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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) June 22, 2000
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COLONIAL DOWNS HOLDINGS, INC.
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(Exact name of registrant as specified in its charter)
VIRGINIA 333-18295 54-1826807
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(State or other jurisdiction (Commission (IRS Employer
of incorporation) File Number) Identification No.)
10515 Colonial Downs Parkway, New Kent, Virginia 23124
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(Address of principal executive offices)
Registrant's telephone number, including area code (804) 966-7223
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(Former name or former address, if changed since last report.)
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ITEM 5. OTHER EVENTS
Colonial Downs Holdings, Inc. (the "Company") is party to a Credit
Agreement dated June 26, 1997, with PNC Bank, N.A. ("PNC") pursuant to which the
Company has borrowed $15 million in aggregate. Pursuant to the terms of the
Credit Agreement and subsequent Forbearance Agreement, the Company is obligated
to repay $15 million to PNC on or before June 30, 2000. CD Entertainment Ltd.,
the Company's largest shareholder, has agreed to loan the Company $15 million to
repay PNC. Existing indebtedness from the Company to CD Entertainment Ltd. will
be consolidated in this loan. Existing indebtedness includes two convertible
subordinated promissory notes, in the original principal amounts of $5.5 million
and $1 million, respectively. The $5.5 million note bears interest at a rate of
7.25% per annum, payable quarterly. The $1 million note bears interest at a rate
of 8.5 % annually, payable at maturity. The $5.5 million note matures September
30, 2000, and the $1 million note matures August 26, 2000. The outstanding
principal balance and accrued interest thereon is convertible into shares of
Class A and Class B Common Stock at $11.59 per share for the $5.5 million note,
and $1.65 per share for the $1 million note.
Under the terms of the $23.2 million promissory note reflecting the
consolidated loan, the loan will bear interest at a rate of LIBOR plus 3%, the
current interest rate on the PNC loan, and will have a term of five years
(thereby extending the existing indebtedness otherwise due CD Entertainment
Ltd.). Principal will be repayable in $1 million increments on each of June 30,
2001, 2002, 2003 and 2004 with the balance due on June 30, 2005. In addition,
the Company has agreed to make an additional annual principal payment contingent
upon the Company's annual cash flow. The Company's New Kent racetrack property
and the racing centers located in Richmond, Hampton, and Brunswick, Virginia
will be pledged as collateral for the loan. The loan is convertible, at the
lenders' option and subject to share availability, into shares of the Company's
Class A common stock at 125% of the average closing price of the Company's
common stock for the period June 23, 2000 through June 29, 2000. The Company
will make efforts to authorize additional shares for such conversion rights.
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 hereto duly authorized.
COLONIAL DOWNS HOLDINGS, INC.
June 23, 2000 /s/ Ian M. Stewart
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Date Ian M. Stewart, President
