<PAGE>
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 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 1-2802
HARVEYS CASINO RESORTS
(Exact Name of Registrant as Specified in its Charter)
Nevada 88-0066882
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
Highway 50 & Stateline Avenue
P.O. Box 128
Lake Tahoe, Nevada 89449
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (702) 588-2411
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 he 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
On July 10, 1996 the registrant had outstanding 9,807,384 shares of its $.01 par
value, common stock.
<PAGE>
HARVEYS CASINO RESORTS
INDEX
PART I. FINANCIAL INFORMATION PAGE NO.
Item 1. Financial Statements
Condensed Consolidated Balance Sheets,
May 31, 1996 (Unaudited) and
November 30, 1995 3
Condensed Consolidated Statements of
Operations (Unaudited) For the Three Months
and Six Months Ended May 31, 1996 and 1995 4
Condensed Consolidated Statements of Cash
Flows (Unaudited) For the Six Months
Ended May 31, 1996 and 1995 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 22
Item 2. Changes in Securities 22
Item 3. Defaults Upon Senior Securities 22
Item 4. Submission of Matters to a Vote of Security Holders 22
Item 5. Other Information 22
Item 6. Exhibits and Reports on Form 8-K 22
SIGNATURES 23
This Quarterly Report on Form 10-Q contains forward-looking
statements within the meaning of Section 27A of the Securities Act
of 1933, as amended. Discussions containing such forward-looking
statements may be found in the notes to condensed consolidated
financial statements and in the material set forth under
Management's Discussion and Analysis of Financial Condition and
Results of Operations'. Actual results could differ materially from
those projected in the forward-looking statements.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED BALANCE SHEETS
( Dollars in thousands, except per share amounts)
<TABLE>
<CAPTION>
ASSETS May 31, November 30,
1996 1995
------- -------
(Unaudited)
<S> <C> <C>
Current assets
Cash and cash equivalents $ 23,869 $ 10,493
Accounts and notes receivable, net 4,956 7,740
Prepaid expenses 3,214 5,381
Other current assets 7,549 7,260
--------- ----------
Total current assets 39,588 30,874
Notes receivable-related party 1,924 2,065
Notes receivable - other 2,797 2,797
Property and equipment
net of accumulated depreciation
of $106,351 and $100,934 at
May and November, respectively) 305,630 250,777
Other assets 18,371 12,993
Investment in unconsolidated affiliate 14,548 13,738
---------- -----------
Total assets $ 382,858 $ 313,244
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current portion of long-term debt
including $3,967 of related party
debt at November 30,1995) $ 2,658 $ 6,467
Accounts and contracts payable 14,783 4,676
Accrued expenses 15,962 13,015
---------- ----------
Total current liabilities 33,403 24,158
Long-term debt, net of current portion
(including $7,935 of related party debt at
November 30,1995) 179,110 126,676
Deferred income taxes 15,277 15,895
Minority interest in subsidiary - 1,758
Other liabilities 13,744 12,456
----------- ----------
Total liabilities 241,534 180,943
----------- ----------
Stockholders' equity
Preferred stock, $.01 par value; 5,000,000
shares authorized; none issued Common stock,
$.01 par value; 30,000,000 shares authorized;
shares issued 9,813,489 (May)
and 9,402,657 (November) 98 94
Additional paid-in capital 38,586 31,524
Retained earnings 103,723 102,064
Treasury stock, at cost; 9,204 shares
(May)and 5,350 shares (November) (137) (80)
Net unrealized loss on securities
available for sale (184) (104)
Deferred compensation (762) (1,197)
---------- ----------
Total stockholders' equity 141,324 132,301
---------- ----------
Total liabilities and stockholders' equity $ 382,858 $ 313,244
========== ==========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Dollars in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended May 31, Ended May 31,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues
Casino $ 45,339 $ 28,651 $ 82,274 $ 55,477
Lodging 6,195 5,665 12,259 11,391
Food and beverage 9,016 8,003 17,445 15,868
Other 1,417 1,475 2,959 3,008
Management fees and joint venture 1,508 374 2,568 371
Less: Casino promotional allowances (4,095) (3,519) ( 8,651) (7,133)
---------- --------- --------- ---------
Total net revenues 59,380 40,649 108,854 78,982
---------- --------- --------- ---------
Costs and expenses
Casino 21,854 13,928 41,616 27,427
Lodging 2,786 2,314 5,073 4,488
Food and beverage 4,735 4,897 9,081 9,894
Other 678 671 1,324 1,343
Selling, general and administrative 16,785 12,147 31,172 24,506
Depreciation and amortization 3,887 3,137 7,448 6,153
Pre-opening expenses 508 - 4,098 2,147
---------- --------- --------- --------
Total costs and expenses 51,233 37,094 99,812 75,958
---------- ---------- --------- --------
Operating income 8,147 3,555 9,042 3,024
---------- ---------- -------- --------
Other income(expense)
Interest income 194 374 392 536
Interest expense (2,908) (2,457) ( 5,059) (4,344)
Minority interest in (income) loss of
consolidated subsidiary (100) 38 67 530
Other, net (284) (4) (288) 13
--------- ---------- -------- --------
(3,098) (2,049) (4,888) (3,265)
--------- ---------- -------- --------
Income(loss) before income taxes and
extraordinary item 5,049 1,506 4,154 ( 241)
Income tax (provision) benefit (1,905) (545) (1,585) 85
--------- ---------- -------- --------
Income (loss) before extraordinary item 3,144 961 2,569 (156)
Extraordinary item-loss on early
retirement of debt, net of income tax
benefit (141) - (141) -
--------- ---------- -------- --------
Net income (loss) $ 3,003 $ 961 $ 2,428 $ (156)
========= ========== ========= =========
Income (loss) per share
Income (loss) before extraordinary
item $ 0.33 $ 0.10 $ .27 $ (0.02)
Extraordinary item-loss on early
retirement of debt,
net of income tax benefit $ (0.02) $ - $ (0.02) -
---------- ---------- --------- ----------
Net income per share $ 0.31 $ 0.10 $ 0.25 $ (0.02)
========== ========== ========== ==========
Dividends declared per share $ 0.04 $ 0.04 $ 0.08 $ 0.08
========== ========== ========== =========
Weighted average shares used in
calculating income(loss) per share 9,623,421 9,487,551 9,537,912 9,412,165
============ =========== =========== ============
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
HARVEYS CASINO RESORTS
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
(Dollars in thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended May 31,
1996 1995
----- ----
<S> <C> <C>
Increase in cash and cash equivalents
Cash flows from operating activities:
Net income ( loss) $ 2,428 $ (156)
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities:
Depreciation and amortization 7,448 6,153
Other, net 11,595 7,794
-------- ----------
Net cash provided by operating activities 21,471 13,791
-------- ----------
Cash flows from investing activities:
Capital expenditures (48,556) (30,907)
nvestment in unconsolidated affiliate - (4,000)
Other, net 245 403
-------- ---------
Net cash used in investing activities (48,311) (34,504)
-------- ---------
Cash flows from financing activities:
Purchase of notes and accured interest
in consolidated subsidary (6,000) -
Principal payments on long-term debt (171,274) (30,663)
Dividends paid (768) (748)
Proceeds from long-term debt 74,000 54,851
Proceeds from public debt offering 150,000 -
Debt issuance costs (5,683) -
Other, net (59) (438)
-------- --------
Net cash provided by financing activities 40,216 23,002
-------- --------
Increase in cash and cash equivalents 13,376 2,289
Cash and cash equivalents at beginning of period 10,493 7,446
-------- --------
Cash and cash equivalents at end of period $ 23,869 $ 9,735
========= =========
</TABLE>
The accompanying notes are an integral part of these statements.
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Basis of Presentation and Consolidation - Harveys Casino Resorts (the
"Company") is engaged in the casino entertainment industry. The Company
owns and operates Harveys Resort Hotel Casino on the south shore of Lake
Tahoe, Nevada. Until April 30, 1996, the Company, through its wholly
owned subsidiary, Harveys C. C. Management Company, Inc. ( HCCMC') owned
70% of the equity interest in Harveys Wagon Wheel Casino Limited Liability
Company ( HWW') which owns Harveys Wagon Wheel Hotel Casino in Central City
Colorado. On April 30, 1996, the Company acquired all of the 30% minority
interest in HWW in exchange for common stock of the Company. HCCMC has a
contract to manage the Central City hotel and casino. Through its wholly
owned subsidiary, Harveys L. V. Management Company, Inc. ( HLVMC'), the
Company owns 40% of the equity interest in Hard Rock Hotel, Inc. ( HRHC'),
which owns the Hard Rock Hotel and Casino in Las Vegas, Nevada. HLVMC has
a contract to manage the Las Vegas hotel and casino which opened for
business on March 9, 1995. Additionally, the Company's wholly owned
subsidiary, Harveys Iowa Management Company, Inc. ( HIMC') is the owner and
operator of Harveys Casino/ Hotel and Kanesville Queen, a riverboat
casino, hotel, convention center complex in Council Bluffs, Iowa. The
riverboat casino portion of the complex opened for business on January 1,
1996 and the land-based hotel opened for business on May 24, 1996.
Pursuant to the management agreement with HRHC, the Company earns a base
management fee of 4% of adjusted gross revenue (as defined in the
agreement) and up to an additional 2% of adjusted gross revenue if certain
financial targets are met. The Company also receives, from HWW, a
management fee of 5% of adjusted gross revenue (as defined in the
management agreement with HWW). These fees are for services the Company
renders as the project manager for each of the hotel casinos. The
management fees from HWW are eliminated in consolidation.
The condensed consolidated financial statements include the accounts of
Harveys Casino Resorts and its majority and wholly owned subsidiaries. All
significant intercompany accounts and transactions have been eliminated.
Investments in unconsolidated affiliates are stated at cost adjusted by
equity in undistributed earnings or losses. Minority interest represents
the minority member's proportionate share of equity in HWW at November 30,
1995 and its proportionate share of income or loss from HWW until April 30,
1996, the date on which the Company acquired the minority interest in HWW.
The condensed consolidated balance sheet as of November 30, 1995 has been
prepared from the audited financial statements at that date. The
accompanying condensed consolidated financial statements have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted.
In the opinion of management, all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of financial
condition at May 31, 1996, have been included. All necessary adjustments
affecting cash flows for the six months ended May 31, 1996 and 1995 or
results of operations for the three and six months ended May 31, 1996 and
1995, have also been included. The results of operations for the interim
periods should not be considered indicative of results for a full fiscal
year.
Certain prior year period amounts have been reclassified to conform to the
current period presentation. These reclassifications have no affect on the
net income or net loss presented for any of the periods.
These financial statements should be read in conjunction with the financial
statements, and notes thereto, in the Company's Annual Report on Form 10-K
for the year ended November 30, 1995.
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
2. Net Income (Loss) Per Share - Net income (loss) per share is computed based
on the weighted average number of shares of common stock and dilutive
common stock equivalents outstanding during the period. Fully diluted per
share amounts are the same as primary per share amounts for all periods
presented.
3. Supplemental Disclosure of Cash Flow Information - The Company made cash
payments for interest of $6.8 million and $ $1.6 million during the six
months ended May 31, 1996 and 1995, respectively. The Company capitalized
$2.4 million of interest in the first six months of fiscal 1996, and
capitalized $ 160,000 in the same period of fiscal 1995. The Company made
cash payments for income taxes of $302,000 in the first half of fiscal
1996, and $200,000 during the same period of fiscal 1995.
4. Future Development Costs - The Company capitalizes costs associated with
new gaming projects until: (i) the project is no longer considered viable
and the costs are expensed; or (ii) the likelihood of the project is
relatively certain and the costs are reclassified either to pre-opening
costs and expensed when operations commence or to property and equipment
and ultimately depreciated. Capitalized future development costs of
approximately $817,000 and $724,000 were included as other assets on the
balance sheet at May 31, 1996 and November 30, 1995, respectively.
5. Pre-opening Expenses - Pre-opening expenses are associated with the
acquisition, development and opening of the Company's new casino resorts.
These amounts are expensed when the casino commences operations and include
items that were capitalized as incurred prior to opening and items that are
directly related to the opening of the property and are non-recurring in
nature. Approximately $3.6 million of pre-opening expenses were expensed in
the first quarter of 1996 in connection with the Company's opening of
HIMC's riverboat casino in Council Bluffs, Iowa on January 1, 1996 and an
additional $508,000 was expensed in the second quarter of 1996 with the
opening of HIMC's land-based hotel facilities in May 1996. Approximately
$2.1 million of pre-opening expenses were expensed in the first quarter of
fiscal 1995 in conjunction with the Company's opening of Harveys Wagon
Wheel Hotel Casino in December 1994. During the second quarter of fiscal
1995, the Hard Rock Hotel and Casino opened and expensed approximately $4.5
million of pre-opening expenses. The Company's equity in the loss of the
Hard Rock Hotel and Casino, which is included in management fees and joint
venture revenues, includes the Company's share of those pre-opening
expenses.
6. Long-Term Debt -As of the following dates long-term debt (in thousands)
consisted of:
May 31, November 30,
<TABLE> 1996 1995
<CAPTION>
<S> <C> <C>
Subordinated notes payable to affiliates $ - $ 11,902
10% senior subordinated notes, due 2006 150,000 -
Subordinated notes, due 2000 7,800 -
Banks and others -
Note payable to banks - 115,000
Notes payable to financing company 4,620 5,800
Note payable-riverboat financing 18,958 -
Other 390 441
-------- -------
181,768 133,143
Less current portion 2,658 6,467
-------- -------
$ 179,110 $ 126,676
======== =======
</TABLE>
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Long-Term Debt (continued)
Aggregate annual maturities of long-term debt (in thousands), based on
amounts borrowed as of May 31, 1996, are as follows:
<TABLE>
<CAPTION>
Years ending
MAY 31,
<C> <C>
1997 $ 2,658
1998 2,007
1999 136
2000 12
2001 26,772
2002 and thereafter 150,183
------------
$ 181,768
============
</TABLE>
10 % Senior Subordinated Notes, Due 2006 - On May 22, 1996 the Company
issued and sold, pursuant to an underwritten public offering, $150 million in
aggregate principal amount of 10 % senior subordinated notes due 2006 (the
Senior Notes'). The proceeds from the sale of the Senior Notes, $145.5
million net of underwriting commissions, were used to paydown the entire
outstanding balance under the Company's reducing revolving bank credit
facility and to payoff a $10 million note payable to a private investor.
The Senior Notes are governed by an indenture ( the Indenture') and are
general unsecured obligations of the Company, subordinated in right of
payment to all existing and future Senior Debt of the Company(as defined in
the Indenture) . The Senior Notes are guaranteed by each of the Restricted
Subsidiaries of the Company ( as defined in the Indenture). Each guarantee
is a general unsecured obligation of the guaranteeing Restricted Subsidiary,
subordinated in right of payment to all existing and future Senior Debt of
each guaranteeing Restricted Subsidiary. At May 31, 1996, the guaranteeing
Restricted Subsidiaries were HCCMC, HWW, HIMC and HLVMC.
Interest on the Senior Notes is payable semi-annually on June 1 and December
1 of each year, commencing December 1, 1996. The Senior Notes are redeemable
at the option of the Company, in whole or in part at any time on or after
June 1, 2001 at prices ranging from 105.313% of the principal amount plus
accrued and unpaid interest to 100% of the principal amount plus accrued and
unpaid interest beginning June 1, 2004 and thereafter. Upon a Change of
Control (as defined in the Indenture) each holder of the Senior Notes will
have the right to require the Company to repurchase such holder's Senior
Notes at 101% of the principal amount plus accrued and unpaid interest to the
repurchase date.
The Indenture contains certain covenants that impose limitations on, among
other things, (i) the incurrance of additional indebtedness by the Company or
any Restricted Subsidiary, (ii) the payment of dividends, (iii) the
repurchase of capital stock and the making of certain other Restricted
Payments and Restricted Investments (as defined in the Indenture) by the
Company or any Restricted Subsidiary, (iv) mergers, consolidations and sales
of assets by the Company or any Restricted Subsidiary, (v) the creation or
incurrance of liens on the assets of the Company or any Restricted Subsidiary
and (vi) transactions by the Company or any of its subsidiaries with
Affiliates (as defined in the Indenture). These limitations are subject to a
number of qualifications and exceptions as described in the Indenture.
Subordinated Notes, Due 2000 - On April 30, 1996, the Company completed
exchanges whereby, (i) the Company acquired the $11.9 million aggregate
principal amount of subordinated notes payable by HWW to affiliates ( the
HWW Notes'), and interest accrued thereon, in exchange for $6 million cash
and $8 million aggregate face amount of
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6. Long-Term Debt (continued)
subordinated notes of the Company, due December 31, 2000 ( the Debt
Exchange') and (ii) the Company acquired all of the 30% minority equity
interest in HWW, and the rights to a priority return from HWW, from Mountain
City Casino Partners, L. P. ( Mountain City') for 382,500 shares of the
Company's common stock, par value $0.01 per share (the Equity Exchange').
The subordinated notes issued by the Company pursuant to the Debt Exchange
(the Harveys Notes') are governed by an indenture ( the Exchange
Indenture'). The Exchange Indenture provides for redemption of the Harveys
Notes at the Company's option, in whole or in part, upon not less than 30 nor
more than 60 days notice at a price of 97.5% of the principal amount plus
accrued and unpaid interest if redeemed before December 31, 1996, at 99% of
the principal amount plus accrued and unpaid interest if redeemed before
December 31, 1997 and at 100% of the principal amount plus accrued and unpaid
interest if redeemed on December 31, 1997, or thereafter. The Exchange
Indenture also calls for mandatory redemption, at the optional redemption
prices, if the Company consummates a public debt offering of any amount.
Subsequent to the closing of the Senior Note offering, the Company notified
the holders of the Harveys Notes that the Company would redeem all of the
Harveys Notes for an aggregate price of $7.8 million plus accrued and unpaid
interest on July 8, 1996.
Subordinated Notes Payable to Affiliates - In November 1993, HWW issued
approximately $11.9 million of 12% subordinated notes payable to affiliates
of Mountain City, which, until April 30, 1996, owned a 30% minority interest
in HWW. Interest on the notes was payable monthly beginning March 1995.
Accrued interest through and including February 1995, of approximately $1.9
million was payable on December 1, 1995. An initial principal payment of
$3.967 million was due in November 1995. HWW did not make the required
principal payment or the $1.9 million interest payment. On April 30, 1996
the Company acquired all of the $11.9 million of subordinated notes, and
accrued interest thereon, in exchange for $6 million in cash and $8 million
principal amount of the Company's Subordinate Notes. See Long-Term Debt-
Subordinated Notes, Due 2000.
Notes Payable to Banks - On August 14, 1995 the Company entered into a
reducing revolving credit agreement with a consortium of banks. On May 15,
1996 and again on May 23, 1996 the reducing revolving credit agreement was
amended, essentially to allow for the Debt Exchange, the Equity Exchange and
the issuance of the Senior Notes.
Currently under the amended reducing revolving credit agreement ( the Credit
Facility') the Company can borrow up to a maximum available principal balance
of $150 million. The maximum available under the Credit Facility is reduced
by the advanced but unpaid principal balance and by any letter of credit
exposure. The advanced but unpaid principal balance at November 30, 1995 was
$115 million. As a result of using a portion of the proceeds from the sale
of the Senior Notes to paydown the outstanding balance, there were no amounts
advanced but unpaid under the Credit Facility at May 31, 1996. Outstanding
letters of credit amounted to approximately $2.2 million at May 31, 1996.
The note payable under the Credit Facility matures in August 2000. Until
then, the annual year-end maximum principal balances are as follows:
<TABLE>
<CAPTION>
November 30,
------------------
<C> <C>
1996 $ 150,000
1997 135,000
1998 120,000
1999 97,500
</TABLE>
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
6.Long-Term Debt (continued)
The Company pays quarterly fees at an annual rate of three-eights (0.375%) or
one-half of one percent (0.5%) on the unborrowed maximum principal balance
depending on the Company's ratio of funded debt to earnings before interest,
taxes, depreciation and amortization. The rate in affect at November 30,
1995 and May 31, 1996 was 0.5%.
Interest is due and payable monthly and is provided at the higher of the
prime rate or the Federal Funds Rate plus one-half of one percent (0.5%),
plus an applicable margin determined by the Company's ratio of funded debt to
earnings before interest, taxes, depreciation and amortization. However, in
accordance with the terms of the Credit Facility, the Company has the option
to cause portions, or all, of the outstanding principal balance to accrue
interest at a rate equal to the London Inter-Bank Offering Rate (LIBOR) plus
the applicable margin.
The note is collateralized by all of the Company's property and equipment,
contract rights, leases, intangibles and other security interest related to
Harveys Resort Hotel Casino, Harveys Wagon Wheel Hotel Casino and the
Company's wholly-owned subsidiary, HIMC. The Credit Facility also contains
covenants which require the Company to maintain certain financial ratios. A
member of the Company's Board of Directors is also a director of the lead
bank of the consortium of banks making the loan.
Notes Payable to Financing Company- HWW entered into an equipment financing
agreement with a financing company to finance the acquisition of up to $7.5
million of gaming and associated equipment. The principal balance of the
secured notes under the equipment financing agreement as of May 31, 1996 was
approximately $4.6 million. The notes are secured by the equipment acquired
and are payable in monthly payments of approximately $194, 000 and $56,000
including interest at 12.15%. The notes will mature in December, 1997, and
July, 1998, respectively.
Note Payable, Riverboat Financing- On December 26, 1995, HIMC entered into a
$20 million Loan and Security Agreement ( the Iowa Loan Agreement'). As
security for the loan, HIMC granted the lender a first preferred ship
mortgage on the riverboat casino vessel known as the Harveys Kanesville Queen
and a first priority security interest in all personalty, earnings and
insurance from the riverboat only, excluding personalty, earnings and
insurance derived form casino gaming operations. The obligation under the
Iowa Loan Agreement was guaranteed by Harveys Casino Resorts. Borrowings
under the Iowa Loan Agreement bore interest at a fixed rate of 8.42% per
annum. Principal and interest payments commenced in January 1996 and were
paid monthly. The Company applied a portion of the net proceeds from the
offering of the Senior Notes to retire the note payable under the Iowa Loan
Agreement in June 1996.
7 Extraordinary Item - In May 1996, the Company expensed the remaining
unamortized debt issuance costs related to a $10 million note payable to a
private investor that was retired before maturity. This item was reflected
in the 1996 operating results as an extraordinary loss of approximately
$141,000 which was net of an income tax benefit of approximately $85,000.
The Company applied a portion of the net proceeds from the sale of the
Senior Notes to retire the note payable under the Iowa Loan Agreement in June
1996 and recognized approximately $302,000 of expense, before income tax
benefit, by expensing the unamortized debt issuance cost related to that
agreement. In July 1996 the Company will retire the Harveys Notes and
expects to recognize approximately $400,000 of similar expense before income
tax benefits.
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
8. Commitments - Until May 10, 1996, the Company, with the approval of its
lenders, guaranteed up to $66.0 million of a loan on behalf of HRHC. On May
10, 1996 the Company was released from such guarantee. The Company paid a
fee of approximately $385,000 to the banks participating in the HRHC loan as
a condition of the release.
On January 1, 1996, the Company opened the riverboat casino portion of its
project in Council Bluffs, Iowa and on May 24, 1996 opened the 251-room,
land-based hotel facilities. The Company is in the process of finishing
construction of the 21,000 square foot convention facility and other land-
based amenities. As a result, the Company has entered into a number of
contracts or agreements relative to the development of the Council Bluffs
project. The cost of the project, including the riverboat casino vessel and
pre-opening expenses is expected to be approximately $110.5 million. Through
May 31, 1996 the Company had incurred approximately $107 million of project
costs.
9.Unconsolidated Affiliate - The Company owns a 40% equity interest in HRHC.
Pursuant to a management agreement, the Company earns a base management fee
of 4% of adjusted gross revenue (as defined in the agreement), and up to an
additional 2% of adjusted gross revenue if certain financial targets are met,
from HRHC. The Company accounts for its investment in HRHC on the equity
method. The Hard Rock Hotel and Casino opened on March 9, 1995. Operating
results prior to the opening were immaterial. Summarized, unaudited
statement of operations information (in thousands of dollars) for HRHC,
follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended May 31, Ended May 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Net revenues $20,176 $19,905 $38,256 $19,905
Operating income (loss) 3,987 (1,201) 6,646 (1,220)
Net income (loss) 1,596 (1,760) 2,301 (1,767)
</TABLE>
The results for the three months and six months ended May 31, 1995 include
the effects of nonrecurring pre-opening expenses of approximately $4.5
million.
10.Summarized Financial Information of Subsidiaries - The Senior Notes issued by
the Company are guaranteed by all direct and in direct subsidiaries of the
Company except for subsidiaries for which the Company's share of assets,
net investment in assets, and inco me before taxes are inconsequential to
consolidated total assets and consolidated income before taxes. The
guarantees are full and unconditional and are joint and several. The
following summarized combined financial information of the guarantor
subsidiaries includes the accounts of HCCMC, HWW (which became
<PAGE>
HARVEYS CASINO RESORTS
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Continued)
(Unaudited)
10. Summarized Financial Information of Subsidiaries (continued)
<TABLE>
<CAPTION>
May 31, 1996 November 30, 1995
------------- -----------------
(Unaudited)
<S> <C> <C>
Balance Sheet Data (in thousands)
Assets:
Current assets $ 13,149 $ 6,591
Noncurrent assets 181,391 130,627
----------- -----------
Total assets $ 194,540 $ 137,218
=========== ===========
Liabilities and Stockholders' Equity:
Current liabilities $ 29,588 $ 16,862
Noncurrent liabilities 124,835 83,371
Minority interest in subsidiary - 1,758
Stockholders' equity 40,117 35,227
---------- ----------
Total liabilities and stockholders' equity $ 194,540 $ 137,218
=========== ===========
</TABLE>
<TABLE>
<CAPTION>
Three Months Six Months
Ended May 31, Ended May 31,
------------- --------------
1996 1995 1996 1995
( Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Statement of Operations Data
(in thousands)
Net revenues $ 29,160 $12,040 $ 50,775 $ 22,260
Costs and expenses (22,103) (9,288) 42,643) (19,559)
Other expense (2,448) (1,804) (3,827) (2,384)
Income tax provision (1,739) (342) (1,644) (112)
--------- -------- -------- -----------
Net income $ 2,870 $ 606 $ 2,661 $ 205
========= ======== ======== ===========
<S> <C> <C>
Statement of Cash Flows Data
(in thousands)
Net cash provided by operating activities $ 11,624 $ 2,409
Net cash used in investing activities (42,667) (32,985)
Net cash provided by financing activities 40,006 31,661
-------- --------
Increase in cash and cash equivalents $ 8,963 $ 1,085
======== ========
</TABLE>
<PAGE>
HARVEYS CASINO RESORTS
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
OVERVIEW
Prior to fiscal 1995 the Company's operations were substantially limited to
those of Harveys Resort Hotel Casino on the south shore of Lake Tahoe, Nevada.
During fiscal 1993, the Company began investing in expansion projects designed
to expand the Company's operations into new and diverse markets. On December 2,
1994, the first of the expansion projects, Harveys Wagon Wheel Hotel Casino
opened in Central City, Colorado. On March 9, 1995, the Hard Rock Hotel and
Casino opened in Las Vegas, Nevada. On January 1, 1996 the riverboat casino
portion of Harveys Casino Hotel and Kanesville Queen opened for business in
Council Bluffs, Iowa and, on May 24, 1996, the adjacent land-based hotel, food
and beverage facilities opened.
On April 30, 1996, the Company acquired the 30% minority interest in HWW and
Harveys Wagon Wheel Hotel Casino and HWW became wholly-owned by the Company.
The operations of Harveys Wagon Wheel Hotel Casino are managed by HCCMC, a
wholly-owned subsidiary of the Company. HCCMC receives a fee for management
services provided by HCCMC. The accounts of HWW are consolidated with those of
the Company. All significant intercompany transactions and accounts are
eliminated in consolidation, including the elimination of the management fee.
The Hard Rock Hotel and Casino is owned by HRHC., a Nevada corporation, of which
the Company, through its wholly owned subsidiary, HLVMC, owns 40% of the equity
interest. HLVMC manages the operations of the Hard Rock Hotel and Casino
pursuant to a management agreement between the Company and HRHC and receives
management fees that are included in the Company's consolidated revenues. The
investment in HRHC is accounted for on the equity method.
Harveys Casino/Hotel and Kanesville Queen project is wholly-owned and, since its
opening in 1996, operated by the Company's wholly-owned subsidiary, HIMC. The
accounts of HIMC are consolidated with those of the Company. All significant
intercompany transactions and accounts are eliminated in consolidation.
On May 22, 1996, the Company received $145.5 million in proceeds, net of
underwriting commissions, from the sale of $150 million of Senior Notes.
The changes in the operating results for the second quarter and first six months
of fiscal 1996 as compared to the second quarter and first six months of fiscal
1995 were primarily the result of the opening of the Company's expansion
projects in fiscal 1996 and fiscal 1995. The changes in the Company's financial
condition, liquidity, and capital resources, as discussed below, were primarily
attributable to the Company's expansion efforts, the acquisition of the
minority interests in HWW, the acquisition of the HWW Notes and the public debt
offering of the Senior Notes.
<PAGE>
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Six Months
Ended May 31, Ended May 31
1996 1995 1996 1995
(dollars in thousands)
<S> <C> <C> <C> <C>
Net Revenues
Harveys Resort Hotel Casino $ 30,220 $ 29,312 $ 58,078 $ 57,429
Harveys Wagon Wheel Hotel Casino 11,720 10,963 21,404 21,182
Harveys Casino/Hotel & Kanesville Queen (1) 15,932 - 26,804 -
Harveys Las Vegas Management Company (2) 1,508 374 2,568 371
Corporate and Development (3) - - - -
------- ---------- ----------- --------
Total Net Revenues $ 59,380 $ 40,649 $ 108,854 $ 78,982
Operating Income (Loss):
Harveys Resort Hotel Casino (3) $ 4,143 $ 4,054 $ 6,529 $ 5,957
Harveys Wagon Wheel Hotel Casino (4) 2,687 1,728 3,990 1,676
Harveys Casino/Hotel & Kanesville Queen (1) 2,917 - 1,687 -
Harveys Las Vegas Management Company (2) 1,453 321 2,455 318
Corporate and Development (3) (3,053) (2,548) (5,619) (4,927)
-------- ---------- ---------- ----------
Total Operating Income $ 8,147 $ 3,555 $ 9,042 $ 3,024
======== ========== ========== ==========
EBITDA (5):
Harveys Resort Hotel Casino $ 6,290 $ 6,307 $ 10,895 $ 10,445
Harveys Wagon Wheel Hotel Casino 3,411 2,559 5,484 5,434
Harveys Casino/Hotel & Kanesville Queen 4,375 - 7,251 -
Harveys Las Vegas Management Company 1,508 1,378 2,566 1,378
Corporate and Development (3,042) (2,548) (5,608) (4,927)
-------- --------- -------- ---------
Total EBITDA $ 12,542 $ 7,696 $ 20,588 $ 12,330
</TABLE>
(1) The riverboat casino portion of Harveys Casino/Hotel & Kanesville Queen
commenced casino operations on January 1, 1996, and the land- based hotel
facilities opened on May 24, 1996. The operating results for the three months
and six months ended May 31, 1996 include approximately $0.5 million and $4.1
million of pre-opening expenses, respectively.
(2) Net revenues and operating income for HLVMC, the wholly-owned subsidiary
of the Company that provides management services to the Hard Rock Hotel and
Casino, consist of fees earned by such entity pursuant to the terms of a
management agreement and the 40% equity interest in the income or loss of the
Hard Rock Hotel and Casino. The fiscal 1995 periods include the effect of
HLVMC's pro rata share of after-tax pre-opening expenses of approximately $1.0
million.
(3) Harveys Resort Hotel Casino is a revenue-generating asset owned by the
Company. The operating results relative to corporate and development expenses
have been excluded from those of Harveys Resort Hotel Casino and presented under
Corporate and Development' in the table above. The Company believes the above
presentation may be useful to potential investors in evaluating the financial
performance of Harveys Resort Hotel Casino.
(4) For the six months ended May 31, 1995, includes approximately $2.1
million of pre-opening expenses.
(5) EBITDA (operating income plus depreciation and amortization) should not
be construed as an indicator of the Company's operating performance, or as an
alternative to cash flows from operating activities as a measure of liquidity.
The Company has presented EBITDA solely as supplemental disclosure because the
Company believes that it enhances the understanding of the financial performance
of companies with substantial depreciation and amortization. For the six months
ended May 31, 1995, Harveys Wagon Wheel Hotel Casino's EBITDA excludes
approximately $2.1 million of pre-opening expenses. For the three months and
six months ended May 31, 1995 HLVMC's EBITDA excludes approximately $1.0
million of HLVMC's pro rata share of after-tax pre-opening expenses
associated with the March 1995 opening of the Hard Rock Hotel and Casino. For
the three months and six months ended May 31, 1996, Harveys Casino Hotel &
Kanesville Queen's EBITDA excludes approximately $0.5 million and $4.1 million
of pre-opening expenses, respectively.
<PAGE>
COMPARISON OF THE SECOND QUARTERS ENDED MAY 31, 1996 AND MAY 31, 1995
The Company's consolidated net revenues for the second quarter of fiscal 1996
amounted to approximately $59.4 million, a new record for the Company's
second quarter and an increase of $18.7 million, or 46.1% over net revenues
recorded in the second quarter of fiscal 1995. The increase was attributable
to the $15.9 million of net revenues produced in the first full quarter of
operations of the Company's riverboat casino in Council Bluffs, Iowa. The
increase in net revenues generated during the current year second quarter at
the Company's Lake Tahoe property amounted to approximately $908,000.
Harveys Wagon Wheel Hotel Casino experienced a 6.9% increase in net revenues,
up $757,000 comparing fiscal year 1996 second quarter amounts to those
generated at the Central City, Colorado property's inaugural second quarter
of operations in fiscal 1995. The Hard Rock Hotel and Casino, which opened
during the second quarter in fiscal 1995, contributed an increase of nearly
$1.1 million to the Company's net revenues in the second quarter of fiscal
1996, by way of management fees and equity in the joint venture income.
Fiscal 1996 second quarter casino revenues, enhanced by the riverboat casino
operations in Council Bluffs, amounted to approximately $45.3 million, an
increase of $16.6 million over the prior year comparable quarter. The
initial second quarter of gaming activity on board the riverboat produced
approximately $15.4 million of casino revenue accounting for the majority of
the quarter-over-quarter increase. The Lake Tahoe and Colorado properties
contributed $264,000 and $1 million, respectively, to the increase in casino
revenues. Casino costs and expenses also increased for the comparable
quarterly periods, up $7.9 million to $21.9 million for the current year
period. The riverboat casino accounted for $6.6 million of the increase
while the Lake Tahoe and Colorado operations accounted for approximately
$589,000 and $754,000 of the increase, respectively, due to increases in
casino complimentaries and promotions at both properties.
Lodging revenues for the fiscal 1996 second quarter improved by approximately
$530,000 over the prior year second quarter and amounted to $6.2 million.
Increases in the occupancy rate at the Lake Tahoe hotel and the opening of
the hotel facility in Council Bluffs at quarter-end provided for the lodging
revenues improvement. Lodging profit margins also improved for the quarter-to
- -quarter comparison due to cost control improvements recognized at the
Central City hotel.
Food and beverage revenues for the current fiscal year second quarter
amounted to $9.0 million, an improvement of $1.0 million over the prior year
second quarter. The beverage and limited food service aboard the Council
Bluffs riverboat casino provided $786,000 of the increase. Expanded food and
beverage offerings became available at the Council Bluffs land-based
facilities at the end of May 1996. Food and beverage costs declined by
approximately $162,000, or 3.3 %, in the quarter-to-quarter comparison due to
improvements in cost-of-sales and labor costs at both the Lake Tahoe and
Central City operations.
Other revenues for the fiscal second quarter remained flat with those from
the prior fiscal year second quarter. The contribution from the Company's
management fees and 40% equity participation in the Hard Rock Hotel and
Casino amounted to an increase of approximately $1.1 million. The Hard Rock
Hotel and Casino opened nine days into the second quarter of fiscal 1995
and, consequently, the three month period of the prior year includes the
effect of HLVMC's pro rata share of after-tax pre-opening expenses of
approximately $1 million.
Selling, general and administrative expenses increased by approximately $4.6
million, or 38.2% to $16.8 million for the current fiscal year second
quarter. The first full quarter of operations in Council Bluffs resulted in
approximately $4.3 million of selling, general and administrative expenses,
excluding the recognition of pre-opening expenses. The Central City
operations recognized an improvement in overall selling, general and
administrative expenses of approximately $365,000 from the second quarter of
<PAGE>
fiscal 1995 compared to the current fiscal year second quarter, while these
expenses increased by $163,000 at the Lake Tahoe property. Depreciation and
amortization expenses increased by $750,000. All of the increase was
associated with the opening and operation of the riverboat casino beginning
in January 1996 in Council Bluffs. Net interest expense increased by
$631,000 or 30.3% to approximately $2.7 million for the second quarter of
fiscal 1996. The increase in interest expense was recognized as a result of
the financing of the Council Bluffs project.
With the opening of the Council Bluffs land-based facilities in the second
quarter of fiscal 1996, the Company recognized approximately $508,000 of
pre-opening expenses. In the second quarter of 1995 the Hard Rock Hotel and
Casino results were affected by the expensing of approximately $4.5 million
of pre-opening costs. These charges had previously been incurred in
connection with the development of those properties and deferred until
operations commenced. HLVMC's pro rata after-tax share of the Hard Rock
Hotel and Casino pre-opening expenses amounted to approximately $1 million
and was included in management fees and joint venture revenues.
In May 1996, the Company expensed the remaining unamortized debt issuance
costs related to a $10 million note payable to a private investor that was
retired before maturity. This item was reflected in the 1996 operating
results as an extraordinary loss of approximately $141,000 which was net of
an income tax benefit of approximately $85,000. Consistent with the
description of the use of proceeds relative to the sale of the Senior Notes,
the Company retired the note payable under the Iowa Loan Agreement in June
1996 and recognized approximately $302,000 of expense, before income tax
benefit, by expensing the unamortized debt issuance cost related to that
agreement. In July 1996 the Company will retire the Harveys Notes and
expects to recognize approximately $400,000 of similar expense before income
tax benefits.
The net income for the fiscal 1996 second quarter amounted to
approximately$3.0 million compared to $961,000 for the prior fiscal year
second quarter. If pre-opening expenses, net of income taxes, were excluded
from both periods, and, if the extraordinary loss on early retirement of debt
was excluded from the current year period, the results would have been net
income of approximately $3.5 million for the current fiscal year period and
net income of approximately $2 million for the prior year period.
COMPARISON OF THE SIX MONTH PERIODS ENDED MAY 31, 1996 AND MAY 31, 1995
The Company's consolidated net revenues through the six months ended May 31,
1996 amounted to approximately $108.9 million, an increase of $29.9 million,
or 37.8% over net revenues recorded in the same period of fiscal 1995. The
increase was primarily attributable to the $26.8 million of net revenues
produced in the operations of the Company's riverboat casino in Council
Bluffs, Iowa. Net revenues generated during the current year at the
Company's Lake Tahoe property accounted for approximately $649,000 of the
increase. Harveys Wagon Wheel Hotel Casino experienced a $222,000 increase
in net revenues, comparing fiscal year 1996 amounts to those generated at the
Central City, Colorado property's inaugural operations in fiscal 1995. The
Hard Rock Hotel and Casino, which opened in March, 1995, contributed an
increase of nearly $2.2 million to the Company's net revenues in the first
six months of fiscal 1996, by way of management fees and equity in the joint
venture income. The prior year period's management fees and equity in joint
venture income were diminished by approximately $1 million as a result of
HLVMC's pro rata share of after-tax pre-opening expenses.
Year-to-date casino revenues, including five months of casino revenues from
the riverboat casino operations in Council Bluffs, amounted to approximately
$82.3 million, an increase of $26.8 million over the prior year period. The
<PAGE>
gaming activity on board the riverboat produced approximately $25.9 million
of casino revenue, accounting for the majority of the year-to-date increase.
The Lake Tahoe operations contributed approximately $213,000 and the Colorado
operations contributed approximately $638,000 to the casino revenue increase.
Casino costs and expenses also increased for the comparable year-to-date
periods, up $14.2 million to $41.6 million for the current year. The
riverboat casino accounted for $11.3 million of the increase while the Lake
Tahoe and Colorado operations accounted for approximately $1.3 million and
$1.6 million of the increase, respectively, due in part, to increases in
casino complimentaries and promotions at both properties.
Lodging revenues for the fiscal 1996 six month period improved by
approximately $868,000 over the prior year comparable period and amounted to
$12.3 million. Increases in the occupancy rate at the Lake Tahoe and Central
City hotels and the opening of the hotel facility in Council Bluffs at the
end of May 1996 provided for the lodging revenues improvement. Lodging
profit margins also improved for the six month comparison with improvements
recognized at both Lake Tahoe and Central City.
Food and beverage revenues for the current fiscal year period amounted to
$17.4 million, an improvement of $1.6 million over the 1995 period. The
beverage and limited food service aboard the Council Bluffs riverboat casino
provided $1.3 million of the increase. Expanded food and beverage offerings
were available at the Council Bluffs land-based facilities at the close of
the six month period ended May 31, 1996. Food and beverage costs declined by
approximately $813,000, or 8.2 %, in the period-to-period comparison due to
improvements in cost-of-sales at the Lake Tahoe property and improvements in
cost-of-sales and labor at the Central City operations.
In June 1996, HWW entered into a management agreement with an unaffiliated
management company (the Management Company') whereby the Management Company
will provide substantially all of the food service and a portion of the
beverage service at Harveys Wagon Wheel Hotel Casino commencing August 1,
1996. The managed food service facilities will include a Tony Roma's Famous
For Ribs restaurant. The Management Company will pay HWW a monthly base fee
and potentially an annual percentage fee if the Management Company's food and
beverage revenues exceed an established target. Consequently, operating
results for Harveys Wagon Wheel Hotel Casino for periods after August 1, 1996
will reflect diminished food and beverage revenues and diminished food and
beverage costs and expenses. Other revenues will include fees earned by the
Company and payable by the Management Company.
Other revenues for the fiscal year-to-date period remained flat with those
from the prior fiscal year period. The contribution from the Company's
management fees and 40% equity participation in the Hard Rock Hotel and
Casino amounted to an increase in revenues of approximately $2.2 million.
The Hard Rock Hotel and Casino opened in March 1995 and, consequently, the
six month period of the prior year includes the effect of HLVMC's pro rata
share of after-tax pre-opening expenses of approximately $1 million.
Selling, general and administrative expenses increased by approximately $6.7
million, or 27.2% to $31.2 million for the current fiscal year period. The
operations in Council Bluffs resulted in approximately $7.3 million of
expenses of a selling, general or administrative nature, excluding the
recognition of pre-opening expenses. The Central City operations recognized
an improvement in overall selling, general and administrative expenses of
approximately $411,000 from the fiscal 1995 period compared to the current
fiscal year, while these expenses also decreased by $209,000 at the Lake
Tahoe property. Depreciation and amortization expenses increased by $1.3
million. All of the increase was associated with the opening and operation
<PAGE>
of the riverboat casino beginning in January 1996, in Council Bluffs. Net
interest expense increased by $859,000 or 22.6% to approximately $4.7 million
for the fiscal 1996 period. The increase in interest expense was recognized
as a result of the financing of the Council Bluffs project.
With the opening of the Council Bluffs riverboat casino in January 1996 and
the opening of land-based facilities in May 1996, the Company recognized
approximately $4.1 million of pre-opening expenses. In the prior fiscal year
the Company opened Harveys Wagon Wheel Hotel Casino in the first quarter and
recognized approximately $2.1 million of pre-opening expenses. Additionally,
the Company's equity in the loss from the Hard Rock Hotel and Casino included
the prorata effects of approximately $4.5 million of pre-opening costs
expensed at the Hard Rock Hotel and Casino during the second quarter of
fiscal 1995. These charges had previously been incurred in connection with
the development of the properties and deferred until operations commenced.
In May 1996, the Company expensed the remaining unamortized debt issuance
costs related to a $10 million note payable to a private investor that was
retired before maturity. This item was reflected in the 1996 operating
results as an extraordinary loss of approximately $141,000 which was net of
an income tax benefit of approximately $85,000. Consistent with the
description of the use of proceeds relative to the sale of the Senior Notes,
the Company retired the note payable under the Iowa Loan Agreement in June
1996 and recognized approximately $302,000 of expense, before income tax
benefit, by expensing the unamortized debt issuance cost related to that
agreement. In July 1996 the Company will retire the Harveys Notes and
expects to recognize approximately $400,000 of similar expense before income
tax benefits.
The net income for the fiscal 1996 period amounted to approximately $2.4
million compared to a loss of $156,000 for the prior fiscal year period. If
pre-opening expenses, net of taxes, were excluded from both periods, and, if
the extraordinary loss on early retirement of debt was excluded form the
current year period, the results would have been net income of approximately
$5.1 million for the current fiscal year period and approximately $1.8
million for the comparable period of fiscal 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of liquidity and capital resources to date have
been cash flow from operations, borrowings under various credit arrangements,
and in fiscal 1996, the net proceeds of $145.5 million, net of underwriting
commissions, from the Company's public debt offering.
At May 31, 1996 the Company had approximately $ 23.9 million of cash and cash
equivalents and a maximum of $147.8 million available under the Credit
Facility, subject to certain financial covenant compliance. Cash flow from
operations for the first half of fiscal 1996 was approximately $21.5 million
compared to $13.8 million for the first half of fiscal 1995.
During the first half of fiscal 1996, the Company continued to fund the
development and construction of the Council Bluffs project with cash
expenditures of $42.5 million . Additionally, the Company made cash payments
for dividends of approximately $768,000 during the six month period and
incurred additional cash expenditures of approximately $6.1 million in
connection with capital improvements and replacements at Harveys Resort Hotel
Casino.
In addition, on April 30, 1996, in agreement with the terms of the Debt
Exchange, the Company paid the holders of the HWW Notes an aggregate of $6
million in cash and an aggregate of $8 million of the subordinated Harveys
Notes in exchange for all of the outstanding HWW Notes and unpaid interest
accrued thereon. On such date, in agreement with the terms of the Equity
Exchange, the Company also exchanged 382,500 shares of the Company's common
stock for (i) 30% of the equity interests of HWW, (ii) the rights to an
approximately $3 million priority return from HWW and (iii) an option to
acquire an additional 5% of the equity interests in HWW.
<PAGE>
On May 22, 1996, the Company completed its public debt offering of the $150
million in Senior Notes. The proceeds, $145.5 million net of underwriting
commissions, were used to paydown the entire outstanding balance under the
Credit Facility and to payoff a $10 million note that was executed in
February 1996 with a private investor. The Company expensed the associated
unamortized debt issuance costs upon the retirement of the $10 million note.
The expense amounted to approximately $141,000, net of an income tax benefit
of approximately $85,000.
In May 1996, in preparation for the public debt offering, the Company
negotiated a release of its guarantee of the amount outstanding under HRHC's
reducing revolving credit facility. The Company paid a fee of approximately
$385,000 to the banks participating in the reducing revolving credit facility
in connection with the release.
As a result of the Debt Exchange, the Equity Exchange, the public debt
offering and the use of proceeds therefrom, and borrowings to fund capital
expenditures, the Company's long-term debt at May 31, 1996 amounted to
approximately $168.2 million, compared to approximately $126.7 million at
November 30, 1995.
After May 31, 1996, and after the required notification periods, the Company
used available cash and borrowings under the Credit Facility to payoff the $8
million principal amount, and accrued interest thereon, of the Harveys Notes
issued in the Debt Exchange and to payoff the approximately $19 million of
principal, and accrued interest thereon, outstanding under the Iowa Loan
Agreement.
The Harveys Notes were redeemed at a redemption price of 97.5%, or $7.8
million, plus accrued and unpaid interest. The Company will recognize
approximately $400,000, before income tax benefits, as a loss on early
retirement of debt by expensing the unamortized debt issuance costs related
to the Harveys Notes.
The note payable under the Iowa Loan Agreement was retired at par plus
accrued and unpaid interest. The unamortized debt issuance costs related to
the Iowa Loan Agreement amounted to approximately $302, 000 at retirement and
were expensed in June 1996.
As a result of these transactions subsequent to the end of the second quarter
and borrowing to fund the Council Bluffs project, the Company's current debt
consists of the $150 million in Senior Notes, $25 million outstanding under
the Credit Facility, $4.2 million outstanding under HWW's equipment financing
notes payable to a financing company and approximately $371,000 of other
debt.
The equipment financing agreement entered into by HWW allowed for the
financing of up to $7.5 million of gaming and associated equipment. Under
the terms of the agreement, repayments of principal and interest are due in
36 monthly installments. The equipment financing agreement is secured by all
of the gaming and associated equipment financed under the agreement. The
obligation under the financing agreement is guaranteed by the Company.
The maximum available principal balance under the Credit Facility of $150
million is reduced by outstanding borrowings and letter of credit exposure.
At November 30, 1995 the outstanding borrowings under the Credit Facility
amounted to $115 million and letters of credit exposure amounted to
approximately $1.7 million leaving $33.3 million available. At May 31, 1996,
there were no outstanding borrowings under the Credit Facility, the letters
of credit exposure had increased to $2.2 million and the maximum amount
available was approximately $147.8 million, subject to compliance with
financial covenants.
<PAGE>
The Credit Facility matures on August 16, 2000. There are no required
repayments of principal under the Credit Facility in 1996. In 1997, required
repayments of principal, assuming maximum principal amounts are outstanding,
total approximately $15 million. The year-end maximum principal balance
outstanding under the Credit Facility reduces to $135 million in 1997, $120
million in 1998 and $97.5 million in 1999. The Company is required to make
payments reducing the principal balance outstanding under the Credit Facility
to the applicable maximum permitted principal balance on February 1, of each
of 1997, 1998, 1999 and 2000. The Credit Facility is secured by all of the
real and personal property of, (i) Harveys Resort Hotel Casino, (ii) HIMC and
(iii) HWW, including a pledge of the subsidiaries' stock, as well as all of
the contracts the Company has entered into in connection with its ownership
and operation of , (i)Harveys Resort Hotel Casino, (ii) HIMC and (iii) HWW.
Interest on borrowings outstanding under the Credit Facility is payable, at
the Company's option, at either the LIBOR or the prime rate of Wells Fargo
Bank, formerly First Interstate Bank of Nevada, N. A. ( Wells Fargo'), in
each case plus an applicable margin. The applicable margin is determined
with reference to the Company's funded debt to EBITDA ratio. The applicable
margins as of May 31, 1996 were 2.0% with respect to the LIBOR based interest
rate, and 0.5%, with respect to the Wells Fargo prime rate based interest
rate.
The Credit Facility contains certain financial and other covenants. The
financial covenants prevent the Company from making any investments in or
advances to affiliates without the prior written consent of the lenders under
the Credit Facility. The covenants allow the declaration and payment of
dividends without the prior written consent of the lenders if certain fixed
charge coverage ratios are maintained. The covenants require the Company to
maintain certain set standards with respect to (i) minimum tangible net
worth, (ii) fixed charge coverage ratios and (iii) minimum annual capital
expenditures. The financial covenants also limit the Company's ability to
incur additional indebtedness.
The Company pays Wells Fargo an annual agency fee of $100,000 for its
services as agent of the lenders under the Credit Facility and an annual
non-usage fee of or 1/2 of 1% of the average daily amount of the unused portions
of funds committed under the Credit Facility, depending upon the applicable
interest rate margin.
The Senior Notes are governed by an indenture ( the Indenture') and are
general unsecured obligations of the Company, subordinated in right of
payment to all existing and future Senior Debt of the Company ( as defined in
the Indenture) . The Senior Notes are guaranteed by each of the Restricted
Subsidiaries of the Company ( as defined in the Indenture). Each
guarantee is a general unsecured obligation of the guaranteeing Restricted
Subsidiary, subordinated in right of payment to all existing and future
Senior Debt of each guaranteeing Restricted Subsidiary. At May 31, 1996, the
guaranteeing Restricted Subsidiaries were HCCMC, HWW, HIMC and HLVMC.
Interest on the Senior Notes is payable semi-annually on June 1 and December
1 of each year, commencing December 1, 1996. The Senior Notes are redeemable
at the option of the Company, in whole or in part at any time on or after
June 1, 2001 at prices ranging from 105.313% of the principal amount plus
accrued and unpaid interest, to 100% of the principal amount plus accrued
and unpaid interest beginning June 1, 2004 and thereafter. Upon a Change of
Control ( as defined in the Indenture) each holder of the Senior Notes will
have the right to require the Company to repurchase such holder's Senior
Notes at 101% of the principal amount plus accrued and unpaid interest to the
repurchase date.
<PAGE>
The Indenture contains certain covenants that impose limitation on, among
other things, (i) the incurrance of additional indebtedness by the Company or
any Restricted Subsidiary, (ii) the payment of dividends, (iii) the
repurchase of capital stock and the making of certain other Restricted
Payments and Restricted Investments (as defined in the Indenture) by the
Company or any Restricted Subsidiary, (iv) mergers, consolidations and sales
of assets by the Company or any Restricted Subsidiary, (v) the creation or
incurrance of liens on the assets of the Company or any Restricted Subsidiary
and (vi) transactions by the Company or any of its subsidiaries with
Affiliates ( as defined in the Indenture). These limitations are subject to
a number of qualifications and exceptions as described in the Indenture.
The Company believes that its existing cash and cash equivalents, cash flows
from operations, and its borrowing capacity under the Credit Facility are
sufficient to meet the cash requirements of its existing operations,
including, (i) the completion of construction of the Council Bluffs project,
(ii) capital improvements and replacements at the operating properties, (iii)
the construction of a parking garage adjacent to Harveys Wagon Wheel Hotel
Casino and (iv) debt service requirements. The existing sources of cash also
provide the Company some flexibility in potential expansion of current
operations or in its pursuit of new gaming opportunities in existing and
emerging jurisdictions. The realization of such expansion opportunities may
require capital investments in excess of current resources and additional
financing may be required. The Company believes that additional funds could
be obtained through additional debt or equity financing. However, no
assurance can be made that such financing would be available at terms
acceptable to the Company, if at all .
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Not Applicable
Item 2 Changes in Securities.
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual meeting was held on March 28, 1996
Matters voted upon at the meeting were the election of three directors,
each to a three year term, and approval of the 1996 Omnibus Incentive
Plan. In respect to the election of directors the following results
were tabulated: William B. Ledbetter, 8,660,586 votes for, 24,148
votes withheld, 719,845 abstentions or broker non-votes; Kirk B.
Ledbetter, 8,660,482 votes for, 24,252 votes withheld, 719,845
abstentions or broker non-votes; Donald D. Snyder, 8,660,897 votes for,
23,837 votes withheld, 719,845 abstentions or broker non-votes. In
respect to the approval of the 1996 Omnibus Incentive Plan the
following results were tabulated: 7,138,894 votes for, 748,129 votes
against, 1,517,556 abstentions or broker non-votes.
Item 5. Other Information.
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
See attached Exhibit Index
(b) Reports on Form 8-K
None
<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 thereunto duly authorized.
HARVEYS CASINO RESORTS
Registrant
Date: July 12, 1995 /s/ John J. McLaughlin
-------------------------
John J. McLaughlin,
Senior Vice President,
Chief Financial Officer andTreasurer
(Authorized Officer and Principal
Financial Officer)
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
2.1 Acquisition Agreement, dated as of March 28, 1996,between the
Registrant and Mountain City Casino Partners, L. P. (9)
3.1 Restated Articles of Incorporation of the Registrant (1)
3.2 Sixth Amended Bylaws of the Registrant (11)
4.1 Form of Stock Certificate of the Registrant (1)
4.2 Indenture, dated as of April 30, 1996 between the Registrant
and IBJ Schroder Bank and Trust, as Trustee (including form
of Note) (9)
4.3 Indenture, dated as of May 15, 1996 by and among the Registrant
( the Issuer') Harveys Wagon Wheel Casino Limited Liability
Company, Harveys C. C. Management Company, Inc., Harveys Iowa
Management Company, Inc. and Harveys L. V. Management Company,
Inc. ( the Guarantors') and IBJ Schroder Bank & Trust Company
as Trustee ( including form of Note) (10)
4.4 First Supplemental Indenture, dated as of June 5, 1996,
supplementing the Indenture dated as of May 15, 1996 among
the Registrant ( the Issuer'), Harveys Wagon Wheel Casino
Limited Liability Company, Harveys C. C. Management Company,
Inc., Harveys Iowa Management Company, Inc. and Harveys L. V.
Management Company, Inc. (the Guarantors'), and IBJ Schroder
Bank and Trust Company as Trustee (12)
10.1 Amended and Restated Loan Agreement, dated April 20, 1989,
between the Registrant and First Interstate Bank of Nevada,
N.A., First Interstate Bank of California, First Interstate
Bank of Oregon, N.A., First Interstate Bank of Washington, N.A.,
First Interstate Bank of Denver, N.A., West One Bank, Idaho,
N.A., National Bank of Detroit and First Interstate Bank of Utah,
N.A. (1)
10.2 Amended and Restated Promissory Note, dated April 20, 1989,
between the Registrant and First Interstate Bank of Nevada,
N.A., First Interstate Bank of California, First Interstate
Bank of Oregon, N.A., First Interstate Bank of Washington,
N.A.,First Interstate Bank of Denver, N.A., West One Bank,
Idaho, N.A.,National Bank of Detroit and First Interstate Bank
of Utah, N.A. (1)
.
10.3 Rate Reduction Agreement, dated February 27, 1990, between
First Interstate Bank of Nevada, N.A., First Interstate Bank of
California, First Interstate Bank of Oregon, N.A., First Interstate
Bank of Washington , N.A., First Interstate Bank of Denver,
N.A., West One Bank, Idaho, N.A., National Bank of Detroit and
First Interstate Bank of Utah, N.A. and the Registrant. (1)
10.4 First Amendment to Amended and Restated Loan Agreement, dated
August 30, 1991, between the Registrant and First Interstate
Bank of Nevada, N.A., First Interstate Bank of California,
First Interstate Bank of Denver, N.A., West One Bank, Idaho,
N.A., National Bank of Detroit and First Interstate Bank of
Utah, N.A. (1)
10.5 Second Amended and Restated Promissory Note, dated August 30,
1991, between the Registrant and First Interstate Bank of
Nevada, N.A., First Interstate Bank of California, First Inter
state Bank of Denver, N.A., West One Bank, Idaho, N.A.,
National Bank of Detroit and First Interstate Bank of Utah,
N.A. (1)
10.6 Second Amendment to Amended and Restated Loan Agreement and
Amendment to A/R Note, dated March 30, 1992, between the
Registrant and First Interstate Bank of Nevada, N.A., First
Interstate Bank of California, First Interstate Bank of
Denver, N.A., West One Bank, Idaho, N.A., National Bank of
Detroit and First Interstate Bank of Utah, N.A. (1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
10.7 Letter Agreement, dated November 25, 1992, between the
Registrant and First Interstate Bank of Nevada, N.A., First Interstate
Bank of California, First Interstate Bank of Denver, N.A., West One
Bank, Idaho, N.A., National Bank of Det roit and First Interstate Bank of
Utah, N.A. (1)
10.8 Third Amendment to Amended and Restated Loan Agreement, dated January 8,
1993, between the Registrant and First Interstate Bank of Nevada, N.A.,
First Interstate Bank of California First Interstate Bank of Denver,
N.A., West One Bank, Idaho, N.A. ,NBD Bank, N.A., and First Interstate
Bank of Utah, N.A. (1)
10.9 Third Amended and Restated Promissory Note, dated January 15, 1993,
between the Registrant and FirstInterstate Bank of Nevada, N.A., First
Interstate Bank of California, First Interstate Bank of Denver, N.A.,
West One Bank, Idaho, N.A. ,NBD Bank, N.A., and First Interstate Bank of
Utah, N.A. (1)
10.10 Fourth Amendment to Amended and Restated Loan Agreement (1)
10.11 Net Lease Agreement, dated February 28, 1985, between Park Cattle Co.
and the Registrant (1)
10.12 Lease, dated July 9, 1973, between Park Cattle Co. and the Registrant (1)
10.13 Deed of Trust with Assignment of Rents and Security Agreement (Nevada
Property), dated March 15, 1985, between the Registrant and Lawyers
Title of Northern Nevada, as Trustee, and First Interstate Bank of
Nevada, N.A., First Interstate Bank of California, National Bank of
Detroit, First Interstate Bank of Denver, N.A.,First Interstate of
Washington, N.A., and First Interstate Bank of Utah, N.A. (1)
10.14 First Amendment to Deed of Trust with Assignment of Rents and Security
Agreement (Nevada Property), dated April 20, 1989, between the Registrant
and Western Title Company, Inc.,as Trustee, and First Interstate
Bank of Nevada, N.A., First Interstate Bank of California, National
Bank of Detroit, First Interstate Bank of Denver, N.A.,First Interstate
Bank of Washington, N.A., First Interstate Bank of Utah, N.A.,
First Interstate Bank of Oregon, N.A., and West One Bank, Idaho, N.A. (1)
10.15 Deed of Trust and Assignment of Rents (California Property), dated March
15, 1985, between the Registrant and Lawyers Title Insurance Corporation,
as Trustee, and First Interstate Bank of Nevada, N.A., First
Interstate Bank of California, National Bank of Detroit, First
Interstate Bank of Denver, N.A.,First Interstate Bank of Washington,
N.A., and First Interstate Bank of Utah, N.A. (1)
10.16 First Amendment to Deed of Trust with Assignment of rents and Security
Agreement (California Property), dated April 20, 1989, between the
Registrant and Western Title Company, Inc., as Trustee, and First
Interstate Bank of Nevada, N.A., First Interstate Bank of California,
National Bank of Detroit, First Interstate Bank of Denver, N.A.,
First Interstate of Washington, N.A., and First Interstate Bank of Utah,
N.A., First Interstate Bank of Oregon, N.A., and West One Bank Idaho,
N.A. (1)
10.17 Second Amendment to Deed of Trust with Assignment of Rents and Security
Agreement (Nevada Property), dated January 12, 1993, between the
Registrant and Western Title Company, Inc., as Trustee, and First
Interstate Bank of Nevada, N.A., First Interstate Bank of California,
First Interstate Bank of Denver, N.A.,First Interstate Bank of Utah,
N.A., West One Bank, Idaho, and NBD Bank, N.A. (1)
10.18 Second Amendment to Deed of Trust with Assignment of Rents and Security
Agreement (California Property), dated January 12, 1993, between the
Registrant and Western Title Company, Inc., as Trustee, and First
Interstate Bank of Nevada, N.A., First Interstate Bank of California,
First Interstate Bank of Denver, N.A.,First Interstate Bank of Utah,
N.A., West One Bank, Idaho, and NBD Bank, N.A. (1)
10.19 Employment Agreement, dated November 1, 1993, between Richard F.
Kudrna, Sr. and the Registrant (1)
10.20 Employment Agreement, dated November 30, 1993,between Thomas M. Yturbide
and the Registrant (1)
10.21 Employment Agreement, dated November 30, 1993, between William B.
Ledbetter and the Registrant (1)
10.22 Collective Bargaining Agreements between the Registrant and
International Alliance of Theatrical Stage Employees and Moving Picture
Machine Operators (1)
10.23 Outside Directors Retirement Plan, Amended (1)
10.24 Director Emerita Resolution - Beverlee Ledbetter (1)
10.25 Supplemental Executive Retirement Plan (1)
10.26 Senior Supplemental Executive Retirement Plan (1)
10.27 Honorary Director Resolution - Vera Gross (1)
10.28 Stockholders Agreement among the Registrant, Lily Pond
Investments, Inc. and Hard Rock Hotel, Inc. (1)
10.29 Management Agreement between the Registrant and Hard Rock Hotel, Inc.
(1)
10.30 Definitive Agreement between Harveys C.C. Management
Company and Mountain City Casino Partners (1)
10.31 Management Agreement between the Registrant and
Harveys Wagon Wheel Casino Limited Liability Company (1)
10.32 Form of Assignment and Assumption Agreement between
Mountain City Casino Partners, L.P. and Harveys Wagon
Wheel Casino Limited Liability Company (1)
10.33 Loan Agreement between Harveys Wagon Wheel Casino
Limited Liability Company and Mountain City Casino Partners, L.P. (1)
10.34 Employment Agreement, dated November 29, 1993, between
Charles W. Scharer and the Registrant (1)
10.35 1993 Omnibus Incentive Plan (2)
10.36 1993 Non-Employee Directors Stock Option Program (2)
10.37 Form of Deferred Compensation Agreement and Schedule of 1994
Participants (2)
10.38 Form of Indemnification Agreement for Directors and Officers
and Schedule of Indemnities (2)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C>
10.39 Loan Agreement among Hard Rock Hotel, Inc., as borrower, the
Registrant, as guarantor, First Interstate Bank of Nevada, N.A., as
agent, and the several lenders thereunder (2)
10.40 Promissory Note among Hard Rock Hotel, Inc., as borrower, the
Registrant, as guarantor, First Interstate Bank of Nevada, N.A., as
agent, and the several lenders thereunder (2)
10.41 Guaranty of Loan executed by the Registrant (2)
10.42 Amendment No. 1 to 1993 Non-Employee Directors Stock Option Program (2)
10.43 $22,200,000 Construction Loan Agreement between Harveys Wagon Wheel
Casino Limited Liability Company, as borrower, and the Registrant,
as lender (3)
10.44 Secured Promissory Note between Harveys Wagon Wheel Casino Limited
Liability Company, as maker, and the Registrant, as holder (3)
10.45 Deed of Trust, Security Agreement and Financing Agreement among
Harveys Wagon Wheel Casino Limited Liability Company, as Grantor,
the Public Trustee of the County of Gilpin, State of Colorado, as
trustee, and the Registrant, as beneficiary (3)
10.46 Security Agreement between Harveys Wagon Wheel Casino Limited
Liability Company, as obligor, and the Registrant, as lender (3)
10.47 Assignment of Rents, Income and Other Contract Rights between
Harveys Wagon Wheel Casino Limited Liability Company, as borrower, and
the Registrant, as lender (3)
10.48 Subordination Agreement among 150 Rodeo Partners,Inc., the Registrant,
and Harveys Wagon Wheel Casino Limited Liability Company (3)
10.49 Fifth Amendment to Amended and Restated Loan Agreement, dated November
8, 1994, between the Registrant, and First Interstate Bank of Nevada,
N.A., West One Bank, Idaho, Society Generale, The Daiwa Bank, Limited,
United States National Bank of Oregon, U.S. Bank of Nevada and First
Security Bank of Idaho, N.A. (4)
10.50 First Amendment to Construction Loan Agreement, dated November 1, 1994,
between Harveys Wagon Wheel Casino Limited Liability Company and the
Registrant (4)
10.51 Amended and Restated Secured Promissory Note, dated November 1, 1994,
between Harveys Wagon Wheel Casino Limited Liability Company and the
Registrant (4)
10.52 First Amendment to Deed of Trust, Security Agreement and Financing
Statement, dated November 1, 1994, between Harveys Wagon Wheel Casino
Limited Liability Company and the Registrant (4)
10.53 First Amendment to Security Agreement, dated November 1, 1994, between
Harveys Wagon Wheel Casino Limited Liability Company and the Registrant
(4)
10.54 First Amendment to Assignment of Rents, Income and Other Contract
Rights, dated November 1, 1994, between Harveys Wagon Wheel Casino
Limited Liability Company and the Registrant (4)
10.55 Amended and Restated Subordination Agreement, dated November 1, 1994,
by and between 150 Rodeo Partners, Inc. and the Registrant and Harveys
Wagon Wheel Casino Limited Liability Company (4)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C>
10.56 First Amendment to Loan Agreement, dated November 8, 1994, by and among
First Interstate Bank of Nevada, N.A., Societe Generale, NBD Bank, N.A.,
United States National Bank of Oregon, West One Bank, Idaho, First
Security Bank of Idaho, N.A., The Daiwa Bank, Limited, and U.S. Bank of
Nevada and First Interstate of Nevada, N.A., Hard Rock Hotel, Inc., and
Harveys Wagon Wheel, Inc. (4)
10.57 First Amendment to Guaranty of Loan, dated November 8,
1994, between the Registrant and First Interstate Bank
of Nevada, N.A., Societe Generale, NBD Bank, N.A., United States
National Bank of Oregon, West One Bank, Idaho, First Security Bank of
Idaho, N.A., The Daiwa Bank, Limited, and U.S. Bank of Nevada (4)
10.58 Employment Agreement dated November 17, 1993, by and between the
Registrant and Bob Hall (4)
10.59 Employment Agreement dated January 13, 1994, by and between the
Registrant and Stephen L. Cavallaro (4)
10.60 Excursion Boat Sponsorship and Operations Agreement, dated August 22,
1994, by and between Iowa West Racing Association and Harveys Iowa
Management Company, Inc. (4)
10.61 Purchase Agreement, dated September 12, 1994, by and between the City
of Council Bluffs and Harveys Iowa Management Co. (4)
10.62 Commitment Letter, dated January 18, 1995, between the
Registrant and First Interstate Bank of
Nevada, N.A. (4)
10.63 Form of Deferred Compensation Agreement and Schedule of 1995
Participants (5)
10.64 Long-term Incentive Plan Guidelines (1994-1996 Performance Period) (5)
10.65 Short-term Incentive Plan (5)
10.66 Employment Agreement dated May 9, 1995 by and between the Registrant and
Gary Armentrout. (6)
10.67 Loan Purchase Agreement (with Full Recourse to Seller)
dated March 10, 1995 by and between the Registrant ("Sellers") and
First Interstate Bank of Nevada, N.A. ("Buyer") (6)
10.68 Option Agreement dated March 10, 1995 by and between First Interstate
Bank of Nevada, N.A. and the Registrant. (6)
10.69 Employment Agreement dated August 5, 1995, by and between the
Registrant and Gary R. Selesner. (7)
10.70 Employment Agreement dated August 14, 1995, by and between the
Registrant and John McLaughlin. (7)
10.71 Employment Agreement dated August 14, 1995, by and between the
Registrant and Kevin Servatius. (7)
10.72 Employment Agreement dated August 24, 1995, by and between the
Registrant and Edward B. Barraco. (7)
10.73 Employment Agreement dated August 21, 1995, by and between the
Registrant and David J. Hurst. (7)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C>
10.74 Employment Agreement dated August 21, 1995, by and between the
Registrant and Lou R. Kelmanson. (7)
10.75 Reducing Revolving Credit Agreement, dated as of August 14, 1995, by
and among the Registrant and Harveys C.C. Management Company, Inc.,
Harveys Iowa Management Company, Inc., (the "Borrowers")and First
Interstate Bank of Nevada, N.A., First Interstate Bank of California,
Bank of the West, First Security Bank of Idaho, N.A., Imperial Bank,
Norwest Bank of Nebraska, N.A., NBD Bank, Societe Generale, The Daiwa
Bank, Limited, U.S. Bank of Nevada, West One Bank, Idaho and Argentbank,
(the 'Lenders')
10.76 Second Amendment to Loan Agreement, dated November 7, 1995, by and
among First Interstate Bank of Nevada, N. A. ,Societe Generale, NBD
Bank, N. A., United States National Bank of Oregon, West One Bank,
Idaho, First Security Bank of Idaho, N. A., The Daiwa Bank, Limited,
U. S. Bank of Nevada, Hard Rock Hotel, Inc. and Harveys Casino Resorts.
(8)
10.77 Second Amended and Restated Reducing Revolving Credit Promissory Note,
dated November 7, 1995 between First Interstate Bank of Nevada,
N. A. as Agent Bank and Hard Rock Hotel, Inc. (8)
10.78 Second Amendment to Guaranty of Loan, dated November 7,
1995, between Harveys Casino Resorts and First Interstate
Bank of Nevada, N. A., Societe Generale, NBD Bank, N. A.,
United State National Bank of Oregon, West One Bank,
Idaho, First Security Bank of Idaho, N. A., The Daiwa
Bank, Limited and U. S. Bank of Nevada. (8)
10.79 Employment Agreement, dated October 22, 1995 and
effective December 1, 1995 by and between Harveys
Casino Resorts and Thomas M. Yturbide. (8)
10.80 Employment Agreement, dated October 22, 1996 and
effective December 1, 1995 by and between Harveys Casino
Resorts and Charles W. Scharer. (8)
10.81 Modification of Employment Agreement, dated November 21,
1995 by and between Harveys Casino Resorts and Richard F.
Kudrna, Sr. (8)
10.82 Harveys Casino Resorts Management Incentive Plan, approved
August 8, 1995. (8)
10.83 Long-term Incentive Plan Guidelines (1995-1997 Performance
Period) (8)
10.84 1996 Omnibus Incentive Plan (10)
10.85 First Amendment, dated as of May 15, 1996, to Reducing
Revolving Credit Agreement by and among the Registrant,
Harveys C. C. Management Company, Inc., Harveys Wagon Wheel
Casino Limited Liability Company and Harveys Iowa Management
Company, Inc. (the Borrowers'),Wells Fargo Bank, N. A., Bank
of the West, First Security Bank of Idaho, N. A., Imperial
Bank, Norwest Bank of Nebraska, N. A., NBD Bank, Societe Generale,
The Sumitomo Bank Limited, Chicago Branch, U. S. Bank of Nevada,
West One Bank, Idaho and Argentbank (the Lenders') (11)
10.86 Second Amendment, dated as of May 23, 1996, to Reducing
Revolving Credit Agreement by and among the Registrant,
Harveys C. C. Management Company, Inc., Harveys Wagon Wheel
Casino Limited Liability Company and Harveys Iowa
Management Company, Inc. (the Borrowers'), Wells Fargo
Bank, N. A., Bank of the West, First Security Bank of
Idaho, N. A., Imperial Bank, Norwest Bank of Nebraska,
N. A., NBD Bank, Societe Generale, The Sumitomo Bank
Limited, Chicago Branch, U. S. Bank of Nevada, West One
Bank, Idaho and Argentbank (the Lenders') (11)
21.1 List of Subsidiaries of the Registrant (7)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description Page
<S> <C>
27 Financial Data Schedule (11)
_______________________________________________
(1) Incorporated herein by reference to Registration Statement No. 33-70670.
(2) Incorporated herein by reference to the Registrant's Quarterly Report
on Form 10-Q for the period ended February 28,1994.
(3) Incorporated herein by reference to the Registrant's Quarterly Report
on Form 10-Q for the period ended May 31, 1994.
(4) Incorporated herein by reference to Registrant's Annual
Report on Form 10-K for the period ended November 30,
1994.
(5) Incorporated herein by reference to Registrant's
Quarterly Report on Form 10-Q for the period ended
February 28, 1995.
(6) Incorporated herein by reference to Registrant's Quarterly Report on
Form 10-Q for the period ended May 31, 1995.
(7) Incorporated herein by reference to Registrant's
Quarterly Report on Form 10-Q for the period ended August
31 1995.
(8) Incorporated herein by reference to Registrant's Annual
Report on Form 10-K for the period ended
November 30, 1995
(9) Incorporated herein by reference to Registration
Statement No. 333-616
(10) Incorporated herein by reference to Registration
Statement No. 333-3576
(11) Filed herewith
(12) Incorporated herein by reference to Registrant's Current
Report on Form 8-K filed June 14, 1996
</TABLE>
<PAGE>
SIXTH AMENDED BYLAWS
OF
HARVEYS CASINO RESORTS
April 25, 1996
<PAGE>
TABLE OF CONTENTS
ARTICLE I - NAME AND OFFICE.
Section 1 - Name
Section 2 - Principal Office.
ARTICLE II - SHAREHOLDERS
Section 1 - Annual Meetings
Section 2 - Notice of Annual Meetings
Section 3 - Special Meetings
Section 4 - Notice of Special Meetings
Section 5 - Waiver of Notice
Section 6 - Quorum
Section 7 - Voting.
Section 8 - Order of Business
Section 9 - Conduct of Election
ARTICLE III - BOARD OF DIRECTORS
Section 1 - Number
Section 2 - Classification and Elections
Section 3 - Initial Classification of Board of Directors
Section 4 - Duties and Powers
Section 5 - Place of Meetings
Section 6 - Annual Meeting of Directors; Notice
Section 7 - Regular Meetings of Directors; Notice
Section 8 - Special Meetings of Directors; Notice
Section 9 - Waiver of Notice
Section 10 - Quorum and Adjournments
Section 11 - Order of Business
Section 12 - Action by Unanimous Written Consent of Directors
Section 13 - Manner of Acting
Section 14 - Telephonic Meetings
Section 15 - Vacancies
Section 16 - Resignation
Section 17 - Removal
Section 18 - Contracts
Section 19 - Encumbering or Conveying Corporate Property
Section 20 - Committees
Section 21 - Delegation of Authority
Section 22 - Salaries
<PAGE>
ARTICLE IV - OFFICERS
Section 1 - Titles
Section 2 - Election
Section 3 - Appointment of Officers
Section 4 - Term of Office
Section 5 - Resignation
Section 6 - Removal
Section 7 - Vacancies
Section 8 - Duties of Officers
Section 9 - The Chairperson
Section 10 - The Chief Executive Officer/President
Section 11 - The Treasurer
Section 12 - The Secretary
Section 13 - The Vice-Chairperson
Section 14 - Appointment of Assistants to Officers
ARTICLE V - SHARES OF STOCK
Section 1 - Certificates of Stock
Section 2 - Issuance
Section 3 - Lost or Destroyed Certificates
Section 4 - Transfer of Shares
Section 5 - Record Date
ARTICLE VI - DIVIDENDS
ARTICLE VII - AMENDMENTS
Section 1 - By Shareholders
Section 2 - By Directors
ARTICLE VIII - CORPORATE SEAL
ARTICLE IX - INDEMNIFICATION
ARTICLE X - GENERAL PROVISIONS
Section 1 - Depositories
Section 2 - Other Securities
<PAGE>
SIXTH AMENDED BYLAWS
OF
HARVEYS CASINO RESORTS
ARTICLE I - NAME AND OFFICE
SECTION 1 - NAME:
The name of the Corporation shall be Harveys Casino Resorts.
SECTION 2 - PRINCIPAL OFFICE:
The principal office of the Corporation shall be located in Douglas County,
Nevada.
The Corporation may also maintain offices at such other places within or without
the United States as the Board of Directors may, from time to time, determine.
ARTICLE II - SHAREHOLDERS
SECTION 1 - ANNUAL MEETINGS:
The annual meeting of the Shareholders of the Corporation shall be held on a
date and at a time selected by the Board of Directors and at such place as is
designated by the Board of Directors each year, for the purpose of appointing
the Outside Auditors for the ensuing fiscal year, electing Directors of the
Corporation to serve during the ensuing year and for the transaction of such
other business as may be brought before the meeting.
SECTION 2 - NOTICE OF ANNUAL MEETINGS:
At least ten (10) days written notice specifying the day and hour and place,
when and where the annual meeting shall be convened, shall be mailed in a United
States Post Office, addressed to each of the Shareholders of record at the time
of issuing the notice, at his or her or its address last known, as the same
appears on the books of the Corporation.
<PAGE>
If the current address of any Shareholder does not appear upon the books of the
Corporation, it will be sufficient to address any notice to such Shareholder at
the last address furnished the Corporation by such Shareholder.
Nevertheless, a failure to give such notice, or any irregularity in such notice,
shall not affect the validity of annual meetings or any proceedings had at such
meeting, and in such event these Bylaws shall be, and shall be deemed to be,
sufficient notice of such meeting without requirement of further notice.
SECTION 3 - SPECIAL MEETINGS:
Special meetings of the Shareholders may be held at the office of the
Corporation in the State of Nevada, or elsewhere, whenever called by the
Chairperson of the Board of Directors, or by a majority of the Board of
Directors, or by vote of, or by an instrument in writing signed by the holders
of at least fifty-one percent (51%) of the issued and outstanding capital stock
of the Corporation.
SECTION 4 - NOTICE OF SPECIAL MEETINGS:
At least ten (10) days written notice of such meeting, specifying the day and
hour and place, when and where such meeting shall be convened, and the objects
for calling the same, shall be mailed in the United States Post Office,
addressed to each of the Shareholders of record at the time of issuing the
notice, at his or her or its address last known, as the same appears on the
books of the Corporation.
If the address of any Shareholders do not appear upon the books of the
Corporation,it will be sufficient to address any notice to such Shareholder at
the last address furnished the Corporation by such Shareholder.
The written certificate of the officer or officers calling any special meeting
setting forth the substance of the notice, and the time and place of the mailing
of same to the several Shareholders, and the respective addresses to which the
same were to be mailed, shall be prima facie evidence of the manner and fact of
the calling and giving such notice.
<PAGE>
SECTION 5 - WAIVER OF NOTICE:
If all the Shareholders of the Corporation shall waive notice of special
meetings, no notice of such meeting shall be required, and whenever all the
Shareholders shall meet in person or by proxy such meeting shall be valid for
all purposes without call or notice and at such meeting any corporate action may
be taken.
SECTION 6 - QUORUM:
At all Shareholders' meetings, the holders of fifty-one percent (51%) in amount
of the entire issued and outstanding capital stock of the Corporation shall
constitute a quorum for all the purposes of such meetings.
If the holders of the amount of stock necessary to constitute a quorum shall
fail to attend, in person or by proxy, a majority in interest of the
Shareholders present in person or by proxy may adjourn from time to time without
notice other than by announcement at the meeting, until holders of the amount of
stock requisite to constitute a quorum shall attend. At any such adjourned
meeting at which a quorum shall be present, any business may be transacted which
might have been transacted as originally called.
SECTION 7 - VOTING:
At each meeting of the Shareholders, every Shareholder shall be entitled to vote
in person or by his duly authorized proxy appointed by instrument in writing
subscribed by such Shareholder. Each Shareholder shall have one (1) vote for
each share of stock standing registered in his or her or its name on the books
of the Corporation, ten (10) days preceding the day of such meeting. The votes
for Directors, and upon demand by any Shareholder, the votes upon any question
before the meeting, shall be by roll call vote.
At each meeting of the Shareholders, a full, true and complete list, in
alphabetical order, of all the Shareholders as of a record date determined by
the Board of Directors entitled to vote at such meeting, and indicating the
<PAGE>
number of shares held by each, certified by the Secretary of the Corporation,
shall be furnished, and shall be open to the inspection of the Shareholders, or
their agents or proxies, at the place where such meeting is to be held. Only the
persons in whose names shares of stock are registered on the record date with
respect to any meeting, as evidenced by the list of Shareholders furnished at
any such meeting, shall be entitled to vote at such meeting. Proxies must be
approved by all Gaming Regulatory Authorities and filed with the Secretary of
the Corporation before an election or a meeting of the Shareholders, or they
cannot be used at such election or meeting.
SECTION 8 - ORDER OF BUSINESS:
At the Shareholders' meetings, the regular order of business shall be as
follows:
1. Call to order;
2. Reading and approval of the Minutes of previous meeting or meetings;
3. Reports of yearly activity to Shareholders, by the Board of Directors;
4. Review of the Outside Auditors' Report;
5. Election of the Board of Directors;
6. Appointment of Outside Auditors;
7. Old business;
8. New business;
9. Adjournment.
SECTION 9 - CONDUCT OF ELECTION:
At each meeting of the Shareholders, the polls shall be opened and closed; the
proxies and ballots issued, received, and be taken in charge of, for the purpose
of the meeting; and all questions touching the qualifications of voters and the
validity of proxies, and the acceptance or rejection of votes, shall be decided
by two (2) inspectors. Such inspectors shall be appointed at the meeting by the
Chairperson of the meeting.
<PAGE>
ARTICLE III - BOARD OF DIRECTORS
SECTION 1 - NUMBER:
The number of Directors which shall constitute the whole Board shall be nine (9)
all of whom shall be twenty-one (21) years of age or older and at least one (1)
of whom shall be a citizen of the United States. The number of Directors may
from time to time be decreased to not less than three (3) or increased by
amending this section of the Bylaws. The Directors shall be elected at the
annual meeting of the Shareholders and except as provided in Section 2 of this
Article, each Director elected shall hold office until his successor is elected
and qualified. Directors must be Shareholders.
SECTION 2 - CLASSIFICATION AND ELECTIONS.
The directors shall be classified with respect to the time for which they
severally hold office, into three classes, as nearly equal in number as possible
as the then total number of directors constituting the entire board permits,
pursuant to the provisions of the corporation's Articles of Incorporation and
Section l hereof. At each annual meeting of the Shareholders the successors to
the class of directors whose term expires at that meeting shall be elected, by a
plurality of the votes cast, to hold office for a term expiring at the annual
meeting of Shareholders held in the third year following the year of their
election and until their successors have been duly elected and qualified.
Pursuant to Article III, Section 20 hereof, the Board of Directors shall
establish a Nominations and Compensation Committee. It shall be the duty of the
Nominations and Compensation Committee to recommend a slate of directors to fill
the offices of the class of directors whose term expires at the then current
annual meeting. Nothing herein shall be construed to limit the ability of the
Board of Directors to impose such greater or lesser duties on the Nominations
and Compensation Committee, including elimination of said committee,as the Board
of Directors may, from time to time, determine. Any director may resign at any
time upon notice to the corporation.
<PAGE>
SECTION 3 - INITIAL CLASSIFICATION OF BOARD OF DIRECTORS:
The nine (9) members of the current board of directors shall be classified as
follows:
(a) The first class shall hold office for a term expiring at the 1994
annual meeting of Shareholders and shall consist of Thomas M. Yturbide,
Robert L. Weise, and Luther Mack.
(b) The second class shall hold office for a term expiring at the 1995
annual meeting of Shareholders and shall consist of the following three (3)
directors; Franklin K. Rahbeck, Richard F. Kudrna, Sr., and Jessica L.
Ledbetter.
(c) The third class shall hold office for a term expiring at the 1996
annual meeting of Shareholders and shall consist of the following three (3)
directors: William B. Ledbetter, Kirk B. Ledbetter, and Donald D. Snyder.
Each successor to any of the foregoing directors shall be classified within his
predecessor's class of directors.
SECTION 4 - DUTIES AND POWERS:
The Board of Directors shall be responsible for the control and management of
the affairs, property and interests of the Corporation, and may exercise all
powers of the Corporation, except as are in the Certificate of Incorporation or
by statute expressly conferred upon or reserved to the Shareholders.
The Chairperson of the Board of Directors shall make a report to the
Shareholders at annual meetings of the Shareholders of the condition of the
Corporation, and shall, on request, furnish each of the Shareholders with a true
copy thereof.
The Board of Directors, in its discretion, may submit any contract or act for
approval or ratification at any annual meeting of the Shareholders called for
the purpose of considering any such contract or act, which, if approved,
orratified by the vote of the holders of a majority of the capital stock of
the Corporation represented in person or by proxy at such meeting, provided that
a lawful quorum of Shareholders is represented in person or by proxy, shall be
valid and binding upon the Corporation and upon all the Shareholders thereof, as
if it has been approved or ratified by every Shareholder of the Corporation.
SECTION 5 - PLACE OF MEETINGS:
Meetings of the Directors may be held at the principal office of the Corporation
in the State of Nevada, or elsewhere, at such place or places as the Board of
Directors may, from time to time, determine.
<PAGE>
SECTION 6 - ANNUAL MEETING OF DIRECTORS; NOTICE:
Immediately following each annual meeting of Shareholders, the Board of
Directors shall hold a regular meeting for the purpose of organization,
election of officers, and the transaction of other business. Notice of such
meeting is hereby dispensed with.
SECTION 7 - REGULAR MEETINGS OF DIRECTORS; NOTICE:
The time for other regular meetings of the Board of Directors,when held, shall
be 8:30 a.m. on the fourth Thursday(BDM October, 1995, changed from second
Tuesday') of each month. If any regular meeting date shall fall on a legal
holiday, then the regular meeting date shall be the business day next
following. The time for the next regularly scheduled meeting of the Board of
Directors may be changed by a majority vote of the Directors at any preceding
meeting of the Directors.
No notice shall be required to be given of any regular meeting of
the Board of Directors, but each Director shall take notice thereof.
SECTION 8 - SPECIAL MEETINGS OF DIRECTORS; NOTICE:
A special meeting of the Board of Directors shall be held whenever called by
the Chairperson or by three (3) Directors. Any and all business may be
transacted at a special meeting. Each call for a special meeting shall be in
writing, signed by the person or persons making the same, addressed and
delivered to the Secretary of the Corporation, and shall state the time and
place of such meeting.
Notice of each special meeting of the Board of Directors shall be given to each
of the Directors by mailing to each of them a copy of such notice at least seven
(7) days prior to (BDM October, 1995,changed from second Tuesday') the time
fixed for such meeting to the address of such Director as shown on the books of
the Corporation. If a Director's address does not appear on the books of the
Corporation, then such notice shall be addressed to said Director at Harveys
Resort Hotel/Casino, Post Office Box 128, Stateline, Nevada, 89449.
<PAGE>
SECTION 9 - WAIVER OF NOTICE:
When all the Directors of the Corporation are present at any meeting of the
Board of Directors, however called or noticed, and consent thereto is indicated
on the record of such meeting, or if the majority of the Directors are present,
and if those not present sign a written waiver of notice of such meeting,
whether prior to or after the holding of such meeting, and said written waiver
is filed with the Secretary of the Corporation, the transactions of such meeting
are as valid as if had at a meeting regularly called and noticed.
SECTION 10 - QUORUM AND ADJOURNMENTS:
A majority of the Board of Directors in office shall constitute a quorum for the
transaction of business; but if at any meeting of the Board there be less than a
quorum present, a majority of those present may adjourn from time to time, until
a quorum shall be present, and no notice of such adjournment shall be required.
The Board of Directors may prescribe rules not in conflict with these Bylaws for
the conduct of its business.
SECTION 11 - ORDER OF BUSINESS:
The regular order of business at meetings of the Board of Directors shall be as
follows:
1. Roll call.
2. Approval of agenda.
3. Disclosure of any Directors' potential conflicts of interest.
4. Approval of the Minutes of the prior Director's meeting
and action on any recommendations of any standing committee.
5 Report by the Chief Financial Officer on financial condition of the
Corporation and financial operating results since the last meeting.
6. Report by the President and CEO on operating results since the last
meeting.
<PAGE>
7. General counsel report.
8. Selected committee reports and ratification of committee actions and
approval of minutes of committee meetings.
9. Other items requiring Board action.
10. Reports by selected members of management as requested by the
Chairperson of the Board.
11. Special report(s) requested by any Director.
12. Old business.
13. New business.
14. Open discussion.
15. Adjournment.
SECTION 12 - ACTION BY UNANIMOUS WRITTEN CONSENT OF DIRECTORS:
Any action required or permitted to be taken by the Board of Directors may be
taken without a meeting if members of the Board shall individually or
collectively consent in writing to such action, and such consents are filed
with the Minutes of the Board. Such action by written consent shall have the
same force and effect as a unanimous vote of such Directors. Any certificate or
other document which relates to action so taken shall state that the action was
taken by unanimous written consent of the Board of Directors without a meeting,
and that these Bylaws authorize the Directors to so act.
SECTION 13 - MANNER OF ACTING:
At all meetings of the Board of Directors, each Director present shall have one
(1) vote. Except as otherwise provided by statute or by these Bylaws, the
action of a majority of the Directors present at any meeting at which a quorum
is present shall be the action of the Board of Directors.
SECTION 14 - TELEPHONIC MEETINGS:
Nothing herein contained shall prevent or render void any action taken by the
Board of Directors through the use of telephones, telegraphs, computers, word
processing machines or other electronic devices so long as such action is
otherwise consistent with these Bylaws.
<PAGE>
SECTION 15 - VACANCIES:
When any vacancy occurs among the Directors by death, resignation,
disqualification or other cause, the remaining Directors, by the affirmative
vote of a majority thereof, shall elect a successor to hold office for the
unexpired portion of the term of the Director whose place shall have become
vacant and until his/her successor shall have been elected and qualified.
SECTION 16 - RESIGNATION:
Any Director may resign at any time by giving written notice to the Board of
Directors, the President or the Secretary of the Corporation. Unless otherwise
specified in such written notice, such resignation shall take effect upon
receipt thereof by the Board of Directors or such officer, and the acceptance of
such resignation shall not be necessary to make it effective.
SECTION 17 - REMOVAL:
Any Director may be removed with or without cause at any time by the affirmative
vote of Shareholders holding of record in the aggregate at least a supermajority
of the outstanding shares of the Corporation at a special meeting of the
Shareholders called for that purpose. For purposes of this provisions, a
supermajority' of Shareholders is defined as two-thirds (2/3) of the
outstanding shares entitled to vote.
SECTION 18 - CONTRACTS:
No contract or other transaction between this Corporation and any other
Corporation shall be impaired, affected or invalidated, nor shall any
Director be liable in any way by reason of the fact that any one or more of the
Directors of this Corporation is or are interested in, or is a director or
officer, or are directors or officers of such other Corporation provided that
such facts are disclosed or made known to the Board of Directors prior to the
execution of said contract or conclusion of said transaction.
<PAGE>
Any Director, personally and individually, may be a party to or may be
interested in any contract or transaction of this Corporation, and no Director
shall be liable in any way by reason of such interest, provided that the fact of
such interest be disclosed or made known to the Board of Directors, and provided
that the Board of Directors shall authorize, approve or ratify such contract or
transaction by the vote (not counting the vote of any such Director) of a
majority of a quorum, notwithstanding the presence of any such Director at the
meeting at which such action is taken. The presence of such Director or
Directors should be counted in determining the presence of a quorum at such
meeting. This Section shall not be construed to impair or invalidate or in any
way affect any contract or other transaction which would otherwise be valid
under the law (common, statutory or otherwise) applicable thereto.
No agreement, contract, franchise, lease or obligation (other than checks in
payment of indebtedness incurred by authority of the Board of Directors)
involving the payment of monies or the credit of the Corporation in excess
of that level established by the Board of Directors, shall be made without the
authority of the Board of Directors duly constituted and acting as such.
Unless otherwise ordered by the Board of Directors, all agreements and contracts
shall be signed by the Chief Executive Officer, the Secretary, or the
Chairperson of the Board of Directors in the name and on behalf of the
Corporation, and if required, shall have the corporate seal thereto attached.
No note, draft, acceptance, endorsement or other evidence of indebtedness shall
be valid as or against the Corporation unless the same shall be signed by the
Chief Executive Officer and attested by the Secretary or an Assistant Secretary,
or signed by the Treasurer or an Assistant Treasurer, and countersigned by the
Chief Executive Officer, or Secretary, or by the Chairperson of the Board of
Directors and attested by the Secretary or Assistant Secretary except that the
Treasurer or an Assistant Treasurer may, without countersignature, sign payroll
checks and make endorsements for deposit to the credit of the Corporation in all
its duly authorized depositaries. No check or order for money shall be signed
in blank by more than one officer of the Corporation.
No loan or advance of money shall be made by the Corporation to any Shareholder,
Director or Officer therein, unless the Board of Directors shall specifically
authorize.
<PAGE>
SECTION 19 - ENCUMBERING OR CONVEYING CORPORATE PROPERTY:
The Directors shall have the power to authorize and cause to be executed,
mortgages and liens without limit as to amount upon the property and franchise
of this Corporation, and pursuant to the affirmative vote, either in person or
by proxy, of the holders of a majority of the capital stock issued and
outstanding, the Directors shall have authority to dispose in any manner of the
whole property of this Corporation.
SECTION 20 - COMMITTEES:
The Board of Directors may, by resolution adopted by a majority of the whole
Board, designate one (1) or more standing committees of the Board of Directors,
including, but not limited to (i) Compensation, (ii) Audit. Each committee
shall consist of a Chairperson and other members.
The committees shall keep regular Minutes of their proceedings and report the
same to the Board of Directors. All actions of the committees shall
nevertheless require Board of Directors' action at the next succeeding meeting
of the full Board of Directors unless specifically provided for to the
contrary.
The Chairperson of the Board of Directors may also appoint ad hoc committees and
members thereof from time to time.
SECTION 21 - DELEGATION OF AUTHORITY:
The Board of Directors shall delegate, to the extent that it considers
necessary, any portion of its authority to manage, control and conduct the
current business of the company, to any standing or special committee of the
Corporation or to any officer or agent thereof. Notwithstanding any delegation
of authority that the Board may make hereunder, it shall exercise general
supervision over the officers and agent of the Corporation and shall be
responsible to the Shareholders for the proper performance of their respective
duties.
SECTION 22 - SALARIES:
The Directors may be paid their expenses of attendance of each meeting of the
Board of Directors and at any standing committee meeting of the Board of
Directors. Directors who are not otherwise employed by the Company shall be
paid a fixed sum for attendance at each meeting of the Board of Directors and
<PAGE>
each standing committee of the Board of Directors together with a stated
retainer as Director. No such payment shall preclude any Director from serving
the Corporation in any other capacity and receiving compensation therefore.
Compensation shall not be paid to members of ad hoc committees.
ARTICLE IV - OFFICERS
SECTION 1 - TITLES:
The Officers of the Corporation shall consist of a Chief Executive
Officer/President (C.E.O.), a Secretary, a Treasurer, and such other Officers,
including a Chairperson of the Board of Directors, and one or more Vice
Presidents, as the Board of Directors may from time to time deem advisable. Any
Officer other than the Chairperson or Vice Chairperson of the Board of Directors
may be, but is not required to be, a Director of the Corporation. Any two (2)
or more offices may be held by the same person.
SECTION 2 - ELECTION:
The Board of Directors at its first meeting after the annual meeting of
Shareholders, shall elect a Chairperson of the Board, Chief Executive
Officer/President, a Secretary, and a Treasurer.
SECTION 3 - APPOINTMENT OF OFFICERS:
The Board of Directors may from time to time, by resolution, appoint Vice
Presidents, Assistant Secretaries, Assistant Treasurers and the Transfer Agent
of the Corporation as it may deem advisable; prescribe their duties and fix
their compensation, if any, and all such appointed officers shall be subject to
removal at anytime by the Board of Directors. All such appointed officers,
agents and factors of the Corporation shall be chosen and appointed in such
manner and shall hold their offices for such terms as the Board of Directors may
by resolution prescribe.
SECTION 4 - TERM OF OFFICE:
Each Officer shall hold office until the annual meeting of the Board of
Directors next succeeding his election, and until his successor shall have been
elected and qualified, or until his death, resignation or removal.
<PAGE>
SECTION 5 - RESIGNATION:
Any officer may resign at any time by giving written notice of such resignation
to the Board of Directors, or to the President or the Secretary of the
Corporation. Unless otherwise specified in such written notice, such
resignation shall take effect upon receipt thereof by the Board of Directors or
by such officer, and the acceptance of such resignation shall not be necessary
to make it effective.
SECTION 6 - REMOVAL:
Any officer may be removed, either with or without cause, and a successor
elected by a majority vote of the Board of Directors at any time.
SECTION 7 - VACANCIES:
A vacancy in any office by reason of death, resignation, inability to act,
disqualification, or any other cause, may at any time be filled for the
unexpired portion of the term by a majority vote of the Board of Directors.
SECTION 8 - DUTIES OF OFFICERS:
Officers of the Corporation shall, unless otherwise provided by the Board of
Directors, each have such powers and duties as generally pertain to their
respective offices as well as such powers and duties as may be set forth in
these Bylaws, or may from time to time be specifically conferred or imposed by
the Board of Directors.
SECTION 9 - THE CHAIRPERSON:
The Chairperson shall be responsible for scheduling all Board of Directors
meetings, annual Shareholder meetings, Board of Directors retreats and other
activities pertaining to the Board of Directors. He/she shall chair all Board
Meetings and shall also insure that meeting agendas cover all matters of
importance to the Board and be responsible for making all arrangements for
<PAGE>
meetings, to include proper notice as provided for herein. The Chairperson
shall also insure that the agenda of meetings is followed and be responsible for
communication between the Board of Directors and management, during the period
between meetings of the Board. Additionally, the Chairperson shall act as an
advisor to the Board interpreting those items requiring clarification. The
Chairperson may attend such committee meetings in addition to monitoring the
performance of the Board of Directors as a collective body and as individual
members and shall further be responsible for strategic and financial planning
and shall otherwise insure the setting and maintaining of policies and
procedures adopted by the Board of Directors.
SECTION 10 - THE CHIEF EXECUTIVE OFFICER/PRESIDENT:
The Chief Executive officer/President of the Corporation shall have the
supervision over and, subject to the control of the Board of Directors, the
direction of the Corporation's affairs, with full power to execute all
resolutions and orders of the Board of Directors not especially entrusted to
some other officer of the Corporation. He shall sign the Certificates of Stock
issued by the Corporation and shall perform such other duties as shall be
prescribed by the Board of Directors.
Unless otherwise ordered by the Board of Directors, the Chief Executive
Officer/President shall have full power and authority in behalf of the
Corporation, to attend and to act and to vote at any meetings of the
Shareholders of any corporation in which the Corporation may hold stock, and at
any such meetings, shall possess and may exercise any and all rights and powers
incident to the ownership of such stock, and which as the new owner thereof, the
Corporation might have possessed and exercised if present. The Board of
Directors may, by resolution, from time to time, confer like powers on any
person or persons in place of the Chief Executive Officer/President to represent
the Corporation for the purposes in this Section mentioned.
SECTION 11 - THE TREASURER:
The Treasurer shall have the custody of all the funds and securities of the
Corporation. When necessary or proper, he shall endorse on behalf of the
Corporation for collection, checks, notes, and other obligations; he shall
deposit all monies to the credit of the Corporation in such bank or banks
or other depositary as the Board of Directors may designate; he shall sign
all receipts and vouchers for payments made by the Corporation except as herein
otherwise provided; he shall jointly with such other officer as shall be
designated by those Bylaws, sign all checks made by the Corporation, and shall
pay out and dispose of the same under the direction of the Board of Directors.
<PAGE>
He shall sign with the President all bills of exchange and promissory notes of
the Corporation; he shall also have the care and custody of the stocks, bonds,
certificates, vouchers, evidences of debt securities, and such other property
belonging to the Corporation as the Board of Directors shall designate; he shall
sign all papers required by law or these Bylaws or the Board of Directors to be
signed by the Treasurer. Whenever required by the Board of Directors, he shall
perform all acts incident to the position of Treasurer subject to the control of
the Board of Directors.
The Treasurer shall, if required by the Board of Directors, give bond to the
Corporation conditioned for the faithful performance of all his duties as
Treasurer in such sum, and with such security as shall be approved by the Board
of Directors, and the expense of such bond to be borne by the Corporation.
SECTION 12 - THE SECRETARY:
The Secretary shall cause to be kept the Minutes of all meetings of the Board of
Directors and the Minutes of all meetings of the Shareholders and of the
Executive Committee in books provided for that purpose. The Secretary shall
attend to the giving and serving of all notices of the Corporation; he/she may
sign with the Chief Executive Officer/President or a Vice President, in the
name of the Corporation, all contracts authorized by the Board of Directors
or Executive Committee; the Secretary shall affix the corporate seal of the
Corporation to any documents when so authorized by the Board of Directors or
Executive Committee; he/she shall affix the corporate seal to all certificates
of stock duly issued by the Corporation; he/she shall have charge of the Stock
Certificate Books, Transfer Books and Stock Ledgers, and such other books and
papers as the Board of Directors or the Executive Committee may direct, all of
which shall at all reasonable times be open to the examination of any
Director(s) upon application at the office of the Corporation during business
hours, and he/she shall, in general, perform all the duties incident to the
office of the Secretary.
SECTION 13 - THE VICE-CHAIRPERSON:
The Vice-Chairperson shall assist the Chairperson in the performance of all of
his or her duties and shall conduct meetings in the absence of the Chairperson
and shall perform such other duties as shall be prescribed by the Board of
Directors.
<PAGE>
SECTION 14 - APPOINTMENT OF ASSISTANTS TO OFFICERS:
The Board of Directors shall have the power, in its discretion,to appoint any
qualified person to act as Assistant to any officer of the Corporation. Such
Assistant shall perform such duties as the Board shall prescribe, including the
performance of the duties of the Chief Executive Officer/President when the
incumbent is unable to act or it is impractical for him to act personally,
subject to any restrictions on such authority as may be imposed by the Board.
The acts of such assistant officer, within the scope of his authority as
delineated by the Board, shall be the acts of the Corporation to the same
extent as if done by the Chief Executive Officer/President.
ARTICLE V - SHARES OF STOCK
SECTION 1 - CERTIFICATES OF STOCK:
Ownership of stock in the Corporation shall be evidenced by certificates of
stock in such forms as shall be prescribed by the Board of Directors, and shall
be under the seal of the Corporation and signed by the Chief Executive
Officer/President and also by the Secretary or by an Assistant Secretary. In
lieu of signatures by the corporate officers, certificates for shares may be
authenticated by facsimiles of the signatures of the President and Secretary or
by a facsimile of the signature of the President and the written signature of
the Secretary or Assistant Secretary.
All certificates shall be consecutively numbered; the name of the person owning
the shares represented thereby with the number of such shares and the date of
issue shall be entered on the Corporation's books.
To be effective, every certificate for shares authenticated by a facsimile of a
signature must be (1) countersigned by the transfer agent or transfer clerk of
the Corporation and registered by an incorporated bank or trust company, either
domestic or foreign, as registrar of transfers, or (2) countersigned by a
facsimile of the signature of the transfer agent or transfer clerk of the
Corporation and registered by written signature by an incorporated bank or trust
company, either domestic or foreign, as registrar of transfers.
<PAGE>
The validity of any certificate for shares, otherwise valid, shall not be
affected in the event that the delivery of such certificate occurs after the
officers or agents whose signatures appear on the certificate by facsimile,
or any of them, are no longer serving as officers or agents by reason of death
or for any other cause.
SECTION 2 - ISSUANCE:
The capital stock of the Corporation shall be issued in such manner and at such
times and upon such conditions as shall be prescribed by the Board of Directors.
SECTION 3 - LOST OR DESTROYED CERTIFICATES:
Any person or persons applying for a certificate of stock in lieu of one alleged
to have been lost or destroyed, shall make affidavit or affirmation of the fact,
and shall deposit with the Corporation an affidavit. Whereupon, at the end of
six (6) months after the deposit of said affidavit and upon such person or
persons giving Bond of Indemnity to the Corporation with surety to be approved
by the Board of Directors in an amount equal to double the current value of
the stock against any damage, loss, or inconvenience to the Corporation, which
may or can arise in consequence of a new or duplicate certificate being issued
in lieu of the one lost or missing, the Board of Directors may cause to be
issued to such person or persons a new certificate, or a duplicate of the
certificate so lost or destroyed. The Board of Directors may, in its
discretion, refuse to issue such new or duplicate certificate save upon the
order of some court having jurisdiction in such matter, anything herein to the
contrary notwithstanding.
SECTION 4 - TRANSFER OF SHARES:
No transfer of stock shall be valid as against the Corporation except on
surrender and cancellation of the original certificate therefor, accompanied by
an assignment or transfer duly executed by the owner therefor, and a new
certificate shall be issued therefore.
Whenever any transfer shall be expressed as made for collateral security and not
absolutely, the same shall be so expressed in the entry of said transfer on the
books of the Corporation.
<PAGE>
SECTION 5 - RECORD DATE:
In lieu of closing the share records of the Corporation, the Board of Directors
may fix, in advance, a date not exceeding sixty (60) (BDM April 25, 1996,
increased from 50 to 60) days, nor less than ten (10) days, as the record date
for the determination of Shareholders entitled to receive notice of, or to vote
at, any meeting of Shareholders, or to consent to any proposal without a
meeting, or for the purpose of determining Shareholders entitled to receive
payment of any dividends, or allotment of any rights, or for the purpose of any
other action. If no record date is fixed, the record date for the determination
of Shareholders entitled to notice of or to vote at a meeting of Shareholders
shall be at the close of business on the day next preceding the day on which
notice is given, or, if no notice is given, the day on which the meeting is
held; the record date for determining Shareholders for any other purpose shall
be at the close of business on the day on which the resolution of the Directors
relating thereto is adopted. When a determination of Shareholders of record
entitled to notice of or to vote at any meeting of Shareholders has been made as
provided for herein,such determination shall apply to any adjournment thereof,
unless the Directors fix a new record date for the adjourned meeting.
ARTICLE VI - DIVIDENDS
The Board of Directors shall have power to reserve over and above the capital
stock paid in, such an amount in its discretion as it may deem advisable to fix
as a reserve fund, and may, from time to time, declare dividends from the
accumulated profits of the Corporation in excess of the amounts so reserved,
and pay the same to the Shareholders of the Corporation, and may also, if it
deems the same advisable, declare stock dividends of the unissued capital stock
of the Corporation.
ARTICLE VII - AMENDMENTS
SECTION 1 - BY SHAREHOLDERS:
Amendments and changes of these Bylaws may be made by a vote of, or a consent in
writing signed individually or collectively by the holders of fifty-one percent
(51%) of the issued and outstanding capital stock.
SECTION 2 - BY DIRECTORS:
Amendments and changes of these Bylaws may be made at any regular or special
meeting of the Board of Directors by a vote of not less than all of the entire
Board, or may be made by a consent in writing signed individually or
collectively by not less than all of the entire Board.
<PAGE>
ARTICLE VIII - CORPORATE SEAL
The Corporation shall have a corporate seal, the design thereof being as
follows:
ARTICLE IX - INDEMNIFICATION
Every person who was or is a party or is threatened to be made a party to or is
involved in any action, suit or proceeding, whether civil, criminal,
administrative or investigative, by reason of the fact that he or a person of
whom he is the legal representative is or was a director or officer of the
Corporation or is or was serving at the request of the Corporation or for its
benefit as a director or officer of another corporation, or as its
representative in a partnership, joint venture, trust or other enterprise, shall
be indemnified and held harmless to the fullest extent legally permissible under
the General Corporation Law of the State of Nevada from time to time against all
expenses, liability and loss (including attorneys' fees, judgments, fines and
amounts paid or to be paid in settlement) reasonably incurred or suffered by him
in connection therewith. Such right of indemnification shall be a contract
right which may be enforced in any manner desired by such person. Such right
of indemnification shall not be exclusive of any other right which such
directors, officers or representatives may have or hereafter acquire and,
without limiting the generality of such statement, they shall be entitled to
their respective rights of indemnification under any by-law, agreement, vote
of Shareholders, provision of law or otherwise, as well as their rights under
this Article. The Board of Directors may cause the Corporation to purchase and
maintain insurance on behalf of any person who is or was a director or officer
of the Corporation, or is or was serving at the request of the Corporation as a
director or officer of another corporation, or as its representative in a
partnership, joint venture, trust or other enterprise against any liability
asserted against such person and incurred in any such capacity or arising out
of such status, whether or not the Corporation would have the power to
indemnify such person.
The indemnification provisions above provided shall include, but not be limited
to, reimbursement of all fees, including amounts paid in settlement and
attorneys' fees actually and reasonably incurred, in connection with the
defense or settlement of any action or suit if such party to be indemnified
acted in good faith and in a manner reasonably believed to be in or not opposed
to the best interests of the Corporation. Indemnification may not be made for
any claim, issue or matter as to which the person claiming indemnity has been
adjudged by a court of competent jurisdiction, after exhaustion of all appeals
therefrom to be liable to the Corporation or for amounts paid in settlement to
the Corporation unless and only to the extent that the court in which the
action or suit was brought or other court of competent jurisdiction determines
upon application that the person is fairly and reasonably entitled to indemnity
for such expenses as the court deems proper.
<PAGE>
ARTICLE X - GENERAL PROVISIONS
SECTION 1 - DEPOSITORIES:
All monies of the Corporation shall be deposited when as received by the
Treasurer in such bank or banks or other depositary as may from time to
time be designated by the Board of Directors, and such deposits shall be made
in the name of the Corporation.
SECTION 2 - OTHER SECURITIES:
The Corporation may take, acquire, hold, mortgage, sell, or otherwise deal in
stocks or bonds or securities of any other corporation if, and as often, as the
Board of Directors shall direct.
<PAGE>
FIRST AMENDMENT TO
REDUCING REVOLVING CREDIT AGREEMENT
THIS FIRST AMENDMENT TO REDUCING REVOLVING CREDIT AGREEMENT ('First
Amendment to Credit Agreement') is made and entered into as of the 15th day of
May, 1996, by and among HARVEYS CASINO RESORTS, a Nevada corporation ( 'HCR'),
HARVEYS C.C. MANAGEMENT COMPANY, INC., a Nevada corporation ( 'HCCMC'), as of
the Equity Exchange Effective Date, as hereafter defined, HARVEYS WAGON WHEEL
CASINO LIMITED LIABILITY COMPANY ( 'HWWLLC') and HARVEYS IOWA MANAGEMENT
COMPANY, INC., a Nevada corporation ( 'HIMC' and together with HCR and HCCMC
and HWWLLC collectively the 'Borrowers'), FIRST INTERSTATE BANK OF NEVADA,
N.A., WELLS FARGO BANK, N.A., successor by merger with FIRST INTERSTATE BANK OF
CALIFORNIA, BANK OF THE WEST, FIRST SECURITY BANK OF IDAHO, N.A., IMPERIAL BANK,
NORWEST BANK OF NEBRASKA, N.A., NBD BANK, SOCIETE GENERALE, THE SUMITOMO BANK,
LIMITED, Chicago Branch, U.S. BANK OF NEVADA, WEST ONE BANK, IDAHO and
ARGENTBANK (herein together with their respective successors and assigns
collectively the 'Lenders'), FIRST INTERSTATE BANK OF NEVADA, N.A., as the
swingline lender (herein in such capacity,together with its successors and
assigns, the ( 'Swingline Lender'), FIRST INTERSTATE BANK OF NEVADA, N.A., as
the issuer of letters of credit hereunder (herein in such capacity, together
with its successors and assigns, the 'L/C Issuer') and FIRST INTERSTATE BANK OF
NEVADA, N.A., as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the 'Agent Bank' and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the 'Banks').
R_E_C_I_T_A_L_S:
WHEREAS:
A. HCR, HCCMC, HIMC and Banks (The Sumitomo Bank, Limited, Chicago
Branch, having acquired the interest of The Daiwa Bank, Limited by Assignment,
Assumption and Consent Agreement dated as of February 2, 1996) entered into a
Reducing Revolving Credit Agreement dated as of August 14, 1995 (the 'Original
Credit Agreement').
B. In this First Amendment to Credit Agreement, all capitalized
words and terms shall have the respective meanings and be construed herein as
provided in Section 1.01 of the Original Credit Agreement, as that Section is
amended hereby. This First Amendment to Credit 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.
<PAGE>
C. Mountain City Casino Partners, L.P., a Colorado limited partnership
('MCCP') is the owner of a thirty percent (30%) equity membership interest in
HWWLLC, which equity interest together with certain rights to a priority
return and option to acquire additional equity interests (collectively
the 'Mountain City Interests') are to be acquired by HCR in exchange (the
'Equity Exchange') for three hundred eighty-two thousand five hundred (382,500)
shares of the common voting stock of HCR pursuant to the terms of that certain
Acquisition Agreement dated as of March 28, 1996 (the 'Acquisition Agreement')
executed by and between HCR and MCCP.
D. The Equity Exchange, together with the exchange of Eight Million
Dollars ($8,000,000.00) in aggregate principal amount of HCR subordinated notes
due December 31, 2001 (the 'Harveys Notes') and Six Million Dollars
($6,000,000.00) in cash (together with the Harveys Notes, the 'Exchange
Consideration') for Eleven Million Nine Hundred One Thousand Five Hundred
Dollars ($11,901,500.00) in aggregate principal amount of Senior Notes due 1997
(the 'HWW Notes') of HWWLLC, and interest accrued thereon in the approximate
amount of approximately One Million Nine Hundred Thousand Dollars
($1,900,000.00) (the 'Debt Exchange') is the subject of the Form S-4
Registration Statement, Registration Number 333-616, filed with the Security and
Exchange Commission on March 15, 1996 (as amended from time to time the
'Exchange Registration').
E. HCR desires to issue up to One Hundred Fifty Million Dollars
($150,000,000.00) in Senior Subordinated Notes due 2006 (the 'Senior
Subordinated Notes') pursuant to and in accordance with the terms and conditions
set forth in the Form S-1 Registration Statement, Registration No. 333-3576
filed with the Securities and Exchange Commission on April 16, 1996
(collectively the 'S-1 Registration') and the indenture governing the Senior
Subordinated Notes (the 'Indenture').
F. In order to permit the Equity Exchange, Debt Exchange and issuance
of the Senior Subordinated Notes, Borrowers have requested and Banks have
agreed to the amendments and modifications to the Original Credit Agreement
which are hereinafter set forth.
<PAGE>
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree to amend the Original Credit Agreement by amending and substituting, as
applicable, the amended terms and provisions as hereinafter set forth, which
amended terms shall be deemed effective as of the First Amendment Effective
Date, unless otherwise noted:
Section 1. DEFINITIONS. Section 1.01 of the Original Credit
Agreement shall be and is hereby amended to include the following definitions.
Those terms which are currently defined by Section 1.01 of the Original Credit
Agreement and which are also defined below shall be defined as set forth below
as of the First Amendment Effective Date unless the definition set forth below
does not become effective until either the Equity Exchange Effective Date or the
Senior Subordinated Notes Effective Date, as applicable, in which case the terms
set forth in the Original Credit Agreement shall continue until the applicable
replacement defined term becomes effective as set forth below:
'Acquisition Agreement' shall have the meaning ascribed to such term
in Recital Paragraph C of the First Amendment to Credit Agreement.
'Assignments' shall mean on and after ten (10) Banking Business Days
following the Equity Exchange Effective Date, collective reference to the Tahoe
Assignment of Permits, Licenses and Contracts, Tahoe Assignment of Spaceleases,
Contracts, Rents and Revenues, Assignment of Park Cattle Lease, Assignment of
Tahoe Greenbelt Lease, Assignment of Management Fees, Assignment of California
Greenbelt Lease, Iowa Assignment of Permits, Licenses and Contracts, Iowa
Assignment of Space Leases, Contracts, Rents and Revenues, Assignment of
Friendship Sublease, Assignment of Iowa Engineer's Contract, Assignment of Iowa
Dock General Contractor's Agreement, Assignment of Iowa Hotel Architect's
Contract, Assignment of Iowa Hotel General Contractor's Agreement, Assignment of
Iowa Riverboat Architect's Contract, Assignment of Iowa Riverboat General
Contractor's Agreement, Central City Assignment of Permits, Licenses and
Contracts and Central City Assignment of Spaceleases, Contracts, Rents and
Revenues.
'Borrowers' shall mean on and after the Equity Exchange Effective Date
collective reference to HCR, HCCMC, HIMC and HWWLLC.
'Central City Assignment of Permits, Licenses and Contracts' shall
mean the Assignment of Permits, Licenses and Contracts to be executed by HCCMC
and HWWLLC within ten (10) Banking Business Days following the Equity Exchange
Effective Date, pursuant to which HCCMC and HWWLLC assign to Agent Bank on
<PAGE>
behalf of the Lenders, all of their respective right, title and interest in and
to all assignable permits, licenses and contracts relating to the Central City
Hotel/Casino Facility, as it may be amended, modified, extended, renewed or
restated from time to time.
'Central City Assignment of Spaceleases, Contracts, Rents and Revenues'
shall mean the Assignment of Spaceleases, Contracts, Rents and Revenues, as may
be amended, modified, extended, renewed or restated from time to time, to be
executed by HCCMC and HWWLLC within ten (10) Banking Business Days following
the Equity Exchange Effective Date, pursuant to which HCCMC and HWWLLC
assign to Agent Bank on behalf of the Lenders: (a) all of their respective
right, title and interest under all Equipment Leases, Contracts and Spaceleases
relating to the Central City Hotel/Casino Facility, and (b) all rents, issues,
profits, revenues and income from the Central City Property and the Central City
Hotel/Casino Facility and any other business activity conducted on the Central
City Property, together with any future expansions thereof, related thereto or
used in connection therewith.
'Central City Casino Property' shall mean that real property which is
particularly described as Parcels 1 and 2 on 'Exhibit V' attached to the First
Amendment to Credit Agreement and by this reference incorporated into the Credit
Agreement.
'Central City Collateral' shall mean collective reference to: (i) all
of the Central City Property and the personal property, furniture, fixtures and
equipment, contract rights, leases, intangibles and other interests of HCCMC and
HWWLLC, which are subject to the liens and security interests of the Central
City Security Documents; (ii) all rights of HCCMC and HWWLLC assigned as
additional security pursuant to the terms of the Central City Security
Documents; and (iii) any and all other property and/or intangible rights,
interest or benefits inuring to or in favor of HCCMC or HWWLLC, which are in any
manner assigned, pledged, encumbered or otherwise hypothecated in favor of Agent
Bank on behalf of Lenders to secure payment of the Bank Facilities.
'Central City Deed of Trust' shall mean the Deed of Trust, Fixture Filing
and Security Agreement with Assignment of Rents to be executed, within ten (10)
Banking Business Days following the Equity Exchange Effective Date, by HCCMC and
HWWLLC, as trustors and debtors, to the Public Trustee of Gilpin County,
Colorado, as trustee, in favor of Agent Bank on behalf of Lenders, as
<PAGE>
beneficiary and secured party, encumbering the Central City Property and other
Collateral more particularly described therein, for the purpose of securing the
Bank Facilities and all other sums which may be owing by Borrowers to the Banks
from time to time under the terms of the Credit Agreement, as said Central City
Deed of Trust may be amended, modified, extended, renewed or restated from time
to time.
'Central City Depository Closing Instructions' shall mean the Depository
Closing Instructions to be given by Agent Bank to Colorado Title Company, within
ten (10) Banking Business Days following the Equity Exchange Effective Date,
setting forth the requirements of Lenders for the issuance of the Central City
Title Insurance Policy and conditions for recordation of the Central City Deed
of Trust and other Central City Security Documents.
'Central City Financing Statements' shall mean the Uniform Commercial
Code Financing Statements to be filed in the office of the Secretary of State of
the State of Colorado, and in the office of the County Recorder of Gilpin
County, Colorado, within ten (10) Banking Business Days following the Equity
Exchange Effective Date, in order to perfect the security interest granted to
Agent Bank on behalf of the Lenders under the Central City Deed of Trust and
other Security Documentation in accordance with the requirements of the Colorado
Uniform Commercial Code, as such Financing Statements may be amended, modified,
extended, renewed or restated from time to time.
'Central City Hotel/Casino Facility' shall mean the hotel and casino
business and related activities conducted by HCCMC and/or HWWLLC on the Central
City Property and all improvements now or hereafter situate thereon, presently
conducted under the style and name of Harveys Wagon Wheel Hotel Casino.
'Central City Parking Garage Property' shall mean that real property
which is particularly described as Parcels 3 and 4 on 'Exhibit V' attached
hereto and incorporated by reference herein.
'Central City Property' shall mean collective reference to the Central
City Casino Property and the Central City Parking Garage Property.
<PAGE>
'Central City Security Documents' shall mean collective reference to
the Central City Deed of Trust, Central City Financing Statements, Central City
Assignment of Permits, Licenses and Contracts, Central City Assignment of
Spaceleases, Contracts, Rents and Revenues, Payment Subordination Agreement and
any other document or instrument which is executed or delivered by HCR, HCCMC
and/or HWWLLC, and accepted by Agent Bank, on behalf of Lenders, as security for
payment of the Bank Facilities.
'Central City Title Insurance Policy' shall mean the ALTA Extended
Coverage Lenders Policy of Title Insurance and endorsements to be attached
thereto, to be issued by Colorado Title Company within ten (10) Banking Business
Days following the Equity Exchange Effective Date, in the aggregate amount of
Twenty Million Dollars ($20,000,000.00) in favor of Agent Bank on behalf of the
Lenders, insuring the Central City Deed of Trust as a first mortgage lien on the
Central City Casino Property, and as a second mortgage lien on the Central City
Parking Garage Property; all subject only to the exceptions permitted to be
shown thereon in accordance with the requirements set forth in the Central City
Depository Closing Instructions.
'Colorado EBITDA' shall mean with reference to the Central City
Casino, for any fiscal period under review, on and after the Equity Exchange
Effective Date: (a) the sum of (i) Colorado EBIT for that period, plus
(ii) depreciation and amortization for that period to the extent deducted in the
determination of Net Income, determined in accordance with GAAP, plus (c) the
amount of Colorado Management Fees paid in Cash by the Central City Casino to
HCCMC for such period, but only to the extent deducted in the determination of
Net Income for that period.
'Credit Agreement' shall mean the Original Credit Agreement as amended
by the First Amendment to Credit Agreement, as it may be further amended,
modified, extended, renewed or restated from time to time.
'Debt Exchange' shall have the meaning ascribed to such term in Recital
Paragraph D of the First Amendment to Credit Agreement.
'Deeds of Trust' shall mean collective reference to: (i) the Tahoe
Deed of Trust and the California Deed of Trust; and (ii) on and after ten (10)
Banking Business Days following the Equity Exchange Effective Date, the Central
City Deed of Trust.
<PAGE>
'Default Notice Recording' shall mean either:
(i) the recordation of a notice of default and election to sell
by Agent Bank, on behalf of Lenders, in the office of the County Recorder of
Douglas County, Nevada, under which a non-judicial foreclosure proceeding under
NRS Chapter 107 or in the office of the County Recorder of El Dorado County,
California, under which a non-judicial foreclosure proceeding under California
law is initiated by Agent Bank as beneficiary under the Tahoe Deed of Trust
and/or the California Deed of Trust;
(ii) the commencement of a judicial foreclosure action in the
Judicial District Court of Nevada in and for the County of Douglas, pursuant to
which Lenders or Agent Bank, on behalf of Lenders, seek judicial foreclosure
under NRS Chapter 106 or a judicial foreclosure action in the Superior Court of
El Dorado County, California, pursuant to which Lenders or Agent Bank on behalf
of Lenders seek judicial foreclosure under California law of the Tahoe Deed of
Trust and/or the California Deed of Trust;
(iii) the commencement of a judicial foreclosure action under the
Iowa Mortgage pursuant to which Lenders or Agent Bank on behalf of Lenders seek
judicial foreclosure or a judicial action in Pottawattamie County, Iowa,
pursuant to which Lenders or Agent Bank on behalf of Lenders seek judicial
foreclosure under Iowa law of the Iowa Mortgage;
(iv) the commencement of a foreclosure action pursuant to which
Lenders or Agent Bank on behalf of Lenders seek foreclosure of the Iowa Ship
Mortgage;
(v) the recordation of a notice of default and election to sell
by Agent Bank, on behalf of Lenders, in the office of the County Recorder of
Gilpin County, Colorado, under which a non-judicial foreclosure proceeding is
initiated by Agent Bank as beneficiary under the Central City Deed of Trust; or
<PAGE>
(vi) the commencement of a judicial foreclosure action in a
Colorado court of competent jurisdiction, pursuant to which Lenders or Agent
Bank, on behalf of Lenders, seek judicial foreclosure under the Central City
Deed of Trust.
'Equipment Leases and Contracts' shall mean the executed leases and
purchase contracts pertaining to FF&E: (i) wherein Borrowers, or any of them,
are the lessee or vendee, as the case may be, as set forth on that certain
Schedule of Equipment Leases and Contracts designated as Schedule 4.19, affixed
to the Original Credit Agreement and by this reference incorporated into the
Credit Agreement and made a part thereof; and (ii) on and after ten (10) Banking
Business Days following the Equity Exchange Effective Date, wherein HCCMC and/or
HWWLLC is the lessee or vendee, as the case may be, as set forth on that certain
Supplemental Schedule of Equipment Leases and Contracts designated as
Supplemental Schedule 4.19 affixed to the First Amendment to Credit Agreement
and by this reference incorporated into the Credit Agreement and made a part
thereof.
'Equity Exchange' shall have the meaning ascribed to such term in
Recital Paragraph C of the First Amendment to Credit Agreement.
'Equity Exchange Effective Date' shall mean the date upon which the
Equity Exchange has been consummated and the Mountain City Interests are owned
by HCR.
'Exchange Registration' shall have the meaning ascribed to such term
in Recital Paragraph D of the First Amendment to Credit Agreement.
'First Amendment Effective Date' shall mean May 15, 1996, or such later
date as each of the conditions precedent set forth in Section 11 of the First
Amendment to Credit Agreement have occurred.
'First Amendment to Credit Agreement' shall have the meaning set forth
in the Preamble of the First Amendment to Reducing Revolving Credit Agreement
dated as of May 15, 1996, executed by and among Borrower and Banks.
'HWW Notes' shall have the meaning ascribed to such term in Recital
Paragraph D of the First Amendment to Credit Agreement.
<PAGE>
'Harveys Notes' shall have the meaning ascribed to such term in Recital
Paragraph D of the First Amendment to Credit Agreement.
'Hotel/Casino Facilities' shall mean collective reference to: (i) the
Tahoe Hotel/Casino Facility and Iowa Riverboat/Hotel Facilities; and (ii) on and
after ten (10) Banking Business Days following the Equity Exchange Effective
Date, the Central City Hotel/Casino Facility; all together with any future
expansions thereof, related thereto or used in connection therewith, and all
appurtenances thereto.
'Indenture' shall have the meaning ascribed to such term in Recital
Paragraph E of the First Amendment to Credit Agreement.
'MCCP' shall have the meaning ascribed to such term in Recital
Paragraph C of the First Amendment to Credit Agreement.
'Mortgages' shall mean collective reference to: (i) the Tahoe Deed of
Trust, California Deed of Trust, Iowa Mortgage and Iowa Ship Mortgage; and
(ii) on and after ten (10) Banking Business Days following the Equity Exchange
Effective Date, the Central City Deed of Trust.
'Mountain City Interests' shall have the meaning ascribed to such term
in Recital Paragraph C of the First Amendment to Credit Agreement.
'Original Credit Agreement' shall have the meaning set forth in Recital
Paragraph A to the First Amendment to Credit Agreement.
'Payment Subordination Agreement' shall have the meaning ascribed to
such term in Section 4(e) of the First Amendment to Credit Agreement.
'Permitted Encumbrances' shall mean, at any particular time, (i) liens
for taxes, assessments or governmental charges not then due, payable and
delinquent, (ii) liens for taxes, assessments or governmental charges not then
required to be paid pursuant to Section 5.10, (iii) liens in favor of Agent Bank
or any Lender created or contemplated by the Security Documentation, (iv) the
liens, encumbrances and restrictions on the Real Properties and existing
<PAGE>
improvements which are allowed by Banks to appear in Schedule B, Part I and II
of the respective Title Insurance Policies (including, without limitation, the
Central City Title Insurance Policy) relating to such Real Properties, (v) liens
in favor of Agent Bank on behalf of the Lenders or consented to in writing by
Agent Bank upon the approval of Requisite Lenders, (vi) until, but not
subsequent to, ten (10) Banking Business Days following the Senior Subordinated
Notes Effective Date, purchase money security interests or Capital Lease
Liabilities for acquired FF&E or the Riverboat Senior Financing up to the
maximum cumulative aggregate amount of Twenty Million Dollars ($20,000,000.00)
and only to the extent of the lesser of the purchase money loan or the fair
market value of the acquired FF&E as of the applicable acquisition date or the
Riverboat as of the date of incurrence of the Riverboat Senior Financing, as the
case may be, (vii) easements, licenses or rights-of-way, hereafter granted to
any Governmental Authority or public utility providing services to the
Hotel/Casino Facilities which are first approved in writing by the Agent Bank
upon the approval of Requisite Lenders, (viii) judgment liens on property other
than the Collateral which do not constitute an Event of Default, (xi) statutory
liens of landlords and liens of carriers, warehousemen, mechanics, customs and
revenue authorities and materialmen and other similar liens imposed by law
incurred in the ordinary course of business which could not reasonably be
expected to cause a Material Adverse Effect and which are discharged in
accordance with Section 5.04, (x) liens incurred or deposits made in the
ordinary course of business in connection with workers' compensation,
unemployment insurance and other types of social security, or to secure the
performance of tenders, statutory obligations, surety and appeal bonds, bids,
leases, government contracts, trade contracts, performance and return-of-money
bonds and other similar obligations; (xi) leases, concessions or subleases
granted to others not interfering in any material respect with the ordinary
conduct of the business of Borrowers, or any of them, or any of their respective
Subsidiaries; and (xii) minor defects, encroachments or irregularities in title
not interfering in any material respect with the ordinary conduct of the
business of Borrowers, or any of them, or any of their respective Subsidiaries;
and (xiii) pledges and security interests granted by HCR in favor of third
parties of HCR's interest in promissory notes made by HRHI payable to the order
of HCR, which promissory notes evidence the terms of repayment of subordinated
loans made by HCR to HRHI pursuant to and in accordance with the terms of the
Hard Rock Makewell Agreement.
<PAGE>
'Real Properties' shall mean collective reference to:
(i) the Tahoe Real Property, the California Greenbelt Property, the Tahoe
Greenbelt Property,the Park Cattle Property and the Iowa Real Property; and (ii)
on and after ten (10) Banking Business Days following the Equity Exchange
Effective Date, the Central City Property.
'Security Documentation' shall mean collective reference to: (i) the
Tahoe Security Documents, the Iowa Security Documents, the Security Agreement
and Pledge of Stock, the Trademark Security Agreement and all other instruments
and agreements to be executed by or on behalf of Borrowers or other applicable
persons, in favor of Agent Bank on behalf of the Lenders, securing repayment of
the Bank Facilities; (ii) until, but not subsequent to, ten (10) Banking
Business Days following the Equity Exchange Effective Date, the Colorado
Security Agreement and Colorado Financing Statements; and (iii) on and after ten
(10) Banking Business Days following the Equity Exchange Effective Date, the
Central City Security Documents.
'Senior Parking Garage Deed of Trust' shall mean that certain Deed of
Trust with Assignment of Rents, Security Agreement and Fixture Filing which is
executed by HCCMC, as borrower, to the Public Trustee of Gilpin County,
Colorado, as trustee, for the benefit of David R. Belding, which was recorded in
the Official Records of Gilpin County, Colorado on February 9, 1996 in Book 594
at Page 190 under Reception No. 87446, for the purpose of encumbering, among
other things, the Central City Parking Garage Property, as security for payment
and performance by HCR and HCCMC under the Senior Parking Garage Loan.
'Senior Parking Garage Loan' shall mean that loan transaction pursuant
to which David R. Belding made a term loan to HCR and HCCMC in the original
principal amount of Ten Million Dollars ($10,000,000.00), which is evidenced by,
among other instruments, a Promissory Note executed by HCR and HCCMC under date
of February 9, 1996 and payable to the order of David R. Belding in the original
principal amount of Ten Million Dollars ($10,000,000.00).
'Senior Subordinated Notes' shall have the meaning ascribed to such
term in Recital Paragraph E of the First Amendment to Credit Agreement.
'Senior Subordinated Notes Effective Date' shall mean the date upon
which the Senior Subordinated Notes have been issued by HCR and HCR has received
the proceeds thereof, net of costs and expenses.
'Spaceleases' shall mean: (i) the executed spaceleases pertaining to
the Tahoe Hotel/Casino Facility and/or Iowa Riverboat/Hotel Facilities, or any
portion thereof, wherein HCR or HIMC, as applicable, is the lessor, as set forth
on that certain Schedule of Spaceleases set forth as Schedule 4.18, affixed to
<PAGE>
the Original Credit Agreement and by this reference incorporated into the Credit
Agreement and made a part thereof; and (ii) on and after ten (10) Banking
Business Days following the Equity Exchange Effective Date, the executed
spaceleases pertaining to the Central City Hotel/Casino Facility, or any portion
thereof, wherein HCR, HCCMC or HWWLLC, as applicable, is the lessor, as set
forth on that certain Supplemental Schedule of Spaceleases set forth as
Supplemental Schedule 4.18, affixed to the First Amendment to Credit Agreement
and by this reference incorporated into the Credit Agreement and made a part
thereof.
'TFCC Ratio' as of the end of any Fiscal Quarter shall mean with
reference to the HCR Consolidation:
The sum of net profit after tax, plus Interest Expense (accrued and
capitalized), plus depreciation and amortization expense, plus operating lease
expense, plus rental expense, minus dividends declared, minus actual Capital
Expenditures (not including budgeted project costs of the Iowa Riverboat/Hotel
Facilities paid in 1995 and 1996 up to the cumulative aggregate amount of
Ninety-Six Million Four Hundred Thousand Dollars ($96,400,000.00), but
including all project costs in excess thereof) in each case for such Fiscal
Quarter and the three (3) Fiscal Quarters immediately preceding such Fiscal
Quarter,
Divided by (/)
The sum of Interest Expense (accrued and capitalized),
plus operating lease expense, plus rental expense in each case for such Fiscal
Quarter and the three (3) Fiscal Quarters immediately preceding such Fiscal
Quarter, plus the current portion of long term Indebtedness (including all
principal payments and Scheduled Reductions required to be made under the Credit
Facility), plus the current portion of Capitalized Lease Liabilities, as of the
end of such Fiscal Quarter under review.
<PAGE>
'Title Insurance Policies' shall mean collective reference to:
(i) the Iowa Title Insurance Policy, the Tahoe Title Insurance Policy and the
Colorado Title Insurance Policy; and (ii) on and after ten (10) Banking Business
Days following the Equity Exchange Effective Date, the Central City Title
Insurance Policy.
Section 2. CONSENT TO AND OCCURRENCE OF EQUITY EXCHANGE. As of
the First Amendment Effective Date, Lenders do hereby consent to completion of
the Equity Exchange by HCR in accordance with and as provided in the Exchange
Registration. HCR agrees to complete or cause the completion of the Equity
Exchange no later than June 15, 1996.
Section 3. ASSUMPTION BY HWWLLC AS OF EQUITY EXCHANGE EFFECTIVE
DATE. HWWLLC joins in the execution of this First Amendment to Credit Agreement
for the purpose of evidencing its agreement and, as of the Equity Exchange
Effective Date, does hereby jointly and severally assume all duties, obligations
and liabilities of Borrowers under the Original Credit Agreement, this First
Amendment to Credit Agreement, the Notes and each of the other Loan Documents as
a Co-Borrower and agrees to jointly and severally perform all of the promises
covenants of Borrowers arising or performable from and after the Equity Exchange
Effective Date.
Section 4. PERFECTION OF SECURITY INTERESTS IN CENTRAL CITY PROPERTY. On or
before ten (10) Banking Business Days following the Equity
Exchange Effective Date:
a. HWWLLC shall cause the Central City Property
to be encumbered by the Central City Security Documents in favor of Agent Bank
on behalf of Lenders as additional Collateral for the Bank Facilities, which
shall include the following documents and instruments in each case in the form
prepared by the Lenders' attorneys:
i. Central City Deed of Trust;
ii. Central City Assignment of Permits, Licenses
and Contracts;
iii. Central City Assignment of Spaceleases,
Contracts, Rents and Revenues; and
iv. Central City Financing Statements.
b. HWWLLC and HCR shall cause the Central City
Title Insurance Policy to be issued in favor of Agent Bank on behalf of the
Lenders in accordance with the Central City Depository Closing Instructions.
<PAGE>
c. HWWLLC and HCR shall cause the Colorado Intercompany Deed of Trust and
each other document of record or filed in the State of Colorado relating to or
perfecting a security interest for the Colorado Intercompany Note to be fully
released and reconveyed. In this regard, Agent Bank agrees to join in the
execution of such documents as may be necessary to cause a release of the
Colorado Financing Statements and cancellation of the Colorado Security
Agreement.
d. The HWW Notes shall be assigned to HCR and HWWLLC and HCR
shall cause all security instruments securing repayment thereof to be fully
released and reconveyed in exchange for the Harveys Notes pursuant to the Debt
Exchange as set forth in the Exchange Registration.
e. HCR shall execute and deliver to Agent Bank on behalf of the Lenders,
a Payment Subordination and Security Agreement ('Payment Subordination
Agreement') in the form prepared by Lenders' attorneys and shall further deliver
the originals of each of the Colorado Intercompany Note and the HWW Notes
(together with endorsements or other evidence of assignment to HCR) which shall
be subject to the payment restrictions and shall be held by Agent Bank pursuant
to the terms of the Payment Subordination Agreement.
f. One or more opinions of counsel to the Borrowers and addressed to the
Agent Bank and each of the Banks, together with their respective successors and
assigns, substantially in the form of the legal opinion marked 'Exhibit M-1',
affixed to the First Amendment to Credit Agreement and by this reference
incorporated herein and made a part hereof.
Section 5. RESTATEMENT OF SECTION 5.23. INVESTMENTS AND ADVANCES.
As of the Equity Exchange Effective Date, Section 5.23 of the Original Credit
Agreement (other than Section 5.23(c) which shall not be deemed amended until
the occurrence of the Senior Subordinated Notes Effective Date) entitled
'Investments and Advances', shall be and is hereby amended and restated in its
entirety as follows:
Section 5.23. INVESTMENTS AND ADVANCES. Other than Investments, Advances and
Contingent Liabilities made or incurred as of the Closing Date, Borrowers shall
not make any further Investments or Advances or incur any further Contingent
Liabilities in connection with or relating to HLVMC, HRHI, the Hard Rock Hotel
<PAGE>
(other than in connection with the Hard Rock Guaranty or Hard Rock Make Well
Agreement), or any of them. Additionally, Borrowers, or any of them, shall not
make any Advances or Investments or incur Contingent Liabilities other than as
specifically permitted below or by Section 5.25:
a. Investments: (i) in Cash Equivalents, or (ii) pursuant to and
consistent with the HCR Investment Policy which Investments are first approved
by Requisite Lenders.
b. New Venture Investments by HCR (other than Investments in HIMC as
provided in subparagraph (c) hereinbelow) and Contingent Liabilities in respect
thereof so long as: (i) the cumulative aggregate of all New Venture Investments
plus the aggregate of Adjusted HCR Contingent Liabilities (exclusive of any HCR
Contingent Liability attributable to the Hard Rock Guaranty or Hard Rock Make
Well Agreement, as the case may be and exclusive of the Colorado Slot Lease
Guaranty) as of any date of determination shall not exceed Forty Million Dollars
($40,000,000.00) at any time prior to Bank Facility Termination, and (ii) the
construction plans and specifications, all material construction contracts and
construction agreements, construction budgets and projections and construction
time tables for construction and completion of each New Venture is first
approved by Agent Bank upon the consent of Requisite Lenders.
c. On and after the Senior Subordinated Notes Effective Date, Investments
in and Advances to HIMC by HCR or any of its Subsidiaries used for the purpose
of financing the costs of construction and development of the Iowa
Riverboat/Hotel Facilities.
d. Advances received by HCR from any of its Subsidiaries.
e. Investments received in settlement of arms-length disputes with
non-Affiliates of Borrowers.
f. Investments received as consideration for asset sales made in
arms-length transactions for fair market consideration.
<PAGE>
g. Investments and Advances to HCCMC or HWWLLC by HCR or any of its
Subsidiaries relating to the Central City Hotel/Casino Facility for the purpose
of: (i) acquiring all right, title and interest of MCCP in and to HWWLLC
pursuant to the Acquisition Agreement, (ii) acquiring the Parking Garage
Property and constructing a parking garage thereon, and (iii) Capital
Expenditures relating to the Central City Hotel/Casino Facility.
Section 6. ADDITION OF SUBSECTIONS 5.24(D) AND (E) REGARDING ADDITIONAL
UNSECURED INDEBTEDNESS AND SENIOR PARKING GARAGE LOAN. As of the Equity
Exchange Effective Date, Section 5.24 of the Original Credit Agreement entitled
'Additional Indebtedness' shall be and is hereby amended by adding thereto
additional Subsections (d) and (e) as follows:
d. Unsecured Indebtedness, provided that any unsecured note or series of
notes or other evidence of Indebtedness to any single lender or syndication of
lenders for a single transaction or series of related transactions in excess of
Ten Million Dollars ($10,000,000.00) shall first be approved in writing by
Requisite Lenders, which approval shall not be unreasonably withheld provided
that each of the following conditions are true with respect to such
Indebtedness:
(i) Covenants relating to such Indebtedness must not be more restrictive
than those required under the Credit Agreement,
(ii) the unsecured note or notes or other evidence of Indebtedness must
mature at least six (6) months following the Maturity Date under the Credit
Agreement,
(iii) the rate of interest on the unsecured note or notes or other evidence
of Indebtedness shall be at the current market rate for similar transactions in
the marketplace, and
(iv) the unsecured note or notes or other evidence of Indebtedness may not
require principal payments to be made prior to Bank Facility Termination.
e. The Senior Parking Garage Loan until the date specified in Section
8(d) of the First Amendment to Credit Agreement, on or before which date the
Senior Parking Garage Loan shall be fully paid.
Section 7. RESTATEMENT OF SECTION 5.25, CONTINGENT LIABILITIES.
As of the Equity Exchange Effective Date, Section 5.25 of the Original Credit
Agreement entitled "Contingent Liabilities" shall be and is hereby amended and
restated in its entirety as follows:
<PAGE>
Section 5.25. CONTINGENT LIABILITIES. Neither HIMC, HCCMC nor HWWLLC may incur
any Contingent Liabilities. No HCR Contingent Liability may contain terms or
provisions more restrictive on HCR than the covenants, terms and provisions
applicable to HCR, the Borrower Consolidation and/or the HCR Consolidation, as
applicable, within the Credit Agreement.
Section 8. OCCURRENCE OF SENIOR SUBORDINATED NOTES EFFECTIVE DATE,
DESIGNATION OF SENIOR DEBT AND REQUIRED PAYMENTS FROM PROCEEDS OF SENIOR
SUBORDINATED NOTES. As of the First Amendment Effective Date, Lenders do hereby
consent to issuance of the Senior Subordinated Notes by HCR in accordance with
and as provided in the S-1 Registration up to the aggregate amount of One
Hundred Fifty Million Dollars ($150,000,000.00). The Senior Subordinated Notes
Effective Dates shall occur on or before July 31, 1996. On or before ten (10)
Banking Business Days following the Senior Subordinated Notes Effective Date
(except as otherwise noted in (d) below), Borrowers shall cause the Bank
Facilities to be Designated Senior Debt pursuant to an Officer's Certificate in
accordance with the procedure set forth in the Indenture and shall pay or cause
to be paid in full the following Indebtedness:
a. all outstanding principal and interest then owing under the Harveys
Notes;
b. all Indebtedness guarantied under the terms of the Colorado Slot Lease
Guaranty;
c. all Indebtedness owing under the terms of the Riverboat Senior
Financing and shall additionally cause the release and reconveyance of all ship
mortgages and other security instruments encumbering the Riverboat or any
equipment, furniture, fixtures or gaming devices located on the Riverboat other
than the Iowa Ship Mortgage and related security interests in favor of Agent
Bank on behalf of the Lenders; and
d. on or before June 15, 1996, Borrower shall pay or cause to be paid all
sums owing on the Senior Parking Garage Loan and cause the full release and
reconveyance of the Senior Parking Garage Deed of Trust and all related security
instruments securing repayment of the Senior Parking Garage Loan.
Section 9. PARCEL MAP REQUIREMENT FOR CENTRAL CITY PARKING GARAGE PROPERTY.
On or before September 15, 1996, Borrowers shall cause a parcel map to be
prepared, approved, filed and recorded in accordance with all applicable laws,
<PAGE>
regulations and requirements of all necessary Governmental Authorities,
including without limitation, Central City, Gilpin County, State of Colorado,
for the purpose of creating the Central City Parking Garage Property as a
legally separate and recognized parcel of real property, which parcel map shall
additionally be first approved by Agent Bank.
Section 10. AMENDMENT OF SECTION 7.01, EVENTS OF DEFAULT. As of the Senior
Subordinated Notes Effective Date, Section 7.01 entitled 'Events of Default'
shall be and is hereby amended by adding thereto an additional Subsections (w)
and (x) as follows:
(w) The occurrence of any 'Change of Control' as defined in the S-1
Registration and/or Indenture which causes any holder or holders of the Senior
Subordinated Notes to require the Company to repurchase all or any part of such
holder's or holders' Senior Subordinated Notes; and
(x) Borrowers, or any of them, shall fail duly and punctually to perform
or comply with any term, covenant, condition or promise contained in the First
Amendment to Credit Agreement, which failure continues for more than ten (10)
Banking Business Days after written notice thereof is delivered to Borrowers by
Agent Bank.
Section 11. CONDITIONS PRECEDENT TO FIRST AMENDMENT EFFECTIVE DATE.
The occurrence of the First Amendment Effective Date is subject to Agent Bank
having received the following documents and payments, in each case in a form and
substance reasonably satisfactory to Banks:
a. Execution and delivery by each of the Borrowers and Banks of fourteen
(14) counterpart originals of the First Amendment to Credit Agreement.
b. Delivery to Agent Bank of a copy of a corporate resolution of each of
the Borrowers authorizing the execution and delivery of this First Amendment to
Credit Agreement and each document, agreement and instrument to be executed and
delivered in connection herewith.
c. Reimbursement to Agent Bank by Borrowers for the reasonable attorneys'
fees of Henderson & Nelson incurred in connection with the preparation and
execution of the First Amendment to Credit Agreement; and
d. Such other documents, instruments or conditions as may reasonably be
required by Agent Bank.
<PAGE>
<PAGE>
Section 12. REPRESENTATIONS AND WARRANTIES. To induce Banks to enter into this
First Amendment to Credit Agreement, Borrowers hereby: (i) ratify and reaffirm
the representations and warranties set forth in Article IV of the Original
Credit Agreement; (ii) warrant and represent that each such representation and
warranty shall be true and correct as of the First Amendment 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 First Amendment Effective Date, no Default
or Event of Default has occurred and remains continuing.
Section 13. NO OTHER CHANGES. Except as specifically set forth herein, the
Original Credit Agreement shall remain unchanged and in full force and effect.
Section 14. GOVERNING LAW. This First Amendment to Credit Agreement shall be
governed by the internal laws of the State of Nevada without reference to
conflicts of laws principles.
Section 15. COUNTERPARTS. This First Amendment to Credit 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 First Amendment
to Credit Agreement by signing any such counterpart.
Section 16. ADDITIONAL/REPLACEMENT SCHEDULES AND EXHIBITS ATTACHED. The
following replacement Schedules and Exhibits are attached hereto and
incorporated herein and made a part of the Credit Agreement as follows:
Supplemental Schedule 4.18 - Supplemental Schedule of Spaceleases
Supplemental Schedule 4.19 - Supplemental Schedule of Equipment Leases and
Contracts
Exhibit M-1 - Colorado Legal Opinion (Form)
Exhibit V - Central City Casino Property and Central City Parking
Garage Property Description
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to
Credit Agreement to be executed as of the day and year first above written.
BORROWERS:
HARVEYS CASINO RESORTS,
a Nevada corporation
By: /s/ Charles W. Scharer
Charles W. Scharer,
President
By: /s/ William B. Ledbetter
William B. Ledbetter,
Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
<PAGE>
HARVEYS C.C. MANAGEMENT COMPANY, INC.,
a Nevada corporation
By: /s/Thomas M. Yturbide
Thomas M. Yturbide,
President
By: /s/William B. Ledbetter
William B. Ledbetter,
Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
HARVEYS IOWA MANAGEMENT COMPANY., INC.,
a Nevada corporation
By: /s/Thomas M. Ytubide
Thomas M. Yturbide,
President
By: /s/Charles W. Scharer
Charles W. Scharer,
Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
<PAGE>
HARVEYS WAGON WHEEL CASINO
LIMITED LIABILITY COMPANY
By:/s/Charles W. Scharer
Charles W. Scharer
Chairman, Board of Managers
By:/s/Thomas M. Yturbide
Member, Board of Managers
Address: HWWLLC:
Highway 50
P. O. Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
BANKS:
FIRST INTERSTATE BANK OF NEVADA, N.A.,
Agent Bank, Lender, Swingline Lender
and L/C Issuer
By: /s/ Grace A. Bartholet
Title: Vice President
Address:
One East First Street
Reno, Nevada 89501
Telephone: (702) 334-5633
Facsimile: (702) 334-5637
<PAGE>
WELLS FARGO BANK, N.A.,
successor by merger with
FIRST INTERSTATE BANK OF
CALIFORNIA, Lender
By: /s/ Guity Javid
Title: Senior Vice President
By: /s/Charles W. Reed
Title:Senior Vice President
Address:
707 Wilshire Boulevard
W16-20 (MAC 2818-166)
Los Angeles, CA 90017
Telephone: (213) 614-3903
Facsimile: (213) 614-2569
BANK OF THE WEST,
Lender
By: /s/ Tom J. Matson
Title: Regional Vice President
Address:
1450 Treat Boulevard
Walnut Creek, CA 94596
Telephone: (510) 942-8675
Facsimile: (510) 256-8276
<PAGE>
FIRST SECURITY BANK OF IDAHO, N.A., Lender
By:/s/ David P. Williams
Title: Vice President
Address:
15 East 100 South
2nd Floor
Salt Lake City, UT 84111
Telephone: (801) 246-5540
Facsimile: (801) 246-5532
IMPERIAL BANK, Lender
By: /s/Steven K. Johnson
Title: Senior Vice President
By:/s/John F. Farrace
Title:Assistant Vice President
Address:
9920 S. La Cienega
Ingelwood, CA 90301
Telephone: (310) 417-5657
Facsimile: (310) 338-6160
<PAGE>
NORWEST BANK OF NEBRASKA, N.A., Lender
By: /s/Dee Ann Wenger
Title:Assistant Vice President
Address:
1919 Douglas Street
Omaha, NE 68102
Telephone: (402) 536-2576
Facsimile: (402) 536-2251
NBD BANK, Lender
By:/s/ James Junker
Title: Vice President
Address:
National Banking Division
Mezzanine Level
611 Woodward Ave.
Detroit, MI 48226
Telephone: (313) 225-1424
Facsimile: (313) 225-2649
<PAGE>
SOCIETE GENERALE, Lender
By:/s/ J.Blaine Shaun
Title:Regional Manager
Address:
2029 Century Park East
Suite 2900
Los Angeles, CA 90067
Telephone: (310) 788-7104
Facsimile: (310) 551-1537
THE SUMITOMO BANK, LIMITED,
Chicago Branch, Lender
By:/s/ David M. Lawrence
Title: Vice President and Manager
By: /s/Bardford E.Chambers
Title:Vice President
Address:
800 W. Sixth Street
Suite 950
Los Angeles, CA 90017
Telephone: (213) 623-7847
Facsimile: (213) 623-4629
<PAGE>
U.S. BANK OF NEVADA, Lender
By:/s/ Kurt Imerman
Title:Vice President
Address:
One East Liberty Street
2nd Floor
Reno, NV 89501
Telephone: (702) 688-6589
Facsimile: (702) 688-6597
WEST ONE BANK, IDAHO, Lender
By:/s/Steve Bentin
Title:Vice President
Address:
Corporate Banking, 1-0094
101 S. Capital Blvd.
Boise, ID 83702
Telephone: (208) 383-7606
Facsimile: (208) 383-7563
<PAGE>
ARGENTBANK, Lender
By: /s/ Lionel J. Lagarde, Jr.
Title:Vice President
Address:
203 West 2nd Street
Thibodaux, LA 70301
Telephone: (504) 447-0552
Facsimile: (504) 447-0604
<PAGE>
SECOND AMENDMENT TO
REDUCING REVOLVING CREDIT AGREEMENT
THIS SECOND AMENDMENT TO REDUCING REVOLVING CREDIT AGREEMENT ( 'Second
Amendment to Credit Agreement') is made and entered into as of the 23rd day of
May, 1996, by and among HARVEYS CASINO RESORTS, a Nevada corporation ( 'HCR'),
HARVEYS C.C. MANAGEMENT COMPANY, INC., a Nevada corporation ( 'HCCMC'), HARVEYS
WAGON WHEEL CASINO LIMITED LIABILITY COMPANY ( 'HWWLLC') and HARVEYS IOWA
MANAGEMENT COMPANY, INC., a Nevada corporation ( 'HIMC' and together with HCR
and HCCMC and HWWLLC collectively the 'Borrowers'), FIRST INTERSTATE BANK OF
NEVADA, N.A., WELLS FARGO BANK, N.A., successor by merger with FIRST INTERSTATE
BANK OF CALIFORNIA, BANK OF THE WEST, FIRST SECURITY BANK OF IDAHO, N.A.,
IMPERIAL BANK, NORWEST BANK OF NEBRASKA, N.A., NBD BANK, SOCIETE GENERALE,
THE SUMITOMO BANK, LIMITED, Chicago Branch, U.S. BANK OF NEVADA, WEST ONE BANK,
IDAHO and ARGENTBANK (herein together with their respective successors and
assigns collectively the 'Lenders'), FIRST INTERSTATE BANK OF NEVADA, N.A., as
the swingline lender (herein in such capacity, together with its successors and
assigns, the 'Swingline Lender'), FIRST INTERSTATE BANK OF NEVADA, N.A., as the
issuer of letters of credit hereunder (herein in such capacity, together with
its successors and assigns, the 'L/C Issuer') and FIRST INTERSTATE BANK OF
NEVADA, N.A., as administrative and collateral agent for the Lenders, Swingline
Lender and L/C Issuer (herein, in such capacity, called the 'Agent Bank' and,
together with the Lenders, Swingline Lender and L/C Issuer, collectively
referred to as the 'Banks').
R_E_C_I_T_A_L_S:
WHEREAS:
A. HCR, HCCMC, HIMC and Banks (The Sumitomo Bank, Limited, Chicago
Branch, having acquired the interest of The Daiwa Bank, Limited by Assignment,
Assumption and Consent Agreement dated as of February 2, 1996) entered into a
Reducing Revolving Credit Agreement dated as of August 14, 1995 (the 'Original
Credit Agreement'). Borrowers and Banks entered into a First Amendment to
Reducing Revolving Credit Agreement dated as of May 15, 1996 (the 'First
Amendment to Credit Agreement' and, together with the Original Credit Agreement,
collectively the 'Existing Credit Agreement').
B. In this Second Amendment to Credit Agreement, all capitalized words
and terms shall have the respective meanings and be construed herein as provided
in Section 1.01 of the Existing Credit Agreement, as that Section is amended
hereby. This Second Amendment to Credit 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.
<PAGE>
C. Borrowers and Banks desire to further amend the Existing Credit
Agreement for the purposes of: (i) amending the definition of TFCC Ratio for the
purpose of (a) increasing the amount of budgeted project costs of the Iowa
Riverboat/Hotel Facilities not to be included in deducted Capital Expenditures
from Ninety-Six Million Four Hundred Thousand ($96,400,000.00) to One Hundred
Ten Million Five Hundred Thousand Dollars ($110,500,000.00) and (b) adding the
costs of acquisition of the Central City Parking Garage Property and
construction of a parking garage facility thereon up to the cumulative aggregate
amount of Ten Million Dollars ($10,000,000.00) as an exclusion to the Capital
Expenditure deduction in the numerator of the TFCC Ratio, (ii) prohibiting
prepayment or defeasance of the Senior Subordinated Notes without the prior
written consent of Agent Bank, and (iii) deleting the requirement contained in
Section 8(b) of the First Amendment to Credit Agreement that all Indebtedness
guaranteed under the terms of the Colorado Slot Lease Guaranty be fully paid on
or before ten (10) Banking Business Days following the Senior Subordinated Notes
Effective Date.
NOW, THEREFORE, for good and valuable consideration, the parties hereto
agree to amend the Existing Credit Agreement by amending and substituting, as
applicable, the amended terms and provisions as hereinafter set forth, which
amended terms shall be deemed effective as of the Second Amendment Effective
Date.
Section 1. DEFINITIONS. Section 1.01 of the Existing Credit Agreement
shall be and is hereby amended to include the following definitions. Those
terms which are currently defined by Section 1.01 of the Existing Credit
Agreement and which are also defined below shall be defined as set forth below
as of the Second Amendment Effective Date:
'Credit Agreement' shall mean the Existing Credit Agreement as amended by
the Second Amendment to Credit Agreement, as it may be further amended,
modified, extended, renewed or restated from time to time.
'Existing Credit Agreement' shall have the meaning set forth in Recital
Paragraph A to the Second Amendment to Credit Agreement.
'First Amendment To Credit Agreement' shall have the meaning set forth in
Recital Paragraph A to the Second Amendment to Credit Agreement.
'Original Credit Agreement' shall have the meaning set forth in Recital
Paragraph A to the Second Amendment to Credit Agreement.
'Second Amendment Effective Date' shall mean May 29, 1996.
'Second Amendment To Credit Agreement' shall have the meaning set forth in
the Preamble of the Second Amendment to Reducing Revolving Credit Agreement
dated as of May 23, 1996, executed by and among Borrower and Banks.
'TFCC Ratio' as of the end of any Fiscal Quarter shall mean with reference
to the HCR Consolidation:
The sum of net profit after tax, plus Interest Expense
(accrued and capitalized), plus depreciation and amortization
expense, plus operating lease expense, plus rental expense,
minus dividends declared, minus actual Capital Expenditures
(not including (a) budgeted project costs of the Iowa Riverboat/Hotel
Facilities paid in 1995 and 1996 up to the cumulative aggregate
amount of One Hundred Ten Million Five Hundred Thousand Dollars
($110,500,000.00) and (b) costs of acquisition of the Central
City Parking Garage Property and construction of a parking
garage facility thereon up to the cumulative aggregate amount of
Ten Million Dollars ($10,000,000.00),but including all project
costs of the Iowa Riverboat/Hotel Facilities and parking garage
facility in excess of the aggregate amounts set forth above)
in each case for such Fiscal Quarter and the three (3)
Fiscal Quarters immediately preceding such Fiscal Quarter,
Divided by (/)
The sum of Interest Expense (accrued and capitalized), plus operating
lease expense, plus rental expense in each case for such Fiscal
Quarter and the three (3) Fiscal Quarters immediately preceding such
Fiscal Quarter, plus the current portion of long term Indebtedness
(including all principal payments and Scheduled Reductions required to
be made under the Credit Facility), plus the current portion of
Capitalized Lease Liabilities, as of the end of such Fiscal Quarter
under review.
<PAGE>
Section 2. PROHIBITION ON PREPAYMENT OR DEFEASANCE OF SENIOR
SUBORDINATED NOTES. Notwithstanding anything contained in the Existing Credit
Agreement to the contrary, none of Borrowers nor any Subsidiary of Borrowers
shall, except with the prior written consent of the Requisite Lenders, purchase,
redeem, retire or otherwise acquire for value, or set apart any money for a
sinking, defeasance or other analogous fund for, the purchase, redemption,
retirement or other acquisition of, or make any voluntary payment or prepayment
of the principal of or interest on, or any other amount owing in respect of, the
Senior Subordinated Notes, except for regularly scheduled payments of principal
and interest in respect of such Senior Subordinated Notes required pursuant to
the instruments evidencing such Senior Subordinated Notes. Any breach of the
covenant set forth in the preceding sentence shall be deemed to be an Event of
Default under the Credit Agreement.
Section 3. DELETION OF REQUIREMENT TO FULLY PAY INDEBTEDNESS GUARANTEED
UNDER THE COLORADO SLOT LEASE GUARANTY. Section 8 (b) of the First Amendment to
Credit Agreement shall be and is hereby deleted and of no further force or
effect.
Section 4. NO OTHER CHANGES. Except as specifically set forth herein, the
Existing Credit Agreement shall remain unchanged and in full force and effect.
Section 5. GOVERNING LAW. This Second Amendment to Credit Agreement shall
be governed by the internal laws of the State of Nevada without reference to
conflicts of laws principles.
Section 6. COUNTERPARTS. This Second Amendment to Credit 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 Second Amendment
to Credit Agreement by signing any such counterpart.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Second
Amendment to Credit Agreement to be executed as of the day and year first above
written.
BORROWERS:
HARVEYS CASINO RESORTS,
a Nevada corporation
By: /s/ John J. M Laughlin
John J. McLaughlin,
Treasurer
By: /s/ Diane Shevlin
Diane Shevlin,
Assistant Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
<PAGE>
HARVEYS C.C. MANAGEMENT COMPANY, INC.,
a Nevada corporation
By: /s/ Thomas M. Yturbide
Thomas M. Yturbide,
President
By: /s/ William B. Ledbetter
William B. Ledbetter,
Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
HARVEYS IOWA MANAGEMENT COMPANY, INC.,
a Nevada corporation
By: /s/ Thomas M. Yturbide
Thomas M. Yturbide,
President
By: /s/ William B. Ledbetter
William B. Ledbetter,
Secretary
Address:
Highway 50
P.O Box 128
Stateline, Nevada 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
<PAGE>
HARVEYS WAGON WHEEL CASINO
LIMITED LIABILITY COMPANY
By: /s/ Franklin K. Rahbeck
Franklin K. Rahbeck,
Board of Managers
By: /s/ Thomas M. Yturbide
Thomas M. Yturbide,
Board of Managers
Address:
Highway 50
P.O. Box 128
Stateline, NV 89449
Telephone: (702) 586-6756
Facsimile: (702) 588-0601
BANKS:
FIRST INTERSTATE BANK OF NEVADA, N.A.,
Agent Bank, Lender, Swingline Lender
and L/C Issuer
By: /s/Joe Brady
Title: Senior Vice President
Address:
One East First Street
Reno, Nevada 89501
Telephone: (702) 334-5633
Facsimile: (702) 334-5637
<PAGE>
WELLS FARGO BANK, N.A.,
successor by merger with
FIRST INTERSTATE BANK OF
CALIFORNIA, Lender
By: /s/ Edith R. Lim
Title: Vice President
By: /s/ Arthur McAllister
Title: Vice President
Address:
707 Wilshire Boulevard
W16-20 (MAC 2818-166)
Los Angeles, CA 90017
Telephone: (213) 614-3903
Facsimile: (213) 614-2569
BANK OF THE WEST, Lender
By: /s/ Tom J. Matson
Title: Regional Vice President
Address:
1450 Treat Boulevard
Walnut Creek, CA 94596
Telephone: (510) 942-8675
Facsimile: (510) 256-8276
<PAGE>
FIRST SECURITY BANK OF IDAHO, N.A., Lender
By: /s/ David P. Williams
Title:Vice President
Address:
15 East 100 South
2nd Floor
Salt Lake City, UT 84111
Telephone: (801) 246-5540
Facsimile: (801) 246-5532
IMPERIAL BANK, Lender
By: /s/ Steven K. Johnson
Title: Senior Vice President
By: /s/ John F. Farrace
Title: Assistant Vice President
Address:
9920 S. La Cienega
Ingelwood, CA 90301
Telephone: (310) 417-5657
Facsimile: (310) 338-6160
<PAGE>
NORWEST BANK OF NEBRASKA, N.A., Lender
By: /s/ Dee Ann Wenger
Title: Assistant Vice President
Address:
1919 Douglas Street
Omaha, NE 68102
Telephone: (402) 536-2576
Facsimile: (402) 536-2251
NBD BANK, Lender
By: /s/ James Junker
Title: Second Vice President
Address:
National Banking Division
Mezzanine Level
611 Woodward Ave.
Detroit, MI 48226
Telephone: (313) 225-1424
Facsimile: (313) 225-2649
<PAGE>
SOCIETE GENERALE, Lender
By: /s/ Donald L. Schubert
Title: Vice President
Address:
2029 Century Park East
Suite 2900
Los Angeles, CA 90067
Telephone: (310) 788-7104
Facsimile: (310) 551-1537
THE SUMITOMO BANK, LIMITED,
Chicago Branch, Lender
By: /s/ Bradford E. Chambers
Title: Vice President
By: /s/ David M. Lawrence
Title: Vice President and Manager
Address:
800 W. Sixth Street
Suite 950
Los Angeles, CA 90017
Telephone: (213) 623-7847
Facsimile: (213) 623-4629
<PAGE>
U.S. BANK OF NEVADA, Lender
By: /s/ Kurt Imerman
Title: Vice President
Address:
One East Liberty Street
2nd Floor
Reno, NV 89501
Telephone: (702) 688-6589
Facsimile: (702) 688-6597
WEST ONE BANK, IDAHO, Lender
By: /s/ Anthony Olbrich
Title: Senior Vice President
Address:
Corporate Banking, 1-0094
101 S. Capital Blvd.
Boise, ID 83702
Telephone: (208) 383-7606
Facsimile: (208) 383-7563
<PAGE>
ARGENTBANK, Lender
By: /s/ Lionel LaGarde
Title:Vice President
Address:
203 West 2nd Street
Thibodaux, LA 70301
Telephone: (504) 447-0552
Facsimile: (504) 447-0604
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> NOV-30-1996
<PERIOD-START> DEC-01-1995
<PERIOD-END> MAY-31-1996
<CASH> 23,869
<SECURITIES> 1,975
<RECEIVABLES> 5,175
<ALLOWANCES> 219
<INVENTORY> 3,005
<CURRENT-ASSETS> 39,588
<PP&E> 411,981
<DEPRECIATION> 106,351
<TOTAL-ASSETS> 382,858
<CURRENT-LIABILITIES> 33,403
<BONDS> 179,110
0
0
<COMMON> 98
<OTHER-SE> 141,226
<TOTAL-LIABILITY-AND-EQUITY> 382,858
<SALES> 20,404
<TOTAL-REVENUES> 108,854
<CGS> 6,277
<TOTAL-COSTS> 57,094
<OTHER-EXPENSES> 42,718
<LOSS-PROVISION> 450
<INTEREST-EXPENSE> 5,059
<INCOME-PRETAX> 4,154
<INCOME-TAX> 1,585
<INCOME-CONTINUING> 2,569
<DISCONTINUED> 0
<EXTRAORDINARY> 141
<CHANGES> 0
<NET-INCOME> 2,428
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
