Amendment No. 1 to the Second Amended and Restated Credit Agreement



  
 Exhibit 10.1

 EXECUTION COPY 
 AMENDMENT NO. 1 
 TO 

SECOND AMENDED AND RESTATED CREDIT AGREEMENT 
 THIS AMENDMENT NO. 1 TO SECOND AMENDED AND RESTATED CREDIT AGREEMENT (the “Amendment”) is made as of November 1, 2010 by and among Churchill Downs Incorporated, a Kentucky
corporation (the “Borrower”), the Guarantors, the financial institutions listed on the signature pages hereto as the “Lenders” referred to below and JPMorgan Chase Bank, N.A., as the agent (the “Agent”)
and the collateral agent (the “Collateral Agent” and collectively with the Agent, the “Agents”) for the Lenders. Capitalized terms used but not otherwise defined herein shall have the respective meanings given to
them in the “Credit Agreement” referred to below. 
 W I T N E S S E T H: 

WHEREAS, the signatories hereto are parties to that certain Second Amended and Restated Credit Agreement, dated as of December 22,
2009, by and among the Borrower, the Guarantors, the financial institutions from time to time parties thereto (the “Lenders”) and the Agent (as the same may from time to time be amended, restated, supplemented or otherwise modified,
the “Credit Agreement”); 
 WHEREAS, the parties hereto have agreed to amend the Credit Agreement on the terms
and conditions set forth herein; 
 WHEREAS, the Borrower has requested the Lenders to consent (such consent, the
“Acquisition Consent”) to the Acquisition (the “Harlow’s Acquisition”) by the Borrower of Harlow’s Casino Resort & Hotel (the “Target”); 

NOW, THEREFORE, in consideration of the premises set forth above, the terms and conditions contained herein, and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the Borrower, the Guarantors, the Lenders and the Agents have agreed to the following amendment to the Credit Agreement. 

1. Amendments. Effective as of the date hereof and subject to the satisfaction of the conditions precedent set forth in
Section 3 below, the Credit Agreement is hereby amended as follows: 
 (a) The definitions of “Aggregate
Commitment”, “Commitment Schedule” and “Excluded Subsidiaries” set forth in Section 1.1 of the Credit Agreement are amended and restated in their entirety as follows: 

“ “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. The Aggregate Commitment on the Amendment No. 1 Effective Date is Three Hundred and Seventy-Five Million and 00/100 Dollars ($375,000,000).” 

“ “Commitment Schedule” means the Schedule identifying each Lender’s Commitment as of the Amendment No. 1
Effective Date attached hereto and identified as such.” 
 “ “Excluded Subsidiaries” means any Excluded
Entity which is a Subsidiary of any of the Loan Parties. The Excluded Subsidiaries on the Amendment No. 1 Effective Date are: Tracknet, LLC, BRIS Data Corporation, TSN Data Corporation, CD ContentCo HC, LLC, a Delaware limited liability
company, CD HRTV HC, LLC, a Delaware limited liability company and United Tote Company Canada.” 







  
 (b) The following
definitions are added to Section 1.1 of the Credit agreement in their appropriate alphabetical order therein: 

“ “Amendment No. 1 Effective Date” means November 1, 2010.” 

“ “Domestic Subsidiary” means a Subsidiary organized under the laws of a jurisdiction located in the United States of
America.” 
 “ “First Tier Foreign Subsidiary” means each Foreign Subsidiary with respect to which any one or
more of the Borrower or its Domestic Subsidiaries (other than a Domestic Subsidiary which is owned by a Foreign Subsidiary) directly owns or Controls more than 50% of such Foreign Subsidiary’s issued and outstanding Equity Interests.”

 “ “Foreign Subsidiary” means any Subsidiary which is not a Domestic Subsidiary.” 

(c) Section 6.18 of the Credit Agreement is hereby amended to delete the reference therein to “$15,000,000” and to
substitute “$20,000,000” therefor. 
 (d) Section 9.14 of the Credit Agreement is hereby amended to add
the following sentence to the end of such Section: 
 “Notwithstanding anything in this Agreement to the contrary, no
Subsidiary that is a Foreign Subsidiary (or a Domestic Subsidiary owned by a Foreign Subsidiary) shall be required to become a Guarantor hereunder or to otherwise comply with the requirements of this Section 9.14 to the extent such Subsidiary
acting as a Guarantor would create adverse tax consequences for the Borrower, provided, that unless the Collateral Agent determines that such pledge would not, in light of the cost and expense associated therewith, provide material credit
support for the benefit of the Lenders pursuant to legally valid, binding and enforceable pledge agreements, each First Tier Foreign Subsidiary shall be required (by such time as is requested by the Collateral Agent) to have 65% of its ownership
interests pledged by the Loan Party which holds the ownership interest in such First Tier Foreign Subsidiary.” 
 (e) The
Commitments of certain of the Lenders (the “Increasing Lenders”) are hereby increased as set forth in the Commitment Schedule on Annex A attached hereto. Accordingly, the Commitment Schedule attached to the Credit Agreement is
hereby amended and restated in its entirety in the form attached hereto as Annex A. The Borrower hereby agrees to compensate each Lender for any and all losses, costs and expenses incurred by such Lender in connection with the sale and
assignment of any Eurodollar Loans and the reallocation described in Section 3(a) below (unless such compensation is waived by such Lender in its sole discretion), in each case on the terms and in the manner set forth in Section 3.4
of the Credit Agreement 
 (f) The Pricing Schedule attached to the Credit Agreement is hereby amended and restated in its
entirety in the form attached hereto as Annex B. 
 2. Consent. Subject to the satisfaction of the
conditions set forth in Section 3 below, the Required Lenders hereby grant the Acquisition Consent so long as (A) the purchase price payable by the Borrower and its Subsidiaries in connection with the Harlow’s Acquisition does
not exceed $140,000,000 

  
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plus any amount paid by the Borrower on the date the Harlow’s Acquisition is closed as a working capital adjustment, (B) the Harlow’s Acquisition is consummated no later
than March 31, 2011, (C) the Borrower and its Subsidiaries comply with the requirements of Section 9.14 of the Credit Agreement with respect to the Harlow’s Acquisition and (D) the Borrower delivers to the Agent, on
or no more than 5 Business Days prior to the consummation of the Harlow’s Acquisition, an Acquisition Compliance Certificate in the form of Exhibit M to the Credit Agreement (the “Harlow’s Acquisition Certificate”),
demonstrating pro forma compliance with those provisions of the Credit Agreement identified in Section 6.13(g) of the Credit Agreement at the time of, and immediately after giving effect to, the consummation of the Harlow’s
Acquisition. 
 3. Conditions of Effectiveness. This Amendment shall become effective and be deemed effective as
of the date hereof, if, and only if, (a) the Agent shall have administered the reallocation of the Aggregate Outstanding Credit Exposure on the Amendment No. 1 Effective Date ratably among the Lenders after giving effect to the increase in
the Aggregate Commitment set forth in Section 1, (b) the Agent shall have received (i) counterparts of this Amendment duly executed by the Borrower, the Guarantors and each Lender, (ii) such opinions, instruments and documents as
are reasonably requested by the Agent and (iii) for the account of each Increasing Lender, an amendment fee in an amount equal to 0.30% of the amount of the increase in such Lender’s Commitment pursuant to this Amendment and (c) the
Borrower shall have paid all of the fees of the Agents and their Affiliates (including, to the extent invoiced, reasonable attorneys’ fees and expenses of the Agents) in connection with this Amendment and the other Loan Documents. 

4. Representations and Warranties of the Loan Parties. The Loan Parties jointly and severally hereby represent and warrant
as follows: 
 (a) Each Loan Party has the power and authority and legal right to execute and deliver this Amendment and the
Credit Agreement (as modified hereby) and to perform its obligations hereunder and thereunder. The execution and delivery by each Loan Party of this Amendment and the performance of its obligations hereunder and under the Credit Agreement (as
modified hereby) have been duly authorized by proper corporate proceedings, and this Amendment and the Credit Agreement (as modified hereby) constitute legal, valid and binding obligations of such Loan Party, enforceable against such Loan Party in
accordance with its terms except as enforceability may be limited by bankruptcy, insolvency or similar laws affecting creditors’ rights generally. 
 (b) As of the date hereof and giving effect to the terms of this Amendment, (i) no Default or Unmatured Default has occurred and is continuing and (ii) the representations and warranties of the
Loan Parties set forth in the Credit Agreement (as modified hereby) and the other Loan Documents are true and correct in all material respects 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. 
 5.
Reference to and Effect on the Credit Agreement and Loan Documents. 
 (a) Upon the effectiveness of this Amendment,
each reference to the Credit Agreement in the Credit Agreement or any other Loan Document shall mean and be a reference to the Credit Agreement as modified hereby. This Amendment is a Loan Document pursuant to the Credit Agreement and shall (unless
expressly indicated herein or therein) be construed, administered, and applied, in accordance with all of the terms and provisions of the Credit Agreement. 
 (b) Each Loan Party, by its signature below, hereby (i) agrees that this Amendment and the transactions contemplated hereby shall not limit or diminish the obligations of the Company arising


  
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under or pursuant to the Credit Agreement and the other Loan Documents to which it is a party, (ii) reaffirms all of its obligations under the Credit Agreement and each and every other Loan
Document to which it is a party (including, without limitation, each applicable Collateral Document), (iii) reaffirms all Liens on the Collateral which have been granted by it in favor of the Agent (for itself and the Lenders) pursuant to any
of the Loan Documents, and (iv) acknowledges and agrees that, except as specifically modified above, the Credit Agreement and all other Loan Documents executed and/or delivered in connection therewith shall remain in full force and effect and
are hereby reaffirmed, ratified and confirmed. 
 (c) The execution, delivery and effectiveness of this Amendment shall not,
except as expressly provided herein, operate as a waiver of any right, power or remedy of the Agent or the Lenders, nor constitute a waiver of or consent to any modification of any provision of the Credit Agreement or any other Loan Documents
executed and/or delivered in connection therewith. 
 6. GOVERNING LAW. THIS AMENDMENT 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. 

7. Headings. Section headings in this Amendment are included herein for convenience of reference only and shall not
constitute a part of this Amendment for any other purpose. 
 8. Counterparts. This Amendment may be executed by
one or more of the parties hereto on any number of separate counterparts (including by means of facsimile or electronic transmission), and all of said counterparts taken together shall be deemed to constitute one and the same instrument. 

******* 

  
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 IN WITNESS WHEREOF,
this Amendment has been duly executed as of the day and year first above written. 
  

			
	BORROWER:
	
	CHURCHILL DOWNS INCORPORATED
		
	By:	 	 /s/ William E. Mudd

	Name:	 	William E. Mudd
	Title:	 	Executive Vice President and Chief Financial Officer
	
	GUARANTORS:
	
	CHURCHILL DOWNS MANAGEMENT COMPANY, LLC, as a Guarantor
		
	By	 	 /s/ William E. Mudd

		 	Name: William E. Mudd
		 	Title: Treasurer
	
	CHURCHILL DOWNS INVESTMENT COMPANY, as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary
	
	CHURCHILL DOWNS SIMULCAST PRODUCTIONS, LLC, as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary
	
	CHARLSON INDUSTRIES, INC., as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary


 Signature Page to
Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 







  
 
			
	CALDER RACE COURSE, INC., as a Guarantor
		
	By	 	 /s/ William E. Mudd

		 	Name: William E. Mudd
		 	Title: Treasurer
	
	TROPICAL PARK, INC., as a Guarantor
		
	By	 	 /s/ William E. Mudd

		 	Name: William E. Mudd
		 	Title: Treasurer
	
	ARLINGTON PARK RACECOURSE, LLC, as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary
	
	ARLINGTON OTB CORP., as a Guarantor
		
	By	 	 /s/Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Treasurer
	
	QUAD CITY DOWNS, INC., as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Treasurer
	
	CHURCHILL DOWNS LOUISIANA HORSERACING COMPANY, L.L.C., as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Treasurer
	
	CHURCHILL DOWNS LOUISIANA VIDEO POKER COMPANY, L.L.C., as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	VIDEO SERVICES, INC., as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Treasurer
	
	CHURCHILL DOWNS TECHNOLOGY INITIATIVES COMPANY, as a Guarantor
		
	By	 	 /s/ Bradley K. Blackwell

		 	Name: Bradley K. Blackwell
		 	Title: Vice President
	
	CHURCHILL DOWNS ENTERTAINMENT GROUP, LLC, as a Guarantor
		
	By	 	 /s/ Rebecca C. Reed

		 	Name: Rebecca C. Reed
		 	Title: Secretary



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	JPMORGAN CHASE BANK, N.A.,
	as a Lender, as Agent and as Collateral Agent
		
	By:	 	 /s/ Timothy K. Boyle

	Name:	 	Timothy K. Boyle
	Title:	 	Senior Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	PNC BANK, NATIONAL ASSOCIATION,
	as a Lender
		
	By:	 	 /s/ Shelly B. Stephenson

	Name:	 	Shelly B. Stephenson
	Title:	 	Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	U.S. BANK NATIONAL ASSOCIATION,
	as a Lender
		
	By:	 	 /s/ Joseph C. Hensley

	Name:	 	Joseph C. Hensley
	Title:	 	Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	FIFTH THIRD BANK,
	as a Lender
		
	By:	 	 /s/ David O’Neal

	Name:	 	David O’Neal
	Title:	 	Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	WELLS FARGO BANK, NATIONAL ASSOCIATION,
	as a Lender
		
	By:	 	 /s/ Thomas P. Crockett

	Name:	 	Thomas P. Crockett
	Title:	 	Senior Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 
			
	BRANCH BANKING AND TRUST COMPANY,
	as a Lender
		
	By:	 	 /s/ Johnny L. Perry

	Name:	 	Johnny L. Perry
	Title:	 	Senior Vice President



  
 Signature Page
to Amendment No. 1 to 
 Churchill Downs Incorporated et al Second Amended and Restated Credit Agreement 








  
 ANNEX A

 COMMITMENT SCHEDULE 
  

					
	 LENDER
	  	COMMITMENT	 
		
	 JPMORGAN CHASE BANK, N.A.
	  	$	75,000,000	  
		
	 PNC BANK, NATIONAL ASSOCIATION
	  	$	75,000,000	  
		
	 U.S. BANK, NATIONAL ASSOCIATION
	  	$	60,000,000	  
		
	 FIFTH THIRD BANK
	  	$	55,000,000	  
		
	 WELLS FARGO BANK, NATIONAL ASSOCIATION
	  	$	55,000,000	  
		
	 BRANCH BANKING AND TRUST COMPANY
	  	$	55,000,000	  
		
	 AGGREGATE COMMITMENT
	  	$	375,000,000	  








  
 ANNEX B

 PRICING SCHEDULE 
  

																													
	 APPLICABLE MARGIN
	  	LEVEL
I
STATUS	 	 	LEVEL
II
STATUS	 	 	LEVEL
III
STATUS	 	 	LEVEL
IV
STATUS	 	 	LEVEL
V
STATUS	 	 	LEVEL
VI
STATUS	 	 	LEVEL
VII
STATUS	 
	 Eurodollar Rate
	  	 	1.625	% 	 	 	1.875	% 	 	 	2.125	% 	 	 	2.375	% 	 	 	2.625	% 	 	 	2.875	% 	 	 	3.125	% 
	 Floating Rate
	  	 	0.625	% 	 	 	0.875	% 	 	 	1.125	% 	 	 	1.375	% 	 	 	1.625	% 	 	 	1.875	% 	 	 	2.125	% 

  

																													
	 APPLICABLE FEE RATE
	  	LEVEL
I
STATUS	 	 	LEVEL
II
STATUS	 	 	LEVEL
III
STATUS	 	 	LEVEL
IV
STATUS	 	 	LEVEL
V
STATUS	 	 	LEVEL
VI
STATUS	 	 	LEVEL
VII
STATUS	 
	 Commitment Fee
	  	 	0.25	% 	 	 	0.30	% 	 	 	0.35	% 	 	 	0.40	% 	 	 	0.45	% 	 	 	0.45	% 	 	 	0.45	% 

 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 1.00 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 greater than or equal to 1.00 to 1.00 and less
than 1.50 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 greater than or equal to 1.50 to 1.00 and less than 2.00 to 1.00. 

“Level IV 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, Level II Status or Level III Status and (ii) the Leverage Ratio is greater than or equal to 2.00 to 1.00 and less than 2.50 to 1.00. 

“Level V 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, Level II Status, Level III Status or Level IV Status and (ii) the Leverage Ratio is greater than or equal to 2.50 to 1.00 and less than 3.00 to 1.00. 







  
 “Level VI
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, Level II Status, Level III Status, Level IV Status or
Level V Status and (ii) the Leverage Ratio is greater than or equal to 3.00 to 1.00 and less than 3.25 to 1.00. 

“Level VII Status” exists at any date if the Borrower has not qualified for Level I Status, Level II Status, Level III Status,
Level IV Status, Level V Status or Level VI Status. 
 “Status” means either Level I Status, Level II Status, Level
III Status, Level IV Status, Level V Status, Level VI Status and Level VII Status. 
 If at any time the Borrower fails to
deliver the Financials to the Agent on or before the date such statements or certificates are due, Level VII Status shall be deemed applicable for the period commencing five (5) business days after such required date of delivery and ending on
the date which is five (5) business days after such statements or certificates are actually delivered, after which the Status shall be determined in accordance with the table above as applicable. 

Except as otherwise provided in the paragraph below, adjustments, if any, to the Status then in effect shall be effective five
(5) business days after the Agent has received the applicable financial statements and certificates (it being understood and agreed that each change in Status shall apply during the period commencing on the effective date of such change and
ending on the date immediately preceding the effective date of the next such change). 
 Notwithstanding the foregoing, upon the
date of delivery of the Harlow’s Acquisition Certificate, the Status set forth in the Harlow’s Acquisition Certificate shall be deemed to be applicable, and adjustments to the Status then in effect shall thereafter be effected in
accordance with the preceding paragraphs.