, Nevada 89109
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (702) 737-2111
NONE
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
<PAGE>
ITEM 5. OTHER EVENTS.
On May 31, 1995, Sahara Nevada Corp., a wholly-owned subsidiary of
Sahara Gaming Corporation, entered into an agreement with Gordon Gaming
Corporation ("Gordon"), a corporation wholly-owned by William G. Bennett, former
chairman and chief executive officer of Circus Circus, pursuant to which Gordon
will purchase the Sahara Hotel & Casino, and Sahara Las Vegas Corp., a wholly-
owned subsidiary of Sahara Gaming Corporation, entered into an exchange
agreement with Gordon pursuant to which Sahara Las Vegas Corp. will exchange 22
acres of land currently being used by the Sahara Hotel & Casino as a parking lot
for 26 acres of land south of the Sahara Hotel & Casino on Las Vegas Boulevard
which is currently occupied by a water park. Total consideration to Sahara
Gaming in the transaction will be $150 million, consisting of approximately $128
million in cash and the exchange of property valued at approximately $22
million.
Consummation of the transaction is subject, among other things, to
approval of the sale by Sahara Gaming's Board of Directors, receipt by the
purchaser of all necessary regulatory licenses and approvals, and consummation
by Mr. Bennett of the purchase of the property to be exchanged in the
transaction.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
Exhibits
--------
10.111 Agreement for Purchase and Sale of the Sahara Hotel and Casino
dated May 31, 1995 by and between Sahara Nevada Corp. and
Gordon Gaming Corporation.
10.112 Agreement for Exchange of Real Property by and between Sahara
Las Vegas Corp. and Gordon Gaming Corporation.
99.1 May 31, 1995 Press Release.
2
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
SAHARA GAMING CORPORATION,
a Nevada corporation
By: /s/ Thomas K. Land
----------------------------------
Name: Thomas K. Land
Title: Senior Vice President
June 1, 1995
3
<PAGE>
EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
10.111 Agreement for Purchase and Sale of the Sahara Hotel and Casino
dated May 31, 1995 by and between Sahara Nevada Corp. and
Gordon Gaming Corporation
10.112 Agreement for Exchange of Real Property by and between Sahara
Las Vegas Corp. and Gordon Gaming Corporation
99.1 June 1, 1995 Press Release
4
<PAGE>
EXHIBIT 10.111
AGREEMENT FOR
PURCHASE AND SALE BY AND BETWEEN
SAHARA NEVADA CORP. ("Seller")
and
GORDON GAMING CORPORATION ("Buyer")
of the
SAHARA HOTEL AND CASINO
Las Vegas, Nevada
Dated: 31 May , 1995.
----------------------- --
Counsel for Counsel for
"Seller" "Buyer"
William J. Raggio, Esq. John Moran
John P. Sande, III, Esq. Moran and Associates
Michael G. Alonso, Esq. 630 South 4th Street
Vargas & Bartlett Suite 400
201 W. Liberty St. Las Vegas, Nevada 89101
P. O. Box 281 702/384-8424
Reno, Nevada 89504 and
702/786-5000 Nikolas L. Mastrangelo
811 South Sixth Street
Las Vegas, Nevada 89101
702/384-5770
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TABLE OF CONTENTS
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<S> <C>
ARTICLE I.................................................................. 2
1 Sale of Property................................................ 2
----------------
1.1 Closing Date............................................ 2
------------
1.2 Property................................................ 3
--------
1.3 Property Exceptions..................................... 4
-------------------
1.4 Prorations and Allocations.............................. 5
--------------------------
ARTICLE II................................................................. 6
2 Purchase Price.................................................. 6
--------------
2.1 Purchase Price.......................................... 6
--------------
2.2 Payment................................................. 8
-------
2.3 Costs................................................... 9
-----
2.4 Gaming Taxes............................................ 9
------------
2.5 Allocation of Purchase Price............................ 10
----------------------------
ARTICLE III................................................................ 10
3 Contracts and Assumption of Liabilities......................... 10
---------------------------------------
3.1 Contracts............................................... 10
---------
(a) Material Contracts................................ 10
------------------
(b) Contracts......................................... 10
---------
3.2 Assumption of Liabilities by Buyer...................... 13
----------------------------------
3.3 No Other Liabilities Assumed............................ 14
----------------------------
ARTICLE IV................................................................. 15
4 Title to Real Property.......................................... 15
----------------------
4.1 Title Reports and Exceptions............................ 15
----------------------------
4.2 Title Policy............................................ 17
------------
ARTICLE V.................................................................. 17
5 Representations and Warranties.................................. 17
------------------------------
5.1 Seller's Representations and Warranties................. 17
---------------------------------------
(a) Due Organization.................................. 17
----------------
(b) Binding Effect.................................... 17
--------------
(c) Notices and Approvals; No Violation of Agreement.. 18
------------------------------------------------
(d) Compliance with Laws.............................. 18
--------------------
(e) Contracts......................................... 18
---------
(f) Litigation........................................ 19
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(g) Employees, Officers and Directors:
----------------------------------
Employment and Similar Contracts: Benefits.............. 20
------------------------------------------
(h) Eminent Domain or Other Proceedings............... 21
-----------------------------------
(i) Properties........................................ 21
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(j) Leases............................................ 21
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(k) Insurance......................................... 22
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(l) Condition.......................................... 22
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(m) Hazardous Waste.................................... 22
---------------
(n) Reports............................................ 23
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(o) Zoning............................................. 23
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(p) Affiliated Parties................................. 23
------------------
5.2 Buyer's Representation and Warranties.................... 24
-------------------------------------
(a) Due Organization................................... 24
----------------
(b) Binding Effect..................................... 24
--------------
(c) Notices and Approvals, No Violation of Agreements.. 24
-------------------------------------------------
(d) Litigation......................................... 25
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ARTICLE VI.................................................................. 25
6 Condition of the Property; Access and Observers;
------------------------------------------------
Independent Investigation........................................ 25
-------------------------
6.1 Access and Observers..................................... 25
--------------------
6.2 Inspections.............................................. 26
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6.3 Maintenance of Property.................................. 26
-----------------------
ARTICLE VII................................................................. 27
7 Conditions Precedent to Closing and Covenants.................... 27
---------------------------------------------
7.1 Buyer's Conditions....................................... 27
------------------
7.2 Seller's Conditions...................................... 28
-------------------
7.3 Hart-Scott-Rodino Filing................................. 29
------------------------
7.4 Workers Adjustment and Retraining Notification Act....... 29
--------------------------------------------------
7.5 Cooperation.............................................. 29
-----------
7.6 Gaming Licenses.......................................... 30
---------------
ARTICLE VIII................................................................ 30
8 Conduct of Business.............................................. 30
-------------------
ARTICLE IX.................................................................. 33
9 Risk of Loss..................................................... 33
------------
9.1 Risk of Loss............................................. 33
------------
9.2 Material Loss............................................ 34
-------------
9.3 Uniform Act.............................................. 34
-----------
ARTICLE X................................................................... 34
10 Termination; Remedies............................................ 34
---------------------
10.1 Termination............................................. 34
-----------
10.2 Effect of Termination................................... 35
---------------------
10.3 Notice of Seller's Breach; Right to Cure................ 37
----------------------------------------
10.4 Specific Performance.................................... 39
--------------------
ARTICLE XI.................................................................. 39
11 Closing.......................................................... 39
-------
11.1 Closing................................................. 39
-------
11.2 Seller's Delivery....................................... 40
-----------------
11.3 Buyer's Delivery........................................ 43
----------------
11.4 Approval of Closing Documents........................... 43
-----------------------------
11.5 Possession.............................................. 43
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ii
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11.6 No Merger................................................. 43
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ARTICLE XII................................................................ 44
12 Post Closing Covenant........................................... 44
---------------------
12.1 Further Assurances........................................ 44
12.2 Cooperation Retention of Records.......................... 44
--------------------------------
12.3 Labor Arbitration and Grievances of Seller................ 45
------------------------------------------
ARTICLE XIII............................................................... 45
13 Brokerage Fees.................................................. 45
--------------
ARTICLE XIV................................................................ 46
14 Survival of Representations and Warranties: Indemnification.... 46
------------------------------------------------------------
14.1 Seller's Indemnity..................................... 46
------------------
14.2 Buyer's Indemnity...................................... 46
-----------------
14.3 Notice of Claim........................................ 47
---------------
ARTICLE XV................................................................. 48
15 Guarantor....................................................... 48
---------
ARTICLE XVI................................................................ 48
16 Notices......................................................... 48
-------
ARTICLE XVII............................................................... 49
17 Miscellaneous................................................... 49
-------------
17.1 Nevada Law............................................. 49
----------
17.2 Assignment; Binding Effect............................. 49
--------------------------
17.3 Time of Essence........................................ 50
---------------
17.4 Captions............................................... 50
--------
17.5 Pronouns............................................... 50
--------
17.6 Knowledge of Party..................................... 50
------------------
17.7 Entire Agreement; Amendment; Waiver.................... 50
-----------------------------------
17.8 No Third Party Beneficiary............................. 50
--------------------------
17.9 Counterparts........................................... 51
------------
17.10 Attorney's Fees........................................ 51
---------------
17.11 Jurisdiction........................................... 51
------------
17.12 No Party Deemed Drafter................................ 52
-----------------------
</TABLE>
iii
<PAGE>
AGREEMENT FOR PURCHASE AND SALE
THIS AGREEMENT FOR PURCHASE AND SALE ("Agreement") is made and entered into
by and among Sahara Nevada Corp., a Nevada corporation, doing business as Sahara
Hotel & Casino ("Seller"), and GORDON GAMING CORPORATION, a Nevada corporation
("Buyer").
W I T N E S S E T H :
---------------------
WHEREAS, Seller is the owner of certain improved real property located in
Clark County, Nevada, commonly known as the Sahara Hotel and Casino; and
WHEREAS, the parties hereto have reached an understanding with respect to
the sale by Seller and the purchase by Buyer of the real property described
herein (the "Sahara Hotel Parcel") and of the assets of the business of Sahara
Hotel & Casino (the "Business"), except as hereinafter specifically excluded;
and
WHEREAS, Sahara Las Vegas Corp., a Nevada corporation ("Sahara Las Vegas"),
and Buyer have entered into an Agreement for Exchange of Real Property (the
"Exchange Agreement") which will be executed by the parties thereto
simultaneously with this Agreement whereby Sahara Las Vegas will transfer to
Buyer certain real property referred to herein and specifically described in the
Exchange Agreement as the Sahara Parcel in exchange for Buyer transferring to
Sahara Las Vegas certain real property referred to herein and specifically
described in the Exchange Agreement as the Wet'N Wild Parcel (the "Exchange
Transaction"); and
WHEREAS, Sahara Las Vegas and Buyer have agreed that the Exchange
Transaction shall qualify as an Exchange pursuant to Section 1031 of the
Internal Revenue Code of 1986 as set forth in the Exchange Agreement. A copy of
the Exchange Agreement is attached hereto as Exhibit A and is incorporated
herein by reference; and
1
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WHEREAS, Buyer has entered into a Purchase and Sale Agreement with Howard
Hughes Properties, a Limited Partnership ("HHP") to acquire title from HHP to
the Wet'N Wild Parcel to facilitate the Exchange Transaction (the "Wet'N Wild
Agreement"). A copy of the Wet'N Wild Agreement is attached hereto as Exhibit
B. The transaction contemplated by the Wet'N Wild Agreement shall hereinafter
be referred to as the "Wet'N Wild Sale"); and
WHEREAS, it is the intention of Buyer and Seller that the transactions
contemplated by this Agreement, the Wet'N Wild Agreement and the Exchange
Agreement close simultaneously; and
WHEREAS, it is the intention of Buyer and Seller that the consummation of
the transactions contemplated by this Agreement, the Wet'N Wild Agreement and
the Exchange Agreement shall result in Sahara Las Vegas holding title to the
Wet'N Wild Parcel and Buyer holding title to the Sahara Parcel and the Sahara
Hotel Parcel.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and upon and subject to the terms and conditions
hereinafter set forth, Seller and Buyer agree as follows:
ARTICLE I
1 Sale of Property
----------------
1.1 Closing Date. At the Closing (as set forth and more specifically
------------
defined in Article XI below), Seller agrees to sell, transfer and convey to
Buyer, and Buyer agrees to purchase from Seller, for the consideration
hereinafter provided, the assets owned by Seller (which assets are herein
collectively called the "Property"), as set forth in Paragraph 1.2 below;
1.2 Property. The following assets owned by Seller shall be sold to Buyer
--------
and Buyer shall purchase from Seller:
(a) Certain improved real property located in Clark County,
Nevada, owned by Seller, and more particularly described in Exhibit C, attached
hereto (the Sahara Hotel Parcel)
2
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together with rights, appurtenances, buildings and improvements thereto and
thereon, including the following:
(i) All of Seller's right, title and interest in and to
(A) all rights, privileges and easements appurtenant to the Sahara Hotel Parcel,
and (B) all development rights, air rights, water, water rights, and all of
Seller's right, title and interest in and to any minerals, oil, gas and other
hydrocarbon substances on or under said real property relating to the Sahara
Hotel Parcel; and
(ii) All of Seller's right, title and interest in and to
the improvements and fixtures (including heating and air conditioning systems
and fixtures used to provide any utility services, food and beverage services,
recreation, and other services or activities) located on the Sahara Hotel
Parcel.
(iii) The Sahara Hotel Parcel, together with all rights
and appurtenances thereto and all buildings, improvements, fixtures and other
items of real property thereon is hereinafter referred to as the "Real
Property".
(b) All of Seller's right, title and interest in and to the
furniture and furnishings, equipment, telephone system (including related
equipment and software that does not require licensing) appliances, motor
vehicles and other transportation equipment, tools, signs and signage, utensils,
tableware, chinaware, glassware, silverware, and all other tangible personal
property owned by Seller on the Closing Date and used exclusively in the
ownership, operation and maintenance of the Business (collectively, "Personal
Property"), including, but not limited to, all assignable warranties on any such
items of property. At the Closing, Buyer shall be entitled to a "fully
operational computer system."
(c) All of Seller's right, title and interest, if any, in and
to any intangible personal property owned by Seller and used exclusively in the
ownership, use and operation of the Business ("Intangible Personal Property"),
including without limitation, the name "Sahara Hotel
3
<PAGE>
and Casino", displays, symbols, color arrangements, logos, and words and
devices, relating directly or indirectly to and used by Seller solely in
connection with the Business, or which identify the products or services of the
Business (and any goodwill associated with such name and with such marks);
(d) All of Seller's right, title and interest in and to all
customer lists, customer mailing lists, all advance reservations, bookings,
originals of casino credit cards and credit files, and copies of such accounting
records and reports relating to the Business as Buyer may reasonably request and
which are necessary for the continued and uninterrupted operation of the
Business by Buyer from and after the Closing Date;
(e) All of Seller's right, title and interest in and to any
telephone numbers used exclusively in connection with the Business;
(f) All assignable Contracts as described in Paragraph 3.1
hereof;
(g) Upon final licensing approval by Nevada Gaming Control
Board, Nevada Gaming Commission and Clark County Liquor and Gaming Board
(collectively "Nevada Gaming Authorities") to transfer the gaming devices, all
of Seller's right, title and interest to all gaming devices and/or equipment
used in connection with the Business.
(h) The Real Property, the Personal Property and Intangible
Personal Property, described herein above, shall be conveyed to Buyer free and
clear of all liabilities, obligations, security interests, liens and
encumbrances, except those expressly approved by Buyer.
1.3 Property Exceptions. Anything in Paragraph 1.2 of this Agreement to
-------------------
the contrary notwithstanding, the Property does not include and Seller reserves
and retains all right, title and interest in and to:
(a) Seller's books and records, except as provided in
Paragraph 1.2(d).
(b) Securities or investments by Seller, whether or not such
assets relate to Seller's ownership of the Property or operation of the
Business;
4
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(c) Any insurance and rights thereunder except as otherwise
provided in this agreement;
(d) Any tangible personal property, described in Exhibit D,
owned by third parties, leased, or loaned to Seller for use in the Business,
unless the lease therefor is an assignable Contract;
(e) Any items of equipment or other personal property (other
than any books and records covered by Paragraph 1.2(d) hereof) which are not
used exclusively in connection with the ownership, or necessary to, the
operation of the Business, described in Exhibit E; and
(f) Any other assets which are not designated for use or
exclusively used in connection with the ownership, operation or maintenance of
the Business, described in Exhibit F.
1.4 Prorations and Allocations. Credits and payments shall be prorated
--------------------------
or allocated as of the Closing (except as otherwise indicated), including, but
not limited to:
(a) Non-delinquent real and personal property taxes and
assessments (and including any supplemental assessments);
(b) Utilities shall be prorated as of the Closing (or as soon
as practicable theretofore or thereafter). Buyer shall make appropriate
arrangements for transfer of all necessary utility and other services in its own
name to be effective as of the Closing (or as soon as practicable theretofore or
thereafter);
(c) rents or periodic payments on any leases or contracts;
(d) security deposits on any leases; and
(e) premiums on any insurance policies retained by the Buyer; and
(f) concerning Seller's Safari Club Time Share Memberships
("Memberships"), which are to be assumed by Buyer, the parties acknowledge that
there are two (2) types of Memberships, namely Fully Paid Memberships and Not
Fully Paid Memberships, as follows:
5
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(i) Fully Paid Memberships are those in which the purchase
price has been fully paid and the member only pays an annual maintenance fee in
January of each year. With respect to the Fully Paid Memberships, Buyer agrees
that Buyer is only entitled to a proration of the annual maintenance fees as of
the Closing.
(ii) Not Fully Paid Memberships are those in which the
purchase price, together with interest and annual maintenance fees, are paid by
the member in monthly installments. With respect to the Not Fully Paid
Memberships, Buyer agrees that there shall be no proration, but Buyer shall be
entitled to any monthly payments under such contracts which become due and
payable after the Closing.
ARTICLE II
2 Purchase Price
--------------
2.1 Purchase Price.
---------------
(a) For and in consideration of the Property, Buyer shall pay
to Seller in cash a purchase price of One Hundred Twenty-Eight Million Four
Hundred Ninety-Five Thousand Six Hundred Dollars ($128,495,600) ("Purchase
Price"). The Purchase Price may be adjusted for any insurance or condemnation
proceeds which may accrue or be paid on or prior to Closing as provided in
Paragraph 9.1 and under other circumstances expressly set forth in this
Agreement.
(b) Seller warrants that at the Closing, current assets as
defined herein ("Current Assets") will equal current liabilities as defined
herein ("Current Liabilities"). To the extent that Current Liabilities exceed
Current Assets at the Closing, Buyer shall be entitled to a credit against the
Purchase Price in an amount equal to the difference. To the extent that Current
Assets exceed Current Liabilities at the Closing, the difference shall be added
to the Purchase Price and shall be paid to Seller in cash, together with the
remaining balance of the Purchase Price at the Closing.
6
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(c) Current Assets as described on Exhibit G shall include but
not be limited to:
(i) All cash and cash equivalents;
(ii) All Sahara gaming chips (including reserve chips) and
tokens;
(iii) All Seller's inventories of food and beverage stocks,
and gift shop inventory;
(iv) All of Seller's right, title and interest in and to
all markers, guest ledger receivables (lounge, restaurant and others), rents and
other accounts and notes receivable relating to the Business;
(v) Seller's bank accounts, deposits and refund claims that
relate to Seller's ownership of the Property or operation of the Business;
(vi) Choses in action, claims and litigation, described
that relate to Seller's ownership of the Property or operation of the Business;
(d) Current Liabilities as described on Exhibit H shall include
but not be limited to:
(i) All liability of Seller existing as of the Closing
with respect to amounts shown on internal progressive slot machine meters, or
meters for other games or gaming devices;
(ii) All liability of Seller existing as of the Closing
involving Seller's employees including but not limited to wages, salaries, bonus
payments, severance pay, sick pay, vacation pay, union dues, contributions to
benefit plans, payroll taxes, holiday, birthday and other premium pay, and all
the liabilities and obligations related to the employment by Seller, to the
extent earned and accrued to the Closing date;
(iii) All debts, obligations, expenses or other liabilities
of Seller arising out of ownership or operation of the Property or the conduct
of the Business by Seller prior to the Closing Date, but excluding long term
debt; and
7
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(iv) All chip liability.
(e) Within sixty (60) days of the execution of this Agreement
the Parties shall describe in writing the specific Current Assets (the "Assumed
Current Assets") and specific Current Liabilities (the "Assumed Current
Liabilities") that Buyer will acquire and/or assume at the Closing. The Current
Assets Buyer has agreed not to acquire (the "Rejected Current Assets") shall
become property exceptions as set forth in Paragraph 1.3 and Seller shall retain
all right, title and interest thereto. The Current Liabilities Buyer has agreed
not to assume (the "Rejected Current Liabilities") shall become Excluded
Liabilities as set forth in Paragraph 3.3 and Seller shall pay, perform,
discharge such Rejected Current Liabilities.
2.2 Payment. The Purchase Price shall be paid as follows:
-------
(a) An earnest money deposit of Ten Million Dollars
($10,000,000) ("Earnest Money Deposit") shall be deposited by Buyer with Stewart
Title Company ("Title Company") prior to execution of this Agreement in an
interest-bearing account, with interest accruing in favor of Buyer. Any interest
accruing as of the Closing Date on the Earnest Money Deposit shall be paid to
Seller on the Closing Date and applied as a credit against the Purchase Price.
If Buyer fails to complete the purchase of the Property in accordance with the
terms of this Agreement for any reason, except: (i) Buyer's, its persons' or
entities' inability to obtain the licenses and/or a finding of suitability by
the Nevada Gaming Authorities to enable Buyer to conduct gaming at the Real
Property; and subject to the provisions contained in Paragraphs 4.1, 5.1, 9.1
and 10.1 herein, Seller shall retain and be entitled to the Earnest Money
Deposit as liquidated damages for breach of contract.
(b) At the Closing, Buyer shall pay Seller the remaining
balance of the Purchase Price in cash or by bank cashiers or certified check
payable in immediately available federal funds, or by wire transfer of funds to
a bank account of account of Seller, said account identity to be provided to
Buyer.
8
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(c) If Buyer so instructs in writing, Title Company shall
invest the Deposit in (i) direct obligations of the United States of America or
any agency thereof, (ii) certificates of deposit issued by any bank organized
under the laws of the United States or any state thereof, provided such bank has
capital, surplus and undivided profits aggregating at least Fifty Million
Dollars ($50,000,000) or (iii) money market fund. Buyer acknowledges and agrees
that said investment shall have matured on or before the Closing. If the
transactions provided for herein close, income or interest on such investments
shall be applied as provided in Paragraph 2.2(a).
2.3 Costs. Costs and expenses relating to the transactions contemplated
-----
by this Agreement shall be borne and paid as follows:
(a) All motor vehicle transfer taxes, vehicle registration fees,
sales, use and excise taxes and documentary stamp or transfer taxes (including,
but not limited to, those set forth in Nevada Revised Statutes Section 375.020)
relating to the purchase and sale of the Property shall be borne and paid one-
half (1/2) by Buyer and one-half (1/2) by Seller;
(b) All fees for recording any grant, bargain and sale deed or
deeds and assignments of the Property to be conveyed and assigned pursuant
hereto shall be borne and paid by Buyer. Fees for the Title Policy shall be paid
as provided in Paragraph 4.2 hereof;
(c) Any fees and expenses of the Title Company shall be paid
one-half (1/2) by Buyer and one-half (1/2) by Seller;
(d) Except as otherwise specifically provided in this Agreement,
Seller and Buyer shall bear their own costs and expenses arising out of the
negotiation, execution, delivery and performance of this Agreement, and the
consummation of the transactions contemplated herein, including without
limitation, legal and accounting fees and expenses.
2.4 Gaming Taxes. Seller shall be and remain liable for any fees or taxes
------------
due pursuant to Chapter 463 of the Nevada Revised Statutes which accrue prior to
the Closing Date.
9
<PAGE>
2.5 Allocation of Purchase Price. The purchase price shall be allocated
----------------------------
in accordance with the agreed fair market value as of the Closing Date as set
forth in Exhibit I.
Seller and Buyer shall timely comply with their Internal Revenue Service
information reporting requirements by completing and attaching all required
forms to their Income Tax Return for the tax year that includes the date on
which the sale and purchase of the property is consummated. Such information
reporting obligations shall be discharged in accordance with the terms of this
Agreement.
ARTICLE III
3 Contracts and Assumption of Liabilities:
---------------------------------------
3.1 Contracts.
---------
(a) Material Contracts. For purposes of this Agreement, the
------------------
term "Material Contract" shall mean: any contract or agreement to which Seller
is a party which relates to the Business and (i) was not incurred in the normal
and ordinary course of business, and/or (ii) is listed on Schedule A attached
hereto. Buyer shall have the option of assuming any or all Material Contracts.
Within fifteen (15) business days of execution of this Agreement, Seller will
deliver to Buyer a copy of any Material Contracts which will be in force on or
after the Closing Date. Within fifteen (15) business days after receipt by Buyer
of such Material Contracts, Buyer shall notify Seller in writing of any Material
Contracts Buyer has agreed to assume. Any Material Contract Buyer has not agreed
to assume shall be Seller's sole responsibility.
(b) Contracts. For purposes of this Agreement, the term
---------
"Contracts" shall mean and include: (1) all current collective bargaining
agreements or other contracts or commitments to or with any labor unions or
other employee representative or groups of employees, and all such future
agreements, contracts, or commitments made or entered into before closing,
provided that Buyer is allowed to participate in any negotiations with such
labor unions or other employee representative or groups of employees; (2) all
contracts and agreements incurred in
10
<PAGE>
connection with the Business which would not constitute Material Contracts,
currently existing or incurred after the date hereof and prior to the Closing
Date in the normal and ordinary course of business; (3) all purchase orders for
non-capital expenditures outstanding on the Closing Date incurred in the
ordinary course of business; (4) any contracts approved (or deemed approved) by
Buyer as herein provided; (5) any other contracts and agreements incurred by
Seller before or after the date hereof in connection with the Business and
approved in writing by Buyer; and (6) any other Contract listed on Schedule B
attached hereto.
(c) Seller has made Buyer aware of the general nature of the
Contracts, which Buyer would assume. Within fifteen (15) business days of
execution of this Agreement, Seller will deliver to Buyer a copy of any
Contracts which will be in force on or after the Closing Date. Within fifteen
(15) business days after receipt by Buyer of such Contracts, Buyer shall notify
Seller in writing of any objections thereto. Buyer and Seller shall undertake in
good faith to resolve any reasonable objections which Buyer may have to any such
Contracts. However, if Buyer's reasonable objections are not resolved, Seller
shall retain said Contract and remain solely liable and responsible for the
same. Buyer shall be deemed to have approved all Contracts which are not
objected to as hereinabove provided. Any Material Contracts or Contracts that
Seller becomes aware of that were not listed on Schedules A and B or provided to
Buyer within fifteen (15) days of execution of this Agreement shall be submitted
to Buyer as soon as Seller becomes aware of such Contracts and Buyer will have
fifteen (15) days from Seller's submission to notify Seller of its reasonable
objections (or whether Buyer is going to assume any Material Contracts).
(d) Notwithstanding the above to the contrary, it is
acknowledged and agreed by Buyer that Buyer shall not object to any contract
which (i) was incurred in the normal and ordinary course of the business by
Seller; (ii) contains terms and conditions which are not materially less
favorable than those which would have been available for such product or service
as of the date of execution of such contract; (iii) is not between Seller and
any third party affiliated with
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Seller; and (iv) was approved by the Chairman of the Board, Chief Financial
Officer or Chief Operating Officer of Sahara Gaming.
(e) Seller, upon execution of this Agreement, and prior to
Closing, shall not enter into any agreement or contract or incur any obligation
in each case related to the Business which term or duration shall extend past
the Closing Date without Buyer's written consent;
(f) At the Closing, Seller shall assign and transfer to Buyer
all of Seller's right, title and interest in and to the Contracts (and the
Material Contracts Buyer has agreed to assume) and unless objected to by Buyer
in accordance with Paragraph 3.1(d) Buyer agrees to assume and perform all
obligations and liabilities on the part of Seller under the Contracts (and
Material Contracts Buyer has agreed to assume) accruing after the Closing Date.
To the extent that the assignment of any Contract is not permitted without the
consent of the other party or parties to such Contract, this Agreement shall not
be effective to assign such Contract if such consent is not given. Seller agrees
that at the request of Buyer, Seller shall use all reasonable efforts to obtain
such consent. If (i) any such consent is not obtained or (ii) if Buyer's
assumption of such Contract is prohibited by law, Seller agrees, to the extent
permitted by law, to undertake with Buyer to enter into a subcontract or other
arrangement pursuant to which Buyer shall receive the benefits of such Contract
upon Buyer's payment of the consideration provided in the Contract and
assumption of the obligation to perform the same. With respect to (f)(i) above,
if any Contract may only be assigned upon payment, directly or indirectly, of
additional consideration, then Buyer may either (1) pay any such additional
consideration whereupon Seller shall assign such Contract to Buyer or (2) elect
not to assume such Contract, which shall be and remain the sole responsibility
of Seller, and Buyer shall have no rights under any such Contract. In the event
Buyer's assumption of any such Contract is prohibited by law, Buyer shall not be
required to assume such Contract, which shall be and remain the sole
responsibility of Seller's and Buyer shall have no rights under any such
Contract;
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(g) For purposes of the Employee Retirement Income Security Act
(ERISA), 29 U.S.C. (S)1381 et seq., Buyer and Seller hereby acknowledge that
this Agreement, with respect to the sale by Seller and the purchase by Buyer, is
a bona fide, arm's-length sale of assets to an unrelated purchaser. Furthermore,
Buyer expressly acknowledges its obligation upon Closing to contribute to multi-
employer pension plans (collectively, "Plans") to which Seller has been
obligated to contribute. Buyer and Seller hereby agree that written notification
shall be provided to the subject Plans of Buyer's and Seller's intention that
the sale be covered by ERISA pursuant to the requirements of 29 C.F.R.
(S)2643.11(a). Buyer hereby further agrees to provide sufficient financial or
other information to the Plans to demonstrate to the satisfaction of the Plans
that at least one of the criteria contained in 29 C.F.R. (S)2643.12, (S)2643.13,
or (S)2643.14(a) is satisfied, thereby eliminating the bond or escrow
requirement of 29 U.S.C. (S)1384(a)(1)(B); provided, Buyer in its sole
--------
discretion, may elect to post a bond or amount in escrow in satisfaction of
29 U.S.C. (S)1384(a)(1)(B). The cost of satisfying the bond or escrow
requirement is the Buyer's responsibility. Seller hereby agrees to be
secondarily liable, pursuant to 29 U.S.C. (S)1384(a)(1)(C), for its deferred
withdrawal liability if Buyer withdraws from the Plans, or any single Plan,
within five (5) years after the sale and does not pay its withdrawal liability.
3.2 Assumption of Liabilities by Buyer. At the Closing, Buyer shall
----------------------------------
assume and pay, perform and discharge, and indemnify and hold Seller harmless
from and against, the following obligations and liabilities of Seller
(hereinafter collectively referred to as "Assumed Liabilities"):
(a) All of Seller's obligations and commitments under the
Contracts (and Material Contracts Buyer has agreed to assume), arising after,
and concerning the period after, the Closing Date;
(b) With respect to progressive pool programs in which Seller
participates with other gaming entities, Buyer shall assume all liability and
any payments under such programs which become due and payable after the Closing
Date listed on Exhibit J;
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(c) Any commitments or coupons for free or discounted
accommodations, services, tickets, food or beverages issued or granted by Seller
to customers or others in the ordinary course of the Business and which remain
outstanding after the Closing Date and which were issued or granted pursuant to
any Contract, described on Exhibit K;
(d) Any and all claims, liabilities, loss, cost, damage or
expense (including reasonable counsel fees and expenses) resulting or arising
out of ownership of the Property or conduct of the Business, caused by Buyer and
occurring upon the Property, after the Closing Date.
The assumption by Buyer of the Assumed Liabilities shall
not enlarge any rights or remedies of any third party under any Contracts with
Seller. Buyer shall not be prevented from contesting in good faith any of the
Assumed Liabilities. Buyer agrees to indemnify, defend and hold Seller and its
directors, officers, employees, agents, successors and assigns harmless from and
against any and all liability, loss, cost, damage and/or expense (including,
without limitation, reasonable attorneys' fees and costs) pertaining to the
Assumed Liabilities, except those arising from the breach of the same or conduct
of Seller prior to Closing Date.
3.3 No Other Liabilities Assumed.
----------------------------
(a) Except as provided in Paragraph 3.2 with respect to the
Assumed Liabilities and in Paragraph 2.1(e) with respect to the Current
Liabilities, Buyer expressly disclaims responsibility for and shall not assume
or be obligated to pay, perform or discharge, and Seller shall pay, perform,
discharge and indemnify and hold Buyer harmless from and against, any debt,
obligation, expense or liability of Seller, whether absolute or contingent,
arising out of or in connection with the Property or the Business, including,
without limitation, any liabilities or obligations arising out of ownership or
operation of the Property or the conduct of the Business by Seller prior to the
Closing Date (collectively, "Excluded Liabilities"). Seller agrees to indemnify,
defend and hold Buyer and its employees, officers, agents, successors and
assigns harmless from and against any and all liability, loss, cost, damage
and/or expense (including, without limitation,
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reasonable attorneys' fees and costs) directly or indirectly arising out of or
attributable to Excluded Liabilities.
ARTICLE IV
4 Title to Real Property.
----------------------
4.1 Title Reports and Exceptions.
----------------------------
(a) Seller shall, within fifteen (15) days of the Seller's
Board of Directors' approval, deliver to Buyer a preliminary report for an ALTA
Owner's Policy from the Title Company, together with copies of all exceptions
reflected in the preliminary report ("Preliminary Report") with respect to title
to the Real Property, and shall cause a survey of the Property to be prepared by
a registered surveyor (the "ALTA Survey"). Within ten (10) days after the
receipt by Buyer of the Preliminary Report and, if later received, the Survey,
Buyer shall notify Seller in writing of any "Title Objections" (which include
"Survey Objections"). "Title Objection" shall mean any item or matter appearing
in a Preliminary Report other than (i) inchoate statutory liens for taxes or
assessments not due and payable, (ii) any such matter which does not in fact
create a material impairment to the continued operation of the Business on the
Real Property; (iii) liens of any and all Special Improvement Districts or
special assessments by any governmental authority relating to the Real Property;
(iv) any matter approved by Buyer; or (v) any matter which is caused by, or
otherwise results from the actions of, Buyer. Within ten (10) days after the
receipt by Buyer of a Continuation Report (including a revised or amended survey
report) from the Title Company, Buyer shall notify Seller of any Title
Objections to matters not previously referenced in the Preliminary Report,
Continuation Report or survey report. Each ten (10) day period shall hereinafter
be referred to as the "Title Review Period". Upon termination of any applicable
Title Review Period, any matter not timely listed as a Title Objection by Buyer
as of such date shall be deemed approved as a Permitted Exception and not
constitute a Title Objection. Seller shall have until the Closing to attempt to
remove or cure any Title Objection.
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(b) If, after the date hereof, a matter is disclosed to Buyer
which Buyer contends to be a Title Objection, Seller shall notify Buyer within
ten (10) business days after notice from Buyer to Seller of the matter which
Buyer contends to be a Title Objection, whether Seller will undertake to cure or
otherwise remove such matter by the Closing. If Seller gives written notice to
Buyer that Seller is unable or unwilling to cure such matter by the Closing
("Seller's Notice"), Buyer, as his sole and exclusive remedy, shall have the
right and option, if such matter is a Title Objection, exercisable by written
notice to Seller within ten (10) business days after Buyer has received Seller's
Notice, to (i) waive same and agree to accept conveyance of the Property subject
to such Title Objection at Closing with offset, reimbursement or payment or (ii)
terminate this Agreement and be entitled to a refund of the Earnest Money
Deposit. Should Buyer not give any notice in the ten (10) business day period
referenced above, such Title Objection shall be conclusively deemed waived by
Buyer and be conclusively deemed a Permitted Exception.
(c) A Title Objection other than one involving a matter set
forth in the Preliminary Report shall be deemed cured by Seller and no longer
constitute a Title Objection if such matter is either removed of record by
appropriate release or other instrument, removed as an exception in a
Continuation Report (whether by reason of "Bonding Around" or "Insured Around")
by Seller or otherwise. "Bonding Around" and "Insured Around" as used herein
mean that the Title Policy shall affirmatively indemnify Buyer from and against
any and all loss and liability, including litigation costs and attorneys' fees
in connection therewith. All exceptions to title of the Property disclosed in
the Preliminary Report or in any Continuation Report thereof which are not Title
Objections, or which are waived by Buyer pursuant to this Agreement, are herein
referred to as the "Permitted Exceptions", and Buyer agrees to take title to the
Property at Closing subject to the Permitted Exceptions. Seller is under no
obligation to initiate legal proceedings or to incur any expense to cure Title
Objections, except that Seller shall remove any voluntary contractual liens
created by Seller.
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4.2 Title Policy. Except as otherwise provided in Paragraph 4.1 at the
------------
Closing, Seller shall deliver to Buyer at Seller's expense: (i) an ALTA Owner's
Policy ("Title Policy") from Title Company or from a company satisfactory to
Buyer, dated the Closing Date in the aggregate amount of Ninety Million Dollars
($90,000,000) insuring Buyer as owner of fee title to the Real Property subject
only to the Permitted Exceptions. The Parties agree that the Title Policy may
be written on a co-insured or re-insured basis by other title insurance
companies to the extent required by the Title Company. Buyer shall pay that
portion of the premium expense for such Title Policy which is attributable to
any special endorsements requested by Buyer. Seller shall pay that portion of
the premium expense for such Title Policy which is attributable to any special
endorsements requested by Seller. Following Closing, Buyer's sole recourse in
the event of any claim or impediment to title to the Real Property shall be
under and pursuant to the Title Policy unless said claim or impediment to title
arises from the intentional or willful acts, actions, or conduct of Seller.
ARTICLE V
5 Representations and Warranties.
------------------------------
5.1 Seller's Representations and Warranties. Seller represents and
---------------------------------------
warrants to Buyer that:
(a) Due Organization. Seller is a corporation duly organized,
----------------
validly existing, in good standing and duly qualified to do business under the
laws of the State of Nevada, and upon receiving the approval of this Agreement
by its Board of Directors, shall have all requisite corporate power and
authority to enter into, perform and carry out all of its duties and obligations
in the transactions contemplated by this Agreement;
(b) Binding Effect. This Agreement, subject to the approval of
--------------
Seller's Board of Directors, and the other documents to be delivered on the part
of Seller pursuant hereto are (or
17
<PAGE>
will be when executed and delivered pursuant hereto) legal, valid and binding
obligations of Seller enforceable in accordance with their terms;
(c) Notices and Approvals; No Violation of Agreement. Except
------------------------------------------------
for the notice specified in Paragraph 7.4, the consent of holders of certain
indebtedness of Seller and certain of Seller's affiliates, the approval of this
Agreement by Seller's Board of Directors, the consents which may be required to
permit assignment to Buyer of certain of the Contracts or leases and the consent
of Hart-Scott-Rodino, (i) no notice to, or approval or consent of, any court or
governmental authority or other person or entity is required in connection with
the execution, delivery and performance of this Agreement by Seller and (ii)
neither the execution and delivery of this Agreement, nor consummation of the
transactions contemplated thereunder, nor compliance by Seller with any of the
provisions thereof, will (1) conflict with any provision of Seller's certificate
of incorporation or bylaws, or (2) violate, conflict with, result in a breach of
or constitute a default under or pursuant to any statute, agreement, judicial or
administrative order, injunction, award, judgment or decree to which Seller is a
party or by which Seller is bound, which violation, conflict, breach or default
in the case of (1) or (2) above would have a material adverse effect on the
Property or Business;
(d) Compliance with Laws. To Seller's knowledge, Seller is in
--------------------
compliance with the requirements of all laws, rules, regulations, licenses,
permits, orders, judgments and decrees of federal, state or local judicial or
governmental authorities ("Regulations") that are applicable to ownership or
operation of the Property and the Business conducted thereon, where any such
noncompliance would have a materially adverse affect on the Business or the
Property;
(e) Contracts.
---------
(i) With respect to Material Contracts, to the best of
Seller's knowledge and as of the date of execution of this Agreement, there are
no Material Contracts other than those set forth on Schedule A hereto or to be
provided pursuant to Paragraph 3.1. Except as
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<PAGE>
provided in Schedule A or otherwise disclosed to Buyer in writing, all Material
Contracts are in full force and effect (except any such Material Contract which
expires by its terms or is terminated by Seller prior to the Closing Date),
Seller has paid all amounts due thereunder and satisfied all other material
obligations accrued thereunder and Seller has not received any written notice of
default in any material respect thereunder and no event has occurred that with
the passage of time or the giving of notice, or both, will constitute a default
in any material respect thereunder (other than any default which may result from
the failure or inability of Seller to obtain the consents of certain parties to
the assignment to Buyer of certain of the Material Contracts). Other than as
disclosed by Seller to Buyer in writing prior to the Closing Date, no other
party is in default in any material respect under any Material Contract.
(ii) With respect to Contracts, to the best of Seller's
knowledge and as of the date of execution of this Agreement, there are no
Contracts other than those set forth on Schedule B hereto or to be provided
pursuant to Paragraph 3.1(b). Except as provided in Schedule B or otherwise
disclosed to Buyer in writing, all Contracts are in full force and effect
(except any such Contract which expires by its terms or is terminated by Seller
prior to the Closing Date), Seller has paid all amounts due thereunder and
satisfied all other material obligations accrued thereunder and Seller has not
received any written notice of default in any material respect thereunder and no
event has occurred that with the passage of time or the giving of notice, or
both, will constitute a default in any material respect thereunder (other than
any default which may result from the failure or inability of Seller to obtain
the consents of certain parties to the assignment to Buyer of certain of the
Contracts). Other than as disclosed by Seller to Buyer in writing prior to the
Closing Date, no other party is in default in any material respect under any
Contract;
(f) Litigation. On the date hereof, Seller is not a party to
----------
any legal or governmental actions, claims, suits, administrative or other
proceedings or investigations before or by any governmental department,
commission, board, regulatory authority, bureau or agency,
19
<PAGE>
whether foreign, federal, state or municipal, or any court, arbitrator or grand
jury which would prevent or materially interfere with the consummation of the
transactions contemplated by this Agreement or which, individually or in the
aggregate, if resolved against Seller would impair or interfere in any material
respect with the ownership of the Property by Buyer or operation by Buyer of the
Business. Except as to those matters as set forth in Exhibit L, to Seller's
knowledge no additional such proceedings are threatened or contemplated by any
governmental authority or any other person or entity;
(g) Employees, Officers and Directors: Employment and Similar
---------------------------------------------------------
Contracts: Benefits. Seller provides medical, dental and other insurance and
- -------------------
employee benefit arrangements (e.g., Seller's 401(k) deferred compensation
program) for Seller's employees engaged in the Business as described on Exhibit
M ("Employee Benefits") (which are either not assumable or are not being assumed
by Buyer). With the exception of Employee Benefits and contracts and covenants,
if any, as are implied at law between an employer and employee under applicable
laws or are terminable at the will of the employer, Seller is neither a party
to, nor has any express or implied obligations, with respect to any of the
following instances which relate to employees engaged in the Business and will
be in effect after the Termination Date:
(i) Agreement, contract or commitment with any employee,
officer, director, agent, consultant, advisor, property manager or other person
engaged in the Business;
(ii) Agreement, contract or arrangement providing for the
payment of any wages, incentive compensation, raise, bonus or commission or
containing any deferred compensation or severance or termination pay liabilities
or obligations; or
(iii) Pension, profit-sharing, retirement, group life
insurance, hospitalization insurance, or other employee benefit or welfare plan,
agreement or arrangement.
20
<PAGE>
(h) Eminent Domain or Other Proceedings. Seller has received
-----------------------------------
no written or oral notice of any initiated or pending condemnation or eminent
domain proceedings, or contemplated sales in lieu thereof, involving a partial
or total taking of any of the Property, nor has Seller received written or oral
notice of any zoning or special assessment proceedings affecting the Real
Property;
(i) Properties. On the Closing Date, Seller shall have good and
----------
indefeasible title to all of the Property, and other than the Real Property, as
to which Buyer shall look solely to the Title Policy and matters set forth in
Article 4 hereof, free and clear of any and all liens, security interests,
mortgages, pledges, claims, options, leases, imperfections of title, easements,
or other encumbrances or rights of third parties except only for (1) liens for
current taxes which are not delinquent and other constitutional or statutory
inchoate liens; (2) such minor imperfections of title as do not either
individually or in the aggregate materially adversely affect use of the Property
in the conduct of the Business, or materially detract from the value of such
Property or Business; and (3) claims based upon or included in the Assumed
Liabilities (such excepted items being herein collectively referred to as
"Permitted Encumbrances");
(j) Leases. Attached hereto as Exhibit N is a list of all
------
leases and licenses existing on the date of execution of this Agreement pursuant
to which any third party has the right to occupy any portion of the Real
Property (said lease or license, including all amendments and modifications
thereto, being called individually a "Lease" and collectively "Leases", and the
tenant, occupant or licensee thereunder being called a "Tenant" and collectively
"Tenants"). The Leases are without default in any material respect by Seller,
and there exists no event, occurrence or condition which (with notice or lapse
of time or both) would constitute a default in any material respect by Seller
under any such Lease and, to Seller's knowledge (except as otherwise disclosed
to Buyer in writing) are without default in any material respect by any other
party thereto. Seller shall provide Buyer with a true, correct and complete copy
of each such Lease, including all
21
<PAGE>
amendments and modifications thereto. If Seller shall deliver to Buyer an
estoppel certificate to be approved by the Buyer for each Tenant under each
lease executed by such Tenant not more than ninety (90) days prior to the
Closing Date, Seller shall be released of any liability for breach of this
Paragraph 5.1(j) with respect to such Lease to the extent the matter in dispute
is the subject of such an estoppel certificate;
(k) Insurance. Seller shall provide Buyer with a correct and
---------
complete list of all policies of fire and liability coverage and other forms of
insurance described in Exhibit O and maintained by Seller on the date of
execution of this Agreement relating to ownership of the Property or the
operation of the Business;
(l) Condition. On the date hereof, Seller has no knowledge of
---------
any condition which would have a material adverse effect on the Property or the
Business;
(m) Hazardous Waste. With the exception of the terms noted in
---------------
environmental review and reports and remedial work performed on the Real
Property in connection with the issuance of indebtedness to Seller and
affiliates of Seller in 1989, to the best of the Seller's knowledge, there is no
contamination, hazardous waste or toxic substance in existence on or below the
surface of the Real Property, including, without limitation, asbestos in or on
the Real Property, PCB's in any transformer or other equipment located in or on
the Real Property, contamination of the soil, sub-soil or ground water or any
use or storage of hazardous waste material on the Real Property, which
constitutes a violation of any law, rule or regulation or standard of any
governmental entity having jurisdiction thereof. If Buyer determines a
violation or potential violation exists, Buyer shall notify Seller of the
violations or potential violations and may elect to terminate this Agreement,
unless Seller is able to remedy or remove the cause for such violation or
potential violation prior to Closing. In the event Buyer terminates this
Agreement, the Deposit shall be returned to the Buyer without further obligation
or liability. If Buyer does not terminate this Agreement Seller shall
promptly and thoroughly perform any and all remedial work
22
<PAGE>
prescribed by a consultant mutually agreed upon by the Parties (the
"Consultant") and any applicable governmental agency or official to bring the
property into compliance with any and all applicable law, rule, regulation, or
standard of any governmental entity ("Remedial Work"). Upon receipt by Seller of
the Consultant's report identifying the necessary Remedial Work to be completed
("Consultant's Report") Seller shall attempt to complete the Remedial Work to
Buyer's reasonable satisfaction prior to the Closing date. Notwithstanding the
foregoing, if the cost to complete the Remedial Work, as reasonably estimated by
the Consultant, exceeds One Hundred Thousand Dollars ($100,000), Seller may
elect not to perform the Remedial Work by delivering written notice to the Buyer
within fifteen days after Seller's receipt of Consultant's Report. Upon receipt
of Seller's notice, Buyer shall have the right to elect, within fifteen days
thereof to: (a) terminate this Agreement and in such event the Title Company
shall return the Deposit to the Buyer; or (b) cause the sale of the property to
be completed pursuant to this Agreement without Seller performing the Remedial
Work but with a reduction of the Purchase Price in the amount of the reasonable
costs and expenses to perform and complete the Remedial Work.
(n) Reports. With the exception of the reports referenced in
-------
Paragraph 5.1(m) above and attached hereto as Exhibit P, to the best of the
Seller's knowledge, there exists no written or tangible report, synopsis or
summary of any asbestos, toxic waste or hazardous substance investigation made
with respect to all or any portion of the Assets (whether or not prepared by
experts and whether or not in the possession of Seller).
(o) Zoning. To the best of the Seller's knowledge, the Real
------
Property is currently zoned to permit all of its present uses.
(p) Affiliated Parties. Except as Noted in Exhibit Q, attached
------------------
hereto and incorporated herein by reference, no officer, director or employee
whose annual compensation exceeds Thirty Thousand Dollars ($30,000) or
consultant receiving fees at an annual rate of Twenty Thousand Dollars
($20,000), or Seller, or affiliate of the foregoing, to Seller's knowledge (i)
23
<PAGE>
owns, directly or indirectly any interest in, or is an officer, director,
consultant, agent or employee of any corporation, firm, association or other
business, entity or organization which is a competitor, lessor, lessee, lender,
borrower, customer, supplier or distributor of Seller or any subsidiary or (ii)
owns, directly or indirectly, in whole or in part, any property, asset, permit,
license or secret or confidential information which Seller is using or the use
of which is necessary, desirable or material for the conduct of the Business.
Any such transaction involving Seller or any subsidiary on the one hand, and any
such person or entity on the other, which are required in accordance with
generally accepted accounting principles to be reflected in the financial
statements of Seller have been so reflected. Each such transaction has taken
place at prices, interest rates, charges and other terms that are substantially
the same as those that would have been paid or incurred in similar transactions
involving Seller, or any subsidiary, as the case may be, and unaffiliated
parties.
5.2 Buyer's Representation and Warranties. Buyer hereby represents and
-------------------------------------
warrants to Seller that:
(a) Due Organization. Buyer is a corporation duly organized,
----------------
validly existing, in good standing and duly qualified to do business under the
laws of the State of Nevada, and has all requisite corporate power and authority
to enter into, perform and carry out all of its duties and obligations in the
transactions contemplated by this Agreement;
(b) Binding Effect. This Agreement and the other documents to
--------------
be delivered on the part of Buyer pursuant hereto are (or will be when executed
and delivered pursuant hereto) legal, valid and binding obligations of Buyer
enforceable in accordance with their terms;
(c) Notices and Approvals, No Violation of Agreements. Except
-------------------------------------------------
for the notices specified in Paragraphs 7.3 and 7.6 hereto: (i) no notice to, or
approval or consent of, any court or governmental authority or other person or
entity is required in connection with the execution, delivery and performance of
this Agreement by Buyer; and (ii) neither the execution and delivery of this
Agreement by Buyer, nor the consummation of the transactions contemplated
24
<PAGE>
hereunder, nor compliance by Buyer with any of the provisions hereof, will
violate, conflict with, result in a breach of or constitute a default under or
pursuant to any statute, agreement, judicial or administrative order,
injunction, award, judgment or decree to which Buyer is a party by which it is
bound, which violation, conflict, breach or default would have a material
adverse effect on the assets, business or financial condition of Buyer;
(d) Litigation. Except for the matters set forth on Exhibit R
----------
hereto, Buyer is not a party to any legal governmental actions, claims, suits,
administrative or other proceedings or investigations before or by any
governmental department, commission, board, regulatory authority, bureau or
agency, whether foreign, federal, state or municipal, or any court, arbitrator
or grand jury which would either (i) prevent or materially interfere with the
consummation of the transactions contemplated by this Agreement, or (ii) if
decided adversely to Buyer, have a material adverse effect upon the assets,
business or financial condition of Buyer. To the best of Buyer's knowledge, no
such proceedings are threatened or contemplated by any governmental authority or
any other person or entity.
ARTICLE VI
6 Condition of the Property; Access and Observers; Independent Investigation.
--------------------------------------------------------------------------
6.1 Access and Observers. After the date hereof and prior to Closing,
--------------------
Seller shall give Buyer, or its designated agents, access during normal business
hours to the Property and to the books and records relating thereto and shall
furnish Buyer during such period with such information in Seller's possession
concerning the Property and its operation as Buyer may reasonably request;
provided, that (a) such access and the furnishing of such information shall not
- --------
interfere with Seller's normal business activities and (b) Buyer shall be
accompanied by, or make requests for information through, those personnel
designated by Seller to Buyer in writing. To the extent permitted by applicable
Nevada gaming laws, Buyer will have the right, prior to Closing and at such
25
<PAGE>
times and in such manner as shall be reasonably specified by Seller, to place
its agents on the Real Property for the purpose of observing the conduct of
Seller's Business. Buyer agrees that such agents shall not interfere with the
normal operation of the Business prior to Closing. Buyer hereby waives any and
all claims, demands or causes of action for personal injury or property damage
which Buyer, its directors, officers, employees and agents may have by reason of
entering onto the Real Property (except for those acts arising from Seller's
negligence), and Buyer indemnifies and holds Seller, its directors, officers,
employees, agents and guests harmless from any and all claims, liabilities,
loss, cost, damage or expense (including reasonable attorneys' fees and
expenses) arising out of any activities of Buyer, its agents, employees,
representatives or contractors upon the Property, or in connection with exercise
by Buyer of its rights in this Paragraph 6.1, except for those acts arising from
Seller's negligence.
6.2 Inspections. In making the decision to enter into this Agreement and
-----------
to consummate the transactions contemplated hereby, Buyer has relied solely on
the basis of its own independent investigation of Seller's Business and Property
and upon the express representations, warranties and covenants in this
Agreement. Without diminishing the scope of the express representations,
warranties and covenants of Seller in this Agreement and without affecting or
impairing Buyer's right to rely thereon, Buyer acknowledges that Seller has not
made, and SELLER HEREBY EXPRESSLY DISCLAIMS AND NEGATES ANY OTHER REPRESENTATION
OR WARRANTY, EXPRESS, IMPLIED OR STATUTORY, RELATING TO THE CONDITION OF THE
PROPERTY (INCLUDING WITHOUT LIMITATION ANY IMPLIED OR EXPRESS WARRANTY OF
MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE) AND FURTHER, BUYER ACCEPTS
ALL THE PROPERTY IN ITS "AS IS, WHERE IS" CONDITION.
6.3 Maintenance of Property. Notwithstanding anything in this Agreement
-----------------------
to the contrary, Seller shall be responsible for all costs prior to the Closing
Date, if any, associated with
26
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maintaining applicable compliance with Clark County Building Code and any other
State and Federal law, rule and/or regulation, including the "Americans With
Disability Act" for the property, as if said property were not the subject of
any sale.
ARTICLE VII
7 Conditions Precedent to Closing and Covenants
---------------------------------------------
7.1 Buyer's Conditions. The obligations of Buyer to purchase the Property
------------------
and to make payment of the remaining balance of the Purchase Price at the
Closing are subject to the satisfaction on or prior to the Closing Date of each
of the following conditions (any one or more of which may be waived in writing
by Buyer):
(a) All terms, covenants, agreements and conditions of this
Agreement to be complied with and performed by Seller on or prior to the Closing
Date shall have been complied with and performed in all material respects, and
all of the representations and warranties of Seller contained in Paragraph 5.1
shall be true on the Closing Date as if made on and as of such date, except as
any of such representations and warranties may be affected by actions taken
pursuant to or in compliance with this Agreement (including, but not by way of
limitation, the provisions of Paragraph 10.3 hereof), and Seller shall have
delivered to Buyer a certificate, executed by the President or an Executive
Vice-President of Seller and dated as of the Closing, to that effect;
(b) Seller shall have delivered to Buyer the instruments,
documents, certificates, opinions and other matters described in Paragraph 11.2;
(c) Buyer shall have obtained the licenses from and/or a
finding of suitability by the Nevada Gaming Authorities to enable buyer to
conduct gaming at the Real Property;
(d) The notice filing, if required under the Hart-Scott-Rodino
Act, shall have been complied with and all waiting periods required thereby
shall have expired; and
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(e) The Wet'N Wild Sale and Exchange Transaction shall close
escrow simultaneously with or prior to the Closing of this transaction on or
before the Closing Date.
7.2 Seller's Conditions. The obligation of Seller to deliver the Property
-------------------
to Buyer at the Closing is subject to the satisfaction on or prior to the
Closing Date of each of the following conditions (any one or more of which may
be waived in writing by Seller):
(a) The consent of holders of certain indebtedness of Seller and
its affiliates, and approval of this Agreement by Seller's Board of Directors
within forty-five (45) days of the execution of this Agreement;
(b) All the terms, covenants, agreements and conditions of this
Agreement to be complied with and performed by Buyer on or prior to the Closing
Date shall have been complied with and performed in all material respects, the
representations and warranties of Buyer contained in Paragraph 5.2 shall be true
on the Closing Date as if made on and as of such date except as any of such
representations and warranties may be affected by actions taken pursuant to or
in compliance with this Agreement, and if Buyer is a corporation, Buyer shall
have delivered to Seller a certificate, executed by the President or an
Executive Vice-President of Buyer and dated as of the Closing, to that effect;
(c) Buyer shall have paid to Seller the Purchase Price as set
forth in Paragraph 2.1;
(d) Buyer shall have delivered to Seller the instruments,
documents, certificates, opinions and other matters described in Paragraph 11.3;
(e) The notice filing, if required under the Hart-Scott-Rodino
Act, shall have been complied with and all waiting periods required thereby
shall have expired; and
(f) The Wet'N Wild Sale and Exchange Transaction shall close
escrow simultaneously with or prior to the Closing of this transaction on or
before the Closing Date.
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7.3 Hart-Scott-Rodino Filing. If the transaction contemplated herein is
------------------------
determined to be subject to the notification requirements of (S)7 of the Clayton
Act, 15 U.S.C. (S)18A and the Rules promulgated thereunder as set forth in
Chapter 16 CFR (S)(S)801 and 803, as amended ("Hart-Scott Act"), Buyer and
Seller will file the respective reports required of them under the Hart-Scott
Act, and the regulations thereunder as soon as possible (and in no event later
than fifteen (15) days after approval of this Agreement by Seller's Board of
Directors). The Parties agree to use their best efforts to satisfy any requests
for additional information or other requirements imposed by the Federal Trade
Commission or the Department of Justice in connection with the transactions
contemplated by this Agreement and to request early termination of any waiting
period imposed by statute.
7.4 Workers Adjustment and Retraining Notification Act. The Parties
--------------------------------------------------
acknowledge and agree that Seller will take all reasonable steps to comply with
the requirements of the Workers Adjustment and Retraining Notification Act (29
U.S.C. (S)2101 et seq.).
7.5 Cooperation. Each party shall make or file all other required
-----------
notifications and use all reasonable effort to obtain all consents, approvals
and authorizations which must be obtained by such party in order to consummate
the transactions contemplated hereby. Each party shall render the other its
full and complete cooperation in giving such notices or obtaining such consents,
approvals and authorizations; provided, however, that neither party shall be
-------- -------
required to incur any cost or expense in giving any notice or obtaining any
consent, approval or authorization which the other party is required to give or
obtain pursuant to the terms hereof. Each party covenants and agrees promptly
to furnish to the other all information and data in the furnishing party's
possession requested in writing by the requesting party which is reasonable and
necessary in order to assist the requesting party to give the necessary notices
or secure any permits, licenses and approvals required in connection with the
Business.
29
<PAGE>
7.6 Gaming Licenses. Within thirty (30) days after execution of this
---------------
Agreement by Seller's Board of Directors, Buyer covenants and agrees to submit
to the Nevada Gaming Control Board, Nevada Gaming Commission and, within a
reasonable time thereafter, the Clark County Liquor and Gaming Licensing Board
its application for licensing of all persons or entities who, as of the date
hereof, would be required to be licensed under applicable Nevada gaming laws and
regulations, which application, when filed, shall, to the best of Buyer's
knowledge, be complete in all material respects. Buyer covenants and agrees not
to knowingly submit for licensing any person or entity who Buyer reasonably
believes is unable or unwilling to qualify for and obtain whatever licenses or
finding of suitability that may be required of such person by the Nevada Gaming
Authorities. Following submission of such application, Buyer covenants and
agrees to use its best efforts and pursue diligently obtaining the licenses from
and/or a finding of suitability by the Nevada Gaming Authorities and to provide
the data reasonably requested by such Authorities in order to obtain such
licenses and/or finding of suitability as soon as reasonably possible after the
execution hereof.
ARTICLE VIII
8 Conduct of Business
-------------------
8.1 Seller covenants and agrees that, after the execution hereof and prior
to Closing (unless Buyer consents in writing otherwise):
(a) Seller will conduct the Business at the Property in the
ordinary course and will use all reasonable efforts to preserve its
relationships with suppliers, customers and others having relationships with
Seller pertaining to the Business;
(b) Seller will make such repairs and replacements and perform
such maintenance operations as are necessary to maintain and keep the Property
in substantially the same repair, working order and condition as such Property
is in on the date hereof (reasonable wear and
30
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tear and damage from fire or other casualty excepted), and will not commit to
make any capital expenditure relating to the Property which would be required to
be paid or assumed by Buyer after Closing;
(c) Seller will not voluntarily sell or otherwise dispose of
(i) any Real Property; or (ii) any other Property, except in the ordinary course
of business as previously conducted. To the extent Seller sells or disposes of
any Property other than Real Property, Seller shall replace same with a similar
item or a suitable alternative therefor;
(d) Seller will maintain in full force and effect its existing
insurance covering the improvements on the Property and the contents thereof.
Buyer acknowledges that such insurance coverages are not assumable by Buyer. At
the request of Buyer and at Buyer's sole cost and expense (which shall be paid
or secured in advance to the reasonable satisfaction of Seller), the amount of
insurance against fire and other casualties which, at the date of this
Agreement, Seller carries on the Real Property, shall be increased by such
amount or amounts as Buyer shall reasonably specify to Seller in writing;
(e) Seller will not terminate (other than for cause) or waive
any rights under any Material Contract Buyer has agreed to assume or any
Contract to be assigned to and assumed by Buyer hereunder;
(f) Unless diligently contested in good faith (such contest
shall not delay the Closing) Seller shall promptly comply with any and all
notices of violation of laws, federal, state, municipal or county ordinances,
regulations, orders or requirements of departments of housing, building, fire,
or other federal, state, municipal or county departments or other governmental
authorities having jurisdiction over the Property or the use or operation
thereof;
(g) Seller shall promptly disclose in writing to Buyer any
change in any facts or circumstances which would make any of the Representations
inaccurate, incomplete or misleading to the detriment of Buyer;
31
<PAGE>
(h) From the date hereof through and including the Closing,
except as expressly provided herein or with Buyer's written consent, Seller
shall not (1) mortgage, pledge, or subject to lien, encumbrance or charge any of
the assets being purchased by Buyer ("Assets"); (ii) sell or transfer any of the
Assets; (iii) permit any damage, destruction or loss (whether or not covered by
insurance) which would materially and adversely affect the Assets; or (iv) waive
any material rights with respect to the Assets.
(i) All federal and state tax returns and reports of Seller for
the Business required by law to be filed have been and will be duly filed on a
timely basis (subject to timely and properly filed extensions), and all federal,
state and other material taxes, assessments, fees and other governmental charges
with respect to the Assets or the Business which are due and payable, have been
and will be paid on a timely basis.
(j) Other than (i) for customary review and wage increases for
Seller's employees consistent with historical practices of Seller, and (ii) for
commitments which arise by Seller's hiring of employees in the ordinary course
of the Business. Seller shall not adopt or amend any bonus, profit sharing,
compensation, stock option, pension, retirement, deferred compensation,
employment or other employee benefit plan, agreement, trust, plan, fund or other
arrangement for the benefit or welfare of any employee or increase in any manner
the compensation or fringe benefits of any employee or pay any benefit not
required by any existing plan, current practice or arrangement. No employee
agreement between Seller and any labor unions, employee representative or groups
of employees ("Represented Employee Agreement") which results from the
renegotiation of any prior Represented Employee Agreement between the date
hereof and the Closing Date (the "Renegotiated Agreements") or other Represented
Employee Agreement which relates to the Business shall be entered into;
provided, however, that Seller may enter into Renegotiated Agreements if the
same shall generally be no less favorable to the Business than those pertaining
to the other hotel-casinos of comparable size, status and character in the
metropolitan
32
<PAGE>
Las Vegas area, Seller provides Buyer with notice prior to entering into such
Renegotiated Agreements and, after receipt of such notice, Buyer approves, in
writing, the terms of the Renegotiated Agreements and Seller will take all
actions necessary to comply with the Consolidated Omnibus Budget Reconciliation
Act of 1985, as amended.
(k) Seller shall not make any representation to any employee of
Seller that is inconsistent with or contrary to the provisions of this
Agreement.
ARTICLE IX
9 Risk of Loss
------------
9.1 Risk of Loss. In the event of material destruction or damage of any
------------
buildings or other improvements located on the Real Property or the condemnation
of a material portion of the Real Property (as such terms are defined in
Paragraph 9.2 hereof) prior to Closing, Seller shall, at its election in its
sole discretion, either (a) upon providing Buyer with a description thereof,
repair such damage and destruction at Seller's expense prior to Closing or (b)
promptly notify Buyer of the damage or destruction and Seller's inability or
decision not to repair it. Within ten (10) days after receipt by Buyer of
Seller's notification of its inability or decision not to repair, Buyer shall
have the right to notify Seller of Buyer's election to terminate this Agreement
or Buyer's election to offset and reduce the purchase price by an amount not to
exceed the cost of repairing such damage or destruction. If any destruction,
damage or condemnation of any building or other improvement on the Real Property
is not material, or if such destruction, damage or condemnation is material and
unrepaired by Seller prior to Closing but Buyer does not elect to terminate this
Agreement as hereinabove provided, Buyer shall be entitled to a credit against
the Purchase Price of an amount equal to the cost to replace or repair the
property by reason of such damage, destruction, or condemnation (to the extent
such funds have not been expended on, or committed to, the repair or restoration
of such damaged, destroyed or condemned property by the
33
<PAGE>
Seller), a sale of the Property shall otherwise be consummated as though such
destruction, damage or condemnation (except for necessary changes in matters
relative to title set forth in the Title Policy and Deed resulting from any
condemnation) had not occurred.
9.2 Material Loss. For the purposes of Paragraph 9.1 hereof, "material
-------------
destruction or damage" shall be deemed to have occurred if the damage is such
that it may be reasonably expected to prevent or materially and adversely affect
the conduct of gaming operations, or operation of the Business, for a period in
excess of sixty (60) days, or result in an uninsured loss in excess of One
Hundred Thousand Dollars ($100,000.00) for which Seller is unwilling to assume
responsibility. In the case of condemnation, for purposes of Paragraph 9.1
hereof, the affected Real Property shall be deemed to be a "material portion of
the Real Property" if such condemnation may be reasonably expected to interfere
with the operation of the Business as presently being conducted or the ability
of Buyer to further develop a portion of the Real Property for hotel/casino
purposes.
9.3 Uniform Act. This Article IX is intended as an express provision with
-----------
respect to destruction and condemnation which supersedes the provisions of the
Nevada Uniform Vendor and Purchaser Risk Act.
ARTICLE X
10 Termination; Remedies
---------------------
10.1 Termination. Subject to the provisions of Paragraphs 10.2 and 10.3
-----------
hereof, this Agreement may be terminated at any time prior to Closing by:
(a) The mutual consent of Seller and Buyer in which case Buyer
shall be entitled to receive the Earnest Money Deposit described in Paragraph
2.2;
(b) Seller or Buyer, on or at any time after nine months from
the Date of this Agreement, if the Closing or the transactions contemplated
hereunder shall not have occurred by
34
<PAGE>
such date for any reason wherein, other than in the event of Buyer's breach of
this Agreement, Buyer shall be entitled to a refund of the Earnest Money
Deposit, provided, however, that at the request of Buyer, this time period shall
be extended for an additional (3) three months upon Buyer releasing the Earnest
Money Deposit to Seller. If the Closing occurs within such three month extended
period, the Earnest Money Deposit shall be applied to the Purchase Price;
otherwise, this Agreement shall be deemed to be terminated and the Earnest Money
Deposit shall be retained unconditionally by Seller;
(c) Seller, at any time on or prior to the Closing Date, if any
of the representations or warranties of Buyer contained herein shall prove to be
inaccurate or incomplete in any material respect or Buyer shall materially
breach any covenant or other obligation imposed on it pursuant to this
Agreement. If termination occurs pursuant to this Paragraph 10.1(c), Seller
shall be entitled to the Earnest Money Deposit.
(d) Seller, at any time on or prior to the Closing Date, if
(i) the conditions set forth in Paragraph 7.2 hereof shall not have been met by
the Closing Date or (ii) the Exchange Transaction cannot close escrow
simultaneously with or prior to the Closing of the transaction contemplated in
this Agreement;
(e) Buyer, at any time on or prior to the Closing Date, if
(i) any of the representations or warranties of Seller contained herein shall
prove to be inaccurate or incomplete in any material respect, or Seller shall
materially breach any covenant or other obligation imposed on it pursuant to
this Agreement, or (ii) if the conditions set forth in Paragraph 7.1 hereof
shall not have been met by the Closing Date; or (iii) under the circumstances
described in Paragraphs 4.1, 9.1, and 10.3 hereof. If termination occurs
pursuant to Paragraphs 10.1(d) or (e), Buyer shall be entitled to a refund of
the Earnest Money Deposit.
10.2 Effect of Termination. Except for any obligations of a party accrued
---------------------
as of the effective time of any termination or as otherwise expressly provided
in this Agreement, in the event
35
<PAGE>
of termination of this Agreement, this Agreement shall become void and have no
effect, without any liability on the part of any party or its directors,
officers or stockholders. Buyer and Seller further agree as follows:
(a) If this Agreement has been terminated by a party under
circumstances in which the other party has willfully or in bad faith failed to
satisfy a covenant or condition to Closing ("Defaulting Party"), the Defaulting
Party shall be and remain liable for any and all liability, loss, cost, damage
and expense which does or may result from such action and the resulting failure
or inability to consummate the transactions contemplated by this Agreement;
(b) If the Exchange Transaction has closed escrow prior to the
Closing of the transaction contemplated by this Agreement and this Agreement is
terminated for any reason, Buyer shall have the option for thirty (30) days from
the date this Agreement terminates ("Buyer's Option Period") to sell, transfer
and convey all of its right, title and interest in and to the Sahara Parcel to
Seller pursuant to the terms and conditions set forth below. If Buyer does not
exercise Buyer's Option in writing to Seller ("Buyer's Notice to Sell") within
Buyer's Option Period, Seller shall have the option for thirty (30) days from
the expiration of Buyer's Option Period ("Seller's Option Period") in writing to
Buyer ("Seller's Notice to Purchase") to purchase from Buyer all of Buyer's
right, title and interest in and to the Sahara Parcel pursuant to the terms and
conditions set forth below ("Seller's Option"). The purchase and Sale of the
Sahara Parcel pursuant to either Buyer's Option or Seller's Option shall
hereinafter be referred to as the "Sahara Parcel Transaction").
(c) If Buyer exercises Buyer's Option or Seller exercises
Seller's Option, Seller shall purchase the Sahara Parcel from Buyer and Buyer
shall sell the Sahara Parcel to Seller for the purchase price of Twenty One
Million Five Hundred Four Thousand Four Hundred Dollars ($21,504,400) and
subject to the same leases, encumbrances and permitted exceptions which Buyer
received title to the Sahara Parcel as set forth in the Exchange Agreement.
Within ten (10)
36
<PAGE>
days of receipt by Seller of Buyer's Notice to Sell or by Buyer of Seller's
Notice to Purchase, as the case may be, the Parties shall begin to negotiate any
necessary additional terms to consummate the Sahara Parcel Transaction, and
escrow shall close on the Sahara Parcel Transaction, unless extended in writing
with the mutual agreement of the Parties, within ninety (90) days of termination
of this Agreement.
(d) The provisions of this Paragraph 10.2 shall survive any
termination of this Agreement.
10.3 Notice of Seller's Breach; Right to Cure.
----------------------------------------
(a) If at any time between the date hereof and the Closing Date,
Buyer becomes aware of any fact or circumstances which leads Buyer to believe
that any representation or warranty made by Seller hereunder either was
inaccurate in a material respect when made or will be inaccurate in a material
respect as of the Closing Date, or that any covenant or condition of Seller
cannot be performed by Seller in a material respect on or before the Closing
date (any such inaccuracy or inability being herein referred to as a
"Noncompliance Matter", but excluding any representation, warranty, covenant or
condition pertaining to title to Real Property, which matters are treated
exclusively in Article IV of this Agreement), the Buyer shall give prompt
written notice to the Seller, which notice shall set forth in reasonable detail
the asserted Noncompliance Matter on the part of Seller. Seller shall have the
right at its option (but shall not be obligated) either to (i) cure such
Noncompliance Matter or (ii) reduce or grant a credit against the Purchase Price
in an amount required to cure such Noncompliance Matter, in which event such
Noncompliance Matter shall not constitute a default hereunder. In the event that
Seller shall on or prior to Closing correct any Noncompliance Matter or grant a
credit against the Purchase Price as aforesaid, Buyer may not subsequently
terminate or decline to consummate this Agreement on the grounds of the
inaccuracy of the representation or warranty or failure of the covenant or
condition, nor shall Buyer have any rights to recover damages by reason thereof;
37
<PAGE>
(b) If the Noncompliance Matter is one which is not a liquidated
claim which can be discharged by the payment of money alone ("Unliquidated
Noncompliance Matter"), Seller shall have the right (but shall not be obligated)
to undertake to cure and remove same prior to Closing or, if Seller is unable
(or unwilling to state that Seller will be able to do so) Seller shall have the
sole right and option, based upon its evaluation of the asserted Unliquidated
Noncompliance Matter, to determine whether Seller will agree to indemnify Buyer
against any claim, liability, loss, cost, damage or expense (including
reasonable attorneys' fees and expenses) which is the direct and proximate
result of the Unliquidated Noncompliance Matter in question, in which event:
(i) If Seller will agree to indemnify Buyer as aforesaid with
respect to such Unliquidated Noncompliance Matter, then Buyer shall be obligated
to consummate the transactions contemplated by this Agreement unless such
Unliquidated Noncompliance Matter can reasonably be expected to have a
materially adverse effect on the Property or operation of the Business. Any
indemnification instrument shall exclude any liability on the part of Seller for
any special or consequential damages, and otherwise shall be in form mutually
agreed by Seller and Buyer.
(ii) If either (1) Seller will not agree to indemnify Buyer
as aforesaid in connection with such Unliquidated Noncompliance Matter or (2)
such Unliquidated Noncompliance Matter can reasonably be expected to have a
materially adverse effect on the Property or operation of the Business, Buyer
shall have the right and option either to (A) waive such Unliquidated
Noncompliance Matter and proceed with Closing without credit against the
Purchase price or (B) terminate this Agreement;
(iii) If prior to Closing a dispute arises between the
parties hereto as to (1) whether any matter asserted is a Noncompliance Matter
or Unliquidated Noncompliance Matter; (2) the cost to correct any Noncompliance
Matter; or (3) whether any Unliquidated
38
<PAGE>
Noncompliance Matter can reasonably be expected to have a materially adverse
effect on the Property or operation of the Business, such dispute shall be
resolved by final and binding arbitration in accordance with the provisions of
the Nevada Uniform Arbitration Act, Nev. Rev. Stat. Section 38.015 et seq.
-------
("Arbitration Act").
10.4 Specific Performance. Buyer and Seller each acknowledge that the
--------------------
transactions contemplated by this Agreement are unique and there may be no
adequate remedy at law if Seller fails to perform any of its obligations
hereunder. In addition to any other rights or remedies Buyer may have, Buyer
shall have the right to obtain specific performance of the obligations of Seller
hereunder.
ARTICLE XI
11 Closing
-------
11.1 Closing. (a) Unless extended as permitted in this Agreement, the
-------
closing ("Closing") shall be held at the offices of Title Company, on the later
to occur of the tenth (10th) day after Buyer obtains the licenses from and/or a
finding of suitability by the Nevada Gaming Authorities to enable Buyer to
conduct gaming on the Real Property, or the first day of October, 1995. The
parties may mutually agree that the Closing shall take place at such other time
and place in metropolitan Las Vegas, Nevada as the parties may agree (the actual
date of Closing being herein referred to as the "Closing Date").
(b) The Parties acknowledge and agree that the Wet'N Wild Sale
must close escrow on or before October 31, 1995, and that the intent of the
Parties hereto is that the transactions contemplated in the Wet'N Wild
Agreement, the Exchange Transaction and this Agreement be closed simultaneously
on or prior to October 31, 1995, but not prior to October 1, 1995.
Notwithstanding the foregoing to the contrary, if the transaction
contemplated by this Agreement cannot close escrow on or before October 31,
1995, the Parties acknowledge and
39
<PAGE>
agree that the transfer and exchange of the Sahara Parcel for the Wet'N Wild
Parcel as contemplated in the Exchange Agreement shall close escrow on or prior
to October 31, 1995, but not prior to October 1, 1995. During the period of time
in between the close of escrow of the Exchange Agreement and the Closing of the
transaction contemplated by this Agreement (the "Interim Period"), Buyer as
lessor shall receive all rents from the leasehold interest referenced in the
Exchange Agreement and Seller shall: (a) maintain liability, casualty and
property damage insurance coverage in the forms and amounts currently maintained
on the Sahara Parcel; (b) cause Buyer to be named as an additional insured to
such insurance policies; and (C) indemnify and hold Buyer harmless, for the
period until Closing of this transaction or the Close of the "Sahara Parcel
Transaction" as defined in Paragraph 10.2 herein, from and against all liability
and damage arising out of or connected to the Sahara Parcel unless such
liability or damage arises from Buyer's negligence, gross negligence,
intentional or willful acts. Upon the simultaneous close of escrow of the
transactions contemplated by the Wet'N Wild Agreement, Exchange Agreement and
this Agreement, Seller shall cause the leasehold interest upon the Sahara Parcel
to be terminated.
11.2 Seller's Delivery. At the Closing, Seller shall deliver to Buyer the
-----------------
following:
(a) A grant, bargain and sale deed ("Deed") conveying the Real
Property to Buyer subject only to the Permitted Exceptions and other matters
permitted under Paragraph 4.1;
(b) A bill of sale conveying the Personal Property to Buyer,
subject to no liens or encumbrances other than Permitted Encumbrances;
(c) An assignment to Buyer of all of Seller's right, title and
interest in and to the Intangible Personal Property;
(d) An assignment to Buyer of all of Seller's right, title and
interest in and to all assignable Contracts, to be effective at the Closing
Date;
(e) An assignment to Buyer of all of Seller's right, title and
interest in and to the Leases to be effective at the Closing Date;
40
<PAGE>
(f) The Material Contracts and other Contracts accepted and
assumed by Buyer, except to the extent previously delivered to Buyer or located
at the Real Property;
(g) All consents obtained by Seller with respect to assignment
of any of the Contracts;
(h) The Title Policy and Reinsurance Agreements (if any);
(i) A "non-foreign affidavit," properly executed by officers of
Seller in recordable form, containing such information as shall be required by
Section 1445(b)(2) of the Internal Revenue Code of 1986, as amended ("Code") and
the applicable temporary regulations issued thereunder. In the event that final
regulations shall have been issued under Section 1445(b)(2) of the Code by the
Closing Date, such non-foreign affidavit shall be in the form required
thereunder;
(j) Such other agreements, notices, certificates or other
instruments as are required to be delivered by Seller hereunder.
(k) Possession of the Property shall be delivered to Buyer as
of midnight on the Closing Date, to the extent applicable, the transfer of
possession shall be pursuant to the closing memorandum approved by the Nevada
Gaming Authorities.
(l) On the Closing Date, authorized representatives of Buyer of
Seller shall take inventory of (i) all baggage, suitcases, luggage, valises and
trunks of hotel guests checked or left in the care of Seller, (ii) all luggage
or other property of guests retained by Seller as security for unpaid accounts
receivable, and (iii) the contents of the storage room; provided, however, that
no such baggage, suitcases, luggage, valises or trunks shall be opened. Except
for such of the property referred to in (ii) above, which shall be removed from
the Premises by Seller on the Closing Date, all such baggage and other items
shall be sealed in a manner to be agreed upon by the parties and listed in an
inventory prepared and signed jointly by representatives of Buyer and Seller on
the Closing Date. Buyer shall be responsible from and after said date for all
baggage and other items listed in such inventory and, where the seals have been
broken, for the contents
41
<PAGE>
thereof. Seller shall be responsible for said contents if the seals have not
been broken and for all luggage or other property of guests not listed on such
inventory or retained by Seller as security for unpaid accounts receivable. By
conveying the Property to Buyer on the Closing Date, Seller shall be deemed,
without further action, to have assigned any storage, warehouse or innkeepers
liens it may have under applicable law.
(m) Safe deposit boxes in use by customers at the Closing Date
will be sealed in a reasonable manner mutually agreeable to Buyer and Seller.
Representatives of both Buyer and Seller shall be given notice and an
opportunity to be present when a seal is broken. Seller will have no further
responsibility for seals broken without the presence of Seller's representative
unless such representative fails to be present after being provided notice
pursuant to this Paragraph. Buyer will have no responsibility for loss or theft
from a safe deposit box whose seal was broken in the presence of Seller's
representative or without the presence of such representative but after giving
such representative notice as provided below. Seller will make a representative
available within one (1) hour after Buyer notifies the person whom Seller will
from time to time designate. At the Closing, Seller shall designate in writing
its initial safe deposit representative. All safe deposit keys, combinations and
records shall be delivered to Buyer at the Closing.
(n) At the Closing, Seller and Buyer shall perform the following
functions for all motor vehicles that were checked and placed in the care of
Seller: (i) mark all motor vehicles with a sticker or tape; and (ii) prepare an
inventory of such items ("Inventoried Vehicles") indicating the check number
applicable thereto and any damage thereto. Thereafter, Buyer shall be
responsible for the Inventoried Vehicles except for damage indicated in the
inventory and Seller shall be liable for claims with respect to any other
vehicles.
(o) Pursuant to and in order to comply with NRS 364A.200,
372.620, 612.695, 244.335 and 244.3352, such amounts as Buyer and Seller
reasonably estimate are necessary to comply with the provisions of the above-
mentioned statutes will be withheld by Title
42
<PAGE>
Company out of the purchase price payable to Seller at Closing until such time
as Seller furnishes Buyer or Buyer's assignee and Title Company the receipts or
certificates provided for in such statutes, or if not so provided for, such
evidence as Buyer or Buyer's assignee may reasonably require to assure Buyer or
Buyer's assignee that the applicable obligations have been paid. If Seller does
not produce such receipts or certificates within the time period provided for in
such statutes, or if any lien or claim therefore is asserted against Buyer or
Buyer's assignee or the property, Title Company shall pay such withheld sums to
the appropriate authority. Buyer or Buyer's assignee and Seller shall execute
mutual escrow instructions to carry out the provisions of this paragraph, and to
authorize Title Company to deposit such withheld amounts in an interest bearing
account for the benefit of Seller.
11.3 Buyer's Delivery. At the Closing Buyer shall deliver or cause to be
----------------
delivered to Seller the following:
(a) Payment of the Purchase Price pursuant to Paragraph 2.2
hereof and any other payments to be made on the Closing Date by Buyer as
provided in this Agreement;
(b) An instrument evidencing assumption by Buyer of the Assumed
Liabilities effective as of the Closing Date;
(c) Such other agreements, notices, certificates and other
instruments as are required to be delivered by Buyer hereunder.
11.4 Approval of Closing Documents. All certificates, instruments,
-----------------------------
documents and agreements to be executed and delivered at Closing shall be in
form and substance reasonably acceptable to and approved by the parties and
their counsel.
11.5 Possession. Possession of the Property shall be delivered to Buyer
----------
at Closing.
11.6 No Merger. None of the covenants and agreements of Buyer and Seller,
---------
as the case may be, contained in this Agreement shall merge with any deed or
conveyance, and such
43
<PAGE>
covenants and agreements shall survive the Closing and shall continue in full
force and effect until such time, if any, as provided in such covenant or
agreement or otherwise limited by law.
ARTICLE XII
12 Post Closing Covenants
----------------------
12.1 Further Assurances. Each party shall, at the request of the other,
------------------
at any time and from time to time following the Closing, execute and deliver to
the requesting party all such further instruments as may be reasonably necessary
or appropriate in order more effectively to (a) assign, transfer and convey to
Buyer, or to perfect or record Buyer's title to or interest in the Property, (b)
evidence and confirm the assumption by Buyer of the liabilities of Seller to be
assumed by Buyer pursuant to this Agreement, or (c) confirm or carry out the
provisions of this Agreement.
12.2 Cooperation Retention of Records. Each party acknowledges that the
--------------------------------
other may be a party to legal proceedings following the Closing which relate to
the Business or Property, and covenants to maintain and make available to the
other upon reasonable request and at the expense of the requesting party, (a)
any and all file and business records in its custody or control relating to the
Business or Property, and (b) any and all individuals employed by the other
party hereto whose testimony or knowledge, in the reasonable opinion of the
other party's counsel, is necessary or useful to it with respect to the issues
involved in such litigation or preparation therefor. Buyer shall keep and
maintain all files, records and other information which Seller shall deliver to
Buyer or leave on the Real Property either at Buyer's offices on the Real
Property or at storage locations in Las Vegas, Nevada for a period of at least
five (5) years after the Closing. Before destroying any such files, records or
information Buyer shall notify Seller and Seller may, at its expense, retain the
same. Seller shall be entitled at all reasonable times to inspect and make
copies at Seller's expense of such files, records and information.
44
<PAGE>
12.3 Labor Arbitration and Grievances of Seller. In the event there are
------------------------------------------
any claims concerning or arising from periods prior to the Closing Date which
are unasserted as of the Closing Date or there are pending and unresolved as of
the Closing Date any employee complaints, charges or grievances before any
court, governmental agency or arbitrator between Seller and any applicant,
employee, or discrimination complaints in any state or federal agency or court
filed by or on behalf of any applicants, employees or former employees of
Seller, arising in connection with the Business, Seller shall be solely
responsible for the handling and/or the resolution of said matters subject to
the following conditions:
(a) Buyer shall make available to Seller all records in the
possession of Buyer and all witnesses employed by Buyer which Seller reasonably
believes are necessary or appropriate in connection with the handling or
resolution of such matters. Buyer agrees to cooperate with Seller in any other
manner reasonably requested by Seller for the satisfactory resolution of such
matters;
(b) In the event the resolution of any such matter requires that
any terminated employee be reinstated, Buyer agrees to reinstate said employee
in its operation in accordance with said resolution provided that no voluntary
--------
resolution shall result in a reinstatement without the consent of Buyer, which
consent shall not be unreasonably withheld;
(c) Any duty to pay wages or benefits to or on behalf of a
terminated employee from the date of termination to the date of reinstatement
shall remain the obligation of Seller. Any such obligation accruing after
reinstatement shall be the responsibility of Buyer.
ARTICLE XIII
13 Brokerage Fees
--------------
45
<PAGE>
Each of the parties hereto agree to indemnify and hold and save the other
or others harmless from any brokerage or finder's fees, commissions,
compensation or expenses (including reasonable attorneys' fees and other
expenses incurred in connection with any such claim) which may be due or
asserted by reason of any such agreement or purported agreement by the
indemnifying party regarding the transaction contemplated herein.
ARTICLE XIV
14 Survival of Representations and Warranties: Indemnification
------------------------------------------------------------
14.1 Seller's Indemnity. Seller covenants and agrees to indemnify and
------------------
save and hold Buyer harmless at all times after the Closing in respect of any
and all claims, liabilities, loss, cost, damage and expense, including
reasonable attorneys' fees and expenses, arising from, by reason of or in
connection with any untruth, breach or inaccuracy in any material respect of any
representation or warranty on the part of Seller under Paragraph 5.1 of this
Agreement, or in any certificate or other instrument provided for in this
Agreement.
14.2 Buyer's Indemnity. Buyer and Guarantor covenant and agree to
-----------------
indemnify and save and hold Seller harmless at all times after the Closing in
respect of any and all claims, liabilities, loss, cost, damage and expense,
including reasonable attorneys' fees and expenses, arising from, by reason of or
in connection with any untruth, breach or inaccuracy in any material respect of
any representation or warranty on the part of Buyer under Paragraph 5.2 of this
Agreement, or in any certificate or other instrument provided for in this
Agreement. Buyer and Guarantor further covenant and agree to indemnify and save
and hold Seller harmless at all times after the execution of this Agreement in
respect of any and all claims, liabilities, loss, cost, damage and expense,
including reasonable attorneys' fees and expenses arising from any claim by a
third party asserting that Buyer's execution of and performance of this
Agreement is unlawful and/or violates any duty of Guarantor to such third party.
46
<PAGE>
14.3 Notice of Claim. Each indemnified party hereunder agrees that
---------------
promptly upon its discovery of any event, occurrence, fact, circumstance or
other matter which, in its reasonable judgment, gives rise to a claim for
indemnity under the provisions of this Agreement, including receipt by it of
notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (any such third party action being collectively
referred to herein as a "Claim") with respect to any matter as to which it is
entitled to indemnity under the provisions of this Agreement, it will give
prompt notice thereof in writing to the indemnifying party together with a
statement of such information respecting such Claim as it shall then have and
that such Claim is one as to which such party is entitled to indemnification
under this Agreement. The omission of any indemnified party so to notify an
indemnifying party of any such Claim shall not relieve the indemnifying party
from any liability in respect of such Claim which it may have otherwise had to
such indemnified party on account of any damages which are the subject of such
Claim except and only to the extent that the indemnifying party is prejudiced
thereby, and in no event shall the indemnifying party be relieved of any other
liability which it may have to such indemnified party pursuant to this
Agreement. Upon receiving such notice, the indemnifying party, at its election,
shall have the right of defense against such Claim, by counsel of its own
choosing, at the indemnifying party's expense. The indemnified party shall
cooperate fully in all respects with the indemnifying party in any such defense,
including, without limitation, by making available to the indemnifying party all
pertinent information under the control of the indemnified party (including
consultation with, and testimony, advice and assistance of officers, employees
and agents of the indemnified party having knowledge of the matters in dispute).
If the indemnifying party does not notify the indemnified party, within ten (10)
days of the indemnified party's notice to the indemnifying party of a Claim,
that the indemnifying party will defend the same, or should the indemnifying
party fail to file any answer or other pleading before the same is due, the
indemnified party may defend or settle such Claim in such manner as the
indemnified party deems appropriate, in its sole
47
<PAGE>
discretion. If the indemnifying party so notifies the indemnified party
concurrently with the indemnifying party's notice of election to defend, the
indemnifying party may defend, but not settle, a Claim without waiving its
rights to assert that such Claim is not subject to the indemnity agreements in
this Article 14. If the indemnifying party elects to defend a Claim, the
indemnified party may, at the indemnified party's expense, participate in such
matter with counsel of the indemnified party's own choosing.
ARTICLE XV
15 Guarantor
---------
15.1 William Bennett, a majority owner of Buyer, hereby guarantees prompt
and satisfactory performance of this Agreement in accordance with all its terms
and conditions.
ARTICLE XVI
16 Notices
-------
16.1 Any and all notices or demands permitted or required to be given
hereunder shall be in writing and shall be validly given or made when personally
delivered or when actually received as prepaid, certified or registered mail,
return receipt requested, or by commercial courier service, addressed as
follows:
If to Seller, to:
Sahara Gaming Corporation
c/o Paul Lowden
2535 Las Vegas Blvd., South
Las Vegas, Nevada 89109
with copies to:
Vargas & Bartlett
c/o Michael Alonso
P.O. Box 281
Reno, Nevada 89504
48
<PAGE>
If to Buyer, to:
Gordon Gaming Corporation
c/o William G. Bennett
170 W. Desert Inn Road
Las Vegas, Nevada 89234
with copies to:
Moran and Associates
c/o John Moran
630 South 4th Street, Suite 400
Las Vegas, Nevada 89101
and
Nikolas L. Mastrangelo
811 South Sixth Street
Las Vegas, Nevada 89101
Any party hereto may change its address for the purpose of receiving
notices or demands by written notice to the other party hereto given as herein
provided.
ARTICLE XVII
17 Miscellaneous
-------------
17.1 Nevada Law. The laws of the State of Nevada applicable to contracts
----------
made and wholly performed therein shall govern the validity, construction,
performance and effect of this Agreement.
17.2 Assignment; Binding Effect. Buyer may not assign, transfer or convey
--------------------------
any of its rights herein or hereunder to any person or entity whatsoever without
the prior written consent of Seller. Any attempt to assign or transfer this
Agreement without such consent shall, at Seller's option, be considered null and
void and of no force and effect. This Agreement shall inure to the benefit of
and be binding upon the parties hereto, their respective successors and
permitted assigns.
49
<PAGE>
17.3 Time of Essence. Time is of the essence of this Agreement and all of
---------------
the terms, provisions, covenants and conditions hereof.
17.4 Captions. The captions appearing at the commencement of the Articles
--------
and Paragraphs hereof are descriptive only and for convenience in reference to
this Agreement and in no way whatsoever define, limit or describe the scope or
intent of this Agreement.
17.5 Pronouns. Masculine or feminine pronouns shall be substituted for
--------
the neuter form and vice versa in any place or places herein in which the
context requires such substitution or substitutions.
17.6 Knowledge of Party. Any representation or warranty herein contained
------------------
made by or on behalf of a party to the knowledge of such party shall be deemed
to mean and be limited to actual knowledge of an executive officer of such party
of the matter in question, or actual knowledge of such facts as would charge
such executive officer of such party with knowledge of the matter in question.
17.7 Entire Agreement; Amendment; Waiver. This Agreement constitutes the
-----------------------------------
entire agreement between the parties pertaining to the subject matter contained
in it and supersedes all prior agreements, brochures, informational memoranda,
representations and understandings of the parties. No amendment or modification
of this Agreement shall be binding unless executed in writing by the parties.
Except as may be otherwise provided in this Agreement, no waiver of any of the
provisions, whether or not similar, nor shall any waiver constitute a continuing
waiver, and no waiver shall be binding unless evidenced by an instrument in
writing executed by the party against whom the waiver is sought to be enforced.
17.8 No Third Party Beneficiary. This Agreement is for the benefit of,
--------------------------
and may be enforced only by, Seller and Buyer and their respective successors
and permitted assigns, and is not for the benefit of, nor intended to be for the
benefit of, and may not be enforced by, any third party.
50
<PAGE>
17.9 Counterparts. This Agreement may be executed in any number of
------------
counterparts, with each counterpart being deemed to be an original instrument,
but all such counterparts together shall constitute but one agreement.
17.10 Attorney's Fees. If any action is brought by any party hereto
---------------
concerning a breach of any of the provisions of this Agreement, the prevailing
party shall be entitled to recover from the other party the reasonable
attorneys' fees and expenses of the prevailing party incurred in connection
therewith.
17.11 Jurisdiction. Seller and Buyer agree that the State of Nevada shall
------------
have sole and exclusive jurisdiction over any action brought to enforce the
terms of this Agreement.
51
<PAGE>
17.12 No Party Deemed Drafter. The parties agree that neither party shall
-----------------------
be deemed to be the drafter of this Agreement and that in the event this
Agreement is ever construed by a court of law or entity, such court shall not
construe this Agremeent or any provision hereof against either party as the
drafter of the Agreement, Seller and Buyer acknowledging that each has
contributed substantially and materially to the preparation hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
for Purchase and Sale as of the 31st day of May, 1995.
"SELLER"
SAHARA NEVADA CORPORATION
By: /s/ PAUL W. LOWDEN
--------------------------------------
Its: President
"BUYER"
GORDON GAMING CORPORATION
By: /s/ WILLIAM G. BENNETT
--------------------------------------
Its: President
GUARANTOR
/s/ WILLIAM G. BENNETT
-----------------------------------------
WILLIAM G. BENNETT
52
<PAGE>
EXHIBIT 10.112
AGREEMENT FOR
EXCHANGE OF REAL PROPERTY BY AND BETWEEN
SAHARA LAS VEGAS CORP. ("Sahara")
and
GORDON GAMING CORPORATION ("Gordon")
Dated: May 31st , 1995.
----------------------- --
Counsel for Counsel for
"Sahara" "Gordon"
William J. Raggio, Esq. John Moran
John P. Sande, III, Esq. Moran and Associates
Michael G. Alonso, Esq. 630 South 4th Street
Vargas & Bartlett Suite 400
201 W. Liberty St. Las Vegas, Nevada 89101
P. O. Box 281 702/384-8424
Reno, Nevada 89504 and
702/786-5000 Nikolas L. Mastrangelo
811 South Sixth Street
Las Vegas, Nevada 89101
702/384-5770
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
1 Transfer and Exchange................................................ 2
---------------------
1.1 Transfer by Sahara............................................. 2
------------------
1.2 Transfer by Gordon............................................. 3
------------------
2 Additional Encumbrances.............................................. 5
-----------------------
3 Prorations and Allocations........................................... 5
--------------------------
4 Escrow............................................................... 6
------
5 Title and Title Review Period........................................ 6
-----------------------------
(a) Preliminary Report..................................... 7
------------------
(b) Other Matters.......................................... 7
-------------
(c) Taxes.................................................. 7
-----
(d) Leases, Wet'N Wild Mortgage............................ 8
---------------------------
(e) Improvements........................................... 8
------------
6 Conditions Precedent to Close of Escrow.............................. 11
---------------------------------------
6.1 Sahara's Conditions............................................ 11
-------------------
(a) Deliveries............................................. 11
----------
(b) Bondholder Consent..................................... 11
------------------
(c) Wet'N Wild............................................. 11
----------
(d) Title Policy........................................... 11
------------
(e) Default................................................ 11
-------
6.2 Gordon's Conditions............................................ 12
-------------------
(a) Deliveries............................................. 12
----------
(b) Wet'N Wild............................................. 12
----------
(c) Title Policy........................................... 12
------------
(d) Default................................................ 12
-------
(e)......................................................... 12
6.3 Sahara's and Gordon's Conditions............................... 12
--------------------------------
7 Costs................................................................ 13
-----
8 Departmental Violations.............................................. 14
-----------------------
9 Deeds................................................................ 15
-----
10 Sahara's Representations and Warranties.............................. 15
---------------------------------------
10.1 Sahara represents and warrants................................. 15
(a) Due Organization....................................... 15
----------------
(b) Binding Effect......................................... 15
--------------
(c) Notices and Approvals; No Violation of Agreement....... 16
-------------------------------------------------
</TABLE>
i
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
(d) Compliance with Laws................................... 16
--------------------
(e) Litigation............................................. 17
----------
(f) Eminent Domain or Other Proceedings.................... 17
-----------------------------------
(g) Insurance.............................................. 17
---------
(h) Condition.............................................. 17
---------
(i) Hazardous Waste........................................ 18
---------------
11 Gordon's Representations and Warranties.............................. 19
---------------------------------------
11.1 Gordon represents and warrants................................. 19
------------------------------
(a) Due Organization....................................... 19
----------------
(b) Binding Effect......................................... 19
--------------
(c) Notices and Approvals, No Violation of Agreements...... 20
-------------------------------------------------
(d) Compliance with Laws................................... 20
--------------------
(e) Litigation............................................. 21
----------
(f) Eminent Domain or Other Proceedings.................... 21
-----------------------------------
(g) Condition.............................................. 21
---------
(h) Wet'N Wild Sale........................................ 21
---------------
(i) Wet'N Wild Agreement................................... 22
--------------------
Risk of Loss.............................................................. 22
- ------------
13 Material Loss........................................................ 23
-------------
14 Closing.............................................................. 24
-------
15 Default.............................................................. 24
-------
16 Survival of Representations and Warranties........................... 24
------------------------------------------
16.1 Indemnification................................................ 24
---------------
(a) Sahara's Indemnity..................................... 24
------------------
(b) Buyer's Indemnity...................................... 25
-----------------
16.2 Notice of Claim................................................ 25
---------------
17 Miscellaneous........................................................ 27
-------------
17.1 No Merger...................................................... 27
---------
17.2 Assurances..................................................... 27
----------
17.3 Notices........................................................ 28
-------
17.4 Nevada Law..................................................... 29
----------
17.5 Assignment; Binding Effect..................................... 29
--------------------------
17.6 Partial Invalidity............................................. 29
------------------
17.7 Time of Essence................................................ 30
---------------
17.8 Captions....................................................... 30
--------
17.9 Pronouns....................................................... 30
--------
17.10 Knowledge of Party............................................. 30
------------------
17.11 Attorney's Fees................................................ 31
---------------
17.12 Jurisdiction................................................... 31
------------
17.13 No Party Deemed Drafter........................................ 32
-----------------------
</TABLE>
ii
<PAGE>
AGREEMENT FOR EXCHANGE OF REAL PROPERTY
THIS AGREEMENT FOR EXCHANGE OF REAL PROPERTY ("Agreement") is made and
entered into by and among Sahara Las Vegas Corp., a Nevada corporation
("Sahara") and Gordon Gaming Corporation, a Nevada corporation ("Gordon").
W I T N E S S E T H:
-------------------
WHEREAS, Sahara is the owner of certain real property located in Clark
County, Nevada, commonly known as the Sahara Hotel East Parking Lot and
comprising approximately 22.14 acres, more or less (the "Sahara Parcel"); and
WHEREAS, Gordon has entered into a Purchase and Sale Agreement with Howard
Hughes Properties, a Limited Partnership ("HHP") to acquire title from HHP to
that certain real property located in Clark County, Nevada, commonly known as
the Wet'N Wild water park and comprising approximately 26.80 acres, more or less
(the "Wet'N Wild Parcel"), in order to facilitate the transaction contemplated
herein (the Wet'N Wild Agreement). A copy of the Wet'N Wild Agreement is
attached hereto as Exhibit A. The transaction contemplated between HHP and
Gordon shall hereinafter be referred to as the "Wet'N Wild Sale"); and
WHEREAS, the parties hereto intend solely to effect a like exchange of the
Sahara Parcel for the Wet'N Wild Parcel pursuant to Section 1031 of the Internal
Revenue Code of 1986 as amended (the "Code");
WHEREAS, it is the intent of the parties hereto that the consummation of
the transactions contemplated by this Agreement and the Wet'N Wild Sale shall
result in Sahara holding title to the Wet'N Wild Parcel and Gordon holding title
to the Sahara Parcel.
NOW, THEREFORE, in consideration of the premises and of the mutual
covenants herein contained, and upon and subject to the terms and conditions
hereinafter set forth, Sahara and Gordon agree as follows:
1
<PAGE>
1 Transfer and Exchange. Sahara hereby agrees to transfer and convey the
---------------------
Sahara Parcel as more particularly described herein to Gordon and Gordon hereby
agrees to transfer and convey or cause HHP to transfer and convey the Wet'N Wild
Parcel as more particularly described herein to Sahara and both parties agree
that the transfer and conveyance of the two parcels shall qualify as a "like
kind exchange" pursuant to Section 1031 of the Code and the treasury regulations
promulgated thereunder. With respect to the exchange of to the two parcels,
each of the parties hereto shall be referred as a "transferor" or "transferee"
as the context requires.
1.1 Transfer by Sahara.
------------------
(a) Sahara agrees to transfer and convey to Gordon, at a
valuation, for the purpose of this Agreement, of Twenty-One Million Five Hundred
Four Thousand Four Hundred Dollars ($21,504,400):
(b) All that certain plot, piece, or parcel of land, with the
improvements thereon, situated generally on the Southeast corner of the
intersection of Sahara Avenue and Paradise Road which is commonly known as the
Sahara Hotel East Parking Lot, the Sahara Parcel, comprising approximately 22.14
acres, more or less, which is more particularly described on Exhibit B attached
hereto.
(c) Such premises are to be conveyed subject to or contingent upon
the following:
(i) A leasehold estate of record created by a lease between
Sahara as Lessor, and Sahara Nevada Corp., a Nevada corporation, successor in
merger to Sahara Operating Limited Partnership ("Lessee"), dated July 30,
1987 (the "Leasehold"). A copy of the lease documents are attached hereto as
Exhibit C.
(ii) An Airspace lease for the pedestrian walkway connecting
the Sahara parcel and the Sahara Hotel parcel by and between the State of Nevada
("Lessor") and Sahara Nevada ("Lessee"), dated August 11, 1982, and assigned to
Sahara Operating Limited Partnership
2
<PAGE>
(the "Airspace Lease"); and a collateral Assignment of Airspace Lease and
Consent by and between Sahara Operating Limited Partnership ("Assignor") and
Sahara Finance Corporation, a Nevada corporation ("Assignee") dated August 17,
1989. A copy of the Airspace lease, amendments and collateral documents are
attached hereto as Exhibit D and are incorporated herein by reference.
1.2 Transfer by Gordon.
------------------
(a) Gordon agrees to transfer and convey or cause HHP to transfer
and convey to Sahara, at a valuation, for the purpose of the Agreement, of
Twenty-One Million Five Hundred Four Thousand Four Hundred Dollars
($21,504,400)(no portion of which is being ascribed to any personal property):
(b) All that certain plot, piece, or parcel of land with the
buildings and improvements thereon, situated generally South of Sahara Avenue
with frontage on Las Vegas Boulevard South and Paradise Road which is commonly
known as the Wet'N Wild water park, the "Wet'N Wild Parcel", comprising
approximately 26.80 acres, more or less, which is more particularly described on
Exhibit E attached hereto.
(c) Such premises are to be conveyed subject to or contingent upon
the following:
(i) A security interest recorded on such premises which is a
lien against the improvements, machinery, fixtures, furniture and equipment
located on the Wet'N Wild Parcel in favor of Hughes Entertainment, Ltd., a
Nevada limited partnership, as security for that certain secured promissory note
with a current outstanding balance of Six Million Five Hundred Sixty-Three
Thousand Forty-Eight Dollars $6,563,048 (the "Wet'N Wild Mortgage"). A copy of
the Secured Promissory Note, Security Agreement, the Exhibits thereto, and Rider
No. 1 to the Security Agreement are attached hereto as Exhibit F.
3
<PAGE>
(ii) A ground lease of the entire Wet'N Wild Parcel by and
between Howard Hughes Properties, L.P. ("Landlord") and Wet'N Wild, Inc.
("Tenant") for a term ending December 31, 2004, or no sooner than December 31,
1996, pursuant to termination provisions that include a termination fee payable
to Tenant by the landlord and based upon the amortized value of Tenant's capital
expenditures as set forth in the lease (the "Wet'N Wild Lease"). The current
termination fee is in the approximate amount of $478,296. A copy of the lease is
attached hereto as Exhibit G.
2 Additional Encumbrances.
-----------------------
2.1 The premises of each party shall be transferred and conveyed subject
to:
(a) All applicable laws, zoning regulations and ordinances of the
City of Las Vegas, and Clark County.
(b) Encroachments upon street and highway.
3 Prorations and Allocations.
--------------------------
3.1 Credits and payments shall be prorated as of the Close of Escrow
(except as otherwise indicated), including, but not limited to:
(a) Non-delinquent real and personal property taxes and
assessments (and including any supplemental assessments);
(b) Utilities, if any, shall be prorated as of the Close of
Escrow (or as soon as practicable thereafter). The transferee of each parcel
shall make appropriate arrangement for the transfer of any and all necessary
utility and other services in its own name to be effective as of the Close of
Escrow (or as soon as practicable thereafter);
(c) Rents or periodic payments on any leases; and
(d) Security deposits on any leases.
4 Escrow.
------
4
<PAGE>
4.1 By this Agreement, Sahara and Gordon shall establish an escrow
("Escrow") with Stewart Title Company ("Title Company") subject to the
provisions of the standard conditions for acceptance of escrow but only to the
extent that the standard conditions impose no additional obligation or
liabilities on the parties, and further subject to the terms and conditions in
this Agreement, the latter to control in the case of conflict, with a signed
counterpart of this document to be delivered as escrow instructions, and any
additional escrow instructions, to the Title Company.
5 Title and Title Review Period.
-----------------------------
5.1 Within ten (10) days of the execution of this Agreement by both
parties, the respective transferor of each parcel shall cause Title Company to
issue to the transferee (with a copy to the respective transferor) a preliminary
report for an ALTA Owner's Policy ("Title Policy") for the property, setting
forth all liens, encumbrances, easements, restrictions, conditions, pending
litigation, judgments, administrative proceedings, and other matters affecting
the transferor's title to the property ("Preliminary Report"), together with
copies of all documents relating to title exceptions referred to in the
Preliminary Report.
5.2 Immediately following the full execution of the Agreement by the
parties, the respective transferor of each parcel shall cause a survey of the
property to be prepared by a registered surveyor ("ALTA Survey") and shall
deliver the ALTA Survey to the other party within thirty (30) days of the
execution of this Agreement. The respective transferor agrees to deliver to the
respective transferee, as soon as practicable, copies of any survey of the
property in their possession.
5.3 The respective transferor shall convey to respective transferee fee
simple title to the property subject only to the exceptions set forth below and
as set forth in Sections 1.1(c) and 1.2(c) (the "Permitted Exceptions"),:
5
<PAGE>
(a) Preliminary Report. The exceptions set forth in each
------------------
respective Preliminary Report. The Preliminary Reports shall be approved or
deemed approved by the respective transferee as provided in Sections 5.4 through
5.7 below.
(b) Other Matters. All other covenants, conditions,
-------------
restrictions, reservations, rights, rights-of-way, easements, dedications,
offers of dedication and other matters of record or apparent from a visual
inspection of the properties, and those matters set forth in Section 2.
(c) Taxes. A lien to secure payment of general and special
-----
real property taxes and assessments not delinquent, and any supplemental tax
liens imposed as a result of this transaction.
(d) Leases, Wet'N Wild Mortgage. Gordon shall take title to
---------------------------
the Sahara Parcel subject to the Leasehold and Airspace Lease, and Sahara shall
take title to the Wet'N Wild Parcel subject to the Wet'N Wild Mortgage and Wet'N
Wild Lease, and all other encumbrances and obligations arising out of the Wet'N
Wild Agreement.
(e) Improvements. Any and all improvements located on the
------------
properties.
5.4 The respective transferee shall have until that date which is five
(5) days after the later of the date of delivery of the Preliminary Report and
the ALTA Survey (the "Title Review Period") to approve the Preliminary Report
and the ALTA Survey together with the underlying documents relating to the
exceptions set forth in the Preliminary Report. The respective transferee shall
have until the expiration of the Title Review Period to give transferor and
Title Company written notice ("Title Notice") of the respective transferee's
disapproval or conditional approval of any matters shown in the Preliminary
Report or the ALTA Survey, provided, however, that either party shall have no
right to disapprove any matters relating to (I) the existence of improvements or
the ongoing construction, if any, of improvements on either Parcel; (ii) minor
encroachments; (iii) immaterial discrepancies relating to the legal descriptions
contained in Exhibits B and E; (iv) any existing utility easements, power poles,
lines, improvements or equipment
6
<PAGE>
upon the Parcels used for the transmission, delivery or supply of utilities to
or from the Parcels; (v) liens of Special Improvements Districts; or (vi) any
matters which do not materially impact each transferee's intended use of the
Parcels. The failure of either transferee to give Title Notice on or before the
end of the Title Review Period shall be deemed to constitute the respective
transferee's approval of the condition of the Preliminary Report and the ALTA
Survey.
5.5 If a respective transferee disapproves or conditionally approves any
matter of title shown in the Preliminary Report on the ALTA Survey, then the
respective transferor may, but shall have no obligation to, within five (5) days
after its receipt of the Title Notice ("Election Period"), elect to eliminate or
ameliorate or cause to eliminate or ameliorate to the respective transferee's
reasonable satisfaction the disapproved or conditionally approved title matters
by giving the respective transferee written notice of those disapproved or
conditionally approved title matters, if any, which the transferor agrees to so
eliminate or ameliorate or cause to eliminate or ameliorate by the Close of
Escrow, provided, that, the transferor shall have no obligation to pay any
consideration or incur any liability in order to eliminate or ameliorate such
disapproved title matters.
5.6 If the respective transferor does not elect to eliminate or ameliorate
or cause to eliminate or ameliorate any disapproved or conditionally approved
title matters, then the respective transferee shall have the right, upon
delivery to the transferor and Title Company, on before five (5) days following
the expiration of the respective Election Period, of written notice to waive its
prior disapproval or conditional approval in which event said disapproved or
conditionally approved matter shall be deemed "approved". If the respective
transferee fails to waive its prior disapproval or conditional approval, this
Agreement shall automatically terminate.
5.7 If, in response to a respective transferee's Title Notice, the
transferor has agreed to either eliminate or ameliorate or cause to eliminate or
ameliorate to the transferee's satisfaction by the Close of Escrow certain
disapproved or conditionally approved title matters described in the
7
<PAGE>
transferee's Title Notice, but the transferor is unable to do so and gives
written notice to transferee and the Title Company to that effect, then the
transferee shall have the right (which shall be that transferee's sole and
exclusive right or remedy for such failure) upon delivery to the transferor and
Title Company (within five (5) days of receipt of the transferor's written
notice, but in any event no later than one (1) business day prior to the
scheduled Closing Date) of written notice to either (I) waive its prior
disapproval, in which event said disapproved matter shall be deemed approved, or
(ii) terminate this Agreement and the Escrow created pursuant hereto. In the
event transferee fails to take either one of the actions described in (I) and
(ii) in the preceding sentence on or before said date transferee shall be deemed
to have waived its prior disapproval or conditional approval and said
disapproved or conditionally approved matter shall be deemed approved. In the
event this Agreement is terminated by either transferee pursuant to the
provisions of this Section 5.7, neither party shall have any further rights or
obligations hereunder.
5.8 At the Close of Escrow and as a condition to each transferee's
obligations at the Close of Escrow, Title Company shall issue to each transferee
subject to the Permitted Exceptions an ALTA Owner's Policy of title insurance of
the Title Company as to the respective property.
6 Conditions Precedent to Close of Escrow.
---------------------------------------
6.1 Sahara's Conditions. Each of the following shall constitute a
--------------------
condition precedent to the obligations of Sahara to close the Escrow and may be
waived only by a written waiver executed by Sahara and delivered to Title
Company:
(a) Deliveries. Gordon shall have deposited or caused be
----------
deposited with Title Company the Grant, Bargain and Sale Deed and with all other
necessary and proper instruments prior to the date set for Close of Escrow.
(b) Bondholder Consent. Sahara shall have received consent of
------------------
holders of those certain Pioneer Bonds to transfer and convey the Sahara Parcel.
8
<PAGE>
(c) Wet'N Wild Sale. The Wet'N Wild Sale shall close
---------------
simultaneously with the Close of Escrow herein.
(d) Title Policy. Title Company has issued the Title Policy on
------------
the Wet'N Wild Parcel to Sahara.
(e) Default. Gordon shall not have failed to satisfy the
-------
covenants and conditions contained in this Agreement.
6.2 Gordon's Conditions. Each of the following shall constitute a
--------------------
condition precedent to the obligations of Gordon to close the Escrow and may be
waived only by a written waiver executed by Gordon and delivered to Title
Company:
(a) Deliveries. Sahara shall have deposited with Title
----------
Company the Grant, Bargain and Sale Deed and with all other necessary and proper
instruments prior to the date set for Close of Escrow.
(b) Wet'N Wild Sale. The Wet'N Wild Sale shall close
---------------
simultaneously with the Close of Escrow herein.
(c) Title Policy. Title Company has issued the Title Policy on
------------
the Sahara Parcel.
(d) Default. Sahara shall not have failed to satisfy the
-------
covenants and conditions contained in this Agreement.
(e) Consent by HHP. HHP shall have consented to Sahara's
--------------
guarantee of the Wet'N Wild Mortgage and assumption of the Wet'N Wild Lease, and
any other encumbrances or obligations arising out of the Wet'N Wild Agreement.
6.3 Sahara's and Gordon's Conditions. Sahara and Gordon each acknowledge
---------------------------------
that the Wet'N Wild Sale must close escrow on or before October 31, 1995, and
that the intent of the parties hereto is that the transactions contemplated in
the Wet'N Wild Sale and this Agreement be closed simultaneously and on or before
October 31, 1995, but not before October 1, 1995.
9
<PAGE>
6.4 Hart-Scot-Rodino Filing. If the transaction contemplated herein is
-----------------------
determined to be subject to the notification requirements of (S)7 of the Clayton
Act, 15 U.S.C. (S)18A and the regulations promulgated thereunder as set forth in
Chapter 16 CFR (S)(S)801 and 803, as amended ("Hart-Scott Act"), Gordon and
Sahara will file their respective reports required of them under the Hart-Scot
Act, and the regulations thereunder as soon as possible (and in no event later
than forty-five (45) days from execution of this Agreement. The Parties agree
to use their best efforts to cooperate with each other and to satisfy any
requests for additional information or other requirements imposed by the Federal
Trade Commission or the Department of Justice in connection with the
transactions contemplated by this Agreement and to request early termination of
any waiting period imposed by the Hart-Scot Act and the regulations thereunder.
7 Costs.
-----
7.1 Costs and expenses relating to the transactions contemplated by this
Agreement shall be borne and paid as follows:
(a) All fees for recording any grant, bargain and sale deeds and
assignments of the properties to be exchanged and conveyed and assigned pursuant
hereto shall be borne and paid by Sahara. Fees for the ALTA Surveys prepared for
the Sahara Parcel and the Wet'N Wild Parcel shall be borne by Sahara. Fees for
the Title Policy shall be paid by the respective transferor provided, however,
that the respective transferee shall pay that portion of the premium expense for
such Title Policy which is attributable to any special endorsements requested by
that transferee. The respective transferor shall pay that portion of the premium
expense for such Title Policy which is attributable to any special endorsements
requested by that respective transferor.
7.2 Any fees and expenses of the Title Company shall be paid by Sahara.
Except as otherwise specifically provided in this Agreement, Sahara and Gordon
shall bear their own costs and expenses arising out of the negotiation,
execution, delivery and performance of this Agreement,
10
<PAGE>
and the consummation of the transactions contemplated herein, including without
limitation, legal and accounting fees and expenses.
7.3 Following Closing, each respective transferee's sole recourse in the
event of any claim or impediment to title to the real property shall be under
and pursuant to the Title Policy unless said claim or impediment to title arises
from the intentional or willful acts, actions, or conduct of the respective
transferor.
8 Departmental Violations.
-----------------------
8.1 The respective transferors shall comply or cause to be complied with
all notes or notices of violations of applicable municipal or other laws,
including zoning ordinances, and the like, against or affecting the premises as
of the date hereof, and the premises shall be exchanged and conveyed free of
such violations. This provision shall survive delivery of the deeds. Each party
shall furnish the other with an authorization to make the necessary searches for
such violations.
9 Deeds.
-----
9.1 Each deed shall be the usual Grant, Bargain and Sale deed in proper
form for record and shall be duly executed and acknowledged so as to convey to
the grantee the fee simple of the premises conveyed, free of all encumbrances,
except as herein stated. Each party shall give or cause to be given and the
other party accept any such title that the Title Company approves and insures.
10 Sahara's Representations and Warranties.
---------------------------------------
10.1 Sahara represents and warrants to Gordon that:
(a) Due Organization. Sahara is a corporation duly organized,
----------------
validly existing, in good standing and duly qualified to do business under the
laws of the State of Nevada, and upon receiving the approval of this Agreement
by its Board of Directors, shall have all requisite corporate power and
authority to enter into, perform and carry out all of its duties and obligations
in the transactions contemplated by this Agreement;
11
<PAGE>
(b) Binding Effect. This Agreement, subject to the approval of
--------------
Sahara's Board of Directors, and the other documents to be delivered on the part
of Sahara pursuant hereto are (or will be when executed and delivered pursuant
hereto) legal, valid and binding obligations of Sahara enforceable against
Sahara in accordance with their terms;
(c) Notices and Approvals; No Violation of Agreement. Except
------------------------------------------------
for the approval of this Agreement by Sahara's Board of Directors and the
holders of certain indebtedness of affiliates of Sahara, no notice to, or
approval or consent of, any court or governmental authority or other person or
entity is required in connection with the execution, delivery and performance of
this Agreement by Sahara and neither the execution and delivery of this
Agreement, nor consummation of the transactions contemplated thereunder, nor
compliance by Sahara with any of the provisions thereof, will (I) conflict with
any provision of Sahara's certificate of incorporation or bylaws, or (ii)
violate, conflict with, result in a breach of or constitute a default under or
pursuant to any statute, agreement, judicial or administrative order,
injunction, award, judgment or decree to which Sahara is a party or by which
Sahara is bound, which violation, conflict, breach or default in the case of (I)
or (ii) above would have a material adverse effect on the Sahara Parcel.
(d) Compliance with Laws. To Sahara's knowledge, Sahara is in
--------------------
compliance with the requirements of all laws, rules, regulations, licenses,
permits, orders, judgments and decrees of federal, state or local judicial or
governmental authorities ("Regulations") that are applicable to ownership or
operation of the Sahara Parcel where any such noncompliance would have a
materially adverse affect on the Property.
(e) Litigation. On the date hereof, Sahara is not a party to
----------
any legal or governmental actions, claims, suits, administrative or other
proceedings or investigations before or by any governmental department,
commission, board, regulatory authority, bureau or agency, whether foreign,
federal, state or municipal, or any court, arbitrator or grand jury which would
12
<PAGE>
prevent or materially interfere with the consummation of the transactions
contemplated by this Agreement or which, individually or in the aggregate, if
resolved against Sahara would impair or interfere in any material respect with
the ownership of the Sahara Parcel by Gordon.
(f) Eminent Domain or Other Proceedings. Sahara has received
-----------------------------------
no written or oral notice of any initiated or pending condemnation or eminent
domain proceedings, or contemplated sales in lieu thereof, involving a partial
or total taking of any of the Sahara Parcel, nor has Sahara received written or
oral notice of any zoning proceedings affecting the Sahara Parcel.
(g) Insurance. Sahara shall provide Gordon with a correct and
---------
complete list of all policies of fire and liability coverage and other forms of
insurance and maintained by Sahara on the date of execution of this Agreement
relating to ownership of the Sahara Parcel.
(h) Condition. On the date hereof, Sahara has no knowledge of
---------
any condition which would have a material adverse effect on the Sahara Parcel.
(i) Hazardous Waste. With the exception of the environmental
---------------
review and reports performed on the Sahara Parcel in connection with the
issuance of indebtedness to Sahara's affiliates in 1989, to the best of the
Sahara's knowledge, there is no contamination, hazardous waste or toxic
substance in existence on or below the surface of the Sahara Parcel, including,
without limitation, asbestos in or on the real property, PCB's in any
transformer or other equipment located in or on the real property, contamination
of the soil, sub-soil or ground water or any use or storage of hazardous waste
material on the real property, which constitutes a violation of any law, rule or
regulation or standard of any governmental entity having jurisdiction thereof.
If Gordon determines a violation or potential violation exists, Gordon shall
notify Sahara of the violations or potential violations and may elect to
terminate this Agreement, unless Sahara is able to remedy or remove the cause
for such violation or potential violation prior to Closing and confirms its
intention to do so in writing. If Gordon does not terminate this Agreement
Sahara shall promptly and thoroughly perform any and all remedial work
prescribed by a consultant
13
<PAGE>
mutually agreed upon by the Parties (the "Consultant") to bring the property
into compliance with any and all applicable law, rule, regulation, or standard
of any governmental entity ("Remedial Work"). Upon receipt by Sahara of a report
from the Consultant specifying the necessary Remedial Work to be completed
("Consultant's Report") Sahara shall begin to complete the Remedial Work to
Gordon's reasonable satisfaction prior to the Closing date. Notwithstanding the
foregoing, if the cost of completing the Remedial Work, as reasonably estimated
by the Consultant, exceeds One Hundred Thousand Dollars ($100,000), Sahara may
elect not to perform the Remedial Work by delivering written notice to Gordon
within fifteen days after receipt of the Consultant's Report. Upon receipt of
Sahara's notice, Gordon shall have the right to elect, within fifteen days
thereof to: (I) terminate this Agreement; or (ii) cause the exchange of the
property to be completed pursuant to this Agreement without Sahara performing
the Remedial Work but with a reduction of the valuation of the Sahara Parcel in
the amount of the reasonable costs and expenses to perform the Remedial Work.
11 Gordon's Representations and Warranties.
---------------------------------------
11.1 Gordon represents and warrants to Sahara that:
(a) Due Organization. Gordon is a corporation duly organized,
----------------
validly existing, in good standing and duly qualified to do business under the
laws of the State of Nevada, which has all requisite corporate power and
authority to enter into, perform and carry out all of its duties and obligations
in the transactions contemplated by this Agreement;
(b) Binding Effect. This Agreement and the other documents to
--------------
be delivered on the part of Gordon pursuant hereto are (or will be when executed
and delivered pursuant hereto) legal, valid and binding obligations of Gordon
enforceable in accordance with their terms;
(c) Notices and Approvals, No Violation of Agreements. No
-------------------------------------------------
notice to, or approval or consent of, any court or governmental authority or
other person or entity is required in connection with the execution, delivery
and performance of this Agreement by Gordon and
14
<PAGE>
neither the execution and delivery of this Agreement, nor consummation of the
transactions contemplated thereunder, nor compliance by Gordon with any of the
provisions thereof, will (I) conflict with any provision of Gordon's certificate
of incorporation or bylaws, or (ii) violate, conflict with, result in a breach
of or constitute a default under or pursuant to any statute, agreement, judicial
or administrative order, injunction, award, judgment or decree to which Gordon
is a party or by which Gordon is bound, which violation, conflict, breach or
default in the case of (I) or (ii) above would have a material adverse effect on
the Wet'N Wild Parcel or the Wet'N Wild Sale.
(d) Compliance with Laws. To Gordon's knowledge, Gordon is in
--------------------
compliance with the requirements of all laws, rules, regulations, licenses,
permits, orders, judgments and decrees of federal, state or local judicial or
governmental authorities ("Regulations") that are applicable to ownership or
operation of the Wet'N Wild Parcel where any such noncompliance would have a
materially adverse affect on the property.
(e) Litigation. On the date hereof, Gordon is not a party to
----------
any legal or governmental actions, claims, suits, administrative or other
proceedings or investigations before or by any governmental department,
commission, board, regulatory authority, bureau or agency, whether foreign,
federal, state or municipal, or any court, arbitrator or grand jury which would
prevent or materially interfere with the consummation of the transactions
contemplated by this Agreement or which, individually or in the aggregate, if
resolved against Gordon would impair or interfere in any material respect with
the ownership of the Wet'N Wild Parcel by Sahara.
(f) Eminent Domain or Other Proceedings. Gordon has not
-----------------------------------
received and is not aware of any written or oral notice of any initiated or
pending condemnation or eminent domain proceedings, or contemplated sales in
lieu thereof, involving a partial or total taking of any of the Wet'N Wild
Parcel, nor has Gordon received written or oral notice of any zoning proceedings
affecting the Wet'N Wild Parcel.
15
<PAGE>
(g) Condition. On the date hereof, Gordon has no knowledge of
---------
any condition which would have a material adverse effect on the Wet'N Wild
Parcel.
(h) Wet'N Wild Sale. To the best of Gordon's knowledge,
---------------
nothing would prevent its acquisition of the Wet'N Wild Parcel.
(i) Wet'N Wild Agreement. Gordon agrees to give Sahara written
--------------------
notice of matters arising out of the Wet'N Wild Agreement, the escrow opened
therewith and the Wet'N Wild Parcel which include, but are not limited to
matters of title, zoning, survey, hazardous materials, leases, destruction or
condemnation of the Wet'N Wild Parcel, close of escrow, defaults and termination
of the Wet'N Wild Agreement ("Wet'N Wild Matters"), prior to Gordon making a
decision with respect to the Wet'N Wild Matters. Gordon and Sahara shall
cooperate with respect to the decisions made on the Wet'N Wild Matters.
12 Risk of Loss.
------------
12.1 In the event of material destruction or damage of any improvements
located on the real property or the condemnation of a material portion of the
real property prior to Closing ("Damaged Parcel"), the owner of the Damaged
Parcel or Gordon if the Wet'N Wild Parcel is the Damaged Parcel ("Damaged Parcel
Owner"), shall, at its election in its sole discretion, either (I) upon
providing the other party with a description thereof, repair such damage and
destruction at the Damaged Parcel Owner's expense prior to Closing or (ii)
promptly notify the other party of the damage or destruction and the Damaged
Parcel Owner's inability or decision not to repair it. Within ten (10) days
after receipt by a party of the Damaged Parcel Owner's notification of its
inability or decision not to repair, the other party shall have the right to
notify the Damaged Parcel Owner of that party's election to terminate this
Agreement or that party's election to offset and reduce the valuation of the
Damaged Parcel. If any destruction, damage or condemnation of any improvement
on the real property is not material, or if such destruction, damage or
condemnation is material and unrepaired by the Damaged Parcel Owner prior to
Closing but the other party does
16
<PAGE>
not elect to terminate this Agreement as hereinabove provided, the other party
shall be entitled to a credit against the valuation of the Damaged Parcel of an
amount equal to the cost to replace or repair the property by reason of such
damage, destruction, or condemnation (to the extent such funds have not been
expended on, or committed to, the repair or restoration of such damaged,
destroyed or condemned property). The transfer and exchange of the parcels shall
otherwise be consummated as though such destruction, damage or condemnation
(except for necessary changes in matters relative to title set forth in the
Title Policy and Deed resulting from any condemnation) had not occurred.
13 Material Loss.
-------------
13.1 For the purposes of this Section, "material destruction or damage"
shall be deemed to have occurred if the damage will result in an uninsured loss
in excess of One Hundred Thousand Dollars ($100,000.00) for which the Damaged
Property Owner is unwilling to assume responsibility. In the case of
condemnation, for purposes of this Section, the affected real property shall be
deemed to be a "material portion of the real property" if such condemnation may
be reasonably expected to interfere with the operation of any business as
presently being conducted on the real property or the ability of the respective
transferee to further develop a portion of the Real Property for hotel/casino
purposes.
14 Closing.
-------
14.1 Provided that all of the conditions precedent to Close of Escrow have
been either satisfied or waived, the parties agree that unless extended by the
parties to this Agreement, the closing ("Close of Escrow") shall be held at the
offices of Title Company, simultaneously with the close of escrow of the Wet'N
Wild Sale (the actual date of Close of Escrow being herein referred to as the
"Closing Date"), on a date after October 1, 1995 but not later than October 31,
1995. Possession of the property shall be delivered to each respective
transferee at Close of Escrow.
15 Default.
-------
17
<PAGE>
15.1 If either party is unable to convey title in accordance with the
terms of this Agreement, their sole liability shall be to pay the net cost of
surveying and examining such title as set forth in this Agreement. As soon as
the payments are made this Agreement shall be considered canceled.
16 Survival of Representations and Warranties.
------------------------------------------
16.1 Indemnification.
----------------
(a) Sahara's Indemnity. Sahara covenants and agrees to
------------------
indemnify and save and hold Gordon harmless at all times after the Close of
Escrow in respect of any and all claims, liabilities, loss, cost, damage and
expense, including reasonable attorneys' fees and expenses, arising from, by
reason of or in connection with any untruth, breach or inaccuracy in any
material respect of any representation or warranty on the part of Sahara under
this Agreement, or in any certificate or other instrument provided for in this
Agreement.
(b) Gordon's Indemnity. Gordon covenants and agrees to
------------------
indemnify and save and hold Sahara harmless at all times after the Close of
Escrow in respect of any and all claims, liabilities, loss, cost, damage and
expense, including reasonable attorneys' fees and expenses, arising from, by
reason of or in connection with any untruth, breach or inaccuracy in any
material respect of any representation or warranty on the part of Gordon under
this Agreement, or in any certificate or other instrument provided for in this
Agreement.
16.2 Notice of Claim. Each indemnified party hereunder agrees that
---------------
promptly upon its discovery of any event, occurrence, fact, circumstance or
other matter which, in its reasonable judgment, gives rise to a claim for
indemnity under the provisions of this Agreement, including receipt by it of
notice of any demand, assertion, claim, action or proceeding, judicial or
otherwise, by any third party (any such third party action being collectively
referred to herein as a "Claim") with respect to any matter as to which it is
entitled to indemnity under the provisions of this Agreement, it will give
prompt notice thereof in writing to the indemnifying party together with a
18
<PAGE>
statement of such information respecting such Claim as it shall then have and
that such Claim is one as to which such party is entitled to indemnification
under this Agreement. The omission of any indemnified party so to notify an
indemnifying party of any such Claim shall not relieve the indemnifying party
from any liability in respect of such Claim which it may have otherwise had to
such indemnified party on account of any damages which are the subject of such
Claim except and only to the extent that the indemnifying party is prejudiced
thereby, and in no event shall the indemnifying party be relieved of any other
liability which it may have to such indemnified party pursuant to this
Agreement. Upon receiving such notice, the indemnifying party, at its written
election, shall have the right of defense against such Claim, by counsel of its
own choosing, at the indemnifying party's expense. The indemnified party shall
cooperate fully in all respects with the indemnifying party in any such defense,
including, without limitation, by making available to the indemnifying party all
pertinent information under the control of the indemnified party (including
consultation with, and testimony, advice and assistance of officers, employees
and agents of the indemnified party having knowledge of the matters in dispute).
If the indemnifying party does not notify the indemnified party, within ten (10)
days of the indemnified party's notice to the indemnifying party of a Claim,
that the indemnifying party will defend the same, or should the indemnifying
party fail to file any answer or other pleading before the same is due, the
indemnified party may defend or settle such Claim in such manner as the
indemnified party deems appropriate, in its sole discretion. If the indemnifying
party so notifies the indemnified party concurrently with the indemnifying
party's notice of election to defend, the indemnifying party may defend, but not
settle, a Claim without waiving its rights to assert that such Claim is not
subject to the indemnity agreements in this Agreement. If the indemnifying party
elects to defend a Claim, the indemnified party may, at the indemnified party's
expense, participate in such matter with counsel of the indemnified party's own
choosing.
17 Miscellaneous.
-------------
19
<PAGE>
17.1 No Merger. None of the covenants and agreements of the parties, as
---------
the case may be, contained in this Agreement shall merge with any deed or
conveyance, and such covenants and agreements shall survive the Closing and
shall continue in full force and effect until such time, if any, as provided in
such covenant or agreement or otherwise limited by law.
17.2 Assurances. Each party shall, at the request of the other, at any
----------
time and from time to time following the Closing, execute and deliver to the
requesting party all such further instruments as may be reasonably necessary or
appropriate in order more effectively to (a) assign, transfer and convey to the
respective transferee, or to perfect or record the respective transferee's title
to or interest in the property, (b) evidence and confirm the assumption by the
respective transferee of the liabilities of the respective transferor to be
assumed by the respective transferee pursuant to this Agreement, or (c) confirm
or carry out the provisions of this Agreement.
17.3 Notices. Any and all notices or demands permitted or required to be
--------
given hereunder shall be in writing and shall be validly given or made when
personally delivered or when actually received as prepaid, certified or
registered mail, return receipt requested, or by commercial courier service,
addressed as follows:
If to Sahara, to:
Sahara Las Vegas Corporation
c/o Paul Lowden
2535 Las Vegas Blvd., South
Las Vegas, Nevada 89105
with copies to:
Vargas & Bartlett
c/o Michael G. Alonso, Esq.
P. O. Box 281
Reno, Nevada 89504
If to Gordon, to:
Gordon Gaming Corporation
c/o William G. Bennett
6170 W. Desert Inn Road
Las Vegas, Nevada 89234
20
<PAGE>
with copies to:
Moran and Associates
c/o John Moran, Esq.
630 South 4th St., Ste. 400
Las Vegas, Nevada 89101
and
Nikolas L. Mastrangelo
811 South Sixth Street
Las Vegas, Nevada 89101
Any party hereto may change its address for the purpose of receiving
notices or demands by written notice to the other party hereto given as herein
provided.
17.4 Nevada Law. The laws of the State of Nevada applicable to contracts
-----------
made and wholly performed therein shall govern the validity, construction,
performance and effect of this Agreement.
17.5 Assignment; Binding Effect. Neither party may assign, transfer or
---------------------------
convey any of its rights herein or hereunder to any person or entity whatsoever
without the prior written consent of the other party. Any attempt to assign or
transfer this Agreement without such consent shall, at the non-assigning party's
option, be considered null and void and of no force and effect. Notwithstanding
the foregoing, either party shall have the right to assign its rights and
interests hereunder, without obtaining the other party's consent, to any entity
which is wholly or majority owned by that party. This Agreement shall inure to
the benefit of and be binding upon the parties hereto, their respective
successors and permitted assigns.
17.6 Partial Invalidity. If any term, provision, covenant or condition of
-------------------
this Agreement, or any application thereof, should be held by a court of
competent jurisdiction to be invalid, void or unenforceable, all provisions,
covenants and conditions of this Agreement, and all applications thereof, not
held invalid, void or unenforceable, shall continue in full force and effect and
shall in no way be affected, impaired or invalidated.
21
<PAGE>
17.7 Time of Essence. Time is of the essence of this Agreement and all of
----------------
the terms, provisions, covenants and conditions hereof.
17.8 Captions. The captions appearing at the commencement of the Articles
---------
and Sections hereof are descriptive only and for convenience in reference to
this Agreement and in no way whatsoever define, limit or describe the scope or
intent of this Agreement.
17.9 Pronouns. Masculine or feminine pronouns shall be substituted for
--------
the neuter form and vice versa in any place or places herein in which the
context requires such substitution or substitutions.
17.10 Knowledge of Party. Any representation or warranty herein contained
-------------------
made by or on behalf of a party to the knowledge of such party shall be deemed
to mean and be limited to actual knowledge of an executive officer of such party
of the matter in question, or actual knowledge of such facts as would charge
such executive officer of such party with knowledge of the matter in question.
17.11 Attorney's Fees. If any action is brought by any party hereto
----------------
concerning a breach of any of the provisions of this Agreement, the prevailing
party shall be entitled to recover from the other party the reasonable
attorneys' fees and expenses of the prevailing party incurred in connection
therewith.
17.12 Jurisdiction. Sahara and Gordon agree that the State of Nevada
------------
shall have sole and exclusive jurisdiction over any action brought to enforce
the terms of this Agreement.
22
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17.13 No Party Deemed Drafter. The parties agree that neither party
-----------------------
shall be deemed to be the drafter of this Agreement and that in the event this
Agreement is ever construed by a court of law or entity, such court shall not
construe this Agreement or any provision hereof against either party as the
drafter of the Agreement, Sahara and Gordon acknowledging that each has
contributed substantially and materially to the preparation hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement for
Exchange of Real Property as of the 31st day of May , 1995.
--------- --------
"SAHARA"
SAHARA LAS VEGAS CORP.,
By: /s/ PAUL W. LOWDEN
-----------------------------
Paul W. Lowden
Its: President
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"GORDON"
GORDON GAMING CORPORATION
By: /s/ WILLIAM G. BENNETT
-----------------------------
William G. Bennett
Its: President
---------------------------
23
<PAGE>
EXHIBIT 99.1
FOR IMMEDIATE RELEASE: Wednesday, May 31, 1995
CONTACT: Thomas K. Land Richard Bernot
Chief Financial Officer or Madeleine Franco
Sahara Gaming Corporation Jordan Richard Assoc.
702-727-2750 801-595-8611
SAHARA GAMING CORPORATION REACHES AGREEMENT WITH WILLIAM
BENNETT FOR SALE OF SAHARA HOTEL & CASINO PROPERTY
LAS VEGAS, NEV. - Thomas K. Land, chief financial officer of Sahara Gaming
Corporation (AMEX: SGM), announced today that the company has executed an
agreement with William G. Bennett for sale to Bennett of the Sahara Hotel &
Casino property located on 18 acres at the north end of the Las Vegas Strip. In
addition, Sahara will exchange 22 acres of adjacent land, currently being
utilized by the hotel and casino as a parking lot, for 26 acres of land just
south of the Sahara Hotel & Casino, on Las Vegas Boulevard, currently occupied
by a water park.
Total consideration to Sahara is $150 million, of which approximately
$128 million will be in cash and the balance will be the exchange of property
valued at approximately $22 million.
Land emphasized that the agreement is subject to a number of
approvals and contingencies, including approval by Sahara's board of directors
and the Nevada regulatory authorities, and consummation by Bennett of the
purchase of the exchange property. Land indicated that cash proceeds from the
sale will be utilized to retire debt secured by the property and that no
specific determinations have been made about the use of excess proceeds. He
pointed out, however, that management continues to evaluate its options,
including the development of 40 acres in the Green Valley area in the fast-
growing southeast section of the Las Vegas valley.
Commenting on the sale of the Sahara, Paul Lowden, chairman and chief
executive officer, said, "We look forward to consummating this transaction with
Mr. Bennett, whose name has long been associated with success in Las Vegas. His
knowledge of the gaming industry and his vision would seem to signal a new era
for the Sahara property and the north end of the Strip."
Sahara Gaming Corporation owns and operates the Sahara Hotel & Casino
and the Hacienda Hotel and Casino on the Las Vegas Strip, the Santa Fe Hotel and
Casino in northwest Las Vegas, and the Pioneer Hotel & Gambling Hall in
Laughlin, Nevada.
