SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): July 29, 1999
PENN NATIONAL GAMING, INC
(Exact name of Registrant as specified in its charter)
Pennsylvania
(State or other jurisdiction of incorporation or organization)
0-24206 23-2234473
(Commission File Number) (I.R.S. Employer Identification No.)
825 BERKSHIRE BLVD, SUITE 200, WYOMISSING, PA
19610 (Address of principal executive offices
including Zip code)
610-373-2400
(Registrant's telephone number including area code)
Not applicable
(Former name and former address, if changed since last report)
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Item 2. Acquisition or Disposition of Assets
GENERAL
On January 28, 1999, pursuant to a First Amendment to an Asset Purchase
Agreement, by, between and among Greenwood New Jersey, Inc. ("Greenwood"),
International Thoroughbred Breeders, Inc., Garden State Race Track, Inc.,
Freehold Racing Association, Atlantic City Harness, Inc. and Circa 1850, Inc.,
the original parties to an Asset Purchase Agreement entered into as of July 2,
1998, and Penn National Gaming, Inc. ("Penn") (the "Agreement"), and pursuant to
which Penn entered into a joint venture ("Joint Venture"), Penn, along with its
Joint Venture partner, Greenwood agreed to purchase certain assets of the Garden
State Race Track and Freehold Raceway, both located in New Jersey (the
"Acquisition").
BASIC TERMS OF THE ACQUISITION
The purchase price for the Acquisition is approximately $46,000,000 (subject to
reduction of up to approximately $1,000,000 based upon the resolution of certain
disputed items, for which amounts have been placed in escrow). The purchase
price consisted of $23,000,000 in cash and $23,000,000 pursuant to two deferred
purchase price promissory notes in the amount of $22,000,000 and $1,000,000,
each. Penn is responsible for approximately 50% for the purchase price. Pursuant
to the Joint Venture Agreement, the Company agreed to guarantee severally: (i)
up to 50% of the obligations of the Joint Venture under its Put Option Agreement
($17.5 million) with Credit Suisse First Boston Mortgage Capital LLC
("CSFB");(ii) up to 50% of the obligations of the Joint Venture obligation for
the seven year lease at Garden State Park; (iii) up to 50% of the International
Thoroughbred Breeders, Inc. for the contingent purchase price notes ($10.0
million) relating to the operating, if passed by the New Jersey legislature by
the Joint Venture of OTW's and a telephone wagering accounts in New Jersey. In
conjunction with the closing, the Company entered into a Debt Service
Maintenance Agreement with Commerce Bank, N.A. for the funding of a $23.0
million credit facility to the Joint Venture. The Joint Venture Agreement
provides for a limited obligation of the Company of $11.5 million subject to
limitations provided for in the Company's 10.625% Senior Notes Indenture.
THE JOINT VENTURE
Greenwood and Penn entered into the Joint Venture on January 28, 1999,
whereby the parties to the Joint Venture effectuated the Acquisition. The Joint
Venture was contingent upon, among other things, Penn obtaining approvals
necessary to effect the Joint Venture, which approvals included: (i) full and
complete New Jersey regulatory approval (including but not limited to approval
of the New Jersey Racing Commission), (ii) Hart Scott Rodino compliance; and
(iii) the written consent of a majority of the holders of its $80 Million Senior
Notes issued December 17, 1997 to any necessary modification to the Indenture
dated December 12, 1997 to permit Penn's investment in the Joint Venture (the
"Penn Approvals"). At the initial closing of the Acquisition on January 28,
1999, Penn loaned FR Park Racing, LP, a New Jersey limited partnership
("FRPRLP") $11,250,000, which is secured by certain assets. After obtaining the
above Approvals, the Joint Venture funded the two deferred purchase price
promissory notes with a credit facility from a bank in the amount of $23.0
million. Penn invested an additional $250,000 into the Joint Venture as capital.
Penn has approximately 50% interest in the Joint Venture. The Acquisition was
consummated on July 29, 1999.
CERTAIN RELATED AGREEMENTS
The Joint Venture will enter into various agreements with respect to
the operation of the racing facilities.
ACCOUNTING TREATMENT
The investment in the Joint Venture will be accounted for under the
equity method of accounting.
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Item 7. Financial Statements, Pro Forma Financial Information and Exhibits
(a) Financial Statements of Businesses Acquired.
As of the time that this Report on Form 8-K is being filed with the
Securities and Exchange Commission (the "Commission"), it is
impractical for Penn to provide financial statements required pursuant
to Item 7(a) of Form 8-K regarding giving effect to the consummation of
the Acquisition contemplated by the Joint Venture. Penn anticipates
such financial statements will be filed with the Commission on or
before October 12, 1999, at which time Penn will file such financial
statements under cover of an amendment to this Form 8-K.
(b) Pro Forma Financial Information.
As of the time this report on Form 8-K is being filed with the
Commission, it is impractical for Penn to provide the pro forma
financial information required pursuant to Item 7 (b) of Form 8-K
regarding giving effect to the consummation of the Acquisition
contemplated by the Joint Venture. Penn anticipates such pro forma
financial information will be filed with the Commission on or before
October 12, 1999, at which time Penn will file such pro forma financial
information under cover of an amendment to this Form 8-K.
(c) Exhibits
Exhibit No. Description
10.91 Second Amendment to Joint Venture Agreement dated as
of July 29, 1999, between the Company and Greenwood
Racing, Inc. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
10.92 Shareholder's Agreement dated July 29, 1999, between
Penn National Holding Company and Greenwood Racing,
Inc. (Incorporated by reference to the Company's
Form 10-Q, File # 0-24206, dated August 12, 1999.)
10.93 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between FR Park Racing, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.94 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between FR Park Services, L.P.,
Pennwood Racing, Inc., and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.95 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between GS Park Racing, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.96 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between GS Park Services, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.01a Subordination and Intercreditor Agreement dated July
29, 1999, between the Company, FR Park Racing and
Commerce Bank, N.A. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
10.02a Debt Service Maintenance Agreement dated July 29,
1999, between the Company and Commerce Bank, N.A.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.03a First Supplemental Indenture dated may 19, 999,
between the Company and State Street Bank and Trust
Company, Trustee. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
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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.
PENN NATIONAL GAMING, INC
September 27, 1999 By:_/s/Robert S. Ippolito________________
Date Robert S. Ippolito, Chief Financial Officer
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Exhibit Index
Exhibit No. Description
10.91 Second Amendment to Joint Venture Agreement dated as
of July 29, 1999, between the Company and Greenwood
Racing, Inc. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
10.92 Shareholder's Agreement dated July 29, 1999, between
Penn National Holding Company and Greenwood Racing,
Inc. (Incorporated by reference to the Company's
Form 10-Q, File # 0-24206, dated August 12, 1999.)
10.93 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between FR Park Racing, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.94 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between FR Park Services, L.P.,
Pennwood Racing, Inc., and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.95 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between GS Park Racing, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.96 Amended and Restated Limited Partnership Agreement
dated July 29, 1999, between GS Park Services, L.P.,
Pennwood Racing, Inc. and Penn National GSFR, Inc.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.01a Subordination and Intercreditor Agreement dated July
29, 1999, between the Company, FR Park Racing and
Commerce Bank, N.A. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
10.02a Debt Service Maintenance Agreement dated July 29,
1999, between the Company and Commerce Bank, N.A.
(Incorporated by reference to the Company's Form
10-Q, File # 0-24206, dated August 12, 1999.)
10.03a First Supplemental Indenture dated may 19, 999,
between the Company and State Street Bank and Trust
Company, Trustee. (Incorporated by reference to the
Company's Form 10-Q, File # 0-24206, dated August 12,
1999.)
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