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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK
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In re:
THE NEW YORK RACING ASSOCIATION INC.,
Debtor.

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Chapter 11
Case No. 06-12618 (JMP)

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ORDER CONFIRMING MODIFIED THIRD AMENDED PLAN OF DEBTOR
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
The New York Racing Association Inc. (NYRA or the Debtor), as debtor and
debtor in possession in the above-captioned chapter 11 case, having proposed and filed the
Debtors Modified Third Amended Plan of Reorganization Pursuant to Chapter 11 of the United
States Bankruptcy Code, dated April 28, 2008 (as may be modified and amended, the Plan)1 ,
with the United States Bankruptcy Court for the Southern District of New York (the Bankruptcy
Court); and the Bankruptcy Court having entered, after due notice and a hearing, an Order (i)
Approving Disclosure Statement for Plan of Reorganization, (ii) Setting A Record Date for
Voting Purposes, (iii) Approving Solicitation Packages and Procedures for Distribution Thereof,
(iv) Approving Forms of Ballots and Establishing Procedures for Tabulation Of Votes on Plan of
Reorganization, and (v) Scheduling A Hearing and Establishing Notice and Objection
Procedures In respect of Confirmation of the Plan, dated November 29, 2007, (the Disclosure
Statement Order); and the Disclosure Statement for the Debtors Third Amended Plan of
Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code (the Disclosure
Statement) and the Plan and the Solicitation Packages (as defined below) having been
1

Unless otherwise defined herein, capitalized terms shall have the meanings ascribed to such
terms in the Plan. A copy of the Plan is attached hereto as Exhibit A.

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distributed to holders of Claims entitled to vote thereon as provided in the Disclosure Statement
Order; and due notice of (i) entry of the Disclosure Statement Order, (ii) the Confirmation
Hearing, and (iii) the deadline for voting on, and/or objecting to, the Plan having been provided
to holders of Claims against and Equity Interests in the Debtor and other parties in interest in
accordance with the Disclosure Statement Order, the Bankruptcy Code, the Federal Rules of
Bankruptcy Procedure (the Bankruptcy Rules), and the Local Bankruptcy Rules for the
Southern District of New York (the Local Rules), as established by the affidavits of service,
mailing, and/or publication filed with the Bankruptcy Court (collectively, the Notice
Affidavits)2 ; and such notice being sufficient under the circumstances and no other or further
notice being required; and objections (the Objections) to the Plan having been interposed by
(1) the United States of America, on behalf of the Internal Revenue Service (the IRS
Objection), (2) Local Union No. 3, International Brotherhood of Electrical Workers, AFL-CIO
(the Union Objection), (3) Pension Benefit Guaranty Corporation (the PBGC Objection), (4)
the Creditors Committee (the Committee Objection) and (5) Plainfield Special Situations
Master Fund Limited (the Plainfield Objection); and the IRS Objection, the Union Objection,
and the Committee Objection having been withdrawn; and upon consideration of (i) the Debtors
Memorandum of Law in Support of Confirmation of Debtors Modified Third Amended Plan of
Reorganization Pursuant to Chapter 11 of the United States Bankruptcy Code, dated April 25,
2008 (the Confirmation Brief), (ii) the Affidavit of Jeffrey S. Stein Certifying The
Methodology for the Tabulation of Votes and Results of Voting with Respect to the Modified
2

The Notice Affidavits include the following: (i) Notice of Publication of Don Gleeson, Daily
Racing Form, Inc., filed with the Bankruptcy Court on April 18, 2008 [Dkt. No. 997], (ii)
Affidavit of Publication of Juanita Boyle, The Daily News, filed with the Bankruptcy Court on
April 18, 2008 [Dkt. No. 997], and (iii) Affidavit of Karen H. Inscho, The New York Post, filed
with the Bankruptcy Court on April 18, 2008 [Dkt. No. 997].

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Third Amended Plan of Debtor Pursuant to Chapter 11 of the United States Bankruptcy Code,
dated April 16, 2008 [Docket No. 995] (describing the methodology for the tabulation and results
of voting with respect to the Plan and evidencing that the Debtor has received the requisite
acceptances of the Plan in both number and amount as required by section 1126 of the
Bankruptcy Code) (the Stein Voting Affidavit); (iii) the Affidavit of Scott W. Winn in Support
of Confirmation of Modified Third Amended Plan of Debtor Pursuant to Chapter 11 of the
United States Bankruptcy Code, dated April 18, 2008 (the Winn Affidavit); (iv) the Affidavit
of James P. Heffernan in Support of Confirmation of Modified Third Amended Plan of Debtor
Pursuant to Chapter 11 of the United States Bankruptcy Code, dated April 18, 2008 (the
Heffernan Affidavit), and (v) each of the Objections which has not been withdrawn or
otherwise mooted; and the hearing to consider confirmation of the Plan having been held before
the Bankruptcy Court on April 28, 2008 (the Confirmation Hearing); and the Bankruptcy
Court having reviewed and considered the Plan, the Disclosure Statement, the Disclosure
Statement Order, the Confirmation Brief, each of the Objections which has not been withdrawn
or otherwise mooted and the responses thereto and all related documents; and the appearance of
all interested parties having been duly noted in the record of the Confirmation Hearing, including
the testimony therein and the exhibits admitted into evidence; and upon all of the proceedings
had before the Bankruptcy Court and upon the entire record of the Confirmation Hearing; and
the Bankruptcy Court having determined based upon all of the foregoing that the Plan should be
confirmed, as reflected by the Bankruptcy Courts rulings made herein and on the record of the
Confirmation Hearing, including, without limitation, the Bankruptcy Courts decision (the
Decision) rendered at the conclusion of the Confirmation Hearing on April 28, 2008; and after

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due deliberation and sufficient cause appearing therefor, it is hereby DETERMINED, FOUND,
ADJUDGED, DECREED:
FINDINGS OF FACT
A.

Findings. The findings set forth herein and on the record of the Confirmation

Hearing constitute the Bankruptcy Courts findings of fact pursuant to Rule 52 of the Federal
Rules of Civil Procedure, as made applicable herein by Bankruptcy Rules 7052 and 9014. To the
extent any of the following findings of fact constitute conclusions of law, they are adopted as
such. To the extent any of the following conclusions of law constitute findings of fact, they are
adopted as such.
B.

Exclusive Jurisdiction, Venue, Core Proceeding (28 U.S.C. 157(b)(2),

1334(a)). This Court has jurisdiction over the Debtors Chapter 11 Case, the confirmation of the
Plan and the Objections pursuant to 28 U.S.C. 1334. Confirmation of the Plan is a core
proceeding pursuant to 28 U.S.C. 157(b), and this Court has jurisdiction to enter a final order
with respect thereto. Venue is proper before this Court pursuant to 28 U.S.C. 1408 and 1409.
C.

Commencement of the Chapter 11 Case. On November 2, 2006, (the Petition

Date), the Debtor commenced with this Court a voluntary case under chapter 11 of the
Bankruptcy Code. The Debtor has operated its business and managed its properties as a debtor
in possession pursuant to sections 1107(a) and 1108 of the Bankruptcy Code. No trustee has
been appointed in this case.
D.

Judicial Notice. The Bankruptcy Court takes judicial notice of the docket of the

Debtors Chapter 11 Case and the related adversary proceedings maintained by the Clerk of the
Bankruptcy Court, including, without limitation, all pleadings and other documents filed, all

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orders entered, and all evidence and arguments made, proffered, adduced and/or presented at the
hearings held before the Bankruptcy Court during the pendency of the Debtors Chapter 11 Case.
E.

Burden of Proof. The Debtor has met its burden of proving the elements of

sections 1129(a) and (b) of the Bankruptcy Code by a preponderance of the evidence.
F.

Solicitation and Notice. On November 29, 2007, the Bankruptcy Court entered

the Disclosure Statement Order, which, among other things, approved the Disclosure Statement,
finding that it contained adequate information within the meaning of section 1125 of the
Bankruptcy Code, and established procedures for the Debtors solicitation of votes of
acceptances and rejections with respect to the Plan. The (a) Disclosure Statement (with a copy
of the Plan attached thereto), (b) Disclosure Statement Order, (c) Confirmation Hearing Notice,
(d) Ballots, (e) a letter from the Debtor, and (f) a letter from the statutory committee of
unsecured creditors (the Creditors Committee) (collectively, the Solicitation Packages)
were served in compliance with the Bankruptcy Rules and the Disclosure Statement Order. As
described in the Disclosure Statement Order, (i) the service of the Solicitation Packages was
adequate and sufficient under the circumstances of this Chapter 11 Case, and (ii) adequate and
sufficient notice of the Confirmation Hearing and other requirements, deadlines, hearings and
matters described in the Disclosure Statement Order were timely provided in compliance with
the Bankruptcy Rules, and provided due process to all parties in interest.
G.

As is evidenced by the Notice Affidavits, all parties required to be provided notice

of the Confirmation Hearing (including the deadline for filing and serving objections to
confirmation of the Plan) have been given due, proper, timely and adequate notice in compliance
with the Bankruptcy Code, the Bankruptcy Rules and the Disclosure Statement Order, and have

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had an opportunity to appear and be heard with respect thereto. No other or further notice is
required.
H.

Voting. Votes on the Plan were solicited after disclosure of adequate

information as defined in section 1125 of the Bankruptcy Code. As evidenced by the Stein
Voting Affidavit, votes to accept or reject the Plan have been solicited and tabulated fairly, in
good faith and in a manner consistent with the Disclosure Statement Order, the Bankruptcy Code
and the Bankruptcy Rules.
M ODIFICATIONS OF THE PLAN OF REORGANIZATION
I.

Modification. On April 18, 2008, and April 27, 2008, the Debtor filed the Plan as

modified by certain modifications from the Plan filed on November 29, 2007 (the
Modifications), which Modifications are hereby made a part of the Plan.
J.

Notice of Plan Modifications. The filing and the description of the Modifications

on the record at the Confirmation Hearing constitutes due and sufficient notice thereof under the
circumstances of this Chapter 11 Case. The Plan, as modified by the Modifications, shall
constitute the Plan. The Modifications do not materially or adversely affect the treatment of
any Claims against or Equity Interests in the Debtor under the Plan. The Modifications neither
require additional disclosure under section 1125 of the Bankruptcy Code nor re-solicitation of
vote on the Plan under section 1126 of the Bankruptcy Code.
K.

Deemed Acceptance of Plan as Modified. In accordance with section 1127 of the

Bankruptcy Code and Bankruptcy Rule 3019, all holders of Claims against the Debtor who voted
to accept the Plan are hereby deemed to have accepted the Plan as amended consistent with the
Modifications.
L.

No holder of a Claim against the Debtor who has voted to accept the Plan shall be

permitted to change its acceptance to a rejection as a consequence of the Modifications.

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Compliance with Bankruptcy Code Section 1127. The Modifications

incorporated in the Plan comply with section 1127 of the Bankruptcy Code and Bankruptcy Rule
3019.
COMPLIANCE WITH SECTION 1129 OF THE BANKRUPTCY CODE
N.

Plan Compliance with the Bankruptcy Code (11 U.S.C. 1129(a)(1)). The Plan

complies with the applicable provisions of the Bankruptcy Code, thereby satisfying section
1129(a)(1) of the Bankruptcy Code.
O.

Proper Classification (11 U.S.C. 1122). In addition to Administrative Expense

Claims and Priority Tax Claims, which need not be classified, Article IV of the Plan designates
seven (7) Classes of Claims against and one (1) Class of Equity Interests in the Debtor3 : Class 1
(Priority Non-Tax Claims), Class 2 (Secured Claims), Class 3 (Unsecured Claims), Class 4
(Insured Litigation Claims), Class 5 (State Claims), Class 6 (PBGC Claims), Class 8 (Penalty
Claims), and Class 9 (NYRA Equity Interests). The Claims and Equity Interests included in
each Class are substantially similar to other Claims and Equity Interests, as the case may be, in
each such Class. Valid business, legal and factual reasons exist for separately classifying the
various Claims and Equity Interests pursuant to the Plan, and such Classes do not unfairly
discriminate between holders of Claims and Equity Interests. The Plan therefore satisfies section
1122 of the Bankruptcy Code.
P.

Designation of Classes of Claims and Equity Interests (11 U.S.C. 1123(a)(1)).

Article III of the Plan provides for the treatment of Administrative Expense Claims and Priority
Tax Claims and Article IV of the Plan designates Classes of Claims against and Equity Interests
3

Upon agreement between NYRA and the IRS, Class 7, previously providing separate
classification for IRS Claims, has been intentionally left empty and the IRS Claim, to the
extent it becomes an Allowed IRS Claim, shall be treated as a Priority Tax Claim and the holder
thereof shall receive payment pursuant to Section 3.3 of the Plan.

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in the Debtor as required by Bankruptcy Code section 1123(a)(1). The Plan therefore satisfies
section 1123(a)(1) of the Bankruptcy Code.
Q.

Specified Unimpaired Classes (11 U.S.C. 1123(a)(2)). Article XVII of the Plan

specifies that Classes 1, 2 and 6 are unimpaired under the Plan, thereby complying with section
1123(a)(2) of the Bankruptcy Code. The Plan therefore satisfies section 1123(a)(2) of the
Bankruptcy Code.
R.

Specified Treatment of Impaired Classes (11 U.S.C. 1123(a)(3)). Article XVII

of the Plan designates Classes 3, 4, 5, 8 and 9 as impaired pursuant to the Plan, and Articles V,
VI, VII, VIII, IX, X, XI, XII and XIII specify the treatment of Claims and Equity Interests in
such Classes. The Plan therefore satisfies section 1123(a)(3) of the Bankruptcy Code.
S.

No Discrimination (11 U.S.C. 1123(a)(4)). The Plan provides for the same

treatment for each Claim or equity interest in each respective Class unless the holder of a
particular Claim or Equity Interest has agreed to a less favorable treatment on account of such
Claim or Equity Interest, thereby satisfying section 1123(a)(4) of the Bankruptcy Code. The
Plan therefore satisfies section 1123(a)(4) of the Bankruptcy Code.
T.

Implementation of the Plan (11 U.S.C. 1123(a)(5)). The Plan provides adequate

and proper means for the implementation of the Plan. The Plan therefore satisfies section
1123(a)(5) of the Bankruptcy Code.
U.

Non-Voting Equity Securities (11 U.S.C. 1123(a)(6)). Section 28.1 of the Plan

provides that, on or prior to the Effective Date, the Debtor shall file (a) the Reorganized Debtor
Certificate of Incorporation and the Reorganized Debtor By-laws and (b) such documents with
the State as are necessary to cause the creation of New NYRA, under the general supervision of
the Office of the Attorney General, pursuant to and as set forth in the Racing Law, as it shall be

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amended, or such other applicable law. Neither the Reorganized Debtor nor New NYRA will
issue any non-voting securities. The Plan therefore satisfies section 1123(a)(6) of the
Bankruptcy Code.
V.

Designation of Directors and Officers (11 U.S.C. 1123(a)(7)). Article XXVII of

the Plan contains provisions with respect to the manner of the selection of trustees, directors and
officers of the Reorganized Debtor and New NYRA, as the case may be, that are consistent with
the interests of creditors, equity security holders, and public policy, thereby satisfying section
1123(a)(7) of the Bankruptcy Code.
W.

Additional Plan Provisions (11 U.S.C. 1123(b)). The other provisions of the

Plan are appropriate and consistent with the applicable provisions of the Bankruptcy Code,
thereby satisfying section 1123(b) of the Bankruptcy Code.
X.

Impairment/Unimpairment of Classes of Claims and Equity Interests (

1123(b)(1)). Pursuant to Article XVII of the Plan, (a) Claims in Class 1 (Priority Non-Tax
Claims), Class 2 (Secured Claims) and Class 6 (PBGC Claims) are unimpaired; and (b) Claims
and Equity Interests in Class 3 (Unsecured Claims), Class 4 (Insured Litigation Claims), Class 5
(State Claims), Class 8 (Penalty Claims), and Class 9 (NYRA Equity Interests) are impaired, as
contemplated by section 1123(b)(1) of the Bankruptcy Code.
Y.

Assumption and Rejection of Executory Contracts (11 U.S.C. 1123(b)(2)). In

accordance with section 1123(b)(2) of the Bankruptcy Code, Section 21.1 of the Plan provides
that, on the Effective Date, the Debtor shall (a) assume all executory contracts and unexpired
leases that have not expired by their own terms on or prior to the Confirmation Date, which have
not been assumed and assigned or rejected with the approval of the Bankruptcy Court, or which
are not the subject of a motion to assume the same pending as of the Confirmation Date;

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provided, however, that any executory contracts or unexpired leases set forth on Exhibit B to the
Plan shall be deemed rejected by the Debtor in Possession on the Confirmation Date and the
entry of the Confirmation Order by the Bankruptcy Court shall constitute approval of such
rejections pursuant to sections 365(a) and 1123 of the Bankruptcy Code and (b) assign all
executory contracts and unexpired leases not otherwise rejected to New NYRA. Accordingly,
the Plan satisfies the requirements of section 1123(b)(2) of the Bankruptcy Code.
Z.

Debtor Compliance with the Bankruptcy Code (11 U.S.C. 1129(a)(2)). Except

as otherwise provided or permitted by orders of the Bankruptcy Court, the Debtor has complied
with the applicable provisions of the Bankruptcy Code, the Bankruptcy Rules, the Local
Bankruptcy Rules, and the Disclosure Statement Order in transmitting the Solicitation Materials
and in tabulating the votes with respect to the Plan, thereby complying with section 1125 with
respect to the Disclosure Statement and the Plan.
AA.

Plan Proposed in Good Faith (11 U.S.C. 1129 (a)(3)). The Debtor is the

proponent for the Plan. The Debtor has proposed the Plan (including all documents necessary to
effectuate the Plan) in good faith and not by any means forbidden by law, thereby complying
with section 1129(a)(3) of the Bankruptcy Code. The Debtors good faith is evident from the
Heffernan Affidavit, the record of this Chapter 11 Case, including the record of the hearing to
approve the Disclosure Statement, the record of the Confirmation Hearing, and other proceedings
held in connection with this Chapter 11 Case. The Plan was proposed with the legitimate and
honest purpose of maximizing the value of the Debtors estate and effectuating a successful
reorganization of the Debtor.
BB.

Payment for Services or Cost and Expenses (11 U.S.C. 1129(a)(4)). All

payments made or to be made by the Debtor for services or for costs and expenses in connection

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with this Chapter 11 Case, or in connection with the Plan and incident to the chapter 11 case,
have been approved by, or are subject to the approval of, the Court as reasonable, thereby
satisfying section 1129(a)(4) of the Bankruptcy Code.
CC.

Directors, Officers, and Insiders (11 U.S.C. 1129(a)(5)). The Debtor has

complied with section 1129(a)(5) of the Bankruptcy Code. The identity and affiliations of the
persons proposed to serve as the initial directors of the Reorganized Debtor after the
confirmation of the Plan have been fully disclosed in the Notice of Proposed Boards of Directors,
dated April 18, 2008 [Docket No. 996] and the appointment to, or continuance in, such offices of
such persons is consistent with the interests of holders of Claims against, and Equity Interests in,
the Debtor and with public policy. As set forth in Section 27.1 of the Plan, from and after the
Effective Date, the board of trustees of the Reorganized Debtor shall consist of C. Steven
Duncker, Charles E. Hayward and Patrick L. Kehoe. Except as set forth in the Plan, provisions
regarding members of the Reorganized Debtor Board of Trustees shall be as set forth in the
Reorganized Debtor By-laws. With respect to New NYRA, Section 27.2 of the Plan provides
that, from and after the Effective Date, and as set forth in the Racing Law, New NYRAs Board
of Directors shall be comprised of twenty-five (25) members: (a) fourteen (14) of whom shall be
elected by the NYRA Board of Trustees or the nominating committee of the NYRA Board of
Trustees, and (b) in accordance with the provisions and the procedures set forth in the
Legislation, seven (7) of whom shall be appointed by the Governor, and two (2) of whom shall
be selected by each of the Speaker of the Assembly and the Temporary President of the State
Senate. Except as set forth herein, provisions regarding members of the New NYRA Board of
Directors and voting requirements of the Board of Directors shall be as set forth in the New
NYRA By-laws..

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No Rate Changes (11 U.S.C. 1129(a)(6)). Section 1129(a)(6) of the Bankruptcy

Code is not applicable in this Chapter 11 Case because either that (a) (i) no governmental
regulatory commission has jurisdiction, after confirmation of the Plan, over the rates of the
Debtor, and (ii) no rate change is contemplated by the Plan or (b) any such regulation is set
forth in the Racing Law and requires no additional approvals.
EE.

Best Interests of Creditors (11 U.S.C. 1129(a)(7)). With respect to each

impaired class of Claims against or Equity Interests in the Debtor, each holder of a Claim or
Equity Interest in such Class has accepted the Plan or will receive or retain pursuant to the Plan
on account of such Claim or Equity Interest property of a value, as of the Effective Date, that is
not less than the amount that such holder would so receive or retain if the Debtor were liquidated
under chapter 7 of the Bankruptcy Code on the Effective Date. Accordingly, the Plan satisfies
section 1129(a)(7) of the Bankruptcy Code.
FF.

Acceptance by Certain Classes (11 U.S.C. 1129(a)(8)). Class 1 (Priority Non-Tax

Claims), Class 2 (Secured Claims) and Class 6 (PBGC Claims) are Classes of unimpaired Claims
that are conclusively presumed to have accepted the Plan pursuant to section 1126(f) of the
Bankruptcy Code. Class 3 (Unsecured Claims) and Class 5 (State Claims) have voted to accept
the Plan in accordance with sections 1126(b) and (c) of the Bankruptcy Code. No votes were
cast on behalf of holders of Claims in Class 4 (Insured Litigation Claims) and Class 8 (Penalty
Claims); such Classes are therefore deemed to accept the Plan. Class 9 (NYRA Equity Interests)
is not entitled to receive or retain any property pursuant to the Plan and thus is deemed not to
have accepted the Plan pursuant to section 1126(g) of the Bankruptcy Code. Pursuant to
NYRAs certificate of incorporation, no assets of NYRA shall be paid or distributed on its
capital stock by way of dividend or otherwise or be used for the purchase or retirement of its

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capital stock. To the extent Class 9 is an impaired Class of Claims pursuant to the Plan, Class 9
is deemed to have rejected the Plan pursuant to section 1126(g) of the Bankruptcy Code. If, and
to the extent, section 1129(a)(8) of the Bankruptcy Code is not satisfied with respect to Class 9,
the Plan may nevertheless be confirmed because the Plan satisfies section 1129(b) of the
Bankruptcy Code with respect to Class 9.
GG.

Treatment of Administrative Expense Claims and Priority Tax Claims (11 U.S.C.

1129(a)(9)). The treatment of Administrative Expense Claims and Priority Tax Claims
pursuant to Article III of the Plan satisfies the requirements of sections 1129(a)(9)(A), (B), (C)
and (D) of the Bankruptcy Code.
HH.

Acceptance by Impaired Classes (11 U.S.C. 1129(a)(10)). Class 3 and Class 5,

each of which is impaired pursuant to the Plan and entitled to vote, voted to accept the Plan by
the requisite majorities, determined without including any acceptance of the Plan by any insider,
thereby satisfying the requirements of section 1129(a)(10) of the Bankruptcy Code.
II.

Feasibility (11 U.S.C. 1129 (a)(11)). The information in the Disclosure

Statement and the evidence proffered or adduced at the Confirmation Hearing and in the Winn
Affidavit, including, without limitation, the sensitivity analysis annexed as Exhibit A to the Winn
Affidavit further demonstrating the sufficiency of the funding for the Plan: (i) is persuasive and
credible; (ii) has not been controverted by other evidence; and (iii) establishes that the Plan is
feasible, there is a reasonable likelihood that the Reorganized Debtor will meet its financial
obligations under the Plan in the ordinary course of business, including, without limitation, its
pension plan obligations, and confirmation of the Plan is not likely to be followed by the
liquidation or need for further financial reorganization of the Reorganized Debtor, thereby
satisfying the requirements of section 1129(a)(11) of the Bankruptcy Code.

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PBGC Claims. On or prior to the Effective Date, the Debtor or the Reorganized

Debtor, as the case may be, shall make payments into the Benefit Plans identified in Sections
1.24 (a)-(e) of the Plan, which, together with all such payments made during the period from the
Petition Date up to and including the Effective Date, shall be attributable to, and in amount
sufficient to satisfy funding deficiencies for the years ended on or prior to December 31, 2007
(the accumulated amount of required minimum funding contributions for such years).
Accordingly, the ongoing and future financial obligations imposed by the maintenance of such
Benefit Plans are not likely to affect the Debtors, the Reorganized Debtors or New NYRAs, as
the case may be, ability to satisfy the feasibility requirements of section 1129(a)(11) of the
Bankruptcy Code.
KK.

Payment of Fees (11 U.S.C. 1129(a)(12)). As required pursuant to Section 29.9

of the Plan, all fees payable under section 1930 of title 28 of the United States Code have been or
will be paid on the Effective Date, and will continue to be paid thereafter as required, thereby
satisfying the requirements of section 1129(a)(12) of the Bankruptcy Code.
LL.

Continuation of Retiree Benefits (11 U.S.C. 1129(a)(13)). Section 29.10 of the

Plan provides that on and after the Effective Date, the Reorganized Debtor shall continue to pay
all retiree benefits of the Debtor (within the meaning of section 1114 of the Bankruptcy Code),
for the duration of the period for which the Debtor has obligated itself to provide such benefits;
provided, however, that the Reorganized Debtor reserves the right to modify any and all such
plans, funds, and programs to the extent permitted by applicable law, thereby satisfying the
requirements of section 1129(a)(13) of the Bankruptcy Code.
MM. No Domestic Support Obligations (11 U.S.C. 1129(a)(14)). The Debtor is not
required by a judicial or administrative order, or by statute, to pay a domestic support obligation.

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Accordingly, section 1129(a)(14) of the Bankruptcy Code is inapplicable in this Chapter 11

Case.
NN.

Debtor Is Not An Individual (11 U.S.C. 1129(a)(15)). The Debtor is not an

individual, and accordingly, section 1129(a)(15) of the Bankruptcy Code is inapplicable in this
Chapter 11 Case.
OO.

No Applicable Nonbankruptcy Law Regarding Transfers (11 U.S.C.

1129(a)(16)). The Debtor is a moneyed, business, or commercial corporation, and accordingly,

section 1129(a)(16) of the Bankruptcy Code is inapplicable in this Chapter 11 Case.
PP.

No Unfair Discrimination; Fair and Equitable (11 U.S.C. 1129(b)). NYRA has

requested that the Court confirm the Plan notwithstanding that Class 9 (NYRA Equity Interests)
(the Rejecting Class) may be deemed to reject the Plan. To the extent required, NYRA has
satisfied the requirements of sections 1129(b)(1) and (b)(2) of the Bankruptcy Code with respect
to the Rejecting Class. Based on the evidence proffered, adduced, and/or presented at the
Confirmation Hearing, the Plan does not discriminate unfairly and is fair and equitable with
respect to the Rejecting Class, as required by sections 1129(b)(1) and (b)(2) of the Bankruptcy
Code, because (i) there is no holder of any interest in NYRA that is junior to the Rejecting Class
and that is receiving or retaining any property under the Plan on account of such junior interests,
and (ii) the holders of Claims against NYRA in Classes that are senior to the Rejecting Class are
receiving distributions, the value of which is equal to 100% of the Allowed amount of their
Claims. Thus, the Plan may be confirmed notwithstanding the deemed rejection by the Rejecting
Class.
QQ.

Only One Plan (11 U.S.C. 1129(c)). The Plan is the only plan filed in this case,

and accordingly, section 1129(c) of the Bankruptcy Code is inapplicable in this Chapter 11 Case.

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Principal Purpose of the Plan (11 U.S.C. 1129(d)). The principal purpose of the

Plan is not the avoidance of taxes or the avoidance of the application of Section 5 of the
Securities Act of 1933, thereby satisfying the requirements of section 1129(d) of the Bankruptcy
Code.
SS.

Small Business Case (11 U.S.C. 1129(e). This Chapter 11 Case is not a small

business case, as that term is defined in the Bankruptcy Code, and, accordingly, section 1129(e)
of the Bankruptcy Code is inapplicable.
TT.

Subordination of Penalty Claims (11 U.S.C. 726(a)(4), 1129(a)(7), and

105(a)). To the extent any Penalty Claim becomes an Allowed Penalty Claim, such Claim is
properly subordinated by the Plan based on (i) the interplay between sections 724(a)(4) and
1129(a)(7) of the Bankruptcy Code, and/or (ii) the equitable powers provided pursuant to section
105(a) of the Bankruptcy Code.
UU.

Good-Faith Solicitation (11 U.S.C. 1125(e)). Based on the record before the

Court in the Chapter 11 Case, the Debtor is deemed to have solicited acceptances of the Plan in
good faith and in compliance with the applicable provisions of the Bankruptcy Code, including
without limitation, sections 1125(a) and (e) of the Bankruptcy Code, and any applicable nonbankruptcy law, rule, or regulation governing the adequacy of disclosure in connection with such
solicitation.
VV.

Satisfaction of Confirmation Requirements. Based upon the foregoing, the Plan

satisfies the requirements for confirmation set forth in section 1129 of the Bankruptcy Code.
WW. Implementation. All documents necessary to implement the Plan and all other
relevant and necessary documents have been negotiated in good faith and at arms length and

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shall, upon completion of documentation and execution, be valid, binding, and enforceable
agreements and not be in conflict with any federal or state law.
XX.

Good Faith. The Debtor, the Creditors Committee, the State, and all of their

respective members, officers, directors, agents, financial advisers, attorneys, employees, equity
holders, partners, affiliates, and representatives, (i) have acted in good faith in negotiating,
formulating and confirming the Plan and agreements, compromises, settlements, transactions and
transfers contemplated thereby, and (ii) will be acting in good faith in proceeding to (a)
consummate the Plan and the agreements, compromises, settlements, transactions, and transfers
contemplated thereby and (b) take the actions authorized and directed or contemplated by this
Order.
YY.

Executory Contracts and Unexpired Leases. The Debtor has satisfied the

provisions of section 365 of the Bankruptcy Code with respect to the assumption, assignment
and rejection of executory contracts and unexpired leases pursuant to the Plan.
ZZ.

Transfers by Debtor. All transfers of property of the Debtors estate, including,

without limitation, the transfer and assignment to the State of New York, an affiliate or agency of
the State of New York or a public benefit corporation incorporated by the State of New York of
the Racetracks and other Transferred Property, shall be free and clear of all liens, charges,
Claims, encumbrances, and other interests, including, without limitation, any liens held by
Pension Benefit Guaranty Corporation pursuant to 29 U.S.C. 302(f) and 26 U.S.C. 412(n),
except as otherwise expressly provided in the Plan, State Settlement Agreement, or this Order;
provided, however, that, under no circumstances, shall such exceptions apply to the transfer and
assignment of the Racetracks and other Transferred Property to the State of New York, an
affiliate or agency of the State of New York or a public benefit corporation incorporated by the

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State of New York. The revesting, on the Effective Date, of the property of the Debtors estate:
(i) vests the Reorganized Debtor or New NYRA, as the case may be, or their successors or
assigns, as the case may be, with good title to such property, free and clear of all liens, charges,
Claims, encumbrances, and other interests, except as expressly provided in the Plan, State
Settlement Agreement, or this Order, and (ii) does not constitute an avoidable transfer under the
Bankruptcy Code or applicable nonbankruptcy law.
AAA. Injunction, Exculpation, and Releases. The Court has jurisdiction under sections
1334(a) and (b) of title 28 of the United States Code to approve the injunction, releases, and
exculpation set forth in Sections 29.3, 29.5, 29.6, and 29.8 of the Plan. Section 105(a) of the
Bankruptcy Code permits issuance of the injunction and approval of the unopposed releases set
forth in Section 29.5 of the Plan, respectively, if, as has been established here, such provisions (i)
are essential to the formulation and implementation of the Plan, as provided in section 1123 of
the Bankruptcy Code, (ii) confer substantial benefits on the Debtors estate, (iii) are fair and
reasonable and (iv) are in the best interests of the Debtor, its estate, and parties in interest.
Further, the exculpation provision in the Plan does not relieve any party of liability for an act or
omission to the extent such act or omission is determined by a Final Order to have constituted
willful misconduct or gross negligence or the other exceptions set forth therein. Based upon the
record of this Chapter 11 Case and the evidence proffered, adduced, and/or presented at the
Confirmation Hearing, this Court finds that the injunction, exculpation, and releases set forth in
Article XXIX of the Plan are consistent with the Bankruptcy Code and applicable law.
BBB. Compromise and Settlement. The filing of the Plan constitutes, among other
things, a motion by the Debtor pursuant to Bankruptcy Rule 9019 to approve the compromise
and settlement set forth in Article II of the Plan (the State Settlement). Pursuant to Bankruptcy

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Rule 9019, in consideration for the classification, distribution, conveyance and other benefits
provided pursuant to the Plan, upon the Effective Date, the provisions of the Plan shall constitute
a good-faith compromise and settlement of all Claims or controversies resolved pursuant to the
Plan, including, without limitation, the State Motion to Dismiss, the Adversary Litigation, and
the State Claims.
CCC. The terms of the State Settlement are (i) reasonable in light of the circumstances
of the Chapter 11 Case, (ii) fair and equitable and (iii) in the best interests of the Debtor, its
estate and creditors. Specifically, the consideration to be received by the Debtor and New
NYRA pursuant to the Legislation and the State Settlement, including, (1) the Effective Date
payment and waiver of distributions as set forth in Section 2.1(e) of the Plan and (2) the support
payments and capital expenditure advances to be made by the State of New York or the operator
of video lottery terminals at Aqueduct, as the case may be, to New NYRA over the term of the
Franchise, as set forth in the Racing Law and the State of New York Tax Law, each as modified
by the Legislation and the Chapter Amendment, is fair and equitable and sufficient in light of the
consideration to be given by the Debtor, including, without limitation, the conveyance of all of
its right, title and interest in, to and under the Racetracks and the other Transferred Property to
the State of New York, an affiliate or agency of the State of New York or a public benefit
corporation incorporated by the State of New York.
CONCLUSIONS OF LAW
NOW, THEREFORE, IT IS HEREBY ORDERED, ADJUDGED, AND
DECREED THAT:
1.

Confirmation. All requirements for confirmation of the Plan have been satisfied.

The Plan is CONFIRMED in its entirety pursuant to section 1129 of the Bankruptcy Code. A

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copy of the confirmed Plan is attached as Exhibit A to this Order. The terms of the Plan are
incorporated by reference into, and are an integral part of, this Order.
2.

Objections. All parties have had a full and fair opportunity to litigate all issues

raised by the Objections, or which might have been raised, and the Objections have been fully
and fairly litigated. Prior to the date of the Confirmation Hearing, the objection to confirmation
of the Plan by the Creditors Committee has been withdrawn with prejudice. All other
Objections, responses, statements, and comments in opposition to the Plan, other than those
withdrawn with prejudice in their entirety prior to the Confirmation Hearing or otherwise
resolved on the record of the Confirmation Hearing and/or herein are overruled for the reasons
stated on the record.
3.

Solicitation and Notice. Notice of the Confirmation Hearing complied with the

terms of the Disclosure Statement Order, was appropriate and satisfactory based on the
circumstances of this chapter 11 case, and was in compliance with the provisions of the
Bankruptcy Code, the Bankruptcy Rules, and the Local Bankruptcy Rules. The solicitation of
votes on the Plan and the Solicitation Packages complied with the solicitation procedures in the
Disclosure Statement Order, were appropriate and satisfactory based upon the circumstances of
this Chapter 11 Case, and were in compliance with the provisions of the Bankruptcy Code, the
Bankruptcy Rules, and the Local Bankruptcy Rules.
4.

Omission of Reference to Particular Plan Provisions. The failure to specifically

describe or include any particular provision of the Plan in this Order shall not diminish or impair
the effectiveness of such provision, it being the intent of this Court that the Plan be approved and
confirmed in its entirety.

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Plan Classification Controlling. The classifications of Claims and Equity

Interests for purposes of the distributions to be made pursuant to the Plan shall be governed
solely by the terms of the Plan. The classification set forth on the Ballots tendered or returned by
the Debtors creditors in connection with voting on the Plan: (a) were set forth on the Ballots
solely for purposes of voting to accept or reject the Plan; (b) do not necessarily represent, and in
no event shall be deemed to modify or otherwise affect, the actual classification of such Claims
and Equity Interests under the Plan for distribution purposes; and (c) shall not be binding on the
Debtor, the Reorganized Debtor, creditors, or interest holders for purposes other than voting on
the Plan.
6.

Ten-Day Stay of Confirmation Order Waived. Pursuant to Bankruptcy Rule

3020(e), the ten-day stay of this Order imposed hereby is waived. The Debtor is authorized and
directed to consummate the Plan and the transactions contemplated thereby, including, without
limitation, those set forth in the State Settlement Agreement, immediately upon, concurrently
with, or as soon as practicable following, satisfaction or waiver of the conditions set forth in
Section 24.1 of the Plan.
7.

Binding Effect. Except as otherwise provided in section 1141(d)(3) of the

Bankruptcy Code, upon entry of this Confirmation Order and subject to the occurrence of the
Effective Date, the provisions of the Plan shall bind (i) any holder of a Claim against or Equity
Interest in the Debtor and its respective successors and assigns, whether or not such Claim or
Equity Interest of such holder is impaired under the Plan and whether or not such holder has
accepted the Plan, (ii) any and all non-Debtor parties to assumed executory contracts and
unexpired leases with the Debtor, (iii) the Objectors, (iv) every other party in interest in this

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Chapter 11 Case, and (v) all parties receiving property under the Plan, and their respective heirs,
executors, administrators, successors, or assigns.
8.

Distributions Under the Plan. All distributions pursuant to the Plan shall be made

in accordance with Article XIX of the Plan.

9.

Disputed Claims. The provisions of Article XIV of the Plan, including, without

limitation, the provisions governing procedures for resolving Disputed Claims, are found to be
fair and reasonable and are approved.
10.

Assumption or Rejection of Executory Contracts and Unexpired Leases (11

U.S.C. 1123(b)(2)). Pursuant to Section 21.1 of the Plan, on the Effective Date, the Debtor
shall (a) assume all executory contracts and unexpired leases that have not expired by their own
terms on or prior to the Confirmation Date, which have not been assumed and assigned or
rejected with the approval of the Bankruptcy Court, or which are not the subject of a motion to
assume the same pending as of the Confirmation Date; provided, however, that any executory
contracts or unexpired leases set forth on Exhibit B to the Plan shall be deemed rejected by the
Debtor in Possession on the Confirmation Date and the entry of the Confirmation Order by the
Bankruptcy Court shall constitute approval of such rejections pursuant to sections 365(a) and
1123 of the Bankruptcy Code and (b) assign all executory contracts and unexpired leases not
otherwise rejected to New NYRA.
11.

Approval of Assumption or Rejection of Executory Contracts and Unexpired

Leases. Entry of this Order shall, subject to and upon the occurrence of the Effective Date,
constitute the approval, pursuant to sections 365(a) and 1123 of the Bankruptcy Code, of the
assumption, assignment, or rejection, as the case may be, of the executory contracts and
unexpired leases assumed, assigned, or rejected pursuant to Section 21.1 of the Plan. The effect

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of confirmation of the Plan, the results thereof, and the transactions resulting therefrom or any
other effect of the Chapter 11 Case, including specifically the changes to the Debtors boards of
trustees and equity interests, shall not be and are not a change of control and shall not trigger
any such or similar provision of any of the executory contracts and unexpired leases assumed
and assigned pursuant to the Plan.
12.

Cure of Defaults. The parties to such executory contracts or unexpired leases to

be assumed and assigned pursuant to the Plan were afforded with good and sufficient notice of
such assumption and an opportunity to object and be heard. With respect to any objections to be
filed to the Debtors assumption of contracts and leases pursuant to Section 21.1 of the Plan, the
Bankruptcy Court shall hold a hearing on a date to be set by the Bankruptcy Court.
Notwithstanding Section 21.1 of the Plan, the Debtor shall retain its rights to reject any of its
executory contracts or unexpired leases that are subject to a dispute concerning amounts
necessary to cure any defaults through the Effective Date.
13.

Bar Date for Filing Proofs of Claim Relating to Executory Contacts and

Unexpired Leases Rejected Pursuant to the Plan. If the rejection of an executory contract or
unexpired lease by the Debtor hereunder results in damages to the other party or parties to such
contract or lease, any claim for such damages, if not heretofore evidenced by a filed proof of
claim, shall be forever barred and shall not be enforceable against the Debtor, or its properties or
agents, successors, or assigns, unless a proof of claim is filed with the Bankruptcy Court and
served upon attorneys for the Debtor on or before thirty (30) days after the latest to occur of (a)
the Confirmation Date, and (b) the date of entry of an order by the Bankruptcy Court authorizing
rejection of a particular executory contract or unexpired lease.

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Vesting of Assets. Pursuant to Section 29.1 of the Plan, except as otherwise

provided in the Plan or the State Settlement Agreement, on the Effective Date, title to (a) the
Ancillary Property shall vest in the Reorganized Debtor and (b) all other assets and properties
(other than the Ancillary Property, the Racetracks and the other Transferred Property) shall vest
in New NYRA free and clear of all Liens and in accordance with section 1141 of the Bankruptcy
Code (subject to the transfers contemplated by the State Settlement Agreement), and the
Confirmation Order shall be a judicial determination of discharge of the liabilities of the Debtor
and the Debtor in Possession except as provided in the Plan. On the Effective Date, New NYRA
and the State of New York shall enter into one or more leases providing for the lease of the
Racetracks (as more specifically defined in such leases) and other property to New NYRA.
15.

Directors and Officers. Pursuant to Article XXVII of the Plan, effective as of the

Effective Date, the composition of the board of trustees of the Reorganized Debtor shall be
designated as set forth in Section 27.1 of the Plan, which provides that, from and after the
Effective Date, the board of trustees of the Reorganized Debtor shall consist of C. Steven
Duncker, Charles E. Hayward and Patrick L. Kehoe. Except as set forth in the Plan, provisions
regarding members of the Reorganized Debtor Board of Trustees shall be as set forth in the
Reorganized Debtor By-laws. With respect to New NYRA, Section 27.2 of the Plan provides
that, from and after the Effective Date, and as set forth in the Racing Law, New NYRAs Board
of Directors shall be comprised of twenty-five (25) members: (a) fourteen (14) of whom shall be
elected by the NYRA Board of Trustees or the nominating committee of the NYRA Board of
Trustees, and (b) in accordance with the provisions and the procedures set forth in the
Legislation, seven (7) of whom shall be appointed by the Governor, and two (2) of whom shall
be selected by each of the Speaker of the Assembly and the Temporary President of the State

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Senate. Except as set forth herein, provisions regarding members of the New NYRA Board of
Directors and voting requirements of the Board of Directors shall be as set forth in the New
NYRA By-laws.
16.

Discharge of Debtor. Pursuant to Section 29.2 of the Plan, except as otherwise

provided in the Plan, this Order or such other order of the Bankruptcy Court that may be
applicable, on the latest to occur of (a) the Effective Date, (b) the entry of a Final Order resolving
all Claims in the Chapter 11 Case and (c) the final distribution made to holders of Allowed
Claims in accordance with Article XIX of the Plan, all Claims against and NYRA Equity
Interests in the Debtor and Debtor in Possession, shall be discharged and released in full;
provided, however, that, the Bankruptcy Court may, upon request by the Reorganized Debtor,
and notice and a hearing, enter an order setting forth that such Claims and NYRA Equity
Interests shall be deemed discharged and released on such earlier date as determined by the
Bankruptcy Court. All Persons and Entities shall be precluded from asserting against the Debtor,
the Debtor in Possession, their successors or assigns, including, without limitation, the
Reorganized Debtor, their agents and employees, or their respective assets, properties or interests
in property, any other or further Claims based upon any act or omission, transaction or other
activity of any kind or nature that occurred prior to the Confirmation Date, whether or not the
facts or legal bases therefor were known or existed prior to the Confirmation Date regardless of
whether a proof of Claim or NYRA Equity Interest was filed, whether the holder thereof voted to
accept or reject the Plan or whether the Claim is an Allowed Claim. Notwithstanding section
1141(d) of the Bankruptcy Code, nothing contained in the Plan or this Order shall be deemed to
discharge or release any person from any obligations arising from that certain Stipulation and
Order (A) Authorizing Setoff of Prepetition Obligations, (B) Dismissing Adversary Proceeding,

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(C) Expunging Certain Proofs of Claim and (C) Providing for the Payment of the Purse Cushion,
which was entered by the Bankruptcy Court on January 24, 2008 (the Purse Order) or (ii) the
Supplemental DIP Loan (other than as provided in Amendment No. 1).
17.

Injunction on Claims. Pursuant to Section 29.3 of the Plan, except as otherwise

expressly provided in the Plan, this Order or such other order of the Bankruptcy Court that may
be applicable, all Persons or Entities who have held, hold or may hold Claims or any other debt
or liability that is discharged or Equity Interests or other right of equity interest that is terminated
or cancelled pursuant to the Plan are permanently enjoined, from and after the Effective Date,
from (a) commencing or continuing in any manner any action or other proceeding of any kind on
any such Claim or other debt or liability or Equity Interest or other right of equity interest that is
terminated or cancelled pursuant to the Plan against the Debtor, the Debtor in Possession or the
Reorganized Debtor, the Debtors estate, New NYRA, the State of New York or their respective
properties or interests in properties, (b) the enforcement, attachment, collection or recovery by
any manner or means of any judgment, award, decree or order against the Debtor, the Debtor in
Possession or the Reorganized Debtor, the Debtors estate, New NYRA, the State of New York
or their respective properties or interests in properties, (c) creating, perfecting, or enforcing any
encumbrance of any kind against the Debtor, the Debtor in Possession or the Reorganized
Debtor, New NYRA, the State of New York or against their respective property or interests in
property, and (d) except to the extent provided, permitted or preserved by sections 553, 555, 556,
559 or 560 of the Bankruptcy Code or pursuant to the common law right of recoupment,
asserting any right of setoff, subrogation or recoupment of any kind against any obligation due
from the Debtor, the Debtor in Possession or the Reorganized Debtor, New NYRA, the State of
New York or against their respective property or interests in property with respect to any such

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Claim or other debt or liability that is discharged or Equity Interest or other right of equity
interest that is terminated or cancelled pursuant to the Plan; provided, however, that such
injunction shall not prejudice any partys right, if any, to enforce the terms of the Purse Order or
the rights of the State of New York with respect to the Supplemental DIP Loan; and, provided,
however, that such injunction shall not preclude the United States of America, any state or any of
their respective police or regulatory agencies from enforcing their police or regulatory powers;
and, provided, further, that, except in connection with a properly filed proof of claim, the
foregoing proviso does not permit the United States of America, any State or any of their
respective police or regulatory agencies from obtaining any monetary recovery from the Debtor,
the Debtor in Possession or the Reorganized Debtor or their respective property or interests in
property with respect to any such Claim or other debt or liability that is discharged or Equity
Interest or other right of equity interest that is terminated or cancelled pursuant to the Plan,
including, without limitation, any monetary claim or penalty in furtherance of a police or
regulatory power. Such injunction (y) shall extend to all successors of the Debtor and Debtor in
Possession, the State and the Creditors Committee and its members, and their respective
properties and interests in property; provided, however, that such injunction shall not extend to
or protect members of the Creditors Committee and their respective properties and interests in
property for actions based upon acts outside the scope of service on the Creditors Committee,
and (z) is not intended, nor shall it be construed, to extend to the assertion, the commencement or
the prosecution of any claim or cause of action against any present or former member of the
Creditors Committee and their respective properties and interests in property arising from or
relating to such members pre-Petition Date acts or omissions.

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Terms of Injunction. Unless otherwise provided, all injunctions or stays provided

for in the Chapter 11 Case pursuant to sections 105, 362 or 525 of the Bankruptcy Code, or
otherwise, and in existence on the Confirmation Date, shall remain in full force and effect until
entry of an order in accordance with Section 29.15 of the Plan or such other Final Order of the
Bankruptcy Court.
19.

Limited Releases. Pursuant to Section 29.5 of the Plan, no claims of the Debtors

estate against its present and former officers, directors, employees, consultants and agents and
arising from or relating to the period prior to the Petition Date are released by the Plan. As of the
Effective Date, the Debtor and the Debtor in Possession shall be deemed to have waived and
released its present and former directors, officers, employees, consultants and agents who were
directors, officers, employees, consultants or agents, respectively, at any time during the Chapter
11 Case, from any and all claims of the Debtors estate arising from or relating to the period
from and after the Petition Date; provided, however, that this provision shall not operate as a
waiver or release of (a) any Person (i) named or subsequently named as a defendant in any action
commenced by or on behalf of the Debtor in Possession, and (ii) adjudicated or subsequently
adjudicated by a court of competent jurisdiction to have engaged in acts of dishonesty or willful
misconduct detrimental to the interests of the Debtor or (b) any claim (i) with respect to any loan,
advance or similar payment by the Debtor to any such person, (ii) with respect to any contractual
obligation owed by such person to the Debtor, (iii) relating to such persons knowing fraud; and,
provided, further, that the foregoing is not intended, nor shall it be construed, to release any of
the Debtors claims that may exist against the Debtors directors and officers liability insurance.
20.

Exculpation. Pursuant to Section 29.6 of the Plan, the Debtor, the Reorganized

Debtor, New NYRA, the State of New York, the Creditors Committee, and any of their

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respective directors, officers, officials, employees, members, attorneys, consultants, advisors and
agents (acting in such capacity), shall not have or incur any liability to any Entity for any act
taken or omitted to be taken in connection with the Chapter 11 Case, the formulation,
preparation, dissemination, implementation, confirmation or approval of the Plan or any
compromises or settlements contained therein, the Disclosure Statement related thereto or any
contract, instrument, release or other agreement or document provided for or contemplated in
connection with the consummation of the transactions set forth in the Plan; provided, however,
that the foregoing provisions of this Section 29.6 shall not affect the liability of any Entity that
otherwise would result from any such act or omission to the extent that such act or omission is
determined in a Final Order to have constituted gross negligence or willful misconduct. Any of
the foregoing parties in all respects shall be entitled to rely upon the advice of counsel with
respect to their duties and responsibilities under the Plan.
21.

Preservation of Rights of Action. Pursuant to Section 29.7, except as otherwise

provided in the Plan, or in any contract, instrument, release of other agreement entered into in
connection with the Plan, in accordance with section 1123(b) of the Bankruptcy Code, the
Reorganized Debtor shall retain sole and exclusive authority to enforce any claims, rights or
causes of action that the Debtor, the Debtor in Possession or its chapter 11 estate may hold
against any Entity, including any claims, rights or causes of action arising under sections 541,
544, 545, 547, 548, 549, 550, 551 and 553 of the Bankruptcy Code.
22.

Injunction on Actions. Pursuant to Section 29.8 of the Plan, except as provided in

the Plan, as of the Effective Date, all non-Debtor entities are permanently enjoined from
commencing or continuing in any manner, any action or proceeding, whether directly,
derivatively, on account of or respecting any claim, debt, right or cause of action of the Debtor,

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the Debtor in Possession or the Reorganized Debtor which the Debtor, the Debtor in Possession
or the Reorganized Debtor, as the case may be, retain sole and exclusive authority to pursue in
accordance with Section 15.1 of the Plan or which has been released pursuant to the Plan,
including, without limitation, pursuant to Sections 2.1 and 29.5 of the Plan; provided, however,
that, except as provided in Section 29.3 of the Plan, such injunction is not intended, nor shall it
be construed to, apply to any proceeding not involving property of the Debtors estate that a nonDebtor Entity may bring against another non-Debtor Entity.
23.

Conditions to Effective Date. The Plan shall not become effective unless and

until the conditions set forth in Section 24.1 of the Plan are satisfied or waived pursuant to
Section 24.2 of the Plan.
24.

Retention of Jurisdiction. Pursuant to Section 25.1 of the Plan, the Bankruptcy

Court shall retain and have exclusive jurisdiction over any matter arising under the Bankruptcy
Code, arising in or related to the Chapter 11 Case or the Plan, or that relates to the following:
a.

to resolve any matters related to the assumption, assumption and

assignment or rejection of any executory contract or unexpired lease to
which the Debtor is a party or with respect to which the Debtor may be
liable and to hear, determine and, if necessary, liquidate, any Claims
arising therefrom, including those matters related to the amendment after
the Effective Date of the Plan, to add any executory contracts or unexpired
leases to the list of executory contracts and unexpired leases to be rejected;

b.

to enter such orders as may be necessary or appropriate to implement or

consummate the provisions of the Plan and all contracts, instruments,
releases, and other agreements or documents created in connection with
the Plan, including, without limitation, the State Settlement Agreement,
unless any such agreements or documents contain express enforcement
and dispute resolution provisions to the contrary, in which case, such
provisions shall govern;

c.

to determine any and all motions, adversary proceedings, applications and

contested or litigated matters that may be pending on the Effective Date or
that, pursuant to the Plan, may be instituted by the Reorganized Debtor
prior to or after the Effective Date;

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d.

to ensure that distributions to holders of Allowed Claims are accomplished

as provided herein;

e.

to hear and determine any timely objections to Administrative Expense

Claims or to proofs of Claim filed, both before and after the Confirmation
Date, including any objections to the classification of any Claim, and to
allow, disallow, determine, liquidate, classify, estimate or establish the
priority of or secured or unsecured status of any Claim, in whole or in
part;

f.

to enter and implement such orders as may be appropriate in the event the
Confirmation Order is for any reason stayed, revoked, modified, reversed
or vacated;

g.

to issue such orders in aid of execution of the Plan, to the extent

authorized by section 1142 of the Bankruptcy Code;

h.

to consider any modifications of the Plan, to cure any defect or omission,

or reconcile any inconsistency in any order of the Bankruptcy Court,
including the Confirmation Order;

i.

to hear and determine all applications for awards of compensation for

services rendered and reimbursement of expenses incurred prior to the
Effective Date;

j.

except to the extent provided in Section 25.1(b) of the Plan or with respect
to matters regarding the regulation of New NYRA pursuant to the Racing
Law, to hear and determine disputes arising in connection with or relating
to the Plan or the interpretation, implementation, or enforcement of the
Plan or the extent of any Entitys obligations incurred in connection with
or released under the Plan;

k.

to issue injunctions, enter and implement other orders or take such other
actions as may be necessary or appropriate to restrain interference by any
Entity with consummation or enforcement of the Plan;

l.

except to the extent provided in Section 25.1(b) of the Plan or with respect
to matters regarding the regulation of New NYRA pursuant to the Racing
Law, to determine any other matters that may arise in connection with or
are related to the Plan, the Disclosure Statement, the Confirmation Order
or any contract, instrument, release or other agreement or document
created in connection with the Plan or the Disclosure Statement;

m.

to hear and determine matters concerning state, local and federal taxes in
accordance with sections 346, 505, and 1146 of the Bankruptcy Code;

n.

to hear any other matter or for any purpose specified in the Confirmation
Order that is not inconsistent with the Bankruptcy Code; and
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to enter a final decree closing the Chapter 11 Case;

provided, however, that the foregoing is not intended to (1) expand the Bankruptcy Courts
jurisdiction beyond that allowed by applicable law, (2) impair the rights of an Entity to (i) invoke
the jurisdiction of a court, commission or tribunal with respect to matters relating to a
governmental units police and regulatory powers and (ii) contest the invocation of any such
jurisdiction; provided, however, that the invocation of such jurisdiction, if granted, shall not
extend to the allowance or priority of Claims or the enforcement of any money judgment against
the Debtor or the Reorganized Debtor, as the case may be, entered by such court, commission or
tribunal, and (3) impair the rights of an Entity to (i) seek the withdrawal of the reference in
accordance with 28 U.S.C. 157(d) and (ii) contest any request for the withdrawal of reference
in accordance with 28 U.S.C. 157(d).
25.

Effectuating Documents and Further Transactions. The Debtor is authorized to

execute, deliver, file, or record such contracts, instruments, releases, indentures, and other
agreements or documents, and take such actions as may be necessary or appropriate to effectuate,
implement, and further evidence the terms and conditions of the Plan.
26.

The transactions contemplated by the Plan, including, but not limited to, the

conveyance of the Racetracks and the other Transferred Property, as contemplated by the State
Settlement Agreement, are undertaken by the Debtor and the State of New York without
collusion and in good faith, and, accordingly, the reversal or modification on appeal of the
authorization provided herein to consummate the Plan shall not affect the validity of any sale,
transfer or conveyance contemplated by the Plan, unless such authorization is duly stayed prior
to the Effective Date pending such appeal.
27.

Corporate Action. On the Effective Date, the adoption of the Reorganized Debtor

Certificate of Incorporation and the Reorganized Debtor By-laws shall be authorized and
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approved in all respects, in each case without further action under applicable law, regulation,
order, or rule, including, without limitation, any action by the stockholders of the Debtor or the
Reorganized Debtor. Subject to the Racing Law, the cancellation of all Equity Interests,
employment agreements, and other matters provided under the Plan involving the corporate
structure of the Reorganized Debtor or corporate action by the Reorganized Debtor shall be
deemed to have occurred, be authorized, and shall be in effect without requiring further action
under applicable law, regulation, order, or rule, including, without limitation, any action by the
stockholders of the Debtor or the Reorganized Debtor. Without limiting the foregoing, from and
after the Confirmation Date, the Debtor, and the Reorganized Debtor may take any and all
actions deemed appropriate in order to consummate the transactions contemplated herein;
provided, however, that, from and after the Effective Date, the actions of the Reorganized Debtor
shall be limited to the administration of the actions contemplated or required by the Plan to be
performed by the Debtor or the Reorganized Debtor, including, without limitation, the resolution
of Claims, distributions in respect thereof and the sale of the Ancillary Property.
28.

Compromise and Settlement. Pursuant to Bankruptcy Rule 9019, the State

Settlement set forth in Article II of the Plan is hereby approved. Pursuant the State Settlement,
among other things, on the Effective Date, (1) the State shall pay to the Debtor One Hundred
Five Million Dollars ($105,000,000.00), for services and expenses required relating to payments
for capital works or purposes, including, without limitation, payments for the purpose of
acquisition of clear title to the Racetracks and the other Transferred Property and related real
property and which the Debtor shall use to satisfy Allowed Claims and for the support of New
NYRA's racing operations and the satisfaction of New NYRA's operating expenses, including,
without limitation, the payment of New NYRA's pension plan obligations in accordance with

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Section 10.1(a) of the Plan, and (2) except as set forth in the State Settlement Agreement, the
State of New York shall waive for the benefit of the Debtors estate and the Reorganized Debtor
any entitlement to receive distributions pursuant to the Plan with respect to the Allowed State
Claims, except with respect to the New York State Tax Claim; provided, however, that, in the
event that the amounts projected to be paid by the State of New York and set forth in the State
Settlement Agreement are in excess of amounts necessary to satisfy Allowed Claims or to
support the Reorganized Debtors or New NYRAs operating and capital expenditure
obligations, as the case may be, such amounts shall be reduced to the extent appropriate.
29.

Appointment of Reorganized Debtor Plan Administrator. The appointment of

Irene M. Posio as Reorganized Debtor Plan Administrator is hereby approved. Pursuant to

Section 23.1 of the Plan, on the Effective Date, compliance with the provisions of the Plan shall
become the general responsibility of the Reorganized Debtor Plan Administrator, an employee of
the Reorganized Debtor, (subject to the supervision of the Board of Directors of the Reorganized
Debtor) pursuant to and in accordance with the provisions of the Plan and the Reorganized
Debtor Plan Administration Agreement.
30.

Withholding and Reporting Requirements. Pursuant to Section 19.7 of the Plan,

the Reorganized Debtor shall comply with all applicable tax withholding and reporting
requirements imposed on it by any governmental unit, and all distributions pursuant to the Plan
shall be subject to such withholding and reporting requirements. Notwithstanding the above,
each holder of an Allowed Claim that is to receive a distribution under the Plan shall have the
sole and exclusive responsibility for the satisfaction and payment of any tax obligations imposed
by any governmental unit, including income, withholding, and other tax obligations, on account
of such distribution.

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Modification. Pursuant to Section 26.1 of the Plan, upon entry of this Order, the

Debtor or the Reorganized Debtor, as the case may be, may, upon order of the Bankruptcy Court,
amend or modify the Plan, in accordance with section 1127(b) of the Bankruptcy Code, or
remedy any defect or omission or reconcile any inconsistency in the Plan in such manner as may
be necessary to carry out the purpose and intent of the Plan. A holder of a Claim that has
accepted the Plan shall be deemed to have accepted the Plan as modified if the proposed
modification does not materially and adversely change the treatment of the Claim of such holder.
32.

Payment of Statutory Fees. All fees payable pursuant to section 1930 of title 28

of the United States Code, and, if applicable, any interest payable pursuant to section 3717 of
title 31 of the United States Code, as determined by the Bankruptcy Court, shall be paid on the
Effective Date or thereafter as and when they become due and owing.
33.

Post-Effective Date Fees and Expenses. From and after the Effective Date, the

Reorganized Debtor shall, in the ordinary course of business and without the necessity for any
approval by the Bankruptcy Court, pay the reasonable professional fees and expenses incurred by
the professionals retained by the Reorganized Debtor and the Creditors' Committee related to
implementation and consummation of the Plan.
34.

Dissolution of the Creditors Committee. On the first (1st) Business Day thirty

(30) days following the Effective Date, and provided that payments to holders of Allowed
Unsecured Claims have been made in accordance with Section 19.1 of the Plan, the Creditors
Committee shall be dissolved and the members thereof shall be released and discharged of and
from all further authority, duties, responsibilities and obligations related to and arising from and
in connection with the reorganization, and the retention or employment of the Creditors
Committees attorneys, accountants and other agents, if any, shall terminate other than for

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purposes of filing and prosecuting applications for final allowances of compensation for
professional services rendered and reimbursement of expenses incurred in connection therewith;
provided, however, that, notwithstanding the foregoing, the existence of the Creditors'
Committee may be extended pursuant to an order of the Bankruptcy Court, upon an application
by the Creditors' Committee, and notice and a hearing, and the showing of good and sufficient
cause therefor.
35.

Exemption from Transfer Taxes. Pursuant to section 1146(a) of the Bankruptcy

Code, the creation of any mortgage, deed of trust, or other security interest, the making or
assignment of any lease or sublease, or the making or delivery of any deed or other instrument of
transfer under, in furtherance of, or in connection with the Plan, including, without limitation, the
sale of the Ancillary Property, shall not be subject to any stamp, real estate transfer, mortgage
recording or other similar tax. All sale transactions consummated by the Debtor and approved
by the Bankruptcy Court on and after the Petition Date through and including the Effective Date,
including, without limitation, the transfers effectuated under the Plan and the sale by the Debtor
of owned property pursuant to section 363(b) of the Bankruptcy Code, shall be deemed to have
been made under, in furtherance of, or in connection with the Plan and, thus, shall not be subject
to any stamp, real estate transfer, mortgage recording, or other similar tax.
36.

Professional Compensation and Reimbursement. On or before the ninetieth

(90th) day after the Effective Date, each professional and other entity requesting compensation
or reimbursement of expenses pursuant to section 327, 328, 330, 503(b), and 1103 of the
Bankruptcy Code for services rendered up to the date and time of entry of this Order shall file an
application for final allowance of compensation and reimbursement of expenses with the Court
(a Final Fee Application), together with proof of service thereof, and shall serve such Final Fee

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Application on the Debtor, counsel for the Debtor, the United States Trustee for the Southern
District of New York, and counsel for the Creditors Committee. Final Fee Applications shall
show and reflect the application of any retainers received in connection with the Debtors
Chapter 11 Case.
37.

Objections, if any, to any Final Fee Application shall be filed with the Court,

together with proof of service thereof, and served upon the applicant and each of the parties
identified in the preceding decretal paragraph, so as to be received not later than 4:00 p.m. (New
York Time) on the date that is the later of (a) the ninetieth (90th) day after the Effective Date and
(b) the thirtieth (30th) day after the Final Fee Application is filed with the Court.
38.

Notice of Entry of Confirmation Order. Pursuant to Bankruptcy Rules 2002(f)(7),

2002(k), and 3020(c), the Debtor or the Reorganized Debtor, as the case may be, shall file and
serve notice of entry of this Order in substantially the form annexed hereto as Exhibit B (the
Notice of Confirmation Order) on all creditors and interest holders, the attorneys for the State
of New York, the United States Trustee for the Southern District of New York, the attorneys for
the Creditors Committee, and other parties in interest, by causing the Notice of Confirmation
Order to be delivered to such parties by first-Class mail, postage prepaid, within 10 business
days after entry of this Order. The Notice of Confirmation Order shall also be posted on the
website of the Debtors Court-appointed voting and tabulation agent, Garden City Group, Inc.,
at: http://www.gardencitygroup.com/cases/nyr. Such notice is adequate under the particular
circumstances and no other or further notice is necessary. The form of Notice of Confirmation
Order substantially in the form annexed hereto as Exhibit B is approved.
39.

Notice of the Effective Date. As soon as practicable after the occurrence of the

Effective Date, the Reorganized Debtor shall file notice of the occurrence of the Effective Date

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and shall serve a copy of same on all parties entitled to receive notice pursuant to this Courts
order, dated November 13, 2006, establishing notice procedures in these chapter 11 cases.
40.

Substantial Consummation. On the Effective Date, the Plan shall be deemed to be

substantially consummated under sections 1101 and 1127 of the Bankruptcy Code.
41.

Governing Law. Except to the extent that the Bankruptcy Code or other federal

law is applicable, or to the extent that an exhibit to the Plan or any document to be entered into in
connection therewith provides otherwise, the rights, duties and obligations arising under the Plan
shall be governed by, and construed and enforced in accordance with, the Bankruptcy Code and,
to the extent not inconsistent therewith, the laws of the State of New York, without giving effect
to principles of conflicts of laws.
42.

Conflicts Between Order and Plan. The provisions of the Plan and this Order

shall be construed in a manner consistent with each other so as to effect the purpose of each;
provided, however, that if there is determined to be any inconsistency between any Plan
provision and any provision of this Order that cannot be so reconciled, then solely to the extent
of such inconsistency, the provisions of this Order shall govern and any provision of this Order
shall be deemed a modification of the Plan and shall control and take precedence; and, provided,
further, that nothing contained in this Order or the Plan shall have any effect on the Debtors or
the Reorganized Debtors obligations in respect of the Supplemental DIP Loan, which shall be
repaid to the extent provided in Amendment No. 1. The provisions of this Order are integrated
with each other and are non-severable and mutually dependent.
43.

Transfers by Debtor. All transfers of property of the Debtor's estate, including,

without limitation, the transfer and assignment to the State of New York, an affiliate or agency of
the State of New York or a public benefit corporation incorporated by the State of New York of

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the Racetracks and other Transferred Property, as contemplated by the State Settlement
Agreement, shall be free and clear of all liens, charges, Claims, encumbrances, and other
interests pursuant to sections 1123(a)(5)(D) and 1141(c) of the Bankruptcy Code and Section
29.1 of the Plan, including, without limitation, any liens held by the Pension Benefit Guaranty
Corporation pursuant to 29 U.S.C. 302(f) and 26 U.S.C. 412(n), except as otherwise
expressly provided in the Plan, State Settlement Agreement, or this Order; provided, however,
that, no such exceptions shall apply to the transfer and assignment of the Racetracks and other
Transferred Property to the State of New York, an affiliate or agency of the State of New York
or a public benefit corporation incorporated by the State of New York.
44.

Final Order. This Order is a final order and the period in which an appeal must be

filed shall commence upon the entry hereof.

Dated: New York, New York

April 28, 2008
s/ James M. Peck
UNITED STATES BANKRUPTCY JUDGE

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Plan of Reorganization

A:\NYRA -CONFIRMATION ORDER.DOC

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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------------x
In re:
THE NEW YORK RACING ASSOCIATION INC.,
Debtor.

:
:
:
:
:
:
:

Chapter 11
Case No. 06-12618 (JMP)

------------------------------------------------------------------------x

MODIFIED THIRD AMENDED PLAN OF DEBTOR PURSUANT

TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue
New York, New York 10153
(212) 310-8000
Attorneys for Debtor and
Debtor in Possession
Dated: April 28, 2008

A:\NYRA -PLAN OF REORGANIZATION.DOC

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TABLE OF CONTENTS
Page
Article I

DEFINITIONS................................................................................................... 1

1.1

Administrative Expense Claim .......................................................................... 1

1.2

Adversary Litigation.......................................................................................... 1

1.3

Allowed Administrative Expense Claim ........................................................... 1

1.4

Allowed Claim ................................................................................................... 1

1.5

Allowed Insured Litigation Claim ..................................................................... 2

1.6

Allowed IRS Claim ............................................................................................ 2

1.7

Allowed Penalty Claim ...................................................................................... 2

1.8

Allowed Priority Claim ...................................................................................... 2

1.9

Allowed Priority Non-Tax Claim ...................................................................... 2

1.10

Allowed Priority Tax Claim............................................................................... 2

1.11

Allowed Secured Claim ..................................................................................... 2

1.12

Allowed State Claim .......................................................................................... 2

1.13

Allowed Unsecured Claim ................................................................................. 2

1.14

Amendment No. 1 .............................................................................................. 2

1.15

Ancillary Property.............................................................................................. 2

1.16

Aqueduct ............................................................................................................ 2

1.17

Assembly............................................................................................................ 2

1.18

Ballot .................................................................................................................. 3

1.19

Ballot Date ......................................................................................................... 3

1.20

Bankruptcy Code................................................................................................ 3

1.21

Bankruptcy Court ............................................................................................... 3

1.22

Bankruptcy Rules ............................................................................................... 3

1.23

Belmont .............................................................................................................. 3

1.24

Benefit Plan........................................................................................................ 3

1.25

Business Day...................................................................................................... 3

1.26

Case Management Order.................................................................................... 3

1.27

Cash.................................................................................................................... 3

1.28

Cash Equivalents................................................................................................ 3

1.29

Chapter 11 Case ................................................................................................. 4

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TABLE OF CONTENTS
(continued)
Page
1.30

Chapter Amendment .......................................................................................... 4

1.31

Claim .................................................................................................................. 4

1.32

Class................................................................................................................... 4

1.33

Code of Conduct ................................................................................................ 4

1.34

Collateral............................................................................................................ 4

1.35

Confirmation Date.............................................................................................. 4

1.36

Confirmation Hearing ........................................................................................ 4

1.37

Confirmation Order............................................................................................ 4

1.38

Creditor .............................................................................................................. 4

1.39

Creditors Committee......................................................................................... 4

1.40

Debtor................................................................................................................. 5

1.41

Debtor in Possession.......................................................................................... 5

1.42

DIP Agreements ................................................................................................. 5

1.43

DIP Obligations .................................................................................................. 5

1.44

DIP Orders ......................................................................................................... 5

1.45

Disbursement Account(s)................................................................................... 5

1.46

Disbursing Agent ............................................................................................... 5

1.47

Disclosure Statement .......................................................................................... 5

1.48

Disclosure Statement Order ............................................................................... 5

1.49

Disputed Claim .................................................................................................. 5

1.50

Disputed Claim Amount .................................................................................... 5

1.51

Effective Date .................................................................................................... 6

1.52

Entity.................................................................................................................. 6

1.53

Final Order ......................................................................................................... 6

1.54

Franchise ............................................................................................................ 6

1.55

Franchise Agreement ......................................................................................... 6

1.56

Governor ............................................................................................................ 6

1.57

Insurance Carrier................................................................................................ 7

1.58

Insurance Policy................................................................................................. 7

1.59

Insured Litigation Claim .................................................................................... 7

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TABLE OF CONTENTS
(continued)
Page
1.60

IRC ..................................................................................................................... 7

1.61

IRS ..................................................................................................................... 7

1.62

IRS Claim........................................................................................................... 7

1.63

Legislation.......................................................................................................... 7

1.64

Legislature.......................................................................................................... 7

1.65

Lien .................................................................................................................... 7

1.66

New NYRA........................................................................................................ 7

1.67

New NYRA By- laws ......................................................................................... 7

1.68

New NYRA Certificate of Incorporation........................................................... 7

1.69

New York State Tax Claim ................................................................................ 7

1.70

NYRA ................................................................................................................ 8

1.71

NYRA Board of Trustees................................................................................... 8

1.72

NYRA Equity Interest........................................................................................ 8

1.73

Oversight Board ................................................................................................. 8

1.74

Pataki.................................................................................................................. 8

1.75

PBGC ................................................................................................................. 8

1.76

PBGC Claim ...................................................................................................... 8

1.77

Penalty Claim ..................................................................................................... 8

1.78

Person................................................................................................................. 8

1.79

Petition Date....................................................................................................... 8

1.80

Plan..................................................................................................................... 8

1.81

Priority Claim..................................................................................................... 8

1.82

Priority Non- Tax Claim ..................................................................................... 8

1.83

Priority Tax Claim ............................................................................................. 8

1.84

Pro Rata Share.................................................................................................... 8

1.85

Proponent ........................................................................................................... 9

1.86

Racetracks .......................................................................................................... 9

1.87

Racing Law ........................................................................................................ 9

1.88

Record Date........................................................................................................ 9

1.89

Reorganized Debtor ........................................................................................... 9

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TABLE OF CONTENTS
(continued)
Page
1.90

Reorganized Debtor By-Laws............................................................................ 9

1.91

Reorganized Debtor Certificate of Incorporation .............................................. 9

1.92

Reorganized Debtor Plan Administration Agreement ....................................... 9

1.93

Reorganized Debtor Plan Administrator............................................................ 9

1.94

Saratoga .............................................................................................................. 9

1.95

Schedules ........................................................................................................... 9

1.96

Secured Claim .................................................................................................... 9

1.97

State Claims ..................................................................................................... 10

1.98

State Motion to Dismiss ................................................................................... 10

1.99

State Senate ...................................................................................................... 10

1.100

State Settlement Agreement............................................................................. 10

1.101

Supplemental DIP Loan................................................................................... 10

1.102

Transferred Property........................................................................................ 10

1.103

Unsecured Claim.............................................................................................. 10

1.104

VLT.................................................................................................................. 10

1.105

VLT Revenues ................................................................................................. 10

1.106

UCC ................................................................................................................. 10

1.107

Other Definitions .............................................................................................. 10

Article II

COMPROMISE AND SETTLEMENT OF DISPUTES WITH

STATE; WAIVER OF CLAIMS ..................................................................... 11

2.1

Compromise and Settlement ............................................................................ 11

Article III

PROVISIONS FOR PAYMENT OF ADMINISTRATIVE

EXPENSE CLAIMS AND PRIORITY TAX CLAIMS ................................. 12

3.1

Administrative Expense Claims ....................................................................... 12

3.2

Professional Compensation and Reimbursement Claims ................................ 13

3.3

Payment of Priority Tax Claims ...................................................................... 13

3.4

Debtor in Possession Financing ....................................................................... 13

Article IV

CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS, .................. 13

4.1

Class 1 - Priority Non-Tax Claims................................................................... 13

4.2

Class 2 - Secured Claims ................................................................................. 13

4.3

Class 3 - Unsecured Claims ............................................................................. 14

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TABLE OF CONTENTS
(continued)
Page
4.4

Class 4 - Insured Litigation Claims ................................................................. 14

4.5

Class 5 - State Claims ...................................................................................... 14

4.6

Class 6 - PBGC Claims .................................................................................... 14

4.7

Class 7 Intentionally Left Blank ................................................................... 14

4.8

Class 8 - Penalty Claims .................................................................................. 14

4.9

Class 9 - NYRA Equity Interests ..................................................................... 14

Article V

PROVISION FOR TREATMENT OF PRIORITY NON-TAX

CLAIMS (CLASS 1) ....................................................................................... 14

5.1

Payment of Allowed Priority Non-Tax Claims (Class 1) ................................ 14

Article VI

PROVISION FOR TREATMENT OF SECURED CLAIMS (CLASS

2) ...................................................................................................................... 14

6.1

Payment of Allowed Secured Claims (Class 2)............................................... 14

Article VII
7.1
Article VIII

PROVISION FOR TREATMENT OF UNSECURED CLAIMS

(CLASS 3)........................................................................................................ 14
Payment of Allowed Unsecured Claims (Class 3)........................................... 14
PROVISION FOR TREATMENT OF INSURED LITIGATION
CLAIMS (CLASS 4) ....................................................................................... 15

8.2

Treatment of Allowed Insured Litigation Claims (Class 4)............................. 15

Article IX

PROVISION FOR TREATMENT OF STATE CLAIMS (CLASS 5) ........... 15

9.1

Treatment of Allowed State Claims (Class 5) ................................................. 15

Article X

PROVISIONS FOR TREATMENT OF PBGC CLAIMS (CLASS 6) .......... 16

10.1

Treatment of PBGC Claims (Class 6).............................................................. 16

Article XI

Intentionally Left blank ................................................................................... 16

Article XII

PROVISIONS FOR TREATMENT OF PENALTY CLAIMS

(CLASS 8) ....................................................................................................... 16

12.1

Treatment of Allowed Penalty Claims (Class 8) ............................................. 16

Article XIII

PROVISION FOR TREATMENT OF NYRA EQUITY INTERESTS

(CLASS 9)........................................................................................................ 16

13.1

Treatment of NYRA Equity Interests (Class 9)............................................... 16

Article XIV

PROVISIONS FOR TREATMENT OF DISPUTED CLAIMS

UNDER THE PLAN ........................................................................................ 17

14.1

Objections to Claims; Prosecution of Disputed Claims................................... 17

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TABLE OF CONTENTS
(continued)
Page
14.3

Payments and Distributions on Disputed Claims............................................. 17

14.4

Funding of Escrows Tax Obligation............................................................... 18

Article XV

PROSECUTION OF CLAIMS HELD BY THE DEBTOR............................ 19

15.1

Prosecution of Claims ...................................................................................... 19

Article XVI

ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF

REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR
EQUITY INTERESTS ..................................................................................... 19

Article XVII

IDENTIFICATION OF CLAIMS AND EQUITY INTERESTS

IMPAIRED AND NOT IMPAIRED BY THE PLAN .................................... 20

Article XVIII

PROVISIONS FOR THE ESTABLISHMENT AND

MAINTENANCE OF DISBURSEMENT ACCOUNTS ................................ 20

18.1

Establishment of Disbursement Account(s)..................................................... 20

18.2

Maintenance of Disbursement Account(s)....................................................... 20

Article XIX

PROVISIONS REGARDING DISTRIBUTIONS .......................................... 21

19.1

Distributions of Cash ....................................................................................... 21

19.2

Timeliness of Payments ................................................................................... 21

19.3

Distributions by the Disbursing Agent ............................................................ 21

19.4

Manner of Payment under the Plan.................................................................. 21

19.5

Delivery of Distributions ................................................................................. 21

19.6

Undeliverable Distributions ............................................................................. 22

19.7

Compliance with Tax Requirements................................................................ 22

19.8

Time Bar to Cash Payments............................................................................. 22

19.9

Distributions After Effective Date ................................................................... 22

19.10

Setoffs .............................................................................................................. 23

19.11

Allocation of Plan Distribut ions Between Principal and Interest .................... 23

Article XX

CREDITORS COMMITTEE ......................................................................... 23

20.1

Dissolution of the Creditors Committee ......................................................... 23

Article XXI

EXECUTORY CONTRACTS AND UNEXPIRED LEASES ........................ 23

21.1

Assumption and Assignment of Executory Contracts and Unexpired

Leases............................................................................................................... 23

21.2

Cure of Defaults for Assumed Executory Contracts and Unexpired

Leases............................................................................................................... 24
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TABLE OF CONTENTS
(continued)
Page
21.3

Rejection Damage Claims................................................................................ 24

21.4

Indemnification and Reimbursement Obligations ........................................... 24

21.5

Termination of Benefit Plans ........................................................................... 24

Article XXII

RIGHTS AND POWERS OF DISBURSING AGENT................................... 25

22.1

Exculpation ...................................................................................................... 25

22.2

Powers of the Disbursing Agent ...................................................................... 25

22.3

Fees and Expenses Incurred From and After the Effective Date ..................... 25

Article XXIII

THE REORGANIZED DEBTOR PLAN ADMINISTRATOR...................... 25

23.1

Appointment of Reorganized Debtor Plan Administrator ............................... 25

23.2

Responsibilities of the Reorganized Debtor Plan Administrator..................... 26

23.3

Powers of the Reorganized Debtor Plan Administrator................................... 26

23.4

Compensation of the Reorganized Debtor Plan Administrator ....................... 26

23.5

Termination of Reorganized Debtor Plan Administrator................................. 26

Article XXIV

CONDITIONS PRECEDENT TO EFFECTIVE DATE OF THE

PLAN; IMPLEMENTATION PROVISIONS................................................. 26

24.1

Conditions Precedent to Effective Date of the Plan......................................... 26

24.2

Waiver of Conditions Precedent ...................................................................... 27

Article XXV
25.1
Article XXVI

RETENTION OF JURISDICTION................................................................. 28
Retention of Jurisdiction.................................................................................. 28
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE
PLAN ............................................................................................................... 29

26.1

Modification of Plan ........................................................................................ 29

26.2

Revocation or Withdrawal ............................................................................... 30

Article XXVII

PROVISION FOR MANAGEMENT.............................................................. 30

27.1

Reorganized Debtor Directors ......................................................................... 30

27.2

New NYRA Directors ...................................................................................... 30

27.3

New NYRA Committees ................................................................................. 30

27.4

New NYRA Officers........................................................................................ 31

Article XXVIII
28.1

ARTICLES OF INCORPORATION AND BY-LAWS OF THE

DEBTOR; CORPORATE ACTION................................................................ 31
Amendment of Articles of Incorporation/Charter............................................ 31
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TABLE OF CONTENTS
(continued)
Page
28.2

Corporate Action.............................................................................................. 31

28.3

Corporate Contribution.................................................................................... 31

Article XXIX

MISCELLANEOUS PROVISIONS................................................................ 32

29.1

Title to Assets................................................................................................... 32

29.2

Discharge of Debtor......................................................................................... 32

29.3

Injunction on Claims ........................................................................................ 32

29.4

Term of Existing Injunctions or Stays ............................................................. 33

29.5

Limited Release of Directors, Officers and Employees................................... 33

29.6

Exculpation ...................................................................................................... 34

29.7

Preservation of Rights of Action...................................................................... 34

29.9

Payment of Statutory Fees ............................................................................... 35

29.10

Retiree Benefits................................................................................................ 35

29.11

Post-Effective Date Fees and Expenses........................................................... 35

29.12

Severability ...................................................................................................... 35

29.13

Governing Law ................................................................................................ 35

29.14

Notices ............................................................................................................. 35

29.15

Closing of Case ................................................................................................ 36

29.16

Section Headings .............................................................................................. 36

29.17

Exemption from Transfer Taxes ...................................................................... 36

29.18

Inconsistencies ................................................................................................. 37

EXHIBIT A

LIST OF STATE CLAIMS ............................................................................... 1

EXHIBIT B

EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE

REJECTED ........................................................................................................ 2

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The New York Racing Association Inc. hereby proposes the following chapter
11 plan pursuant to section 1121(a) of the Bankruptcy Code.
ARTICLE I
DEFINITIONS
As used in the Plan, the following terms shall have the respective meanings
specified below and be equally applicable to the singular and plural of terms defined:
1.1
Administrative Expense Claim: Any Claim constituting a cost or expense of
administration of the Chapter 11 Case asserted or authorized to be asserted in accordance with
sections 503(b) and 507(a)(2) of the Bankruptcy Code, including, without limitation, any actual
and necessary costs and expenses of preserving the estate of the Debtor, any actual and
necessary costs and expenses of operating the businesses of the Debtor in Possession, any costs
and expenses of the Debtor in Possession for the management, maintenance, preservation, sale
or other disposition of any assets, the administration and implementation of the Plan, the
administration, prosecution or defense of Claims by or against the Debtor and for distributions
under the Plan, any Claims for reclamation in accordance with section 546(c)(2) of the
Bankruptcy Code allowed pursuant to Final Order, any Claims for compensation and
reimbursement of expenses arising during the period from and after the Petition Date and prior
to the Effective Date and awarded by the Bankruptcy Court in accordance with sections 328,
330, 331 or 503(b) of the Bankruptcy Code or otherwise in accordance with the provisions of
the Plan, whether fixed before or after the Effective Date, and any fees or charges assessed
against the Debtors estate pursuant to section 1930, chapter 123, Title 28, United States Code.
1.2
Adversary Litigation: The adversary proceeding commenced by NYRA,
styled The New York Racing Association Inc. v. George E. Pataki, et al., Adv. Pro. No. 0601957 (JMP).
1.3
Allowed Administrative Expense Claim: An Administrative Expense Claim,
to the extent it is or has become an Allowed Claim.
1.4
Allowed Claim: Any Claim against the Debtor or the Debtors estate, (i) proof
of which was filed on or before the date designated by the Bankruptcy Court as the last date for
filing such proof of claim against the Debtor or the Debtors estate, or (ii) if no proof of Claim
has been timely filed, which has been or hereafter is listed by the Debtor in its Schedules as
liquidated in amount and not disputed or contingent, in each such case in clauses (i) and (ii)
above, a Claim as to which no objection to the allowance thereof, or action to equitably
subordinate or otherwise limit recovery with respect thereto, has been interposed within the
applicable period of limitation fixed by the Plan, the Bankruptcy Code, the Bankruptcy Rules
or a Final Order, or as to which an objection has been interposed and such Claim has been
allowed in whole or in part by a Final Order. For purposes of determining the amount of an
Allowed Claim, there shall be deducted therefrom an amount equal to the amount of any
claim which the Debtor may hold against the holder thereof, to the extent such claim may be set
off pursuant to applicable bankruptcy or non-bankruptcy law. Without in any way limiting the
foregoing, Allowed Claim shall include any Claim arising from the recovery of property in

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accordance with sections 550 and 553 of the Bankruptcy Code and allowed in accordance with
section 502(h) of the Bankruptcy Code, any Claim allowed under or pursuant to the terms of
the Plan; provided, however, that (i) Claims allowed solely for the purpose of voting to accept
or reject the Plan pursuant to an order of the Bankruptcy Court shall not be considered
Allowed Claims hereunder unless otherwise specified herein or by order of the Bankruptcy
Court, (ii) for any purpose under the Plan, Allowed Claim shall not include interest,
penalties, or late charges arising from or relating to the period from and after the Petition Date
and (iii) Allowed Claim shall not include any Claim subject to disallowance in accordance
with section 502(d) of the Bankruptcy Code.
1.5
Allowed Insured Litigation Claim: An Insured Litigation Claim, to the extent
it is or has become an Allowed Claim.
1.6
Allowed IRS Claim: The IRS Claim, to the extent it is or has become an
Allowed Claim
1.7
Allowed Penalty Claim: A Penalty Claim, to the extent it is or has become an
Allowed Claim.
1.8
Allowed Priority Claim: A Priority Claim, to the extent it is or has become an
Allowed Claim.
1.9
Allowed Priority Non-Tax Claim: A Priority Non-Tax Claim, to the extent it
is or has become an Allowed Claim.
1.10 Allowed Priority Tax Claim: A Priority Tax Claim, to the extent it is or has
become an Allowed Claim.
1.11 Allowed Secured Claim: A Secured Claim, to the extent it is or has become an
Allowed Claim.
1.12 Allowed State Claim: A State Claim, to the extent it is or has become an
Allowed Claim.
1.13 Allowed Unsecured Claim: An Unsecured Claim, to the extent it is or has
become an Allowed Claim.
1.14 Amendment No. 1: Amendment No. 1 to Amended and Restated Debtor-inPossession Loan and Security Agreement, dated as of March 28, 2008, between NYRA and the
State of New York.
1.15 Ancillary Property: Approximately seventy (70) parcels of real property to
which the Debtor holds title but which is not used in connection with the operation of the
Racetracks or thoroughbred racing.
1.16

Aqueduct: Aqueduct Racetrack.

1.17

Assembly: The Assembly of the State of New York.

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1.18 Ballot: The form distributed to each holder of an impaired Claim on which is to
be indicated acceptance or rejection of the Plan.
1.19 Ballot Date: The date established by the Bankruptcy Court and set forth in the
Disclosure Statement Order for the submission of Ballots.
1.20 Bankruptcy Code: The Bankruptcy Reform Act of 1978, as amended, to the
extent codified in Title 11, United States Code, as applicable to the Chapter 11 Case.
1.21 Bankruptcy Court: The United States Bankruptcy Court for the Southern
District of New York or such other court having jurisdiction over the Chapter 11 Case.
1.22 Bankruptcy Rules: The Federal Rules of Bankruptcy Procedure, as
promulgated by the United States Supreme Court under section 2075 of Title 28 of the United
States Code, and any Local Rules of the Bankruptcy Court, as amended, as applicable to the
Chapter 11 Case.
1.23

Belmont: Belmont Park.

1.24 Benefit Plan: Any employee welfare benefit plan, employee pension benefit
plan or a plan which is both an employee welfare benefit plan and an employee pension benefit
plan within the meaning of Section 3(3) of ERISA, including, without limitation, (a) the
Retirement Plan for Administrative and Racing Employees of the NYRA Inc., (b) the Pension
Plan for Employees of the Admissions Department of the NYRA Inc., (c) the Pension Plan for
Employees of the Mutuel Department of the NYRA, Inc., (d) the NYRA Inc. Pension PlanAssistant Starters, and (e) the Pension Plan for Employees of the Maintenance Department of
the NYRA Inc., and any such similar employee benefit plan or arrangement which the Debtor
maintained prior to the Petition Date.
1.25 Business Day: A day other than a Saturday, a Sunday or any other day on
which commercial banks in New York, New York are required or authorized to close by law or
executive order.
1.26 Case Management Order: The Order Pursuant to Section 105(a) of the
Bankruptcy Code and Rules 1015(c) and 9007 of the Federal Rules of Bankruptcy Procedure
Implementing Certain Notice and Case Management Procedures, dated November 13, 2006,
entered by the Bankruptcy Court.
1.27

Cash: Lawful currency of the United States of America.

1.28 Cash Equivalents: Equivalents of Cash in the form of readily marketable

securities or instruments issued by a person other than the Debtor, including, without limitation,
readily marketable direct obligations of, or obligations guaranteed by, the United States of
America, commercial paper of domestic corporations carrying a Moodys Rating of A or
better, or equivalent rating of any other nationally recognized rating service, or interest-bearing
certificates of deposit or other similar obligations of domestic banks or other financial
institutions having a shareholders equity or equivalent capital of not less than One Hundred

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Million Dollars ($100,000,000.00), having maturities of not more than one (1) year, at the then
best generally available rates of interest for like amounts and like periods.
1.29 Chapter 11 Case: The case commenced under chapter 11 of the Bankruptcy
Code by the Debtor on the Petition Date, styled In re The New York Racing Association Inc.,
Chapter 11 Case No. 06-12618 (JMP), currently pending before the Bankruptcy Court.
1.30 Chapter Amendment: The amendment to the Legislation which shall correct
certain technical errors and clarify certain provisions of the Legislation, including, without
limitation, the distribution mechanism associated with the VLT Revenues.
1.31 Claim: Any right to payment from the Debtor or from property of the Debtor or
its estate, whether or not such right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, disputed, undisputed, legal, equitable, secured, or unsecured,
known or unknown or asserted; or any right to an equitable remedy for breach of performance
if such breach gives rise to a right of payment from the Debtor or from property of the Debtor,
whether or not such right to an equitable remedy is reduced to judgment, fixed, contingent,
matured, unmatured, disputed, undisputed, secured, or unsecured.
1.32 Class: A category of holders of Claims or Equity Interests set forth in Article
IV of the Plan.
1.33 Code of Conduct: The corporate governance code of conduct, acceptable to the
State of New York and NYRA, which shall be adopted by the Reorganized Debtor pursuant to
the State Settlement Agreement.
1.34 Collateral: Any property or interest in property of the estate of the Debtor that
is subject to an unavoidable Lien to secure the payment or performance of a Claim.
1.35 Confirmation Date: The date the Clerk of the Bankruptcy Court enters the
Confirmation Order on the docket of the Bankruptcy Court with respect to the Chapter 11 Case.
1.36 Confirmation Hearing: The hearing to consider confirmation of the Plan in
accordance with section 1129 of the Bankruptcy Code, as such hearing may be adjourned or
continued from time to time.
1.37

Confirmation Order: The order of the Bankruptcy Court confirming the Plan.

1.38 Creditor: Any Person or Entity holding a Claim against the Debtors estate or,
pursuant to section 102(2) of the Bankruptcy Code, against property of the Debtor that arose or
is deemed to have arisen on or prior to the Petition Date, including, without limitation, a Claim
against the Debtor or Debtor in Possession of a kind specified in sections 502(g), 502(h) or
502(i) of the Bankruptcy Code.
1.39 Creditors Committee: The statutory committee of creditors holding
Unsecured Claims appointed in the Chapter 11 Case pursuant to section 1102(a)(1) of the
Bankruptcy Code, as reconstituted from time to time.

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Debtor: The New York Racing Association Inc.

1.41 Debtor in Possession: The Debtor as debtor in possession pursuant to sections

1101(1) and 1107(a) of the Bankruptcy Code.
1.42 DIP Agreements: The (a) Debtor-in-Possession Credit Agreement, dated as of
November 3, 2006, between NYRA and the State of New York, (b) Amended and Restated
Debtor-in-Possession Loan and Security Agreement, dated as of March 16, 2007, between
NYRA and the State of New York and (c) Amendment No. 1.
1.43 DIP Obligations: The obligations of the Debtor arising from or related to the
DIP Agreements.
1.44 DIP Orders: The (a) Final Order Authorizing, Nunc Pro Tunc, Debtor in
Possession to Enter into Post-Petition Credit Agreement and Obtain Post-Petition Financing
Pursuant to Sections 363 and 364 of the Bankruptcy Code and Granting Liens, Security
Interests and Superpriority Claims, dated February 22, 2007, and (b) Order Authorizing Debtor
in Possession Pursuant to Sections 363 and 364 of the Bankruptcy Code to Obtain
Supplemental Postpetition Financing From the State of New York and Granting Liens, Security
Interests, Superpriority Claims and Related Relief, dated March 16, 2007.
1.45 Disbursement Account(s): The account(s) to be established by the
Reorganized Debtor on the Effective Date in accordance with Section 18.1 of the Plan, together
with any interest earned thereon.
1.46 Disbursing Agent: Solely in its capacity as agent of the Debtor to effectuate
distributions pursuant to the Plan, the Reorganized Debtor, or such other Entity as may be
designated by the Debtor and reasonably acceptable to the State and appointed by the
Bankruptcy Court and set forth in the Confirmation Order.
1.47 Disclosure Statement: The disclosure statement for the Plan approved by the
Bankruptcy Court in accordance with section 1125 of the Bankruptcy Code.
1.48 Disclosure Statement Order: The Final Order of the Bankruptcy Court
approving the Disclosure Statement in accordance with section 1125 of the Bankruptcy Code.
1.49 Disputed Claim: Any Claim against the Debtor, to the extent the allowance of
such Claim is the subject of a timely objection or request for estimation in accordance with the
Plan, the Bankruptcy Code, the Bankruptcy Rules or the Confirmation Order, or is otherwise
disputed by the Debtor in accordance with applicable law, which objection, request for
estimation or dispute has not been withdrawn, with prejudice, or determined by a Final Order.
1.50 Disputed Claim Amount: The lesser of (a) the liquidated amount set forth in
the proof of claim filed with the Bankruptcy Court relating to a Disputed Claim, (b) if the
Bankruptcy Court has estimated such Disputed Claim pursuant to section 502(c) of the
Bankruptcy Code, the amount of a Disputed Claim as estimated by the Bankruptcy Court, and
(c) the amount of such Disputed Claim allowed by the Bankruptcy Court pursuant to section
502 of the Bankruptcy Court, or zero, if such Disputed Claim is disallowed by the Bankruptcy

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Court pursuant to such section, in either case, regardless of whether the order or judgment
allowing or disallowing such Claim has become a Final Order; provided, however, that, in the
event that such Claim has been disallowed, but the order of disallowance has not yet become a
Final Order, the Bankruptcy Court may require the Disbursing Agent to reserve Cash in an
amount equal to the amount that would be attributed to such Claim if it were an Allowed
Claim, or a lesser amount, to the extent that the Bankruptcy Court, in its sole and absolute
discretion, determines such reserve is necessary to protect the rights of such holder under all of
the facts and circumstances relating to the order of disallowance and the appeal of such holder
from such order.
1.51 Effective Date: The earlier to occur of (a) the first (1st) Business Day following
the Confirmation Date that (i) the conditions to effectiveness of the Plan set forth in Section
24.1 of the Plan have been satisfied or otherwise waived in accordance with Section 24.2 of the
Plan and (ii) the effectiveness of the Confirmation Order shall not be stayed and (b) such other
date following the Confirmation Date that the Debtor and the Governor, in their joint and
absolute discretion, designate.
1.52 Entity: A Person, a corporation, a general partnership, a limited partnership, a
limited liability company, a limited liability partnership, an association, a joint stock company,
a joint venture, an estate, a trust, an unincorporated organization, a governmental unit or any
subdivision thereof, including, without limitation, the Office of the United States Trustee, or
any other entity.
1.53 Final Order: An order or judgment of the Bankruptcy Court as to which the
time to appeal, petition for certiorari or move for reargument or rehearing has expired and as to
which no appeal, petition for certiorari or other proceedings for reargument or rehearing shall
then be pending; and if an appeal, writ of certiorari, reargument or rehearing thereof has been
sought, such order shall have been affirmed by the highest court to which such order was
appealed, or certiorari shall have been denied or reargument or rehearing shall have been
denied or resulted in no modification of such order, and the time to take any further appeal,
petition for certiorari or move for reargument or rehearing shall have expired; provided,
however, that the possibility that a motion under section 502(j) of the Bankruptcy Code, Rule
59 or Rule 60 of the Federal Rules of Civil Procedure or any analogous rule under the
Bankruptcy Rules, may be but has not then been filed with respect to such order, shall not
cause such order not to be a Final Order.
1.54 Franchise: The governmental authority to conduct pari-mutuel wagering with
respect to thoroughbred horse racing at the Racetracks.
1.55 Franchise Agreement: The agreement to be entered into between the State of
New York and New NYRA, relating to the Franchise and the operation of the Racetracks
during the period from the Effective Date up to and including the twenty-fifth anniversary
thereof, as the same may be extended, pursuant to the Racing Law, as the same may be
amended.
1.56

Governor: The current Governor of the State of New York.

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1.57 Insurance Carrier: Any entity providing insurance coverage to NYRA

pursuant to an Insurance Policy.
1.58 Insurance Policy: Any and all polices between NYRA and an Insurance
Carrier, providing insurance coverage, including, but not limited to general liability,
workmens compensation, and automobile coverage, as of the Effective Date.
1.59 Insured Litigation Claim: Any Claim or cause of action against the Debtor for
which the claimant or the Debtor may recover under an Insurance Policy.
1.60
1.61
of Treasury.

IRC: The Internal Revenue Code of 1986, as amended from time to time.
IRS: The Internal Revenue Service, an agency of the United States Department

1.62 IRS Claim: Any and all Claims of the IRS or proofs of claim filed by the IRS
against the Debtor in the Chapter 11 Case; provided, however, that, to the extent that any
portion of any Claim of the IRS or proofs of the claim filed by the IRS against the Debtor in the
Chapter 11 Case includes any Claim for a fine, penalty, forfeiture, multiple, exemplary or
punitive damages or otherwise not predicated upon compensatory damages and that is subject
to subordination in accordance with section 726(a)(4) of the Bankruptcy Code or otherwise,
such portion of any such Claim or proof of claim shall be considered and treated as a Penalty
Claim pursuant to Article XII of the Plan.
1.63 Legislation: The Legislation passed by the Assembly and the State Senate, A.
9998 and S. 6950, respectively, and enacted into law on February 19, 2008 as Chapter 18 of the
Laws of 2008.
1.64

Legislature : The Assembly and the State Senate.

1.65 Lien: Any charge against or interest in property to secure payment of a debt or
performance of an obligation.
1.66 New NYRA. The not-for-profit entity to be created on or prior to the Effective
Date, named The New York Racing Association, Inc., pursuant to Section 402 of the New York
Not-for-Profit Corporation Law and as authorized by Chapter 18 of the Laws of 2008.
1.67 New NYRA By-laws: The by-laws of New NYRA, which by-laws shall be in
form and substance satisfactory to the State of New York.
1.68 New NYRA Certificate of Incorporation: The Certificate of Incorporation of
New NYRA, which certificate of incorporation shall be in form and substance satisfactory to
the State of New York.
1.69 New York State Tax Claim: The Claim of the New York State Department of
Tax and Finance which, to the extent an Allowed Claim, shall be treated as an Allowed Priority
Tax Claim in an amount no greater than One Million Four Hundred Four Thousand Dollars
($1,404,000.00).

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1.70 NYRA: The New York Racing Association Inc. and any of its officers, trustees,
or employees acting on its behalf.
1.71

NYRA Board of Trustees: The Board of Trustees of NYRA.

1.72 NYRA Equity Interest: Any Equity Interest in the Debtor represented by duly
authorized, validly issued and outstanding shares of common stock or any interest or right to
convert into such an equity interest or acquire any equity interest of the Debtor which was in
existence immediately prior to or on the Petition Date.
1.73 Oversight Board: The New York State Non-Profit Racing Association
Oversight Board.
1.74

Pataki: George E. Pataki, the former Governor of the State.

1.75

PBGC: Pension Benefit Guaranty Corporation.

1.76 PBGC Claim: A Claim asserted by the PBGC with respect to one or more of
the Benefit Plans.
1.77 Penalty Claim: Any Claim for a fine, penalty, forfeiture, multiple, exemplary
or punitive damages or otherwise not predicated upon compensatory damages and that is
subject to subordination in accordance with section 726(a)(4) of the Bankruptcy Code or
otherwise, as determined pursuant to a Final Order.
1.78

Person: A person as defined in section 101(41) of the Bankruptcy Code.

1.79 Petition Date: November 2, 2006, the date on which NYRA filed its voluntary
petition for relief commencing the Chapter 11 Case.
1.80 Plan: This Modified Third Amended Plan of Debtor Pursuant to Chapter 11 of
the United States Bankruptcy Code, as the same is amended, modified or supplemented from
time to time in accordance with the terms and provisions hereof.
1.81
may be.

Priority Claim: A Priority Non-Tax Claim or a Priority Tax Claim, as the case

1.82 Priority Non-Tax Claim: Any Claim against the Debtor, other than an
Administrative Expense Claim or a Priority Tax Claim, entitled to priority in payment in
accordance with sections 507(a)(3), (4), (5), (6), (7) or (9) of the Bankruptcy Code, but only to
the extent entitled to such priority.
1.83 Priority Tax Claim: Any Claim of a governmental unit against the Debtor
entitled to priority in payment under sections 502(i) and 507(a)(8) of the Bankruptcy Code.
1.84 Pro Rata Share : With respect to Claims (a) within the same Class, the
proportion that a Claim bears to the sum of all Claims, as the case may be, within such Class,

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and (b) among all Classes, the proportion that a Class of Claims bears to the sum of all Claims,
as the case may be.
1.85

Proponent: The Debtor in Possession.

1.86

Racetracks: Aqueduct, Belmont and Saratoga.

1.87 Racing Law: The New York Racing, Pari-Mutuel Wagering and Breeding Law
(L.1982, c. 865, 1, as amended, Consolidated Laws Chapter 47-A), as in effect from time to
time.
1.88 Record Date: The date or dates established by the Bankruptcy Court in the
Confirmation Order for the purpose of determining the holders of Allowed Claims and Equity
Interests entitled to receive distributions pursuant to the Plan.
1.89

Reorganized Debtor: The Debtor, from and after the Effective Date.

1.90 Reorganized Debtor By-Laws: The by-laws of the Reorganized Debtor, which
by-laws shall be in form and substance satisfactory to the Creditors' Committee and the State of
New York.
1.91 Reorganized Debtor Certificate of Incorporation: The certificate of
incorporation of the Reorganized Debtor, which certificate of incorporation shall be in form
and substance satisfactory to the Creditors' Committee and the State of New York.
1.92 Reorganized Debtor Plan Administration Agreement: The agreement
prescribing the powers, duties and rights of the Reorganized Debtor Plan Administrator in
administering the Plan, which agreement shall be in form and substance satisfactory to the
Creditors' Committee and the State of New York.
1.93 Reorganized Debtor Plan Administrator: Irene M. Posio, retained, as of the
Effective Date, by the Reorganized Debtor as the employee responsible for, among other
things, the matters described in Section 23.2 hereof.
1.94

Saratoga: Saratoga Race Course.

1.95 Schedules: The respective schedules of assets and liabilities, the list of Equity
Interests, and the statements of financial affairs filed by the Debtor in accordance with section
521 of the Bankruptcy Code and the Official Bankruptcy Forms of the Bankruptcy Rules as
such schedules and statements have been or may be supplemented or amended on or prior to
the Effective Date.
1.96 Secured Claim: A Claim, other than a State Claim, against the estate of the
Debtor (a) secured by a Lien on Collateral or (b) subject to setoff under section 553 of the
Bankruptcy Code, to the extent of the value of the Collateral or to the extent of the amount
subject to setoff, as applicable, as determined in accordance with section 506(a) of the
Bankruptcy Code or as otherwise agreed to, in writing, by (1) the Debtor and the holder of such
Claim, subject to the consent of the State of New York and the Creditors Committee, or (2) the

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Reorganized Debtor and the holder of such Claim, subject to the consent of the State of New
York, as the case may be; provided, however, that, to the extent that the value of such interest is
less than the amount of the Claim which has the benefit of such security, the unsecured portion
of such Claim shall be treated as an Unsecured Claim unless, in any such case, the Class of
which such Claim is a part makes a valid and timely election in accordance with section
1111(b) of the Bankruptcy Code to have such Claim treated as a Secured Claim to the extent
allowed.
1.97 State Claims: The Claims of the State of New York or proofs of claim filed by
the State of New York against the Debtor in the Chapter 11 Case that are set forth on Exhibit A
hereto.
1.98 State Motion to Dismiss: The Motion of the State of New York and the New
York State Non-Profit Racing Association Oversight Board to Dismiss Debtors Chapter 11
Case Pursuant to 28 U.S.C. 1334 and Section 109(d) of the Bankruptcy Code, dated
December 29, 2006.
1.99

State Senate: The Senate of the State of New York.

1.100 State Settlement Agreement: The agreement, together with all exhibits
annexed thereto, to be entered into between, among others, the State of New York and the
Debtor setting forth the compromise and settlement between NYRA and the State of New York
of, among other matters, (a) the State Motion to Dismiss, (b) the Adversary Litigation, and (c)
the State Claims.
1.101 Supplemental DIP Loan: The advance in the amount of Nine Million Dollars
($9,000,000.00) made by the State of New York to NYRA pursuant to the DIP Agreements.
1.102 Transferred Property: All right, title and interest in such property as will be
described in the State Settlement Agreement.
1.103 Unsecured Claim: Any Claim against the Debtor, other than an Administrative
Expense Claim, a Secured Claim, a Priority Non-Tax Claim, a Priority Tax Claim, an Insured
Litigation Claim, a State Claim, an IRS Claim, a PBGC Claim or a Penalty Claim.
1.104 VLT: A video lottery terminal.
1.105 VLT Revenues: The amount of total revenue wagered on VLTs at Aqueduct
after payout for prizes won in accordance with Section 1612(b) of the New York State Tax
Law.
1.106 UCC: The Uniform Commercial Code, as in effect from time to time in the
State of New York.
1.107 Other Definitions : Unless the context otherwise requires, any capitalized term
used and not defined herein or elsewhere in the Plan that is defined in the Bankruptcy Code
shall have the meaning assigned to that term in the Bankruptcy Code. Unless otherwise
specified, (a) all section, schedule or exhibit references in the Plan are to the respective section

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in, article of, or schedule or exhibit to, the Plan, as the same may be amended, waived, or
modified from time to time and (b) all references to dollars are to the lawful currency of the
United States of America. The words herein, hereof, hereto, hereunder, and other
words of similar import refer to the Plan as a whole and not to any particular section,
subsection, or clause contained in the Plan. The rules of construction contained in section 102
of the Bankruptcy Code shall apply to the construction of the Plan. In computing any period of
time prescribed or allowed by the Plan, unless otherwise expressly provided, the provisions of
Bankruptcy Rule 9006(a) shall apply.
ARTICLE II
COMPROMISE AND SETTLEMENT
OF DISPUTES WITH STATE; WAIVER OF CLAIMS
2.1
Compromise and Settlement: The Plan incorporates, and is expressly
conditioned upon effectiveness of, a proposed compromise and settlement of certain issues
disputed by the Debtor and the State of New York including, among other issues, resolution of
(a) the State Motion to Dismiss, (b) the Adversary Litigation and (c) the State Claims, which,
upon the Effective Date, shall be binding upon the Debtor, the State of New York, all Creditors,
and all Entities receiving any payments or other distributions under the Plan. The terms of the
compromise and settlement shall be explicitly set forth in the State Settlement Agreement.
Without limiting the foregoing, the following describes certain of the principal provisions of
the State Settlement Agreement, but the terms of the State Settlement Agreement shall in all
events control to the extent of any inconsistencies between the Plan, the Confirmation Order, or
any other document, and the State Settlement Agreement; provided, however, that, under all
circumstances, the State Settlement Agreement shall be consistent with the provisions of the
Plan and the Confirmation Order with respect to the Benefit Plans:
(a)
Franchise Agreement: On the Effective Date, the State of New York and
New NYRA shall enter into the Franchise Agreement providing New NYRA with the
Franchise for the period from the Effective Date up to and including the twenty-fifth
anniversary thereof, as the same may be extended.
(b)
Resolution of the Adversary Litigation: On the Effective Date, the
Adversary Litigation shall be dismissed with prejudice.
(c)
Resolution of the Motion to Dismiss: On the Effective Date, the Motion
to Dismiss shall be withdrawn with prejudice.
(d)
Transfer of the Racetracks and Other Property: On the Effective Date, to
the extent set forth in the State Settlement Agreement, and in consideration for and reliance
upon (1) the Effective Date payment and waiver of distributions as set forth in Section 2.1(e) of
the Plan and (2) the support payments and capital expenditure advances to be made by the State
of New York or the operator of video lottery terminals at Aqueduct, as the case may be, to New
NYRA over the term of the Franchise, all as set forth in the Racing Law and the State of New
York Tax Law, each as may be modified by the Legislation and the Chapter Amendment,
NYRA shall convey all of its right, title and interest in, to and under the Racetracks and the

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other Transferred Property to the State of New York, an affiliate or agency of the State of New
York or a public benefit corporation incorporated by the State of New York.
(e)
State and NYRA Obligations: On the Effective Date, (1) the State shall
pay to the Debtor One Hundred Five Million Dollars ($105,000,000.00), for services and
expenses required relating to payments for capital works or purposes, including, without
limitation, payments for the purpose of acquisition of clear title to the Racetracks and the other
Transferred Property and which the Debtor shall use to satisfy Allowed Claims and for the
support of New NYRA's racing operations and the satisfaction of New NYRA's operating
expenses, including, without limitation, the payment of New NYRA's pension plan obligations
in accordance with Section 10.1(a) of the Plan, and (2) except to the extent set forth in the State
Settlement Agreement, the State of New York shall waive for the benefit of the Debtors estate
and the Reorganized Debtor any entitlement to receive distributions pursuant to the Plan with
respect to the Allowed State Claims, except with respect to the New York State Tax Claim;
provided, however, that, in the event that the amounts projected to be paid by the State of New
York and set forth in the State Settlement Agreement are in excess of amounts necessary to
satisfy Allowed Claims or to support the Reorganized Debtors or New NYRA's operating and
capital expenditure obligations, as the case may be, such amounts shall be reduced to the extent
appropriate.
(f)
Sale of Ancillary Property: From and after the Effective Date, the
Reorganized Debtor shall use its reasonable best efforts to sell the Ancillary Property in one or
more arms' length transaction(s) and the proceeds thereof shall be applied in the following
order of priority: (i) first, to pay any amounts due, payable or outstanding in respect of the
Allowed IRS Claim, (ii) second, and without duplication of any amounts accounted for in
clause (i) above, to reimburse NYRA or New NYRA, as the case may be, with respect to
payments made on account of the Allowed IRS Claim prior to the sale of the Ancillary
Property, in an amount necessary to satisfy the Allowed IRS Claim, together with all interest
which may have accrued on the Allowed IRS Claim, and (iii) upon the written agreement of the
State and the Reorganized Debtor, the balance, if any, to be used to (1) fund the operating
expenses of NYRA or New NYRA, as the case may be, or support the racing operations of
NYRA or New NYRA, as the case may be, and (2) repay the Supplemental DIP Loan at any
time prior to the maturity thereof.
ARTICLE III
PROVISIONS FOR PAYMENT OF
ADMINISTRATIVE EXPENSE CLAIMS AND PRIORITY TAX CLAIMS
3.1
Administrative Expense Claims : On the later to occur of (a) the Effective
Date and (b) the date on which an Administrative Expense Claim shall become an Allowed
Claim, the Reorganized Debtor shall (i) pay to each holder of an Allowed Administrative
Expense Claim, in Cash, the full amount of such Allowed Administrative Expense Claim or (ii)
satisfy and discharge such Allowed Administrative Expense Claim in accordance with the
terms and conditions of the agreements with respect thereto; provided, however, that, in the
event that in the ordinary course of business New NYRA satisfies an Administrative Expense
Claim relating to NYRA's racing operations or otherwise, the Reorganized Debtor shall

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reimburse New NYRA to the extent of such payment and the obligation hereunder shall
constitute an Administrative Expense Claim.
3.2
Professional Compensation and Reimbursement Claims : All Entities
awarded compensation or reimbursement of expenses by the Bankruptcy Court in accordance
with sections 328, 330 or 331 of the Bankruptcy Code or entitled to the priorities established
pursuant to section 503(b)(2), 503(b)(3), 503(b)(4) or 503(b)(5) of the Bankruptcy Code, shall
be paid in full, in Cash, the amounts allowed by the Bankruptcy Court on or as soon as
reasonably practicable following the later to occur of (i) the Effective Date and (ii) the date
upon which the Bankruptcy Court order allowing such Claim becomes a Final Order.
3.3
Payment of Priority Tax Claims: On the Effective Date, each holder of an
Allowed Priority Tax Claim, including, without limitation, the holder of the New York State
Tax Claim and the IRS Claim, respectively, shall be entitled to receive distributions in an
amount equal to the full amount of such Allowed Priority Tax Claim. At the option and
discretion of the Debtor, which option shall be exercised, in writing, on or prior to the
commencement of the Confirmation Hearing, such payment shall be made by the Reorganized
Debtor or New NYRA, as the case may be, (a) in full, in Cash, on the Effective Date, (b) in
accordance with section 1129(a)(9)(C) of the Bankruptcy Code, in full, in Cash, in equal
quarterly installments, commencing on the first (1st) Business Day following the Effective
Date and ending on the fifth (5th) anniversary of the commencement of the Chapter 11 Case,
together with interest accrued thereon at a rate (i) to be determined by the Bankruptcy Court
and set forth in the Confirmation Order or (ii) with respect to the Allowed IRS Claim, set forth
in Section 6621 of the IRC, or (c) by mutual agreement of the holder of such Allowed Priority
Tax Claim, including, without limitation, the holder of the New York State Tax Claim and the
IRS Claim, respectively, and the Debtor or Reorganized Debtor, as the case may be; provided,
however, that, in the event that net proceeds from the sale of the Ancillary Property are
insufficient to satisfy the Allowed IRS Claim, from and after the sale of the Ancillary Property,
New NYRA shall be responsible for all subsequent payments in connection with the Allowed
IRS Claim.
3.4
Debtor in Possession Financing: On the Effective Date, except with respect to
the Supplemental DIP Loan (which shall be repaid to the extent provided in accordance with
Amendment No. 1), (a) the Debtor shall be relieved of any and all obligation to satisfy or
otherwise repay the outstanding DIP Obligations, and (b) all Liens and other encumbrances
granted pursuant to the DIP Orders with respect to property and interests in property claimed
by the Debtor shall be deemed released.
ARTICLE IV
CLASSIFICATION OF CLAIMS AND EQUITY INTERESTS,
Claims and Equity Interests are classified as follows:
4.1

Class 1 - Priority Non-Tax Claims

4.2

Class 2 - Secured Claims

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4.3

Class 3 - Unsecured Claims

4.4

Class 4 - Insured Litigation Claims

4.5

Class 5 - State Claims

4.6

Class 6 - PBGC Claims

4.7

Class 7 Intentionally Left Blank

4.8

Class 8 - Penalty Claims

4.9

Class 9 - NYRA Equity Interests

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ARTICLE V
PROVISION FOR TREATMENT OF PRIORITY NON-TAX CLAIMS (CLASS 1)
5.1
Payment of Allowed Priority Non-Tax Claims (Class 1): Unless otherwise
mutually agreed upon by the holder of an Allowed Priority Non-Tax Claim and the
Reorganized Debtor, each holder of an Allowed Priority Non-Tax Claim shall receive in full
satisfaction, settlement, release, and discharge of, and in exchange for such Allowed Priority
Non-Tax Claim, Cash in an amount equal to such Allowed Priority Non-Tax Claim on the later
of the Effective Date and the date such Allowed Priority Non-Tax Claim becomes an Allowed
Priority Non-Tax Claim, or as soon thereafter as is possible.
ARTICLE VI
PROVISION FOR TREATM ENT OF SECURED CLAIMS (CLASS 2)
6.1
Payment of Allowed Secured Claims (Class 2): On the Effective Date, each
holder of an Allowed Secured Claim shall receive in full satisfaction, settlement, release, and
discharge of, and in exchange for such Allowed Secured Claim one of the following
distributions: (a) the payment of such holders Allowed Secured Claim in full, in Cash; (b) the
sale or disposition proceeds of the property securing any Allowed Secured Claim to the extent
of the value of their respective interests in such property; (c) the surrender to the holder or
holders of any Allowed Secured Claim of the property securing such Claim; or (d) such other
distributions as shall be necessary to satisfy the requirements of chapter 11 of the Bankruptcy
Code. The manner and treatment of each Secured Claim shall be determined by the Debtor and
transmitted, in writing, to each holder of a Secured Claim at least five (5) days prior to the
commencement of the Confirmation Hearing.
ARTICLE VII
PROVISION FOR TREATM ENT OF UNSECURED CLAIMS (CLASS 3)
7.1
Payment of Allowed Unsecured Claims (Class 3): On the Effective Date,
each holder of an Allowed Unsecured Claim shall receive on account of such Allowed

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Unsecured Claim distributions of Cash in an amount equal to one hundred percent (100%) of
such holders Allowed Unsecured Claim, plus interest accrued thereon during the period from
February 1, 2008 up to and including the Effective Date, at the rate of four percent (4%) per
annum.
ARTICLE VIII
PROVISION FOR TREATM ENT OF INSURED LITIGATION CLAIMS (CLASS 4)
8.1
Assumption of Insurance Policies: On the Effective Date, the Debtor shall
assume and, to the extent that the applicable coverage period extends beyond the Effective
Date, assign to New NYRA, all Insurance Policies and each Insurance Carrier providing
insurance pursuant to an Insurance Policy shall continue to provide coverage to the
Reorganized Debtor and New NYRA, as the case may be, in accordance with the terms and
provisions set forth therein, including, without limitation, remitting to New NYRA such
amounts of excess collateral or surplus premiums as permitted in accordance with the Insurance
Policy.
8.2
Treatment of Allowed Insured Litigation Claims (Class 4): Unless otherwise
mutually agreed upon by the holder of an Allowed Insured Litigation Claim and the Debtor or
the Reorganized Debtor, as the case may be, each holder of an Allowed Insured Litigation
Claim shall be entitled, in full satisfaction, settlement, release, and discharge of, and in
exchange for such Allowed Insured Litigation Claim, to proceed with the liquidation of such
Claim, including any litigation pending as of the Petition Date and seek recovery from the
applicable Insurance Carrier; provided, however, that, except with respect to the payment of a
deductible which may be required thereunder, under no circumstances, shall the holder of an
Allowed Insured Litigation Claim recover from the Reorganized Debtor or New NYRA any
amounts with respect to such Allowed Insured Litigation Claim.
ARTICLE IX
PROVISION FOR TREATM ENT OF STATE CLAIMS (CLASS 5)
9.1
Treatment of Allowed State Claims (Class 5): On the Effective Date, and
except as provided pursuant to the terms of the State Settlement Agreement, (a) all State Claims
shall be deemed Allowed State Claims and (b) each holder of an Allowed State Claim, other
than the holder of the New York State Tax Claim, shall not be entitled to, and shall not receive
or retain, any property or interest in property on account of such Allowed State Claims under
the Plan. To the extent that proofs of claim filed by the State of New York in this Chapter 11
Case exceed the amounts set forth in the State Settlement Agreement, all such State Claims
shall be deemed amended without any further act or action to conform to the amounts set forth
in the State Settlement Agreement.

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ARTICLE X
PROVISIONS FOR TREATMENT OF PBGC CLAIMS (CLASS 6)
10.1

Treatment of PBGC Claims (Class 6):

(a)
On the Effective Date, New NYRA shall assume the Benefit Plans and
the obligations of contributing sponsor under ERISA, including, without limitation, the
obligation to make required minimum funding contributions pursuant to such Benefit Plans and
ERISA.
(b)
On or prior to the Effective Date, the Debtor or the Reorganized Debtor,
as the case may be, shall make payments into the Benefit Plans identified in Sections 1.23(a)(e) of the Plan, which, together with all such payments made during the period from the
Petition Date up to and including the Effective Date, shall be attributable to, and in amount
sufficient to satisfy funding deficiencies for the years ended on or prior to December 31, 2007
(the accumulated amount of required minimum funding contributions for such years).
(c)
On the Effective Date, and upon assumption of the Benefit Plans and
payment of the amounts set forth in Section 10.1(b) of the Plan, the PBGC Claims shall be
deemed withdrawn, without prejudice to the rights of the PBGC or the true party in interest
with respect to the Benefit Plans to take such action as may be appropriate with respect to
future actions or inactions, as the case may be, of New NYRA, as contributing sponsor, with
respect to the Benefit Plans, during the period subsequent to the Effective Date in accordance
with the terms and provisions of the Benefit Plans and ERISA.
ARTICLE XI
INTENTIONALLY LEFT BLANK
ARTICLE XII
PROVISIONS FOR TREATMENT OF PENALTY CLAIMS (CLASS 8)
12.1 Treatment of Allowed Penalty Claims (Class 8): Commencing on the
Effective Date, and provided that Allowed Unsecured Claims have been paid in full, each
holder of an Allowed Penalty Claim shall be entitled to receive on account of such Allowed
Penalty Claim distributions of Cash in an amount equal to one hundred percent (100%) of such
holders Allowed Penalty Claim.
ARTICLE XIII
PROVISION FOR TREATM ENT OF NYRA EQUITY INTERESTS (CLASS 9)
13.1 Treatment of NYRA Equity Interests (Class 9): On the Effective Date, (a)
the NYRA Equity Interests shall be cancelled and the holders of NYRA Equity Interests shall
not be entitled to, and shall not receive or retain, any property or interest in property on account
of such NYRA Equity Interests under the Plan and (b) three new shares of NYRA Equity

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Interests shall be issued to the Reorganized Debtor Plan Administrator who shall hold such
non-certified and non-transferable shares of common stock as custodian for the directors of the
Reorganized Debtors.
ARTICLE XIV
PROVISIONS FOR TREATMENT OF
DISPUTED CLAIMS UNDER THE PLAN
14.1 Objections to Claims; Prosecution of Disputed Claims : The Reorganized
Debtor shall object to the allowance of Claims or Equity Interests filed with the Bankruptcy
Court with respect to which they dispute liability, priority or amount, including, without
limitation, objections to Claims which have been assigned and the assertion of the doctrine of
equitable subordination with respect thereto. All objections, affirmative defenses and
counterclaims shall be litigated to Final Order; provided, however, that the Reorganized Debtor
(within such parameters as may be established by the Board of Directors of the Reorganized
Debtor) shall have the authority to file, settle, compromise or withdraw any objections to
Claims or Equity Interests. Unless otherwise ordered by the Bankruptcy Court, the
Reorganized Debtor shall file and serve all objections to Claims as soon as practicable, but, in
each instance, not later than thirty (30) days following the Effective Date or such later date as
may be approved by the Bankruptcy Court. The Reorganized Debtor shall consult with the
State of New York on a regular basis concerning the investigation, prosecution and proposed
settlement of Disputed Claims and shall provide written reports to the State of New York on a
quarterly basis regarding the status of Disputed Claims.
14.2 Estimation of Claims: Unless otherwise limited by an order of the Bankruptcy
Court, the Reorganized Debtor may at any time request the Bankruptcy Court to estimate for
final distribution purposes any contingent, unliquidated or Disputed Claim pursuant to section
502(c) of the Bankruptcy Code regardless of whether the Debtor or the Reorganized Debtor
previously objected to such Claim, and the Bankruptcy Court will retain jurisdiction to consider
any request to estimate any Claim at any time during litigation concerning any objection to any
Claim, including, without limitation, during the pendency of any appeal relating to any such
objection. Unless otherwise provided in an order of the Bankruptcy Court, in the event that the
Bankruptcy Court estimates any contingent, unliquidated or Disputed Claim, the estimated
amount shall constitute either the allowed amount of such Claim or a maximum limitation on
such Claim, as determined by the Bankruptcy Court; provided, however, that, if the estimate
constitutes the maximum limitation on such Claim, the Debtor or the Reorganized Debtor, as
the case may be, may elect to pursue supplemental proceedings to object to any ultimate
allowance of such Claim; and, provided, further, that the foregoing is not intended to limit the
rights granted by section 502(j) of the Bankruptcy Code. All of the aforementioned Claims
objection, estimation and resolution procedures are cumulative and not necessarily exclusive of
one another.
14.3

Payments and Distributions on Disputed Claims :

(a)
Disputed Claims Reserve: From and after the Effective Date, and until
such time as all Disputed Claims have been compromised and settled or determined by Final

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Order, the Disbursing Agent shall reserve and hold in escrow for the benefit of each holder of a
Disputed Claim, Cash, in an amount equal to the distributions which would have been made to
the holder of such Disputed Claim if it were an Allowed Claim in an amount equal to the lesser
of (i) the Disputed Claim Amount, (ii) the amount in which the Disputed Claim shall be
estimated by the Bankruptcy Court pursuant to section 502 of the Bankruptcy Code for
purposes of allowance, which amount, unless otherwise ordered by the Bankruptcy Court, shall
constitute and represent the maximum amount in which such Claim may ultimately become an
Allowed Claim or (iii) such other amount as may be agreed upon by the holder of such
Disputed Claim and the Reorganized Debtor. Any Cash reserved and held for the benefit of a
holder of a Disputed Claim shall be treated as a payment and reduction on account of such
Disputed Claim for purposes of Section 19.1 of the Plan and computing any additional amounts
to be paid in Cash in the event the Disputed Claim ultimately becomes an Allowed Claim.
Such Cash reserved for the benefit of holders of Disputed Claims shall be either (x) held by the
Disbursing Agent, in an interest-bearing account or (y) invested in interest-bearing obligations
issued by the United States Government, or by an agency of the United States Government and
guaranteed by the United States Government, and having (in either case) a maturity of not more
than thirty (30) days, for the benefit of such holders pending determination of their entitlement
thereto under the terms of the Plan. No payments or distributions shall be made with respect to
all or any portion of any Disputed Claim pending the entire resolution thereof by Final Order.
(b)
Allowance of Disputed Claims: At such time as a Disputed Claim
becomes, in whole or in part, an Allowed Claim, the Disbursing Agent shall distribute to the
holder thereof the distributions, if any, to which such holder is then entitled under the Plan
together with any interest which has accrued on the amount of Cash (net of any expenses,
including any taxes of the escrow, relating thereto), but only to the extent that such interest is
attributable to the amount of the Allowed Claim. Such distribution, if any, shall be made as
soon as practicable after the date that the order or judgment of the Bankruptcy Court allowing
such Disputed Claim becomes a Final Order but in no event more than sixty (60) days
thereafter. The balance of any Cash previously reserved shall be included in Cash and used for
future calculations of Cash to holders of Allowed Penalty Claims, if any, in accordance with
the terms and provisions of the Plan.
(c)
Tax Treatment of Escrow: Subject to the receipt of contrary guidance
from the IRS or a court of competent jurisdiction (including the receipt by the Disbursing
Agent of a private letter ruling requested by the Disbursing Agent, or the receipt of an adverse
determination by the IRS upon audit if not contested by the Disbursing Agent, or a condition
imposed by the IRS in connection with a private letter ruling requested by the Debtor), the
Disbursing Agent shall (i) treat the escrow as one or more discrete trusts (which may be
composed of separate and independent shares) for federal income tax purposes in accordance
with the trust provisions of the IRC (Sections 641 et seq.) and (ii) to the extent permitted by
applicable law, report consistent with the foregoing for state and local income tax purposes.
All holders of Allowed Claims shall report, for tax purposes, consistent with the foregoing.
14.4 Funding of Escrows Tax Obligation: If the reserve created in accordance
with Section 14.3(a) hereof has insufficient funds to pay any applicable taxes imposed upon it
or its assets, subject to the other provisions contained herein, the Reorganized Debtor shall
advance to the escrow the funds necessary to pay such taxes (a Tax Advance), with such Tax

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Advances repayable from future amounts otherwise receivable by the escrow pursuant to
Section 14.3 or otherwise. If and when a distribution is to be made from the escrow, the
distributee will be charged its pro rata portion of any outstanding Tax Advance (including
accrued interest). If a cash distribution is to be made to such distributee, the Disbursing Agent
shall be entitled to withhold from such distributees distribution the amount required to pay
such portion of the Tax Advance (including accrued interest). If such cash is insufficient to
satisfy the respective portion of the Tax Advance, the distributee shall, as a condition to
receiving such other assets, pay in cash to the Disbursing Agent an amount equal to the
unsatisfied portion of the Tax Advance (including accrued interest). Failure to make such
payment shall entitle the Disbursing Agent to reduce and permanently adjust the amounts that
would otherwise be distributed to such distributee to fairly compensate the Disputed Claims
reserve created in accordance with Section 14.3(a) of the Plan for the unpaid portion of the Tax
Advance (including accrued interest).
ARTICLE XV
PROSECUTION OF CLAIMS HELD BY THE DEBTOR
15.1 Prosecution of Claims : From and after the Effective Date, the Reorganized
Debtor shall, as a representative of the estate of the Debtor, litigate any claims or causes of
action that constituted assets of the Debtor or Debtor in Possession, including, without
limitation, any avoidance or recovery actions under sections 541, 544, 545, 547, 548, 549, 550,
551 and 553 of the Bankruptcy Code and any other causes of action, rights to payments of
claims that may be pending on the Effective Date or instituted by the Debtor or Debtor in
Possession thereafter, to a Final Order, and the Reorganized Debtor may compromise and settle
such claims, upon approval of the Bankruptcy Court. The net proceeds of any such litigation or
settlement (after satisfaction of all costs and expenses incurred in connection therewith) shall
be remitted to the Disbursing Agent for distribution in accordance with the terms and
provisions of the Plan.
ARTICLE XVI
ACCEPTANCE OR REJECTION OF PLAN; EFFECT OF
REJECTION BY ONE OR MORE CLASSES OF CLAIMS OR EQUITY INTERESTS
16.1 Impaired Classes to Vote: Each holder of a Claim or Equity Interest in an
impaired Class, not otherwise deemed to have accepted or rejected the Plan in accordance with
Section 16.2 of the Plan, shall be entitled to vote separately to accept or reject the Plan.
16.2 Acceptance by Class of Creditors : An impaired Class of holders of Claims
shall have accepted the Plan if the Plan is accepted by at least two-thirds (2/3) in dollar amount
and more than one-half (1/2) in number of the Allowed Claims of such Class that have voted to
accept or reject the Plan.
16.3 Cramdown: In the event that any impaired Class of Claims or Equity Interests
shall fail to accept, or be deemed to reject, the Plan in accordance with section 1129(a) of the

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Bankruptcy Code, the Debtor reserves the right to request that the Bankruptcy Court confirm
the Plan in accordance with section 1129(b) of the Bankruptcy Code or amend the Plan.
ARTICLE XVII
IDENTIFICATION OF CLAIMS AND EQUITY
INTERESTS IMPAIRED AND NOT IMPAIRED BY THE PLAN
17.1 Impaired and Unimpaired Classes: Claims in Classes 1, 2 and 6 are not
impaired under the Plan. Claims and Equity Interests in Classes 3, 4, 5, 8 and 9 are impaired
under the Plan.
17.2 Impaired Classes Entitled to Vote on Plan: The Claims in Classes 3, 4, 5 and
8 are impaired and receiving distributions pursuant to the Plan and are therefore entitled to vote
to accept or reject the Plan.
17.3 Equity Interests Deemed to Reject: The NYRA Equity Interests in Class 9 are
not entitled to receive any distributions or retain their NYRA Equity Interests pursuant to the
Plan, and are deemed to reject the Plan and are not entitled to accept or reject the Plan.
17.4 Controversy Concerning Impairment: In the event of a controversy as to
whether any Class of Claims or Equity Interests is impaired under the Plan, the Bankruptcy
Court shall, after notice and a hearing, determine such controversy.
ARTICLE XVIII
PROVISIONS FOR THE ESTABLISHMENT
AND MAINTENANCE OF DISBURSEMENT ACCOUNTS
18.1 Establishment of Disbursement Account(s): On or prior to the Effective Date,
the Debtor shall establish one or more segregated bank accounts in the name of the
Reorganized Debtor as Disbursing Agent under the Plan, which accounts shall be trust accounts
for the benefit of Creditors pursuant to the Plan and utilized solely for the investment and
distribution of Cash consistent with the terms and conditions of the Plan. On or prior to the
Effective Date, and periodically thereafter, the Debtor shall deposit into such Disbursement
Account(s) all Cash of the Debtor, less amounts reasonably determined by the Debtor or the
Reorganized Debtor, as the case may be, as necessary to fund the ongoing implementation of
the Plan and operations of the Reorganized Debtor.
18.2 Maintenance of Disbursement Account(s): Disbursement Account(s) shall be
maintained at one or more domestic banks or financial institutions of the Reorganized Debtors
choice having a shareholders equity or equivalent capital of not less than One Hundred Million
($100,000,000.00). The Reorganized Debtor shall invest Cash in Disbursement Account(s);
provided, however, that sufficient liquidity shall be maintained in such account or accounts to
(a) make promptly when due all payments upon Disputed Claims if, as and when they become
Allowed Claims and (b) make promptly when due the other payments provided for in the Plan.

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ARTICLE XIX
PROVISIONS REGARDING DISTRIBUTIONS
19.1 Distributions of Cash: On or as soon as practicable after the Effective Date,
the Disbursing Agent shall (1) distribute to each holder of an Allowed Administrative Expense
Claim, Allowed Priority Claim, Allowed Secured Claim and Allowed Unsecured Claim (or
cause to be distributed to each holder of a Disputed Claim in accordance with Section 14.3 of
the Plan), an amount equal to such holders Allowed Claim (plus such additional amounts as
may be due and owing in accordance with the provisions of Section 7.1 of the Plan) and (2)
distribute to each holder of an Allowed Penalty Claim, an amount equal to such holders
Allowed Claim; provided, however, that, in the event that prior to the Effective Date, the
Debtor or the applicable Insurance Carrier has resolved an Insured Litigation Claim and
payment thereof remains outstanding as of the Effective Date, distributions with respect to such
Allowed Insured Litigation Claims shall be made on the later to occur of (a) the date agreed
upon by the Insurance Carrier and the respective Creditor and (b) the date set forth in this
Section 19.1; and, provided, further, that, under no circumstances, shall any distributions be
made, or caused to be made, on account of Allowed Penalty Claims until such time as Allowed
Unsecured Claims have been paid in full, or provisions have been made to pay such Claims in
full.
19.2 Timeliness of Payments: Any payments or distributions to be made pursuant to
the Plan shall be deemed to be timely made if made within fifteen (15) days after the dates
specified in the Plan. Whenever any distribution to be made under this Plan shall be due on a
day other than a Business Day, such distribution shall instead be made, without interest, on the
immediately succeeding Business Day, but shall be deemed to have been made on the date due.
19.3 Distributions by the Disbursing Agent: All distributions to be made pursuant
to the Plan shall be made by the Disbursing Agent at the direction of the Reorganized Debtor.
The Disbursing Agent shall be deemed to hold all property to be distributed hereunder in trust
for the Persons entitled to receive the same. The Disbursing Agent shall not hold an economic
or beneficial interest in such property.
19.4 Manner of Payment under the Plan: Unless the Entity receiving a payment
agrees otherwise, any payment in Cash to be made by the Reorganized Debtor shall be made, at
the election of the Reorganized Debtor, by check drawn on a domestic bank or by wire transfer
from a domestic bank; provided, however, that no Cash payments shall be made to a holder of
an Allowed Claim until such time, if ever, as the amount payable thereto is equal to or greater
than Ten Dollars ($10.00).
19.5 Delivery of Distributions : Subject to the provisions of Rule 9010 of the
Bankruptcy Rules, and except as provided in Section 19.4 of the Plan, distributions and
deliveries to holders of Allowed Claims shall be made at the address of each such holder as set
forth on the Schedules filed with the Bankruptcy Court unless superseded by the address set
forth on proofs of claim filed by such holders, or at the last known address of such a holder if
no proof of claim is filed or if the Debtor has been notified in writing of a change of address.

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Undeliverable Distributions :

(a)
Holding of Undeliverable Distributions: If any distribution to any holder
is returned to the Reorganized Debtor as undeliverable, no further distributions shall be made to
such holder unless and until the Reorganized Debtor is notified, in writing, of such holders
then-current address. Undeliverable distributions shall remain in the possession of the
Reorganized Debtor until such time as a distribution becomes deliverable. All Entities
ultimately receiving undeliverable Cash shall not be entitled to any interest or other accruals of
any kind. Nothing contained in the Plan shall require the Reorganized Debtor to attempt to
locate any holder of an Allowed Claim.
(b)
Failure to Claim Undeliverable Distributions: On or about the six (6)
month anniversary of the Effective Date, the Reorganized Debtor shall file a list with the
Bankruptcy Court setting forth the names of those Entities for which distributions have been
made hereunder and have been returned as undeliverable as of the date thereof. Any holder of
an Allowed Claim that does not assert its rights pursuant to the Plan to receive a distribution
within one (1) year from and after the Effective Date shall have its entitlement to such
undeliverable distribution discharged and shall be forever barred from asserting any entitlement
pursuant to the Plan against New NYRA, the Reorganized Debtor or its property or the State of
New York. In such case, any consideration held for distribution on account of such Claim shall
revert to the Reorganized Debtor for redistribution to holders of Allowed Claims in accordance
with the provisions of Section 19.1 hereof.
19.7 Compliance with Tax Requirements: The Reorganized Debtor shall comply
with all applicable tax withholding and reporting requirements imposed on it by any
governmental unit, and all distributions pursuant to the Plan shall be subject to such
withholding and reporting requirements.
19.8 Time Bar to Cash Payments: Checks issued by the Reorganized Debtor on
account of Allowed Claims shall be null and void if not negotiated within ninety (90) days from
and after the date of issuance thereof. Requests for reissuance of any check shall be made
directly to the Reorganized Debtor by the holder of the Allowed Claim with respect to which
such check originally was issued. Any claim in respect of such a voided check shall be made
on or before the later of (a) the first (1st) anniversary of the Effective Date or (b) ninety (90)
days after the date of issuance of such check, if such check represents a final distribution
hereunder on account of such Claim. After such date, all Claims in respect of voided checks
shall be discharged and forever barred and the Reorganized Debtor shall retain all monies
related thereto for the sole purpose of redistribution to holders of Allowed Claims in
accordance with the terms and provisions hereof or, upon payment in full of Allowed Claims,
to New NYRA.
19.9 Distributions After Effective Date: Distributions made after the Effective
Date to holders of Claims that are not Allowed Claims as of the Effective Date, but which later
become Allowed Claims shall be deemed to have been made in accordance with the terms and
provisions of Section 19.1 of the Plan.

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19.10 Setoffs: The Reorganized Debtor may, pursuant to applicable bankruptcy or

non-bankruptcy law, set off against any Allowed Claim (except the New York State Tax
Claim) and the distributions to be made pursuant to the Plan on account thereof (before any
distribution is made on account of such Claim), the claims, rights and causes of action of any
nature the Debtor or the Reorganized Debtor may hold against the holder of such Allowed
Claim; provided, however, that neither the failure to effect such a setoff nor the allowance of
any Claim hereunder shall constitute a waiver or release by the Debtor, Debtor in Possession or
the Reorganized Debtor of any such claims, rights and causes of action that the Debtor, Debtor
in Possession or the Reorganized Debtor may possess against such holder; and, provided,
further, that nothing contained herein is intended to limit the ability of any Creditor to
effectuate rights of setoff or recoupment preserved or permitted by the provisions of sections
553, 555, 559 or 560 of the Bankruptcy Code or pursuant to the common law right of
recoupment.
19.11 Allocation of Plan Distributions Between Principal and Interest: To the
extent that any Allowed Claim entitled to a distribution under the Plan is comprised of
indebtedness and accrued but unpaid interest thereon, such distribution shall be allocated first
to the principal amount of the Claim (as determined for federal income tax purposes) and then,
to the extent the consideration exceeds the principal amount of the Claim, to accrued but unpaid
interest.
ARTICLE XX
CREDITORS COMMITTEE
20.1 Dissolution of the Creditors Committee: On the first (1st) Business Day
thirty (30) days following the Effective Date, and provided that payments to holders of
Allowed Unsecured Claims have been made in accordance with Section 19.1 of the Plan, the
Creditors Committee shall be dissolved and the members thereof shall be released and
discharged of and from all further authority, duties, responsibilities and obligations related to
and arising from and in connection with the reorganization, and the retention or employment of
the Creditors Committees attorneys, accountants and other agents, if any, shall terminate
other than for purposes of filing and prosecuting applications for final allowances of
compensation for professional services rendered and reimbursement of expenses incurred in
connection therewith; provided, however, that, notwithstanding the foregoing, the existence of
the Creditors' Committee may be extended pursuant to an order of the Bankruptcy Court, upon
an application by the Creditors' Committee, and notice and a hearing, and the showing of good
and sufficient cause therefor.
ARTICLE XXI
EXECUTORY CONTRACTS AND UNEXPIRED LEASES
21.1 Assumption and Assignment of Executory Contracts and Unexpired Leases:
On the Effective Date, the Debtor shall (a) assume all executory contracts and unexpired leases
that have not expired by their own terms on or prior to the Confirmation Date, which have not
been assumed and assigned or rejected with the approval of the Bankruptcy Court, or which are

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not the subject of a motion to assume the same pending as of the Confirmation Date; provided,
however, that any executory contracts or unexpired leases set forth on Exhibit B to the Plan
shall be deemed rejected by the Debtor in Possession on the Confirmation Date and the entry of
the Confirmation Order by the Bankruptcy Court shall constitute approval of such rejections
pursuant to sections 365(a) and 1123 of the Bankruptcy Code and (b) assign all executory
contracts and unexpired leases not otherwise rejected to New NYRA.
21.2 Cure of Defaults for Assumed Executory Contracts and Unexpired Leases:
Any monetary amounts required as cure payments on each executory contract and unexpired
lease to be assumed pursuant to the Plan shall be satisfied, pursuant to section 365(b)(1) of the
Bankruptcy Code, by payment of the cure amount in Cash on the Effective Date or upon such
other terms and dates as the parties to such executory contracts or unexpired leases otherwise
may agree. In the event of a dispute regarding (a) the amount of any cure payment, (b) the
ability of the Debtor or any assignee to provide adequate assurance of future performance
(within the meaning of section 365 of the Bankruptcy Code) under the contract or lease to be
assumed or (c) any other matter pertaining to assumption arises, the cure payments required by
section 365(b)(1) of the Bankruptcy Code shall be subject to the jurisdiction of the Bankruptcy
Court and made following the entry of a Final Order resolving such dispute.
21.3 Rejection Damage Claims: If the rejection of an executory contract or
unexpired lease by the Debtor in Possession hereunder results in damages to the other party or
parties to such contract or lease, any claim for such damages, if not heretofore evidenced by a
filed proof of claim, shall be forever barred and shall not be enforceable against the Debtor, or
its properties or agents, successors, or assigns, unless a proof of claim is filed with the
Bankruptcy Court and served upon attorneys for the Debtor on or before thirty (30) days after
the latest to occur of (a) the Confirmation Date, and (b) the date of entry of an order by the
Bankruptcy Court authorizing rejection of a particular executory contract or unexpired lease.
21.4 Indemnification and Reimbursement Obligations : For purposes of the Plan,
(a) the obligations of the Debtor to indemnify and reimburse its directors or officers that were
directors or officers, respectively, on or prior to the Petition Date shall be assumed by the
Reorganized Debtor and (b) indemnification obligations of the Debtor arising from services as
officers and directors during the period from and after the Petition Date shall be Administrative
Expense Claims to the extent previously authorized by a Final Order.
21.5 Termination of Benefit Plans : Notwithstanding anything contained in the Plan
to the contrary, from and after the Confirmation Date, the Debtor, the Reorganized Debtor or
New NYRA, as the case may be, shall be entitled to terminate any and all Benefit Plans in
accordance with the terms and provisions of the documents and instruments relating thereto and
applicable law; provided, however, that, until the termination of any such Benefit Plan, the
Debtor, the Reorganized Debtor or New NYRA, as the case may be, shall (i) continue to
perform any and all of their administrative obligations thereunder and (ii) with respect to the
defined Benefit Plans, continue to make minimum contributions and pay Pension Benefit
Guaranty Corporation insurance premiums, including, without limitation, those payments set
forth in Article X of the Plan.

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ARTICLE XXII
RIGHTS AND POWERS OF DISBURSING AGENT
22.1 Exculpation: From and after the Effective Date, the Disbursing Agent, in its
capacity as such, shall be exculpated by all Persons and Entities, including, without limitation,
holders of Claims and other parties in interest, from any and all claims, causes of action and
other assertions of liability arising out of the discharge of the powers and duties conferred upon
such Disbursing Agent by the Plan or any order of the Bankruptcy Court entered pursuant to or
in furtherance of the Plan, or applicable law, except for actions or omissions to act arising out
of the gross negligence or willful misconduct of such Disbursing Agent. No holder of a Claim
or other party in interest shall have or pursue any claim or cause of action against the
Disbursing Agent for making payments in accordance with the Plan or for implementing the
provisions of the Plan.
22.2 Powers of the Disbursing Agent: The Disbursing Agent shall be empowered
to (a) take all steps and execute all instruments and documents necessary to effectuate the Plan,
(b) make distributions contemplated by the Plan, (c) comply with the Plan and the obligations
thereunder, and (d) exercise such other powers as may be vested in the Disbursing Agent
pursuant to order of the Bankruptcy Court, pursuant to the Plan, or as deemed by the
Disbursing Agent to be necessary and proper to implement the provisions of the Plan.
22.3 Fees and Expenses Incurred From and After the Effective Date: Except as
otherwise ordered by the Bankruptcy Court, the amount of any reasonable fees and expenses
incurred by the Disbursing Agent from and after the Effective Date and any reasonable
compensation and expense reimbursement claims, including, without limitation, reasonable
fees and expenses of counsel, made by the Disbursing Agent, shall be paid in Cash by the
Reorganized Debtor without further order of the Bankruptcy Court within fifteen (15) days of
submission of an invoice by the Disbursing Agent. In the event that the Reorganized Debtor
objects to the payment of such invoice for post-Effective Date fees and expenses, in whole or in
part, and the parties cannot resolve such objection after good faith negotiation, the Bankruptcy
Court shall retain jurisdiction to make a determination as to the extent to which the invoice
shall be paid by the Reorganized Debtor.
ARTICLE XXIII
THE REORGANIZED DEBTOR PLAN ADMINISTRATOR
23.1 Appointment of Reorganized Debtor Plan Administrator: On the Effective
Date, except as otherwise provided herein or in the documents executed and delivered in
connection with the consummation of the transactions contemplated herein, compliance with
the provisions of the Plan shall be the responsibility of the Reorganized Debtor Plan
Administrator, an employee of the Reorganized Debtor, (subject to the supervision of the Board
of Directors of the Reorganized Debtor) pursuant to and in accordance with the provisions of
the Plan and the Reorganized Debtor Plan Administration Agreement.

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23.2 Responsibilities of the Reorganized Debtor Plan Administrator: In

accordance with the Reorganized Debtor Plan Administration Agreement, the responsibilities
of the Reorganized Debtor Plan Administrator shall include (a) facilitating the Reorganized
Debtor's prosecution or settlement of objections to and estimations of Claims, (b) prosecution
or settlement of claims and causes of action held by the Debtor and Debtor in Possession, (c)
calculating and assisting the Disbursing Agent in implementing all distributions in accordance
with the Plan, (d) filing all required tax returns and paying taxes and all other obligations on
behalf of the Reorganized Debtor from funds held by the Reorganized Debtor, (e) periodic
reporting to the Bankruptcy Court, of the status of the Claims resolution process, distributions
on Allowed Claims and prosecution of causes of action, and (f) such other responsibilities as
may be vested in the Reorganized Debtor Plan Administrator pursuant to the Plan, the
Reorganized Debtor Plan Administration Agreement or Bankruptcy Court order or as may be
necessary and proper to carry out the provisions of the Plan.
23.3 Powers of the Reorganized Debtor Plan Administrator: The powers of the
Reorganized Debtor Plan Administrator shall, without any further Bankruptcy Court approval
in each of the following cases, include (a) the power to invest funds in, and withdraw, make
distributions and pay taxes and other obligations owed by the Reorganized Debtor from funds
held by the Reorganized Debtor Plan Administrator and/or the Reorganized Debtor in
accordance with the Plan, (b) the power to compromise and settle claims and causes of action
on behalf of or against the Reorganized Debtor, and (c) such other powers as may be vested in
or assumed by the Reorganized Debtor Plan Administrator pursuant to the Plan, the
Reorganized Debtor Plan Administration Agreement or as may be deemed necessary and
proper to carry out the provisions of the Plan.
23.4 Compensation of the Reorganized Debtor Plan Administrator: In addition
to reimbursement for actual out-of-pocket expenses incurred by the Reorganized Debtor Plan
Administrator, the Reorganized Debtor Plan Administrator shall be entitled to receive
reasonable compensation for services rendered on behalf of the Reorganized Debtor in an
amount and on such terms as may be reflected in the Reorganized Debtor Plan Administration
Agreement.
23.5 Termination of Reorganized Debtor Plan Administrator: The duties,
responsibilities and powers of the Reorganized Debtor Plan Administrator shall terminate
pursuant to the terms of the Reorganized Debtor Plan Administration Agreement.
ARTICLE XXIV
CONDITIONS PRECEDENT TO EFFECTIVE DATE OF
THE PLAN; IMPLEMENTATION PROVISIONS
24.1 Conditions Precedent to Effective Date of the Plan: The occurrence of the
Effective Date and the substantial consummation of the Plan are subject to satisfaction of the
following conditions precedent:
(a)
Entry of the Confirmation Order: The Clerk of the Bankruptcy Court
shall have entered the Confirmation Order, in form and substance reasonably satisfactory to the

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Debtor, the State of New York and the Creditors Committee, and the Confirmation Order shall
have become a Final Order.
(b)
Execution of Actions Relating to the Granting of the Franchise: The
State of New York shall have granted the Franchise to New NYRA, effective as of the
Effective Date, for the period from the Effective Date up to and including the twenty-fifth
(25th) anniversary thereof.
(c)
Execution of the Franchise Agreement: The State of New York and New
NYRA shall have entered into the Franchise Agreement.
(d)
Execution of the State Settlement Agreement: The State of New York
and the Debtor shall have entered into the State Settlement Agreement, which agreement shall
have become effective in accordance with its terms.
(e)
Execution of Documents; Other Actions: All other actions and
documents necessary to implement the Plan and/or required by the Racing Law shall have been
effected or executed, including, without limitation, adoption of the Code of Conduct, the New
NYRA By-laws and the New NYRA Certificate of Incorporation and the execution and
delivery of one or more leases for the leasing of the Racetracks (as may be more specifically
defined in such leases) and other property to New NYRA for the length of the Franchise.
(f)
Allowed Claim Threshold: The aggregate amount of Allowed
Unsecured Claims shall be equal to or less than Twenty Six Million Dollars ($26,000,000.00).
(g)
IRS Claim: The IRS Claim shall be allowed or estimated for purposes of
allowance in accordance with section 502(c) of the Bankruptcy Code in an amount equal to or
less than Sixteen Million Dollars ($16,000,000.00).
(h)
Chapter Amendment: The Chapter Amendment shall (1) have been
passed by the Legislature and enacted into law and (2) not adversely impact the economics
provided to New NYRA in accordance with the Legislation, including, without limitation, the
provisions of Section 1612, Subdivisions (f)(1) and (2) of the tax law relating to the four
percent (4%) of VLT Revenues and three percent (3%) of VLT Revenues, respectively, to be
paid to New NYRA and used by New NYRA for capital expenditures and the support of New
NYRA's racing operations, respectively.
(i)

Effective Date: The Effective Date shall occur on or before June 30,

2008.
24.2 Waiver of Conditions Precedent: To the extent practicable and legally
permissible, each of the conditions precedent in Section 24.1 hereof, may be waived, in whole
or in part, by the Debtor with the consent of the Governor and the Creditors Committee. Any
such waiver of a condition precedent may be effected at any time by filing a notice thereof with
the Bankruptcy Court.

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ARTICLE XXV
RETENTION OF JURISDICTION
25.1 Retention of Jurisdiction: The Bankruptcy Court shall retain and have
exclusive jurisdiction over any matter arising under the Bankruptcy Code, arising in or related
to the Chapter 11 Case or the Plan, or that relates to the following:
(a)
to resolve any matters related to the assumption, assumption and
assignment or rejection of any executory contract or unexpired lease to which a Debtor is a
party or with respect to which a Debtor may be liable and to hear, determine and, if necessary,
liquidate, any Claims arising therefrom, including those matters related to the amendment after
the Effective Date of the Plan, to add any executory contracts or unexpired leases to the list of
executory contracts and unexpired leases to be rejected;
(b)
to enter such orders as may be necessary or appropriate to implement or
consummate the provisions of the Plan and all contracts, instruments, releases, and other
agreements or documents created in connection with the Plan, including, without limitation, the
State Settlement Agreement, unless any such agreements or documents contain express
enforcement and dispute resolution provisions to the contrary, in which case, such provisions
shall govern;
(c)
to determine any and all motions, adversary proceedings, applications
and contested or litigated matters that may be pending on the Effective Date or that, pursuant to
the Plan, may be instituted by the Reorganized Debtor prior to or after the Effective Date;
(d)
to ensure that distributions to holders of Allowed Claims are
accomplished as provided herein;
(e)
to hear and determine any timely objections to Administrative Expense
Claims or to proofs of Claim filed, both before and after the Confirmation Date, including any
objections to the classification of any Claim, and to allow, disallow, determine, liquidate,
classify, estimate or establish the priority of or secured or unsecured status of any Claim, in
whole or in part;
(f)
to enter and implement such orders as may be appropriate in the event
the Confirmation Order is for any reason stayed, revoked, modified, reversed or vacated;
(g)
to issue such orders in aid of execution of the Plan, to the extent
authorized by section 1142 of the Bankruptcy Code;
(h)
to consider any modifications of the Plan, to cure any defect or omission,
or reconcile any inconsistency in any order of the Bankruptcy Court, including the
Confirmation Order;
(i)
to hear and determine all applications for awards of compensation for
services rendered and reimbursement of expenses incurred prior to the Effective Date;

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(j)
except to the extent provided in Section 25.1(b) of the Plan or with
respect to matters regarding the regulation of New NYRA pursuant to the Racing Law, to hear
and determine disputes arising in connection with or relating to the Plan or the interpretation,
implementation, or enforcement of the Plan or the extent of any Entitys obligations incurred in
connection with or released under the Plan;
(k)
to issue injunctions, enter and implement other orders or take such other
actions as may be necessary or appropriate to restrain interference by any Entity with
consummation or enforcement of the Plan;
(l)
except to the extent provided in Section 25.1(b) of the Plan or with
respect to matters regarding the regulation of New NYRA pursuant to the Racing Law, to
determine any other matters that may arise in connection with or are related to the Plan, the
Disclosure Statement, the Confirmation Order or any contract, instrument, release or other
agreement or document created in connection with the Plan or the Disclosure Statement;
(m)
to hear and determine matters concerning state, local and federal taxes in
accordance with sections 346, 505, and 1146 of the Bankruptcy Code;
(n)
to hear any other matter or for any purpose specified in the Confirmation
Order that is not inconsistent with the Bankruptcy Code; and
(o)

to enter a final decree closing the Chapter 11 Cases;

provided, however, that the foregoing is not intended to (1) expand the Bankruptcy Courts
jurisdiction beyond that allowed by applicable law, (2) impair the rights of an Entity to (i)
invoke the jurisdiction of a court, commission or tribunal with respect to matters relating to a
governmental units police and regulatory powers and (ii) contest the invocation of any such
jurisdiction; provided, however, that the invocation of such jurisdiction, if granted, shall not
extend to the allowance or priority of Claims or the enforcement of any money judgment
against the Debtor or the Reorganized Debtor, as the case may be, entered by such court,
commission or tribunal, and (3) impair the rights of an Entity to (i) seek the withdrawal of the
reference in accordance with 28 U.S.C. 157(d) and (ii) contest any request for the withdrawal
of reference in accordance with 28 U.S.C. 157(d).
ARTICLE XXVI
MODIFICATION, REVOCATION, OR WITHDRAWAL OF THE PLAN
26.1 Modification of Plan: The Debtor reserves the right, in accordance with the
Bankruptcy Code and the Bankruptcy Rules in the event any amendment or modification would
materially adversely affect the substance of the economic and governance provisions set forth
in the Plan, including, without limitation, Article II of the Plan, to amend or modify the Plan or
any exhibits to the Plan at any time prior to the entry of the Confirmation Order. Upon entry of
the Confirmation Order, the Debtor may, upon order of the Bankruptcy Court, amend or
modify the Plan, in accordance with section 1127(b) of the Bankruptcy Code, or remedy any
defect or omission or reconcile any inconsistency in the Plan in such manner as may be
necessary to carry out the purpose and intent of the Plan. A holder of a Claim that has accepted
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the Plan shall be deemed to have accepted the Plan as modified if the proposed modification
does not materially and adversely change the treatment of the Claim of such holder.
26.2

Revocation or Withdrawal:
(a)

The Plan may be revoked or withdrawn prior to the Confirmation Date

by the Debtor.
(b)
If the Plan is revoked or withdrawn prior to the Confirmation Date, or if
the Plan does not become effective for any reason whatsoever, then the Plan shall be deemed
null and void. In such event, nothing contained herein shall be deemed to constitute a waiver
or release of any claims by the Debtor or any other Entity, including the State of New York, or
to prejudice in any manner the rights of the Debtor or any other Entity in any further
proceedings involving the Debtor or the State.
ARTICLE XXVII
PROVISION FOR MANAGEMENT
27.1 Reorganized Debtor Directors : From and after the Effective Date, the board
of directors of the Reorganized Debtor shall consist of C. Steven Duncker, Charles E. Hayward
and Patrick L. Kehoe. Except as set forth herein, provisions regarding members of the
Reorganized Debtor Board of Directors shall be as set forth in the Reorganized Debtor Bylaws.
27.2 New NYRA Directors : From and after the Effective Date, and as set forth in
the Racing Law, New NYRAs Board of Directors shall be comprised of twenty-five (25)
members: (a) fourteen (14) of whom shall be elected by the NYRA Board of Trustees or the
nominating committee of the NYRA Board of Trustees, and (b) in accordance with the
provisions and the procedures set forth in the Legislation, seven (7) of whom shall be appointed
by the Governor, and two (2) of whom shall be selected by each of the Speaker of the
Assembly and the Temporary President of the State Senate. Except as set forth herein,
provisions regarding members of the New NYRA Board of Directors and voting requirements
of the Board of Directors shall be as set forth in the New NYRA By-laws.
27.3 New NYRA Committees: From and after the Effective Date, the majority of
the Board of Directors may appoint committees, including an executive committee, and the
existence and powers and responsibilities of such committees shall be consistent with those set
forth in the New NYRA By-laws. Without limiting the foregoing, the Board of Directors shall
establish (a) a compensation committee to fix salary guidelines, such guidelines to be consistent
with the operation of other first class thoroughbred racing operations in the United States, (b) a
finance committee to review annual operating and capital budgets for each of the Racetracks,
(c) a nominating committee to nominate any new directors to be designated by the Debtor or
New NYRA to replace the existing directors designated by the Debtor or New NYRA, and (d)
an executive committee (the "Executive Committee"); provided, however, that each of the
aforementioned committees shall include at least one of the Directors designated by the

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Governor and, with respect to the Executive Committee, at least one of the Directors designated
by each of the Speaker of the Assembly and the Temporary President of the State Senate.
27.4 New NYRA Officers : From and after the Effective Date, New NYRA shall
determine all officers of New NYRA.
ARTICLE XXVIII
ARTICLES OF INCORPORATION AND BY-LAWS
OF THE DEBTOR; CORPORATE ACTION
28.1 Amendment of Articles of Incorporation/Charter: On or prior to the
Effective Date, the Debtor shall file (a) the Reorganized Debtor Certificate of Incorporation and
the Reorganized Debtor By-laws and (b) such documents with the State as are necessary to
cause the creation of New NYRA, under the general supervision of the Office of the Attorney
General, pursuant to and as set forth in the Racing Law or such other applicable law.
28.2 Corporate Action: On the Effective Date, the adoption of the Reorganized
Debtor Certificate of Incorporation and the Reorganized Debtor By-laws shall be authorized
and approved in all respects, in each case without further action under applicable law,
regulation, order, or rule, including, without limitation, any action by the stockholders of the
Debtor or the Reorganized Debtor. Subject to the Racing Law, the cancellation of all Equity
Interests, employment agreements, and other matters provided under the Plan involving the
corporate structure of the Reorganized Debtor or corporate action by the Reorganized Debtor
shall be deemed to have occurred, be authorized, and shall be in effect without requiring further
action under applicable law, regulation, order, or rule, including, without limitation, any action
by the stockholders of the Debtor or the Reorganized Debtor. Without limiting the foregoing,
from and after the Confirmation Date, the Debtor, and the Reorganized Debtor may take any
and all actions deemed appropriate in order to consummate the transactions contemplated
herein; provided, however, that, from and after the Effective Date, the actions of the
Reorganized Debtor shall be limited to the administration of the actions contemplated or
required by the Plan to be performed by the Debtor or the Reorganized Debtor, including,
without limitation, the resolution of Claims, distributions in respect thereof and the sale of the
Ancillary Property.
28.3 Corporate Contribution: Except with respect to the payment of Allowed
Priority Tax Claims which may be assumed by New NYRA, upon (a) the liquidation of the
Reorganized Debtor's assets, including, without limitation, the Ancillary Property, and (b) the
payment in full of Allowed Claims, the Board of Trustees of the Reorganized Debtor shall take
any and all action as to cause the dissolution of the Reorganized Debtor, including, without
limitation, contributing all of the Reorganized Debtor's Cash and Cash Equivalents to New
NYRA.

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ARTICLE XXIX
MISCELLANEOUS PROVISIONS
29.1 Title to Assets: Except as otherwise provided in the Plan or the State
Settlement Agreement, on the Effective Date, (a) title to (i) the Ancillary Property shall vest in
the Reorganized Debtor, (ii) all assets and properties (other than the Ancillary Property, the
Racetracks and the other Transferred Property) shall vest in New NYRA free and clear of all
Liens, Claims, encumbrances and interests and in accordance with section 1141 of the
Bankruptcy Code (subject to the transfers contemplated by the State Settlement Agreement),
and (iii) the Racetracks and the other Transferred Property shall vest in the State of New York,
an affiliate or agency of the State of New York, or a public corporation incorporated by the
State of New York free and clear of all Liens, Claims, encumbrances and interests and in
accordance with sections 1123 and 1141 of the Bankruptcy Code and (b) the Confirmation
Order shall be a judicial determination of discharge of the liabilities of the Debtor and the
Debtor in Possession except as provided in the Plan. On the Effective Date, New NYRA and
the State of New York shall enter into one or more leases providing for the lease of the
Racetracks (as may be more specifically defined in such leases) and other property to New
NYRA.
29.2 Discharge of Debtor: Except as otherwise provided in the Plan, the
Confirmation Order or such other order of the Bankruptcy Court that may be applicable, on the
latest to occur of (a) the Effective Date, (b) the entry of a Final Order resolving all Claims in
the Chapter 11 Case and (c) the final distribution made to holders of Allowed Claims in
accordance with Article XIX of the Plan, all Claims, other than the Debtor's obligations
pursuant to the Supplemental DIP Loan, against and NYRA Equity Interests in the Debtor and
Debtor in Possession, shall be discharged and released in full; provided, however, that, the
Bankruptcy Court may, upon request by the Reorganized Debtor, and notice and a hearing,
enter an order setting forth that such Claims and NYRA Equity Interests shall be deemed
discharged and released on such earlier date as determined by the Bankruptcy Court. All
Persons and Entities shall be precluded from asserting against the Debtor, the Debtor in
Possession, their successors or assigns, including, without limitation, the Reorganized Debtor,
their agents and employees, or their respective assets, properties or interests in property, any
other or further Claims based upon any act or omission, transaction or other activity of any kind
or nature that occurred prior to the Confirmation Date, whether or not the facts or legal bases
therefor were known or existed prior to the Confirmation Date regardless of whether a proof of
Claim or NYRA Equity Interest was filed, whether the holder thereof voted to accept or reject
the Plan or whether the Claim is an Allowed Claim.
29.3 Injunction on Claims: Except as otherwise expressly provided in the Plan,
the Confirmation Order or such other order of the Bankruptcy Court that may be
applicable, all Persons or Entities who have held, hold or may hold Claims or any other
debt or liability that is discharged or Equity Interests or other right of equity interest that
is terminated or cancelled pursuant to the Plan are permanently enjoined, from and after
the Effective Date, from (a) commencing or continuing in any manner any action or other
proceeding of any kind on any such Claim or other debt or liability or Equity Interest or
other right of equity interest that is terminated or cancelled pursuant to the Plan against

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the Debtor, the Debtor in Possession or the Reorganized Debtor, the Debtors estate, New
NYRA, the State of New York or their respective properties or intere sts in properties, (b)
the enforcement, attachment, collection or recovery by any manner or means of any
judgment, award, decree or order against the Debtor, the Debtor in Possession or the
Reorganized Debtor, the Debtors estate, New NYRA, the State of New York or their
respective properties or interests in properties, (c) creating, perfecting, or enforcing any
encumbrance of any kind against the Debtor, the Debtor in Possession or the Reorganized
Debtor, New NYRA, the State of New York or against their respective property or
interests in property, and (d) except to the extent provided, permitted or preserved by
sections 553, 555, 556, 559 or 560 of the Bankruptcy Code or pursuant to the common law
right of recoupment, asserting any right of setoff, subrogation or recoupment of any kind
against any obligation due from the Debtor, the Debtor in Possession or the Reorganized
Debtor, New NYRA, the State of New York or against their respective property or
interests in property with respect to any such Claim or other debt or liability that is
discharged or Equity Interest or other right of equity interest that is terminated or
cancelled pursuant to the Plan; provided, however, that such injunction shall not preclude
the United States of America, any state or any of their respective police or regulatory
agencies from enforcing their police or regulatory powers; and, provided, further, that,
except in connection with a properly filed proof of claim, the foregoing proviso does not
permit the United States of America, any State or any of their respective police or
regulatory agencies from obtaining any monetary recovery from the Debtor, the Debtor
in Possession or the Reorganized Debtor or their respective property or interests in
property with respect to any such Claim or other debt or liability that is discharged or
Equity Interest or other right of equity interest that is terminated or cancelled pursuant
to the Plan, including, without limitation, any monetary claim or penalty in furtherance of
a police or regulatory power. Such injunction (y) shall extend to all successors of the
Debtor and Debtor in Possession, the State of New York and the Creditors Committee
and its members, and their respective properties and interests in property; provided,
however, that such injunction shall not extend to or protect membe rs of the Creditors
Committee and their respective properties and interests in property for actions based
upon acts outside the scope of service on the Creditors Committee, and (z) is not
intended, nor shall it be construed, to extend to the assertion, the commencement or the
prosecution of any claim or cause of action against any present or former member of the
Creditors Committee and their respective properties and interests in property arising
from or relating to such members pre-Petition Date acts or omissions.
29.4 Term of Existing Injunctions or Stays: Unless otherwise provided, all
injunctions or stays provided for in the Chapter 11 Case pursuant to sections 105, 362 or 525 of
the Bankruptcy Code, or otherwise, and in existence on the Confirmation Date, shall remain in
full force and effect until entry of an order in accordance with Section 29.15 of the Plan or such
other Final Order of the Bankruptcy Court.
29.5 Limited Release of Directors, Officers and Employees: No claims of the
Debtors estate against its present and former officers, directors, employees, consultants and
agents and arising from or relating to the period prior to the Petition Date are released by this
Plan. As of the Effective Date, the Debtor and the Debtor in Possession shall be deemed to
have waived and released its present and former directors, officers, employees, consultants and

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agents who were directors, officers, employees, consultants or agents, respectively, at any time
during the Chapter 11 Case, from any and all claims of the Debtors estate arising from or
relating to the period from and after the Petition Date; provided, however, that this provision
shall not operate as a waiver or release of (a) any Person (i) named or subsequently named as a
defendant in any action commenced by or on behalf of the Debtor in Possession, and (ii)
adjudicated or subsequently adjudicated by a court of competent jurisdiction to have engaged in
acts of dishonesty or willful misconduct detrimental to the interests of the Debtor or (b) any
claim (i) with respect to any loan, advance or similar payment by the Debtor to any such
person, (ii) with respect to any contractual obligation owed by such person to the Debtor, (iii)
relating to such persons knowing fraud; and, provided, further, that the foregoing is not
intended, nor shall it be construed, to release any of the Debtors claims that may exist against
the Debtors directors and officers liability insurance.
29.6 Exculpation: The Debtor, the Reorganized Debtor, New NYRA, the State of
New York, the Creditors Committee, and any of their respective directors, officers, officials,
employees, members, attorneys, consultants, advisors and agents (acting in such capacity), shall
not have or incur any liability to any Entity for any act taken or omitted to be taken in
connection with the Chapter 11 Case, the formulation, preparation, dissemination,
implementation, confirmation or approval of the Plan or any compromises or settlements
contained therein, the Disclosure Statement related thereto or any contract, instrument, release
or other agreement or document provided for or contemplated in connection with the
consummation of the transactions set forth in the Plan; provided, however, that the foregoing
provisions of this Section 29.6 shall not affect the liability of any Entity that otherwise would
result from any such act or omission to the extent that such act or omission is determined in a
Final Order to have constituted gross negligence or willful misconduct. Any of the foregoing
parties in all respects shall be entitled to rely upon the advice of counsel with respect to their
duties and responsibilities under the Plan.
29.7 Preservation of Rights of Action: Except as otherwise provided in the Plan, or
in any contract, instrument, release of other agreement entered into in connection with the Plan,
in accordance with section 1123(b) of the Bankruptcy Code, the Reorganized Debtor shall
retain sole and exclusive authority to enforce any claims, rights or causes of action that the
Debtor, the Debtor in Possession or its chapter 11 estate may hold against any Entity, including
any claims, rights or causes of action arising under sections 541, 544, 545, 547, 548, 549, 550,
551 and 553 of the Bankruptcy Code.
29.8 Injunction on Actions: Except as provided in the Plan, as of the Effective
Date, all non-Debtor entities are permanently enjoined from commencing or continuing in
any manner, any action or proceeding, whether directly, derivatively, on account of or
respecting any claim, debt, right or cause of action of the Debtor, the Debtor in Possession
or the Reorganized Debtor which the Debtor, the Debtor in Possession or the Reorganized
Debtor, as the case may be, retain sole and exclusive authority to pursue in accordance
with Section 15.1 of the Plan or which has been released pursuant to the Plan, including,
without limitation, pursuant to Sections 2.1 and 29.5 of the Plan; provided, however, that,
except as provided in Section 29.3 of the Plan, such injunction is not intended, nor shall it
be construed to, apply to any proceeding not involving property of the Debtors estate
that a non-Debtor Entity may bring against another non-Debtor Entity.

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29.9 Payment of Statutory Fees: All fees payable pursuant to section 1930 of title
28 of the United States Code, and, if applicable, any interest payable pursuant to section 3717
of title 31 of the United States Code, as determined by the Bankruptcy Court, shall be paid on
the Effective Date or thereafter as and when they become due and owing.
29.10 Retiree Bene fits: From and after the Effective Date, pursuant to section
1129(a)(13) of the Bankruptcy Code, New NYRA shall assume and pay all retiree benefits
(within the meaning of section 1114 of the Bankruptcy Code), if any, at the level established in
accordance with subsection (e)(1)(B) or (g) of section 1114 of the Bankruptcy Code, at any
time prior to the Confirmation Date, and for the duration of the period during which the Debtor
has obligated itself to provide such benefits; provided, however, that New NYRA may modify
such benefits to the extent permitted by applicable law.
29.11 Post-Effective Date Fees and Expenses: From and after the Effective Date, the
Reorganized Debtor shall, in the ordinary course of business and without the necessity for any
approval by the Bankruptcy Court, retain such professionals and pay the reasonable
professional fees and expenses incurred by the Reorganized Debtor related to implementation
and consummation of the Plan without further approval from the Bankruptcy Court.
29.12 Severability: If, prior to the Confirmation Date, any term or provision of the
Plan shall be held by the Bankruptcy Court to be invalid, void or unenforceable, the
Bankruptcy Court shall, with the consent of the Debtor and the State of New York, have the
power to alter and interpret such term or provision to make it valid or enforceable to the
maximum extent practicable, consistent with the original purpose of the term or provision held
to be invalid, void or unenforceable, and such term or provision shall then be applicable as
altered or interpreted. Notwithstanding any such holding, alteration or interpretation, the
remainder of the terms and provisions of the Plan shall remain in full force and effect and shall
in no way be affected, impaired or invalidated by such holding, alteration or interpretation. The
Confirmation Order shall constitute a judicial determination and shall provide that each term
and provision of the Plan, as it may have been altered or interpreted in accordance with the
foregoing, is valid and enforceable pursuant to its terms.
29.13 Governing Law: Except to the extent that the Bankruptcy Code or other federal
law is applicable, or to the extent that an exhibit hereto or any document to be entered into in
connection herewith provides otherwise, the rights, duties and obligations arising under this
Plan shall be governed by, and construed and enforced in accordance with, the Bankruptcy
Code and, to the extent not inconsistent therewith, the laws of the State of New York, without
giving effect to principles of conflicts of laws.
29.14 Notices: All notices, requests, and demands to or upon the Debtor, the Debtor
in Possession or the Reorganized Debtor to be effective shall be in writing, including by
facsimile transmission, and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when actually delivered or, in the case of notice by facsimile
transmission, when received and telephonically confirmed, addressed as follows:

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The New York Racing Association Inc.

Aqueduct Racetrack
110-00 Rockaway Boulevard
Jamaica, New York 11417
Attention: Chief Financial Officer
Telephone: (718) 641-4700
With a copy to:
Weil, Gotshal & Manges LLP
767 Fifth Avenue
New York, New York 10153
Attention: Brian S. Rosen, Esq.
Telephone: (212) 310-8000
29.15 Closing of Case: The Reorganized Debtor shall, promptly upon the full
administration of the Chapter 11 Case, file with the Bankruptcy Court all documents required
by Bankruptcy Rule 3022 and any applicable order of the Bankruptcy Court.
29.16 Section Headings: The section headings contained in this Plan are for reference
purposes only and shall not affect in any way the meaning or interpretation of the Plan.
29.17 Exemption from Transfer Taxes: Pursuant to section 1146(a) of the
Bankruptcy Code, the creation of any mortgage, deed of trust, or other security interest, the
making or assignment of any lease or sublease, or the making or delivery of any deed or other
instrument of transfer under, in furtherance of, or in connection with the Plan, including,
without limitation, the sale of the Ancillary Property, shall not be subject to any stamp, real
estate transfer, mortgage recording or other similar tax.

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29.18 Inconsistencies: To the extent of any inconsistencies between the information

contained in the Disclosure Statement and the terms and provisions of the Plan, the terms and
provisions contained herein shall govern.
Dated: New York, New York
April 28, 2008
The New York Racing Association Inc.

By:

WEIL, GOTSHAL & MANGES LLP

767 Fifth Avenue
New York, New York 10153
(212) 310-8000

/s/ C. Steven Duncker

Name: C. Steven Duncker
Title:
Chairman

By:

/s/ Brian S. Rosen

Name: Brian S. Rosen

Attorneys for Debtor and

Debtor in Possession

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EXHIBIT A
LIST OF STATE CLAIMS
Claimant
New York State Dept. of
Labor

Claim No.

Claim Amount

242

$442,727.96

Racing and Wagering Board

490

$199,918.37

New York State Division of

the Lottery

491

$6,133,479.45

NYSUDC, d/b/a Empire State

Development Corp.

492

$5,022,765.88

NYSUDC, d/b/a Empire State

Development Corp.

621

$8,551,140.50

Oversight Board

622

$76,173,000.00

State of New York

623

$61,243,855.00

New York State Dept. of

Environmental Conservation

638

$5,200.00

New York State Dept. of

Taxation and Finance

665

$1,238,575.99

New York State Dept. of

Taxation and Finance

674

$1,403,837.11

New York State Dept. of

Taxation and Finance

675

$1,403,837.11

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EXHIBIT B
EXECUTORY CONTRACTS AND UNEXPIRED LEASES TO BE REJECTED

Name and Mailing

Address of Other
Parties to Lease or Contract

Date Entered and

Description of Contract or Lease

Tishman Construction Corporation of New York

666 Fifth Avenue
New York, New York 10103-0256

Agreement, dated March 1, 2006, between NYRA and Tishman

Construction Corporation of New York for construction
management services at Aqueduct Racetrack in connection with
the renovation and construction of a new Video Lottery
Terminal Operation and related base building modifications.

VVA, LLC
117 East 31st Street
New York, New York 10016

Agreement, dated December 22, 2005, between NYRA and

VVA, LLC to provide project management services to NYRA in
connection with the construction of NYRAs Video Lottery
Terminal facility at Aqueduct Racetrack.

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Exhibit B
Notice of Confirmation

Main Document

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UNITED STATES BANKRUPTCY COURT

SOUTHERN DISTRICT OF NEW YORK
------------------------------------------------------------------------x
In re:
THE NEW YORK RACING ASSOCIATION INC.,
Debtor.

:
:
:
:
:
:
:

Chapter 11
Case No. 06-12618 (JMP)

------------------------------------------------------------------------x
NOTICE OF ENTRY OF ORDER CONFIRMING DEBTORS
MODIFIED THIRD AMENDED PLAN OF REORGANIZATION
PURSUANT TO CHAPTER 11 OF THE UNITED STATES BANKRUPTCY CODE
TO ALL CREDITORS, EQUITY INTEREST
HOLDERS AND PARTIES IN INTEREST:
PLEASE TAKE NOTICE that an order (the Confirmation Order) confirming
the Debtors Modified Third Amended Plan of Reorganization Pursuant to Chapter 11 of the
United States Bankruptcy Code, dated April 27, 2008 (as amended, the Plan), of The New
York Racing Association Inc. (NYRA or the Debtor), as debtor and debtor in possession,
was entered by the Honorable James M. Peck, United States Bankruptcy Judge, and docketed by
the Clerk of the United States Bankruptcy Court for the Southern District of New York (the
Bankruptcy Court) on April [_], 2008. Unless otherwise defined in this notice, capitalized
terms used in this notice shall have the meanings ascribed to them in the Plan and the
Confirmation Order.
PLEASE TAKE FURTHER NOTICE that the Confirmation Order is available for
inspection in the office of the Clerk of the Bankruptcy Court at the United States Bankruptcy
Court, Alexander Hamilton Custom House, One Bowling Green, New York, New York 10004.
The Confirmation Order is also available on the Garden City Group, Inc. website:
www.gardencitygroup.com.
PLEASE TAKE FURTHER NOTICE that the Plan and its provisions are binding
on the Debtor, any entity acquiring or receiving property or a distribution under the Plan, and any
holder of a Claim against or equity interest in the Debtor as of November 12, 2007, the Courtapproved Record Date, including all governmental entities, whether or not the Claim or equity
interest of such holder is impaired under the Plan and whether or not such holder or entity has
accepted the Plan.
PLEASE TAKE FURTHER NOTICE that, on or before the ninetieth (90th) day
after the Effective Date, all applications for final allowances of compensation and reimbursement
of expenses pursuant to sections 327, 328, 330, 503(b) and 1103 of title 11 of the United States
Code for professional services rendered up to the Confirmation Date (each a Final Fee
Application) must be filed with the Bankruptcy Court, together with proof of service thereof,

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and served on (i) Weil, Gotshal & Manges LLP, Attorneys for the Debtor and Debtor in
Possession, 767 Fifth Avenue, New York, New York 10153, Attention: Brian S. Rosen, Esq.; (ii)
The New York Racing Association Inc., Aqueduct Racetrack, 110-00 Rockaway Boulevard,
Jamaica, New York 11417, Attention: Chief Financial Officer, (iii) Kirkpatrick & Lockhart
Preston Gates Ellis LLP, 599 Lexington Avenue, New York, New York 10022, Attorneys for the
Creditors Committee, Attention: Jeffrey N. Rich, Esq.; and (iv) the Office of the United States
Trustee, 33 Whitehall Street, 21st Floor, New York, New York 10004, Attention: Brian
Masumoto, Esq.
PLEASE TAKE FURTHER NOTICE that objections, if any, to any Final Fee
Application shall be filed with the Court, together with proof of service thereof, and served upon
the applicant and the parties identified above, so as to be received not later than 5:00 p.m.
Eastern Time on the date that is five business days prior to the hearing on the Final Fee
Applications.
Dated: New York, New York
April [_], 2008

WEIL GOTSHAL & MANGES LLP

767 Fifth Avenue
New York, New York 10153
Telephone: (212) 310-8000
Facsimile: (212) 310-8007
Attorneys for the Debtor
and Debtor in Possession

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