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In June 1999, the Company signed a Letter of Intent with
Beverly Hillbillies Gaming Company Inc. and Beverly Hillbillies Gaming
Entertainment LLC to enter into a joint venture to finalize development of and
finance its Black Hawk, Colorado Casino and Hotel project.
The new entity will be titled, "Jethro's Beverly Hillbillies Mansion and Casino", and will be redesigned around the characters, settings, events and theme of the 1960's and '70's television sitcom, The Beverly Hillbillies.
Max Baer, Jr., the founder and chairman of Beverly Hillbillies Gaming Entertainment, LLC successfully secured the exclusive master licenses from CBS and Viacom, Inc. to exploit the Beverly Hillbillies theme in connection with gaming and other entertainment venues. Mr. Baer, who is best known for his portrayal of "Jethro Bodine" during the nine year run of the television series, is also planning a facility in Reno.
Under the terms of the joint venture, named "Jethro's Black Hawk, LLC," the parties will enter into an operating agreement with each party's participation to be established and set forth in accordance with an equity ownership formula. Beverly Hillbillies Gaming Entertainment, LLC will provide management services for the facility.
Financing, financial advisory services and placement agent services will be provided by Westwood Capital, LLC of New York City, New York who is an investment banking firm specializing in structured debt financing and merger and acquisition transactions for companies in the financial services and real estate industries. Additionally, Westwood Capital provides project and corporate financing for companies in the gaming and hospitality industries.
During September and October 1999, the Company completed final review of an Admission and Operating Agreement securing the commitment of all parties to bring the project to fruition. Under the aforementioned agreements' terms, Jethro's Black Hawk, LLC will assume all existing secured indebtedness of the Company, begin making the required interest payments as of September 30, 1999, and make full payment of all such indebtedness by March 31, 2000. As of December 31, 1999, the parties have not yet signed such agreements as Beverly Hillbillies Gaming Entertainment LLC has experienced problems in closing on its property for the Reno project. It is anticipated that such closing will finalize during the year 2000 and the agreement will be signed at that time.
All parties acknowledge their responsibility to be approved by the Colorado Gaming Commission and will proceed to do so prior to project completion.
It is still anticipated that construction will begin sometime in 2000.
Although the Company is confident in the abilities of all parties to provide financing and accomplish all the above mentioned goals, there can be no assurance that any of these items will be provided or completed immediately or in the future. Despite its ongoing relationship with Beverly Hillbillies Gaming Entertainment, LLC, the Company is continued to research other means and sources of bringing the project to fruition. To that effect, in December 1999, the Company signed a short term thirty day exclusive agreement with a Florida lending group to secure the necessary funds to complete the project and submitted a proposal to Casinos Austria International to manage or joint venture the proposed facility.
Additionally, in November 1999, the Company contracted with Heritage West of Black Hawk, Colorado to locate a joint venture partner, lease or in the extreme, sell the property on terms suitable to the Company.
Black Hawk is a picturesque mountain town approximately 40 miles west of Denver. In the past year, July 1998 through June 1999, Black Hawk hosted approximately 3 million visitors and generated over 60% of the state's gaming revenues. The Hotel Casino, on the northern most end of the Black Hawk gaming district, will be in a most highly visible location as it is in a direct line of site to all visitors approaching Black Hawk's Gregory Street intersection on State Highway 119. The Black Hawk and nearby Central City casino market includes many small, privately held gaming facilities that the Company believes offer limited amenities and are characterized by a shortage of convenient on-site parking. There are a few large facilities currently operating with varying levels of services and amenities, as well as new facilities planned. The theme, hospitality, ample parking, modern hotel accommodations and a full line of amenities, will set it apart from, and should give it a competitive advantage over, the other casinos in the Black Hawk/Central City market.
The Hotel Casino complex will be designed and constructed pursuant to a guaranteed maximum price agreement which is to be finalized prior to construction. The design and construction team consists of Semple Brown Roberts, P.C., a Denver based architectural firm (the "Architect") and PCL Construction Services, Inc., a multi-million dollar North American construction firm with U.S. headquarters located in Denver. The Architect is the designer of Fitzgerald's Casino in Black Hawk, while the Contractor's gaming credits include the MGM Grand Hotel Casino and Stratosphere Tower in Las Vegas, Nevada, as well as the Chinook Winds Gaming and Convention Center in Lincoln City, Oregon. |
