UNITED STATES
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): October
9, 1996
AMERISTAR CASINOS, INC.
(Exact name of registrant as specified in its charter)
Nevada 0-22494 88-0304799
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation or Number)
organization)
P.O. Box 92200
Henderson, Nevada 89009
(Address of principal executive offices and Zip
Code) (702) 737-0777
(Registrant's telephone number, including area code)
P.O. Box 259
Jackpot, Nevada 89825
(Former name or former address, if changed since last report)
ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
On October 9, 1996 (the "Closing Date"), Gem
Gaming, Inc. ("Gem"), a Nevada corporation, was merged
with and into Ameristar Casino Las Vegas, Inc.
("ACLVI"), a Nevada corporation and a wholly owned
subsidiary of Ameristar Casinos, Inc. (the "Company").
Gem is developing The Reserve Hotel & Casino ("The
Reserve") in the Henderson Green Valley suburban
communities in the southeastern portion of the Las
Vegas, Nevada greater metropolitan area. The
merger of Gem into ACLVI (the "Merger") was
consummated at a closing (the "Closing") pursuant to a
Merger Agreement originally entered into as of May 31,
1996, among the Company, ACLVI, Gem and Gem's
stockholders, and amended as of July 2, 1996 and on
October 2, 1996 effective as of September 27, 1996
(collectively, the "Merger Agreement").
THE RESERVE HOTEL & CASINO. The Reserve, with an
African safari and big game reserve theme that includes
statues of elephants, giraffes and other animals, is
being constructed in phases at the southeast corner of the
junction of Lake Mead Drive and Interstate 515 in
Henderson, Nevada.
Initial Gem Design Plans. Gem's development plans
contemplated that the initial phase of The Reserve would
be approximately 198,000 square feet and would include an
approximately 34,000-square foot casino (including both
slot machines and table games), 225 hotel rooms,
various dining facilities, a race and sports book and a
bingo area. Gem had anticipated opening The Reserve
on October 1, 1996. Following the execution of the
Merger Agreement, the Company, with the cooperation of
Gem, commenced a redesign of The Reserve intended to
expand the scope and size of the project, both initially
and overall, to enhance the furnishings and decor and to
reconfigure some of the interior spaces.
Ameristar Redesign. Although the redesign process is
ongoing and the design of The Reserve is still subject to
change, the following description reflects the Company's
current intentions for the development of The Reserve.
The Reserve will be constructed in three phases and will
be opened upon the completion of
the first two phases. Phase I will include
approximately 265,000 square feet of space, with most
of the increased space being added to back-of-the-house
areas (kitchen, warehouse and offices). Phase I will
include a buffet, a 24hour restaurant, a steak house,
an Italian restaurant and a lounge. The size of the
casino and hotel in Phase I will generally remain the
same as in Gem's original plans, but the interior
finishes will be enhanced. Phase I will also include a
swimming pool.
Phase II of The Reserve will include approximately
54,000 square feet of additional casino and
entertainment space, a race and sports book, another
lounge and a parking structure.
Phase III of The Reserve, construction of which
would not be commenced until after the opening of
Phases I and II, is contemplated to add a second hotel
tower with approximately 250 rooms, meeting rooms, an
additional restaurant, additional gaming space, a
children's activity center and an expanded swimming
pool.
Status of Construction. Prior to entering into
the Merger Agreement, Gem had entered into construction
and other contracts for portions of The Reserve. ACLVI
has succeeded to these contracts as a result of the
Merger. Substantial modifications to these contracts
have been and will be necessary due to the redesign of
the project.
Construction of the hotel has been substantially
completed, subject to the installation of furniture,
fixtures and equipment to be provided by ACLVI and the
application of the exterior finish. The shell of the
casino and food service areas is approximately 85%
completed, and the mechanical, electrical, plumbing
and HVAC systems have been installed. The redesign of
The Reserve will require some of this work to be
reconfigured.
Determination of Revised Opening Date and
Development Budget. Until the redesign of The Reserve
is further along, the Company will not be in a position
to provide information concerning the revised opening
date or the development budget for Phases I and II of
The Reserve. In order to fund the completion of Phases
I and II of The Reserve, the Company will need to
increase its revolving bank credit facility or obtain
additional financing from another source. See
"Repayment of Gem Bank Debt; Increase in Long-Term
Debt" below.
Market and Anticipated Competition. The greater
metropolitan area of Las Vegas, which includes
HendersonGreen Valley, has been one of the fastest
growing metropolitan areas in the United States during
the last five years. Henderson has grown in population
by approximately 57% during this period. Although the
Company anticipates that the Las Vegas metropolitan
area and Henderson-Green Valley will continue to
experience population growth, there can be no
assurances that such growth will continue for any
particular period of time or at the same rates as in
the recent past.
According to the Nevada Department of
Transportation, approximately 65,000 vehicles per day
currently pass through the junction of Interstate 515
and Lake Mead Drive, the site of The Reserve. Upon the
completion of Interstate 215 nearby, currently
anticipated in late 1997, the Nevada Department of
Transportation has estimated that the traffic counts at
the Interstate 515/Lake Mead Drive junction will
increase to approximately 115,000 vehicles per day.
The gaming market in the greater metropolitan Las
Vegas area includes segments for visitors and local
residents, and both segments of this market are
subject to intense and dynamic competition. The
Company expects that The Reserve will compete primarily
for local customers in the Henderson-Green Valley
suburban communities, although the Company also intends
to market The Reserve to visitors. The primary
subsegments of the visitors market that the Company
anticipates will be served by The Reserve include
persons driving from Arizona via Interstate 515,
persons driving to and from Lake Mead from California
and other visitors to the Las Vegas area who desire
lodging in Henderson-Green Valley.
There are currently 12 small limited service
casinos within a five-mile radius of The Reserve site.
Station Casinos, Inc. is developing Sunset Station
casino-hotel approximately 3.5 miles north of The
Reserve site along Interstate 515, which is expected to
open in mid-1997. Sunset Station will be larger than
The Reserve. The Company is aware of several sites in
Henderson-Green Valley that have been zoned for casino
hotels. Although several others have previously
announced plans for the development of additional
casino resorts in or near Henderson-Green Valley, the
Company is not aware of any public announcements by
others firmly committing to the development of any of
these proposed projects. The Company expects The
Reserve to face significant competition in the
Henderson-Green Valley market and that it is likely
additional casino resorts ultimately will be developed
in this market area.
The Reserve Site. The site upon which The Reserve
is being developed is approximately 23 acres, but ACLVI has
options to acquire additional adjacent land that could
increase the area of the site to approximately 46 acres.
Each option exercise must be for at least five acres and a
minimum of five acres of the option land must be acquired
each year (commencing October 1, 1997) or the remaining
options expire. The option exercise prices, which increase
at the rate of 8% per annum from October 1, 1995, are $5.00
per square foot ($217,800 per acre) for the first 17 acres
and $3.50 per square foot ($152,460 per acre) for each
remaining acre.
The construction of Phases I and II of The Reserve
will require ACLVI to exercise options for between five and
10 acres of additional land. Phase III construction will
also require ACLVI to acquire additional land, the area of
which has not yet been determined.
The Reserve site, including the option parcels, was
previously used for surface waste disposal activities for
approximately 50 years. Prior to 1994, the site had large
areas of debris, rubble and some stained soils resulting
from these waste activities. Site studies revealed
asbestos, lead and pesticide concentrations in the surface
soils. Following a surface remediation program by a third
party in 1994, the Nevada Division of Environmental
Protection approved a closure of the remediation and
indicated that no further work was required.
A 1995 phase I environmental study on the 23 acres now
owned by ACLVI showed that some rubble remained on
portions of the property, but that all hazardous material
had been removed. ACLVI has commissioned a phase I
environmental study on the 23 acres of The Reserve site
under option, but has not yet received any report of the
results of this study. Phase I environmental studies
involve the conduct of limited procedures and may not
identify the existence or extent of actual environmental
conditions. Across Lake Mead Drive from The Reserve site
is a large industrial complex that is the subject of an
ongoing environmental investigation and remediation process
under the supervision of the Nevada Division of
Environmental Protection. This industrial complex has
caused some soils and groundwater contamination. Although
no assurances can be given, the Company believes it is
unlikely that any portion of The Reserve site will be
materially affected by this contamination as The Reserve
site is upgradient from the industrial complex.
TERMS OF THE MERGER AGREEMENT. The following
description of the terms of the Merger Agreement and
related agreements is qualified in its entirety by, and
made subject to, the actual provisions of the Merger Agreement, which
have been filed and/or incorporated by reference as
exhibits to this Report on Form 8-K.
Parties to the Merger Agreement. In addition to the
Company, ACLVI and Gem, the parties to the Merger Agreement
are Steven W. Rebeil in his individual capacity and in his
capacity as trustee of the Karizma Trust created under a
Trust Agreement dated July 21, 1991, as amended ("Rebeil"),
and Dominic J. Magliarditi
("Magliarditi"). The Karizma Trust and Magliarditi (the
"Gem Stockholders") were the only stockholders of Gem immediately prior
to the Merger and owned approximately 96.9 percent and 3.1
percent, respectively, of the outstanding common stock of Gem prior
to the Merger.
Conversion and Cancellation of Gem Shares; PostMerger Offering.
The Merger Agreement, as originally entered into, contemplated that
7.5 million shares of the Company's Common Stock, subject to
adjustment in certain cases, would be issued to the Gem Stockholders
as merger consideration. Under the amended Merger Agreement, all of
the outstanding shares of Gem common stock were cancelled at the
Closing and were converted into the right to receive cash, subject
to reduction as described below, equal to the amount of the net
proceeds (after payment of underwriters' discounts and
commissions and certain other offering expenses) in excess of $4.0
million of an underwritten secondary public offering (the
"Offering") of 7.5 million shares of the Company's Common Stock
(the "PostMerger Offering Stock") if the Offering is concluded by
the Company by June 1, 1997. The earlier of the closing of the
Offering or June 1, 1997 is referred to in this Report as the
"Settlement Date." If the Offering has not been completed by June
1, 1997, the Gem Stockholders will receive promissory notes, as
described below.
The Company did not issue any shares of the Company's
Common Stock to either of the Gem Stockholders at the Closing, and
the Merger Agreement provides that neither of the Gem Stockholders
has any right to vote or dispose of any shares of the Post-Merger
Offering Stock, which remain unissued.
If the per share net offering proceeds in the Offering are
greater than $8.00 per share, the Company will be entitled to retain
out of the net offering proceeds, and will not pay to the Gem
Stockholders as merger consideration, an additional amount, up to
an aggregate of $1.2 million, equal to (i) one-half (1/2) of (ii)
the amount by which the per share net offering proceeds exceed
$8.00 (iii) multiplied by 7,500,000.
In determining the net offering proceeds for purposes of calculating
the amount of the merger consideration, the deduction for the
expenses of the Offering other than underwriting discounts and
commissions will not exceed 0.5% of the gross offering proceeds, or
if the public offering price is $8.00 or more, such deduction will
not exceed the greater of 0.5% of the gross offering proceeds and
$350,000 (the "Offering Expenses").
The Company has agreed not to sell more than 500,000
shares of its Common Stock, other than the Post-Merger Common
Stock, through the Offering or any other underwritten public
offering prior to the Settlement Date, unless all of the Post-
Merger Offering Stock is sold in the Offering. The Offering may
include shares of Common Stock in addition to the Post-Merger
Offering Stock, and the Company will designate which shares to be
included in the Offering will constitute Post-Merger Closing Stock.
Although the Company has agreed in the Merger Agreement
to use commercially reasonable efforts to conclude the
Offering prior to June 1, 1997, the Company has not entered into
any agreements or understandings with any potential underwriters for
the Offering or any other public offering of its securities or
otherwise begun to make preparations for the Offering or any other
public offering. There can be no assurance that the Company will
seek to make a public offering of any of its securities prior to
June 1, 1997, or that any public offering undertaken will be
successfully completed. As of the date of this Report, the Company
believes it is unlikely that the Offering, if proceeded with, would
be made prior to the second quarter of 1997.
If the Offering is not concluded in whole or in part
prior to the Settlement Date, the Company will deliver to the Gem
Stockholders promissory notes in an aggregate principal amount
equal to (i) the Average 10-Day Closing Price of the Common Stock
(as defined in the Merger Agreement) as of the Settlement Date (ii)
multiplied by 7,500,000 (iii) minus $4,000,000 and (iv) minus one-
half (1/2) of any Offering Expenses. Such promissory notes would be
unsecured, would mature on the third anniversary of the Settlement
Date and would accrue interest at the rate of eight percent (8%) per
annum. Interest payments would be payable on a monthly basis.
Until the Settlement Date, these promissory notes will be held in
escrow by a bank for completion and/or release to the Company or the
Gem Stockholders in accordance with a joint notice to be delivered
by the Company and the Gem Stockholders.
If, prior to June 1, 1997, the Company's Common Stock
is not listed or designated for active trading on an established
United States securities market solely as the result of the prior
completion of a "Rule 13e-3 transaction" (as defined in Rule 13e3
("Going Private Transactions by Certain Issuers or Their
Affiliates") of the Securities and Exchange Commission), the Merger
Agreement provides that the date of such Rule 13e-3 transaction
will be the Settlement Date and that the 10-Day Average Closing
Price of the Common Stock will be $9.00 for purposes of determining
the principal amount of the promissory notes issuable to the Gem
Stockholders. Such promissory notes, if issued, will mature six (6)
months after the Settlement Date. Neither the Company nor any
subsidiary of the Company nor, to the best of the Company's
knowledge, any affiliate of the Company has any present intention to
commence any Rule 13e3 transaction.
The merger consideration, regardless of its form, will be
allocated between the Gem Stockholders in proportion to their
ownership of Gem common stock. Immediately prior to the Merger,
Rebeil and Magliarditi owned 4,750 and 150 shares of Gem common
stock, respectively.
The Merger Agreement, as originally entered into, provided for
the merger consideration to be reduced based in part on the cost to
construct The Reserve in accordance with certain standards provided
for in the Merger Agreement. Due to the changes in the scope and
plans of The Reserve made by Gem at the request of Ameristar since
the Merger Agreement was entered into and the resulting delay in the
completion of The Reserve, it would have been impracticable to
determine with accuracy the amount of this consideration
adjustment. In the most recent amendment to the Merger Agreement,
the parties provided for this consideration adjustment to be $4.0
million, as described above, based on certain representations and
warranties made by Gem and Rebeil, including certain of the
financial representations and warranties described below.
Financial Representations and Warranties; Post-Merger Audit of Gem
Balance Sheet. Certain financial representations and warranties
were made by Gem and Rebeil in or pursuant to the Merger Agreement,
including representations and warranties that: (a) Gem's capital
expenditures accrued in connection with the development of The
Reserve as of August 31, 1996 were approximately $19.7 million; (b)
Gem had no material outstanding liabilities to contractors and
materialmen for the construction of The Reserve that were due and
payable as of August 31, 1996; (c) the outstanding principal
balance of Gem's bank debt as of August 31, 1996 and the Closing
Date was $10.0 million and $11.4 million, respectively; (d) Gem had
no other liabilities as of the Closing Date related to The Reserve
or otherwise except as set forth on its unaudited balance sheet
dated as of August 31, 1996 or incurred after that date in the
ordinary course of Gem's business; and (e) Gem's stockholders'
equity as of August 31, 1996 was approximately $11.4 million. The
Company has engaged its independent public accountants to audit
Gem's financial statements as of, and for the periods ending on,
December 31, 1995 and September 30, 1996.
Other Representations and Warranties; The Merger Agreement
contains additional representations and warranties by one or both of
Gem and Rebeil addressing various matters, many of which are
customarily addressed by representations and warranties in
agreements for similar acquisition transactions.
Survival of Representations and Warranties; Indemnification.
The representations and warranties made in or pursuant to the
Merger Agreement survive for a period of three years after the
Closing, or in certain cases until the expiration of applicable
statutes of limitations.
The Merger Agreement provides for Rebeil to indemnify the
Company, ACLVI and their affiliates and representatives against
various liabilities, obligations, costs and expenses arising out of,
resulting from or incident to breaches of representations and
warranties made in or pursuant to the Merger Agreement, breaches of
covenants or agreements made in or pursuant to the Merger Agreement
and certain specified liabilities. Rebeil's aggregate liability for
indemnification claims will not exceed the value of the merger
consideration. The indemnification liability of Rebeil will be
reduced if and to the extent that Ameristar or ACLVI receives,
without a reservation of rights, payment of an insurance claim with
respect to the indemnified claim.
The Merger Agreement also provides for Ameristar and ACLVI to
indemnify the Gem Stockholders against various liabilities,
obligations, costs and expenses arising out of, resulting from or
incident to breaches of representations and warranties made in or
pursuant to the Merger Agreement, breaches of covenants or
agreements made in or pursuant to the Merger Agreement, and certain
obligations or liabilities of Rebeil under certain guarantees by
Rebeil of Gem obligations. The aggregate liability of Ameristar
and ACLVI for indemnification claims will not exceed the value of
the merger consideration.
REPAYMENT OF GEM BANK DEBT; INCREASE IN LONG-TERM DEBT. In
connection with the Closing of the Merger, the Company repaid the
outstanding balance (approximately $11.4 million) of a bank loan of
Gem that was secured by The Reserve. This repayment was funded out
of a draw on the Company's Revolving Credit Facility, which was
increased by $4.5 million to $99.0 million. As of the date of
this Report, the outstanding principal balance of the Company's
Revolving Credit Facility was $99.0 million. As a result of the
increase in the Revolving Credit Facility, the first semi-annual
reduction in available principal under the Revolving Credit
Facility will occur on January 1, 1997 instead of July 1, 1997. The
January 1, 1997 scheduled principal reduction is in the amount of
$4.5 million. The Company anticipates that it will need to obtain
additional financing in order to fund the initial scheduled
principal reduction under the Revolving Credit Facility and any
material capital expenditures other than those for the completion of
the Ameristar Council Bluffs project in Iowa.
The Company is considering various financing arrangements to
increase its long-term debt, including, as previously disclosed, a
possible replacement of the Company's current Revolving Credit
Facility with an approximately $175 million bank credit facility.
The Company is currently in negotiations with Wells Fargo Bank,
N.A., the lead agent for the Company's current Revolving Credit
Facility, and other lenders concerning such a replacement of the
Revolving Credit Facility. There can be no assurance that these
negotiations or any other financing arrangement will be completed by
January 1, 1997 or at all. For additional information on the
Company's liquidity and capital resources, see "Management's
Discussion and Analysis of Financial Condition and Results of
Operation-Liquidity and Capital Resources" in the Company's Reports
on Form 10-K and 10-Q for the year and quarter ended December 31,
1995 and June 30, 1996, respectively.
REGULATORY APPROVALS. The Merger did not require the prior
approval or consent of any gaming regulatory authority in the
States of Nevada, Mississippi and Iowa, and the Company does not
believe that the issuance of the above-described promissory notes as
merger consideration, if necessary, will require the Company to
obtain any approval or consent of any such regulatory authority.
However, any of the Nevada, Mississippi or Iowa gaming authorities
could require either or both Rebeil or Magliarditi to be found
suitable as the holders of debt securities of the Company. If a
creditor of the Company is found to be unsuitable by such a
regulatory authority, the Company could be sanctioned if it makes
payments on the debt to the creditor. Pursuant to other regulatory
requirements, each of Rebeil and Magliarditi has filed an
application with the Nevada gaming authorities for a finding of
suitability. In addition, any public offering by the Company of its
securities, including the Offering, requires the approval of the
Nevada gaming authorities. For additional information, see
"Business--Government Regulations" in the Company's Report on Form
10-K for the year ended December 31, 1996.
ADDITIONAL ARRANGEMENTS WITH REBEIL. Under the Merger
Agreement, as originally entered into, Rebeil was to become Vice
Chairman of the Company's Board of Directors and enter into a long-
term employment agreement with the Company. In the most recent
amendment to the Merger Agreement, the parties agreed that Rebeil
would not join the Company as a director, officer or employee or in
any other capacity. The Merger Agreement provides that the Company
will pay a monthly stipend to Rebeil in the amount of $25,000 on the
Closing Date and on the first day of each month thereafter until
the Settlement Date. The Company made the initial stipend payment
to Rebeil on the Closing Date. The Merger Agreement also provides
for Rebeil to use on a rent-free basis certain office space in a
modular office facility adjacent to The Reserve construction site
for a period from the Closing Date until 10 days after the
Settlement Date.
EMPLOYMENT OF MAGLIARDITI. The Merger Agreement provides for
Ameristar to employ Magliarditi after the closing as Senior Vice
President/Co-General Counsel pursuant to an employment agreement.
The employment agreement has not been completed as of the date of
this Report, but the Merger Agreement provides that the employment
agreement will include the following primary terms and conditions:
(i) a contract term of three years, automatically renewable for
successive one-year terms unless either party gives six months'
prior notice of termination; (ii) a base annual salary of $200,000;
and (iii) if the Company terminates Magliarditi's employment without
cause or if Magliarditi terminates his employment for good reason
(as defined, which includes a failure by the Company to extend the
term of the agreement), a severance payment in an amount determined
in part by the remaining contract term.
Magliarditi has filed an application with the Nevada gaming
regulatory authorities for a finding of suitability to be an
officer of the Company, which is currently expected to be
considered during public hearings in November 1996. Magliarditi has
agreed that until the Nevada gaming authorities act upon his
application for a finding of suitability, he will not assume any
position as an officer of the Company.
TRANSACTIONS WITH GEM AIR, INC. Gem Air, Inc., a corporation
wholly owned by Rebeil ("Gem Air"), was the sole owner of a 1982 Cessna
Citation ISP jet aircraft (the "Aircraft") and leased the ground, and
certain improvements thereto, upon which Gem Air had previously
completed a hangar facility located at McCarran International Airport in
Las Vegas, Nevada (the "Hangar"). On July 5, 1996 (the "Aircraft
Closing Date"), the Company and Gem Air consummated various transactions
relating to the Aircraft and the Hangar in accordance with the
provisions of the Merger Agreement. The following description of the
terms of these transactions is qualified in its entirety by, and made
subject to, the actual provisions of the relevant agreements, which have
been filed and/or incorporated by reference as exhibits to this Report
on Form 8-K.
The Company purchased from Gem Air a one-half (1/2) interest in the
Aircraft for approximately $466,123. The Aircraft is encumbered by a
loan from a commercial lender, the principal amount of which was
approximately $667,750 as of the Aircraft Closing Date. The Company and
Gem Air own the Aircraft as tenants in common and entered into an
Aircraft Operating Agreement. Under the Aircraft Operating Agreement,
the Company has operational control of the Aircraft and is responsible
for servicing the commercial loan secured by the Aircraft and paying all
maintenance and other operating costs of the Aircraft, except that Gem
Air is responsible for the variable costs of the use of the Aircraft by
Gem Air or its agents. The Aircraft Operating Agreement includes
provisions permitting either co-owner to initiate a sale of the
Aircraft, which may include a sale of one coowner's interest in the
Aircraft to the other co-owner.
Gem Air conveyed the Hangar, including an assignment of its
leasehold interests, to Nevada AG Air, Ltd., a Nevada limited liability
company, the members of which are the Company and Gem Air ("Nevada AG
Air"). The Company and Gem Air, acting together, are the managers of
Nevada AG Air. Concurrently with the conveyance of the Hangar, Nevada
AG Air subleased the Hangar to the Company for a term ending on July 31,
2025, at a monthly rental equal to the base rental payable under the
ground lease (currently $3,674) plus $100. The Company has contributed
$361,705 in cash to Nevada AG Air and Gem Air contributed to Nevada AG
Air assets with an agreed value of $579,898. Nevada AG Air made an
initial distribution of $289,949 to Gem Air. The conveyance of the
Hangar by Gem Air to Nevada AG Air was made subject to a bank loan
secured by the Hangar in the principal amount of approximately $320,000.
The Company is making the payments necessary to service this loan, which
payments are considered additional capital contributions to Nevada AG
Air. Based on each member's net capital contributions to Nevada AG Air
as of the date of this Report, the Company and Gem Air have 55.5% and
44.5% percentage interests, respectively, in Nevada AG Air.
CAUTIONARY STATEMENT CONCERNING FORWARD LOOKING STATEMENTS. The
information included in this Report includes forward-looking statements,
such as statements concerning the redesign, construction and financing of
The Reserve, the anticipated increase in the Company's long-term debt, the
contemplated public offering of the Company's Common Stock prior to June
1, 1997, anticipated market and competitive conditions that will affect
The Reserve, the potential impact of gaming regulatory requirements in
connection with the Merger and the existence or absence of environmental
contamination affecting The Reserve site. Actual results might differ
materially from those projected in or anticipated or contemplated by these
forwardlooking statements due to various factors, many of which are beyond
the control of the Company. Information concerning some of
these factors is set forth above in this Report and in the Company's
other publicly available reports on Forms 10-K, 10-Q and 8-K filed
with the Securities and Exchange Commission. In addition to the
cautionary statements in this Report, attention is drawn to the
cautionary statements included under the captions "Business-Government
Regulations" in the Company's Report on Form 10-K for the fiscal year
ended December 31, 1995, and "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in each of the 1995
Form 10-K and the Company's Report on Form 10-Q for the quarterly
period ended June 30, 1996.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS.
(a) and (b) Financial Statements and Pro Forma Financial
Information.
The financial statements and the pro forma financial
information relating to the transaction described in Item
2 of this Report (collectively, the "Financial
information"), which are required to be filed as part of this Report
pursuant to paragraphs (a) and (b) of Item 7 of Form 8K, are not
included with this filing in reliance on Items 7(a)(4) and 7(b)(2) of
Form 8-K. It is impracticable to provide the Financial
Information at the time this Report is filed.
In accordance with Item 7(a)(4) of Form 8-K, the Financial
Information will be filed by amendment to this Report on
Form 8-K/A as soon as practicable, but not later than
December 23, 1996.
(c) Exhibits.
2. Plan of Acquisition, Reorganization,
Liquidation or Succession. See Exhibits 10.1 through 10.9 and
Exhibit 99.1.
10.1 Merger Agreement by and among Gem
Gaming, Inc., Ameristar Casinos, Inc., Ameristar Casino
Las Vegas, Inc., Steven W. Rebeil and Dominic J.
Magliarditi, dated as of May 31, 1996. Incorporated by
reference to Exhibits 10.1 and 99.1 to the Ameristar
Casinos, Inc. Report on Form 10-Q for the quarterly
period ended June 30, 1996 (the "June 30, 1996 10-
Q").
10.2 First Amendment to Merger Agreement
by and among Gem Gaming,Inc., Ameristar Casinos,
Inc., Ameristar Casino Las Vegas, Inc., Steven W.
Rebeil and Dominic J. Magliarditi, dated as of July
2, 1996. Incorporated by reference to Exhibit 10.5
to the June 30, 1996 10-Q.
10.3 Second Amendment to Merger Agreement by
and among Gem Gaming, Inc., Ameristar Casinos, Inc.,
Ameristar Casino Las Vegas, Inc., Steven W.
Rebeil and Dominic J. Magliarditi, dated as of
September 27, 1996. See also Exhibit 99.1.
10.4 Gem Individuals' Notes Escrow Agreement
and Escrow Instructions by and
among Ameristar Casinos, Inc.,
Steven W. Rebeil and Dominic J.
Magliarditi, dated as of September
27, 1996.
10.5 Letter agreement between Ameristar
Casinos, Inc. and Dominic J.
Magliarditi, dated as of
October 3, 1996.
10.6 Purchase Agreement between Ameristar
Casinos, Inc. and Gem Air, Inc. dated
as of June 30, 1996. Incorporated by
reference to Exhibit 10.6 to the June
30, 1996 10-Q.
10.7 Aircraft Operating Agreement between
Ameristar Casinos, Inc. and Gem Air,
Inc., dated as of July 5, 1996.
Incorporated by reference to Exhibit
10.4 to the June 30, 1996 10-Q.
10.8 Operating Agreement of Nevada AG Air,
Ltd., dated as of July 5, 1996.
Incorporated by reference to Exhibit
10.2 to the June 30, 1996 10-Q.
10.9 Sublease between Ameristar Casinos,
Inc. and Nevada AG Air, Ltd., dated as
of June 30, 1996. Incorporated by
reference to Exhibit 10.3 to the June
30, 1996 10-Q.
99.1 Agreement to furnish the Securities
and Exchange Commission certain omitted exhibits and
schedules to Exhibit 10.3.
SIGNATURE
Pursuant to the requirements of the Securities
Exchange Act of 1934, the undersigned registrant
has duly caused this report to be signed on its
behalf by the undersigned hereunto duly
authorized.
AMERISTAR CASINOS, INC.
(Registrant)
Date: October 23 , 1996
By: /s/ Thomas M.Steinbauer
Thomas M. Steinbauer,
Senior Vice President
and Chief
Financial Officer
INDEX TO EXHIBITS
Exhibit Method of Filing
2. Plan of Acquisition, Reorganization, See Exhibits 10.1 through
Liquidation or Succession. 10.9 and Exhibit 99.1.
10.1 Merger Agreement by and among Gem Incorporated by reference to
Gaming, Inc., Ameristar Casinos, Exhibits 10.1 and 99.1 to
Inc., Ameristar Casino Las Vegas, the Ameristar Casinos, Inc.
Inc., Steven W. Rebeil and Dominic Report on Form 10-Q for the
J. Magliarditi, dated as of May 30, quarterly period ended
1996. June 30, 1996 (the "June 30,
1996 10-Q").
10.2 First Amendment to Merger Agreement Incorporated by reference to
by and among Gem Gaming, Inc., Exhibit 10.5 to the June 30,
Ameristar Casinos, Inc., Ameristar 1996 10-Q.
Casino Las Vegas, Inc., Steven W.
Rebeil and Dominic J. Magliarditi,
dated as of July 2, 1996.
10.3 Second Amendment to Merger Agreement Filed herewith electronically
by and among Gem Gaming, Inc.,
Ameristar Casinos, Inc., Ameristar
Casino Las Vegas, Inc., Steven W.
Rebeil and Dominic J. Magliarditi,
dated as of September 27, 1996. See
also Exhibit 99.1.
10.4 Gem Individuals' Notes Escrow Filed herewith electronically
Agreement and Escrow Instructions
by and among Ameristar Casinos, Inc.,
Steven W. Rebeil and Dominic
J. Magliarditi, dated as of
September 27, 1996.
10.5 Letter agreement between Ameristar Filed herewith electronically
Casinos,Inc. and Dominic J.
Magliarditi, dated as of
October 3, 1996.
10.6 Purchase Agreement between Incorporated by reference to
Ameristar Casinos, Inc. and Gem Exhibit 10.6 to the June 30,
Air, Inc. dated as of June 30, 1996 10-Q.
1996.
10.7 Aircraft Operating Agreement Incorporated by reference to
between Ameristar Casinos, Inc. Exhibit 10.4 to the June 30,
Gem Air, Inc., dated as of 10-Q. 1996.
July 5, 1996.
10.8 Operating Agreement of Nevada Incorporated by reference to
AG Air, Ltd., dated as of Exhibit 10.2 to the June 30, 1996.
July 5, 1996 10-Q.
10.9 Sublease between Ameristar Incorporated by reference to
Casinos, Inc. and Nevada AG Air, Exhibit 10.3 to the June 30,
Ltd., dated as of June 30, 1996. 1996 10-Q.
99.1 Agreement to furnish the Filed herewith electronically
Securities and Exchange
Commission certain omitted
exhibits and schedules to
Exhibit 10.3.
SECOND AMENDMENT TO MERGER AGREEMENT
This SECOND AMENDMENT TO MERGER AGREEMENT dated as of
September 27, 1996 (this "Amendment"), is made by and among GEM
GAMING, INC., a Nevada corporation ("Gem"), AMERISTAR CASINOS,
INC., a Nevada corporation ("Ameristar"), AMERISTAR CASINO LAS
VEGAS, INC., a Nevada corporation and a wholly owned subsidiary
of Ameristar ("ACLV"), STEVEN W. REBEIL, an individual and in his
capacity as Trustee of the Karizma Trust created under that
certain Trust Agreement, dated July 2, 1991, as amended
("Rebeil"), and DOMINIC J. MAGLIARDITI, an individual
("Magliarditi," and together with Rebeil, the "Gem Individuals").
Recitals
A. WHEREAS, Gem, Ameristar, ACLV and the Gem
Individuals are parties to that certain Merger Agreement dated as
of May 31, 1996, as amended by that certain First Amendment to
Merger Agreement dated as of July 2, 1996 (the "Merger
Agreement"), pursuant to which Gem will be merged with and into
ACLV.
B. WHEREAS, Rebeil has concluded that he has
philosophical disagreements with Ameristar's managerial style,
and as a consequence of such conclusion, and certain other
reasons, Gem, Ameristar, ACLV and the Gem Individuals now desire
to further amend the Merger Agreement as set forth herein.
Agreement
NOW, THEREFORE, in consideration of the mutual
agreements, provisions and covenants contained in this Amendment,
and intending to be legally bound hereby, Gem, Ameristar, ACLV
and the Gem Individuals hereby agree as follows:
Article 1
Definitions
1.1 Undefined Terms. Except for those terms defined
herein, all capitalized terms shall have the meanings set forth
in the Merger Agreement.
1.2 Additional Terms. The following terms are hereby
added to the Merger Agreement and shall have the following
meanings:
"Additional Stock" shall mean Ameristar Common Stock
included in the Offering that is not Post-Merger Offering
Stock, as designated by Ameristar by written notice to
Rebeil and Magliarditi on or before the closing of the
Offering. The amount of Additional Stock that may be
included in the Offering is subject to limitation as set
forth in Section 2.10(a) of the Merger Agreement.
"Closing Date Balance Sheet" shall mean the unaudited
Balance Sheet of Gem dated as of the August 31, 1996 and
prepared in accordance with GAAP and Regulation S-X.
"Gem Individuals' Notes Escrow Agreement" shall mean
that certain Gem Individuals' Notes Escrow Agreement and
Escrow Instructions dated as of the Closing Date and
executed by the Escrow Agent, Ameristar, Magliarditi and
Rebeil.
"Gem Individuals' Notes" shall mean the "Rebeil Note"
and the "Magliarditi Note," as such terms are defined in
Section 2.10 of the Merger Agreement (as amended by the
Second Amendment).
"Gem Individuals' Share of Completion Differential"
shall be deemed to mean Four Million Dollars ($4,000,000)
solely for the purpose of calculating the amounts payable to
the Gem Individuals in accordance with Section 2.10 hereof.
The Gem Individuals' Share of Completion Differential
represents the parties' settlement and compromise with
respect to the calculation of the "Adjustment Amount" (as
said term is used in the Merger Agreement). The settlement
and compromise with respect to the Gem Individuals' Share of
Completion Differential shall not be deemed a representation
or acknowledgment by any party with respect to the facts
underlying the calculation of the "Adjustment Amount," it
being understood that each party shall have the right to
continue to rely upon the accuracy of the respective
warranties made in its favor by the other parties pursuant
to the Merger Agreement and the documents and certificates
delivered pursuant thereto.
"Going Private Event" shall mean the removal of
Ameristar Common Stock from listing or designation for
active trading on an established United States securities
market solely as the result of the prior completion of a
"Rule 13e-3 transaction" (as defined in Rule 13e-3 of the
SEC).
"Net Proceeds of the Post-Merger Offering Stock" shall
mean the proceeds of the Post-Merger Offering Stock sold in
the Offering, less the pro rata share (based on the amount
of Post-Merger Offering Stock sold in the Offering as a
portion of the total amount of Ameristar Common Stock sold
in the Offering) of the Offering Expenses. Ameristar shall
provide Rebeil with a reasonable opportunity to review
Ameristar's calculation of said costs and the back-up data
(e.g., invoices from professionals) used to calculate said
costs (it being understood that the foregoing shall not be
construed as requiring Ameristar to disclose information
which Ameristar's counsel concludes is subject to attorney-
client privilege or attorney work product disclosure
protection).
"Offering Expenses" shall mean the sum of (a) the
underwriter's discount and commission and (b) expenses,
attorneys' fees and accountants' fees, printing costs,
filing fees and all other costs (excluding underwriter's
discount and commission) to the extent that they reasonably
arise as a consequence of Ameristar's efforts to effect the
Offering; provided, however, that for purposes of this
Agreement, the amount set forth in clause (b) of this
definition of the term "Offering Expenses" shall not exceed
(i) if the gross price per share paid by the purchasers of
stock in the Offering is less than $8.00/share, then one-
half of one percent of the gross proceeds of the Offering,
or (ii) if the gross price per share paid by the purchasers
of stock in the Offering is greater than or equal to
$8.00/share, then the greater of (A) one-half of one percent
of the gross proceeds of the Offering and (B) $350,000. As
implemented by the provisions of Schedules 6 and 7 to the
Escrow Agreement, if the Offering does not occur on or
before the Settlement Date, then the Offering Expenses shall
be borne equally by the Gem Individuals and Ameristar.
"Offering" shall have the meaning set forth in Section
2.10 of the Merger Agreement (as amended by the Second
Amendment).
"Post-Merger Offering Stock" shall mean seven million
five-hundred thousand (7,500,000) shares of Ameristar Common
Stock. Notwithstanding the use of such defined term, the
Gem Individuals acknowledge and agree that nothing herein
shall be construed as conferring upon the Gem Individuals
any right, title or interest to the Post-Merger Offering
Stock (it being understood, however, that the Gem
Individuals shall have the right to receive the respective
payments contemplated by Section 2.10 of the Merger
Agreement).
"Second Amendment" shall mean the Second Amendment to
Merger Agreement dated as of September 27, 1996, by and
among Gem, Ameristar, ACLV and the Gem Individuals.
"Settlement Date" shall mean the earlier of (i) the
date that is eight (8) months after the Closing Date (but no
later than June 1, 1997), (ii) the closing of the sale of
Ameristar Common Stock sold in the Offering, or (iii) the
date (if any) upon which a Going Private Event occurs.
1.3 Revised Terms. The definitions of the following
terms set forth in Section 1.1 of the Merger Agreement are hereby
amended to read as follows:
"Ancillary Agreements" shall mean the Gem Individual
Notes Escrow Agreement and the Gem Individuals' Notes.
"Closing Date" shall mean October 1, 1996, or as soon
thereafter as Ameristar in good faith can obtain appropriate
amendments to its credit facility with Wells Fargo in order to
obtain funds to pay off, on the Closing Date, the loan to Gem
from Bank of America.
"Merger Consideration" shall mean Gem Individuals'
right to payment pursuant to Sections 2.10 and 2.12 of the
Merger Agreement, as amended by the Second Amendment."
1.4 Re-defined Term. The defined term "Ineligible
Person" in Section 1.1 of the Merger Agreement is replaced so
that henceforth all references to Ineligible Person shall be
replaced with the term "Exiting Gem Shareholder." The substance
of the definition shall not change.
Article 2
Acknowledgment of Parties
The parties agree that each of the Gem Individuals
shall be treated as an "Exiting Gem Shareholder" for purposes of
Section 7.3 of the Merger Agreement.
Article 3
Amendments to Merger Provisions
3.1 Conversion of Shares. Section 2.8 and Section 2.9
of the Merger Agreement are hereby amended by deleting such
sections in their entirety and inserting the following in their
place:
"2.8 Conversion of Shares. In consideration for the
Merger, all of the shares of Gem Stock shall be exchanged
for the right of Rebeil and Magliarditi to receive payments
in accordance with Sections 2.10 and 2.12."
3.2 Offering. Section 2.10 of the Merger Agreement
entitled "Consideration Adjustment" is hereby amended by deleting
such section in its entirety and inserting the following in its
place:
"2.10 Post-Closing Offering. Ameristar shall use
commercially reasonable efforts to conclude an underwritten
public offering of Ameristar Common Stock (the "Offering")
on or before the date that is eight (8) months after the
Closing Date (but no later than June 1, 1997), subject to
the following terms and conditions:
(a) The Offering. Ameristar shall determine the
number of shares of Ameristar Common Stock that will be
included in the Offering in the exercise of its good faith
discretion after consultation with the Underwriter (as such
term is defined below); provided, however, that under no
circumstances shall Ameristar be entitled to sell through an
underwritten public offering more than five-hundred thousand
(500,000) shares of Additional Stock before the Settlement
Date unless Ameristar shall have previously sold or
contemporaneously sells all of the Post-Merger Offering
Stock in the Offering. Notwithstanding the foregoing,
nothing in this Agreement shall be deemed a limitation on
(1) Ameristar's right to manage, finance, sell, dispose of
or otherwise deal with its assets and its businesses, or (2)
Ameristar's right to effect additional offerings of
Ameristar Common Stock, after the Settlement Date, on such
terms as Ameristar may deem appropriate.
(b) The Underwriter. The lead managing underwriter of
the Offering shall be a nationally recognized underwriter
selected by Ameristar and Rebeil (the "Underwriter"). In
connection with the selection of the Underwriter (1)
Ameristar shall require the Underwriter and Ameristar's
accountants and attorneys materially involved in the
Offering to provide estimates of their anticipated fees and
expenses in connection with the Offering, and (2) Ameristar
shall provide Rebeil, prior to selection of the Underwriter,
with an opportunity to meet with the final potential
underwriter candidates so as to discuss in general terms
such candidates' proposed plans for the Offering. Rebeil
shall not unreasonably withhold or deny his approval of the
Underwriter.
(c) Additional Rights of The Gem Individuals with
Respect to the Offering. The Gem Individuals shall have the
following rights in connection with the Offering: (i) the
Gem Individuals shall have the right to meet with the
Underwriter, as reasonably requested by the Gem Individuals,
to discuss the status of the Offering; (ii) Ameristar shall
provide, in a reasonably prompt fashion following request,
the Gem Individuals with information reasonably requested by
them with respect to the marketing (including "road shows")
and the status of the Offering through the Settlement Date;
and (iii) the Gem Individuals shall be provided with
reasonable advance notice (which shall mean at least five
(5) days, when reasonably possible) of, and shall be
entitled to attend, informational meetings (i.e., "road
shows") with respect to the Offering. Except as otherwise
provided herein, Ameristar shall have no obligation to
provide the Gem Individuals with any information with
respect to Ameristar or the Offering.
(d) Limitations on Rights of Gem Individuals With
Respect to the Offering. Notwithstanding any provisions of
this Agreement to the contrary, neither of the Gem
Individuals
shall take, or cause or permit any of his Affiliates to take,
directly or indirectly, any action with respect to the
Offering, and neither Ameristar nor ACLV shall be required
to take or omit to take, any action with respect to the
Offering, if (i) in the reasonable determination of counsel
experienced in securities laws and regulations and working
on the Offering, such action would violate any applicable
law ("Applicable Law") (including without limitation the
Securities Act, the Exchange Act, the rules and regulations
of the SEC and any state securities law), or (ii) the
Underwriter determines that such action would not be
appropriate in connection with the Offering.
(e) The Gem Individuals' Obligations With Respect to
the Offering. Until the Settlement Date, each of the Gem
Individuals shall:
(i) At all times reasonably cooperate with
Ameristar in connection with the Offering and Ameristar SEC
filings and take all steps reasonably requested by Ameristar
in connection with the Offering or Ameristar SEC filings.
Such steps may include, without imitation, (A) the delivery
of agreements, certificates, instruments and documents
reasonably requested by the Underwriter, (B) the provision
of any information reasonably necessary to describe the Gem
Individuals' involvement with Ameristar, or the Gem
Individuals' interest in the net proceeds of the Post-Merger
Offering Stock, for any document to be filed by Ameristar
with the SEC or any state securities administrator,
including the Registration Statement and any public
statement to be made by Ameristar, and (C) the provision of
such information, representations, certificates or other
documents that may be reasonably requested by Ameristar's
independent public accountants in connection with any audit
or review of any Gem Financial Statements, including without
limitation, the Closing Date Balance Sheet. Each of the Gem
Individuals shall cause all information that he shall
provide to Ameristar neither to contain any untrue statement
of material fact nor to omit to state any material fact
necessary to make such information or any part thereof not
misleading.
(ii) Not disclose any information about Ameristar,
ACLV or any of Ameristar's other Subsidiaries or Affiliates
that is not generally known by the general public, without
the prior consent of Ameristar and approval of its outside
counsel, except on a "need to know" basis to the Underwriter
and counsel and experts retained by the Gem Individuals who
have agreed not to purchase, sell or otherwise deal in
Securities or other securities of Ameristar and who have
agreed to be bound by the confidentiality limitations
imposed by this Agreement.
(iii) Not (A) buy, sell or otherwise trade any
Securities or other securities of Ameristar or any options
to purchase or sell Ameristar Common Stock written by
persons other than Ameristar, (B) cause or permit any of his
Affiliates to buy, sell or otherwise trade, directly or
indirectly, any such securities, or (C) direct, cause or
influence, directly or indirectly, any other person to buy,
sell or otherwise trade such securities.
(iv) Without limiting clause (iii) above, not,
directly or indirectly, take any action himself, cause or
permit any action to be taken by any of his Affiliates, or
direct, cause or influence any third party to take any
action, that would (A) violate any of Sections 11, 12 or 17
of the Securities Act, Section 10(b) of the Exchange Act, or
Rules 10b-5 or 10b-6 of the SEC, whether or not in
connection with the Offering, (B) result in a breach of, or
failure of a representation made by Ameristar in, the
underwriting agreement for the Offering, or (C) result in a
breach of, or failure of a representation made by such Gem
Individual in, any agreement, certificate, instrument or
document executed by such Gem Individual for the benefit of
the Underwriter.
(f) The Gem Individuals' Right to Comment. Until the
Settlement Date, each of the Gem Individuals shall review
all documentation provided by Ameristar or the Underwriter
in connection with the Offering and periodically provide
comments and suggestions to Ameristar and the Underwriter
with respect to such documents regarding the marketing and
terms of the Offering (including the correction of any
information contained in any such document that such Gem
Individual knows or believes to be false or misleading).
Ameristar shall review and consider the Gem Individuals'
comments in good faith, but Ameristar shall have no
obligation to modify its proposed course of conduct or take
any action based on such comments or suggestions.
(g) Sale of All of the Post-Merger Offering Stock.
Except as provided in clause 2.10(i), if, on or before the
Settlement Date, the closing of the Offering occurs and
pursuant thereto Ameristar sells all of the Post-Merger
Offering Stock, then Ameristar and the Gem Individuals,
within three (3) Business Days after the Settlement Date,
shall take the following steps:
(i) First, said parties shall calculate the "Gem
Individuals' Shared Proceeds," which shall equal (A) the Net
Proceeds of the Post-Merger Offering Stock minus (B) the sum
of:
(1) the Gem Individuals' Share of the
Completion Differential ($4,000,000); plus
(2) one-half (1/2) of the excess (if any) of
the Net Proceeds of the Post-Merger Offering Stock over
a threshold amount determined by multiplying the number
of shares of Post-Merger Offering Stock sold in the
Offering times $8.00/share. Notwithstanding the
foregoing, the amount calculated pursuant to this
clause (2) shall not exceed One Million Two Hundred
Thousand Dollars ($1,200,000). Thus, if the Net
Proceeds of the Post-Merger Offering Stock are less
than the aforementioned threshold amount, then the
figure calculated in this clause (2) shall be zero
dollars ($0).
(ii) Second, said parties shall calculate (A) the
"Rebeil Payment," which shall equal the Gem Individuals'
Shared Proceeds multiplied times Rebeil's Gem Proportionate
Interest (7,270,408/7,500,000), and (B) the "Magliarditi
Payment," which shall equal the product of the Gem
Individuals' Shared Proceeds multiplied times Magliarditi's
Gem Proportionate Interest (229,592/7,500,000).
(iii) Third, Ameristar shall pay the Rebeil
Payment to Rebeil and the Magliarditi Payment to Magliarditi
within three (3) Business Days after the Settlement Date.
To the extent practicable, Ameristar shall endeavor to cause
said payments to be effected by direct disbursements from
the Underwriter.
(iv) Fourth, Rebeil, Magliarditi and Ameristar
shall each truthfully execute and deliver to Escrow Agent a
notice in the form of Schedule 1 attached to the Gem
Individuals' Notes Escrow Agreement, and Rebeil and
Magliarditi shall take such further actions as Ameristar may
request in order to cause the Rebeil Note, the Alternative
Rebeil Note, the Magliarditi Note and the Alternative
Magliarditi Note to be marked "CANCELLED" and delivered to
Ameristar (provided that in no event shall Rebeil or
Magliarditi be required to take any such actions earlier
than the date that the Rebeil Payment is delivered to Rebeil
and the Magliarditi Payment is delivered to Magliarditi).
(h) Sale of Less than All of the Post-Merger Offering
Stock. At the request of the Gem Individuals, if, on or
before the Settlement Date, Ameristar fails to sell all of
the Post-Merger Offering Stock in the Offering, then
Ameristar shall provide each of Rebeil and Magliarditi with
a promissory note for the respective value of such party's
Gem Proportionate Interest of the Post-Merger Offering
Stock, as determined by the Average 10-Day Closing Price as
of the Settlement Date, less the Gem Individuals' Share of
the Completion Differential. The parties have determined to
proceed on the basis of the general intent behind the
proposal of the Gem Individuals. Accordingly, in
furtherance of this general intent, the parties agree more
specifically as follows:
(i) At the Closing, Rebeil, Magliarditi and
Ameristar shall each execute and deliver to the Escrow Agent
the Note Escrow Agreement. In connection therewith,
Ameristar shall execute and deliver to the Escrow Agent, for
handling pursuant to the Escrow Agreement, the following:
(A) A promissory note in the form of
Schedule 1 attached to the Escrow Agreement (the "Rebeil
Note"), which shall continue to have blanks for the "date of
the note" and the "principal amount" (which shall be
delivered or cancelled only in accordance with the Escrow
Agreement);
(B) A promissory note in the form of
Schedule 2 attached to the Escrow Agreement (the
"Alternative Rebeil Note"), which shall be completed so that
the principal amount thereof equals the Average 10-Day
Closing Price as of the Closing Date multiplied by 7,270,408
shares but which shall continue to have a blank for the
"Settlement Date";
(C) A promissory note in the form of
Schedule 3 to the Escrow Agreement (the "Magliarditi Note"),
which shall continue to have blanks for the "date of the
note" and the "principal amount" (which shall be delivered
or cancelled only in accordance with the Escrow Agreement);
(D) A promissory note in the form of
Schedule 4 attached to the Escrow Agreement (the
"Alternative Magliarditi Note"), which shall be completed so
that the principal amount thereof equals the Average 10-Day
Closing Price as of the Closing Date multiplied by 229,592
shares but which shall continue to have a blank for the
"Settlement Date."
(ii) Except as provided in clause 2.10(i) below,
if Ameristar fails to sell all of the Post-Merger Offering
Stock in the Offering before the Settlement Date, then:
(A) within three (3) Business Days after the
Settlement Date, Ameristar shall calculate the amount of the
Offering Expenses and truthfully complete, execute and
deliver to Rebeil and Escrow Agent a notice in the form of
Schedule 6 attached to the Escrow Agreement. Following
Rebeil's approval of said notice (which approval shall not
be unreasonably withheld), Rebeil shall execute the same and
deliver a copy to the Escrow Agent, and Ameristar and Rebeil
thereafter shall take such further steps as may be
reasonably necessary in order to cause the Escrow Agent (1)
to complete the Rebeil Note in accordance with the terms of
said notice and to deliver the Rebeil Note to Rebeil and (2)
to mark the Alternative Rebeil Note as "CANCELLED" and to
return the Alternative Rebeil Note to Ameristar.
Notwithstanding the foregoing, if Ameristar fails to timely
deliver a completed notice in the form of Schedule 6 to
Rebeil and Escrow Agent on or before the end of the third
(3rd) Business Day following the Settlement Date, then
Rebeil shall have the right to truthfully complete said
notice and deliver the same to the Escrow Agent.
(B) within three (3) Business Days after the
Settlement Date, Ameristar shall each truthfully complete,
execute and deliver to Magliarditi and Escrow Agent a notice
in the form of Schedule 7 attached to the Note Escrow
Agreement. Following approval of said notice (which
approval shall not be withheld so long as the calculations
thereon are made on a basis consistent with the calculations
made in the notice approved by Rebeil pursuant to clause (A)
above), Magliarditi shall execute the same and deliver a
copy to the Escrow Agent, and Ameristar and Magliarditi
shall take such further steps as may be reasonably necessary
in order to cause the Escrow Agent (1) to complete the
Magliarditi Note in accordance with the terms of said notice
and to deliver the Magliarditi Note to Magliarditi and (2)
to mark the Alternative Magliarditi Note as "CANCELLED" and
to return the Alternative Magliarditi Note to Ameristar.
Notwithstanding the foregoing, if Ameristar fails to timely
deliver a completed notice in the form of Schedule 7 to
Magliarditi and Escrow Agent on or before the end of the
third (3rd) Business Day following the Settlement Date, then
Magliarditi shall have the right to truthfully complete said
notice and deliver the same to the Escrow Agent.
(i) Going Private Event. If a Going Private Event
occurs, then the Gem Individuals shall not be entitled to
the payments, notes or Ameristar Common Stock described in
Section 2.10(g) or 2.10(h) of the Merger Agreement. In lieu
thereof, Ameristar and the Gem Individuals shall each
execute and deliver to Escrow Agent, within three (3)
Business Days after the Settlement Date, a notice in the
form attached to the Escrow Agreement as Schedule 8. Upon
the determination, if any, by any person to commence a Rule
13e-3 transaction with respect to Ameristar Common Stock,
Ameristar shall not be obligated to proceed, and shall not
proceed, further with the Offering.
3.3 Stipend and Occupancy Rights. New Sections 2.12
and 2.13 are hereby added to the Merger Agreement as follows:
"2.12 Stipend. Ameristar shall pay Twenty-Five
Thousand Dollars ($25,000) to Rebeil on the Closing Date or
October 2, 1996, whichever occurs first. On the Closing
Date, Ameristar further shall deposit into the Escrow
$175,000 with an irrevocable instruction to the Escrow
Agent: (a) to disburse Twenty-Five Thousand Dollars
($25,000) to Rebeil on the first day of each calendar month
commencing November 1, 1996 through the Settlement Date; (b)
pending disbursement, to invest such funds in interest
bearing accounts (with the income charged to Ameristar's
taxpayer identification number); and (c) upon written notice
from Ameristar following the Settlement Date, to return any
undisbursed balance to Ameristar."
"2.13. Post-Closing Occupancy Through Settlement
Date. From the Closing Date until the day that is ten (10)
days after the Settlement Date, ACLV shall permit Rebeil to
use and occupy, rent free, the portion of ACLV's premises
located near the Reserve that is more particularly described
on Exhibit "B attached hereto (the "Premises"). Neither
Rebeil nor any employee of Rebeil nor any employee of any
company owned or controlled by Rebeil shall initiate contact
with or make any attempt to communicate with any employee,
invitee or licensee of Ameristar or ACLV unless Craig H.
Neilsen, Brian E. Katz, Thomas M. Steinbauer or another
employee of Ameristar or ACLV previously designated in
writing for such purposes shall have consented to such
communication. Rebeil shall not unreasonably request such
consent.
Rebeil shall use the Premises only for general office purposes
and shall not use the Premises for any unlawful purpose,
violate any government ordinance or create any nuisance.
Rebeil shall neither disrupt the activities of ACLV, other
tenants or employees, licenses or invitees of ACLV, nor
interfere with or disturb the operation of ACLV's business.
Rebeil shall not sublet or sub-license any portion of the
Premises. If Rebeil breaches any provision of this
Agreement, then ACLV shall be entitled to exercise all
remedies at law or in equity, including any provisional
remedy or remedies (i.e., unlawful detainer) that a landlord
has with respect to its tenant's breaches of lease."
Article 4
Amendments to Covenants and Conditions
4.1 Vote Required. The first two sentences of Section
5.10 of the Merger Agreement entitled "Vote Required" are hereby
deleted in their entirety.
4.2 Employee Matters. Section 6.9 of the Merger
Agreement is hereby amended by deleting such section in its
entirety and inserting the following in its place:
"6.9 Employee Matters. Ameristar and Magliarditi shall
enter into an employment agreement in a form approved by
Ameristar and Magliarditi containing the material terms set
forth in Exhibit AA to the Merger Agreement and such
additional terms as the parties may agree upon in the
exercise of good faith (it being understood that except as
specifically set forth in said Exhibit, Magliarditi shall
not be entitled to terms more favorable than those generally
available to the senior officers of Ameristar). Ameristar
and Magliarditi shall endeavor to execute and deliver said
employment agreement within ten (10) days after the
execution and delivery of the Second Amendment."
4.3 Board of Directors. Sections 6.10 and 11.5 of the
Merger Agreement entitled "Board of Directors" are hereby deleted
in their entirety.
4.4 Denial of License; Individuals. Subsection 7.3(e)
of the Merger Agreement is hereby deleted in its entirety.
4.5 Corporate Authorization.
(a) Section 8.9 of the Merger Agreement is hereby
amended by deleting such section in its entirety and inserting
the following in its place:
"8.9 Corporate Authorization. The Board of Directors
of each of Ameristar and ACLV shall have approved all
necessary resolutions for the execution and delivery of this
Agreement and the Ancillary Agreements, the consummation of
the transactions contemplated hereby and thereby and the
performance of the obligations of Ameristar and ACLV
hereunder and thereunder."
(b) Section 9.14 of the Merger Agreement is hereby
amended by deleting such section in its entirety and inserting
the following in its place:
"9.14 Corporate Authorization. The Board of
Directors of each of Ameristar and ACLV shall have approved
all necessary resolutions for the execution and delivery of
this Agreement and the Ancillary Agreements, the
consummation of the transactions contemplated hereby and
thereby and the performance of the obligations of Ameristar
and ACLV hereunder and thereunder."
4.6 Officers. Section 11.6 of the Merger Agreement is
hereby amended by deleting such section in its entirety and
inserting the following in its place:
"11.6 Officers. The present officers of Ameristar
shall continue in office and, upon Closing, Ameristar shall
cause Dominic J. Magliarditi to be elected to the offices of
Senior Vice-President and Co-General Counsel."
4.7 Deletion of Tax-Free Objective. Subsection
11.10(c) of the Merger Agreement is hereby deleted in its
entirety.
Article 5
"Clean-Up" Amendments
5.1 Amendments to Exhibits. Exhibits M, N, O and DD
to the Merger Agreement are hereby deleted. Exhibit B to the
Merger Agreement is amended by deleting such exhibit in its
entirety and inserting in its place Exhibit B attached hereto.
5.2 Amendments to Deliveries. Section 3.2(c)(v) and
Section 3.2(d) of the Agreement are hereby amended by deleting
such Sections in their entirety.
Article 6
Miscellaneous Provisions
6.1 No Other Amendments. Except as specifically
provided in this Amendment (or in the Escrow Agreement, the terms
of which are incorporated herein by reference), no amendments,
revisions or changes are made to the Merger Agreement. All other
terms and conditions of the Merger Agreement remain in full force
and effect and apply fully to this Amendment.
6.2 Choice of Law. This Amendment shall be construed,
interpreted and the rights of the parties determined in
accordance with the laws of the State of Nevada (without
reference to choice of law provisions), except with respect to
matters of law concerning the internal corporate affairs of any
corporate entity which is a party to or the subject of this
Amendment, and as to those matters the law of the jurisdiction
under which the respective entity derives its powers shall
govern.
6.3 Multiple Counterparts. This Amendment may be
executed in one or more counterparts, and by different parties
hereto in separate counterparts, each of which when executed
shall be deemed to be an original, including counterparts
transmitted by facsimile, but all of which taken together shall
constitute one and the same agreement.
6.4 Invalidity. In the event that any one or more of
the provisions contained in this Amendment or in any other
instrument referred to herein, shall, for any reason, be held to
be invalid, illegal or unenforceable in any respect, then to the
maximum extent permitted by law, such invalidity, illegality or
unenforceability shall not affect any other provision of this
Amendment or any other such instrument.
6.5 Titles; Gender. The titles, captions or headings
of the Articles, Sections and Subsections herein, and the use of
a particular gender, are for convenience of reference only and
are not intended to be a part of or to affect or restrict the
meaning or interpretation of this Agreement.
6.6 Effect of Amendment. On and after the date
hereof, each reference in the Merger Agreement or the Ancillary
Agreements to the "Merger Agreement" or the "Agreement" shall
mean the Merger Agreement as amended hereby. Except as
specifically amended above, the Merger Agreement shall remain in
full force and effect and is hereby ratified and confirmed. The
execution, delivery and effectiveness of this Amendment shall
not, except as expressly provided herein, operate as a waiver of
any right, power or remedy of any party hereto, nor constitute a
waiver of any provision of the Merger Agreement.
6.7 Legal and Tax Advice. Each party hereto has had
an opportunity to discuss this Amendment with counsel of their
respective choosing, and to have the legal consequences of this
Amendment and the transactions contemplated hereby explained by
such counsel. Each party hereto also has had an opportunity to
seek and obtain the advice of a competent tax professional with
respect to the tax consequences of this Amendment and the
transactions contemplated hereby. No party is relying upon any
other party or any of their respective stockholders, directors,
officers, agents or Representatives for purposes of interpreting
the provisions of this Amendment or assessing the consequences
hereof.
6.8 Arbitration. Notwithstanding any provisions of
the Merger Agreement to the contrary, each party shall have all
rights and remedies afforded by applicable law in the event of a
breach by another party of a covenant, representation or warranty
set forth in the Merger Agreement, as amended hereby. The
parties further confirm that disputes under the Merger Agreement,
as amended hereby, shall be subject to arbitration in accordance
with Section 12.13 of the Merger Agreement. The parties further
expressly agree that Ameristar, ACLV and the Gem Individuals
shall have the right to specifically enforce the obligations of
the other parties (a) to close the Merger in accordance with the
terms of the Merger Agreement and (b) with respect to the
covenants set forth in Sections 2.10 and 2.12 of the Merger
Agreement, as amended hereby.
6.9 Alternative Notes. The Alternative Rebeil Note
and the Alternative Magliarditi Note are being executed by
Ameristar and delivered to Escrow Agent in order to provide
further comfort to Rebeil and Magliarditi that Ameristar will
perform its obligations under Sections 2.10(h) and 2.10(i) of the
Merger Agreement, as amended hereby. Notwithstanding the
foregoing: (a) said notes shall be handled solely in accordance
with the terms of this Agreement and the Escrow Agreement; (b) in
no event shall Ameristar at any time have obligations under both
the Rebeil Note and the Alternative Rebeil Note; and (c) in no
event shall Ameristar at any time have obligations under both the
Magliarditi Note and the Alternative Magliarditi Note.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be executed by their duly authorized officers as of
the day and year first above written.
AMERISTAR:
AMERISTAR CASINOS, INC.,
a Nevada corporation
By: /s/ Craig H. Neilsen
Craig H. Neilsen
President
On this 2nd day of October, 1996, Craig H. Neilsen directed
Thomas M. Steinbauer, in his presence as sell as our own, to sign
the foregoing document as "Craig H. Neilsen." Upon viewing the
signature as signed by Thomas M. Steinbauer, and in our presence,
Craig H. Neilsen declared to us that he adopted it as his own
signature.
/s/ Peter Liguori
Witness
/s/ Christine L. Hinton
Witness
State of Nevada )
) ss.
County of Clark )
I, Catherine Zeljeznjak, Notary Public in and for said
county and state, do hereby certify that Craig H. Neilsen
personally appeared before me and is known or identified to me to
be the President of Ameristar Casinos, Inc., the corporation that
executed the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen, who
being unable due to physical incapacity to sign his name or offer
his mark, did direct Thomas M. Steinbauer, in his presence, as
well as my own, to sign his name to the foregoing document.
Craig H. Neilsen, after viewing his name as signed by Thomas M.
Steinbauer, thereupon adopted it as his own by acknowledging to
me his intention to so adopt as if he had personally executed the
same in behalf of said corporation, and further acknowledged to
me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal this 2nd day of October, 1996.
/s/Catherine Zeljeznjak
Notary Public
My Commission Expires on:
6/24/99
ACLV:
AMERISTAR CASINO LAS VEGAS,
INC., a Nevada
corporation
By: /s/ Craig H. Neilsen
Craig H. Neilsen
President
On this 2nd day of October, 1996, Craig H. Neilsen directed
Thomas M. Steinbauer, in his presence as sell as our own, to sign
the foregoing document as "Craig H. Neilsen." Upon viewing the
signature as signed by Thomas M. Steinbauer, and in our presence,
Craig H. Neilsen declared to us that he adopted it as his own
signature.
/s/ Peter Liguori
Witness
/s/ Christine L. Hinton
Witness
State of Nevada )
) ss.
County of Clark )
I, Catherine Zeljeznjak, Notary Public in and for said
county and state, do hereby certify that Craig H. Neilsen
personally appeared before me and is known or identified to me to
be the President of Ameristar Casinos, Inc., the corporation that
executed the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen, who
being unable due to physical incapacity to sign his name or offer
his mark, did direct Thomas M. Steinbauer, in his presence, as
well as my own, to sign his name to the foregoing document.
Craig H. Neilsen, after viewing his name as signed by Thomas M.
Steinbauer, thereupon adopted it as his own by acknowledging to
me his intention to so adopt as if he had personally executed the
same in behalf of said corporation, and further acknowledged to
me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and official
seal this 2nd day of October, 1996.
Catherine Zeljeznjak
Notary Public
My Commission Expires on:
6/24/99
GEM:
GEM GAMING, INC.,
a Nevada corporation
By: /s/Steven W. Rebeil
Name: Steven W. Rebeil
Its: Chairman
By: /s/Dominic J. Magliarditi
Name: Dominic J. Magliarditi
Its: Vice President/General Counsel
REBEIL:
STEVEN W. REBEIL,
an individual
/s/Steven W. Rebeil
STEVEN W. REBEIL, in his
capacity as Trustee of the
Karizma Trust created under
that certain Trust Agreement dated July 2,
1991, as amended
/s/Steven W. Rebeil
MAGLIARDITI:
DOMINIC J. MAGLIARDITI,
an individual
/s/ Dominic J. Magliarditi
Consent of Spouse of Steven W. Rebeil
The undersigned hereby confirms (i) that she has read,
approved of and agreed with the terms of this Amendment and all
transactions contemplated thereby, (ii) that as the spouse of one
of the signatories thereto, her property (including her interests
in any community property) may be held liable for the obligations
of her spouse under this Amendment and all transactions and other
agreements contemplated hereby, (iii) that she will be bound by
this Amendment and all other agreements contemplated hereby as if
she were a party thereto, and that any agreements,
acknowledgments, representations or warranties made by her spouse
under this Amendment or any other agreements contemplated hereby
shall apply equally to the undersigned as if made by the
undersigned, (iv) that she approves all actions taken to date by
her spouse in connection with this Amendment and all other
agreements contemplated hereby, and that she has authorized and
empowered her spouse to take any and all further actions which he
deems necessary or appropriate in order to effect the
transactions contemplated thereby, and (v) that Ameristar may
rely upon the confirmations set forth in this Consent of Spouse
in entering into and proceeding with this Amendment.
Date: October 3, 1996 /s/Jilly Rebeil
Consent of Spouse of Dominic J. Magliarditi
The undersigned hereby confirms (i) that she has read,
approved of and agreed with the terms of this Amendment and all
transactions contemplated hereby, (ii) that as the spouse of one
of the signatories thereto, her property (including her interests
in any community property) may be held liable for the obligations
of her spouse under this Amendment and all transactions and other
agreements contemplated hereby, (iii) that she will be bound by
this Amendment and all other agreements contemplated hereby as if
she were a party thereto, and that any agreements,
acknowledgments, representations or warranties made by her spouse
under this Amendment or any other agreements contemplated hereby
shall apply equally to the undersigned as if made by the
undersigned, (iv) that she approves all actions taken to date by
her spouse in connection with this Amendment and all transactions
and other agreements contemplated thereby, and that she has
authorized and empowered her spouse to take any and all further
actions which he deems necessary or appropriate in order to
effect the transactions contemplated thereby, and (v) that
Ameristar may rely upon the confirmations set forth in this
Consent of Spouse in entering into and proceeding with this
Amendment.
Date: October 1, 1996 /s/Francine R. Magliarditi
Exhibit A
Form of Gem's Project Status Certificate
Exhibit B
Space Available to Rebeil
EXHIBITS TO SECOND AMENDMENT TO MERGER AGREEMENT
EXHIBIT A Form of Gem's Project Status Certificate
EXHIBIT B SPACE AVAILABLE TO REBEIL
See attached.
GEM INDIVIDUALS' NOTES ESCROW AGREEMENT AND ESCROW
INSTRUCTIONS
This GEM INDIVIDUALS' NOTES ESCROW AGREEMENT AND
ESCROW INSTRUCTIONS (this "Agreement") is made as of
September 27, 1996, by and between AMERISTAR CASINOS,
INC., a Nevada corporation ("Ameristar"), STEVEN W.
REBEIL, an individual and in his capacity as Trustee
of the Karizma Trust created under that certain Trust
Agreement, dated July 2, 1991, as amended
("Rebeil"), and DOMINIC J. MAGLIARDITI, an
individual
("Magliarditi").
RECITALS
A. Ameristar, Gem Gaming, Inc., a Nevada
corporation ("Gem"), Ameristar Casino Las, Vegas, Inc., a
Nevada corporation ("ACLV"), Rebeil and Magliarditi have
entered into that certain Merger Agreement dated as of May
31, 1996, as amended by that certain First Amendment to
Merger Agreement dated July 2, 1996, as further
amended by that certain Second Amendment to Merger
Agreement dated as of September 27, 1996 (the
"Merger
Agreement"), whereby Gem has agreed to merge into and with
ACLV on the terms and conditions and for the consideration
set forth therein.
B. The Merger Agreement contemplates that the
parties
will enter into this Agreement to provide for the
irrevocable
procedures and mechanics by which the Gem Individuals'
Notes
specified in the Merger Agreement will be held and,
if applicable, completed and delivered to Rebeil and
Magliarditi.
C. All capitalized terms used herein
without definition shall have the meaning assigned thereto
in the Merger Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the
foregoing premises and the covenants set forth herein and
in the Agreement and other good and valuable consideration,
the parties agree as follows:
ARTICLE 1 - Deliveries to Escrow Agent
1.1 At the Closing, Ameristar shall deliver to
First Security Bank of Nevada (Attn: David Smith,
President), as escrow agent (the "Escrow Agent"), each of
the following:
(a) a promissory note in the form attached
hereto as Schedule 1, which shall continue to have blanks
for the "date of this note" and the "principal amount" (the
"Rebeil Note");
(b) a promissory note in the form attached
hereto as Schedule 2, which shall have the "principal
amount" filled in with an amount equal to the product
of 7,270,408 shares multiplied by the Average 10-Day
Closing Price as of the Closing Date but which shall
continue to have a blank for the "Settlement Date" (the
"Alternative Rebeil Note");
(c) a promissory note in the form attached
hereto as Schedule 3, which shall continue to have a blank
for the "date of this note" and the "principal amount"
(the "Magliarditi
Note"); and
(d) a promissory note in the form attached
hereto as Schedule 4, which shall have the "principal
amount" filled in with an amount equal to the product of
229,592 shares multiplied by the Average 10-Day Closing
Price as of the Closing Date but which shall continue to
have a blank for the "Settlement Date") (the "Alternative
Magliarditi Note").
Escrow Agent shall handle the Rebeil Note, the Alternative
Rebeil Note, the Magliarditi Note and the Alternative
Magliarditi Note strictly and exclusively in accordance
with the terms and provisions of this Agreement at all
times. Escrow Agent shall not ever act in any way or
manner contrary to this Agreement unless instructed to do
so in a writing duly signed by Ameristar, Rebeil and
Magliarditi.
ARTICLE 2 - Disposition of Rebeil Note and Magliarditi Note
2.1 Cancellation of Rebeil Note and Magliarditi
Note Following Sale of All Post-Merger Offering Stock. Upon
receiving a Note Cancellation Notice in the form of
Schedule 5 attached
hereto, duly executed by an officer of Ameristar, Rebeil
and Magliarditi, Escrow Agent shall mark the Magliarditi
Note, the Alternative Magliarditi Note, the Rebeil Note and
the Alternative Rebeil Note "CANCELLED" and deliver all
such documents to Ameristar as specified in the Note
Cancellation Notice.
2.2 Completion and Delivery of Rebeil Note
and Magliarditi Note Following Sale of Less than all
Post-Merger Offering Stock.
(a) Rebeil. Upon receiving a Rebeil
Note Completion Notice in the form of Schedule 6 attached
hereto, duly executed by an officer of Ameristar and
Rebeil (or executed by Rebeil alone, if Rebeil and Escrow
Agent have not received from Ameristar its proposed notice
in the form of Schedule 6 attached hereto within three
(3) Business Days following the Settlement Date that the
Escrow Agent is advised of by the Underwriter), Escrow
Agent shall (i) complete the "Principal Amount" of the
Rebeil Note so that such amount equals the amount set
forth as the "PRINCIPAL AMOUNT OF REBEIL NOTE" set forth in
paragraph 4 of the Rebeil Note Completion Notice, (ii) date
the Rebeil Note as of the Settlement Date identified in
the Rebeil Note Completion Notice, (iii) deliver the Rebeil
Note to Rebeil as specified in the Rebeil Note Completion
Notice and (iv) mark the Alternative Rebeil Note as
"CANCELLED" and return the Alternative Rebeil Note to
Ameristar.
(b) Magliarditi. Upon receiving a
Magliarditi Note Completion Notice in the form of Schedule 7
attached hereto, duly executed by an officer of Ameristar
and Magliarditi (or executed by Magliarditi alone, if
Magliarditi and Escrow Agent have not received from
Ameristar its proposed notice in the form of Schedule 7
attached hereto within three (3) Business Days following the
Settlement Date that the Escrow Agent is advised of by the
Underwriter), Escrow Agent shall (i) complete the "Principal
Amount" of the Magliarditi Note so that such amount equals
the amount set forth as the "PRINCIPAL AMOUNT OF MAGLIARDITI
NOTE" set forth in paragraph 4 of the Magliarditi Note
Completion Notice, (ii) date the Magliarditi Note as of the
Settlement Date identified in the Magliarditi Note
Completion Notice, (iii) deliver the Magliarditi Note to
Magliarditi as specified in the Magliarditi Note Completion
Notice and (iv) mark the Alternative Magliarditi Note as
"CANCELLED" and return the Alternative Magliarditi Note to
Ameristar.
2.3 Completion and Delivery of Rebeil Note
and Magliarditi Note Following Going Private Event. Upon
receiving a Going Private Notice in the form of Schedule 8
attached hereto, duly executed by an officer of Ameristar,
Rebeil and Magliarditi, the Escrow Agent shall (i) complete
the "Principal Amount" of the Rebeil Note so that such
amount equals Sixty One Million Five Hundred Thirty One
Thousand Five Hundred Dollars ($61,531,500), (ii) complete
the "Principal Amount" of the Magliarditi Note so that
such amount equals the amount of One Million Nine Hundred
Sixty Eight Thousand Five Hundred Dollars
($1,968,500), (iii) date the Rebeil Note and the
Magliarditi Note as of the date identified on the Going
Private Notice as the Settlement Date, (iv) complete the
"maturity date" of the Rebeil Note and the Magliarditi
Note to be the date that is six (6) months after the
Settlement Date, (v) deliver the Rebeil Note to Rebeil and
the Magliarditi Note to Magliarditi as specified in the
Going Private Notice, and (vi) mark the Alternative Rebeil
Note and the Alternative Magliarditi Note as "CANCELLED" and
return such notes to Ameristar.
2.4 Escrow Termination. In the event that
Escrow Agent has not received a Rebeil Note Completion
Notice, a Magliarditi Note Completion Notice, a Going
Private Notice or a Note Cancellation Notice within
twelve (12) months of the date hereof, then Escrow Agent
shall deliver the Rebeil Note, the Alternative Rebeil
Note, the Magliarditi Note and the Alternative Magliarditi
Note to Ameristar and shall terminate the escrow
established by this Agreement.
ARTICLE 3 - Fees and Costs
3.1 Ameristar shall pay Escrow Agent's escrow
fee or escrow termination charge.
ARTICLE 4 - Notices
4.1 All notices, requests, demands and
other
communications which are required or may be given under
this Agreement shall be in writing and shall be deemed to
have been duly given when received if personally
delivered; when
transmitted if transmitted by telecopy, electronic or
digital transmission method; the day after it is sent, if
sent for next day delivery to a domestic address by
recognized overnight delivery service (e.g., Federal
Express); and upon receipt, if sent by certified or
registered mail, return receipt requested. In each case
notice shall be sent to:
If to Escrow Agent:
First Security Bank of Nevada
Attn: David Smith
If to Rebeil:
Steven W. Rebeil
93 Spanish Gate Drive
Las Vegas, Nevada 89113
If to Magliarditi:
Dominic J. Magliarditi
735 Helmhill Avenue
Las Vegas, Nevada 89123
If to Ameristar:
Ameristar Casinos, Inc.
777 West Lake Mead Drive
P.O. Box 92200
Las Vegas, Nevada 89009
Attention: Brian E. Katz,
Esq.
With a copy to:
Latham & Watkins
701 B Street, Suite 2100
San Diego, California 92101
Attention: Bruce P. Shepherd, Esq.
ARTICLE 5 - Extent of Escrow Agent's Responsibilities
5.1 Escrow Agent shall not be liable for any of
its
acts or omissions unless the same shall constitute negligence
or willful misconduct.
5.2 Escrow Agent shall have no obligation to
inform
any party of any other transaction or of facts within
Escrow Agent's knowledge, provided such matters do not
prevent Escrow Agent's compliance with this Agreement.
5.3 Escrow Agent shall not be responsible for (i)
the
sufficiency or correctness as to form or the validity of
any document deposited with Escrow Agent, (ii) the
manner of execution of any such deposited document, unless such
execution occurs in Escrow Agent's premises and under its
supervision, or (iii) the identity, authority or rights of
any person executing any document deposited with Escrow Agent.
5.4 If Escrow Agent receives or becomes aware
of conflicting demands or claims with respect to the escrow,
the rights of any party hereto, or funds, documents or other
items deposited with Escrow Agent, Escrow Agent shall have the
right to discontinue any further acts until such conflict is
resolved to its satisfaction, and it shall have the further
right to commence or defend any action for the determination of
such conflict. The parties shall, immediately after demand
therefor by Escrow Agent, reimburse Escrow Agent (in such
respective proportions as Escrow Agent shall determine) any
reasonable attorneys' fees and court costs incurred by
Escrow Agent pursuant to this Section. Notwithstanding any
provisions of this Agreement to the contrary, Escrow
Agent shall at all
times be obligated to perform in accordance with Article 2
hereof unless instructed otherwise in a writing duly
signed by Ameristar, Rebeil and Magliarditi.
5.5 In the event that pursuant to Article 2
hereof Escrow Agent receives multiple notices duly signed by
the appropriate parties thereto, and such notices call for the
Escrow Agent to take inconsistent actions, Escrow Agent shall
have the right to rely upon, and implement the actions called
for by, the first such notice so received by Escrow Agent,
and to disregard the subsequent notices.
ARTICLE 6 - General Provisions
6.1 Captions in this Agreement are inserted
for convenience of reference only and do not define, describe
or limit the scope or the intent of this Agreement or any of
the terms hereof.
6.2 All exhibits referred to herein and
attached hereto are incorporated herein by reference.
6.3 No modification, waiver, amendment, discharge
or change of this Agreement shall be valid unless the same is
in writing and signed by the party against whom the
enforcement of such modification, waiver, amendment,
discharge or change is or may be sought.
6.4 In the event that any party commences
litigation for the judicial interpretation, enforcement,
termination, cancellation or rescission hereof, or for damages for the
breach hereof, the prevailing party or parties shall be
entitled to reasonable attorneys' fees and court and other
costs incurred.
6.5 This Agreement shall be construed and enforced
in accordance with the laws of the State of Nevada.
6.6 Time is of the essence to this Agreement.
6.7 In the event that any term, covenant,
condition, provision or agreement herein contained is held to be
invalid, void or otherwise unenforceable by any court of
competent jurisdiction, the fact that such term, covenant,
condition, provision or agreement is invalid, void
or otherwise unenforceable shall in no way affect
the validity or enforceability of any other term, covenant, condition,
provision or agreement herein contained.
6.8 All terms of this Agreement shall be binding
upon, inure to the benefit of and be enforceable by, the
parties hereto and their respective legal
representatives, successors and
assigns. Neither party may assign its rights under this
Agreement without the written consent of the other party to
this Agreement except in connection with an assignment
permitted by Section 12.2 of the Merger Agreement.
6.9 This Agreement may be executed in one or more
counterparts, and by different parties hereto in separate
counterparts, each of which when executed shall be deemed to be
an original, including counterparts transmitted by facsimile,
but all of which taken together shall constitute one and the
same agreement.
IN WITNESS WHEREOF, this Agreement has been executed
by the parties, as of the date first set forth above.
AMERISTAR:
AMERISTAR CASINOS, INC.,
a Nevada corporation
By:/s/ Craig H. Neilsen
Name: Craig H. Neilsen
Its: President
On this 2nd day of October, 1996, Craig H. Neilsen
directed Thomas M. Steinbauer, in his presence as well as our
own, to sign the foregoing document as "Craig H. Neilsen."
Upon viewing the signature as signed by Thomas M. Steinbauer,
and in our presence, Craig H. Neilsen declared to us that he
adopted it as his own signature.
/s/ Peter Liguori
Witness
/s/ Christine L. Hinton
Witness
State of Nevada )
) ss.
County of Clark )
I, Catherine Zeljeznjak, Notary Public in and for
said county and state, do hereby certify that Craig H.
Neilsen personally appeared before me and is known or
identified to me to be the President of Ameristar Casinos,
Inc., the corporation that executed the within instrument or
the person who executed the instrument on behalf of said
corporation. Craig H. Neilsen, who being unable due to
physical incapacity to sign his name or offer his mark, did
direct Thomas M. Steinbauer, in his presence, as well as my
own, to sign his name to the foregoing document. Craig H.
Neilsen, after viewing his name as signed by Thomas M.
Steinbauer, thereupon adopted it as his own by acknowledging
to me his intention to so adopt as if he had personally
executed the same in behalf of said corporation, and further
acknowledged to me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal this 22nd day of October, 1996.
/s/ Catherine Zeljeznjak
Notary Public
My Commission Expires on: 6/24/99
STEVEN W. REBEIL,
an individual
/s/ Steven W. Rebeil
STEVEN W. REBEIL,
in his capacity as Trustee of
the Karizma Trust created under
that certain Trust Agreement,
dated July 2, 1991, as amended
/s/ Steven W. Rebeil
DOMINIC J. MAGLIARDITI,
an individual
/s/ Dominic J. Magliarditi
CONSENT OF SPOUSE OF STEVEN W. REBEIL
The undersigned hereby confirms (i) that she has
read, approved of and agreed with the terms of this Agreement
and all transactions contemplated hereby, (ii) that as the
spouse of one of the signatories hereto, her property
(including her interests
in any community property) may be held liable for the
obligations of her spouse under this Agreement and all
transactions and other agreements contemplated hereby, (iii)
that she will be bound by this Agreement and all other
agreements contemplated hereby as if she were
a party thereto, and that any
agreements,
acknowledgments, representations or warranties made by her
spouse under this Agreement or any other agreements
contemplated hereby shall apply equally to the undersigned
as if made by the undersigned, (iv) that she approves all
actions taken to date by her spouse in connection with this
Agreement and all transactions and other
agreements contemplated hereby, and that she has
authorized and empowered her spouse to take any and all
further
actions which he deems necessary or appropriate in order
to effect the transactions contemplated
thereby, and (v) that
Ameristar may rely upon the confirmations set forth in
this Consent of Spouse in entering into and
proceeding with this
Agreement.
Date: October 3, 1996 /s/ Jilly Rebeil
CONSENT OF SPOUSE OF DOMINIC J. MAGLIARDITI
The undersigned hereby confirms (i) that she has
read, approved of and agreed with the terms of this Agreement
and all transactions contemplated hereby, (ii) that as the
spouse of one of the signatories hereto, her property
(including her interests in any community property) may be held
liable for the obligations of her spouse under this Agreement
and all transactions and other agreements contemplated hereby,
(iii) that she will be bound by this Agreement and all other
agreements contemplated hereby as if she were
a party thereto, and that any
agreements,
acknowledgments, representations or warranties made by her
spouse under this Agreement or any other agreements
contemplated hereby shall apply equally to the undersigned
as if made by the undersigned, (iv) that she approves all
actions taken to date by her spouse in connection with this
Agreement and all transactions and other
agreements contemplated hereby, and that she has
authorized and empowered her spouse to take any and all
further
actions which he deems necessary or appropriate in order
to effect the transactions contemplated
thereby, and (v) that
Ameristar may rely upon the confirmations set forth in
this Consent of Spouse in entering into and
proceeding with this
Agreement.
Date: October 1, 1996 /s/Francine R. Magliarditi
CONSENT OF ESCROW AGENT
The undersigned Escrow Agent hereby agrees
to
(i) accept the foregoing Agreement, (ii) be escrow agent
under
said Agreement as specified, and (iii) be bound by said
Agreement in the performance of its duties as escrow
agent; provided, however, that the
undersigned shall have no obligations,
liability or responsibility under (A) this Agreement
or
otherwise, unless and until said Agreement, fully signed by
the parties, has been delivered to the undersigned, or
(B) any amendment to said Agreement unless and until the same
shall be accepted by the undersigned in writing.
Dated: October 3, 1996
ESCROW AGENT:
By: /s/ Mark Dreschler
Name: Mark Dreschler
Title: President
Schedule 1
Form of Rebeil Note
Principal Amount:
$______________
Date of this Note: __________________
1. Promise to Pay. For good and
valuable consideration, AMERISTAR CASINOS, INC., a Nevada
corporation ("Ameristar"), promises to pay to STEVEN W.
REBEIL, trustee of the Karizma Trust ("Payee"),
$______________ (the "Principal Amount") with interest at
the rate of eight percent (8%) per annum (the "Interest
Rate") from the Date of this Note set forth above (the
"Settlement Date"), until paid, in accordance with the terms
contained herein. Interest shall be computed on the basis of
a 360-day year and the actual number of days elapsed. Should
any interest not be paid when due, it shall thereafter
accrue interest as principal.
2. Payment Schedule. Accrued interest shall
be payable in arrears on the first day of each month following
the Settlement Date. Ameristar shall pay the entire
balance of principal and any accrued but unpaid interest on
or before the date that is three (3) years after the
Settlement Date (the "Maturity Date"). All payments shall be
applied first to accrued interest and then to the principal
balance. All payments shall be made at 93 Spanish Gate
Drive, Las Vegas, Nevada 89113, or at such other place as
Payee may from time to time designate. All
payments shall be made in lawful money of the United States.
The indebtedness under this Note may be prepaid in whole or in
part at any time, without penalty or prepayment premium.
3. Miscellaneous Provisions. If Payee refers
this Note to an attorney to enforce, construe or defend any
provision hereof, with or without the filing of any legal
action or proceeding, Ameristar shall pay to Payee upon demand
the amount of all attorneys' fees, costs and other expenses
incurred by Payee in connection therewith, together with
interest thereon from the date of demand at the rate
applicable to the principal balance of this Note. No
provision of this Note may be amended, modified, supplemented,
changed, waived, discharged or terminated unless Payee
consents thereto in writing. In case any one or more of
the provisions contained in this Note should be held to be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired thereby. Time is of the essence of this Note and
the performance of each of the covenants and agreements
contained herein. This Note shall be governed by and
construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, Ameristar has executed this Note
as of the Date of this Note.
AMERISTAR
CASINOS, INC.,
a Nevada
corporation
Name: Craig
H.
Neilsen
Title: President
On this _____ day of _____________________, 19____, Craig
H. Neilsen directed ________________________________________,
in his presence as well as our own, to sign the foregoing
document as "Craig H. Neilsen." Upon viewing the signature
as signed by ______________________________________, and in
our presence, Craig H. Neilsen declared to us that he
adopted it as his own signature.
Witness
Witness
State of Nevada )
) ss.
County of Clark )
I, _________________________________, Notary Public in
and for said county and state, do hereby certify that
Craig H. Neilsen personally appeared before me and is known
or identified to me to be the
_________________________ of
_________________________, the corporation that executed
the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen,
who being unable due to physical incapacity to sign his name
or offer his mark, did direct
______________________________________, in his
presence, as well as my own, to sign his name to the
foregoing document. Craig H. Neilsen, after viewing his name
as signed by ___________________________________________,
thereupon adopted it as his own by acknowledging to me his
intention to so adopt as if he had personally executed
the same in behalf of said
corporation, and further acknowledged to me that such
corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal this _____ day of ______________________, 19____.
Notary Public
My Commission Expires
on: Schedule 2
Form of Rebeil Alternative Note
Principal Amount:
$______________
Date of this Note: October 3, 1996
1. Promise to Pay. For good and
valuable consideration, AMERISTAR CASINOS, INC., a Nevada
corporation ("Ameristar"), promises to pay to STEVEN W.
REBEIL, trustee of the Karizma Trust ("Payee"),
$______________ (the "Principal
Amount") with interest at the rate of eight percent (8%)
per
annum (the "Interest Rate") from ____________________
(the "Settlement Date"), until paid, in accordance with the
terms contained herein. Interest shall be computed on the
basis of a 360-day year and the actual number of days
elapsed. Should any interest not be paid when due, it
shall thereafter accrue
interest as principal.
2. Payment Schedule. Accrued interest shall
be payable in arrears on the first day of each month following
the Settlement Date. Ameristar shall pay the entire
balance of principal and any accrued but unpaid interest on
or before the date that is three (3) years after the
Settlement Date (the "Maturity Date"). All payments shall be
applied first to accrued interest and then to the principal
balance. All payments shall be made at 93 Spanish Gate
Drive, Las Vegas, Nevada 89113, or at such other place as
Payee may from time to time designate. All
payments shall be made in lawful money of the United States.
The indebtedness under this Note may be prepaid in whole or in
part at any time, without penalty or prepayment premium.
3. Miscellaneous Provisions. If Payee refers
this Note to an attorney to enforce, construe or defend any
provision hereof, with or without the filing of any legal
action or proceeding, Ameristar shall pay to Payee upon demand
the amount of all attorneys' fees, costs and other expenses
incurred by Payee in connection therewith, together with
interest thereon from the date of demand at the rate
applicable to the principal balance of this Note. No
provision of this Note may be amended, modified, supplemented,
changed, waived, discharged or terminated unless Payee
consents thereto in writing. In case any one or more of
the provisions contained in this Note should be held to be
invalid, illegal or unenforceable in any respect,
the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired thereby. Time is of the essence of this Note and
the performance of each of the covenants and agreements
contained herein. This Note shall be governed by and
construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, Ameristar has executed this Note
as of the Date of this Note.
AMERISTAR CASINOS, INC.,
a Nevada corporation
Name: Craig H. Neilsen
Title: President
On this _____ day of _____________________, 19____, Craig
H. Neilsen directed ________________________________________,
in his presence as well as our own, to sign the foregoing
document as "Craig H. Neilsen." Upon viewing the signature
as signed by ______________________________________, and in
our presence, Craig H. Neilsen declared to us that he
adopted it as his own signature.
Witness
Witness
State of Nevada )
) ss.
County of Clark )
I, _________________________________, Notary Public in
and for said county and state, do hereby certify that
Craig H. Neilsen personally appeared before me and is known
or identified to me to be the
_________________________ of
_________________________, the corporation that executed
the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen,
who being unable due to physical incapacity to sign his name
or offer his mark, did direct
______________________________________, in his
presence, as well as my own, to sign his name to the
foregoing document. Craig H. Neilsen, after viewing his name
as signed by ___________________________________________,
thereupon adopted it as his own by acknowledging to me his
intention to so adopt as if he had personally executed
the same in behalf of said
corporation, and further acknowledged to me that such
corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal this _____ day of ______________________, 19____.
Notary Public
My Commission Expires
on: Schedule 3
Form of Magliarditi Note
Principal Amount:
$______________
Date of this Note: _______________________
1. Promise to Pay. For good and
valuable
consideration, AMERISTAR CASINOS, INC., a Nevada
corporation ("Ameristar"), promises to pay to DOMINIC J.
MAGLIARDITI ("Payee"), $______________ (the "Principal Amount")
with interest at the rate of eight percent (8%) per annum (the
"Interest Rate") from the Date of this Note set forth above
(the "Settlement Date"), until paid, in accordance with
the terms contained herein. Interest shall be computed
on the basis of a 360-day
year and the actual number of days elapsed. Should any
interest not be paid when due, it shall thereafter accrue
interest as principal.
2. Payment Schedule. Accrued interest shall
be payable in arrears on the first day of each month following
the Settlement Date. Ameristar shall pay the entire
balance of principal and any accrued but unpaid interest on
or before the date that is three (3) years after the
Settlement Date (the "Maturity Date"). All payments shall be
applied first to accrued interest and then to the principal
balance. All payments shall be made at 724 Helmhill Drive,
Las Vegas, Nevada 89123, or at such other place as Payee may
from time to time designate. All
payments shall be made in lawful money of the United States.
The indebtedness under this Note may be prepaid in whole or in
part at any time, without penalty or prepayment premium.
3. Miscellaneous Provisions. If Payee refers
this Note to an attorney to enforce, construe or defend any
provision hereof, with or without the filing of any legal
action or proceeding, Ameristar shall pay to Payee upon demand
the amount of all attorneys' fees, costs and other expenses
incurred by Payee in connection therewith, together with
interest thereon from the date of demand at the rate
applicable to the principal balance of this Note. No
provision of this Note may be amended, modified, supplemented,
changed, waived, discharged or terminated unless Payee
consents thereto in writing. In case any one or more of
the provisions contained in this Note should be held to be
invalid, illegal or unenforceable in any respect,
the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired thereby. Time is of the essence of this Note and
the performance of each of the covenants and agreements
contained herein. This Note shall be governed by and
construed in accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, Ameristar has executed this Note
as of the Date of this Note.
AMERISTAR CASINOS, INC.,
a Nevada corporation
Name: Craig H. Neilsen
Title: President
On this _____ day of _____________________, 19____, Craig
H. Neilsen directed ________________________________________,
in his presence as well as our own, to sign the foregoing
document as "Craig H. Neilsen." Upon viewing the signature
as signed by ______________________________________, and in
our presence, Craig H. Neilsen declared to us that he
adopted it as his own signature.
Witness
Witness
State of Nevada )
) ss.
County of Clark )
I, _________________________________, Notary Public in
and for said county and state, do hereby certify that
Craig H. Neilsen personally appeared before me and is known
or identified to me to be
the _________________________ of
_________________________, the corporation that executed
the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen,
who being unable due to physical incapacity to sign his name
or offer his mark, did direct
______________________________________, in his
presence, as well as my own, to sign his name to the
foregoing document. Craig H. Neilsen, after viewing his name
as signed by ___________________________________________,
thereupon adopted it as his own by acknowledging to me his
intention to so adopt as if he had
personally executed the same in behalf of said
corporation, and further acknowledged to me that such
corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal this _____ day of ______________________, 19____.
Notary Public
My Commission Expires on:
Schedule 4
Form of Alternative Magliarditi Note
Principal Amount:
$______________
Date of this Note: October 3, 1996
1. Promise to Pay. For good and
valuable consideration, AMERISTAR CASINOS, INC., a Nevada
corporation ("Ameristar"), promises to pay to DOMINIC J.
MAGLIARDITI ("Payee"), $______________ (the "Principal Amount")
with interest at the rate of eight percent (8%) per annum (the
"Interest Rate") from _______________________ (the "Settlement
Date"), until paid, in accordance with the terms contained
herein. Interest shall be computed on the basis of a 360-day
year and the actual number of days elapsed. Should any
interest not be paid when due, it shall thereafter accrue
interest as principal.
2. Payment Schedule. Accrued interest shall
be payable in arrears on the first day of each month following
the Settlement Date. Ameristar shall pay the entire
balance of principal and any accrued but unpaid interest on
or before the date that is three (3) years after the
Settlement Date (the "Maturity Date"). All payments shall be
applied first to accrued interest and then to the principal
balance. All payments shall be made at 735 Helmhill Drive,
Las Vegas, Nevada 89123, or at such other place as Payee may
from time to time designate. All payments shall be made in
lawful money of the United States. The indebtedness under this
Note may be prepaid in whole or in part at any time, without
penalty or prepayment premium.
3. Miscellaneous Provisions. If Payee refers
this Note to an attorney to enforce, construe or defend any
provision hereof, with or without the filing of any legal
action or proceeding, Ameristar shall pay to Payee upon demand
the amount of all attorneys' fees, costs and other expenses
incurred by Payee in connection therewith, together with
interest thereon from the date of demand at the rate
applicable to the principal balance of this Note. No
provision of this Note may be amended, modified, supplemented,
changed, waived, discharged or terminated unless Payee
consents thereto in writing. In case any one or more of
the provisions contained in this Note should be held to be
invalid, illegal or unenforceable in any respect, the
validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected
or impaired
thereby. Time is of the essence of this Note and the
performance of each of the covenants and agreements contained
herein. This Note shall be governed by and construed in
accordance with the laws of the State of Nevada.
IN WITNESS WHEREOF, Ameristar has executed this Note
as of the Date of this Note.
AMERISTAR
CASINOS, INC.,
a Nevada
corporation
Name: Craig
H.
Neilsen
Title: President
On this _____ day of _____________________, 19____, Craig
H. Neilsen directed ________________________________________,
in his presence as well as our own, to sign the foregoing
document as "Craig H. Neilsen." Upon viewing the signature
as signed by ______________________________________, and in
our presence,
Craig H. Neilsen declared to us that he adopted it as his
own signature.
Witness
Witness
State of Nevada )
) ss.
County of Clark )
I, _________________________________, Notary Public in
and for said county and state, do hereby certify that
Craig H. Neilsen personally appeared before me and is known
or identified to me to be
the _________________________ of
_________________________, the corporation that executed
the within instrument or the person who executed the
instrument on behalf of said corporation. Craig H. Neilsen,
who being unable due to physical incapacity to sign his name
or offer his mark, did direct
______________________________________, in his
presence, as well as my own, to sign his name to the
foregoing document. Craig H. Neilsen, after viewing his name
as signed by ___________________________________________,
thereupon adopted it as his own by acknowledging to me his
intention to so adopt as if he had personally executed
the same in behalf of said
corporation, and further acknowledged to me that such
corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and
official seal this _____ day of ______________________, 19____.
Notary Public
My Commission Expires on:
Schedule 5
Form of Note Cancellation Notice
I, _______________, acting in my capacity as
the [insert title] of Ameristar Casinos, Inc., a Nevada
corporation ("Ameristar"), hereby certify and represent
and warrant as follows:
1. This certificate is made in connection with
that
certain Gem Individuals' Notes Escrow Agreement and
Escrow Instructions (the "Escrow Agreement") dated as of
September 27, 1996, by and between Ameristar, Steven W.
Rebeil, an individual and in his capacity as Trustee of the
Karizma Trust created under that certain Trust Agreement,
dated July 2, 1991, as amended ("Rebeil"), and Dominic
J. Magliarditi, an individual ("Magliarditi").
Capitalized terms used herein without definition shall
have the meanings set forth in the Escrow Agreement.
Although this notice references the Merger Agreement and may
further reference certain defined terms used therein, such
references are solely for the benefit of the parties to the
Escrow Agreement and Escrow Agent shall have no obligations
or responsibilities with respect to the Merger Agreement.
2. Pursuant to Section 2.10(g)(iv) of the
Merger
Agreement and Section 2.1 of the Escrow Agreement, each of
the Rebeil Note, the Alternative Rebeil Note, the Magliarditi
Note and the Alternative Magliarditi Note are to be marked
"CANCELLED" and delivered by Escrow Agent to Ameristar.
Dated: By:
APPROVED AND ACKNOWLEDGED:
Steven W. Rebeil, an individual
Steven W. Rebeil, in his capacity as Trustee of
the Karizma Trust created under that certain
Trust Agreement, dated July 2, 1991, as
amended
Dominic J. Magliarditi
Schedule 6
Form of Rebeil Note Completion Notice
I, , acting in my capacity
as
the [insert title] of Ameristar Casinos, Inc., a
Nevada corporation ("Ameristar"), hereby certify and
represent and warrant as follows:
1. This certificate is made in connection with
that
certain Gem Individual Notes Escrow Agreement and
Escrow Instructions (the "Escrow Agreement") dated as of
September 27, 1996, by and between Ameristar, Steven W.
Rebeil, an individual and in his capacity as Trustee of the
Karizma Trust created under that certain Trust Agreement,
dated July 2, 1991, as amended ("Rebeil"), and Dominic
J. Magliarditi, an individual
("Magliarditi"). Capitalized terms used herein
without
definition shall have the meanings set forth in the Agreement,
or if not defined therein, in the "Merger Agreement"
referenced in the Escrow Agreement. Although this notice
references the Merger Agreement and may further reference
certain defined terms used therein, such references are
solely for the benefit of the parties to the Escrow
Agreement and Escrow Agent shall have no obligations or
responsibilities with respect to the Merger Agreement.
2. On __________ (the "Settlement
Date"),
____________ (______) shares of Post-Merger Offering Stock
were sold in connection with the "Offering," as such term is
used in the Merger Agreement.
3. The Average 10-Day Closing Price of
Ameristar Common Stock as of the Settlement Date is
__________ Dollars ($_______).
4. Pursuant to Section 2.2 of the Escrow
Agreement, the principal amount of the Rebeil Note, as set
forth below, shall be inserted therein. In connection
therewith, the parties shall undertake the following
calculations:
Number of Shares of Post-Merger Offering
Stock 7,500,000
Number of Shares of Post-Merger Offering Stock Sold
in the Offering
-
0
Number of Shares of Post-Merger Offering Stock Not
Sold = 7,500,000
Average 10-Day Closing Price as of Settlement
Date x
Subtotal =
Gem Individuals' Share of Completion
Differential - 4,000,000
Sum of the Amounts Calculated Pursuant to
Sections 2.10(g)(i)(B)(2)
of the Merger Agreement (which
amount shall be zero dollars ($0)
if the Net Proceeds of the Post-
Merger Offering Stock are less than
$8.00/ share multiplied by the
number of shares of Post-Merger
Offering
Stock sold in the Offering) -
One-Half of Offering Expenses -
Subtotal =
Rebeil's Gem Proportionate Interest
x .969
PRINCIPAL AMOUNT OF REBEIL NOTE =
5. Pursuant to Section 2.10(h)(ii)(A) of the
Merger Agreement, after the principal amount of the Rebeil Note
has been completed pursuant to Section 2.2 of the Escrow
Agreement and the Escrow Agent has dated the Rebeil Note as of
the Settlement Date, Escrow Agent: (a) is to deliver the
Rebeil Note to Rebeil; and
(b) is to mark the Alternative Rebeil Note as "CANCELLED"
and return the Alternative Rebeil Note to Ameristar.
Dated: By:
APPROVED AND ACKNOWLEDGED:
Steven W. Rebeil, an individual
Steven W. Rebeil, in his capacity as Trustee of
the Karizma Trust created under that certain
Trust Agreement, dated July 2, 1991, as
amended
Schedule 7
Form of Magliarditi Note Completion Notice
I, , acting in my capacity
as
the [insert title] of Ameristar Casinos, Inc., a
Nevada
corporation ("Ameristar"), hereby certify and represent
and warrant as follows:
1. This certificate is made in connection with
that certain Gem Individuals' Notes Escrow Agreement and
Escrow Instructions (the "Escrow Agreement") dated as of
September 27, 1996, by and between Ameristar, Steven W.
Rebeil, an individual and in his capacity as Trustee of the
Karizma Trust created under that certain Trust Agreement,
dated July 2, 1991, as amended ("Rebeil"), and Dominic
J. Magliarditi, an individual ("Magliarditi").
Capitalized terms used herein without
definition shall have the meanings set forth in the
Escrow
Agreement, or if not defined therein, in the "Merger
Agreement"
referenced in the Escrow Agreement. Although this
notice
references the Merger Agreement and may further reference
certain defined terms used therein, such references are solely
for the benefit of the parties to the Escrow Agreement and
Escrow Agent shall have no obligations or responsibilities
with respect to the Merger Agreement.
2. On __________ (the "Settlement
Date"),
____________ (______) shares of Post-Merger Offering Stock
were sold in connection with the "Offering," as such term is
used in the Merger Agreement.
3. The Average 10-Day Closing Price of
Ameristar Common Stock as of the Settlement Date is
__________ Dollars ($_______).
4. Pursuant to Section 2.2 of the Escrow
Agreement, the principal amount of the Magliarditi Note, as set
forth below, shall be inserted therein. In connection
therewith, the parties shall undertake the following
calculations:
Number of Shares of Post-Merger Offering
Stock 7,500,000
Number of Shares of Post-Merger Offering Stock Sold
in the Offering
-
0
Number of Shares of Post-Merger Offering Stock Not
Sold = 7,500,000
Average 10-Day Closing Price as of Settlement
Date x
Subtotal =
Gem Individuals' Share of Completion
Differential - 4,000,000
Sum of the Amounts Calculated Pursuant to
Sections 2.10(g)(i)(B)(2)
of the Merger Agreement (which
amount shall be zero dollars ($0)
if the Net Proceeds of the Post-
Merger Offering Stock are less than
$8.00/ share multiplied by the
number of shares of Post-Merger
Offering
Stock sold in the
Offering)
- -
One-Half of Offering Expenses -
Subtotal =
Magliarditi's Gem Proportionate
Interest
x .031
PRINCIPAL AMOUNT OF MAGLIARDITI NOTE =
5. Pursuant to Section 2.10(h)(ii)(B) of the
Merger Agreement, after the principal amount of the Magliarditi
Note has been completed pursuant to Section 2.2 of the Escrow
Agreement and the Escrow Agent has dated the Magliarditi Note
as of the Settlement Date, Escrow Agent (a) is to deliver
the Magliarditi Note to Magliarditi; and (b) is to
mark the Alternative Magliarditi Note as "CANCELLED" and
return the Alternative Magliarditi Note to Ameristar.
Dated: By:
APPROVED AND ACKNOWLEDGED:
Dominic J. Magliarditi
Schedule 8
Form of Going Private Notice
I, , acting in my capacity
as
the [insert title] of Ameristar Casinos, Inc., a
Nevada
corporation ("Ameristar"), hereby certify and represent
and warrant as follows:
1. This certificate is made in connection with
that certain Gem Individual Notes Escrow Agreement and
Escrow
Instructions (the "Escrow Agreement") dated as of September
27, 1996, by and between Ameristar, Steven W. Rebeil, an
individual and in his capacity as Trustee of the Karizma Trust
created under that certain Trust Agreement, dated July 2,
1991, as amended ("Rebeil"), and
Dominic J. Magliarditi, an individual
("Magliarditi"). Capitalized terms used herein
without
definition shall have the meanings set forth in the
Escrow Agreement, or if not defined therein, in the "Merger
Agreement" referenced in the Escrow Agreement. Although
this notice
references the Merger Agreement and may further reference
certain defined terms used therein, such references are solely
for the benefit of the parties to the Escrow Agreement and
Escrow Agent shall have no obligations or responsibilities
with respect to the Merger Agreement.
2. A "Going Private Event," as such term is used
in
the Merger Agreement, has occurred. Accordingly, the
Escrow Agent is hereby instructed to insert Sixty One
Million Five Hundred Thirty One Thousand Five Hundred Dollars
($61,531,500) as the principal amount of the Rebeil Note and
One Million Nine Hundred Sixty Eight Thousand Five Hundred
Dollars ($1,968,500) as the principal amount of the Magliarditi
Note.
3. The Settlement Date occurred on _____________,
19___.
4 Pursuant to Section 2.10(i) of the
Merger Agreement, after the principal amount of each of the
Rebeil Note and the Magliarditi Note has been completed
pursuant to Section 2.3 of the Escrow Agreement and the
Escrow Agent has dated the Rebeil Note and the Magliarditi
Note as of the Settlement Date and has inserted the date
that is six (6) months following the Settlement Date as the
"Maturity Date" of the Rebeil Note and the Magliarditi Note,
Escrow Agent (a) is to deliver the Rebeil Note to Rebeil and
the Magliarditi Note to Magliarditi and (b) is to mark the
Alternative Rebeil Note and the Alternative Magliarditi Note as
"CANCELLED" and to return said notes to Ameristar.
Dated: By:
APPROVED AND ACKNOWLEDGED:
Steven W. Rebeil, an individual
Steven W. Rebeil, in his capacity as Trustee of
the Karizma Trust created under that certain
Trust Agreement, dated July 2, 1991, as
amended
________________________________________
Dominic J. Magliarditi
October 3, 1996
Dominic J. Magliarditi
735 Helmhill Avenue
Las Vegas, Nevada 89123
Re: Merger Agreement / Employee Matters
Dear Nick:
This letter is intended to implement the provisions of
Section 6.9 of the Merger Agreement (as amended by the Second
Amendment thereto dated September 27, 1996) in the context of
your currently pending application for gaming licensure in
Nevada.
Ameristar understands that your application is likely
to be heard by the Nevada Gaming Control Board during the month
of November. Ameristar hereby confirms that it will enter into
an employment agreement with you as contemplated by Section 6.9,
provided that until such time as your license is granted, you
shall not become an officer of Ameristar as set forth in such
section. In all other respects, the employment agreement shall
contain the material terms described in Section 6.9 of the Merger
Agreement.
Except as amended hereby, the agreements between the
parties set forth in the Merger Agreement, as amended through the
Second Amendment, shall continue in full force and effect.
To confirm your agreement with the foregoing, please
sign this letter in the place indicated below.
Very truly yours,
/s/ Brian Katz
Brian Katz,
Vice President
Reviewed and approved
/s/ Dominic J. Magliarditi
Dominic J. Magliarditi
Date: October 3, 1996
AGREEMENT TO FURNISH EXHIBITS
AMERISTAR CASINOS, INC. hereby agrees to furnish
supplementally to the Securities and Exchange Commission
upon its request a copy of any of the exhibits to the
following Exhibits to the Report on Form 8-K: 10 .3 Second
Amendment to Merger Agreement by and among Gem Gaming, Inc.,
Ameristar Casinos, Inc., Ameristar Casino Las Vegas, Inc.,
Steven W. Rebeil, and Dominic J. Magliarditi, dated
September 27, 1996. Each of the foregoing Exhibits includes
a list setting forth a description of each such exhibit.