SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of
earliest event reported): November 16, 2009
PENN NATIONAL GAMING, INC.
Commission file number 0-24206
Incorporated Pursuant to
the Laws of the Commonwealth of Pennsylvania
Identification No. 23-2234473
Berkshire Blvd., Suite 200
Wyomissing, PA 19610
Check the appropriate box below if the Form 8-K
filing is intended to simultaneously satisfy the filing obligation of the
registrant under any of the following provisions:
pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
communications pursuant to Rule 14d-2(b) under the Exchange Act (17
communications pursuant to Rule 13e-4(c) under the Exchange Act (17
8.01. Other Events.
On November 16, 2009, Nevada Gaming Ventures, Inc. (NGVI),
an indirect subsidiary of Penn National Gaming, Inc. (Penn), entered
into both (a) a stalking horse Asset Purchase Agreement (the Stalking
Horse Agreement) by and among Fontainebleau Las Vegas Holdings, LLC (Resort
Holdings), Fontainebleau Las Vegas, LLC (Resort), Fontainebleau Las Vegas
Capital Corp. (Resort Capital and, together with Resort Holdings and Resort, the
Resort Sellers), Fontainebleau Las Vegas Retail Parent, LLC (Retail
Holdings), Fontainebleau Las Vegas Retail Mezzanine, LLC (Retail Mezzanine),
Fontainebleau Las Vegas Retail, LLC (Retail and, together with Retail
Holdings and Retail Mezzanine, the Retail Sellers, and, together with the
Resort Sellers, the Sellers) and NGVI, and (b) a Debtor-In-Possession
Credit Agreement (the DIP Credit Agreement) among Resort Holdings, Resort,
Resort Capital, the Lenders party thereto and NGVI.
Each of the Resort Sellers is a debtor in a chapter 11 case before the
United States Bankruptcy Court for the Southern District of Florida (the
Bankruptcy Court), and each of the Retail Sellers has agreed to commence
cases under chapter 11 of the Bankruptcy Code by filing voluntary petitions for
relief with the Bankruptcy Court.
Together, the Sellers own the assets comprising the unfinished hotel,
resort and casino known as the Fontainebleau Las Vegas (the Project).
The effectiveness of the Stalking Horse Agreement and DIP Credit
Agreement are subject to the approval of the Bankruptcy Court. If the agreements are so approved, NGVI will
be designated as the stalking horse bidder in an auction of the Project
pursuant to Section 363 of the U.S. Bankruptcy Code. As the stalking horse bidder, NGVIs offer to
purchase the Project, as set forth in the Stalking Horse Agreement, would be
the standard by which any other bids to purchase the Project will be evaluated.
Other interested bidders who submit qualifying offers would be permitted to
participate in the auction of the Project.
The Sellers have agreed to request that the Bankruptcy Court set January 15,
2010 as the deadline for other bids and schedule the auction for January 21,
Pursuant to the DIP Credit Agreement, if approved, NGVI will be
committed to provide Resort with a revolving credit facility of approximately
$51.5 million through February 9, 2010, subject to earlier termination
upon the occurrence of certain events.
The DIP Credit Agreement requires Resort to spend any borrowings it
makes under the DIP Credit Agreement to stabilize the unfinished buildings at
the Project and on other budgeted expenses.
Pursuant to the Stalking Horse Agreement, if approved, NGVI will agree,
absent any higher or otherwise better bid, to acquire the Project from the
Sellers (the Purchase) for (i) $50 million in cash (subject to reduction
for certain remediation costs, among other adjustments), and (ii) the
release of the Sellers, at the closing of the Purchase, from any outstanding
obligations under the DIP Credit Agreement.
Consummation of the Purchase would be subject to customary conditions to
closing, including receipt of Bankruptcy Court approvals. If the Bankruptcy Court approves the Stalking
Horse Agreement, then, upon termination of the agreement in certain
circumstances including the Bankruptcy Courts approval of a competing
transaction, a default by the Sellers under specified provisions of the DIP
Credit Agreement or the failure of the parties to meet certain procedural
deadlines the Sellers would be required to pay NGVI a termination fee equal
to 3% of (a) $50 million plus (b) the amount of the Sellers
outstanding obligations under the DIP Credit Agreement at the time of
The foregoing descriptions of the Stalking Horse Agreement and DIP
Credit Agreement are qualified in their entirety by reference to the full text
of the Stalking Horse Agreement and DIP Credit Agreement, which are filed as
Exhibits 99.1 and 99.2 to this report, respectively, and are incorporated into
this report by reference. The Stalking
Horse Agreement and DIP Credit Agreement have been included to provide
investors and security holders with information regarding their respective
terms. They are not intended to provide any other factual information about
NGVI, the Sellers or their respective subsidiaries
affiliates. Each agreement contains representations and warranties by NGVI, on
the one hand, and by certain Sellers, on the other hand, made solely for the
benefit of the other. The assertions embodied in those representations and
warranties are qualified by information in applicable disclosure schedules that
the parties have exchanged in connection with signing the Stalking Horse
Agreement and DIP Credit Agreement. These disclosure schedules contain
information that modifies, qualifies and creates exceptions to the
representations and warranties set forth in the Stalking Horse Agreement and
DIP Credit Agreement. Moreover, certain representations and warranties in the
Stalking Horse Agreement and DIP Credit Agreement were made as of a specified
date, may be subject to a contractual standard of materiality different from
what might be viewed as material to shareholders, or may have been used for the
purpose of allocating risk between NGVI, on the one hand, and the Sellers, on
the other hand. Accordingly, the representations and warranties in the Stalking
Horse Agreement and DIP Credit Agreement are not necessarily characterizations
of the actual state of facts about NGVI or the Sellers at the time they were
made or otherwise and should only be read in conjunction with the other
information that NGVI or the Sellers file with the Bankruptcy Court or that
Penn makes publicly available in reports, statements and other documents filed
with the Securities and Exchange Commission.
This Form 8-K contains forward-looking statements within the
meaning of the Private Securities Litigation Reform Act of 1995 related to the
auction of the Project. Actual results may vary materially from
expectations. These forward-looking statements are subject to risks and
uncertainties that could cause actual results to differ from expectations including,
but are not limited to, rulings of the Bankruptcy Court. Penn does not intend to update publicly any
forward-looking statements except as required by law.
Item 9.01 Financial Statements and
99.1 Asset Purchase Agreement, dated as of November 16,
2009, by and among Fontainebleau Las Vegas Holdings, LLC, Fontainebleau Las
Vegas, LLC, Fontainebleau Las Vegas Capital Corp., Fontainebleau Las Vegas
Retail Parent, LLC, Fontainebleau Las Vegas Retail Mezzanine, LLC,
Fontainebleau Las Vegas Retail, LLC and Nevada Gaming Ventures, Inc.
Credit Agreement, dated as of November 16, 2009, among Fontainebleau Las
Vegas Holdings, LLC, Fontainebleau Las Vegas, LLC, Fontainebleau Las Vegas
Capital Corp., the Lenders party thereto and Nevada Gaming Ventures, Inc.
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.
November 17, 2009
NATIONAL GAMING, INC.
/s/ Robert S. Ippolito
Robert S. Ippolito
Vice President, Secretary