<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
____________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 10, 1999
HOLLYWOOD PARK, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-10619 95-3667491
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
330 N. Brand Boulevard, Suite 1110, Glendale, California 91203-2308
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (818) 662-5900
1050 South Prairie Avenue, Inglewood, California 90301
(Former address, if changed since last report)
<PAGE>
Item 2. Acquisition or Disposition of Assets
On September 10, 1999, pursuant to an Asset Purchase Agreement (as
amended), dated May 5, 1999, Hollywood Park, Inc., a Delaware corporation
("Hollywood Park") and Churchill Downs Incorporated, a Kentucky corporation
("Churchill Downs"), Hollywood Park completed the sales of certain assets,
including the Hollywood Park Racetrack and Hollywood Park-Casino on
approximately 240 acres of land at the track site in Inglewood, California, to
Churchill Downs California Company, a wholly-owned subsidiary of Churchill
Downs.
Under terms of the Asset Purchase Agreement, Churchill Downs California
Company paid $117,000,000 in cash for the Hollywood Park Racetrack and all
related assets. In addition, Churchill Downs California Company paid $23,000,000
in cash for the Hollywood Park-Casino building (located on the 240 acres sold),
which Hollywood Park leased back from Churchill Downs California Company under a
10-year lease agreement (with one 10-year renewal option) for $3,000,000 per
annum.
Churchill Downs has guaranteed all of the obligations of Churchill Downs
California Company under the transaction documents.
On September 10, 1999, Hollywood Park issued a press release, a copy of
which is attached hereto as Exhibit 99.1 and incorporated herein by reference.
In addition, in connection with the sale of the Hollywood Park Racetrack,
Hollywood Park has leased the Hollywood Park-Casino building and related
personal property (the personal property of the Hollywood Park-Casino continues
to be owned by Hollywood Park) to Century Gaming Management, Inc., a California
corporation, for a period of twelve months. The monthly base rent is $500,000,
which Hollywood Park has the right to increase as of January 1, 2000, to
$600,000.
Item 5. Other Events.
In connection with the sale of the Hollywood Park Racetrack, Hollywood Park
moved its corporate offices to Glendale, California. The new address of its
corporate offices is 330 N. Brand Boulevard, Suite 1110, Glendale, California
91203-2308.
Item 7. Financial Statements, Pro Forma Information and Exhibits
(a) Not Applicable
(b) Pro Forma Financial Information
Introduction to Unaudited Pro Forma Consolidated Financial Statements
Unaudited Pro Forma Consolidated Balance Sheet as of
June 30, 1999
Unaudited Pro Forma Consolidated Statement of Operations
for the Year Ended December 31, 1998
Unaudited Pro Forma Consolidated Statement of Operations
for the Six Months Ended June 30, 1999
(c) The following are furnished as exhibits to this report:
2
<PAGE>
10.1 Asset Purchase Agreement, dated May 5, 1999, between Hollywood
Park, Inc., and Churchill Downs Incorporated is hereby
incorporated by reference to Exhibit 10.41 of Hollywood Park's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
10.2 Form of Amendment No. 1, dated as of August 31, 1999, to Asset
Purchase Agreement between Hollywood Park, Inc. and Churchill
Downs Incorporated.*
10.3 Form of Guaranty issued by Churchill Downs Incorporated in
favor of Hollywood Park, Inc.*
99.1 Press Release issued on September 10, 1999, by Hollywood Park,
Inc.*
_______________
* - filed herewith
3
<PAGE>
Introduction to Unaudited Pro Forma Consolidated Financial Statements
Reflecting Dispositions of the Hollywood Park Racetrack and Hollywood
Park-Casino
The following unaudited pro forma consolidated balance sheet was prepared from
the unaudited consolidated balance sheet of Hollywood Park, Inc. ("Hollywood
Park") as of June 30, 1999.
The following unaudited pro forma consolidated statements of operations were
prepared from the audited consolidated statements of operations of Hollywood
Park for the year ended December 31, 1998, the unaudited consolidated statements
of operations of Hollywood Park for six months ended June 30, 1999, the audited
statements of operations of the Hollywood Park Racetrack ("Racetrack") and
Hollywood Park-Casino ("Casino") for the year ended December 31, 1998 and the
unaudited statements of operations of the Racetrack and Casino for the six
months ended June 30, 1999.
It was assumed the disposition of the Racetrack and the Casino occurred on
January 1, 1998 for the unaudited pro forma consolidated statements of
operations and as of June 30, 1999 for the unaudited pro forma consolidated
balance sheet. In accordance with pro forma presentation guidelines, the pro
forma statements of operations for the year ended December 31, 1998 and the six
months ended June 30, 1999 do not reflect an estimated net gain from these
transactions.
The disposition of the Racetrack was accounted for as a sale. The disposition
of the Casino was accounted for as a financing transaction and therefore not
recognized as a sale for accounting purposes as Hollywood Park will sub-lease
the Casino to a third-party operator.
The following unaudited pro forma consolidated financial statements should be
read in conjunction with the accompanying notes and assumptions. The unaudited
pro forma financial information is presented for illustrative purposes only and
is based upon an estimate of the transaction costs, closing reserves and income
taxes related to the transactions. Accordingly, the gain on the sale of the
Racetrack and the asset impairment write-down of the Casino, after taxes, are
estimated and are neither necessarily indicative of the operating results or
financial position that would have occurred if the dispositions had been
completed in an earlier period, nor necessarily indicative of future operating
results or financial position.
These pro forma financial statements are based on, and should be read in
conjunction with, the historical consolidated financial statements and the
related notes thereto of Hollywood Park (see Hollywood Park's Annual Report on
Form 10-K for 1998, and Quarterly Report on Form 10-Q, for June 30, 1999).
4
<PAGE>
Hollywood Park, Inc.
Notes to Unaudited Pro Forma Consolidated
Balance Sheet as of June 30, 1999
Assumptions - The dispositions occurred as of June 30, 1999. The disposition of
the Racetrack was accounted for as a sale and the disposition of the Casino was
accounted for as a financing transaction.
Pro Forma Adjustments - The following adjustments have been made to the
unaudited pro forma consolidated balance sheet:
(a) To record the sales proceeds of $117 million for the Racetrack, land and
related assets.
(b) To record the Casino disposition proceeds of $23 million.
(c) To record the sale of the Racetrack, land and related assets, net of
accumulated depreciation.
(d) To record an asset impairment write-down of the Casino to estimated fair
market value.
(e) To record estimated transaction and other related costs of approximately
$10 million.
(f) To record the current and deferred federal and state income taxes payable
related to the dispositions.
(g) To record current and long-term debt related to the finance accounting of
the Casino.
(h) To record the estimated gain on the sale of the Racetrack, land and related
assets and the estimated asset impairment write-down of the Casino
building. The following is the preliminary calculation of the estimated
impact to the statement of operations resulting from these transactions (in
thousands):
<TABLE>
<CAPTION>
Racetrack Casino Cumulative
--------- ------ ----------
<S> <C> <C> <C> <C>
Cash proceeds $117,000 $ 23,000 $140,000
Less: Estimated transaction and other related costs 8,000 2,000 10,000
Net book value of the Racetrack and Casino
assets disposed of 45,339 24,569 69,908
Goodwill, net of accumulated amortization,
related to the Racetrack and Casino 0 18,899 18,899
-------- ---------- ---------
Gain (impairment write-down) before income taxes 63,661 (22,468) 41,193
Less: Income taxes 23,400 1,600 25,000
-------- ---------- ---------
Gain (impairment write-down) $ 40,261 ($ 24,068) $ 16,193
======== ========== =========
</TABLE>
The above calculations are preliminary, subject to final determination of the
net book value of assets disposed of, income tax consequences and transaction
and other costs. Actual accounting adjustments related to the dispositions
may differ from the pro forma adjustments.
5
<PAGE>
<TABLE>
<CAPTION>
Hollywood Park, Inc.
Unaudited Pro Forma Consolidated Balance Sheet
As of June 30, 1999
(in thousands)
Hollywood Pro Forma Pro Forma
Park, Inc. Adjustments Consolidated
---------- ----------- ------------
<S> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 127,530 $117,000(a) $ 267,530
23,000(b)
Restricted cash 17,964 0 17,964
Short term investments 16,143 0 16,143
Other receivables, net 15,805 0 15,805
Prepaid expenses and other assets 20,979 0 20,979
Deferred tax assets 18,266 0 18,266
Current portion of notes receivable 2,320 0 2,320
---------- ---------- ----------
Total current assets 219,007 140,000 359,007
Notes receivable 12,987 12,987
Property, plant and equipment, net 597,553 (45,339)(c) 550,645
(1,569)(d)
Goodwill, net 95,585 (18,899)(d) 76,686
Gaming license, Casino Magic Bossier City, net 35,645 0 35,645
Concession agreement, Casino Magic Argentina, net 7,117 0 7,117
Debt issuance costs, net 25,300 0 25,300
Other assets 15,682 0 15,682
---------- ---------- ----------
$1,008,876 $ 74,193 $1,083,069
========== ========== ==========
====================================================================================================================
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable $ 15,466 $ 0 $ 15,466
Accrued interest 25,755 0 25,755
Other accrued liabilities 52,853 10,000(e) 64,453
1,600(f)
Accrued compensation 20,194 0 20,194
Gaming liabilities 8,998 0 8,998
Racing liabilities 17,045 0 17,045
Current portion of notes payable 8,312 1,816(g) 10,128
---------- ---------- ----------
Total current liabilities 148,623 13,416 162,039
Notes payable, less current maturities 603,702 21,184(g) 624,886
Deferred tax liabilities 1,565 23,400(f) 24,965
Other liabilities 3,649 0 3,649
---------- ---------- ----------
Total liabilities 757,539 58,000 815,539
Minority interests 3,933 0 3,933
Stockholders' Equity:
Capital stock --
Preferred - $1.00 par value, authorized 250,000 shares;
none issued and outstanding in 1999 and 1998 0 0 0
Common - $0.10 par value, authorized 40,000,000 Shares;
25,970,358 and 25,800,069 shares issued and outstanding 2,597 0 2,597
in 1999 and 1998
Capital in excess of par value 220,651 0 220,651
Retained earnings 24,182 16,193(h) 40,375
Accumulated other comprehensive loss (26) 0 (26)
---------- ---------- ----------
Total stockholders' equity 247,404 16,193 263,597
---------- ---------- ----------
$1,008,876 $ 74,193 $1,083,069
========== ========== ==========
- -------
See accompanying notes to the unaudited pro forma consolidated balance sheet.
</TABLE>
6
<PAGE>
Hollywood Park, Inc.
Notes to Unaudited Pro Forma Consolidated
Statements of Operations
Assumptions - The unaudited pro forma consolidated statements of operations for
the year ended December 31, 1998, and the six months ended June 30, 1999, are
presented as if the dispositions had taken place on January 1, 1998. The
results of operations of the Racetrack and Casino have been eliminated from the
Hollywood Park historical results of operations, so that only the continuing
Hollywood Park operations are reflected.
In accordance with pro forma presentation guidelines, the pro forma statements
of operations do not reflect an estimated gain or impairment write-down from
these transactions or any income generated during the periods shown from the
proceeds received. A reduction of debt, investments in other assets including
short-term investment securities or an investment in other casino operations may
have resulted which has not been reflected in these pro forma statements of
operations.
Pro Forma Adjustments - The following adjustments have been made to the
unaudited pro forma consolidated statements of operations:
(a) To eliminate the historical results of operations of the Racetrack and
Casino.
(b) To record Casino rental income to be received by Hollywood Park, Inc. In
connection with the financing transactions of the Casino, the Company
entered into a one year lease agreement with an unaffiliated third party to
operate the Casino. Rent will be received by Hollywood Park in the amount
of $500,000 per month. [Hollywood Park has the option to increase the rent
to $600,000 per month as of January 1, 2000 for the remainder of the
lease.]
(c) To record estimated operating expenses related to the Casino.
(d) To record estimated depreciation expense for the Casino and related assets
associated with the financing, as well as depreciation expense for
Hollywood Park assets sold which are not reflected in the historical
results of operations of the Racetrack and Casino.
(e) To record interest expense for the amortization of the lease financing debt
associated with the Casino.
(f) To record the federal and state income tax effect of pro forma adjustments
at the Company's effective 40% tax rate.
7
<PAGE>
Hollywood Park, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Year Ended December 31, 1998
(in thousands, except per share data)
<TABLE>
<CAPTION>
Less:
Hollywood Park
Hollywood Race Track Pro Forma Pro Forma
Park, Inc. and Casino (a) Adjustments Consolidated
---------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Gaming $293,057 $46,255 $0 $246,802
Racing 66,871 51,934 0 14,937
Food and beverage 30,510 11,110 0 19,400
Hotel and recreational vehicle park 3,076 0 0 3,076
Truck stop and service station 14,499 0 0 14,499
Other income 18,954 5,452 6,000(b) 19,502
--------- --------- --------- ----------
426,967 114,751 6,000 318,216
--------- --------- --------- ----------
Expenses:
Gaming 161,549 27,167 0 134,382
Racing 29,316 22,650 0 6,666
Food and beverage 38,860 15,722 0 23,138
Hotel and recreational vehicle park 1,213 0 0 1,213
Truck stop and service station 13,279 0 0 13,279
General and administrative 95,491 27,784 0 67,707
Other 7,995 2,026 200(c) 6,169
Depreciation and amortization 32,121 8,411 3,269(d) 26,979
Loss on write-off of assets 2,221 0 0 2,221
REIT restructuring 419 0 0 419
--------- --------- --------- ----------
382,464 103,760 3,469 282,173
--------- --------- --------- ----------
Operating income 44,503 10,991 2,531 36,043
Interest expense, net 22,518 0 1,184(e) 23,702
--------- --------- --------- ----------
Income before minority interests and
income taxes 21,985 10,991 1,347 12,341
--------- --------- --------- ----------
Minority interests 374 0 0 374
Income tax expense 8,442 4,221 539(f) 4,760
--------- --------- --------- ----------
Net income $13,169 $6,770 $808 $7,207
========= ========= ========= ==========
=============================================================================================================
Per common share:
Net income - basic $0.50 $0.28
Net income - diluted $0.50 $0.28
Number of shares - basic 26,115 26,115
Number of shares - diluted 26,115 26,115
</TABLE>
- -------
See accompanying notes to the unaudited pro forma consolidated statements of
operations
8
<PAGE>
Hollywood Park, Inc.
Unaudited Pro Forma Consolidated Statements of Operations
For the Six Months Ended June 30, 1999
(in thousands, except per share data)
<TABLE>
<CAPTION>
Less:
Hollywood Park
Hollywood Race Track Pro Forma Pro Forma
Park, Inc. and Casino (a) Adjustments Consolidated
--------- -------------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues:
Gaming $285,305 $24,254 $0 $261,051
Racing 38,741 29,739 0 9,002
Food and beverage 21,701 5,785 0 15,916
Hotel and recreational vehicle park 5,700 0 0 5,700
Truck stop and service station 7,534 0 0 7,534
Other income 12,546 3,449 3,000(b) 12,097
--------- --------- --------- ---------
371,527 63,227 3,000 311,300
--------- --------- --------- ---------
Expenses:
Gaming 156,499 13,050 0 143,449
Racing 15,378 11,586 0 3,792
Food and beverage 25,763 7,932 0 17,831
Hotel and recreational vehicle park 2,866 0 0 2,866
Truck stop and service station 6,900 0 0 6,900
General and administrative 73,112 13,621 0 59,491
Other 7,277 1,150 100(c) 6,227
Depreciation and amortization 27,202 4,292 1,633(d) 24,543
Indiana pre-opening 1,509 0 0 1,509
--------- --------- --------- ---------
316,506 51,631 1,733 266,608
--------- --------- --------- ---------
Operating income 55,021 11,596 1,267 44,692
Interest expense, net 30,053 0 545(e) 30,598
--------- --------- --------- ---------
Income before minority interests and
income taxes 24,968 11,596 722 14,094
--------- --------- --------- ---------
Minority interests 1,137 0 0 1,137
Income tax expense 9,987 4,638 289(f) 5,638
--------- --------- --------- ---------
Net income $13,844 $6,958 $433 $7,319
========= ========= ========= =========
================================================================================================================
Per common share:
Net income - basic $0.54 $0.28
Net income - diluted $0.54 $0.28
Number of shares - basic 25,836 25,836
Number of shares - diluted 25,836 25,836
</TABLE>
- -----
See accompanying notes to the unaudited pro forma consolidated statements of
operations
9
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
HOLLYWOOD PARK, INC.
Date: September 27, 1999 By: /s/ Bruce C. Hinckley
-------------------------------
Bruce C. Hinckley
Vice President, Treasurer and
Chief Financial Officer
10
<PAGE>
Exhibit Index
-------------
Exhibit Description
- ------- -----------
10.1 Asset Purchase Agreement, dated May 5, 1999, between Hollywood
Park, Inc., and Churchill Downs Incorporated is hereby
incorporated by reference to Exhibit 10.41 of Hollywood Park's
Quarterly Report on Form 10-Q for the quarter ended June 30,
1999.
10.2 Form of Amendment No. 1, dated as of August 31, 1999, to Asset
Purchase Agreement between Hollywood Park, Inc. and Churchill
Downs Incorporated.*
10.3 Form of Guaranty issued by Churchill Downs Incorporated in favor
of Hollywood Park, Inc.*
99.1 Press Release dated September 10, 1999, by Hollywood Park, Inc.*
_______________
* - filed herewith
11
<PAGE>
EXHIBIT 10.2
AMENDMENT No. 1 TO
ASSET PURCHASE AGREEMENT BETWEEN HOLLYWOOD PARK, INC. AND
CHURCHILL DOWNS INCORPORATED DATED AS OF MAY 5, 1999
Dated as of August 31, 1999
This AMENDMENT No. 1 is entered into by Hollywood Park, Inc., a Delaware
corporation (HPI), Churchill Downs Incorporated, a Kentucky corporation (CDI),
and Churchill Downs California Company, a Kentucky corporation (CDC), with
reference to the following facts:
WHEREAS, CDI has assigned all of it rights and obligations under that
certain Asset Purchase Agreement dated May 5, 1999 (the "Purchase Agreement")
between HPI and CDI, to CDC and CDC has accepted such rights and obligations;
WHEREAS, by virtue of such assignment, CDC is a party to this Amendment No.
1 and by its execution hereof, CDI acknowledges that CDC is a party to this
Amendment No. 1;
WHEREAS, the California Division of Gambling Control is reviewing, and has
requested clarifications to, the Purchase Agreement between the parties hereto,
for good and valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the Purchase Agreement is amended as follows:
Capitalized terms used herein but not otherwise defined shall have the
meanings ascribed to them in the Asset Purchase Agreement.
Section 1 Definitions. The Office Lease defined in Section 1 whereby HPI
would lease office space from CDI on terms substantially similar to the form of
lease attached as Exhibit E and Exhibit E-1 will no longer be necessary. Any
and all references to the Office Lease are hereby deleted.
Section 2.2.2 Accounts Receivable. Accounts Receivable expressly excludes
all accounts and notes receivable pertaining to gaming at the Hollywood Park-
Casino.
Section 2.2.9 Excluded Contracts, Permits and Licenses. The following is
added to the list of contracts, permits and licenses not transferred to CDC (as
assignee of CDI) as noted on Schedule 2.2.9:
"15. Provisional license to operate Hollywood Park-Casino held by HPI."
Section 4.4 Government Approvals. The following is added to the list of
governmental approvals required as noted on Schedule 4.4:
<PAGE>
"2. Approvals required from the Division of Gambling Control in connection
with this Agreement and the Casino Lease."
Section 4.17 Litigation. The following disclosure is hereby added to
Schedule 4.17 in respect to HPI's knowledge of material legal, administrative,
arbitration or other proceedings, claims, actions or governmental regulatory
investigations of any nature pending or threatened against or affecting the
Assets:
"Regulatory investigation by the Division of Gambling Control in connection
with HPI's operation of the Hollywood Park-Casino."
Additionally, the title of Schedule 4.17 is changed from "Litigation" to
"Litigation and Other Regulatory Investigation."
Section 5.6 Financing. The following sentence is added to the end of
Section 5.6:
"Any such alternate financing shall meet the approval of the Division of
Gambling Control."
Sections 8.1.13 and 10.3: Casino Operator. The approved Casino Operator
is Century Gaming Management, Inc., a California corporation. The references to
California Casino Management in Sections 8.1.13 and 10.3 shall be replaced with
Century Gaming Management, Inc., a California corporation.
Section 10.4 Termination Date. Subject to and without waiving or
modifying the parties' respective rights of termination provided for in this
Section 10.4 or otherwise available to it, Seller acknowledges that (i) Buyer
has informed it that Buyer's lender requires three business days prior notice to
release the funds which Buyer intends to utilize to purchase the Assets and
consummate the Transactions; and (ii) upon Seller's receipt of a copy of such
notice, the parties shall perform all acts necessary to consummate such
transactions upon expiration of the three business day period.
Section 11.7 Non-Parimutuel Gaming. It is the intent of the parties to
comply with California gaming laws. To the extent California law changes such
that non-parimutuel gaming becomes legal, prior to any such gaming activity
taking place at Hollywood Park, necessary approvals or licensure shall be sought
and obtained from the Division of Gambling Control.
2
<PAGE>
Section 12.9 Assignment and Assumption. The following shall be added to
become Section 12.9 entitled Assignment and Assumption:
"Section 12.9 Assignment and Assumption. Buyer is assigning to Churchill
-------------------------
Downs California Company, a Kentucky Corporation ("CDC"), its rights to
enter into the following agreements: (1) Casino Lease; (2) Parking
License; (3) Easement Agreement, and (4) License Agreement (collectively
the "Assigned Agreements"). As a material inducement to and in
consideration of Seller's consent to Buyer's assignment of the Assigned
Agreements, Buyer shall, on the Closing Date, execute and deliver to Seller
a guaranty (the "Guarantee") substantially in the form attached hereto as
Exhibit B.
3
<PAGE>
This Amendment No. 1, which may be executed in two or more counterparts
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument, supersedes any inconsistent
provisions in the Agreement. The Agreement, as amended hereby, remains in
full force and effect.
Dated as of this 31st day of August, 1999.
HOLLYWOOD PARK, INC.
By: ____________________________________
Its:____________________________________
CHURCHILL DOWNS INCORPORATED
By: ____________________________________
Its:____________________________________
By: ____________________________________
Its:____________________________________
CHURCHILL DOWNS CALIFORNIA
COMPANY
By: ____________________________________
Its:____________________________________
4
<PAGE>
EXHIBIT 10.3
GUARANTY
--------
THIS GUARANTY ("Guaranty") is made and entered into as of ________ __, 1999
by CHURCHILL DOWNS INCORPORATED, a Kentucky corporation ("Guarantor"), with
reference to the following facts:
A. HOLLYWOOD PARK, INC., a Delaware corporation ("HPI"), and Guarantor
entered into that certain Asset Purchase Agreement dated May 5, 1999, as amended
by that certain Amendment No. 1 dated _________ __, 1999 (collectively "Asset
Purchase Agreement"), whereby HPI agreed to sell to CDI certain assets,
including both real and personal property, tangible and intangible, used by HPI
in the operation of a horse racing facility known as the Hollywood Park
Racetrack and card club casino known as the Hollywood Park-Casino (the "Casino")
in Inglewood, California.
B. Pursuant to the Asset Purchase Agreement, Guarantor and HPI agreed to
enter into the following additional agreements: a lease, attached hereto as
Exhibit A and incorporated herein by this reference (the "Lease"); (ii) a
- ---------
parking agreement, attached hereto as Exhibit B and incorporated herein by this
---------
reference (the "Parking Agreement"); (iii) an easement agreement, attached
hereto as Exhibit C and incorporated herein by this reference (the "Easement
---------
Agreement"); and (iv) a license agreement attached hereto as Exhibit D and
---------
incorporated herein by this reference (the "License Agreement") (collectively,
the "Additional Agreements").
C. Pursuant to that certain Assignment and Assumption Agreement dated
August 31, 1999, Guarantor assigned and Churchill Downs California Company, a
Kentucky corporation ("CDC"), assumed all of Guarantor's rights, title and
interest in the Asset Purchase Agreement and the Additional Agreements
(collectively, the "Assigned Agreements").
NOW THEREFORE, the undersigned Guarantor, in consideration of HPI's consent
to Guarantor's assignment of the Assigned Agreements, and for other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged by Guarantor, hereby agrees with HPI as follows:
Guarantor hereby unconditionally and irrevocably guarantees (i) the full,
prompt and faithful performance of all of the covenants, agreements,
indemnities, obligations, and warranties of CDC contained in the Assigned
Agreements (collectively, "Contract Obligations"), and (ii) the full, prompt
payment of all damages, costs and expenses (including reasonable attorneys'
fees), that may arise out of or in connection with CDC's failure to promptly and
fully pay, perform and observe any of the Contract Obligations (the obligations
set forth in the foregoing clauses (i) and (ii) are collectively defined as
"Obligations" and singularly as an "Obligation").
HPI need not inquire into the power of CDC or the authority of its
officers, directors or agents acting or purporting to act in its behalf with
regard to the Assigned Agreements, and any Obligation incurred in reliance upon
the professed exercise of said power or authority is within the scope of this
Guaranty. Guarantor acknowledges and represents to HPI that Guarantor has
thoroughly reviewed and is familiar with the terms and conditions of
<PAGE>
the Assigned Agreements, and that Guarantor will derive a benefit from the
consummation of the Assigned Agreements.
HPI may waive any defaults or may fail to assert any rights or grant any
other indulgence or concession with respect to all or any part of each
Obligation, and Guarantor shall remain bound under this Guaranty notwithstanding
any of the foregoing. No single or partial exercise by HPI of any right, remedy
or power hereunder shall preclude any other or future exercise of any other
right, remedy or power.
The liability of Guarantor under this Guaranty shall be unconditional
irrespective of (i) any lack of enforceability of any of the Obligations, (ii)
any change of the time, manner or place of payment, or any other term, or any
settlement or compromise, of any of the Obligations, or any partial or total
release or discharge of CDC with respect thereto; (iii) whether recovery from
CDC or any other guarantor or person liable for any Obligation is or hereafter
becomes barred by any statute of limitations, or for any other reason; (iv) any
law, regulation or order of any jurisdiction affecting any term of any of the
Obligations or HPI's rights with respect thereto, and (v) any other
circumstances which might otherwise constitute a defense available to, or a
discharge of, CDC or Guarantor with regard to the Obligations. Guarantor waives
promptness, diligence, presentment, demand and notices with respect to any of
the Obligations and the guaranty obligations under this Guaranty. The guaranty
obligations of Guarantor under this Guaranty are direct and primary obligations
and Guarantor hereby waives any requirement that HPI resort to or exhaust any
right to take any action against CDC or any collateral security. This is a
continuing Guaranty and shall remain in full force and effect, and HPI's rights
shall not be exhausted, until such time as all of the Obligations have been
performed or paid, provided, that this Guaranty shall automatically be
--------
reinstated for the entire amount owing and all performances guaranteed hereunder
in the event that HPI is required by law or court order to repay to CDC any
amount previously received by HPI as a result of CDC's insolvency, bankruptcy or
reorganization or by application of any bankruptcy laws or other laws,
including, without limitation, laws for the benefit of creditors.
Guarantor agrees to execute, acknowledge and deliver to HPI such other and
further instruments, and take such other actions, as may be reasonably required
by HPI to implement the intent and purpose hereof.
This Guaranty shall be governed and construed in accordance with the laws
of the State of California, without giving effect to the conflicts of law
principles thereof. The rights of HPI hereunder and at law are cumulative, and
not exclusive to each other, and may be exercised by HPI from time to time. In
case any one or more of the provisions contained herein should be invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein shall not in any way
be affected or impaired.
Guarantor agrees to pay to HPI, on demand, all attorneys' fees and costs
and other expenses (including, without limitation, all fees and costs of
litigation, including appeals, experts and other items) incurred by HPI in
collecting or compromising any Obligation or enforcing (or attempting to do any
or all of the foregoing) this Guaranty against the Guarantor.
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Guarantor hereby irrevocably submits to the jurisdiction of any California
State or Federal Court sitting in California in any action or proceeding arising
out of or relating to this Guaranty, and Guarantor hereby irrevocably agrees
that all claims in respect of such action or proceeding may be heard and
determined in such California State or Federal Court. Guarantor hereby
irrevocably waives to the fullest extent Guarantor may effectively do so, (i)
the defenses of an inconvenient forum or improper venue to the maintenance of
such action or proceeding, and (ii) any claim that Guarantor is not personally
subject to the jurisdiction of any such courts. Guarantor agrees that final,
non-appealable judgment in any such action brought in any such court shall be
conclusive and binding upon Guarantor and may be enforced by HPI in the courts
of any state, in any federal court, and in any other courts, whether foreign or
domestic, having jurisdiction over Guarantor or any of its property or assets,
and Guarantor agrees not to assert any defense, counterclaim or right of set-off
in any action brought by HPI to enforce such judgment.
Guarantor hereby irrevocably appoints ________________________________ as
its agent to receive, on behalf of Guarantor and its property, service of copies
of the summons and complaint and any other process which may be served in any
such action or proceeding (the "Process Agent"). Such service may be made by
mailing or delivering a copy of such process to Guarantor in care of the Process
Agent at the Process Agent's above address, and Guarantor hereby irrevocably
authorizes and directs the Process Agent to accept such service on its behalf.
As an alternative method of service, Guarantor also irrevocably consents to the
service of any and all process in any such action or proceeding by the mailing
of copies of such process to Guarantor at _________________________________.
Guarantor agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment in
any other manner provided by law. Nothing in this paragraph shall affect the
right of HPI to serve legal process in any other manner permitted by law or
affect the right of HPI to bring any action or proceeding against Guarantor or
Guarantor's property or assets in the courts of any other jurisdiction, whether
foreign or domestic.
To the extent that Guarantor has or hereafter may acquire any diplomatic or
sovereign immunity, or any immunity from jurisdiction of any court or from any
legal process (whether through service or execution, execution or otherwise)
with respect to Guarantor or Guarantor's property or assets, Guarantor hereby
waives, and agrees not to assert any claims of, such immunity with respect of
its obligations under this Guaranty. Guarantor acknowledges that the making of
waivers in this Guaranty, and HPI's reliance on the enforceability thereof, is a
material inducement to HPI to enter into the Purchase Agreement. Guarantor
agrees to execute, deliver and file all such further instruments as may be
reasonably necessary under the laws of the State of California, in order to make
effective the consent by Guarantor to jurisdiction of the state courts of
California and the federal courts sitting in California.
No modification of this Guaranty shall be effective unless placed in
writing and executed by the parties hereto. This Guaranty shall bind and inure
to the benefit of HPI and assigns, and Guarantor, and no other person or entity
shall have any rights or obligations hereunder.
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The obligations of Guarantor hereunder are independent of the obligations
of the CDC and, in the event of any default in or failure to perform of the
Obligations, a separate action or actions may be brought and prosecuted against
Guarantor whether or not the CDC is joined therein or a separate action or
actions are brought against the CDC, and regardless of the right to pursue any
other remedy in HPI's power.
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IN WITNESS WHEREOF, Guarantor has executed this Guaranty as of the date and
year first above written.
"Guarantor"
CHURCHILL DOWNS INCORPORATED
By: _____________________________
Its: ____________________________
By: _____________________________
Its: ____________________________
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EXHIBIT 99.1
Hollywood Park, Inc. Completes Sale of Racetrack to Churchill Downs
GLENDALE, Calif., Sept. 10/PRNewswire/--Hollywood Park, Inc. (NYSE: HPK -
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news) and Churchill Downs, Inc. (Nasdaq: CHDN - news), today announced that they
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have completed the transaction in which Hollywood Park sold the Hollywood Park
Racetrack, the Hollywood Park Casino, and approximately 240 acres of land at the
track site in Inglewood, Calif. to Churchill Downs.
Under the terms of the agreement, Churchill Downs paid $140 million in cash
for the assets and Hollywood Park retained a 10-year lease on the Hollywood Park
Casino, a California card club, at a lease rate of $3 million per year with a
renewal option. Plans for the transaction were initially announced in May 1999.
Eurl Wyatt will continue to serve as Vice President and General Manager for
Hollywood Park Race Track. Additionally, Churchill Downs recently announced
that racing industry veteran Allen Gutterman will oversee the track's marketing
efforts. Don Robbins will step into a new role as a consultant for the track in
the areas of governmental and racing affairs.
R.D. Hubbard, Chief Executive Officer of Hollywood Park, Inc. said, "We are
please to have completed the sale of the Hollywood Park Race Track to Churchill
Downs as we continue to focus on the development of our gaming businesses.
Churchill Downs is a leader in the racing industry, which will ensure the
continuation of live racing at Hollywood Park for the foreseeable future."
"The completion of the Hollywood Park Race Track purchase is a milestone
for our Company," said Thomas H. Meeker, President and Chief Executive Officer
for Churchill Downs. "We are excited to now be a part of the excellent West
Coast racing circuit and to begin integration of this historic racetrack into
our existing operations. The addition of Hollywood Park's simulcast program
will be essential to our efforts as we continue to build a comprehensive
simulcast network."
Churchill Downs, Incorporated, headquartered in Louisville, Ky., is one of
the world's leading horse racing companies. Its flagship operation, Churchill
Downs, is home of the Kentucky Derby and will host its 126th running on May 6,
2000. The Company has additional racing and simulcast-wagering operations in
Kentucky, Indiana and Florida and interests in various racing services
companies. Churchill Downs Incorporated can be found on the Internet at
kentuckyderby.com.
Hollywood Park, Inc. is a diversified gaming company that owns and operates
eight casinos (four with hotels) in Nevada, Mississippi, Louisiana and
Argentina; owns a card club casino and, via the transaction with CDI, leases a
second card club casino, both in the Los Angeles metropolitan area; and owns and
operates a racing facility in Arizona. Hollywood Park, Inc. is also in the
developmental stages of the Belterra Resort and Casino, a riverboat gaming
casino on the Ohio River in Indiana (located in Switzerland County, Ind., 35
miles from Cincinnati) and has announced its intentions to seek the 15th and
final gaming license to be issued in Louisiana (at a site in Lake Charles, La.).
In connection with the sale
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of the Hollywood Park Race Track, Hollywood Park, Inc. relocated its corporate
offices to Glendale, Calif.
(The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Forward-looking information involves
important risks and uncertainties that could significantly affect future results
and, accordingly, such results may differ from those expressed in forward-
looking statements made by or on behalf of Hollywood Park, including statements
related to sale of property to Churchill Downs, or the sale of property for non
sports use. For more information on the potential factors that could affect the
Company's financial results, review the Company's filings with the Securities
and Exchange Commission, including the Company's annual report on Form 10-K and
the Company's other filings with the SEC.)
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