<PAGE> 1
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): August 16, 1996
BOYD GAMING CORPORATION
(Exact Name of Registrant as Specified in its Charter)
Nevada
(State or Other Jurisdiction of
Incorporation or Organization)
1-12168 88-0242733
(Commission File Number) (I.R.S. Employer
Identification No.)
2950 South Industrial Road
Las Vegas, Nevada 89109
(Address of Principal Executive Offices) (Zip Code)
(702) 792-7200
(Registrant's telephone number,
including area code)
<PAGE> 2
Item 5. Other Events.
a. Sam's Town Reno Project
On August 9, 1996, Boyd Gaming Corporation (the "Company"), through a
wholly-owned subsidiary, entered into an agreement to acquire a parcel of land
in Reno, Nevada upon which it plans to develop Sam's Town Reno, a $92 million
casino, hotel and entertainment complex. Sam's Town Reno is planned to include
a 33,000 square foot casino, a hotel with 211 guest rooms and suites, five
restaurants, an outdoor arena, retail shops and various other amenities. The
acquisition was consummated on August 16, 1996.
Pursuant to the terms of the purchase agreement, the Company paid $6
million for the 100-acre parcel. William S. Boyd, Chairman and Chief Executive
Officer of the Company, and Warren L. Nelson, a Director of the Company, each
owns a 17.5% interest in the partnership from which the Company acquired the
land.
Development of Sam's Town Reno is subject to a number of
contingencies, including, but not limited to, approval of, and licensing by,
the Nevada gaming authorities, land-use permits, building and zoning permits
and liquor licenses.
b. Mary's Prize Sale.
On August 23, 1996, the Company sold one of its riverboats, Mary's
Prize, to Casino Magic of Louisiana, Corp. Pursuant to the terms of the
agreement, Casino Magic paid $20 million for the riverboat. A portion of the
proceeds from the sale were used to repay approximately $17.6 million of
indebtedness relating to the riverboat's construction. Projects for which
Mary's Prize was constructed have either been delayed or did not materialize.
Item 7. Financial Statements and Exhibits.
(a) Not applicable.
(b) Not applicable.
(c) Exhibits.
<TABLE>
<CAPTION>
Exhibit Number Description
-------------- -----------
<S> <C>
2.1 Property Purchase Agreement, dated as of August
9, 1996, by and between Steamboat Station
Company, a Nevada general partnership and Boyd
Reno, Inc., a Nevada corporation and wholly-owned
subsidiary of Registrant.
</TABLE>
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<TABLE>
<S> <C>
2.2 Buy-Sell Agreement, dated August 2, 1996, by and
between Boyd Gaming Corporation and Casino Magic
of Louisiana, Corp., a Louisiana corporation.
99.1 Unaudited Financial Statements for the six-month
period ended June 30, 1996 for Par-A-Dice Gaming
Corporation.
</TABLE>
<PAGE> 4
* * * * *
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.
BOYD GAMING CORPORATION
Date: September 3, 1996 /s/ Keith E. Smith
-----------------------------
Keith E. Smith
Vice President and Controller
<PAGE> 1
EXHIBIT 2.1
PROPERTY PURCHASE AGREEMENT
AND
ESCROW INSTRUCTIONS
THIS DOCUMENT (hereinafter referred to as this "Agreement") is
dated and made effective as of August 9, 1996 and is made and entered into by
and between LUD J. CORRAO ("CORRAO"); STEAMBOAT STATION COMPANY, a Nevada
general partnership ("SELLER"); BOYD RENO, INC., a Nevada corporation ("BUYER")
and UNITED TITLE OF NEVADA, a Nevada corporation ("ESCROW AGENT").
W I T N E S S E T H:
WHEREAS, SELLER owns the real property described in Exhibit
"A" attached hereto and by this reference incorporated herein, title to which
property is vested in CORRAO and is being held for the benefit of SELLER; and
WHEREAS, from time to time, Corrao Construction Company, Inc.,
Corrao Construction Company of Nevada and/or Corrao Construction Company (each
and all of which are hereinafter individually and collectively referred to as
"Construction") has undertaken actions relative to development of the property
described in Exhibit "A", all of which actions have been undertaken for the
benefit of SELLER; and
WHEREAS, BUYER wishes to acquire that property, and SELLER is
willing to sell the property to BUYER on certain terms and subject to certain
conditions,
NOW, THEREFORE, in consideration of the agreements and
promises set forth below, the parties hereto agree as follows:
1. Subject to the provisions of Paragraph 5 and the
conditions set forth in Paragraph 7, SELLER agrees to sell to BUYER the
property described in Exhibit "A" and all appurtenances, rights, entitlements,
interests and benefits relating thereto (including, without limitation, those
relating to water, sewer connections, governmental approvals, deposits,
payments and project documentation obtained or held by SELLER or by CORRAO or
Construction on behalf of SELLER), all of which are hereinafter collectively
referred to as the "Property", and BUYER agrees to purchase the Property from
SELLER for a purchase price (the "Purchase Price") of SIX MILLION DOLLARS
($6,000,000.00), subject to adjustment following Close of Escrow (as defined in
Paragraph 3) relative to the Funding Obligation (as defined in Paragraph 29).
2. BUYER shall pay the Purchase Price by depositing funds
into the escrow (the "Escrow") to be established pursuant to the provisions of
Paragraph 3 as follows:
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(a) BUYER shall deposit funds in the sum of SIX
HUNDRED THOUSAND DOLLARS ($600,000.00) into Escrow any time
prior to 5:00 p.m., August 14, 1996. That sum shall be placed
into an interest-bearing account by the ESCROW AGENT. That
sum together with the interest accruing thereon through the
date of disbursement from Escrow collectively represent an
earnest money deposit on the Property and are hereinafter
collectively referred to as the "Deposit". The $600,000.00
sum, together with the interest accruing thereon through date
of disbursement from Escrow, shall apply to the Purchase
Price.
(b) BUYER shall deposit funds equal to the FIVE
MILLION FOUR HUNDRED THOUSAND DOLLAR ($5,400,000.00) balance
of the Purchase Price (adjusted for BUYER'S costs, prorations
and interest included in the Deposit) into Escrow at or prior
to Close of Escrow.
3. An escrow shall be established for the transaction that is
the subject of this Agreement under Escrow No. 96-105077 DS with the ESCROW
AGENT at 201 West Liberty Street, Reno, Nevada 89501, with the escrow officer
to be Darlene Spratt. Unless extended as provided in Paragraph 6, or unless
otherwise agreed by written agreement executed by both BUYER and SELLER, close
of escrow ("Close of Escrow") shall occur by the depositing of all required
funds and documents into Escrow before 5:00 p.m., August 16, 1996, with
applicable documents to be recorded and funds to be disbursed on that day or
the following business day. Upon Close of Escrow, the ESCROW AGENT shall
record the Deed (as defined in Paragraph 5), and cash deposited by BUYER as and
for the Purchase Price shall be utilized by the ESCROW AGENT to pay SELLER'S
incurred costs through Escrow. Upon Close of Escrow, the ESCROW AGENT shall
place TWO HUNDRED THOUSAND DOLLARS ($200,000.00) of the Purchase Price into an
interest-bearing account satisfactory to SELLER, with interest accruing for the
benefit of SELLER, to be held by the ESCROW AGENT in Escrow and disbursed in
accordance with the provisions of Paragraph 29. That $200,000.00 is
hereinafter referred to as the "Retained Funds". The remaining cash proceeds
deposited with the ESCROW AGENT by BUYER as and for the Purchase Price shall be
disbursed to SELLER upon recording of the Deed.
4. Escrow fees, recording fees, transfer taxes and other
costs that are not otherwise specifically provided for in this Agreement and
that are incurred through Escrow shall be divided in the manner customary in
Washoe County, Nevada; provided, however, that BUYER shall bear all fees and
costs in any way associated with any financing obtained by BUYER relative to
the Property. Possession of the Property shall be transferred at Close of
Escrow; provided, however, that BUYER understands and acknowledges that a
portion of the Property is currently occupied by a residential tenant (the
"Tenant"), and BUYER agrees to take possession of the Property subject to the
occupancy rights of the Tenant; further provided, that BUYER understands and
acknowledges that the Property is subject to the effect of an abstract of lease
agreement (the "Fleetwood Lease") and other documents of record in which
Fleetwood Corporation ("Fleetwood") is noted as a lessee, and if Fleetwood is
in occupancy of any portion of the Property, BUYER agrees to take possession of
the Property subject to the occupancy rights of Fleetwood. Title shall be
conveyed to and vested
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in BUYER unless BUYER assigns its rights hereunder as provided in Paragraph 11.
The ESCROW AGENT shall prorate real property taxes as of the date the Deed is
recorded. BUYER ACKNOWLEDGES THAT REAL PROPERTY TAX LAWS ALLOW THE WASHOE
COUNTY ASSESSOR TO REVALUE REAL PROPERTY AT THE TIME THAT OWNERSHIP OF PROPERTY
IS CONVEYED. AS A RESULT, BUYER MAY RECEIVE SUPPLEMENTAL REAL PROPERTY TAX
BILLS, DEPENDING ON WHEN CLOSE OF ESCROW OCCURS. IT IS BUYER'S RESPONSIBILITY
TO PAY ALL SUPPLEMENTAL TAX BILLS DIRECTLY TO THE WASHOE COUNTY TREASURER, AND
NO SUPPLEMENTAL TAX BILL WILL BE PAID BY THE ESCROW AGENT THROUGH ESCROW. Any
actual or proposed assessments (including accrued interest) which relate to the
Property by reason of its inclusion or proposed inclusion within an improvement
district (whether or not the assessments in any way encumber or are of record
against the Property at Close of Escrow, and whether or not they have been
levied at Close of Escrow), whether such assessments are payable in one lump
sum or installments, and whether or not they are specifically noted in the
Preliminary Title Report (as defined in Paragraph 5), shall be borne and
assumed by BUYER at Close of Escrow and shall not constitute a part of the
Purchase Price; nor shall they be credited against the Purchase Price. The
ESCROW AGENT shall prorate, through Escrow, any utility fees, rents and
casualty insurance premiums for any policy of casualty insurance of CORRAO, or
SELLER that is assumed by BUYER relative to the Property. Prorations shall be
made on the basis of information to be supplied to ESCROW AGENT by CORRAO,
SELLER or SELLER'S attorney and approved by BUYER or BUYER'S attorney at or
prior to Close of Escrow.
5. ESCROW AGENT has provided SELLER and BUYER with a
preliminary title report (the "Preliminary Title Report") on the Property dated
April 11, 1996. At Close of Escrow, SELLER shall have CORRAO convey title to
the Property (free and clear of any interest of CORRAO'S spouse) to BUYER by
Grant, Bargain, Sale Deed (the "Deed") subject to title exceptions then of
record and any conditions then existing on the Property. At Close of Escrow,
SELLER shall pay for and provide BUYER with an unendorsed CLTA standard
coverage owner's policy of title insurance (the "Title Policy") from a title
insurer (the "Title Insurer") that insures transactions through the ESCROW
AGENT, insuring BUYER'S ownership interest in the Property in the amount of the
Purchase Price, subject to (i) standard printed policy form exceptions, (ii)
title exceptions reflected in the Preliminary Title Report, exclusive of title
exceptions that BUYER, SELLER and the ESCROW AGENT agree in writing to
eliminate as exceptions in the Title Policy, (iii) any records of survey that
may affect the Property and that are filed in the Office of the County Recorder
of Washoe County, Nevada following the effective time and date of the
Preliminary Title Report, (iv) all conditions, and the effect of all conditions
("Resolution Conditions"), that have been previously imposed or that may be
hereafter imposed by the Washoe County Commission ("Commission") or by any
other Washoe County ("County") or other governmental or quasi-governmental
commission, council, board or agency on or relative to any Resolutions of
Intent (as defined below), (v) liabilities, obligations and agreements of
SELLER relating to services to be provided relative to the Property and to the
appurtenances, rights, entitlements, interests and benefits that are included
in the definition of the "Property", all of which are hereinafter referred to
as the "Entitlement Obligations" (and which
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include, but are not limited to, liabilities and obligations relating to water,
sewer service and other utilities, surface water drainage facilities and the
Resolution Conditions and the liabilities and obligations, including unpaid
monetary obligations of 1) SELLER and Construction under that certain Agreement
dated as of July 18, 1985 between SELLER, Construction and County relative to
sewer service, 2) SELLER and CORRAO under that certain Agreement for Inclusion
of Land within the South Truckee Meadows General Improvement District dated
October 13, 1986 between CORRAO on behalf of SELLER and South Truckee Meadows
General Improvement District relative to water service and the dedication of
water rights and facilities, 3) SELLER under that certain Agreement (the
"Steamboat Channel Agreement") dated January 19, 1988 between SELLER and County
relative to maintenance and fortification of the Steamboat Channel and 4)
SELLER, CORRAO and Construction under that certain Water Rights Dedication
Agreement between Construction and County, recorded as Document No. 1287815 on
November 17, 1988 in the Official Records of Washoe County, Nevada, (vi) title
exceptions arising by reason of any act, omission or activity of BUYER, its
employees or contractors, including, but not limited to, those activities noted
in Paragraph 9 of this Agreement and (vii) such other exceptions to title as
may be approved in writing by BUYER at or prior to Close of Escrow
(collectively, the "Permitted Exceptions"). Prior to any termination of the
transaction that is the subject of this Agreement, neither SELLER nor CORRAO
shall voluntarily encumber the Property with title exceptions other than the
Permitted Exceptions. BUYER may elect to acquire an ALTA extended coverage
owner's policy of title insurance and/or such policy endorsements as BUYER may
desire, but if BUYER elects to acquire such extended coverage or any such
endorsement, BUYER shall pay all additional premiums and other costs and
expenses resulting from such coverage and endorsements, including, but not
limited to, all inspection fees and survey costs. Further, BUYER'S ability to
obtain such extended title insurance coverage or any such endorsement shall not
be a condition to Close of Escrow or to any obligation of BUYER hereunder. For
purposes of this Agreement, the term "Resolutions of Intent" means any
resolutions of intent and other consents and approvals for which application
and/or petition with the Commission or any County or other governmental or
quasi-governmental commission, council, board or agency has been previously
made or is hereafter made relative to the Property for (i) rezoning of all or
any portion of the Property, (ii) special use permits and variances, (iii)
vacations of public rights-of-way and easements, (iv) aesthetic review
approvals, major project reviews, plot plan approvals, building elevation
approvals and condition waivers and (v) any extension of time requests relative
to any of the foregoing. The Resolutions of Intent include, but are not
limited to, the approval by the Commission of the Special Use Permit for Major
Project Review Case No. MPR-4-81W and all extensions relating thereto
(collectively, the "Major Project Review"). Notwithstanding anything in any of
the foregoing provisions of this Paragraph to the contrary, nothing herein is
intended to impose any liability or obligation on BUYER to reimburse SELLER, or
anyone on SELLER'S behalf, for payments or other consideration paid with
respect to the Entitlement Obligations prior to Close of Escrow except as
respects prorations of monthly utility charges, including monthly sewer charges
under the above-referenced Agreement of July 18, 1985. EXCEPT AS EXPRESSLY
PROVIDED IN PARAGRAPH 8, SELLER'S ONLY OBLIGATIONS TO BUYER RELATIVE TO THE
STATUS OF TITLE TO THE PROPERTY ARE AS SET FORTH IN THIS PARAGRAPH.
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<PAGE> 5
SELLER HAS NO OTHER OBLIGATIONS AND MAKES NO OTHER WARRANTIES OR
REPRESENTATIONS, EXPRESS OR IMPLIED, IN THAT REGARD.
6. If, on any date when Close of Escrow is to occur, the
Title Insurer refuses to issue the Title Policy in conformance with Paragraph
5, unless BUYER agrees in writing to accept the Title Policy as the Title
Insurer proposes to issue the same, thereby waiving any conditions to the
contrary (which BUYER shall have the right to do), SELLER shall have the right
and option to extend the date for Close of Escrow for up to thirty (30) days,
during which time SELLER shall have the right and option (but not the
obligation) to attempt to have the Title Policy issued in conformance with
Paragraph 5. If SELLER is successful in such efforts as it chooses to make in
that regard, the parties agree to effect Close of Escrow within that 30-day
extension period. If SELLER is unsuccessful in those efforts, the further
rights and obligations of the parties under this Agreement shall be as set
forth in Paragraph 13. SELLER may extend the date for Close of Escrow in
accordance with the provisions of this Paragraph by giving written notice of
such extension to BUYER and the ESCROW AGENT on or before the date on which
recording of the Deed would otherwise occur. If BUYER elects to obtain ALTA
extended coverage title insurance and/or policy endorsements as contemplated in
Paragraph 5, and if on the date when Close of Escrow is to occur, the Title
Insurer refuses or is unable to issue the extended coverage policy or
endorsements, then BUYER shall have the right and option to extend the date for
Close of Escrow for up to fourteen (14) days, during which time BUYER shall
have the right and option to attempt to have the Title Policy issued in
conformance with BUYER'S desires. Whether or not BUYER is successful in such
efforts as it chooses to make in that regard, and subject to the other
provisions of this Agreement, including the other provisions of this Paragraph,
the parties agree to effect Close of Escrow within that 14-day extension
period. BUYER may extend the date for Close of Escrow in accordance with the
provisions of this Paragraph by giving written notice of such extension to
SELLER and the ESCROW AGENT at any time prior to the date when Close of Escrow
would otherwise occur.
7. The obligations of the parties under this Agreement,
including their obligations to effect Close of Escrow and either transfer and
convey the Property or pay the Purchase Price, shall be subject to the
following conditions, which conditions, except as otherwise specifically and
expressly provided in this Agreement, may be waived by a benefitted party only
by a written instrument signed by that party:
(a) The agreement by the Title Insurer at Close of
Escrow to issue the Title Policy for a premium cost that is no
greater than its standard premium rate, subject to only the
Permitted Exceptions and without extraordinary cost or other
extraordinary financial arrangement. This condition is for
the benefit of only BUYER and may be waived by BUYER;
provided, however, that if (i) this condition has not been
fulfilled at the time Escrow is to close or has not been
waived by BUYER at the time Escrow is to close and (ii)
neither SELLER nor CORRAO hereafter voluntarily encumbers the
Property with a title exception other than a Permitted
Exception, then notwithstanding the provisions of Paragraph 5,
this condition shall also be a condition for the benefit of
SELLER.
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(b) The performance (or tender of performance) by
the other party (BUYER or SELLER) of all of the prior and
contemporaneous obligations of that other party under this
Agreement. This condition is for the benefit of both BUYER
and SELLER.
(c) BUYER being aware of no fact or circumstance at
Close of Escrow that is then at variance with a condition or
state of affairs that SELLER or CORRAO warrants in Paragraph
8, either absolutely, or to its knowledge, to be correct as of
the date of this Agreement. This condition is for the benefit
of only BUYER.
(d) SELLER being aware of no fact or circumstance at
Close of Escrow that is then at variance with a condition or
state of affairs that BUYER, in Paragraph 8, warrants to be
correct as of the date of this Agreement. This condition is
for the benefit of only SELLER.
(e) There having deposited into Escrow by Tenant, at
or prior to Close of Escrow, an Estoppel Certificate in the
form of Exhibit "B" attached hereto and by this reference
incorporated herein, executed by Tenant. This condition is
for the benefit of only BUYER and may be waived by BUYER.
8. SELLER, BUYER and CORRAO hereby warrant and represent as
follows:
(a) SELLER and CORRAO warrant and represent that as
of the date of this Agreement, the following are true and
correct:
(i) SELLER owns the Property, and title to
the Property is vested in CORRAO and being held for
the benefit of SELLER.
(ii) The person or persons executing this
Agreement on behalf of SELLER constitute all of the
current partners of SELLER, and those executing
parties have full power and authority to do so and to
perform every act and to execute and deliver every
document and instrument necessary or appropriate to
convey the Property to BUYER and close Escrow as
contemplated in this Agreement.
(iii) All necessary Partnership action has
been taken to authorize execution and performance of
this Agreement by SELLER.
(iv) The execution of this Agreement does
not, and the performance of SELLER'S obligations
under this Agreement will not violate any provision
of SELLER'S partnership agreement.
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(v) All acts and actions undertaken by
Construction relative to the Property or to the
development of the Property have been undertaken on
behalf of SELLER, and Construction has no right,
title or interest in or to the Property.
(b) SELLER and CORRAO warrant and represent that as
of the date of this Agreement, the following are true, to the
best knowledge of CORRAO and each and all of the partners of
SELLER:
(i) Neither the execution of this Agreement
nor the performance hereof by SELLER or CORRAO will
result in any breach or violation of the terms of any
law, rule, ordinance or regulation or of any decree,
judgment or order to which SELLER or CORRAO is a
party now in effect from any court or governmental
body. There are no consents, waivers, authorizations
or approvals from any third party necessary to be
obtained by SELLER or CORRAO in order to permit
SELLER to convey the Property to BUYER and close
Escrow as contemplated in this Agreement.
(ii) Neither CORRAO, SELLER nor any of
SELLER'S partners is a party to any pending or
threatened action, suit, proceeding or investigation,
at law or in equity or otherwise, in, for or by any
court or governmental board, commission, agency,
department or officer arising from or relating to the
Property or to the past or present operations and
activities of SELLER, CORRAO or Construction upon or
relating to the Property.
(iii) There are no pending or threatened
condemnation proceedings affecting any portion of
the Property.
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(iv) Except as respects occupancy rights of
Tenant and the Fleetwood Lease, there are no
unrecorded written or oral leases, arrangements,
agreements, understandings, options, contracts or
rights of first refusal relative to any lease, sale,
transfer or conveyance of all or any portion of the
Property.
(v) SELLER and CORRAO have complied in all
material respects with all laws, ordinances, rules,
regulations and orders of federal, state or local
governments and/or their agencies with respect to the
Property.
(vi) Neither SELLER nor CORRAO has received
any notice or has any knowledge of any hazardous
material (as defined below) on, under or about the
Property which now or with the passage of time would
violate any governmental law, regulation or
ordinance.
(vii) The Resolution of Intent constituting
the Major Project Review has not expired and has not
been revoked, and since April 1, 1996, neither SELLER
nor CORRAO has received any notice from the
Commission or any other County governmental or
quasi-governmental commission, board or agency that
any action is pending or threatened by the Commission
or any such County commission, board or agency to
have the Resolution of Intent constituting the Major
Project Review revoked, or to have it declared
invalid or expired.
As used in this Agreement, the term "hazardous materials"
means any material, waste, substance, pollutant or contaminant
which may or could pose a risk of injury or threat to health
of the environment and which is (i) included within the
definitions of "hazardous substance", "hazardous waste",
"hazardous material", "toxic substance", "solid waste" or
"pollutant or contaminant" in, or otherwise regulated by, the
Comprehensive Environmental Response, Compensation and
Liability Act of 1980, the Resource Conservation and Recovery
Act of 1976, the Toxic Substances Control Act of 1976, the
Hazardous Materials Transportation Act, 49 U.S.C. Sections
1801, et seq or the regulations promulgated pursuant to those
laws; (ii) a substance defined as "hazardous waste" under
applicable Nevada law and in the regulations promulgated
pursuant to Nevada law; (iii) any material, waste or substance
consisting of petroleum or refined petroleum products; (iv)
asbestos in any form; (v) polychlorinated biphenyls; (vi)
flammable explosives; or (vii) radioactive materials or radon.
(c) BUYER warrants and represents that as of the
date of this Agreement, the following are true and correct:
(i) BUYER has full corporate power and
authority to enter into this Agreement and carry out
its obligations hereunder. The execution of
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this Agreement and the performance by BUYER hereunder
have been duly authorized by all requisite corporate
action on the part of BUYER.
(ii) This Agreement constitutes a valid and
binding obligation of BUYER, and performance
hereunder will not violate any provision of BUYER'S
Articles of Incorporation, Bylaws, agreements,
mortgages or other commitments.
(iii) The person executing this Agreement on
behalf of BUYER has full power and authority to do so
and to perform every act and to execute and deliver
every document and instrument necessary or
appropriate to consummate the transaction that is set
forth in this Agreement.
If prior to Close of Escrow, either party gains knowledge of any fact,
condition or circumstance that is at variance with a fact, condition or
circumstance warranted by a party, to its knowledge, to be correct as of the
date of this Agreement, that party covenants to give the other party notice
thereof prior to Close of Escrow. As utilized herein, the term "knowledge" as
of a date or time means actual, conscious, mental awareness as of the date or
time, without having made, or having any obligation to make, investigation or
inquiry, and excludes implied, constructive, imputed or record knowledge or
notice. Notwithstanding any other provision in this Agreement to the contrary,
except as to warranties and representations, the breach of which has been
asserted by timely and proper Warranty Notice (as defined below), time being of
the essence, the warranties and representations of the parties set forth in
Subparagraph 8(b) shall expire and terminate one year from the date of Close of
Escrow, at which time no party shall have any right against another with
respect to any breach of any such warranty or representation. A Warranty
Notice shall be a written notice to SELLER (i) given in conformance with the
requirements set forth in Paragraph 16, (ii) stating with specificity the
particular warranty or representation and the specific sub-subparagraph of
Subparagraph 8(b) that is claimed to be breached and (iii) stating with
specificity the actual condition, fact or circumstance that BUYER claims to be
at variance with the fact, condition or circumstance that is the subject of the
applicable sub-subparagraph.
9. The parties acknowledge and agree that BUYER, its
employees and contractors have had (and through Close of Escrow or termination
of the transaction that is the subject of this Agreement shall have) the right
to enter upon the Property for the limited purpose of conducting such
inspections, borings, surveys, studies and tests on the Property as BUYER may
desire, and BUYER has had and shall have the right to place and maintain signs
on the Property (or, at BUYER'S election, to replace or repaint any signs of
SELLER on the Property); provided, however, that BUYER, at its expense, has the
obligation of first obtaining any and all required governmental permits and
approvals with respect to any of the foregoing activities; further provided
that BUYER covenants that no ground water wells shall be installed, drilled or
placed on or about the Property by BUYER, its employees or contractors prior to
Close of Escrow without SELLER' prior written consent, which consent may be
withheld at the discretion
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of SELLER. BUYER hereby agrees to immediately pay, and to indemnify SELLER and
hold SELLER and the Property harmless from and against, any and all claims,
liens, judgments, liabilities, costs, expenses (including attorneys' fees),
losses, fines, penalties and damages incurred or suffered by SELLER and/or to
which the Property becomes subject and which are asserted or arise by reason
of, or which in any way relate to or result from any such activities. Within
five (5) business days of BUYER'S receipt thereof, BUYER shall provide SELLER
with copies of all maps, plans, renderings, test reports, surveys and studies
prepared by BUYER or on BUYER'S behalf relative to the Property, all without
cost to SELLER. If Close of Escrow fails to occur, then within ten (10)
business days of either the date when Close of Escrow was to have occurred or
the date of termination of the transaction that is the subject of this
Agreement, whichever is earlier, with respect to any physical condition
resulting from any activity that is the subject of this Paragraph, BUYER shall
remove any signs placed on the Property by BUYER (and remove or, at BUYER'S
election, paint over any repainted signs of SELLER located on the Property),
restore the Property to the condition existing as of the date of this Agreement
and deliver to SELLER a written assignment of all of BUYER'S interest in all
maps, plans, renderings, test reports, surveys and studies prepared by BUYER or
on BUYER'S behalf relative to the Property, all without cost to, delegation of
any duty to, or assumption of any obligation by SELLER. Except as may be
expressly and specifically set forth in Paragraph 8, SELLER makes no
representations, warranties, guarantees or assurances as to the accuracy,
validity or completeness of any map, report or other information which may be
furnished by SELLER to BUYER, and BUYER'S use thereof or reliance thereon shall
be at BUYER'S risk. Except as may be expressly and specifically set forth in
Paragraph 8, BUYER makes no representations, warranties, guarantees or
assurances as to the accuracy, validity or completeness of any map, report or
other information which may be furnished by BUYER to SELLER, and SELLER'S use
thereof or reliance thereon shall be at SELLER'S risk.
10. BUYER UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT BUYER
WILL BE ACQUIRING THE PROPERTY IN ITS THEN "AS IS" CONDITION AT CLOSE OF
ESCROW, FOLLOWING AND BASED UPON ITS OWN INDEPENDENT AND COMPLETED EXAMINATION
AND INVESTIGATION OF THE PROPERTY AND THE STATUS OF TITLE TO THE PROPERTY, AND
NOT IN RELIANCE ON ANY STATEMENT, WARRANTY OR REPRESENTATION OF SELLER, CORRAO
OR ANY OTHER PARTY THAT IS NOT EXPRESSLY SET FORTH IN THIS AGREEMENT. BUYER
UNDERSTANDS, ACKNOWLEDGES AND AGREES THAT NEITHER SELLER NOR CORRAO HAS MADE OR
WILL MAKE ANY WARRANTIES, GUARANTEES, COVENANTS OR REPRESENTATIONS, EXPRESS OR
IMPLIED, RELATIVE TO THE PROPERTY, THE STATUS OF TITLE TO THE PROPERTY OR THE
TRANSACTION THAT IS THE SUBJECT OF THIS AGREEMENT UNLESS EXPRESSLY AND
SPECIFICALLY SET FORTH IN THIS AGREEMENT OR IN ANOTHER WRITTEN DOCUMENT SIGNED
BY THAT PARTY, AND THAT NO REAL ESTATE BROKER AND NO OTHER AGENT OF SELLER OR
CORRAO PRESENTLY HAS, HAS EVER HAD, OR SHALL EVER HAVE ANY AUTHORITY TO MAKE
ANY SUCH WARRANTY, GUARANTY, COVENANT OR REPRESENTATION ON BEHALF OF EITHER
OF THOSE PARTIES.
10
<PAGE> 11
11. BUYER'S rights hereunder may be assigned without the
approval of SELLER as to assignee, but only if the proposed assignee and BUYER
first sign a written assignment and assumption agreement with form and content
satisfactory to SELLER, in SELLER'S discretion, in which (i) SELLER is an
expressly designated intended beneficiary, (ii) the assignee agrees to assume
and to fully and timely perform each and every obligation of BUYER hereunder,
(iii) BUYER agrees to remain fully, jointly and severally liable with such
assignee relative to any and all obligations of BUYER hereunder and (iv) the
obligations and liabilities of the assignee and BUYER in that assignment and
assumption agreement are acknowledged by the assignee and BUYER to survive
Close of Escrow and recording and delivery of the Deed. BUYER shall not have
the right to assign its rights hereunder or designate or nominate any party to
acquire title to the Property except as expressly provided in this Paragraph or
as otherwise approved in writing by SELLER, in SELLER'S discretion. Any
attempted or purported assignment, nomination or designation by BUYER that
fails to conform to the requirements set forth in the preceding provisions of
this Paragraph shall be null, void and of no force or effect.
12. BUYER and SELLER each warrants to the other that it has
not dealt with or had contact or communication with any real estate salesman,
broker or finder relative to the transaction that is the subject of this
Agreement. Each warranting party agrees to indemnify and hold the other party
and the Property harmless from (i) any contrary claims and related suits and
actions of any broker or finder for brokerage fees, finders fees and similar
fees, compensation and commissions, whether or not well-founded and (ii) any
costs and expenses, including attorneys' fees, incurred by the indemnified
party relating thereto.
13. Time is of the essence with respect to the Close of
Escrow, with respect to the fulfillment or waiver of each condition and with
respect to each performance required of BUYER and SELLER hereunder
notwithstanding any other and additional references in this Agreement to time
being of the essence (which other and additional references are simply for
purposes of reminder and emphasis). If Close of Escrow fails to timely occur
without an extension that is expressly permitted in this Agreement because one
or more conditions to a party's obligation to close Escrow have not been
fulfilled, tendered or waived, or if the transaction that is the subject of
this Agreement is terminated pursuant to an express provision in this Agreement
permitting or requiring such termination, then except as otherwise provided in
Paragraph 9 and Paragraph 12 (the provisions of which Paragraphs shall take
precedence and priority over the provisions of this Paragraph), or unless the
applicable condition or conditions consist solely of a breach of a party's
obligations or warranties under this Agreement, (i) the transaction that is the
subject of this Agreement, the Escrow and the further rights and obligations of
the parties (save and except for those rights and obligations specifically
noted in Paragraph 23 or elsewhere in this Agreement as surviving termination),
including any claims or rights of BUYER relative to the Property, shall
automatically terminate without the need for any notice from, or other action
on the part of, any party hereto, (ii) BUYER and SELLER shall equally bear all
costs, fees and expenses incurred with and through the ESCROW AGENT and (iii)
following (but not before) fulfillment of BUYER'S obligations
11
<PAGE> 12
under Paragraph 9, the ESCROW AGENT shall return to each depositing party, all
documents and monies that have been placed into Escrow by that party.
14. Notwithstanding anything in the immediately preceding
Paragraph or elsewhere in this Agreement to the contrary, if (i) all conditions
to BUYER'S obligations to close Escrow set forth in Paragraph 7 have been
tendered, fulfilled or waived, (ii) the time for Close of Escrow has expired
without expressly permitted or agreed written extension and (iii) BUYER has
failed to timely close Escrow, or in the event of any other default or breach
of any covenant, obligation or agreement of BUYER under this Agreement
(including, but not limited to, BUYER'S failure to timely deposit funds into
Escrow pursuant to the provisions of any Subparagraph of Paragraph 2 of this
Agreement, time being of the essence, or a breach and default of BUYER provided
for in Paragraph 15), the transaction that is the subject of this Agreement,
the Escrow and BUYER'S further rights under this Agreement, including all
claims and rights of BUYER relative to the Property, shall automatically
terminate and expire without the need for any notice from SELLER, or any other
action on the part of SELLER. In such event, BUYER shall bear all fees, costs
and expenses incurred with and through the ESCROW AGENT, and the ESCROW AGENT
shall return to the depositing party, all documents that have been placed in
Escrow. In such case, subject to the last sentence of this Paragraph, SELLER
shall be entitled to obtain and retain all of the Deposit as liquidated damages
in settlement and payment of SELLER'S costs, expenses and damages (including
consequential damages) resulting from such breach, default or failure of BUYER,
and BUYER shall promptly perform all acts and provide all written consents and
agreements requested by the ESCROW AGENT and/or SELLER to permit expeditious
disbursement of the Deposit to SELLER. The parties agree that the exact amount
of costs, expenses and damages incurred and suffered by SELLER would be
difficult to determine and that the amount of the Deposit is a reasonable
estimate of that amount. Notwithstanding anything in the foregoing to the
contrary, SELLER'S obtaining and retaining of the Deposit shall not be in
settlement or payment of BUYER'S obligations under Paragraph 9 or Paragraph 12,
and BUYER shall in any event be and remain liable to SELLER with respect to
BUYER'S obligations under those Paragraphs following termination of this
Agreement and SELLER'S receipt of the Deposit.
15. Notwithstanding anything in Paragraph 13 or elsewhere in
this Agreement to the contrary, if Close of Escrow fails to timely occur solely
because of (i) the failure of SELLER to fulfill an obligation of SELLER
hereunder or (ii) the failure of fulfillment of one or more conditions
consisting solely of breaches of affirmative obligations or warranties of
SELLER hereunder, or in the event of a breach of any warranty of SELLER
hereunder discovered prior to Close of Escrow, in any such event, except as
provided in Subparagraphs (a) and (b) below, BUYER'S sole recourse and remedy
as the result of such failure or breach, to the exclusion of all other remedies
at law or in equity (all of which other remedies, except as provided in
Subparagraphs (a) and (b) below are hereby expressly waived by BUYER), shall be
to obtain a refund of the Deposit and to terminate the further rights and
obligations of the parties hereunder by making timely and proper written demand
upon SELLER and the ESCROW AGENT within sixty (60) days of the date on which
Close of Escrow was to have occurred for return of the
12
<PAGE> 13
Deposit to BUYER. Notwithstanding the foregoing, BUYER shall have the
following (and only the following) remedies under the following (but only the
following) circumstances:
(a) If (but only if) (i) such failure or breach
results from an intentional and wilful breach of this
Agreement by SELLER, (ii) CORRAO has not conveyed title to the
Property to another party and (iii) within 60 days of the date
on which Close of Escrow was to have occurred, BUYER 1) files
a complaint in the Eighth Judicial District Court of the State
of Nevada with a single cause of action against SELLER and
CORRAO for specific performance and 2) serves the complaint
and a related summons upon SELLER and CORRAO within those 60
days, then BUYER shall have available to it the one, single,
exclusive, alternative (but not additional) remedy of specific
performance, to the exclusion of all other remedies at law or
in equity, all of which other remedies are hereby expressly
waived by BUYER.
(b) If (but only if) (i) such failure or breach
results from an intentional and wilful breach of this
Agreement by SELLER, (ii) CORRAO has conveyed title to the
Property to another party and (iii) within 60 days of the date
on which Close of Escrow was to have occurred, BUYER 1) files
a complaint in the Eighth Judicial District Court of the State
of Nevada with no more than two (2) causes of action against
SELLER and CORRAO, one for specific performance and one for
recovery of monetary damages seeking only monetary damages
equal to the Recoverable Damages as defined below and 2)
serves the complaint and a related summons upon SELLER and
CORRAO within those 60 days, then BUYER shall have available
to it the two, exclusive, alternative (but not additional)
remedies of specific performance or recovery of monetary
damages in an amount equal to (but not exceeding) the
Recoverable Damages, to the exclusion of all other remedies at
law or in equity, all of which other remedies are hereby
expressly waived by BUYER. For purposes of this Agreement,
the term "Recoverable Damages" shall mean the positive dollar
amount, if any, resulting from the subtraction of the Purchase
Price from the total purchase price received by SELLER and/or
CORRAO as consideration for the conveyance of the Property by
SELLER and/or CORRAO to the other party as contemplated in
this Subparagraph.
Should BUYER elect to pursue the remedy of specific performance by timely
filing a complaint praying for such relief as provided in Subparagraph (a) or
(b) above, and serving the complaint and related summons in a timely manner
upon SELLER, SELLER shall be entitled to obtain and permanently retain all of
the Deposit. Notwithstanding any of the foregoing provisions of this Paragraph
to the contrary, if within 60 days of the date on which Close of Escrow was to
have occurred, BUYER has failed to (i) make timely and proper written demand
upon SELLER and the ESCROW AGENT for return of the Deposit or (ii) timely file
and serve a complaint (and summons) as provided in Subparagraph (a) or (b)
above, or if BUYER should at any time pursue any remedy not permitted under the
provisions of this Paragraph, whether in lieu of, or in addition to, any remedy
permitted hereunder, BUYER shall be in breach and default of this
13
<PAGE> 14
Agreement; BUYER shall have no further rights, remedies or recourse under this
Agreement, all of which are hereby expressly waived by BUYER; and the further
rights and obligations of the parties shall be as set forth in Paragraph 14.
Notwithstanding anything in this Agreement to the contrary, and notwithstanding
any applicable law to the contrary (BUYER'S rights of recovery under which
being hereby expressly waived by BUYER), (i) BUYER hereby expressly waives any
and all rights of BUYER to collect or recover consequential damages from
CORRAO, SELLER or SELLER'S partners, including, but not limited to, damages
based upon lost income or lost profits and (ii) the collective liability of
CORRAO, SELLER and SELLER'S partners hereunder, and any recourse by BUYER
against SELLER, SELLER'S partners and/or CORRAO following Close of Escrow and
delivery of the Deed to BUYER shall be limited solely and exclusively to
monetary damages that do not cumulatively exceed the Purchase Price, and
neither CORRAO, SELLER nor any of SELLER'S partners shall have any additional
liability therefor, BUYER hereby expressly waiving and releasing CORRAO, SELLER
and SELLER'S partners from any and all such additional liability.
16. All elections, notices, consents, requests, claims,
demands, identifications, designations, approvals, waivers, deliveries and
other communications permitted, desired or required to be given hereunder
(referred to collectively herein as "notice[s]") shall be in writing and shall
be effective and deemed to be both "given" and "received" (i) when hand
delivered to the address of the receiving party, (ii) when delivered to the
address of the receiving party by Express Mail, Federal Express or other
commercial delivery service, (iii) on the third business day following deposit
in the United States mail as certified or registered mail, return receipt
requested or (iv) when successfully transmitted by facsimile transmission, in
any of such cases, delivered, addressed or dispatched as follows:
"SELLER" STEAMBOAT STATION COMPANY
and/or c/o Lud Corrao
"CORRAO" 3500 Lakeside Court, Suite 120
Reno, Nevada 89509
[Facsimile No.: (702) 829-8712]
With copy given in the foregoing
manner to:
K. MICHAEL LEAVITT
Leavitt, Sully & Rivers
601 East Bridger Avenue
Las Vegas, Nevada 89101
[Facsimile No.: (702) 382-2892]
"BUYER" BOYD RENO, INC.
2950 South Industrial Road
Las Vegas, Nevada 89109
Attn: Robert L. Boughner
[Facsimile No.: (702) 792-7263]
14
<PAGE> 15
With copy given in the foregoing
manner to:
PETER C. BERNHARD, Esq.
Schreck, Jones, Bernhard, Woloson
& Godfrey, Chartered
600 East Charleston Boulevard
Las Vegas, Nevada 89104
[Facsimile No.: (702) 382-8135]
"ESCROW AGENT" UNITED TITLE OF NEVADA
Attn: Darlene Spratt
(Re: 96-105077 DS)
201 West Liberty Street
Reno, Nevada 89501
[Facsimile No.: (702) 686-2608]
A party entitled to receive notices hereunder may, from time to time, change
its address for receiving notices by giving written notice in the manner set
forth above.
17. Effective as of Close of Escrow, BUYER shall (i) assume
all liabilities, obligations and duties of SELLER, CORRAO and/or Construction
that arise under or with respect to the Entitlement Obligations and (ii)
indemnify SELLER, SELLER'S partners, CORRAO and Construction, and hold them
harmless from all obligations, liabilities and costs arising under, as a result
of or with respect to all Entitlement Obligations, including all claims, liens,
judgments, expenses (including attorneys' fees), losses and damages which in
any way relate thereto, result therefrom or arise with respect thereto. In
that regard, upon Close of Escrow, or within a reasonable period of time
thereafter, (but before expiration of SELLER'S current letter of credit), BUYER
shall post and maintain a letter of credit in favor of County in the amount of
TWENTY-FIVE THOUSAND DOLLARS ($25,000.00) and execute a new agreement with
County for maintenance of the Steamboat Channel as contemplated in Paragraph 5
of the Steamboat Channel Agreement.
18. The provisions of this document have been negotiated by
all parties hereto and shall therefore not be interpreted or construed in favor
of or with prejudice against any particular party, but in accordance with the
general tenor of the language used.
19. This Agreement may be executed in two or more
counterparts. A set of counterparts containing the signatures of all parties
hereto shall have the same effect as a single Agreement containing the
signatures of all parties. All parties executing this Agreement (including
CORRAO'S spouse), agree to execute and deliver such additional documents and
15
<PAGE> 16
instruments as may be reasonably required to carry out the terms and provisions
of this Agreement and to consummate the transaction that is the subject of this
Agreement.
20. This Agreement shall bind and inure to the benefit of the
respective heirs, executors, administrators, representatives, successors and
(to the extent permitted in this Agreement) assigns of the parties hereto, and
Contractor and SELLER'S partners are intended third-party beneficiaries of this
Agreement. Except for the parties noted in the foregoing sentence, no party
other than a signator to this Agreement is an intended beneficiary of this
Agreement, and this Agreement shall not be enforceable by any creditor of a
party.
21. If legal action is initiated relative to this Agreement
or the rights or obligations of any party under this Agreement, the parties
hereto stipulate and agree that such action must seek only the remedies
available to the parties hereunder and must be initiated, maintained and
continued in Clark County, Nevada. The non-prevailing parties in such action
shall pay reasonable attorneys' fees to the prevailing parties, with the
amounts to be determined by the court in said action. The laws of the State of
Nevada shall govern the validity, construction, performance and effect of this
Agreement.
22. This Agreement contains the entire agreement between the
parties with respect to the Property and the transaction that is the subject of
this Agreement and supersedes and replaces any and all prior or contemporaneous
discussions, negotiations, correspondence, understandings and agreements
between the parties relative thereto. This Agreement may be amended,
supplemented or modified by, but only by, a written document executed by both
BUYER and SELLER. No party shall have the right to rely upon, and no party
shall be bound by or subject to, any agreement, statement, assurance, covenant,
warranty, guaranty, representation or waiver unless it is in writing and signed
by the party purportedly making the same. A waiver by a party of any
condition, duty or obligation shall not constitute a waiver of any other
condition, duty or obligation or a continuing waiver of the same, subsequently
arising condition, duty or obligation.
23. Notwithstanding any other provision of this Agreement to
the contrary, the provisions, warranties, rights and obligations of the parties
that are set forth in Paragraphs 8, 12, 13, 14, 15, 16, 17, 18, 21, 22, 23, 24,
25, 26, 27 and 29 shall survive Close of Escrow, transfer of title to the
Property, delivery of the Deed or (as the case may be) cancellation and
termination of the transaction that is the subject of this Agreement and the
other rights and obligations of the parties hereunder.
24. BUYER shall neither record, nor have recorded on its
behalf, either this Agreement or any memorandum or other document which
references this Agreement or the rights of BUYER hereunder save and except for
a statutory notice of pendency of a legal action which is initiated in
accordance with the requirements of this Agreement. Any such prohibited
recording shall constitute a material breach of this Agreement by BUYER and
shall automatically result in the consequences set forth in Paragraph 14.
16
<PAGE> 17
25. Masculine, feminine and neuter pronouns shall be
substituted freely for each other, and the plural and singular forms of
pronouns shall be substituted freely for each other in any provision of this
Agreement in which the context appropriately requires such substitution. Any
reference in this Agreement to time of day refers to local time in Las Vegas,
Nevada. Any reference in this Agreement to a "business" day refers to a day
that is not a Saturday, Sunday or legal holiday (or observed as a legal
holiday) for Nevada state governmental offices pursuant to Nevada Revised
Statutes. Reference in this Agreement to the "discretion" of a party means the
party's sole and absolute discretion. Such discretion shall not be subject to
any external standard, including but not limited to, any standard of custom,
"good faith" or reasonableness.
26. Any remedies noted in this Agreement are not intended to
be exclusive of other remedies which would be available upon occurrence of the
events giving rise to such remedies unless such exclusivity is expressly
stated. Therefore, any remedies which are noted in this Agreement without
mention of exclusivity are to be in addition to any and all other remedies
available at law or in equity.
27. The ESCROW AGENT is hereby authorized by each of the
parties to disburse funds and to deliver and record such documents as may be
appropriate in accordance with the terms of this Agreement. If this Agreement
or any other matter related hereto shall become the subject of any litigation
or controversy, BUYER and SELLER agree to jointly and severally hold the ESCROW
AGENT free and harmless from resulting associated loss or expense, including
reasonable attorneys' fees, that may be suffered by the ESCROW AGENT unless the
loss or expense results from an act or omission of the ESCROW AGENT. If either
BUYER or SELLER gives written claim or notice to the ESCROW AGENT that the
transaction that is the subject of this Agreement and the Escrow have
terminated, the ESCROW AGENT shall (i) provide the other party (BUYER or
SELLER) with a copy of that claim or notice and (ii) give further notice to
that party that the ESCROW AGENT shall consider the transaction and Escrow
terminated and shall perform as provided in this Agreement unless that party
gives the ESCROW AGENT a conflicting notice or claim within five (5) business
days of the date the ESCROW AGENT'S notice is given to that party; provided,
however, that if this Agreement directs the ESCROW AGENT to follow a particular
course of conduct, the ESCROW AGENT may, at its option, perform as directed by
this Agreement without the necessity of communicating with the other party or
providing the other party with a copy of the claim or notice. If the ESCROW
AGENT provides the other party with a copy of the claim or notice, then unless
conflicting notice or claim is given to the ESCROW AGENT by that party within
those 5 business days, the ESCROW AGENT may thereupon and shall thereupon
perform as provided in this Agreement, and particularly as provided in the
applicable Paragraph 13, 14 or 15. If conflicting demands, claims or notices
are given to the ESCROW AGENT with respect to this Agreement, the parties agree
that the ESCROW AGENT shall be entitled to refrain from any further action
until it shall have received further instructions executed by BUYER and SELLER
or, in the alternative, the ESCROW AGENT shall be entitled to file a suit in
interpleader upon twenty (20) days' notice to BUYER and SELLER of its intent to
do so. Upon filing of any action in interpleader and the deposit of all
documents and funds in its possession with the Eighth Judicial District Court
in and for the State of Nevada or such other depository as may be agreed
17
<PAGE> 18
upon by the parties, the ESCROW AGENT shall be fully released and discharged
from any further obligation imposed upon it by this Agreement. The ESCROW
AGENT shall not be liable in its capacity as such for any deficiency or
correctness as to format or execution or validity of any instruments deposited
with it, nor as to the identity, authority or rights of any person executing
them, nor for the failure by any person other than the ESCROW AGENT to comply
with any of the provisions of any agreement, contract or any other instrument
deposited with the ESCROW AGENT or referred to in this Agreement. The ESCROW
AGENT'S duties hereunder shall be limited to the safekeeping of all monies,
instruments and other documents received by it as the ESCROW AGENT and for
disposition in accordance with the terms of this Agreement or as the ESCROW
AGENT may be further instructed. BUYER and SELLER hereby instruct the ESCROW
AGENT to deposit funds in the amount of TWO HUNDRED THOUSAND DOLLARS
($200,000.00) (constituting the "Retained Funds" as contemplated in Paragraph 3
of this Agreement) into an interest-bearing account approved by CORRAO or
SELLER'S attorney at Close of Escrow, with the interest thereon to accrue for
the benefit of SELLER. SELLER shall bear any expense in connection with that
account, including, but not limited to, any fees or penalties imposed by the
depository for servicing, set up or early withdrawal of funds and tax
liabilities relating to accruing interest, and SELLER hereby agrees to hold
ESCROW AGENT harmless with regard to the same. ESCROW AGENT shall not be
responsible for any penalties, loss of principal or interest or any delays in
the withdrawal of the funds which may be imposed by the depository as a result
of the making or redeeming of the investment pursuant to ESCROW AGENT, nor
shall ESCROW AGENT be liable for any loss or impairment of funds while the
funds are in the course of collection or while those funds are on deposit with
the depository if such loss or impairment results from the failure, insolvency
or suspension of the depository.
28. SELLER warrants that SELLER is not a "foreign person" as
defined by Section 1445 of the Internal Revenue Code. At Close of Escrow,
SELLER agrees to deposit into Escrow, for delivery to BUYER following Close of
Escrow, an appropriate affidavit stating that SELLER is not a "foreign person"
and containing such information as is required by Internal Revenue Code Section
1445 and the regulations issued thereunder.
29. BUYER and SELLER acknowledge that one of the Resolution
Conditions previously imposed relative to the Major Project Review consists of
the following condition (hereinafter referred to as the "Fire Station
Condition"):
"The developer shall contribute monies toward the construction
of or shall construct a fire station to the satisfaction of
the Truckee Meadows Fire Protection District. The developer
shall have the option to utilize the existing barn structure
to meet this condition; funds for or remodeling of the barn
structure to be to the mutual satisfaction of the fire
protection district and the developer."
BUYER and SELLER acknowledge and agree that the amount of "monies" required to
be contributed relative to construction of a fire station (or the cost of
constructing a fire station), as well as the amount of "funds" required for
remodeling of an existing structure (or the cost of any
18
<PAGE> 19
such remodeling) as required by the foregoing condition are currently
undetermined. BUYER and SELLER agree to work together in good faith before and
after Close of Escrow to determine and minimize the amount of such monies,
funds or cost (with the eventual required amount thereof being hereinafter
referred to as the "Funding Obligation"). Before and after Close of Escrow
BUYER agrees to permit CORRAO to first initiate and then fully participate in
such discussions and negotiations with applicable authorities as shall be
necessary to determine and definitively quantify the Funding Obligation. If it
is determined that the Funding Obligation exceeds ONE HUNDRED THOUSAND DOLLARS
($100,000.00), SELLER shall bear the amount of that excess, up to (but not
exceeding) the amount of the Retained Funds. Therefore, at such time as the
Funding Obligation is determined, BUYER and SELLER shall notify the ESCROW
AGENT, and the ESCROW AGENT shall disburse the Retained Funds as follows:
(a) If the Funding Obligation is determined to be
$100,000.00 or less, all of the Retained Funds and interest
accruing on the Retained Funds shall be disbursed to SELLER.
(b) If the Funding Obligation is determined to
exceed the amount of the Retained Funds by $100,000.00 or
more, all of the Retained Funds shall be disbursed to BUYER,
and interest accruing on the Retained Funds shall be disbursed
to SELLER.
(c) If the Funding Obligation is determined to
exceed $100,000.00 by less than the amount of the Retained
Funds, the ESCROW AGENT shall disburse to BUYER from the
Retained Funds an amount equal to the difference between the
Funding Obligation and $100,000.00, and the ESCROW AGENT shall
disburse the balance of the Retained Funds and interest
accruing on the Retained Funds to SELLER.
Notwithstanding the foregoing, if BUYER and SELLER have been unable to
determine the amount of the Funding Obligation within two (2) years following
the date of Close of Escrow, upon written request of either BUYER or SELLER
made after the expiration of those 2 years, the ESCROW AGENT shall disburse
one-half (1/2) of the Retained Funds to BUYER and 1/2 of the Retained Funds and
interest accruing on the Retained Funds to SELLER, and SELLER'S obligations
with respect to the Fire Station Condition and the Funding Obligation shall in
all respects be fulfilled and terminate.
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<PAGE> 20
30. Neither the preparation nor the delivery of this unsigned
or partially signed document shall have any force or effect whatsoever.
Further, this document shall be null and void and of no force or effect
whatsoever unless before 5:00 p.m., August 14, 1996 the ESCROW AGENT has
received (i) this Agreement (or counterparts of this Agreement), unmodified and
originally executed by all parties (other than itself) for whom signature space
is provided below and (ii) the cash sum required under the provisions of
Subparagraph 2(a). Time is of the essence.
DATED and made effective as of the day and year first above
written.
"SELLER" "BUYER"
STEAMBOAT STATION COMPANY, BOYD RENO, INC., a Nevada
a Nevada general partnership corporation
By By
----------------------------- -------------------------------
WILLIAM S. BOYD, Partner ROBERT L. BOUGHNER
Vice President
By
-----------------------------
MARGARET ELARDI, Partner "CORRAO"
By
----------------------------- ---------------------------------
WARREN NELSON, Partner LUD J. CORRAO
By: CORRAO COMPANY, LTD., a ----------------------------------
Nevada limited-liability PATRICIA A. CORRAO, spouse of
company, Partner LUD J. CORRAO, hereby joins in
the execution of this
Agreement and consents and
By agrees hereto
-----------------------------
LUD J. CORRAO, Manager
By
-----------------------------
LUD J. CORRAO, Partner
20
<PAGE> 21
The undersigned UNITED TITLE OF NEVADA hereby agrees to act as
the ESCROW AGENT for the transaction that is the subject of this Agreement and
hereby accepts this Agreement as its instructions for purposes of that Escrow.
UNITED TITLE OF NEVADA, a
Nevada corporation
By
---------------------------------
DARLENE SPRATT
Escrow Officer
21
<PAGE> 22
EXHIBIT "A"
-----------
PARCEL A:
- ---------
Parcels 1, 2, and 4 as shown on "Amended Parcel Map", amending Parcels 3 and 4
of Parcel Map No. 903 for Joseph W. Baldecchi, filed in the office of the
County Recorder of Washoe County, State of Nevada, on June 11, 1980, as File
No. 677273, Official Records, as Parcel Map No. 1113.
PARCEL B:
- ---------
All that certain real property being a portion of the Southwest one-quarter of
the Northeast one-quarter (SW 1/4 NE 1/4) and the Northwest one-quarter of the
Southeast one-quarter (NW 1/4 SE 1/4) of Section 28, Township 18 North, Range
20 East, MDB&M, situate in Washoe County, Nevada, the boundary of which is more
particularly described as follows:
Beginning at the Southeast corner of said Southwest one-quarter of the
Northeast one-quarter (SE 1/4 NE 1/4) of Section 28, identical with the
Northeast corner of said Northwest one-quarter of the Southeast one-quarter (NW
1/4 SE 1/4) of Section 28;
Thence South 50.00 feet (S 00016'52" W on that certain Record of Survey for
Corrao Construction Co., Survey Map No. 1413, filed in the office of the County
Recorder of Washoe County, State of Nevada, on August 22, 1980, File No.
689711) along the East line of said Northwest one-quarter of the Southeast
one-quarter (NW 1/4 SE 1/4) of Section 28;
Thence North 87044'01" West 1249.07 feet (N 87038'54" W 1248.40 feet on said
Record of Survey) to a point on the Easterly right-of-way line of U.S. Highway
395;
Thence North 10051'30" West 51.29 feet (N 10049'11" W 51.32 feet on said Record
of Survey) along said Easterly right-of-way line;
Thence South 87044'02" East 1258.74 feet (S 87038'54" E 1258.28 feet on said
Record of Survey) to the point of beginning.
PARCEL C:
- ---------
The West half of the Southeast quarter of Section 28, Township 18 North, Range
20 East, MDB&M, excepting therefrom all that portion lying West of the East
right-of-way line of U.S. Highway 395 as conveyed to the State of Nevada by
Deeds recorded June 5, 1959 as Document No. 304310 and 304311, Washoe County,
Nevada, Records.
Excepting therefrom the interest conveyed to the State of Nevada, in the Deeds
recorded June 5, 1959 under Document Nos. 304310 and 304311, Washoe County,
Nevada, Records.
<PAGE> 23
Also excepting therefrom the parcel of land conveyed to Sierra Pacific Power
Company, a Maine corporation, by Deed recorded July 23, 1962, under Document
No. 363531, Deed Records.
Also excepting therefrom any well or bore hole (and the well site thereof)
which may have been heretofore drilled upon any portion of the above described
property by Magma Power Company or by its wholly owned subsidiary, Nevada
Thermal Power Company; and
Excepting and excluding and reserving the right to use such well or bore hole
for the production, utilization and sale of natural steam or thermal energy
produced therefrom and with the right to go to and from such well or bore hole
for the purpose of drilling, redrilling, deepening, or any remedial or other
work to be performed thereon or therein, and to install, maintain and utilize
such pipe lines, roads or other installations reasonably necessary for
utilization of any such well or bore hole or for exercise of the said rights
reserved and excepted and excluded herefrom.
Also excepting therefrom all oil, gas, steam, and minerals of whatsoever
nature, found under the property hereby conveyed; the said reservation does not
include any right of ingress or egress and does not include the right to remove
any oil, gas, steam, or minerals through the surface of the land or to maintain
any works thereon for any purpose, but reserves only the right to remove the
said oil, gas, steam, and minerals from beneath the surface of the property.
<PAGE> 24
EXHIBIT "B"
-----------
(Tenant's Estoppel Certificate)
LANDLORD: STEAMBOAT STATION COMPANY
TENANT: HARVEY & PHYLLIS SARGENT
BUYER: BOYD RENO, INC.
PREMISES: 600 Geiger Grade Road
LEASE
COMMENCING: December 16, 1995 (the "Lease")
The undersigned Tenant certifies to BUYER as follows:
1. The Lease is the Standard House Rental Contract, a copy of
which is attached hereto as Exhibit "1".
2. Tenant is in possession of the Premises demised under the
Lease.
3. The Lease calls for rent in the monthly amount of FIVE
HUNDRED FIFTY DOLLARS ($550.00).
4. The Lease is a month-to-month lease, terminable by either
Landlord or Tenant upon 30 days' notice to the other.
5. That no advance rental for a term longer than one month
has been paid in connection with the Lease, there is no "free rent" or other
concession under the Lease, and the rent has been paid to and including
__________________.
6. That a security deposit in the amount of $500.00 has been
paid to Landlord.
7. That to Tenant's knowledge all obligations and conditions
under the Lease to be performed to date by Landlord or Tenant have been
satisfied, free of defenses and set-offs.
8. That the Lease is in full force and effect and contains no
obligation of Landlord except to provide quiet use and enjoyment of the
Premises as long as Tenant pays rent, that to Tenant's knowledge there is no
existing default on the part of the Landlord or the Tenant in any of the terms
and conditions of the Lease and no event has occurred which, with the passing
of time or giving of notice or both, would constitute as event of default.
<PAGE> 25
9. That this certification is made knowing that BUYER is
relying upon the representation herein made.
DATED: , 1996. TENANT:
--------------- -------------------------
ADDRESS: 600 Geiger Grade Road
Reno, Nevada 89511
<PAGE> 1
EXHIBIT 2.2
BUY-SELL AGREEMENT
KNOW ALL MEN BY THESE PRESENTS:
BOYD GAMING CORPORATION (hereinafter referred to as "Seller") whose
office address is 1950 South Industrial Road, Las Vegas, Nevada 89109-1100 and
CASINO MAGIC OF LOUISIANA, CORP. (hereinafter referred to as "Buyer") whose
office address is 711 Casino Magic Dr., Bay St. Louis, Mississippi 39520, have
and do hereby agree as follows:
Seller agrees to sell to Buyer and Buyer agrees to purchase from
Seller, the riverboat Gaming Vessel, "MARY'S PRIZE", Official number 1028011, a
description of which is attached hereto as SCHEDULE "A", on or before August
25, 1996 (said date hereinafter referred to as "Closing"). Title to the Vessel
shall not pass to Buyer until payment is received by Seller at Closing.
PURCHASE PRICE
- --------------
The purchase price for this sale shall be the sum of TWENTY MILLION
AND 00/100 ($20,000,000.00) DOLLARS. This purchase price is for the Vessel
MARY'S PRIZE and all her machinery, engines, equipment, appurtenances, stores
and spare parts (hereinafter collectively referred to as "Vessel"). At the
time this Agreement is executed by all parties possession of the Vessel will be
transferred to Buyer (said time of execution and transfer of possession
hereinafter referred to as "Delivery") and all risk of loss shall pass to Buyer
at that time. At time of Delivery, Buyer will pay to Sell TWO HUNDRED
SEVENTY-FIVE THOUSAND AND 00/100 ($275,000.00) DOLLARS. At the time of
Closing, all funds paid to Seller by Buyer will be credited against the
purchase price of TWENTY MILLION AND 00/100 ($20,000,000.00) DOLLARS. If
Closing does not occur on or before August 25, 1996, Seller will have no right
to compel Buyer to purchase the Vessel; however, the Seller shall retain TWO
HUNDRED THIRTY THOUSAND AND 00/100 ($230,000.00) of the funds paid by Buyer to
Seller at Delivery as liquidated damages and Buyer waives any right to a return
of such funds for any reason. The remaining funds shall be available for Buyer
at Seller's direction to
1
<PAGE> 2
resort the Vessel to the condition it was in at time of Delivery and to satisfy
all other financial obligations of Buyer, if any, under this Agreement. Buyer
will be responsible for funds which are necessary to so restore the Vessel and
to satisfy all other financial obligations of Buyer, if any, hereunder. If any
funds remain after such restoration and satisfaction, said funds shall be
disbursed to Buyer.
DELIVERY
- --------
Seller agrees to deliver possession of the Vessel to Buyer in Morgan
City, Louisiana upon execution of this Agreement by all parties. At the time
of Delivery, if possible, Seller shall provide to Buyer a full set of the
Vessel's plans, as builts, schematics, wiring specifications, low voltage
wiring diagrams, certified evacuation and safety plan, certified periodic test
procedures and all other plans and blueprints related to Vessel. If Seller can
not provide said documents at Delivery, Seller will use reasonable, good faith
efforts to provide said documents within fifteen (15) days following Delivery,
provided, however, the Seller's failure to deliver said documents and items
shall not constitute a breach of this Agreement by Seller, nor shall such
failure constitute grounds for Buyer not to close this transaction.
Seller shall deliver the Vessel to Buyer as is and where is. Seller
makes NO WARRANTY of any kind whatsoever, except as to title to the Vessel,
free and clear of all liens, mortgages and encumbrances, whether expressed or
implied, including without limitations, any implied warranty of
merchantability, quality, condition, fitness for any particular purpose, or
against any redhibitory vices, or any other vices or defects, hidden, latent or
otherwise, all such warranties being expressly WAIVED by Buyer. At time of
Closing, Seller shall not be required to provide Buyer with any approvals or
consents from the United States Coast Guard necessary to permit the Vessel to
be moved to Bossier City, Louisiana; however, by Closing, Seller shall have
exercised reasonable, good faith efforts to obtain such necessary approvals and
consents, provided, however, the Seller's failure to deliver said approvals or
consents shall not constitute a breach of this Agreement by Seller, nor shall
such failure constitute grounds for Buyer not to close this transaction.
2
<PAGE> 3
Seller is required to provide Buyer with a valid Certificate of
Inspection; however, Seller shall not be required to provide a valid
Certificate of Inspection to operate as a passenger vessel, at Delivery.
Seller will use reasonable good faith efforts to obtain the Certificate of
Inspection prior to Closing, however, this is not a condition for Closing.
Buyer shall cooperate with Seller in assisting Seller to obtain the Certificate
of Inspection, and if Seller incurs any extra costs or expenses in obtaining
the Certificate of Inspection attributable to Buyer's accelerated schedule,
Buyer shall reimburse Seller for any said extra costs or expenses documented by
Seller. Furthermore, Seller shall not be required to provide at Delivery a
Certificate of Documentation, FCC License, Society Tonnage, Interim Class, Hull
Classification and Machinery Classification Certificate (if applicable) and/or
their regulatory equivalent (if applicable) at the time of Delivery; however,
Seller shall use reasonable good faith to obtain such Certificates and
documents within a reasonable time after Delivery, provided, however, the
Seller's failure to deliver said Certificates and Documents shall not
constitute a breach of this Agreement by Seller, nor shall such failure
constitute grounds for Buyer not to close this transaction.
During the period from the time of Delivery until Closing (hereinafter
referred to as the "Period"), Buyer shall do all that is necessary on its part
to maintain the Vessel's documentation in full force, and any fee or other
expense for the maintenance of the documentation shall be paid by the Buyer.
If Closing does not occur on or before August 25, 1996, the Vessel
shall be re-delivered to Seller in the same or as good structure, state,
condition, and class as that in which she was delivered, fair wear and tear not
affecting class excepted (the "Re-delivery"). The Vessel upon Re-delivery
shall have her survey cycles up to date and class certificates valid with no
outstanding recommendations, but only to the extent such certificates were
applicable and in force at the time of Delivery.
MAINTENANCE AND OPERATION
- -------------------------
The Vessel shall, during the Period, be in the full possession at the
absolute disposal for all purposes of the Buyer and under its complete control
in every respect. Buyer shall, for so long as the Vessel remains under its
control during said Period, take all reasonable steps to maintain the Vessel,
her machinery, engines, equipment,
3
<PAGE> 4
appurtenances and spare parts in a good state of repair and in efficient
operating condition in accordance with good commercial maintenance practice,
ordinary wear and tear excepted. During said Period, Buyer shall keep the
Vessel in compliance with all governmental and classification society rules and
regulations.
While the Vessel is under Buyer's control, during the Period, Buyer
shall at its own expense or by its own procurement crew, navigate, operate,
supply, fuel, and repair the Vessel wherever required and shall, as between
itself and seller be responsible for all charges and expenses of every kind and
nature whatsoever incidental to the Vessel's use and operation during said
Period.
During the Period, Buyer shall not have the right to transport the
Vessel from its berth in Morgan City, Louisiana without the prior written
approval of Seller. Buyer shall have the right to shift the Vessel within the
port of Morgan City, Louisiana, with the prior written consent of Seller, which
consent shall not be unreasonably withheld.
During the Period, Buyer shall make no structural changes to the
Vessel or in her machinery without first obtaining written approval from the
Seller. If changes are made, the Buyer shall, if the Seller requires, restore
the Vessel to its former condition in the event Closing does not occur by
August 25, 1996. Buyer agrees to defend, indemnify and/or hold harmless Seller
for any costs incurred by Seller for any reason which arises out of or results
from any changes and/or modifications to the Vessel.
Prior to Closing all equipment and necessities to operate places on
the Vessel by Buyer, including without limitation gaming equipment, shall
remain at all times property of the Buyer, regardless of whether such equipment
may constitute or be deemed to constitute an appurtenance of the Vessel.
During the Period, Buyer is required to establish and maintain
financial security or responsibility in respect of oil or other pollution
damage as required by any government agency. The Buyer shall indemnify, defend
and hold Seller harmless against all consequences arising from the Buyer's
failure or inability to comply with governmental requirements from time of
Delivery until Closing.
4
<PAGE> 5
INSPECTION
- ----------
During the Period, except for restricted areas involved in the
Vessel's gaming operations, Seller or its designee shall have the right at any
reasonable time to inspect or survey the Vessel to ascertain the condition of
the Vessel and to satisfy itself that the Vessel is being properly maintained.
SURVEY AND INVENTORY
- --------------------
A complete survey and inventory at time of Delivery and, if Closing
does not occur, Re-delivery of the Vessel's equipment, outfit, appliances and
all the consumable stores on board the Vessel shall be made by Seller and Buyer
on Delivery and on Re-delivery. The Buyer and the Seller, respectively, shall
at the time of Delivery and Re-delivery pay for all bunkers, oils, fuel, water,
provisions, paints, oils ropes, and other consumable stores on the said Vessel
at the market prices.
MORTGAGE
- --------
The Vessel is subject to a Preferred Ship Mortgage (the "Mortgage") n
favor of First Security Bank of Utah, N.A., not in its individual capacity, but
solely in its capacity as Trustee, (hereinafter after referred to as
"Mortgagee"). From the date of Delivery until Closing, this Agreement shall be
subject and subordinate to the terms and conditions of the Mortgage and the
other loan documents referred to therein. Buyer agrees to comply with the
insurance requirements under the Mortgage as per the Insurance Schedule
attached hereto as SCHEDULE "B". Seller agrees not to default on the Mortgage
and will notify Buyer within three (3) days of any notice of default Seller
receives from the Mortgage Holder.
Seller agrees to deliver to Buyer at the time of Closing good title to
Vessel which is free from all encumbrances, leases, maritime liens and/or debts
of any kind whatsoever, including but not limited to, the Preferred Ship
Mortgage on Vessel, in favor of First Security Bank of Utah, N.A. Should any
such claim exist against the Vessel, Seller hereby undertakes to indemnify,
defend and hold Buyer harmless against all consequences of such claims. Should
the Vessel be arrested by reason of claims or liens arising out of her
operation hereunder by seller prior to Delivery, Seller shall at its own
expense take all reasonable steps to secure the release of the Vessel and
discharge any such claims or liens.
5
<PAGE> 6
This Agreement is not conditioned upon obtaining Seller's mortgagee's
approval; however, in the event, such approval is required by Seller's
mortgagee, Seller shall be responsible for obtaining such approval from
Seller's mortgagee for Seller to enter into this Agreement.
Seller agrees to provide Buyer with a valid Bill of Sale with warranty
of title to transfer ownership to the Vessel to Buyer at the time of Closing.
Seller shall also transfer and assign to Buyer and subrogate Buyer to any
warranty, right or claim, if any such warranty, right or claim exists, that
Seller has, or may have, against the builder of the Vessel or any supplier of
equipment for the Vessel. Seller shall also provide Buyer with satisfactory
evidence of corporate power and authority to transfer Vessel.
INSURANCE
- ---------
During the Period, the Vessel shall be kept insured by the Buyer at
Buyer's expense. Buyer shall acquire the insurance described herein on
SCHEDULE "B" in the amounts and deductibles specified therein. Seller
certifies that the insurance described in SCHEDULE "B" complies with the
insurance required in the Mortgage. The insurance referenced herein shall be
acquired and arranged by the Buyer to protect the interest of the Seller, the
Seller's Mortgagee and the Buyer. Seller and Seller's Mortgagee shall be named
as additional insureds on all policies of insurance obtained by Buyer pursuant
to this Agreement. Buyer may at its discretion arrange for additional
insurance to that required herein and any insurance to protect the interest of
any managers it may appoint, any other entity, or any insurance required to
operate the Vessel as a Gaming Vessel.
Should the Vessel become an actual or constructive total loss under
the insurance, during the Period, all insurance payments for such loss shall be
paid to Seller for distribution between Seller, Mortgagee and Buyer according
to their respective interests. Buyer shall then be under no further obligation
to Seller in respect to the Vessel under this Agreement. All other rights of
the parties remain in full force and effect. In the event the Vessel is an
actual or constructive total loss, during the Period, this Agreement shall
terminate as of the event giving rise to the loss.
During the Period, Seller shall, upon the request of Buyer, promptly
execute such documents as may be required to enable Buyer to abandon the Vessel
to its insurers and
6
<PAGE> 7
claim a constructive total loss, provided, however, that if the Vessel's
insurers declare the Vessel to be a total loss or a constructive total loss,
but Seller gives notice in writing to Buyer that Seller desires that the Vessel
not be abandoned and that a partial loss only be claimed, then this Agreement
shall terminate as from the date of the event giving rise to such loss and any
insurance payments in respect of the partial loss shall be paid to Seller.
Prior to the time of Closing, neither Buyer nor Seller shall do any
act or voluntarily permit any act which causes the insurance required herein to
be suspended, impaired, defeated, or canceled.
Buyer further agrees to provide to Seller within one (1) day of
execution of this Agreement an opinion letter from Buyer's insurance agent
stating that all conditions and terms of SCHEDULE "B" have been met.
LIENS
- -----
During the Period, Buyer shall be allowed to install furniture,
fixtures, machinery and equipment on the Vessel relating to its Gaming
operation including but not limited to food and beverage service, any
machinery, device, equipment or furniture used directly or indirectly in the
conduct of Gaming operations, gaming devices, table games, surveillance
equipment, computers and bar equipment, and to secure the acquisition of this
furniture, fixtures, machinery, and equipment with a lien superior in rank to
any other lien as it relates to the furniture, fixtures, machinery and
equipment referenced herein.
Buyer shall indemnify, defend and hold Seller and the Vessel harmless
against any lien of whatsoever nature arising upon the Vessel during the
Period, and against any claims against Seller or the Vessel arising out of the
operation of the Vessel by Buyer or out of any neglect of Buyer in relation to
the Vessel or the operation thereof; provided, however, that Buyer's obligation
to indemnify Seller shall not extend to liens arising from the acts or
omissions of Seller. Should the Vessel be arrested by reason of claims or
liens arising out of her operation hereunder by Buyer during the Period, Buyer
shall at its own expense take all reasonable steps to secure the release of the
Vessel and discharge any such claims or liens.
7
<PAGE> 8
TOWAGE
- ------
After Delivery and prior to Closing, all towage in connection with
transporting the Vessel as permitted under this Agreement with Seller's consent
shall be for the Buyer's benefit and Buyer shall pay and be responsible for any
costs associated with transporting the Vessel and the cost of repairing damage
occasioned thereby shall be borne by Buyer.
TAXES
- -----
It is understood and agreed by Seller and Buyer that the sale of
Vessel by Seller constitutes an isolated and occasional sale by Seller, and
that no sale, use, transfer or other tax(es) should be payable in connection
therewith; however, if any such tax(es) is payable, Buyer shall pay such
tax(es) and shall indemnify and hold harmless Seller for any such tax(es).
Seller shall be responsible for any ad valorem property taxes applicable to the
Vessel prior to Delivery of the Vessel to Buyer, and Buyer will be responsible
for all ad valorem property taxes applicable to the Vessel after Delivery.
NOTICES
- -------
Unless otherwise provided in this Agreement, all payments, notices and
communications with respect to this Agreement shall be made to Buyer at 711
Casino Magic Drive, Bay St. Louis, Mississippi 39520 and to Seller at 2950 S.
Industrial Road, Las Vegas, Nevada 89109-1100, Attn: Ellis Landau.
During the Period, not withstanding any provisions of this Agreement
to the contrary, the parties agree that no notice from Buyer shall be effective
unless it is also given to the Mortgagee. Any notice of default shall state
the nature of the alleged default. The Mortgagee shall be given notice of any
legal proceeding between Seller and Buyer and/or any alleged default by Seller
and the Mortgagee shall have the right to intervene in any such legal
proceeding and be made a party thereto.
The parties hereto agree to give notice of any default on any of the
parties respective obligations under this Agreement to the Louisiana Gaming
control Board, Louisiana State Police, Gaming Enforcement Division, upon
occurrence of such default. Furthermore, all parties agree to give immediate
notice to the Louisiana Gaming Control Board, Louisiana State Police, Gaming
Enforcement Division, in the event that this Agreement does not close by August
25, 1996.
8
<PAGE> 9
CONSIDERATION
- -------------
Except as set forth in this Agreement, no consideration has been paid
to Seller by Buyer prior to the date hereof and no consideration will be paid
to Seller by Buyer until Closing.
GOVERNING LAW
- -------------
This Agreement shall be governed by the laws of the United States of
America and the State of Louisiana and any and all disputes arising out of this
Agreement shall be brought in the United States District Court for the Eastern
District of Louisiana.
COMPLIANCE WITH GAMING LAWS
- ---------------------------
The parties have entered into this Agreement with the understanding
that the Agreement complies with all gaming laws and regulations of the State
of Louisiana. Should, however, any provision of this Agreement he found to be
in violation of said laws or regulations, this Agreement shall be void ab
initio.
SPECIFIC PERFORMANCE
- --------------------
If either Seller or Buyer should default on any of its respective
obligations under this Agreement, the non-defaulting party, in addition to and
not in derogation of any other of its rights, may sue for specific performance
of this Agreement. Furthermore, if any legal action or other proceeding is
brought for the enforcement of this Agreement or any provision hereof, or
because of an alleged dispute, breach, default or misrepresentation in
connection with any of the provisions of this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees and other reasonable
costs incurred in such action or proceeding, in addition to any other relief to
which such party shall be entitled.
PRIOR AGREEMENTS
- ----------------
This Agreement supersedes all prior agreements and constitutes the
entire agreement between the parties concerning the subject matter hereof, and
this Agreement specifically negates and nullifies the Bar Boat Charter entered
into by the parties on June 26, 1996.
AMENDMENTS
- ----------
During the Period, this Amendment may not be amended or modified
except by an instrument executed by both parties.
9
<PAGE> 10
SEVERABILITY
- ------------
The provisions of the Agreement are separate and severable. If any
provision, item or application of this Agreement shall be deemed invalid in
whole or in part, such invalidity shall not affect the other provisions, items,
or applications of this Agreement which can be given effect without the invalid
provision, item or application.
LICENSEE
- --------
Under no circumstance shall any term or condition of this Agreement be
construed to give Seller any ownership, interest and/or control, either actual
or constructive, in the Buyer, or any of its subsidiaries or its parent
corporation.
CASINO MAGIC CORP.
- ------------------
Casino Magic Corp. shall be a signatory to this Agreement for the
limited purpose of guaranteeing performance and payment of all obligations of
Buyer in this Agreement except the obligation to close. Casino Magic Corp.
expressly and specifically states and Seller agrees that Casino Magic Corp. is
not guaranteeing and it is not liable for any obligation of Buyer to close this
Agreement and Casino Magic Corp. is not guaranteeing payment of the Purchase
Price of TWENTY MILLION DOLLARS AND 00/100 ($20,000,000.00) due to Seller from
Buyer at Closing.
TIME OF THE ESSENCE
- -------------------
Time is expressly declared to be of the essence in this Agreement. If
Closing does not occur on or before August 25, 1996, this will constitute an
event of default and the non-defaulting party may elect to terminate this
Agreement if it so desires and/or pursue any contractual or legal remedies it
may have.
CITIZENSHIP
- -----------
Buyer warrants to Seller that it is now, and will remain until
Closing, a citizen of the United States of America as defined in 46 U.S.C. 802.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on this ___ day of
September, 1996.
WITNESSES: BOYD GAMING CORPORATION
(Seller)
By:
- ------------------------ -------------------------
Title:
- ------------------------ -----------------------
10
<PAGE> 11
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on this ____ day of
September, 1996.
WITNESSES: CASINO MAGIC OF LOUISIANA CORP.
(Buyer)
By:
- ----------------------- ---------------------------
Title:
- ----------------------- -------------------------
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their duly authorized representatives on this ____ day of
September, 1996.
WITNESSES: CASINO MAGIC CORP.
(Signatory)
By:
- ----------------------- ---------------------------
Title:
- ----------------------- -------------------------
11
<PAGE> 1
EXHIBIT 99.1
PAR-A-DICE GAMING CORPORATION
- -------------------------------------------------------------------------------
CONSOLIDATED BALANCE SHEET
June 30, December 31,
(in thousands, except share data) (Unaudited) 1996 1995
- -------------------------------------------------------------------------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 2,721 $ 4,232
Receivables:
Trade, net of allowances of $150 and $80 339 541
Inventories 272 377
Prepaid expenses and other 654 628
- -------------------------------------------------------------------------------
Total current assets 3,986 5,778
Property and equipment, net 53,760 46,866
Due from related parties 1,117 1,117
Other assets, net 137 171
- -------------------------------------------------------------------------------
Total assets $59,000 $53,932
===============================================================================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Trade accounts payable $ 983 $ 1,794
Accrued expenses 4,042 4,019
Notes payable and current portion of
long-term debt 2,400 3,100
- -------------------------------------------------------------------------------
Total current liabilities 7,425 8,913
Long-term debt, net of current portion 14,100 11,800
- -------------------------------------------------------------------------------
Total liabilities 21,525 20,713
- -------------------------------------------------------------------------------
Minority interest 1,000 1,000
- -------------------------------------------------------------------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, no par value: authorized
13,000,000 shares: issued 9,308,535 and
9,568,535 shares 8,788 9,048
Retained earnings 27,687 23,171
- -------------------------------------------------------------------------------
Total stockholders' equity 36,475 32,219
- -------------------------------------------------------------------------------
Total liabilities and stockholders' equity $59,000 $53,932
===============================================================================
<PAGE> 2
PAR-A-DICE GAMING CORPORATION
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF INCOME
For the six months ended June 30,
(in thousands) (Unaudited) 1996 1995
- -------------------------------------------------------------------------------
OPERATING REVENUES
Casino $48,595 $45,796
Admissions and parking 611 1,128
Food and beverage 2,629 2,092
Other 241 282
- -------------------------------------------------------------------------------
Total operating revenues 52,076 49,298
- -------------------------------------------------------------------------------
OPERATING EXPENSES
Casino 15,427 14,472
Food and beverage 3,567 3,038
General and administrative 18,833 16,936
- -------------------------------------------------------------------------------
Total operating expenses 37,827 34,446
- -------------------------------------------------------------------------------
OPERATING INCOME 14,249 14,852
- -------------------------------------------------------------------------------
OTHER (INCOME) EXPENSE
Loss on disposition of property 0 24
Interest and other income (304) (210)
Interest expense 637 765
- -------------------------------------------------------------------------------
Total other (income) expense 333 579
- -------------------------------------------------------------------------------
INCOME BEFORE PROVISION FOR STATE INCOME TAXES 13,916 14,273
Provision for state income taxes 181 206
- -------------------------------------------------------------------------------
NET INCOME $13,735 $14,067
===============================================================================
<PAGE> 3
PAR-A-DICE GAMING CORPORATION
- -------------------------------------------------------------------------------
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the six months ended June 30,
(in thousands) (Unaudited) 1996 1995
- -------------------------------------------------------------------------------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $13,735 $14,067
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,270 2,178
(Gain) loss on dispositions of property -- 38
Changes in assets and liabilities:
Trade receivables, net 202 9
Inventories 106 13
Prepaid expenses and other (129) (209)
Accounts payable (825) (1,241)
Due to affiliate -- (2,832)
Accrued expenses 38 (501)
- -------------------------------------------------------------------------------
Net cash provided by operating activities 15,397 11,522
- -------------------------------------------------------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of property -- 77
Purchase of property and equipment (9,027) (740)
Investment in affiliates -- (339)
- -------------------------------------------------------------------------------
Net cash used in investing activities (9,027) (1,002)
- -------------------------------------------------------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from notes payable and long-term debt 5,800 --
Payments on notes payable and long-term debt (4,200) (1,200)
Distributions to stockholders (8,000) (13,077)
Stockholder redemption (1,480) --
- -------------------------------------------------------------------------------
Net cash used in financing activities (7,880) (14,277)
- -------------------------------------------------------------------------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (1,510) (3,757)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 4,231 7,726
- -------------------------------------------------------------------------------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 2,721 $ 3,969
===============================================================================
Supplemental cash flow disclosure:
Interest paid (net of amount capitalized) $ 825 $ 775
=======================
State income taxes paid $ 341 $ 393
=======================
<PAGE> 4
PAR-A-DICE GAMING CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
For the period ended June 30, 1995 and 1996
(in thousands, except share data)
(unaudited)
COMMON STOCK
-------------------- RETAINED STOCKHOLDERS'
SHARES AMOUNT EARNINGS EQUITY
------------------------------------------------
BALANCE, JANUARY 1, 1995 9,568,535 $9,048 $ 17,444 $ 26,492
Net income 14,067 14,067
Distribution to stockholders (13,077) (13,077)
------------------------------------------------
BALANCE, JUNE 30, 1995 9,568,535 9,048 18,434 27,482
================================================
BALANCE, JANUARY 1, 1996 9,568,535 9,048 23,172 32,220
Net income 13,735 13,735
Distribution to stockholders (8,000) (8,000)
Stockholder redemption (260,000) (260) (1,220) (1,480)
------------------------------------------------
BALANCE, JUNE 30, 1996 9,308,535 $8,788 $27,687 $36,475
================================================
<PAGE> 5
PAR-A-DICE GAMING CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of the Company, the accompanying unaudited consolidated
financial statements contain all adjustments necessary, consisting of only
normal recurring adjustments, to present fairly the results of its operations
and its cash flows for the six month periods ended June 30, 1996 and 1995. This
report should be read in conjunction with the Company's audited consolidated
financial statements. The operating results and cash flows for the six months
ended June 30, 1996 are not necessarily indicative of the results that will be
achieved for the full year or for future periods.
31
