UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
WASHINGTON,
D.C. 20549
FORM
8-K
CURRENT
REPORT
PURSUANT
TO SECTION 13 OR 15(d) OF THE
SECURITIES
EXCHANGE ACT OF 1934
Date
of Report (Date of earliest event reported): May 2, 2007
(Exact
name of registrant as specified in its charter)
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Kentucky
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0-1469
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61-0156015
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(State
of incorporation)
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(Commission
file number)
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(IRS
Employer Identification No.)
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700
Central Avenue, Louisville, Kentucky 40208
(Address
of principal executive offices)
(Zip
Code)
(502)
636-4400
(Registrant's
telephone number, including area code)
Check
the
appropriate box below if the Form 8-K is intended to simultaneously satisfy
the
filing obligation of the registrant under any of the following
provisions:
[
] Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[
] Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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[
]
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Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
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[
]
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Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
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ITEM
1.01.
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ENTRY
INTO A MATERIAL DEFINITIVE
AGREEMENT
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On
May 2,
2007, Churchill Downs Incorporated (the "Company") as Borrower entered into
an
Amendment No. 1 (the “First Amendment”) to the Amended and Restated Credit
Agreement dated as of September 23, 2005 (the "Agreement") with JPMorgan Chase
Bank, N.A. and the other lending institutions listed in the Agreement (the
"Lenders"), JPMorgan Chase Bank, N.A. as Agent and Collateral Agent (the
"Agent"), with PNC Bank, National Association as Syndication Agent and National
City Bank as Documentation Agent. The Guarantors under the Agreement
continue to be Company subsidiaries Churchill Downs Management Company,
Churchill Downs Investment Company, Churchill Downs Simulcast Productions,
LLC,
Charlson Industries, Inc., Calder Race Course, Inc., Tropical Park, Inc.,
Arlington Park Racecourse, LLC, Arlington OTB Corp., Quad City Downs, Inc.,
CDIP, LLC, CDIP Holdings, LLC, Churchill Downs Louisiana Horseracing Company,
L.L.C., Churchill Downs Louisiana Video Poker Company, L.L.C. and Video
Services, Inc.
The
First
Amendment primarily serves (i) to reduce the maximum aggregate commitment under
the credit facility from $200,000,000 to $120,000,000 and (ii) reduce the
interest rates applicable to amounts borrowed under this facility. Given the
reduction in the maximum aggregate commitment, four lenders that were originally
parties to the Agreement are removed as lenders under the terms of the First
Amendment. These “Departing Lenders” are: Bank of America, N.A.; Branch Banking
& Trust Company; Comerica Bank; and Suntrust Bank.
The
amounts of the letter of credit sub-facility (not to exceed $25,000,000) and
the
swing line commitment (up to a maximum principal amount of $15,000,000) are
not
reduced by the First Amendment. The Company continues to have the ability,
at
any time, with the consent of the Agent but without the consent of the Lenders
except as set forth in the Agreement and subject to satisfaction of the
requirements set forth in the Agreement, to increase the maximum aggregate
commitment by up to an additional $50,000,000, which would increase the maximum
aggregate commitment to $170,000,000. Borrowings made pursuant to the Agreement
may be revolving loans or swing line loans, the combined sum of which may not
exceed the maximum borrowing amount. Amounts borrowed under the Agreement
may be borrowed, repaid and reborrowed from time to time until September 23,
2010.
Borrowings
made pursuant to the Agreement will bear interest, payable the last day of
each
calendar quarter on floating rate advances or at the end of any interest period
on Eurodollar advances, at either (a) the floating rate, described in the
Agreement as the higher of the Agent’s prime rate or the federal funds rate plus
0.50%, or (b) the applicable margin (the "Applicable Margin"), which is
determined with reference to the Company’s leverage ratio plus a rate based upon
the Eurodollar rate (a publicly published rate). The lower end of the range
of
the Applicable Margin is reduced pursuant to the terms of the First Amendment
from 75 to 50 additional basis points. In addition, whereas the Agreement
provided for four “levels” for the Applicable Margin based on the Company’s
leverage ratio, the pricing schedule incorporated into the First Amendment
includes seven levels for the Applicable Margin. Swing line loans continue
to
bear interest at the prime rate of the swing line lender. Under the
Agreement, the Company agreed to pay a commitment fee, payable on the last
day
of each calendar quarter, at rates that range from 0.15% to 0.375% of the
available aggregate commitment, depending on the Company's leverage ratio.
The
First Amendment serves to reduce the range of the commitment fee to rates from
0.10% to 0.25% and similarly increases the number of “levels” for commitment
fees from four to seven.
The
First
Amendment adds a negative covenant that imposes a $100,000,000 cap on the amount
of any investment that the Company may make to construct a gaming and/or slot
machine facility in Florida in the event that laws in that state permit and
the
Company obtains authority to engage in such activities. The First Amendment
also
modifies two of the financial covenants, providing for a one-time increase
in
the maximum leverage ratio for a period of eight consecutive quarters in the
event that the Company constructs a gaming and/or slot facility in Florida
and
increasing the baseline for the minimum consolidated net worth covenant from
$190,000,000 to $290,000,000.
Certain
of the Lenders party to the First Amendment, and their respective affiliates,
have performed, and may in the future perform for the Company and its
subsidiaries, various commercial banking, investment banking, underwriting
and
other financial advisory services, for which they have received, and will
receive, customary fees and expenses.
The
foregoing description of the First Amendment is qualified in its entirety by
reference to the First Amendment, which is filed as Exhibit 10.1 hereto and
incorporated herein by reference.
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ITEM
2.03.
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CREATION
OF A DIRECT FINANCIAL OBLIGATION OR AN OBLIGATION UNDER AN OFF-BALANCE
SHEET ARRANGEMENT OF A
REGISTRANT
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The
information described above under Part (i) of "Item 1.01 Entry Into a Material
Definitive Agreement" is incorporated herein by reference.
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ITEM
9.01.
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FINANCIAL
STATEMENTS AND EXHIBITS
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(d)
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Exhibits
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Numbers
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Description
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10.1
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Amendment
No. 1 to the Amended and Restated Credit Agreement among Churchill
Downs
Incorporated, the guarantors party thereto, the Lenders party thereto
and
JPMorgan Chase Bank, N.A., as agent and collateral agent, with PNC
Bank,
National Association, as Syndication Agent, and National City Bank,
as
Documentation Agent, dated as of May 2, 2007
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SIGNATURE
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant
has
duly caused this report to be signed on its behalf by the undersigned hereunto
duly authorized.
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CHURCHILL
DOWNS INCORPORATED
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Date:
May 2, 2007
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/s/
Michael W. Anderson
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Michael
W. Anderson
Vice
President & Treasurer
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