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Exhibit 10.8

                          REVOLVING CREDIT AGREEMENT

         THIS REVOLVING CREDIT AGREEMENT is entered into as of January 1, 2001
(this "Agreement"), by and between LOS ANGELES TURF CLUB, INCORPORATED, a
California corporation ("Borrower"), and WELLS FARGO BANK, NATIONAL ASSOCIATION
("Bank").

                                  R E C I T A L
                                  - - - - - - -

         The Borrower has requested from the Bank the credit accommodation
described below, and the Bank has agreed to provide said credit accommodation to
the Borrower on the terms and subject to the conditions contained herein.

         NOW, THEREFORE, for valuable consideration, the receipt and sufficiency
of which are hereby acknowledged, the Bank and the Borrower hereby agree as
follows:

                                    ARTICLE I

                                   DEFINITIONS

SECTION 1.1.   DEFINITIONS.

         The following terms with initial capital letters have the following
meanings:

         "Affiliate" means, with respect to any Person, any other Person that,
directly or indirectly through one or more intermediaries, controls, or is
controlled by, or is under common control with, such first Person. The term
"control" means the possession, directly or indirectly, of the power, whether or
not exercised, (i) to vote 20% or more of the securities having voting power for
the election of directors (or Persons performing similar functions) of such
Person or (ii) to direct or cause the direction of the management or policies of
a Person, whether through the ownership of voting securities, by contract or
otherwise, and the terms "controlled" and "common control" have correlative
meanings. Unless otherwise indicated, "Affiliate" refers to an Affiliate of the
Borrower. Notwithstanding the foregoing, in no event shall the Bank or any
Affiliate of the Bank be deemed to be an Affiliate of the Borrower.

         "Applicable Law" means all applicable provisions of all (i)
constitutions, treaties, statutes, laws, rules, regulations and ordinances of
any Governmental Authority, (ii) Governmental Approvals and (iii) orders,
decisions, judgments, awards and decrees of any Governmental Authority
(including common law and principles of public policy).

         "Approved Subordination Terms" means the terms of subordination set
forth in Exhibit G.
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         "Asset Disposition" means any sale or other disposition, in any single
transaction or series of related transactions, by the Borrower or any Subsidiary
of the Borrower, of any of its assets (including (x) by way of a Sale-Leaseback
Transaction and (y) in the case of a Subsidiary of the Borrower, any issuance of
any Capital Stock of such Subsidiary to any Person other than the Borrower or a
Wholly-Owned Subsidiary of the Borrower (other than directors qualifying
shares)) except that "Asset Disposition" shall not include (A) any disposition
of assets or issuance of Capital Stock by any Subsidiary to the Borrower or a
Wholly-Owned Subsidiary, (B) a merger or consolidation permitted pursuant to
Section 6.6 or (C) sales of inventory held or purchased for sale to others or
dispositions of other property that has become obsolete or worn out, in each
case in the ordinary course of business.

         "Bankruptcy Code" means Title 11 of the United States Code (11 U.S.C.
Section 101 et seq.), as amended from time to time.

         "Base LIBOR" means the rate per annum for Dollar deposits quoted by the
Bank as the Inter-Bank Market Offered Rate, with the understanding that such
rate is quoted by the Bank for the purpose of calculating effective rates of
interest for loans making reference thereto, on the first day of an Interest
Period for delivery of funds on said date for a period of time approximately
equal to the number of days in such Interest Period and in an amount
approximately equal to the principal amount to which such Interest Period
applies. The Borrower understands and agrees that the Bank may base its
quotation of the Inter-Bank Market Offered Rate upon such offers or other market
indicators of the Inter-Bank Market as the Bank in its discretion deems
appropriate including, but not limited to, the rate offered for Dollar deposits
on the London Inter-Bank Market.

         "Benefit Plan" means a defined benefit plan as defined in Section 3(35)
of ERISA (other than a Multiemployer Plan) in respect of which the Borrower or
any ERISA Affiliate is, or within the immediately preceding six (6) years was,
an "employer" as defined in Section 3(5) of ERISA.

         "Borrowing" means a borrowing consisting of Loans of the same type made
on the same day.

         "Business Day" means any day that is not a Saturday, Sunday or other
day on which banks in Los Angeles, California are authorized or obligated to
close.

         "Capital Expenditures" means, for any period, expenditures (whether
paid in cash or accrued as liabilities and including Capital Leases entered into
during the period) of the Borrower and its Subsidiaries during such period that
are required in accordance with GAAP to be capitalized on the consolidated
balance sheet of the Borrower.

         "Capital Leases" means all leases of the Borrower and its Subsidiaries
of real or personal property that are required to be capitalized on the
consolidated balance sheet of the Borrower. The amount of any Capital Lease
shall be the capitalized amount thereof.

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         "Capital Stock" means, with respect to any Person, all (i) shares,
interests, participations or other equivalents (howsoever designated) of capital
stock and other equity interests of such Person and (ii) rights (other than
Indebtedness securities convertible into capital stock or other equity
interests), warrants or options to acquire any such capital stock or other
equity interests.

         "Change of Control" means the failure by Santa Anita to continue to
hold all of the outstanding shares of all classes of the Capital Stock of the
Borrower.

         "Code" means the Internal Revenue Code of 1986, as amended from time to
time.

         "Collateral" means all property in which a Lien is created or conveyed
in or under the Loan Documents, or any of them, in favor of the Bank.

         "Commitment" means the Bank's commitment to make Loans to the Borrower
in an aggregate principal amount not to exceed $10,000,000.

         "Contingent Obligation" means, as to any Person, any obligation, direct
or indirect, contingent or otherwise, of such Person (i) with respect to any
Indebtedness or other obligation of another Person, including any direct or
indirect guarantee of such Indebtedness (other than any endorsement for
collection in the ordinary course of business) or any other direct or indirect
obligation, by agreement or otherwise, to purchase or repurchase any such
Indebtedness or obligation or any security therefor, or to provide funds for the
payment or discharge of any such Indebtedness or obligation (whether in the form
of loans, advances, stock purchases, capital contributions or otherwise), (ii)
to provide funds to maintain the financial condition of any other Person if the
primary purpose of such obligations is to provide assurance that the
Indebtedness or other obligations of such other Person will be paid or
discharged or the holders of such Indebtedness or other obligations will be
protected against loss, or (iii) otherwise to assure or hold harmless the
holders of Indebtedness or other obligations of another Person against loss in
respect thereof, or (iv) under Hedging Contracts. The amount of any Contingent
Obligation under clause (i) or (ii) shall be the lesser of (a) an amount equal
to the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made and (b) the maximum amount for which
such Person may be liable pursuant to the terms of the instrument embodying such
Contingent Obligation, unless such primary obligation and the maximum amount for
which such Person may be liable are not stated or determinable, in which case
the amount of such Contingent Obligation shall be such Person's maximum
reasonably anticipated liability in respect thereof.

         "Contractual Obligation" means, as applied to any Person, any provision
of any security issued by that Person or of any agreement or other instrument to
which that Person is a party or by which it or any of the properties owned or
leased by it is bound or otherwise subject.

         "Deed of Trust" means the Deed of Trust and Assignment of Rents and
Leases executed by Santa Anita for the benefit of the Bank in order to secure
the obligations of Santa Anita under the Term Loan Credit Agreement.

                                       3
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         "Default" means any condition or event that, with the giving of notice
or lapse of time or both, would, unless cured or waived, become an Event of
Default.

         "DOL" means the United States Department of Labor and any Person
succeeding to the functions thereof.

         "Dollars" and "$" means lawful money of the United States of America.

         "Effective Date" means the first Business Day on which the conditions
set forth in Section 4.1 are satisfied or waived.

         "Environmental Damages" means all claims, judgments, damages, losses,
penalties, liabilities (including strict liability), costs and expenses,
including costs of investigation, remediation, defense, settlement and
reasonable attorneys' fees and consultants' fees, that are incurred at any time
as a result of the existence of Hazardous Material upon, about or beneath the
Mortgaged Property or any other real property owned by the Borrower or any of
its Subsidiaries or migrating or threatening to migrate to or from any such real
property, or arising from any investigation, proceeding or remediation of any
location at which the Borrower, any of its Subsidiaries or any predecessors are
alleged to have directly or indirectly disposed of Hazardous Materials or
arising in any manner whatsoever out of any violation of Environmental
Requirements.

         "Environmental Lien" means a Lien in favor of any Governmental
Authority for Environmental Damages.

         "Environmental Requirements" means all Applicable Laws relating to
Hazardous Materials or the protection of human health or the environment,
including all requirements pertaining to reporting, permitting, investigation
and remediation of releases or threatened releases of Hazardous Materials into
the environment, or relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.

         "ERISA" means the Employee Retirement Income Security Act of 1974, any
amendments thereto, any successor statutes, and any regulations promulgated
thereunder.

         "ERISA Affiliate" means (i) any corporation which is a member of the
same controlled group of corporations (within the meaning of Section 414(b) of
the Code) as the Borrower; (ii) any trade or business (whether or not
incorporated) which is under common control (within the meaning of Section
414(c) of the Code) with the Borrower; and (iii) a member of the same affiliated
service group (within the meaning of Section 414(m) of the Code) as the
Borrower, any corporation described in clause (i) above or any trade or business
described in clause (ii) above or (iv) any other Person which is required to be
aggregated with the Borrower pursuant to regulations promulgated under Section
414(o) of the Code.

         "Event of Default" is defined in Section 7.1.

                                       4
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         "Fair Market Value" means, with respect to any asset or property, the
sale value that could be obtained in an arm's-length transaction, for cash,
between a willing seller and a willing buyer, neither of whom is under pressure
or compulsion to complete the transaction.

         "Federal Reserve Board" means the Board of Governors of the Federal
Reserve System, or any successor thereto.

         "Fees" means, collectively, the fees described or referenced in Section
2.5.

         "Fiscal Year" means the fiscal year of the Borrower, which shall be the
12 month-period ending on December 31 in each year or such other period as the
Borrower may designate and the Bank may approve in writing, which approval shall
not be unreasonably withheld or delayed. "Fiscal Quarter" or "fiscal quarter"
means any quarter of a Fiscal Year.

         "GAAP" means generally accepted accounting principles as in effect in
the United States of America as in effect from time to time.

         "Governmental Approval" means an authorization, consent, approval,
permit or license issued by, or a registration or filing with, any Governmental
Authority.

         "Governmental Authority" means any nation and any state or political
subdivision thereof and any entity exercising executive, legislative, judicial,
regulatory or administrative functions of or pertaining to government and any
tribunal or arbitrator of competent jurisdiction.

         "Hazardous Materials" means any substance (i) the presence of which
requires investigation or remediation under any Applicable Law; (ii) that is or
becomes defined as a "hazardous waste" or "hazardous substance" under any
Applicable Law, including the Comprehensive Environmental Response, Compensation
and Liability Act (42 U.S.C. Section 9601 et seq.) or the Resource Conservation
and Recovery Act (42 U.S.C. Section 6901 et seq.); (iii) that is toxic,
explosive, corrosive, inflammable, infectious, radioactive, carcinogenic,
mutagenic, or otherwise hazardous and is or becomes regulated by any
Governmental Authority; (iv) the presence of which on the Mortgaged Property or
any other real property owned by the Borrower or any of its Subsidiaries causes
or threatens to cause a nuisance upon such real property or to adjacent
properties or poses or threatens to pose a hazard to any such real property or
to the health or safety of Persons on or about any such real property; or (v)
without limitation, that contains gasoline or other petroleum hydrocarbons,
polychlorinated biphenyls or asbestos.

         "Hedging Contract" means, for any Person, any interest rate, commodity,
foreign exchange or other hedging agreement (including swaps, collars, caps and
forward contracts) between such Person and one or more financial institutions
providing for the transfer or mitigation of fluctuations of interest rates,
exchange rates or other prices either generally or under specific contingencies.

         "Indebtedness", as applied to any Person, means, at any time, without
duplication, (a) all Indebtedness, obligations or other liabilities of such
Person (i) for borrowed money or evidenced by debt securities, debentures,
acceptances, notes or other similar instruments, and any past due interest, fees
and charges relating thereto, (ii) payable under profit payment agreements or in

                                       5
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respect of obligations to redeem, repurchase or exchange any securities of such
Person or to pay dividends in respect of any Capital Stock, (iii) with respect
to letters of credit issued for such Person's account, (iv) to pay the deferred
purchase price of property or services, except accounts payable and accrued
expenses arising in the ordinary course of business or (v) in respect of Capital
Leases; (b) all Contingent Obligations of such Person; (c) all Indebtedness,
obligations or other liabilities of such person or others secured by a Lien on
any property of such Person, whether or not such Indebtedness, obligations or
liabilities are assumed by such Person, all as of such time; and (d) all
Indebtedness, obligations or other liabilities of such Person in respect of
Hedging Contracts, net of liabilities owed to such Person by the counterparties
thereon.

         "Intercompany Debt" means any Indebtedness of any Subsidiary that is
owed to any Wholly-Owned Subsidiary or the Borrower.

         "Interest Period" means, with respect to each LIBOR Loan, the period
commencing on the date specified in the related Notice of Borrowing or Notice of
Conversion/Continuation (or telephonic notice in lieu thereof) and ending on the
numerically corresponding day in the calendar month that is one, two or three
months thereafter, as the Borrower may elect pursuant to Section 2.1 or Section
2.4; provided that (i) in the case of immediately successive Interest Periods,
the succeeding Interest Period shall commence on the day on which the preceding
Interest Period expires; (ii) any Interest Period (A) that would otherwise end
on a day that is not a Business Day shall be extended to the next succeeding
Business Day, unless such succeeding Business Day falls in another calendar
month, in which case such Interest Period shall end on the next preceding
Business Day or (B) that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end on the last Business Day of
the calendar month at the end of such Interest Period; and (iii) no Interest
Period for any Loan shall end after the Termination Date.

         "Investment" means, with respect to any Person, (i) any direct or
indirect purchase or other acquisition by that Person of Capital Stock or
securities, or any beneficial interest in Capital Stock or other securities, of
any other Person, any partnership (whether general or limited) or limited
liability company interest in any other Person, or all or any substantial part
of the business or assets of any other Person, and (ii) any direct or indirect
loan, advance or capital contribution by that Person to any other Person,
including all Indebtedness and accounts receivable from that other Person that
are not current assets or did not arise from sales to that other Person in the
ordinary course of business. The amount of any Investment shall be the original
cost of such Investment plus the cost of all additions thereto, without any
adjustments for increases or decreases in value, or write-ups, write-downs or
write-offs with respect to such Investment.

         "LATC Guaranty" means the guaranty of obligations under the Term Loan
Credit Agreement by the Borrower, in substantially the form of Exhibit F, as
amended from time to time.

         "Leases" is defined in Section 3.20.

                                       6
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         "LIBOR" means the rate per annum (rounded upward, if necessary, to the
nearest whole 1/8 of 1%) equal to a fraction, the nominator of which shall equal
Base LIBOR and the denominator of which shall equal 100% minus the LIBOR Reserve
Percentage.

         "LIBOR Loan" means a Loan which bears interest at a rate determined by
reference to a LIBOR as provided in Section 2.3.

         "LIBOR Reserve Percentage" means the reserve percentage prescribed by
the Board of Governors of the Federal Reserve System (or any successor) for
"Eurocurrency Liabilities" (as defined in Regulation D of the Federal Reserve
Board, as amended), adjusted by Bank for expected changes in such reserve
percentage during the applicable Fixed Rate Term.

         "Lien" means any lien, mortgage, pledge, security interest, charge, or
encumbrance of any kind (including any conditional sale or other title retention
agreement or any lease in the nature thereof) and any agreement to give or
refrain from giving any lien, mortgage, pledge, security interest, charge, or
other encumbrance of any kind.

         "Loan" is defined in Section 2.1.

         "Loan Account" is defined in Section 2.2.

         "Loan Documents" means, collectively, this Agreement, the Note, the
LATC Guaranty, the Assignment of Leases and Rents and any other agreement,
instrument or other writing executed or delivered by the Borrower or any
Subsidiary in connection herewith or therewith, and all amendments, exhibits and
schedules to any of the foregoing.

         "Margin Regulations" means Regulations U and X of the Federal Reserve
Board, as amended from time to time.

         "Margin Stock" means "margin stock" as defined in the Margin
Regulations.

         "Material Adverse Effect" or "Material Adverse Change" means the
occurrence of an event or events, or the existence of facts or circumstances,
that has or have a material adverse effect on, or result in a material adverse
change in, as the case may be, any one or more of the following:

                  (A) the ability of the Borrower or of any Subsidiary to
         conduct a Racetrack Business at the Track; or

                  (B) the ability of the Borrower and its Subsidiaries to
         perform their respective obligations under the Loan Documents; or

                  (C) the validity, legality or enforceability of any Loan
         Document, any material provision therein, or the rights and remedies of
         the Bank thereunder; or

                  (D) the validity, enforceability, perfection or priority of
         any of the Liens in favor of the Bank arising or created under the Loan
         Documents or any of them.

                                       7
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"Material Adverse Effect" or "Material Adverse Change" shall also include the
occurrence of an event or events or the existence of facts or circumstances that
could reasonably be expected to adversely affect the business, assets, results
of operations, financial condition or financial prospects of the Borrower and
its Subsidiaries, taken as a whole, and thereby:

               (i)   result in the incurrence by the Borrower or a Subsidiary of
         a liability or liabilities, or require an expenditure or expenditures,
         in an aggregate amount in excess of $2,000,000;

               (ii)  impair or diminish the value of any asset or assets of the
         Borrower or a Subsidiary in an aggregate amount in excess of
         $2,000,000; or

               (iii) reduce the actual or projected operating revenue or cash
         flow in the Fiscal Year in which such event occurs, or in which such
         facts or circumstances occur, or in the next succeeding Fiscal Year, by
         10% or more in relation to the respective amounts thereof (x) in the
         Fiscal Year preceding the Fiscal Year in which such event occurs, or in
         which such facts or circumstances occur, or (y) reflected in the
         forecast most recently delivered in respect of such Fiscal Years
         pursuant to Section 5.1(h) hereof.

         "Material Environmental Amount" means an amount payable by the Borrower
or any of its Subsidiaries in excess of $1,500,000 in respect of any
Environmental Damage or in connection with the violation or alleged violation
of, or compliance or attempted compliance with, any Environmental Requirement.

         "Mortgaged Property" means Santa Anita's real property located at 285
West Huntington Drive, Arcadia, California 91066 and known as the Santa Anita
Race Track (and the surrounding land) as described more fully in the Deed of
Trust.

         "Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA which is, or within the immediately preceding six (6) years
was, contributed to by the Borrower or any ERISA Affiliate.

         "Net Income" means, for any period, net income (or loss) after taxes of
the Borrower and its Subsidiaries on a consolidated basis for such period
determined in accordance with GAAP.

         "Note" means a Revolving Credit Promissory Note made by the Borrower
payable to the order of the Bank in substantially the form of Exhibit A, as
amended from time to time.

         "Notice of Borrowing" is defined in Section 2.1.

         "Oak Tree" means Oak Tree Racing Association, a California non-profit
corporation.

         "Notice of Conversion/Continuation" is defined in Section 2.4.

         "Obligations" means all present and future obligations and liabilities
of the Borrower or any of its Subsidiaries of every type and description arising
under or in connection with the Loan Documents due or to become due to the Bank
or any Person entitled to indemnification under the

                                       8
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Loan Documents, or any of their respective successors, transferees or assigns,
whether for principal, interest, letter of credit or other reimbursement
obligations, cash collateral cover, Fees, expenses, indemnities or other amounts
(including attorneys' fees and expenses).

         "Operating Lease" means, as applied to any Person, any lease of any
property (whether real, personal, or mixed) under which such Person is the
lessee and that is not capitalized on the balance sheet of such Person.

         "Parent" means Magna Entertainment Corp., a Delaware corporation, of
which Santa Anita is a Wholly-Owned Subsidiary.

         "Parent Pledge Agreement" means the Amended and Restated Pledge
Agreement between Parent and the Bank in substantially the form of Exhibit B, as
amended from time to time.

         "PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to the functions thereof.

         "Permitted Liens" means, with respect to any asset, the Liens (if any)
permitted to exist on such asset under Section 6.2.

         "Person" means an individual, a corporation, a partnership, a limited
liability company, a trust, an unincorporated organization or any other entity
or organization, including a government or any agency or political subdivision
thereof.

         "Plan" means an employee benefit plan defined in Section 3(3) of ERISA
in respect of which the Borrower or any ERISA Affiliate is, or within the
immediately preceding six years was, an "employer" as defined in Section 3(5) of
ERISA.

         "Prime Rate" means at any time the rate of interest most recently
announced within the Bank at its principal office as its Prime Rate, with the
understanding that the Prime Rate is one of the Bank's Prime Rate and serves as
the basis upon which effective rates of interest are calculated for those loans
making reference thereto, and is evidenced by the recording thereof in such
internal publication or publications as the Bank may designate. Each change in
the rate of interest shall become effective on the date each Prime Rate change
is announced within the Bank.

         "Prime Rate Loan" means any Loan which bears interest at a rate
determined by reference to the Prime Rate as provided in Section 2.3.

         "Racetrack Business" means the operation of the Track and all
horseracing, gaming, entertainment, and other activities associated therewith in
a manner consistent with past practices of the Track.

         "Racing Day" means any day with respect to which horseracing and
associated gaming, entertainment and other activities have been authorized to be
conducted at the Track pursuant to a valid Racing License.

                                       9
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         "Racing License" means a license or permit issued by the California
Horse Racing Board, or such other relevant Governmental Authority, pursuant to
which the licensee or permitee is authorized to hold horseracing and related
events on a specified number of days during any calendar year at a specified
location.

         "Regulation D" means Regulation D of the Federal Reserve Board, as
amended from time to time.

         "Regulatory Change" means (i) the adoption or becoming effective after
the date hereof of any treaty, law, rule or regulation, (ii) any change in any
such treaty, law, rule or regulation (including Regulation D), or any change in
the administration or enforcement thereof, by any Governmental Authority,
central bank or other monetary authority charged with the interpretation or
administration thereof, in each case after the date hereof, or (iii) compliance
by the Bank (or, in the case of capital adequacy requirements, any holding
company of the Bank) with, any interpretation, directive, request, order or
decree (whether or not having the force of law) of any such Governmental
Authority, central bank or other monetary authority issued or made after the
date hereof.

         "Reportable Event" means any of the events described in Section 4043 of
ERISA.

         "Restricted Payment" means (i) any dividend, distribution or payment,
direct or indirect, to or for the benefit of any holder of any Capital Stock of
the Borrower now or hereafter outstanding, except (a) a dividend or other
distribution payable solely in shares or equivalents of the same class of
Capital Stock of the Person paying such dividend or making such distribution,
(b) the issuance of Capital Stock upon the exercise of outstanding warrants,
options or other rights, or (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or indirect, of
any Capital Stock of the Borrower now or hereafter outstanding, or (iii) any
payment of principal of or interest on, or any payment made to redeem,
repurchase, defease (by way either of in-substance or legal defeasance) or
otherwise acquire or retire for value, (a) any Subordinated Debt of the Borrower
or (b) any Contingent Obligation with respect to any such Subordinated Debt,
except, so long as no Default or Event of Default has occurred and is
continuing, any payment of accrued interest when due in accordance with the
terms of the documents or instruments governing or evidencing such Subordinated
Debt, or (iv) any payment of principal of or interest on any Indebtedness or
other obligation (other than Subordinated Debt and Intercompany Debt) owing by
the Borrower or any Subsidiary to Santa Anita or any other Affiliate of the
Borrower.

         "Revolving Credit Obligations" means, at any particular time, the
outstanding principal amount of all Loans at such time.

         "Sale-Leaseback Transaction" means any arrangement with any Person
providing for the leasing by the Borrower of any real or personal property that,
or of any property similar to and used for substantially the same purposes as
any other property that, has been or is to be sold or otherwise transferred by
the Borrower to such Person with the intention of entering into such a lease.

                                       10
<PAGE>

         "Santa Anita" means The Santa Anita Companies, Inc., a Delaware
corporation.

         "Santa Anita Guaranty" means the amended guaranty of the Obligations by
Santa Anita for the benefit of the Bank in substantially form of Exhibit D, as
amended from time to time.

         "Santa Anita Lease" means that certain Amended & Restated Lease between
Santa Anita, as Lessor, and the Borrower, as Lessee, dated November 9, 1994, and
First Amendment thereto dated February 28, 1998.

         "Santa Anita Pledge Agreement" means the Amended and Restated Pledge
Agreement between Santa Anita and the Bank in substantially the form of Exhibit
C, as amended from time to time.

         "SEC" means the United States Securities and Exchange Commission, and
any successor.

         "Senior Officer" means, with respect to the Borrower, the Chairman of
the Board of Directors, the President, the Chief Executive Officer, the Chief
Operating Officer, the Chief Financial Officer, the Treasurer or any Vice
President.

         "Subordinated Debt" means any Indebtedness of the Borrower existing on
the date hereof or hereafter incurred that is subordinated to the Obligations on
the Approved Subordination Terms or on other terms approved in advance in
writing by the Bank and which (i) is unsecured, (ii) has an effective interest
rate not greater than the interest rate that is applicable to the Loans at the
time such Indebtedness is incurred (if such Indebtedness bears interest at a
fixed rate) or from time to time (if such Indebtedness bears interest at a
floating rate), (iii) has a stated maturity date no earlier than one year
following the Termination Date, (iv) contains no financial or operating
covenants, (v) does not require any payment of principal prior to the
Termination Date, and (vi) (x) is governed and evidenced only by a promissory
note in substantially the form of Exhibit I hereto or (y) has other terms and
provisions that are reasonably satisfactory to the Bank.

         "Subsidiary" means, with respect to any Person, (i) any other Person of
which more than 50% of the total voting power of the Capital Stock entitled to
vote in the election of the board of directors (or other Persons performing
similar functions) is at the time directly or indirectly owned by such first
Person and (ii) any other Person the accounts of which would be consolidated
with those of such Person in a consolidated balance sheet of such Person
prepared in accordance with GAAP. Unless otherwise indicated, "Subsidiary"
refers to a Subsidiary of the Borrower.

         "Taxes" means any present or future income, stamp and other taxes,
charges, fees, levies, duties, imposts, withholdings or other assessments,
together with any interest and penalties, additions to tax and additional
amounts imposed by any federal, state, local or foreign taxing authority upon
any Person.

         "Termination Date" means the earlier to occur of (i) the date of
termination of the Commitment pursuant to the terms hereof and (ii) May 1, 2001.

                                       11
<PAGE>

         "Termination Event" means (i) a Reportable Event with respect to any
Benefit Plan; (ii) the withdrawal of the Borrower or any ERISA Affiliate from a
Benefit Plan during a plan year in which the Borrower or such ERISA Affiliate
was a "substantial employer" as defined in Section 4001(a)(2) of ERISA or the
cessation of operations which results in the termination of employment of at
least 20% of Benefit Plan participants who are employees of the Borrower or any
ERISA Affiliate; (iii) the imposition of an obligation on the Borrower or any
ERISA Affiliate under Section 4041 of ERISA to provide affected parties written
notice of intent to terminate a Benefit Plan in a distress termination described
in Section 4041(c) of ERISA; (iv) the institution by the PBGC of proceedings to
terminate a Benefit Plan; (v) any event or condition which could reasonably
constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Benefit Plan; or (vi) the partial or
complete withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan.

         "Term Loan Credit Agreement" means the Credit Agreement, dated as of
November 15, 1999, between Santa Anita and the Bank, as the same may amended,
supplemented or otherwise modified from time to time.

         "Term Loan Documents" means the "Loan Documents" as defined in the Term
Loan Credit Agreement.

         "Track" means the race track located on the Mortgaged Property and
commonly known as the Santa Anita Race Track.

         "Uniform Commercial Code" means the Uniform Commercial Code as enacted
in the State of California, as it may be amended from time to time.

         "Wholly-Owned" means, with respect to any Subsidiary, that all the
Capital Stock (except for directors' qualifying shares) of such Subsidiary is
directly or indirectly owned by the Borrower.

SECTION 1.2.    RELATED MATTERS.

         (a) Construction. Unless the context of this Agreement clearly requires
             ------------
otherwise, references to the plural include the singular, the singular includes
the plural, the part includes the whole, "including" is not limiting, and "or"
has the inclusive meaning represented by the phrase "and/or." The words
"hereof," "herein," "hereby," "hereunder" and similar terms in this Agreement
refer to this Agreement as a whole (including the Preamble, the Recitals, the
Schedules and the Exhibits) and not to any particular provision of this
Agreement. Article, section, subsection, exhibit, schedule, recital and preamble
references in this Agreement are to this Agreement unless otherwise specified.
References in this Agreement to any agreement, other document or law "as
amended" or "as amended from time to time," or to amendments of any document or
law, shall include any amendments, supplements, replacements, renewals, waivers
or other modifications not prohibited by the Loan Documents. References in this
Agreement to any law (or any part thereof) include any rules and regulations
promulgated thereunder (or with respect to such part) by the relevant
Governmental Authority, as amended from time to time.

                                       12
<PAGE>

         (b) Determinations. Any determination or calculation contemplated by
             --------------
this Agreement that is made by the Bank shall be final and conclusive and
binding upon the Borrower in the absence of manifest error. References in this
Agreement to any "determination" by the Bank include good faith estimates by the
Bank (in the case of quantitative determinations), and good faith beliefs by the
Bank (in the case of qualitative determinations).

         (c) Accounting Terms and Determinations. Unless otherwise specified
             -----------------------------------
herein (and whether or not expressly stated), all accounting terms used herein
shall be interpreted, all accounting determinations hereunder shall be made, and
all financial statements required to be delivered hereunder shall be prepared in
accordance with GAAP as in effect from time to time provided, however, that if
there occurs after the date hereof any change in GAAP that affects in any
respect the calculation of any covenant contained in Article VI, the Bank and
the Borrower shall negotiate in good faith amendments to the provisions of this
Agreement that relate to the calculation of such covenant with the intent of
having the respective positions of the Bank and the Borrower after such change
in GAAP conform as nearly as possible to their respective positions as of the
date of this Agreement and, until any such amendments have been agreed upon, the
Borrower's compliance with the covenants in Article VI shall be determined as if
no such change in GAAP has occurred.

                                   ARTICLE II

                                   THE CREDIT

SECTION 2.1.   LOANS.

         (a) Loans. Subject to the terms and conditions set forth herein, the
             -----
Bank hereby agrees to make revolving loans, in Dollars (each individually, a
"Loan" and, collectively, the "Loans") to the Borrower from time to time during
the period from the Effective Date to the Business Day next preceding the
Termination Date in an amount not to exceed at any time the Commitment, provided
that the Revolving Credit Obligations shall not exceed, at any time, the
Commitment. Subject to the provisions hereof, the Borrower may repay any
outstanding Loan on any day which is a Business Day and any amounts so repaid
may be reborrowed, up to the amount of available under this Section at the time
of such Borrowing, until the Business Day next preceding the Termination Date.

         (b) Types of Loans and Minimum Amounts. Each Borrowing of Loans shall
             ----------------------------------
be in a minimum aggregate amount of $500,000 and integral multiples of $100,000.

         (c) Notice of Borrowing. When the Borrower desires to borrow under this
             -------------------
Section 2.1, it shall deliver to the Bank an irrevocable Notice of Borrowing (a
"Notice of Borrowing"), signed by it, no later than 1:00 p.m. (Los Angeles time)
(i) on the Business Day next preceding the proposed funding date, in the case of
a Borrowing of Prime Rate Loans and (ii) at least three (3) Business Days in
advance of the proposed funding date, in the case of a Borrowing of LIBOR Loans.
Such Notice of Borrowing shall specify (i) the proposed funding date (which
shall be a Business Day), (ii) the aggregate amount of the proposed Borrowing,
(iii) whether the proposed Borrowing will be of Prime Rate Loans or LIBOR Loans,
(iv) in the case of LIBOR Loans, the

                                       13
<PAGE>

length of the Interest Period with respect to such Borrowing and (v)
instructions for the disbursement of the proceeds of the proposed Borrowing. In
lieu of delivering such a Notice of Borrowing, the Borrower shall give the Bank
irrevocable telephonic notice of any proposed Borrowing by 1:00 p.m. on the day
of the proposed Borrowing, and shall confirm such notice by delivery of the
Notice of Borrowing by telecopy to the Bank promptly, but in no event later than
3:00 p.m. (Los Angeles time) on the same day.

         (d) Making of Revolving Loans. (i) Promptly after receipt of a Notice
             -------------------------
of Borrowing under Section 2.1(b) (or telephonic notice in lieu thereof), the
Bank, subject to the satisfaction of the conditions set forth in Section 4.2,
shall make the amount of such Borrowing available to the Borrower in immediately
available funds or shall disburse such proceeds in accordance with the
Borrower's disbursement instructions set forth in the applicable Notice of
Borrowing.

         (e) Use of Proceeds of Revolving Loans. The proceeds of the Loans may
             ----------------------------------
be used solely for the following purposes: (i) to make distributions to Santa
Anita in respect of the Borrower's Capital Stock and (ii) to fund working
capital in the ordinary course of the business of the Borrower and its
Subsidiaries.

         (f) Termination Date. The Commitment shall terminate, and all
             ----------------
outstanding Revolving Credit Obligations shall be paid in full, on the
Termination Date. The Bank's obligation to make Loans shall terminate on the
Business Day next preceding the Termination Date.

SECTION 2.2.    EVIDENCE OF INDEBTEDNESS.

         (a) Note. The Borrower shall execute and deliver to the Bank on the
             ----
Effective Date the Note evidencing the Loans.

         (b) Loan Account. The Bank shall maintain in accordance with its usual
             ------------
practice an account or accounts (a "Loan Account") evidencing the Indebtedness
of the Borrower to the Bank resulting from the Loans owing to the Bank from time
to time, including the amount of principal and interest payable and paid to the
Bank from time to time hereunder and under the Note.

SECTION 2.3.    INTEREST; INTEREST PAYMENTS.

         (a) Interest. Each Loan shall bear interest on the unpaid principal
             --------
amount thereof, from and including the date of the making of such Loan to and
excluding the due date or the date of any repayment in full thereof, at the
following rates per annum: (i) for so long as and to the extent that such Loan
is a Prime Rate Loan, at the Prime Rate (as in effect from time to time) for
each day on which all or any portion of a Loan is a Prime Rate Loan; and (i) for
so long as and to the extent that such Loan is a LIBOR Loan, at the LIBOR for
each day during each Interest Period applicable thereto plus 2.20%. When
interest is determined in relation to the Prime Rate, each change in the rate of
interest hereunder shall become effective on the date each Prime Rate change is
announced within the Bank.

                                       14
<PAGE>

         (b) Interest Payments. Accrued interest shall be payable in arrears (i)
             -----------------
on the last day each calendar month; (ii) in the case of any interest accrued at
the rate specified in Section 2.3(c) below, on demand; and (iii) when the Loans
shall become due (whether at maturity, by reason of prepayment, acceleration or
otherwise).

         (c) Default Interest. Notwithstanding the rates of interest specified
             ----------------
in Section 2.3(a) or elsewhere herein, if all or a portion of the principal of
any Loan or any interest thereon or any other amount that is due and payable
hereunder or under any other Loan Document is not paid when due (whether at
stated maturity, by acceleration or otherwise), the Borrower shall pay interest
on such overdue amount of the principal of such Loan, interest or other amount
owing to the Bank hereunder or under any other Loan Document, on demand from
time to time, to the extent permitted by law, (i) in the case of overdue
principal, at the rate otherwise applicable to the Loans plus two percent (2%)
per annum and (ii) in the case of all other amounts owing to the Bank, at a rate
per annum equal to the Prime Rate plus two percent (2%), in each case, from and
including such date of non-payment to but excluding the date on which such
amount is paid in full (after as well as before judgment).

         (d) Computation of Interest. Interest on all Obligations shall be
             -----------------------
computed on the basis of the actual number of days elapsed in the period during
which interest accrues and a year of 360 days. In computing interest on any
Loan, the first day of any applicable Interest Period shall be included and the
last day of such Interest Period shall be excluded.

SECTION 2.4.   CONVERSION/CONTINUATION; LIBOR PROVISIONS.

         (a) Conversion or Continuation. (i) The Borrower shall have the option
             --------------------------
(A) at any time, to convert all or any part of outstanding Prime Rate Loans to
LIBOR Loans; (B) on the last day of the Interest Period applicable thereto, (1)
to convert all or any part of outstanding LIBOR Loans to a Prime Rate Loans, or
(2) continue all or any part of outstanding LIBOR Loans as LIBOR Loans and the
succeeding Interest Period of such continued LIBOR Loans shall commence on last
day of the then current Interest Period; provided, however, no such outstanding
Loan may be continued as, or be converted into, a LIBOR Loan if (x) the
continuation of, or the conversion into, would violate any of the provisions of
this Section or (y) an Event of Default or Default would occur or has occurred
and is continuing.

                  (ii) To convert or continue the any Loan under Section
2.4(a)(i), the Borrower shall deliver a Notice of Conversion/Continuation (a
"Notice of Conversion/Continuation") to the Bank no later than 11:00 a.m. (Los
Angeles time) at least (x) one Business Day in the case of the conversion of a
Prime Rate Loan or (y) three (3) Business Days in the case of conversion into or
continuation as a LIBOR Loan, advance of the proposed conversion/continuation
date. A Notice of Conversion/Continuation shall specify (A) the proposed
conversion/continuation date (which shall be a Business Day), (B) whether the
Loan shall be converted or continued, and (C) in the case of a conversion into,
or continuation of, a LIBOR Loan, the requested Interest Period. In lieu of
delivering a Notice of Conversion/Continuation, the Borrower may give the Bank
telephonic notice of any proposed conversion/continuation by the time required
under this Section, and such notice shall be confirmed in writing delivered to
the Bank promptly (but in no event later than 3:00 p.m. (Los Angeles time) on
the same day). Any Notice of

                                       15
<PAGE>

Conversion/Continuation for conversion to, or continuation of, any Loan (or
telephonic notice in lieu thereof) shall be irrevocable, and the Borrower shall
be bound to convert or continue in accordance therewith.

         (b) Changes; Legal Restrictions. If after the date hereof the Bank
             ---------------------------
determines that the adoption or implementation of or any change in or in the
interpretation or administration of any law or regulation or any guideline or
request from any central bank or other Governmental Authority or
quasi-governmental authority exercising jurisdiction, power or control over the
Bank or over banks or financial institutions generally (whether or not having
the force of law), compliance with which, in each case after the date hereof:

             (i)   subjects the Bank to charges (other than Taxes) in respect of
the Loans or in respect of the Bank's Commitment or changes the basis of
taxation of payments to the Bank of principal, fees, interest, or any other
amount payable hereunder with respect to LIBOR Loans; or

             (ii)  imposes, modifies, or holds applicable, any reserve (other
than reserves taken into account in calculating the LIBOR), special deposit,
compulsory loan, FDIC insurance or similar requirement against assets held by,
or deposits or other liabilities in or for the account of, advances or loans by,
commitments made, or other credit extended by, or any other acquisition of funds
by, the Bank;

and the result of any of the foregoing is to increase the cost to the Bank of
making, converting or continuing any Loan as a LIBOR Loan, or reduce any amount
receivable thereunder; then, in such case, the Borrower shall, within fourteen
(14) days after written demand by the Bank, pay to the Bank from time to time as
specified by the Bank, such amount or amounts as may be necessary to compensate
the Bank (in the form of an increased rate of, or different method of
calculating, interest or otherwise) for any such additional cost incurred or
reduced amount received. Such demand shall be accompanied by a statement as to
the amount of such compensation and include a summary of the basis for such
demand (it being agreed that such summary, showing in reasonable detail the
basis for the calculation of such compensation, shall, absent clearly
demonstrable error, be final and conclusive and binding on the Borrower).

         (c) Confirmation of LIBOR. Upon the reasonable request of the Borrower
             ---------------------
from time to time, the Bank shall promptly provide to the Borrower such
information with respect to the applicable LIBOR as may be so requested.

         (d) Interest Rate Unascertainable, Inadequate or Unfair. In the event
             ---------------------------------------------------
that at least one (1) Business Day before any Interest Period in which any Loan
is to be converted into, or made or continued as, a LIBOR Loan:

             (i)   the Bank determines that adequate and fair means do not exist
for ascertaining the applicable interest rates by reference to which the LIBOR
then being determined is to be fixed; or

                                       16
<PAGE>

             (ii)  the Bank determines that Dollar deposits in the outstanding
principal amount of any Loan at such time are not generally available in the
London interbank market for a period equal to such proposed Interest Period;

then the Bank shall forthwith give written notice thereof to the Borrower,
whereupon (until the Bank notifies the Borrower that the circumstances giving
rise to such suspension no longer exist) the right of the Borrower to elect to
have such Loan bear interest based upon the LIBOR shall be suspended and any
LIBOR Loan shall be converted into a Prime Rate Loan on the last day of the then
current Interest Period therefor.

         (e) Illegality. (i) If at any time the Bank determines (which
             ----------
determination shall, absent manifest error, be final and conclusive and binding
upon all parties) that the conversion into, or the making or continuation of, a
LIBOR Loan has become unlawful or impermissible by compliance by the Bank with
any law, governmental rule, regulation or order of any Governmental Authority
(whether or not having the force of law and whether or not failure to comply
therewith would be unlawful or would result in costs or penalties), then, and in
any such event, the Bank may give notice of that determination, in writing, to
the Borrower.

             (ii)  When notice is given by the Bank under this Section, the
Borrower's right to request from the Bank and the Bank's obligation, if any, to
make, convert or continue any Loan as a LIBOR Loan shall be immediately
suspended, and the Borrower shall immediately, or if permitted by applicable
law, no later than the date permitted thereby, upon at least one (1) Business
Day's prior written notice to the Bank, convert any LIBOR Loan into a Prime Rate
Loan.

             (iii) If at any time after the Bank gives notice under this
Section the Bank determines that it may lawfully make LIBOR Loans, the Bank
shall promptly give notice of that determination, in writing, to the Borrower.
The Borrower's right to request, and the Bank's obligation, if any, to convert
to or make or continue a LIBOR Loan shall thereupon be restored.

         (f) Compensation. In addition to all amounts required to be paid by the
             ------------
Borrower pursuant to this Agreement, the Borrower shall compensate the Bank,
within fourteen (14) days after written demand by the Bank, for all losses,
expenses and liabilities (including, without limitation, any loss or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by the Bank to fund or maintain the LIBOR Loans to the Borrower) which
the Bank may sustain (i) if for any reason a Borrowing, conversion into, or
continuation of LIBOR Loans does not occur on a date specified therefor in a
Notice of Borrowing or a Notice of Conversion/Continuation given by the Borrower
or in a telephonic request by it for borrowing or conversion/continuation or a
successive Interest Period does not commence after notice therefor is given
pursuant to this Section 2.4, including, without limitation, pursuant to Section
2.4(d), (ii) if for any reason a LIBOR Loan is prepaid (including, without
limitation, mandatorily pursuant to Section 2.6) on a date which is not the last
day of the applicable Interest Period, (iii) as a consequence of a required
conversion of a LIBOR Loan to a Prime Rate Loan as a result of any of the events
indicated in Section 2.4(d) or (e), or (iv) as a consequence of any failure by
the Borrower to repay the any LIBOR Loan when required by the terms hereof. The
Bank shall deliver to the Borrower concurrently with such demand a written
statement in reasonable detail

                                       17
<PAGE>

as to such losses, expenses and liabilities, and this statement shall be
conclusive as to the amount of compensation due to the Bank, absent manifest
error.

SECTION 2.5.    FEES.

         (a) Upfront Fee. The Borrower shall pay to the Bank on the Effective
             -----------
Date an upfront fee equal to $[10,000] plus all out-of-pocket costs and expenses
of the Bank (including, without limitation, disbursements and reasonable fees of
legal counsel to the Bank) incurred in connection with this Agreement.

         (b) Calculation and Payment of Fees. The Fees shall be calculated on
             --------------------------------
the basis of the actual number of days elapsed in a 360-day year. All Fees shall
be payable in addition to, and not in lieu of, interest, expense reimbursements,
indemnification and other Obligations. Fees shall be payable to the Bank's
Account in accordance with Section 2.7 except as otherwise provided by the Bank
in writing.

SECTION 2.6.    REDUCTIONS OF THE COMMITMENT; PREPAYMENTS.

         (a) Voluntary Reductions. The Borrower, upon at least three (3)
             --------------------
Business Days' prior written notice to the Bank, shall have the right, from time
to time, to terminate in whole or permanently reduce in part the Commitment,
provided that the Borrower shall have made whatever payment may be required to
reduce the Revolving Credit Obligations to an amount less than or equal to the
Commitment as reduced or terminated. Any partial reduction of the Commitment
shall be in an aggregate minimum amount of $500,000 and integral multiples of
$100,000 in excess of that amount. Any notice of termination or reduction given
to the Bank under this Section shall specify the date (which shall be a Business
Day) of such termination or reduction and, with respect to a partial reduction,
the aggregate principal amount thereof. When notice of termination or reduction
is delivered as provided herein, the principal amount of the Loans specified in
the notice shall become due and payable on the date specified in such notice.

         (b) Voluntary Prepayments. Subject to this Section, the Borrower may,
             ---------------------
at its option, at any time or from time to time, prepay the Loans in whole or in
part, without premium or penalty, provided that (a) any prepayment shall be in
an aggregate principal amount of at least $500,000 and in integral multiples of
$100,000 in excess thereof (or, alternatively, the whole amount of Loans then
outstanding) and (b) any prepayment of a LIBOR Loan shall be made only together
with amounts payable pursuant to Section 2.4(f).

         (c) Mandatory Prepayments of Revolving Credit Obligations. In the event
             -----------------------------------------------------
the Revolving Credit Obligations at any time are greater than the Commitment,
the Borrower shall immediately make a mandatory payment of the Revolving Credit
Obligations in an amount equal to the amount of such excess, which payment shall
be applied to the Revolving Credit Obligations in accordance with Section 2.7.
The prepayments in respect of reductions and terminations described shall be
subject to Section 2.4(f).

                                       18
<PAGE>

SECTION 2.7.     MANNER OF PAYMENT.

         (a) Except as otherwise expressly provided, the Borrower shall make
each payment under the Loan Documents to the Bank in Dollars and in immediately
available funds, without any deduction whatsoever, including any deduction for
any setoff, recoupment, counterclaim or Taxes, by depositing such payment in the
account specified by the Bank from time to time not later than 10:00 a.m. (Los
Angeles time) on the due date thereof. Any payments received after 10:00 a.m.
(Los Angeles time) on any Business Day shall be deemed received on the next
succeeding Business Day.

         (b) Payments on Non-Business Days. Whenever any payment to be made
             -----------------------------
hereunder shall be due on a day that is not a Business Day, such payment shall
instead be made on the next succeeding Business Day, together with interest
accrued during the period of such extension.

         (c) Application of Payments. (i) Subject to the provisions of paragraph
             -----------------------
(ii) below and except as otherwise provided herein, all payments in respect of
the Loans shall be applied first to outstanding Prime Rate Loans and then to
outstanding LIBOR Loans, in each case, in the inverse order of termination of
Interest Periods applicable thereto.

             (ii)  After the occurrence and during the continuance of an
Event of Default, the Bank may, and shall upon the acceleration of the
Obligations, apply all payments in respect of any Obligations and all proceeds
of Collateral in the following order:

             (A)   first, to pay Obligations in respect of any expense
                   -----
         reimbursements, indemnities and other similar amounts then due to the
         Bank, including without limitation, any amounts in respect of cash
         management services provided to the Borrower and its Subsidiaries by
         the Bank in connection with this Agreement;

             (B)   second, to pay Obligations in respect of any Fees then due to
                   ------
         the Bank;

             (C)   third, to pay interest due in respect of the Loans; and
                   -----

             (D)   fourth, to pay or prepay principal outstanding on Loans.
                   ------

         The order of priority set forth above may at any time and from time to
time be changed by the Bank without necessity of notice to or consent of or
approval by the Borrower or any other Person.

         (d) Payments Set Aside. To the extent the Bank receives payment of any
             ------------------
amount under the Loan Documents, whether by way of payment by the Borrower,
setoff, as proceeds of Collateral or otherwise, which payment is subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party under any bankruptcy law,
other law or equitable cause, in whole or in part, then, to the extent of such
payment received, the Obligations or part thereof intended to be satisfied
thereby shall be revived and continue in full force and effect, together with
all Collateral security therefor, as if such payment had not been received by
the Bank.

                                       19
<PAGE>

         (e) The Borrower authorizes the Bank to collect all principal, interest
and fees due under this Agreement and any other Loan Document by charging
Borrower's demand deposit account number 4375-672318 with the Bank, or any other
demand deposit account maintained by the Borrower with the Bank, for the full
amount thereof. Should there be insufficient funds in any such demand deposit
account to pay all such sums when due, the full amount of such deficiency shall
be immediately due and payable by the Borrower.

SECTION 2.8.   REGULATORY CHANGES.

         (a)   Capital Costs. If a Regulatory Change regarding capital adequacy
               -------------
(including the adoption or becoming effective of any treaty, law, rule,
regulation or guideline adopted pursuant to or arising out of the July 1988
report of the Basle Committee on Banking Regulations and Supervisory Practices
entitled "International Convergence of Capital Measurement and Capital
Standards") has or would have the effect of reducing the rate of return on the
capital of or maintained by the Bank or any company controlling the Bank as a
consequence of any Loan or other obligations hereunder and other commitments of
this type to a level below that which the Bank or company could have achieved
but for such Regulatory Change (taking into account the Bank's or company's
policies with respect to capital adequacy), then the Borrower shall from time to
time pay to the Bank, within 10 days after request by the Bank, such additional
amounts as the Bank determines to be sufficient to compensate the Bank or
company for such reduction in return, to the extent the Bank or such company
determines such reduction to be attributable to the existence, issuance or
maintenance of any Loan or other obligations for the account of the Borrower.
Such demand shall be accompanied by a statement as to the amount of such
compensation and include a summary of the basis for such demand (it being agreed
that such summary, showing in reasonable detail the basis for the calculation of
such compensation, shall, absent clearly demonstrable error, be final and
conclusive and binding on the Borrower).

         (b)   Taxes. (i) If the Borrower is required by Applicable Law to make
               -----
any deduction or withholding in respect of any Taxes (other than Excluded Taxes)
from any amount payable under any Loan Document to or for the account of the
Bank, the Borrower shall pay to or for the account of the Bank, on the date such
amount is payable, such additional amounts as the Bank reasonably determines may
be necessary so that the net amounts received by it or for its account, in the
aggregate, after all applicable deductions or withholdings, shall equal the
amount that the Bank would have been entitled to receive if no deductions or
withholdings were made. "Excluded Taxes" means, with respect to any payment to
the Bank, any taxes imposed on or measured by the overall net income (including
a franchise tax based on net income) of the Bank by the jurisdiction in which it
is incorporated, maintains its principal executive office or in which its
agent's office is located.

               (ii)  If the Bank is required by law to make any payment on
account of Taxes (other than Excluded Taxes) on or in relation to any sum
received or receivable by it under any Loan Document, or any liability for Taxes
(other than Excluded Taxes) in respect of any such payment is imposed, levied or
assessed against the Bank, then the Borrower shall pay when due such additional
amounts as the Bank reasonably determines to be necessary so that the amount
received by it, less any such Taxes paid, imposed, levied or assessed, including
any Taxes (other than Excluded Taxes) imposed on such additional amounts, shall
equal the amount that the Bank

                                       20
<PAGE>

would have been entitled to retain in the absence of the payment, imposition,
levy or assessment of such Taxes.

SECTION 2.9.     COLLATERAL.

         As security for all the Obligations, Santa Anita shall grant to the
Bank a first priority Lien on all of the Capital Stock of the Borrower pursuant
to Santa Anita Pledge Agreement.

         All of the foregoing shall be evidenced by and subject to the terms of
such security agreements, financing statements, deeds of trust and other
documents as Bank shall reasonably require, all in form and substance
satisfactory to Bank. Borrower shall reimburse Bank immediately upon demand for
all out-of-pocket costs and expenses incurred by Bank in connection with any of
the foregoing security, including without limitation, filing and recording fees
and out-of-pocket costs of appraisals, audits and title insurance.

SECTION 2.10.    GUARANTIES.

         The Obligations of the Borrower to the Bank shall be guaranteed in full
by Santa Anita as evidenced by and subject to the terms of Santa Anita Guaranty.

                                  ARTICLE III

                         REPRESENTATIONS AND WARRANTIES

         The Borrower makes the following representations and warranties to the
Bank, which representations and warranties shall survive the execution of this
Agreement and shall continue in full force and effect until the full and final
payment, and satisfaction and discharge, of the Obligations:

SECTION 3.1.     ORGANIZATION, POWERS AND GOOD STANDING.

         The Borrower and each of its Subsidiaries is a corporation duly
organized, validly existing and in good standing under the laws of its
jurisdiction of organization, and has all requisite corporate power and
authority and the legal right to own and operate its properties, to carry on its
business as heretofore conducted and as proposed to be conducted, to enter into
the Loan Documents to which it is a party and to carry out the transactions
contemplated thereby. The Borrower and each of its Subsidiaries is duly
qualified to do business and in good standing in each jurisdiction in which it
owns or operates any material property or conducts any business or in which it
otherwise is required by law to be so qualified, except any jurisdictions where
any failure to be so qualified, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

SECTION 3.2.     AUTHORIZATION, BINDING EFFECT, NO CONFLICTS.

         (a) Authorization. The execution, delivery and performance by the
             -------------
Borrower and each of its Subsidiaries of each Loan Document to which they are a
party have been duly authorized by all necessary corporate or other action on
the part of such Person. Each such Loan

                                       21
<PAGE>

Document has been duly executed and delivered by the Borrower and each of its
Subsidiaries party thereto and is the legal, valid and binding obligation of
such Person, enforceable against it in accordance with its terms, except as
enforcement may be limited by equitable principles and by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to creditors'
rights generally.

         (b) No Conflict. The execution, delivery and performance by any of the
             -----------
Borrower or its Subsidiaries of each Loan Document to which they are a party,
and the consummation of the transactions contemplated thereby, do not (a)
violate any provision of the charter or other organizational documents of such
Person, (b) except for consents that have been obtained and are in full force
and effect, conflict with, result in a breach of, or constitute (or, with the
giving of notice or lapse of time or both, would constitute) a default under, or
require the approval or consent of any Person pursuant to, any Contractual
Obligation of the Borrower or any of its Subsidiaries, or violate any Applicable
Law binding on the Borrower or any of its Subsidiaries, except where such
violation, conflict, breach, or default could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect or (c)
result in the creation or imposition of any Lien upon any asset of the Borrower
or any of its Subsidiaries, or any income or profits therefrom, except for Liens
in favor of the Bank under the Loan Documents.

         (c) Governmental Approvals. Except for filings and recordings in
             ----------------------
connection with the perfection of Liens created by the Loan Documents, no
Governmental Approval is or will be required in connection with the execution,
delivery and performance by the Borrower or any of its Subsidiaries of any Loan
Document to which it is a party or the transactions contemplated thereby or to
ensure the legality, validity or enforceability thereof.

SECTION 3.3.    SUBSIDIARIES; CAPITAL STOCK.

         (a) Subsidiaries. Each Subsidiary of the Borrower, the authorized and
             ------------
issued Capital Stock of each such Subsidiary and the record and beneficial owner
of such Capital Stock are identified in Schedule 3.3, as amended from time to
time. All of the outstanding shares of Capital Stock of each of the Subsidiaries
of the Borrower have been duly authorized and validly issued, are fully paid and
nonassessable and are free and clear of any Liens. Except as disclosed in
Schedule 3.3, as amended from time to time, there are not outstanding any
securities convertible into or exchangeable for shares of Capital Stock of any
of the Subsidiaries of the Borrower, or any options, warrants or other rights to
purchase any such Capital Stock, or any commitments of any kind for the issuance
of additional shares of such Capital Stock or any such convertible or
exchangeable securities or options, warrants or rights to purchase such Capital
Stock. Except as disclosed in Schedule 3.3, neither the Borrower nor any of its
Subsidiaries is a party to any agreement with respect to the issuance, voting or
sale of issued or unissued shares of Capital Stock of any Subsidiary.

         (b) Borrower Capital Stock. As of the Effective Date, (i) the
             ----------------------
authorized and outstanding Capital Stock of the Borrower is as set forth in
Schedule 3.3 and (ii) all outstanding shares of such Capital Stock are duly
authorized and validly issued, are fully paid and nonassessable and are owned
beneficially and of record as set forth in Schedule 3.3, in each case free and
clear of all Liens (other than Permitted Liens).

                                       22
<PAGE>

SECTION 3.4.   LITIGATION.

         Except as disclosed in Schedule 3.4, there are no actions, suits or
proceedings pending or, to the knowledge of the Borrower, threatened against or
affecting the Borrower, any of its Subsidiaries or any of their properties that
(a) if adversely determined, individually or in the aggregate, could have a
Material Adverse Effect, or (b) draws into question the validity, legality or
enforceability of any Loan Document or any transaction contemplated thereby.

SECTION 3.5.   CORRECTNESS OF FINANCIAL STATEMENT.

         The consolidated financial statement of Santa Anita and its
Subsidiaries dated December 31, 1998, a true copy of which has been delivered by
the Borrower to the Bank prior to the date hereof, (a) is complete and correct
and presents fairly the financial condition of the Santa Anita and its
Subsidiaries on a consolidated basis and (b) has been prepared in accordance
with GAAP consistently applied. Since the date of such financial statement there
has been no Material Adverse Change in the financial condition of the Borrower,
nor has Borrower mortgaged, pledged, granted a security interest in or otherwise
encumbered any of its assets or properties except (i) in favor of the Bank, (ii)
Permitted Liens or (iii) as otherwise permitted by the Bank in writing.

SECTION 3.6.   AGREEMENTS; APPLICABLE LAW.

         (a) Neither the Borrower nor any of its Subsidiaries is in violation of
or in default under its charter or bylaws or any of its Contractual Obligations,
except where such violation or default could not reasonably be expected,
individually or in the aggregate, to have a Material Adverse Effect.

         (b) Except as disclosed in Schedule 3.6, the Borrower and its
Subsidiaries are in material compliance with all Applicable Laws and the use of
the Track and operation of the Racetrack Business are in material compliance
with all Applicable Laws relating thereto including, without limitation, the
regulations and requirements of the California Horse Racing Board, and, to the
Borrower's knowledge, it has not received any notice of non-compliance with
Applicable Laws.

SECTION 3.7.   INCOME TAX RETURNS.

         All United States federal income tax returns and all other material tax
returns required to be filed by the Borrower or any of its Subsidiaries have
been filed and all Taxes due pursuant to such returns have been paid, except
such Taxes, if any, as are being contested in good faith and as to which
adequate reserves have been established in accordance with GAAP. To the
knowledge of the Borrower, there have not been asserted or proposed to be
asserted any Tax deficiency against the Borrower or any of its Subsidiaries
(except deficiencies that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect) that is not reserved
against on the financial books of the Borrower or such Subsidiary, as the case
may be.

                                       23
<PAGE>

SECTION 3.8.   GOVERNMENTAL REGULATIONS.

         Neither the Borrower nor any of its Subsidiaries is (a) an "investment
company" registered or required to be registered under the Investment Company
Act of 1940, as amended, or a company controlled by or principal underwriter of
such a company, or (b) subject to regulation under the Public Utility Holding
Company Act of 1935 or to any federal or state, statute or regulation limiting
its ability to incur Debt for money borrowed (other than the Margin
Regulations).

SECTION 3.9.   MARGIN REGULATIONS.

         Neither the Borrower nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purposes of purchasing or carrying Margin Stock. The value of all
Margin Stock held by the Borrower or any of its Subsidiaries constitutes less
than 25% of the value, as determined in accordance with the Margin Regulations,
of all assets of the Borrower and its Subsidiaries.

SECTION 3.10.  TITLE TO PROPERTY.

         Except as disclosed on Schedule 3.10, each of the Borrower and its
Subsidiaries has good title to or valid and subsisting leasehold interests in
all of its property reflected in its books and records as being owned or leased
by it. No such property is subject to any Lien, other than Permitted Liens.

SECTION 3.11.  ENVIRONMENTAL CONDITION.

         Except as disclosed in Schedule 3.11:

         (a) Any real property owned or leased by the Borrower or any of its
Subsidiaries and, to the Borrower's knowledge, each property adjacent thereto,
is free from contamination from any Hazardous Materials, except contamination
that, individually or in the aggregate, could not reasonably be expected to
result in the payment of a Material Environmental Amount. Neither the Borrower
nor any of its Subsidiaries or, to the knowledge of the Borrower, any prior
owner or other user of such real property owned by the Borrower or any of its
Subsidiaries or any such adjacent property has caused or suffered any
Environmental Damages in connection with such real property, such adjacent
property or the business or operations of the Borrower or its Subsidiaries,
except for Environmental Damages that have not had and could not reasonably be
expected to, individually or in the aggregate, result in the payment of a
Material Environmental Amount.

         (b) Neither the Borrower nor any of its Subsidiaries or, to the
knowledge of the Borrower, any prior owner or other user of any real property
owned by the Borrower or any of its Subsidiaries or any adjacent property has
received notice of any actual or alleged violation of Environmental
Requirements, or notice of any actual or alleged liability for Environmental
Damages in connection with such real property or such adjacent property or the
business or operations of the Borrower, except for violations and liabilities
that could not reasonably be expected, individually or in the aggregate, to
result in the payment of a Material Environmental

                                       24
<PAGE>

Amount. There exists no order, judgment or decree, and there is not pending or,
to the knowledge of the Borrower, threatened, any action, suit, proceeding or
investigation relating to any actual or alleged liability arising out of the
presence or suspected presence of Hazardous Material, any actual or alleged
violation of Environmental Requirements or any actual or alleged liability for
Environmental Damages in connection with the real property owned by the Borrower
or any of its Subsidiaries or the business or operations of the Borrower or its
Subsidiaries (except for Environmental Damages that have not had and could not
reasonably be expected to, individually or in the aggregate, result in the
payment of a Material Environmental Amount).

SECTION 3.12.  ABSENCE OF CERTAIN RESTRICTIONS.

         Except as disclosed in Schedule 3.12, neither the Borrower nor any of
its Subsidiaries is subject to any Contractual Obligation that restricts or
limits the ability of any Subsidiary to (a) make Restricted Payments to the
Borrower, (b) pay Indebtedness owed the Borrower or any Subsidiary thereof, (c)
make any loans or advances to the Borrower or (d) except as provided in
Contractual Obligations respecting the specific assets subject to Permitted
Liens, transfer any of its property to the Borrower.

SECTION 3.13.  LABOR MATTERS.

         There are no material strikes or other labor disputes pending or, to
the knowledge of the Borrower, threatened against the Borrower or any of its
Subsidiaries. Except as set forth in Schedule 3.13, there are no collective
bargaining agreements to which the Borrower or any of its Subsidiaries is a
party.

SECTION 3.14.  YEAR 2000 MATTERS.

         Except as set forth in Schedule 3.14, all of the material computer
software, computer hardware (whether general or special purpose), and other
similar or related items of automated, computerized or software systems that are
used or relied on by the Borrower or any of its Subsidiaries in the conduct of
its business will not malfunction, will not cease to function, will not generate
incorrect data, and will not produce incorrect results when processing,
providing or receiving (a) date-related data into and between the twentieth and
twenty-first centuries and (b) date-related data in connection with any valid
date in the twentieth and twenty-first centuries.

SECTION 3.15.  TRANSACTIONS WITH AFFILIATES.

         As of the Effective Date, except as disclosed in Schedule 3.15 and
except for transactions on arm's length terms pursuant to which the Borrower or
any Subsidiary makes payments in the ordinary course of business upon terms no
less favorable than the Borrower or such Subsidiary could obtain from third
parties, none of the officers, directors or employees of the Borrower or any of
its Subsidiaries is presently a party to any transaction with the Borrower or
any Subsidiary (other than for services as employees, officers and directors),
including any contract, agreement or other arrangement providing for the
furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
director or such employee or, to the knowledge of the Borrower, any corporation,
partnership, trust or

                                       25
<PAGE>

other entity in which any officer, director or any such employee has a
substantial interest or is an officer, director, trustee or partner.

SECTION 3.16.  DISCLOSURE.

         The information in each document, certificate or written statement
furnished to the Bank by or on behalf of the Borrower or any of its Subsidiaries
with respect to the business, assets, prospects, results of operation or
financial condition of the Borrower of such Subsidiary or use in connection with
the transactions contemplated by this Agreement at the time of delivery thereof,
was true and correct in all material respects and did not omit, when considered
as a whole, any material fact necessary in order to make the statements made not
misleading, in light of the circumstances under which they were made. There is
no fact known to the Borrower (other than matters of a general economic nature)
that has had or could reasonably be expected to have, individually or in the
aggregate, a Material Adverse Effect and that has not been disclosed herein or
in such other documents, certificates or statements.

SECTION 3.17.  NO SUBORDINATION.

         There is no agreement, indenture, contract or instrument to which
Borrower or any of its Subsidiaries is a party or by which Borrower or any of
its Subsidiaries may be bound that requires the subordination in right of
payment of any of Obligations to which the Borrower or such Subsidiary is
obligated to make payment with respect to under this Agreement or any other Loan
Document.

SECTION 3.18.  LICENSES, PERMITS, FRANCHISES.

         The Borrower and each of its Subsidiaries possesses all Governmental
Approvals (other than Governmental Approvals which the failure to obtain could
not, either individually or in the aggregate, have a Material Adverse Effect)
that are necessary for the ownership, maintenance and operation of its
properties and conduct of its business as now conducted and proposed to be
conducted, and is not in material violation thereof. Without limitation, the
Borrower and its Subsidiaries possess, and will hereafter possess (i) all
governmental permits, consents, approvals, franchises, licenses and approvals
relating to the use or occupancy of the Track and operation of the Racetrack
Business, including a Racing License that permits, together with a Racing
License obtained by Oak Tree for the 2000-'01 racing season, no less than 100
Racing Days at the Track for the 2000-'01 racing season, and all gaming, permits
and licenses, racing licenses, certificates of occupancy, certificates of
compliance, food handlers permits, liquor licenses, and any certificates of
unofficial bodies that may be required or customary for the conduct of the
Racetrack Business and (ii) rights to all trademarks, trade names, patents, and
fictitious names, if any, in each case, necessary to enable the Borrower and its
Subsidiaries it to conduct the Racetrack Business or any other business in which
the Borrower or any of its Subsidiaries is currently engaged in compliance with
applicable law.

                                       26
<PAGE>

SECTION 3.19.  ERISA.

         The Borrower is, and all ERISA Affiliates are, in compliance in all
material respects with all applicable provisions of the ERISA; neither the
Borrower nor any ERISA Affiliate has violated any provision of any Plan; no
Reportable Event has occurred and is continuing with respect to any Plan
initiated by the Borrower or any ERISA Affiliate; the Borrower and all ERISA
Affiliates have met their minimum funding requirements under ERISA with respect
to each Plan; and each Plan will be able to fulfill its benefit obligations as
they come due in accordance with the Plan documents and under generally accepted
accounting principles.

SECTION 3.20.  LEASES.

         Schedule 3.20 lists all material leases or subleases to which the
Borrower or any Subsidiary, as of the Effective Date, is a lessee, sublessee,
lessor or sublessor and affecting any portion of the Mortgaged Property, the
operation of the Racetrack Business or any other business of the Borrower and
its Subsidiaries as presently conducted (collectively, the "Leases").

                                   ARTICLE IV

                                   CONDITIONS

SECTION 4.1.   CLOSING CONDITIONS.

         The occurrence of the Effective Date, and the obligations of the Bank
pursuant to the Commitment, are subject to the following conditions precedent,
each of which shall be satisfied on or prior to the Effective Date:

         (a) The Bank shall have received all of the following, each of which
shall be originals unless otherwise specified, each properly executed by officer
of each party thereto, each dated as of the Effective Date and each in form and
substance reasonably satisfactory to the Bank and its legal counsel:

          (1)  at least one (1) executed counterpart of this Agreement, executed
by the Borrower;

          (2)  an original Note executed by the Borrower in favor of the Bank,
in a principal amount equal to the Commitment;

          (3)  at least one (1) executed counterpart of the Santa Anita Guaranty
executed by Santa Anita;

          (4)  at least one (1) executed counterpart of the Santa Anita Pledge
Agreement executed by Santa Anita, together with all documents and instruments
(including, without limitation, stock certificates and stock powers with respect
to the stock pledged thereunder) required to be delivered pursuant thereto;

                                       27
<PAGE>

          (5) at  least  one  (1)  executed  counterpart  of the  Parent  Pledge
Agreement executed by Parent, together with all documents and instruments
(including, without limitation, stock certificates and stock powers with respect
to the stock pledged thereunder) required to be delivered pursuant thereto;

          (6) with  respect  to the  Borrower,  Santa  Anita  and  Parent,  such
documentation as the Bank may reasonably require to establish the due
organization, valid existence and good standing of such Person, qualification to
engage in business in each material jurisdiction in which it is engaged in
business or required to be so qualified, such Person's authority to execute,
deliver and perform the Loan Documents to which it is a party, including
certificates of good standing, certificates of corporate resolutions, incumbency
certificates, and the like; and

          (7) a  certificate  of the chief  financial  officer of the  Borrower,
certifying that the  representations  contained in Article III are true and
correct in all material respects.

         (b) Fees and Expenses Paid. The Borrower shall have paid (i) all Fees
             -----------------------
due on or before the Effective Date and (ii) all expenses of the Bank which the
Borrower has agreed therein to pay and for which the Borrower shall have been
billed on or before the Effective Date.

         (c) Representations and Warranties. The representations and warranties
             -------------------------------
of the Borrower contained in Article 3 of this Agreement and in each other Loan
Document to which the Borrower is a party shall be true and correct in all
material respects.

         (d) No Default. The Borrower and any other Parties (other than the
             -----------
Bank) shall be in compliance with all the terms and provisions of the Loan
Documents, and after giving effect to the initial Loan, no Default or Event of
Default shall have occurred and be continuing.

         (e) Absence of Litigation Events. There has not been issued any
             -----------------------------
injunction, order or decree that prohibits or limits any of the transactions
contemplated by the Loan Documents and there shall not be any action, suit,
proceeding or investigation pending or, to the knowledge of the Borrower,
currently threatened against the Borrower or any of its Subsidiaries that (i)
draws into question the validity, legality or enforceability of any Loan
Document or the ability of any such Person to consummate the transactions
contemplated thereby or (ii) might result, either individually or in the
aggregate, in any Material Adverse Change.

         (f) Approvals. All governmental and third party approvals (including
             ----------
landlords' and other consents) necessary or, in the discretion of the Bank,
advisable in connection with the continuing operations of the Borrower and its
Subsidiaries and the transactions contemplated hereby and under the other Loan
Documents shall have been obtained and be in full force and effect.

         (g) Licenses. The Bank shall have received an officer's certificate in
             ---------
form and substance satisfactory to the Bank certifying that the Borrower and its
Subsidiaries possess (i) a Racing License for the 2000-'01 racing season and
(ii) all permits or licenses (except for those

                                       28
<PAGE>

permits or licenses which the failure to obtain would not have a Material
Adverse Effect) specified in Section 3.18.

         (h) Documentation. The Bank shall have received all additional
             --------------
documents which it reasonably may request in connection with such the making of
the Loans or any other transaction contemplated by this Agreement or any other
Loan Document.

         (i) Legal Matters.  All legal matters relating to the Loan Documents
             --------------
shall be reasonably satisfactory to the Bank.

SECTION 4.2.   CONDITIONS PRECEDENT TO LOANS.

         The obligation of the Bank to make any Loan on any date shall be
subject to the following conditions precedent:

         (a) Satisfaction of Closing Conditions. The conditions precedent set
             ----------------------------------
forth in Section 4.1 shall have been satisfied or waived in writing by the Bank.

         (b) Notice of Borrowing. The Borrower shall have delivered to the Bank,
             -------------------
in accordance with the applicable provisions of this Agreement, a Notice of
Borrowing (or telephonic notice in lieu thereof).

         (c) Representations and Warranties. All of the representations and
             ------------------------------
warranties of the Borrower and its Subsidiaries contained in the Loan Documents
shall be true and correct in all material respects on and as of the Effective
Date as though made on and as of that date (except to the extent that such
representations and warranties expressly were made only as of a specific date).

         (d) No Default. No Default or Event of Default shall exist or result
             ----------
from the making of the Loans or any other action contemplated by this Agreement
or any other Loan Document.

         (e) No Material Adverse Change. No Material Adverse Change shall have
             --------------------------
occurred since the date of the financial statements referred to in Section 3.5
and no material adverse change shall have occurred in the Applicable Laws
affecting the Bank or the Borrower.

         (f) Satisfaction of Conditions. Each Borrowing of a Loan shall
             --------------------------
constitute a representation and warranty by the Borrower as of the date of such
Borrowing that the conditions contained in clauses (c) through (e) above have
been satisfied.

                                    ARTICLE V

                              AFFIRMATIVE COVENANTS

         The Borrower covenants that so long as any Loan is outstanding, the
Borrower shall, and shall cause each of its Subsidiaries to:

                                       29
<PAGE>

SECTION 5.1.             FINANCIAL STATEMENTS AND OTHER REPORTS.

         Deliver, or cause to be delivered, to the Bank:

         (a) Annual Financial Reports. As soon as practicable and in any event
             ------------------------
within 120 days after the end of each Fiscal Year, the consolidated (and
consolidating) balance sheet of Santa Anita and its Subsidiaries as of the end
of such Fiscal Year and the related consolidated (and, except as to statements
of stockholders' equity, consolidating) statements of income, stockholders'
equity and cash flow of Santa Anita and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the consolidated (and
consolidating) figures for the previous Fiscal Year, all in reasonable detail
and (i) in the case of such consolidated financial statements, accompanied by an
unqualified report thereon of Ernst & Young LLP or other independent certified
public accountants of recognized national standing selected by Santa Anita and
reasonably satisfactory to the Bank and (ii) in the case of such consolidating
financial statements, certified by the chief financial officer of Santa Anita as
being fairly stated in all material respects when considered in relation to the
audited consolidated financial statements of Santa Anita and its Subsidiaries;

         (b) Quarterly Financials. As soon as practicable and in any event
             --------------------
within 60 days after the end of each fiscal quarter (other than the last fiscal
quarter of any Fiscal Year), an unaudited consolidated (and consolidating)
balance sheet of Santa Anita and its Subsidiaries as of the end of such quarter
and the related unaudited consolidated statements of income, stockholders'
equity and cash flow for such quarter and the portion of the Fiscal Year ended
at the end of such quarter, setting forth in each case in comparative form the
consolidated figures for the corresponding periods of the prior Fiscal Year, all
in reasonable detail and certified by Santa Anita's chief financial officer as
fairly presenting the consolidated financial condition of Santa Anita and its
Subsidiaries as of the dates indicated, and their consolidated results of
operations and cash flows for the periods indicated, in conformity with GAAP,
subject to normal year-end adjustments and the absence of footnotes;

         (c) SEC Filings of Parent. Promptly after the filing thereof with the
             ---------------------
SEC, all annual reports on Form 10-K and quarterly reports on Form 10-Q filed by
Parent with the SEC;

         (d) Evidence of Compliance with Financial Covenants. Together with each
             ------------------------------------------------
delivery of financial statements pursuant to clauses (a) and (b) above, a
certificate of the chief financial officer of the Borrower or Santa Anita in
substantially the form of Exhibit H hereto, duly completed and setting forth the
calculations required to establish compliance with Sections 6.17 and 6.18 of the
Term Loan Credit Agreement on the date of such financial statements;

         (e) Event of Default. Within three Business Days after the Borrower
             ----------------
becomes aware of the occurrence of any Default or Event of Default, a
certificate of a Senior Officer of the Borrower setting forth the details
thereof and the action that the Borrower is taking or proposes to take with
respect thereto;

         (f) Notice of Litigation. Within three Business Days after the Borrower
             --------------------
obtains knowledge of the threat or commencement of litigation or proceedings
affecting the Borrower or

                                       30
<PAGE>

any of its Subsidiaries, or of any material development in any pending or future
litigation, (i) that alleges liability in excess of $1,000,000, (ii) in which
injunctive or similar relief is sought that, if obtained could have a Material
Adverse Effect or (iii) that questions the validity or enforceability of any
Loan Document, notice providing reasonable details about the threat or
commencement of such litigation or about such material development;

         (g) Audit Reports. Within three Business Days after receipt thereof,
             -------------
copies of all final reports or letters submitted to Santa Anita by its
independent certified public accountants in connection with each audit of the
financial statements of Santa Anita or its Subsidiaries made by such
accountants, including any management report, which reports Santa Anita agrees
to obtain in connection with each of its annual audits;

         (h) Business Plan. Within 90 days after the end of each Fiscal Year of
             --------------
Santa Anita, a forecast for each of the next succeeding two Fiscal Years of the
consolidated balance sheet and the consolidated results of operations and cash
flow of Santa Anita and its Subsidiaries, together with (i) an outline of the
major assumptions upon which the forecast is based and (ii) a calculation in
reasonable detail evidencing compliance with all covenants set forth herein on
the basis of, and after giving effect to, such forecast;

          (i)  Environmental  Notices.  Within  three  Business  Days  after the
               -----------------------
receipt  thereof by the  Borrower,  a copy of any notice,  summons,  citation or
written communication  concerning any actual,  alleged,  suspected or threatened
violation of Environmental Requirements,  or liability of the Borrower or any of
its Subsidiaries for Environmental Damages;

         (j)   Corporate Changes.  Within three Business Days after the
               -----------------
occurrence of any change in the name or the organizational structure of
Borrower, including amendments or other modifications to the Borrower's
articles of incorporation or bylaws;

         (k) Cancellation of Insurance. Within three Business Days after the
             -------------------------
occurrence of any termination or cancellation of any insurance policy which
Borrower or any of its Subsidiaries is required to maintain pursuant to this
Agreement or any other Loan Document, or any uninsured or partially uninsured
loss through liability or property damage, or through fire, theft or any other
cause affecting Borrower's property in excess of an aggregate of $1,000,000;

         (l) Other Information. From time to time such additional information
             -----------------
regarding the Borrower or any of its Subsidiaries or any of their respective
businesses, assets, liabilities, prospects, results of operations or condition
(financial or otherwise) as the Bank may reasonably request.

SECTION 5.2.             RECORDS AND INSPECTION, ETC.

         (a) Maintain adequate books, records and accounts as may be required or
necessary to permit the preparation of consolidated financial statements in
accordance with sound business practices and GAAP and (b) permit such Persons as
the Bank may designate, at reasonable times and as often as may be reasonably
requested, under reasonable circumstances, to (i) visit and inspect any of its
properties, (ii) inspect and copy its books and records, and (iii) discuss with
its

                                       31
<PAGE>

officers and its independent accountants (so long as no Default or Event of
Default has occurred and is continuing, with prior coordination through the
Borrower), its business, assets, liabilities, prospects, results of operations
or financial condition.

SECTION 5.3.             CORPORATE EXISTENCE, ETC.

         At all times preserve and keep in full force and effect its corporate
existence and all material rights, franchises and other Governmental Approvals,
provided, however, that (a) the corporate existence of any Subsidiary may be
terminated as contemplated and permitted by Section 6.6 and (b) the corporate
existence of any Subsidiary may be terminated, and any such Governmental
Approval may be terminated or not renewed, if such termination or nonrenewal, as
the case may be, is determined by the Board of Directors of the Borrower to be
in the best interest of the Borrower and is not disadvantageous in any material
respect to the Bank.

SECTION 5.4.             PAYMENT OF TAXES.

         Pay and discharge all material Taxes imposed upon it or any of its
properties or in respect of any of its franchises, business, income or property
before any penalty shall be incurred with respect to such Taxes, provided,
however, that, unless and until foreclosure, distraint, levy, sale or similar
proceedings shall have commenced, the Borrower and its Subsidiaries need not pay
or discharge any such Tax so long as the validity or amount thereof is being
contested in good faith and by appropriate proceedings and so long as any
reserves or other appropriate provisions as may be required by GAAP shall have
been made therefor.

SECTION 5.5.             MAINTENANCE OF PROPERTIES.

         Maintain or cause to be maintained in good repair, working order and
condition (ordinary wear and tear excepted and subject to alterations made in
connection with the renovations described in the business plan delivered to the
Bank pursuant to Section 5.1(h)) all properties and other assets necessary to
its business, and from time to time the Borrower or the applicable Subsidiary
shall make or cause to be made all appropriate repairs, renewals and
replacements thereto, except where the failure to do so could not reasonably be
expected to have a Material Adverse Effect.

SECTION 5.6.             MAINTENANCE OF INSURANCE.

         (a) Maintain with financially sound and reputable insurance companies
satisfactory to the Bank, insurance in at least such amounts, of such character
and against at least such risks as is maintained by the Borrower and each such
Subsidiary on the date of this Agreement and described in Schedule 5.6, or, if
such insurance is not available on a commercially reasonable basis, with the
Bank's prior written consent, such insurance, in at least such amounts, of such
character and against at least such risks as is usually maintained by companies
of established repute engaged in the same or a similar business in the same
general area. Such insurance shall include fire and extended coverage, public
liability, property damage, workers' compensation, business interruption, flood
(if the Bank determines that such insurance is required under

                                       32
<PAGE>

Applicable Law) and such other coverage as the Bank may reasonably request,
provided, however, that the Bank shall not require the Borrower to obtain
earthquake loss insurance.

         (b) In addition to any requirements under the Loan Documents, (i) all
property loss or damage insurance policies with respect to any assets of the
Borrower or any of its Subsidiaries shall contain lenders loss payable
endorsements in favor of the Bank in form and substance satisfactory to it,
which shall provide that all insurance proceeds (A) in excess of $2,000,000 or
(B) payable after the insurer has received written notice from the Bank that an
Event of Default then exists (until a contrary notice is received), shall be
payable directly to the Bank, provided that any business interruption insurance
proceeds resulting from a business interruption of less than five (5) days shall
be released to the Borrower, (ii) all insurance policies shall (A) provide that
no cancellation, reduction in amount or material adverse change in coverage
thereof shall be effective until at least 30 days after receipt by the Bank of
written notice thereof, (B) insure the interests of the Bank regardless of any
breach of or violation by the Borrower or any of its Subsidiaries or any other
Person of any warranties, declarations or conditions contained therein, and (C)
provide that the Bank shall have no obligation or liability for premiums,
commissions, assessments or calls in connection with such insurance or in
connection with any representation or warranty made by the Borrower or any of
its Subsidiaries or any Subsidiary thereof in connection with obtaining of such
insurance, and (iii) all business interruption and extra expense insurance shall
name the Bank as a loss payee.

SECTION 5.7.             CONDUCT OF BUSINESS; POSSESSION OF LICENSES.

         (a) Engage only in the businesses in which the Borrower or such
Subsidiary is engaged on the date hereof except for other businesses that are
ancillary or incidental to its ongoing business as presently conducted or as
contemplated in the business plan delivered pursuant to Section 4.1. The
Borrower shall, and shall cause each of its Subsidiaries to, conduct its
business in compliance in all material respects with all Applicable Law, all its
Governmental Approvals and all its Contractual Obligations except to the extent
any noncompliance could not reasonably be expected, individually or in the
aggregate, to have a Material Adverse Effect.

         (b) (i) Maintain all licenses, permits and other consents and approvals
required with respect to the operation of the Racetrack Business; (ii) (A)
maintain any then current Racing License, and (B) promptly apply for a Racing
License for each racing season subsequent to the 2000-'01 racing season, (iii)
use its best efforts to obtain a valid Racing License for each such subsequent
racing season in a timely fashion customary practice within the industry and
(iv) obtain a Racing License for each calendar year that permits, together with
any Racing License obtained by Oak Tree for such calendar year, at least 100
Racing Days at the Track.

SECTION 5.8.             ADDITIONAL GUARANTIES AND COLLATERAL.

         Upon the creation or acquisition after the date hereof of any
Subsidiary, the Borrower shall, at the Bank's request, cause such Subsidiary to
execute and deliver a guaranty in substantially the form of Exhibit D hereto and
such other Loan Documents as the Bank may request, and the Borrower shall grant,
and cause to be granted, a first priority Lien on all of the issued and
outstanding Capital Stock of such Subsidiary pursuant to the Borrower Pledge

                                       33
<PAGE>

Agreement, in each case in form and substance satisfactory to the Bank. The
Borrower, at its own expense, shall execute and deliver, or cause to be executed
and delivered, and thereafter cause to be registered, filed or recorded with the
appropriate Governmental Authority, any and all documents and instruments deemed
by the Bank to be necessary or desirable for the creation and perfection of the
foregoing Liens and shall pay all Taxes and fees related to such registration,
filing or recording.

SECTION 5.9.     SUBORDINATION OF OTHER INDEBTEDNESS.

         Cause all Intercompany Debt and Subordinated Debt to be subordinated to
the prior payment in full in cash of the Obligations or the obligations under
the LATC Guaranty, as applicable, on terms of subordination satisfactory to the
Bank; provided, however, that as long as no Event of Default then exists, the
Borrower and/or any of its Subsidiaries may pay such Intercompany Debt in the
ordinary course of business consistent with past practice.

SECTION 5.10     ENVIRONMENTAL COMPLIANCE.

         Comply, in all material respects with all Environmental Requirements
and shall not cause or permit to exist on the Mortgaged Property and any other
real property owned by the Borrower or any of its Subsidiaries any Hazardous
Materials, unless the presence of such materials is necessary for the conduct of
the business of the Borrower or its Subsidiaries, all necessary Governmental
Approvals for such activity have been obtained and there is no material risk
that any Environmental Damages could result from such activity.

SECTION 5.11.    ERISA.

         Maintain and operate all Plans that are maintained and operated by the
Borrower or any of its Subsidiaries so as to comply with the provisions of
ERISA, the Code, all other applicable laws, and the regulations and
interpretations thereunder and the respective requirements of the governing
documents for such Plans to the extent that failure to comply with such
provisions, regulations, interpretations and requirements have a Material
Adverse Effect.

SECTION 5.12.    YEAR 2000 COMPLIANCE.

         Perform all acts reasonably necessary to ensure that (a) the Borrower
and any business in which the Borrower or any Subsidiary holds a substantial
interest, and (b) all customers, suppliers and vendors that are material to the
Borrower's business, become Year 2000 Compliant in a timely manner. Such acts
shall include, without limitation, performing a comprehensive review and
assessment of all of the Borrower's systems and adopting a detailed plan, with
itemized budget, for the remediation, monitoring and testing of such systems. As
used herein, "Year 2000 Compliant" shall mean, in regard to any entity, that all
software, hardware, firmware, equipment, goods or systems utilized by or
material to the business operations or financial condition of such entity, will
properly perform date sensitive functions before, during and after the year
2000. The Borrower shall, immediately upon request, provide to the Bank such
certifications or other evidence of Borrower's compliance with the terms hereof
as the Bank may from time to time require.

                                       34
<PAGE>

                                   ARTICLE VI

                               NEGATIVE COVENANTS

         The Borrower covenants and agrees that so long as any Loan remains
outstanding, the Borrower will not, and will neither cause nor permit any of its
Subsidiaries to:

SECTION 6.1.             INDEBTEDNESS.

         Incur, create, assume or permit to exist any Indebtedness, except:

         (a)      the Obligations and the obligations of the Borrower or any
Subsidiary under the Term Loan Documents;

         (b)      Intercompany Debt;

         (c)      Subordinated Debt;

         (d)      Indebtedness existing on the date hereof and set forth in
Schedule 6.1, and Indebtedness incurred to refinance such Indebtedness;

         (e)      Indebtedness under any Hedging Contract; and

         (f)      Indebtedness consisting of purchase money Indebtedness
incurred in the ordinary course of business after the Effective Date to finance
Capital Expenditures, provided that (i) the Indebtedness incurred shall not
exceed 85% of the purchase price of the assets financed thereby and (ii) the
aggregate principal amount of any Indebtedness incurred pursuant to this
paragraph (f) during any Fiscal Year shall not exceed $2,000,000, and
Indebtedness incurred to refinance such Indebtedness.

SECTION 6.2.             LIENS.

         Create, incur, assume or permit to exist any Lien on or with respect to
any asset, or any income or profits therefrom, whether now owned or hereafter
acquired, except:

         (a)      Liens securing the Obligations and Liens created under the
Term Loan Documents;

         (b)      Liens existing on the date hereof and set forth on Schedule
6.2;

         (c)      Liens for taxes, assessments or charges of any Governmental
Authority for claims that are not material and are not yet due or being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves or other appropriate provisions are being maintained in
accordance with GAAP;

                                       35
<PAGE>

         (d) statutory Liens of landlords and Liens of carriers, warehousemen,
mechanics, materialmen, bankers and other Liens imposed by law and created in
the ordinary course of business;

         (e) Liens incurred and deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security benefits or to secure the performance (including by way of
surety bonds or appeal bonds) of tenders, bids, leases, contracts, statutory
obligations or similar obligations or arising as a result of progress payments
under contracts, in each case in the ordinary course of business and not
relating to the repayment of Indebtedness;

         (f) easements, rights-of-way, covenants, consents, reservations,
encroachments, variations and other restrictions, charges or encumbrances
(whether or not recorded) that do not materially interfere with the ordinary
conduct of business;

         (g) building restrictions, zoning laws and other statutes, laws, rules,
regulations, ordinances and restrictions;

         (h) leases or subleases granted in the ordinary course of business to
others not materially interfering with the business of, and consistent with past
practices of, the Borrower or any Subsidiary;

         (i) any attachment or judgment Lien not constituting an Event of
Default;

         (j) Liens existing on assets of any Person at the time such Person
becomes a Subsidiary, provided that (i) such Lien was not created in
contemplation of such Person becoming a Subsidiary, and (ii) such Lien does not
encumber any assets other than the assets subject to such Lien at the time such
Person becomes a Subsidiary;

         (k) other Liens incidental to the conduct of the business or the
ownership of the assets of the Borrower or any Subsidiary that (i) were not
incurred in connection with borrowed money, (ii) do not in the aggregate
materially detract from the value of the assets subject thereto or materially
impair the use thereof in the operation of such business and (iii) do not secure
obligations aggregating in excess of $250,000; and

         (l) Liens on equipment or other personal property assets hereafter
acquired by the Borrower or any of its Subsidiaries, provided that (i) such
Liens secure Indebtedness permitted by Section 6.1(f), (ii) such Liens are
incurred, and the Indebtedness secured thereby is created, within 90 days after
such acquisition of such equipment or other acquired assets, (iii) the
Indebtedness secured thereby does not exceed 85% of the lesser of the cost of
such equipment or other acquired asset and (iv) such Liens do not attach to or
otherwise encumber the Mortgaged Property or any other property or assets of the
Borrower or any of its Subsidiaries other than the equipment or other asset so
acquired.

                                       36
<PAGE>

SECTION 6.3.      RESTRICTED PAYMENTS.

         Pay or make, or agree to declare, pay or make, any Restricted Payment,
except (a) dividends, distributions or payments by any Subsidiary to the
Borrower and (b) distributions made by the Borrower in respect of the Borrower's
Capital Stock, provided that, in the case of clause (b), no Event of Default
then exists.

SECTION 6.4.      LOANS, ADVANCES, INVESTMENTS.

         Make or permit to exist any loans or advances to or Investments in any
person or entity, except:

         (a)(i) marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by any agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within one year from the date of acquisition thereof, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision of any such state or any public instrumentality thereof maturing
within one year from the date of acquisition thereof and having, at the time of
acquisition, the highest rating obtainable from either Standard & Poor's Rating
Group or Moody's Investors Service, Inc., (iii) commercial paper having, at the
time of acquisition, the highest rating obtainable from either Standard & Poor's
Rating Group or Moody's Investors Service, Inc., (iv) demand deposits,
certificates of deposit, other time deposits, and bankers' acceptances maturing
within one year from the date of acquisition thereof issued by any bank
operating under the laws of the United States or any state thereof or the
District of Columbia that has combined capital and surplus of not less than
$500,000,000, or (v) institutional money market funds organized under the laws
of the United States of America or any state thereof that are approved in
writing by the Bank or, if not so described or approved, substantially all of
whose assets are securities of the types described in the foregoing clauses (i),
(ii), (iii), and (iv);

         (b)(i) trade credit extended on usual and customary terms in the
ordinary course of business, (ii) advances to employees for moving, relocation
and travel expenses, drawing accounts and similar expenditures in the ordinary
course of business and not to exceed $500,000 at any time outstanding, and (iii)
acquisitions of capital stock, debt, securities, or other property received in
connection with the bankruptcy, reorganization or similar proceeding of, or
settlement of delinquent accounts and disputes with, customers in the ordinary
course of business, and, in each case, extensions, modifications, and renewals
thereof;

         (c)    any Investment identified in Schedule 6.4, limited to the amount
of such Investment on the date hereof; and

         (d)    Intercompany Debt.

SECTION 6.5.      LEASE EXPENDITURES.

         Incur expenses with respect to Operating Leases (other than the Santa
Anita Lease) in any fiscal year in excess of an aggregate of $100,000.

                                       37
<PAGE>

SECTION 6.6.    FUNDAMENTAL CHANGES.

         Enter into any merger or consolidation, or liquidate, wind-up or
dissolve (or suffer any liquidation or dissolution) or enter into any agreement
providing for any of the foregoing, except for a merger of a Wholly Owned
Subsidiary of the Borrower into the Borrower or (with the Borrower as the
surviving corporation) or another Wholly Owned Subsidiary, or convey, lease,
sell, transfer or otherwise dispose of, in one transaction or series of
transactions, all or substantially all of the Borrower's or any Subsidiary's
business or assets, whether now or hereafter acquired.

SECTION 6.7.    ASSET DISPOSITIONS.

         Make any Asset Disposition, except:

         (a) the sale of inventory in the ordinary course of business;

         (b) sales of assets outside of the ordinary course of business not in
excess of $250,000 in a single transaction or series of related transactions or
aggregating less than $1,000,000 in any Fiscal Year; and

         (c) in addition to dispositions permitted under clauses (a) and (b) of
this Section 6.7, the disposition of equipment if such equipment is obsolete or
no longer useful in the ordinary course of the Borrower's or such Subsidiary's
business; provided that the aggregate Fair Market Value of all such equipment
disposed of in any Fiscal Year shall not exceed $1,000,000.

SECTION 6.8.    SALE-LEASEBACKS.

         Enter into any arrangement, directly or indirectly, whereby the
Borrower or any of its Subsidiaries shall sell or transfer any property owned by
it in order then or thereafter to lease such property or lease other property
which the Borrower or such Subsidiary intends to use for substantially the same
purpose as the property being sold or transferred, without the prior written
consent of the Bank.

SECTION 6.9.    TRANSACTIONS WITH AFFILIATES.

         Enter into any transaction (including the transfer or lease of any
property or the rendering of any service) with any Affiliate of the Borrower,
unless such transaction is on fair and reasonable terms no less favorable to the
Borrower or its Subsidiary, as the case may be, than those terms that might be
obtained at the time in a comparable arm's length transaction with a Person who
is not an Affiliate of the Borrower or, if such transaction is not one that by
its nature could be obtained from such other Person, is on fair and reasonable
terms and was negotiated in good faith, provided that this Section shall not
restrict (a) dividends, distributions and other payments and transfers on
account of the Capital Stock of the Borrower or any Wholly-Owned Subsidiary or
(b) the transactions contemplated under this Agreement or any other Loan
Document.

                                       38
<PAGE>

SECTION 6.10.    AMENDMENTS OF CHARTER DOCUMENTS.

         Amend its charter, bylaws or other charter documents in any respect
that affects the voting rights of Capital Stock included in the Collateral or
holders thereof, increases payment obligations of the Borrower, affects the
validity or enforceability of any Loan Document or Lien thereunder or that
otherwise could reasonably be expected to have a Material Adverse Effect,
without in each case obtaining the prior written consent of the Bank.

SECTION 6.11.    RESTRICTIVE AGREEMENTS.

         Enter into any Contractual Obligation that, directly or indirectly,
restricts or limits the ability of such Subsidiary to (a) pay dividends or make
distributions on its Capital Stock, (b) pay Indebtedness owed to the Borrower or
any Subsidiary or (c) make any loans or advances to the Borrower or any
Subsidiary (except as provided hereunder).

SECTION 6.12.    NEGATIVE PLEDGES.

         Enter into or otherwise become subject to, directly or indirectly, any
agreement prohibiting or restricting the Borrower or any Subsidiary in any
manner (including by way of covenant, representation or default), from
incurring, creating or assuming any Lien upon any of its assets.

SECTION 6.13.    AMENDMENTS OR WAIVERS OF SUBORDINATED DEBT DOCUMENTS.

         Amend any loan or other documents pursuant to which any Subordinated
Debt (or any related Contingent Obligation) is outstanding, or waive or
otherwise relinquish any of its rights or causes of action under or arising out
of such documents, with respect to terms and provisions regarding interest
rates, principal or interest payment amounts, principal or interest payment
dates, subordination, representations by or covenants of the Borrower, any
Subsidiary, or events of default, or other material provisions, without in each
case obtaining the prior written consent of the Bank.

SECTION 6.14.    ISSUANCE OF CAPITAL STOCK.

         Issue any Capital Stock to any Person other than (a) in the case of the
Borrower, to Santa Anita and (b) in the case of any Subsidiary, to the Borrower,
in each case, subject to a Lien in favor of the Bank under the Loan Documents.

SECTION 6.15.    ERISA.

         (a) Engage, or permit any Subsidiary to engage, in any prohibited
transaction described in Sections 406 of ERISA or 4975 of the Code for which a
statutory or class exemption is not available or a private exemption has not
been previously obtained from the DOL;

                                       39
<PAGE>

         (b) Terminate, or permit any Subsidiary to terminate, any Benefit Plan
which would result in any liability of the Borrower or any Subsidiary under
Title IV of ERISA in excess of $1,000,000;

         (c) Fail to make any contribution or payment to any Multiemployer Plan
which the Borrower or any Subsidiary or any Subsidiary may be required to make
under any agreement relating to such Multiemployer Plan, or any law pertaining
thereto;

         (d) Fail, or permit any Subsidiary to fail, to timely pay contributions
or installments required under Section 412 of the Code or due with respect to
any waived funding deficiency with respect to any Benefit Plan; or

         (e) Amend, or permit any Subsidiary to amend, a Benefit Plan resulting
in an increase in current liability for the plan year such that the Borrower or
any Subsidiary is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Code;

SECTION 6.16.    USE OF PROCEEDS.

         Use the proceeds of any Loan except for the purposes stated in Section
2.1 hereof.

                                   ARTICLE VII

                                EVENTS OF DEFAULT

SECTION 7.1.     EVENTS OF DEFAULT.

         The occurrence of any of the following shall constitute an "Event of
Default" under this Agreement:

         (a) The Borrower (i) shall fail to pay as and when due (whether at
stated maturity, upon acceleration, upon required prepayment or otherwise) any
principal of any Loan, or (ii) shall fail to pay any interest, Fees or other
amounts payable under the Loan Documents within three Business Days of the date
when due under the Loan Documents; or

         (b) (i) The Borrower shall fail to perform, comply with or observe any
agreement, covenant or obligation under Sections 5.1(e), 5.1(g), Section 5.3 or
5.7, or any Section of Article VI; or (ii) there shall exist an Event of Default
under the Term Loan Credit Agreement; or

         (c) The Borrower shall fail to perform, comply with or observe any
agreement, covenant or obligation under any provision of any Loan Document
(other than those covenants set forth in clause (b) above) and such failure
shall not have been remedied within 30 days after the Borrower becomes aware of
such failure; or

         (d) Any representation or warranty or certification made or furnished
by any the Borrower under any Loan Document shall prove to have been false or
incorrect in any material respect when made (or deemed made); or

                                       40
<PAGE>

         (e) (i) The Borrower shall default in the payment (whether at stated
maturity, upon acceleration, upon required prepayment or otherwise), beyond any
period of grace provided therefor, of (A) any principal of or interest on any
other Indebtedness for borrowed money in an aggregate principal amount in excess
of $250,000 or the deferred purchase price of any property or (B) any principal
of or interest on any Indebtedness (other than for borrowed money or the
deferred purchase price of any property), so long as the validity or amount
thereof is being contested in good faith and by appropriate proceedings and no
action has been commenced to enforce and Lien securing such Indebtedness, or
(ii) any other breach or default (or other event or condition) shall occur under
any agreement, indenture or instrument relating to any such Indebtedness, if the
effect of such breach or default (or such other event or condition) is to cause,
or to permit the holder or holders of such Indebtedness (or a Person on behalf
of such holder or holders) to cause (upon the giving of notice, the lapse of
time or both, or otherwise), such Indebtedness to become or be declared due and
payable, or required to be prepaid, redeemed, purchased or defeased (or an offer
of prepayment, redemption, purchase or defeasance be made), prior to its stated
maturity; or

         (f) There shall be commenced against the Borrower or any of its
Subsidiaries an involuntary case seeking the liquidation or reorganization of
the Borrower or such Subsidiary under the Bankruptcy Code or any similar
proceeding under any other Applicable Law or an involuntary case or proceeding
seeking the appointment of a receiver, liquidator, sequestrator, custodian,
trustee or other officer having similar powers of the Borrower or such
Subsidiary or to take possession of all or a substantial portion of its property
or to operate all or a substantial portion of its business, and any of the
following events occur: (i) the Borrower or such Subsidiary consents to the
institution of such involuntary case or proceeding; (ii) the petition commencing
the involuntary case or proceeding is not timely controverted; (iii) the
petition commencing such involuntary case or proceeding remains undismissed and
unstayed for a period of 60 days; or (iv) an order for relief shall have been
issued or entered therein; or

         (g) The Borrower or any of its Subsidiaries shall institute a voluntary
case seeking liquidation or reorganization under the Bankruptcy Code or any
similar proceeding under any other Applicable Law, or shall consent thereto; or
shall consent to the conversion of an involuntary case to a voluntary case; or
shall file a petition, answer a complaint or otherwise institute any proceeding
seeking, or shall consent to or acquiesce in the appointment of, a receiver,
liquidator, sequestrator, custodian, trustee or other officer with similar
powers of it or to take possession of all or a substantial portion of its
property or to operate all or a substantial portion of its business; or shall
make a general assignment for the benefit of creditors; or shall generally not
pay its debts as they become due; or the Board of Directors of the Borrower or
such Subsidiary (or any committee thereof) adopts any resolution or otherwise
authorizes action to approve any of the foregoing; or

         (h) The Borrower or any of its Subsidiaries shall suffer (i) any money
judgments, fines, writs or warrants of attachment or similar processes that,
individually or in the aggregate, involve an amount or value in excess of
$500,000 (excluding therefrom money judgments to the extent covered by insurance
as to which the carrier has accepted liability), or (ii) any other material
non-monetary judgment or decree (including a judgment for injunctive relief),
and, in any such case, such judgments, writs, warrants or other orders shall
continue unsatisfied and

                                       41
<PAGE>

unstayed for a period of 60 days or any action shall be taken by a judgment
creditor to levy upon the assets of the Borrower or any Subsidiary to enforce
any such judgment; or

         (i) The Borrower, any Subsidiary or any ERISA Affiliate shall: (a)
engage in any prohibited transaction described in Sections 406 of ERISA or 4975
of the Code for which a statutory or class exemption is not available or a
private exemption has not been previously obtained from the DOL; (b) terminate
any Benefit Plan which would result in any liability of the Borrower (including
joint and several liability with another Person) under Title IV of ERISA in
excess of $1,000,000; (c) fail to make any contribution or payment to any
Multiemployer Plan which the Borrower or any Subsidiary or any ERISA Affiliate
may be required to make under any agreement relating to such Multiemployer Plan,
or any law pertaining thereto that could result in liability of the Borrower
(including joint and several liability with another Person) in excess of
$1,000,000; (d) fail to timely pay contributions or installments required under
Section 412 of the Code or due with respect to any waived funding deficiency
with respect to any Benefit Plan that could result in liability of the Borrower
(including joint and several liability with another Person) in excess of
$1,000,000; or (e) amend a Benefit Plan resulting in an increase in current
liability for the plan year such that the Borrower or any Subsidiary or any
ERISA Affiliate is required to provide security to such Benefit Plan under
Section 401(a)(29) of the Code; or

         (j) Any Loan Document, or any material provision thereof, shall cease
to be in full force and effect for any reason, or any Lien in favor of the Bank
thereunder shall fail to have the priority required thereunder, except upon a
release or termination of such Loan Document or Lien pursuant to the terms
thereof; or the Borrower or any of its Subsidiaries shall contest or purport to
repudiate or disavow any of its obligations under or the validity of
enforceability of any Loan Document or any material provision thereof; or

         (k) A Change of Control shall occur at any time.

SECTION 7.2.   REMEDIES.

         (a) Upon the occurrence of an Event of Default under Section 7.1(f) or
(g), then (i) all indebtedness of the Borrower under each of the Loan Documents,
any term thereof to the contrary notwithstanding, automatically shall become
immediately due and payable without presentment, demand, protest or notice of
dishonor, all of which are hereby expressly waived by the Borrower; (ii) the
obligation, if any, of the Bank to extend any further credit under any of the
Loan Documents shall immediately cease and terminate; and (iii) the Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit accommodation from the Bank subject hereto and to
exercise any or all of the rights of a beneficiary or secured party pursuant to
applicable law.

         (b) Upon the occurrence of an Event of Default under 7.1 (other than
under Section 7.1(f) or (g)), then (i) all indebtedness of the Borrower under
each of the Loan Documents, any term thereof to the contrary notwithstanding,
shall at the Bank's option and without notice become immediately due and payable
without presentment, demand, protest or notice of

                                       42
<PAGE>

dishonor, all of which are hereby expressly waived by the Borrower; (ii) the
obligation, if any, of the Bank to extend any further credit under any of the
Loan Documents shall immediately cease and terminate; and (iii) the Bank shall
have all rights, powers and remedies available under each of the Loan Documents,
or accorded by law, including without limitation the right to resort to any or
all security for any credit accommodation from the Bank subject hereto and to
exercise any or all of the rights of a beneficiary or secured party pursuant to
applicable law.

         (c) All rights, powers and remedies of the Bank may be exercised at any
time by the Bank and from time to time after the occurrence of an Event of
Default, are cumulative and not exclusive, and shall be in addition to any other
rights, powers or remedies provided by law or equity.

                                  ARTICLE VIII

                                  MISCELLANEOUS

SECTION 8.1.   NO WAIVER.

         No delay, failure or discontinuance of Bank in exercising any right,
power or remedy under any of the Loan Documents shall affect or operate as a
waiver of such right, power or remedy; nor shall any single or partial exercise
of any such right, power or remedy preclude, waive or otherwise affect any other
or further exercise thereof or the exercise of any other right, power or remedy.
Any waiver, permit, consent or approval of any kind by Bank of any breach of or
default under any of the Loan Documents must be in writing and shall be
effective only to the extent set forth in such writing.

SECTION 8.2.   NOTICES.

         All notices, requests and demands which any party is required or may
desire to give to any other party under any provision of this Agreement must be
in writing delivered to each party at the following address:

         BORROWER:           LOS ANGELES TURF CLUB, INCORPORATED
                             285 West Huntington Drive
                             Arcadia, California  91066
                             Attention: President
                             Facsimile: (626) 446-9565

         with a copy to:

                             Magna Entertainment Corp.
                             337 Magna Drive
                             Aurora, Ontario, Canada  L4G 7L1
                             Attention: James Nicol
                             Facsimile: (905) 726-7169

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<PAGE>

         BANK:               WELLS FARGO BANK, NATIONAL ASSOCIATION
                             John Manning
                             Wells Fargo Bank
                             1000 Lakes Drive, Suite 250
                             West Covina, California 91790
                             Facsimile: 626-919-2909

or to such other address as any party may designate by written notice to all
other parties. Each such notice, request and demand shall be deemed given or
made as follows: (a) if sent by hand delivery, upon delivery; (b) if sent by
mail, upon the earlier of the date of receipt or three (3) days after deposit in
the U.S. mail, first class and postage prepaid; and (c) if sent by telecopy,
upon receipt.

SECTION 8.3.   COSTS, EXPENSES AND ATTORNEYS' FEES.

         Borrower shall pay to Bank immediately upon demand (a) the Bank's
out-of-pocket costs and expenses, including reasonable attorneys' fees expended
or incurred by the Bank in connection with the negotiation and preparation of
this Agreement and the other Loan Documents, the Bank's continued administration
hereof and thereof, and the preparation of any amendments and waivers hereto and
thereto, and (b) the Bank's costs and expenses, including attorney's fees (to
include outside counsel fees but exclude costs of the Bank's in-house counsel)
expended or incurred by the Bank in connection with the enforcement of Bank's
rights and/or the collection of any amounts which become due to Bank under any
of the Loan Documents, or the prosecution or defense of any action in any way
related to any of the Loan Documents, including without limitation, any action
for declaratory relief, whether incurred at the trial or appellate level, in an
arbitration proceeding or otherwise, and including any of the foregoing incurred
in connection with any bankruptcy proceeding (including without limitation, any
adversary proceeding, contested matter or motion brought by Bank or any other
person) relating to the Borrower or any other person or entity.

SECTION 8.4.   INDEMNITY.

         The Borrower shall indemnify, defend and hold harmless the Bank and the
officers, directors, employees, agents, attorneys, affiliates, successors and
assigns of the Bank (collectively, the "Indemnitees") from and against (a) any
and all transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution delivery, filing or recording
of the Loan Documents or the making of the Loans, and (b) any and all
liabilities, losses, damages, penalties, judgments, claims, costs and expenses
of any kind or nature whatsoever (including reasonable attorneys' fees (to
include outside counsel fees but exclude costs of in-house counsel)), and
disbursements in connection with any actual or threatened investigative,
administrative or judicial proceeding, whether or not such Indemnitee shall be
designated a party thereto (and provided that such Indemnitee shall be entitled
to select its own counsel in all such proceedings) that may be imposed on,
incurred by or asserted against such Indemnitee, in any manner relating to or
arising out of the Loan Documents, the Loans, the use or intended use of the
proceeds of the Loans (the "Indemnified Liabilities"); provided that (i) no
Indemnitee shall have the right to be indemnified or held harmless hereunder for
its own

                                       44
<PAGE>

gross negligence or willful misconduct, as determined by a final judgment of a
court of competent jurisdiction, and (ii) the Borrower shall have no obligation
hereunder in respect of Indemnified Liabilities arising from a breach of any
Loan Document by the Indemnitee making a claim hereunder.

         Without limiting the generality of the foregoing, the Borrower further
agrees to fully and promptly pay, perform, discharge, defend, indemnify and hold
harmless each Indemnitee from and against any Environmental Damages; provided
that the Borrower shall not have any obligation to any Indemnitee hereunder with
respect to any Environmental Damages to the extent such Environmental Damages
arise solely from the gross negligence or willful misconduct of that Indemnitee
as determined by a final judgment of a court of competent jurisdiction.

         To the extent that the undertaking to indemnify and hold harmless set
forth herein may be unenforceable as violative of any Applicable Law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the Indemnified Liabilities that is permissible under
Applicable Law. All Indemnified Liabilities shall be payable on demand.

SECTION 8.5.   SUCCESSORS, ASSIGNMENT.

         This Agreement shall be binding upon and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of the parties; provided however, that the Borrower may not assign or transfer
its interest hereunder without the Bank's prior written consent. The Bank
reserves the right to sell, assign, transfer, negotiate or grant participation
in all or any part of, or any interest in, Bank's rights and benefits under each
of the Loan Documents; provided, however, that the Bank agrees that, in the
event that it assigns less than the full amount of the Term Loan, the Bank shall
act as "Administrative Agent" for itself and any such assignees. In connection
therewith, the Bank may disclose all documents and information which the Bank
now has or may hereafter acquire relating to any credit extended by the Bank to
the Borrower, the Borrower or its business, any Subsidiary or the business of
such Subsidiary, or any Collateral.

SECTION 8.6.   ENTIRE AGREEMENT; AMENDMENT.

         This Agreement and the other Loan Documents constitute the entire
agreement between the Borrower and the Bank with respect to any extension of
credit by the Bank subject hereto and supersede all prior negotiations,
communications, discussions and correspondence concerning the subject matter
hereof. This Agreement may be amended or modified only in writing signed by each
party hereto.

SECTION 8.7.   NO THIRD PARTY BENEFICIARIES.

         This Agreement is made and entered into for the sole protection and
benefit of the parties hereto and their respective permitted successors and
assigns, and no other person or entity shall be a third party beneficiary of, or
have any direct or indirect cause of action or claim in connection with, this
Agreement or any other of the Loan Documents to which it is not a party.

                                       45
<PAGE>

SECTION 8.8.   TIME.

         Time is of the essence of each and every provision of this Agreement
and each other of the Loan Documents.

SECTION 8.9.   SEVERABILITY OF PROVISIONS.

         If any provision of this Agreement shall be prohibited by or invalid
under applicable law, such provision shall be ineffective only to the extent of
such prohibition or invalidity without invalidating the remainder of such
provision or any remaining provisions of this Agreement.

SECTION 8.10.  COUNTERPARTS.

         This Agreement may be executed in any number of counterparts, each of
which when executed and delivered shall be deemed to be an original, and all of
which when taken together shall constitute one and the same Agreement.

SECTION 8.11.  GOVERNING LAW.

         This Agreement shall be governed by and construed in accordance with
the laws of the State of California.

SECTION 8.12.  ARBITRATION.

         (a) Arbitration. Upon the demand of any party, any Dispute shall be
             -----------
resolved by binding arbitration (except as set forth in (e) below) in accordance
with the terms of this Agreement. A "Dispute" shall mean any action, dispute,
claim or controversy of any kind, whether in contract or tort, statutory or
common law, legal or equitable, now existing or hereafter arising under or in
connection with, or in any way pertaining to, any of the Loan Documents, or any
past, present or future extensions of credit and other activities, transactions
or obligations of any kind related directly or indirectly to any of the Loan
Documents, including without limitation, any of the foregoing arising in
connection with the exercise of any self-help, ancillary or other remedies
pursuant to any of the Loan Documents. Any party may by summary proceedings
bring an action in court to compel arbitration of a Dispute. Any party who fails
or refuses to submit to arbitration following a lawful demand by any other party
shall bear all costs and expenses incurred by such other party in compelling
arbitration of any Dispute.

         (b) Governing Rules. Arbitration proceedings shall be administered by
             ---------------
the American Arbitration Association ("AAA") or such other administrator as the
parties shall mutually agree upon in accordance with the AAA Commercial
Arbitration Rules. All Disputes submitted to arbitration shall be resolved in
accordance with the Federal Arbitration Act (Title 9 of the United States Code),
notwithstanding any conflicting choice of law provision in any of the Loan
Documents. The arbitration shall be conducted at a location in California
selected by the AAA or other administrator. If there is any inconsistency
between the terms hereof and any such rules, the terms and procedures set forth
herein shall control. All statutes of limitation applicable to any Dispute shall
apply to any arbitration proceeding. All discovery activities shall be expressly
limited to matters directly relevant to the Dispute being arbitrated. Judgment
upon any award

                                       46
<PAGE>

rendered in an arbitration may be entered in any court having jurisdiction;
provided however, that nothing contained herein shall be deemed to be a waiver
by any party that is a bank of the protections afforded to it under 12 U.S.C.
(S) 91 or any similar applicable state law.

         (c) No Waiver; Provisional Remedies, Self-Help and Foreclosure. No
             ----------------------------------------------------------
provision hereof shall limit the right of any party to exercise self-help
remedies such as setoff, foreclosure against or sale of any real or personal
property collateral or security, or to obtain provisional or ancillary remedies,
including without limitation injunctive relief, sequestration, attachment,
garnishment or the appointment of a receiver, from a court of competent
jurisdiction before, after or during the pendency of any arbitration or other
proceeding. The exercise of any such remedy shall not waive the right of any
party to compel arbitration or reference hereunder.

         (d) Arbitrator Qualifications and Powers; Awards. Arbitrators must be
             --------------------------------------------
active members of the California State Bar or retired judges of the state or
federal judiciary of California, with expertise in the substantive laws
applicable to the subject matter of the Dispute. Arbitrators are empowered to
resolve Disputes by summary rulings in response to motions filed prior to the
final arbitration hearing. Arbitrators (i) shall resolve all Disputes in
accordance with the substantive law of the state of California, (ii) may grant
any remedy or relief that a court of the state of California could order or
grant within the scope hereof and such ancillary relief as is necessary to make
effective any award, and (iii) shall have the power to award recovery of all
costs and fees, to impose sanctions and to take such other actions as they deem
necessary to the same extent a judge could pursuant to the Federal Rules of
Civil Procedure, the California Rules of Civil Procedure or other applicable
law. Any Dispute in which the amount in controversy is $5,000,000 or less shall
be decided by a single arbitrator who shall not render an award of greater than
$5,000,000 (including damages, costs, fees and expenses). By submission to a
single arbitrator, each party expressly waives any right or claim to recover
more than $5,000,000. Any Dispute in which the amount in controversy exceeds
$5,000,000 shall be decided by majority vote of a panel of three arbitrators;
provided however, that all three arbitrators must actively participate in all
hearings and deliberations.

         (e) Judicial Review. Notwithstanding anything herein to the contrary,
             ---------------
in any arbitration in which the amount in controversy exceeds $25,000,000, the
arbitrators shall be required to make specific, written findings of fact and
conclusions of law. In such arbitrations (i) the arbitrators shall not have the
power to make any award which is not supported by substantial evidence or which
is based on legal error, (ii) an award shall not be binding upon the parties
unless the findings of fact are supported by substantial evidence and the
conclusions of law are not erroneous under the substantive law of the state of
California, and (iii) the parties shall have in addition to the grounds referred
to in the Federal Arbitration Act for vacating, modifying or correcting an award
the right to judicial review of (A) whether the findings of fact rendered by the
arbitrators are supported by substantial evidence, and (B) whether the
conclusions of law are erroneous under the substantive law of the state of
California. Judgment confirming an award in such a proceeding may be entered
only if a court determines the award is supported by substantial evidence and
not based on legal error under the substantive law of the state of California.

                                       47
<PAGE>

         (f) Real Property Collateral; Judicial Reference. Notwithstanding
             --------------------------------------------
anything herein to the contrary, no Dispute shall be submitted to arbitration if
the Dispute concerns Indebtedness secured directly or indirectly, in whole or in
part, by any real property unless (i) the holder of the mortgage, lien or
security interest specifically elects in writing to proceed with the
arbitration, or (ii) all parties to the arbitration waive any rights or benefits
that might accrue to them by virtue of the single action rule statute of
California, thereby agreeing that all Indebtedness and obligations of the
parties, and all mortgages, liens and security interests securing such
Indebtedness and obligations, shall remain fully valid and enforceable. If any
such Dispute is not submitted to arbitration, the Dispute shall be referred to a
referee in accordance with California Code of Civil Procedure Section 638 et
seq., and this general reference agreement is intended to be specifically
enforceable in accordance with said Section 638. A referee with the
qualifications required herein for arbitrators shall be selected pursuant to the
AAA's selection procedures. Judgment upon the decision rendered by a referee
shall be entered in the court in which such proceeding was commenced in
accordance with California Code of Civil Procedure Sections 644 and 645.

                                       48
<PAGE>

         (g) Miscellaneous. To the maximum extent practicable, the AAA, the
             -------------
arbitrators and the parties shall take all action required to conclude any
arbitration proceeding within 180 days of the filing of the Dispute with the
AAA. No arbitrator or other party to an arbitration proceeding may disclose the
existence, content or results thereof, except for disclosures of information by
a party required in the ordinary course of its business, by applicable law or
regulation, or to the extent necessary to exercise any judicial review rights
set forth herein. If more than one agreement for arbitration by or between the
parties potentially applies to a Dispute, the arbitration provision most
directly related to the Loan Documents or the subject matter of the Dispute
shall control. This arbitration provision shall survive termination, amendment
or expiration of any of the Loan Documents or any relationship between the
parties.

                        [Signatures on following page]

                                       49
<PAGE>

         IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed as of the day and year first written above.

                                   LOS ANGELES TURF CLUB, INCORPORATED


                                   By:   _____________________________________
                                         Name:
                                         Title:


                                   By:   _____________________________________
                                         Name:
                                         Title:



                                   WELLS FARGO BANK, NATIONAL ASSOCIATION


                                   By:   _____________________________________
                                         Name:
                                         Title:

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