UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0-22494
AMERISTAR CASINOS, INC.
(Exact name of Registrant as Specified in its Charter)
Nevada 88-0304799
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
P.O. Box 92200, Henderson, Nevada 89009
(Address of principal executive offices)
(702) 737-0777
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15 (d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has
been subject to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class of Stock Outstanding at November 13, 1996
Common Stock, $.01 par value 20,360,000 shares
<PAGE>
AMERISTAR CASINOS, INC.
Form 10-Q
INDEX
Page No.
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements:
A. Condensed Consolidated Balance Sheets
at September 30, 1996 (unaudited)
and December 31, 1995 3 - 4
B. Condensed Consolidated Statements of
Income (unaudited) for the three months
and nine months ended September 30, 1996
and 1995 5
C. Condensed Consolidated Statements of
Cash Flows (unaudited) for the
nine months ended September 30, 1996 and 1995 6
D. Notes to Condensed Consolidated
Financial Statements 7 - 10
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 11 - 18
Part II. OTHER INFORMATION 19 - 22
SIGNATURE 23
EXHIBIT INDEX 24
<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
ASSETS
September 30, December 31,
1996 1995
(unaudited)
<TABLE>
<S> <C> <C>
CURRENT ASSETS:
Cash $11,008 $14,787
Restricted cash 279 256
Restricted security deposit - 11,511
Receivables, net 1,224 888
Receivables from affiliates - 115
Income tax refund receivable 550 311
Inventories 2,122 2,273
Prepaid expenses 4,070 2,467
Deferred income taxes 1,199 1,199
------- -------
Total current assets 20,452 33,807
PROPERTY AND EQUIPMENT AND LEASEHOLD
INTERESTS, at cost, less accumulated
depreciation and amortization of
$53,191 and $42,716, respectively 190,390 163,217
DEPOSITS AND OTHER ASSETS 2,027 2,055
PREOPENING COSTS 1,341 3,141
-------- --------
Total $214,210 $202,220
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
LIABILITIES AND STOCKHOLDERS' EQUITY
September 30, December 31,
1996 1995
(unaudited)
CURRENT LIABILITIES:
<TABLE>
<S> <C> <C>
Accounts payable $ 4,485 $ 3,767
Construction contracts payable 5,183 7,838
Accrued liabilities 14,415 10,394
Current obligations under
capitalized leases 416 506
Current maturities of notes
payable and long-term debt 6,824 6,895
-------- --------
Total current liabilities 31,323 29,400
DEFERRED INCOME TAXES 5,904 5,904
OBLIGATIONS UNDER CAPITALIZED LEASES,
net of current maturities 7,172 7,441
NOTES PAYABLE AND LONG-TERM DEBT,
net of current maturities 99,193 94,428
-------- --------
Total liabilities 143,592 137,173
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value:
Authorized - 30,000,000 shares
Issued - None - -
Common stock, $.01 par value:
Authorized - 30,000,000 shares
Issued and outstanding -
20,360,000 shares 204 204
Additional paid-in capital 43,043 43,043
Retained earnings 27,371 21,800
-------- --------
Total stockholders' equity 70,618 65,047
-------- --------
Total $214,210 $202,220
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1995 1996 1995
---- ---- ---- ----
<TABLE>
<S> <C> <C> <C> <C>
REVENUES:
Casino $ 43,359 $ 27,346 $121,984 $ 76,513
Food and beverage 7,267 5,309 17,681 15,047
Rooms 2,297 2,465 5,798 6,261
General store 661 728 1,821 1,996
Other 1,507 1,331 4,048 4,045
------- ------- -------- --------
55,091 37,179 151,332 103,862
Less-promotional allowances 3,637 2,895 9,162 8,149
------- ------- -------- --------
51,454 34,284 142,170 95,713
------- ------- -------- --------
OPERATING EXPENSES:
Casino 19,363 11,614 56,538 33,716
Food and beverage 6,226 3,781 12,234 9,958
Rooms 593 611 1,708 1,794
General store 589 627 1,600 1,732
Other 1,383 1,545 3,710 4,580
Selling, general & administrative 11,346 4,780 27,631 14,675
Business development 462 398 1,264 1,395
Utilities and maintenance 1,830 1,852 6,766 5,399
Depreciation and amortization 3,774 2,301 10,575 6,794
Preopening costs - - 6,147 -
------- ------- -------- --------
45,566 27,509 128,173 80,043
INCOME FROM OPERATIONS 5,888 6,775 13,997 15,670
------- ------- -------- --------
OTHER INCOME (EXPENSE):
Interest income 45 47 311 137
Interest expense (2,089) (1,490) (5,602) (4,053)
Net gain on disposition
of assets - - 63 -
------- ------- -------- --------
INCOME BEFORE INCOME TAX PROVISION
AND EXTRAORDINARY ITEM 3,844 5,332 8,769 11,754
Income tax provision 1,416 1,914 3,198 4,132
------- ------- -------- --------
INCOME BEFORE EXTRAORDINARY ITEM 2,428 3,418 5,571 7,622
Extraordinary item-loss on early
retirement of debt, net of
applicable income tax benefit - (657) - (657)
------- ------- -------- --------
NET INCOME $ 2,428 $ 2,761 $ 5,571 $ 6,965
======= ======= ======= ========
EARNINGS PER SHARE :
Before extraordinary item $ 0.12 $ 0.17 $ 0.27 $ 0.37
Extraordinary item - (0.03) - (0.03)
------- ------- ------- -------
Net income $ 0.12 $ 0.14 $ 0.27 $ 0.34
======= ======= ======= =======
WEIGHTED AVERAGE SHARES OUTSTANDING 20,360 20,360 20,360 20,360
======= ======= ======= ========
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
AMERISTAR CASINOS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(In thousands)
(Unaudited)
Nine Months
Ended September 30,
1996 1995
<TABLE>
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,571 $ 6,965
-------- -------
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 10,575 6,794
Extraordinary loss on early retirement of debt - 1,010
Change in deferred income taxes - 1,165
Net gain on disposition of assets (63) -
Amortization of preopening costs 6,147 -
Increase in other current assets (4,319) (951)
Decrease (increase) in other non-current assets 28 (2,299)
(Increase) decrease in income tax receivable (239) 803
Increase in income tax payable - 1,161
Increase in other current liabilities 4,738 3,039
------- -------
Total adjustments 15,143 10,722
------- -------
Net cash provided by operating activities 20,714 17,687
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (34,634) (34,953)
Decrease in construction contracts payable (2,655) (2,161)
Proceeds from sale of assets 63 -
------- -------
Net cash used in investing activities: (37,226) (37,114)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of long-term debt 8,057 80,366
Restricted security deposit 11,511 -
Principal payments of long-term debt
and capital leases (6,835) (61,199)
------- -------
Net cash provided by financing activities: 12,733 19,167
------- -------
Net decrease in cash (3,779) (260)
Cash at beginning of period 14,787 9,169
------- -------
Cash at end of period $ 11,008 $ 8,909
======== =======
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid during the period for interest
(net of amount capitalized) $ 4,908 $ 2,647
======== =======
Cash paid for income taxes $ 2,900 $ 670
======== =======
Assets purchased with long-term debt $ 3,006 $ 32
======== =======
Assets purchased with capital leases $ 107 $ -
======== =======
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
<PAGE>
Notes to Condensed Conolidated Financial Statements
1. -- Principles of consolidation and basis of presentation -
Ameristar Casinos, Inc. ("Ameristar" or "ACI"), through its
wholly owned subsidiaries, owns and operates four gaming and
entertainment properties in Nevada, Mississippi and Iowa. The
Cactus Petes, Inc. ("CPI") subsidiary owns and operates Cactus
Petes Resort Casino ("Cactus Petes") and The Horseshu Hotel and
Casino (collectively, the "Jackpot Properties"), two casino-hotels
located in Jackpot, Nevada at the Idaho border. Ameristar, through
Ameristar Casino Vicksburg, Inc. ("ACVI"), owns and operates a
riverboat-themed dockside casino ("Vicksburg Casino") and related
land-based facilities (collectively, "Ameristar Vicksburg") in
Vicksburg, Mississippi on a site along the bank of the Mississippi
River near the Interstate 20 bridge. The Ameristar Casino Council
Bluffs, Inc. ("ACCBI") subsidiary owns and operates a cruise
riverboat casino (the "Council Bluffs Casino") in Council Bluffs,
Iowa. The Council Bluffs Casino and related land-based facilities
(collectively, "Ameristar Council Bluffs") are located near the
Nebraska Avenue exit of Interstate 29 South across the Missouri
River from Omaha, Nebraska. The Council Bluffs Casino opened on
January 19, 1996, the Main Street Pavilion opened on June 17,
1996, and the Ameristar Hotel opened on November 1, 1996. The
remaining Ameristar Council Bluffs facilities (a sports bar
cabaret, swimming pool and steak house) are under construction.
Although no assurances can be given, management expects the sports
bar cabaret to be completed by December 31, 1996, the swimming
pool to be completed by February 1, 1997 and the steak house to be
completed by March 1, 1997, absent in each case construction,
weather or other delays. The failure to complete construction by
January 19, 1997, could result in the imposition of fines or the
loss or restriction of ACCBI's gaming license or otherwise could
have a material adverse effect on the Company. Although no
assurances can be given, management believes it is probable that
ACCBI would be able to obtain regulatory relief to avoid any
material regulatory consequences of a failure to complete Ameristar
Council Bluffs by January 19, 1997. See "Part II. Other
Information - Item 5. Other Information - Deadline for Completion
of Ameristar Council Bluffs." Ameristar Casino Las Vegas, Inc.
("ACLVI") was incorporated on April 30, 1996 to be the operating
entity for The Reserve Hotel and Casino ("The Reserve") under
development in Henderson, Nevada at the intersection of Interstate
515 and Lake Mead Drive. This acquisition was completed on October
9, 1996 (See note "4 - Subsequent events - Acquisition of The
Reserve"). In connection with this acquisition the Company
established Nevada AG Air Ltd. ("NVAGAIR"), a limited liability
company, in July 1996 to hold certain aviation assets the Company
controls through a majority interest in NVAGAIR. Ameristar,
together with its wholly owned subsidiaries and NVAGAIR, are
collectively referred to herein as the "Company."
The condensed consolidated financial statements included
herein have been prepared by the Company, without audit, pursuant
<PAGE>
to the rules and regulations of the Securities and Exchange
Commission. Accordingly, the condensed consolidated financial
statements do not include all of the disclosures required by
generally accepted accounting principles. However, the
accompanying unaudited condensed consolidated financial statements
do contain all adjustments that, in the opinion of management, are
necessary to present fairly the financial position and the results
of operations for the interim periods included therein. The
interim results reflected in the condensed consolidated financial
statements are not necessarily indicative of results to be expected
for the full fiscal year.
The accompanying condensed consolidated financial statements
should be read in conjunction with the financial statements and
notes thereto included in the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1995.
2. -- Reducing revolving credit facility -
On July 5, 1995, the Company entered into a Revolving Credit
Facility with a syndicate of banks totaling a maximum of $94.5
million (the "Revolving Credit Facility"). This amount was
subsequently increased to $99.0 million on October 4, 1996. As of
September 30, 1996, the Company had drawn $86.5 million on the
Revolving Credit Facility. These borrowings have been used to
repay prior borrowings of $44.8 million and to fund the continued
development of Ameristar Council Bluffs. The remainder of the
proceeds of the Revolving Credit Facility will be used to fund
additional advances from the Company to ACCBI for the construction
of the Ameristar Council Bluffs project and for the repayment of
approximately $11.4 million in borrowings outstanding on The
Reserve upon its acquisition by the Company. After completion of
Ameristar Council Bluffs, any available balance may be used for the
working capital needs of the Company and its subsidiaries (See note
"4 - Subsequent Events - Reducing Revolving Credit Facility" for
additional information on use of the Revolving Credit Facility).
3. -- Commitments and contingencies -
Development of Ameristar Council Bluffs is expected to cost
approximately $107.0 million , which includes the cost of land,
building, and riverboat and equipment. As of the date of this
Report, the Company had invested approximately $100.9 million in
Ameristar Council Bluffs, including $18.0 million on vessel
construction.
<PAGE>
4. -- Subsequent Events -
ACQUISITION OF THE RESERVE
On October 9, 1996 the Company completed the acquisition of
The Reserve under development in Henderson, Nevada, through the
merger of Gem Gaming, Inc. ("Gem") into ACLVI. The merger was
consummated 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"). ACLVI will complete the development of The Reserve
and will operate it.
The merger consideration to the Gem shareholders consisted of
(i) the right to receive cash, subject to reduction as described
below, equal to the amount of the net proceeds (after payment of
certain offering expenses) in excess of $4.0 million of an
underwritten public offering of 7.5 million shares of Ameristar's
Common Stock, or (ii) if such offering is not completed by June 1,
1997, receive a three-year, eight percent promissory notes in an
aggregate principal amount equal to (A) the average 10-day closing
price of the Company's Common Stock as of June 1, 1997 (B)
multiplied by 7,500,000 (C) minus $4.0 million and (D) minus
certain offering expenses. Depending on the amount of the per
share net offering proceeds, the merger consideration may be
subject to an additional reduction of up to $1.2 million.
Although the Company agreed in the Merger Agreement to use
commercially reasonable efforts to conclude the contemplated
offering prior to June 1, 1997, the Company has not entered into
any agreements or understandings with any potential underwriters
for such offering or otherwise begun to make preparations for such
offering. There can be no assurance that Ameristar will seek to
make a public offering of its Common Stock 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 commenced, would be completed
prior to the second quarter of 1997.
In connection with the closing of the merger, which occurred
October 9, 1996, the Company repaid the outstanding balance
(approximately $11.4 million) of a bank loan of Gem that was
secured by The Reserve. The Company funded this repayment through
additional borrowings under its Revolving Credit Facility.
The Reserve is located on a 53-acre site at the southeast
corner of Interstate 515 and Lake Mead Drive between Henderson and
Green Valley, of which 46 acres are developable. ACLVI owns 23
acres of the site and the remaining property is under option. The
Reserve is designed to capture the spirit of an exotic and
mysterious safari adventure with the interior decor replicating the
natural environment of an African game reserve.
<PAGE>
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 two phases and
will be opened upon the completion of phase I. Phase I will
include approximately 319,000 square feet of space, which will
include a 70,000 square foot casino, 225 hotel rooms, a swimming
pool, a race and sports book and bingo area, a buffet, a 24-hour
restaurant, a steak house, an Italian restaurant and a
entertainment lounge, video lounge, sports lounge and a parking
structure.
Phase II of the Reserve is contemplated to add a second hotel
tower with approximately 250 rooms, meeting rooms, an additional
restaurant, a children's activity center and an additional swimming
pool and court yard. Construction of phase II is planned to
commence subsequent to phase I opening.
Because of the extent of the design changes, which remain
subject to modification, the Company is not currently in a position
to provide information concerning the opening date or development
budget for The Reserve.
For additional information concerning The Reserve and its
acquisition, see the Company's Report on Form 8-K filed with the
Securities and Exchange Commission on October 24, 1996.
Information concerning the financing of the continuing development
of The Reserve is also included in the Form 8-K Report and in this
Form 10-Q Report under "Management's Discussion and Analysis of
Financial Condition and Results of Operation-Liquidity and Capital
Resources."
REDUCING REVOLVING CREDIT FACILITY
In connection with the acquisition of The Reserve, the Company
obtained an increase in its Revolving Credit Facility from $94.5 to
$99.0 million on October 4, 1996. As of October 10, 1996 the
balance outstanding was $99.0 million, the maximum allowable
balance under the current agreement. 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. See
"Management's Discussion and Analysis of Financial Condition and
Results of Operations-Liquidity and Capital Resources".
<PAGE>
Management's Discussion and Analysis of Financial Condition and
Results of Operations (unaudited)
Ameristar Casinos, Inc. ("Ameristar" or "ACI"), through its
wholly owned subsidiaries, owns and operates four gaming and
entertainment properties in Nevada, Mississippi and Iowa. The
Cactus Petes, Inc. ("CPI") subsidiary owns and operates Cactus
Petes Resort Casino ("Cactus Petes") and The Horseshu Hotel and
Casino (collectively, the "Jackpot Properties"), two casino-hotels
located in Jackpot, Nevada at the Idaho border. Ameristar, through
Ameristar Casino Vicksburg, Inc. ("ACVI"), owns and operates a
riverboat-themed dockside casino ("Vicksburg Casino") and related
land-based facilities (collectively, "Ameristar Vicksburg") in
Vicksburg, Mississippi on a site along the bank of the Mississippi
River near the Interstate 20 bridge. The Ameristar Casino Council
Bluffs, Inc. ("ACCBI") subsidiary owns and operates a cruise
riverboat casino (the "Council Bluffs Casino") in Council Bluffs,
Iowa. The Council Bluffs Casino and related land-based facilities
(collectively, "Ameristar Council Bluffs") are located near the
Nebraska Avenue exit of Interstate 29 South across the Missouri
River from Omaha, Nebraska. The Council Bluffs Casino opened on
January 19, 1996, the Main Street Pavilion opened on June 17,
1996, and the Ameristar Hotel opened on November 1, 1996. The
remaining Ameristar Council Bluffs facilities (a sports bar
cabaret, swimming pool and steak house) are under construction.
Although no assurances can be given, management expects the sports
bar cabaret to be completed by December 31, 1996, the swimming
pool to be completed by February 1, 1997 and the steak house to be
completed by March 1, 1997, absent in each case construction,
weather or other delays. The failure to complete construction by
January 19, 1997, could result in the imposition of fines or the
loss or restriction of ACCBI's gaming license or otherwise could
have a material adverse effect on the Company. Although no
assurances can be given, management believes it is probable that
ACCBI would be able to obtain regulatory relief to avoid any
material regulatory consequences of a failure to complete Ameristar
Council Bluffs by January 19, 1997. See "Part II. Other
Information - Item 5. Other Information - Deadline for Completion
of Ameristar Council Bluffs." Ameristar Casino Las Vegas, Inc.
("ACLVI") was incorporated on April 30, 1996 to be the operating
entity for The Reserve Hotel and Casino ("The Reserve") under
development in Henderson, Nevada at the intersection of Interstate
515 and Lake Mead Drive. This acquisition was completed on October
9, 1996 (See note "4 - Subsequent events - Acquisition of The
Reserve"). In connection with this acquisition the Company
established Nevada AG Air Ltd. ("NVAGAIR"), a limited liability
company, in July 1996 to hold certain aviation assets the Company
controls through a majority interest in NVAGAIR. Ameristar,
together with its wholly owned subsidiaries and NVAGAIR, are
collectively referred to herein as the "Company."
The Company's quarterly and annual operating results may be
affected by competitive pressures, the timing of the commencement
of new gaming operations, the amount of preopening costs incurred
<PAGE>
by the Company, construction at existing facilities and general
weather conditions. Consequently, the Company's operating results
for any quarter or year may not be indicative of results to be
expected for future periods.
Summary
The growth in year-to-date operating levels for the first nine
months of 1996 over 1995 (net of preopening costs) is primarily due
to the opening of the Council Bluffs Casino in January 1996 and a
continuation of improved operating margins at Ameristar Vicksburg.
Consolidated net revenues for the three and nine months ended
September 30, 1996, respectively, were $51.4 million and $142.2
million compared with $34.3 million and $95.7 million,
respectively, for the same periods in 1995, increases of 49.9% and
48.6%, respectively.
Income from operations was $5.9 million and $14.0 million
($5.9 million and $20.1 million before preopening costs) for the
three and nine months ended September 30, 1996, respectively,
compared to $6.8 million and $15.7 million for the same periods in
the prior year. Preopening costs of $6.1 million for the nine
months ended June 30, 1996 are associated with the opening of
certain facilities at Ameristar Council Bluffs.
Total operating expenses before preopening costs as a
percentage of net revenue increased to 89% and 86% for the three
and nine months ended September 30, 1996, as compared to 80% and
84%, respectively, in the prior year. These increases are a result
of growing competitive pressures in the Council Bluffs and Jackpot
markets and to increases in corporate costs related to the
Company's continuing growth and the relocation of its executive
offices to Las Vegas, Nevada.
Net income for the three and nine months ended September 30,
1996 was $2.4 million and $5.6 million, respectively, compared to
net income of $2.8 million and $7.0 million, respectively, in the
same periods in 1995. Excluding the after-tax effect of preopening
costs totaling $3.9 million, net income of $9.5 million was
generated in the nine months ended September 30, 1996.
Earnings per share for the three and nine months ended
September 30, 1996 was $.12 and $.27, respectively. Before
preopening costs earnings per share for these periods was $.12 and
$.47, respectively. Earnings per share was $.14 and $.34,
respectively, for the three and nine month comparable periods ended
September 30, 1995.
<PAGE>
Revenue
The Jackpot Properties produced net revenues of $15.0
million and $40.2 million for the three and nine months ended
September 30, 1996, respectively, as compared to $16.2 million and
$43.7 million, respectively, for the same periods in the prior
year. Management believes that competition in Jackpot (which has
added some new and renovated facilities since early 1995) and from
Native American and other casinos in the outer market, including
Washington, Oregon and Alberta, Canada, is having a negative impact
on revenues. Management believes that recent declines in the rates
of population and economic growth in southern Idaho also have
adversely affected the Jackpot Properties. The nine-month
performance of the Jackpot Properties in 1996 was also affected by
adverse weather conditions and below-average table games win
percentage experienced during the second quarter. In an effort to
improve its competitive position, the Jackpot Properties are
attempting to increase visitation by its existing customers through
the use of direct mail in outlying areas to develop new customers.
The Jackpot Properties are also introducing approximately 460 new
slot machines in the fourth quarter of 1996 and the first quarter
of 1997. Innovative slot machine layouts and enhanced slot signage
are also being implemented in connection with these upgrades.
Ameristar Vicksburg continued to be the market leader in
Warren County, Mississippi in the third quarter of 1996 with an
average market share during the third quarter of approximately 32%.
Net revenues for Ameristar Vicksburg were $17.1 million and $50.3
million for the three and nine months ended September 30, 1996,
respectively, compared with $17.8 million and $51.8 million for the
same periods in the prior year. These decreases in 1996 were
related to overall shrinkage in the Vicksburg market for the
quarter compared to the third quarter of 1995, a loss of market
share from the 1995 to 1996 periods and a lower table games hold
percentage for the nine months ended September 30, 1996 as compared
to the same period in the prior year.
Ameristar Council Bluffs, which opened its casino on January
19, 1996 and portions of its land-based facilities on June 17 and
November 1, 1996, had net revenues of $19.3 million and $51.4
million for the three and nine months ended September 30, 1996.
Operating income (before preopening costs of $6.1 million during
the first nine months; There were no preopening costs expensed in
the third quarter) was $1.0 million and $7.0 million, respectively,
for the three and nine months ended September 30, 1996. Although
no assurances can be given, management believes that the operating
performance of Ameristar Council Bluffs will improve following the
completion of the remaining land-based facilities, expected in
December 1996 and the first quarter of 1997. See "Part II. Other
Information - Item 5. Other Information - Deadline for Completion
of Ameristar Council Bluffs."
<PAGE>
On a consolidated basis, casino revenues increased $16.0
million and $45.5 million or 59%, respectively, for the three and
nine months ended September 30, 1996 in comparison to the same
periods in 1995, due primarily to the opening of the Council Bluffs
Casino. For the nine-month period the increases due to the Council
Bluffs Casino were partially offset by decreases at the Jackpot
Properties ($2.2 million) and Ameristar Vicksburg ($0.6 million).
Food and beverage revenues increased by $2.0 million or 37% and
$2.6 million or 18%, respectively, for the three and nine months
ended September 30, 1996 as compared to the comparable periods of
the prior year. These increases are largely attributable to the
opening of two new outlets at Ameristar Council Bluffs on June 17,
1996. Rooms revenue decreased $0.2 million or 7% and $0.5 million
or 7%, respectively for the three and nine months ended September
30, 1996, primarily due to the adverse weather conditions,
increased competition and market factors affecting the Jackpot
Properties as discussed above. Other revenues increased $0.2
million or 13% for the three months ended September 30, 1996 and
were flat the nine months ended September 30, 1996, compared to the
three and nine months ended September 30, 1995.
Expenses
Casino expenses increased $7.7 million or 67% and $22.8
million or 68%, respectively, for the three and nine months ended
September 30, 1996 as compared to the same periods in the prior
year. These increases are due to the opening of the Council Bluffs
Casino offset slightly by a reduction in casino costs at the
Company's other properties.
Food and beverage expenses increased $2.4 million or 65% and
$2.3 million or 23%, respectively, in the three and nine months
ended September 30, 1996, compared to the same periods in the prior
year. These increases reflect the opening of the two new
restaurants at Ameristar Council Bluffs in June 1996 partially
offset by cost control improvements implemented at Ameristar
Vicksburg.
Selling, general and administrative expenses increased $6.6
million or 137% and $13.0 million or 88% from the three and nine
months ended September 30, 1995, respectively, to the comparable
periods in the current year. These increases are primarily due to
the opening of the Council Bluffs property in stages during 1996.
In addition, corporate expenses have increased due to the
relocation of the Company's executive offices to Las Vegas, Nevada
in the third quarter and other recurring expenses associated with
the growth of the Company.
Business development costs increased $0.1 million or 16% and
decreased $0.1 million or 9%, respectively, for the three and nine
months ended September 30, 1996, compared to the same periods of
the prior year. The Company continues to explore gaming
<PAGE>
development opportunities in other jurisdictions and potential
acquisitions in the gaming industry.
Utilities and maintenance expenses remained constant for the
three months ended September 30,1996 when compared to the same
period in 1995. The increase in utilities and maintenance expenses
in the 1996 quarter for the new Ameristar Council Bluffs property
were substantially offset by site maintenance costs at Ameristar
Vicksburg in the 1995 quarter. The increase in utilities and
maintenance costs for the nine-month period ended September 30,1996
from the 1995 period are related to the new Council Bluffs
property. Depreciation costs also increased during the quarter and
nine-month periods due to the addition of the Ameristar Council
Bluffs facilities to the Company's asset base.
Preopening costs of $6.1 million related to the opening of the
Ameristar Council Bluffs facilities were expensed during the first
and second quarters of 1996.
Interest expense was $2.1 million and $5.6 million, net of
capitalized interest of $0.6 million and $1.6 million in the three
and nine months ended September 30, 1996, respectively, an increase
of $0.6 million or 40% and $1.5 million or 38%, respectively, as
compared to the same periods in 1995. These increases were related
to an increase in debt outstanding due to Ameristar Council Bluffs
construction.
The Company's effective federal tax rate for the three and
nine months ended September 30, 1996 was 36.8% and 36.5%,
respectively, versus the federal statutory rate of 35%, due to
certain non-deductible expenses.
Liquidity and Capital Resources
The Company's cash flow from operations was $20.7 million for
the nine months ended September 30, 1996 as compared to $17.7
million for the nine months ended September 30, 1995. The Company
had unrestricted cash of approximately $11.0 million as of
September 30, 1996. The Company historically has funded its daily
operations through net cash provided by operating activities and
its significant capital expenditures through bank debt and other
debt financing. The Company's current assets decreased by
approximately $13.4 million from December 31, 1995 to September
30, 1996, primarily as a result of continued construction activity
at ACCBI of approximately $33.3 million.
The Company, as borrower, and its principal operating
subsidiaries (including ACLVI), as guarantors, maintain a Revolving
Credit Facility with Wells Fargo Bank, NA (formerly First
Interstate Bank of Nevada, NA) ("WFB") and a syndicate of banks
(the "Revolving Credit Facility"). The maximum principal available
at September 30, 1996 was $94.5 million. However, the Company may
<PAGE>
not borrow under the Revolving Credit Facility in excess of 3.5
times its rolling four quarter EBITDA ("Earnings before Interest,
Taxes, Depreciation and Amortization"). As of September 30, 1996,
3.5 times the Company's rolling four quarter EBITDA exceeded the
maximum funds available under the Revolving Credit Facility.
Borrowings under the Revolving Credit Facility bear interest
at a rate based either on LIBOR or WFB's prime rate, at the
election of the Company, and the ratio of the Company's
consolidated total debt to consolidated cash flow, as measured by
an EBITDA formula. As of September 30, 1996, the Company had four
LIBOR draws outstanding totaling $86.5 million with a current
average interest rate of 8.5 percent per annum. These borrowings
have been used to repay pre-existing borrowings of $44.8 million
and to fund the continued development of Ameristar Council Bluffs.
The Company obtained a $4.5 million increase in the Revolving
Credit Facility to $99.0 million on October 4, 1996 in order to
fund certain costs in connection with the acquisition of The
Reserve. On October 8, 1996 the Company borrowed the remaining
$12.5 million available under the Revolving Credit Facility to pay
acquisition-related costs and approximately $1.0 million of
construction costs for Ameristar Council Bluffs. As of the date of
this Report, the outstanding principal balance of the Revolving
Credit Facility is $99.0 million. In connection with the increase
in the Revolving credit Facility, the bank lenders gave their
consent for Ameristar to make capital contributions to ACLVI of up
to $0.5 million and to make loans to ACLVI of up to $16 million
(which intercompany loans may be funded out of borrowings under the
Revolving Credit Facility). Following the completion of Ameristar
Council Bluffs, the Revolving Credit Facility permits draws under
the Revolving Credit Facility to be used only for general working
capital purposes and the funding of permitted intercompany loans to
ACLVI.
The maximum borrowings available under the Revolving Credit
Facility reduces semi-annually commencing January 1, 1997 on a
sliding scale (ranging from $4.5 million to $7.1 million in
reductions) with a final principal payment of $42 million due at
maturity on December 31, 2001.
The Revolving Credit Facility is secured by liens on
substantially all of the real and personal property of the Company
and its subsidiaries other than ACLVI. The Revolving Credit
Facility binds the Company to a number of affirmative and negative
covenants, including promises to maintain certain financial ratios
within defined parameters. As of September 30, 1996, the Company
was in compliance with these covenants.
In connection with the acquisition of The Reserve, the Company
also assumed additional debts of $.7 million secured by an aircraft
controlled by the Company. This note matures in August 1998 and
<PAGE>
accrues interest at a rate of 8.03% per year. The monthly payments
are approximately $10,326. Additionally, the Company assumed a 10
year capital lease for approximately $1.3 million for signage for
The Reserve. The lease accrues interest at a rate of 9.5% with a
monthly payment commencing December 1996 of approximately $33,000.
The Company's ACCBI subsidiary has entered into several other
borrowing arrangements with Ameristar as guarantor. ACCBI entered
into a preferred ship mortgage with General Electric Credit Corp.
on December 28, 1995 for the sum of $11,511,000. Proceeds from an
equipment loan entered into with WFB on December 12, 1995 for
approximately $7.1 million were used to finance ACCBI's slot
machines, surveillance equipment and property signage. ACCBI also
entered into several additional equipment financing agreements in
1995 totaling approximately $0.9 million. On June 27, 1996, ACCBI
entered into an agreement with PDS Financial Corporation ("PDS")
for borrowings of up to approximately $2.1 million collaterialized
by certain furniture, fixtures and equipment. The PDS loan has
also been guaranteed by Ameristar. The outstanding balance of this
loan at September 30, 1996 was $1.2 million. ACCBI has the right
to draw an additional $0.9 million on this loan when certain
holdback conditions are met.
See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital
Resources" in the Company's Annual Report on Form 10-K for the
fiscal year ended December 31, 1995 for additional information
relating to Company borrowings.
Capital expenditures in the three and nine months ended
September 30, 1996 were approximately $8.0 million and $34.6
million, respectively, compared to approximately $18.9 million and
$35.0 million for the three and nine months ended September 30,
1995, respectively. The majority of these expenditures were
related to the construction and development of Ameristar Council
Bluffs. The Company funded these capital expenditures from net
cash provided by operating activities and bank debt, including the
Revolving Credit Facility.
The Company anticipates making additional capital expenditures
of approximately $12 million in 1996 following the date of this
Report for its existing properties and properties under
development, of which $4 million is expected to be used for the
completion of Ameristar Council Bluffs and $5 million is expected
to be used in connection with the development of The Reserve. In
addition, a $4.5 million scheduled principal repayment will be due
on January 1, 1997, under the Company's Revolving Credit Facility,
and additional capital expenditures will be required in 1997 for
the development of The Reserve and other activities of the Company.
These capital expenditure requirements are anticipated to be funded
out of operating cash flow, lease financing and through other
borrowing sources. The Company previously disclosed that it
<PAGE>
was in negotiations with WFB and other banks to replace its
Revolving Credit Facility with an increased bank credit facility.
While such replacement of the Revolving Credit Facility remains
under consideration, the Company is also considering alternative
financing arrangements. Although management believes that the
Company will be able to obtain additional borrowings at such times
as shall be necessary to meet its capital expenditure requirements,
no assurances can be given that such additional borrowings will be
timely obtained or at all. In addition, if the Company undertakes
any additional expansion projects, additional funds would likely be
required, and there can be no assurance that sources of such
funding would be available at terms acceptable to the Company.
Factors Affecting Forward-Looking Information
The Private Securities Litigation Reform Act of 1995 provides
a "safe harbor" from liability for forward-looking statements.
Certain information included in this Form 10-Q and other materials
filed or to be filed by the Company with the Securities and
Exchange Commission (as well as information included in oral
statements or other written statements made or to be made by or on
behalf of the Company) are forward-looking, such as statements
relating to growth and expansion plans, the effects of competition
and potential competition, the adequacy of future operating
performance, the adequacy of the Company's liquidity and capital
resources and the completion of financing transactions, the
completion of construction of properties under development, the
effects of regulatory requirements and the Company's ability to
meet such requirements and the anticipated outcome of contingent
claims against the Company. Such forward-looking statements
involve important risks and uncertainties, many of which will be
beyond the control of the Company. These risks and uncertainties
could significantly affect anticipated results in the future, both
short-term and long-term, and, accordingly, such results may
differ, in some cases materially, from those projected in or
anticipated or contemplated by forward-looking statements made by
or on behalf of the Company. Information concerning some of the
factors that could cause future actual results to differ from those
projected in or anticipated or contemplated by the forward-looking
statements can be found elsewhere in this Report on Form 10-Q and
in the Company's other publicly available reports filed with the
Securities and Exchanged Commission under the Securities Exchange
Act of 1934, including but not limited to the Company's Annual
Report on Form 10-K for the year ended December 31, 1995. In
particular, attention is directed to the cautionary statements
included in this Report under the captions "Management's Discussion
and Analysis of Financial Condition and Results of Operations" and
"Part II. Item 5. Other Information" and in the Form 10-K report
under the captions "Business -- Current Operations," "Business --
Expansion Strategy," "Business -- Government Regulations,"
"Description of Property" and "Management's Discussion and Analysis
of Financial Condition and Results of Operations."
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. Legal Proceedings
PERINI V.ACCBI
Perini-Anderson, a joint venture in which Perini Building
Company is a principal, is the general contractor for the
construction of the pavilion and hotel at Ameristar Council Bluffs.
The contract between Perini-Anderson and ACCBI contains a
guaranteed maximum price and specific dates for completion. The
contract also contains provisions for liquidated damages if Perini-
Anderson fails to meet the established completion dates.
On September 20, 1996, ACCBI received from Perini-Anderson a
demand for arbitration regarding the amounts due under the
contract. The demand does not contain a plea for a specific dollar
amount of damages, and instead requests an award for extra or
changed work, delayed, disrupted and accelerated work, together
with inefficiencies and impacts experienced on the project, along
with unpaid retainage and certain other costs. ACCBI submitted a
counterclaim for approximately $6,850,000 for cost overruns in
excess of the guaranteed maximum price that ACCBI has had to pay,
liquidated damages for delay and certain other costs. Perini-
Anderson has asserted that it is entitled to equitable extensions
to the scheduled completion date for, among other things, delays
caused by change orders and unanticipated severe weather
conditions, that eliminate liability of Perini-Anderson to ACCBI
for cost overruns and liquidated damages.
The arbitration proceedings will be conducted in accordance
with the rules of the American Arbitration Association and will be
held in Council Bluffs, Iowa. The parties are in the process of
selecting the arbitrators, and as of the date of this Report a
hearing date has not been set. Management is not able at this time
to make an assessment with respect to the outcome of this
arbitration proceeding.
MARGARET BOTSFORD V. ACVI
On October 30, 1996, Margaret Botsford commenced a lawsuit in
the Circuit Court of Warren County, Mississippi, entitled Margaret
Botsford v. Ameristar Casino Vicksburg et al. The case number is
96,205-CI. Ms. Botsford was an employee of ACVI. She alleges in
the complaint that she was wrongfully asked to take a breathalyzer
test for alcohol, She claims that the tests showed that she was
neither under the influence of alcohol, nor was she impaired. She
further alleges that ACVI wrongfully terminated her. According to
the complaint, ACVI's actions defamed her, failed to hold certain
information confidential, and falsely arrested her. She ask for
$500,000 in compensatory damages and $5 million in punitive
damages. ACVI is investigating the matter and has not yet filed a
answer.
<PAGE>
DONALD RAY YOUNG V. ACI AND ACVI
This case was filed in the Circuit Court of Warren County,
Mississippi, on August 13, 1996, as case number 960149CI. The
nature of the lawsuit is personal injury occurring during the
construction of the vessel for ACVI. The plaintiff was an employee
of Yates Construction Company, the general contractor for the
project, and alleges that ACVI and ACI did not supply a safe place
to work. He alleges he incurred some back injuries, and seeks
damages totaling $875,000.
At the time of the accident (August 13, 1993), ACI had not yet
been formed. ACI has moved for dismissal on that ground, but that
motion has not yet been heard. ACVI is continuing to investigate
the matter.
For additional information relating to legal proceedings see
the Company's Annual Report on Form 10-K for the year ended
December 31, 1995.
ITEM 5. Other Information
POTENTIAL ADDITIONAL MISSISSIPPI COMPETITION
The Mississippi Gaming Commission is considering an
application from Horseshoe Gaming, Inc. to construct an
approximately $125 million casino and auto race track development
on the Big Black River. The Mississippi Gaming Commission has
announced that the matter will be considered at a meeting to be
held on November 15, 1996.
The proposed site on the Big Black River is near Interstate 20
between Jackson and Vicksburg, Mississippi. Management believes
that such a development would provide a significant competitive
advantage over Ameristar Vicksburg and other gaming operations in
Warren County due to its closer proximity to Jackson. However,
there currently is no exit off Interstate 20 in the vicinity of
this site, the area surrounding this site is undeveloped and lacks
any infrastructure and the site may not meet the navigable waterway
requirements of Mississippi law for the development of a casino.
Nevertheless, if the Mississippi Gaming Commission grants the
license, and if the project is in fact constructed, Ameristar
Casino Vicksburg and the Company will likely be materially and
adversely affected.
DEADLINE FOR COMPLETION OF AMERISTAR COUNCIL BLUFFS
The Iowa Racing and Gaming Commission conditioned the award of
the license to ACCBI upon all of the Company's facilities being
completed one year after the opening of the casino. The one year
anniversary is January 19, 1997. The Agreement between Iowa West
<PAGE>
Racing Association and ACCBI requires certain of the Ameristar
Council Bluffs facilities to be substantially complete within two
years from the date the Iowa Racing and Gaming Commission awarded
the license or the per person admission fee payable to Iowa West
Racing Association increases from $1.50 to $4.50 until these
facilities are substantially complete. The two year anniversary is
January 27, 1997.
Currently all of the land-based facilities are complete except
the steak house, the sports bar cabaret, and the swimming pool
for the hotel, all of which are currently under construction.
Although no assurances can be given, management believes that the
sports bar cabaret will be completed and opened by December 31,
1996, that the swimming pool (which management does not believe is
included in the gaming license completion requirement) can be
completed by February 1, 1997 and that the steak house likely will
be completed approximately March 1, 1997, in each case absent
construction, weather or other delays.
Based on informal communications between the Company and the
staff of the Iowa Racing and Gaming Commission and representatives
of the City of Council Bluffs, management believes it is probable
that the Company would be able to obtain regulatory relief to avoid
any material regulatory consequences of a failure to complete
Ameristar Council Bluffs by January 19, 1997. However, no
assurance can be given that such relief will be obtained. The
failure to obtain such relief could result in the imposition of
fines or the loss or restriction of the gaming license for the
Council Bluffs Casino, which may have a material adverse effect on
ACCBI and the Company, including possibly the occurrence of an
event of default under one or more credit facilities.
In the absence of a significant casualty loss or other force
majeure event, management believes that any increase in admission
fees to Iowa West Racing Association, if payable, will not have a
material adverse effect on the Company.
COMPLIANCE WITH IOWA CRUISING REQUIREMENTS
As of September 30, 1996, the Company has fulfilled its
cruising requirements for the period April 1, 1996 through October
31, 1996 of this year, favorably resolving the previously disclosed
issue regarding cruising requirements. This annual requirement
will begin again for ACCBI on April 1, 1997.
NEBRASKA BALLOT INITIATIVE TO AUTHORIZE GAMING
In its Report on Form 10-Q for the quarter ended June 30,
1996, the Company disclosed the possibility of an initiative being
placed on the November 5, 1996 election ballot that would authorize
slot machines and casino gaming at certain locations in Nebraska,
including Omaha, which is across the Missouri River from Ameristar
<PAGE>
Council Bluffs. This initiative was not placed on the November
election ballot due to the determination of the Nebraska Secretary
of State that an insufficient number of petition signatures were
obtained.
ITEM 6. Exhibits and Reports on Form 8-K
A. The following exhibits are filed as a part of this
report:
10.1 AIA Standard Form of Agreement between CAMCO
PACIFIC CONSTRUCTION COMPANY, INC. and Gem
Gaming, Inc., dated October 25, 1995.
10.2 AIA Standard Form of Agreement between CAMCO
PACIFIC CONSTRUCTION COMPANY, INC. and Gem
Gaming, Inc., dated October 25, 1995.
10.3 Ameristar Casinos, Inc. Management Stock Option
Incentive Plan, As Amended and Restated Through
September 4, 1996.
10.4 Consent to Merger and Increased Commitment
Agreement between Ameristar Casinos, Inc. And
Wells Fargo Bank, National Association, dated
October 4, 1996.
27 Financial Data Schedule
99.1 Agreement to furnish to the Securities and
Exchange Commission certain long-term debt
instruments.
B. Reports on Form 8-K
None during the quarter ended September 30, 1996.
<PAGE>
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
AMERISTAR CASINOS, INC.
Registrant
Date: November 13, 1996 /s/ Thomas M. Steinbauer
Thomas M. Steinbauer
Sr. Vice President
Chief Financial Officer
<PAGE>
Exhibit
Number Description of Exhibit
10.1 AIA Standard Form of Agreement between CAMCO PACIFIC
CONSTRUCTION COMPANY, INC. and Gem Gaming, Inc., dated
October 25, 1995 for the construction of The Reserve
Hotel.
10.2 AIA Standard Form of Agreement between CAMCO PACIFIC
CONSTRUCTION COMPANY, INC. and Gem Gaming, Inc., dated
October 25, 1995 for the construction of The Reserve
Casino facility.
10.3 Ameristar Casinos, Inc. Management Stock Option Incentive
Plan, Amended and Restated on September 4, 1996
10.4 Consent to Merger and Increased Commitment Agreement
between Ameristar Casinos, Inc. And Wells Fargo Bank,
National Association, dated October 4, 1996.
27 Financial Data Schedule
99.1 Agreement to furnish to the Securities and
Exchange Commission certain long-term debt
instruments.
THE AMERICAN INSTITUTE OF ARCHITECTS
AIA Document A101
Standard Form of Agreement Between
Owner and Contractor
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR
MODIFICATION.
The 1987 Edition of AIA Document A201, (General Conditions of the
Contract for Construction, is adopted in this document by
reference. Do not use with other general conditions unless this
document is modified.
This document has been approved and endorsed by The Association
of General Contractors of America.
AGREEMENT
made as of the twenty-fifth day of October in the year of
Nineteen Hundred and Ninety-five
BETWEEN the Owner: (Name and address)
Gem Gaming, Inc.
4330 S. Valley View #102
Las Vegas, Nevada 89103
(702) 221-1177, (702) 221-1179 - Fax
and the Contractor: (Name and address)
Camco Pacific Construction Company, Inc.
20250 Acacia Street, Suite 200
Newport Beach, California 92660
(714) 250-3001, (714) 250-1001 - Fax
The Project is: (Name and location)
The Reserve, (Hotel only)
Lake Mead Drive @ U.S. Hwy. 95 (777 West Lake Mead Drive)
Henderson, Nevada
The Architect is: (Name and address)
Scheurer Architects
20250 Acacia Street, Suite 260
Newport Beach, California 92660
(714) 752-4009, (714) 752-8737 - Fax
The Owner and Contractor agree as set forth below.
<PAGE>
ARTICLE I
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of
the Contract (General, Supplementary and other Conditions),
Drawings, Specifications, addenda issued prior to execution of
this Agreement, other documents listed in this Agreement and
Modifications issued after execution of this Agreement; these
form the Contract, and are as fully a part of the Contract as if
attached to this Agreement or repeated herein. The Contract
represents the entire and integrated agreement between the
parties hereto and supersedes prior negotiations, representations
or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article
9.
ARTICLE 2
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the
Contract Documents, except to the extent specifically indicated
in the Contract Documents to be the responsibility of others, or
as follows:
ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract
Time of Paragraph 3.2 is measured, and shall be the date of this
Agreement, as first written above, unless a different date is
stated below or provision is made for the date to be fixed in a
notice to proceed issued by the Owner. The date of commencement
shall be fixed in a Notice to Proceed provided by Gem Gaming,
Inc. or it's authorized agent to Camco Pacific Construction
Company, Inc. The Notice to Proceed will also act as
verification that all funds are in place to complete the project.
A Letter of Committment from the Lender will be required to the
satisfaction of Contractor and Bonding Company. (Insert the date
of commencement, if it differs from the date of this Agreement
or, if applicable, state that the date will be fixed in a notice
to proceed.)
Unless the date of commencement is established by a notice to
proceed issued by the Owner, the Contractor shall notify the
Owner in writing not less than five days before commencing the
Work to permit the timely filing of mortgages, mechanic's liens
and other security interests.
3.2 The Contractor shall achieve Substantial Completion of the
entire Work not later than (Insert the calendar date or number of
calendar days after the date of commencement. Also insert any
requirements for earlier Substantial Completion of certain
portions of the Work, if not stated elsewhere in the Contract
Documents.)
Two Hundred Sixty Two (262) calendar days from November 1, 1995
or issuance of footing and foundation permit, whichever is later.
If full buidling permit not issued by December 15, 1995, the
timing shall be extended for the number of days the permit is
delayed.
, subject to adjustments of this Contract Time as provided in the
Contract Documents. (Insert provisions, if any, for liquidated
damages relating to failure to complete on time.)
<PAGE>
ARTICLE 4
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum of Six
Million Seventy One Thousand Seventy Five Dollars ($6,071,075),
subject to additions and deductions as provided in the Contract
Documents
4.2 The Contract Sum is based upon the following alternates, if
any, which are described in the Contract Documents and are hereby
accepted by the Owner: (State the numbers or other identification
of accepted alternates. If decisions on other alternates are to
be made by the Owner subsequent to the execution of this
Agreement, attach a schedule of such other alternates showing the
amount for each and the date until which that amount is valid.)
4.3 Unit prices, if any, are as follows:
<PAGE>
ARTICLE 5
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the
Architect by the Contractor and Certificates for Payment issued
by the Architect, the Owner shall make progress payments on
account of the Contract Sum to the Contractor as provided below
and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be
one calendar month ending on the last day or the month, or as
follows;
5.3 provided an Application for Payment is received by the
Architect not later than the fifth day of a month, the Owner
shall make payment to the Contractor not later than the twentieth
(20th) day of the same month. If an Application for Payment is
received by the Architect after the application date fixed above,
payment shall be made by the Owner not later than ten days after
the Architect receives the Application for Payment.
5.4 Each Application for Payment shall be based upon the schedule
of values submitted by the Contractor in accordance with the
Contract Documents. The schedule of values shall allocate the
entire Contract Sum among the various portions of the Work and be
prepared in such form and supported by such data to substantiate
its accuracy as the Architect may require. This schedule, unless
objected to by the Architect, shall be used as a basis for
reviewing the Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of
completion of each portion of the Work as of the end of the
period covered by the Application for Payment.
5.6 Subject to the provisions of the Contract Documents, the
amount of each progress payment shall be computed as follows:
5.6.1. Take that portion of the Contract Sum properly allocable
to completed Work as determined by multiplying the percentage
completion of each portion of the Work by the share of the total
Contract Sum allocated to that portion of the Work in the
schedule of values, less retainage of ten percent (10%). Pending
final determination of cost to the Owner of changes in the Work,
amounts not in the dispute may be included as provided in
Subparagraph 7.3.7 of the General Conditions even though the
Contract Sum has not yet been adjusted by Change Order;
5.6.2 Add that portion of the Contract Sum properly allocable to
materials and equipment delivered and suitably stored at the site
for subsequent incorporation in the completed construction (or,
if approved in advance by the Owner, suitably stored off the site
at a location agreed upon in writing), less retainage of zero
percent (0%);
5.6.3 Subtract the aggregate of previous payments made by the
Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has
withheld or nullified a Certificate for Payment as provided in
Paragraph 9.5 of the General Conditions.
5.7 The progress payment amount determined in accordance with
Paragraph 5.6 shall be further modified under the following
circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum
sufficient to increase the total payments to Ninety Five percent
(95%) of the Contract Sum, less such amounts as the Architect
shall determine for incomplete Work and unsettled claims; and
5.7.2 Add, if final completion of the Work is thereafter
materially delayed through no fault of the Contractor, any
additional amounts payable in accordance with Subparagraph 9.10.3
of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as
follows: (If it is intended, prior to Substantial Completion of
the entire Work, to reduce or limit the retainage resulting from
the percentages inserted in Subparagraphs 5.6.1 and 5.6.2 above,
and this is not explained elsewhere in the Contract Documents,
insert here provisions for such reduction or limitation.)
10% Retention shall be withheld for the first 50% of the Contract
amount. At such time no additional retention withheld.
<PAGE>
ARTICLE 6
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the
Contract Sum, shall be made by the Owner to the Contractor when
(1) the Contract has been fully performed by the Contractor
except for the Contractor's responsibility to correct
nonconforming Work as provided in Subparagraph 12.2.2 of the
General Conditions and to satisfy other requirements, if any,
which necessarily survive final payment; and (2) a final
Certificate for Payment has been issued by the Architect; such
final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for
Payment, or as follows:
A. In no event shall final payment be made to Contractor unless
all certificates of occupancy have been issued for the project.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of
the General Conditions or another Contract Document, the
reference refers to that provision as amended or supplemented by
other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear
interest from the date payment is due at the rate stated below,
or in the absence thereof, at the legal rate prevailing from time
to time at the place where the Project is located. (Insert rate
of interest agreed upon, if any.)
10% per annum (.83/month)
7.2B The terms of this Agreement are subject to the review and
approval of Bank of America Nevada (BAN) and BA Construction
Services and the Contractor's Bonding company. The parties agree
to work with BAN and Bonding company to make changes to the
contract as may be required by BAN and Bonding Compay, if
possible and agreeable to the parties.
(Usury laws and requirements under the Federal Truth in Lending
Act, similar state and local consumer credit laws and other
regulations at the Owner's and Contractor's principal places of
business, the location of the Project and elsewhere may affect
the validity of this provision. Legal advice should be obtained
with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
Retention to be released in its entirety thirty (30) days after
installation of work for the follwing items: Structural Steel,
Joists, Steel Trusses, Masonry & Concrete and metal decking. In
no evenht shall retention be released unless all certificates of
occupancy have been issued for the project.
7.4 See first Addendum for additional/clarifying terms and
conditions.
ARTICLE 8
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor
as provided in Article 14 of the General Conditions.
8.2.1 The Work may be suspended by the Owner as provided in
Article 14 of the General Conditions.
<PAGE>
ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement
Between Owner and Contractor, AIA Document A1Ol, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the
Contract for Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are
those contained in the Project Manual dated _________________,
and are as follows:
Document Title
Pages
No Project Manual Included
9.1.4 The Specifications are those contained in the Project
Manual dated as in subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an Exhibit
attached to this Agreement.)
Section Title
Pages
No Project Specifications Included
<PAGE>
9.1.5 The Drawings are as follows, and are dated
_____________________ unless a different date is shown below:
(Either list the Drawings here or refer to an Exhibit attached to
this Agreement.)
Number Title
Date
See Attached "List of Drawings"
9.1.6 The addenda, if any are as follows:
Number Date
Pages
First Addendum to Contractor's Agreement attached hereto and
incorporated herein by this reference.
Portions of addenda relating to bidding requirements are not part
of the Contract Documents unless the bidding requirements are
also enumerated in this Article 9.
<PAGE>
9.1.7 Other documents, if any, forming part of the Contract
Documents are as follows: (List here any additional documents
which are intended to form part of the Contract Documents. The
General conditions provide that bidding requirements such as
advertisement or invitation to bid, Instructions to Bidders,
sample forms and the Contractor's bid are not part of the
Contract Documents unless enumerated in this Agreement. They
should be listed here only if intended to be part of the Contract
Documents.)
This Agreement is entered into as of the day and year first
written above and is executed in at least three original copies
of which one is to be delivered to the Contractor, one to the
Architect for use in the administration of the Contract, and the
remainder to the Owner.
OWNER CONTRACTOR
/s/ Michael V. Villamor /s/ Dewain E.
Campbell
(Signature) (Signature)
Michael V. Villamor, President Dewain E.
Campbell
Gem Gaming, Inc. President
(Printed name and title) (Printed name and
title)
CAUTION: You should sign an original AIA document which has this
caution printed in red. An original assures that changes will not
be obscured as may occur when documents are reproduced.
<PAGE>
THE RESERVE HOTEL & CASINO
LIST OF DRAWINGS
NUMBER TITLE DATE
2 Horizontal Control Plan 6/12/95
A2.1 First Floor Plan - Casino 8/22/95
A2.2 Second Floor Plan - Casino 8/22/95
A2.3 Partial First Floor Plan - Casino 8/22/95
A2.4 Partial First Floor Plan - Casino 8/22/95
A2.5 Partial First Floor Plan - Casino 8/22/95
A2.6 Partial First Floor Plan - Casino 8/22/95
A2.7 Partial Second Floor Plan - Casino 8/22/95
A2.8 Partial Second Floor Plan - Casino 8/22/95
A2.9 Partial Second Floor Plan - Casino 8/22/95
A2.16 Exterior Elevations - Casino 8/22/95
A2.17 Exterior Elevations - Casino 8/22/95
A2.18 Casino/Tower - Roof Plan 8/22/95
A2.19 Building Sections - Casino 8/22/95
A3.1 Tower - First/Typical Plans 8/22/95
A3.2 Tower - Tenth Floor Plan 8/22/95
A3.3 Tower - Enlarged Plans 8/22/95
A3.6 Tower - East Elevation 8/22/95
A3.7 Tower - West Elevation 8/22/95
A3.8 Tower - North/South Elevations 8/22/95
A3.9 Tower - Section 8/22/95
A3.10 Tower - Stair Sections 8/22/95
A3.12 Tower - Enlarged Plans 8/22/95
S.1 Typical Details 2/27/95
S.2 General Notes 7/10/95
S.3.1 Casino Foundation Plan 7/31/95
S.3.2 Casino Upper Level Framing Plan 7/31/95
S.3.3 Casino Roof Framing Plan 7/31/95
S.4.1 Tower (Phase I) Foundation Plan 7/18/95
S.4.2 Tower (Phase I) 2nd-10th Floor & Roof
Framing Plan 7/10/95
S.5 Casino Sections 7/31/95
S.7.1 Casino Grade BM and Brace Frame Elevations 7/31/95
S.7.2 Casino Grade BM and Brace Frame Elevations 7/31/95
S.9.1 Tower Shear Wall Elevations 7/31/95
S.9.2 Tower Shear Wall Elevations 7/31/95
S.10.1 Casino Details 7/31/95
S.10.2 Casino Details 7/31/95
S.11.1 Tower Details 7/17/95
FIRST ADDENDUM TO CONTRACTOR'S AGREEMENT
(HOTEL TOWER)
This First Addendum ("First Addendum") to the General
Contractor Agreement is made this 25th day of October, 1995 by
and between Gem Gaming, Inc., a Nevada corporation ("Owner") and
Camco Pacific Construction Company, Inc., a California
corporation ("Contractor").
R E C I T A L S
A. Owner and Contractor entered into an agreement
dated _________________, 1995 (the "Agreement") whereby
Contractor agreed to perform various general contractor services
for Owner in Owner's development of a hotel/casino and related
improvements in Henderson, Nevada (the "Project").
B. The parties desire to provide for additional
provisions to the Agreement as set forth in this First Addendum.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used herein
and not otherwise defined shall be accorded the meanings set
forth in the Agreement.
2. Construction Budget. Contractor warrants and
agrees that the budget for the construction of the Project shall
not exceed the following:
(a) Contractor shall construct the Hotel Tower
consisting of 224 rooms at a cost not to exceed the amount
of $23,000 per turn-key room (each room to be the size of
12' x 27' (+/-)). In addition, Contractor shall construct
miscellaneous offices and facilities ("Back of House") on
the ground floor of the Hotel Tower for a cost not to exceed
the amount of $919,075. The total cost is $6,071,075.
(b) Owner and Contractor shall work diligently to
bring this Project in "on budget" as shown above. It is
expressly understood that such project requires the
cooperation of all parties to assure that the Project does
not go over budget.
3. Proof of Financing. Owner shall provide to
Contractor and Bonding Company an acceptable "Proof of Financing"
document that guarantees sufficient funds are available to meet
the obligations of the Contract, including potential Change
Orders.
4. Late Penalty. Owner and Contractor acknowledge
and agree that if the Project is not substantially complete and
ready for the purpose intended in accordance with Article 3 of
the Construction Contract that damages to Owner would be
difficult to
<PAGE>
calculate and the parties agree to set forth a specific sum in
the event of such an occurrence. Contractor shall be responsible
for the per day amounts described below payable to Owner as total
liquidated damages for each day the Project is not substantially
complete and ready for the purpose intended. Such liquidated
damages shall include any and all damages, including but not
limited to actual and consequential damages (Owner does not waive
any of its rights or remedies under the First Addendum or General
Contractor Agreement by this liquidated damages provision).
LATE PENALTY
a. 1-15 days late $ 1,000/day
b. 16-30 days late 2,000/day
for those days over 15
days
c. > 30 days late 2,500/day
for those days over 30
days
5. Contractor Coordination. Contractor agrees to
provide the following services, in addition to those that may be
provided for in the Agreement, as part of the basic services of
Contractor:
(a) Contractor shall be responsible for mechanical and
plumbing engineering. Contractor shall coordinate with
electrical engineer, previously hired by Owner. Contractor
shall assume responsibility for electrical design.
(b) Contractor shall coordinate and interface with all
architectural and engineering disciplines and other
disciplines working on the Project.
6. Performance of Contractor Services. All services
of Contractor shall be performed to the satisfaction of Owner, as
per standards of the industry.
7. Reaffirmation of Agreement. The Agreement, except
as modified by this First Addendum, is reaffirmed in its
entirety. If there is any inconsistency between the Agreement
and this First Addendum the terms of the First Addendum shall
control.
8. Exclusions. The following shall not be the
responsibility of Contractor:
(a) Architectural and Engineering Fees except for
Mechanical and Plumbing Engineering Fees.
(b) Sewer and water assessments.
(c) City of Henderson Building Inspectors, plan check fees,
transportation tax, building permits, development fees,
<PAGE>
connection fees, special inspections, testings and regular
inspections.
(d) Furnishings.
(e) Carpeting (Contractor shall install only).
(f) Interior decor and exterior decor, including
stonework (Contractor shall install all drywall and drywall
soffits in the casino, including raised walks).
(g) Wall coverings and floor coverings (Contractor
shall install only).
(h) Power Company charges.
(i) Installation of gaming equipment.
(j) Signs.
(k) Special plumbing and electrical fixtures (standard
fixtures included in base contract).
(l) Bar and kitchen equipment (Contractor shall do
rough installation to all equipment locations with all
utilities in slab).
(m) All site work specifically including, but not
limited to, grading, paving, site utilities (wet and dry),
landscaping, storm drain, site lighting, bollards, benches,
etc. Such may be added through change order at option of
Owner. Contractor shall coordinate and interface with such
disciplines.
(n) All exterior shapes, domes, caps, etc., shall be
provided by Owner (Contractor shall provide flat stucco
system for same).
(o) Specialty systems (public address, computers,
sound, keno, bingo, T.V. (cable and closed circuit),
telephone, security and surveillance, etc.). (Contractor
shall install/supply conduit and power for all specialty
systems).
(p) Swimming pool, spa and related work (Contractor to
coordinate only).
(q) Handling of any existing on-site toxic/hazardous
materials.
(r) Building illumination or signs (power only
included).
<PAGE>
(s) Concealed fire sprinkler heads.
(t) Site utilities (Contractor to provide utilities 5 feet
from structure to connect with utilities installed during
site work).
(u) Elevator cab interior finishes.
(v) Gaming equipment, tables and slot machines
(Contractor to install/provide all conduit, walker duct,
power, etc.).
(w) Property insurance.
(x) Window coverings.
(j) Handicap lift.
(k) Porte Cocheres. Such may be added through change order at
option of Owner.
(l) Fire/life safety package.
(m) Tenant improvement work at executive office areas of casino.
9. Condition of Documents. It is expressly
understood that the Contract documents, including Plans and
Specifications, are incomplete as of the execution date of this
Contract. Should such documents substantially change as a result
of changes beyond the control of the Contractor (Architect,
Engineer, Governmental Agency, or the Owner) a Change Order shall
be issued modifying Contract sum, either deductive or additive.
Project Architect shall be 100% complete with all documents no
later than December 1, 1995. If not, project delays will occur
at cost of such shall be borne by Owner.
10. Changes Orders. Should Scope of the Work change,
Contractor shall receive a Change Order, either deductive or
additive. Should a Change Order be additive, Contractor shall be
entitled to a 10% fee, above all direct and indirect costs. Any
such Change Order may cause schedule modifications, resulting in
overall substantial completion date modifications.
11. Time is of the Essence. Owner and Contractor
mutually agree that time is of the essence of this Contract and
shall work diligently to meet the substantial completion dates.
Owner shall be responsible to get timely cooperation from
Architects, Engineers and Consultants that are under its control.
12. Contract Control. It is understood by all parties
that BA Construction Services shall serve as contract control
<PAGE>
agent. All parties shall work diligently to provide any required
information in a timely manner so as to avoid delays in
processing of Progress and Final Payments.
13. Complimentary Contracts. Owner and Contractor are
entering into two separate contracts for the construction of The
Reserve Hotel/Casino. Such two contracts are intended to
compliment one another so as to provide one complete Project
consisting of the Hotel and Casino.
14. Presumption. This Agreement nor any section of
this Agreement shall be construed against any party due to the
fact that the Agreement or any section of it was drafted by said
party.
IN WITNESS WHEREOF, the parties have signed this First
Addendum the date and year first above written.
OWNER: CONTRACTOR:
GEM GAMING, INC., CAMCO PACIFIC CONSTRUCTION, INC..
A NEVADA CORPORATION A CALIFORNIA CORPORATION
/s/Michael V. Villamor /s/Dewain E. Campbell
By:_______________________ By:____________________________
Michael V. Villamor, Dewain E. Campbell,
President President
THE AMERICAN INSTITUTE OF ARCHITECTS
AIA Document A101
Standard Form of Agreement Between
Owner and Contractor
where the basis of payment is a
STIPULATED SUM
1987 EDITION
THIS DOCUMENT HAS IMPORTANT LEGAL CONSEQUENCES; CONSULTATION WITH
AN ATTORNEY IS ENCOURAGED WITH RESPECT TO ITS COMPLETION OR
MODIFICATION.
The 1987 Edition of AIA Document A201, (General Conditions of the
Contract for Construction, is adopted in this document by
reference. Do not use with other general conditions unless this
document is modified.
This document has been approved and endorsed by The Association
of General Contractors of America.
AGREEMENT
made as of the twenty-fifth day of October in the year of
Nineteen Hundred and Ninety-five
BETWEEN the Owner: (Name and address)
Gem Gaming, Inc.
4330 S. Valley View #102
Las Vegas, Nevada 89103
(702) 221-1177, (702) 221-1179 - Fax
and the Contractor: (Name and address)
Camco Pacific Construction Company, Inc.
20250 Acacia Street, Suite 200
Newport Beach, California 92660
(714) 250-3001, (714) 250-1001 - Fax
The Project is: (Name and location)
The Reserve, (Casino only)
Lake Mead Drive @ U.S. Hwy. 95 (777 West Lake Mead Drive)
Henderson, Nevada
The Architect is: (Name and address)
Scheurer Architects
20250 Acacia Street, Suite 260
Newport Beach, California 92660
(714) 752-4009, (714) 752-8737 - Fax
The Owner and Contractor agree as set forth below.
>page>
ARTICLE I
THE CONTRACT DOCUMENTS
The Contract Documents consist of this Agreement, Conditions of
the Contract (General, Supplementary and other Conditions),
Drawings, Specifications, addenda issued prior to execution of
this Agreement, other documents listed in this Agreement and
Modifications issued after execution of this Agreement; these
form the Contract, and are as fully a part of the Contract as if
attached to this Agreement or repeated herein. The Contract
represents the entire and integrated agreement between the
parties hereto and supersedes prior negotiations, representations
or agreements, either written or oral. An enumeration of the
Contract Documents, other than Modifications, appears in Article
9.
ARTICLE 2
THE WORK OF THIS CONTRACT
The Contractor shall execute the entire Work described in the
Contract Documents, except to the extent specifically indicated
in the Contract Documents to be the responsibility of others, or
as follows:
ARTICLE 3
DATE OF COMMENCEMENT AND SUBSTANTIAL COMPLETION
3.1 The date of commencement is the date from which the Contract
Time of Paragraph 3.2 is measured, and shall be the date of this
Agreement, as first written above, unless a different date is
stated below or provision is made for the date to be fixed in a
notice to proceed issued by the Owner.
The date of commencement shall be fixed in a Notice to Proceed
provided by Gem Gaming, Inc. or it's authorized agent to Camco
Pacific Construction Company, Inc. The Notice to Proceed will
also act as verification that all funds are in place to complete
the project. A Letter of Committment from the Lender will be
required to the satisfaction of Contractor and Bonding Company.
(Insert the date of commencement, if it differs from the date of
this Agreement or, if applicable, state that the date will be
fixed in a notice to proceed.)
Unless the date of commencement is established by a notice to
proceed issued by the Owner, the Contractor shall notify the
Owner in writing not less than five days before commencing the
Work to permit the timely filing of mortgages, mechanic's liens
and other security interests.
3.2 The Contractor shall achieve Substantial Completion of the
entire Work not later than (Insert the calendar date or number of
calendar days after the date of commencement. Also insert any
requirements for earlier Substantial Completion of certain
portions of the Work, if not stated elsewhere in the Contract
Documents.)
Two Hundred Eighty-Five (285) calendar days from November 1, 1995
or issuance of footing and foundation permit, whichever is later.
If full buidling permit not issued by December 15, 1995, the
timing shall be extended for the number of days the permit is
delayed.
, subject to adjustments of this Contract Time as provided in the
Contract Documents. (Insert provisions, if any, for liquidated
damages relating to failure to complete on time.)
<PAGE>
ARTICLE 4
CONTRACT SUM
4.1 The Owner shall pay the Contractor in current funds for the
Contractor's performance of the Contract the Contract Sum of
Seven Millio forty Seven Thousand Four Hundred Thirty Four
Dollars ($7,047,434), subject to additions and deductions as
provided in the Contract Documents
4.2 The Contract Sum is based upon the following alternates, if
any, which are described in the Contract Documents and are hereby
accepted by the Owner: (State the numbers or other identification
of accepted alternates. If decisions on other alternates are to
be made by the Owner subsequent to the execution of this
Agreement, attach a schedule of such other alternates showing the
amount for each and the date until which that amount is valid.)
4.3 Unit prices, if any, are as follows:
<PAGE>
ARTICLE 5
PROGRESS PAYMENTS
5.1 Based upon Applications for Payment submitted to the
Architect by the Contractor and Certificates for Payment issued
by the Architect, the Owner shall make progress payments on
account of the Contract Sum to the Contractor as provided below
and elsewhere in the Contract Documents.
5.2 The period covered by each Application for Payment shall be
one calendar month ending on the last day or the month, or as
follows;
5.3 provided an Application for Payment is received by the
Architect not later than the fifth day of a month, the Owner
shall make payment to the Contractor not later than the twentieth
(20th) day of the same month. If an Application for Payment is
received by the Architect after the application date fixed above,
payment shall be made by the Owner not later than ten days after
the Architect receives the Application for Payment.
5.4 Each Application for Payment shall be based upon the schedule
of values submitted by the Contractor in accordance with the
Contract Documents. The schedule of values shall allocate the
entire Contract Sum among the various portions of the Work and be
prepared in such form and supported by such data to substantiate
its accuracy as the Architect may require. This schedule, unless
objected to by the Architect, shall be used as a basis for
reviewing the Contractor's Applications for Payment.
5.5 Applications for Payment shall indicate the percentage of
completion of each portion of the Work as of the end of the
period covered by the Application for Payment.
5.6 Subject to the provisions of the Contract Documents, the
amount of each progress payment shall be computed as follows:
5.6.1. Take that portion of the Contract Sum properly allocable
to completed Work as determined by multiplying the percentage
completion of each portion of the Work by the share of the total
Contract Sum allocated to that portion of the Work in the
schedule of values, less retainage of ten percent (10%). Pending
final determination of cost to the Owner of changes in the Work,
amounts not in the dispute may be included as provided in
Subparagraph 7.3.7 of the General Conditions even though the
Contract Sum has not yet been adjusted by Change Order;
5.6.2 Add that portion of the Contract Sum properly allocable to
materials and equipment delivered and suitably stored at the site
for subsequent incorporation in the completed construction (or,
if approved in advance by the Owner, suitably stored off the site
at a location agreed upon in writing), less retainage of zero
percent (0%);
5.6.3 Subtract the aggregate of previous payments made by the
Owner; and
5.6.4 Subtract amounts, if any, for which the Architect has
withheld or nullified a Certificate for Payment as provided in
Paragraph 9.5 of the General Conditions.
5.7 The progress payment amount determined in accordance with
Paragraph 5.6 shall be further modified under the following
circumstances:
5.7.1 Add, upon Substantial Completion of the Work, a sum
sufficient to increase the total payments to Ninety Five percent
(95%) of the Contract Sum, less such amounts as the Architect
shall determine for incomplete Work and unsettled claims; and
5.7.2 Add, if final completion of the Work is thereafter
materially delayed through no fault of the Contractor, any
additional amounts payable in accordance with Subparagraph 9.10.3
of the General Conditions.
5.8 Reduction or limitation of retainage, if any, shall be as
follows: (If it is intended, prior to Substantial Completion of
the entire Work, to reduce or limit the retainage resulting from
the percentages inserted in Subparagraphs 5.6.1 and 5.6.2 above,
and this is not explained elsewhere in the Contract Documents,
insert here provisions for such reduction or limitation.)
10% Retention shall be withheld for the first 50% of the Contract
amount. At such time no additional retention withheld.
<PAGE>
ARTICLE 6
FINAL PAYMENT
Final payment, constituting the entire unpaid balance of the
Contract Sum, shall be made by the Owner to the Contractor when
(1) the Contract has been fully performed by the Contractor
except for the Contractor's responsibility to correct
nonconforming Work as provided in Subparagraph 12.2.2 of the
General Conditions and to satisfy other requirements, if any,
which necessarily survive final payment; and (2) a final
Certificate for Payment has been issued by the Architect; such
final payment shall be made by the Owner not more than 30 days
after the issuance of the Architect's final Certificate for
Payment, or as follows:
A. In no event shall final payment be made to Contractor unless
all certificates of occupancy have been issued for the project.
ARTICLE 7
MISCELLANEOUS PROVISIONS
7.1 Where reference is made in this Agreement to a provision of
the General Conditions or another Contract Document, the
reference refers to that provision as amended or supplemented by
other provisions of the Contract Documents.
7.2 Payments due and unpaid under the Contract shall bear
interest from the date payment is due at the rate stated below,
or in the absence thereof, at the legal rate prevailing from time
to time at the place where the Project is located. (Insert rate
of interest agreed upon, if any.)
10% per annum (.83/month)
7.2B The terms of this Agreement are subject to the review and
approval of Bank of America Nevada (BAN) and BA Construction
Services and the Contractor's Bonding company. The parties
agree to work with BAN and Bonding company to make changes
to the contract as may be required by BAN and Bonding
Compay, if possible and agreeable to the parties.
(Usury laws and requirements under the Federal Truth in Lending
Act, similar state and local consumer credit laws and other
regulations at the Owner's and Contractor's principal places of
business, the location of the Project and elsewhere may affect
the validity of this provision. Legal advice should be obtained
with respect to deletions or modifications, and also regarding
requirements such as written disclosures or waivers.)
7.3 Other provisions:
Retention to be released in its entirety thirty (30) days after
installation of work for the follwing items: Structural Steel,
Joists, Steel Trusses, Masonry & Concrete and metal decking. In
no evenht shall retention be released unless all certificates of
occupancy have been issued for the project.
7.4 See first Addendum for additional/clarifying terms and
conditions.
ARTICLE 8
TERMINATION OR SUSPENSION
8.1 The Contract may be terminated by the Owner or the Contractor
as provided in Article 14 of the General Conditions.
8.2.1 The Work may be suspended by the Owner as provided in
Article 14 of the General Conditions.
ARTICLE 9
ENUMERATION OF CONTRACT DOCUMENTS
9.1 The Contract Documents, except for Modifications issued after
execution of this Agreement, are enumerated as follows:
9.1.1 The Agreement is this executed Standard Form of Agreement
Between Owner and Contractor, AIA Document A1Ol, 1987 Edition.
9.1.2 The General Conditions are the General Conditions of the
Contract for Construction, AIA Document A201, 1987 Edition.
9.1.3 The Supplementary and other Conditions of the Contract are
those contained in the Project Manual dated _________________,
and are as follows:
Document Title
Pages
No Project Manual Included
9.1.4 The Specifications are those contained in the Project
Manual dated as in subparagraph 9.1.3, and are as follows:
(Either list the Specifications here or refer to an Exhibit
attached to this Agreement.)
Section Title
Pages
No Project Specifications Included
<PAGE>
9.1.5 The Drawings are as follows, and are dated
_____________________ unless a different date is shown below:
(Either list the Drawings here or refer to an Exhibit attached to
this Agreement.)
Number Title
Date
See Attached "List of Drawings"
9.1.6 The addenda, if any are as follows:
Number Date
Pages
First Addendum to Contractor's Agreement
Portions of addenda relating to bidding requirements are not part
of the Contract Documents unless the bidding requirements are
also enumerated in this Article 9.
9.1.7 Other documents, if any, forming part of the Contract
Documents are as follows: (List here any additional documents
which are intended to form part of the Contract Documents. The
General conditions provide that bidding requirements such as
advertisement or invitation to bid, Instructions to Bidders,
sample forms and the Contractor's bid are not part of the
Contract Documents unless enumerated in this Agreement. They
should be listed here only if intended to be part of the Contract
Documents.)
This Agreement is entered into as of the day and year first
written above and is executed in at least three original copies
of which one is to be delivered to the Contractor, one to the
Architect for use in the administration of the Contract, and the
remainder to the Owner.
OWNER CONTRACTOR
/s/ Michael V. Villamor /s/ Dewain E. Campbell
(Signature) (Signature)
Michael V. Villamor, President Dewain E. Campbell
Gem Gaming, Inc. President
(Printed name and title) (Printed name and title)
CAUTION: You should sign an original AIA document which has this
caution printed in red. An original assures that changes will not
be obscured as may occur when documents are reproduced.
<PAGE>
THE RESERVE HOTEL & CASINO
LIST OF DRAWINGS
NUMBER TITLE DATE
2 Horizontal Control Plan 6/12/95
A2.1 First Floor Plan - Casino 8/22/95
A2.2 Second Floor Plan - Casino 8/22/95
A2.3 Partial First Floor Plan - Casino 8/22/95
A2.4 Partial First Floor Plan - Casino 8/22/95
A2.5 Partial First Floor Plan - Casino 8/22/95
A2.6 Partial First Floor Plan - Casino 8/22/95
A2.7 Partial Second Floor Plan - Casino 8/22/95
A2.8 Partial Second Floor Plan - Casino 8/22/95
A2.9 Partial Second Floor Plan - Casino 8/22/95
A2.16 Exterior Elevations - Casino 8/22/95
A2.17 Exterior Elevations - Casino 8/22/95
A2.18 Casino/Tower - Roof Plan 8/22/95
A2.19 Building Sections - Casino 8/22/95
A3.1 Tower - First/Typical Plans 8/22/95
A3.2 Tower - Tenth Floor Plan 8/22/95
A3.3 Tower - Enlarged Plans 8/22/95
A3.6 Tower - East Elevation 8/22/95
A3.7 Tower - West Elevation 8/22/95
A3.8 Tower - North/South Elevations 8/22/95
A3.9 Tower - Section 8/22/95
A3.10 Tower - Stair Sections 8/22/95
A3.12 Tower - Enlarged Plans 8/22/95
S.1 Typical Details 2/27/95
S.2 General Notes 7/10/95
S.3.1 Casino Foundation Plan 7/31/95
S.3.2 Casino Upper Level Framing Plan 7/31/95
S.3.3 Casino Roof Framing Plan 7/31/95
S.4.1 Tower (Phase I) Foundation Plan 7/18/95
S.4.2 Tower (Phase I) 2nd-10th Floor & Roof
Framing Plan 7/10/95
S.5 Casino Sections 7/31/95
S.7.1 Casino Grade BM and Brace Frame Elevations 7/31/95
S.7.2 Casino Grade BM and Brace Frame Elevations 7/31/95
S.9.1 Tower Shear Wall Elevations 7/31/95
S.9.2 Tower Shear Wall Elevations 7/31/95
S.10.1 Casino Details 7/31/95
S.10.2 Casino Details 7/31/95
S.11.1 Tower Details 7/17/95
FIRST ADDENDUM TO CONTRACTOR'S AGREEMENT
(CASINO)
This First Addendum ("First Addendum") to the General
Contractor Agreement is made this 25th day of October, 1995 by
and between Gem Gaming, Inc., a Nevada corporation ("Owner") and
Camco Pacific Construction Company, Inc., a California
corporation ("Contractor").
R E C I T A L S
A. Owner and Contractor entered into an agreement
dated _________________, 1995 (the "Agreement") whereby
Contractor agreed to perform various general contractor services
for Owner in Owner's development of a hotel/casino and related
improvements in Henderson, Nevada (the "Project").
B. The parties desire to provide for additional
provisions to the Agreement as set forth in this First Addendum.
NOW, THEREFORE, the parties agree as follows:
1. Definitions. All capitalized terms used herein
and not otherwise defined shall be accorded the meanings set
forth in the Agreement.
2. Construction Budget. Contractor warrants and
agrees that the budget for the construction of the Project shall
not exceed the following:
(a) Contractor shall construct the Casino and public
facility areas at the cost not to exceed $66.49 square foot
(which consists of approximately 106,000 +/- square feet).
Total cost is $7,047,434.
(b) Owner and Contractor shall work diligently to
bring this Project in "on budget" as shown above. It is
expressly understood that such project requires the
cooperation of all parties to assure that the Project does
not over budget.
3. Proof of Financing. Owner shall provide to
Contractor and Bonding Company an acceptable "Proof of Financing"
document that guarantees sufficient funds are available to meet
the obligations of the Contract, including potential Change
Orders.
4. Late Penalty. Owner and Contractor acknowledge
and agree that if the Project is not substantially complete and
ready for the purpose intended in accordance with Article 3 of
the Construction Contract that damages to Owner would be
difficult to calculate and the parties agree to set forth a
specific sum in the event of such an occurrence. Contractor
shall be responsible for the per day amounts described below
payable to Owner as total
<PAGE>
liquidated damages for each day the Project is not substantially
complete and ready for the purpose intended. Such liquidated
damages shall include any and all damages, including but not
limited to actual and consequential damages (Owner does not waive
any of its rights or remedies under the First Addendum or General
Contractor Agreement by this liquidated damages provision).
LATE PENALTY
a. 1-15 days late $1,000/day
b. 16-30 days late
$2,000/day for those days
over 15 days
c. > 30 days late
$2,500/day for those days
over 30 days
5. Contractor Coordination. Contractor agrees to
provide the following services, in addition to those that may be
provided for in the Agreement, as part of the basic services of
Contractor:
(a) Contractor shall be responsible for mechanical and
plumbing engineering. Contractor shall coordinate with
electrical engineer, previously hired by Owner. Contractor
shall assume responsibility for electrical design.
(b) Contractor shall coordinate and interface with all
architectural and engineering disciplines and other
disciplines working on the Project.
6. Performance of Contractor Services. All services
of Contractor shall be performed to the satisfaction of Owner, as
per standards of the industry.
7. Reaffirmation of Agreement. The Agreement, except
as modified by this First Addendum, is reaffirmed in its
entirety. If there is any inconsistency between the Agreement
and this First Addendum the terms of the First Addendum shall
control.
8. Exclusions. The following shall not be the
responsibility of Contractor:
(a) Architectural and Engineering Fees except for
Mechanical and Plumbing Engineering Fees.
(b) Sewer and water assessments.
(c) City of Henderson Building Inspectors, plan check
fees, transportation tax, building permits, development
fees, connection fees, special inspections testings and
regular inspections.
(d) Furnishings.
<PAGE>
(e) Carpeting (Contractor shall install only).
(f) Interior decor and exterior decor, including
stonework (Contractor shall install all drywall and drywall
soffits in the casino, including raised walks).
(g) Wall coverings and floor coverings (Contractor
shall install only).
(h) Power Company charges.
(i) Installation of gaming equipment.
(j) Signs.
(k) Special plumbing and electrical fixtures (standard
fixtures included in base contract).
(l) Bar and kitchen equipment (Contractor shall do
rough installation to all equipment locations with all
utilities in slab).
(m) All site work specifically including, but not
limited to, grading, paving, site utilities (wet and dry),
landscaping, storm drain, site lighting, bollards, benches,
etc. Such may be added through change order at option of
Owner. Contractor shall coordinate and interface with such
disciplines.
(n) All exterior shapes, domes, caps, etc., shall be
provided by Owner (Contractor shall provide all stucco
system for same).
(o) Specialty systems (public address, computers,
sound, keno, bingo, T.V. (cable and closed circuit),
telephone, security and surveillance, etc.). (Contractor
shall install/supply conduit and power for all specialty
systems).
(p) Swimming pool, spa and related work (Contractor to
coordinate only).
(q) Handling of any existing on-site toxic/hazardous
materials.
(r) Building illumination or signs (power only
included).
(s) Concealed fire sprinkler heads.
(t) Site utilities (Contractor to provide utilities 5'
from structure to connect with utilities installed during
site work).
<PAGE>
(u) Elevator cab interior finishes.
(v) Gaming equipment, tables and slot machines
(Contractor to install/provide all conduit, walker duct,
power, etc.).
(w) Property insurance.
(x) Window coverings.
(y) Handicap lift.
(z) Porte Cocheres. Such may be added through change
order at option of Owner.
(aa) Fire/life safety package.
(bb) Tenant improvement work at executive office areas
of casino.
9. Condition of Documents. It is expressly
understood that the Contract documents, including Plans and
Specifications, are incomplete as of the execution date of this
Contract. Should such documents substantially change as a result
of changes beyond the control of the Contractor (Architect,
Engineer, Governmental Agency, or the Owner) a Change Order shall
be issued modifying Contract sum, either deductive or additive.
Project Architect shall be 100% complete with all documents no
later than December 1, 1995. If not, project delays will occur
at cost of such shall be borne by owner.
10. Changes Orders. Should Scope of the Work change,
Contractor shall receive a Change Order, either deductive or
additive. Should a Change Order be additive, Contractor shall be
entitled to a 10% fee, above all direct and indirect costs. Any
such Change Order may cause schedule modifications, resulting in
overall substantial completion date modifications.
11. Time is of the Essence. Owner and Contractor
mutually agree that time is of the essence of this Contract and
shall work diligently to meet the substantial completion dates.
Owner shall be responsible to get timely cooperation from
Architects, Engineers and Consultants that are under its control.
12. Contract Control. It is understood by all parties
that BA Construction Services shall serve as contract control
agent. All parties shall work diligently to provide any required
information in a timely manner so as to avoid delays in
processing of Progress and Final Payments.
13. Complimentary Contracts. Owner and Contractor are
entering into two separate contracts for the construction of The
<PAGE>
Reserve Hotel/Casino. Such two contracts are intended to
compliment one another so as to provide one complete Project
consisting of the Hotel and Casino.
14. Presumption. This Agreement nor any section of
this Agreement shall be construed against any party due to the
fact that the Agreement or any section of it was drafted by said
party.
IN WITNESS WHEREOF, the parties have signed this First
Addendum the date and year first above written.
OWNER: CONTRACTOR:
GEM GAMING, INC., CAMCO PACIFIC CONSTRUCTION, INC..
A NEVADA CORPORATION A CALIFORNIA CORPORATION
By: /s/ Michael V. Villamor By: /s/ Dewain E. Campbell
Michael V. Villamor, Dewain E. Campbell,
President President
AMERISTAR CASINOS, INC.
MANAGEMENT STOCK OPTION INCENTIVE PLAN
AS AMENDED AND RESTATED THROUGH SEPTEMBER 4, 1996
1. PURPOSE
The purpose of the Ameristar Casinos, Inc. Management
Stock Option Incentive Plan is to further the interests of
Ameristar Casinos, Inc., a Nevada corporation (the
"Company"), and its subsidiaries by encouraging and enabling
selected officers, directors, employees, consultants,
advisers, independent contractors and agents, upon whose
judgment, initiative and effort the Company is largely
dependent for the successful conduct of its business, to
acquire and retain a proprietary interest in the Company by
ownership of its stock through the exercise of stock options
intended to be granted hereunder. Options granted hereunder
are either options intended to qualify as "incentive stock
options" within the meaning of Section 422 of the Code or
non-qualified stock options.
2. DEFINITIONS
Whenever used herein the following terms shall have the
following meanings, respectively:
(a) "Board" shall mean the Board of Directors of
the Company.
(b) "Code" shall mean the Internal Revenue Code
of 1986, as amended, and the regulations promulgated
thereunder.
(c) "Committee" shall mean the Stock Option or
Compensation Committee appointed by the Board to
administer the Plan, or if no committee has been
appointed reference to the "Committee" shall be deemed
to refer to the Board.
(d) "Common Stock" shall mean the Company's
Common Stock, $0.01 per value.
(e) "Company" shall mean Ameristar Casinos, Inc.,
a Nevada corporation.
(f) "Employee" shall mean, in connection with
Incentive Options, only employees of the Company or any
Subsidiary or Parent Corporation of the Company.
(g) "Fair Market Value Per Share" of the Common
Stock on any date shall mean, if the Common Stock is
publicly traded, the mean between the highest and
lowest quoted selling prices of the Common Stock on
such date or, if not available, the mean between the
bona fide bid and asked prices of the Common Stock on
such date. In any situation not covered above, the
Fair Market Value Per Share shall be determined by the
Committee in accordance
with one of the valuation methods described in
Section 20.2031-2 of the Federal Estate Tax Regulations
(or any successor provision thereto).
(h) "Incentive Option" shall mean an Option
granted under the Plan which is designated as and
qualified as an incentive stock option within the
meaning of Section 422 of the Code.
(i) "Non-Employee Director" shall have the
meaning set forth in Rule 16b-3 promulgated by the
Securities and Exchange Commission pursuant to the
Securities Exchange Act of 1934, as amended, or any
successor rule.
(j) "Non-Qualified Option" shall mean an Option
granted under the Plan which does not qualify as, or is
not designated as, an incentive stock option within the
meaning of Section 422 of the Code.
(k) "Option" shall mean an Incentive Option or a
Non-Qualified Option.
(l) "Optionee" shall mean any person who has been
granted an Option under the Plan.
(m) "Outside Director" shall have the meaning set
forth in Section 162(m).
(n) "Parent Corporation" shall have the meaning
set forth in Section 424(e) of the Code.
(o) "Permanent Disability" shall mean termination
of a Relationship with the Company or any Subsidiary or
Parent Corporation of the Company with the consent of
the Company or such Subsidiary by reason of permanent
and total disability within the meaning of
Section 22(e)(3) of the Code.
(p) "Plan" shall mean the Ameristar Casinos, Inc.
Management Stock Option Incentive Plan, as amended and
restated hereby.
(q) "Relationship" shall mean that the Optionee
is or has agreed to become an officer, director,
employee, consultant, adviser, independent contractor
or agent of the Company or any Subsidiary of the
Company.
(r) "Section 162(m)" means Section 162(m) of the
Code and Section 1.162-27 of the Treasury Regulations
or any successor provision(s) thereto.
(s) "Subsidiary" shall have the meaning set forth
in Section 424(f) of the Code.
3. ADMINISTRATION
(a) The Plan shall be administered either (i) by
the Board, or (ii) in the discretion of the Board, by a
Committee of at least two directors of the Company
appointed by the Board, all of which members are both
Non-
Employee Directors and Outside Directors, except
that the Plan shall be administered by the Board to the
extent provided in the last sentence of this Section.
Notwithstanding the provisions of the immediately
preceding sentence, the requirement for Non-Employee
Directors in such sentence shall only apply to the
grant of Options to Persons subject to Section 16(a) of
the Securities Exchange Act of 1934, as amended, and
the requirement for Outside Directors in such sentence
shall only apply to the grant of Options to persons who
are "covered employees" within the meaning of
Section 162(m). The Board may from time to time
appoint members of the Committee in substitution for or
in addition to members previously appointed and may
fill vacancies. Notwithstanding any other provision of
the Plan to the contrary, if a committee of directors
has been designated by the Board to administer the
Plan, all actions with respect to the administration of
the Plan in respect of the members of such committee
shall be taken by the Board.
(b) Any action of the Committee with respect to
the administration of the Plan shall be taken by
majority vote or by written consent of a majority of
its members.
(c) Subject to the provisions of the Plan, the
Committee shall have the authority to construe and
interpret the Plan, to define the terms used therein,
to determine the time or times an Option may be
exercised and the number of shares for which an Option
may be exercised at any one time, to prescribe, amend
and rescind rules and regulations relating to the Plan,
to approve and determine the duration of leaves of
absence which may be granted to participants without
constituting a termination of their employment for
purposes of the Plan, and to make all other
determinations necessary or advisable for the
administration of the Plan. All determinations and
interpretations made by the Committee shall be
conclusive and binding on all Optionees and on their
guardians, legal representatives and beneficiaries.
(d) The Company shall indemnify and hold harmless
the members of the Board and the Committee from and
against any and all liabilities, costs and expenses
incurred by such persons as a result of any act, or
omission to act, in connection with the performance of
such persons' duties, responsibilities and obligations
under the Plan, other than such liabilities, costs and
expenses as may result from the negligence, bad faith,
willful misconduct or criminal acts of such persons.
(e) The Company will provide financial
information to the Optionees on the same basis as the
Company provides such information to its stockholders.
(f) The Committee may from time to time delegate
to one or more officers of the Company any or all of
its authorities granted hereunder except with respect
to awards granted to persons subject to Section 16 of
the Securities Exchange Act of 1934, as amended. The
Committee shall specify the maximum number of shares
that the officer or officers to whom such authority is
delegated may award, and the Committee may in its
discretion
specify any other limitations or restrictions on
the authority delegated to such officer or officers.
4. NUMBER OF SHARES SUBJECT TO PLAN
The aggregate number of shares of Common Stock subject
to Options which may be granted under the Plan shall not
exceed 1,600,000. The shares of Common Stock to be issued
or delivered upon the exercise of Options may be authorized
but unissued shares, shares issued and reacquired by the
Company or shares purchased by the Company on the open
market. If any Option granted hereunder shall expire or
terminate for any reason without having been exercised in
full, the unpurchased shares subject thereto shall again be
available for purposes of the Plan.
5. ELIGIBILITY AND PARTICIPATION
(a) Non-Qualified Options may be granted to any
person who has a Relationship with the Company or any
of its Subsidiaries. Incentive Options may be granted
to any Employee. The Committee shall determine the
persons to whom Options shall be granted, the time or
times at which such Options shall be granted and the
number of shares to be subject to each Option. An
Optionee may, if he is otherwise eligible, be granted
an additional Option or Options if the Committee shall
so determine. An Employee may be granted Incentive
Options or Non-Qualified Options or both under the
Plan; provided, however, that the grant of Incentive
Options and Non-Qualified Options to an Employee shall
be the grant of separate Options and each Incentive
Option and each Non-Qualified Option shall be
specifically designated as such.
(b) In no event shall the aggregate fair market
value (determined as of the time the Option is granted)
of the shares with respect to which Incentive Options
(granted under the Plan or any other plans of the
Company or any Subsidiary or Parent Corporation of the
Company) are exercisable for the first time by an
Optionee in any calendar year exceed $100,000.
(c) In no event shall the aggregate number of
shares of Common Stock with respect to which Options
may be granted to a single Optionee during the term of
the Plan exceed 200,000 shares.
6. PURCHASE PRICE
The purchase price of each share covered by each Option
shall be determined by the Committee; provided, however,
that in the case of an Incentive Option such price shall not
be less than 100% of the Fair Market Value Per Share of the
Common Stock on the date the Incentive Option is granted;
and provided further that if at the time an Incentive Option
is granted the Optionee owns or would be considered to own
by reason of Section 424(d) of the Code more than 10% of the
total combined voting power of all classes of stock of the
Company, the purchase price of the shares covered by such
Incentive Option shall not be less than 110% of the Fair
Market Value Per Share of the Common Stock on the date the
Incentive Option is granted.
7. DURATION OF OPTIONS
The expiration date of an Option and all rights
thereunder shall be determined by the Committee; provided,
however, that the expiration date of an Incentive Option
must be within 10 years from the date on which the Incentive
Option is granted, unless at the time the Incentive Option
is granted the Optionee owns or would be considered to own
by reason of Section 424(d) of the Code more than 10% of the
total combined voting power of all classes of stock of the
Company or any Subsidiary or Parent Corporation of the
Company, in which case the expiration date of such Incentive
Option must be within five years from the date of grant. In
the event the Committee does not specify the expiration date
of an Option, the expiration date shall be 10 years from the
date on which the Option was granted; provided, however,
that if at the time an Incentive Option is granted the
Optionee owns or would be considered to own by reason of
Section 424(d) of the Code more than 10% of the total
combined voting power of all classes of stock of the Company
or any Subsidiary or Parent Corporation of the Company, such
Incentive Option shall expire five years from the date of
grant. Options shall be subject to earlier termination as
provided herein.
8. EXERCISE OF OPTIONS
(a) An Option shall vest and become exercisable
from time to time in installments or otherwise in
accordance with such schedule and upon such other terms
and conditions as the Committee shall in its discretion
determine at the time the Option is granted. An
Optionee may purchase less than the total number of
shares for which the Option is exercisable, provided
that a partial exercise of an Option may not be for
less than 100 shares, unless the exercise is during the
final year of the Option, and shall not include any
fractional shares. As a condition to the exercise, in
whole or in part, of any Option, the Committee may in
its sole discretion require the Optionee to pay, in
addition to the purchase price of the shares covered by
the Option, an amount equal to any federal, state,
local or other taxes that the Committee has determined
are required to be paid in connection with the exercise
of such Option in order to enable the Company to claim
a deduction, to satisfy tax withholding requirements or
otherwise. Furthermore, if any Optionee disposes of
any shares of stock acquired by exercise of an
Incentive Option prior to the expiration of either of
the holding periods specified in Section 422(a)(1) of
the Code, the Optionee shall pay to the Company, or the
Company shall have the right to withhold from any
payments to be made to the Optionee, an amount equal to
any federal, state, local or other taxes that the
Committee has determined are required to be paid in
connection with the exercise of such Option in order to
enable the Company to claim a deduction or otherwise.
To the extent permitted by the Committee, and subject
to such terms and conditions as the Committee may
provide, an Optionee may elect to have any withholding
tax obligation, or any additional tax obligation with
respect to any awards hereunder, satisfied by (i)
having the Company withhold shares of Common Stock
otherwise deliverable to such person with respect to
the Option being exercised or (ii) delivering to the
Company shares of unrestricted Common Stock, which
shares shall be valued as provided in Section 9(b).
(b) No Option will be exercisable (and any
attempted exercise will be deemed null and void) if
such exercise would create a right of recovery for
"short-swing profits" under Section 16(b) of the
Securities Exchange Act of 1934, as amended. This
Section 8(b) is intended to protect persons subject to
Section 16(b) against inadvertent violations of
Section 16(b) and shall not apply with respect to any
particular exercise of an Option if expressly waived in
writing by the Optionee at the time of such exercise.
9. METHOD OF EXERCISE
(a) To the extent that an Option has become
exercisable, the Option may be exercised from time to
time by giving written notice to the Company stating
the number of shares with respect to which the Option
is being exercised, accompanied by payment of the
purchase price for the number of shares being purchased
and, if applicable, any federal, state, local or other
taxes required to be paid in accordance with the
provisions of Section 8(a) hereof. Payment of the
purchase price shall be made in such manner as the
Committee may provide in the award of the Option, which
may include cash (including cash equivalents), delivery
of shares of Common Stock already owned by the Optionee
or subject to Options under the Plan, any other manner
permitted by law as determined by the Committee
(including "cashless exercises"), or any combination of
the foregoing.
(b) If any payment is made with shares of Common
Stock already owned, the Optionee, or other person
entitled to exercise the Option, shall deliver to the
Company certificates representing the number of shares
of Common Stock in payment for the shares being
purchased, duly endorsed for transfer to the Company.
If requested by the Committee, prior to the acceptance
of such certificates in payment for such shares, the
Optionee, or any other person entitled to exercise the
Option, shall supply the Committee with a
representation and warranty in writing that he has good
and marketable title to the shares represented by the
certificate(s), free and clear of all liens and
encumbrances. The value of any shares of Common Stock
tendered in payment for any shares being purchased
shall be their Fair Market Value Per Share on the date
of the exercise, and the value of any shares of Common
Stock subject to Options under the Plan that are
cancelled in payment for any shares being purchased
shall be their Fair Market Value Per Share on the date
of the exercise reduced by the exercise price per share
provided for in such Option.
(c) Notwithstanding the foregoing, the Company
shall have the right to postpone the time of delivery
of the shares for such period as may be required for it
to comply, with reasonable diligence, with any
applicable listing requirements of any national
securities exchange or any federal, state or local law.
If an Optionee, or other person entitled to exercise an
Option, fails to accept delivery of or fails to pay for
all or any portion of the shares requested in the
notice of exercise, upon tender of delivery thereof,
the Committee shall have the right to terminate the
Optionee's Option with respect to such shares.
10. NON-TRANSFERABILITY AND LIMITED TRANSFERABILITY OF
OPTIONS; DISPOSITION OF OPTIONS OR COMMON STOCK BY
OPTIONEES SUBJECT TO SECTION 16
(a) An Option agreement may permit an Optionee to
transfer a Non-Qualified Option to his or her children,
grandchildren or spouse ("Immediate Family"), to one or
more trusts for the benefit of such Immediate Family
members, or to one or more partnerships in which such
Immediate Family members are the only partners if
(i) the agreement setting forth such Non-Qualified
Option expressly provides that such Non-Qualified
Option may be transferred only with the express written
consent of the Committee, and (ii) the Optionee does
not receive any consideration in any form whatsoever
for such transfer. Any Non-Qualified Option so
transferred shall continue to be subject to the same
terms and conditions as were applicable to such Non-
Qualified Option immediately prior to the transfer
thereof. Any Option not (x) granted pursuant to any
agreement expressly allowing the transfer of such
Option as provided above or (y) amended expressly to
permit its transfer shall not be transferable by the
Optionee otherwise than by will or by the laws of
descent and distribution, and such Option shall be
exercisable during the Optionee's lifetime only by the
Optionee.
(b) If for any reason any Option granted to a
person subject to Section 16 of the Securities Exchange
Act of 1934, as amended, is not approved in the manner
provided for in clause (d)(1) or (d)(2) of Rule 16b-3,
neither the Option (except upon its exercise) nor the
Common Stock underlying the Option may be disposed of
by the Optionee until six months have elapsed following
the date of grant of the Option, unless the Committee
otherwise specifically permits such disposition.
11. CONTINUANCE OF RELATIONSHIP
Nothing contained in the Plan or in any Option granted
under the Plan shall confer upon any Optionee any rights
with respect to the continuation of his or her employment by
or other Relationship with the Company or any Subsidiary or
Parent Corporation of the Company or interfere in any way
with the right of the Company or any Subsidiary or Parent
Corporation of the Company at any time to terminate such
employment or other Relationship or to increase or decrease
the compensation of the Optionee from the rate in existence
at the time of the grant of an Option.
12. TERMINATION OF RELATIONSHIP OTHER THAN BY DEATH OR
PERMANENT DISABILITY
Except as the Committee may determine otherwise at any
time with respect to any particular Non-Qualified Option
granted hereunder:
(a) In an Optionee ceases to have a Relationship
for any reason other than the Optionee's death or
Permanent Disability, any Options granted to him shall
terminate 90 days from the date on which such
Relationship
terminates unless such Optionee has resumed or
initiated a Relationship and has a Relationship on such
date. During such 90-day period, the Optionee may
exercise any Option granted to him but only to the
extent such Option was exercisable on the date of
termination of the Optionee's Relationship and provided
that such Option has not expired or otherwise
terminated as provided herein. A leave of absence
approved in writing by the Committee shall not be
deemed a termination of Relationship for purposes of
this Section 12, but no Option may be exercised during
any such leave of absence, except during the first
90 days thereof.
(b) For purposes hereof, termination of an
Optionee's Relationship for reasons other than death or
Permanent Disability shall be deemed to take place upon
the earliest to occur of the following: (i) the date
of the Optionee's retirement from employment under the
normal retirement policies of the Company or any
Subsidiary of the Company; (ii) the date of the
Optionee's retirement from employment with the approval
of the Committee because of disability other than
Permanent Disability; (iii) the date the Optionee
receives notice or advice that his or her employment or
other Relationship is terminated; (iv) the date the
Optionee ceases to render the services which he was
employed, engaged or retained to render to the Company
or any Subsidiary (absences for temporary illness,
emergencies and vacations or leaves of absence approved
in writing by the Committee excepted); or (v) in the
case of a director of the Company, the date on which
such person ceases to be a director of the Company
unless such person has an other Relationship at such
time. The fact that the Optionee may receive payment
from the Company or any Subsidiary of the Company after
termination for vacation pay, for services rendered
prior to termination, for salary in lieu of notice or
for other benefits shall not affect the termination
date.
13. DEATH OR PERMANENT DISABILITY OF OPTIONEE
Except as the Committee may expressly determine
otherwise at any time with respect to any particular Non-
Qualified Option granted hereunder, if an Optionee shall die
at a time when such person is in a Relationship or if the
Optionee shall cease to have a Relationship by reason of
Permanent Disability, any Options granted to the Optionee
shall terminate one year after the date of the Optionee's
death or termination of Relationship due to Permanent
Disability unless by its terms it shall expire before such
date or otherwise terminate as provided herein, and shall
only be exercisable to the extent that it would have been
exercisable on the date of the Optionee's death or
termination of the Optionee's Relationship due to Permanent
Disability. In the case of death, the Option may be
exercised by the person or persons to whom the Optionee's
rights under the Option shall pass by will or by the laws of
descent and distribution.
14. STOCK PURCHASE NOT FOR DISTRIBUTION
Each Optionee shall, by accepting the grant of an
Option under the Plan, represent and agree, for the Optionee
and the Optionee's transferees by will or the laws of
descent and distribution, that all shares of stock purchased
upon exercise of the Option will be received and held
without a view to distribution except as may be permitted by
the Securities Act of 1933, as amended, and the rules and
regulations
promulgated thereunder. After each notice of exercise
of any portion of an Option, if requested by the Committee,
the person entitled to exercise the Option shall agree in
writing that the shares of stock are being acquired in good
faith without a view to distribution.
15. PRIVILEGES OF STOCK OWNERSHIP
No person entitled to exercise any Option granted under
the Plan shall have any of the rights or privileges of a
stockholder of the Company with respect to any shares of
Common Stock issuable upon exercise of such Option until
such person has become the holder of record of such shares.
No adjustment shall be made for dividends or distributions
of rights in respect of such shares if the record date is
prior to the date on which such person becomes the holder of
record, except as provided in Section 16 hereof.
16. ADJUSTMENTS
(a) If the number of outstanding shares of Common
Stock is increased or decreased, or if such shares are
exchanged for a different number or kind of shares or
securities of the Company, through reorganization,
merger, recapitalization, reclassification, stock
dividend, stock split, combination of shares or other
similar transaction, the aggregate number of shares of
Common Stock subject to the Plan as provided in
Section 4 hereof, the shares of Common Stock subject to
issued and outstanding Options under the Plan and the
aggregate number of shares of Common Stock with respect
to which Options may be granted to a single Optionee as
provided in Section 5(c) hereof shall be appropriately
and proportionately adjusted by the Committee. Any
such adjustment in the outstanding Options shall be
made without change in the aggregate purchase price
applicable to the unexercised portion of the Option but
with an appropriate adjustment in the price for each
share or other unit of any security covered by the
Option. No adjustment shall be made on account of any
transaction or event not specifically set forth in this
Section 16(a), including, without limitation, the
issuance of Common Stock for consideration.
(b) Notwithstanding the provisions of
Section 16(a), upon the dissolution or liquidation of
the Company or upon any reorganization, merger or
consolidation with one or more corporations as a result
of which the Company is not the surviving corporation,
or upon a sale of all or substantially all of the
assets of the Company to another corporation or entity,
the Committee may take such action, if any, as it in
its discretion may deem appropriate to accelerate the
time within which and the extent to which Options may
be exercised, to terminate Options at or prior to the
date of any such event or to provide for the assumption
of Options by surviving, consolidated, successor or
transferee corporations.
(c) Adjustments under this Section 16 shall be
made by the Committee, whose determination as to which
adjustments shall be made, and the extent thereof,
shall be final, binding and conclusive. No fractional
shares of stock shall be issued under the Plan or in
connection with any such adjustment.
17. AMENDMENT AND TERMINATION OF PLAN
(a) The Board may from time to time, with respect
to any shares at the time not subject to Options,
suspend or terminate the Plan or amend or revise the
terms of the Plan. Amendments may be made without
stockholder approval except (i) if and to the extent
necessary to satisfy any applicable mandatory legal or
regulatory requirements (including the requirements of
any stock exchange or over-the-counter market on which
the Common Stock or any other securities of the Company
is listed or qualified for trading and any requirements
imposed under any state securities laws or regulations
as a condition to the registration of securities
distributable under the Plan or otherwise), or (ii) as
required for the Plan to satisfy the requirements of
Section 162(m), Section 422 of the Code or any other
non-mandatory legal or regulatory requirements if the
Board of Directors deems it desirable for the Plan to
satisfy any such requirements.
(b) No amendment, suspension or termination of
the Plan shall, without the consent of the Optionee,
alter or impair in a manner adverse to the Optionee any
rights or obligations under any Option theretofore
granted to such Optionee.
(c) The terms and conditions of any Option
granted to an Optionee may be modified or amended only
by a written agreement executed by the Optionee and the
Company; provided, however, that if any amendment or
modification of an Incentive Option would constitute a
"modification, extension or renewal" within the meaning
of Section 424(h) of the Code, such amendment shall be
null and void unless the amendment contains an
acknowledgment by the parties substantially in the
following form: "The parties hereto recognize and
agree that this amendment constitutes a modification,
renewal or extension within the meaning of
Section 424(h) of the Code, of the option granted on
_______________."
18. EFFECTIVE DATE OF AMENDED AND RESTATED PLAN
The Plan, as amended and restated hereby, shall become
effective upon the later of (i) its approval by the Board
and (ii) the date upon which the Company becomes subject to
the version of Rule 16b-3 adopted by the Securities and
Exchange Commission in Release No. 34-37260 promulgated
under the Securities Exchange Act of 1934, as amended;
provided, however, that the adoption of the amendments to
the Plan effected hereby to increase the number of shares
that may be issued upon the exercise of Options under the
Plan from 1,000,000 to 1,600,000 and to expand the
eligibility provisions to include non-employee directors
shall be subject to the approval of the stockholders of the
Company by a majority of the outstanding shares of Common
Stock; and provided further that prior to such approval by
the stockholders of the Company, Options may be granted
pursuant to such amended provisions of the Plan subject to
obtaining the approval of the adoption of such amendments by
the Company's stockholders not later than 12 months after
the date of adoption of the Plan by the Board.
19. TERM OF PLAN
No Option shall be granted pursuant to the Plan after
10 years from the earlier of the date of adoption of the
Plan by the Board or the date of approval by the Company's
stockholders of the adoption of the Plan.
The date of adoption of the Plan by the Board was
September 4, 1996. The date of the last approval by the
stockholders of the Plan was October 27, 1993.
CONSENT TO MERGER AND
INCREASED COMMITMENT AGREEMENT
THIS CONSENT TO MERGER AND INCREASED COMMITMENT
AGREEMENT ("Consent Agreement") is made and entered into as
of the 4th day of October, 1996, by and among AMERISTAR
CASINOS, INC., a Nevada corporation ("Borrower"), WELLS
FARGO BANK, National Association, successor by merger to
First Interstate Bank of Nevada, N.A. and First Interstate
Bank of Idaho, U.S. BANK OF IDAHO, formerly known as West
One Bank, Idaho, DEPOSIT GUARANTY NATIONAL BANK, NBD BANK,
TRUSTMARK NATIONAL BANK, FIRST NATIONAL BANK OF COMMERCE,
NORWEST BANK OF NEBRASKA, N.A., U.S. BANK OF NEVADA,
ARGENTBANK and MERCHANTS BANK (herein together with their
respective successors and assigns collectively, the
"Lenders") and WELLS FARGO BANK, National Association, as
administrative and collateral agent for the Lenders (herein
in such capacity called the "Agent" and together with the
Lenders collectively referred to as the "Banks").
R_E_C_I_T_A_L_S:
WHEREAS:
A. Borrower and Banks entered into a Credit
Agreement dated as of June 1, 1995 (the "Credit Agreement").
In this Consent Agreement all capitalized words and terms
shall have the respective meanings and be construed herein
as provided in Section 1 of the Credit Agreement. This
Consent Agreement shall be deemed to incorporate such words
and terms as a part hereof in the same manner and with the
same effect as if the same were fully set forth herein.
B. Borrower has created Ameristar Casino Las
Vegas, Inc., a Nevada corporation ("ACLVI") as a wholly
owned subsidiary of Borrower. Borrower, ACLVI, Gem Gaming,
Inc., a Nevada corporation ("Gem"), 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,
collectively the "Gem Individuals") entered into a Merger
Agreement dated May 30, 1996, as amended by First Amendment
to Merger Agreement dated as of July 2, 1996 and Second
Amendment to Merger Agreement dated as of September 25, 1996
(as may be further amended from time to time, collectively
the "Merger Agreement"), under the terms of which Gem is to
be merged with and into ACLVI with
<PAGE>
ACLVI to be the surviving corporation as a wholly owned
subsidiary of Borrower. Upon consummation of the Merger, as
defined in the Merger Agreement, ACLVI will be the owner of
the "Project", as defined in the Merger Agreement. Under
the terms of the Merger Agreement Borrower will acquire
certain other assets and make certain investments more
particularly therein described.
C. Borrower has requested various consents and
waivers from the Banks under the Credit Agreement to enable
the Merger to occur and has further requested that the
aggregate Commitments of the Lenders be increased by the
amount of Four Million Five Hundred Thousand Dollars
($4,500,000.00) from Ninety-Four Million Five Hundred
Thousand Dollars ($94,500,000.00) to Ninety-Nine Million
Dollars ($99,000,000.00).
D. Wells Fargo Bank, a National Association, has
agreed to fund the increase to the aggregate Commitments in
the amount of Four Million Five Hundred Thousand Dollars
($4,500,000.00), and Banks have agreed to the consents and
waivers hereinafter set forth on the terms and subject to
the conditions hereinafter specified.
NOW, THEREFORE, in consideration of the foregoing
and other good and valuable considerations, the parties
hereto agree to the terms, conditions and provisions set
forth in this Consent Agreement, which shall be deemed
effective as of the Consent Effective Date.
1. Increase of Aggregate Commitments. Pursuant
to Section 2.1A of the Credit Agreement, the aggregate
Commitments shall be and are, as of the Consent Effective
Date, increased from Ninety-Four Million Five Hundred
Thousand Dollars ($94,500,000.00) to Ninety-Nine Million
Dollars ($99,000,000.00) with each Lender's Commitment as
set forth opposite its name on Schedule 2.1 affixed to this
Consent Agreement and by this reference incorporated herein
and made a part hereof, which shall fully restate and
supersede the Schedule 2.1 annexed to the Credit Agreement.
2. Consent to ACLVI Loan. As part of the Merger
transaction, Borrower intends to loan to ACLVI principal
sums up to the aggregate amount of Sixteen Million Dollars
($16,000,000.00) (the "ACLVI Intercompany Loan") to be
evidenced by a Promissory Note to be executed by ACLVI,
payable to the order of Borrower (the "ACLVI Intercompany
<PAGE>
Note"). Banks shall and do hereby, as of the Consent
Effective Date, consent to:
(a) use of the proceeds of Loans under the
Credit Agreement for the funding of advances to ACLVI under
the ACLVI Intercompany Loan up to the maximum aggregate
amount of Sixteen Million Dollars ($16,000,000.00) (consent
required under Section 2.5A of the Credit Agreement);
(b) creation of the Indebtedness evidenced
by the ACLVI Intercompany Loan up to the maximum aggregate
amount of Sixteen Million Dollars ($16,000,000.00) (consent
required under Section 6.1(ii) of the Credit Agreement);
(c) the Investment evidenced by the ACLVI
Intercompany Loan up to the maximum aggregate amount of
Sixteen Million Dollars ($16,000,000.00) (consent required
under Section 6.3(vi) of the Credit Agreement); and
(d) creation of ACLVI as a wholly owned
Subsidiary of Borrower (consent required under Section 6.12
of the Credit Agreement).
3. Capital Contributions to ACLVI. Banks shall
and do hereby, as of the Consent Effective Date, consent to
Borrower funding Capital Contributions to ACLVI up to the
maximum aggregate amount of Five Hundred Thousand Dollars
($500,000.00) (consent required under Section 6.3(vi) of the
Credit Agreement).
4. Consent to Merger and Increased of Authorized
Shares. Banks shall and do hereby, as of the Consent
Effective Date, consent to the Merger of Gem into ACLVI and
to the other transactions contemplated by the terms of the
Merger Agreement (consent required under Section 6.7 of the
Credit Agreement) and to the making of the ACLVI
Intercompany Loan and Capital Contributions to ACLVI as
permitted in Paragraph 3 hereinabove (consent required under
Section 6.7(iv) of the Credit Agreement). Lenders further
shall and do hereby, as of the Consent Effective Date,
consent to the increase of the number of shares of
authorized common voting stock of Borrower from thirty
million (30,000,000) shares to fifty million (50,000,000)
shares (consent required under Section 6.7 of the Credit
Agreement). Banks acknowledge and agree that the "Rebeil
Note," "Alternative Rebeil Note," "Magliarditi Note" and
"Alternative Magliarditi Note," each as defined in the
Merger Agreement, will not constitute or be construed to be
<PAGE>
Indebtedness of Borrower until the occurrence of the
"Settlement Date," as defined in the Merger Agreement.
5. Consent to Licensing "Ameristar" Trademark to
ACLVI. Banks shall and do hereby, as of the Consent
Effective Date, consent to ACLVI's use of the name
"Ameristar" and Borrower's licensing or other permission for
the use of the "Ameristar" tradename and servicemark by
ACLVI (consent required pursuant to Section 6.13 of the
Credit Agreement).
6. Other Related Investments by Borrower. The
Merger Agreement contains provisions requiring Borrower to
purchase a one-half (1/2) interest in a 1982 Cessna Citation
ISP jet aircraft ("Cessna") and a one-half (1/2) interest in a
leased hanger facility located at McCarren International
Airport in Las Vegas (the "Hanger"). Borrower and Gem Air,
Inc., a Nevada corporation ("Gem Air"), a corporation wholly
owned by Rebeil, have formed Nevada AG Air, L.L.C., Ltd., a
Nevada limited liability company ("Nevada AG"), for the
purpose of owning the leasehold to the Hanger. Borrower has
paid Gem Air Four Hundred Sixty-Six Thousand One Hundred
Twenty-Three Dollars and Seventy-One Cents ($466,123.71) for
the one-half (1/2) interest in the Cessna and has contributed
the sum of Two Hundred Eighty-Nine Thousand Nine Hundred
Forty-Nine Dollars ($289,949.00) plus the cost of the title
insurance to Nevada AG, for an aggregate investment of
approximately Seven Hundred Fifty-Six Thousand Seventy-Two
Dollars ($756,072.00). Lenders shall and do hereby as of
the Consent Effective Date, consent to Borrower's Investment
in the Cessna and Nevada AG up to the maximum aggregate
amount of Seven Hundred Sixty-Five Thousand Dollars
($765,000.00) (consent required under Section 6.3(viii) of
the Credit Agreement).
7. Conditions Precedent to Consent Effective
Date. The Consent Effective Date shall be deemed to have
occurred at such time as Agent has received each of the
following documents and each of the following requirements
has occurred:
a. execution and delivery by Borrower,
Banks and each of the Guarantors of twelve (12) counterpart
originals of the Consent Agreement;
b. delivery by ACLVI of a duly authorized
and executed Certificate of Joinder to the Guaranty in the
form of Exhibit A, affixed hereto and by this reference
incorporated herein and made a part hereof;
<PAGE>
c. execution by Borrower and delivery to
Agent Bank of a duly authorized and executed Certificate of
Designation of Promissory Note as Pledged Debt in the form
of Exhibit B, affixed hereto and by this reference
incorporated herein and made a part hereof, together with
the original duly executed ACLVI Intercompany Note;
d. delivery to Agent Bank of the stock
certificate or certificates evidencing all of the issued and
outstanding shares of ACLVI and the due authorization and
execution of the Schedule B Pledge Amendment in the form of
Exhibit C, affixed hereto and by this reference incorporated
herein and made a part hereof, in favor of Agent on behalf
of Lenders in which the ACLVI stock is pledged to the Banks
as additional security under the Pledge Agreement;
e. reimbursement to Agent by Borrower for
the reasonable attorneys' fees of Henderson & Nelson
incurred in connection with the preparation and execution of
the Consent Agreement; and
f. such other documents, instruments,
legal opinions or conditions as may be reasonably required
by Agent.
8. Representations and Warranties. To induce
Banks to enter into this Consent Agreement, except with
respect to the matters described on the Disclosures marked
"Exhibit D", affixed hereto and by this reference
incorporated herein and made a part hereof, Borrower hereby:
(i) ratifies and reaffirms the representations and
warranties set forth in Section 4 of the Credit Agreement;
(ii) warrants and represents that each such representation
and warranty shall be true and correct as of the Consent
Effective Date, other than representations and warranties
which expressly speak as of a different date which shall be
true and correct as of such date; and (iii) represent and
warrant that, as of the Consent Effective Date, no Default
or Event of Default has occurred and remains continuing.
9. No Other Changes. Except as specifically set
forth herein, the Credit Agreement shall remain unchanged
and in full force and effect.
10. Governing Law. This Consent Agreement shall
be governed by the internal laws of the State of Nevada
without reference to conflicts of laws principles.
<PAGE>
11. Counterparts. This Consent Agreement may be
executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any party
hereto may execute this Consent Agreement by signing any
such counterpart.
12. Joinder of Guarantors. Guarantors join in
the execution of this Consent Agreement for the purpose of
acknowledging their consent and agreement to the terms
hereof and for the further purpose of confirming that
notwithstanding the matters set forth in this Consent
Agreement and the joinder of ACLVI as a Guarantor, the
obligations of the Guarantors under the Guaranty shall not
be impaired or affected and the Guaranty is, and shall
continue to be, in full force and effect and is hereby
confirmed and ratified in all respects.
IN WITNESS WHEREOF, the parties hereto have caused
this Consent Agreement to be executed as of the day and year
first above written.
BORROWER:
AMERISTAR CASINOS,
INC., a Nevada corporation
By /s/Thomas Steinbauer
Title Senior Vice President
GUARANTORS:
CACTUS PETE'S, INC.
By /s/ Thomas Steinbauer
Title Vice President
AMERISTAR CASINO COUNCIL
BLUFFS, INC.
By /s/ Thomas Steinbauer
Title Vice President
AMERISTAR CASINO VICKSBURG,
INC.
By /s/ Thomas Steinbauer
Title Vice President
AMERISTAR CASINO LAS VEGAS,
INC., a Nevada corporation
By /s/ Thomas Steinbauer
Title Vice President
BANKS:
WELLS FARGO BANK,
National Association,
successor by merger to
First Interstate Bank of
Nevada,
N.A. and First Interstate
Bank of Idaho
By /s/ Casey Potter
Title Vice President
U.S. BANK OF IDAHO,
formerly known as West One
Bank, Idaho
By /s/ Anthony w. Olbrich
Title Senior Vice President
DEPOSIT GUARANTY NATIONAL
BANK
By /s/ Larry C. Ratzlaff
Title Senior Vice President
NBD BANK
By /s/Timothy O'Neal
Title Authorized Agent
TRUSTMARK NATIONAL BANK
By /s/ David A. Guyton
Title Vice President
FIRST NATIONAL BANK OF
COMMERCE
By /s/ Stephen M. Valdes
Title Vice President
NORWEST BANK OF NEBRASKA,
N.A.
By /s/ DeeAnn K. Wegner
Title Asst. Vice President
U.S. BANK OF NEVADA
By /s/ Kurt Imermann
Title Vice President
ARGENTBANK
By /s/ Lionel J. Lagarde, Jr.
Title Vice President
MERCHANTS BANK
By /s/ Tommu Duren
Title Senior Vice President
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This data should be reviewed in conjunction with the financial statements
included in this report.
</LEGEND>
<CIK> 0000912145
<NAME> AMERISTAR CASINOS, INC.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 11287
<SECURITIES> 0
<RECEIVABLES> 1224
<ALLOWANCES> 0
<INVENTORY> 2122
<CURRENT-ASSETS> 20452
<PP&E> 243581
<DEPRECIATION> 53191
<TOTAL-ASSETS> 214210
<CURRENT-LIABILITIES> 31323
<BONDS> 0
0
0
<COMMON> 204
<OTHER-SE> 70414
<TOTAL-LIABILITY-AND-EQUITY> 214210
<SALES> 142170
<TOTAL-REVENUES> 142170
<CGS> 0
<TOTAL-COSTS> 128173
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5602
<INCOME-PRETAX> 8769
<INCOME-TAX> 3198
<INCOME-CONTINUING> 5571
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5571
<EPS-PRIMARY> .27
<EPS-DILUTED> .27
</TABLE>
Exhibit 99.1
Agreement to Furnish Long-Term Debt Instruments
Pursuant to Item 601(b)(4)(iii) of Regulation S-K, Ameristar
Casinos, Inc. (The "Registrant") hereby agrees to furnish
supplementally to the Securities and Exchange Commission a copy
of any of the following long-term debt instruments:
Credit Agreement between PDS Financial Corporation and
Ameristar Casino Council Bluffs, Inc., dated June 27, 1996.
Security Agreement between PDS Financial Corporation
and Ameristar Casino Council Bluffs, Inc., dated June 27, 1996.
Promissory Note between PDS Financial Corporation and
Ameristar Casino Council Bluffs, Inc., dated June 27, 1996.
Guaranty By Ameristar Casinos, Inc. In favor of PDS
Financial Corporation and dated June 27, 1996.
