Exhibit 10(b)

 

CREDIT AGREEMENT

 

This Agreement, dated as of April 3, 2003, is among CHURCHILL DOWNS
INCORPORATED, the GUARANTORS party hereto, the LENDERS party hereto and BANK
ONE, KENTUCKY, NA, a national banking association having its principal office in
Louisville, Kentucky, as AGENT.  The parties hereto agree as follows:

 

ARTICLE I

 

DEFINITIONS

 

As used in this Agreement:

 

“Acquisition” means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
other Loan Party (i) acquires any going business or all or substantially all of
the assets of any Person, or division thereof, whether through purchase of
assets, merger or otherwise or (ii) directly or indirectly acquires (in one
transaction or as the most recent transaction in a series of transactions) at
least a majority (in number of votes) of the securities of a corporation which
have ordinary voting power for the election of directors (other than securities
having such power only by reason of the happening of a contingency) or a
majority (by percentage or voting power) of the outstanding ownership interests
of a partnership or limited liability company.

 

“Acquisition Compliance Certificate” has the meaning given it in Section 6.13.

 

“Adjusted EBITDA” of any Person or any period means the EBITDA for that Person
for that period adjusted on a pro forma basis for the EBITDA of acquired or
divested operations.

 

“Advance” means a borrowing hereunder, (i) made by the Lenders on the same
Borrowing Date, or (ii) converted or continued by the Lenders on the same date
of conversion or continuation, consisting, in either case, of the aggregate
amount of the several Loans of the same Type and, in the case of Eurodollar
Loans, for the same Interest Period.  The term “Advance” shall include Swing
Line Loans unless otherwise expressly provided.

 

“Affected Lender” has the meaning given it in Section 2.21.

 

“Affiliate” of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person.  A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.

 

“Agent” means Bank One in its capacity as contractual representative of the
Lenders pursuant to Article X, and not in its individual capacity as a Lender,
and any successor Agent appointed pursuant to Article X.

 

“Aggregate Commitment” means the aggregate of the Commitments of all the
Lenders, as reduced or increased from time to time pursuant to the terms hereof.

 

“Aggregate Outstanding Credit Exposure” means, at any time, the aggregate of the
Outstanding Credit Exposure of all the Lenders.

 

“Agreement” means this Credit Agreement, as it may be amended or modified and in
effect from time to time.

 

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“Agreement Accounting Principles” means generally accepted accounting principles
as in effect from time to time, applied in a manner consistent with that used in
preparing the financial statements referred to in Section 5.4.

 

“Alternate Base Rate” means, for any day, a rate of interest per annum equal to
the higher of (i) the Prime Rate for such day or (ii) the sum of the Federal
Funds Effective Rate for such day plus 1/2% per annum.

 

“Applicable Fee Rate” means, at any time, the percentage rate per annum at which
the Commitment Fee is accruing on the unused portion of the Aggregate Commitment
at such time as set forth in the Pricing Schedule.

 

“Applicable Margin” means, with respect to Advances of any Type at any time, the
percentage rate per annum which is applicable at such time with respect to
Advances of such Type as set forth in the Pricing Schedule.

 

“Approved Fund” means any Fund that is administered or managed by (a) a Lender,
(b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that
administers or manages a Lender.

 

“Arranger” means, collectively, Banc One Capital Markets, Inc., a Delaware
corporation, and its successors, and PNC Capital Markets, Inc., a Pennsylvania
corporation, and its successors, in their capacity as Co-Lead Arrangers and
Joint Book Runners.

 

“Assignment of Patents, Trademarks and Copyrights” shall mean the Assignment of
Patents, Trademarks and Copyrights, dated as of the date of this Agreement,
executed by the Loan Parties in favor of the Collateral Agent.

 

“Article” means an article of this Agreement unless another document is
specifically referenced.

 

“Authorized Officer” means any of the chief executive officer, chief financial
officer, any executive vice president, any senior vice president, the treasurer,
and any other officer designated as such by the board of directors of the
Borrower, acting singly.

 

“Available Aggregate Commitment” means, at any time, the Aggregate Commitment
then in effect minus the Aggregate Outstanding Credit Exposure at such time.

 

“Bank One” means Bank One, Kentucky, NA, a national banking association having
its principal office in Louisville, Kentucky, in its individual capacity, and
its successors.

 

“Benefit Arrangement” shall mean at any time an “employee benefit plan,” within
the meaning of Section 3(3) of ERISA, which is neither a Plan nor a
Multiemployer Plan and which is maintained, sponsored or otherwise contributed
to by any member of the Controlled Group.

 

“Borrower” means Churchill Downs Incorporated, a Kentucky corporation, and its
successors and assigns.

 

“Borrowing Date” means a date on which an Advance is made hereunder.

 

“Borrowing Notice” is defined in Section 2.10, and shall be in a form
satisfactory to the Agent, generally in the form of Exhibit R.

 

“Business Day” means (i) with respect to any borrowing, payment or rate
selection of Eurodollar Advances, a day (other than a Saturday or Sunday) on
which banks generally are open in Louisville and New York City for the conduct
of substantially all of their commercial lending activities, interbank wire
transfers can be made on the Fedwire system and dealings in United States
dollars are carried on in the London interbank market and (ii) for all other
purposes, a day (other than a Saturday or Sunday) on which banks generally are
open in Louisville for the conduct of substantially all of their commercial
lending activities and interbank wire transfers can be made on the Fedwire
system.

 

“CDMC” shall mean Churchill Downs Management Company, a Kentucky corporation,
and wholly owned subsidiary of the Borrower.

 

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“Calder” means Calder Race Course, Inc., a Florida corporation.

 

“Calder Financing Statements” is defined in Section 6.21.

 

“Calder Mortgage” means the Mortgage executed by Calder in favor of the
Collateral Agent with respect to the Real Property owned by Calder.  Calder
shall execute the Calder Mortgage and deliver such Calder Mortgage to the Agent
on the Closing Date in a form sufficient for recordation and the Agent may
thereafter record such Mortgage at any time pursuant to Section 6.21.

 

“Capital Expenditures” means, without duplication, any expenditures for any
purchase or other acquisition of any asset which would be classified as a fixed
or capital asset or a Capitalized Lease Obligation on a consolidated balance
sheet of the Borrower and its Subsidiaries prepared in accordance with Agreement
Accounting Principles, including without limitation those expenditures under the
Master Plan for Capital Expenditures.

 

“Capitalized Lease” of a Person means any lease of Property by such Person as
lessee which would be capitalized on a balance sheet of such Person prepared in
accordance with Agreement Accounting Principles.

 

“Capitalized Lease Obligations” of a Person means the amount of the obligations
of such Person under Capitalized Leases which would be shown as a liability on a
balance sheet of such Person prepared in accordance with Agreement Accounting
Principles.

 

“Cash Equivalent Investments” means (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P or P-1 or better by Moody’s, (iii) demand deposit accounts
maintained in the ordinary course of business, and (iv) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000; provided in each case that
the same provides for payment of both principal and interest (and not principal
alone or interest alone) and is not subject to any contingency regarding the
payment of principal or interest.

 

“Change in Control” means the occurrence of any of the following:  Any person
(as such term is used in Section 13(d) and Section 14(d)(2) of the Exchange Act
as in effect on the date of the Closing Date) or related Persons constituting a
group (as such term is used in Rule 13d-5 under the Exchange Act), other than a
group including, and under the general supervision of, the Excluded Group:  (i)
become the “beneficial owners” (as such term is used in Rule 13d-3 under the
Exchange Act as in effect on the date of the Closing Date), directly or
indirectly, of more than 50% of the total voting power of all classes then
outstanding of the voting stock or membership or other equity interests of the
Borrower, or (ii) acquire after the date of the Closing Date (x) the power to
elect, appoint or cause the election or appointment of at least a majority of
the members of the board of directors of the Borrower, through beneficial
ownership of the capital stock of the Borrower or otherwise, or (y) all or
substantially all of the properties and assets of the Borrower.

 

“Change” has the meaning given it in Section 3.2.

 

“Closing Date” means the Business Day on which the first Loan shall be made,
which shall be April 3, 2003.

 

“Code” means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.

 

“Collateral” means and includes, collectively but without limitation, all
property and assets in which the Loan Parties grant the Collateral Agent for the
benefit of the Lenders an interest as collateral or other security for all or
any of the Secured Obligations, whether real or personal property, whether
granted directly or indirectly, whether granted now or in the future, and
whether granted in the form of a security interest, mortgage, deed of trust,
assignment, pledge, chattel mortgage, chattel trust, factor’s lien, equipment
trust, conditional sale, trust receipt, lien, charge, lien or title retention,
contract, lease or consignment agreement intended as a security device, or any
other security or lien interest whatsoever, whether created by law, contract or
otherwise and is intended to and shall include all real and personal property,
tangible and intangible, of the Loan Parties; provided, however, the term
Collateral shall not include (i) the Horseman’s Account, (ii) the bond issued
under the Master Plan Bond Transaction and payments owed by one Loan Party to
another Loan Party in connection with the Master Plan Bond Transaction, (iii)
ownership interests of any

 

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Loan Party in any (a) Excluded Subsidiary, (b) any Excluded Entity, and (c)
those Persons listed on Schedule 3 hereto in which, as of the Closing Date, a
Loan Party directly or indirectly owns less than 100% of the outstanding
interest of such Person and in which the organizational agreements governing
such Person prohibit the applicable Loan Party from granting a security interest
in such ownership interest, and (iv) any chattel paper, contract rights or other
general intangibles which are now held or hereafter acquired by any Loan Party
to the extent that such chattel paper, contract rights or other general
intangibles (including, but not limited to, licenses) are not assignable or
capable of being encumbered (a) as a matter of law or (b) under the terms of any
agreement applicable thereto (but solely to the extent that any such restriction
is enforceable and not ineffective under applicable law) without the consent of
the other party to such agreement where such consent has not been obtained after
the applicable Loan Party has made a reasonably diligent effort satisfactory to
the Agent to obtain such consent.

 

“Collateral Agent” means Bank One in its capacity as contractual representative
of the Lenders and the Term Note Purchasers as Collateral Agent under the
Collateral Sharing Agreement, and not in its individual capacity as a Lender,
and any successor Collateral Agent appointed under the Collateral Sharing
Agreement.

 

“Collateral Documents” means, collectively, all of the instruments, documents
and agreements by which any Person grants a security interest in Collateral,
including without limitation, those documents referenced in Section 6.25 of this
Agreement, which in turn includes without limitation, the Pledge and Security
Agreement, the Mortgages, the Negative Pledge Agreement, the Assignment of
Patents, Trademarks and Copyrights, the Intercompany Subordination Agreement,
the Collateral Sharing Agreement and all other documents or instruments executed
as security for the Secured Obligations from time to time.

 

“Collateral Sharing Agreement” means that certain Collateral Sharing Agreement
dated as of April 3, 2003, with Bank One as Collateral Agent, in the form of
Exhibit G, as it may be amended or supplemented from time to time.

 

“Collateral Shortfall Amount” is defined in Section 8.1.

 

“Commitment” means, for each Lender, the obligation of such Lender to make
Revolving Loans to, and participate in Facility LCs issued upon the application
of, the Borrower in an aggregate amount not exceeding the amount set forth
opposite its signature below, as it may be modified as a result of any
assignment that has become effective pursuant to Section 12.3.2 or as otherwise
modified from time to time pursuant to the terms hereof.

 

“Commitment Fee” is defined in Section 2.7.

 

“Consolidated Capital Expenditures” means, with reference to any period, the
Capital Expenditures of the Loan Parties calculated on a consolidated basis for
such period in accordance with Agreement Accounting Principles.

 

“Consolidated Adjusted EBITDA” for any Period means the consolidated Adjusted
EBITDA of all of the Loan Parties for that period, consolidated in accordance
with Agreement Accounting Principles.  The EBITDA of the Excluded Subsidiaries
shall not be included in Consolidated Adjusted EBITDA.

 

“Consolidated Fixed Charges” means for any period of determination the
consolidated Fixed Charges of all of the Loan Parties for that period,
consolidated in accordance with Agreement Accounting Principles.  The Fixed
Charges of the Excluded Subsidiaries shall not be included in Consolidated Fixed
Charges.

 

“Consolidated Funded Indebtedness” means at any time the aggregate dollar amount
of Consolidated Indebtedness which has actually been funded and is outstanding
at such time, whether or not such amount is due or payable at such time.

 

“Consolidated Indebtedness” means at any time the Indebtedness of the Loan
Parties calculated on a consolidated basis as of such time in accordance with
Agreement Accounting Principles.

 

“Consolidated Interest Expense” means, with reference to any period, the
interest expense of the Loan Parties calculated on a consolidated basis for such
period in accordance with Agreement Accounting Principles.

 

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“Consolidated Net Income” means, with reference to any period, the net income
(or loss) of all of the Loan Parties calculated on a consolidated basis for such
period in accordance with Agreement Accounting Principles.

 

“Consolidated Net Worth” means as of any date of determination total
stockholders’ equity of all of the Loan Parties as of such date determined and
consolidated in accordance with Agreement Accounting Principles.

 

“Consolidated Rentals” means, with reference to any period, the Rentals of the
Loan Parties calculated on a consolidated basis for such period in accordance
with Agreement Accounting Principles.

 

“Contingent Obligation” of a Person means any agreement, undertaking or
arrangement by which such Person assumes, guarantees, endorses, contingently
agrees to purchase or provide funds for the payment of, or otherwise becomes or
is contingently liable upon, the obligation or liability of any other Person, or
agrees to maintain the net worth or working capital or other financial condition
of any other Person, or otherwise assures any creditor of such other Person
against loss, including, without limitation, any guaranty, comfort letter,
operating agreement, take-or-pay contract or the obligations of any such Person
as general partner of a partnership with respect to the liabilities of the
partnership.

 

“Controlled Group” means all members of a controlled group of corporations or
other business entities and all trades or businesses (whether or not
incorporated) under common control which, together with the Borrower or any of
its Subsidiaries, are treated as a single employer under Section 414 of the
Code.

 

“Conversion/Continuation Notice” is defined in Section 2.11, and shall be in a
form satisfactory to this Agent, generally in the form of Exhibit S.

 

“Credit Extension” means the making of an Advance or the issuance of a Facility
LC hereunder.

 

“Credit Extension Date” means the Borrowing Date for an Advance or the issuance
date for a Facility LC.

 

“Current Fields of Enterprise” means those fields of enterprise that each Loan
Party is engaged in as of the date of this Agreement, and activities related
thereto, including, but not limited to the acquisition of Persons that provide
wagering platforms, and shall not include any mode of gambling other than
pari-mutuel wagering on horse racing and Permitted Alternative Gaming which, in
each case, is conducted in full compliance with applicable law.

 

“Default” means one or more of the events described in Article VII.

 

“EBITDA” for any Person for any period of determination means that Person’s net
income plus, to the extent deducted from revenues in determining net income, (i)
interest expense, (ii) expense for taxes paid or accrued, (iii) depreciation,
(iv) amortization, (v) extraordinary losses incurred other than in the ordinary
course of business, and (vi) the impairment charge deducted from the net income
of Ellis Park Race Course, Inc. with respect to the fourth fiscal quarter 2002
minus, to the extent included in net income, that Person’s extraordinary gains
realized other than in the ordinary course of business, in each case for such
period determined in accordance with Agreement Accounting Principles.

 

“Environmental Laws” means all applicable federal, provincial, state and local
laws, rules, regulations, reported and publicly available orders, reported
judicial determinations, and reported and publicly available decisions of an
executive body or any governmental or quasi-governmental entity, whether in the
past, the present or the future, pertaining to health and/or the environment in
effect in any and all jurisdictions in which the Borrowers are at any time
leasing equipment pursuant to a Lease or otherwise doing business. The
Environmental Laws shall include, but shall not be limited to, the following:
(1) the Comprehensive Environmental Response, Compensation, and Liability Act,
42 U.S.C. Sections 9601, et seq.; the Superfund Amendments and Reauthorization
Act, Public Law 99-499, 100 Stat. 1613; the Resource Conservation and Recovery
Act, 42 U.S.C. Sections 6901, et seq.; the National Environmental Policy Act, 42
U.S.C. Section 4321; the Safe Drinking Water Act, 42 U.S.C. Sections 300F, et
seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601; the Hazardous
Materials Transportation Act, 49 U.S.C. Section 1801; the Federal Water
Pollution Control Act, 33 U.S.C. Sections 1251; et seq.; the Clean Air Act, 42
U.S.C. Section 7401, et seq.; and the regulations promulgated in connection
therewith; and (2) Environmental Protection Agency regulations

 

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pertaining to asbestos (including 40 C.F.R. Part 61, Subpart M); Occupational
Safety and Health Administration regulations pertaining to asbestos (including
29 C.F.R. Sections 1910.1001 and 1926.58); and any state, province and local
laws and regulations pertaining to Hazardous Materials and/or asbestos.

 

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and any rule or regulation issued thereunder.

 

“Eurodollar Advance” means an Advance which, except as otherwise provided in
Section 2.13, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar Base Rate” means, with respect to a Eurodollar Advance for the
relevant Interest Period, the applicable British Bankers’ Association LIBOR rate
for deposits in U.S. dollars as reported by any generally recognized financial
information service as of 11:00 a.m. (London time) two Business Days prior to
the first day of such Interest Period, and having a maturity equal to such
Interest Period, provided that, if no such British Bankers’ Association LIBOR
rate is available to the Agent, the applicable Eurodollar Base Rate for the
relevant Interest Period shall instead be the rate determined by the Agent to be
the rate at which Bank One, N.A. or one of its Affiliate banks offers to place
deposits in U.S. dollars with first-class banks in the London interbank market
at approximately 11:00 a.m. (London time) two Business Days prior to the first
day of such Interest Period, in the approximate amount of Bank One, N.A.’s
relevant Eurodollar Loan and having a maturity equal to such Interest Period.

 

“Eurodollar Loan” means a Loan which, except as otherwise provided in Section
2.13, bears interest at the applicable Eurodollar Rate.

 

“Eurodollar Rate” means, with respect to a Eurodollar Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the Eurodollar Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the Applicable Margin.

 

“Exchange Act” means the Securities Exchange Act of 1934.

 

“Excluded Entities” means any corporation, partnership, limited liability
company or other Person in which the Loan Parties hold an ownership interest,
either directly or indirectly, and which is not a Loan Party.

 

“Excluded Group” means and includes Duchossois Industries, Inc. and its
Affiliates and Brad M. Kelly and his Affiliates.

 

“Excluded Subsidiaries” means any Excluded Entity which is a Subsidiary of the
Borrower.  The Excluded Subsidiaries on the Closing Date are Hoosier Park, L.P.,
Charlson Broadcast Technologies LLC, Churchill Downs California Food Services
Company, Tracknet, LLC, and Anderson Park, Inc.

 

“Excluded Taxes” means, in the case of each Lender or applicable Lending
Installation and the Agent, taxes imposed on its overall net income, and
franchise taxes imposed on it, by (i) the jurisdiction under the laws of which
such Lender or the Agent is incorporated or organized or (ii) the jurisdiction
in which the Agent’s or such Lender’s principal executive office or such
Lender’s applicable Lending Installation is located.

 

“Exhibit” refers to an exhibit to this Agreement, unless another document is
specifically referenced.

 

“Facility LC” is defined in Section 2.3.1.

 

“Facility LC Application” is defined in Section 2.3.3.

 

“Facility LC Collateral Account” is defined in Section 2.3.11.

 

“Facility Termination Date” means March 31, 2008, or any earlier date on which
the Aggregate Commitment is reduced to zero or otherwise terminated pursuant to
the terms hereof.

 

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“Federal Funds Effective Rate” means, for any day, an interest rate per annum
equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10:00 a.m.
(Louisville time) on such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent in its
sole discretion.

 

“Financial Contract” of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, and/or (ii) any Rate Management
Transaction.

 

“Fixed Charge Coverage Ratio” means, as of any date of calculation, the ratio of
Consolidated Adjusted EBITDA to Consolidated Fixed Charges, in each instance
computed as provided in Section 6.24.1 and in accordance with Agreement
Accounting Principles.

 

“Fixed Charges” means for any period of determination, the sum of interest
expense, income tax expenses, scheduled principal installments on Indebtedness
with maturities greater than one year (as adjusted for prepayments), dividend
payments, scheduled payments under Capitalized Leases and Capital Expenditures
(excluding (a) Capital Expenditures consisting solely of consideration paid or
payable for Permitted Acquisitions, and (b) Capital Expenditures expended under
and in compliance with the Master Plan for Capital Expenditures)  for such
period.

 

“Floating Rate” means, for any day, a rate per annum equal to (i) the Alternate
Base Rate for such day plus (ii) the Applicable Margin, in each case changing
when and as the Alternate Base Rate changes.

 

“Floating Rate Advance” means an Advance which, except as otherwise provided in
Section 2.13, bears interest at the Floating Rate.

 

“Floating Rate Loan” means a Loan which, except as otherwise provided in Section
2.13, bears interest at the Floating Rate.

 

“Fund” means any Person (other than a natural person) that is (or will be)
engaged in making, purchasing, holding or otherwise investing in commercial
loans and similar extensions of credit in the ordinary course of its business.

 

“Guarantor Joinder” is defined in Section 9.14.

 

“Guarantors” means, subject to Section 6.12(iii) collectively, Churchill Downs
Management Company, Churchill Downs Investment Company, Racing Corporation of
America, Calder Race Course, Inc., Tropical Park, Inc., Churchill Downs
California Company, Churchill Downs California Fall Operating Company, Arlington
Park Racecourse, LLC, Arlington Management Services, LLC, Arlington OTB Corp.,
Quad City Downs, Inc., CDIP, LLC, CDIP Holdings, LLC, and Ellis Park Race
Course, Inc., any Person who becomes a Guarantor under Section 9.14, and the
successors and assigns of any of them, and “Guarantor” means any one or more of
these.

 

“Guaranty” means that certain Guaranty dated as of the date of this Agreement,
executed by the Guarantors in favor of the Collateral Agent, entered into
pursuant to this Agreement, as it may be amended or modified and in effect from
time to time.

 

“Hazardous Materials” means any substance, chemical, wastes (medical or
otherwise), or contaminants, including, without limitation, asbestos,
polychlorinated biphenyls (“PCBs”), paint containing lead, gasoline or other
petroleum products, radioactive material, urea formaldehyde foam insulation, and
discharges of sewage or effluent that is designated or defined (either by
inclusion in a list of materials or by reference to exhibited characteristics)
as hazardous, toxic or dangerous, or as a designated or prohibited substance, in
any federal, state, provincial, municipal or local law, by-law, code having the
force of law, or ordinance, including, without limitation, the applicable
Environmental Laws, now existing or hereafter in effect, and all rules having
the force of law and regulations promulgated thereunder.

 

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“Horseman’s Account” means refundable deposits and amounts held by a Loan Party
for the benefit of horsemen, ownership of which deposits and amounts is vested
in such horsemen.

 

“Indebtedness” of a Person means such Person’s (i) obligations for borrowed
money, (ii) obligations representing the deferred purchase price of Property or
services (other than accounts payable arising in the ordinary course of such
Person’s business payable on terms customary in the trade), (iii) obligations,
whether or not assumed, secured by Liens or payable out of the proceeds or
production from Property now or hereafter owned or acquired by such Person, (iv)
obligations which are evidenced by notes, acceptances, or other instruments, (v)
obligations of such Person to purchase securities or other Property arising out
of or in connection with the sale of the same or substantially similar
securities or Property, (vi) Capitalized Lease Obligations, (vii) LC
Obligations, (viii) aggregate undrawn stated amount under Letters of Credit that
are not Facility LCs, plus the aggregate amount of all reimbursement obligations
in connection therewith, and (ix) any other obligation for borrowed money or
other financial accommodation which in accordance with Agreement Accounting
Principles would be shown as a liability on the consolidated balance sheet of
such Person, but the term “Indebtedness” does not include trade payables and
accrued expenses, deferred revenue related to the annual running of the Kentucky
Derby, deferred revenue from the leasing or licensing of personal seat licenses,
and obligations not exceeding $3,000,000 under outstanding pari-mutuel tickets
that are payable with respect to races run not more than one year prior to the
date of determination which were incurred in the ordinary course of business,
which are not represented by a promissory note or other evidence of indebtedness
and (other than pari-mutuel tickets) which are not more than thirty (30) days
past due, all determined in accordance with Agreement Accounting Principles.

 

“Indemnity Agreement” shall mean the Environmental Indemnity Agreement, dated as
of April 3, 2003, among the Agent, the Borrower and the Guarantors.

 

“Intercompany Subordination Agreement” shall mean a subordination agreement
among the Loan Parties in the form attached hereto as Exhibit H.

 

“Interest Period” means, with respect to a Eurodollar Advance, a period of one,
two, three or six months commencing on a Business Day selected by the Borrower
pursuant to this Agreement.  Such Interest Period shall end on the day which
corresponds numerically to such date one, two, three or six months thereafter,
provided, however, that if there is no such numerically corresponding day in
such next, second, third or sixth succeeding month, such Interest Period shall
end on the last Business Day of such next, second, third or sixth succeeding
month.  If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.

 

“Investment” of a Person means any loan, advance (other than commission, travel
and similar advances to officers and employees made in the ordinary course of
business), extension of credit (other than accounts receivable arising in the
ordinary course of business on terms customary in the trade) or contribution of
capital by such Person; stocks, bonds, mutual funds, partnership interests,
notes, debentures or other securities owned by such Person; any deposit accounts
and certificate of deposit owned by such Person; and structured notes,
derivative financial instruments and other similar instruments or contracts
owned by  such Person.

 

“LC Fee” is defined in Section 2.3.4.

 

“LC Issuer” means PNC Bank (or any subsidiary or affiliate of PNC Bank
designated by PNC Bank) in its capacity as issuer of Facility LCs hereunder.

 

“Investment Compliance Certifcate” is defined in Section 6.13(ii)(c).

 

“LC Obligations” means, at any time, the sum, without duplication, of (i) the
aggregate undrawn stated amount under all Facility LCs outstanding at such time
(including without limitation increases, if any, in the stated amount provided
in any Facility LC, whether or not the time for such increase has occurred) plus
(ii) the aggregate unpaid amount at such time of all Reimbursement Obligations.

 

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“LC Payment Date” is defined in Section 2.3.5.

 

“LC Reimbursement Agreement” is defined in Section 2.3.3.

 

“Lenders” means the lending institutions listed on the signature pages of this
Agreement and their respective successors and assigns, together with any lending
institution that becomes a Lender under Section 12.3.  Unless otherwise
specified, the term “Lenders” includes PNC Bank in its capacity as Swing Line
Lender.

 

“Lending Installation” means, with respect to a Lender or the Agent, the office,
branch, subsidiary or Affiliate of such Lender or the Agent listed on the
signature pages hereof or on a Schedule or otherwise selected by such Lender or
the Agent pursuant to Section 2.19.

 

“Letter of Credit” of a Person means a letter of credit or similar instrument
which is issued upon the application of such Person or upon which such Person is
an account party or for which such Person is in any way liable.

 

“Leverage Ratio” means, as of any date of calculation, the ratio of (i)
Consolidated Funded Indebtedness outstanding on such date to (ii) Consolidated
Adjusted EBITDA, in each instance computed in accordance with Section 6.24.2 and
Agreement Accounting Principles.

 

“Lien” means any lien (statutory or other), mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance or preference, priority or other
security agreement or preferential arrangement of any kind or nature whatsoever
(including, without limitation, the interest of a vendor or lessor under any
conditional sale, Capitalized Lease or other title retention agreement).

 

“Loan” means a Revolving Loan or a Swing Line Loan.

 

“Loan Documents” means this Agreement, the Facility LC Applications, the LC
Reimbursement Agreement, any Notes issued pursuant to Section 2.15, the
Collateral Documents, the Guaranty, and all other documents (excluding the
Working Cash Sweep Rider) and/or instruments executed and delivered pursuant to
and/or in connection with this Agreement.

 

“Loan Parties” means the Borrower and the Guarantors from time to time.

 

“Master Plan Bond Rentals” means rentals payable under the Master Plan Bond
Transaction.

 

“Master Plan Bond Transaction” means the transaction through which the City of
Louisville, Kentucky (n/k/a Louisville/Jefferson County Metro Government)
Taxable Industrial Building Revenue Bond, Series 2002 (Churchill Downs
Incorporated Project) was issued.

 

“Master Plan for Capital Expenditures” means those certain plans, specifications
and cost summaries of the Borrower which provide for the renovation and
improvement of certain portions of the Borrower’s Property located generally on
Central Avenue in Louisville, Kentucky, and known as the Churchill Downs
racetrack facility, together with contiguous parcels used in connection with
that racetrack facility, including, without limitation, the renovation of the
clubhouse, grandstands and the Jockey Club, the addition of approximately 66 new
corporate suites, the installation of certain new elevators, a mechanical system
upgrade, and the addition of new space for catered functions.

 

“Material Adverse Effect” means a material adverse effect on (i) the business,
Property, condition (financial or otherwise), results of operations, or
prospects, of the Loan Parties taken as a whole, (ii) the ability of the
Borrower to perform its obligations under the Loan Documents to which it is a
party, or (iii) the validity or enforceability of any of the Loan Documents or
the rights or remedies of the Agent, the LC Issuer, the Collateral Agent or the
Lenders thereunder.

 

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“Material Indebtedness” means Indebtedness in an outstanding principal amount of
$3,000,000.00 or more in the aggregate (or the equivalent thereof in any
currency other than U.S. dollars).

 

“Material Indebtedness Agreement” means any agreement under which any Material
Indebtedness was created or is governed or which provides for the incurrence of
Indebtedness in an amount which would constitute Material Indebtedness (whether
or not an amount of Indebtedness constituting Material Indebtedness is
outstanding thereunder).

 

“Modify” and “Modification” are defined in Section 2.3.1.

 

“Moody’s” means Moody’s Investors Service, Inc.

 

“Mortgages” shall mean the Mortgages and Deeds of Trust in substantially the
form of collective Exhibit I executed and delivered by each of the applicable
Loan Parties with respect to each of the parcels of Real Property Collateral to
the Collateral Agent for the benefit of the Lenders, subject to the terms of the
Collateral Sharing Agreement.  The Calder Mortgage with respect to the Real
Property in Florida will not be recorded on the Closing Date, but the Agent may
cause the Collateral Agent to record the Calder Mortgage at any time pursuant to
Section 6.21.

 

“Multiemployer Plan” means a Plan maintained pursuant to a collective bargaining
agreement or any other arrangement to which the Borrower or any member of the
Controlled Group is a party to which more than one employer is obligated to make
contributions.

 

“Negative Pledge Agreement” means that certain Negative Pledge Agreement in
substantially the form of Exhibit J executed and delivered by Calder and all the
Loan Parties in favor of the Agent with respect to all interest of the Loan
Parties in any Property of Calder, including without limitation any Property
subject to the Calder Mortgage and/or any Calder Financing Statements.

 

“Non-U.S. Lender” is defined in Section 3.5(iv).

 

“Note” is defined in Section 2.15(iv).

 

“Note Purchase Agreement” means, collectively, the Note Purchase Agreements each
dated April 3, 2003, among the Borrower and the Term Note Purchasers.

 

“Notice of Acquisition” is defined in Section 6.13(iii)(b).

 

“Obligations” means, collectively,  all unpaid principal of and accrued and
unpaid interest on the Loans, all obligations, contingent or otherwise, under
and/or in connection with any Notes and/or to or for the benefit of any Lender
and/or the LC Issuer under and/or in connection with the other Loan Documents,
all Reimbursement Obligations, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent, the Collateral Agent for the benefit of any Lender
or the LC Issuer, the LC Issuer or any indemnified party arising under the Loan
Documents, whether they exist on the date of this Agreement, or arise or are
created or acquired after the date of this Agreement.

 

“Off-Balance Sheet Liability” of a Person means (i) any repurchase obligation or
liability of such Person with respect to accounts or notes receivable sold by
such Person, (ii) any liability under any Sale and Leaseback Transaction which
is not a Capitalized Lease, (iii) any liability under any so-called “synthetic
lease” transaction entered into by such Person, or (iv) any obligation arising
with respect to any other transaction which is the functional equivalent of or
takes the place of borrowing but which does not constitute a liability on the
balance sheets of such Person, but excluding from this clause (iv) Operating
Leases.

 

“Operating Lease” of a Person means any lease of Property (other than a
Capitalized Lease) by such Person as lessee which has an original term
(including any required renewals and any renewals effective at the option of the
lessor) of one year or more.

 

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“Other Taxes” is defined in Section 3.5(ii).

 

“Outstanding Credit Exposure” means, as to any Lender at any time, the sum of
(i) the aggregate principal amount of its Loans outstanding at such time, plus
(ii) an amount equal to its Pro Rata Share of the LC Obligations at such time,
plus (iii) an amount equal to its Pro Rata Share of the aggregate principal
amount of Swing Line Loans outstanding at such time.

 

“Participants” is defined in Section 12.2.1.

 

“Payment Date” means the last day of each calendar quarter.

 

“PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.

 

“Permitted Acquisitions” has the meaning given it in Section 6.13(iii).

 

“Permitted Alternative Gaming” means slot machines and/or video lottery
terminals and/or electronic gaming machines operated by one or more of the Loan
Parties at a facility owned or leased by, and operated by one or more of the
Loan Parties, and at which either (1) live horse racing is underway at that
facility and pari-mutuel wagering is being conducted with respect to those
races; and/or (2) live horse racing is being simulcast at that facility and
pari-mutuel wagering is being conducted with respect to those races.

 

“Permitted Liens” is defined in Section 6.16.

 

“Permitted Secured Rate Management Transaction” has the meaning given it in
Section 6.16(vii).

 

“Person” means any natural person, corporation, firm, joint venture,
partnership, limited liability company, association, enterprise, trust or other
entity or organization, or any government or political subdivision or any
agency, department or instrumentality thereof.

 

“Plan” means an employee pension benefit plan which is covered by Title IV of
ERISA or subject to the minimum funding standards under Section 412 of the Code
as to which the Borrower or any member of the Controlled Group may have any
liability.

 

“Pledge and Security Agreement” means the Pledge and Security Agreement in
substantially the form of Exhibit K executed and delivered by each of the
applicable Loan Parties to the Collateral Agent for the ratable benefit of the
Lenders, subject to the provisions of the Collateral Sharing Agreement.

 

“PNC Bank” means PNC Bank, National Association, a national banking association
having its principal office in Pittsburgh, Pennsylvania, and having an office in
Louisville, Kentucky, in its individual capacity, and its successors.

 

“Pricing Schedule” means the Schedule attached hereto identified as such.

 

“Prime Rate” means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One or its parent (which is not necessarily
the lowest rate charged to any customer), changing when and as said prime rate
changes.

 

“Prior Credit Facility” means the credit facility provided to the Borrower
under, and all of the obligations of the Borrower and all or any of the
Guarantors, under that certain Credit Agreement dated as of April 23, 1999,
among the Borrower, the Guarantors (as such term is defined therein) party
thereto, the Banks, (as such term is defined therein) party thereto, and PNC
Bank, in its capacity as Agent for the Banks thereunder, as amended, modified
and/or supplemented through the date of this Agreement.

 

“Prohibited Transaction” shall mean any prohibited transaction as defined in
Section 4975 of the Internal Revenue Code or Section 406 of ERISA for which
neither an individual nor a class exemption has been issued by the United States
Department of Labor.

 

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“Pro Rata Share” means, with respect to a Lender, a portion equal to a fraction
the numerator of which is such Lender’s Commitment and the denominator of which
is the Aggregate Commitment.

 

“Property” of a Person means any and all property, whether real, personal,
tangible, intangible, or mixed, of such Person, or other assets owned, leased or
operated by such Person.

 

“Purchasers” is defined in Section 12.3.1.

 

“Rate Management Obligations” of a Person means any and all obligations of such
Person, whether absolute or contingent and howsoever and whensoever created,
arising, evidenced or acquired (including all renewals, extensions and
modifications thereof and substitutions therefor), under (i) any and all Rate
Management Transactions, and (ii) any and all cancellations, buy backs,
reversals, terminations or assignments of any Rate Management Transactions.

 

“Rate Management Transaction” means any transaction (including an agreement with
respect thereto) now existing including, without limitation, those transactions
described on Schedule 6.22 or hereafter entered by the Borrower which is a rate
swap, basis swap, forward rate transaction, commodity swap, commodity option,
equity or equity index swap, equity or equity index option, bond option,
interest rate option, foreign exchange transaction, cap transaction, floor
transaction, collar transaction, forward transaction, currency swap transaction,
cross-currency rate swap transaction, currency option or any other similar
transaction (including any option with respect to any of these transactions) or
any combination thereof, whether linked to one or more interest rates, foreign
currencies, commodity prices, equity prices or other financial measures.

 

“Real Property” means, collectively, each of the parcels of owned and/or leased
real property of any of the Loan Parties, all of which is listed on Schedule
5.23.

 

“Real Property Collateral” means each of the parcels of owned Real Property
listed on Schedule 5.23 except as set forth on such Schedule.

 

“Recorded Mortgages” means each of the Mortgages, except for the Calder
Mortgage, but if the Calder Mortgage is subsequently recorded in accordance with
Section 6.21, Recorded Mortgage shall include such Calder Mortgage on and after
the date of such recordation.

 

“Regulation D” means Regulation D of the Board of Governors of the Federal
Reserve System as from time to time in effect and any successor thereto or other
regulation or official interpretation of said Board of Governors relating to
reserve requirements applicable to member banks of the Federal Reserve System.

 

“Regulation U” means Regulation U, T, G or X of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.

 

“Reimbursement Obligations” means, at any time, the aggregate of all obligations
of the Borrower then outstanding under Section 2.3 to reimburse the LC Issuer
for amounts paid by the LC Issuer in respect of any one or more drawings under
Facility LCs.

 

“Rentals” of a Person means the aggregate fixed amounts payable by such Person
under any Operating Lease but shall not include Master Plan Bond Rentals or Tote
Rentals.

 

“Reportable Event” means a reportable event as defined in Section 4043 of ERISA
and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC has by regulation waived
the requirement of Section 4043(a) of ERISA that it be notified within 30 days
of the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.

 

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“Reports” is defined in Section 9.6.

 

“Required Lenders” means Lenders in the aggregate having at least fifty-one
percent (51%) of the Aggregate Outstanding Credit Exposure, or if the Aggregate
Commitment has been terminated, Lenders in the aggregate holding at least
fifty-one percent (51%) of the aggregate principal amount of all of the Loans
plus all of the LC Obligations.

 

“Reserve Requirement” means, with respect to an Interest Period, the maximum
aggregate reserve requirement (including all basic, supplemental, marginal and
other reserves) which is imposed under Regulation D on Eurocurrency liabilities.

 

“Restricted Assets” has the meaning given it in Section 6.13.

 

“Revolving Loan” means, with respect to a Lender, such Lender’s Loan made
pursuant to its Commitment to lend set forth in Section 2.1 (or any conversion
or continuation thereof).

 

“Risk-Based Capital Guidelines” has the meaning given it in Section 3.2

 

“S&P” means Standard and Poor’s Ratings Services, a division of The McGraw Hill
Companies, Inc.

 

“Sale and Leaseback Transaction” means any sale or other transfer of Property by
any Person with the intent to lease such Property as lessee.

 

“Schedule” refers to a specific schedule to this Agreement, unless another
document is specifically referenced.

 

“Seasonal Borrowing Needs Adjustment” means the reduction of the Consolidated
Funded Indebtedness as of the end of (i) the first fiscal quarter of the
Borrower’s fiscal year 2004 by $20,000,000, and (ii) the first fiscal quarter of
the Borrower’s fiscal year 2005 by $20,000,000.

 

“Section” means a numbered section of this Agreement, unless another document is
specifically referenced.

 

“Secured Obligations” means, collectively, (i) all Obligations, (ii) all Rate
Management Obligations owing to one or more Lenders, and (iii) any and all other
indebtedness and/or obligations to or for the benefit of the Agent and/or one or
more Lenders and/or the LC Issuer secured by and/or in all or any of the
Collateral Documents, in each case whether they exist on the date of this
Agreement, or arise or are created or acquired after the date of this Agreement.

 

“Single Employer Plan” means a Plan maintained by the Borrower or any member of
the Controlled Group for employees of the Borrower or any member of the
Controlled Group.

 

“Subsidiary” of a Person means (i) any corporation more than 50% of the
outstanding securities having ordinary voting power of which shall at the time
be owned or controlled, directly or indirectly, by such Person or by one or more
of its direct or indirect Subsidiaries or by such Person and one or more of its
direct or indirect Subsidiaries, or (ii) any partnership, limited liability
company, association, joint venture or similar business organization more than
50% of the ownership interests having ordinary voting power of which shall at
the time be so owned or controlled.  Unless otherwise expressly provided, all
references herein to a “Subsidiary” shall mean a Subsidiary of the Borrower.

 

“Swing Line Borrowing Notice” is defined in Section 2.2.2.

 

“Swing Line Commitment” means the obligation of the Swing Line Lender in Section
2.2 to make Swing Line Loans up to a maximum principal amount of $15,000,000.

 

“Swing Line Lender” means PNC Bank, or such other Lender which may succeed to
its rights and obligations as Swing Line Lender pursuant to the terms of this
Agreement.

 

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“Swing Line Loan” means a Loan made available to the Borrower by the Swing Line
Lender pursuant to Section 2.2.3.

 

“Taxes” means any and all present or future taxes, duties, levies, imposts,
deductions, charges or withholdings, and any and all liabilities with respect to
the foregoing, but excluding Excluded Taxes and Other Taxes.

 

“Term Note Purchasers” means the holders of the Term Notes from time to time,
and their successors and assigns.

 

“Term Notes” means the Floating Rate Senior Secured Notes due March 31, 2010,
issued by the Borrower under the Note Purchase Agreement.

 

“Term Substantial Portion” means, with respect to the Property of the Borrower
and the other Loan Parties, collectively, Property which represents 20% or more
of Consolidated Net Worth or Property which is responsible for 20% of the
Consolidated Net Income, in each case, as would be shown in the consolidated
financial statements of the Loan Parties as at the end of the fiscal month next
preceding the Closing Date (or if financial statements have not been delivered
hereunder for that month, then the financial statements delivered hereunder for
the quarter ending immediately prior to that month).  For purposes of
determining Term Substantial Portion of the Property of the Borrower and the
other Loan Parties, the value of any Property of Ellis Park Race Course, Inc.
and/or Racing Corporation of America sold, transferred or otherwise disposed of
in connection with the sale, transfer or other disposition of Ellis Park Race
Course, Inc. or Racing Corporation of America in compliance with this Agreement
shall not be considered.

 

“Title Insurer” is defined in Section 4.1.

 

“Tote Rentals” means all amounts paid by a Person for rental of equipment and/or
the provision of services under any agreement between such Person and a
totalisator company.

 

“Transferee” is defined in Section 12.4.

 

“Twelve Month Substantial Portion” means, with respect to the Property of the
Borrower and the other Loan Parties, collectively, Property which represents 10%
or more of Consolidated Net Worth or Property which is responsible for 10% of
the Consolidated Net Income, in each case, as would be shown in the consolidated
financial statements of the Loan Parties as at the beginning of the twelve-month
period ending with the month in which such determination is made (or if
financial statements have not been delivered hereunder for that month which
begins the twelve-month period, then the financial statements delivered
hereunder for the quarter ending immediately prior to that month).  For purposes
of determining Twelve Month Substantial Portion of the Property of the Borrower
and the other Loan Parties, the value of any Property of Ellis Park Race Course,
Inc., and/or Racing Corporation of America sold, transferred or otherwise
disposed of in connection with the sale, transfer or other disposition of Ellis
Park Race Course, Inc. or Racing Corporation of America, in compliance with this
Agreement shall not be considered.

 

“Type” means, with respect to any Advance, its nature as a Floating Rate Advance
or a Eurodollar Advance and with respect to any Loan, its nature as a Floating
Rate Loan or a Eurodollar Loan.

 

“Unfunded Liabilities” means the amount (if any) by which the present value of
all vested and unvested accrued benefits under all Single Employer Plans exceeds
the fair market value of all such Plan assets allocable to such benefits, all
determined as of the then most recent valuation date for such Plans using PBGC
actuarial assumptions for single employer plan terminations.

 

“Unmatured Default” means an event which but for the lapse of time or the giving
of notice, or both, would constitute a Default.

 

“Wholly-Owned Subsidiary” of a Person means (i) any Subsidiary all of the
outstanding voting securities of which shall at the time be owned or controlled,
directly or indirectly, by such Person or one or more Wholly-Owned Subsidiaries
of such Person, or by such Person and one or more Wholly-Owned Subsidiaries of
such Person, or (ii) any

 

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partnership, limited liability company, association, joint venture or similar
business organization 100% of the ownership interests having ordinary voting
power of which shall at the time be so owned or controlled.

 

“Working Cash Sweep Rider” is defined in Section 2.2.5.

 

The foregoing definitions shall be equally applicable to both the singular and
plural forms of the defined terms.

 

ARTICLE II

 

THE CREDITS

 

2.1                                 Revolving Loan Commitment.  From and
including the date of this Agreement and prior to the Facility Termination Date,
each Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make Loans to the Borrower from time to time in amounts not to
exceed in the aggregate at any one time outstanding the amount of its
Commitment.  On the date of this Agreement, the amount of the Aggregate
Commitment is $200,000,000.  Subject to the terms of this Agreement, the
Borrower may borrow, repay and reborrow at any time prior to the Facility
Termination Date.  The Commitments to lend hereunder shall expire on the
Facility Termination Date.  The Aggregate Commitment may be increased up to a
total of $250,000,000 upon compliance with Section 2.22 below.  No Lender shall
have any obligation to increase its Commitment; any such increase shall be at
the sole discretion of such Lender.

 

2.2                                 Swing Line Loans.

 

2.2.1                        Amount of Swing Line Loans.  Upon the satisfaction
of the conditions precedent set forth in Section 4.2 and, if such Swing Line
Loan is to be made on the date of the initial Advance hereunder, the
satisfaction of the conditions precedent set forth in Section 4.1 as well, from
and including the date of this Agreement and prior to the Facility Termination
Date, the Swing Line Lender agrees, on the terms and conditions set forth in
this Agreement, to make Swing Line Loans to the Borrower from time to time in an
aggregate principal amount not to exceed the Swing Line Commitment, provided
that the Aggregate Outstanding Credit Exposure (including without limitation
Swing Line Loans) shall not at any time exceed the Aggregate Commitment, and
provided further that at no time shall the sum of (i) the Swing Line Lender’s
Pro Rata Share of the Swing Line Loans, plus (ii) the outstanding Revolving
Loans made by the Swing Line Lender pursuant to Section 2.1, exceed the Swing
Line Lender’s Commitment at such time.  Subject to the terms of this Agreement,
the Borrower may borrow, repay and reborrow Swing Line Loans at any time prior
to the Facility Termination Date.

 

2.2.2                        Borrowing Notice.  The Borrower shall deliver to
the Agent and the Swing Line Lender irrevocable notice (a “Swing Line Borrowing
Notice”) not later than noon (Louisville time) on the Borrowing Date of each
Swing Line Loan, specifying (i) the applicable Borrowing Date (which date shall
be a Business Day), and (ii) the aggregate amount of the requested Swing Line
Loan which shall be an amount not less than $100,000.  The Swing Line Loans
shall bear interest at a rate per annum equal to the prime rate of interest
announced by the Swing Line Lender from time to time, plus the Applicable Margin
set forth in the Pricing Schedule for the Floating Rate at that time.

 

2.2.3                        Making of Swing Line Loans.  Promptly after receipt
of a Swing Line Borrowing Notice, the Agent shall notify each Lender by fax, or
other similar form of transmission, of the requested Swing Line Loan.  Not later
than 2:00 p.m. (Louisville time) on the applicable Borrowing Date, the Swing
Line Lender shall make available the Swing Line Loan, in funds immediately
available in Louisville, to the Agent at its address specified pursuant to
Article XIII.  The Agent will promptly make the funds so received from the Swing
Line Lender available to the Borrower on the Borrowing Date at the Agent’s
aforesaid address.

 

2.2.4                        Repayment of Swing Line Loans.  Each Swing Line
Loan shall be paid in full by the Borrower on or before the fifth (5th) Business
Day after the Borrowing Date for such Swing Line Loan.  In addition, the Swing
Line Lender (i) may at any time in its sole discretion with respect to any
outstanding Swing Line Loan,

 

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or (ii) shall, except when a Working Cash Sweep Rider is in effect, on the fifth
(5th) Business Day after the Borrowing Date of any Swing Line Loan, require each
Lender (including the Swing Line Lender) to make a Revolving Loan in the amount
of such Lender’s Pro Rata Share of such Swing Line Loan (including, without
limitation, any interest accrued and unpaid thereon), for the purpose of
repaying such Swing Line Loan.  Not later than noon (Louisville time) on the
date of any notice received pursuant to this Section 2.2.4, each Lender shall
make available its required Revolving Loan, in funds immediately available in
Louisville to the Agent at its address specified pursuant to Article XIII. 
Revolving Loans made pursuant to this Section 2.2.4 shall initially be Floating
Rate Loans and thereafter may be continued as Floating Rate Loans or converted
into Eurodollar Loans in the manner provided in Section 2.11 and subject to the
other conditions and limitations set forth in this Article II.  Unless a Lender
shall have notified the Swing Line Lender, prior to its making any Swing Line
Loan, that any applicable condition precedent set forth in Sections 4.1 or 4.2
had not then been satisfied, such Lender’s obligation to make Revolving Loans
pursuant to this Section 2.2.4 to repay Swing Line Loans shall be unconditional,
continuing, irrevocable and absolute and shall not be affected by any
circumstance, including, without limitation, (a) any setoff, counterclaim,
recoupment, defense or other right which such Lender may have against the Agent,
the Swing Line Lender or any other Person, (b) the occurrence or continuance of
a Default or Unmatured Default, (c) any adverse change in the condition
(financial or otherwise) of the Borrower, or (d) any other circumstance,
happening or event whatsoever.  In the event that any Lender fails to make
payment to the Agent of any amount due under this Section 2.2.4, the Agent shall
be entitled to receive, retain and apply against such obligation the principal
and interest otherwise payable to such Lender hereunder until the Agent receives
such payment from such Lender or such obligation is otherwise fully satisfied. 
In addition to the foregoing, if for any reason any Lender fails to make payment
to the Agent of any amount due under this Section 2.2.4, such Lender shall be
deemed, at the option of the Agent, to have unconditionally and irrevocably
purchased from the Swing Line Lender, without recourse or warranty, an undivided
interest and participation in the applicable Swing Line Loan in the amount of
such Revolving Loan, and such interest and participation may be recovered from
such Lender together with interest thereon at the Federal Funds Effective Rate
for each day during the period commencing on the date of demand and ending on
the date such amount is received.  On the Facility Termination Date, the
Borrower shall repay in full the outstanding principal balance of the Swing Line
Loans.

 

2.2.5                        Working Cash Sweep Rider.  Any provision of this
Section 2.2 to the contrary notwithstanding, the Agent and each Lender
acknowledges that, at the request of the Borrower, the Swing Line Lender has
linked the Swing Line Loans to the Borrower’s demand deposit account with the
Swing Line Lender.  The Agent and the Lenders further acknowledge that the
Borrower has entered into a Working Cash, Line of Credit, Investment Sweep Rider
(“Working Cash Sweep Rider”) with the Swing Line Lender, pursuant to which
certain cash management activities, including the making of Swing Line Loans,
will occur automatically in amounts that may be less than the stated minimum
Swing Line Loan set forth in Section 2.2.2 above, and without the need for a
Swing Line Borrowing Notice. Each Lender agrees that it shall be obligated,
pursuant to and in accordance with the third and fourth sentences of Section
2.2.4,  to fund such Lender’s Pro Rata Share of any such automatically-made
Swing Line Loans on the fifth (5th) Business Day following the day such advances
are made, unless the Agent shall have given the Swing Line Lender written notice
prior to the date the Swing Line Loan was made that any applicable condition
precedent set forth in Sections 4.1 or 4.2 had not then been satisfied, and the
Swing Line Lender has had a reasonable amount of time, not to exceed two (2)
Business Days from such notice, within which to act.  In the event of
termination of the Working Cash Sweep Rider by either the Borrower or the Swing
Line Lender, the Swing Line Lender will promptly notify the Agent of such
termination.

 

2.3                                 Letter of Credit Subfacility.

 

2.3.1                        Issuance. The LC Issuer hereby agrees, on the terms
and conditions set forth in this Agreement, to issue standby and commercial
letters of credit (each, a “Facility LC”) and to renew, extend, increase,
decrease or otherwise modify each Facility LC (“Modify,” and each such action a
“Modification”), from time to time from and including the date of this Agreement
and prior to the Facility Termination Date upon the request of the Borrower;
provided that immediately after each such Facility LC is issued or Modified, (i)
the aggregate amount of the outstanding LC Obligations shall not exceed
$15,000,000 and (ii) the Aggregate Outstanding Credit Exposure shall not exceed
the Aggregate Commitment.  No Facility LC shall have an expiry date later than
the earlier of (x) the fifth Business Day prior to the Facility Termination Date

 

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and (y) one year after its issuance; provided that any Facility LC with an
expiry date one year after issuance may provide for the renewal thereof for
additional one-year periods (which shall in no event extend beyond the date
referred to in clause (x) above).  The Borrower and the Guarantors represent and
warrant that the Letters of Credit described and listed on Schedule 2.3.1
constitute all the Letters of Credit issued by the LC Issuer for and on behalf
of the Borrower and the Guarantors under the Prior Credit Facility; and all
parties to this Agreement agree that on the Closing Date those Letters of Credit
shall become Facility LCs.

 

2.3.2                        Participations.  Upon the issuance or Modification
by the LC Issuer of a Facility LC in accordance with this Section 2.3, the LC
Issuer shall be deemed, without further action by any party hereto, to have
unconditionally and irrevocably sold to each Lender, and each Lender shall be
deemed, without further action by any party hereto, to have unconditionally and
irrevocably purchased from the LC Issuer, a participation in such Facility LC
(and each Modification thereof) and the related LC Obligations in proportion to
its Pro Rata Share.

 

2.3.3                        Notice.  Subject to Section 2.3.1, the Borrower
shall give the LC Issuer and the Agent notice prior to 10:00 a.m. (Louisville
time) at least three Business Days, or such shorter period of time as may be
acceptable to the LC Issuer in its discretion, prior to the proposed date of
issuance or Modification of each Facility LC, specifying the beneficiary, the
proposed date of issuance (or Modification) and the expiry date of such Facility
LC, and describing the proposed terms of such Facility LC and the nature of the
transactions proposed to be supported thereby.  Upon Agent’s receipt of such
notice, the Agent shall promptly notify the LC Issuer if the proposed amount of
such Facility LC will cause the Aggregate Outstanding Credit Exposure to equal
or exceed the Aggregate Commitment. The issuance or Modification by the LC
Issuer of any Facility LC shall, in addition to the conditions precedent set
forth in Article IV (the satisfaction of which the LC Issuer shall have no duty
to ascertain), be subject to the conditions precedent that such Facility LC
shall be satisfactory to the LC Issuer and that the Borrower shall have executed
and delivered a Reimbursement Agreement (“LC Reimbursement Agreement”) in the
form of Exhibit Q, and such application agreement and/or such other instruments
and agreements relating to such Facility LC as the LC Issuer shall have
reasonably requested (each, a “Facility LC Application”).  The terms of the LC
Reimbursement Agreement and Facility LC Application shall supplement the terms
of this Agreement, but in the event of any conflict between the terms of this
Agreement and the terms of any LC Reimbursement Agreement and/or any Facility LC
Application, the terms of this Agreement shall control.  On the date of issuance
or Modification by the LC Issuer of any Facility LC, the LC Issuer shall notify
the Agent, and the Agent shall promptly notify each Lender of the issuance or
Modification of each Facility LC, specifying the beneficiary, the date of
issuance (or Modification) and the expiry date of such Facility LC, the terms of
the Facility LC and the nature of the transactions supported by the Facility LC.

 

2.3.4                        LC Fees.  The Borrower shall pay to the Agent, for
the account of the Lenders ratably in accordance with their respective Pro Rata
Shares, with respect to each Facility LC, a letter of credit fee at a per annum
rate equal to the Applicable Margin for Eurodollar Loans in effect from time to
time on the average daily undrawn stated amount under such Facility LC, such fee
to be payable in arrears on each Payment Date, and such fee to be payable on the
date of such issuance or increase (each such fee described in this sentence an
“LC Fee”).  The Borrower shall also pay to the LC Issuer for its own account (x)
at the time of issuance of each Facility LC, a fronting fee equal to 0.125% of
the face amount of each Facility LC, and (y) documentary and processing charges
in connection with the issuance or Modification of and draws under Facility LCs
in accordance with the LC Issuer’s standard schedule for such charges as in
effect from time to time.

 

2.3.5                        Administration; Reimbursement by Lenders.  Upon
receipt from the beneficiary of any Facility LC of any demand for payment under
such Facility LC, the LC Issuer shall notify the Agent and the Agent shall
promptly notify the Borrower and each other Lender as to the amount to be paid
by the LC Issuer as a result of such demand and the proposed payment date (the
“LC Payment Date”).  The responsibility of the LC Issuer to the Borrower and
each Lender shall be only to determine that the documents (including each demand
for payment) delivered under each Facility LC in connection with such
presentment shall be in conformity in all material respects with such Facility
LC.  The LC Issuer shall endeavor to exercise the same care in the issuance and
administration of the Facility LCs as it does with respect to letters of credit
in which no participations are granted, it being understood that in the absence
of any gross negligence or willful misconduct by the LC Issuer, each Lender
shall be unconditionally and irrevocably liable without regard to the

 

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occurrence of any Default or any condition precedent whatsoever, to reimburse
the LC Issuer on demand for (i) such Lender’s Pro Rata Share of the amount of
each payment made by the LC Issuer under each Facility LC to the extent such
amount is not reimbursed by the Borrower pursuant to Section 2.3.6 below, plus
(ii) interest on the foregoing amount to be reimbursed by such Lender, for each
day from the date of the LC Issuer’s demand for such reimbursement (or, if such
demand is made after 11:00 a.m. (Louisville time) on such date, from the next
succeeding Business Day) to the date on which such Lender pays the amount to be
reimbursed by it, at a rate of interest per annum equal to the Federal Funds
Effective Rate for the first three days and, thereafter, at a rate of interest
equal to the rate applicable to Floating Rate Advances.

 

2.3.6                        Reimbursement by Borrower.  The Borrower shall be
irrevocably and unconditionally obligated to reimburse the LC Issuer on or
before the applicable LC Payment Date for any amounts to be paid by the LC
Issuer upon any drawing under any Facility LC, without presentment, demand,
protest or other formalities of any kind; provided that neither the Borrower nor
any Lender shall hereby be precluded from asserting any claim for direct (but
not consequential) damages suffered by the Borrower or such Lender to the
extent, but only to the extent, caused by (i) the willful misconduct or gross
negligence of the LC Issuer in determining whether a request presented under any
Facility LC issued by it complied with the terms of such Facility LC or (ii) the
LC Issuer’s failure to pay under any Facility LC issued by it after the
presentation to it of a request strictly complying with the terms and conditions
of such Facility LC.  All such amounts paid by the LC Issuer and remaining
unpaid by the Borrower shall bear interest, payable on demand, for each day
until paid at a rate per annum equal to (x) the rate applicable to Floating Rate
Advances for such day if such day falls on or before the applicable LC Payment
Date and (y) the sum of 2% plus the rate applicable to Floating Rate Advances
for such day if such day falls after such LC Payment Date.  The LC Issuer will
pay to each Lender ratably in accordance with its Pro Rata Share all amounts
received by it from the Borrower for application in payment, in whole or in
part, of the Reimbursement Obligation in respect of any Facility LC issued by
the LC Issuer, but only to the extent such Lender has made payment to the LC
Issuer in respect of such Facility LC pursuant to Section 2.3.5.  Subject to the
terms and conditions of this Agreement (including without limitation the
submission of a Borrowing Notice in compliance with Section 2.10 and the
satisfaction of the applicable conditions precedent set forth in Article IV),
the Borrower may request an Advance hereunder for the purpose of satisfying any
Reimbursement Obligation.

 

2.3.7                        Obligations Absolute.  The Borrower’s obligations
under this Section 2.3.7 shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against the LC Issuer, any Lender or any
beneficiary of a Facility LC.  The Borrower further agrees with the LC Issuer
and the Lenders that the LC Issuer and the Lenders shall not be responsible for,
and the Borrower’s Reimbursement Obligation in respect of any Facility LC shall
not be affected by, among other things, the validity or genuineness of documents
or of any endorsements thereon, even if such documents should in fact prove to
be in any or all respects invalid, fraudulent or forged, or any dispute between
or among the Borrower, any of its Affiliates, the beneficiary of any Facility LC
or any financing institution or other party to whom any Facility LC may be
transferred or any claims or defenses whatsoever of the Borrower or of any of
its Affiliates against the beneficiary of any Facility LC or any such
transferee.  The LC Issuer shall not be liable for any error, omission,
interruption or delay in transmission, dispatch or delivery of any message or
advice, however transmitted, in connection with any Facility LC.  The Borrower
agrees that any action taken or omitted by the LC Issuer or any Lender under or
in connection with each Facility LC and the related drafts and documents, if
done without gross negligence or willful misconduct, shall be binding upon the
Borrower and shall not put the LC Issuer or any Lender under any liability to
the Borrower.  Nothing in this Section 2.3.7 is intended to limit the right of
the Borrower to make a claim against the LC Issuer for damages as contemplated
by the proviso to the first sentence of Section 2.3.6.

 

2.3.8                        Actions of LC Issuer.  The LC Issuer shall be
entitled to rely, and shall be fully protected in relying, upon any Facility LC,
draft, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document believed by it to be genuine and correct and to have been signed,
sent or made by the proper Person or Persons, and upon advice and statements of
legal counsel, independent accountants and other experts selected by the LC
Issuer.  The LC Issuer shall be fully justified in failing or refusing to take
any action under this Agreement unless it shall first have received such advice
or concurrence of the Required Lenders as it reasonably deems appropriate or it

 

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shall first be indemnified to its reasonable satisfaction by the Lenders against
any and all liability and expense which may be incurred by it by reason of
taking or continuing to take any such action. Notwithstanding any other
provision of this Section 2.3, the LC Issuer shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement in
accordance with a request of the Required Lenders, and such request and any
action taken or failure to act pursuant thereto shall be binding upon the
Lenders and any future holders of a participation in any Facility LC.

 

2.3.9                        Indemnification.  The Borrower hereby agrees to
indemnify and hold harmless each Lender, the LC Issuer and the Agent, and their
respective directors, officers, agents and employees from and against any and
all claims and damages, losses, liabilities, costs or expenses which such
Lender, the LC Issuer or the Agent may incur (or which may be claimed against
such Lender, the LC Issuer or the Agent by any Person whatsoever) by reason of
or in connection with the issuance, execution and delivery or transfer of or
payment or failure to pay under any Facility LC or any actual or proposed use of
any Facility LC, including, without limitation, any claims, damages, losses,
liabilities, costs or expenses which the LC Issuer may incur by reason of or in
connection with (i) the failure of any other Lender to fulfill or comply with
its obligations to the LC Issuer hereunder (but nothing herein contained shall
affect any rights the Borrower may have against any defaulting Lender) or
(ii) by reason of or on account of the LC Issuer issuing any Facility LC which
specifies that the term “Beneficiary” included therein includes any successor by
operation of law of the named Beneficiary, but which Facility LC does not
require that any drawing by any such successor Beneficiary be accompanied by a
copy of a legal document, satisfactory to the LC Issuer, evidencing the
appointment of such successor Beneficiary; provided that the Borrower shall not
be required to indemnify any Lender, the LC Issuer or the Agent for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by (x) the willful misconduct or gross negligence of the LC
Issuer in determining whether a request presented under any Facility LC complied
with the terms of such Facility LC or (y) the LC Issuer’s failure to pay under
any Facility LC after the presentation to it of a request strictly complying
with the terms and conditions of such Facility LC. Nothing in this Section 2.3.9
is intended to limit the obligations of the Borrower under any other provision
of this Agreement.

 

2.3.10                  Lenders’ Indemnification.  Each Lender shall, ratably in
accordance with its Pro Rata Share, indemnify the LC Issuer, its affiliates and
their respective directors, officers, agents and employees (to the extent not
reimbursed by the Borrower) against any cost, expense (including reasonable
counsel fees and disbursements), claim, demand, action, loss or liability
(except such as result from such indemnitees’ gross negligence or willful
misconduct or the LC Issuer’s failure to pay under any Facility LC after the
presentation to it of a request strictly complying with the terms and conditions
of the Facility LC) that such indemnitees may suffer or incur in connection with
this Section 2.3 or any action taken or omitted by such indemnitees hereunder.

 

2.3.11                  Facility LC Collateral Account.  The Borrower agrees
that it will, upon the request of the Agent or the Required Lenders and until
the final expiration date of any Facility LC and thereafter as long as any
amount is payable to the LC Issuer or the Lenders in respect of any Facility LC,
maintain a special collateral account pursuant to arrangements satisfactory to
the Agent (the “Facility LC Collateral Account”) at the Agent’s office at the
address specified pursuant to Article XIII, in the name of the Borrower but
under the sole dominion and control of the Agent, for the benefit of the Lenders
and the LC Issuer and in which the Borrower shall have no interest other than as
set forth in Section 8.1.  The Borrower hereby pledges, assigns and grants to
the Agent, on behalf of and for the ratable benefit of the Lenders, and the LC
Issuer, a security interest in all of the Borrower’s right, title and interest
in and to all funds which may from time to time be on deposit in the Facility LC
Collateral Account to secure the prompt and complete payment and performance of
the Obligations.  The Agent will invest any funds on deposit from time to time
in the Facility LC Collateral Account in certificates of deposit of Bank One
having a maturity not exceeding 30 days.  Nothing in this Section 2.3.11 shall
either obligate the Agent to require the Borrower to deposit any funds in the
Facility LC Collateral Account or limit the right of the Agent to release any
funds held in the Facility LC Collateral Account in each case other than as
required by Section 8.1.

 

2.3.12                  Rights as a Lender.  In its capacity as a Lender, the LC
Issuer shall have the same rights and obligations as any other Lender.

 

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2.4                                 Required Payments; Termination.  Any
outstanding Advances and all other unpaid Obligations shall be paid in full by
the Borrower on the Facility Termination Date.

 

2.5                                 Ratable Loans.  Each Advance hereunder shall
consist of Loans made from the several Lenders ratably according to their Pro
Rata Shares.

 

2.6                                 Types and Number of Eurodollar Advances. 
The Advances may be Floating Rate Advances or Eurodollar Advances, or a
combination thereof, selected by the Borrower in accordance with Sections 2.10
and 2.11, or Swing Line Loans selected by Borrower in accordance with Section
2.2.  The Borrower may have no more than six (6) Eurodollar Advances outstanding
at any one time.

 

2.7                                 Commitment Fee; Reductions in Aggregate
Commitment.  The Borrower agrees to pay to the Agent for the account of each
Lender according to its Pro Rata Share a commitment fee (the “Commitment Fee”)
in arrears at a per annum rate equal to the Applicable Fee Rate in effect from
time to time on the average daily Available Aggregate Commitment of such Lender
from the date hereof to and including the Facility Termination Date, payable on
each Payment Date hereafter and on the Facility Termination Date.  Swing Line
Loans shall not count as usage of any Lender’s Commitment for the purpose of
calculating the commitment fee due hereunder.  The Borrower may permanently
reduce the Aggregate Commitment in whole, or in part ratably among the Lenders
in integral multiples of $5,000,000, upon at least one Business Days’ written
notice to the Agent, which notice shall specify the amount of any such
reduction, provided, however, that the amount of the Aggregate Commitment may
not be reduced below the Aggregate Outstanding Credit Exposure.  All accrued
Commitment Fees shall be payable on the effective date of any termination of the
obligations of the Lenders to make Credit Extensions hereunder.

 

2.8                                 Minimum Amount of Each Advance.  Each
Eurodollar Advance shall be in the minimum amount of $500,000 (and in multiples
of $100,000 if in excess thereof), and each Floating Rate Advance (other than an
advance to repay Swing Line Loans) shall be in the minimum amount of $500,000
(and in multiples of $100,000 if in excess thereof), provided, however, that any
Floating Rate Advance may be in the amount of the Available Aggregate
Commitment.

 

2.9                                 Optional Principal Payments.  The Borrower
may from time to time pay, without penalty or premium, all outstanding Floating
Rate Advances (other than Swing Line Loans), or, in a minimum aggregate amount
of $1,000,000 or any integral multiple of $1,000,000 in excess thereof, any
portion of the outstanding Floating Rate Advances (other than Swing Line Loans)
upon one Business Day’s prior notice to the Agent.  The Borrower may at any time
pay, without penalty or premium, all outstanding Swing Line Loans, or, in a
minimum amount of $100,000 and increments of $50,000 in excess thereof, any
portion of the outstanding Swing Line Loans, with notice to the Agent and the
Swing Line Lender by 11:00 a.m. (Louisville Time) on the date of repayment.  The
Borrower may from time to time pay, subject to the payment of any funding
indemnification amounts required by Section 3.4 but without penalty or premium,
all outstanding Eurodollar Advances or any portion of the outstanding Eurodollar
Advances upon three (3) Business Days’ prior notice to the Agent.

 

2.10                           Method of Selecting Types and Interest Periods
for New Advances.  Each Type of Advance shall bear interest according to its
Type, from the date the Advance is made until it is repaid.  The Borrower shall
select the Type of Advance and, in the case of each Eurodollar Advance, the
Interest Period applicable thereto from time to time.  The Borrower shall give
the Agent irrevocable notice (a “Borrowing Notice”) not later than 11:00 a.m.
(Louisville time) at least one Business Day before the Borrowing Date of each
Floating Rate Advance and three Business Days before the Borrowing Date for each
Eurodollar Advance, specifying:

 

(i)                                   the Borrowing Date, which shall be a
Business Day, of such Advance,

 

(ii)                                the aggregate amount of such Advance,

 

(iii)                             the Type of Advance selected, and

 

(iv)                            in the case of each Eurodollar Advance, the
Interest Period applicable thereto.

 

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Not later than 1:00 p.m. (Louisville time) on each Borrowing Date, each Lender
shall make available its Loan or Loans in funds immediately available in
Louisville to the Agent at its address specified pursuant to Article XIII.  The
Agent will make the funds so received from the Lenders available to the Borrower
at the Agent’s aforesaid address.

 

2.11                           Conversion and Continuation of Outstanding
Advances.  Floating Rate Advances (other than Swing Line Loans) shall continue
as Floating Rate Advances unless and until such Floating Rate Advances are
converted into Eurodollar Advances pursuant to this Section 2.11 or are repaid
in accordance with Section 2.9.  Each Eurodollar Advance shall continue as a
Eurodollar Advance until the end of the then applicable Interest Period
therefor, at which time such Eurodollar Advance shall be automatically converted
into a Floating Rate Advance unless (x) such Eurodollar Advance is or was repaid
in accordance with Section 2.9 or (y) the Borrower shall have given the Agent a
Conversion/Continuation Notice (as defined below) requesting that, at the end of
such Interest Period, such Eurodollar Advance continue as a Eurodollar Advance
for the same or another Interest Period.  Subject to the terms of  Section 2.10,
the Borrower may elect from time to time to convert all or any part of a
Floating Rate Advance (other than a Swing Line Loan) into a Eurodollar Advance. 
The Borrower shall give the Agent irrevocable notice (a “Conversion/Continuation
Notice”) of each conversion of a Floating Rate Advance into a Eurodollar Advance
or continuation of a Eurodollar Advance not later than 11:00 a.m. (Louisville
time) at least three Business Days prior to the date of the requested conversion
or continuation, specifying:

 

(i)                                     the requested date, which shall be a
Business Day, of such conversion or continuation,

 

(ii)                                  the aggregate amount and Type of the
Advance which is to be converted or continued, and

 

(iii)                               the amount of such Advance which is to be
converted into or continued as a Eurodollar Advance and the duration of the
Interest Period applicable thereto.

 

2.12                           Changes in Interest Rate, etc. Each Floating Rate
Advance (other than a Swing Line Loan) shall bear interest on the outstanding
principal amount thereof, for each day from and including the date such Advance
is made or is automatically converted from a Eurodollar Advance into a Floating
Rate Advance pursuant to Section 2.11, to but excluding the date it is paid or
is converted into a Eurodollar Advance pursuant to Section 2.11 hereof, at a
rate per annum equal to the Floating Rate for such day.  Each Swing Line Loan
shall bear interest on the outstanding principal amount thereof, for each day
from and including the day such Swing Line Loan is made to but excluding the
date it is paid, at a rate per annum equal to the Floating Rate for such day. 
Changes in the rate of interest on that portion of any Advance maintained as a
Floating Rate Advance will take effect simultaneously with each change in the
Alternate Base Rate.  Each Eurodollar Advance shall bear interest on the
outstanding principal amount thereof from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined by the Agent as applicable to
such Eurodollar Advance based upon the Borrower’s selections under Sections 2.10
and 2.11 and otherwise in accordance with the terms hereof.  No Interest Period
may end after the Facility Termination Date.

 

2.13                           Rates Applicable After Default.  Notwithstanding
anything to the contrary contained in Section 2.10, 2.11 or 2.12, during the
continuance of a Default or Unmatured Default the Required Lenders may, at their
option, by notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that no
Advance may be made as, converted into or continued as a Eurodollar Advance. 
During the continuance of a Default the Required Lenders may, at their option,
by notice to the Borrower (which notice may be revoked at the option of the
Required Lenders notwithstanding any provision of Section 8.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that (i)
each Eurodollar Advance shall bear interest for the remainder of the applicable
Interest Period at the rate otherwise applicable to such Interest Period plus 2%
per annum, and (ii) each Floating Rate Advance shall bear interest at a rate per
annum equal to the Floating Rate in effect from time to time plus 2% per annum
and (iii) the LC Fee shall be increased by 2% per annum, provided that, during
the continuance of a Default under Section 7.6 or 7.7, the interest rates set
forth in clauses (i) and (ii) above and the increase in the LC Fee set forth in
clause (iii) above shall be applicable to all Credit Extensions without any
election or action on the part of the Agent or any Lender.

 

2.14                           Method of Payment.  All payments of the
Obligations hereunder shall be made, without setoff, deduction, or counterclaim,
in immediately available funds to the Agent at the Agent’s address specified
pursuant to Article XIII, or at any other Lending Installation of the Agent
specified in writing by the Agent to the Borrower, by

 

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noon (local time) on the date when due and shall (except with respect to
repayments of Swing Line Loans, and in the case of Reimbursement Obligations for
which the LC Issuer has not been fully indemnified by the Lenders, or as
otherwise specifically required hereunder) be applied ratably by the Agent among
the Lenders.  Each payment delivered to the Agent for the account of any Lender
shall be delivered promptly by the Agent to such Lender, in the same type of
funds that the Agent received, at such Lender’s address specified pursuant to
Article XIII or at any Lending Installation specified in a notice received by
the Agent from such Lender.  The Agent is hereby authorized to charge the
account of the Borrower maintained with Bank One for each payment of principal,
interest Reimbursement Obligations and fees as it becomes due hereunder. Each
reference to the Agent in this Section 2.14 shall also be deemed to refer, and
shall apply equally, to the LC Issuer, in the case of payments required to be
made by the Borrower to the LC Issuer pursuant to Section 2.3.6.

 

2.15                           Noteless Agreement; Evidence of Indebtedness.

 

(i)                                  Each Lender shall maintain in accordance
with its usual practice an account or accounts evidencing the indebtedness of
the Borrower to such Lender resulting from each Loan made by such Lender from
time to time, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.

 

(ii)                               The Agent shall also maintain accounts in
which it will record (a) the amount of each Loan made hereunder, the Type
thereof and the Interest Period (if applicable) with respect thereto, (b) the
amount of any principal or interest due and payable or to become due and payable
from the Borrower to each Lender hereunder, (c) the original stated amount of
each Facility LC and the amount of LC Obligations outstanding at any time, and
(d) the amount of any sum received by the Agent hereunder from the Borrower and
each Lender’s share thereof.

 

(iii)                            The entries maintained in the accounts
maintained pursuant to paragraphs (i) and (ii) above shall be prima facie
evidence of the existence and amounts of the Obligations therein recorded;
provided, however, that the failure of the Agent or any Lender to maintain such
accounts or any error therein shall not in any manner affect the obligation of
the Borrower to repay the Obligations in accordance with their terms.

 

(iv)                           Any Lender may request that its Loans be
evidenced by a promissory note or, in the case of the Swing Line Lender,
promissory notes representing its Revolving Loans and Swing Line Loans,
respectively, substantially in the form of Exhibit E, with appropriate changes
for notes evidencing Swing Line Loans (each, a “Note”).  In such event, the
Agent shall prepare and forward to the Borrower for execution and delivery to
such Lender a Note or Notes payable to the order of such Lender.  Thereafter,
the Loans evidenced by each such Note and interest thereon shall at all times
(prior to any assignment pursuant to Section 12.3) be represented by one or more
Notes payable to the order of the payee named therein, except to the extent that
any such Lender subsequently returns any such Note for cancellation and requests
that such Loans once again be evidenced as described in paragraphs (i) and (ii)
above.

 

2.16                           Telephonic Notices.  The Borrower hereby
authorizes the Lenders and the Agent to extend, convert or continue Advances,
effect selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower, it being understood that the
foregoing authorization is specifically intended to allow Borrowing Notices and
Conversion/Continuation Notices to be given telephonically.  The Borrower agrees
to deliver promptly to the Agent a written confirmation signed by an Authorized
Officer, if such confirmation is requested by the Agent or any Lender, of each
telephonic notice.  If the written confirmation differs in any material respect
from the action taken by the Agent and the Lenders, the records of the Agent and
the Lenders shall govern absent manifest error.

 

2.17                           Interest Payment Dates; Interest and Fee Basis. 
Interest accrued on each Floating Rate Advance shall be payable on each Payment
Date, commencing with the first such date to occur after the date hereof, on
each date set forth in the Working Cash Sweep Rider, on any date on which the
Floating Rate Advance is prepaid, whether due to acceleration or otherwise, and
on the Facility Termination Date.  Interest accrued on that portion of the
outstanding principal amount of any Floating Rate Advance converted into a
Eurodollar Advance on a day other than a Payment

 

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Date shall be payable on the date of conversion.  Interest accrued on each
Eurodollar Advance shall be payable on the last day of its applicable Interest
Period, on any date on which the Eurodollar Advance is prepaid, whether by
acceleration or otherwise, and on the Facility Termination Date.  Interest
accrued on each Eurodollar Advance having an Interest Period longer than three
months shall also be payable on the last day of each three-month interval during
such Interest Period.  Interest, Commitment Fees and LC Fees shall be calculated
for actual days elapsed on the basis of a 360-day year, except for interest
payable on Advances at the Alternate Base Rate which shall accrue on the basis
of the actual number of days elapsed over a year of 365 or 366 days, as
appropriate.  Interest shall be payable for the day an Advance is made but not
for the day of any payment on the amount paid if payment is received prior to
noon (local time) at the place of payment.  If any payment of principal of or
interest on an Advance shall become due on a day which is not a Business Day,
such payment shall be made on the next succeeding Business Day and, in the case
of a principal payment, such extension of time shall be included in computing
interest in connection with such payment.

 

2.18                           Notification of Advances, Interest Rates,
Prepayments and Commitment Reductions.  Promptly after receipt thereof, the
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. Promptly after notice from the LC
Issuer, the Agent will notify each Lender of the contents of each request for
issuance of a Facility LC hereunder.  The Agent will notify each Lender of the
interest rate applicable to each Eurodollar Advance promptly upon determination
of such interest rate and will give each Lender prompt notice of each change in
the Alternate Base Rate.

 

2.19                           Lending Installations.  Each Lender may book its
Loans and its participation in any LC Obligations and the LC Issuer may book the
Facility LCs at any Lending Installation selected by such Lender or the LC
Issuer, as the case may be, and may change its Lending Installation from time to
time.  All terms of this Agreement shall apply to any such Lending Installation
and the Loans, Facility LCs, participations in LC Obligations and any Notes
issued hereunder shall be deemed held by each Lender or the LC Issuer, as the
case may be,  for the benefit of any such Lending Installation.  Each Lender and
the LC Issuer may, by written notice to the Agent and the Borrower in accordance
with Article XIII, designate replacement or additional Lending Installations
through which Loans will be made by it or Facility LCs will be issued by it and
for whose account Loan payments or payments with respect to Facility LCs are to
be made.

 

2.20                           Non-Receipt of Funds by the Agent.  Unless the
Borrower or a Lender, as the case may be, notifies the Agent prior to the date
on which it is scheduled to make payment to the Agent of (i) in the case of a
Lender, the proceeds of a Loan or (ii) in the case of the Borrower, a payment of
principal, interest or fees to the Agent for the account of the Lenders, that it
does not intend to make such payment, the Agent may assume that such payment has
been made.  The Agent may, but shall not be obligated to, make the amount of
such payment available to the intended recipient in reliance upon such
assumption.  If such Lender or the Borrower, as the case may be, has not in fact
made such payment to the Agent, the recipient of such payment shall, on demand
by the Agent, repay to the Agent the amount so made available together with
interest thereon in respect of each day during the period commencing on the date
such amount was so made available by the Agent until the date the Agent recovers
such amount at a rate per annum equal to (x) in the case of payment by a Lender,
the Federal Funds Effective Rate for such day for the first three days and,
thereafter, the interest rate applicable to the relevant Loan or (y) in the case
of payment by the Borrower, the interest rate applicable to the relevant Loan.

 

2.21                           Replacement of Lender.  If the Borrower is
required pursuant to Section 3.1, 3.2 or 3.5 to make any additional payment to
any Lender or if any Lender’s obligation to make or continue, or to convert
Floating Rate Advances into, Eurodollar Advances shall be suspended pursuant to
Section 3.3 (any Lender so affected an “Affected Lender”), the Borrower may
elect, if such amounts continue to be charged or such suspension is still
effective, to replace such Affected Lender as a Lender party to this Agreement,
provided that no Default or Unmatured Default shall have occurred and be
continuing at the time of such replacement, and provided further that,
concurrently with such replacement, (i) another bank or other entity which is
reasonably satisfactory to the Borrower and the Agent shall agree, as of such
date, to purchase for cash the Advances and other Obligations due to the
Affected Lender pursuant to an assignment substantially in the form of Exhibit C
and to become a Lender for all purposes under this Agreement and to assume all
obligations of the Affected Lender to be terminated as of such date and to
comply with the requirements of Section 12.3 applicable to assignments, and (ii)
the Borrower shall pay to such Affected Lender in same day funds on the day of
such replacement (A) all interest, fees and other amounts then accrued but
unpaid to such Affected Lender by the Borrower hereunder to and including the
date of termination, including without limitation payments due

 

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to such Affected Lender under Sections 3.1, 3.2 and 3.5, and (B) an amount, if
any, equal to the payment which would have been due to such Lender on the day of
such replacement under Section 3.4 had the Loans of such Affected Lender been
prepaid on such date rather than sold to the replacement Lender.

 

2.22                           Increase in Commitments.

 

2.22.1               Amount of Increase in Commitments.  The Borrower may at any
time, with the consent of the Agent but without the consent of the Lenders
except as provided in Sections 2.22.2 and 2.22.5.1, increase the Aggregate
Commitment up to an amount not to exceed $250,000,000, subject to satisfaction
of each and all of the requirements contained in this Section 2.22.

 

2.22.2               Eligibility.  Each Lender who provides an increase in the
Aggregate Commitment (each a “New Commitment Provider”) shall be either an
existing Lender at the time of the increase (each an “Existing Lender”) or a
financial institution reasonably acceptable to the Agent and the Borrower (and
the Borrower’s acceptance shall not be unreasonably withheld) that is not then
currently a Lender (each a “New Lender”) provided, that the Borrower shall first
offer any increase in the Commitments to the Existing Lenders by giving notice
thereof to each of the Existing Lenders and fifteen (15) Business Days to
respond to such notice (failure to respond on a timely basis shall be deemed a
rejection).  Any notice given hereunder shall not be deemed to be a request for,
or requirement of, consent from any Existing Lender who is not a New Commitment
Provider to the increase in the Aggregate Commitment.

 

2.22.3               Notice.  The Borrower and the Agent jointly shall notify
the Lenders at least fifteen (15) Business Days before the date (“Commitment
Increase Effective Date”) any increase in the Aggregate Commitment shall become
effective.  Such notice shall state the amount of the increase in the Aggregate
Commitment, the names of the Lenders providing the additional Commitments and
the Commitment Increase Effective Date.

 

2.22.4               Minimum Amount.  Any increase in the Aggregate Commitment
provided by any individual Lender shall be in an amount not less than $5,000,000
and integral multiples of $1,000,000 in excess thereof.

 

2.22.5               Implementation of Increase.  On the Commitment Increase
Effective Date:

 

(i)                                     Joinder.  Each New Commitment Provider
shall execute and deliver to the Agent two Business Days prior to the Commitment
Increase Effective Date a Joinder in the form attached as Exhibit L (“Lender
Joinder”), which shall become effective on the Commitment Increase Effective
Date. The Lender Joinder shall set forth the Commitment provided by the New
Commitment Provider if it is a New Lender and the new amount of the Commitment
and the increase in the Commitment to be provided if it is an Existing Lender.
If the New Commitment Provider is a New Lender it shall on the Effective Date
join and become a party to this Agreement and the other Loan Documents as a
Lender for all purposes hereunder and thereunder, subject to the provisions of
this Section 2.22, having a Commitment as set forth in the Lender Joinder
tendered by the same.  Any Lender whose Commitment shall remain unaffected shall
be deemed to have consented and agreed to such Lender Joinder.

 

(ii)                                  Floating Rate Loans.  Each New Commitment
Provider shall (i) purchase from the other Lenders such New Commitment
Provider’s Pro Rata Share in any Floating Rate Loans outstanding on the
Commitment Increase Effective Date, and (ii) share ratably in all Floating Rate
Loans borrowed by the Borrower after the Commitment Increase Effective Date.

 

(iii)                               Eurodollar Rate Loans.  Each New Commitment
Provider shall (a) purchase from the other Lenders such New Commitment
Provider’s Pro Rata Share in each outstanding Eurodollar Loan on the date on
which the Borrower either renews its Eurodollar Loan election with respect to
the Eurodollar Loan in question or converts such Eurodollar Loan to a Floating
Rate Loan, provided that the New Commitment Providers shall not

 

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purchase an interest in such Loans from the other Lenders on the Commitment
Increase Effective Date (unless the Commitment Increase Effective Date is a
renewal or conversion date, as applicable, in which case the preceding sentence
shall apply), and (b) shall participate in all new Eurodollar Loans borrowed by
the Borrower on and after the Commitment Increase Effective Date.

 

(iv)                              Facility LCs.  Each New Commitment Provider
shall participate in all Facility LCs outstanding on the Commitment Increase
Effective Date according to its Pro Rata Share and in accordance with the terms
of this Agreement.

 

(v)                                 Limit on Amount.  Any increase in the
Commitments pursuant to this Section 2.22 may not cause the total amount of the
Commitments to exceed $250,000,000.

 

(vi)                              No Default or Unmatured Default;
Representations and Warranties.  There shall exist no Default or Unmatured
Default on the Commitment Increase Effective Date.  Without limiting that
sentence, the representations and warranties contained in Article V must be true
and correct in all material respects as of such Commitment Increase Effective
Date except to the extent any such representation is stated to relate solely to
an earlier date, in which case such representation shall have been true and
correct on and as of such earlier date.  If a Default or Unmatured Default
exists on such Commitment Increase Effective Date, or such representations and
warranties are not true and correct to the extent and as required in the second
sentence of this Section 2.22.5(vi), the Borrower shall not request an increase
of, and may not increase, the Aggregate Commitment.

 

(vii)                           No Obligation.  No Existing Lender shall be
required to increase its Commitment in the event that the Borrower asks such
Existing Lender to provide all or a portion of any increase in the Aggregate
Commitment desired by the Borrower.

 

ARTICLE III

 

YIELD PROTECTION; TAXES

 

3.1                                 Yield Protection.  If, on or after the date
of this Agreement, the adoption of any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any change in the interpretation or
administration thereof by any governmental or quasi-governmental authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender or applicable Lending
Installation or the LC Issuer with any request or directive (whether or not
having the force of law) of any such authority, central bank or comparable
agency:

 

(i)                                     subjects any Lender or any applicable
Lending Installation or the LC Issuer to any Taxes, or changes the basis of
taxation of payments (other than with respect to Excluded Taxes) to any Lender
or the LC Issuer in respect of its Eurodollar Loans, Facility LCs or
participations therein, or

 

(ii)                                  imposes or increases or deems applicable
any reserve, assessment, insurance charge, special deposit or similar
requirement against assets of, deposits with or for the account of, or credit
extended by, any Lender or any applicable Lending Installation or the LC Issuer
(other than reserves and assessments taken into account in determining the
interest rate applicable to Eurodollar Advances), or

 

(iii)                               imposes any other condition the result of
which is to increase the cost to any Lender or any applicable Lending
Installation or the LC Issuer of making, funding or maintaining its

 

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Eurodollar Loans, or of issuing or participating in Facility LCs,  or reduces
any amount receivable by any Lender or any applicable Lending Installation or
the LC Issuer in connection with its Eurodollar Loans, Facility LCs or
participations therein, or requires any Lender or any applicable Lending
Installation or the LC Issuer to make any payment calculated by reference to the
amount of Eurodollar Loans, Facility LCs or participations therein held or
interest received by it, by an amount deemed material by such Lender or the LC
Issuer, as the case may be,

 

and the result of any of the foregoing is to increase the cost to such Lender or
applicable Lending Installation Lender or the LC Issuer, as the case may be, of
making or maintaining its Eurodollar Loans or Commitment or of issuing or
participating in Facility LCs or to reduce the return received by such Lender or
applicable Lending Installation or the LC Issuer, as the case may be, in
connection with such Eurodollar Loans, Commitment, Facility LCs or
participations therein, then, within 15 days of demand by such Lender or the LC
Issuer, as the case may be, the Borrower shall pay such Lender or the LC Issuer,
as the case may be, such additional amount or amounts as will compensate such
Lender, or the LC Issuer, as the case may be, for such increased cost or
reduction in amount received.

 

3.2                                 Changes in Capital Adequacy Regulations.  If
a Lender or the LC Issuer determines the amount of capital required or expected
to be maintained by such Lender or the LC Issuer, any Lending Installation of
such Lender or the LC Issuer or any corporation controlling such Lender or the
LC Issuer is increased as a result of a Change, then, within 15 days of demand
by such Lender or the LC Issuer, the Borrower shall pay such Lender or the LC
Issuer the amount necessary to compensate for any shortfall in the rate of
return on the portion of such increased capital which such Lender or the LC
Issuer determines is attributable to this Agreement, its Outstanding Credit
Exposure or its Commitment to make Loans and issue or participate in Facility
LCs, as the case may be, hereunder (after taking into account such Lender or the
LC Issuer’s policies as to capital adequacy).  “Change” means (i) any change
after the date of this Agreement in the Risk-Based Capital Guidelines or (ii)
any adoption of or change in any other law, governmental or quasi-governmental
rule, regulation, policy, guideline, interpretation, or directive (whether or
not having the force of law) after the date of this Agreement which affects the
amount of capital required or expected to be maintained by any Lender or the LC
Issuer or any Lending Installation or any corporation controlling any Lender or
the LC Issuer.  “Risk-Based Capital Guidelines” means (i) the risk-based capital
guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled “International Convergence of Capital Measurements and
Capital Standards,” including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.

 

3.3                                 Availability of Types of Advances.  If any
Lender determines that maintenance of its Eurodollar Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation, or directive,
whether or not having the force of law, or if the Required Lenders determine
that (i) deposits of a type and maturity appropriate to match fund Eurodollar
Advances are not available or (ii) the interest rate applicable to Eurodollar
Advances does not accurately reflect the cost of making or maintaining
Eurodollar Advances, then the Agent shall suspend the availability of Eurodollar
Advances and require any affected Eurodollar Advances to be repaid or converted
to Floating Rate Advances, subject to the payment of any funding indemnification
amounts required by Section 3.4.

 

3.4                                 Funding Indemnification.  If any payment of
a Eurodollar Advance occurs on a date which is not the last day of the
applicable Interest Period, whether because of acceleration, prepayment or
otherwise, or a Eurodollar Advance is not made on the date specified by the
Borrower for any reason other than default by the Lenders, the Borrower will
indemnify each Lender for any loss or cost incurred by it resulting therefrom,
including, without limitation, any loss or cost in liquidating or employing
deposits acquired to fund or maintain such Eurodollar Advance.

 

3.5                                 Taxes.

 

(i)                                     All payments by the Borrower to or for
the account of any Lender, the LC Issuer or the Agent hereunder or under any
Note or Facility LC Application shall be made free and clear of and without
deduction for any and all Taxes.  If the Borrower shall be required by law to
deduct any Taxes from or in respect of any sum payable hereunder to any Lender,
the LC Issuer or the

 

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Agent, (a) the sum payable shall be increased as necessary so that after making
all required deductions (including deductions applicable to additional sums
payable under this Section 3.5) such Lender, the LC Issuer or the Agent (as the
case may be) receives an amount equal to the sum it would have received had no
such deductions been made, (b) the Borrower shall make such deductions, (c) the
Borrower shall pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish to the Agent
the original copy of a receipt evidencing payment thereof within 30 days after
such payment is made.

 

(ii)                                  In addition, the Borrower hereby agrees to
pay any present or future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any payment made
hereunder or under any Note or Facility LC Application or from the execution or
delivery of, or otherwise with respect to, this Agreement or any Note or any
Facility LC Application  (“Other Taxes”).

 

(iii)                               The Borrower hereby agrees to indemnify the
Agent, the LC Issuer and each Lender for the full amount of Taxes or Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed on amounts
payable under this Section 3.5) paid by the Agent, the LC Issuer or such Lender
as a result of its Commitment, any Loans made by it hereunder, or otherwise in
connection with its participation in this Agreement and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto. 
Payments due under this indemnification shall be made within 30 days of the date
the Agent, the LC Issuer or such Lender makes demand therefor pursuant to
Section 3.6.

 

(iv)                              Each Lender that is not incorporated under the
laws of the United States of America or a state thereof (each a “Non-U.S.
Lender”) agrees that it will, not more than ten Business Days after the date of
this Agreement, (i) deliver to the Agent two duly completed copies of United
States Internal Revenue Service Form W-8BEN or W-8ECI, certifying in either case
that such Lender is entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income taxes, and (ii)
deliver to the Agent a United States Internal Revenue Form W-8 or W-9, as the
case may be, and certify that it is entitled to an exemption from United States
backup withholding tax.  Each Non-U.S. Lender further undertakes to deliver to
each of the Borrower and the Agent (x) renewals or additional copies of such
form (or any successor form) on or before the date that such form expires or
becomes obsolete, and (y) after the occurrence of any event requiring a change
in the most recent forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the Agent.  All forms
or amendments described in the preceding sentence shall certify that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form or amendment with
respect to it and such Lender advises the Borrower and the Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.

 

(v)                                 For any period during which a Non-U.S.
Lender has failed to provide the Borrower with an appropriate form pursuant to
clause (iv), above (unless such failure is due to a change in treaty, law or
regulation, or any change in the interpretation or administration thereof by any
governmental authority, occurring subsequent to the date on which a form
originally was required to be provided), such Non-U.S. Lender shall not be
entitled to indemnification under this Section 3.5 with respect to Taxes imposed
by the United States; provided that, should a Non-U.S. Lender which is otherwise
exempt from or subject to a reduced rate of withholding tax become subject to
Taxes because of its failure to deliver a form required under clause (iv),
above, the Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such Taxes.

 

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(vi)                              Any Lender that is entitled to an exemption
from or reduction of withholding tax with respect to payments under this
Agreement or any Note pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the Agent), at the time or
times prescribed by applicable law, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate.

 

(vii)                           If the U.S. Internal Revenue Service or any
other governmental authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did not properly
withhold tax from amounts paid to or for the account of any Lender (because the
appropriate form was not delivered or properly completed, because such Lender
failed to notify the Agent of a change in circumstances which rendered its
exemption from withholding ineffective, or for any other reason), such Lender
shall indemnify the Agent fully for all amounts paid, directly or indirectly, by
the Agent as tax, withholding therefor, or otherwise, including penalties and
interest, and including taxes imposed by any jurisdiction on amounts payable to
the Agent under this subsection, together with all costs and expenses related
thereto (including attorneys fees and time charges of attorneys for the Agent,
which attorneys may be employees of the Agent).  The obligations of the Lenders
under this Section 3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.

 

3.6                                 Lender Statements; Survival of Indemnity. To
the extent reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its Eurodollar Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of Eurodollar Advances under Section 3.3, so long as such
designation is not, in the judgment of such Lender, disadvantageous to such
Lender.  Each Lender shall deliver a written statement of such Lender to the
Borrower (with a copy to the Agent) as to the amount due, if any, under Section
3.1, 3.2, 3.4 or 3.5.  Such written statement shall set forth in reasonable
detail the calculations upon which such Lender determined such amount and shall
be final, conclusive and binding on the Borrower in the absence of manifest
error.  Determination of amounts payable under such Sections in connection with
a Eurodollar Loan shall be calculated as though each Lender funded its
Eurodollar Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the Eurodollar
Rate applicable to such Loan, whether in fact that is the case or not.  Unless
otherwise provided herein, the amount specified in the written statement of any
Lender shall be payable on demand after receipt by the Borrower of such written
statement.  The obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5
shall survive payment of the Obligations and termination of this Agreement.

 

ARTICLE IV

 

CONDITIONS PRECEDENT

 

4.1.                              Initial Credit Extension.  The Lenders shall
not be required to make the initial Credit Extension hereunder unless:

 

(i)                                     the Borrower has furnished to the Agent,
with sufficient copies for the Lenders, the following, in each case satisfactory
to the Agent, in its discretion, and its counsel:

 

(a)                                  Copies of the articles or certificate of
incorporation of the Borrower and each other Loan Party, together with all
amendments, and a certificate of good standing (or comparable certificate in the
case of those governmental offices which do not issue good standing
certificates), each certified by the appropriate governmental officer in its
jurisdiction of incorporation or formation.

 

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(b)                                 Copies, certified by the Secretary or
Assistant Secretary (or Person serving an equivalent function) of the Borrower
and each other Loan Party, of its by-laws or operating agreement, as applicable,
and of its board of directors’ resolutions and of resolutions or actions of any
other body authorizing the execution of the Loan Documents to which the Borrower
and each other Loan Party is a party.

 

(c)                                  An incumbency certificate, executed by the
Secretary or Assistant Secretary (or Person serving an equivalent function) of,
as applicable, the Borrower and each other Loan Party, which shall identify by
name and title and bear the signatures of the Authorized Officers and any other
officers or Persons of the Borrower and each other Loan Party authorized to sign
the Loan Documents to which, as applicable, the Borrower and each other Loan
Party is a party, upon which certificate the Agent and the Lenders shall be
entitled to rely until informed of any change in writing by the Borrower and
each other Loan Party.

 

(d)                                 A certificate, signed by the chief financial
officer of the Borrower, in the form of Exhibit P stating that on the initial
Credit Extension Date no Default or Unmatured Default has occurred and is
continuing.

 

(e)                                  A written opinion of the Borrower’s and the
Guarantors’ counsel, addressed to the Lenders in substantially the form of
Exhibit A.

 

(f)                                    Any Notes requested by a Lender pursuant
to Section 2.15 payable to the order of each such requesting Lender.

 

(g)                                 Written money transfer instructions from the
Borrower, in substantially the form of Exhibit D, addressed to the Agent and
signed by an Authorized Officer, together with such other related money transfer
authorizations as the Agent may have reasonably requested.

 

(h)                                 If the initial Credit Extension will be the
issuance of a Facility LC, a properly completed Facility LC Application.

 

(i)                                     All Collateral Documents and other Loan
Documents executed by the Borrower or the Guarantors, as the case may be,
including without limitation the Pledge and Security Agreement, the Guaranty,
the Mortgages, the Negative Pledge Agreement, the Indemnity Agreement, the
Assignment of Patents, Trademarks and Copyrights, the Intercompany Subordination
Agreement and the Collateral Sharing Agreement.

 

(j)                                     Evidence satisfactory to the Agent
(including without limitation copies of executed originals of the Note Purchase
Agreement and all documents and instruments related thereto, certified by the
Borrower to be true, correct and complete) that the closing contemplated in
Section 3 of the Note Purchase Agreement has occurred and Term Note Purchasers
have purchased and scheduled to fund not less than $75,000,000 in Term Notes.

 

(k)                                  Sufficient originals of the Collateral
Sharing Agreement for each Lender executed and delivered by the Collateral
Agent, the Agent on behalf of the Lenders and all of the Term Note Purchasers.

 

(l)                                     Title insurance policies or an
irrevocable commitment to issue policies in the form of Lender approved
pro-forma policies, in favor of the Collateral Agent for the benefit of the
Lenders, in ALTA 1992 Form B Loan Policy form without creditor’s rights
exceptions, and in amounts agreed upon and acceptable to the Agent, with
premiums paid thereon (except in the case of the Calder Mortgage), delivered by
the Loan

 

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Parties, issued by Commonwealth Land Title Insurance Company (the “Title
Insurer”) and insuring the Recorded Mortgages as valid first priority Liens upon
the applicable Loan Parties’ fee simple title to, or leasehold interest in, the
Real Property Collateral and all improvements and all appurtenances thereto
(including such easements and appurtenances as may be required by the Agent),
free and clear of any and all defects and encumbrances whatsoever, subject only
to such exceptions as may be approved in writing by the Agent, with endorsements
thereto as to such matters as the Agent may designate, purchased by the Loan
Parties on the Closing Date for each of the Mortgages except for the Calder
Mortgage.  The Loan Parties shall purchase title insurance for the Calder
Mortgage in accordance with Section 6.21.

 

(m)                               The Borrower shall deliver surveys of the
properties listed on Schedule 4.1(i)(m) not later than three (3) days prior to
the Closing Date.  Such surveys shall be prepared by surveyors listed on such
Schedule 4.1(i)(m).  Such surveys shall be reasonably satisfactory to the Agent
and shall be certified to the Collateral Agent, each Lender and the Title
Insurer.  Each survey shall evidence to the satisfaction of the Agent that all
of the Real Property Collateral included in the applicable Mortgage is owned by
the applicable Loan Party free and clear of defects of title, obstructions or
hindrances, except for Permitted Liens, and be sufficient to allow the Title
Insurer to issue loan policies without survey exceptions.

 

(n)                                 The insurance certificate described in
Section 5.20 and 6.6(ii).

 

(o)                                 Existing Environmental audits and/or Phase I
Environmental assessments performed on each parcel of Real Property Collateral
listed on Schedule 4.1(i)(o), with the results of such environmental audits
and/or assessments satisfactory to the Agent in its discretion.  In the event
Phase II assessments, contamination assessment reports or remediation action
plans have been prepared for any Real Property Collateral, such plans,
assessments and reports, including recent updates and data submissions, shall be
provided to Agent and must be satisfactory to Agent in its discretion.  Without
limiting the foregoing, such assessments and/or audits shall be performed in
accordance with ASTM 1527 E standards for environmental assessments and shall
determine whether there are any Recognized Environmental Conditions (as defined
in such standards) on the Real Property Collateral, provide the historical
ownership and use of the Real Property Collateral, describe the current use of
the Real Property Collateral, provide any information available in EPA records
and state EPA records on previous investigations and litigation, describe any
adjacent properties which have been or could be potential hazards, and locations
of equipment containing PCBs and provide a conclusion and recommendation
statement.  If any of the Real Property Collateral contains any Hazardous
Materials (other than materials used by the Loan Parties from time to time in
the ordinary course of business), that might be potentially Hazardous Materials
if not handled, stored, and/or used in accordance with all relevant
Environmental Laws, rules and/or regulations dealing with Hazardous Materials or
potentially Hazardous Materials, but only to the extent it is actually handled,
stored and used in connection with all such Laws, rules and/or regulations) or,
in the Agent’s discretion the Real Property Collateral has been adversely
affected by any Hazardous Materials or substances, the Lenders shall be excused
from any obligation to provide the Credit Extensions.

 

(p)                                 Reports of searches of personal property of
records from the appropriate reporting agencies listed on Schedule 4.1(i)(p). 
The Agent may obtain such reports but the Borrower shall pay all costs
associated with obtaining them.  The reports of searches of the personal
property of records shall not disclose any security interest in the Loan
Parties’ personal property prior to the Collateral Agent’s security interest
therein other than Permitted Liens.

 

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(q)                                 All material third-party consents required
to effectuate the transactions under the Loan Documents, including without
limitation those described on Schedule 4.1(i)(q).

 

(r)                                    Evidence satisfactory to the Agent that
no action, proceeding, investigation, regulation or legislation shall have been
instituted, threatened or proposed before any court, governmental agency or
legislative body to enjoin, restrain or prohibit, or to obtain damages in
respect of, this Agreement, the other Loan Documents or the consummation of the
transactions contemplated hereby or thereby or which, in the Agent’s sole
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement or any of the other Loan Documents.

 

(s)                                  Evidence satisfactory to the Agent with
respect to the proper perfection and priority of all of the Liens created in
favor of the Collateral Agent securing all of the Secured Obligations including
such consents, approvals and agreements as the Agent may require from the
Louisville/Jefferson County Metro Government with respect to the Borrower’s
property subject to the Master Plan Bond Transaction.

 

(t)                                    Evidence satisfactory to the Agent that
prior to, or simultaneously with the closing of the transactions described
herein, the Borrower has paid all of the outstanding loans, interest and other
obligations under the Prior Credit Facility (except in the case of the Letters
of Credit described in Section 2.3.1) and shall have delivered to the Agent a
copy of a payoff letter, in a form satisfactory to the Agent, in its discretion,
signed by PNC Bank, as agent under the Prior Credit Facility and evidencing the
payoff and termination of such Prior Credit Facility, as well as termination of
any Liens in connection therewith.

 

(u)                                 [Reserved]

 

(v)                                 Unqualified audited financial statements for
the Borrower dated as of December 31, 2002.

 

(w)                               A certificate in the form of Exhibit P signed
by the chief financial officer of the Borrower stating that at the initial
Credit Extension no Material Adverse Effect has occurred since December 31, 2002
or is occurring, and all of the representations and warranties made by or on
behalf of any of the Loan Parties relating to this Agreement and/or any of the
other Loan Documents remain true, correct and complete.

 

(x)                                   Payment or reimbursement of expenses as
and to the extent required under Section 9.6 and payment of fees under Section
10.13.

 

(y)                                 Such other documents as the Agent, any
Lender or their counsel may have reasonably requested.

 

(ii)                                  The Agent and the Lenders shall have
determined to their satisfaction:

 

(a)                                  There exists no Default or Unmatured
Default.

 

(b)                                 No Material Adverse Effect shall have
occurred since December 31, 2002.

 

(c)                                  The Loan Parties have complied with all
applicable requirements of Regulation U.

 

(d)                                 All legal and regulatory matters (including
those relating to taxes) are satisfactory.

 

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(e)                                  No injunctions or temporary restraining
orders against any Loan Party exist which would prohibit a Credit Extension.

 

(f)                                    No existing or potential environmental
liability with respect to any Loan Party and/or any Collateral exists that would
have a Material Adverse Effect.

 

4.2                                 Each Credit Extension.  The Lenders shall
not be required to make any Credit Extension unless on the applicable Credit
Extension Date:

 

(i)                                     There exists no Default or Unmatured
Default.

 

(ii)                                  The representations and warranties
contained in Article V are true and correct in all material respects as of such
Credit Extension Date except to the extent any such representation or warranty
is stated to relate solely to an earlier date, in which case such representation
or warranty shall have been true and correct on and as of such earlier date.

 

(iii)                               All legal matters incident to the making of
such Credit Extension shall be satisfactory to the Lenders and their counsel.

 

Each Borrowing Notice or request for issuance of a Facility LC with respect to
each such Credit Extension shall constitute a representation and warranty by the
Borrower that the conditions contained in Sections 4.2(i) and (ii) have been
satisfied.

 

ARTICLE V

 

REPRESENTATIONS AND WARRANTIES

 

The Loan Parties jointly and severally represent and warrant to the Agent and
the Lenders that:

 

5.1                                 Existence and Standing.  Each of the Loan
Parties and its Subsidiaries is a corporation, partnership (in the case of
Subsidiaries only) or limited liability company duly and properly incorporated
or organized, as the case may be, validly existing and (to the extent such
concept applies to such entity) in good standing under the laws of its
jurisdiction of incorporation or organization and has all requisite authority to
conduct its respective business in each jurisdiction in which its respective
business is conducted and where the failure to do so would cause a Material
Adverse Effect.

 

5.2                                 Authorization and Validity.  Each Loan Party
has the power and authority and legal right to execute and deliver the Loan
Documents to which it is a party and to perform its obligations thereunder.  The
execution and delivery by the Loan Party of the Loan Documents to which it is a
party and the performance of its obligations thereunder have been duly
authorized by proper corporate proceedings, and the Loan Documents to which the
Loan Party is a party constitute legal, valid and binding obligations of the
applicable Loan Party enforceable against the applicable Loan Party in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors’
rights generally.

 

5.3                                 No Conflict; Government Consent.  Neither
the execution and delivery by a Loan Party of the Loan Documents to which it is
a party, nor the consummation by it of the transactions therein contemplated,
nor compliance with the provisions thereof by it will violate (i) any law, rule,
regulation, order, writ, judgment, injunction, decree or award binding on any
such Loan Party or (ii) any such Loan Party’s articles or certificate of
incorporation, partnership agreement, certificate of partnership, articles or
certificate of organization, by-laws, or operating or other management
agreement, as the case may be, or (iii) the provisions of any indenture,
instrument or agreement to which any such Loan Party is a party or is subject,
or by which it, or its Property, is bound, or conflict with or constitute a
default thereunder, or except for the Liens required by the terms of Loan
Documents, result in, or require, the creation or imposition of any Lien in, of
or on the Property of any such Loan Party pursuant to the terms of any such
indenture, instrument or agreement.  Except for the recordation of any
applicable Collateral Documents with any applicable

 

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governmental authority, no order, consent, adjudication, approval, license,
authorization, or validation of, or filing, recording or registration with, or
exemption by, or other action in respect of any governmental or public body or
authority, or any subdivision thereof, which has not been obtained by any Loan
Party, is required to be obtained by any Loan Party in connection with the
execution and delivery of the Loan Documents, the borrowings under this
Agreement, the payment and performance by the Borrower of the Obligations or the
legality, validity, binding effect or enforceability of any of the Loan
Documents.  Notwithstanding anything in this Agreement or the other Loan
Documents to the contrary, the parties to this Agreement and the other Loan
Documents acknowledge that (i) the transfer, assignment, change of ownership or
interest, foreclosure or realization on any of the Collateral or the stock of
Churchill Downs Management Company or (ii) any transfer, assignment, or change
of ownership or interest in any pari-mutuel permits or licenses must comply with
applicable law, which may require prior approval by the Florida Division of
Pari-Mutuel Wagering or comparable governmental authority in the applicable
State.

 

5.4                                 Financial Statements.  The December 31, 2002
consolidated financial statements of the Loan Parties heretofore delivered to
the Lenders were prepared in accordance with generally accepted accounting
principles in effect on the date such statements were prepared and fairly
present the consolidated financial condition and operations of the Loan Parties
at such date and the consolidated results of their operations for the period
then ended.

 

5.5                                 Material Adverse Change.  Since December 31,
2002 there has been no change in the business, Property, prospects, condition
(financial or otherwise) or results of operations of the Loan Parties taken as a
whole, which could reasonably be expected to have a Material Adverse Effect.

 

5.6                                 Taxes.  Each Loan Party has filed all United
States federal tax returns and all other tax returns which are required to be
filed and has paid all taxes due pursuant to said returns or pursuant to any
assessment received by such Loan Party, except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided in
accordance with Agreement Accounting Principles and as to which no Lien exists. 
The United States income tax returns of each Loan Party and the other Loan
Parties have been audited by the Internal Revenue Service through the fiscal
year ended December 31, 1998.  No tax liens have been filed and no claims are
being asserted with respect to any such taxes.  The charges, accruals and
reserves on the books of each Loan Party in respect of any taxes or other
governmental charges are adequate.

 

5.7                                 Litigation and Contingent Obligations. 
There is no litigation, arbitration, governmental investigation, proceeding or
inquiry pending or, to the knowledge of any of their officers, threatened
against or affecting any Loan Party which could reasonably be expected to have a
Material Adverse Effect or which seeks to prevent, enjoin or delay the making of
any Credit Extensions. Other than any liability incident to any litigation,
arbitration or proceeding which could not reasonably be expected to have a
Material Adverse Effect, the Loan Parties have no material contingent
obligations not provided for or disclosed in the financial statements referred
to in Section 5.4.

 

5.8                                 Subsidiaries.  Schedule 1 contains an
accurate list of all Subsidiaries of the Loan Parties as of the date of this
Agreement, setting forth their respective jurisdictions of organization and the
percentage of their respective capital stock or other ownership interests owned
by each Loan Party.  All of the issued and outstanding shares of capital stock
or other ownership interests of such Subsidiaries have been (to the extent such
concepts are relevant with respect to such ownership interests) duly authorized
and issued and are fully paid and non-assessable.

 

5.9                                 ERISA.  Except for any Multiemployer Plan,
none of the Loan Parties sponsors or contributes to a Plan that is covered by
Title IV of ERISA or that is subject to the minimum funding standards under
Section 412 of the Code.  Neither any Loan Party nor any other member of the
Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $10,000,000.00 in the
aggregate.  No Loan Party has any knowledge that any Plan fails to comply in all
material respects with all applicable requirements of law and regulation. 
Neither the Borrower nor any other member of the Controlled Group has withdrawn
from any Plan or initiated steps to do so, and no steps have been taken to
reorganize or terminate any Plan.

 

5.10                           Accuracy of Information.  No information, exhibit
or report furnished by the Borrower or any of the other Loan Parties to the
Agent or to any Lender in connection with the negotiation of, or compliance
with, the Loan Documents contained any misstatement of material fact or omitted
to state a material fact necessary to make the statements contained therein not
misleading.

 

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5.11                           Regulation U.  Margin stock (as defined in
Regulation U) constitutes less than 25% of the value of those assets of the Loan
Parties which are subject to any limitation on sale, pledge, or other
restriction hereunder.

 

5.12                           Material Agreements.  Neither the Borrower nor
any Subsidiary is a party to any agreement or instrument or subject to any
charter or other corporate restriction which could reasonably be expected to
have a Material Adverse Effect.  Neither the Borrower nor any Subsidiary is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in (i) any agreement to which it is a party,
which default could reasonably be expected to have a Material Adverse Effect or
(ii) any agreement or instrument evidencing or governing Indebtedness.

 

5.13                           Compliance With Laws.  The Loan Parties have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property except for any failure
to comply with any of the foregoing which could not reasonably be expected to
have a Material Adverse Effect.

 

5.14                           Ownership of Properties.  Except as set forth on
Schedule 2, on the date of this Agreement, the Loan Parties will have good
title, free of all Liens other than Permitted Liens, to all of the Property and
assets reflected in the Borrower’s most recent consolidated financial statements
provided to the Agent as owned by the Loan Parties. Subject to the terms of the
Collateral Sharing Agreement and except for the Permitted Liens, liens granted
to the Collateral Agent for the benefit of the Lenders pursuant to the Mortgages
will constitute valid first priority Liens under applicable law.  Borrower will
take all such action as will be necessary or advisable to establish such Lien of
the Collateral Agent and its priority as described in the preceding sentence at
or prior to the time required for such purpose, and there will be as of the date
of execution and delivery of the Mortgages no necessity for any further action
in order to protect, preserve and continue such Lien and such priority except
for (i) the filing of continuation statements to continue financing statements
(filed as fixture filings) upon the expiration thereof and (ii) for the
recordation of the Calder Mortgage and for the recording of the Mortgages (other
than the Calder Mortgage) all of which recordation of such Mortgages (other than
the Calder Mortgage) shall have occurred on the Closing Date (or within one
Business Day following the Closing Date provided that the title insurance policy
relating to such Mortgages (other than the Calder Mortgage) provides coverage as
of the Closing Date based on pro forma policies delivered and accepted on or
before the Closing Date).

 

5.15                           Plan Assets; Prohibited Transactions.  The
Borrower (a) is not an entity deemed to hold “plan assets” within the meaning of
29 C.F.R. § 2510.3-101 of an employee benefit plan (as defined in Section 3(3)
of ERISA) which is subject to Title I of ERISA or any plan (within the meaning
of Section 4975 of the Code), and assuming the source of the Loans does not in
any case include the assets of any employee benefit plan, neither the execution
of this Agreement nor the making of Credit Extensions hereunder gives rise to a
prohibited transaction within the meaning of Section 406 of ERISA or Section
4975 of the Code, and (b) the Borrower is an “operating company” as defined in
29 C.F.R 2510-101 (c) or “benefit plan investors” (as defined in 29 C.F.R. §
2510.3-101(f)) do not own 25% or more of the value of any class of equity
interests in the Borrower.

 

5.16                           Environmental Matters. In the ordinary course of
its business, the officers of the Borrower consider the effect of Environmental
Laws on the business of the Loan Parties, in the course of which they identify
and evaluate potential risks and liabilities accruing to the Borrower due to
Environmental Laws.  On the basis of this consideration, the Borrower has
concluded that Environmental Laws cannot reasonably be expected to have a
Material Adverse Effect.  Neither the Borrower nor any Subsidiary has received
any notice to the effect that its operations are not in material compliance with
any of the requirements of applicable Environmental Laws or are the subject of
any federal or state investigation evaluating whether any remedial action is
needed to respond to a release of any toxic or hazardous waste or substance into
the environment, which non-compliance or remedial action could reasonably be
expected to have a Material Adverse Effect.

 

5.17                           Investment Company Act.  Neither the Borrower nor
any Subsidiary is an “investment company” or a company “controlled” by an
“investment company”, within the meaning of the Investment Company Act of 1940,
as amended.

 

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5.18                           Public Utility Holding Company Act.  Neither the
Borrower nor any Subsidiary is a “holding company” or a “subsidiary company” of
a “holding company”, or an “affiliate” of a “holding company” or of a
“subsidiary company” of a “holding company”, within the meaning of the Public
Utility Holding Company Act of 1935, as amended.

 

5.19                           Post-Retirement Benefits.  The present value of
the expected cost of post-retirement medical and insurance benefits payable by
the Loan Parties to their employees and former employees, as estimated by the
Borrower in accordance with procedures and assumptions deemed reasonable by the
Required Lenders, does not exceed $10,000,000.00.

 

5.20                           Insurance.  The certificate signed by the
President or chief financial officer of the Borrower, that attests to the
existence and adequacy of, and summarizes, the property and casualty insurance
program carried by the Borrower with respect to itself and the other Loan
Parties and that has been furnished by the Borrower to the Agent and the
Lenders, is complete and accurate.  This summary includes the insurer’s or
insurers’ name(s), policy number(s), expiration date(s), amount(s) of coverage,
type(s) of coverage, exclusion(s), and deductibles.  This summary also includes
similar information, and describes any reserves, relating to any self-insurance
program that is in effect.

 

5.21                           Solvency.  (i) Immediately after the consummation
of the transactions to occur on the date hereof and immediately following the
making of each Loan, if any, made on the date hereof and after giving effect to
the application of the proceeds of such Loans, (a) the fair value of the assets
of the Loan Parties on a consolidated basis, at a fair valuation, will exceed
the debts and liabilities, subordinated, contingent or otherwise, of the Loan
Parties on a consolidated basis; (b) the present fair saleable value of the
Property of the Loan Parties on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of the Loan Parties
on a consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the Loan Parties on a consolidated basis will be able to pay their
debts and liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Loan Parties on a
consolidated basis will not have unreasonably small capital with which to
conduct the businesses in which they are engaged as such businesses are now
conducted and are proposed to be conducted after the date hereof.

 

(ii)                                  The Borrower does not intend to, or to
permit any of the other Loan Parties to, and does not believe that it or any of
the other Loan Parties will, incur debts beyond such Person’s ability to pay
such debts as they mature, taking into account the timing of and amounts of cash
to be received by it or any such Loan Party and the timing of the amounts of
cash to be payable on or in respect of its Indebtedness or the Indebtedness of
any such Loan Party.

 

5.22                           Intellectual Property. Schedule 5.22 sets forth a
true and complete list, differentiated by each Loan Party, of all of the
patents, trademarks, licenses not included in Schedule 5.25, copyrights and
other intellectual property owned by any of the Loan Parties or which any of
them has an interest.

 

5.23                           Properties. Schedule 5.23 sets forth a true and
complete list, differentiated by each Loan Party, of the addresses of all Real
Property.

 

5.24                           Operating Locations. Schedule 5.24 sets forth a
true and complete list, differentiated by each Loan Party, of the street
addresses of each of the Loan Parties’ operating locations.

 

5.25                           Certain Licenses. Schedule 5.25 sets forth a true
and complete list, differentiated by each Loan Party of all licenses or other
authorities under which any Loan Party is a licensee from any racing commission
or authority or holder of other racing rights.

 

5.26                           Predecessor Entities of the Loan Parties. 
Schedule 5.26 sets forth a list of any and all predecessors and/or prior names
of any Loan Party within the past five (5) years, including any entity or
entities which may no longer exist, whether by reason of merger, acquisition,
consolidation, sale of its material assets, dissolution, bankruptcy,
reorganization, which may have or had an interest in the Collateral or any part
thereof, together with such predecessor’s (1) state of incorporation, (2) the
jurisdictional location of all of such entities offices and locations and (3)
all jurisdictional locations where any Collateral may have been kept.

 

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ARTICLE VI

 

COVENANTS

 

From and after the date of this Agreement, unless the Required Lenders shall
otherwise consent in writing:

 

6.1                                 Financial Reporting.  The Borrower will
maintain, for itself and each Subsidiary, a system of accounting established and
administered in accordance with Agreement Accounting Principles, and furnish to
the Lenders:

 

(i)                                     Within ninety (90) days after the close
of each of Borrower’s fiscal years, an unqualified (except for qualifications
relating to changes in Agreement Accounting Principles or practices reflecting
changes in generally accepted accounting principles and required or approved by
the Borrower’s independent certified public accountants) audit report certified
by PriceWaterhouseCoopers or such other independent certified public accountants
acceptable to the required Lenders, prepared in accordance with Agreement
Accounting Principles on a consolidated basis for itself and the other Loan
Parties, including consolidated balance sheets as of the end of such period,
related consolidated profit and loss and reconciliation of surplus statements,
and a consolidated statement of cash flows, accompanied by any management letter
prepared by said accountants, provided that satisfaction of the requirements of
this Section 6.1(i) shall be deemed to have been met by delivery within the time
frame specified above of (a) copies of the Borrower’s Annual Report on Form 10-K
for such fiscal year prepared in accordance with the requirements therefor and
filed with the Securities and Exchange Commission, and (b) the financial
statements and reports otherwise required in this Section 6.1(i), consolidated
as to the Borrower and the other Loan Parties, except that such financial
statements and reports need not be audited and may be internally prepared.

 

(ii)                                  Within forty-five (45) days after the
close of the first three quarterly periods of each of its fiscal years, for
itself and the other Loan Parties, consolidated unaudited balance sheets as at
the close of each such period and consolidated profit and loss statements and a
consolidated statement of cash flows for the period from the beginning of such
fiscal year to the end of such quarter, all certified by its chief financial
officer, provided that satisfaction of the requirements of this Section 6.1(ii)
shall be deemed to have been met by delivery within the time frame specified
above of copies of (a) the Borrower’s Quarterly Report on Form 10-Q prepared in
accordance with the requirements therefor and filed with the Securities and
Exchange Commission, and (b) the financial statements and reports otherwise
required in this Section 6.1(ii), consolidated as to the Borrower and the other
Loan Parties.

 

(iii)                               As soon as available, but in any event
within ninety (90) days after the beginning of each fiscal year of the Borrower,
a copy of the plan and budget (including, at a minimum, a projected consolidated
balance sheet for the following fiscal year end and projected quarterly income
statements) of the Borrower and the other Loan Parties for such fiscal year.

 

(iv)                              Together with the financial statements
required under Sections 6.1(i) and (ii), a compliance certificate in
substantially the form of Exhibit B signed by its chief financial officer or
treasurer showing the calculations necessary to determine compliance with this
Agreement and stating that no Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and status thereof.

 

(v)                                 Within two hundred seventy (270) days after
the close of each fiscal year, a statement of the Unfunded Liabilities of each
Single Employer Plan, if any, certified as correct by an actuary enrolled under
ERISA.

 

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(vi)                              If the Borrower has established a Plan, as
soon as possible and in any event within 10 days after the Borrower knows that
any Reportable Event has occurred with respect to any Plan, a statement, signed
by the chief financial officer of the Borrower, describing said Reportable Event
and the action which the Borrower proposes to take with respect thereto.

 

(vii)                           As soon as possible and in any event within 10
days after receipt by the Borrower, a copy of (a) any notice or claim to the
effect that the Borrower or any of the other Loan Parties is or may be liable to
any Person as a result of the release by the Borrower, any of the other Loan
Parties, or any other Person of any Hazardous Materials into the environment,
and (b) any notice alleging any violation of any Environmental Laws by the
Borrower or any of the other Loan Parties, which, in either case, could
reasonably be expected to have a Material Adverse Effect.

 

(viii)                        Promptly upon the furnishing thereof to the
shareholders of the Borrower, copies of all annual reports to shareholders
(including without limitation annual reports to shareholders, if any, prepared
pursuant to Rule 14a-3 under the Exchange Act), financial statements, reports
and proxy statements so furnished.

 

(ix)                                Promptly upon the filing thereof, copies of
all registration statements and annual, quarterly, monthly or other regular
reports which any of the Loan Parties files with the Securities and Exchange
Commission.

 

(x)                                   Such other information (including
non-financial information) as the Agent or any Lender may from time to time
reasonably request.

 

6.2                                 Use of Proceeds.  The Borrower and each
other Loan Party will, and will cause each Subsidiary to, use the proceeds of
the Credit Extensions to (a) refinance the Prior Credit Facility and (b) for
general corporate purposes, including for working capital and Acquisition
needs.  The Borrower will not, nor will it permit any Subsidiary to, use any of
the proceeds of the Advances to purchase or carry any “margin stock” (as defined
in Regulation U).

 

6.3                                 Notice of Default.  The Borrower and each
other Loan Party will give prompt notice in writing to the Agent of the
occurrence of any Default or Unmatured Default and of any other development,
financial or otherwise, which could reasonably be expected to have a Material
Adverse Effect.

 

6.4                                 Conduct of Business.  The Borrower and each
other Loan Party will, and will cause each Subsidiary (other than the Excluded
Subsidiaries) to, carry on and conduct its respective business in substantially
the same manner and in substantially the Current Fields of Enterprise and do all
things necessary to remain duly incorporated or organized, validly existing and
(to the extent such concept applies to such entity) in good standing as a
domestic corporation, partnership or limited liability company in its
jurisdiction of incorporation or organization, as the case may be, and maintain
all requisite authority to conduct its business in each jurisdiction in which
its respective business is conducted in each case in which the failure to so
maintain such authority would have a Material Adverse Effect.

 

6.5                                 Taxes.  The Borrower and each other Loan
Party will, and will cause each Subsidiary to, timely file complete and correct
United States federal and applicable foreign, state and local tax returns
required by law and pay when due all taxes, assessments and governmental charges
and levies upon such Loan Party or such Loan Party’s income, profits or
Property, except those which are being contested in good faith by appropriate
proceedings and with respect to which adequate reserves have been set aside in
accordance with Agreement Accounting Principles.

 

6.6                                 Insurance.

 

(i)                                     The Borrower and each other Loan Party
will, and will cause each Subsidiary to, maintain with financially sound and
reputable insurance companies insurance on all their Property in such amounts
and covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.

 

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(ii)                                  All insurance which the Loan Parties are
required to maintain shall be satisfactory to the Agent in form, amount and
insurer.  Such insurance shall provide that any loss thereunder shall be payable
notwithstanding any action, inaction, breach of warranty or condition, breach of
declarations, misrepresentation or negligence of any of the Loan Parties.  Each
policy shall contain an agreement by the insurer that, notwithstanding lapse of
a policy for any reason, or right of cancellation by the insurer or any
cancellation by any Loan Party such policy shall continue in full force for the
benefit of the Collateral Agent for at least thirty (30) days after written
notice thereof to the Agent and the applicable Loan Party, and no alteration in
any such policy shall be made except upon thirty (30) days written notice of
such proposed alteration to the Agent and the applicable Loan Party and written
approval by the Agent.  At or before the making of the first Credit Extension,
each Loan Party shall provide the Agent with certificates evidencing its due
compliance with the requirements of this Section.

 

6.7                                 Compliance with Laws.  The Borrower and each
other Loan Party will, and will cause each Subsidiary to, comply with all laws,
rules, regulations, orders, writs, judgments, injunctions, decrees or awards to
which such party may be subject including, without limitation, all Environmental
Laws, provided that it shall not be deemed to be a violation of this Section 6.7
if any failure to comply with any law would not result in fines, penalties,
remediation costs, other similar liabilities or injunctive relief which in the
aggregate would constitute a Material Adverse Effect.

 

6.8                                 Maintenance of Properties.  The Borrower and
each other Loan Party will, and will cause each Subsidiary (other than the
Excluded Subsidiaries) to, do all things necessary to maintain, preserve,
protect and keep its Property in good repair, working order and condition,
normal wear and tear excepted and taking into account the age and condition of
such Property and make all necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times.

 

6.9                                 Inspection.  The Borrower and each other
Loan Party will, and will cause each Subsidiary to, permit the Agent, the
Collateral Agent and the Lenders, by their respective representatives and
agents, to inspect any of the Property, books and financial records of the
Borrower and each Subsidiary, to examine and make copies of the books of
accounts and other financial records of the Borrower and each Subsidiary, and to
discuss the affairs, finances and accounts of the Borrower and each Subsidiary
with, and to be advised as to the same by, their respective officers at such
reasonable times and intervals as the Agent, the Collateral Agent or any Lender
may designate; provided, however, so long as no Default or Unmatured Default has
occurred or is continuing, no such inspections, examinations, or discussions
shall occur during the two week period preceding, or on the day of, the running
of the [i] Kentucky Derby or [ii] Breeder’s Cup, if the Breeder’s Cup is to be
held at Churchill Downs.

 

6.10                           Indebtedness.  The Borrower and the other Loan
Parties will not, nor will they permit any Subsidiary (other than Excluded
Subsidiaries) to, create, incur or suffer to exist any Indebtedness, except:

 

(i)                                     The Loans and the Reimbursement
Obligations.

 

(ii)                                  Indebtedness existing on the date hereof
and described in Schedule 2.

 

(iii)                               Indebtedness arising under Rate Management
Transactions related to the Loans to the extent permitted under Section 6.22.

 

(iv)                              Indebtedness secured by any purchase money
security interests not exceeding $5,000,000;

 

(v)                                 Capitalized Lease Obligations in an amount
not exceeding $5,000,000;

 

(vi)                              Indebtedness to sellers in connection with
Permitted Acquisitions in an aggregate amount not to exceed $10,000,000 provided
that such Indebtedness is subordinated to the Indebtedness hereunder pursuant to
subordination provisions acceptable to the Required Lenders in the Required
Lenders’ reasonable discretion;

 

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(vii)                           Indebtedness secured by any Lien permitted
pursuant to Section 6.16;

 

(viii)                        Indebtedness of not greater than $100,000,000 in
principal, plus accrued interest not yet due and payable, under the Term Notes;

 

(ix)                                Indebtedness of not greater than
$153,000,000 under the Master Plan Bond Transaction;

 

(x)                                   Indebtedness permitted under Section 6.15,
reduced by the amounts of Indebtedness actually outstanding at any time that is
described in or subject to clauses (iv), (v) and/or (vi) of this Section 6.10.

 

6.11                           Merger.  Without the consent of the Required
Lenders, the Borrower will not, nor will it permit any Subsidiary (other than
the Excluded Subsidiaries) to, merge or consolidate with or into any other
Person, except that a Loan Party may merge into the Borrower or a Wholly-Owned
Subsidiary that is or becomes a Loan Party provided that at least ten (10)
Business Days before the date of such consolidation or merger, the applicable
parties shall have delivered to the Agent all of the new Mortgages, amendments
to Mortgages, financing statements, amendments thereto and other amendments to
the Loan Documents and the schedules thereto required to reflect such
consolidation or merger and to perfect or confirm the Liens of the Collateral
Agent for the benefit of the Lenders in the assets of the Loan Parties which are
parties thereto.

 

6.12                           Sale of Assets.

 

(i)                                     The Borrower will not, nor will it
permit any Subsidiary (other than the Excluded Subsidiaries) to, lease, sell or
otherwise dispose of its Property to any other Person, except:

 

(a)                                  Sales of inventory in the ordinary course
of business (subject to subsection (ii) below).

 

(b)                                 Leases, sales or other dispositions of its
Property (including ownership interests in Guarantors described in Subsection
6.12(iii)(a) and/or (b)) that, together with all other Property of the Loan
Parties previously leased, sold or disposed of (other than inventory in the
ordinary course of business) as permitted by this Section, in the aggregate, (1)
during the twelve-month period ending with the month in which any such lease,
sale or other disposition occurs, do not constitute a Twelve Month Substantial
Portion of the Property of the Loan Parties, or (2) from and after the Closing
Date does not constitute a Term Substantial Portion of the Property of the Loan
Parties, in each case (subject to subsection (ii) below); provided that prior to
and upon completion of such lease, sale or other disposition no Default or
Unmatured Default would exist, including after giving effect to such sale,
transfer or other disposition.

 

(c)                                  Without regard to, and in addition to the
limits of Section 6.12(i)(b), the sale, transfer or other disposition of the
assets of, or ownership interests in, Ellis Park Race Course and/or Racing
Corporation of America, provided that prior to and upon completion of such sale,
transfer or other disposition no Default or Unmatured Default would exist,
including after giving effect to such sale, transfer or other disposition, and
provided further that the full amount of the cash proceeds realized on such
sale, transfer or other disposition are applied to reduce the Aggregate
Outstanding Credit Exposure.

 

(ii)                                  The sales of assets permitted under (i)
(a), and (b) above would be permitted only on the condition that for leases,
sales or other dispositions that, in any single transaction or related series of
transactions, generate $1,000,000 or more of lease, sale or disposition
proceeds, immediately upon completion of the sale the full amount of the
proceeds realized on the lease, sale or other disposition are applied to reduce
the Aggregate Outstanding Credit Exposure.

 

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(iii)                               (a)                                  Upon
the sale of Property permitted under and in accordance with Subsection
6.12(i)(c) above, the Agent is hereby authorized by the Lenders to instruct the
Collateral Agent to cause Racing Corporation of America and Ellis Park Race
Course, Inc. to be released from their obligations under the Guaranty without
the need for any further authorization from the Lenders, to the extent the Agent
may do so under, and subject to the terms of, the Collateral Sharing Agreement.

 

(b)                                 Upon consummation of the sale or other
disposition of Property that (1) consists of (A) all of the interests of all
Loan Parties in a Guarantor, including, without limitation, all of the capital
stock, LLC or partnership (as applicable) and other equity interests in that
Guarantor, or (B) all of the Property of a Guarantor, and (2) is permitted under
and consummated in accordance with Subsections 6.12(i)(b) and (ii) above, the
Agent is hereby authorized by the Lenders instruct the Collateral Agent to cause
that particular Guarantor to be released from its obligations under the Guaranty
without the need for any further authorization from the Lenders, to the extent
the Agent may do so under, and subject to the terms of, the Collateral Sharing
Agreement, provided that no Default or Unmatured Default shall exist and be
continuing or result from that sale or other disposition of that Property and/or
the release of that Guarantor from its obligations under the Guaranty, and
provided further that Guarantor is simultaneously released from any and all
guaranty and/or other obligations with respect to the Term Notes and/or the Note
Purchase Agreement.

 

Notwithstanding the foregoing provisions of this Section 6.12, nothing contained
in this Section 6.12 or this Agreement shall prevent the Borrower nor any other
Loan Party or any Subsidiary from conducting its revenue producing activities in
the ordinary course of its respective business, including, but not limited to,
the (a) leasing or licensing of parking facilities, banquet facilities, boxes,
suites or other facilities to the patrons of the Borrower, each Loan Party and
each Subsidiary (collectively, the “Patrons”), (b) granting of personal suite
licenses to Patrons, (c) granting of licenses to Patrons to use space in the
“marquee village” and other similar facilities, and (d) the license or use for a
fee of simulcast signals, trademarks, copyrights, and other similar assets, and
(e) prepaying and/or forgiving any amounts owed under or canceling the bond or
the Lease issued or entered into in connection with the Master Plan Bond
Transaction.

 

6.13                           Investments and Acquisitions.  The Borrower will
not, nor will it permit any other Loan Party to, make or suffer to exist any
Investments (including without limitation, loans and advances to, and other
Investments in, Subsidiaries), or commitments therefor, or to create any
Subsidiary or to become or remain a partner in any partnership or joint venture,
or to make any Acquisition of any Person, except:

 

(i)                                     Cash Equivalent Investments.

 

(ii)                                  Any Investment (a) in existence on the
date hereof (including without limitation existing Investments in Subsidiaries)
and described in Schedule 1, (b) in any Subsidiary that is a Loan Party if such
Investment is not an Acquisition, and (c) so long as no Default or Unmatured
Default has occurred and is continuing, in an Excluded Entity that is not an
Acquisition if, but only if, the aggregate amount of all Investments in all
Excluded Entities under this clause (ii)(c) after the date of this Agreement,
when aggregated with all of the Acquisitions and/or Investments under clauses
(iii)(d)(4), (iii)(e) and (iii)(f) of this Section 6.13 made after the date of
this Agreement (including such proposed Investment), shall not exceed 20% of
Consolidated Net Worth at the time of the proposed Investment in such Excluded
Entity.  The Loan Parties shall demonstrate, including in appropriate
circumstances determined by and acceptable to the Agent, through representations
by the Loan Parties, that they shall be in compliance with all provisions of
this Agreement after giving effect to any Investment permitted by this clause
6.13 (ii)(c) by delivering, at least five (5) Business Days prior to making or
closing such Investment a certificate in the form of Exhibit O (each an
“Investment Compliance Certificate”) evidencing such compliance.

 

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(iii)                               The Borrower or any Loan Party may effect an
Acquisition through a merger, consolidation or by purchase, lease or otherwise
of the capital stock or ownership interest of another Person, or of Property of
another Person (each a “Permitted Acquisition”), to the extent, but only to the
extent, such Loan Party shall have complied with all of the applicable following
provisions:

 

(a)                                  In the case of a Permitted Acquisition by
the Borrower, the Borrower shall be the surviving entity in any merger or
consolidation.

 

(b)                                 At least thirty (30) Business Days before
the date of the proposed Acquisition, the Borrower shall have delivered to the
Agent a notice of acquisition substantially in the form of Exhibit F attached
hereto (a “Notice of Acquisition”) describing in detail the proposed
Acquisition.

 

(c)                                  (1) Such Person is either (A) an existing
Guarantor or (B) has executed a Guarantor Joinder to join this Agreement as a
Guarantor pursuant to Section 9.14, or shall have done so on or before the date
of such Permitted Acquisition, or, (2) in the alternative, upon request provided
in the Notice of Acquisition of the Loan Party acquiring such Person, on or
before the date of closing of such Permitted Acquisition, the Required Lenders
shall have consented, in their discretion, in writing, to permit such acquired
Person to be an Excluded Entity.

 

(d)                                 If the Person to be acquired is not to be an
Excluded Entity, then clauses (1), (2), (3) and (4) of this subsection apply:

 

(1)                                  The Loan Party which acquires such
ownership interest in such Person shall pledge such ownership interests to the
Collateral Agent pursuant to the Pledge and Security Agreement and Section 9.14
on or before the date of the closing of such Permitted Acquisition, except as
provided in clauses (iii)(d)(3) or (iii)(e) below; and such Person shall, on or
before the date of the closing of such Permitted Acquisition execute and deliver
a Guarantor Joinder and otherwise comply with the requirements of Section 9.14;

 

(2)                                  No Default or Unmatured Default shall exist
prior to and/or after giving effect to such Permitted Acquisition;

 

(3)                                  If such Person is engaged in a Current
Field of Enterprise and applicable laws relating to horse racing or gaming
prohibit the pledge of the ownership interests of such Person or the grant of
Liens in one or more assets of such Person (such stock and assets, collectively,
the “Restricted Assets”), such Person and its owners shall not be obliged to
grant Liens in the Restricted Assets, provided that the Loan Parties shall use
their best efforts with respect to the matters within their respective control
to obtain, within ninety (90) days after the date of such Permitted Acquisition
(A) the consent of the applicable regulatory authority to the pledge or grant of
first and prior Liens in the Restricted Assets of such Person to the Collateral
Agent, or (B) the acknowledgement by such regulatory authority that such a
pledge or grant of security interests does not require such consent; and the
applicable Loan Parties shall within ten (10) days after receiving any such
acknowledgement or consent take all steps necessary or appropriate to pledge and
grant first and prior Liens, other than Permitted Liens, in favor of the
Collateral Agent in, as applicable, the Restricted Assets pursuant to the Pledge
and Security Agreement and any other applicable Collateral Documents, other Loan
Documents, and/or other documents in the form of the Collateral Documents except
for the name of the applicable Loan Party and the description of the Property;
and

 

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(4)                                  If such Person is not engaged in a Current
Field of Enterprise, the aggregate consideration paid for the Acquisition of and
Investment in that Person, together with all other Acquisitions under this
clause (iii)(d)(4) previous to the Acquisition in question, when aggregated with
all of the Investments under clause(ii)(c) and Acquisitions under clauses
(iii)(e) and (iii)(f) of this Section 6.13, shall not exceed 20% of Consolidated
Net Worth at the time of the proposed Acquisition of such Person.

 

(e)                                  If the acquired Person is to be an Excluded
Entity, then clauses (1), (2), (3) and (4) of this subsection apply:

 

(1)                                  The board of directors or other equivalent
governing body of such Person shall have approved such Permitted Acquisition
and, if the Loan Parties shall use any portion of the Loans to fund such
Permitted Acquisition, the Loan Parties shall also have delivered to the Lenders
written evidence of the approval of the board of directors (or equivalent body)
of such Person for such Permitted Acquisition;

 

(2)                                  No Default or Unmatured Default shall exist
prior to and/or after giving effect to such Permitted Acquisition;

 

(3)                                  The Loan Parties shall have delivered to
the Agent at least five (5) Business Days before such Permitted Acquisition
copies of any agreements entered into or proposed to be entered into by such
Loan Parties in connection with such Permitted Acquisition and shall deliver to
the Agent for its review such other information about such Person or its
Property as the Agent may reasonably require; and

 

(4)                                  The aggregate consideration paid for the
Acquisition of and Investment in all Persons pursuant to this clause (iii)(e) of
this Section 6.13, when aggregated with all other consideration paid for the
Acquisition of and Investments in any Person under this clause (iii)(e) and when
aggregated with all Investments under clause (ii)(c) and all Acquisitions under
clauses (iii)(d)(4) and (iii)(f) of this Section, shall not exceed 20% of
Consolidated Net Worth at the time of the Proposed Acquisition of such Person.

 

(f)                                    If the Permitted Acquisition is through
purchase, lease or other acquisition of Property of a Person by a Loan Party,
then clauses (1), (2) and (3) of this subsection apply:

 

(1)                                  No Default or Unmatured Default shall exist
prior to and/or after giving effect to such Permitted Acquisition.

 

(2)                                  That Loan Party shall pledge such Property
pursuant to the Pledge and Security Agreement and/or Mortgage(s), as
appropriate, and Section 6.29, unless such Loan Party is engaged in a Current
Field of Enterprise and applicable laws relating to horse racing or gaming cause
the Property, or some part of it, being acquired to be Restricted Assets, in
which case such Loan Party shall not be obliged to grant Liens in the Restricted
Assets, provided that the Loan Parties shall use their best efforts with respect
to the matters within their respective control to obtain, within ninety (90)
after the date of such Permitted Acquisition (A) the consent of the applicable
regulatory authority to the pledge or grant of first and prior Liens, other than
Permitted Liens, in the Restricted Assets of such Loan Party to the Collateral
Agent, or (B) the acknowledgement by such regulatory authority that such a
pledge or

 

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grant of security interests does not require such consent, and that Loan Party
shall within ten (10) days after receiving any such acknowledgement or consent
take all steps necessary or appropriate to pledge and grant first and prior
Liens, other than Permitted Liens, in favor of the Collateral Agent in, as
applicable, the Restricted Assets pursuant to the Pledge and Security Agreement
and any other applicable Collateral Documents, other Loan Documents, and/or
documents consistent with the Collateral Documents.

 

(3)                                  If that Loan Party is not engaged in a
Current Field of Enterprise both before and after the Permitted Acquisition, the
aggregate consideration paid for the Acquisition of Property of such Person by
such Loan Party pursuant to this clause (iii)(f) of this Section 6.13, when
aggregated with all other consideration paid for the Investment in any Person
under clause (ii)(c) and when further aggregated with all other Acquisitions and
Investments under clauses (iii)(d)(4) and (iii)(e) of this Section, shall not
exceed 20% of Consolidated Net Worth at the time of the proposed Acquisition of
such Property.

 

(g)                                 The Loan Parties shall demonstrate,
including, in appropriate circumstances determined by and acceptable to the
Agent, through representations by the Loan Parties, that they shall be in
compliance with (i) the covenants contained in Sections 6.10, 6.11, 6.12, 6.13,
6.14, 6.15,  6.16, 6.17, 6.18, 6.19, 6.23, 6.24, 6.25, 6.26, 6.30, 6.32, 6.33
and 6.34 (including in such computation Indebtedness, Contingent Obligations,
Sale and Leaseback Transactions and all other liabilities and/or obligations
assumed or incurred by a Loan Party or such Person in connection with such
Permitted Acquisition), and (ii) all other provisions of this Agreement after
giving effect to any Permitted Acquisition, by delivering at least five (5)
Business Days prior to such Permitted Acquisition a certificate in the form of
Exhibit M (each an “Acquisition Compliance Certificate”) evidencing such
compliance.

 

6.14                           Subsidiaries.  Each Loan Party shall not, and
shall not permit any of its Subsidiaries to, own or create, directly or
indirectly, any Subsidiaries other than (a) any Subsidiary on the Closing Date,
and (b) any Subsidiary formed or acquired after the Closing under this Agreement
pursuant to a Permitted Acquisition.  Unless the Subsidiary so acquired is an
Excluded Entity with respect to which the Loan Parties have complied with
Section 6.13, such newly formed or acquired Subsidiary and the applicable Loan
Party, as applicable, shall grant and cause to be perfected first and prior
Liens (other than Permitted Liens) in favor of the Collateral Agent in the
assets held by, and stock of or other ownership interest in, such Subsidiary,
subject to Section 6.13(iii)(d)(3).  Except as otherwise permitted under Section
6.13 of this Agreement, each of the Loan Parties shall not become or agree to
become (1) a general or limited partner in any general or limited partnership,
except that Loan Parties may be general or limited partners in other Loan
Parties, (2) become a member or manager of, or hold a limited liability company
interest in, a limited liability company, except that the Loan Parties may be
members or managers of, or hold limited liability company interest in, other
Loan Parties, or (3) become a joint venturer or hold a joint venture interest in
any joint venture.

 

6.15                           Certain Transactions. Except for the Sale and
Leaseback Transaction that is a part of the Master Plan Bond Transaction, the
Borrower and the other Loan Parties collectively, in the aggregate, may not
incur Indebtedness under Sections 6.10(x) or Off Balance Sheet Liabilities under
Section 6.23 (ii), which, at any one time, aggregate for the Borrower and all of
the other Loan Parties, collectively, in an amount more than $40,000,000.00.

 

6.16                           Liens.  The Borrower will not, nor will it permit
any Subsidiary to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except (collectively,
“Permitted Liens”):

 

(i)                                     Liens for taxes, assessments or
governmental charges or levies on such Loan Party’s Property if the same shall
not at the time be delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings and for which
adequate reserves

 

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in accordance with Agreement Accounting Principles shall have been set aside on
such Loan Party’s books.

 

(ii)                                  Liens imposed by law, such as carriers’,
warehousemen’s and mechanics’ liens and other similar Liens arising in the
ordinary course of business which secure payment of obligations not more than
sixty (60) days past due or which are being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance with
Agreement Accounting Principles shall have been set aside on such Loan Party’s
books.

 

(iii)                               Liens arising out of pledges or deposits
under worker’s compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar legislation.

 

(iv)                              Utility easements, building restrictions and
such other encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar character and which
do not in any material way affect the marketability of the same or interfere
with the use thereof in the business of the Borrower or its Subsidiaries.

 

(v)                                 Liens existing on the date hereof and
described in Schedule 2 and any Lien filed or which arises, at any time solely
against Property of any Excluded Subsidiary.

 

(vi)                              Liens in favor of the Collateral Agent, for
the benefit of the Lenders and subject to the terms of the Collateral Sharing
Agreement, granted pursuant to any Collateral Document.

 

(vii)                           Liens, security interests and mortgages for the
benefit of any individual Lender which provides a Rate Management Transaction
permitted under Section 6.22 (each a “Permitted Secured Lender Rate Management
Transaction”) between one or more of the Loan Parties and such Lender, provided
that any such Liens shall be pari passu with the Liens securing the other
Secured Obligations hereunder and be subject to the collateral sharing
provisions contained in the Collateral Sharing Agreement.  The parties to a
“Permitted Secured Rate Management Transaction” shall state in the documentation
governing such agreement that such agreement is intended to be a “Permitted
Secured Rate Management Transaction” hereunder, and upon doing so such agreement
shall be treated as a “Permitted Secured Rate Management Transaction” for all
purposes hereunder and under each of the other Loan Documents and such agreement
shall be entitled to share in the Collateral as more fully provided for herein
and therein.

 

(viii)                        Liens created in connection with assets leased
under Capitalized Leases described in and permitted under Section 6.10(v).

 

(ix)                                Purchase money security interests described
in and permitted under Section 6.10(iv).

 

(x)                                   So long as, (A)  the validity or amount
thereof is being contested in good faith by appropriate and lawful proceedings
diligently conducted and so long as levy and execution thereon have been stayed
and continue to be stayed or (B) if a final judgment is entered, such judgment
is discharged within thirty (30) days of entry, and in either case they do not
in the aggregate, materially impair the ability of the Borrower to perform its
Obligations hereunder and under the other Loan Documents, then the following:

 

(a)                                  Claims or Liens for taxes, assessments or
charges due and payable and subject to interest or penalty, provided that the
applicable Loan Party maintains such reserves or other appropriate provisions as
shall be required by Agreement Accounting Principles and pays all such taxes,
assessments or charges forthwith upon the commencement of proceedings to
foreclose any such Lien provided that, notwithstanding any such reserves, the
Loan Parties shall pay any Liens related to recording or related taxes

 

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(including documentary stamp taxes or intangible taxes), immediately upon the
existence of any Default or immediately upon the request of the Agent if the
Collateral Agent has recorded or is recording a Mortgage with respect to such
realty;

 

(b)                                 Claims, Liens or encumbrances upon, and
defects of title to, real or personal property other than the Collateral,
including any attachment of personal or real property or other legal process
prior to adjudication of a dispute on the merits;

 

(c)                                  Claims or Liens of mechanics, materialmen,
warehousemen, carriers, or other statutory nonconsensual Liens; or

 

(d)                                 Claims or Liens resulting from judgments or
orders which, in the aggregate, do not exceed $5,000,000.00.

 

(xi)                                Liens permitted under the title policies
referred to in Section 4.1(i) hereof.

 

6.17                           Capital Expenditures.  The Borrower will not, nor
will it permit any Subsidiary to, expend, or be committed to expend, funds for
Capital Expenditures under the Borrower’s Master Plan for Capital Expenditures
in an amount exceeding $125,000,000.00 for the Borrower and its Subsidiaries in
the aggregate.

 

6.18                           Rentals.  The Borrower will not, nor will it
permit any Loan Party to, create, incur or suffer to exist obligations for
Consolidated Rentals in excess of $10,000,000.00 in any one fiscal year for the
Borrower and its Subsidiaries in the aggregate.

 

6.19                           Affiliates.  The Borrower will not, and will not
permit any Subsidiary to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except (i) in the ordinary course of
business and pursuant to the reasonable requirements of the Borrower’s or such
Subsidiary’s business and (ii) upon fair and reasonable terms no less favorable
to the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.

 

6.20                           No Prepayment of Material Indebtedness. The Loan
Parties shall not, nor will any of them permit any Subsidiary to, prepay,
anticipate, defease, purchase, redeem or acquire any Material Indebtedness
(other than Obligations hereunder), either in whole or in part, directly or
indirectly, prior to the scheduled maturity thereof, except for payment of
regularly scheduled installments of principal and/or interest thereon as and
when those installments come due in the regular course, and not by acceleration
thereof, provided that nothing in this Section 6.20 shall prohibit an Excluded
Subsidiary to prepay any Indebtedness with respect to which it, but not any Loan
Party, is obligated.

 

6.21                           Recordation of Calder Mortgage.  The Agent may,
and at the direction of the Required Lenders shall, direct the Collateral Agent
to record the Calder Mortgage; and appropriate UCC fixture filings.  The other
financing statements for filing in Florida (the “Calder Financing Statements”)
will be filed concurrently with the Closing. The Loan Parties shall take all
such steps as the Agent, the Collateral Agent or the Required Lenders request
and shall otherwise cooperate in connection with the recordation of the Calder
Mortgage, and related documents pursuant to the preceding sentence, including
(i) obtaining title insurance for the benefit of the Collateral Agent and the
Lenders in an amount not less than the appraised value of the property covered
by such Calder Mortgage  (which the Loan Parties shall be required to pay for)
and (ii) if a Default exists at the time of such recordation or if a Default
should occur following such recordation, the Loan Parties shall pay (or
reimburse the Agent for) all documentary stamp taxes, intangible asset taxes or
other fees and expenses associated with such recordation.  The Calder Mortgage
shall be treated as a “Recorded Mortgage” for purposes of this Agreement
including the warranty in Section 5.14 relating to the Recorded Mortgages.

 

6.22                           Financial Contracts.  The Borrower has entered
into the transactions of the type described in the definition of “Rate
Management Transactions” described on Schedule 6.22, and may enter into one or
more transactions of the type described in the definition of “Rate Management
Transactions” with one or more of the Lenders after the date of this Agreement,
but the Borrower shall not, nor will it permit any Subsidiary to enter into or
remain liable under any Financial Contract that is speculative in nature.

 

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6.23                           Sale and Leaseback Transactions and other
Off-Balance Sheet Liabilities.  The Borrower will not, nor will it permit any
Subsidiary to, enter into or suffer to exist any (i) Sale and Leaseback
Transaction except the Sale and Leaseback Transaction that is a part of the
Master Plan Bond Transaction or (ii) any other transaction pursuant to which it
incurs or has incurred Off-Balance Sheet Liabilities, except for (a) Rate
Management Obligations permitted to be incurred under the terms of Section 6.22
and (b) as provided in Section 6.15.

 

6.24                           Financial Covenants.

 

6.24.1                  Fixed Charge Coverage Ratio.  The Borrower will not
permit the Fixed Charge Coverage Ratio, determined as of the end of each of its
fiscal quarters for the then most-recently ended four fiscal quarters of (i)
Consolidated Adjusted EBITDA to (ii) Consolidated Fixed Charges, all calculated
for the Loan Parties on a consolidated basis, to be less than 1.35 to 1.0.

 

6.24.2                  Leverage Ratio.  The Borrower will not permit the
Leverage Ratio, determined as of the end of each of its fiscal quarters, of (i)
Consolidated Funded Indebtedness, as adjusted by the Seasonal Borrowing Needs
Adjustment in appropriate fiscal quarters, to (ii) Consolidated Adjusted EBITDA
for the then most-recently ended four fiscal quarters to be greater than:

 

Leverage Ratio

 

Period

 

 

 

 

 

3.5 to 1.0

 

Closing Date through June 29, 2005

 

3.0 to 1.0

 

June 30, 2005 through June 29, 2006

 

2.5 to 1.0

 

June 30, 2006 and thereafter

 

 

6.24.3                  Minimum Net Worth. The Borrower will at all times
maintain Consolidated Net Worth of not less than (a) $195,000,000 as of the
Closing Date, and (b) beginning with Borrower’s fiscal year ending December 31,
2003, the sum of (i) $195,000,000 plus (ii) 50% of Consolidated Net Income
earned in each fiscal year (without deduction for losses), plus (iii) 100% of
the proceeds from any public and/or private offering and/or sale of any common
and/or preferred stock and/or other equity security, and/or any note, debenture,
or other security convertible, in whole or in part, to common and/or preferred
stock and/or other equity security, net of reasonable expenses, commissions and
fees associates with such sale, from and after the date of this Agreement.

 

6.25                           Loan Parties shall enter into Collateral
Documents.  The Borrower and each of the other Loan Parties shall grant to the
Collateral Agent, for the benefit of the Lenders, subject to the terms of the
Collateral Sharing Agreement, a first priority perfected security interest in
all of the Property of the Borrower and each of the Loan Parties, provided that
(i) recordation of the Calder Mortgage and UCC fixture filings for filing in
Florida may be delayed pursuant to and in accordance with Section 6.21, and (ii)
Racing Corporation of America and Ellis Park Race Course, Inc. shall not be
required to execute or deliver any Collateral Document other than the Guaranty. 
To that end, each of the Loan Parties shall duly authorize, execute and promptly
deliver the Guaranty to the Agent and deliver to the Collateral Agent the
Mortgages, the Pledge and Security Agreement, the Assignments of Patents,
Trademarks and Copyrights, the Collateral Sharing Agreement, the Intercompany
Subordination Agreement and any and all other Collateral Documents, including
without limitation all documents or instruments necessary or appropriate to
create and/or perfect or otherwise protect the Liens in the Collateral in favor
of the Collateral Agent for the benefit of the Lenders, subject to the terms of
the Collateral Sharing Agreement.

 

6.26                           Maintenance of Patents, Trademarks, Etc.  Each
Loan Party shall, and shall cause each of its Subsidiaries  (except for the
Excluded Subsidiaries) to, maintain in full force and effect all patents,
trademarks, service marks, trade names, copyrights, licenses, franchises,
permits and other authorizations necessary for the ownership and operation of
its properties and business if the failure so to maintain the same would
constitute a Material Adverse Effect.

 

6.27                           Plans and Benefit Arrangements.  The Borrower
shall, and shall cause each other member of the Controlled Group to, comply with
ERISA, the Code and other applicable Laws applicable to Plans, or Benefit

 

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Arrangements except where such failure, alone or in conjunction with any other
failure, would not result in a Material Adverse Effect.  Without limiting the
generality of the foregoing, the Borrower shall make, and cause each member of
the Controlled Group to make, in a timely manner, all contributions due to
Plans, Benefit Arrangements and Multiemployer Plans.

 

6.28                           Compliance with Laws.  Each Loan Party shall, and
shall cause each of its Subsidiaries to, comply with all applicable all
applicable statutes, rules, regulations, orders and restrictions of any domestic
or foreign government or any instrumentality or agency thereof having
jurisdiction over the conduct of their respective businesses or the ownership of
their respective Property, including all Environmental Laws, in all respects,
provided that it shall not be deemed to be a violation of this Section 6.28 if
any failure to comply with any of the foregoing would not result in fines,
penalties, remediation costs, other similar liabilities or injunctive relief
which in the aggregate would constitute a Material Adverse Effect.

 

6.29                           Further Assurances.  Each Loan Party shall, from
time to time, at its expense, (i) take such steps as may be necessary and/or
appropriate to faithfully preserve and protect the Lien in favor of the
Collateral Agent, for the benefit of the Lenders pursuant to and subject to the
terms of the Collateral Sharing Agreement, on and security interest in the
Collateral more fully described in the Collateral Documents as a continuing
first priority perfected Lien, subject only to Permitted Liens, (ii) shall do
such other acts and things as the Agent in its sole discretion may deem
necessary or advisable from time to time in order to preserve, perfect and
protect the Liens granted under the Loan Documents and to exercise and enforce
its rights and remedies thereunder with respect to the Collateral, and (iii) as
Property is acquired and as required by the other provisions of this Agreement,
enter into additional documents from time to time in the form of the Collateral
Documents (except as to the applicable Loan Party and the Property subject
thereto) and take such other steps to grant and perfect first priority Liens on
those assets to the Collateral Agent, for the benefit of the Lenders pursuant to
and subject to the Collateral Sharing Agreement.

 

6.30                           Subordination of Intercompany Loans.  Each Loan
Party shall cause any intercompany Indebtedness, and loans or advances owed by
any Loan Party to any other Loan Party to be subordinated pursuant to the terms
of the Intercompany Subordination Agreement.

 

6.31                           Plans and Benefit Arrangements.  Each of the Loan
Parties shall not, and shall not permit any of its Subsidiaries to:

 

(i)                                     engage in a Prohibited Transaction with
any Plan, Benefit Arrangement or Multiemployer Plan which, alone or in
conjunction with any other circumstances or set of circumstances resulting in
liability under ERISA, would constitute a Material Adverse Effect;

 

(ii)                                  fail to make when due any contribution to
any Multiemployer Plan that the Borrower or any member of the Controlled Group
may be required to make under any agreement relating to such Multiemployer Plan,
or any Law pertaining thereto;

 

(iii)                               withdraw (completely or partially) from any
Multiemployer Plan where any such withdrawal is likely to result in a material
liability under Section 4063 of ERISA of the Borrower or any member of the
Controlled Group that would constitute a Material Adverse Effect;

 

(iv)                              terminate, or institute proceedings to
terminate, any Plan, where such termination is likely to result in a material
liability to the Borrower or any member of the Controlled Group that would
constitute a Material Adverse Effect;

 

(v)                                 make any amendment to any Plan with respect
to which security is required under Section 307 of ERISA;

 

(vi)                              fail to give any and all notices and make all
disclosures and governmental filings required under ERISA or the Code, where
such failure is likely to result in a Material Adverse Effect; or

 

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(vii)                           create or enter into any Plan subject to the
minimum funding requirements of ERISA, without the prior written consent of the
Required Lenders.

 

6.32                           Issuance of Stock. Except as may be permitted in
Section 6.13, each of the Loan Parties other than the Borrower shall not issue
any additional shares of such Loan Party’s capital stock or any options,
warrants or other rights in respect thereof to any Person not a Loan Party,
provided that the Borrower shall deliver stock powers and the original
certificates evidencing such new shares in such Loan Party and shall take any
other steps necessary to grant security interests in such shares in favor of the
Collateral Agent prior to issuing such shares.

 

6.33                           Changes in Organizational Documents.  Except as
provided in the next sentence, each of the Loan Parties shall not, and shall not
permit any of its Subsidiaries to, amend in any respect its certificate of
incorporation (including any provisions or resolutions relating to capital
stock), by-laws, certificate of limited partnership, partnership agreement,
articles or certificate of formation, limited liability company agreement or
other organizational documents without providing at least ten (10) calendar
days’ prior written notice to the Agent and, in the event such change would be
materially adverse to the Lenders as determined by the Agent in its sole
discretion, obtaining the prior written consent of the Required Lenders.  The
Borrower may amend its articles of incorporation to do any or all of the
following:  (1) in connection with a public offering of shares of its capital
stock to provide for an increase in the number of authorized shares of such
stock or (2) in connection with such a public offering to increase the total
number of shares issuable as Series 1998 Preferred Stock to reflect the increase
in the number of shares of the Borrower’s common stock outstanding, and (3)
delete any provisions related to cumulative voting by shareholders in the
election or removal of directors.

 

6.34                           Contingent Obligations.  The Borrower will not,
nor will it permit any Subsidiary (except for the Excluded Subsidiaries) to,
make or suffer to exist any Contingent Obligation (including, without
limitation, any Contingent Obligation with respect to the obligations of a
Subsidiary), except (i) by endorsement of instruments for deposit or collection
in the ordinary course of business, (ii) the Reimbursement Obligations, (iii)
for the Guaranty; and (iv) guaranties of the obligations of Loan Parties not to
exceed $10,000,000 at any one time in the aggregate for all such guaranties.

 

6.35                           Other Agreements.  The Loan Parties will not
enter into any agreement containing any provision which would be violated or
breached by the performance of their obligations hereunder or under any
instrument or document delivered or to be delivered by them hereunder or in
connection herewith.  In addition, the Loan Parties covenant that they shall
not, and shall not cause or permit any Subsidiary to, deliver any guaranty or
any other collateral, in each case, securing or with respect to obligations of
the Borrower or any other Subsidiary in respect of the Note Purchase Agreement
unless any such guaranty or additional collateral is in favor of the Collateral
Agent under the Collateral Sharing Agreement.

 

6.36                           Preservation of Existence. Each Loan Party shall,
and shall cause each of its Subsidiaries (other than the Excluded Subsidiaries)
to maintain its legal existence as a corporation, limited partnership or limited
liability company and its license or qualification and good standing in each
jurisdiction in which its ownership or lease of property or the nature of its
business makes such license or qualification necessary, except (i) as otherwise
may be expressly be permitted in Sections 6.11, 6.12. 6.13 and/or 6.14, (ii)
upon a sale of Ellis Park Race Course, Inc., Racing Corporation of America, or
their respective assets as contemplated in Section 6.12(i)(c), Racing
Corporation of America and/or Ellis Park Race Course, Inc. would no longer be
subject to the requirements and/or limitations of this Section 6.36, and (iii)
where such failure to do so shall not have a Material Adverse Effect.

 

ARTICLE VII

 

DEFAULTS

 

The occurrence of any one or more of the following events shall constitute a
Default:

 

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7.1                                 Any representation or warranty made or
deemed made by or on behalf of the Loan Parties to the Lenders or the Agent
under or in connection with this Agreement, any Credit Extension, or any
certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.

 

7.2                                 Nonpayment of principal of any Loan when
due, or nonpayment of any Reimbursement Obligation in or of any interest upon
any Loan or Reimbursement Obligation within one Business Day after the same
becomes due, or of any commitment fee, LC Fee or other obligations under any of
the Loan Documents within five days after the same becomes due.

 

7.3                                 The breach by the Borrower and/or any Loan
Party of any of the terms or provisions of Sections 6.2, 6.3, 6.10, 6.11, 6.12,
6.13, 6.14, 6.15, 6.16, 6.17, 6.18, 6.19, 6.20, 6.22, 6.23, 6.24, 6.25, 6.26,
6.27, 6.28, 6.29, 6.30, 6.31, 6.32, 6.33, 6.34, 6.35 and/or 6.36.

 

7.4                                 The breach by the Borrower and/or any Loan
Party (other than a breach which constitutes a Default under another Section of
this Article VII) of any of the terms or provisions of this Agreement and/or any
other Loan Document which is not remedied within five days after written notice
from the Agent or any Lender.

 

7.5                                 Failure of the Borrower or any of the other
Loan Parties to pay when due any Material Indebtedness; or the default by the
Borrower or any of the other Loan Parties in the performance (beyond the
applicable grace period with respect thereto, if any) of any term, provision or
condition contained in any Material Indebtedness Agreement, or any other event
shall occur or condition exist, the effect of which default, event or condition
is to cause, or to permit the holder(s) of such Material Indebtedness or the
lender(s) under any Material Indebtedness Agreement to cause, such Material
Indebtedness to become due prior to its stated maturity or any commitment to
lend under any Material Indebtedness Agreement to be terminated prior to its
stated expiration date; or any Material Indebtedness of the Borrower or any of
the other Loan Parties shall be declared to be due and payable or required to be
prepaid or repurchased (other than by a regularly scheduled payment) prior to
the stated maturity thereof; or the Borrower or any of its Subsidiaries or any
Guarantor shall not pay, or admit in writing its inability to pay, its debts
generally as they become due.

 

7.6                                 The Borrower or any of the other Loan
Parties shall (i) have an order for relief entered with respect to it under the
Federal bankruptcy laws as now or hereafter in effect, (ii) make an assignment
for the benefit of creditors, (iii) apply for, seek, consent to, or acquiesce
in, the appointment of a receiver, custodian, trustee, examiner, liquidator or
similar official for it or any Term Substantial Portion or Twelve Month
Substantial Portion of its Property, (iv) institute any proceeding seeking an
order for relief under the Federal bankruptcy laws as now or hereafter in effect
or seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate or partnership action to authorize or effect any of the
foregoing actions set forth in this Section 7.6 or (vi) fail to contest in good
faith any appointment or proceeding described in Section 7.7.

 

7.7                                 Without the application, approval or consent
of the Borrower or any of the other Loan Parties, a receiver, trustee, examiner,
liquidator or similar official shall be appointed for the Borrower or any of the
other Loan Parties or any Term Substantial Portion or Twelve Month Substantial
Portion of its Property, or a proceeding described in Section 7.6(iv) shall be
instituted against the Borrower or any of the other Loan Parties and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 60 consecutive days.

 

7.8                                 Any court, government or governmental agency
shall condemn, seize or otherwise appropriate, or take custody or control of,
all or any portion of the Property of any of the Loan Parties which, when taken
together with all other Property of the Loan Parties so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such action occurs, constitutes a Term
Substantial Portion or Twelve Month Substantial Portion.

 

7.9                                 The Borrower or any of the other Loan
Parties shall fail within thirty (30) days to pay, bond or otherwise discharge
one or more (i) judgments or orders for the payment of money in excess of
$5,000,000.00 (or the

 

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equivalent thereof in currencies other than U.S. Dollars) in the aggregate, or
(ii) nonmonetary judgments or orders which, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, which
judgment(s), in any such case, is/are not stayed on appeal or otherwise being
appropriately contested in good faith.

 

7.10                           Nonpayment by the Borrower or any Loan Party of
any Rate Management Obligation when due or the breach by the Borrower or any
Subsidiary of any term, provision or condition contained in any Rate Management
Transaction or any transaction of the type described in the definition of “Rate
Management Transactions,” whether or not any Lender or Affiliate of a Lender is
a party thereto.

 

7.11                           Any Change in Control shall occur.

 

7.12                           The Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the Borrower or any other member of the Controlled Group
as withdrawal liability (determined as of the date of such notification),
exceeds $10,000,000.00 or requires payments exceeding $10,000,000.00 per annum.

 

7.13                           The Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $10,000,000.00.

 

7.14                           The Borrower or any of the other Loan Parties
shall (i) be the subject of any proceeding or investigation pertaining to the
release by the Borrower, any of the other Loan Parties or any other Person of
any toxic or hazardous waste or substance into the environment, or (ii) violate
any Environmental Law, which, in the case of an event described in clause (i) or
clause (ii), could reasonably be expected to have a Material Adverse Effect.

 

7.15                           The occurrence of any “default,” as defined in
any Loan Document (other than this Agreement) or the breach of any of the terms
or provisions of any Loan Document (other than this Agreement), which default or
breach continues beyond any period of grace therein provided.

 

7.16                           Any Guaranty shall fail to remain in full force
or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Guaranty, or any Guarantor shall fail to
comply with any of the terms or provisions of any Guaranty to which it is a
party, or any Guarantor shall deny that it has any further liability under any
Guaranty to which it is a party, or shall give notice to such effect.

 

7.17                           Any Collateral Document shall for any reason fail
to create a valid and perfected first priority security interest in any
Collateral purported to be covered thereby, except as permitted by the terms of
any Collateral Document, or any Collateral Document shall fail to remain in full
force or effect or any action shall be taken to discontinue or to assert the
invalidity or unenforceability of any Collateral Document, or the Borrower shall
fail to comply with any of the terms or provisions of any Collateral Document.

 

7.18                           The representations and warranties set forth in
Section 5.15 (Plan Assets; Prohibited Transactions) shall at any time not be
true and correct.

 

7.19                           The Borrower or any Loan Party shall fail to pay
when due any Operating Lease Obligation, obligation with respect to a Letter of
Credit, obligation under a Sale and Leaseback Transaction or Contingent
Obligation which in any of those cases involves a Material Indebtedness.

 

7.20                           The occurrence of any “Default” or “Event of
Default, “ as defined in the Note Purchase Agreement, or the breach of any of
the terms or provisions of the Note Purchase Agreement beyond any period of
grace therein provided.

 

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7.21                           The occurrence of any default under or breach of
any of the terms or provisions of the applicable documents in the Master Plan
Bond Transaction, which default or breach continues beyond any period of grace
therein provided.

 

ARTICLE VIII

 

ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES

 

8.1                                 Acceleration; Facility LC Collateral
Account.

 

(i)                                     If any Default described in Section 7.6
or 7.7 occurs with respect to the Borrower, the obligations of the Lenders to
make Loans hereunder and the obligation and power of the LC Issuer to issue
Facility LCs shall automatically terminate and the Obligations shall immediately
become due and payable without any election or action on the part of the Agent,
the Collateral Agent, the LC Issuer or any Lender and the Borrower will be and
become thereby unconditionally obligated, without any further notice, act or
demand, to pay to the Collateral Agent an amount in immediately available funds,
which funds shall be held in the Facility LC Collateral Account, equal to the
difference of (x) an amount equal to the lesser of (1) $30,000,000.00, or (2)
the quotient of (A) the amount of LC Obligations at such time divided by (B) the
aggregate of the Pro Rata Obligation Shares of all of the Lenders under the
Collateral Sharing Agreement at the time of the determination, less (y) the
amount on deposit in the Facility LC Collateral Account at such time which is
free and clear of all rights and claims of third parties and has not been
applied against the Obligations (such difference, the “Collateral Shortfall
Amount”).  If any other Default occurs, the Required Lenders (or the Agent with
the consent of the Required Lenders) may (a) terminate or suspend the
obligations of the Lenders to make Loans hereunder and the obligation and power
of the LC Issuer to issue Facility LCs, or declare the Obligations to be due and
payable, or both, whereupon the Obligations shall become immediately due and
payable, without presentment, demand, protest or notice of any kind, all of
which the Borrower hereby expressly waives, and (b) upon notice to the Borrower
and in addition to the continuing right to demand payment of all amounts payable
under this Agreement, make demand on the Borrower to pay, and the Borrower will,
forthwith upon such demand and without any further notice or act, pay to the
Collateral Agent the Collateral Shortfall Amount, which funds shall be deposited
in the Facility LC Collateral Account.

 

(ii)                                  If at any time while any Default is
continuing, the Agent determines that the Collateral Shortfall Amount at such
time is greater than zero, the Agent may make demand on the Borrower to pay, and
the Borrower will, forthwith upon such demand and without any further notice or
act, pay to the Collateral Agent the Collateral Shortfall Amount, which funds
shall be deposited in the Facility LC Collateral Account.

 

(iii)                               The Collateral Agent may at any time or from
time to time after funds are deposited in the Facility LC Collateral Account,
apply such funds to the payment of the Obligations and any other amounts as
shall from time to time have become due and payable by the Borrower to the
Lenders or the LC Issuer pursuant to and in accordance with the Collateral
Sharing Agreement.

 

(iv)                              At any time while any Default is continuing,
neither the Borrower nor any Person claiming on behalf of or through the
Borrower shall have any right to withdraw any of the funds held in the Facility
LC Collateral Account.  After all of the Obligations have been indefeasibly paid
in full and the Aggregate Commitment has been terminated, any funds remaining in
the Facility LC Collateral Account shall be distributed in accordance with
Section 9 of the Collateral Sharing Agreement.

 

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(v)                                 If, within 30 days after acceleration of the
maturity of the Obligations or termination of the obligations of the Lenders to
make Loans and the obligation and power of the LC Issuer to issue Facility LCs
hereunder as a result of any Default (other than any Default as described in
Section 7.6 or 7.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Agent shall, by notice to the Borrower, rescind and annul such acceleration
and/or termination.

 

(vi)                              The Collateral Agent shall have the right to
exercise the remedies and other rights with respect to the Collateral provided
in and subject to the Collateral Documents.

 

8.2                                 Amendments.  Subject to the provisions of
this Section 8.2 and the Collateral Sharing Agreement, the Required Lenders (or
the Agent with the consent in writing of the Required Lenders) and the Borrower
may enter into agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any manner the
rights of the Lenders or the Borrower hereunder or waiving any Default
hereunder; provided, however, that no such supplemental agreement shall, without
the consent of all of the Lenders:

 

(i)                                     Extend the final maturity of any Loan,
or extend the expiry date of any Facility LC to a date after the Facility
Termination Date or postpone any regularly scheduled payment of principal of any
Loan or forgive all or any portion of the principal amount thereof or any
Reimbursement Obligation related thereto, or reduce the rate or extend the time
of payment of interest or fees thereon or Reimbursement Obligation related
thereto.

 

(ii)                                  Reduce the percentage specified in the
definition of Required Lenders.

 

(iii)                               Extend the Facility Termination Date, or
reduce the amount or extend the payment date for, the mandatory payments
required under Section 2.4, or increase the amount of the Aggregate Commitment,
except as provided in Section 2.22, or of the Commitment of any Lender hereunder
or the commitment to issue Facility LCs, or permit the Borrower to assign its
rights under this Agreement.

 

(iv)                              Amend this Section 8.2.

 

(v)                                 Release any Guarantor except as provided in
Section 6.12(iii) or, except as provided in the Collateral Sharing Agreement
and/or the other Collateral Documents, agree to subordinate the Lenders’ Liens
with respect to all or substantially all of the Collateral.

 

(vi)                              Release substantially all of the Collateral,
provided that the Lenders acknowledge that the Agent may alone instruct the
Collateral Agent to release any Collateral as and to the extent provided in
Section 10.16, and to the extent the Agent may do so under, and subject to the
terms of, the Collateral Sharing Agreement.

 

No amendment of any provision of this Agreement relating to the Agent shall be
effective without the written consent of the Agent, and no amendment of any
provision relating to the LC Issuer shall be effective without the written
consent of the LC Issuer.  The Agent may (i) waive payment of the fee required
under Section 12.3.3 and (ii) implement any flex pricing provisions contained in
the fee letter described in Section 10.13 or any commitment letter delivered in
connection with the transaction which is the subject of this Agreement without
obtaining the consent of any other party to this Agreement so long as, in the
case of any implementation of any flex-pricing provisions, the Agent’s actions
would not require consent of all of the Lenders pursuant to the foregoing
provisions of this Section.

 

8.3                                 Preservation of Rights.  No delay or
omission of the Lenders, the LC Issurer, the Agent or the Collateral Agent to
exercise any right under the Loan Documents shall impair such right or be
construed to be a waiver of any Default or an acquiescence therein, and the
making of a Credit Extension notwithstanding the existence of a Default or the
inability of the Borrower to satisfy the conditions precedent to such Credit
Extension shall not constitute any waiver or acquiescence.  Any single or
partial exercise of any such right shall not preclude other or further exercise

 

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thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 8.2, and then only to the extent in such writing
specifically set forth.  All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Agent, the LC
Issuer, the Lenders and the Collateral Agent until the Secured Obligations have
been paid in full.

 

ARTICLE IX

 

GENERAL PROVISIONS

 

9.1                                 Survival of Representations.  All
representations and warranties of the Borrower contained in this Agreement shall
survive the making of the Credit Extensions herein contemplated.

 

9.2                                 Governmental Regulation.  Anything contained
in this Agreement to the contrary notwithstanding, neither the LC Issuer nor any
Lender shall be obligated to extend credit to the Borrower in violation of any
limitation or prohibition provided by any applicable statute or regulation.

 

9.3                                 Headings.  Section headings in the Loan
Documents are for convenience of reference only, and shall not govern the
interpretation of any of the provisions of the Loan Documents.

 

9.4                                 Entire Agreement.  The Loan Documents embody
the entire agreement and understanding among the Borrower, the Agent, the LC
Issuer and the Lenders and supersede all prior agreements and understandings
among the Borrower, the Agent, the LC Issuer and the Lenders relating to the
subject matter thereof other than those contained in the fee letter described in
Section 10.13 and any flex pricing provisions contained in any commitment letter
entered into in connection with the transactions that are the subject of this
Agreement, all of which survives and remains in full force and effect during the
term of this Agreement.

 

9.5                                 Several Obligations; Benefits of this
Agreement.  The respective obligations of the Lenders hereunder are several and
not joint and no Lender shall be the partner or agent of any other (except to
the extent to which the Agent is authorized to act as such).  The failure of any
Lender to perform any of its obligations hereunder shall not relieve any other
Lender from any of its obligations hereunder.  This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns, provided,
however, that the parties hereto expressly agree that the Arranger shall enjoy
the benefits of the provisions of Sections 9.6, 9.10 and 10.11 to the extent
specifically set forth therein and shall have the right to enforce such
provisions on its own behalf and in its own name to the same extent as if it
were a party to this Agreement.

 

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9.6                                 Expenses; Indemnification.

 

(i)                                     The Borrower shall reimburse the Agent
and Banc One Capital Markets, Inc. for any costs, internal charges and
out-of-pocket expenses (including reasonable attorneys’ fees and time charges of
attorneys for the Agent, which attorneys may be employees of the Agent) paid or
incurred by the Agent or the Arranger in connection with the preparation,
negotiation, execution, delivery, syndication, distribution (including, without
limitation, via the internet), review, amendment, modification, and
administration of the Loan Documents.  The Borrower also agrees to reimburse the
Agent, Banc One Capital Markets, Inc., the LC Issuer and the Lenders for any
costs, internal charges and out-of-pocket expenses (including reasonable
attorneys’ fees and time charges of attorneys for the Agent, Banc One Capital
Markets, Inc., the LC Issuer and the Lenders, which attorneys may be employees
of the Agent, Banc One Capital Markets, Inc., or the Lenders) paid or incurred
by the Agent, Banc One Capital Markets, Inc., the LC Issuer or any Lender in
connection with the collection and enforcement of the Loan Documents.  Expenses
being reimbursed by the Borrower under this Section include, without limitation,
the cost and expense of obtaining an appraisal, if any, of any parcel of real
property or interest in real property described in any relevant Collateral
Documents which appraisal, if any, shall be in conformity with the applicable
requirements of any law or any governmental rule, regulation, policy, guideline
or directive (whether or not having the force of law), or any interpretation
thereof, including, without limitation, the provisions of Title XI of the
Financial Institutions Reform, Recovery and Enforcement Act of 1989, as amended,
reformed or otherwise modified from time to time, and any rules promulgated to
implement such provisions and costs and expenses incurred in connection with the
Reports described in the following sentence.  The Borrower acknowledges that
from time to time the Agent may prepare and may distribute to the Lenders (but
shall have no obligation or duty to prepare or to distribute to the Lenders)
certain audit reports (the “Reports”) and/or the Collateral Agent may prepare
and distribute Reports to the Agent (but the Collateral Agent shall have no
obligation or duty to prepare or distribute such Reports, nor shall the Agent
have any obligation or duty to distribute such Reports to the Lenders as it may
receive from the Collateral Agent) pertaining to the Borrower’s Property for
internal use by the Agent from information furnished to it by or on behalf of
the Borrower, after the Agent or the Collateral Agent has exercised its rights
of inspection pursuant to this Agreement.

 

(ii)                                  The Borrower hereby further agrees to
indemnify the Agent, the Arranger, the LC Issuer and each Lender, their
respective affiliates, and each of their directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent, the Arranger, the LC Issuer any
Lender or any affiliate is a party thereto) which any of them may pay or incur
arising out of or relating to this Agreement, the other Loan Documents, the
transactions contemplated hereby or the direct or indirect application or
proposed application of the proceeds of any Credit Extension hereunder except to
the extent that they are determined in a final non-appealable judgment by a
court of competent jurisdiction to have resulted from the gross negligence or
willful misconduct of the party seeking indemnification.

 

(iii)                               The Agent and the Lenders shall not be
liable for, and the Loan Parties agree that they shall immediately pay to the
Agent and the Lenders when incurred and shall indemnify, defend and hold the
Lenders harmless from and against, all loss, cost, liability, damage and expense
(including, without limitation, reasonable attorneys’ fees and costs incurred in
the investigation, defense and settlement of claims) that the Agent or the
Lenders may suffer or incur as mortgagees as a result of, or in connection in
any way with any applicable Environmental Laws (including the assertion that any
lien existing pursuant to the Environmental Laws takes priority over the lien or
security interests of the Collateral Agent or Lenders), or any environmental
assessment or study from time to time reasonably undertaken or requested by the
Agent or any Lenders or breach of any covenant or undertaking by the

 

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Loan Parties.  The obligations of the Loan Parties under this Section 9.6 shall
survive the termination of this Agreement.

 

9.7                                 Numbers of Documents.  All statements,
notices, closing documents, and requests hereunder shall be furnished to the
Agent with sufficient counterparts so that the Agent may furnish one to each of
the Lenders.

 

9.8                                 Accounting.  Except as provided to the
contrary herein, all accounting terms used herein shall be interpreted and all
accounting determinations hereunder shall be made in accordance with Agreement
Accounting Principles, except that any calculation or determination which is to
be made on a consolidated basis shall be made for the Borrower and the other
Loan Parties.

 

9.9                                 Severability of Provisions.  Any provision
in any Loan Document that is held to be inoperative, unenforceable, or invalid
in any jurisdiction shall, as to that jurisdiction, be inoperative,
unenforceable, or invalid without affecting the remaining provisions in that
jurisdiction or the operation, enforceability, or validity of that provision in
any other jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.

 

9.10                           Nonliability of Lenders.  The relationship
between the Borrower on the one hand and the Lenders, the LC Issuer and the
Agent on the other hand shall be solely that of borrower and lender.  Neither
the Agent, the Arranger, the LC Issuer nor any Lender shall have any fiduciary
responsibilities to the Borrower.  Neither the Agent, the Arranger, the LC
Issuer nor any Lender undertakes any responsibility to the Borrower to review or
inform the Borrower of any matter in connection with any phase of the Borrower’s
business or operations.  The Borrower agrees that neither the Agent, the
Arranger, the LC Issuer nor any Lender shall have liability to the Borrower
(whether sounding in tort, contract or otherwise) for losses suffered by the
Borrower in connection with, arising out of, or in any way related to, the
transactions contemplated and the relationship established by the Loan
Documents, or any act, omission or event occurring in connection therewith,
unless it is determined in a final nonappealable judgment by a court of
competent jurisdiction that such losses resulted from the gross negligence or
willful misconduct of the party from which recovery is sought.  Neither the
Agent, the Arranger, the LC Issuer nor any Lender shall have any liability with
respect to, and the Borrower hereby waives, releases and agrees not to sue for,
any special, indirect, consequential or punitive damages suffered by the
Borrower in connection with, arising out of, or in any way related to the Loan
Documents or the transactions contemplated thereby.

 

9.11                           Confidentiality.  Each Lender agrees to, and to
cause its Affiliates to, hold any confidential information which it may receive
from the Borrower pursuant to this Agreement in confidence, except for
disclosure (i) to its Affiliates and to other Lenders and their respective
Affiliates, (ii) to legal counsel, accountants, and other professional advisors
to such Lender or to a Transferee, (iii) to regulatory officials, (iv) to any
Person as requested pursuant to or as required by law or regulation, (v) to any
Person in connection with any legal proceeding to which such Lender is a party,
to the extent required by law or legal process, provided that such Lender shall
have used its best reasonable efforts to provide notice to the Borrower of the
legal process requesting disclosure of such confidential information prior to
disclosure, (vi) to such Lender’s direct or indirect contractual counterparties
in swap agreements or to legal counsel, accountants and other professional
advisors to such counterparties, provided that such Lender is a party to a Rate
Management Transaction with the Borrower, (vii) permitted by Section 12.4, and
(viii) to rating agencies if requested or required by such agencies in
connection with a rating relating to the Advances hereunder.

 

9.12                           Nonreliance.  Each Lender hereby represents that
it is not relying on or looking to any margin stock (as defined in Regulation U
of the Board of Governors of the Federal Reserve System) for the repayment of
the Credit Extensions provided for herein.

 

9.13                           Disclosure.  The Borrower and each Lender hereby
acknowledge and agree that the Agent and/or its Affiliates from time to time may
hold investments in, make other loans to or have other relationships with the
Borrower and its Affiliates.

 

9.14                           Joinder of Guarantors.  If a Subsidiary is
required to join this Agreement as a Guarantor pursuant to Section 6.14
(regarding Subsidiaries) and/or 6.13 (regarding Permitted Acquisitions) then (a)
such Subsidiary shall execute and deliver to the Agent (1) a Guarantor Joinder
in substantially the form attached hereto as Exhibit N (a “Guarantor Joinder”)
pursuant to which it shall join as a Guarantor each of the documents to which
the Guarantors are

 

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parties; (2) documents in the forms described in Section 4.1 modified as
appropriate to relate to such Subsidiary, including opinions of counsel with
respect to each Subsidiary; (3) documents necessary to grant and perfect first
and prior Liens (other than Permitted Liens) in favor of the Collateral Agent in
all property and assets held by such Subsidiary and in the ownership interests
in such Subsidiary, and (b) to the extent required under this Agreement, the
Loan Party which holds the ownership interest in such Subsidiary shall take such
steps as are necessary to pledge such interests pursuant to the Pledge and
Security Agreement and grant to the Collateral Agent first and prior Liens
(other than Permitted Liens) therein, except to the extent such grant of
security interests is excused or delayed under Section 6.13(iii)(d)(3) of this
Agreement.  In the case of any Subsidiary formed after the date of this
Agreement, the Loan Parties shall deliver such Guarantor Joinder and related
documents to the Agent within five (5) business days after the date of the
filing of such Subsidiary’s Articles of Incorporation if the Subsidiary is a
corporation, the date of the filing of its certificate of limited partnership if
it is a limited partnership, or the date of its organization if it is an entity
other than a limited partnership or corporation, or the closing date of the
acquisition agreement in the case of a Permitted Acquisition.

 

9.15                           Business Days. Except as provided in the
definition of “Interest Period” in Article I above, if any provision of this
Agreement or any of the other Loan Documents requires that the Borrower perform
any act (other than to make a payment) on a day that is not a Business Day, then
the action shall be deemed to be due on the first day thereafter that is a
Business Day; and in the case of a payment, shall be due on the last Business
Day prior to the date that is not a Business Day but upon which the payment is
due.

 

9.16                           No Course of Dealing. No course of dealing
between the Borrower and the Lenders, the Agent or the Collateral Agent shall
operate as a waiver of any of the rights of the Lenders, the Agent and the
Collateral Agent under any of the Loan Documents.

 

9.17                           Waivers by the Borrower. The Borrower hereby
waives, to the extent permitted by applicable law, (a) all presentments, demands
for performances, notices of nonperformance (except to the extent specifically
required by this Agreement or any other of the Loan Documents), protests,
notices of protest and notices of dishonor in connection with this Agreement or
any Notes, (b) any requirement of diligence or promptness on the part of any
Lender in enforcement of rights under the provisions of any of the Loan
Documents, and (c) any requirement of marshaling assets or proceeding against
Persons or assets in any particular order.

 

9.18                           Incorporation by Reference. All schedules,
annexes or other attachments to this Agreement are incorporated into this
Agreement as if set out in full at the first place in this Agreement that
reference is made thereto.

 

ARTICLE X

 

THE AGENT

 

10.1                           Appointment; Nature of Relationship.  Bank One is
hereby appointed by each of the Lenders as its contractual representative
(herein referred to as the “Agent”) hereunder and under each other Loan
Document, and each of the Lenders irrevocably authorizes the Agent to act as the
contractual representative of such Lender with the rights and duties expressly
set forth herein and in the other Loan Documents.  The Agent agrees to act as
such contractual representative upon the express conditions contained in this
Article X.  Notwithstanding the use of the defined term “Agent,” it is expressly
understood and agreed that the Agent shall not have any fiduciary
responsibilities to any Lender by reason of this Agreement or any other Loan
Document and that the Agent is merely acting as the contractual representative
of the Lenders with only those duties as are expressly set forth in this
Agreement and the other Loan Documents.  In its capacity as the Lenders’
contractual representative, the Agent (i) does not hereby assume any fiduciary
duties to any of the Lenders, and (ii) is acting as an independent contractor,
the rights and duties of which are limited to those expressly set forth in this
Agreement and the other Loan Documents.  Each of the Lenders hereby agrees to
assert no claim against the Agent on any agency theory or any other theory of
liability for breach of fiduciary duty, all of which claims each Lender hereby
waives.

 

10.2                           Powers.  The Agent shall have and may exercise
such powers under the Loan Documents as are specifically delegated to the Agent
by the terms of each thereof, together with such powers as are reasonably
incidental

 

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thereto, subject to the terms of the Collateral Sharing Agreement.  The Agent
shall have no implied duties to the Lenders, or any obligation to the Lenders to
take any action thereunder except any action specifically provided by the Loan
Documents to be taken by the Agent.

 

10.3                           General Immunity.  Neither the Agent nor any of
its directors, officers, agents or employees shall be liable to the Borrower,
the Lenders or any Lender for any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except to the extent such action or inaction is determined in a final
non-appealable judgment by a court of competent jurisdiction to have arisen from
the gross negligence or willful misconduct of such Person.

 

10.4                           No Responsibility for Loans, Recitals, etc
Neither the Agent nor any of its directors, officers, agents or employees shall
be responsible for or have any duty to ascertain, inquire into, or verify (a)
any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (b) the performance or observance of any of
the covenants or agreements of any obligor under any Loan Document, including,
without limitation, any agreement by an obligor to furnish information directly
to each Lender; (c) the satisfaction of any condition specified in Article IV,
except receipt of items required to be delivered solely to the Agent; (d) the
existence or possible existence of any Default or Unmatured Default; (e) the
validity, enforceability, effectiveness, sufficiency or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith;
(f) the value, sufficiency, creation, perfection or priority of any Lien in any
collateral security; or (g) the financial condition of the Borrower or any
Guarantor of any of the Obligations or of any of the Borrower’s or any such
Guarantor’s respective Subsidiaries.  The Agent shall have no duty to disclose
to the Lenders information that is not required to be furnished by the Borrower
to the Agent at such time, but is voluntarily furnished by the Borrower to the
Agent (either in its capacity as Agent, or as Collateral Agent, or in its
individual capacity).

 

10.5                           Action on Instructions of Lenders.  The Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Required Lenders, and such instructions and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.  The Lenders hereby acknowledge that the Agent shall be under no duty
to take any discretionary action permitted to be taken by it pursuant to the
provisions of this Agreement or any other Loan Document unless it shall be
requested in writing to do so by the Required Lenders.  The Agent shall be fully
justified in failing or refusing to take any action hereunder and under any
other Loan Document unless it shall first be indemnified to its satisfaction by
the Lenders pro rata against any and all liability, cost and expense that it may
incur by reason of taking or continuing to take any such action.

 

10.6                           Employment of Agents and Counsel.  The Agent may
execute any of its duties as Agent hereunder and under any other Loan Document
by or through employees, agents, and attorneys-in-fact and shall not be
answerable to the Lenders, except as to money or securities received by it or
its authorized agents, for the default or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.  The Agent shall be
entitled to advice of counsel concerning the contractual arrangement between the
Agent and the Lenders and all matters pertaining to the Agent’s duties hereunder
and under any other Loan Document.

 

10.7                           Reliance on Documents; Counsel.  The Agent shall
be entitled to rely upon any Note, notice, consent, certificate, affidavit,
letter, telegram, statement, paper or document believed by it to be genuine and
correct and to have been signed or sent by the proper person or persons, and, in
respect to legal matters, upon the opinion of counsel selected by the Agent,
which counsel may be employees of the Agent.

 

10.8                           Agent’s Reimbursement and Indemnification.  The
Lenders agree to reimburse and indemnify the Agent ratably in proportion to
their respective Commitments (or, if the Commitments have been terminated, in
proportion to their Commitments immediately prior to such termination) (i) for
any amounts not reimbursed by the Borrower for which the Agent is entitled to
reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses incurred by the Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents (including, without limitation, for any expenses incurred by the Agent
in connection with any dispute between the Agent and any Lender or between two
or more of the Lenders) and (iii) for any liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever which may be imposed on, incurred by or
asserted against the Agent

 

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in any way relating to or arising out of the Loan Documents or any other
document delivered in connection therewith or the transactions contemplated
thereby (including, without limitation, for any such amounts incurred by or
asserted against the Agent in connection with any dispute between the Agent and
any Lender or between two or more of the Lenders), or the enforcement of any of
the terms of the Loan Documents or of any such other documents, provided that
(i) no Lender shall be liable for any of the foregoing to the extent any of the
foregoing is found in a final non-appealable judgment by a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Agent and (ii) any indemnification required pursuant to Section 3.5(vii)
shall, notwithstanding the provisions of this Section 10.8, be paid by the
relevant Lender in accordance with the provisions thereof.  The obligations of
the Lenders under this Section 10.8 shall survive payment of the Obligations and
termination of this Agreement.

 

10.9                           Notice of Default.  The Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Unmatured
Default hereunder unless the Agent has received written notice from a Lender or
the Borrower referring to this Agreement describing such Default or Unmatured
Default and stating that such notice is a “notice of default”.  In the event
that the Agent receives such a notice, the Agent shall give prompt notice
thereof to the Lenders.

 

10.10                     Rights as a Lender.  In the event the Agent is a
Lender, the Agent shall have the same rights and powers hereunder and under any
other Loan Document with respect to its Commitment and its Loans as any Lender
and may exercise the same as though it were not the Agent, and the term “Lender”
or “Lenders” shall, at any time when the Agent is a Lender, unless the context
otherwise indicates, include the Agent in its individual capacity.  The Agent
and its Affiliates may accept deposits from, lend money to, and generally engage
in any kind of trust, debt, equity or other transaction, in addition to those
contemplated by this Agreement or any other Loan Document, with the Borrower or
any of its Subsidiaries in which the Borrower or such Subsidiary is not
restricted hereby from engaging with any other Person.  The Agent, in its
individual capacity, is not obligated to be remain a Lender.

 

10.11                     Lender Credit Decision.  Each Lender acknowledges that
it has, independently and without reliance upon the Agent, the Arranger or any
other Lender and based on the financial statements prepared by the Borrower and
such other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents.  Each Lender also acknowledges that it will, independently and
without reliance upon the Agent, the Arranger or any other Lender and based on
such documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
this Agreement and the other Loan Documents.

 

10.12                     Successor Agent.  The Agent may resign at any time by
giving written notice thereof to the Lenders and the Borrower, such resignation
to be effective upon the appointment of a successor Agent or, if no successor
Agent has been appointed, forty-five days after the retiring Agent gives notice
of its intention to resign.  The Agent may be removed at any time with or
without cause by written notice received by the Agent from the Required Lenders,
such removal to be effective on the date specified by the Required Lenders. 
Upon any such resignation or removal, the Required Lenders shall have the right
to appoint, on behalf of the Borrower and the Lenders, a successor Agent.  If no
successor Agent shall have been so appointed by the Required Lenders within
thirty days after the resigning Agent’s giving notice of its intention to
resign, then the resigning Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Agent.  Notwithstanding the previous sentence, the Agent
may at any time without the consent of the Borrower or any Lender, appoint any
of its Affiliates which is a commercial bank as a successor Agent hereunder.  If
the Agent has resigned or been removed and no successor Agent has been
appointed, the Lenders may perform all the duties of the Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders.  No
successor Agent shall be deemed to be appointed hereunder until such successor
Agent has accepted the appointment.  Any such successor Agent shall be a
commercial bank having capital and retained earnings of at least $100,000,000. 
Upon the acceptance of any appointment as Agent hereunder by a successor Agent,
such successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the resigning or removed Agent.  Upon
the effectiveness of the resignation or removal of the Agent, the resigning or
removed Agent shall be discharged from its duties and obligations hereunder and
under the Loan Documents.  After the effectiveness of the resignation or removal
of an Agent, the provisions of this Article X shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.  In

 

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the event that there is a successor to the Agent by merger, or the Agent assigns
its duties and obligations to an Affiliate pursuant to this Section 10.12, then
the term “Prime Rate” as used in this Agreement shall mean the prime rate, base
rate or other analogous rate of the new Agent.

 

10.13                     Agent and Arranger Fees.  The Borrower agrees to pay
to the Agent and the Arranger, for their respective accounts, the fees agreed to
by the Borrower, the Agent and the Arranger pursuant to that certain letter
agreement dated February 7, 2003, or as otherwise agreed from time to time.

 

10.14                     Delegation to Affiliates.  The Borrower and the
Lenders agree that the Agent may delegate any of its duties under this Agreement
to any of its Affiliates.  Any such Affiliate (and such Affiliate’s directors,
officers, agents and employees) which performs duties in connection with this
Agreement shall be entitled to the same benefits of the indemnification, waiver
and other protective provisions to which the Agent is entitled under Articles IX
and X.

 

10.15                     Execution of Collateral Documents.  The Lenders hereby
empower and authorize the Agent to cause the Collateral Agent, to the extent the
Agent may do so under, and subject to the terms of, the Collateral Sharing
Agreement, to execute and deliver to the Borrower on their behalf the Security
Agreement(s) and all related financing statements and any financing statements,
agreements, documents or instruments as shall be necessary or appropriate to
effect the purposes of the Security Agreement(s).

 

10.16                     Collateral Releases.  The Lenders acknowledge that the
Collateral Agent is authorized, pursuant and subject to the terms of, the
Collateral Sharing Agreement (including, without limitation, any required
consent or authorization, in certain circumstances, of the “Requisite Creditors”
as defined in the Collateral Sharing Agreement), to execute and deliver to the
Borrower on their behalf any agreements, documents or instruments as shall be
necessary or appropriate to effect any releases of Collateral which shall be
permitted by the terms of this Agreement (including, for example, lease, sale or
other disposition of Property permitted in Section 6.12) or of any other Loan
Document or which shall otherwise have been approved by the Required Lenders
(or, if required by the terms of Section 8.2, all of the Lenders, or, if
required by the Collateral Sharing Agreement, the Requisite Creditors) in
writing (or as otherwise provided in the Collateral Sharing Agreement), without
further authorization or consent from the Lenders; and without limiting any
other consents or authorizations provided by the Lenders, the Lenders hereby
consent to the Collateral Agent having and exercising that authority.

 

10.17                     Co-Agents, Documentation Agent, Syndication Agent,
etc.  Neither any of the Lenders identified in this Agreement as a “co-agent”
nor the Documentation Agent or the Syndication Agent shall have any right,
power, obligation, liability, responsibility or duty under this Agreement other
than those applicable to all Lenders as such.  Without limiting the foregoing,
none of such Lenders shall have or be deemed to have a fiduciary relationship
with any Lender.  Each Lender hereby makes the same acknowledgments with respect
to such Lenders as it makes with respect to the Agent in Section 10.11.

 

10.18                     Collateral Sharing Agreement.  The Lenders acknowledge
that Bank One is entering into the Collateral Sharing Agreement as the
Collateral Agent to act as the contractual representative of the Lenders and the
Term Note Purchasers as provided in, and with the rights and duties expressly
set forth in, the Collateral Sharing Agreement.  The Lenders consent to Bank One
entering into that Collateral Sharing Agreement and to Bank One having and
exercising such powers and duties under the Collateral Sharing Agreement and the
other Loan Documents as are specifically delegated to Bank One as Collateral
Agent by the terms of each thereof, together with such powers as are reasonably
incidental thereto.  Bank One shall have no implied duties to the Lenders, or
any obligation to the Lenders to take any action thereunder, except any action
specifically provided by the Collateral Sharing Agreement.  The Agent shall have
no duty to take, or refrain from taking, any action under this Agreement if such
action or restraint by the Agent would require action by the Collateral Agent
under the Collateral Sharing Agreement which the Collateral Agent is not
authorized to take.  To the extent of any conflict between the Collateral
Sharing Agreement and this Agreement, the Collateral Sharing Agreement shall
prevail and control.

 

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ARTICLE XI

 

SETOFF; RATABLE PAYMENTS

 

11.1                           Setoff.  In addition to, and without limitation
of, any rights of the Lenders under applicable law, if the Borrower becomes
insolvent, however evidenced, or any Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available, but not including funds held by a Loan Party which are
held by that Loan Party only as custodian or trustee (and in which that Loan
Party does not have a beneficial interest) such as, (by way of example and not
limitation), Horseman’s Accounts, and which are clearly labeled to indicate that
such funds are so held by the Loan Party) and any other Indebtedness at any time
held or owing by any Lender or any Affiliate of any Lender to or for the credit
or account of the Borrower may be offset and applied toward the payment of the
Obligations owing to such Lender, whether or not the Obligations, or any part
thereof, shall then be due.

 

11.2.                        Ratable Payments.  If any Lender, whether by setoff
or otherwise, has payment made to it upon its Outstanding Credit Exposure (other
than payments received pursuant to Section 3.1, 3.2, 3.4 or 3.5) in a greater
proportion than that received by any other Lender, such Lender agrees, promptly
upon demand, to purchase a portion of the Aggregate Outstanding Credit Exposure
held by the other Lenders so that after such purchase each Lender will hold its
Pro Rata Share of the Aggregate Outstanding Credit Exposure.  If any Lender,
whether in connection with setoff or amounts which might be subject to setoff or
otherwise, receives collateral or other protection for its Obligations or such
amounts which may be subject to setoff, such Lender agrees, promptly upon
demand, to take such action necessary such that all Lenders share in the
benefits of such collateral ratably in proportion to their respective Pro Rata
Shares of the Aggregate Outstanding Credit Exposure.  In case any such payment
is disturbed by legal process, or otherwise, appropriate further adjustments
shall be made.

 

ARTICLE XII

 

BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS

 

12.1                           Successors and Assigns.  The terms and provisions
of the Loan Documents shall be binding upon and inure to the benefit of the
Borrower, each other Loan Party and the Lenders and their respective successors
and assigns permitted hereby, except that (i) the Borrower shall not have the
right to assign its rights or obligations under the Loan Documents without the
prior written consent of each Lender, (ii) any assignment by any Lender must be
made in compliance with Section 12.3, and (iii) any transfer by Participation
must be made in compliance with Section 12.2.  Any attempted assignment or
transfer by any party not made in compliance with this Section 12.1 shall be
null and void, unless such attempted assignment or transfer is treated as a
participation in accordance with Section 12.3.3.  The parties to this Agreement
acknowledge that clause (ii) of this Section 12.1 relates only to absolute
assignments and this Section 12.1 does not prohibit assignments creating
security interests, including, without limitation, (x) any pledge or assignment
by any Lender of all or any portion of its rights under this Agreement and any
Note to a Federal Reserve Bank or (y) in the case of a Lender which is a Fund,
any pledge or assignment of all or any portion of its rights under this
Agreement and any Note to its trustee in support of its obligations to its
trustee; provided, however, that no such pledge or assignment creating a
security interest shall release the transferor Lender from its obligations
hereunder unless and until the parties thereto have complied with the provisions
of Section 12.3.  The Agent may treat the Person which made any Loan or which
holds any Note as the owner thereof for all purposes hereof unless and until
such Person complies with Section 12.3; provided, however, that the Agent may in
its discretion (but shall not be required to) follow instructions from the
Person which made any Loan or which holds any Note to direct payments relating
to such Loan or Note to another Person.  Any assignee of the rights to any Loan
or any Note agrees by acceptance of such assignment to be bound by all the terms
and provisions of the Loan Documents.  Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the owner of the rights to any Loan (whether or not a Note has been
issued in evidence thereof), shall be conclusive and binding on any subsequent
holder or assignee of the rights to such Loan.

 

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12.2                           Participations.

 

12.2.1                  Permitted Participants; Effect.  Any Lender may at any
time sell to one or more banks or other entities (“Participants”) participating
interests in any Outstanding Credit Exposure of such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such Lender
under the Loan Documents.  In the event of any such sale by a Lender of
participating interests to a Participant, such Lender’s obligations under the
Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations,
such Lender shall remain the owner of its Outstanding Credit Exposure and the
holder of any Note issued to it in evidence thereof for all purposes under the
Loan Documents, all amounts payable by the Borrower under this Agreement shall
be determined as if such Lender had not sold such participating interests, and
the Borrower, the Agent and the Collateral Agent shall continue to deal solely
and directly with such Lender in connection with such Lender’s rights and
obligations under the Loan Documents.

 

12.2.2                  Voting Rights.  Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment, modification
or waiver of any provision of the Loan Documents other than any amendment,
modification or waiver with respect to any Credit Extension or Commitment in
which such Participant has an interest which would require consent of all of the
Lenders pursuant to the terms of Section 8.2 or of any other Loan Document.

 

12.2.3                  Benefit of Certain Provisions.  The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in Section
11.1 in respect of its participating interest in amounts owing under the Loan
Documents to the same extent as if the amount of its participating interest were
owing directly to it as a Lender under the Loan Documents, provided that each
Lender shall retain the right of setoff provided in Section 11.1 with respect to
the amount of participating interests sold to each Participant.  The Lenders
agree to share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each Lender, any
amount received pursuant to the exercise of its right of setoff, such amounts to
be shared in accordance with Section 11.2 as if each Participant were a Lender. 
The Borrower further agrees that each Participant shall be entitled to the
benefits of and bound by the provisions of Section 2.21 and Sections 3.1, 3.2,
3.4 and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a Participant
shall not be entitled to receive any greater payment under Section 3.1, 3.2 or
3.5 than the Lender who sold the participating interest to such Participant
would have received had it retained such interest for its own account, unless
the sale of such interest to such Participant is made with the prior written
consent of the Borrower, and (ii) any Participant not incorporated under the
laws of the United States of America or any State thereof agrees to comply with
the provisions of Section 3.5 to the same extent as if it were a Lender.

 

12.3                           Assignments.

 

12.3.1                  Permitted Assignments.  Any Lender may at any time
assign to one or more banks or other entities (“Purchasers”) all or any part of
its rights and obligations under the Loan Documents.  Such assignment shall be
substantially in the form of Exhibit C or in such other form as may be agreed to
by the parties thereto.  Each such assignment with respect to a Purchaser which
is not a Lender or an Affiliate of a Lender or an Approved Fund shall either be
in an amount equal to the entire applicable Commitment and Loans of the
assigning Lender or  (unless each of the Borrower and the Agent otherwise
consents) be in an aggregate amount not less than $5,000,000.  The amount of the
assignment shall be based on the Commitment or outstanding Loans (if the
Commitment has been terminated) subject to the assignment, determined as of the
date of such assignment or as of the “Trade Date,” if the “Trade Date” is
specified in the assignment.

 

12.3.2                  Consents.  The consent of the Borrower and the Agent
shall be required prior to an assignment becoming effective unless the Purchaser
is a Lender, an Affiliate of a Lender or an Approved Fund, provided that the
consent of the Borrower shall not be required if a Default has occurred and is
continuing.  The consent of the Agent shall be required prior to an assignment
becoming effective unless the Purchaser is a Lender, an Affiliate of a Lender or
an Approved Fund.  Any consent required under this Section 12.3.2 shall not be
unreasonably withheld or delayed.

 

61

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12.3.3                  Effect; Effective Date.  Upon (i) delivery to the Agent
of an assignment, together with any consents required by Sections 12.3.1 and
12.3.2, and (ii) payment of a $3,500 fee to the Agent (payable by a party other
than a Loan Party) for processing such assignment (unless such fee is waived by
the Agent), such assignment shall become effective on the effective date
specified in such assignment.  The assignment shall contain a representation by
the Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and Outstanding Credit Exposure under the applicable
assignment agreement constitutes “plan assets” as defined under ERISA and that
the rights and interests of the Purchaser in and under the Loan Documents will
not be “plan assets” under ERISA.  On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to this
Agreement and any other Loan Document executed by or on behalf of the Lenders
and shall have all the rights and obligations of a Lender under the Loan
Documents, to the same extent as if it were an original party thereto, and the
transferor Lender shall be released with respect to the Commitment and
Outstanding Credit Exposure assigned to such Purchaser without any further
consent or action by the Borrower, the Lenders or the Agent.  In the case of an
assignment covering all of the assigning Lender’s rights and obligations under
this Agreement, such Lender shall cease to be a Lender hereunder but shall
continue to be entitled to the benefits of, and subject to, those provisions of
this Agreement and the other Loan Documents which survive payment of the
Obligations and termination of the applicable agreement.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this Section 12.3 shall be treated for purposes of this Agreement as
a sale by such Lender of a participation in such rights and obligations in
accordance with Section 12.2.  Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.3, the transferor Lender, the Agent and
the Borrower shall, if the transferor Lender or the Purchaser desires that its
Loans be evidenced by Notes, make appropriate arrangements so that new Notes or,
as appropriate, replacement Notes are issued to such transferor Lender and new
Notes or, as appropriate, replacement Notes, are issued to such Purchaser, in
each case in principal amounts reflecting their respective Commitments, as
adjusted pursuant to such assignment.

 

12.3.4                  Register.  The Agent, acting solely for this purpose as
an agent of the Borrower, shall maintain at one of its offices in Louisville,
Kentucky a copy of each Assignment and Assumption delivered to it and a register
for the recordation of the names and addresses of the Lenders, and the
Commitments of, and principal amounts of the Loans owing to, each Lender
pursuant to the terms hereof from time to time (the “Register”).  The entries in
the Register shall be conclusive, and the Borrower, the Agent and the Lenders
may treat each Person whose name is recorded in the Register pursuant to the
terms hereof as a Lender hereunder for all purposes of this Agreement,
notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower and any Lender, at any reasonable time and from time
to time upon reasonable prior notice.

 

12.4                           Dissemination of Information.  The Borrower
authorizes each Lender to disclose to any Participant or Purchaser or any other
Person acquiring an interest in the Loan Documents by operation of law (each a
“Transferee”) and any prospective Transferee any and all information in such
Lender’s possession concerning the creditworthiness of the Borrower and its
Subsidiaries, including without limitation any information contained in any
Reports; provided that each Transferee and prospective Transferee agrees to be
bound by Section 9.11 of this Agreement.

 

12.5                           Tax Treatment.  If any interest in any Loan
Document is transferred to any Transferee which is not incorporated under the
laws of the United States or any State thereof, the transferor Lender shall
cause such Transferee, concurrently with the effectiveness of such transfer, to
comply with the provisions of Section 3.5(iv).

 

ARTICLE XIII

 

NOTICES

 

13.1                           Notices.  Except as otherwise permitted by
Section 2.10 with respect to borrowing notices, all notices, requests and other
communications to any party hereunder shall be in writing (including electronic
transmission,

 

62

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facsimile transmission or similar writing) and shall be given to such party: (x)
in the case of the Borrower, any other Loan Party, or the Agent, at the address
of Borrower or facsimile number of Borrower set forth on the signature pages
hereof, (y) in the case of any Lender, at its address or facsimile number set
forth below its signature hereto, or (z) in the case of any party, at such other
address or facsimile number as such party may hereafter specify for the purpose
by notice to the Agent and the Borrower in accordance with the provisions of
this Section 13.1.  Each such notice, request or other communication shall be
effective (i) if given by facsimile transmission, when transmitted to the
facsimile number specified in this Section and confirmation of receipt is
received, (ii) if given by mail, 72 hours after such communication is deposited
in the mails with first class postage prepaid, addressed as aforesaid, or (iii)
if given by any other means, when delivered (or, in the case of electronic
transmission, received) at the address specified in this Section; provided that
notices to the Agent under Article II shall not be effective until received.

 

13.2                           Change of Address.  The Borrower, any other Loan
Party, the Agent and any Lender may each change the address for service of
notice upon it by a notice in writing to the other parties hereto.

 

ARTICLE XIV

 

COUNTERPARTS

 

This Agreement may be executed in any number of counterparts, all of which taken
together shall constitute one agreement, and any of the parties hereto may
execute this Agreement by signing any such counterpart.  This Agreement shall be
effective when it has been executed by the Borrower, the Loan Parties, the
Agent, the LC Issuer and the Lenders and each party has notified the Agent by
facsimile transmission or telephone that it has taken such action.

 

ARTICLE XV

 

CHOICE OF LAW; CONSENT TO JURISDICTION; WAIVER OF JURY TRIAL

 

15.1                        CHOICE OF LAW.  THE LOAN DOCUMENTS (OTHER THAN THOSE
CONTAINING A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS (WITHOUT REGARD TO THE CONFLICT OF LAWS
PROVISIONS) OF THE COMMONWEALTH OF KENTUCKY, BUT GIVING EFFECT TO FEDERAL LAWS
APPLICABLE TO NATIONAL BANKS.

 

15.2                        CONSENT TO JURISDICTION.  THE BORROWER HEREBY
IRREVOCABLY SUBMITS TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES
FEDERAL OR COMMONWEALTH OF KENTUCKY COURT SITTING IN LOUISVILLE, KENTUCKY IN ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE
BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR
PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES
ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT,
ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM.  NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT, THE
COLLATERAL AGENT, THE LC ISSUER OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION.  ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE AGENT, THE LC ISSUER OR ANY LENDER OR ANY AFFILIATE OF
THE AGENT, THE LC ISSUER OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY
MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN LOUISVILLE, KENTUCKY.

 

63

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15.3                        WAIVER OF JURY TRIAL.  THE BORROWER, THE AGENT, THE
LC ISSUER AND EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING
INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT,
CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.

 

[THE BALANCE OF THIS PAGE IS BLANK

AND SIGNATURES BEGIN ON THE FOLLOWING PAGE.]

 

64

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IN WITNESS WHEREOF, the Borrower, the Lenders, the LC Issuer and the Agent have
executed this Agreement as of the date first above written.

 

 

CHURCHILL DOWNS INCORPORATED

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention:  General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

GUARANTORS:

 

 

 

 

 

CHURCHILL DOWNS MANAGEMENT
COMPANY

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

CHURCHILL DOWNS INVESTMENT
COMPANY

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

RACING CORPORATION OF AMERICA

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

65

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CALDER RACE COURSE, INC.

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

TROPICAL PARK, INC.

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

CHURCHILL DOWNS CALIFORNIA
COMPANY

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

CHURCHILL DOWNS CALIFORNIA
FALL OPERATING COMPANY

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

66

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ARLINGTON PARK RACECOURSE, LLC

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

ARLINGTON MANAGEMENT SERVICES,
LLC

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

ARLINGTON OTB CORP.

 

 

 

 

 

By

 

/s/ Mary Ann Guenther

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

QUAD CITY DOWNS, INC.

 

 

 

 

 

By

 

/s/ Mary Ann Guenther

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

67

--------------------------------------------------------------------------------

 

 

CDIP, LLC

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

CDIP HOLDINGS, LLC

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

 

 

 

 

ELLIS PARK RACE COURSE, INC.

 

 

 

 

 

By

 

/s/ Rebecca C. Reed

 

 

 

 

 

 

Title:

 

Secretary

 

 

 

700 Central Avenue

 

 

Louisville, Kentucky 40208

 

Attention: General Counsel

 

 

Telephone:

(502) 636-4429

 

 

FAX:

(502) 636-4439

 

68

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Commitment

 

 

 

 

 

 

 

 

 

 

 

$30,000,000.00

 

BANK ONE, KENTUCKY, NA as Agent,
Individually, as a Lender and as Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ H. Joseph Brenner

 

 

 

 

 

H. Joseph Brenner

 

 

 

 

First Vice President

 

 

 

 

416 W. Jefferson Street

 

 

 

 

Louisville, Kentucky  40202

 

 

 

 

 

 

 

 

 

Attention:  H. Joseph Brenner

 

 

 

 

Telephone:

(502) 566-2789

 

 

 

 

FAX:

(502) 566-8339

 

 

 

 

 

 

 

 

 

With a copy to:

 

 

 

Frost Brown Todd LLC

 

 

 

Suite 3200

 

 

 

400 W. Market Street

 

 

 

Louisville, Kentucky  40202

 

 

 

Attention: Charles R. Keeton, Esq.

 

 

 

 

Telephone:

(502) 568-0257

 

 

 

 

FAX:

(502) 581-1087

 

 

 

 

 

 

 

 

 

 

 

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$30,000,000.00

 

PNC BANK, NATIONAL ASSOCIATION
As a Lender, as LC Issuer and as Syndication Agent

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Richard M. Ellis

 

 

 

 

 

Richard M. Ellis

 

 

 

 

Senior Vice President

 

 

 

 

500 West Jefferson Street

 

 

 

 

2nd Floor

 

 

 

 

Louisville, Kentucky  40296

 

 

 

 

 

 

 

 

 

Attention:  Shelly Stephenson, Vice President

 

 

 

 

Telephone:

(502) 581-4522

 

 

 

 

FAX:

(502) 581-3355

 

69

--------------------------------------------------------------------------------

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$25,000,000.00

 

NATIONAL CITY BANK OF KENTUCKY

 

 

 

As a Lender and as Documentation Agent

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Kevin L. Anderson

 

 

 

 

 

Kevin L. Anderson

 

 

 

 

Senior Vice President

 

 

 

 

101 South Fifth Street

 

 

 

 

37th Floor

 

 

 

 

Louisville, Kentucky  40202

 

 

 

 

 

 

 

 

 

Attention:  Kevin L. Anderson

 

 

 

 

Telephone:

(502) 581-7894

 

 

 

 

FAX:

(502) 581-4424

 

 

 

 

 

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$22,500,000.00

 

FIFTH THIRD BANK, KENTUCKY, INC.

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Edward B. Martin

 

 

 

 

 

Edward B. Martin

 

 

 

 

Vice President

 

 

 

 

401 South 4th Avenue

 

 

 

 

Louisville, Kentucky  40202-3411

 

 

 

 

 

 

 

 

 

Attention:  Edward B. Martin

 

 

 

 

Telephone:

(502) 562-5536

 

 

 

 

FAX:

(502) 562-5540

 

 

 

 

 

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$18,500,000.00

 

BRANCH BANKING & TRUST COMPANY

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Frank R. Eckerd

 

 

 

 

 

Frank R. Eckerd

 

 

 

 

Senior Vice President

 

 

 

 

500 West Broadway

 

 

 

 

7th Floor

 

 

 

 

Louisville, Kentucky  40202

 

 

 

 

 

 

 

 

 

Attention:  Frank R. Eckerd

 

 

 

 

Telephone:

(502) 562-5877

 

 

 

 

FAX:

(502) 562-6990

 

70

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Commitment

 

 

 

 

 

 

 

 

 

 

 

$18,500,000.00

 

COMERICA BANK

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Kathleen Kasperek

 

 

 

 

 

Kathleen Kasperek

 

 

 

 

Vice President

 

 

 

 

500 Woodward Avenue

 

 

 

 

MC 3269 – 9th Floor

 

 

 

 

Detroit, Michigan  48214

 

 

 

 

 

 

 

 

 

Attention:  Kathleen Kasperek

 

 

 

 

Telephone:

(313) 222-3808

 

 

 

 

FAX:

(313) 222-9516

 

 

 

 

 

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$18,500,000.00

 

U.S. BANK NATIONAL ASSOCIATION

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ David Wombwell

 

 

 

 

 

David Wombwell

 

 

 

 

Senior Vice President

 

 

 

 

One Financial Square

 

 

 

 

Louisville, Kentucky  40202-3322

 

 

 

 

 

 

 

 

 

Attention:  David Wombwell

 

 

 

 

Telephone:

(502) 565-6685

 

 

 

 

FAX:

(502) 565-6460

 

 

 

 

 

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$18,500,000.00

 

SUN TRUST BANK

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Scott Corely

 

 

 

 

 

Scott Corley

 

 

 

 

Director

 

 

 

 

201 4th Avenue N.

 

 

 

 

3rd Floor

 

 

 

 

Nashville, Tennessee  37219

 

 

 

 

 

 

 

 

 

Attention:  Scott Corley

 

 

 

 

Telephone:

(615) 748-5715

 

 

 

 

FAX:

(615) 748-5269

 

71

--------------------------------------------------------------------------------

 

Commitment

 

 

 

 

 

 

 

 

 

 

 

$18,500,000.00

 

BANK OF AMERICA

 

 

 

 

 

 

 

 

 

 

 

By

 

/s/ Bryan Hulker

 

 

 

 

 

Bryan Hulker

 

 

 

 

Senior Vice President

 

 

 

 

414 Union Street

 

 

 

 

TN1-100-04-01 – 4th Floor

 

 

 

 

Nashville, Tennessee  37239

 

 

 

 

 

 

 

 

 

Attention:  Bryan Hulker

 

 

 

 

Telephone:

(615) 749-3001

 

 

 

 

FAX:

(615) 749-4762

 

 

 

 

 

 

Total    $200,000,000.00

 

 

 

 

 

The other schedules and other attachments to this agreement, which disclose
certain information responsive to provisions of the agreement or reflect the
terms of the agreement, have been omitted because they are duplicative of
information contained in the agreement and/or are not material. The registrant
agrees to furnish supplementally a copy of any such omitted schedules or other
attachments to the Commission upon request.

 

72

--------------------------------------------------------------------------------

 

PRICING SCHEDULE

 

APPLICABLE MARGIN

 

LEVEL I
STATUS

 

LEVEL II
STATUS

 

LEVEL III
STATUS

 

LEVEL IV
STATUS

 

Eurodollar Rate

 

1.25

%

1.50

%

1.75

%

2.25

%

Floating Rate

 

0

%

0

%

0.25

%

0.75

%

 

APPLICABLE FEE RATE

 

LEVEL I
STATUS

 

LEVEL II
STATUS

 

LEVEL III
STATUS

 

LEVEL IV
STATUS

 

Commitment Fee

 

0.25

%

0.30

%

0.375

%

0.50

%

 

For the purposes of this Schedule, the following terms have the following
meanings, subject to the final paragraph of this Schedule:

 

“Financials” means the annual or quarterly financial statements of the Borrower
delivered pursuant to Section 6.1(i) or (ii).

 

“Level I Status” exists at any date if, as of the last day of the fiscal quarter
of the Borrower referred to in the most recent Financials, the Leverage Ratio is
less than 2.00 to 1.00.

 

“Level II Status” exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status and (ii) the Leverage Ratio is
less than 2.50 to 1.00.

 

“Level III Status” exists at any date if, as of the last day of the fiscal
quarter of the Borrower referred to in the most recent Financials, (i) the
Borrower has not qualified for Level I Status or Level II Status and (ii) the
Leverage Ratio is less than 3.00 to 1.00.

 

“Level IV Status” exists at any date if the Borrower has not qualified for Level
I Status, Level II Status or Level III Status.

 

“Status” means either Level I Status, Level II Status, Level III Status or Level
IV Status.

 

The Applicable Margin and Applicable Fee Rate shall be determined in accordance
with the foregoing table based on the Borrower’s Status, adjusted quarterly and
measured on the most recent four fiscal quarters ending on the determination
date as reflected in the then most recent Financials.  Adjustments, if any, to
the Applicable Margin or Applicable Fee Rate shall be effective five Business
Days after the Agent has received the applicable Financials.  If the Borrower
fails to deliver the Financials to the Agent at the time required pursuant to
Section 6.1, then the Applicable Margin and Applicable Fee Rate shall be the
highest Applicable Margin and Applicable Fee Rate set forth in the foregoing
table until five days after such Financials are so delivered.

 

73

--------------------------------------------------------------------------------