§ 216. Disposition of racing facilities or certain assets. 1. Any
franchised corporation desiring to grant, give, devise, or sell any
assets including tangible and intangible assets, racing facilities and
real estate shall apply to the commission and to the franchise oversight
board for approval of such disposition, provided, however, that the
approval of such commission and such board shall not be necessary for
the sale of property, other than real property, that is appropriately,
customarily and usually sold by the association in the normal course of
its business. If in the judgment of the commission and the franchise
oversight board, acting individually, the public interest, convenience
or necessity and the best interest of racing will be served thereby, the
commission and franchise oversight board shall each enter an order
granting approval of such disposition and of the terms thereof.

2. Such franchised corporation during the term of such a franchise
shall not pledge, mortgage or otherwise encumber any of the racetrack
facilities or properties acquired after the effective date of this
subdivision without the prior written approval of the franchise
oversight board.

The franchised corporation may incur indebtedness, including without
limitation, the issuance of non-convertible debt securities in
connection therewith, and grant liens on and security interests in
assets and interests, including without limitation, the revenue streams
referred to herein, except that any debt incurred or funds raised shall
be used to promote racing at the franchise racetracks. The franchised
corporation shall not create any lien or security interest in any asset
that runs with the franchise, such as the simulcasting contract, the
repayment of which would extend beyond the term of the franchise. All
incurrence of debt or grant of liens or security interests other than
those arising within the ordinary course of business such as
materialmen's and mechanics' liens first require the approval of the
franchise oversight board.

3. The state through the urban development corporation may borrow to
fund racetrack capital improvements at Aqueduct racetrack, Belmont Park
racetrack and Saratoga race course and borrow on behalf of the
franchised corporation pursuant to franchise oversight board approval
secured against the franchised corporation's right to receive payments
for racetrack capital improvements pursuant to subdivision f of section
sixteen hundred twelve of the tax law, provided, however, the indenture
shall restrict the use of net proceeds to capital expenditures at the
racetrack and provided further that any such borrowing shall be secured
only by such future stream of racetrack capital improvement payments
payable to the franchised corporation. The urban development corporation
shall initially borrow funds necessary for approved capital expenditures
in years one through five and then at appropriate times as determined by
the franchise oversight board for years six through ten, years eleven
through fifteen, years sixteen through twenty and years twenty-one
through twenty-five. The amount of borrowing for approved capital
expenditures shall not exceed the amount that would have been paid out
for facility improvements in the event the full payment pursuant to
subdivision f of section sixteen hundred twelve of the tax law for that
purpose was made.