Exhibit 10.14

 

LIMITED WAIVER AND SECOND AMENDMENT
TO FIFTH AMENDED AND RESTATED CREDIT AGREEMENT

 

This LIMITED WAIVER AND SECOND AMENDMENT TO FIFTH AMENDED AND RESTATED CREDIT
AGREEMENT (this “Second Amendment”), dated as of March 31, 2008, is entered into
by and among: (A) MTR GAMING GROUP, INC., a Delaware corporation (“MTRI”),
MOUNTAINEER PARK, INC., a West Virginia corporation (“MPI”), SPEAKEASY GAMING OF
LAS VEGAS, INC., a Nevada corporation (“SGLVI”), PRESQUE ISLE DOWNS, INC., a
Pennsylvania corporation (“PIDI”), and SCIOTO DOWNS, INC., an Ohio corporation
(“SDI” and together with MTRI, MPI, SGLVI and PIDI, each, a “Borrower” and
collectively, the “Borrowers”); (B) the Requisite Lenders; and (C) WELLS FARGO
BANK, NATIONAL ASSOCIATION, as administrative agent and collateral agent for the
Lenders under the Credit Agreement, the Swingline Lender and the L/C Issuer (in
such capacity, the “Agent Bank”).  Capitalized terms used herein and not
otherwise defined herein shall have the meanings given to them in the Credit
Agreement defined below.

 

RECITALS

 

A.            Borrowers, the Agent Bank and the Lenders have previously entered
into that certain Fifth Amended and Restated Credit Agreement, dated as of
September 22, 2006 (the “Original Credit Agreement”), as amended by First
Amendment to Fifth Amended and Restated Credit Agreement dated as of June 19,
2007 (the “First Amendment” and together with the Original Credit Agreement as
in effect prior to the date hereof, the “Existing Credit Agreement” and as the
same may be further amended, restated, supplemented or otherwise modified and in
effect from time to time, including, but not limited to, by this Second
Amendment, the “Credit Agreement”), by and among Borrowers, the Lenders, and
Wells Fargo Bank, National Association, as Agent Bank, L/C Issuer and Swingline
Lender.

 

B.            As of the date of this Second Amendment, Events of Default have
occurred and are continuing under the Existing Credit Agreement as a result of
the “Covenant Defaults,” as such term is defined in Recital D of that certain
Agreement for Release of Collateral, Application of Sale Proceeds and
Forbearance dated as of March 5, 2008 between the Borrowers and Agent Bank.

 

C.            Borrowers have requested a limited waiver with respect to the
Covenant Defaults and certain amendments to the Existing Credit Agreement as set
forth below.

 

D.            The Agent Bank and the Requisite Lenders are willing to grant such
requests on the terms and subject to the conditions set forth in this Second
Amendment.

 

AGREEMENT

 

NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and
agreements set forth below and other good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereby agree,
except as otherwise set forth herein, as of the Second Amendment Effective Date
(as defined in Section 4 below) as follows:

 

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SECTION 1.                         Limited Waiver.  On the terms and subject to
the conditions of this Second Amendment (including the satisfaction of the
conditions precedent set forth in Section 4 below), the Agent Bank and the
Requisite Lenders hereby waive the Covenant Defaults.  The foregoing limited
waiver of the Covenant Defaults is a one-time waiver and not a continuing
waiver, and shall apply only to the matters and time periods set forth in the
definition of Covenant Defaults.  Without limiting the generality of the
foregoing, such waiver shall not apply to any failure by Borrowers to comply
with any of the covenants in the Credit Agreement giving rise to the Covenant
Defaults or any other provisions of the Credit Agreement or any other Loan
Documents.

 

SECTION 2.                         Amendments.  On the terms and subject to the
conditions of this Second Amendment (including the satisfaction of the
conditions precedent set forth in Section 4 below), the Existing Credit
Agreement is hereby amended as follows:

 

(a)           Definition of “Acceptable Senior Refinancing”.  The definition of
“Acceptable Senior Refinancing” is hereby added to Section 1.01 of the Existing
Credit Agreement as follows:

 

“Acceptable Senior Refinancing” shall mean a full refinancing of the Senior
Unsecured Notes on an unsecured basis and otherwise on terms and conditions and
pursuant to documents, in each case, acceptable to the Requisite Lenders in
their sole discretion (including, without limitation, the amount, maturity,
amortization, interest rate, covenants, defaults and remedies) and the Requisite
Lenders have confirmed such acceptability in writing.

 

(b)           Definition of “Adjusted Fixed Charge Coverage Ratio”.  The
definition of “Adjusted Fixed Charge Coverage Ratio” in Section 1.01 of the
Existing Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Adjusted Fixed Charge Coverage Ratio” shall mean as of the last day of each
Fiscal Quarter with reference to the Borrower Consolidation:

 

An amount equal to the sum of the following: (i) EBITDA for the four Fiscal
Quarter period ending on that date, plus (ii) the sum of equity contributions
received by the Borrower Consolidation during the four Fiscal Quarter period
ending on that date plus, to the extent not already included in the calculation
of EBITDA, the aggregate amount of cash gains from any sale of Non-Core Assets
of any Borrower that are recognized during the four Fiscal Quarter period ending
on that date; provided that the aggregate amount under this clause (ii) shall
not exceed Two Million Dollars ($2,000,000) for the four Fiscal Quarter period
ending on that date, minus (iii) the aggregate amount of Distributions actually
paid during the four Fiscal Quarter period ending on that date, minus (iv) the
aggregate amount federal and state taxes on or measured on or measured by income
that were actually paid during the four Fiscal Quarter period ending on that
date (less the aggregate amount of any income tax refunds actually received
during such period), minus (v) the

 

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aggregate amount of the Capital Expenditure Proxy Amount for the four Fiscal
Quarter period ending on that date

 

Divided by (÷)

 

An amount equal to the sum of the following: (i) Interest Expense (expensed and
capitalized) determined for the four Fiscal Quarter period ending on that date,
plus (ii) the current portion of all interest bearing Indebtedness as of the end
of the four Fiscal Quarter period ending on that date, plus (iii) the current
portion of Capitalized Lease Liabilities as of the end of the four Fiscal
Quarter period ending on that date.

 

(c)           Definition of “Aggregate Commitment”.  The definition of
“Aggregate Commitment” in Section 1.01 of the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“Aggregate Commitment” shall mean reference to the aggregate amount committed by
Lenders for advance to or on behalf of the Borrowers as Borrowings under the
Credit Facility in the principal amount of One Hundred Twenty Five Million
Dollars ($125,000,000.00) as of the Second Amendment Effective Date, as may be
reduced from time to time by: (i) the Scheduled Reductions, (ii) Voluntary
Permanent Reductions, and/or (iii) Mandatory Commitment Reductions.

 

(d)           Definition of “Applicable Margin”.  The definition of “Applicable
Margin” in Section 1.01 of the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“Applicable Margin” shall mean (i) for any Base Rate Loan, 2.250% and (ii) for
any LIBOR Loan, prior to the Second Amendment Effective Date, 2.875% and, from
and after the Second Amendment Effective Date, 5.000%.

 

(e)           Definition of “Capital Proceeds”.  The definition of “Capital
Proceeds” in Section 1.01 of the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“Capital Proceeds” shall mean the proceeds received by the Borrower
Consolidation from (i) partial or total condemnation or destruction of any part
of any property of the Borrowers or any Subsidiary of the Borrowers,
(ii) insurance proceeds (other than rent insurance and business interruption
insurance) received in connection with damage to or destruction of any property
of the Borrowers or any Subsidiary of the Borrowers, and (iii) the sale,
transfer, conveyance or other disposition of any portion of any property of the
Borrowers or any Subsidiary of the Borrowers (not including, however, any
proceeds received by Borrowers, or any of them, from a condemnation, damage or
destruction of FF&E or other personal property if such FF&E or other personal
property is replaced by items of equivalent value and utility, in each case such
exclusion to apply only during any period in which no Default or Event of
Default has occurred and is continuing).

 

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(f)            Definition of “Cash Collateralize”.  The definition of “Cash
Collateralize” is hereby added to Section 1.01 of the Existing Credit Agreement
as follows:

 

“Cash Collateralize” shall mean to pledge and deposit with or deliver to the
Agent Bank, for the benefit of the Banks, as collateral for the Obligations,
cash or deposit account balances in an amount equal to the then applicable L/C
Exposure pursuant to documentation in form and substance reasonably satisfactory
to the Agent Bank (which documents are hereby consented to by the Lenders). 
Derivatives of such term shall have a corresponding meaning.

 

(g)           Definition of “Change of Control”. The definition of “Change of
Control in Section 1.01 of the Existing Credit Agreement is hereby amended by
(i) deleting the “.” at the end of paragraph “(c)” and replacing it with “; or”
and (ii) adding thereto the following paragraph “(d)”:

 

“(d)         A “Change of Control” as defined in the Senior Subordinated
Indenture, a “Change of Control” as defined in the Senior Unsecured Indenture or
a “change of control” or “change in control” as defined in any document
governing any other Indebtedness of any Borrower or Restricted Subsidiary which
gives the holders of such Indebtedness the right to accelerate or otherwise
require payment or redemption of such Indebtedness prior to the maturity date
thereof.”

 

(h)           Definition of “EBITDA”.  The definition of “EBITDA” in
Section 1.01 of the Existing Credit Agreement is hereby amended and restated in
its entirety as follows:

 

“EBITDA” shall mean, for any period with reference to the Borrower
Consolidation, (a) Net Income for such period plus, (b) to the extent deducted
in determining such Net Income for such period, the sum of the following for
such period, without duplication: (i) Interest Expense (expensed and
capitalized) for such period , (ii) the aggregate amount of federal and state
taxes on or measured by income for such period (whether or not payable during
that period), (iii) depreciation, amortization and all other non-cash expenses
for such period, (iv) all non-cash losses and extraordinary losses and
(v) preopening expenses for such period, minus (c) all non-cash gains and
extraordinary gains to the extent taken into account in arriving at such Net
Income, in each case as determined in accordance with GAAP.

 

For purposes of Financial Covenants, EBITDA shall include only Cash
distributions actually funded by an Unrestricted Subsidiary that are received by
the Borrower Consolidation.

 

Pro forma credit shall be given for the EBITDA of a company (or identifiable
business unit or division) included in Borrower Consolidation that was acquired
in a transaction permitted by this Credit Agreement as if such company (or
identifiable business unit or division) was owned on the first day of the
applicable period; companies (or identifiable business units or divisions) sold,
transferred or otherwise

 

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disposed of during any period will be treated as if not owned during the entire
applicable period.

 

(i)            Definition of “Mandatory Commitment Reduction(s)”.  The
definition of “Mandatory Commitment Reduction(s)” in Section 1.01 of the
Existing Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Mandatory Commitment Reduction(s)” shall mean a permanent reduction of the
Aggregate Commitment which shall be made from time to time as may be required
under Sections 2.15, 5.12, 5.26 and/or 8.02.

 

(j)            Definition of “Maturity Date”.  The definition of “Maturity Date”
in Section 1.01 of the Existing Credit Agreement is hereby amended and restated
in its entirety as follows:

 

“Maturity Date” shall mean March 31, 2010; provided, however, in the event the
Senior Unsecured Notes are not fully refinanced pursuant to an Acceptable Senior
Refinancing by October 1, 2009, the “Maturity Date” shall be October 1, 2009.

 

(k)           Definition of “Net Proceeds”.  The definition of “Net Proceeds” in
Section 1.01 of the Existing Credit Agreement is hereby amended and restated in
its entirety as follows:

 

“Net Proceeds” shall mean the aggregate cash proceeds received by the Borrower
Consolidation in respect of (a) Capital Proceeds net of the direct costs
relating to such sale, transfer, conveyance or disposition of FF&E or any other
property of the Borrowers or any Subsidiary of the Borrowers, amounts required
to be applied to the repayment of Indebtedness secured by a Lien on the asset or
assets that were the subject of such sale, transfer, conveyance or disposition
of FF&E or any other property of the Borrowers or any Subsidiary of the
Borrowers and all Indebtedness assumed by the purchaser in connection with such
sale, transfer, conveyance or disposition of FF&E or any other property of the
Borrowers or any Subsidiary of the Borrowers and all taxes paid or payable as a
result of such sale, transfer, conveyance or disposition, and (b) any Equity
Offering issued by MTRI, in each case less all costs, fees and expenses
(including without limitation underwriting, placement, financial advisory and
similar fees and expenses) incurred in connection with the issuance of such
Equity Offering, but shall not include the proceeds of Insider Cash Loan and
Insider Non-Cash Loans, until such Insider Non-Cash Loans have been repaid.

 

(l)            Definition of “Non-Core Assets”.  The definition of “Non-Core
Assets” is hereby added to Section 1.01 of the Existing Credit Agreement as
follows:

 

“Non-Core Assets” shall mean all assets of the Borrower Consolidation other than
(i) the MPI Hotel/Casino Facilities and all operations and business conducted at
or in connection with the MPI Hotel/Casino Facilities and all assets located at
the MPI Hotel/Casino Facilities or used in the operations or business of or
useful to the MPI Hotel/Casino Facilities, (ii) the SDI Facility and all
operations and business conducted at or in connection with the SDI Facility and
all assets located at the SDI Facility or used in

 

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the operations or business of or useful to the SDI Facility, (iii) the PIDI
Facility and all operations and business conducted at or in connection with the
PIDI Facility and all assets located at PIDI Facility or used in the operations
or business of or useful to the PIDI Facility, (iv) the Borrowers, (v) the
Unrestricted Subsidiaries and (vi) the common stock, preferred stock,
participations, shares, partnership interests, limited liability company
interests or other equity interests of any Borrower and any Restricted
Subsidiary (regardless of how designated and whether or not voting or
non-voting) and warrants, options and other rights to acquire any of the
foregoing.

 

(m)          Definition of “Phase II SGLVI Net Proceeds”.  Section 1.01 of the
Existing Credit Agreement is hereby amended and restated by adding thereto the
following:

 

“Phase II SGLVI Net Proceeds” shall mean the Net Proceeds resulting from the
sale or disposition of the personal property consisting of the SGLVI Collateral.

 

(n)           Definition of “Revolving Credit Note”.  The definition of
“Revolving Credit Note” in Section 1.01 of the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“Revolving Credit Note” shall mean collective reference to the Revolving Credit
Note (Second Restated), a copy of which is marked “Exhibit A”, affixed to the
Second Amendment and by this reference incorporated herein and made a part
hereof, to be executed by Borrowers on or before the Second Amendment Effective
Date, payable to the order of Agent Bank on behalf of the Lenders, evidencing
the Credit Facility, together with each Replacement Note or Replacement Notes
issued on and after the Second Amendment Effective Date to one or more of the
Lenders pursuant to Section 2.05(i) evidencing the respective Syndication
Interest of such Lender or Lenders, in each case as the same may be amended,
modified, supplemented, replaced, renewed or restated from time to time, which
Revolving Credit Note shall fully restate and supersede the revolving credit
note (first restated) and replacement notes issued in connection with the
Existing Credit Agreement.

 

(o)           Definition of “Schedule of Lenders’ Proportions in Credit
Facility”.  The definition of “Schedule of Lenders’ Proportions in Credit
Facility” in Section 1.01 of the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“Schedule of Lenders’ Proportions in Credit Facility”, a copy of which is set
forth as Schedule 2.01(a), affixed to the Second Amendment and by this reference
incorporated herein and made a part hereof, setting forth the respective
Syndication Interest and maximum amount to be funded under the Credit Facility
by each Lender with respect to the Aggregate Commitment as of the Second
Amendment Effective Date, as the same may be amended or restated from time to
time in connection with an Assignment and Assumption Agreement, which revised
Schedule 2.01(a) shall fully restate and supersede Schedule 2.01(a) attached to
the Existing Credit Agreement and all previous amendments and restatements
thereof.

 

(p)           Definition of “Senior Secured Leverage Ratio”.  The definition of

 

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“Senior Secured Leverage Ratio” in Section 1.01 of the Existing Credit Agreement
is hereby amended and restated in its entirety as follows:

 

“Senior Secured Leverage Ratio” as of the end of any Fiscal Quarter shall mean
the ratio resulting by dividing (a) Total Senior Secured Funded Debt as of such
date by (b) EBITDA for the four Fiscal Quarter period ending on that date.

 

(q)           Definition of “Subordinated Obligations”.  The definition of
“Subordinated Obligations” is hereby added to Section 1.01 of the Existing
Credit Agreement as follows:

 

“Subordinated Obligations” shall mean, as of any date of determination (without
duplication), any Indebtedness of the Borrowers or any of their respective
Restricted Subsidiaries (including the Senior Subordinated Notes) on that date
which has been subordinated in right of payment to the Obligations in a manner
reasonably satisfactory to the Requisite Lenders and contains such other
protective terms with respect to senior debt (such as amount, maturity,
amortization, interest rate, covenants, defaults, remedies, payment blockage and
terms of subordination) as the Requisite Lenders may require in their sole
discretion.

 

(r)            Definition of “Total Funded Debt”.  The definition of “Total
Funded Debt” in Section 1.01 of the Existing Credit Agreement is hereby amended
and restated in its entirety as follows:

 

“Total Funded Debt” shall mean with reference to the Borrower Consolidation for
any period: (i) the Aggregate Outstandings as of the last day of such period,
plus (ii) the total as of the last day of such period of both the long-term and
current portions (without duplication) of all other Indebtedness (including
Contingent Liabilities) and Capitalized Lease Liabilities.

 

(s)           Definition of “Total Leverage Ratio”.  The definition of “Total
Leverage Ratio” in Section 1.01 of the Existing Credit Agreement is hereby
amended and restated in its entirety as follows:

 

“Total Leverage Ratio” as of the end of any Fiscal Quarter shall mean the ratio
resulting by dividing (a) Total Net Funded Debt as of such date by (b) EBITDA
for the four Fiscal Quarter period ending on that date.

 

(t)            No LIBOR Loans.  Article I of the Existing Credit Agreement is
hereby amended by adding a new Section 1.06 thereto as follows:

 

“Section 1.06         No LIBOR Loans.  Notwithstanding anything in this Credit
Agreement or the other Loan Documents to the contrary, from and after the Second
Amendment Effective Date, Borrowers shall have no right to borrow, convert,
continue or otherwise hold or obtain LIBOR Loans; provided that any and all
LIBOR Loans outstanding as of the Second Amendment Effective Date shall remain
LIBOR Loans until the end of then-current Interest Period and upon the
expiration of the applicable Interest Period such LIBOR Loan shall be
automatically converted to a Base Rate Loan.”

 

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(u)           Commitment Increases - Removed.  Section 2.01(d) of the Existing
Credit Agreement is hereby amended by replacing “Fifty Million Dollars
($50,000,000.00)” with “Zero Dollars ($0).”

 

(v)           Interest Payment Dates.  The second sentence of Section 2.05(b) of
the Existing Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Interest accrued on each Base Rate Loan shall be due and payable on (a) the
Second Amendment Effective Date, (b) thereafter, on the 20th day of each
calendar month (or if the 20th day of such calendar month is not a Banking
Business Day, the first Banking Business Day thereafter) and (c) the Maturity
Date.”

 

(w)          Commitment Fee.  Section 2.09(b) of the Existing Credit Agreement
is hereby amended and restated in its entirety as follows:

 

“b.           Borrowers shall pay a monthly nonusage fee (the “Commitment Fee”)
to the Agent Bank for the account of the Lenders.  The Commitment Fee shall
commence to accrue on the Second Amendment Effective Date and shall be
calculated as the product of (i) 0.75% multiplied by an amount equal to (ii) the
daily average of the Aggregate Commitment less the daily average of the Funded
Outstandings computed on the basis of a three hundred sixty (360) day year based
on the number of actual days elapsed.  Each Commitment Fee shall be payable in
arrears on a monthly basis on or before the fifth (5th) day following receipt by
Borrowers of an invoice from Agent Bank setting forth the amount of such
Commitment Fee for each applicable calendar month, and upon Bank Facilities
Termination.  Each Commitment Fee shall be promptly distributed by Agent Bank to
Lenders in proportion to their respective Syndication Interest in the Credit
Facility, as in effect from time to time during each applicable calendar month.”

 

(x)            Letters of Credit Fees.  Sections 2.09(c)(i) of the Existing
Credit Agreement is hereby amended and restated in its entirety as follows:

 

“(i)          As of the Second Amendment Effective Date, Borrowers have paid all
unpaid letter of credit fees accrued and unpaid as of the Second Amendment
Effective Date for each Letter of Credit outstanding under the Existing Credit
Agreement.  With respect to all Letters of Credit issued hereunder for the
period from and including the day each such Letter of Credit issued to, but
excluding, the applicable Stated Expiry Date, the Borrowers shall pay to the
Agent Bank a letter of credit fee (“L/C Fee”) equal to the greater of (i) Five
Hundred Dollars ($500.00) and (ii) the Stated Amount of each such Letter of
Credit multiplied by 5.00% (per annum), due and payable monthly in arrears on
the first Banking Business Day of each month and on the Stated Expiry Date of
each such Letter of Credit.”

 

(y)           Late Fees.  Section 2.09 of the Existing Credit Agreement is
hereby amended and restated by adding thereto the following paragraphs at the
end thereof:

 

“d.           In the event that Borrowers fail to comply with Section 5.08(a),
(b), (c), (d) or (e) in any respect on or before the due date set forth in
Section 5.08(a), (b),

 

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(c), (d) or (e), Borrowers shall pay to Agent Bank for the account of the
Lenders in respect of each such failure a per occurrence fee equal to $50,000.00
(each, a “Per Occurrence Fee”), which shall be due and payable on the first day
after such due date. The Per Occurrence Fees shall not be refundable under any
circumstances.  Each Per Occurrence Fee received by Agent Bank shall be promptly
distributed by Agent Bank to Lenders in proportion to their respective
Syndication Interests in the Credit Facility at the time of receipt by Agent
Bank.  Nothing herein shall limit any rights and remedies the Agent Bank or the
Lenders may have in respect of any such failure to timely comply with
Section 5.08(a), (b), (c), (d) or (e).”

 

(z)            Mandatory Prepayments/Commitment Reductions.  Article II of the
Existing Credit Agreement is hereby amended by adding a new Section 2.15 thereto
as follows:

 

“Section 2.15.        Mandatory Prepayments; Aggregate Commitment Reductions. 
Borrowers shall prepay or Cash Collateralize (if applicable) the Obligations as
follows:

 

a.             If, at any time after the Second Amendment Effective Date, any
Borrower or any Subsidiary of a Borrower sells or otherwise disposes of any
property (other than as permitted under Section 6.12(a) and Section 6.12(b)),
Borrowers shall, not later than five (5) Banking Business Days after the
completion of such sale or other disposition, prepay the outstanding Obligations
in the manner set forth in Section 2.15(d), in an aggregate principal amount
equal to one hundred percent (100%) of the Net Proceeds (other than Phase II
SGLVI Net Proceeds up to $2,000,000 so long as no Event of Default has occurred
and is continuing) from such sale or disposition.  Notwithstanding the
foregoing, Borrowers shall not be required to make a prepayment pursuant to this
Section 2.15(a) with respect to any sale or other disposition made under
Section 6.12(c) (a “Relevant Sale”) if Borrowers reinvest such Net Proceeds in
assets used or useful in their business within one hundred eighty (180) days
after the date of such Relevant Sale.  Upon the Agent Bank’s request, Borrowers
shall provide proof, reasonably satisfactory to the Agent Bank, that such Net
Proceeds have been reinvested within such one hundred eighty (180) day period. 
If, at any time after the occurrence of a Relevant Sale and prior to the
acquisition of the related replacement assets, the one hundred eighty (180) day
period provided in the preceding sentence shall elapse, a mandatory prepay event
is triggered under Section 2.15(b) or an Event of Default shall occur, then
Borrowers shall promptly prepay the Obligations in the amount and in the manner
described in Section 2.15(d).

 

b.             If, at any time after the Second Amendment Effective Date, the
Borrower Consolidation or any member thereof would have an obligation to redeem,
prepay or otherwise purchase or have an obligation to make an offer to redeem,
prepay, or otherwise purchase Senior Unsecured Notes (including any Indebtedness
under any refinancing thereof) or the Senior Subordinated Notes or all or any
portion of the amounts owing thereunder (for example under Section 4.13 of the
Senior Unsecured Indenture and Section 4.13 of the Senior Subordinated
Indenture), then not later than five (5) Banking Business Days prior to the date
such obligation would otherwise arise in respect of the

 

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Senior Unsecured Notes (including any Indebtedness under any refinancing
thereof) or the Senior Subordinated Notes Borrowers shall prepay the outstanding
Obligations in the manner set forth in Section 2.15(d), in an aggregate
principal amount equal to the amount necessary to cause any such obligation in
respect of the Senior Unsecured Notes (including any Indebtedness under any
refinancing thereof) or the Senior Subordinated Notes to not arise. 
Notwithstanding the foregoing, in no event shall the Borrower Consolidation or
any member thereof have an obligation to make a prepayment under this
Section 2.15(b) upon the occurrence of a “Required Regulatory Redemption” under
Section 3.8 of the Senior Subordinated Indenture.

 

c.             If, at any time after the Second Amendment Effective Date, a
Change of Control shall occur, Borrowers shall within five (5) Banking Business
Days thereafter, prepay the outstanding Obligations in the manner set forth in
Section 2.15(d), in an aggregate principal amount equal to one hundred percent
(100%) of the Obligations outstanding.

 

d.             The amount of all required prepayments shall be applied as
follows:  (A) to prepay the Swingline Loans to the extent Swingline Loans are
then outstanding, (B) then to prepay the loans, advances and all other
Obligations (other than L/C Exposure) to the extent loans, advances and other
Obligations (other than L/C Exposure) are then outstanding and (C) otherwise, to
cash collateralize the Obligations in an amount equal to the L/C Exposure in
form and substance satisfactory to the Agent Bank, which cash collateral will be
applied to any loans or advances or reimbursement obligations or other payment
obligations that exist or arise hereunder from and after the date such cash
collateral has been pledged as contemplated herein, and if such L/C Exposure has
been reduced to zero and no other Obligations are outstanding, then such cash
collateral will be delivered to the persons legally entitled thereto.  As of the
date any prepayment is required under this Section 2.15, the Aggregate
Commitment shall be automatically reduced by the amount of the prepayment
required under this Section 2.15.

 

e.             The Aggregate Commitment shall be automatically and permanently
reduced to zero on the earlier of (i) the date that a Change of Control occurs
and (ii) the Maturity Date.”

 

(aa)         Subsidiaries.  Section 4.24 of the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“As of the Second Amendment Effective Date, no member of the Borrower
Consolidation has any Subsidiaries that are not members of the Borrower
Consolidation, other than those Subsidiaries existing as of the Second Amendment
Effective Date which are described on the Schedule of Restricted and
Unrestricted Subsidiaries attached to the Second Amendment as Schedule 4.24.”

 

(bb)         Senior Unsecured Indenture.  The last two sentences of Section 4.27
of the Existing Credit Agreement are hereby amended and restated in their
entirety as follows:

 

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“No Default or Event of Default under and as defined in the Senior Unsecured
Indenture (including any successor Indenture or governing document) and the
Borrower Consolidation has done all things required to be done to keep
unimpaired its rights thereunder.  This Credit Agreement, the Loan Documents,
the Bank Facilities and all Obligations (including Swingline Loans and all other
loans and advances hereunder from and after such Swingline Loans, loans and
advances are made and including Letters of Credit from and after the date such
Letters of Credit are issued) are permitted under the terms of the Senior
Unsecured Indenture.”

 

(cc)         Senior Subordinated Indenture.  The last two sentences of
Section 4.28 of the Existing Credit Agreement are hereby amended and restated in
their entirety as follows:

 

“No Default or Event of Default under and as defined in the Senior Subordinated
Indenture (including any successor Indenture or governing document) and the
Borrower Consolidation has done all things required to be done to keep
unimpaired its rights thereunder.  This Credit Agreement, the Loan Documents,
the Bank Facilities and all Obligations (including Swingline Loans and all other
loans and advances hereunder from and after such Swingline Loans, loans and
advances are made and including Letters of Credit from and after the date such
Letters of Credit are issued) are permitted under the terms of the Senior
Subordinated Indenture, and all Obligations (including Swingline Loans and all
other loans and advances hereunder from and after such Swingline Loans, loans
and advances are made and including Letters of Credit from and after the date
such Letters of Credit are issued) are “Senior Debt” and “Designated Senior
Debt” as defined in the Senior Subordinated Indenture.”

 

(dd)         Compliance Certificate.  Section 5.08(e) of the Existing Credit
Agreement is hereby amended by adding the following to the end of such Section:

 

“The Compliance Certificate shall also include (i) a representation by the
Borrowers that they have taken all steps necessary to prevent having an
obligation to redeem, prepay or otherwise purchase or an obligation to make an
offer to redeem, prepay or otherwise purchase (A) any Senior Unsecured Notes or
any portion thereof (including any Indebtedness of any refinancing thereof)
under Section 4.13 of the Senior Unsecured Indenture (and any successor section)
or (B) any Senior Subordinated Notes or any portion thereof under Section 4.13
of the Senior Subordinated Indenture (and any successor section) and (ii) a
brief explanation in narrative form which explains those steps.”

 

(ee)         Asset Sales.  Section 5.08 of the Existing Credit Agreement is
hereby amended and restated in its entirety by adding thereto the following
clause “(i)” immediately after clause “(h)”:

 

“i.  Within three (3) Banking Business Days after each sale or any other
disposition of any assets by any Borrower or any Subsidiary of a Borrower, the
Borrowers shall promptly notify the Agent Bank in writing of: (I) the date of
such sale or other disposition, (II) the assets that were sold or otherwise
disposed of, (III) the

 

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consideration received by the Borrowers for such sale or other disposition,
(IV) the amount of “Net Cash Proceeds” (as such term is defined in the Senior
Subordinated Indenture) received from such sale or other disposition and (V) the
amount of “Net Cash Proceeds” (as such term is defined in the Senior Unsecured
Indenture, or if there is an Acceptable Senior Refinancing, the analogous term
(if any) in the documents entered into in connection therewith) received from
such sale or other disposition.”

 

(ff)           Prohibition on Prepayment or Defeasance of Senior Unsecured
Debt.  Section 5.25 of the Existing Credit Agreement is hereby amended and
restated in its entirety as follows:

 

“Section 5.25.    Prohibition on Prepayment or Defeasance of Senior Unsecured
Debt.  Notwithstanding anything contained in the Credit Agreement to the
contrary, no member of the Borrower Consolidation shall, except with the prior
written consent of the Requisite Lenders, pay, prepay, purchase, redeem, retire
or otherwise acquire for value, or set apart any money for a sinking, defeasance
or other analogous fund for, the purchase, redemption, retirement or other
acquisition of, or make any voluntary payment or prepayment of the principal of
or interest on, or any other amount owing in respect of, the Senior Unsecured
Notes or Senior Subordinated Notes or any Subordinated Obligations, except for
(i) a refinance of the Senior Unsecured Notes pursuant to an Acceptable Senior
Refinancing by October 1, 2009, (ii) regularly scheduled payments of interest in
respect of such Senior Unsecured Notes required pursuant to the instruments
evidencing such Senior Unsecured Notes and the Senior Unsecured Indenture,
(iii) regularly scheduled payments of interest in respect of such Senior
Subordinated Notes required pursuant to the instruments evidencing such Senior
Subordinated Notes and the Senior Subordinated Indenture to the extent such
payments are not blocked or prohibited under the terms of such Senior
Subordinated Notes and the Senior Subordinated Indenture, (iv) the principal
amount of any Regulatory Redemption required by any Gaming Authority and
(v) with respect to any other Subordinated Obligations, payments expressly
permitted by the terms of such Subordinated Obligations and the subordination
provisions related thereto, in each case, which have been approved by the
Requisite Lenders in their sole discretion as contemplated by this Credit
Agreement.   Notwithstanding anything contained in the Credit Agreement to the
contrary, no member of the Borrower Consolidation shall, except with the prior
written consent of the Requisite Lenders, supplement, modify, amend, restate,
extend or otherwise change the terms of the Senior Unsecured Notes (including
any refinancing thereof), the Senior Unsecured Indenture (including any
refinancing thereof), the Senior Subordinated Notes, the Senior Subordinated
Indenture or any document related thereto or any document, instrument or
agreement evidencing or governing or any Subordinated Obligations.

 

(gg)         Total Leverage Ratio.  Section 6.01 of the Existing Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“Section 6.01. Total Leverage Ratio.  Commencing as of the Fiscal Quarter ending
on March 31, 2008 and continuing as of each Fiscal Quarter end until Bank
Facilities Termination, the Borrower Consolidation shall maintain a Total
Leverage

 

12

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Ratio no greater than the ratios described hereinbelow as of the end of each
Fiscal Quarter in accordance with the following schedule, to be calculated for a
fiscal period consisting of each such Fiscal Quarter and the most recently ended
three (3) preceding Fiscal Quarters on a rolling four (4) Fiscal Quarter Basis:

 

Fiscal Quarter End

 

Maximum Total
Leverage Ratio

 

 

 

As of the end of the Fiscal Quarter ending on March 31, 2008

 

6.35 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on June 30, 2008

 

6.25 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on September 30, 2008

 

5.75 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on December 31, 2008

 

5.25 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on March 31, 2009 and as of the end
of the Fiscal Quarter ending on June 30, 2009

 

5.00 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on September 30, 2009 and as of the
end of the Fiscal Quarter ending on December 31, 2009

 

4.75 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on March 31, 2010 and as of the end
of each Fiscal Quarter end occurring thereafter until the Bank Facilities
Termination

 

4.50 to 1.00”

 

(hh)         Adjusted Fixed Charge Coverage Ratio.  Section 6.03 of the Existing
Credit Agreement is hereby amended and restated in its entirety as follows:

 

“Section 6.03.   Adjusted Fixed Charge Coverage Ratio.  Commencing as of the
Fiscal Quarter ending on June 30, 2008 and continuing as of each Fiscal Quarter
end until Bank Facilities Termination, the Borrower Consolidation shall maintain
an Adjusted Fixed Charge Coverage Ratio no less than the ratios described
hereinbelow as of the end of each Fiscal Quarter in accordance with the
following schedule:

 

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Fiscal Quarter End

 

Minimum Adjusted
Fixed Charge
Coverage Ratio

 

 

 

As of the end of the Fiscal Quarter ending on June 30, 2008

 

1.00 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on September 30, 2008

 

1.10 to 1.00

 

 

 

As of the end of the Fiscal Quarter ending on December 31, 2008 and as of each
Fiscal Quarter end occurring thereafter until Bank Facilities Termination

 

1.25 to 1.00”

 

(ii)           Minimum Tangible Net Worth.  Section 6.04 of the Existing Credit
Agreement is hereby amended and restated in its entirety by replacing it with
“[Reserved]”.

 

(jj)           Limitation of Indebtedness.  Section 6.05 of the Existing Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“Section 6.05.  Limitation on Indebtedness.  The Borrower Consolidation shall
not owe or incur any Indebtedness, except as specifically permitted below:

 

a.             Aggregate Outstandings under the Bank Facilities and all other
Obligations under the Loan Documents;

 

b.             Interest Rate Hedges up to the aggregate notional amount no
greater than the Aggregate Commitment as of any date of determination ;

 

c.             Indebtedness owing by the Borrower Consolidation under the Senior
Unsecured Notes up to an aggregate principal amount equal to One Hundred Thirty
Million Dollars ($130,000,000) less any repayments of principal or redemptions
thereof; provided, however, that the Borrower Consolidation may refinance such
permitted amount of Indebtedness if such refinancing is consummated pursuant to
an Acceptable Senior Refinancing;

 

d.             Indebtedness owing by the Borrower Consolidation under the Senior
Subordinated Notes up to an aggregate principal equal to One Hundred Twenty Five
Million Dollars ($125,000,000) less any repayments of principal or redemptions
thereof;

 

e.             Secured purchase money Indebtedness and Capital Lease Liabilities
relating to FF&E used and to be used in connection with the Hotel/Casino
Facilities (collectively “FF&E Financing”) that were incurred prior to the
Second Amendment Effective Date up to the maximum aggregate principal not to
exceed $36,000,000 (less the amount of any payments made thereon);

 

f.              Contingent Liabilities to the extent permitted under
Section 6.08;

 

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g.             Unsecured trade payables incurred in the ordinary course of
business less than one hundred twenty (120) days past due;

 

h.             Indebtedness evidenced by the National City Loan in the
approximate amount of Two Million Five Hundred Thousand Dollars ($2,500,000)
less any repayments of the principal thereof;

 

i.  Indebtedness incurred prior to the Second Amendment Effective Date for the
purpose of financing premiums on Directors’ and Officers’ Liability Insurance
Coverage up to the aggregate amount of One Million Dollars ($1,000,000.00) at
any time outstanding; and

 

j.              Subordinated Obligations incurred after the Second Amendment
Effective Date; provided that (i) after giving effect to the incurrence of such
Indebtedness (if a revolver, treated as if fully drawn), the Borrower
Consolidation is in pro forma compliance with Section 6.01 (Total Leverage
Ratio) as if such Indebtedness had been incurred as of the end of the most
recently ended Fiscal Quarter and the Borrower shall have provided the Agent
Bank with a certificate in form and substance acceptable to the Agent Bank
demonstrating such compliance and (ii) such Indebtedness is on terms and
conditions and pursuant to documentation (including rate, tenor, amount,
security and subordination) reasonably satisfactory to the Requisite Lenders in
the sole discretion and the Requisite Lenders consent thereto is evidenced in
writing.”

 

(kk)         Restrictions on Distributions.  Section 6.06 of the Existing Credit
Agreement is hereby amended and restated in its entirety as follows:

 

“Section 6.06.        Restrictions on Distributions.  Unless approved in writing
by the Requisite Lenders, no member of the Borrower Consolidation shall make any
Distribution other than (a) a Distribution to other members of the Borrower
Consolidation or (b) Distributions made from and after the Second Amendment
Effective Date to MTR Harness or JRI so long as such Distributions in MTR
Harness or JRI (when added to all Investments made from and after the Second
Amendment Effective Date in MTR Harness and JRI) do not exceed $1,250,000 in the
aggregate.”

 

(ll)           Capital Expenditure Requirements.  Section 6.07 of the Existing
Credit Agreement is hereby amended and restated in its entirety as follows:

 

“Section 6.07.  Capital Expenditure Requirements.  Unless approved in writing by
the Requisite Lenders, no member of the Borrower Consolidation shall make any
Capital Expenditures, except a member of the Borrower Consolidation may make a
Capital Expenditure if the amount of such Capital Expenditures plus the
aggregate amount of any other Capital Expenditures made by any member of the
Borrower Consolidation during the Fiscal Year in which such proposed Capital
Expenditure is to occur does not exceed Sixteen Million Seven Hundred Thousand
Dollars ($16,700,000); provided, however, that the Borrower Consolidation may
make Capital Expenditures for any Fiscal Year in excess of the Sixteen Million
Seven Hundred Thousand Dollars ($16,700,000) permitted above so long as (i) such
Capital Expenditures are necessary for

 

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a Borrower to comply with the rules and regulations mandated by any Gaming
Authority and (ii) the total amount of Capital Expenditures does not exceed
(I) for Fiscal Year 2008 and 2009, $33,400,000 and (II) for the first Fiscal
Quarter of 2010, $4,175,000.  In the event that Borrower Consolidation makes
permitted Capital Expenditures for any Fiscal Year in excess of the Sixteen
Million Seven Hundred Thousand Dollars ($16,700,000) permitted above, then the
amount of permitted Capital Expenditures for the immediately following Fiscal
Year shall be reduced by the amount of such excess.”

 

(mm)       Contingent Liabilities.  The first sentence of Section 6.08 of the
Existing Credit Agreement is hereby amended and restated in its entirety as
follows:

 

“Unless approved in writing by the Requisite Lenders, the Borrower Consolidation
shall not directly or indirectly incur any Contingent Liability(ies) without the
prior written consent of the Requisite Lenders (other than Contingent
Liability(ies) as to JRI or MTR Harness so long as the payment of such
Contingent Liability(ies), if necessary, would be permitted by
Section 6.06(b) and Section 6.09(m)).”

 

(nn)         Investments.  Section 6.09 of the Existing Credit Agreement is
hereby amended and restated in its entirety as follows:

 

“Section 6.09.        Investment Restrictions.  Unless approved in writing by
the Requisite Lenders, the Borrower Consolidation shall not make any Investments
(whether by way of loan, stock purchase, capital contribution, or otherwise),
except for Investments in the following:

 

a. Cash, Cash Equivalents and direct obligations of the United States Government
so long as Agent Bank for the benefit of the Banks has a fully-perfected, first
priority lien on and security interest in any such Cash, Cash Equivalents or
direct obligations (subject to Permitted Encumbrances);

 

b.  Prime commercial paper (AA rated or better) so long as Agent Bank for the
benefit of the Banks has a fully-perfected, first priority lien on and security
interest in any such prime commercial paper (subject to Permitted Encumbrances);

 

c.  Certificates of Deposit or Repurchase Agreement issued by a commercial bank
having a capital surplus in excess of One Hundred Million Dollars
($100,000,000.00) so long as Agent Bank for the benefit of the Banks has a
fully-perfected, first priority lien on and security interest in any such
Certificates of Deposit or Repurchase Agreement (subject to Permitted
Encumbrances);

 

d.  Money market or other funds of nationally recognized institutions investing
solely in obligations described in (a), (b) and (c) above so long as Agent Bank
for the benefit of the Banks has a fully-perfected, first priority lien on and
security interest in any such money market or other funds (subject to Permitted
Encumbrances);

 

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e.  Insider Cash Loans originated prior to the Second Amendment Effective Date
in an aggregate principal amount not to exceed One Million Five Hundred Thousand
Dollars ($1,500,000.00) at any one time less any repayments thereof;

 

f.  Insider Non-Cash Loans originated prior to the Second Amendment Effective
Date to the extent permitted by Law;

 

g. Capital Expenditures to the extent permitted under Section 6.07;

 

h.  [Reserved];

 

i.  [Reserved];

 

j.  [Reserved];

 

k.  On and after the Original Closing Date but prior to the Second Amendment
Effective Date, Investments made in MTR Harness in an aggregate amount not to
exceed at any one time Twelve Million Five Hundred Thousand Dollars
($12,500,000.00);

 

l.  On and after the Original Closing Date but prior to the Second Amendment
Effective Date, Investments made in JRI in an aggregate amount not to exceed
Five Million Dollars ($5,000,000.00); provided that if Pine Hollow Golf Course
Property was purchased with the proceeds of Investments made in JRI, the
Borrowers shall have caused such property to be encumbered as additional
Collateral hereunder subject to the New Acquisition Certifications; and

 

m.  Investments made from and after the Second Amendment Effective Date in MTR
Harness or JRI so long as such Investments (when added to all Distribution made
from and after the Second Amendment Effective Date to MTR Harness and JRI) do
not exceed $1,250,000 in the aggregate.”

 

(oo)         Sale of Assets, Consolidation, Merger, or Liquidation. 
Section 6.12 of the Existing Credit Agreement is hereby amended and restated in
its entirety as follows:

 

“Section 6.12.  Sales of Assets, Consolidation, Merger, or Liquidation.  Unless
approved in writing by the Requisite Lenders, no member of the Borrower
Consolidation shall wind up, liquidate or dissolve its affairs or enter into any
transaction of merger or consolidation (except a merger or consolidation with
another entity within the Borrower Consolidation), or convey, sell, lease or
otherwise dispose of (or make an agreement to do any of the foregoing at any
time prior to Bank Facilities Termination) all or any material part of its
respective property or assets (except to another entity within the Borrower
Consolidation), except that the following shall be permitted:

 

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a.                                       The Borrower may make sales of
inventory in the ordinary course of business;

 

b.                                      So long as no Default or Event of
Default shall have occurred and remains continuing and the Borrowers comply with
the notice requirements set forth in Section 5.08(i), the Borrowers may in the
ordinary course of business and subject to the provisions of subsection
(c) hereinbelow, sell FF&E and other items of personal property Collateral that
are, in Borrowers’ prudent business judgment, obsolete or no longer necessary
for the Borrower Consolidation’s business objectives;

 

c.                                       So long as no Default or Event of
Default shall have occurred and remains continuing, the Borrowers use the Net
Proceeds therefrom to prepay or Cash Collateralize (if applicable) the
Obligations or reinvest such Net Proceeds in accordance with Section 2.15 and
the Borrowers comply with the notice requirements set forth in Section 5.08(i),
the Borrowers may sell or otherwise dispose of any Non-Core Assets; and

 

d.                                      So long as no Default or Event of
Default shall have occurred and remains continuing and the Borrowers use the Net
Proceeds therefrom (other than the Phase II SGLVI Net Proceeds up to $2,000,000)
to prepay or Cash Collateralize (if applicable) the Obligations or reinvest such
Net Proceeds in accordance with Section 2.15(a) and the Borrowers comply with
the notice requirements set forth in Section 5.08(i), the Borrowers may sell or
otherwise dispose of the SGLVI Collateral.”

 

(pp)                          Events of Default – Section 7.01(b). 
Section 7.01(b) of the Existing Credit Agreement is hereby amended and restated
in its entirety as follows:

 

“b.                                Borrowers shall have defaulted in the payment
of any principal owing in respect of the Obligations, or Borrowers shall have
defaulted in the payment of interest on the Revolving Credit Note or Swingline
Note when due, and such default on interest continues for a period of more than
five (5) days;”

 

(qq)                          Events of Default – Section 7.01(x). 
Section 7.01(x) of the Existing Credit Agreement is hereby amended and restated
in its entirety as follows:

 

“x.                                  The Senior Unsecured Notes are not fully
refinanced pursuant to an Acceptable Senior Refinancing by October 1, 2009; or”

 

(rr)                                Events of Default – Section 7.01(y). 
Section 7.01 of the Existing Credit Agreement is hereby amended by adding a new
Section 7.01(y) thereto as follows:

 

“y.                                Any trustee for, or any holder of, any
Subordinated Obligations asserts in writing that any such Subordinated
Obligations (or any portion thereof) is not subordinated to the Obligations in
accordance with its terms or the applicable subordination agreement (in the case
of such other Subordinated Obligations); or any event occurs which gives the
holder or holders of such Subordinated Obligations (or an agent or trustee on
its or their behalf) the right to declare such Subordinated Obligations due
before the date on which it otherwise would become due, or the right to require
the

 

18

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issuer thereof, to redeem, purchase or otherwise defease, or offer to redeem,
purchase or otherwise defease, all or any portion of any Subordinated
Obligations, or a final judgment is entered by a court of competent jurisdiction
that any Subordinated Obligations (or any portion thereof) is not subordinated
in accordance with its terms or the applicable subordination agreement (in the
case of such other Subordinated Obligations) to the Obligations.”

 

(ss)                            Replacement Schedules and Exhibits.

 

(i)                                     Schedule 2.01(a) of the Existing Credit
Agreement is hereby amended and restated in its entirety with
Schedule 2.01(a) attached hereto.

 

(ii)                                  Schedule 2.01(c) of the Existing Credit
Agreement is hereby amended and restated in its entirety with Schedule
2.01(c) attached hereto.

 

(iii)                               Schedule 4.24 of the Existing Credit
Agreement is hereby amended and restated in its entirety with Schedule 4.24
attached hereto.

 

(iv)                              Exhibit A of the Existing Credit Agreement is
hereby amended and restated in its entirety with Exhibit A attached hereto.

 

(v)                                 Exhibit D of the Existing Credit Agreement
is hereby amended and restated in its entirety with Exhibit D attached hereto.

 

SECTION 3.                            Amendment Fee.  In addition to all other
amounts payable by the Borrowers to the Agent Bank and/or the Lenders, on the
Second Amendment Effective Date, Borrowers shall pay to the Agent Bank, for the
account of each Lender that has executed and delivered this Second Amendment on
or prior to the Second Amendment Effective Date, a non-refundable amendment fee
in an amount equal to 1.00% of such Lender’s Syndication Interest of the
Aggregate Commitment as of the Second Amendment Effective Date after giving
effect to this Second Amendment (collectively, the “Amendment Fees”).  The
Amendment Fees are fully earned, due and payable as of the Second Amendment
Effective Date.

 

SECTION 4.                            Conditions Precedent to the Effectiveness
of this Second Amendment.  The limited waiver contained in Section 1 above and
the amendments contained in Section 2 above are conditioned upon satisfaction of
the following conditions (the first date on which all of the following
conditions have been satisfied being referred to herein as the “Second Amendment
Effective Date”):

 

(a)           Due execution and delivery by Borrowers and Banks of eight
(8) duplicate originals of this Second Amendment;

 

(b)           Due execution and delivery by Borrowers of the original Revolving
Credit Note (Second Restated);

 

(c)           A certificate, duly executed and delivered by the Secretary of
each Borrower, certifying a true and correct copy of the resolutions for each of
the Borrowers authorizing each respective Borrowers to enter into all documents
and agreements to be executed

 

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by it pursuant to this Second Amendment and further authorizing and empowering
the officer or officers who will execute such documents and agreements with the
authority and power to execute such documents and agreements on behalf of each
respective corporation;

 

(d)                                 Except for LIBOR interest payments (which
shall be due and payable as set forth in Section 2.05(b) of the Existing Credit
Agreement), Borrowers have paid all accrued but unpaid interest on the
Obligations, Commitment Fees that are due and payable, and Letter of Credit Fees
for each Letter of Credit outstanding under the Existing Credit Agreement;

 

(e)                                  Borrowers shall have caused their attorneys
to deliver a legal opinion reasonably satisfactory to Agent Bank;

 

(f)                                    Agent Bank shall have received, on behalf
of the Lenders that have executed and delivered this Second Amendment as of the
Second Amendment Effective Date, the Amendment Fees;

 

(g)                                 Reimbursement to Agent Bank by Borrowers for
all fees and out-of-pocket expenses incurred by Agent Bank in connection with
the Second Amendment and invoiced as of the Second Amendment Effective Date, but
not limited to, attorneys’ fees of Orrick, Herrington & Sutcliffe LLP and all
other like expenses remaining unpaid as of the Second Amendment Effective Date;
and

 

(h)                                 Such other documents, instruments or
conditions as may be reasonably required by Agent Bank.

 

SECTION 5.                         Representations and Warranties.  In order to
induce the Agent Bank and the Requisite Lenders to enter into this Second
Amendment and to amend the Existing Credit Agreement in the manner provided in
this Second Amendment, Borrowers represent and warrant to the Agent Bank and
each Bank as follows:

 

(a)                                  Power and Authority.  Borrowers have all
requisite corporate power and authority to enter into this Second Amendment and
the Revolving Credit Notes (Second Restated) and to carry out the transactions
contemplated by, and perform their obligations under, the Credit Agreement.

 

(b)                                 Authorization of Agreements.  The execution
and delivery of this Second Amendment by Borrowers and the performance of the
Credit Agreement by Borrowers has been duly authorized by all necessary action,
and this Second Amendment and the Revolving Credit Notes (Second Restated) have
been duly executed and delivered by Borrowers.

 

(c)                                  Enforceability.  Each of this Second
Amendment, the Revolving Credit Notes (Second Restated) and the Credit Agreement
constitutes the legal, valid and binding obligation of each Borrower enforceable
against such Borrower in accordance with its terms, except as may be limited by
bankruptcy, insolvency, other similar laws affecting the enforcement of
creditors’ rights in general or general principles of equity (regardless of
whether such enforceability is considered in a proceeding in equity or at law).

 

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(d)                                 No Conflict.  The execution and delivery by
Borrowers of this Second Amendment, the Revolving Credit Notes (Second Restated)
and the performance by Borrowers of each of this Second Amendment, the Revolving
Credit Notes (Second Restated) and the Credit Agreement do not and will not
(i) violate any law, rule, regulation, order, writ, injunction or decree of any
court or Governmental Authority to which Borrowers are subject, (ii) violate any
provision of, or result in the breach or the acceleration of, or entitle any
other Person to accelerate any indenture, evidence of indebtedness, loan or
financing agreement, or other agreement or instrument to which any Borrower is
bound or (iii) result in the creation or imposition of any lien, charge, or
encumbrance of any nature whatsoever upon any of their respective property or
assets.

 

(e)                                  Governmental Consents.  No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority is required for the due execution, delivery and performance by
Borrowers of this Second Amendment and the Revolving Credit Notes (Second
Amendment).

 

(f)                                    Representations and Warranties in the
Credit Agreement.  Borrowers confirm that, as of the Second Amendment Effective
Date, the representations and warranties contained in the Credit Agreement are
(after giving effect to this Second Amendment) true and correct in all material
respects (except to the extent any such representation and warranty is expressly
stated to have been made as of a specific date, in which case it shall be true
and correct as of such specific date) and that no Default has occurred and is
continuing.

 

SECTION 6.                          Releases.  In further consideration of this
Second Amendment, each Borrower hereby (i) represents that it has no defenses to
or setoffs against any Obligations owing to the Banks nor claims against the
Banks for any matter whatsoever, related to or unrelated to the Obligations,
(ii) waives, releases and forever discharges each of the Banks and their
respective agents, officers and directors, from any and all known and unknown
claims, actions, causes of action, demands, setoffs, damages, causes, suits,
accounts, controversies and reckonings, in law or in equity, filed or otherwise,
which they or any of them have or may have against the Banks, or any of them, by
reason of any matter, facts, cause, act or thing of any conceivable kind or
character, whatsoever, occurring on or prior to the date of execution hereof,
which in any way, directly or indirectly relates to, concerns, arises out of or
is founded upon this Second Amendment and/or the documentation, obligations and
transactions evidenced by the Credit Agreement or any of the Loan Documents.

 

SECTION 7.                          Miscellaneous.

 

(a)                                  Reference to and Effect Upon the Existing
Credit Agreement and other Loan Documents.

 

(i)                                     Except as specifically amended by this
Second Amendment and the documents executed and delivered in connection
herewith, the Existing Credit Agreement and each other Loan Document shall
remain in full force and effect and each is hereby ratified and confirmed by the
Borrower.  Without limiting the foregoing, the Liens granted pursuant to the
Security Documents shall continue in full force and effect.

 

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(ii)                                  Each reference in the Existing Credit
Agreement to “this Credit Agreement”, “hereunder”, “hereof”, “herein” or any
other word or words of similar import shall mean and be a reference to the
Credit Agreement as amended hereby, and each reference in any other Loan
Document to the Existing Credit Agreement or any word or words of similar import
shall be and mean a reference to the Credit Agreement as amended hereby.

 

(iii)                               The execution and delivery of this Second
Amendment and performance of the Credit Agreement shall not, except as expressly
provided herein, constitute a waiver of any provision of, or operate as a waiver
of any right, power or remedy of the Agent Bank or the Lenders under the
Existing Credit Agreement or any of the other Loan Documents.

 

(iv)                              If there is any conflict between the terms and
provisions of this Second Amendment and the terms and provisions of the Existing
Credit Agreement or any other Loan Document, the terms and provisions of this
Second Amendment shall govern.

 

(b)                                 Additional Modifications.  Upon the
reasonable request of the Agent Bank, the Borrowers shall deliver and cause to
be delivered such amendments, documents, supplements, modifications (including
amendments to any Security Documentation) in connection with the Loan Documents
and take such steps (including cooperation in obtaining title endorsements and
the like) as reasonably requested by the Agent Bank in furtherance of the intent
of the parties and to further clarify the Loan Documents if deemed reasonably
necessary or advisable by the Agent Bank.

 

(c)                                  Further Assurances.  Borrowers shall
deliver to Agent Bank such documents requested by the Agent Bank in furtherance
of the transaction contemplated in the Loan Documents, the Credit Agreement and
this Second Amendment as well as second amended and restated mortgages and deeds
of trust, second amendment endorsements to the Title Insurance Policies,
security agreements, pledge agreements, lessor consents and estoppels
(containing appropriate mortgagee and lender protection language), control
agreements, and other instruments, agreements, certificates, opinions and
documents (including Uniform Commercial Code financing statements and fixture
filings and landlord waivers) as Agent Bank may reasonably request to:

 

(i)                                     grant, perfect, maintain, protect and
evidence security interests in favor of the Agent Bank, for the benefit of the
Banks, in any or all present and future property of Borrowers and Restricted
Subsidiaries prior to the Liens or other interests of any Person, except for
Permitted Encumbrances; and

 

(ii)                                  otherwise establish, maintain, protect and
evidence the rights provided to the Agent Bank, for the benefit of the Banks,
pursuant to the Security Documentation.

 

Borrowers shall fully cooperate with the Agent Bank and the Lenders and perform
all additional acts reasonably requested by the Agent Bank to effect the
purposes of this Section 7(b).

 

(d)                                 Expenses.  Borrowers acknowledges that all
costs and expenses of the Agent Bank incurred in connection with this Second
Amendment and the related Loan Documents will be paid in accordance with
Section 10.20 of the Credit Agreement.

 

22

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(e)                                  Headings.  Section and subsection headings
in this Second Amendment are included for convenience of reference only and
shall not constitute a part of this Second Amendment for any other purpose or be
given any substantive effect.

 

(f)                                    Counterparts.  This Second Amendment may
be executed in one or more counterparts, each of which shall be deemed an
original but all of which together shall constitute one and the same
instrument.  Transmission by telecopier or electronic mail of an executed
counterpart of this Second Amendment shall be deemed to constitute due and
sufficient delivery of such counterpart.

 

(g)                                 Governing Law.  This Second Amendment shall
be governed by and construed according to the laws of the State of Nevada
without reference to conflicts of law rules.  The scope of the foregoing
governing law provision is intended to be all-encompassing of any and all
disputes that may be brought in any court or any mediation or arbitration
proceeding and that relate to the subject matter of this Second Amendment,
including contract claims, tort claims, breach of duty claims and all other
common law and statutory claims.

 

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

 

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IN WITNESS WHEREOF, the parties hereto have duly executed this Second Amendment
as of the date first above written.

 

 

 

BORROWERS:

 

 

 

MTR GAMING GROUP, INC.,

 

a Delaware corporation

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

Edson R. Arneault

 

 

President

 

 

 

 

 

 

 

MOUNTAINEER PARK, INC.,

 

a West Virginia corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

Edson R. Arneault

 

 

President

 

 

 

 

 

 

 

SPEAKEASY GAMING OF LAS VEGAS, INC.,

 

a Nevada corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

Edson R. Arneault

 

 

President

 

 

 

 

 

 

 

PRESQUE ISLE DOWNS, INC.,

 

a Pennsylvania corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

Edson R. Arneault

 

 

President

 

--------------------------------------------------------------------------------

 

 

SCIOTO DOWNS, INC.,

 

an Ohio Corporation

 

 

 

 

 

 

 

By

  /s/ Edson R. Arneault

 

 

Edson R. Arneault

 

 

President

 

--------------------------------------------------------------------------------

 

 

BANKS

 

 

 

 

 

 

 

WELLS FARGO BANK, NATIONAL

 

ASSOCIATION, as Agent Bank, Lender, Swingline

 

Lender and L/C Issuer

 

 

 

 

 

 

 

By:

  /s/ James Neil

 

 

James Neil

 

 

Vice President

 

--------------------------------------------------------------------------------

 

 

 

NATIONAL CITY BANK, successor by merger to 

 

NATIONAL CITY BANK OF PENNSYLVANIA,

 

Lender

 

 

 

 

 

 

 

By

  /s/ Emil Kwaczala

 

 

Name: Emil Kwaczala

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

 

CIT LENDING SERVICES CORPORATION,

 

Lender

 

 

 

 

 

 

 

By

  /s/ Anthony Holland

 

 

Name: Anthony Holland

 

 

Title:, Vice President

 

--------------------------------------------------------------------------------

 

 

PNC BANK

 

Lender

 

 

 

 

 

 

 

By

  /s/ Trey Brown

 

 

Name: Trey Brown

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

 

FIFTH THIRD BANK,

 

Lender

 

 

 

 

 

 

 

By

  /s/ Neil Corry - Roberts

 

 

Name: Neil Corry - Roberts

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

 

CITIZENS BANK OF PENNSYLVANIA,

 

Lender

 

 

 

 

 

 

 

By

  /s/ Euclid B. Noble

 

 

Name: Euclid B. Noble

 

 

Title: Vice President

 

--------------------------------------------------------------------------------

 

 

COMMERZBANK AG,

 

NEW YORK AND GRAND CAYMAN

 

BRANCHES

 

Lender

 

 

 

 

 

 

 

By

  /s/ Werner Schmidbauer

 

 

Name: Werner Schmidbauer

 

 

Title: SVP

 

 

 

 

 

 

 

By

  /s/ Karla Wirth

 

 

Name: Karla Wirth

 

 

Title: AVP

 

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