OKLAHOMA HORSE RACING COMMISSION REGULARLY SCHEDULED MEETING OCTOBER 19, 2017 MINUTES

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1 OKLAHOMA HORSE RACING COMMISSION REGULARLY SCHEDULED MEETING OCTOBER 19, 2017 CALL TO ORDER Chairman Lucas called the of the Commission to order at 9:31 a.m. in the Board Room of the Department of Agriculture, Food and Forestry, Oklahoma City, Oklahoma. Chairman Lucas advised the Commission that he would have to leave the meeting early and recommended hearing Global Gaming Solutions, LLC s request for approval of a new credit facility before the continued deliberations on the CY 2018 racetrack racing and gaming license applications. No Commissioner objected to the change in the order of agenda topics. ROLL CALL Commission members answering roll call were Commissioners Goumaz, Kirk, Marcum, Sanders, Von Hemel and Chairman Lucas. Commissioners Harrell, Ingersoll-Keener and Wright were unable to attend the meeting. The following Commission staff members were in attendance: Mr. Kelly Cathey, Mr. Pete Markstone, Ms. Shonna Gore, Mr. Mike Corey, Ms. Amanda Kilgore, Mr. Kevin Ortman and Ms. Bonnie Morris. Approximately nine people attended and signed the registry which is part of the record. INTRODUCTION OF NEW LAW ENFORCEMENT AGENTS Mr. Kelly Cathey, Commission Executive Director, introduced Ms. Amanda Kilgore and Mr. Kevin Ortman as the new Law Enforcement Agents at Remington Park who began their employment on October 2, 2017.

2 Commissioner Kirk made a motion to approve the drafted Minutes of the August 17, 2017 as presented. Commissioner Von Hemel seconded the motion. The vote was recorded as follows: Aye: Mr. Kirk, Mr. Von Hemel, Ms. Goumaz, Mr. Lucas Abstain: Mr. Marcum, Mr. Sanders Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Wright The motion passed on a 4-0 vote. GLOBAL GAMING SOLUTIONS, LLC S REQUEST FOR APPROVAL OF A MORTGAGE OF REMINGTON PARK LEASEHOLD ESTATE AND PLEDGE OF REMINGTON PARK ASSETS AS A GUARANTY Background Remington Park s racing license Order requires Commission written approval before Global Gaming RP, LLC can sell, transfer, lease, sublease or otherwise affect any interest in the real property of the racetrack. Most recently, at its June 16, 2016 meeting, the Commission approved Global Gaming RP, LLC s request for a proposed working capital loan for $10,056, from Landmark Bank. The proceeds were used to replenish a portion of the funds that were used to pay off an earlier Bank of Oklahoma loan and also used for ongoing working capital needs. Current Consideration The Commission received an October 5, 2017 letter from Ms. Monica J. Hoenshell, Esq., of the Calvert Law Firm, counsel for Global Gaming Solutions, LLC, the sole member of Global Gaming RP, LLC [Remington Park], and a summary of terms document regarding a proposed $60 million credit facility between Global Gaming Solutions, LLC and Wells Fargo Bank. As part of the credit facility, Remington Park would guaranty the credit facility and pledge its assets, including mortgaging its leasehold interest in the real property occupied by the Remington Park racetrack and casino, as security for its guaranty. The credit facility was proposed to optimize the capital structure of Global Gaming Solutions, LLC and Remington Park since both of those entities generate substantial cash flow and have little to no debt other than the credit facility. If approved, a term of the Credit Agreement between Global Gaming Solutions, LLC and Wells Fargo stated that the earlier Landmark Bank, N.A. loan to Remington Park would never exceed $500,000 going forward. 2

3 Ms. Hoenshell, as Counsel for Global Gaming RP, LLC, presented the financing details at the meeting. She said the purposes of the credit facility were for optimizing the capital structure and leveraging some of their income and good business investments. A portion of the credit facility was used to pay off Remington Park s $10,056, loan to Landmark Bank except for $500,000. Ms. Hoenshell stated that the closing on the loan occurred on October 2, 2017 without the pledge of the racetrack assets by Remington Park. Commissioner Goumaz asked what portion of the $60 million loan would trickle down for use by Remington Park. Ms. Hoenshell said that at the current time, only the $10 million would be used by Remington Park with the remainder of the $60 million used to optimize Global Gaming Solutions, LLC s capital structure as well as its subsidiaries, such as Remington Park. Commissioner Goumaz stated that the reason the Commission was discussing the proposed credit facility was due to the reluctance of Global Gaming Solutions, LLC to waive its sovereign immunity as it pertains to the racetrack. In lieu of the waiver, a condition in the racing license Order requires a 2:1 debt-to-worth ratio which she stated was being met. She added that Remington Park had not been providing the quarterly financial statements as required in the racing license Order, so she planned to recommend that the responsibility of providing the quarterly statements be placed on Remington Park rather than the Commission. Commissioner Goumaz stated that she would prefer that Remington Park provide a limited guaranty to the extent it would be involved in the credit facility, such as the $10 million, and for the guaranty to be collateralized. Ms. Hoenshell stated the limited guaranty was not the structure planned for the credit facility but that Remington Park would be able to obtain more of the credit facility from time to time as it needed. She added that the financial covenants, such as the 2:1 debtto-worth ratio, seemed reasonable. Commissioner Goumaz responded that the financial covenants did not contemplate potential contingent liabilities, adding that pledging 100% of the racetrack assets for the credit facility would not be reflected in the balance sheet or calculated into the equation. Commissioner Goumaz said that she planned to recommend that Remington Park s CY 2018 racing license Order be modified from the draft to require quarterly financial statements being forwarded from the racetrack to the Commission; expand the debt-toworth ratio to include contingent liabilities; and require a list of potential contingent liabilities with the quarterly financial statements. Ms. Hoenshell responded that the planned changes to the financial reporting would not pose a problem for Remington Park, adding that limiting the guaranty to the extent Remington Park would be involved in the credit facility would be problematic. She stated 3

4 that Remington Park s guaranty was added to the loan to reduce the rates and the fees; if Remington Park limited its guaranty, then the savings would be lost. Commissioner Goumaz requested that Ms. Hoenshell suggest to Global Gaming Solutions, LLC that it consider amending the credit facility with Wells Fargo Bank to limit Remington Park s guaranty to $10 million or a higher level with the guaranty to be collateralized. Ms. Hoenshell responded that she would. Commissioner Goumaz made a motion to approve Global Gaming Solutions, LLC s request for a new credit facility with the following recommended changes to Remington Park s CY 2018 racing license Order: (1) expand the definition of debt-to-worth ratio to include contingent liabilities; (2) require the racetrack s submission of quarterly financial statements to the Commission; and (3) require a list, reporting all proposed contingent liabilities. Commissioner Kirk seconded the motion. The vote was recorded as follows: Aye: Ms. Goumaz, Mr. Kirk, Mr. Marcum, Mr. Sanders, Mr. Von Hemel, Mr. Lucas Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Wright The motion passed on a 6-0 vote. CONTINUED DELIBERATIONS REGARDING CY 2018 RACING AND GAMING LICENSE APPLICATIONS FOR REMINGTON PARK, WILL ROGERS DOWNS AND FAIR MEADOWS AT TULSA Background At the August 17, 2017 meeting, representatives for Will Rogers Downs and Fair Meadows at Tulsa presented their respective applications for CY 2018 racing and gaming licenses. Commissioners and Commission Staff asked questions. The Commission then took preliminary action to award CY 2018 racing and gaming licenses to Remington Park and Will Rogers Downs and CY 2018 racing and recipient license to Fair Meadows at Tulsa, allot CY 2018 live race dates and direct Commission Staff to draft License Orders for continued deliberations for the next Commission meeting. Current Consideration The drafted racing and gaming license Orders were distributed to the Commissioners prior to the meeting. Chairman Lucas stated it was his understanding there were a couple of CY 2018 horsemen s agreements received after the October 1, 2017 deadline listed in OAC 325: As such, Chairman Lucas requested any motion to approve an organization licensee s racing license include a provision stating if no agreement 4

5 between the respective horsemen s group and a racetrack was received before the October 1, 2017 deadline [for any reason], that the terms of the latest agreement between the prospective parties be recognized until a new agreement has been submitted to the Commission. [Please see footnote 1 below.] Commissioner Goumaz made a motion to take final action to allot CY 2018 live race dates and adopt the drafted CY 2018 racing and companion gaming 2 license Orders to the racetracks with the following changes to Remington Park s racing license Order to amend Condition #27 to: (1) expand the definition of debt-to-worth ratio to include contingent liabilities; (2) require the submission of quarterly financial statements to the Commission; and (3) require a list, reporting all potential contingent liabilities. Commissioner Kirk seconded the motion. The vote was recorded as follows: Aye: Ms. Goumaz, Mr. Kirk, Mr. Marcum, Mr. Sanders, Mr. Von Hemel, Mr. Lucas Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Wright The motion passed on a 6-0 vote. Chairman Lucas left the meeting at 9:52 a.m. Vice-Chair Goumaz presided for the rest of the meeting. APPEAL HEARING OF GERRY AND THERESA MC LEAN REGARDING STEWARDS ORDER 2017-RP-054A Background In Stewards Order 17-RP-054A, Mr. Gerry McLean, Trainer, was found to be in violation of OAC 325:35-1-5, Trainer Responsibility, and OAC 325:45-1-4, Drugs or Medication, and the Directive on Commission-Sanctioned Thresholds for his horse, EXPRESSIONS N SNOW, testing positive for Tolfenamic Acid, a prohibited substance. The Board of Stewards fined Mr. McLean $2,500 and suspended his occupation license for a period of three hundred sixty-five (365) days beginning Thursday, April 13, 2017, and continuing through Thursday, April 12, The Stewards also disqualified the horse, EXPRESSIONS N SNOW, from second place with the horse to remain unplaced in the 6 th race at Remington Park on Saturday, March 25, The purse was ordered to be redistributed. 1 Subsequent to the meeting, all signed CY 2018 Horsemen s Agreements were submitted to the Commission. 2 Fair Meadows at Tulsa received a Recipient license. 5

6 In Stewards Order 17-RP-055A, Ms. Theresa Lynn McLean, Owner, was suspended pursuant to OAC 325: (a)(6), Grounds for Denial, Refusal, Suspension or Revocation of License. On June 28, 2017, Mr. Gerry McLean and Mrs. Theresa McLean filed an appeal of the Board of Stewards Order 17-RP-054A, dated June 5, Appeal Hearing The McLeans were represented by Mr. Carl Hughes, counsel. The Board of Stewards at Remington Park was represented by Mr. James Rucker, counsel. The Commission heard arguments from both attorneys and asked questions of both attorneys. Commissioner Marcum made a motion to go into Executive Session to deliberate on the McLeans Appeal and include Alecia George, Assistant Attorney General and Commission Legal Advisor, and Mr. Kelly Cathey, Commission Executive Director. Commissioner Sanders seconded the motion. The vote was recorded as follows: Aye: Mr. Marcum, Mr. Sanders, Ms. Goumaz, Mr. Kirk, Mr. Von Hemel Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Lucas, Mr. Wright The motion passed on a 5-0 vote. The Executive Session started at 10:21 a.m. At 11:07 a.m., Commissioner Sanders made a motion to return to Open Session. Commissioner Kirk seconded the motion. The vote was recorded as follows: Aye: Mr. Sanders, Mr. Kirk, Ms. Goumaz, Mr. Marcum, Mr. Von Hemel Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Lucas, Mr. Wright The motion passed on a 5-0 vote. Commissioner Sanders made a motion to uphold the Stewards decisions in Stewards Orders 17-RP-054A and 17-RP-055A and instruct the Commission Legal Advisor to draft an Order, including Findings of Fact and Conclusions of Law discussed in Executive Session, for continued deliberations at the November 16, 2017 Commission meeting. Commissioner Marcum seconded the motion. The vote was recorded as follows: Aye: Mr. Sanders, Mr. Marcum, Ms. Goumaz, Mr. Kirk, Mr. Von Hemel Absent: Mr. Harrell, Ms. Ingersoll-Keener, Mr. Lucas, Mr. Wright The motion passed on a 5-0 vote. 6

7 REPORTS There were no reports. ANY MATTER NOT KNOWN ABOUT OR WHICH COULD NOT HAVE BEEN REASONABLY FORESEEN PRIOR TO POSTING THE AGENDA There was no such matter. ANNOUNCEMENTS Vice-Chair Goumaz announced that the Oklahoma Classics, a series of stakes races for Oklahoma-Bred Thoroughbreds, would be held on Friday, October 20, 2017, at Remington Park. ADJOURNMENT The meeting was adjourned by acclamation by Vice-Chair Goumaz at 11:09 a.m. Approved this 16 th day of November, On Behalf of the Commission: ATTEST: Kelly G. Cathey, Executive Director KGC/bjm/10/23/17, 10/26/17, 10/27/17, 11/16/17 Joe Lucas, Chairman In conformity with the Oklahoma Open Meeting Act, advance notice of this regular Commission meeting was originally transmitted to the Oklahoma Secretary of State on September 9, 2016; and public notice of this meeting, together with the agenda, was posted in prominent public view in the lobby of the Department of Agriculture, Food and Forestry, Oklahoma City on October 18, The announcement of the CY 2017 Commission meetings was posted on the OHRC website on September 9, The agenda for this meeting was posted on the OHRC website, on October 16,