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ASSET PURCHASE AGREEMENT

between

CHURCHILL DOWNS CALIFORNIA COMPANY,
a Kentucky corporation,

and

BAY MEADOWS LAND COMPANY, LLC
a Delaware limited liability company

Dated as of July 6, 2005

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TABLE OF CONTENTS             Page   1. DEFINITIONS 1   2. TRANSFER OF ASSETS 9
  2.1 Transfer of Assets 9 2.1.1 Real Property 9 2.1.2 Personal Property 9 2.1.3
Inventory 10 2.1.4 Intellectual Property Rights 10 2.1.5 Cash and Accounts 11
2.1.6 Accounts Receivable and Accounts Payable 11 2.1.7 Books and Records 11
2.1.8 Assigned Contracts 11 2.1.9 Permits and Licenses 12 2.1.10 Vehicles 12
2.1.11 Readerboard Signs 12 2.1.12 SCOTWINC 12 2.1.13 Goodwill 12 2.1.14 Prepaid
Expenses 12 2.1.15 Claims Against Third Parties 12 2.1.16 Insurance Proceeds 12
  2.2 Assets Not Transferred 13 2.2.1 Excluded Personal Property and Prepaid
Deposits 13 2.2.2 Claims Against Third Parties 13 2.2.3 Insurance 13 2.2.4
Unrelated Information 13 2.2.5 Certain Contracts and Licenses 14 2.2.6 Eual
Wyatt Employment Contract 14   3. CLOSING, PURCHASE PRICE, ASSUMPTION OF
LIABILITIES 14   3.1 Closing 14   3.2 Stimultaneous Delivery: Conditions
Concurrent 14   3.3 Purchase Price 14 3.3.1 Purchase Price 14 3.3.2 Assumed
Liabilities 15   (a)     Assigned Contracts 15   (b)     Post-Closing Operations
15

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TABLE OF CONTENTS
(Continued)             Page (c)     Specific Undertakings 15  
(d)     Condition of the Assets 15   (e)     Environmental Conditions 15  
(f)     Liabilities on Balance Sheet 16   (g)     Cash and Accounts 16   3.4
Non-Assumption of Certain Liabilities 16 3.4.1 Tax Liabilities 16 3.4.2
Indemnification Obligations 16 3.4.3 Litigation 16 3.4.4 Workers' Compensation
Claims 16 3.4.5 Certain Employee Liabilities 16 3.4.6 Liabilities Relating to
the Excluded Assets 17 3.4.7 Brokers, etc. 17 3.4.8 Debt 17 3.4.9 Affiliates 17
3.4.10 Certain Environmental Liabilities 17   3.5 Deliveries at Closing 17   3.6
Tax Allocation 20   3.7 Costs and Prorations 21 3.7.1 Costs 21 3.7.2 Prorations
21   (a)     Taxes 21   (b)     Prepaid Items, Deposits and Utilities 22  
(c)     Rent22 22   (d)     Assigned Contracts 22   (e)     Purse Payments 22
3.7.3 Closing Statement 23   4. REPRESENTATIONS AND WARRANTIES OF SELLER 24  
4.1 Organization, Corporate Power, and Authority 24

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TABLE OF CONTENTS
(Continued)             Page   4.2 Authorization of Agreements 24   4.3 Effect
of Agreement 25   4.4 Governmental Approvals 25   4.5 Licenses 25   4.6
Condition of Real Property and Assets; Diligence Materials 25 (i) AS-IS, WHERE
IS 25 (ii) DUE DILIGENCE MATERIALS 26   4.7 Compliance with Laws 26   4.8
Financial Statements 27   4.9 Hazardous Substances 27   4.10 Environmental
Matters 27   4.11 Personal Property; Liens 27   4.12 Leases 27   4.13
Intentionally Omitted 28   4.14 Foreign Person Status 28   4.15 Eminent Domain:
Zoning; Street Changes; Other Litigation 28   4.16 Absence of Certain Changes or
Events 28   4.17 Material Contracts 29   4.18 Litigation 29   4.19 Assets 29  
4.20 Commissions 30   4.21 Labor Relations and Collective Bargaining Agreements
30   4.22 Severance Obligations 30   4.23 Employee Benefit Plans 30  

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TABLE OF CONTENTS
(Continued)             Page   4.24 Guaranties 31   4.25 Foreign Corrupt
Practices Act 31   4.26 Intellectual Property Rights 31   4.27 Insurance 33  
4.28 Taxes 33   4.29 LFR Levine•Fricke 33   4.30 Accounts Receivables 33   5.
REPRESENTATIONS AND WARRANTIES OF BUYER 33   5.1 Organization, Power and
Authority 33   5.2 Authorization of Agreement 34   5.3 Effect of Agreement 34  
5.4 Approvals 34   5.5 Commissions 34   5.6 Financing 34   5.7 Buyer's
Investigation 34   5.8 Environmental Investigation 35   5.9 OFAC List 34   5.10
LFR Levine•Fricke 35   6. COVENANTS OF SELLER 35   6.1 Preliminary Title Report
35   6.2 Conduct of Racetrack Business 36 6.2.1 Ordinary Course 36 6.2.2
Maintain Insurance 36 6.2.3 Purchase or Sale of Assets 36 6.2.4 Maintenance of
Assets 36 6.2.5 Assigned Contracts 36

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TABLE OF CONTENTS
(Continued)             Page 6.2.6 Employment Contracts 36 6.2.7 Collective
Bargaining Agreements 36 6.2.8 Maintain Licenses 36 6.2.9 Zoning 37   6.3 Access
37 6.3.1 Actions with Agencies 37 6.3.2 Correcting Damage 38 6.3.3 Indemnity 38
  6.4 Consents 38   6.5 Collective Bargaining Agreements 39   6.6 Racing Dates;
Redevelopment 39   6.7 Notices of Certain Events 39   6.8 Updated Disclosure
Schedule 39   6.9 Intentionally omitted 39   6.10 Seller's Obligation to Seek
Indemnification from Pinnacle in Certain Circumstances 40   7. COVENANTS OF
BUYER 40   7.1 Permits and Consents 40   7.2 Access to Books and Records 40  
7.3 Cooperation in Third-Party Litigation 41   7.4 Race Track Operator License
41   8. CONDITIONS PRECEDENT 42   8.1 Conditions Precedent to Obligations of
Buyer 42 8.1.1 HSR Act 42 8.1.2 Accuracy of Representations and Warranties 42
8.1.3 Compliance with Covenants 42 8.1.4 Actions or Proceedings 42 8.1.5 Opinion
of Counsel for Seller 43 8.1.6 Consents Obtained 43 8.1.7 Title Insurance 43

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TABLE OF CONTENTS
(Continued)             Page 8.1.8 Environmental Matters 43 8.1.9 Reliance
Letter 43 8.1.10 Estoppel Certificate 43   8.2 Conditions Precedent to
Obligations of Sellerr 43 8.2.1 HSR Act 43 8.2.2 Accuracy of Representations and
Warranties 43 8.2.3 Compliance with Covenants 43 8.2.4 Opinion of Counsel for
Buyer 43 8.2.5 Consents Obtained 44 8.2.6 Purchase Price 44 8.2.7 Environmental
Matters 44 8.2.8 Buyer's Environmental Insurance 44   9. SURVIVAL OF
REPRESENTATIONS; INDEMNIFICATION 44   9.1 Survival of Representations 44   9.2
Agreements to Indemnify 45 9.2.1 General Indemnity 45   (a)     Seller's General
Indemnity 45   (b)     Buyer's General Indemnity 45   (c)     Limitations on
Indemnification 45   (d)     Waiver and Release 46   (e)     Physical Conditiony
47 9.2.2 Conflict 47 9.2.3 Subrogation 48 9.2.4 Other Indemnification Provisions
48   9.3 Conditions of Indemnification 48 9.3.1 Notice 48 9.3.2 Assumption of
Defense 49 9.3.3 Claim Adverse to Indemnifying Party 50 9.3.4 Cooperation 50
9.3.5 Damages 50   9.4 Calculation of Losses 50   9.5 Remedies Exclusive 51

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TABLE OF CONTENTS
(Continued)             Page 10. TERMINATION 51   10.1 Injunction 51   10.2
Mutual Agreement 51   10.3 Required Consents 51   10.4 Material Breach 51   10.5
Environmental Termination 51   10.6 Uncured Asset Loss 51   10.7 Effects of
Termination 52   11. OTHER COVENANTS 53   11.1 Announcements 53   11.2
Employment Matters 53 11.2.1 Offers of Employment 53 11.2.2 Retention of
Liabilities 54 11.2.3 Multiemployer Plans 55   11.3 Cooperation 55   11.4
Excluded Assets 55   11.5 Tax Cooperation 56   11.6 Racetrack Business 56   11.7
Commercially Reasonable Efforts 56   11.8 Removal of Signage and Logos 56   11.9
Race Tickets 56   12. PHASE II ENVIRONMENTAL DILIGENCE PRIOR TO CLOSING 57  
12.1 Buyer Submission of Phase II Workplan 57   12.2 Allocation of Remediation
Costs 59   12.3 Dispute Resolution 59  

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TABLE OF CONTENTS
(Continued)             Page 13. MISCELLANEOUS 60   13.1 Bulk Transfer Laws 60  
13.2 Expenses 60   13.3 Waivers 60   13.4 Amendments, Supplements 60   13.5
Entire Agreement 60   13.6 Binding Effect, Benefitss 61   13.7 Assignability 61
  13.8 Notices 61   13.9 Governing Law: Jurisdiction 62   13.10 Attorneys' Fees
62   13.11 Rules of Construction 62 13.11.1 Headings 62 13.11.2 Tense and Case
62 13.11.3 Severability 62 13.11.4 Knowledge 63 13.11.5 Agreement Negotiated 63
  13.12 Counterparts 63   13.13 Specific Performance 63   13.14 Cooperation in
Exchange 63   13.15 No Merger 64  

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EXHIBITS LIST     Exhibit A   Assignment and Assumption of Lease Agreement    
Exhibit B  Assignment and Assumption of License Agreement    Exhibit C 
Assignment and Assumption of Parking License Agreement    Exhibit D  Bill of
Sale and Assignment and Assumption Agreement    Exhibit E  Description of Land 
  Exhibit F  Reinvestment Agreement    Exhibit G  Simulcast Agreement    Exhibit
H  Transaction Financial Statements and Balance Sheet    Exhibit I 
Intentionally Omitted    Exhibit J  Permitted Liens and Title Exceptions   
Exhibit K  Work Plan    Exhibit L  Form of Estoppel (Casino Lease)    Exhibit M 
License Agreement    Exhibit N  Escrow Agreement 

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        This ASSET PURCHASE AGREEMENT (together with the exhibits and schedules
hereto, the “Agreement”) is entered into as of July 6, 2005 by and between
CHURCHILL DOWNS CALIFORNIA COMPANY, a Kentucky corporation (“Seller”), and BAY
MEADOWS LAND COMPANY, LLC, a Delaware limited liability company (“Buyer”), with
reference to the following facts:

RECITALS

      WHEREAS,

    A.        Seller is the owner of certain assets more particularly described
in this Agreement, including, without limitation, both real and personal
property, tangible and intangible, used by it in the operation of a horse racing
facility known as Hollywood Park Racetrack.

    B.        Seller desires to sell, and Buyer desires to purchase, all of
Seller’s assets as described in this Agreement, and Buyer desires to assume
certain of Seller’s liabilities as described in this Agreement, all on the terms
and conditions set forth herein.

        NOW, THEREFORE, in consideration of the premises and the mutual
covenants hereinafter set forth, the parties agree as follows:

    1.        DEFINITIONS. The following terms shall have the following meanings
when used in this Agreement:

        “1999 Asset Purchase Agreement” shall mean that certain Asset Purchase
Agreement between Hollywood Park, Inc. and Churchill Downs Incorporated dated as
of May 5, 1999.

        “Affiliate” or “Affiliates” shall mean, with respect to any Person, any
Person directly or indirectly controlling, controlled by or under direct or
indirect common control with such other Person, either through the ownership of
all or part of any Person or by means of contract or management rights or
otherwise.

        “Allocation Statement” shall have the meaning set forth in Section 3.6.

        “Assets” shall have the meaning set forth in Section 2.1.

        “Asset Loss” shall have the meaning set forth in Section 10.6.

        “Assigned Contracts” shall have the meaning set forth in Section 2.1.8.

        “Assignment and Assumption of Lease Agreement” shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit A hereto, pursuant
to which Buyer shall assume all of the right, title and interest as “landlord”
under the Casino Lease, and shall agree to perform and discharge all obligations
arising thereunder, in each case arising or occurring after the Closing Date.

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        “Assignment and Assumption of License Agreement” shall mean an
Assignment and Assumption Agreement substantially in the form of Exhibit B
hereto, pursuant to which Buyer shall assume all of the right, title and
interest as “licensor” under the License Agreement, and shall agree to perform
and discharge all obligations arising thereunder in each case arising or
occurring after the Closing Date.

        “Assignment and Assumption of Parking License Agreement” shall mean an
Assignment and Assumption Agreement substantially in the form of Exhibit C
hereto, pursuant to which Buyer shall assume all of the right, title and
interest as “licensee” under the Parking License Agreement, and shall agree to
perform and discharge all obligations arising thereunder, in each case arising
or occurring after the Closing Date.

        “Assumed Liabilities” shall have the meaning set forth in Section 3.3.2.

        “Backup Files” shall have the meaning set forth in Section 2.1.2(c).

        “Bill of Sale” shall mean a Bill of Sale and Assignment and Assumption
Agreement substantially in the form of Exhibit D hereto, pursuant to which
Seller shall assign to Buyer all Personal Property items set forth therein and
Buyer shall acquire same and assume and agree to pay, perform and discharge when
due the Assumed Liabilities.

        “Buyer Indemnified Party” or “Buyer Indemnified Parties” shall have the
meanings set forth in Section 9.2.1(a).

        “Buyer Plan” shall have the meaning set forth in Section 11.2.1.

        “Casino Building” shall mean that certain building, including the
“pavilion” portion thereof, as delineated on Exhibit E, commonly known as 3883
W. Century Boulevard, Inglewood, California 90303, in which the “Hollywood Park
Casino” is operated, and all fixtures, built-in apparatuses, built-in equipment,
built-in appliances and fittings of every kind located on the Casino Building or
used in the operation of the Casino Business, halls, dining rooms, lounges,
offices, lobbies and all other public spaces, lavatories, basements, cellars,
vaults and other portions of the Casino Building, such as heating and air
conditioning systems and facilities used to provide any utility services,
refrigeration, ventilation, garbage disposal, recreation or other services
thereto, and all leasehold improvements of tenants, if any.

        “Casino Business” shall mean the operation of the casino known as the
“Hollywood Park Casino” in and about the Casino Building.

        “Casino Lease” shall mean that certain lease dated September 10, 1999
pursuant to which Seller has leased the Casino Building to Pinnacle.

        “Casino Operator” shall mean Century Gaming Management, Inc., the tenant
under the Casino Sublease.

        “Casino Sublease” shall mean a Lease between Pinnacle and the Casino
Operator pursuant to which the Casino Operator subleases the assets of the
Casino Business and operates the Casino Business.

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        “CDCFOC” shall mean Churchill Downs California Fall Operating Company, a
Kentucky corporation.

        “CHRB” shall have the meaning set forth in Section 4.1.

        “Closing” and “Closing Date” shall have the respective meanings set
forth in Section 3.1.

        “Closing Statement” shall have the meaning set forth in Section 3.7.3.

        “Collective Bargaining Agreement” shall mean those collective bargaining
agreements to which Seller is a party that cover employees of the Racetrack
Business and are listed on Section 4.21 of the Disclosure Schedule.

        “Contract(s)” shall mean any contract, agreement, option, lease,
license, sales order, purchase order or other legally binding commitment,
whether written or oral, pertaining to the operation of the Racetrack Business.

        “Debt” shall mean any indebtedness of Seller, whether or not contingent,
in respect of borrowed money or evidenced by bonds, notes, debentures or other
similar instruments or letters of credit (or reimbursement agreements in respect
thereof) or banker’s acceptances or the balance deferred and unpaid of the
purchase price of any Asset, if and to the extent any of the foregoing
indebtedness (other than letters of credit) would appear as a liability upon a
balance sheet of Seller prepared in accordance with GAAP, including the
indebtedness secured by the Deed of Trust dated April 2, 2003, from Seller to
Bank One, Kentucky, NA, in the amount of $250,000,000, and all indebtedness of
others secured by a lien on any Asset (whether or not such indebtedness is
assumed by Seller) and, to the extent not otherwise included, any guaranty by
Seller of any indebtedness of any other Person.

        “Deposit” shall have the meaning set forth in Section 3.3.1.

        “Diligence Materials” shall mean the documents, information, reports,
studies, financial information and other materials posted in the virtual data
room which was established at http://66.45.42.20/invite/926-00-42212, and to
which access was provided to both Buyer and the other selected bidders
interested in the Transactions, as listed in Section 1 of the Disclosure
Schedule.

        “Disclosure Schedule” shall mean the schedules delivered to Buyer by or
on behalf of the Seller, containing all lists, descriptions, exceptions and
other information and materials as included therein.

        “Employee Benefit Plan” shall have the meaning set forth in
Section 4.23.

        “Environmental Claim or Claims” shall mean any actions, suits, demands,
demand letters, directives, claims, liens, investigations, proceedings or
notices of noncompliance or violation asserted by a third party or governmental
agency alleging potential liability arising out of, based on, or resulting from
the presence or release into the environment of any Hazardous Substances, at or
onto the Real Property.

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        “Environmental Laws” shall mean all laws (including, without limitation,
common law), statutes, decrees, injunctions, permits, regulations, rules,
ordinances, by-laws, orders, judgments or determinations of any governmental or
judicial authority at the federal, state or local level, in effect as of the
Closing Date, which regulate or relate to the protection or clean-up of the
environment, the use, treatment, storage, transportation, generation,
manufacture, processing, distribution, handling or disposal of, or emission,
discharge or other release or threatened release of Hazardous Substances, the
preservation or protection of waterways, groundwater, drinking water, air,
wildlife, plants or other natural resources, or the health and safety of persons
or property, including, without limitation, protection of the health and safety
of employees, other than laws, statutes, regulations, rules, ordinances,
by-laws, orders or determinations pertaining to land use planning, zoning
matters, and development entitlements.

        “Environmental Remediation Cost Estimate” shall have the meaning set
forth in Section 12.1(e).

        “ERISA” shall mean the Employee Retirement Income Security Act of 1974,
as amended.

        “ERISA Affiliate” shall have the meaning set forth in Section 4.23.

        “Estimated Working Capital” shall have the meaning set forth in Section
3.7.3(a).

        “Excluded Assets” shall have the meaning set forth in Section 2.2.

        “Excluded Liabilities” shall have the meaning set forth in Section 3.4.

        “Extended Closing Date” shall have the meaning set forth in Section
10.6.

        “Final Closing Statement” shall have the meaning set forth in Section
3.7.3(b).

        “Final Remediation Cost Estimate” shall have the meaning set forth in
Section 12.1(e).

        “Final Working Capital” shall have the meaning set forth in Section
3.7.3(b).

        “GAAP” means generally accepted accounting principles in the United
States as in effect from time to time, applied on a consistent basis.

        “Governmental Authority” shall have the meaning set forth in Section
4.7.

        “Grant Deed” shall have the meaning set forth in Section 3.5(a)(1).

        “Hazardous Substances” shall mean any pollutant, contaminant, chemical,
waste and any toxic, infectious, carcinogenic, reactive, corrosive, ignitable,
or flammable chemical or chemical compound or hazardous substance, material or
waste, whether solid, liquid or gas, including, without limitation, any quantity
of asbestos in any form, urea formaldehyde, PCBs, radon gas, crude oil or any
fraction thereof, all forms of natural gas, petroleum products or by-products or
derivatives, radioactive substance or material, pesticide waste waters, sludges,
slag and any other substance, material or waste that is subject to regulation,
control or remediation under any Environmental Laws, including but not limited
to any common law.

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        “Hired Employee” shall have the meaning set forth in Section 11.2.1.

        “HP Plan” shall have the meaning set forth in Section 11.2.1.

        “HSR” or “HSR Act”, each as used herein, shall mean the
Hart-Scott-Rodino Antitrust Improvements Act of 1976, as the same may be amended
from time to time.

        “Improvements” shall mean, collectively, all buildings, structures and
improvements of any kind and nature located on the Land, other than the Casino
Building, and all fixtures and built-in equipment located on such buildings,
structures and improvements, including all built-in apparatuses, built-in
equipment, built-in appliances and fittings of every kind located on or used in
the operation of the Racetrack Business, horse stalls, stables, tack rooms,
fencing, halls, dining rooms, lounges, offices, lobbies and all other public
spaces, lavatories, basements, cellars, vaults and other portions of such
buildings, structures and improvements, such as heating and air conditioning
systems and facilities used to provide any utility services, parking services,
refrigeration, ventilation, garbage disposal, recreation or other services
thereto, and all landscaping and leasehold improvements of tenants, if any.

        “Indemnification Cap” shall have the meaning set forth in Section
9.2.1(c).

        “Indemnification Threshold” shall have the meaning set forth in Section
9.2.1(c).

        “Indemnified Party” shall mean, with respect to any Losses, the party
seeking indemnity hereunder.

        “Indemnifying Party” shall mean, with respect to any Losses, the party
from whom indemnity is being sought hereunder.

        “Intellectual Property Assets” shall have the meaning set forth in
Section 2.1.4(a).

        “Intellectual Property Rights” shall mean all patent rights, copyrights,
moral rights, trademark, service mark, and trade name rights (including all
goodwill associated therewith), rights under unfair competition law, trade
secret rights (including customer lists and customer databases), privacy rights,
publicity rights, and all similar intellectual and industrial property rights
now known or hereafter existing under the laws of the United States or any other
jurisdiction (including all rights under common law and in applications and
registrations pertaining to the foregoing).

        “Internal Revenue Code” shall have the meaning set forth in
Section 3.5(a)(9).

        “Inventories” shall mean, collectively, all feed supplies, hay, stock,
health care and veterinary supplies, food and beverage items, provisions in
storerooms, other merchandise intended for sale or resale, fuel, mechanical
supplies, stationery and other expensed supplies, and all other goods, materials
and supplies used or intended for use at, or held for sale (whether on or off
site) in connection with, the Racetrack Business, to the extent owned or held by
Seller, including, without limitation, (i) food and liquor in unbroken packages,
(ii) raw and uncooked food, unopened beverages and other salable merchandise,
(iii) reserve stocks of operating supplies not in use, and (iv) engineering and
maintenance supplies.

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        “Land” shall mean that certain real property more particularly described
in Exhibit E.

        “Laws” shall have the meaning set forth in Section 4.7.

        “Leases” shall mean the leases or subleases to which Seller or an
Affiliate of Seller is lessor or sublessor and affecting any portion of the
Assets which constitute Assigned Contracts.

        “License Agreement” shall mean that certain License Agreement dated
September 10, 1999 together with each of the exhibits attached thereto, all of
which is attached hereto as Exhibit M, pursuant to which Seller has granted to
Pinnacle an exclusive license to use certain of the Hollywood Park trademarks,
tradenames, logos and marks, as more particularly described therein.

        “Licenses” shall mean, collectively, all governmental permits,
franchises, licenses and approvals relating to the Assets or the use, occupancy
and operations of the Racetrack Business or any other portion of the Assets,
including all environmental, gaming and racing permits and licenses,
certificates of occupancy, certificates of compliance, food handlers permits,
liquor licenses, any certificates of unofficial bodies, such as the National
Fire Prevention Association and such other certificates as may be required or
customary in the jurisdiction where the Assets are located or which pertain
thereto, including, without limitation, those licenses listed on Section 2.1.9
of the Disclosure Schedule.

        “Lien” shall mean with respect to any property or asset, any mortgage,
claim, charge, lease, covenant, easement, encumbrance, security interest, lien,
option, pledge, rights of others, restriction or other adverse claim of any kind
(whether on voting, sale, transfer, disposition or otherwise) in respect of such
property or asset, whether imposed by agreement, understanding, law, equity or
otherwise.

        “LLF” shall mean LFR Levine•Fricke.

        “Loss” or “Losses,” each as used herein, shall mean all demands, claims,
actions or causes of action, assessments, losses, damages, costs, expenses,
liabilities, encumbrances, liens, expenses of investigation and defense of any
claim, judgments, awards, fines, sanctions, penalties, charges and amounts paid
in settlement (net of insurance proceeds actually received), including
reasonable costs, fees and expenses of attorneys, accountants and other agents
of such Person.

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        “Material Adverse Effect” shall mean any event, change, circumstances,
effect or state of facts that is materially adverse to (i) the financial
condition, business or results of operations of the Racetrack Business or the
Assets, taken as a whole, or (ii) the ability of the Seller to perform its
obligations under this Agreement or to consummate the transactions contemplated
hereby, provided, however, that “Material Adverse Effect” shall not include the
effect of any circumstance, change, development, event or state of facts arising
out of or attributable to any of the following, either alone or in combination:
(1) the market in which the Racetrack Business operates generally, (2) general
economic or political conditions, (3) the public announcement of this Agreement
or the consummation of the transactions contemplated hereby, or (4) any changes
in applicable laws, regulations or accounting rules.

        “Material Asset” shall have the meaning set forth in Section 6.7(d).

        “Material Contracts” shall have the meaning set forth in Section 4.17.

        “Monument Letter” shall mean that certain Letter dated March 30, 2005
pursuant to which the Shapiro family has been granted the right to remove and
relocate the remains of Native Diver and the monument above his grave in the
event Hollywood Park Racetrack ceases to operate as a racetrack.

        “Multiemployer Plan” shall have the meaning set forth in Section 4.23.

        “Net Cash Flow” means the annual net income of the Racetrack Business
for the relevant 12 month period ending on December 31 of each calendar year
during the term of this Agreement, (A) plus to the extent deducted in computing
such net income, (i) net interest expense, and (ii) depreciation and
amortization (including amortization of goodwill and other intangibles), and (B)
minus maintenance related capital expenditures incurred in the ordinary course
of business (but no such deduction shall be taken for other capital expenditures
not incurred in the ordinary course of business), all as determined in
accordance with GAAP.

        “Other Consents” shall have the meaning set forth in Section 6.4(b).

        “Other Source Payments” shall have the meaning set forth in Section 9.4.

        “Parking License Agreement” shall mean that certain license agreement
dated September 28, 2004 pursuant to which Wal-Mart Stores, Inc. has agreed to
allow patrons of the Racetrack Business to park on certain adjacent property.

        “Permitted Liens” shall have the meaning set forth in Section 4.11(b).

        “Person” means an individual, corporation, partnership, limited
liability company, association, trust, estate or other entity or organization.

        “Personal Property” shall have the meaning set forth in Section 2.1.2.

        “Phase II Period” shall have the meaning set forth in Section 12.1(a).

        “Phase II Report” shall have the meaning set forth in Section 12.1(e).

        “Phase II Testing” shall have the meaning set forth in Section 12.1.

        “Pinnacle”means Pinnacle Entertainment, Inc., a Delaware corporation,
formerly known as Hollywood Park, Inc.

        “Preliminary Closing Statement” shall have the meaning set forth in
Section 3.7.3(a).

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        “Potential Contributor” shall have the meaning set forth in Section
9.2.1(c)(iii).

        “Purchase Price” shall have the meaning set forth in Section 3.3.1.

        “Racetrack Business” shall mean the operation of the Hollywood Park
Racetrack on a portion of the Real Property.

        “Racetrack Employees” shall mean the employees currently employed by
Seller and who perform services in connection with the Racetrack Business.

        “Racetrack Operator License” shall have the meaning set forth in Section
7.4.

        “Readerboard Signs” shall have the meaning set forth in Section 2.1.11.

        “Real Property” shall have the meaning set forth in Section 2.1.1.

        “Reinvestment Agreement” shall mean that certain Reinvestment Agreement
substantially in the form of Exhibit F hereto.

        “Required Consents” shall have the meaning set forth in Section 6.4(a).

        “Required Working Capital” shall have the meaning set forth in Section
3.7.3(a).

        “Schedule Update” shall have the meaning set forth in Section 6.8.

        “Scheduled Intellectual Property Assets” shall have the meaning set
forth in Section 2.1.4(a).

        “SCOTWINC” shall mean Southern California Offtrack Wagering
Incorporated, a California corporation.

        “Seller Employee Benefit Plan” shall have the meaning set forth in
Section 4.23.

        “Seller Indemnified Party” and “Seller Indemnified Parties” shall have
the meanings set forth in Section 9.2.1(b).

        “Simulcast Agreement” shall mean that certain Simulcast Agreement
substantially in the form of Exhibit G hereto.

        “Surviving Plans” shall have the meaning set forth in Section 11.2.3.

        “Termination Notice” shall have the meaning set forth in Section 7.4(b).

        “Title Company” shall have the meaning set forth in Section 6.1.

        “Title Policy” shall have the meaning set forth in Section 6.1.

        “Track Improvements” shall have the meaning set forth in Section 11.6.

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        “Transactions” shall mean the transactions contemplated by the
Transaction Documents.

        “Transaction Financial Statements and Balance Sheet” shall mean the
unaudited income statement and balance sheet of the Racetrack Business as of
March 31, 2005, each prepared by Seller and attached hereto as Exhibit H; and,
if requested by Buyer in writing within 10 days from the date hereof, Seller
shall also deliver an audited income statement and balance sheet of the
Racetrack Business as of December 31, 2004, provided that Buyer shall be
required to pay to Seller upon demand an amount equal to the cost of such audit.

        “Transaction Documents” shall mean this Agreement, the Grant Deed, the
Bill of Sale, the Assignment and Assumption of License Agreement, the Assignment
and Assumption of Lease Agreement, the Assignment and Assumption of Parking
License Agreement, the Reinvestment Agreement, the Simulcast Agreement and the
Closing Statement and such other documents as the parties shall mutually agree
are necessary to complete the Transactions.

        “Withdrawal Liability Cap” shall have the meaning set forth in Section
11.2.3.

        “Work Plan” shall have the meaning set forth in Section 12.1.

        “Working Capital” means as of any date, (i) current assets minus (ii)
current liabilities of the Racetrack Business on such date excluding the effect
of any provision for deferred income tax assets or liabilities.

    2.        TRANSFER OF ASSETS

        2.1 Transfer of Assets. Subject to the terms and conditions of this
Agreement, on the Closing Date, Seller will sell, convey, transfer, assign and
deliver to Buyer (and cause CDCFOC to sell convey, transfer, assign and deliver
to Buyer), and Buyer will purchase from Seller, free and clear of all Liens,
other than Permitted Liens, all of those assets of Seller described below, which
comprise all of the assets of Seller, specifically including those assets which
are owned by Seller and used or useable in connection with, or otherwise
necessary to operate, the Racetrack Business (the “Assets”), as the same shall
exist on the Closing Date (except the Excluded Assets, as defined in Section
2.2):

          2.1.1 Real Property. That certain real property in the City of
Inglewood, County of Los Angeles, State of California, consisting of
approximately 238 acres, as delineated on Exhibit E, including the Land,
Improvements thereon, the Casino Building and all rights, privileges and
easements which are appurtenant to such real property (the “Real Property”).

          2.1.2 Personal Property.

    (a)        All tangible personal property, including, but not limited to,
the Swaps statue, machinery and equipment including computer equipment (but not
certain licensed software installed therein except to the extent assigned as
Intellectual Property Assets under Section 2.1.4 of this Agreement) and
communications equipment, furniture, supplies, inventory and trade fixtures
reflected on the Transaction Financial Statements and Balance Sheet or otherwise
located on the Real Property on the Closing Date and used in the Racetrack
Business (other than the personal property items, software, computer and other
equipment and prepaid deposits (prorated pursuant to Section 3.7.2(b)) herein,
in each case as set forth on Section 2.2.1 of the Disclosure Schedule).

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    (b)        Any leases relating to tangible personal property and service
agreements relating to such leases, including, but not limited to, machinery and
equipment, furniture and tools, inventory, trade fixtures and supplies, located
on the Real Property or used or usable in the Racetrack Business, including
those personal property leases and service agreements relating to such leases
listed on Section 2.1.2(b) of the Disclosure Schedule.

    (c)        Seller agrees to use its reasonable best efforts to take, or
cause to be taken, all actions and to do, or cause to be done, all things
necessary or desirable to provide Buyer with (a) a complete list of computer
software (including any operating system, middleware, server or database) that
is necessary for, used or held for use in connection with the Racetrack Business
and (b) a list of software that is specifically excluded from the Assets and
deemed to be Excluded Assets as soon as commercially reasonable (but in no event
later than thirty (30) days after the date hereof). During such 30-day period,
authorized representatives of both Buyer and Seller shall interview the
employees who are computer users as part of the Racetrack Business, identify
applications and data files that they use which are necessary for or used in
connection with the Racetrack Business, and cooperate to prepare a comprehensive
list of such data that is not (i) subject to existing privacy policies, (ii)
proprietary information covered by Section 2.2.4 hereof or (iii)
non-transferrable pursuant to the terms of applicable software licenses. Seller
also agrees that is shall, within such 30-day period, make a back-up copy of all
such remaining computer software, digital files and other information systems
(i.e., data that is not subject to deletion under clauses (i), (ii) and (iii) of
the foregoing sentence) (the “Backup Files”). Such Backup Files shall be made
available to Buyer as and when reasonably required for purposes of migrating the
remaining data on or after the Closing Date to any cleaned or new hard drives in
the systems transferred to Buyer at Closing. In addition to, and not in
limitation of the foregoing, Seller shall, at its sole cost and expense, be
responsible for obtaining to the extent reasonably possible and with the
reasonable assistance of Buyer any transferrable software licenses required to
enable Buyer to use the Backup Files from and after the Closing Date

          2.1.3 Inventory. All Inventory reflected on the Transaction Financial
Statements and Balance Sheet or otherwise located on the Real Property on the
Closing Date or used or usable in the Racetrack Business.

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          2.1.4 Intellectual Property Rights.

    (a)        All Intellectual Property Rights owned by or licensed to Seller
which are necessary for, used or held for use in connection with the Racetrack
Business (collectively, the “Intellectual Property Assets”), subject to (i) all
of the terms and conditions of the licenses or other agreements by which Seller
holds, uses, or exploits those Intellectual Property Assets identified on
Section 4.26 of the Disclosure Schedule (“Scheduled Intellectual Property
Assets”), (ii) any existing licenses granted by Seller and other obligations
related to the Intellectual Property Assets as of the Closing Date identified on
Section 4.26 of the Disclosure Schedule, including, without limitation, the
License Agreement (together with each of the exhibits attached thereto),
(iii) the royalty obligations, contracts, claims and other restrictions on the
exercise of such Intellectual Property Assets, actual and potential, identified
on Section 4.26 of the Disclosure Schedule, and (iv) any restrictions,
conditions, terms or limitations arising under the Scheduled Intellectual
Property Assets or arising by operation of law with respect to the Scheduled
Intellectual Property Assets regarding the transfer of such Scheduled
Intellectual Property Assets.

    (b)        All Intellectual Property Rights owned by Seller and relating to
the Casino Business, subject to (i) any existing licenses granted by Seller and
other obligations related to the Intellectual Property Assets as of the Closing
Date identified on Section 4.26 of the Disclosure Schedule, including, without
limitation, the License Agreement (together with each of the exhibits attached
thereto), (ii) the royalty obligations, contracts, claims and other restrictions
on the exercise of such Intellectual Property Assets, actual and potential,
identified on Section 4.26 of the Disclosure Schedule, and (iii) any
restrictions, conditions, terms or limitations regarding the transfer of such
Scheduled Intellectual Property Assets.

          2.1.5 Cash and Accounts. Working Capital, cash on hand and cash
equivalents of Seller (relating to the Racetrack Business), including, but not
limited to, petty cash, bank accounts and temporary cash investments, in an
amount sufficient to operate the Racetrack Business consistent with past
practices of Seller.

          2.1.6 Accounts Receivable and Accounts Payable. All accounts, notes,
receivables, and refund claims, and all accounts payable, relating to the
Racetrack Business.

          2.1.7 Books and Records. All books and records including current
employee manuals, personnel records relating to or containing performance
reviews and similar evaluations (but excluding medical records) and all files,
documents, papers, customer and supplier lists, data bases, architectural plans,
drawings and specifications, advertising and promotional materials and
information relating to any management and accounting procedures and guidelines
specific to the Racetrack Business, whether in hard copy or digital format, used
in or relating to the Racetrack Business, pertaining to the Assets, the Assumed
Liabilities or otherwise to the Racetrack Business that are related to
continuing the operation of the Racetrack Business as a going concern, subject
to the Seller retaining copies of the same.

          2.1.8 Assigned Contracts. All rights of Seller and CDCFOC under all
Contracts relating to the Racetrack Business relating to periods after the
Closing Date (the “Assigned Contracts”), including, but not limited to, (a)
Material Contracts listed in Section 4.17 of the Disclosure Schedule, (b)
Collective Bargaining Agreements, (c) all unfilled orders outstanding as of the
Closing Date for the purchase of raw materials, goods or services by Seller and
all unfilled orders outstanding as of the Closing Date for the sale of goods or
services by Seller, (d) other Contracts entered into in the ordinary course of
business of the Racetrack Business through the Closing Date and (e) the Monument
Letter; provided, however, that any Contract that requires the consent to
assignment of a party thereto and for which such consent has not been obtained
prior to the Closing shall not be transferred or assigned on the Closing Date
but shall be handled as provided in Section 6.4.

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          2.1.9 Permits and Licenses. All transferable Licenses.    
        2.1.10 Vehicles. All vehicles reflected on the Transaction Financial
Statements and Balance Sheet and supporting schedules thereto.    
        2.1.11 Readerboard Signs. The two readerboard signs located adjacent to
the 405 and 105 freeways (the "Readerboard Signs")             2.1.12 SCOTWINC
All of the transferable interests and rights, if any, in SCOTWINC held by
Seller.  

          2.1.13 Goodwill. All goodwill specific to the Racetrack Business or
the Assets, together with the right to represent to third parties that Buyer is
the successor of the Racetrack Business.

          2.1.14 Prepaid Expenses. All prepaid expenses, including, without
limitation, taxes, leases and rentals (in all cases subject to proration, if
applicable, in accordance with Section 3.7.2 hereof).

          2.1.15 Claims Against Third Parties. All rights, claims, credits,
causes of action or rights of set off against third parties arising with respect
to events or breaches occurring or arising after the Closing Date under the
Assigned Contracts and, to the extent assignable, all of Seller’s right, title
and interest in and to any contractors’, suppliers’, materialmens’ and builders’
guarantees and warranties of workmanship and/or materials respecting the
Racetrack Business.

          2.1.16 Insurance Proceeds. If an Asset Loss occurs with respect to an
asset which is material to the Casino Building or an asset which is material to
the operation of the Racetrack Business and such Asset Loss is not cured by
Seller prior to the Closing Date or the Extended Closing Date (as defined in
Section 10.6), and if Buyer waives its rights or is deemed to have waived its
rights under Section 10.6 to terminate this Agreement as a result thereof, all
rights in and to net insurance proceeds attributable to such Asset Loss (if and
to the extent that the Asset Loss was an insured loss) or condemnation awards
(net of the costs and expenses incurred by Seller in collecting same), plus the
amount of any deductible or retention with respect to any such insured Asset
Loss.

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The Assets shall include all assets described above that are acquired by Seller
in the ordinary course of business consistent with past practices for use in
connection with the Racetrack Business between the date hereof and the Closing
Date (except to the extent such assets would constitute Excluded Assets), but
shall exclude assets of the type described above that are disposed of, sold or
consumed after the date hereof in the ordinary course of business on a basis
consistent with past practice. If, for any reason, any Excluded Assets are
physically transferred to Buyer, or Buyer otherwise gains access to any such
Seller property as a result of the transactions contemplated herein, no
assignment or license of such property to Buyer shall be implied and, as between
Buyer and Seller, all ownership interests and other rights of any kind in such
property shall remain with Seller. If Buyer knowingly comes into possession of,
or gains access to, any Seller information or property which is not part of the
Assets to be conveyed hereunder, Buyer shall (a) treat any such information as
the confidential information of Seller, (b) promptly upon discovery by Buyer of
its possession of such Seller information or property notify Seller that Buyer
possesses or has access to such information or property, and (c) cooperate fully
with Seller to return to Seller or destroy such property promptly, as Seller may
direct at its option. Specifically, but without limitation, any information
stored on the computers transferred to Buyer hereunder, or transferred to Buyer
by any other electronic media, but not otherwise expressly transferred by this
Section 2.1 shall, as between Buyer and Seller, remain the sole and exclusive
property of Seller.

        2.2 Assets Not Transferred. Notwithstanding anything to the contrary
contained herein, the following assets and properties of Seller are specifically
excluded from the Assets and shall be retained by it (the “Excluded Assets”):

          2.2.1 Excluded Personal Property and Prepaid Deposits. The personal
property items, including personal property items to which Seller’s logo is
permanently affixed and from which it cannot be removed or painted over,
software, computer and other equipment and prepaid deposits, in each case, as
set forth on Section 2.2.1 of the Disclosure Schedule;

          2.2.2 Claims Against Third Parties. Claims or rights against third
parties, except those arising with respect to events or breaches occurring or
discovered after the Closing Date under the Assigned Contracts; provided,
however, that any rights of indemnification, contribution or reimbursement that
may exist under the Assigned Contracts in respect of liabilities or obligations
retained by the Seller hereunder shall be Excluded Assets;

          2.2.3 Insurance. All insurance policies maintained by Seller or its
parent and rights thereunder, including but not limited to rights to any
cancellation value as of the Closing Date and any prepaid business insurance
premiums set forth on Section 2.2.3 of the Disclosure Schedule;

          2.2.4 Unrelated Information. Employee medical records, proprietary
business information and records which are not used exclusively in the Racetrack
Business, including, but not limited to, management procedures and guidelines
(other than those which are specific to the Racetrack Business) and proprietary
financial reporting formats, accounting procedures and strategic plans; and

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          2.2.5 Certain Contracts and Licenses. All non-transferable Licenses
listed on Section 2.2.5 of the Disclosure Schedule, and the rights of any Seller
under (i) any Contract to the extent relating to any non-transferable Licenses,
and (ii) any Contract that requires the consent to assignment of a party thereto
and for which such consent has not been obtained pursuant to the provisions of
Section 6.4(c) prior to the Closing; provided that any such Contract shall be
assigned upon receipt of any necessary consents.

          2.2.6 Eual Wyatt Employment Contract. Seller agrees that the
Employment Agreement by and between Hollywood Park Operating Company and Eual
Wyatt dated as of January 1, 1999, shall be terminated at Closing and any
obligations thereunder shall be Excluded Assets hereunder.

Buyer acknowledges that all property or assets belonging to the tenant under the
Casino Lease or the Casino Operator, including, without limitation, any signage
located in or on the Casino Building, are assets of the Casino Operator and not
Seller, and thus are not included in the conveyances hereunder.

3. CLOSING, PURCHASE PRICE, ASSUMPTION OF LIABILITIES.

        3.1 Closing. The consummation of the purchase and sale of the Assets
(the “Closing”) shall occur on September 23, 2005, unless extended (i) by the
mutual written agreement of Buyer and Seller, (ii) by Seller pursuant to
Section 10.6 of this Agreement or (iii) by Buyer and Seller to allow for the
determination of the Final Remediation Cost Estimate pursuant to Article 12. The
date upon which the Closing shall occur is sometimes referred to in this
Agreement as the “Closing Date.” Subject to the terms and conditions of this
Agreement, Seller shall deliver possession of the Assets to Buyer on the Closing
Date, free and clear of all Liens (except Permitted Liens). The parties agree
that time is of the essence.

        3.2 Simultaneous Delivery: Conditions Concurrent. All documents and
other items to be delivered at the Closing shall be deemed to have been
delivered simultaneously, and no delivery shall be effective until all such
items have been delivered.

        3.3 Purchase Price.

          3.3.1 Purchase Price. The purchase price for the Assets (collectively,
the “Purchase Price”), shall be (a) $260,000,000 in cash; plus (b) the
assumption of the Assumed Liabilities, minus (c) the amount of the reduction
referenced in Section 12.2, if any, in the event neither Buyer nor Seller
terminates this Agreement pursuant to Article 12 hereto. Buyer has, on the date
hereof, paid into escrow by wire transfer of immediately available funds the sum
of Ten Million Dollars ($10,000,000) (such amount, together with any interest or
dividends earned thereon shall be referred to herein as the “Deposit”), which
amount shall be held in escrow and applied to the Purchase Price on the Closing
Date. If the Closing fails to occur and this Agreement is terminated by Seller
as a result of Buyer’s material breach, the Deposit shall be immediately
released to Seller upon such termination. If the Closing fails to occur and this
Agreement is terminated by Buyer as a result of Seller’s material breach, or if
this Agreement is terminated by either party in accordance with Article 10
(other than as a result of termination by Seller after a material breach by the
Buyer) or by either party in accordance with Article 12 hereof, the Deposit
shall be immediately returned to Buyer upon such termination. The parties shall
execute an escrow agreement with the Title Company substantially in the form of
Exhibit N simultaneously with the execution of this Agreement.

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          3.3.2 Assumed Liabilities. On the terms and subject to the conditions
set forth in this Agreement, at the Closing, Buyer shall assume and become
responsible for the liabilities and obligations of Seller relating to the
Racetrack Business, whether absolute, contingent, accrued or otherwise
(collectively, the “Assumed Liabilities”), including the following:

    (a)        Assigned Contracts. Any and all liabilities, obligations and
commitments arising or occurring after the Closing Date under the Assigned
Contracts.

    (b)        Post-Closing Operations. All liabilities and obligations arising
out of events or transactions after the Closing in connection with the operation
of the Racetrack Business by Buyer.

    (c)        Specific Undertakings. Any and all liabilities, obligations and
commitments of Seller specifically undertaken by Buyer pursuant to any other
provision of this Agreement.

    (d)        Condition of the Assets. All liabilities arising as a consequence
of the physical, structural or seismic condition of the Assets on and after the
Closing Date.

    (e)        Environmental Conditions. Other than the Excluded Liabilities,
any and all liabilities, claims, demands, losses, costs, damages, injuries,
obligations, judgments, actions, causes of action, fines, assessments,
penalties, or expenses, including consultants’ and attorneys’ fees, as a result
of the presence of any Hazardous Substance in, on or about the Real Property,
including without limitation those liabilities, claims, demands, losses, costs,
damages, injuries, obligations, judgments, actions, causes of action, fines,
assessments, penalties, or expenses, including consultants’ and attorneys’ fees,
arising as a result of any redevelopment or demolition activities of Buyer, or
any subsequent buyers, in, on or about the Real Property. Such assumed liability
also includes without limitation any liabilities, claims, demands, losses,
costs, damages, injuries, obligations, judgments, actions, causes of action,
fines, assessments, penalties, or expenses, including consultants’ and
attorneys’ fees, associated with (1) claims for investigation or remediation of
any Hazardous Substances on the Real Property; (2) claims for property damages
by subsequent buyers or neighbors due to Hazardous Substances on the Real
Property or migrating from the Real Property; (3) claims for natural resource
damages by any Governmental Authority due to the presence of any Hazardous
Substance on the Real Property or migrating from the Real Property; and (4)
claims of personal injury by any individual as a result of the presence of any
Hazardous Substance on the Real Property or migrating from the Real Property.

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    (f)        Liabilities on Balance Sheet. All accounts payable and other
liabilities of the Seller relating to the Racetrack Business on the Closing Date
that are set forth on the Transaction Financial Statements and Balance Sheet,
subject to changes to the amounts of such payables in the ordinary course of
business and to the provisions of Sections 3.7.3 and 6.2.10.

    (g)        Cash and Accounts. Any and all restrictions, obligations and
guidelines pertaining to the Working Capital, cash on hand and cash equivalents
of Seller (relating to the Racetrack Business) transferred to Buyer pursuant to
Section 2.1.5 above that are listed on Section 3.3.2(g) of the Disclosure
Schedule.

        3.4 Non-Assumption of Certain Liabilities. Buyer is not assuming, and
shall not be deemed to have assumed any liabilities, obligations or commitments
of Seller, whether contingent or non-contingent, liquidated or unliquidated,
asserted or unasserted (other than the Assumed Liabilities set forth above), all
of which shall remain the liabilities, obligations and commitments of Seller
(such liabilities collectively, the “Excluded Liabilities”). The Excluded
Liabilities include:

          3.4.1 Tax Liabilities. Liabilities for any taxes relating to periods
prior to the Closing:             3.4.2 Indemnification Obligations. Seller's
obligations to indemnify Buyer as provided in Article 9;  

          3.4.3 Litigation. Except as otherwise provided in Article 9, all
liabilities with respect to litigation, actions, proceedings or arbitrations
whether pending on the Closing Date or asserted after the Closing Date, but in
each case only to the extent the same relate to or arise from events which
occurred prior to such Closing Date, including, without limitation, the actions
described on Section 3.4.3 of the Disclosure Schedule but excluding any of the
Assumed Liabilities in Section 3.3.2(e);

          3.4.4 Workers’ Compensation Claims. All liabilities for workers’
compensation claims brought by Seller’s former employees and all such claims
brought by Seller’s current employees, to the extent such claims relate to, or
arise from, events which occurred on or prior to the Closing;

          3.4.5 Certain Employee Liabilities. All liabilities (a) to the extent
such liabilities relate to former employees of the Seller and current employees
of the Seller who are not Hired Employees (other than as explicitly provided
with respect to WARN liabilities in Section 11.2.2 of this Agreement), (b) 
which relate to Collective Bargaining Agreements for periods prior to the
Closing Date, (c) to the extent such liabilities relate to Hired Employees but
which relate to periods prior to the Closing Date (other than as explicitly
provided with respect to WARN liabilities in Section 11.2.2 of this Agreement),
(d) with respect to any agreement entered into by Seller prior to the date
hereof relating to any change of control or severance payment or any additional
compensation or bonus paid or payable to any current employee to maintain his or
her employment in connection with the Racetrack Business through the Closing
Date, other than  as referenced in Section 3.3.2(h) of this Agreement, (e) as
set forth in Section 9.2.4 of this Agreement or as otherwise provided for in
this Agreement, or (f) with respect to any plans, programs or policies of Seller
or its Affiliates that provide for retirement benefits or equity-based or
deferred compensation and any awards granted thereunder;

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          3.4.6 Liabilities Relating to the Excluded Assets. All liabilities or
obligations arising prior to, on or after the Closing Date with respect to or in
connection with the Excluded Assets;

          3.4.7 Brokers, etc. Any commissions or expenses owed to Lazard Freres
& Co., LLC, or fees of any other broker, finder, investment banker, attorney or
other intermediary or advisor employed by Seller or any of its Affiliates in
connection with the Transactions contemplated hereby or otherwise;

         3.4.8  Debt.  All Debt;

          3.4.9 Affiliates. Any liability, whether currently in existence or
arising hereafter, owed by Seller to any of its Affiliates, other than those
arising in respect of Contracts to be assumed by Buyer hereunder; and

          3.4.10 Certain Environmental Liabilities. Any and all liabilities,
claims, demands, losses, costs, damages, injuries, obligations, judgments,
actions, causes of action, fines, assessments, penalties or expenses, including
consultants’ and attorneys’ fees resulting from (a) the direct or indirect
disposal or arrangement for the disposal of Hazardous Substances from the Real
Property to, at or onto a location other than the Real Property from
September 10, 1999 through the Closing Date, including without limitation to the
Dominguez Channel Watershed/Consolidated Slip, or (b) any property owned, leased
or operated by Seller (other than the Real Property).

Notwithstanding the provisions of Sections 3.4.3 and 3.4.5 hereof, in the event
a court orders equitable relief with respect to such Excluded Liabilities which
equitable relief Seller could no longer comply with due to its sale of the
Assets which would be affected by such equitable relief, Buyer shall be
responsible for complying with such order and Seller shall reimburse Buyer for
the actual out-of-pocket cost thereof; provided, however, that Buyer shall not
voluntarily agree to any such equitable relief (if it intends to seek
reimbursement from Seller) unless it shall first have advised Seller as to the
proposed equitable relief and Seller shall have consented thereto (such consent
not to be unreasonably withheld).

        3.5 Deliveries at Closing. At Closing, Seller and Buyer shall each
deliver to the other such instruments and funds as are necessary to consummate
the purchase and sale of the Assets and the assignment and assumption of the
Assumed Liabilities, including the following:

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  (a) Seller shall deliver to Buyer:

  1. A duly executed and acknowledged grant deed (“Grant Deed”), sufficient to
convey to Buyer fee title to the Real Property.

  2. Two (2) counterpart copies of the Bill of Sale and Assignment and
Assumption Agreement, duly executed by Seller and CDCFOC.

  3. Two (2) counterpart copies of the Assignment and Assumption of License
Agreement, duly executed by Seller.

  4. Two (2) counterpart copies of the Assignment and Assumption of Lease
Agreement, duly executed by Seller.

  5. Two (2) counterpart copies of the Assignment and Assumption of Parking
License Agreement, duly executed by Seller, together with the Consent to
Assignment and Assumption of Parking License attached thereto duly executed by
the Licensor under and as defined in the Parking License Agreement.

  6. Two (2) counterpart copies of the Simulcast Agreement duly executed by
Seller.

  7. Two (2) counterpart copies of the Reinvestment Agreement duly executed by
Seller.

  8. Such other instruments of transfer necessary or appropriate to transfer and
vest in Buyer all of Seller’s right, title and interest in and to the Assets.

  9. An affidavit directed to Buyer giving Seller’s taxpayer identification
number and confirming under penalty of perjury that Seller is not a “foreign
person,” which affidavit shall be sufficient to relieve Buyer of any withholding
obligation under Section 1445 of the Internal Revenue Code of the United States
(“Internal Revenue Code”) (provided, however, that if Seller fails to deliver
such affidavit, Buyer’s remedy shall be to withhold from the Purchase Price in
accordance with law).

  10. A California Real Estate Withholding Exemption Certificate (Form 593-C),
which shall be sufficient to relieve Buyer of any withholding obligation under
the California Revenue and Taxation Code (provided however that if Seller fails
to deliver such Certificate, Buyer’s remedy shall be to withhold from the
Purchase Price in accordance with law).

  11. Originals or copies of any warranties and guaranties received by Seller
and to be assigned to Buyer, but only to the extent in Seller’s possession or
readily available to Seller, from any contractors, subcontractors, suppliers or
materialmen in connection with any construction, repairs or alterations of the
Improvements and the Casino Building.

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  12. Originals or copies of all Assigned Contracts and all transferable
Licenses, if any, to be assigned to Buyer pursuant to this Agreement.

  13. All existing as-built plans and specifications for the Improvements and
the Casino Building which are in the possession or under the control of Seller.

  14. The Closing Statement, duly executed by Seller.

  15. The opinion of counsel to Seller referred to in Section 8.1.5.

  16. A short-form trademark assignment of U.S. Registration 1,850,076 for
HOLLYWOOD PARK duly executed by Seller.

  17. A list of all accounts receivable and prepaid expenses as of the Closing
Date.

  18. The keys to all locks located on or in the Assets (and any and all cards,
passwords, devices or things necessary to access the Assets).

  19. Releases or acceptable pay-off letters for any Liens securing Debt.

  20. An estoppel certificate from the tenant under the Casino Lease,
substantially in the form attached hereto as Exhibit L.

  21. Certificates of title duly endorsed to Buyer as to each motor vehicle
included in Assets.

  22. Such other instruments and documents as may be reasonably required for
Seller to perform its obligations hereunder or as may be reasonably required by
the Title Company.

  (b) Buyer shall deliver to Seller:

  1. The Purchase Price (not including the Assumed Liabilities), in cash or
immediately available funds.

  2. Two (2) counterpart copies of the Bill of Sale and Assignment and
Assumption Agreement, duly executed by Buyer.

  3. Two (2) counterpart copies of the Assignment and Assumption of License
Agreement, duly executed by Buyer.

  4. Two (2) counterpart copies of the Assignment and Assumption of Lease
Agreement, duly executed by Buyer.

  5. Two (2) counterpart copies of the Assignment and Assumption of Parking
License Agreement, duly executed by Buyer.

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  6. Two (2) counterpart copies of the Closing Statement, duly executed by
Buyer.

  7. Two (2) counterpart copies of the Simulcast Agreement duly executed by
Buyer.

  8. Two (2) counterpart copies of the Reinvestment Agreement duly executed by
Buyer.

  9. The opinion of counsel to Buyer referred to in Section 8.2.4.

  10. A copy of the environmental insurance policy referenced in Section 8.2.8
(or other evidence of the binding thereof).

  11. The form of reseller certificate that complies with the requirements of
the California Taxation and Revenue Code and other applicable state taxation
laws.

  12. Such other instruments and documents as may be reasonably required for
Buyer to perform its obligations hereunder or as may be reasonably required by
the Title Company.

        3.6 Tax Allocation. As soon as practicable after the Closing, Buyer
shall deliver to Seller, after consultation with Seller, a statement (the
“Allocation Statement”), allocating the Purchase Price (including Assumed
Liabilities, to the extent properly taken into account under Section 1060 of the
Internal Revenue Code) to broad categories constituting components of the Assets
in accordance with Section 1060 of the Internal Revenue Code. If within 10 days
after delivery of the Allocation Statement Seller notifies Buyer in writing that
Seller objects to the allocation set forth in the Allocation Statement, Buyer
and Seller shall use commercially reasonable efforts to resolve such dispute
within 20 days. If the parties are unable to reach an agreement during such 20
day period, the allocation of the Purchase Price shall be determined by
appraisal to be performed by a “Big-Four” accounting firm mutually acceptable to
Buyer and Seller. The costs of the appraisal shall be borne equally by Buyer and
Seller. Each party will report timely the purchase and sale of the Assets in
accordance with the Allocation Statement (adjusted, if necessary, to reflect any
such accounting firm appraisal and any post-Closing adjustments to the Purchase
Price) for all federal, state, local and other tax purposes. Buyer and Seller
agree to file any additional information return required to be filed pursuant to
Section 1060 of the Internal Revenue Code in accordance with the Allocation
Statement (as so adjusted). Not later than 30 days prior to the filing of its
Form 8594 relating to this transaction, each party shall deliver to the other
party a copy of such Form 8594.

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        3.7 Costs and Prorations  

          3.7.1 Costs. Costs of the Closing shall be allocated as follow: Seller
shall pay:

  (a) the costs of preparing and recording the Grant Deed and all other
documents (other than those relating to Buyer’s financing, if any) to be
recorded at the Closing;

  (b) all state and local documentary transfer, stamp, or similar taxes, if any,
imposed in connection with the transfer of the Real Property;

  (c) all trustee’s and other fees in connection with any deeds of trust which
shall be reconveyed at Closing; and

  (d) the cost of preparing the Preliminary Title Report and the premiums for a
CLTA Owner’s Title Policy in the amount of the portion of the Purchase Price
allocated to the Real Property.

Buyer shall pay:

  (a) all state and local sales or use taxes imposed in connection with the
transfer of the Personal Property (as such term is described in Section 2.1.2);

  (b) the cost of preparation and recordation of its mortgage, deed of trust, or
other applicable financing instruments, if any;

  (c) the cost of any new surveys conducted by Buyer;

  (d) the costs incurred by Buyer to obtain a liquor license for the Racetrack
Business;

  (e) the portion of the premium for the Title Policy not chargeable to Seller
as provided above, including the incremental cost of the ALTA Title Policy and
all endorsements thereto specified by Buyer; and

  (f) the HSR filing fee.

All other costs, if any, shall be apportioned in the customary manner for real
estate transactions in Los Angeles County.

          3.7.2 Prorations. At Closing, the parties shall prorate as of the
Closing Date, the following with respect to the Racetrack Business and the
Assets:

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    (a)        Taxes: Real estate taxes, assessments, personal property taxes
and rent tax, if any, on all or any portion of the Real Property, based on the
regular and supplemental tax bills for the calendar year in which the Closing
occurs. In the event that the aggregate amount of the property taxes payable in
respect of the Assets are not ascertainable as of the Closing Date, then the
parties will prorate such taxes on the basis of the latest available tax bill
and will make such post-Closing adjustment as may be necessary when the
aggregate amount of the taxes are determined. All taxes and assessments relating
to periods prior to and through the Closing shall be paid by Seller and Buyer
shall be responsible for all taxes and assessments relating to periods after the
Closing. Seller shall pay any supplemental tax bills or taxes or assessments
levied by the taxing authorities or received subsequent to the Closing Date to
the extent applicable to periods prior to the Closing Date. If any supplemental
real estate taxes are levied for the taxable period up to and including the
Closing Date, the parties will, immediately after the Closing or the issuance of
the supplemental real estate tax bill (whichever last occurs), prorate between
themselves, in cash, without interest and to the date of the Closing Date, the
supplemental real estate taxes shown by such bill.

    (b)        Prepaid Items, Deposits and Utilities. All prepaid items and
deposits applicable to the ownership of the Assets or operation of the Racetrack
Business covering periods prior to and after the Closing Date, including without
limitation, the items referenced in Section 2.1.14 of this Agreement and the
items listed on Section 3.7.2 of the Disclosure Schedule and all utilities
including gas, water, sewer, electricity, telephone and other utilities supplied
to the Improvements. All meters shall be read as of the Closing Date.

    (c)        Rent. Base rent and any common area charges payable by the tenant
under the Casino Lease.

    (d)        Assigned Contracts. Amounts payable under Assigned Contracts
shall be prorated on an accrual basis. Seller shall pay when due all amounts for
which a bill has been received by Seller prior to the Closing Date. For any such
bills received after the Closing Date, Seller agrees to pay its prorated share
when due or to promptly reimburse Buyer if paid by Buyer.

        In addition, from and after the Closing Date the parties agree as
follows:

    (e)        Purse Payments. Seller hereby represents, warrants and covenants
with Buyer that Seller does not include any “purse” overpayments (or
underpayments) under its race meet agreements with horsemen in Seller’s working
capital calculations. Accordingly, Buyer hereby covenants and agrees that, to
the extent that such horsemen received credits for purses in excess of the
amounts generated under any such race meet agreements for Spring and Fall meets
held prior to the Closing Date, Buyer shall, during the course of the next
Spring and Fall meet conducted by the Buyer from and after the Closing Date,
unless Buyer is legally precluded from doing so, (i) use commercially reasonable
efforts to obtain a credit from the horsemen for such overpayments (i.e., a
credit or offset against Buyer’s purse obligations to horsemen for 2006 Fall
meet corresponding to any overpayment made by Seller to such horsemen during the
2005 Fall meet, and a credit against Buyer’s purse obligations to horsemen for
the 2006 Spring meet corresponding to any overpayment made by Seller during the
2005 Spring meet), (ii) as and when the Buyer receives such credits, pay to
Seller an amount equal to the amount thereof (within ten (10) days from the date
such credits are applied), and (iii) provide Seller with reasonable access to
Buyer’s books and records relating to purse payments in order to verify
compliance herewith.

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                3.7.3 Closing Statement.

    (a)        At least ten days prior to the Closing Date, Seller in good faith
shall prepare and deliver to Buyer (1) a preliminary closing statement
consistent with the provisions of Section 3.7.2 (the “Preliminary Closing
Statement”) and otherwise consistent with this Agreement and (2) a statement of
the amount of each component of Working Capital (including accounts receivables
and related allowances for collectibility as shown on the Transaction Financial
Statements and Balance Sheet or on the accounting records of Seller as of the
Closing Date) which it estimates will exist as of immediately prior to the
Closing, giving effect to the transfer of the Assets and assumption of the
Assumed Liabilities but excluding the Excluded Assets and Excluded Liabilities
(the “Estimated Working Capital”), together with a representation that such
amount was determined in accordance with GAAP applied on a basis consistent with
those used in preparation of the Transaction Financial Statements and Balance
Sheet (except as required to comply with the definition of Working Capital), it
being understood that (and without limiting any other adjustments to be made)
that the Buyer shall receive cash or a credit at Closing equal to the working
capital needs of the Racetrack Business (based on historical income and
expenses) (the “Required Working Capital”). The Required Working Capital shall
be as agreed to by the parties prior to the Closing Date, or, if they fail to
reach such an agreement, shall be determined by a nationally recognized
accounting firm selected by the Seller and approved by the Buyer, the cost and
expense of which shall be shared equally between the parties.

    (b)        Within sixty (60) days after the Closing Date, Seller shall
deliver to Buyer (1) a final closing statement consistent with the provisions of
Section 3.7.2 (the “Final Closing Statement”) and otherwise consistent with this
Agreement and (2) a statement of the amount of each component of Working Capital
(including accounts receivables and related allowances for collectibility as
shown on the Transaction Financial Statements and Balance Sheet or on the
accounting records of Seller as of the Closing Date) as of the Closing, giving
effect to the transfer of the Assets and assumption of the Assumed Liabilities
but excluding the Excluded Assets and Excluded Liabilities (the “Final Working
Capital”), together with a representation that such amount was determined in
accordance with GAAP applied on a basis consistent with those used in
preparation of the Transaction Financial Statements and Balance Sheet (except as
required to comply with the definition of Working Capital). Buyer shall cause
its employees and the employees of the Racetrack Business to assist Seller and
its representatives in the preparation of the Final Closing Statement and Final
Working Capital and shall provide Seller and its representatives reasonable
access, during normal business hours and upon reasonable prior notice, to the
personnel, properties, books and records of the Buyer and the Racetrack Business
for such purpose.

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    (c)        Buyer shall inform Seller of any questions or disputes within
five (5) days of its receipt of the Final Closing Statement and Final Working
Capital. If the parties are unable to agree upon the proposed Final Closing
Statement and/or Final Working Capital, any dispute will be resolved by an
independent nationally recognized public accounting firm mutually agreeable to
the parties.

    (d)        The Purchase Price shall be adjusted as follows:

               (i)        If the Final Working Capital as finally determined
pursuant to this Section 3.7.3 is greater than the Required Working Capital, the
Purchase Price shall be adjusted upwards in an amount equal to the difference
between the Final Working Capital and the Required Working Capital, and Buyer
shall promptly pay such amount to the Seller; and

               (ii)        If the Required Working Capital is greater than the
Final Working Capital as finally determined pursuant to this Section 3.7.3, the
Purchase Price shall be adjusted downwards in an amount equal to the difference
between the Required Working Capital and the Final Working Capital, and Seller
shall promptly pay such amount to the Buyer.

               (iii)        If there are any differences between the Preliminary
Closing Statement and the Final Closing Statement, the Purchase Price shall be
adjusted upwards or downwards, without any duplication, to reflect any such
changes..

4. REPRESENTATIONS AND WARRANTIES OF SELLER.

        Seller represents and warrants to Buyer that, except as set forth on any
Disclosure Schedule:

        4.1 Organization, Corporate Power, and Authority. Seller is a
corporation duly organized, validly existing and in good standing under the laws
of the Commonwealth of Kentucky. Seller has all requisite corporate power and
authority and all Licenses, required to own, operate and lease the Assets, to
conduct the Racetrack Business (subject to obtaining the requisite approval of
the California Horse Racing Board (the “CHRB”) with respect to the allocation of
racing days and the licensing of particular meets), to execute and deliver the
Transaction Documents to which it is a party and to perform its respective
obligations thereunder.

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        4.2 Authorization of Agreements. The execution, delivery and performance
by Seller of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary corporate action by the Seller. This Agreement has been, and each
other Transaction Document to which Seller is a party will be at the Closing,
duly executed and delivered by Seller, and constitute, or will, when delivered,
constitute, the legal, valid and binding obligations of Seller, enforceable
against Seller in accordance with their respective terms, except as may be
limited by bankruptcy, insolvency, reorganization, moratorium, and other similar
laws and equitable principles relating to or limiting creditors’ rights
generally (regardless of whether considered in a proceeding in equity or at
law).

        4.3 Effect of Agreement. The execution, delivery and performance by
Seller of the Transaction Documents to which it is a party, and the consummation
by it of the Transactions, will not violate the Articles of Incorporation or
By-laws of Seller, or any judgment, award or decree to which it is a party, or
by which Seller or the Assets are bound, or result in a breach of or constitute
(with due notice or lapse of time or both) a default under, or give rise to any
right of termination, cancellation or acceleration of any right or obligation of
Seller or to a loss of any benefit relating to the Racetrack Business to which
Seller is entitled under any provision of any indenture agreement or other
instrument binding upon Seller or by which any of the Assets is or may be bound,
or result in the creation or imposition of any Lien upon any of the Assets,
except (a) to the extent that the effect thereof is not reasonably likely to
have a Material Adverse Effect, (b) consents and releases which may be required
under Seller’s credit facilities, or (c) consents which may be required for
assignment of certain of the Contracts.

        4.4 Governmental Approvals. The Seller is not required to file, seek or
obtain any approval, authorization, consent or order or action of or filing with
any Governmental Authority in connection with the execution and delivery by
Seller of the Transaction Documents or the consummation by Seller of the
Transactions, except (i) for any filings required to be made under the HSR Act,
(ii) where failure to obtain such approval, authorization, consent, order or
action, or to make such filing would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect, (iii) as may be
necessary as a result of any facts or circumstances relating to Buyer or any of
its Affiliates, or (iv) as set forth in Section 5.4 of the Disclosure Schedule.
To the knowledge of Seller, there are no facts relating to the identity or
circumstances of Seller that would prevent or materially delay obtaining any of
the Required Consents.

        4.5 Licenses. Section 4.5 of the Disclosure Schedule lists all the
Licenses held by the Seller or CDCFOC required for the operation of the
Racetrack Business, including all Licenses relating to horse racing. Seller has
delivered or made available to Buyer true and complete copies of all such
Licenses. Seller has received no notice regarding the suspension, cancellation
or termination of any of the Licenses, or any alleged violations or orders to
comply, and to the knowledge of Seller, all such Licenses are valid and in full
force and effect.

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        4.6 Condition of Real Property and Assets; Diligence Materials.

    (i)        AS-IS, WHERE IS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN THIS
AGREEMENT, THE SALE OF THE ASSETS HEREUNDER IS AND WILL BE MADE ON AN “AS IS,
WHERE IS” BASIS AND SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES
AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES OR GUARANTIES OF ANY KIND OR
CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT
OR FUTURE OF, AS TO, CONCERNING OR WITH RESPECT TO THE CONDITION OF ANY ASSET OR
ANY OTHER MATTER WHATSOEVER. Without limiting the generality of the foregoing,
it is the explicit intent and understanding of each party hereto that, except as
expressly set forth in this Agreement, neither party hereto, nor any of such
party’s Affiliates, directors, officers, employees, shareholders or other
representatives, is making any representation or warranty whatsoever (including,
without limitation, any implied warranty of merchantability, habitability,
fitness for particular purpose, title, zoning, tax consequences, latent or
patent physical or environmental condition, utilities, operating history or
projections, valuation, governmental approvals, the compliance of the Real
Property with governmental laws, the truth, accuracy or completeness of all
documents pertaining to the Real Property or any other information provided by
or on behalf of Seller to Buyer), whether oral or written, express or implied,
as to the accuracy or completeness of any information regarding the Racetrack
Business, the Assets, the Real Property or the Assumed Liabilities. Each party
hereto hereby agrees that, other than as expressly set forth in this Agreement,
it is not relying on any statement, representation or warranty, whether oral or
written, express or implied, made by the other party hereto (or such other
party’s Affiliates, directors, officers, employees, shareholders or other
representatives). Buyer has not relied and will not rely on, and Seller is not
liable for or bound by, any express or implied warranties, guaranties,
statements, representations or information pertaining to the Assets or relating
thereto made or furnished by Seller or any real estate broker, investment
banking firm or agent or contractor or consultant representing or purporting to
represent Seller, to whomever made or given, directly or indirectly, orally or
in writing, unless specifically set forth in this Agreement.

    (ii)        DUE DILIGENCE MATERIALS. EXCEPT AS OTHERWISE EXPRESSLY PROVIDED
IN THIS AGREEMENT, ANY INFORMATION PROVIDED OR TO BE PROVIDED WITH RESPECT TO
THE CONDITION OF THE ASSETS (INCLUDING, WITHOUT LIMITATION, THE PHYSICAL,
FINANCIAL OR ENVIRONMENTAL CONDITION) WAS OR WILL BE OBTAINED FROM A VARIETY OF
SOURCES AND SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF
ANY INFORMATION OBTAINED FROM THIRD PARTIES AND MAKES NO (AND EXPRESSLY
DISCLAIMS ALL) REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH
INFORMATION.

        4.7 Compliance with Laws. Excluding for purposes hereof the subject
matter addressed in Section 4.9 below, with regard to the use and operation of
the Racetrack Business, except as set forth in the Disclosure Schedule, there is
no non-compliance with applicable statutes, codes, ordinances, rules,
regulations, requirements, orders, writs, directives, injunctions, awards,
judgments and decrees (collectively, “Laws”) of any domestic or foreign court,
commission, tribunal or any governmental agency or authority (collectively,
“Governmental Authority”), or with any Licenses required by Laws issued by any
Governmental Authority including without limitation, the regulations and
requirements of the California Racing Board, the California Department of
Health, the Department of Commerce and Consumer Affairs, the California
Department of Toxic Substances Control, the California Regional Water Control
Board - Los Angeles Region, the California State Water Resources Control Board,
the City of Inglewood Building Department and any other county commission or
agency, in each case that would have a Material Adverse Effect.

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        4.8 Financial Statements. The Transaction Financial Statements and
Balance Sheet have been, and the monthly financial information to be delivered
pursuant to Section 6.3 will be, prepared in accordance with accounting
principles applied on a consistent basis (except as may be indicated therein or
in the notes thereto), and present fairly the financial position of the
Racetrack Business and the Assets as of the respective dates thereof and the
results of operations and cash flows for the period covered by such financial
statements and balance sheet, subject to normal year-end audit adjustments and
any other adjustments described therein.

        4.9 Hazardous Substances. Except as set forth in the Diligence
Materials, to Seller’s knowledge, there has been no discharge, disposal,
dumping, injection, deposit, spill, leak, or release of a Hazardous Substance
on, at, to, under, in, or from the surface of the soil or subsurface of the Real
Property, that is reasonably anticipated to have a Material Adverse Effect.

        4.10 Environmental Matters. Except as set forth in the Diligence
Materials, to the Seller’s knowledge, there are no pending Environmental Claims
that are reasonably anticipated to have a Material Adverse Effect. To Seller’s
knowledge, Seller has made available to Buyer all environmental reports in its
possession concerning the Real Property.

        4.11 Personal Property; Liens.

    (a)        Seller has good title to, or in the case of leased personal
property has valid leasehold interests in, all Assets that are personal
property.

    (b)        No Asset is subject to any Lien, except for the following
(collectively, “Permitted Liens”):

    (i)        Liens securing indebtedness or other obligations disclosed on the
Transaction Financial Statement and Balance Sheet;

    (ii)        Liens for taxes not yet due and payable or those being contested
in good faith (and for which adequate accruals or reserves have been established
on the Transaction Financial Statement and Balance Sheet);

    (iii)        with respect to the Real Property, Liens listed in Exhibit J
hereto;

    (iv)        Liens which do not materially detract from the value of such
Assets, or materially interfere with any present or intended use of such Assets;
and

    (v)        Liens to be released as of the Closing.

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        4.12 Leases. Except as set forth on Section 4.12 of the Disclosure
Schedule, there are no Leases or other agreements relating to the possession or
occupancy of any portion of the Real Property or operation of the Racetrack
Business. Seller has a valid leasehold interest in each of the Leases set forth
on Section 4.12 of the Disclosure Schedule. Seller has delivered, or otherwise
made available to Buyer, true and complete copies of each of the Leases set
forth on Section 4.12 of the Disclosure Schedule, including any amendments,
supplements, extensions or other modifications thereof. Neither Seller nor, to
Seller’s knowledge, the other party thereto, is in material breach or default of
any such Lease. Seller has paid or accrued for, or will pay or accrue for prior
to the Closing, all amounts due and owing prior to the Closing under all such
Leases requiring the payment of a specific sum(s) of money on a specific date(s)
or as the result of a specific occurrence(s).

      4.13 Intentionally Omitted.

       4.14 "Foreign Person" Status. Seller is not a "foreign person" within the
meaning of section 1445 of the Internal Revenue Code.

        4.15 Eminent Domain: Zoning; Street Changes; Other Litigation. There are
no actions, litigation or proceedings pending, or to Seller’s knowledge,
contemplated or threatened, to take all or any portion of the Real Property, or
any interest therein, by eminent domain or other similar authority, or to modify
the zoning of, the Real Property.

        4.16 Absence of Certain Changes or Events. Since March 31, 2005, the
Racetrack Business has been conducted in the ordinary course of business,
consistent with past practice, as disclosed on the Transaction Financial
Statements and Balance Sheet, and Seller has not with respect to the Racetrack
Business or the Assets entered into an agreement or arrangement with respect to
racing dates or incurred any material obligation or liability (fixed or
contingent), except normal trade or business obligations and liabilities
incurred in the ordinary course of business and obligations and liabilities in
connection with the Transactions, and except those obligations and liabilities
which would not reasonably be expected to have a Material Adverse Effect,
discharged or satisfied any material lien, security interest or encumbrance or
paid any material obligation or liability (fixed or contingent), other than
pursuant to the terms of such obligation, mortgaged, pledged or subjected to any
material Lien any of the Assets or transferred, leased or otherwise disposed of
any portion of the Assets. In addition, since March 31, 2005, there has not
been:

    (a)        any event, occurrence, development or state of circumstances or
facts which, individually or in the aggregate, has had or could reasonably be
expected to have a Material Adverse Effect;

    (b)        any transaction or commitment made, or any contract or agreement
entered into, by Seller relating to the Racetrack Business or any Assets
(including the acquisition or disposition of any assets) or any relinquishment
by Seller of any contract or other right, in either case material to the
Racetrack Business, other than transactions and commitments in the ordinary
course of business consistent with past practices and those contemplated by this
Agreement;

    (c)        any (i) employment, deferred compensation, severance, retirement
or other similar agreement entered into with any current or former officer or
employee of the Racetrack Business (or any amendment to any such existing
agreement), (ii) grant of any severance or termination pay to any current or
former officer or employee of the Racetrack Business or (iii) change in
compensation or other benefits payable to any current or former officer or
employee of the Racetrack Business pursuant to any severance or retirement plans
or policies thereof, other than in the ordinary course of business consistent
with past practice;

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    (d)        any labor dispute, other than routine individual grievances, or
any activity or proceeding by a labor union or representative thereof to
organize any employees of the Racetrack Business, which employees were not
subject to a collective bargaining agreement as of the date of the Transaction
Financial Statement and Balance Sheet, or any lockouts, strikes, slowdowns, work
stoppages or threats thereof by or with respect to employees of the Racetrack
Business; or

    (e)        any commitment for a capital expenditure or for additions or
improvements to property, plant and equipment in excess of $100,000 on an
individual basis or in excess of $500,000 in the aggregate, other than those
listed in Section 4.16(e) of the Disclosure Schedule.

        4.17 Material Contracts. Section 4.17 of the Disclosure Schedule sets
forth each executory Contract (collectively, the “Material Contracts”) (a) that
obligates Seller to pay an amount of $100,000 or more and which cannot be
terminated at any time without material penalty, (b) by which any material
portion of the Assets are bound, (c) that is an employment or severance
agreement or Collective Bargaining Agreement or (d) that is a Lease for any
Readerboard Signs. Seller has made available to Buyer true and complete copies
of all written Contracts, together with all amendments thereto, and accurate
descriptions of all oral Contracts, listed, or required to be listed, on Section
4.17 of the Disclosure Schedule. Neither Seller nor, to the knowledge of the
Seller, the other parties thereto is in material breach of any such Material
Contract, each Material Contract is valid and enforceable in accordance with its
terms for the periods stated therein, and there is not under any such Material
Contract any existing material default (including, but not limited to, any
payment default) or event of material default or event that, with notice or
lapse of time or both, would constitute such a material default. Seller has paid
or accrued for, or will pay or accrue for prior to the Closing, all amounts due
and owing prior to the Closing under the Assigned Contracts requiring the
payment of a specific sum(s) of money on a specific date(s) or as the result of
a specific occurrence(s).

        4.18 Litigation. Except as disclosed in Section 3.4.3 of the Disclosure
Schedule, there is no material legal, administrative, arbitration or other
proceeding, claim, action, or governmental or regulatory investigation of any
nature pending or, to the knowledge of Seller, threatened against or affecting
the Seller, the Racetrack Business or the Assets.

        4.19 Assets. The Assets constitute all of the assets and properties used
for, and materially necessary for the operation of, the Racetrack Business as of
the date of the Transaction Financial Statements and Balance Sheet, except as to
Assets sold, disposed of or consumed in the ordinary course of business since
such date and the Excluded Assets.

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        4.20 Commissions. Except for Lazard Freres & Co., LLC, whose fees shall
be Seller’s sole responsibility, neither Seller nor any of its directors,
officers, employees or agents have employed, or incurred any liability to, any
broker, finder or agent for any brokerage fees, finder’s fees, commissions or
other amounts with respect to the Transactions.

        4.21 Labor Relations and Collective Bargaining Agreements. To Seller’s
knowledge, except as set forth in Section 4.21 of the Disclosure Schedule,
(a) there is no unfair labor practice charge or complaint or union or employee
grievance or arbitration against Seller pending, or, to Seller’s knowledge,
threatened in writing against Seller; (b) there is no labor strike, dispute,
slowdown or stoppage threatened or pending against Seller; (c) there is no
representation claim or petition pending against Seller before the National
Labor Relations Board; (d) Seller and its Affiliates are in material compliance
with all labor laws applicable to Racetrack Employees; and (e) there has been no
material work stoppage during the last five (5) years in respect to the
Racetrack Business. Section 4.21 of the Disclosure Schedule contains a true and
complete list of each Collective Bargaining Agreement to which Seller or CDCFOC
is a party.

        4.22 Severance Obligations. The consummation of the Transactions (either
alone or together with any other event) will not entitle any current or former
Racetrack Employee to any compensation, bonus, retirement, severance or similar
benefit or enhance any such benefit, or to any acceleration or vesting of any
such benefit, with respect to which Buyer will have any obligation or
responsibility (contingent or otherwise), with the exception of Buyer’s
severance obligations to Hired Employees as set forth in Section 11.2.1.

        4.23 Employee Benefit Plans. To Seller’s knowledge, there are no liens
against the Assets under Section 412(n) of the Internal Revenue Code or
Sections 302(f) or 4068 of ERISA. Except as set forth on Section 4.23 of the
Disclosure Schedule, neither Seller nor, to Seller’s knowledge, any corporation,
trade, business or other entity under common control with Seller, within the
meaning of Sections 414(b), (c), (m) or (o) of the Internal Revenue Code, or
under Section 4001 of ERISA (an “ERISA Affiliate”) has incurred any withdrawal
liability with respect to any multi-employer plan within the meaning of
Section 3(37) of ERISA (a “Multiemployer Plan”) or terminated any plan subject
to Title IV of ERISA. Except as set forth on Section 4.23 of the Disclosure
Schedule, neither Seller nor, to Seller’s knowledge, any ERISA Affiliate has
within the six years preceding the date of this Agreement contributed to, or
expects to incur any obligation to contribute to any “single-employer plan” as
defined in Section 4001(a)(15) of ERISA. From and after Closing, except pursuant
to applicable Collective Bargaining Agreements, pursuant to an agreement with,
or membership in, the California Racetrack Federation Association or as provided
in this Agreement, Buyer will have no obligation to contribute to, or any
liability in respect of, any Employee Benefit Plan (as such term is defined
below) sponsored or maintained by Seller or any ERISA Affiliate, or to which
Seller or any ERISA Affiliate was obligated to contribute. Buyer will not be
required to contribute after the Closing to any employee benefit plan as defined
in Section 3(3) of ERISA to which only one employer contributes directly or
indirectly (with the number of contributing employers being determined under
Sections 414(b), (c), (m), (n) and (o) of the Internal Revenue Code). Neither
Seller nor any ERISA Affiliate has incurred any current or projected liability
in respect of post-employment or post-retirement health, medical or life
insurance benefits for current, former or retired employees of the Racetrack
Business, except as required to avoid an excise tax under Section 4980B of the
Internal Revenue Code or any similar state or local law. For purposes of this
Agreement, the term “Employee Benefit Plan” means (i) any employee benefit plan
within the meaning of Section 3(3) of ERISA, or (ii) any employment, severance,
termination or other agreement or any other agreement, program, arrangement or
policy (whether written or oral) providing for insurance coverage (including
self-insured arrangements), workers’ compensation, disability benefits,
supplemental unemployment benefits, vacation benefits, fringe benefits,
retirement, or pension benefits (including, without limitation, any
Multiemployer Plan), or for profit sharing, deferred compensation, bonuses,
stock options, stock appreciation or other forms of incentive compensation or
post-retirement insurance, compensation or benefits. Section 4.23 of the
Disclosure Schedules contains a true and complete list of each Employee Benefit
Plan sponsored, maintained or contributed to by Seller or any ERISA Affiliate
under which any current or former employee, consultant or director of the
Racetrack Business has any present or future right to benefits (the “Seller
Employee Benefit Plans”); provided, however, that there shall be no obligation
to list on Section 4.23 of the Disclosure Schedules any Seller Employee Benefit
Plan that is not a single-employer plan and that solely covers current or former
employees of the Racetrack Business whose employment is or was subject to the
terms of a Collective Bargaining Agreement.

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        4.24 Guaranties. Except as set forth on Section 4.24 of the Disclosure
Schedule, there are no guaranties, letters of credit or performance bonds with
respect to any obligations or liabilities of the Racetrack Business or any
Asset.

        4.25 Foreign Corrupt Practices Act. To Seller’s knowledge, Seller has
not, directly or indirectly, used any corporate funds for unlawful
contributions, gifts, entertainment or other unlawful expenses relating to
political activity, made any unlawful payment to foreign or domestic government
officials or employees or to foreign or domestic political parties or campaigns
from corporate funds, violated any provision of the Foreign Corrupt Practices
Act of 1977, as amended, or made any bribe, rebate, payoff, influence payment,
kickback or other similar unlawful payment.

      4.26 Intellectual Property Rights.

    (a)        Section 4.26(a) of the Disclosure Schedule contains a complete
and correct list of all: U.S. or foreign trademark, service mark, or trade name
registrations and applications owned by or, for applications, filed on behalf of
Seller that are material to the Racetrack Business or the Casino Business, or
that contain the phrase HOLLYWOOD, including an identification of the mark at
issue, and the registration or application number.

    (b)        Section 4.26(b) of the Disclosure Schedule contains a complete
and correct list of all U.S. or foreign copyright registrations and applications
owned by, or, for applications, filed on behalf of, Seller that are used
principally in connection with the Racetrack Business or the Casino Business,
including an identification of the title and nature of the work at issue and its
registration number (if applicable).

    (c)        Section 4.26(c) of the Disclosure Schedule contains a complete
and correct list of all: (i) agreements granting Seller the right to use any
Intellectual Property Rights material to the Racetrack Business or the Casino
Business (excluding commercial off the shelf software that is generally
available on non-discriminatory pricing terms for an aggregate fee of $25,000 or
less); and (ii) all agreements by which Seller has licensed to third parties any
of the Intellectual Property Rights material to the Racetrack Business that are
assigned to Buyer hereunder. Except as identified on Section 4.26 of the
Disclosure Schedule, to Seller’s knowledge, the agreements listed in
Section 4.26(c) of the Disclosure Schedule are valid and binding obligations of
Seller, enforceable in accordance with their terms, and neither Seller nor any
other Person party thereto is in default thereunder. Notwithstanding the
foregoing, Seller does not represent or warrant that Section 4.26(c) of the
Disclosure Schedule includes agreements that will not have a Material Adverse
Effect on the Intellectual Property Assets or the use or value thereof, where
the license of Intellectual Property Rights under such agreements is implied
rather then express or is incidental to a relationship that does not relate
primarily to the licensing of Intellectual Property Rights.

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    (d)        To Seller’s knowledge, the Intellectual Property Assets
constitute sufficient rights to practice all Intellectual Property Rights Seller
uses in the conduct of the Racetrack Business as currently conducted by Seller.
There exist no material restrictions on the disclosure or use of the
Intellectual Property Assets, including, to Seller’s knowledge, any such
restrictions arising in connection with any infringement or alleged
infringement, except as set forth in any of the agreements listed on Section
4.26(c) of the Disclosure Schedule. The consummation of the transactions
contemplated by this Agreement will not alter, encumber, impair or extinguish
any Intellectual Property Assets (other than the Excluded Assets), except as set
forth in any of the agreements listed in Section 4.26(c) of the Disclosure
Schedule.

    (e)        Seller holds all right, title and interest in and to all
Intellectual Property Assets owned by Seller, free and clear of any lien other
than Permitted Liens. All assignments of Intellectual Property Assets to Seller
have been duly recorded with the appropriate Governmental Authority, except for
assignments from employees or contractors of Seller, and except for failures to
record assignments that will not, individually or in the aggregate, give rise to
a Material Adverse Effect. No material Intellectual Property Assets are invalid
or unenforceable as a result of any intentional misstatements made by Seller in
any filings with the Patent & Trademark Office or Copyright Office regarding
such Intellectual Property Assets.

    (f)        To Seller’s knowledge: (i) no claim is threatened to the effect
that the use of the Intellectual Property Assets by Seller infringes,
misappropriates or otherwise violates any Intellectual Property Rights of
another Person and (ii) no Person is infringing on any of the Intellectual
Property Assets owned by Seller.

    (g)        (i) No claim has been served upon Seller or, to Seller’s
knowledge, filed against Seller, alleging that the use of the Intellectual
Property Assets by Seller infringes, misappropriates, or otherwise violates any
intellectual property rights of another Person; (ii) to Seller’s knowledge,
Seller’s current use, sale, or licensing of the Intellectual Property Assets
does not infringe any Intellectual Property Rights of another Person; (iii) none
of the Intellectual Property Assets owned by Seller are subject to any
outstanding order or judgment restricting the use or licensing thereof by
Seller, and (iv) Seller has not received from another Person any written offer
to license asserting that Seller’s conduct of its business infringes or
otherwise violates the Intellectual Property Rights of another Person or other
written assertion of such infringement or violation.

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    (h)        Except as set forth in any of the agreements listed in Section
4.26(c) of the Disclosure Schedule: Seller has not granted any material current
or contingent rights under the Intellectual Property Assets to license, sell, or
otherwise distribute products or services.

    (i)        Seller has taken steps that are reasonable and customary in its
industry to protect its confidential information and trade secrets, except where
the failure to take such steps will not give rise to a Material Adverse Effect.

        4.27 Insurance. The Assets are insured in accordance with Seller’s
standard insurance policies, and all insurance policies maintained by Seller are
in full force and effect and will be in full force and effect as of the Closing.
Section 4.27 of the Disclosure Schedule lists all insurance policies and bonds
that are material to the Racetrack Business.

        4.28 Taxes. Seller has paid, or will pay (including by payment to Buyer
or a taxing authority pursuant to Section 3.7.2(a)), on a timely basis when due
all taxes required to be paid with respect to taxable periods ending on or prior
to the Closing Date (including the pre-Closing Date portion of any taxable
period beginning before and ending after the Closing Date), the non-payment of
which could result in (i) a Lien on any Asset, (ii) a Material Adverse Effect or
(iii) Buyer becoming liable therefor.

        4.29 LFR Levine•Fricke. Neither Seller, nor its Affiliates, has retained
LLF for consulting or other services during the last three (3) years.

        4.30 Accounts Receivables. The accounts receivable of Seller reflected
on the Transaction Financial Statements and Balance Sheet or on the accounting
records of Seller as of the Closing Date  (i) have arisen only from bona fide
transactions in the ordinary course of business, (ii) are reflected properly on
Seller’s books and records, and (ii) unless paid prior to the Closing Date, are
or will be as of the Closing Date current and collectible net of the respective
reserves shown on the Transaction Financial Statements and Balance Sheet or on
the accounting records of Seller as of the Closing Date.

5. REPRESENTATIONS AND WARRANTIES OF BUYER.

        Buyer represents and warrants to Seller that:

        5.1 Organization, Power and Authority. Buyer is a limited liability
company duly organized, validly existing and in good standing under the laws of
the State of Delaware and is duly qualified to do business as a foreign entity
in the jurisdictions in which Buyer conducts its business, except where the
failure so to qualify will not have a material adverse effect on Buyer’s ability
to perform its obligations under the Transaction Documents. Buyer has all
requisite limited liability company power and authority to acquire, own, lease
and operate the Assets, to conduct the Racetrack Business and to execute and
deliver the Transaction Documents to which it is a party and to perform its
obligations thereunder.

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        5.2 Authorization of Agreement. The execution, delivery and performance
by Buyer of the Transaction Documents to which it is a party, and the
consummation by it of the Transactions, have been duly authorized by all
necessary action by Buyer. This Agreement has been, and each other Transaction
Document to which Buyer is a party will be at the Closing, duly executed and
delivered by Buyer and constitute, or will, when delivered, constitute, the
legal, valid and binding obligations of Buyer, enforceable against Buyer in
accordance with their respective terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium and other similar laws and equitable
principles relating to or limiting creditors’ rights generally (regardless of
whether considered in a proceeding in equity or at law).

        5.3 Effect of Agreement. The execution, delivery and performance by
Buyer of the Transaction Documents to which it is a party, and the consummation
by it of the Transactions, will not violate the organizational documents of
Buyer or any judgment, award or decree to which it is a party, or by which Buyer
or its properties or assets are bound, or conflict with, result in a breach of
or constitute (with due notice or lapse of time or both) a default under, or
give rise to any right of termination, cancellation or acceleration of any right
or obligation of Buyer or to a loss of any benefit to which Buyer is entitled
under any provision of any material indenture, material agreement or other
material instrument to which Buyer is a party, or by which Buyer or its
properties or assets are bound, or result in the creation or imposition of any
Lien upon any of the properties or assets of Buyer, except to the extent the
effect thereof will not be materially adverse to Buyer’s ability to fulfill its
obligations under the Transaction Documents to which it is a party.

        5.4 Approvals. Except as set forth in Section 5.4 of the Disclosure
Schedule and except for filings pursuant to the HSR Act, no approval,
authorization, consent or order or action of or filing with any Governmental
Authority is required to be obtained by Buyer for the execution and delivery by
Buyer of the Transaction Documents to which it is a party or the consummation by
it of the Transactions. Buyer has received all required consents from its
lender(s) necessary for Buyer to execute this Agreement and consummate the
Transactions. To the knowledge of Buyer, there are no facts relating to the
identity or circumstances of Buyer that would prevent or materially delay
obtaining any of the required consents.

        5.5 Commissions. Neither Buyer nor any of its directors, officers,
employees or agents have employed, or incurred any liability to, any broker,
finder or agent for any brokerage fees, finder’s fees, commissions or other
amounts with respect to the Transactions.

        5.6 Financing. Buyer has sufficient funds available to consummate the
Transactions. To the extent Buyer’s internal financing sources become
unavailable, Buyer will promptly arrange for alternate financing for the
Transactions, which financing will be in place in time to permit the Closing to
occur on September 23, 2005.

        5.7 Buyer’s Investigation. Buyer is a sophisticated and experienced
investor in real estate and will make its own investigation and analysis of the
Assets being acquired hereunder as Buyer deems necessary with respect to the
condition, suitability, compliance with law, and prospects for future
development of such Assets for Buyer’s use and all other aspects of this
Transaction. Buyer will rely upon its own (and its consultants’) inspections,
investigations and analyses of the Real Property and other Assets, and, with the
exception of only those express representations and warranties of Seller set
forth herein upon which Buyer shall be entitled to rely, Buyer will not rely in
any way upon any representations, statements, agreements, warranties, studies,
reports, descriptions, guidelines or other information or material furnished by
Sellers or its representatives, whether oral or written, express or implied, of
any nature whatsoever regarding any such matters it being expressly acknowledged
that Seller has not verified the accuracy or completeness of any such
information or the qualification of the persons preparing such information.
Buyer acknowledges that Seller has not made any representations or warranties
regarding the condition or suitability of the Assets, except as expressly set
forth in this Agreement.

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        5.8 Environmental Investigation. Buyer represents and warrants to Seller
that, subject to the terms set forth in Article 12 hereof, Buyer has conducted
such site investigations of the Real Property, including, but not limited to,
the physical and environmental conditions thereof, as Buyer deems necessary to
satisfy itself as to the condition of the Real Property and the existence or
nonexistence or curative action to be taken with respect to any Hazardous
Substances on the Real Property, and will rely solely upon same and not upon any
information provided by or on behalf of Seller or its agents or employees with
respect thereto, other than such representations, warranties and covenants of
Seller as are expressly set forth in this Agreement. Except as otherwise
provided in this Agreement, upon Closing, on behalf of itself, its lenders,
successors, successors-in-interest and assigns, Buyer shall assume the risk that
adverse matters, including, but not limited to, construction defects and adverse
physical and environmental conditions, may not have been revealed by Buyer’s
investigations.

        5.9 OFAC List. Buyer is not identified on the list of specially
designated nationals and blocked persons subject to financial sanctions that is
maintained by the U.S. Treasury Department, Office of Foreign Assets Control and
any other similar list maintained by the Office of Foreign Assets Control
pursuant to any authorizing United States law, regulation or Executive Order of
the President of the United States, nor is Buyer subject to trade embargo or
economic sanctions pursuant to any authorizing United States law, regulation or
Executive Order of the President of the United States.

        5.10 LFR Levine•Fricke. Neither Buyer, nor its Affiliates, has retained
LLF for consulting or other services during the last three (3) years.

6. COVENANTS OF SELLER.

        6.1 Preliminary Title Report. Seller has made (i) that certain
preliminary title report issued by First American Title Insurance Company (the
“Title Company”) (No. NCS-138403-LA2) dated May 25, 2005, and (ii) that certain
ALTA survey of the Land dated June 2, 2005 prepared by Psomas as Job No.
1HOL1701.05 available to Buyer and Buyer has reviewed same and has signed off on
the state of title and shall accept title to the Land, Improvements and the
Casino Building subject to all such agreed-upon title exceptions, which are
limited to those matters listed in Exhibit J attached hereto. It shall be
Buyer’s sole responsibility to have obtained, prior to the execution of this
Agreement, an unconditional commitment of the Title Company to issue its ALTA
form of owner’s policy of title insurance (the “Title Policy”) at Closing in
favor of Buyer insuring Buyer as the fee owner of the Real Property in the
amount of the portion of the Purchase Price allocated to the Real Property,
subject to no exceptions except the exceptions approved by Buyer and listed in
Exhibit J hereto, with endorsements, reinsurance and direct access agreements as
reasonably required by Buyer; provided, however, that Seller at Closing shall
provide such Owner’s affidavits and statements and evidence of authority as may
be required for the issuance of the Title Policy.

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        6.2 Conduct of Racetrack Business. During the period from the date
hereof to the Closing Date, unless Buyer consents otherwise in writing (which
consent shall not be unreasonably withheld or delayed), Seller shall:

          6.2.1 Ordinary Course. Conduct the Racetrack Business only in the
ordinary course consistent with past practice except as contemplated by this
Agreement. In addition, Seller shall file any appropriate applications with the
CHRB as required for a license for the fall 2005 meet to continue to conduct
horse racing with pari-mutuel wagering thereon for the usual and customary race
dates of Hollywood Park, and shall use its normal and customary efforts to
obtain such a license; and use commercially reasonable efforts to preserve
intact current business organizations and relationships with third parties and
the current number of racing dates allocated to the Racetrack Business;

          6.2.2 Maintain Insurance. Maintain any insurance coverage existing as
of the date hereof against loss or damage to the Assets;

          6.2.3 Purchase or Sale of Assets. Not acquire a material amount of
assets from any other Person or sell, lease, license, transfer, encumber or
otherwise dispose of any of the Assets except for any sale, lease, license,
transfer or encumbrance in the ordinary course of business, or agree or commit
to do any of the foregoing;

          6.2.4 Maintenance of Assets. Maintain the Assets, in the aggregate, in
a condition comparable to their current condition, reasonable wear, tear and
depreciation excepted, and except for Assets disposed of, sold or consumed in
the ordinary course of business;

          6.2.5 Assigned Contracts. Not amend any Material Contract or be in
default under any Material Contract (other than to the extent that the execution
of this Agreement and the consummation of the Transactions may or may be alleged
to constitute a default under any Material Contract);

          6.2.6 Employment Contracts. Not (i) increase the compensation or other
remuneration of any Racetrack Employees without the prior written consent of
Buyer, or (ii) enter into any employment, severance or similar agreement with
any Racetrack Employee, other than for the payment of severance on or prior to
the Closing Date, which payments shall be solely the responsibility of Seller
under Section 3.4.5;

          6.2.7 Collective Bargaining Agreements. Not enter into any new, or
amend any existing, Collective Bargaining Agreements, unless Buyer is afforded
an opportunity to participate in negotiations in accordance with Section 6.5;

          6.2.8 Maintain Licenses. Use commercially reasonable efforts to
maintain, preserve, and renew any Licenses consistent with past practices; and

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          6.2.9 Zoning. Not take any action or make any commitment, which
relates to the development, zoning, rezoning or leasing or prospective leasing
of the Real Property.

        6.3 Access. Subject to the other limitations contained in this
Agreement, from the date hereof until the Closing Date, Seller will (a) during
ordinary business hours and upon reasonable notice from Buyer, permit Buyer and
its authorized representatives to have access to the offices, properties, books,
records and all Assets in order to make such inspections, tests, and
investigations as Buyer shall deem appropriate, (b) furnish, as soon as
reasonably practicable, to Buyer or its authorized representatives such other
information in Seller’s possession with respect to the Racetrack Business and
the Assets as Buyer may from time to time reasonably request (including monthly
financial information relating to the Racetrack Business as soon as practicable
after the end of each calendar month), and (c) otherwise reasonably cooperate in
the examination or audit of the Racetrack Business by Buyer. Such rights shall
be limited by the provisions of this section. Notwithstanding the foregoing,
Buyer shall not be entitled to conduct any Phase II environmental testing or
other testing which would be invasive to the Real Property, including any
drilling, except pursuant to Article 12. After the Closing, Seller will hold,
and will use commercially reasonable efforts to cause its respective officers,
directors, employees, accountants, counsel, consultants, advisors and agents to
hold, in confidence, unless compelled to disclose by judicial or administrative
process or by other requirements of law, all confidential documents and
information concerning the Racetrack Business, except to the extent that such
information can be shown to have been (i) previously known on a non-confidential
basis by Seller, (ii) in the public domain through no fault of Seller or
(iii) later lawfully acquired by Seller from sources other than those related to
its prior ownership of the Racetrack Business. The obligation of Seller to hold
any such information in confidence shall be satisfied if Seller exercises the
same care with respect to such information as it would take to preserve the
confidentiality of its own similar information. On and after the Closing Date,
Seller will afford promptly to Buyer and its agents reasonable access to its
books of account, financial and other records (including accountant’s work
papers), information, employees and auditors to the extent necessary or useful
for Buyer in connection with any audit, investigation, dispute or litigation or
any other reasonable business purpose relating to the Racetrack Business;
provided that any such access by Buyer shall not unreasonably interfere with the
conduct of the business of Seller. With respect to Buyer’s activities:

          6.3.1 Actions with Agencies. If prior to the Closing, Buyer shall
initiate any inquiry or request directed at any governmental official with
respect to the Real Property, or shall wish to engage in any discussions with
any federal, state or local agency concerning matters with respect to the Real
Property, Buyer shall (i) inform Seller from time to time of such inquiry,
request or discussions, (ii) provide Seller with a reasonable opportunity to
participate in any meetings or discussions, and (iii) keep Seller informed of
the status thereof, provided however, that nothing in this Section shall be
deemed to prevent Buyer or its representatives from requesting, inspecting or
reviewing any and all records of any federal, state or local Governmental
Authority or from having contact with any Governmental Authority for purposes of
obtaining the permits and regulatory authorization necessary to conduct the
Phase II Testing. Upon execution of this Agreement, Buyer and its
representatives may have any other contact with a Governmental Authority that
would ordinarily be included in an ASTM E-1527 Phase I Assessment or that is
required to conduct its Phase II Testing.

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          6.3.2 Correcting Damage. Buyer shall immediately repair any and all
damage resulting from the acts or omissions of Buyer or Buyer’s agents,
employees, contractors, representatives or subcontractors relating to the whole
or any part of the Real Property.

          6.3.3 Indemnity. Subject to the provisions of Section 3.4 herein,
Buyer shall indemnify, defend and hold Seller harmless from and against any and
all claims and Liens arising out of the respective activities of Buyer and its
authorized representatives in and about the Real Property prior to the Closing
or earlier termination of this Agreement. For the sake of clarity, Buyer shall
not be responsible for any Losses arising out of any contamination identified by
Buyer or its authorized representatives if this Agreement is terminated pursuant
to Article 10 or 12 herein.

        6.4 Consents.

                   (a)        Section 6.4(a) of the Disclosure Schedule sets
forth each agreement, contract, License or other instrument binding upon Seller
requiring a consent or other action by any Person as a result of the execution,
delivery and performance of this Agreement, except such consents or actions as
would not, individually or in the aggregate, have a Material Adverse Effect if
not received or taken by the Closing Date (the “Required Consents”).

                   (b)        Section 6.4(b) of the Disclosure Schedule sets
forth each agreement, contract, License, or other instrument binding upon Seller
requiring a consent or action by any Person (other than the Required Consents)
as a result of the execution, delivery and performance of this Agreement (the
“Other Consents”). After the date hereof, Seller shall use commercially
reasonable efforts and cooperate with Buyer to obtain each Other Consent prior
to Closing.

                   (c)        As promptly as practicable after the date hereof,
Seller shall make all required filings with Governmental Authorities necessary
in connection with the Transactions, and use all reasonable efforts to obtain
all permits, approvals, authorizations and consents of all third parties,
required for Seller to consummate the Transactions. Seller shall furnish
promptly to Buyer all information that is in Seller’s possession and not
otherwise available to Buyer that Buyer may reasonably request in connection
with any such filing to be made by Buyer. Seller and Buyer shall use reasonable
efforts to obtain such consents to the assignment of the Contracts as may be
required. Notwithstanding anything herein to the contrary, the parties hereto
acknowledge and agree that at the Closing, Seller will not assign to Buyer any
Contract that by its terms requires, prior to such assignment, the consent of
any other contracting party thereto unless such consent has been obtained prior
to the Closing Date. With respect to each such Contract not assigned on the
Closing Date, after the Closing Date, Seller shall continue to deal with the
other contracting party(ies) to such Contract as the prime contracting party,
and Buyer and Seller shall use reasonable efforts to obtain the consent of all
required parties to the assignment of such Contract. Such Contract shall be
promptly assigned by Seller to Buyer after receipt of such consent after the
Closing Date, and thereafter shall be deemed to be an Assigned Contract for all
purposes hereunder. If such consent is not a Required Consent or if Buyer
nevertheless elects to consummate the Closing, Seller and Buyer shall cooperate
in an arrangement reasonably satisfactory to Buyer and Seller under which Buyer
would obtain, to the extent practicable, the claims, rights and benefits of each
such Contract and assume the corresponding obligations thereunder in accordance
with this agreement, including subcontracting, sub-licensing or sub-leasing to
Buyer, or under which Seller would enforce for the benefit of Buyer, with Buyer
assuming Seller’s obligations, any and all claims, rights and benefits of Seller
against a third party thereto. Seller will promptly pay to Buyer when received
all monies received by Seller under any Asset or any claim, right or benefit
arising thereunder not transferred to Buyer pursuant to this Section 6.4.

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        6.5 Collective Bargaining Agreements. To the extent that any Collective
Bargaining Agreements have a term date which expires prior to the Closing Date,
Seller may be required to enter into negotiations with the respective unions. In
such event, Seller shall keep Buyer informed promptly of the status of
negotiations with respect to new collective bargaining agreements with the
unions party to such Collective Bargaining Agreements and, at Buyer’s option, a
representative of Buyer may participate in any such negotiations.

        6.6 Racing Dates; Redevelopment. Seller agrees that, for a period of
three years from the Closing Date, neither it nor any of its Affiliates shall
take or cause to be taken any action that might result in (i) any decrease in
the number of racing dates allocated to the Racetrack Business or (ii) Buyer’s
ability to obtain approval by the City of Inglewood of a general plan amendment
and a conforming zone change so as to provide the primary entitlement for
Buyer’s intended overall development of the Real Property.

        6.7 Notices of Certain Events. Prior to the Closing Date, Seller shall
promptly notify Buyer of:

    (a)        any written notice or other written communication from any Person
alleging that the consent of such Person is or may be required in connection
with the transactions contemplated by this Agreement;

    (b)        any written notice or other written communication from any
Governmental Authority in connection with the transactions contemplated by this
Agreement;

    (c)        any actions, suits, claims, investigations or proceedings
commenced or, to its knowledge, threatened against, relating to or involving or
otherwise affecting Seller or the Racetrack Business or any Asset that, if
pending on the date of this Agreement, would have been required to have been
disclosed pursuant to this Agreement or that relate to the consummation of the
transactions contemplated by this Agreement; and

    (d)        the damage or destruction by fire or other casualty of any Asset
material to the Racetrack Business or the Casino Building (each, a “Material
Asset”) or part thereof or in the event that any Material Asset or part thereof
becomes the subject of any proceeding or, to the knowledge of Seller, threatened
proceeding for the taking thereof or any part thereof or of any right relating
thereto by condemnation, eminent domain or similar governmental action.

        6.8 Updated Disclosure Schedule. Prior to the Closing Date, Seller shall
update the Disclosure Schedule by delivering to Buyer a revised Disclosure
Schedule showing all changes since the date of hereof through the Closing Date
(each a “Schedule Update”). If Buyer is unwilling, in its reasonable discretion,
to consent to any Schedule Update or portion thereof, Seller may withdraw the
Schedule Update or the applicable portion. If Seller elects not to withdraw the
Schedule Update (or the applicable portion), Buyer may terminate this Agreement
at any time thereafter during such period between the signing of this Agreement
and the Closing Date, in which event the Deposit shall be immediately returned
to Buyer. No later than three days prior to the Closing, Seller shall provide to
Buyer written notice of the information it expects (as of the date of such
notice) to appear on any Schedule Update. Each Schedule Update delivered to
Buyer (and not withdrawn by Seller) shall be deemed to modify the
representations and warranties made herein by Seller as of the Closing Date.

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        6.9 Intentionally Omitted.

        6.10 Seller’s Obligation to Seek Indemnification from Pinnacle in
Certain Circumstances. After the Closing Date, to the extent that any
Environmental Claim (as such term is defined under the 1999 Asset Purchase
Agreement) made against Seller is an Environmental Claim (as such term is
defined under the 1999 Asset Purchase Agreement) for which: (1) Pinnacle (or its
successor) is contractually obligated to indemnify, defend and hold harmless
Seller or its Affiliates under the 1999 Asset Purchase Agreement pursuant to
Section 9.2.2 of such Agreement; and (2) any such Environmental Claim
constitutes a matter as to which Buyer is obligated to indemnify Seller
Indemnified Parties under Section 9.2.1(b) of this Agreement; then Seller shall
use commercially reasonable efforts to first seek, or cause its Affiliates to
seek, indemnification for such Environmental Claim from Pinnacle or its
successors, under Section 9.2.2 of the 1999 Asset Purchase Agreement, prior to
seeking indemnification from Buyer under Section 9.2.1(b) hereof. Without
limiting the generality thereof, Buyer acknowledges that the assertion by
Pinnacle or any one or more of its successors of any defense or right, whether
arising from the status of Pinnacle or such successor as a surety or otherwise,
which results or may result in a deferral, denial, suspension or abatement of a
claim for indemnity asserted by Seller under the 1999 Asset Purchase Agreement
shall not constitute a defense to the performance of Buyer’s duty to indemnify
Seller under Section 9.2.1(b) hereof. As of the date hereof, Seller is not aware
of any such defense or right.

7. COVENANTS OF BUYER.

        7.1 Permits and Consents. As promptly as practicable after the date
hereof, Buyer shall make all filings with Governmental Authorities necessary in
connection with the Transactions, and use all reasonable efforts to obtain all
permits, licenses, approvals, authorizations and consents of all third parties
required for Buyer to consummate the Transactions. The parties hereto shall
reasonably cooperate with the other party in making all necessary filings and
obtaining all required permits, licenses, approvals, authorizations and consents
and promptly furnish to the other party all information that is in such party’s
possession and not otherwise available to the other party which such party may
reasonably request in connection with any actions to be performed by the parties
to consummate the Transactions.

        7.2 Access to Books and Records. Except as otherwise provided herein,
Buyer shall maintain, or shall caused to be maintained, for at least seven (7)
years all original books, records, files, documents, papers and agreements
pertaining to the Assets, the Assumed Liabilities or to the Racetrack Business
before the Closing. If, at any time, Buyer proposes to dispose of any of such
original documents, Buyer shall first provide Seller with sixty (60) days
written notice of such proposal and shall offer to deliver the original
documents it wishes to dispose of to Seller at the expense of Seller. At the end
of such sixty (60) day period, Buyer may, without liability to Seller, dispose
of any such original documents which Seller has not informed Buyer in writing
that it desires to recover.

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        7.3 Cooperation in Third-Party Litigation. After the Closing, Buyer
shall provide such cooperation as Seller or its counsel may reasonably request
in connection with (a) any proceedings for which Buyer may be entitled to
indemnification from Seller under Section 9.2 hereof; and (b) the Excluded
Liabilities. Such cooperation shall include, but not be limited to: (i) making
available at the reasonable request of Seller or its counsel and permitting
Seller and its counsel, to make and retain copies of, any and all documents in
the possession of or otherwise available to Buyer and allowing Seller to make
inspections of the Real Property; (ii) making available upon the reasonable
request of Seller or its counsel, employees and other persons within the control
of or available to Buyer to consult with and assist Seller and its counsel and
to prepare for and testify in connection with any proceedings, including
depositions, trials and arbitration proceedings; and (iii) making available at
the reasonable request of Seller or its counsel such other resources as may be
within the control of or available to Buyer. Seller shall reimburse Buyer for
Buyer’s reasonable, documented out-of-pocket expenses incurred (including such
items as travel costs, and reasonable attorneys’ fees but not including any
employee salaries or overhead) in connection with fulfilling its obligations
under this Section 7.3.

        7.4 Racetrack Operator License. (a) As promptly as practicable after the
date hereof, Buyer shall apply in writing with the CHRB for a racetrack operator
license (the “Racetrack Operator License”), shall pay all required deposit fees
pursuant to Section 19480 of the California Business and Professional Code and
regulations issued by the Board, and shall use commercially reasonable efforts
to pursue and obtain a Racetrack Operator License. Buyer shall file a Notice of
Intention to file pursuant to Rule l431 of the CHRB at least 120 days prior to
the 2005 Fall meet, and shall submit its application with respect thereto at
least 90 days prior to the 2005 Fall meet. Buyer shall, subject to its right to
give a Termination Notice under Section 7.4(b), maintain its Racetrack Operator
License for three years immediately following the Closing Date.

                   (b)        If in any of the three years immediately following
the Closing Date, (i) the CHRB shall allocate to Hollywood Park a number of
racing dates that is less than the number of racing dates historically allocated
to Hollywood Park and (ii) Buyer determines that continued operation of the
Racetrack Business would be reasonably likely to result in Net Cash Flow of zero
dollars or less during the current or any following year, then Buyer may provide
to Seller a written notice of Buyer’s intent to terminate the Racetrack Business
(a “Termination Notice”) and, unless Seller notifies Buyer within fifteen (15)
days that it disagrees with Buyer’s Termination Notice, may terminate the
Racetrack Business. If Seller disagrees with Buyer’s Termination Notice, such
dispute shall be resolved by any nationally recognized accounting firm within
thirty (30) days after Seller notifies Buyer that it disagrees with Buyer’s
Termination Certificate. Buyer shall provide any financial information or other
documentation reasonably requested by such accounting firm and Buyer and Seller
shall each pay 50% of the costs and expenses of such accounting firm. The
decision of such accounting firm shall be final and binding upon Buyer and
Seller.

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                   (c)        If, prior to the date that is three years after
the Closing Date, Buyer terminates the Racetrack Business for any reason other
than as expressly provided in Section 7.4(b), Buyer expressly and irrevocably
acknowledges and agrees that Seller would suffer a considerable loss and damages
including, without limitation, the loss of the benefit of the Reinvestment
Agreement and other consequential damages arising as a result of lost profits,
which the Seller and Buyer agree are and will continue to be extremely difficult
to ascertain with any degree of certainty. Accordingly, the parties agree that
in the event of such termination, Buyer shall pay to Seller the sum of fifteen
million dollars ($15,000,000) as liquidated damages in respect of such
termination of the Racetrack Business. Such amount shall be paid within ten (10)
days following such termination. Buyer expressly and irrevocably acknowledges
and agrees that such amount is fair and reasonable under the circumstances
existing as of the date hereof.

8. CONDITIONS PRECEDENT.

        8.1 Conditions Precedent to Obligations of Buyer. The obligations of
Buyer under this Agreement are subject, at the option of Buyer, to the
satisfaction or waiver of each of the following conditions on or prior to the
Closing Date:

           8.1.1HSR Act. All waiting periods under the HSR Act shall have
expired or terminated.

          8.1.2 Accuracy of Representations and Warranties. The representations
and warranties of Seller contained in this Agreement or in any certificate
delivered to Buyer pursuant hereto shall be true and correct in all material
respects on and as of the Closing Date as though made at and as of that date
(except where such representation and warranty is made as of a date specifically
set forth therein) and Seller shall have delivered to Buyer a certificate to
that effect.

          8.1.3 Compliance with Covenants. Seller shall in all material respects
have performed and complied with all material terms, agreements, covenants and
conditions of this Agreement to be performed or complied with by it at the
Closing Date, and Seller shall have delivered to Buyer a certificate to that
effect.

          8.1.4 Actions or Proceedings. There shall not be instituted or pending
any action or proceeding by any Person before any Governmental Authority,
(i) seeking to restrain, prohibit or otherwise interfere with the ownership or
operation by Buyer or any of its Affiliates of all or any material portion of
the Assets or the Racetrack Business or assets of Buyer or any of its Affiliates
or to compel Buyer or any of its Affiliates to dispose of all or any material
portion of the Assets or of Buyer or any of its Affiliates or (ii) seeking to
require divestiture by Buyer or any of its Affiliates of any Assets or any
portion of the Racetrack Business. There shall not be any action taken, or any
Laws enacted, enforced, promulgated, issued or deemed applicable to the purchase
of the Assets, by any Governmental Authority, other than the application of the
waiting period provisions of the HSR Act to the purchase of the Assets, that, in
the reasonable judgment of Buyer could, directly or indirectly, result in any of
the consequences referred to in subsections (i) and (ii) of this Section;
provided that Buyer acknowledges the application of this Section to Laws in
effect as of the date hereof would not have such consequences.

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          8.1.5 Opinion of Counsel for Seller. Buyer shall have received the
favorable opinion of counsel to Seller, dated the Closing Date, to the effect
specified in Sections 4.1, 4.2 and 4.3 of this Agreement.

          8.1.6 Consents Obtained. Seller shall have obtained all the Required
Consents.

          8.1.7 Title Insurance. Buyer shall have obtained an ALTA extended
coverage form of owner’s title insurance policy, or a binder to issue the same,
dated the Closing Date and in an amount satisfactory to Buyer, insuring or
committing to insure, at ordinary premium rates without any requirement for
additional premiums, good and marketable fee simple title to the Real Property,
free and clear of any Liens, except Liens permitted pursuant to Section 6.1.

          8.1.8 Environmental Matters. Buyer shall not have exercised its right
of termination under Article 12 of this Agreement.

          8.1.9 Reliance Letter. Buyer, and only if requested by Buyer’s lender,
such lender, shall have received a reliance letter from ENVIRON International
Corporation regarding the Phase I Environmental Site Assessment and Limited
Compliance Assessment dated April 11, 2005.

          8.1.10 Estoppel Certificate. Buyer shall have received an estoppel
certificate from the tenant under the Casino Lease, substantially in the form
attached hereto as Exhibit L.

          8.1.10 Conditions Precedent to Obligations of Seller. The obligations
of Seller under this Agreement are subject, at the option of Seller, to the
satisfaction or waiver of each of the following conditions at or prior to the
Closing Date:

          8.2.1 HSR Act. All waiting periods under the HSR Act shall have
expired or terminated.

          8.2.2 Accuracy of Representations and Warranties. The representations
and warranties of Buyer contained in this Agreement or in any certificate
delivered to Seller pursuant hereto shall be true and correct in all material
respects on and as of the Closing Date as though made at and as of that date
(except where such representation and warranty is made as of a date specifically
set forth therein), and Buyer shall have delivered to Seller a certificate to
that effect.

          8.2.3 Compliance with Covenants. Buyer shall in all material respects
have performed and complied with all material terms, agreements, covenants and
conditions of this Agreement to be performed or complied with by it at the
Closing Date, and Buyer shall have delivered to Seller a certificate to that
effect.

          8.2.4 Opinion of Counsel for Buyer. Seller shall have received the
favorable opinion of counsel to Buyer, dated the Closing Date, to the effect
specified in Sections 5.1, 5.2 and 5.3 of this Agreement.

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          8.2.5 Consents Obtained. Each party hereto shall have obtained all the
Required Consents, except where the failure to obtain such consents or approvals
is a result of a breach by Seller.

          8.2.6 Purchase Price. Buyer shall have delivered the Purchase Price in
accordance with Section 3.3.

          8.2.7 Environmental Matters. Seller shall not have exercised its right
of termination under Article 12 of this Agreement.

          8.2.8 Buyer’s Environmental Insurance. If Buyer obtains an acquisition
loan to finance all or a portion of the Purchase Price and if, in connection
with such loan, Buyer gives the acquisition lender a mortgage or deed of trust
in the Real Property, Buyer shall cause Seller to be named as an additional
insured on any environmental liability insurance policy or policies purchased by
Buyer during the time that the loan obligations remain outstanding relating to
the Real Property. Seller agrees it shall bring a claim under such insurance
policy or policies only in connection with Environmental Claims brought by any
acquisition lender for which Buyer has failed to indemnify Seller pursuant to
Section 9.2 of this Agreement. Buyer shall (i) endeavor to give Seller notice of
the terms of the policies and a reasonable opportunity to provide comments to
same, and (ii) provide to Seller a copy of such policy or policies (or evidence
of the binding thereof) promptly after its receipt of the same.

9. SURVIVAL OF REPRESENTATIONS; INDEMNIFICATION.

        9.1 Survival of Representations. The representations or warranties
contained herein shall survive until the date which is one year after the
Closing Date and shall then expire, except for (i) representations, warranties
and covenants relating to taxes, which shall survive until the expiration of the
period provided by law during which the tax in question can be collected by the
relevant taxing authority and (ii) the representations and warranties in
Sections 4.1, 4.2, 4.3 and 4.20 of this Agreement shall survive indefinitely or
until the latest date permitted by law. The covenants and agreements of the
parties hereto contained in this Agreement (other than those with respect to
taxes, those in this Article 9, and those which by their terms are intended to
survive beyond one year) or in any certificate or other writing delivered in
connection herewith shall survive the Closing for one year or for the shorter
period explicitly specified therein, except that for such covenants and
agreements that survive for such shorter period, breaches thereof shall survive
for one year. Notwithstanding the preceding sentence, any breach of covenant,
agreement, representation or warranty in respect of which indemnity may be
sought under this Agreement shall survive the time at which it would otherwise
terminate pursuant to the preceding sentence, if notice of the inaccuracy
thereof giving rise to such right of indemnity specifying in reasonable detail
the facts on which the claim is based shall have been given in accordance with
Section 9.3 hereof. Unless written notice is given in accordance with the
previous sentence, any such representation, warranty or covenant shall, upon the
expiration specified in this Section 9.1, be deemed to be of no further force or
effect, as if never made, and no action may be brought based on the same,
whether for breach of contract, tort, indemnification or any other legal theory.

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        9.2 Agreements to Indemnify.

          9.2.1 General Indemnity.

    (a)        Seller’s General Indemnity. Effective at and after the Closing
and subject to the terms and conditions of this Article 9, Seller hereby agrees
to save, indemnify, defend and hold Buyer harmless, on an after-tax basis, from
and against all Losses incurred by Buyer and Buyer’s employees, directors,
officers, shareholders and agents or other representatives (each a “Buyer
Indemnified Party” or collectively, the “Buyer Indemnified Parties”) resulting
from (i) a breach of any representation or warranty by Seller contained in this
Agreement, (ii) any breach of any covenant of or agreement by Seller contained
in this Agreement, or (iii) any Excluded Liability. Notwithstanding anything to
the contrary contained herein, Seller shall not be in breach of any
representation or warranty made in this Agreement, if prior to the Closing,
Buyer had knowledge that such representation or warranty was incorrect or
untrue.

    (b)        Buyer’s General Indemnity. Subject to the terms and conditions of
this Section 9, Buyer hereby agrees to save, indemnify, defend and hold Seller
harmless, on an after-tax basis, from and against all Losses incurred by Seller
and Seller’s employees, directors, officers, shareholders and agents or other
representatives (each a “Seller Indemnified Party” or collectively, the “Seller
Indemnified Parties”) resulting from (i) a breach of any representation or
warranty by Buyer contained in this Agreement, (ii) any breach of any covenant
or agreement by the Buyer contained in this Agreement, or (iii) any of the
Assumed Liabilities. Notwithstanding anything to the contrary contained herein,
Buyer shall not be in breach of any representation or warranty made in this
Agreement, if prior to the Closing, Seller had knowledge that such
representation or warranty was incorrect or untrue.

    (c)        Limitations on Indemnification.

               (i)        Notwithstanding anything herein contained to the
contrary, the Seller shall not be liable to any Buyer Indemnified Party for any
claim for indemnification under Section 9.2.1(a)(i) or Section 9.2.1(a)(ii)
unless and until the aggregate amount of all Losses incurred by such party
otherwise indemnified against under clauses (i) through (ii) of
Section 9.2.1(a), as the case may be, exceeds $1,000,000, (the “Indemnification
Threshold”) in which case the Seller shall be liable only for the Losses in
excess of such amount; provided that the aggregate amount of such Losses
indemnified hereunder by Seller shall not exceed $10,000,000 (the
“Indemnification Cap”).

               (ii)        Seller shall not be obligated to indemnify any Buyer
Indemnified Party with respect to (x) any Loss to the extent that a specific
accrual or reserve for the amount of such Loss was reflected on the Transactions
Financial Statement and Balance Sheet or notes thereto or (y) any Loss relating
to a breach of any representation, warranty or covenant in this Agreement by
Seller, any Affiliate thereof, or any of Seller’s directors, officers,
employees, shareholders, agents or other representative to the extent that Buyer
proceeds with the Closing notwithstanding knowledge by Buyer or any Affiliate
thereof at or prior to the Closing of such breach.

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               (iii)        If any Buyer Indemnified Party receives any payment
from the Seller in respect of any Losses pursuant to Section 9.2(a) and the
Buyer Indemnified Party could have recovered all or a part of such Losses from a
third party (a “Potential Contributor”) based on the underlying claim asserted
against Seller, the Buyer Indemnified Party shall assign, on a non-recourse
basis and without any representation or warranty, such of its rights to proceed
against the Potential Contributor as are reasonably necessary to permit Seller
to recover from Potential Contributor the amount of such payment. Any payment
received in respect of such claim shall be distributed in the following order of
priority: (a) first, to the Buyer Indemnified Party in the amount of the
Indemnification Threshold; (b) second, to the Seller in an amount equal to the
aggregate payments made by Seller to the Buyer Indemnified Party in respect of
such claim, plus costs and expenses incurred in investigating, defending, or
otherwise incurred in connection with its rights hereunder; and (c) the balance,
if any, to the Buyer Indemnified Party.

               (iv)        The parties shall cooperate with each other with
respect to resolving any claim or liability with respect to which either party
has an obligation to indemnify hereunder, including by making commercially
reasonable efforts to mitigate or resolve any claim or liability.

    (d)        Waiver and Release. Except as specifically set forth in this
Agreement and the Transaction Documents, effective as of the Closing, in the
absence of fraud or willful misconduct on the part of either party in connection
with the negotiation, execution or delivery of this Agreement or the
consummation of the Transactions contemplated hereby or by the Transaction
Documents, Buyer, on behalf of itself and each of the Buyer Indemnified Parties,
on the one hand, and Seller on behalf of itself and each of the Seller
Indemnified Parties, hereby unconditionally and irrevocably waive any rights and
claims any of them may have against each other hereunder, whether at law or in
equity, relating to the Racetrack Business, the Assets, the Assumed Liabilities
and/or the Transactions contemplated hereby. The rights and claims waived and
released pursuant to this Section 9.2.1(d) include, without limitation, claims
for contribution or other rights of recovery arising out of or in any way
relating to Environmental Laws, claims for breach of contract, breach of
representation and warranty, breach of implied covenants, negligent
misrepresentation, any and all other claims for breach of duty, any and all
claims, demands, causes of action (including without limitation causes of action
based on statutory or common law), losses, damages, liabilities, costs and
expenses (including attorneys’ fees, expert fees and court costs) of any and
every kind or character, known or unknown, which Buyer could assert or allege
against Seller (and Seller’s affiliates, subsidiaries, officers, directors,
shareholders, employees and agents) at any time by reason of or arising out of
any Hazardous Substances identified or discovered on, in, or under the Real
Property, any latent or patent construction defects or physical conditions,
violations or liability under any applicable laws (including, without
limitation, any Environmental Laws) and any and all other acts, omissions,
events, circumstances or matters regarding the Real Property. After the Closing,
except as specifically set forth in this Agreement and the other Transaction
Documents, this Section 9 shall constitute the sole and exclusive remedy of
Buyer or the Buyer Indemnified Parties against the Seller, on the one hand, and
of Seller or the Seller Indemnified Parties against the Buyer, on the other
hand, for breach of any representation, warranty, covenant or other claim
arising out of or in any way relating to this Agreement, the Transaction
Documents and/or the Transactions contemplated hereby. For the sake of clarity,
however, nothing provided in this Section 9.2.1(d) or in this Agreement shall
constitute a waiver of Buyer’s rights to cause Seller to comply with Section
6.10 hereto.

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          As part of the provisions of this Section 9.2.1(d), but not as a
limitation thereon, Buyer hereby agrees, represents and warrants that, except as
otherwise provided in this Agreement and the other Transaction Documents, the
matters released herein are not limited to matters which are known or disclosed,
and Buyer hereby waives with respect to the matters released herein any and all
rights and benefits which it now has, or in the future may have conferred upon
it, by virtue of the provisions of federal, state or local law, rules or
regulations, including, without limitation, Section 1542 of the Civil Code of
the State of California, which provides as follows:

  A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW
OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.

          For purposes of this Section, Buyer shall be defined as Buyer or
Buyer’s officers, directors, shareholders, affiliates, partners, limited
partner, members, employees and agents.

    (e)        Physical Condition. Except as set forth in Sections 9.2.1(a) and
9.2.2, no indemnification or other claim may be made by Buyer against Seller
relating to the physical condition of the Real Property, including without
limitation, the structural or seismic condition thereof.

          9.2.2 Accuracy of Representations and Warranties. Conflict. If a
matter arises which is subject to the indemnification provisions of both 9.2.1
and any other indemnification provisions set forth in this Agreement, the
provisions of 9.2.1 shall apply exclusively.

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          9.2.3 Subrogation. If an Indemnifying Party makes any payment under
this Section 9 in respect of any Losses, such Indemnifying Party shall be
subrogated, to the extent of such payment, to the rights of the Indemnified
Party against any insurer or third party with respect to such Losses; provided,
however, that such Indemnifying Party shall not have any rights of subrogation
with respect to the other party hereto or any of its Affiliates or any of its or
its Affiliates’ officers, directors, agents or employees.

          9.2.4 Other Indemnification Provisions.

    (a)        Without limiting the generality of any provision of this
Agreement, Seller shall indemnify, defend and hold Buyer harmless from and
against all Losses incurred by Buyer and Buyer’s employees, directors, officers,
shareholders and agents resulting from: (a) any taxes imposed with respect to
the operation of the Racetrack Business for periods prior to and through the
Closing Date, (b) Seller’s obligation to contribute to or sponsorship of or
participation in any Seller Employee Benefit Plan (whether arising prior to, on
or after the Closing Date) or (c) any withdrawal liability under Sections 4063
or 4201 of ERISA with respect to any Seller Employee Benefit Plan which has
arisen or may arise in connection with the consummation of the Transactions, or
otherwise with respect to a withdrawal by Seller or any of its ERISA Affiliates
from any Seller Employee Benefit Plan. The indemnification provided in this
Section 9.2.4(a) shall (x) not be subject to the provisions of Section 9.2.1(c)
and (y) survive the expiration provision of this Agreement and any applicable
statute of limitations.

    (b)        Without limiting the generality of any provision of this
Agreement, Buyer shall indemnify, defend and hold Seller harmless from and
against all Losses incurred by Seller and Seller’s employees, directors,
officers, shareholders and agents resulting from: (a) any taxes imposed with
respect to the operation of the Racetrack Business for periods after the Closing
Date, (b) Buyer’s obligation to contribute to or sponsorship of or participation
in any Employee Benefit Plan after the Closing Date or (c) any withdrawal
liability arising after the Closing Date under Sections 4063 and 4201 of ERISA
with respect to a withdrawal by Buyer or any of its ERISA Affiliates from any
Employee Benefit Plan sponsored or maintained by Buyer, subject to the
limitations contained in Section 11.2.3 of this Agreement. The indemnification
provided in this Section 9.2.4(b) shall (x) not be subject to the provisions of
Section 9.2.1(c) and (y) survive the expiration provision of this Agreement and
any applicable statute of limitations.

        9.3 Conditions of Indemnification. The respective obligations and
liabilities of the Indemnifying Party to the Indemnified Party under Section 9.2
shall be subject to the following terms and conditions:

          9.3.1 Notice. Within thirty (30) days after receipt of notice of
commencement of any action or the assertion of any claim by a third party or
Governmental Authority (but in any event at least ten (10) days preceding the
date on which an answer or other pleading must be served in order to prevent a
judgment by default in favor of the party asserting the claim), or notice of any
other matter for which indemnification may be sought, an Indemnified Party shall
give the Indemnifying Party written notice thereof together with a copy of any
claim, process or other legal pleading and, in the event the notice relates to
any other matter, a reasonably detailed description of the nature of such other
matter, and the Indemnifying Party shall have the right to undertake the defense
thereof by representatives of its own choosing that are reasonably satisfactory
to the Indemnified Party. Notwithstanding the Indemnifying Party’s undertaking
of such defense, the Indemnified Party shall have the right to engage its own
counsel, at its own expense, and participate in the defense of the claim;
provided, however, that the Indemnifying Party shall retain the right in its
sole and absolute discretion to make all decisions with respect to the defense,
settlement or compromise of such claim, except as otherwise provided herein;
provided that the Indemnifying Party remains liable for any payments due under
any such settlement or compromise. The failure of the Indemnified Party to give
notice of any claim or other matter within the time period specified herein
shall not adversely affect the Indemnified Party’s right to indemnification
hereunder except to the extent that such failure adversely affects the right of
the Indemnifying Party to assert any reasonable defense to such claim or
otherwise results in prejudice’s the Indemnifying Party.

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          9.3.2 Assumption of Defense. If the Indemnifying Party, by the
fifteenth day after receipt of notice of any claim or matter (or, pursuant to
the parenthetical in Section 9.3.1, by the fifth day preceding the day on which
an answer or other pleading must be served in order to prevent judgment by
default in favor of the person asserting such claim), does not elect to defend
against such claim, the Indemnified Party will (upon further notice to the
Indemnifying Party) have the right to undertake the defense, compromise or
settlement of such claim on behalf of and for the account and risk of the
Indemnifying Party (but only to the extent of the indemnification obligation);
provided, however, that the Indemnified Party shall not settle or compromise
such claim without the Indemnifying Party’s consent, which consent shall not be
unreasonably withheld. If after electing not to defend against such claim or
proceeding, the Indemnifying Party seeks to question the manner in which the
Indemnified Party defended such claim or proceeding or the amount of or nature
of any such settlement, the Indemnifying Party shall have the burden to prove by
a preponderance of the evidence that the Indemnified Party did not defend such
claim or proceeding in a reasonably prudent manner.

          Notwithstanding the preceding paragraph, the Indemnifying Party shall
have the right to assume the defense of any claim or matter at any time prior to
settlement, compromise or final determination thereof if the Indemnifying Party
provides assurances, reasonably satisfactory to the Indemnified Party, that the
Indemnifying Party will be financially able to satisfy such claim in full (to
the extent of the indemnification obligation) if such claim or proceeding is
decided adversely. The Indemnifying Party shall select counsel reasonably
acceptable to the Indemnified Party to conduct the defense of such claim or
proceeding.

          If the Indemnifying Party assumes the defense of any claim or matter
in accordance with this Section 9.3, the Indemnifying Party shall be authorized
to consent to a settlement of, or the entry of any judgment arising from, any
such claim or matter, without the prior written consent of the Indemnified
Party; provided, however, that:

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    (i)        the Indemnifying Party shall pay or cause to be paid all amounts
arising out of such settlement or judgment, or shall obtain and deliver to such
Indemnified Party prior to the execution of a settlement a general release
executed by the claimant, which general release shall release the Indemnified
Party from any liability in such matter;

    (ii)        the Indemnifying Party shall not be authorized to encumber any
of the assets of any Indemnified Party or to agree to any restriction that would
apply to any Indemnified Party or to its conduct of business; and

    (iii)        a condition to any such settlement shall be a complete release
of such Indemnified Party with respect to such claim.

          If, in the reasonable opinion of counsel for the Indemnified Party,
there is a conflict of interest between the Indemnifying Party and the
Indemnified Party, the Indemnified Party may direct the defense with respect to
those issues as to which a conflict exists or potentially exists at the
Indemnifying Party’s sole cost and expense.

          9.3.3 Claim Adverse to Indemnifying Party. Notwithstanding anything to
the contrary in this Section 9.3, if there is a reasonable probability that a
claim may materially adversely affect the Indemnifying Party other than as a
result of money damages or other money payments, the Indemnifying Party shall
have the right, at its own cost and expense, to compromise or settle such claim,
but the Indemnifying Party shall not, without the prior written consent of the
Indemnified Party, settle or compromise any claim or consent to the entry of any
judgment which does not include as an unconditional term thereof the giving by
the claimant or the plaintiff to the Indemnified Party a release from all
liability in respect of such claim.

          9.3.4 Cooperation. In connection with any such indemnification, the
Indemnified Party will cooperate in all commercially reasonable requests of the
Indemnifying Party.

          9.3.5 Damages. Notwithstanding anything to the contrary elsewhere in
this Agreement or any other Transaction Document, no party (or its Affiliates)
shall, in any event, be liable to the other party (or its Affiliates) for any
consequential damages, including, but not limited to, loss of revenue or income,
cost of capital, or loss of business reputation or opportunity relating to the
breach or alleged breach of this Agreement.

          9.4 Calculation of Losses. The amount of any Losses payable under
Section 9.2 by the Indemnifying Party shall be net of any amounts recovered by
the Indemnified Party in respect of such Losses under applicable insurance
policies or from any other Person responsible therefor (calculated after
reduction for reasonable fees, expenses, and indirect costs incurred in such
recovery) (any such amounts shall be referred to herein as “Other Source
Payments”). If the Indemnified Party receives any Other Source Payments
subsequent to its receipt of an indemnification payment by the Indemnifying
Party hereunder, then such Indemnified Party shall promptly reimburse the
Indemnifying Party making such indemnification payment up to the amount of such
Other Source Payments (to the extent attributable to the Losses in question)
actually received by the Indemnified Party. Nothing in this section shall be
construed or interpreted to mean that an Indemnified Party must seek recovery
for any Losses payable under Section 9.2 from applicable or potentially
applicable insurance policies or from any other Person alleged to be responsible
therefor, other than as set forth in this Agreement.

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          9.5 Remedies Exclusive. Except as provided herein, the remedies
provided in this Article 9 and Section 6.10 shall be the exclusive remedy for
each party for monetary damages and for any Environmental Claim (whether at law
or in equity) between the parties. None of Seller’s officers, employees, agents,
stockholders, consultants, investment bankers, legal advisers or representatives
shall have any liability or obligation to Buyer in connection with the
Transactions contemplated by this Agreement or in respect of any statement,
representation, warranty or assurance of any kind made by Seller, its
representatives or any other Person. None of Buyer’s officers, employees,
agents, stockholders, consultants, investment bankers, legal advisors or
representatives shall have any liability or obligation to Seller in connection
with the Transactions contemplated by this Agreement or in respect of any
statement, representation, warranty, or assurance of any kind made by Buyer, its
representatives or any other Person.

10. TERMINATION.

      This Agreement may be terminated:

        10.1 Injunction. By either Buyer or Seller if any court or Governmental
Authority of competent jurisdiction in the United States shall have issued an
order (other than a temporary restraining order), decree, judgment or ruling or
taken any other action restraining, enjoining or otherwise prohibiting the
Transactions and such order, decree, ruling or other action shall have become
final and non-appealable.

        10.2 Mutual Agreement. By mutual written agreement of Buyer and Seller.

         10.3 Required Consents. By failure to obtain any Required Consents as
of the Closing Date, subject to Seller's right to a reasonable extension in
order to obtain such Required Consents.

        10.4 Material Breach. By either Buyer or Seller, if there has been a
material breach on the part of the other party in its representations,
warranties or covenants set forth herein; provided, however, that if such breach
is susceptible to cure the breaching party shall have twenty (20) business days
after receipt of notice from the other party of its intention to terminate this
Agreement pursuant to this Section 10.4 in which to cure such breach.
Termination for material breach shall not impair any party’s rights to pursue
any available remedies at law or in equity.

        10.5 Environmental Termination. By Seller or Buyer pursuant to Article
12.

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        10.6 Uncured Asset Loss. By Buyer, if any loss, damage, impairment,
confiscation or condemnation of all or any portion of the Assets (each, an
“Asset Loss”) occurs with respect to an asset which is material to the Casino
Building or an asset which is material to the operation of the Racetrack
Business and such Asset Loss is not cured by Seller prior to the Closing Date
(it being acknowledged that Seller shall not have any obligation to do so);
provided, however, that notwithstanding anything to the contrary set forth
herein, (i) in the event such Asset Loss may be cured within 180 days, but may
not be cured by Seller prior to the Closing Date despite the diligent
undertakings of Seller to cure such Asset Loss prior to the Closing Date, Seller
shall have the right to extend the Closing Date by such reasonable period of
time as necessary to cure such Asset Loss prior to the Closing Date, provided
that such time period shall not exceed 180 days from the date of the Asset Loss
(the “Extended Closing Date”), by providing written notice of such election to
Buyer and, notwithstanding anything to the contrary set forth herein, this
Agreement may be terminated by Buyer pursuant to this Section 10.6 solely if
such Asset Loss is not cured by Seller by such Extended Closing Date or
(ii) Buyer shall have the right to elect to receive the net insurance proceeds
attributable to such Asset Loss (if and to the extent that such Asset Loss was
an insured loss) in lieu of Seller’s cure of such Asset Loss prior to the
Closing Date, in which event, notwithstanding anything to the contrary set forth
herein, Buyer shall be deemed to have waived its right to terminate this
Agreement pursuant to this Section 10.6.

        10.7 Effects of Termination. If this Agreement is terminated pursuant to
this Section 10, all obligations of the parties hereunder (except for those
pursuant to Section 10 and Sections 6.3.3, 11.1, 13.2, 13.8, 13.9 and 13.10)
shall terminate without liability of any party to any other party; provided,
however, that no termination shall relieve any party from any liability arising
from or relating to a material breach prior to termination.

  IF THE SALE IS NOT CONSUMMATED DUE TO A MATERIAL BREACH BY BUYER HEREUNDER,
THEN SELLER SHALL BE ENTITLED TO RETAIN THE DEPOSIT AS LIQUIDATED DAMAGES, WHICH
RETENTION SHALL OPERATE TO TERMINATE THIS AGREEMENT AND RELEASE BUYER FROM ANY
AND ALL LIABILITY HEREUNDER, EXCEPT AS PROVIDED IN SECTIONS 10, AND SECTIONS
6.3.3, 11.1, 13.2, 13.8, 13.9 AND 13.10. THE PARTIES HAVE AGREED THAT SELLER’S
ACTUAL DAMAGES, IN THE EVENT OF A FAILURE TO CONSUMMATE THIS SALE DUE TO BUYER’S
DEFAULT, WOULD BE EXTREMELY DIFFICULT OR IMPRACTICABLE TO DETERMINE. AFTER
NEGOTIATION, THE PARTIES HAVE AGREED THAT, CONSIDERING ALL THE CIRCUMSTANCES
EXISTING ON THE DATE OF THIS AGREEMENT, THE AMOUNT OF THE DEPOSIT IS A
REASONABLE ESTIMATE OF THE DAMAGES THAT SELLER WOULD INCUR IN SUCH EVENT. BY
PLACING THEIR INITIALS BELOW, EACH PARTY SPECIFICALLY CONFIRMS THE ACCURACY OF
THE STATEMENTS MADE ABOVE AND THE FACT THAT EACH PARTY WAS REPRESENTED BY
COUNSEL WHO EXPLAINED, AT THE TIME THIS AGREEMENT WAS MADE, THE CONSEQUENCES OF
THIS LIQUIDATED DAMAGES PROVISION. THE FOREGOING IS NOT INTENDED TO LIMIT
BUYER’S INDEMNITY OBLIGATIONS HEREUNDER.

INITIALS: SELLER _______   BUYER _______

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11. OTHER COVENANTS.

        11.1 Announcements. Each party agrees not to make, nor cause to be made,
any news releases or other public announcements pertaining to the Transactions
without first consulting the other party and attempting to formulate a mutually
satisfactory arrangement for such disclosure, and in any case will make an
announcement thereafter without the consent of the other only to the extent it
believes in good faith that disclosure is required by applicable law or by
obligations pursuant to any rules of or listing agreement with any national
securities exchange or the NASDAQ National Market System. The commencement of
litigation relating to this Agreement or any proceedings in connection therewith
shall not be deemed a violation of this Section 11.1.

      11.2 Employment Matters.

          11.2.1 Offers of Employment. Section 11.2.1 of the Disclosure Schedule
contains a list of each current Racetrack Employee. Beginning on the date hereof
and ending August 1, 2005, Seller agrees, upon reasonable notice from Buyer, to
allow Buyer to interview those Racetrack Employees who are department heads and
supervisors of department heads. Any such interviews shall take place during
ordinary business hours and shall be conducted in compliance with applicable
law. At the end of such period, Buyer shall provide Seller with a list of the
Racetrack Employees to whom it intends to offer employment. Such offers of
employment will be contingent upon and effective on the Closing Date. Employees
who accept such offers of employment are referred to herein as “Hired
Employees.” Buyer agrees to pay to those Hired Employees listed by name on
Section 11.2.1 of the Disclosure Schedule who remain continuously employed by
Buyer on the third anniversary of the Closing Date a retention bonus as set
forth in such section (the “Retention Bonus”). If within three years following
the Closing Date any Hired Employee listed on such schedule is (i) involuntarily
terminated by Buyer without cause (where “cause” means a willful breach or
neglect of a duty, breach of fiduciary duty, insubordination, theft, fraud,
dishonesty, malfeasance or misfeasance in performance of one’s duties,
commission of a felony and/or the material disregard of the policies or
procedures of Buyer), (ii) involuntarily terminated by Buyer due to the
cessation of the Racetrack Business by Buyer, or (iii) constructively terminated
by Buyer (where “constructive termination” means a reduction in base salary,
annual bonus opportunity, rank, title, reporting requirements, authority or
duties from that in effect as of the date hereof (which such action is not cured
by Buyer within ten days of receipt of notice from the employee to Buyer); a
failure to pay amounts owed or benefits when due (which failure is not cured by
Buyer within ten days of receipt of notice from the employee to Buyer); or a
relocation of the primary place of employment of more than 20 miles from the
location as of the date hereof; provided, however, that severance benefits for
constructively terminated employees are limited to just those employees
designated as eligible on Section 11.2.1 of the Disclosure Schedule), Buyer
shall (x) pay the Retention Bonus to such employee upon termination and
(y) provide, through payment by Buyer of all applicable COBRA premiums, such
employee continued medical, dental and vision coverage (as then in effect for
active employees) for a period of six months following termination of employment
to the extent such employee elects COBRA continuation coverage. Subject to the
foregoing obligations following the Closing, each full-time Hired Employee shall
be eligible to receive benefits under Employee Benefits Plans sponsored or
maintained by Buyer or its Affiliates, or to which Buyer or its Affiliates
contribute (and for the costs of which Seller shall not be responsible), on the
same basis as similarly situated employees of Buyer who are employed in its
racetrack business. To the extent any Hired Employee has accrued but unpaid
wages (including vacation entitlements) as of the Closing Date, Seller shall pay
to such Hired Employee any such amounts immediately prior to the Closing Date.
Seller shall also pay to each Hired Employee the pro-rata portion of his or her
annual bonus for the year in which the Closing occurs, if any, on or about the
date when any such bonus has ordinarily been paid. Each full-time Hired
Employee’s period of service and compensation history with Seller or its
Affiliates shall be counted in determining eligibility for, and to the extent
applicable, the amount and/or vesting of, vacation benefits or any benefits or
practice as to which period of service is a factor, including benefits under
each Employee Benefit Plan maintained or sponsored by Buyer or its Affiliates,
or to which Buyer or its Affiliates contribute to the extent that such service
was recognized under any analogous plan of Seller or its Affiliates immediately
prior to the Closing Date. Each full-time Hired Employee shall be covered as of
his date of hire under any Employee Benefit Plan maintained or sponsored by
Buyer or its Affiliates, or to which Buyer or its Affiliates contribute,
providing health care benefits (whether or not through insurance) without regard
to any waiting period or any condition or exclusion based on any pre-existing
conditions, medical history, claims experience, evidence of insurability, or
genetic factors (except to the extent such exclusions or conditions were
applicable under a corresponding Seller Employee Benefit Plan), and shall
receive full credit for any deductible payments made before the Closing Date, to
the extent that such expenses were incurred during a period in which such
employee was covered under a corresponding Seller Employee Benefit Plan. For the
avoidance of doubt, except as otherwise expressly provided in this Agreement,
Buyer and its Affiliates shall not assume or have transferred to them the
sponsorship of any of the Seller Employee Benefit Plans or any other benefit
plans or arrangements maintained by Seller or any of its Affiliates.

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          Seller shall cause the interests of Hired Employees in the SunTrust
Retirement Services 401(k) Investment Plan (the “HP Plan”) to become fully
vested at the Closing Date and distributable immediately thereafter. In the
event a Hired Employee receives an “eligible rollover distribution” (within the
meaning of Section 402(c)(4) of the Internal Revenue Code) from the HP Plan, if
Buyer sponsors a tax-qualified defined contribution plan (“Buyer Plan”), Buyer
shall cause the Buyer Plan to accept a direct rollover of such eligible rollover
distribution (excluding any portion of such eligible rollover distribution
comprised of the outstanding balance of a loan from the HP Plan to such Hired
Employee).

          11.2.2 Retention of Liabilities. Seller shall be responsible for all
liabilities, if any, resulting from Seller’s termination of any Racetrack
Employee prior to or on the Closing Date, including, but not limited to,
(a) hospitalization or medical claims; (b) any claim asserting the right to
participate in any medical insurance program on a “self-pay” basis under COBRA
or any comparable state or local law; (c) any claims or litigation resulting
from such terminations and/or the sale of the Assets, regardless of when such
claims may be asserted and (d) any severance payments or benefits.
Notwithstanding any other Section of this Agreement, Buyer shall be solely
responsible for all liabilities, if any, under federal and state WARN acts
incurred in connection with the Transactions. Five business days prior to the
Closing Date, Seller shall provide to Buyer a list of all Racetrack Employees
whose employment was terminated during the period beginning on the date hereof
and ending on the date such list is provided, noting the date of termination for
each employee and whether such termination was voluntary or involuntary on the
part of the employee.

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          11.2.3 Multiemployer Plans. Seller may withdraw from any of the
Multiemployer Plans listed in Section 11.2.3 of the Disclosure Schedule at the
Closing Date. With respect to such Multiemployer Plans listed on Section 11.2.3
of the Disclosure Schedule which Seller shall not elect to so withdraw from (the
“Surviving Plans”), Buyer and Seller shall take all steps necessary under
Section 4204 of ERISA so that the transaction contemplated by this Agreement
will not constitute a partial or complete withdrawal under Section 4201 of
ERISA. In addition, between the date hereof and the Closing Date, Buyer and
Seller shall use commercially reasonable efforts so that the transaction
contemplated by this Agreement will not constitute a withdrawal under the
California Race Track Pension Plan. As required by Section 4204(a)(1)(C) of
ERISA, the Seller agrees that if Buyer withdraws in a complete withdrawal, or a
partial withdrawal with respect to operations, with respect to any of the
Surviving Plans during the first 5 plan years following the Closing Date, the
Seller is secondarily liable for any withdrawal liability it would have had to
the applicable Surviving Plans with respect to the operations if the liability
of the Buyer with respect to such Surviving Plan(s) is not paid. In addition,
the Seller agrees that if Buyer shall withdraw in a complete or partial
withdrawal from the California Race Track Pension Plan and/or any of the
Surviving Plans due to a cessation of the Racetrack Business on or before the
last day of the fifth plan year beginning immediately after the Closing, the
Seller shall indemnify and hold the Buyer harmless from and against any
withdrawal liability incurred by Buyer in connection with such complete or
partial withdrawal, provided that the aggregate amount of such withdrawal
liability indemnified hereunder by Seller shall not exceed the amount of the
withdrawal liability that would have been incurred by Seller if Seller had
completely withdrawn from the applicable plan or plans on the Closing Date (the
“Withdrawal Liability Cap”). The Withdrawal Liability Cap shall be calculated in
good faith in accordance with ERISA and agreed upon by Buyer and Seller within
ninety days following the Closing Date.

        11.3 Cooperation. Each party hereto agrees, both before and after the
Closing, to execute any and all further documents and writings and to perform
such other reasonable actions which may be or become necessary or expedient to
effectuate and carry out the Transactions (which shall not include any
obligation to make payments).

        11.4 Excluded Assets. If, after the Closing Date, Excluded Assets,
including, but not limited to, proprietary information of Seller, shall remain
on the Real Property, then Buyer shall take reasonable efforts to deliver such
Excluded Assets to Seller at the expense of Seller and, so long as such
information shall remain on the Real Property, Buyer shall exercise the same
reasonable degree of care with respect thereto as it does with respect to its
own property.

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        11.5 Tax Cooperation. After the Closing, the parties shall, and shall
cause their respective Affiliates to, cooperate with each other in the
preparation of all tax returns and shall provide, or cause to be provided, to
such other party any records and other information reasonably requested by such
party in connection therewith as well as access to, and the cooperation of, the
auditors of such other party and its Affiliates. After the Closing, the parties
shall, and shall cause their respective Affiliates to, cooperate with the other
party in connection with any tax investigation, tax audit or other tax
proceeding relating to the Racetrack Business or the Assets. Any information
obtained pursuant to this Section relating to taxes shall be kept confidential
by the other party.

        11.6 Racetrack Business. Provided that either (i) the CHRB allocates to
Hollywood Park Racetrack a number of racing dates for each of the three years
immediately following the Closing Date that is not less than the number of
racing dates historically allocated to Hollywood Park Racetrack or (ii) the
board of directors of the Thoroughbred Owners of California provides to the CHRB
written support for allocation of such number of racing dates to Hollywood Park
Racetrack, then Buyer agrees to allocate at least five million dollars
($5,000,000) for certain capital improvements to the racing surfaces and the
turf course of Hollywood Park Racetrack, including a new Polytrack racing
surface and turf course repairs (“Track Improvements”). Buyer shall commence
such Track Improvements no later than one hundred and twenty (120) days
following the last day of the meet first occurring after the date that either of
the events set forth in (i) or (ii) of this Section 11.6 shall have occurred
(such 120-day period to be extended if and to the extent that Buyer is prevented
from doing so as a result of events constituting force majeure or any other
circumstances outside of Buyer’s control), and once such Track Improvements have
commenced, they shall be completed as soon as reasonably practicable. The
parties acknowledge and agree that if the Track Improvements are required
hereunder and not completed in accordance herewith, Seller will suffer loss
which is extremely difficult to ascertain. Accordingly the parties agree that in
such event Buyer shall be required to pay to Seller as liquidated damages the
amount that is the sum of five million dollars ($5,000,000) less the amount
actually spent on such Track Improvements in immediately available funds. Buyer
expressly and irrevocably acknowledges and agrees that such sum is fair and
reasonable under the circumstances existing as of the date hereof

        11.7 Commercially Reasonable Efforts. Each party will use commercially
reasonable efforts (excluding the institution of litigation) to cause all
conditions to its obligations hereunder to be timely satisfied and to perform
and fulfill all obligations on its part to be performed and fulfilled under this
Agreement to the end that the Transactions shall be effected substantially in
accordance with the terms of this Agreement as soon as reasonably practicable.
In addition, each party will use reasonable efforts to ensure that its
representations and warranties remain true and correct in all respects as of the
Closing Date.

        11.8 Removal of Signage and Logos. Each party hereby acknowledges and
agrees that Buyer and Seller shall cooperate to determine the best means of, and
Buyer shall be responsible for, removing the various signs and logos of Seller
from the personal property items described in Sections 2.1.2 and 2.1.10.

        11.9 Race Tickets. Seller agrees that for as long as Seller shall
continue to operate the Kentucky Derby, then (i) for as long as Buyer shall
conduct race meets at Hollywood Park Racetrack, Buyer shall be entitled to
purchase tickets to two (2) boxes (with 6 seats in each, for a total of 12
tickets) each year at the then current market rates, and (ii) for as long as
Buyer shall conduct race meets at Bay Meadows Racetrack, Buyer shall be entitled
to purchase tickets to one (1) box (with 6 seats) each year at the then current
market rate. In addition, Seller agrees that for as long as Seller shall
continue to operate the Kentucky Oaks, then (i) for as long as Buyer shall
conduct race meets at Hollywood Park Racetrack, Buyer shall be entitled to
purchase tickets to two (2) boxes (with 6 seats in each, for a total of 12
tickets) each year at the then current market rates, and (ii) for as long as
Buyer shall conduct race meets at Bay Meadows Racetrack, Buyer shall be entitled
to purchase tickets to one (1) box (with 6 seats) each year at the then current
market rate to the Kentucky Oaks. The box seats for both such events shall be in
locations at least as favorable as the locations provided for use by employees
of Bay Meadows Racing Association and the Hollywood Park Racetrack at the 2005
Kentucky Derby. In addition, Seller shall to provide box one (1) box (with 6
seats) to both the Kentucky Derby and Kentucky Oaks (so long as Seller shall
continue to operate same) to CAL National Bank as a sponsor in respect of the
operations of the Hollywood Park Racetrack pursuant to that certain Sponsorship
Agreement dated April 1, 2005 between Seller and CAL National Bank, so long as
such sponsorship agreement shall be in effect. Seller shall use commercially
reasonable efforts to satisfy Buyer’s ticket purchase requests for any
additional box seats as may be available for any of Seller’s events, at the then
current market rates and terms.

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12. PHASE II ENVIRONMENTAL DILIGENCE PRIOR TO CLOSING

        12.1 Buyer Submission of Phase II Work Plan. At Buyer’s option, but in
any case prior to the execution of this Agreement, Buyer shall have provided to
Seller and Seller shall have approved a work plan for any Phase II or other
intrusive environmental testing Buyer deems necessary for purposes of evaluating
the subsurface environmental or other Hazardous Substance conditions on, at,
under, in or from the Real Property that may affect Buyer’s redevelopment plans
(such testing, the “Phase II Testing”). Buyer’s work plan shall include (1) a
detailed description of any proposed sampling of air, soil, soil gas, or
groundwater that Buyer seeks to perform, including the location of any sampling
and any proposed analytical methods to evaluate such samples, and (2) an
explanation of the purpose for any such sampling and analyses. If such a work
plan shall have been provided by Buyer and approved by Seller, it shall be
attached to this Agreement as Exhibit K and referred to herein as “Work Plan”.

    (a)        After approval by Seller of the Work Plan (which shall occur
prior to the date hereof), Buyer or Buyer’s agents shall be given access to the
Real Property to undertake and complete its Phase II Testing (described in the
Work Plan) and its Phase II Report (as defined below). The Phase II Testing and
Phase II Report shall be completed by August 1, 2005 unless extended by the
mutual agreement of Buyer and Seller (the period commencing on the date hereof
and ending on August 1, 2005 (or on such mutually agreed extended date) shall be
referred to herein as the “Phase II Period”).

    (b)        Seller or Seller’s agents may observe and be present at the Real
Property when Buyer or Buyer’s agents perform the Phase II Testing. Seller shall
have the right to obtain split samples at Seller’s own expense and at Seller’s
sole discretion. Buyer shall contemporaneously provide to Seller, copies of all
final data, laboratory reports, or analytical results of its sampling on the
Real Property received by Buyer or Buyer’s agents pursuant to this Section.

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    (c)        Subject to Seller’s approval, which shall not be unreasonably
withheld, Buyer and its authorized representatives shall have the right to
modify the Work Plan if, in the course of Buyer’s investigation, circumstances
arise that require a modification of the Work Plan in order to accurately
evaluate the environmental or other Hazardous Substance conditions on, at,
under, in or from the Real Property or Assets. This subsection shall not extend
the time period in which Buyer must complete all Phase II Testing, which shall
not extend beyond the Phase II Period.

    (d)        In the event that either Seller or Buyer discovers the presence
of any Hazardous Substance on, at, under, in or from the Real Property or in the
groundwater thereunder as a result of the Phase II Testing Buyer performs
pursuant to this Article 12 for which it concludes that any applicable federal,
state or local law, ordinance, regulation or rule governing the release of
hazardous materials, toxic chemicals, hazardous substances, hazardous waste, or
waste into the soil or groundwater, requires a report to be made to a
Governmental Authority, then Seller, in its sole and absolute discretion, shall
determine whether any reporting to a Governmental Authority is required, and if
Seller determines the same is required, Seller shall have the sole and exclusive
right and responsibility to do so. In the event Seller does report any or all of
the results of the Phase II Testing, Seller shall notify Buyer promptly of such
reporting and provide a copy of the public documents that Seller submits to a
Governmental Authority and all responses received from the applicable
Governmental Authority, if any. Nothing in this Section 12.1(d), however, shall
prevent Buyer or its authorized representatives from complying with any
independent reporting obligation to which they may be subject under any Law.

    (e)        Upon the expiration of the Phase II Period, Buyer may elect to
(i) waive its rights under this Article 12 to seek a purchase price reduction;
or (ii) deliver to Seller a written estimate of the anticipated costs, if any,
to investigate or remediate environmental or Hazardous Substance conditions (in
air, soil, soil gas or groundwater) on, at, under, in or from the Real Property
in order to complete Buyer’s planned redevelopment of the Real Property provided
that those costs for redevelopment activities shall not include costs for
redevelopment activities unrelated to environmental contamination, including,
but not limited to, grading, compliance with the California Environmental
Quality Act, demolition, removal of any subsurface structures (e.g. pipelines or
tanks) or special handling for contaminated demolition debris (e.g. asbestos,
lead-based paint or contaminated concrete) (such written estimate an
“Environmental Remediation Cost Estimate”); or (iii) terminate this Agreement
and receive the full amount of the Deposit from Seller, provided that Buyer
shall not be permitted to terminate this Agreement pursuant to this Section
12.1(e) unless the Final Environmental Remediation Cost Estimate exceeds $20
million as determined either by Buyer and Seller together or by LLF. In the
event that Buyer prepares an Environmental Remediation Cost Estimate, Buyer
shall provide that estimate in writing to Seller along with copies of all final
data, laboratory reports or analytical results of its sampling (unless already
provided pursuant to Section 12.1(b)) and an explanation of how Buyer arrived at
the estimate and why such costs are necessary to bring the Real Property into
compliance with all Environmental Laws applicable to investigation and
remediation of the Real Property if it were redeveloped consistent with Buyer’s
redevelopment plans (“Phase II Report”). If, within ten business days following
Seller’s receipt of the Environmental Remediation Cost Estimate submitted by
Buyer, Seller does not approve such estimate, Seller shall so notify Buyer in
writing and either, at Seller’s option, (i) Seller shall terminate this
Agreement, in which case Buyer shall receive the full amount of the Deposit from
Seller, or (ii) the dispute resolution provisions of Section 12.3 below will be
used to reach an agreed upon Environmental Remediation Cost Estimate. If Seller
does approve Buyer’s Environmental Remediation Cost Estimate, Seller shall,
within ten business days following receipt of such estimate, so notify Buyer in
writing, such estimate shall be deemed a final Environmental Remediation Cost
Estimate (the “Final Remediation Cost Estimate”) and Buyer and Seller shall
allocate the Final Remediation Cost Estimate as provided in Section 12.2 below,
subject to Buyer’s right to terminate pursuant to Section 12.1(e).

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        12.2 Allocation of Remediation Costs. If this Agreement is not
terminated by either party under this Article 12 and a Final Remediation Cost
Estimate is agreed upon, Buyer shall be obligated to absorb and pay for, with no
adjustment in the Purchase Price, the first $2 million of remediation costs set
forth in the Final Remediation Cost Estimate. If the Final Environmental
Remediation Cost Estimate exceeds $2 million, Seller shall have the option of
either (i) reducing the Purchase Price by the amount in the Final Environmental
Remediation Cost Estimate that exceeds $2 million, or (2) terminating this
Agreement, in which event Buyer shall receive a return of the Deposit and
thereafter the parties shall have no further obligations to conclude the sale
contemplated herein.

        12.3 Dispute Resolution. If Buyer and Seller cannot agree on the Final
Environmental Remediation Cost Estimate, and Seller elects not to terminate this
Agreement, then Buyer and Seller shall follow the steps set forth in this
Section 12.3. Buyer and Seller hereby agree that LLF (i) is a third party,
neutral environmental consultant, (ii) has not been retained by either party or
by either party’s Affiliates during the three years prior to the Closing Date,
other than for its services hereunder, (iii) has experience in remediation of
real property in Southern California, (iv) is acceptable to both of them as the
sole and final arbitrator for resolving any disputes regarding the Environmental
Remediation Cost Estimate, and (v) that the parties shall equally share the cost
of LLF’s fees for work performed pursuant to this Section. LLF has agreed to
serve in the capacity as a third party, neutral environmental consultant for
purposes of this section. If within, five business days following Buyer’s
receipt of Seller’s written notification that Seller does not approve Buyer’s
Environmental Remediation Cost Estimate (which written notification shall
include Seller’s Environmental Remediation Cost Estimate and an explanation of
how Seller arrived at the estimate) and Buyer and Seller have failed to reach
agreement on the Environmental Remediation Cost Estimate, then Buyer and Seller
shall submit their respective Environmental Remediation Cost Estimates to LLF.
LLF shall review both submissions and within five business days shall prepare a
brief summary of its analysis of the cost estimates and its conclusion regarding
the correct cost estimate to both Buyer and Seller. LLF’s conclusion regarding
the correct Environmental Remediation Cost Estimate shall be binding on both
Buyer and Seller, and not subject to appeal or judicial review initiated by
either Buyer or Seller or any of their respective Affiliates. Such conclusion of
LLF shall be deemed a Final Remediation Cost Estimate and Buyer and Seller shall
allocate the Final Remediation Cost Estimate as provided in Section 12.2 of this
Agreement subject to Buyer’s and Seller’s rights of termination under Section
12.1(e) and 12.2 herein, respectively.

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13. MISCELLANEOUS.

        13.1 Bulk Transfer Laws. Buyer hereby waives compliance by Seller with
any applicable bulk transfer laws, including, without limitation, the bulk
transfer provisions of the Uniform Commercial Code of any state, or any similar
statute, with respect to the transaction contemplated by this Agreement. Seller
agrees to indemnify and hold buyer harmless against any and all claims, Losses
incurred by Buyer or any of its Affiliates as a result of any failure to comply
with any bulk transfer laws.

        13.2 Expenses. Whether or not the Transactions are consummated, neither
of the parties hereto shall have any obligation to pay any of the fees and
expenses of the other party incident to the negotiation, preparation and
execution of the Transaction Documents, or the closing of the Transactions,
including, but not limited to, the fees and expenses of legal counsel,
accountants, investment bankers, consultants and other experts.

        13.3 Waivers. Either party may, by written notice to the other party,
(a) extend the time for the performance of any of the obligations or other
actions of the other party under this Agreement; (b) waive any inaccuracies in
the representations or warranties of the other party contained in this Agreement
or in any certificates delivered pursuant to this Agreement; (c) waive
compliance with any of the conditions or covenants of the other contained in
this Agreement; or (d) waive performance of any of the obligations of the other
under this Agreement. With regard to any power, remedy or right provided herein
or otherwise available to any party hereunder, (i) no waiver or extension of
time will be effective unless expressly contained in a writing signed by the
waiving party, and (ii) no alteration, modification or impairment will be
implied by reason of any previous waiver, extension of time, or delay or
omission in exercise of rights or other indulgence.

         13.4 Amendments, Supplements. This Agreement may be amended or
supplemented at any time by the mutual written consent of the parties.

        13.5 Entire Agreement. This Agreement, the Disclosure Schedule, the
documents incorporated by reference and the Transaction Documents, constitute
the entire agreement between the parties hereto with respect to the subject
matter hereof and supersede all prior agreements and understandings, oral and
written, between the parties hereto with respect to the subject matter hereof.
No representation, warranty, promise, inducement or statement of intention has
been made by either party that is not embodied in this Agreement or the
Transaction Documents and neither party shall be bound by, or be liable for, any
alleged representation, warranty, promise, inducement or statement of intention
not embodied herein or therein.

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        13.6 Binding Effect, Benefits. This Agreement shall inure to the benefit
of and be binding upon the parties hereto and their respective permitted
successors and assigns. Except as set forth in Section 9, nothing in this
Agreement, expressed or implied, is intended to confer on any person other than
the parties hereto or their respective permitted successors and assigns, any
rights, remedies, obligations or liabilities under or by reason of this
Agreement.

        13.7 Assignability. Neither this Agreement nor any of the parties’
rights hereunder shall be assignable by either party (other than to an
Affiliate), without the prior written consent of the other party, which consent
shall be within such party’s sole discretion; provided, however, that any such
permitted assignment shall not discharge the assignor from its obligations under
this Agreement.

        13.8 Notices. All notices under this Agreement shall be in writing and
shall be delivered by personal service or telegram, telecopy or certified mail
(if such service is not available, then by first class mail), postage prepaid,
or overnight courier to such address as may be designated from time to time by
the relevant party, and which will initially be as set forth below. All notices
shall be deemed given when received. No objection may be made to the manner of
delivery of any notice actually received in writing by an authorized agent of a
party. Notices shall be addressed as follows or to such other address as the
party to whom the same is directed will have specified in conformity with the
foregoing:

    (a)        If to Seller:

  c/o Churchill Downs Incorporated
700 Central Avenue
Louisville, KY 40208
Attn: Rebecca C. Reed
Tel: (502) 636-4429
Fax: (502) 636-4439

With duplicate notice to:

  Gibson, Dunn & Crutcher, LLP
333 South Grand Avenue
Los Angeles, CA 90071
Attn: D. Eric Remensperger, Esq.
Tel: (213) 229-7000
Fax: (213) 229-7520

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    (b)        If to Buyer:

  Bay Meadows Land Company, LLC
1200 Park Place, Suite 200
San Mateo, CA 94403
Attn: Terrence E. Fancher
Tel: (650) 524-1222
Fax: (650) 524-1213

  With duplicate notice to:

  Stockbridge Capital Partners, LLC
712 5th Avenue, 21st Floor
New York, NY 1019
Attn: Darren Drake Tel:
(646) 253-1205
Fax: (646) 253-1211

  Davis Polk & Wardwell
450 Lexington Avenue
New York, NY 10017
Attn: Thomas Patrick Dore, Jr., Esq.
Tel: (212) 450-4000
Fax: (212) 450-3800

        13.9 Governing Law: Jurisdiction. This Agreement has been negotiated and
entered into in the State of California, and all questions with respect to the
Agreement and the rights and liabilities of the parties will be governed by the
laws of that state, regardless of the choice of laws provisions of California or
any other jurisdiction. Any and all disputes between the parties which may arise
pursuant to this Agreement will be heard.

       13.10 Attorneys’ Fees. As to any litigation or arbitration (including any
proceedings in a bankruptcy court) between the parties hereto or their
representatives concerning any provision of this Agreement or the rights and
duties of any person or entity hereunder, solely as between the parties hereto
or their successors, each party shall bear its own attorneys’ fees and expenses.

      13.11 Rules of Construction.

          13.11.1 Headings. The section headings in this Agreement are inserted
only as a matter of convenience, and in no way define, limit, or extend or
interpret the scope of this Agreement or of any particular section.

          13.11.2 Tense and Case. Throughout this Agreement, as the context may
require, references to any word used in one tense or case shall include all
other appropriate tenses or cases.

          13.11.3 Severability. The validity, legality or enforceability of the
remainder of this Agreement will not be affected even if one or more of the
provisions of this Agreement will be held to be invalid, illegal or
unenforceable in any respect. Upon such a holding or determination, the parties
shall negotiate in good faith to modify this Agreement so as to effect the
original intent of the parties as closely as possible in an acceptable manner in
order that the Transactions be consummated as originally contemplated to the
fullest extent possible.

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           13.11.4 Knowledge.

    (a)        Whenever a representation or warranty is stated to be based on
the knowledge of Seller, or words to that effect, such phrase refers to whether
any of Rick Baedeker, Steve Arnold, Eual Wyatt, Allen Gutterman, Jeffrey Mainka
or Michael Miller has actual present knowledge (without having made any
investigation and without any duty to investigate or inquire) of the matters
involved.

    (b)        Whenever a representation or warranty is stated to be based on
the knowledge of Buyer, or words to that effect, such phrase refers to whether
any of Terrence E. Fancher or Jack Liebau, Sr. has actual present knowledge
(without having made any investigation and without any duty to investigate or
inquire) of the matters involved.

          13.11.5 Agreement Negotiated. The parties hereto are sophisticated and
have been represented by lawyers throughout the Transactions who have carefully
negotiated the provisions hereof. As a consequence, the parties do not believe
the presumption of California Civil Code Section 1654 and similar laws or rules
relating to the interpretation of contracts against the drafter of any
particular clause should be applied in this case and therefore waive its
effects.

        13.12 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

        13.13 Specific Performance. The parties understand and agree that the
Property is unique and for that reason, among others, Buyer will be irreparably
damaged in the event that this Agreement is not specifically enforced.
Accordingly, in the event of any breach or default in or of this Agreement or
any of the warranties, terms or provisions hereof by Seller, Buyer shall have,
in addition to a claim for damages for such breach or default, and in addition
and without prejudice to any right or remedy available at law or in equity, the
right to demand and have specific performance of this Agreement.

        13.14 Cooperation in Exchange. Buyer acknowledges that Seller may
transfer the Real Property to Buyer as part of a tax-deferred exchange by Seller
pursuant to Section 1031 of the Internal Revenue Code, and that Seller has the
right to restructure all or a part of the within transaction as provided in
Internal Revenue Code Section 1031 as a concurrent or delayed (non-simultaneous)
tax deferred exchange for the benefit of Seller. Buyer agrees to cooperate, and
if requested by Seller, to accommodate Seller in any such exchange; provided
that (i) such cooperation and/or accommodation shall be at no further cost or
liability to Buyer and Seller hereby indemnifies Buyer in connection therewith;
and (ii) the restructuring of the within transaction shall not prevent nor delay
the Closing beyond the Closing Date. Seller, in electing to structure the sale
as an exchange, shall have the right to substitute another entity or person, who
will be Seller’s accommodator in Seller’s place and stead. Buyer and Seller
acknowledge and agree that such substitution will not relieve the herein named
Seller of any liability or obligation hereunder, and Buyer shall have the right
to look solely to such herein named Seller with respect to the obligations of
Seller under this Agreement.

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        13.15 No Merger. The parties intend that the provisions of this
Agreement shall survive the delivery of the deeds and not merge therewith.

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        IN WITNESS WHEREOF, this Asset Purchase Agreement has been duly executed
and delivered by the duly authorized officers of the parties hereto as of the
date first above written.

  “SELLER”

CHURCHILL DOWNS CALIFORNIA
COMPANY, a Kentucky corporation

By: /s/Rick Baedeker       
Name: Rick Baedeker
Its: President

 

“BUYER”

BAY MEADOWS LAND COMPANY, LLC
  a Delaware limited liability company

By: /s/Terrence E. Fancher       
Name: Terrence E. Fancher
Its: President

SIGNATURE PAGE TO ASSET PURCHASE AGREEMENT